1
Exhibit 10.2
$85,000,000
CREDIT AGREEMENT
Dated as of October 9, 1998
among
MOSLER INC.
as Borrower,
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THE BANKS, FINANCIAL INSTITUTIONS AND
OTHER INSTITUTIONAL LENDERS NAMED HEREIN,
as Initial Lenders,
-------------------
FLEET NATIONAL BANK,
as Initial Issuing Bank,
as Swing Line Bank,
as Administrative Agent
-----------------------
and
as Documentation Agent
----------------------
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TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS...................................2
SECTION 1.1 Certain Defined Terms.........................................2
SECTION 1.2 Computation of Time Periods..................................28
SECTION 1.3 Accounting Terms.............................................28
SECTION 1.4 Other Definitional Provisions................................28
ARTICLE 2 AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF
CREDIT ...................................................................28
SECTION 2.1 The Advances.................................................28
SECTION 2.2 Making the Advances..........................................30
SECTION 2.3 Issuance of and Drawings and Reimbursement
Under Letters of Credit......................................32
SECTION 2.4 Repayment of Advances........................................34
SECTION 2.5 Termination or Reduction of the Commitments..................35
SECTION 2.6 Prepayments..................................................36
SECTION 2.7 Interest.....................................................38
SECTION 2.8 Fees.........................................................39
SECTION 2.9 Conversion of Advances.......................................40
SECTION 2.10 Increased Costs, Etc.........................................41
SECTION 2.11 Payments and Computations....................................42
SECTION 2.12 Taxes........................................................44
SECTION 2.13 Sharing of Payments, Etc.....................................46
SECTION 2.14 Use of Proceeds..............................................47
SECTION 2.15 Defaulting Lenders...........................................47
SECTION 2.16 Removal of Lender............................................49
ARTICLE 3 CONDITIONS OF LENDING.............................................50
SECTION 3.1 Conditions Precedent to Initial Extension of Credit..........50
SECTION 3.2 Conditions Precedent to Each Borrowing and Issuance..........57
SECTION 3.3 Determinations Under Section 3.1.............................58
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE BORROWER....................59
SECTION 4.1 Organization.................................................59
SECTION 4.2 Subsidiaries.................................................59
SECTION 4.3 Corporate Power, Authorization...............................59
SECTION 4.4 Governmental Authorizations, Approvals.......................60
SECTION 4.5 Due Execution, Validity, Enforceability......................60
SECTION 4.6 Financial Statements.........................................60
SECTION 4.7 Accurate Information.........................................60
SECTION 4.8 Litigation...................................................61
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SECTION 4.9 Regulation U.................................................61
SECTION 4.10 ERISA........................................................61
SECTION 4.11 Casualty.....................................................61
SECTION 4.12 Environmental Matters........................................61
SECTION 4.13 Burdensome Documents.........................................62
SECTION 4.14 Priority of Liens............................................62
SECTION 4.15 Taxes........................................................63
SECTION 4.16 Compliance with Securities Laws..............................63
SECTION 4.17 Solvency.....................................................64
SECTION 4.18 Debt.........................................................64
SECTION 4.19 No Defaults, Compliance with Laws............................64
SECTION 4.20 Owned Real Property..........................................64
SECTION 4.21 Leased Real Property.........................................65
SECTION 4.22 Material Contracts...........................................65
SECTION 4.23 Intellectual Property........................................65
SECTION 4.24 Acquisition Documents........................................65
SECTION 4.25 Fees.........................................................65
ARTICLE 5 AFFIRMATIVE COVENANTS.............................................66
SECTION 5.1 Compliance with Law..........................................66
SECTION 5.2 Payment of Taxes, Etc........................................66
SECTION 5.3 Compliance with Environmental Laws...........................66
SECTION 5.4 Preparation of Environmental Reports.........................66
SECTION 5.5 Maintenance of Insurance.....................................67
SECTION 5.6 Preservation of Corporate Existence, Etc.....................67
SECTION 5.7 Visitation Rights............................................67
SECTION 5.8 Keeping of Books.............................................68
SECTION 5.9 Maintenance of Properties, Etc...............................68
SECTION 5.10 Compliance with Terms of Leaseholds..........................68
SECTION 5.11 Performance of Material Contracts............................68
SECTION 5.12 Agreement to Grant Additional Security.......................68
SECTION 5.13 Interest Rate Protection.....................................70
SECTION 5.14 Performance of Acquisition Documents.........................70
SECTION 5.15 Year 2000 Compatibility......................................71
SECTION 5.16 Cash Concentration or Blocked Accounts.......................71
ARTICLE 6 NEGATIVE COVENANTS................................................71
SECTION 6.1 Liens, Etc...................................................71
SECTION 6.2 Debt.........................................................73
SECTION 6.3 Fundamental Changes..........................................74
SECTION 6.4 Sales, Etc. of Assets........................................74
SECTION 6.5 Investments in Other Persons.................................75
SECTION 6.6 Dividends, Etc...............................................76
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SECTION 6.7 Change in Nature of Business.................................77
SECTION 6.8 Charter Amendments...........................................78
SECTION 6.9 Accounting Changes...........................................78
SECTION 6.10 Prepayments, Etc. of Debt....................................78
SECTION 6.11 Amendment, Etc. of Acquisition Documents.....................78
SECTION 6.12 Amendment, Etc. of Material Contracts........................78
SECTION 6.13 Negative Pledge..............................................78
SECTION 6.14 Partnerships, New Subsidiaries...............................78
SECTION 6.15 Transactions with Affiliates.................................79
SECTION 6.16 Speculative Transactions.....................................79
SECTION 6.17 Capital Expenditures.........................................79
SECTION 6.18 Issuance of Stock............................................80
ARTICLE 7 REPORTING REQUIREMENTS............................................80
SECTION 7.1 Default Notice...............................................80
SECTION 7.2 Monthly Financials...........................................80
SECTION 7.3 Quarterly Financials.........................................81
SECTION 7.4 Annual Financials............................................81
SECTION 7.5 Annual Forecasts.............................................82
SECTION 7.6 ERISA Events and ERISA Reports...............................82
SECTION 7.7 Plan Terminations............................................82
SECTION 7.8 Actuarial Reports............................................82
SECTION 7.9 Plan Annual Reports..........................................82
SECTION 7.10 Reserved.....................................................83
SECTION 7.11 Multiemployer Plan and ESOP Notices..........................83
SECTION 7.12 Litigation...................................................83
SECTION 7.13 Securities Reports...........................................83
SECTION 7.14 Creditor Reports.............................................83
SECTION 7.15 Agreement Notices............................................83
SECTION 7.16 Revenue Agent Reports........................................84
SECTION 7.17 Environmental Conditions.....................................84
SECTION 7.18 Real Property................................................84
SECTION 7.19 Insurance....................................................84
SECTION 7.20 Borrowing Base Certificate...................................84
SECTION 7.21 Management Letters...........................................84
SECTION 7.22 Other Information............................................84
ARTICLE 8 FINANCIAL COVENANTS...............................................85
Section 8.1 Minimum EBITDA...............................................85
Section 8.2 Consolidated Senior Debt to EBITDA Ratio.....................85
Section 8.3 Consolidated Funded Debt to EBITDA...........................86
Section 8.4 Interest Coverage Ratio......................................86
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ARTICLE 9 EVENTS OF DEFAULT.................................................87
SECTION 9.1 Payment......................................................87
SECTION 9.2 Representations and Warranties...............................88
SECTION 9.3 Certain Covenants............................................88
SECTION 9.4 Other Covenants..............................................88
SECTION 9.5 Other Defaults...............................................88
SECTION 9.6 Bankruptcy, Etc..............................................88
SECTION 9.7 Judgments....................................................89
SECTION 9.8 Loan Documents...............................................89
SECTION 9.9 Liens........................................................89
SECTION 9.10 Change of Control............................................89
SECTION 9.11 ERISA Events.................................................89
SECTION 9.12 Borrowing Base Deficiency....................................90
ARTICLE 10 THE ADMINISTRATIVE AGENT.........................................91
SECTION 10.1 Authorization and Action....................................91
SECTION 10.2 Agent's Reliance, Etc.......................................91
SECTION 10.3 Fleet and Affiliates........................................92
SECTION 10.4 Lender Party Credit Decision................................92
SECTION 10.5 Indemnification.............................................92
SECTION 10.6 Successor Administrative Agents.............................93
SECTION 10.7 Events of Default...........................................94
ARTICLE 11 MISCELLANEOUS....................................................95
SECTION 11.1 Amendments, Etc.............................................95
SECTION 11.2 Notices Etc.................................................96
SECTION 11.3 No Waiver; Remedies.........................................97
SECTION 11.4 Costs and Expenses..........................................97
SECTION 11.5 Right of Set-off............................................99
SECTION 11.6 Binding Effect.............................................100
SECTION 11.7 Assignments and Participations.............................100
SECTION 11.8 Execution in Counterparts..................................103
SECTION 11.9 No Liability of the Issuing Bank...........................103
SECTION 11.10 Confidentiality............................................104
SECTION 11.11 Severability...............................................104
SECTION 11.12 Integration................................................104
SECTION 11.13 JURISDICTION, ETC..........................................104
SECTION 11.14 GOVERNING LAW..............................................105
SECTION 11.15 WAIVER OF JURY TRIAL.......................................105
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EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - Form of Revolving Credit Note
Exhibit D - Form of Notice of Borrowing
Exhibit E - Form of Security Agreement
Exhibit F - Form of Intellectual Property Security Agreement
Exhibit G - Form of Subsidiary Guaranty
Exhibit H - Form of Swing Line Note
SCHEDULES
Schedule I Commitments and Applicable Lending Offices
Schedule II. Affiliates of Xxxxx & Company, Inc.
Schedule 3.1(a)(x) States in which Loan Parties are Qualified to do Business
Schedule 3.1(e) Disclosed Litigation
Schedule 3.1(r) Landlord Waivers/Bailee Letters
Schedule 4.2 Subsidiaries
Schedule 4.4 Required Authorizations and Approvals
Schedule 4.12 Environmental Matters
Schedule 4.13 Burdensome Documents
Schedule 4.14 Filing Jurisdiction
Schedule 4.18(a) Existing Debt
Schedule 4.18(b) Surviving Debt
Schedule 4.19 No Defaults
Schedule 4.20 Owned Real Estate
Schedule 4.21 Leased Real Estate
Schedule 4.22 Material Contracts
Schedule 4.23 Intellectual Property
Schedule 6.1(j) Liens
Schedule 6.5(b) Loans and Advances to Officers, Directors or Employees
Schedule 6.5(h) Existing Investments
Schedule 6.18 Existing Issuances, Etc. of Stock
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of October 9, 1998, by and among
MOSLER INC., a Delaware corporation (the "BORROWER"), the banks, financial
institutions and other institutional lenders listed on the signature pages
hereof as the Initial Lenders (the "INITIAL LENDERS"), FLEET NATIONAL BANK, as
Initial Issuing Bank (the "INITIAL ISSUING BANK"), FLEET NATIONAL BANK, as the
Swing Line Bank (the "SWING LINE BANK"), FLEET NATIONAL BANK, as administrative
agent (together with any successor appointed pursuant to Article 10, the
"ADMINISTRATIVE AGENT") and as documentation agent (together with any successor
appointed pursuant to Section 11.7, the "Documentation Agent") for the Lender
Parties (as hereinafter defined).
PRELIMINARY STATEMENT:
(1) The Borrower currently contemplates entering into a
transaction pursuant to which the Borrower will purchase substantially all of
the assets of De La Rue Cash Systems Inc. ("DE LA RUE CASH SYSTEMS") and De La
Rue Systems Americas Corporation ("DE LA RUE SYSTEMS AMERICAS") relating to such
Persons' business and operations in the financial security equipment and service
industry (such transaction being hereinafter called the "ACQUISITION" and the
assets being transferred pursuant to the Acquisition being referred to herein as
the "LEFEBURE DIVISION") pursuant to the terms of that certain Asset Purchase
Agreement dated as of September 30, 1998, by and among the Borrower, De La Rue
Systems Americas and De La Rue Cash Systems Inc. (the "ACQUISITION AGREEMENT");
(2) The Borrower has requested that the Lender Parties (as
hereinafter defined) make loans to the Borrower and issue letters of credit
having an aggregate principal and face amount at any one time outstanding of up
to Eighty-Five Million Dollars ($85,000,000), to be used by the Borrower (i) to
finance the purchase price for the Acquisition, including any post-closing
purchase price adjustments payable in accordance with the terms of the
Acquisition Agreement, (ii) to pay fees and expenses incurred in connection with
the Transaction, (iii) to provide working capital and finance capital
expenditures for the Borrower and its Subsidiaries and for acquisitions by the
Borrower and its Subsidiaries, and (iv) to refinance certain existing
indebtedness of the Borrower, and the Lender Parties have agreed to make such
loans and issue such letters of credit all on and subject to the terms and
conditions of this Agreement;
(3) This Credit Agreement is intended to replace, refinance and
refund the Amended and Restated Financing Agreement, dated as of October 1,
1996, among the Borrower, Star Bank, National Association and the Lenders from
time to time parties thereto (the "Existing Credit Agreement");
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
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ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ACQUISITION" has the meaning specified in the Preliminary Statements.
"ACQUISITION AGREEMENT" has the meaning specified in the Preliminary
Statements.
"ACQUISITION DATE" means the date on which the Acquisition shall have
been consummated in accordance with the Acquisition Documents.
"ACQUISITION DOCUMENTS" means the Acquisition Agreement, Transitional
Services Agreement, Patent License Agreement, Supply Agreement, International
Distribution Agreement, FRS/FCS Distribution Agreement and Assignment and
Assumption Agreement, as such terms are defined in the Acquisition Agreement,
and all schedules and exhibits related to each such agreement.
"ACQUISITION PURCHASE PRICE" means the aggregate purchase price payable
by the Borrower under the Acquisition Agreement for the LeFebure Division,
including any post-closing adjustments payable by the Borrower pursuant to
Article III of the Acquisition Agreement.
"ADDITIONAL COLLATERAL DOCUMENTS" has the meaning specified in Section
5.12(e).
"ADMINISTRATIVE AGENT" has the meaning specified in the recital of
parties to this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the
Administrative Agent maintained by the Administrative Agent with Fleet at its
office at Fleet National Bank, Xxx Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Account No. 151035203156, Attention: Loan Administration.
"ADVANCE" means a Revolving Credit Advance, a Swing Line Advance or a
Letter of Credit Advance.
"AFFECTED LENDER" has the meaning specified in Section 2.16.
"AFFILIATE" means, as to any Person, any other Person other than a
wholly-owned Subsidiary that, directly or indirectly, controls, is controlled by
or is under common control with such Person. For purposes of this definition,
the term "control" (including the terms "controlling," "controlled by" and
"under common control with") of a Person means the possession, direct or
indirect, of the power to vote 50% or more of the Voting Stock of such Person or
to direct or cause the direction of
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the management and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"AFTER-ACQUIRED MORTGAGED PROPERTY" means any parcel (or adjoining
parcels) of real property (including any leaseholds) acquired by any Loan Party
after the Closing Date subject to a Mortgage granted to the Administrative Agent
for the benefit of the Secured Parties pursuant to SECTION 5.13.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender Party,
such Lender Party's Domestic Lending Office in the case of a Prime Rate Advance
and such Lender Party's Eurodollar Lending Office in the case of a Eurodollar
Rate Advance.
"APPLICABLE MARGIN" means, with respect to a Eurodollar Rate Advance,
2.625% and with respect to a Prime Rate Advance, 1.625%.
"ASSET DISPOSITION' shall mean the disposition of any or all of the
fixed assets of the Borrower or any of its Subsidiaries whether by sale, lease,
transfer, loss, damage, destruction, condemnation or otherwise.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender Party and an Eligible Assignee, and accepted by the
Administrative Agent and, so long as no Event of Default shall have occurred and
be continuing, by the Borrower, in accordance with Section 11.7 and in
substantially the form of EXHIBIT A hereto.
"AVAILABLE AMOUNT" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such time
(assuming compliance at such time with all conditions to drawing).
"BANK HEDGE AGREEMENT" means any interest rate Hedge Agreement required
or permitted under Section 5.13 that is entered into by and between the Borrower
and any Hedge Bank.
"BLOCKED ACCOUNTS" has the meaning given that term in Section 5.16.
"BORROWER" has the meaning specified in the recital of parties to this
Agreement.
"BORROWER'S ACCOUNT" means the account of the Borrower maintained by
the Borrower with Fleet National Bank at its office at Xxx Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, Account No. 9415860353.
"BORROWING" means a Revolving Credit Borrowing or a Swing Line
Borrowing.
"BORROWING BASE" on any date means the sum of (i) 80% of the value of
the Eligible Receivables PLUS (ii) 50% of the value of the Eligible Inventory,
in each case set forth in the most
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recent Borrowing Base Certificate delivered to the Administrative Agent pursuant
to the terms of this Agreement on or prior to such date; PROVIDED, HOWEVER,
insofar as the Administrative Agent in its reasonable discretion increases any
reserve it may apply to reduce the value of Eligible Inventory or Eligible
Receivables beyond any such reserve at the date hereof, and such increase (which
shall be effective immediately) shall solely cause a Borrowing Base Deficiency,
the Borrower shall, notwithstanding anything herein to the contrary, have ninety
days in which to cure such Borrowing Base Deficiency before such deficiency will
constitute a Default hereunder; PROVIDED, HOWEVER, the automatic reductions in
the amount of Eligible Inventory or Eligible Receivables occurring after the
Closing Date shall not be deemed an increase of any reserve for purposes hereof.
"BORROWING BASE CERTIFICATE" means a certificate in substantially the
form of EXHIBIT B hereto, duly certified by the Chief Financial Officer of the
Borrower.
"BORROWING BASE DEFICIENCY" means, at any time, the failure of the
Borrowing Base at such time to equal or exceed the sum of (a) the aggregate
principal amount of the Revolving Credit Advances, the Letter of Credit Advances
and the Swing Line Advances outstanding at such time PLUS (b) the aggregate
Available Amount under all Letters of Credit outstanding at such time.
"BUSINESS DAY" means a day of the year on which banks are not required
or authorized by law to close in Boston, Massachusetts and New York, New York
and, if the applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
"CAPITAL EXPENDITURES" means, for any Person for any period, the sum of
all expenditures made, directly or indirectly, by such Person or any of its
Subsidiaries during such period for Equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have been or should be, in accordance with GAAP, reflected as
additions to property, plant or Equipment on a Consolidated balance sheet of
such Person; PROVIDED, that Capital Expenditures shall not include such
expenditures to the extent that such expenditures constitute a reinvestment of
Net Cash Proceeds from any Asset Disposition or Extraordinary Receipt permitted
under this Agreement.
"CAPITALIZED LEASES" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"CASH DOMINION EVENT" has the meaning specified in Section 5.16.
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"CASH EQUIVALENTS" means any of the following, to the extent owned by
the Borrower or any of its Subsidiaries, free and clear of all Liens other than
Liens created under the Collateral Documents: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that is a
Lender Party or a member of the Federal Reserve System that issues (or the
parent of which issues) commercial paper rated as described in clause (c) and
has combined capital and surplus of at least $500,000,000, (c) commercial paper
in an aggregate amount of no more than $1,000,000 per issuer outstanding at any
time, issued by any corporation organized under the laws of any State of the
United States and rated at least "Prime-2" (or the then equivalent grade) by
Xxxxx'x Investors Service, Inc. or "A-2" (or the then equivalent grade) by
Standard & Poor's Ratings Group (or if at such time neither is issuing ratings,
then a comparable rating of such other nationally recognized rating agency as
shall be approved by the Administrative Agent in its reasonable judgment) or (d)
investments in money market funds complying with the risk limiting conditions of
Rule 2a-7 or any successor rule of the Securities and Exchange Commission under
the Investment Company Act.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., as amended from time
to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental Protection
Agency.
"CHANGE OF CONTROL" means any of the following events: (a) Xxxxx and
its Affiliates shall at any time cease to own, in the aggregate, at least 51% of
the total voting power of all the outstanding capital stock of the Borrower, (b)
neither Xxxxx nor any of its Affiliates shall have the power (whether or not
exercised), by virtue of owning shares of the Capital Stock of the Borrower or
by contract or otherwise, to elect or cause the election of a majority of the
board of directors of the Borrower; or (c) a "Change of Control" as defined in
the Senior Unsecured Note Indenture shall have occurred. For purposes of this
definition "control", when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract, by
family relationship or otherwise; and the terms "controlling" and "controlled"
have the meanings correlative to the foregoing.
"CLOSING DATE" means the date on which all of the conditions precedent
set forth in Section 3.1 to the Initial Extension of Credit shall have been
satisfied or waived.
"COLLATERAL" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Administrative Agent for the benefit of the Secured
Parties.
"COLLATERAL DOCUMENTS" means the Security Agreement, the Intellectual
Property Security Agreement, the Mortgages and any other agreement that creates
or purports to create a Lien in favor
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of the Administrative Agent for the benefit of the Secured Parties, including
the Additional Collateral Documents delivered pursuant to Section 5.13.
"COLLECTING BANKS" has the meaning specified in Section 5.16.
"COMMITMENT" means a Revolving Credit Commitment or a Letter of Credit
Commitment.
"CONFIDENTIAL INFORMATION" means information provided by or on behalf
of the Borrower or any of its Subsidiaries to the Administrative Agent or any
Lender Party or obtained by the Administrative Agent or such Lender Party based
on a review of the books and records of the Borrower or any of its Subsidiaries
in each case pursuant to this Agreement, but does not include any such
information that is or becomes generally available to the public other than as a
result of a breach by the Administrative Agent or any Lender Party of its
obligations hereunder or that is or becomes available to the Administrative
Agent or such Lender Party from a source acting other than on behalf of the
Borrower that is not, to the best of the Administrative Agent's or such Lender
Party's knowledge, acting in violation of a confidentiality agreement with the
Borrower.
"CONSOLIDATED" refers to the consolidation of accounts, in accordance
with GAAP, of any Person and all of its Subsidiaries, and if not specified, the
Borrower and all of its Subsidiaries.
"CONSOLIDATED DEBT TO EBITDA" means, for any fiscal quarter of the
Borrower, a ratio of (a) Debt of the Borrower and its Subsidiaries as at the end
of such fiscal quarter to (b) EBITDA for the most recently completed four fiscal
quarters of the Borrower and its Subsidiaries.
"CONSOLIDATED NET INCOME" means, for any period, the net income of the
Borrower and its Subsidiaries; PROVIDED, HOWEVER, that there shall not be
included in such Consolidated Net Income
(i) any net income of any person if such person is not a
Subsidiary, except that (A) the Borrower's equity in the net income of
any such person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed by
such person during such period to the Borrower or a Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or
other distribution to a Subsidiary, to the limitations contained in
clause (iii) below) and (B) the Borrower's equity in a net loss of any
such person for such period shall be included in determining such
Consolidated Net Income;
(ii) any net income of any person acquired by the Borrower or
a Subsidiary in a pooling of interests transaction for any period prior
to the date of such acquisition;
(iii) any net income of any Subsidiary if such Subsidiary is
subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Subsidiary, directly
or indirectly, to the Borrower, except that (A) the Borrower's equity
in the net income of any such Subsidiary for such period shall be
included in such Consolidated Net Income up to the aggregate amount of
cash actually distributed by such Subsidiary
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during such period to the Borrower or another Subsidiary as a dividend
or other distribution (subject, in the case of a dividend or other
distribution to another Subsidiary, to the limitation contained in this
clause) and (B) the Borrower's equity in a net loss of any such
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(iv) any gain or loss realized upon the sale or other
disposition of any property, plant or equipment of the Borrower or its
Subsidiaries (including pursuant to any sale-and-leaseback arrangement)
other than obsolete property, plant or equipment sold or otherwise
disposed of in the ordinary course of business and any gain (but not
loss) realized upon the sale or other disposition of any capital stock
of any person;
(v) any amortization of debt discount and deferred debt
issuance costs associated with the Existing Credit Agreement;
(vi) any cumulative catch-up adjustment in connection with
SFAS 106 entitled "Employers' Accounting for Post-retirement Benefits
Other Than Pensions;" and
(vii) the cumulative effect of a change in accounting
principles.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.9 or
2.10.
"DEBT" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all Obligations of such Person for the
deferred purchase price of property or services (exclusive of any Obligation of
the Borrower to make any purchase price adjustment under Article III of the
Acquisition Agreement or any like provisions included in any agreement entered
into in connection with a Permitted Acquisition and other than trade liabilities
incurred in the ordinary course of business and payable in accordance with
customary practices), (c) all Obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all Obligations of such
Person 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), (e) all
Obligations of such Person as lessee under Capitalized Leases, (f) all
Obligations, contingent or otherwise, of such Person under acceptance, letter of
credit or similar facilities, (g) all Obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in respect of any capital
stock of or other ownership or profit interest in such Person or any other
Person or any warrants, rights or options to acquire such capital stock but
excluding (i) any dividends payable solely in equity securities, including any
"paid-in-kind" dividends on any preferred stock and (ii) any obligations of the
type referenced in Section 6.6(d), (h) all Obligations of such Person in respect
of Hedge Agreements, (i) all Debt of others referred to in clauses (a) through
(h) above or clause (j) below guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Debt or to advance or supply
funds for the payment or purchase of such Debt, (ii) to
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purchase, sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment of
such Debt or to assure the holder of such Debt against loss, (iii) to supply
funds to or in any other manner invest in the debtor (including any agreement to
pay for property or services irrespective of whether such property is received
or such services are rendered) or (iv) otherwise to assure a creditor against
loss, and (j) all Debt referred to in clauses (a) through (i) above of another
Person secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts, contract rights or inventory) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Debt.
"DEBT ISSUANCE" means any issuance or sale or other incurrence by the
Borrower or any of its Subsidiaries of any Debt; PROVIDED, HOWEVER, that for
purposes of determination of Net Cash Proceeds under Section 2.6(b)(ii), the
term "Debt Issuance" shall not include the issuance, sale or other incurrence of
Debt permitted under Section 6.2.
"DEFAULT" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or time elapse
or both.
"DEFAULTED ADVANCE" means, with respect to any Lender Party at any
time, the portion of any Advance required to be made by such Lender Party to the
Borrower pursuant to Section 2.1 or 2.2 at or prior to such time which has not
been made by such Lender Party or by the Administrative Agent for the account of
such Lender Party pursuant to Section 2.2(e) as of such time. In the event that
a portion of a Defaulted Advance shall be deemed made pursuant to Section
2.15(a), the remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section 2.1 on the
same date as the Defaulted Advance so deemed made in part.
"DEFAULTED AMOUNT" means, with respect to any Lender Party at any time,
any amount required to be paid by such Lender Party to the Administrative Agent
or any other Lender Party hereunder or under any other Loan Document at or prior
to such time which has not been so paid as of such time, including, without
limitation, any amount required to be paid by such Lender Party to (a) the Swing
Line Bank pursuant to Section 2.2(b) to purchase a portion of a Swing Line
Advance made by the Swing Line Bank, (b) the Issuing Bank pursuant to Section
2.3(c) to purchase a portion of a Letter of Credit Advance made by the Issuing
Bank, (c) the Administrative Agent pursuant to Section 2.2(e) to reimburse the
Administrative Agent for the amount of any Advance made by the Administrative
Agent for the account of such Lender Party, (d) any other Lender Party pursuant
to Section 2.13 to purchase any participation in Advances owing to such other
Lender Party and (e) the Administrative Agent or the Issuing Bank pursuant to
Section 10.5 to reimburse the Administrative Agent or the Issuing Bank for such
Lender Party's ratable share of any amount required to be paid by the Lender
Parties to the Administrative Agent or the Issuing Bank as provided therein. In
the event that a portion of a Defaulted Amount shall be deemed paid pursuant to
Section 2.15(b), the remaining portion of such Defaulted Amount shall be
considered a Defaulted Amount originally
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required to be paid hereunder or under any other Loan Document on the same date
as the Defaulted Amount so deemed paid in part.
"DEFAULTING LENDER" means, at any time, any Lender Party that, at such
time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any
action or be the subject of any action or proceeding of a type described in
Section 9.6.
"DE LA RUE" means, collectively, De La Rue Cash Systems and De La Rue
Systems Americas.
"DE LA RUE CASH SYSTEMS" means De La Rue Cash Systems Inc., a
corporation organized under the laws of the State of Delaware, and any legal
successor in interest thereto.
"DE LA RUE SYSTEMS AMERICAS" means De La Rue Systems Americas
Corporation, a corporation organized under the laws of the Commonwealth of
Massachusetts, and any legal successor in interest thereto.
"DISCLOSED LITIGATION" has the meaning specified in Section 3.1(e).
"DISPOSAL" means the discharge, deposit, injection, dumping, spilling,
leaking or placing of any solid waste or hazardous waste, as those terms are
defined by any federal, state, local or foreign law, into or on any land or
water so that such solid waste or hazardous waste or any constituents thereof
may enter the environment or be emitted into the air or discharged into any
waters, including ground waters.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office" opposite
its name on SCHEDULE I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender Party, as the case may be, or such other office of such
Lender Party as such Lender Party may from time to time specify to the Borrower
and the Administrative Agent.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the laws of
the United States of America or any State thereof.
"EBITDA" means, for any period, the sum, determined on a Consolidated
basis, of (i) Consolidated Net Income, (ii) Interest Expense, (iii) income tax
expense, (iv) depreciation expense, (v) extraordinary and nonrecurring losses,
(vi) amortization expense, (vii) all other non-cash charges and expenses,
including non-cash ESOP expenses, the non-cash portion of the effect of SFAS
106, the expense associated with amortization of the intangible and other assets
(including amortization or other expense recognition of any costs associated
with asset write-ups in accordance with APB Nos. 16 and 17), and (viii) all cash
expenses relating to the Transaction which are not capitalized (including any
non-recurring transition costs associated with the Transaction), MINUS
extraordinary and nonrecurring gains (in each case determined in accordance with
GAAP).
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"ELIGIBLE ASSIGNEE" means with respect to any Facility (other than the
Letter of Credit Facility), (a) a Lender; (b) an Affiliate of a Lender; and (c)
subject to the prior approval of the Administrative Agent and, so long as no
Event of Default shall have occurred and be continuing, the Borrower, such
approval by the Borrower not to be unreasonably withheld or delayed, (i) a
commercial bank organized under the laws of the United States, or any State
thereof, and having total assets in excess of $500,000,000; (ii) a savings and
loan association or savings bank organized under the laws of the United States,
or any State thereof, and having total assets in excess of $500,000,000; (iii) a
commercial bank organized under the laws of any other country that is a member
of the OECD or has concluded special lending arrangements with the International
Monetary Fund associated with its General Arrangements to Borrow or of the
Cayman Islands, or a political subdivision of any such country, and having total
assets in excess of $500,000,000, so long as such bank is acting through a
branch or agency located in the United States; (iv) the central bank of any
country that is a member of the OECD; and (v) a finance company, insurance
company or other financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its business
and having total assets in excess of $500,000,000; and, with respect to the
Letter of Credit Facility, a Person that is an Eligible Assignee under subclause
(i) or (iii) of clause (c) of this definition and is approved by the
Administrative Agent and the Borrower, such approval by the Borrower not to be
unreasonably withheld or delayed; PROVIDED, HOWEVER, that no Loan Party or
Affiliate of a Loan Party shall qualify as an Eligible Assignee under this
definition.
"ELIGIBLE INVENTORY" means Inventory of the Borrower located in the
United States or Puerto Rico (minus any reserves reasonably requested by the
Administrative Agent) as to which (a) the Borrower has acquired title, (b) the
Lenders have a first perfected security interest and (c) the Borrower shall have
furnished to the Administrative Agent information adequate for purposes of
identification at times and in form and substance as may be reasonably requested
by the Administrative Agent; PROVIDED, that Inventory shall not constitute
Eligible Inventory (i) if and when the Borrower sells it, otherwise passes title
thereto or consumes it, (ii) if the Lenders release their security interest
therein, or (iii) to the extent that it (A) is obsolete or not currently useable
or salable in the ordinary course of the Borrower's business, (B) is produced in
violation of the Fair Labor Standards Act and subject to the so-called "hot
goods" provision contained in Title 29, Section 215(a) (1) of the United States
Code, or (C) is Inventory held for consumption by the Borrower or a Subsidiary
of the Borrower and not for sale in the ordinary course of business. Any
Inventory which is Eligible Inventory at any time, but which subsequently fails
to meet any of the foregoing requirements, shall forthwith cease to be Eligible
Inventory until such time as it once again meets all of the foregoing
requirements; PROVIDED, HOWEVER, that in no event will Inventory that consists
of raw materials and work-in-process be included in Borrowing Base in an amount
in excess of $5,000,000; and PROVIDED, FURTHER, that, in addition to whatever
other reserves may be applicable to the calculation of Eligible Inventory, a
reserve equal to 5% of the net book value of the Borrower's Inventory will be
deducted from the net book value of the Inventory prior to any such calculation
of Eligible Inventory made after one year of the Closing Date, and such reserve
will be increased to 10% with respect to any such calculation made after two
years of the Closing Date.
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"ELIGIBLE RECEIVABLES" means only such Receivables of the Borrower
(minus any reserves reasonably requested by the Administrative Agent which are
reflected on the books and records of the Borrower (valued at their book value
net of any applicable reserves), but shall in no event include:
(a) Receivables that do not arise out of sales of goods or rendering of
services in the ordinary course of the Borrower's business;
(b) Receivables on terms other than those normal or customary in the
Borrower's business;
(c) Receivables owing from any Person that is an Affiliate of the
Borrower; PROVIDED, HOWEVER, that the limitation in this clause (c) shall not
apply to any Person who is an Affiliate solely because its equity securities are
owned by Xxxxx and Companies, Inc. or any investment funds it manages;
(d) Receivables more than 120 days past the date due;
(e) Receivables owing from any Person that shall take or be the subject
of any action or proceeding of a type described in Section 9.6;
(f) Receivables (i) owing from any Person that is also a supplier to or
creditor of the Borrower unless such Person has waived any right of set-off in a
manner reasonably acceptable to the Administrative Agent or (ii) representing
any manufacturer's or supplier's credits, discounts, incentive plans or similar
arrangements entitling a Borrower to discounts on future purchases therefrom;
PROVIDED, HOWEVER, the limitations in (f)(i) hereof will not apply to any
Receivables due from a Lender Party hereto.
(g) Receivables owing from an account debtor that is an agency,
department or instrumentality of the United States or any State thereof unless a
Borrower shall have satisfied (within 60 days of the Closing Date) the
requirements of the Assignment of Claims Act of 1940, as amended, and any
similar State legislation and the Administrative Agent is satisfied as to the
absence of set-offs, counterclaims and other defenses on the part of such
account debtor.
(h) Receivables in respect of which the Security Agreement, after
giving effect to the related filings of financing statements that have then been
made, if any, does not or has ceased to create a valid and perfected first and
only priority lien or security interest in favor of the Secured Parties securing
the Secured Obligations.
; PROVIDED, HOWEVER, that the limitations in clauses (a) to (h) above shall not
be applicable to any Receivables acquired in the Acquisition and whose
collectibility is guaranteed in full by De La Rue; and, PROVIDED, FURTHER, in
addition to whatever other reserves may be applicable to the calculation of
Eligible Receivables, a reserve equal to 5% of the net book value of Borrower's
Receivables will
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be deducted from the net book value of the Receivables for any calculation of
Eligible Receivables made after one year of the Closing Date and such reserve
will be increased to 10% to any such calculation made after two years of the
Closing Date.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to public health and
safety or the environment, including, without limitation, (a) by any
governmental or regulatory authority or third party for enforcement, cleanup,
Removal, Response, Remedial or other actions or damages and (b) by any
governmental or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any international or transnational law,
federal, state, local or foreign statute, law, ordinance, rule, regulation,
code, order, writ, judgment, injunction, decree or judicial or agency
interpretation, policy or guidance relating to pollution or protection of the
environment or natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage, disposal, threatened
release, release or discharge of Hazardous Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"EQUIPMENT" has the meaning specified in Section 1(a) of the Security
Agreement.
"EQUITY ISSUANCE" means any sale or issuance by the Borrower or any of
its Subsidiaries of any capital stock or other ownership of profit interest, any
securities convertible or exchangeable for capital stock or other ownership or
profit interest or any warrants, rights or options to acquire capital stock or
other ownership or profit interest; PROVIDED, HOWEVER, that for purposes of
determination of Net Cash Proceeds under Section 2.6(b)(ii), the term "Equity
Issuance" shall not include any issuance or sale of (a) capital stock of the
Borrower to any Person as consideration paid in connection with, or to enable
the Borrower or a Subsidiary of the Borrower to fund, a Permitted Acquisition;
(b) capital stock of the Borrower issued on or before the Closing Date in
connection with the Acquisition; (c) common stock of the Borrower issued to any
director of the Borrower required by applicable law in connection with such
person acting in such capacity; and (d) common stock of the Borrower to
management and employees thereof, respectively, pursuant to a stock option plan
subscription agreement, incentive plan or similar arrangement or the exercise of
options issued pursuant thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
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"ERISA AFFILIATE" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under common
control with any Loan Party, within the meaning of Section 414 of the Internal
Revenue Code.
"ERISA EVENT" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with respect
to a Plan; (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan under ERISA Section 4041(c), pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a
facility of any Loan Party or any ERISA Affiliate in the circumstances described
in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA
Affiliate from a Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the
conditions for imposition of a lien under Section 302(f) of ERISA shall have
been met with respect to any Plan; (g) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA that constitutes grounds for the termination
of, or the appointment of a trustee to administer, such Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Eurodollar Lending Office"
opposite its name on SCHEDULE I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party (or, if no such office is specified,
its Domestic Lending Office), or such other office of such Lender Party as such
Lender Party may from time to time specify to the Borrower and the
Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing, an interest rate per annum
(rounded upward, if necessary, to the nearest 1/100 of one percent) as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to such Interest Period which appears on the Telerate
Page 3750 as of 11:00 a.m. (New York time) two Business Days before the first
day of such Interest Period; PROVIDED, HOWEVER, that if the rate described above
does not appear on the Telerate System on any applicable interest determination
date, the Eurodollar Rate shall be the rate (rounded upward as described above,
if necessary) for deposits in U.S. dollars for a period substantially equal to
the interest period on the Reuters Page "LIBO" (or such other page as may
replace the LIBO page on
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that service for the purpose of displaying such rates), as of 11:00 a.m. (London
time) two Business Days before the first day of such Interest Period.
If both the Telerate and Reuters system are unavailable, then the rate
for that date will be determined on the basis of the offered rates for deposits
in U.S. dollars for a period of time comparable to such Interest Period which
are offered by four major banks in the London interbank market at approximately
11:00 a.m. (New York time) two Business Days before the first day of such
Interest Period as selected by the Administrative Agent. The principal London
office of each of the four major London banks will be requested to provide a
quotation of its U.S. dollar deposit offered rate. If at least two such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the rate
for that date will be determined on the basis of the rates quoted for loans in
U.S. dollars to leading European banks for a period of time comparable to such
Interest Period offered by major banks in New York City at approximately 11:00
a.m. (New York time) two Business Days before the first day of such Interest
Period. In the event that the Administrative Agent is unable to obtain any such
quotation as provided above, it will be deemed that the Eurodollar Rate for such
Interest Rate cannot be determined.
In the event that the Board of Governors of the Federal Reserve System
shall impose a Eurodollar Rate Reserve Percentage with respect to Eurocurrency
Liabilities, the Eurodollar Rate for an Interest Period shall be equal to the
amount determined above for such Interest Period divided by a percentage equal
to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance that bears interest as
provided in Section 2.7(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" means, for any Interest Period for
all Eurodollar Rate Advances comprising part of the same Borrowing, the reserve
percentage applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Rate Advances is determined) having a term equal to such Interest
Period.
"EVENTS OF DEFAULT" has the meaning specified in Article 9.
"EXISTING DEBT" means Debt of the Borrower and its Subsidiaries
outstanding immediately before giving effect to the Transaction and described in
SCHEDULE 4.18(a).
"EXTRAORDINARY RECEIPT" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business, to the extent
(and only to the extent) consisting of
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proceeds of insurance (other than proceeds of business interruption insurance to
the extent such proceeds constitute compensation for lost earnings) or
condemnation awards (and payments in lieu thereof); PROVIDED, HOWEVER, that an
Extraordinary Receipt shall not include cash receipts received from proceeds of
insurance or condemnation awards (and payments in lieu thereof) to the extent
that such proceeds, awards or payments are reinvested in the business of the
Borrower and its Subsidiaries in a manner consistent with the requirements of
Section 6.7 hereof, so long as (i) such application is made within 180 days
after such Person's receipt of such proceeds, awards or payments and (ii) such
proceeds or payments or, if such reinvestment is in a project authorized by the
Board of Directors of the Borrower that will take longer than 180 days to
complete, the period of time necessary to complete such project.
"FACILITY" means the Revolving Credit Facility, the Letter of Credit
Facility or the Swing Line Facility.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FISCAL YEAR" means, with respect to the Borrower and its Subsidiaries,
any period of fifty-two (or, if applicable, fifty-three) consecutive weeks
ending on the Saturday occurring nearest to June 30 of any year. References to a
Fiscal Year with a number corresponding to any calendar year (e.g., "FISCAL YEAR
1998") refer to the Fiscal Year ending on the Saturday occurring nearest to June
30 of that calendar year.
"FLEET" means Fleet National Bank in its capacity as a Lender or
Issuing Bank.
"FOREIGN SUBSIDIARY" means any Subsidiary organized under the laws of
any jurisdiction other than the United States of America or any State thereof.
"FUNDED DEBT" means, with respect to the Borrower, the Advances, and
with respect to the Borrower and the other Loan Parties and any other Person,
all other Debt of such Person that by its terms matures more than one year after
the date of determination or matures within one year from such date but is
renewable or extendible, at the option of such Person, to a date more than one
year after such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period of more
than one year after such date, including the current portion of all such Debt.
"GAAP" has the meaning specified in Section 1.3.
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"GUARANTEED OBLIGATIONS" has the meaning specified in the Subsidiary
Guaranties.
"GUARANTORS" means (a) each Domestic Subsidiary of the Borrower and (b)
each Person which shall have executed and delivered or become a party to a
Subsidiary Guaranty hereunder.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any applicable Environmental Law.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
"HEDGE BANK" means any Lender Party in its capacity as a party to a
Bank Hedge Agreement.
"INDEMNIFIED PARTY" has the meaning specified in Section 11.4(b).
"INFORMATION MEMORANDUM" means the information memorandum, dated
September 1998, by the Administrative Agent to the Lenders.
"INITIAL EXTENSION OF CREDIT" means the earlier to occur of the initial
Borrowing and the initial issuance of a Letter of Credit.
"INITIAL ISSUING BANK" has the meaning specified in the recital of
parties to this Agreement.
"INITIAL LENDERS" has the meaning specified in the recital of parties
to this Agreement.
"INSUFFICIENCY" means, with respect to any Plan, the amount, if any, by
which its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA, exceed the amount equal to 110% of its assets.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" has the meaning specified in
Section 3.1(a)(v).
"INTEREST EXPENSE" means, with respect to any Person for any period,
interest expense on all Debt of such Person for such period net of interest
income for such period, whether paid or accrued, determined on a Consolidated
basis for such Person and its Subsidiaries and in accordance with GAAP, and
including, without limitation, (a) in the case of the Borrower, interest expense
in respect of Debt resulting from Advances, (b) the interest component of all
obligations under Capitalized Leases, (c) commissions, discounts and other fees
and charges payable in connection with letters of credit (including, without
limitation, Letters of Credit), (d) the net payment, if any, payable in
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connection with Hedge Agreements less the net credit, if any, received in
connection with Hedge Agreements and (e) all fees paid by the Borrower pursuant
to Section 2.8(a).
"INTEREST PERIOD" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such Eurodollar
Rate Advance or the date of the Conversion of any Prime Rate Advance into such
Eurodollar Rate Advance, and ending on the last day of the period selected by
the Borrower pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below. The duration of each such Interest Period shall be one,
two, three or six months, as the Borrower may, upon notice received by the
Administrative Agent not later than 11:00 A.M. (New York time) on the third
Business Day prior to the first day of such Interest Period, select; PROVIDED,
HOWEVER, that:
(a) The Borrower may not select any Interest Period with
respect to any Eurodollar Rate Advance under a Facility that ends after
any principal repayment installment date for such Facility unless,
after giving effect to such selection, the aggregate principal amount
of Prime Rate Advances and of Eurodollar Rate Advances having Interest
Periods that end on or prior to such principal repayment installment
date for such Facility shall be at least equal to the aggregate
principal amount of Advances under such Facility due and payable on or
prior to such date;
(b) Whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, PROVIDED, HOWEVER, that, if such extension would cause
the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the
next preceding Business Day;
(c) Whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months in
such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month; and
(d) Until the earlier of (i) 120 days after the Closing Date,
or (ii) the date on which the Administrative Agent notifies the
Borrower that the syndication of the Facilities has been completed,
only Interest Periods with a duration of seven days, if available to
all the Lenders, shall be available to the Borrower for Eurodollar Rate
Advances, or if such Interest Periods are not available to all the
Lenders, Interest Periods of such duration as may be selected by the
Administrative Agent and are acceptable to the other Lenders.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
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"INVENTORY" of any person means all of such Person's now owned and
hereafter acquired inventory, goods, merchandise and other personal property,
wherever located, to be furnished under any contract of service or held for sale
or lease, all returned goods, raw materials, other materials and supplies of any
kind, nature or description which are or might be consumed in such Person's
business or used in connection with the packing, shipping, advertising, selling
or finishing of such goods, merchandise and such other personal property, and
all documents of title or other documents representing them.
"INVESTMENT" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock or other ownership or
profit interest, warrants, rights, options, obligations or other securities of
such Person, any capital contribution to such Person or any other investment in
such Person, including, without limitation, any arrangement pursuant to which
the investor incurs Debt of the types referred to in clause (i) or (j) of the
definition of "Debt" in respect of such Person.
"ISSUING BANK" means the Initial Issuing Bank and each Eligible
Assignee to which Letter of Credit Commitment hereunder has been assigned
pursuant to Section 11.7.
"XXXXX" means Xxxxx Investment Associates IV, L.P., a Delaware limited
partnership. As used in the definition of "Change of Control", the term "Xxxxx"
shall be deemed to mean Xxxxx & Company, Inc. and all Affiliates thereof owning
any outstanding voting stock in the Borrower as of the date hereof, which
Affiliates are listed on SCHEDULE II hereto.
"L/C CASH COLLATERAL ACCOUNT" has the meaning specified in the Security
Agreement.
"L/C RELATED DOCUMENTS" has the meaning specified in Section
2.4(c)(ii)(A).
"LEFEBURE DIVISION" has the meaning specified in the Preliminary
Statements.
"LENDER PARTY" means any Lender, the Issuing Bank or the Swing Line
Bank.
"LENDERS" means the Initial Lenders and each Person that shall become a
Lender hereunder pursuant to Section 11.7.
"LETTER OF CREDIT" means any Letter of Credit issued hereunder (as
specified in Section 2.3(a)).
"LETTER OF CREDIT ADVANCE" means an advance made by the Issuing Bank or
any Revolving Credit Lender pursuant to Section 2.3(c).
"LETTER OF CREDIT AGREEMENT" has the meaning specified in Section
2.3(a).
"LETTER OF CREDIT COMMITMENT" means, with respect to the Issuing Bank,
the amount set forth opposite the Issuing Bank's name on SCHEDULE I hereto under
the caption "Letter of Credit
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Commitment" or, if the Issuing Bank has entered into one or more Assignments and
Acceptances, set forth for the Issuing Bank in the Register maintained by the
Administrative Agent pursuant to Section 11.7(d) as the Issuing Bank's "Letter
of Credit Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.5.
"LETTER OF CREDIT FACILITY" means, at any time, an amount equal to the
amount of the Issuing Bank's Letter of Credit Commitment at such time, as such
amount may be reduced pursuant to Section 2.5.
"LIEN" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
"LOAN DOCUMENTS" means (a) this Agreement, (b) the Notes, (c) each
Subsidiary Guaranty, (d) the Collateral Documents, (e) each Letter of Credit
Agreement, (f) each Bank Hedge Agreement, (g) each Additional Collateral
Document, and all other agreements, instruments and documents executed in
connection therewith, in each case as the same may at any time be amended,
supplemented, restated or otherwise modified and in effect.
"LOAN PARTIES" means the Borrower, each Guarantor, and each other
Person who shall, at any time, have executed and delivered a Loan Document to
the Administrative Agent.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any material adverse change in (a) the
business, condition (financial or otherwise), results of operations or
properties of any Loan Party and its Subsidiaries (taken as a whole), (b) the
ability of any Loan Party to perform its obligations under the Loan Documents to
which it is a party or (c) any material aspect of the Transaction.
"MATERIAL ADVERSE EFFECT" has the meaning specified in Section 3.1(e).
"MATERIAL CONTRACT" means, with respect to any Person, each contract
listed on SCHEDULE 4.22, each contract which is a replacement or a substitute
for any contract listed on such Schedule and each other contract to which such
Person is a party which is material to the business, condition (financial or
otherwise), operations, performance, properties or prospects of such Person.
"MORTGAGE" means each mortgage, deed of trust or other similar document
to be executed and delivered by the appropriate Loan Party, in form and
substance acceptable to the Administrative Agent and the Lenders in order (a) to
provide that such Loan Party is the mortgagor or grantor, (b) to comply with
and/or provide for specific laws of the jurisdictions in which the property to
be encumbered is located, and (c) to assure that the Administrative Agent for
the benefit of the Secured Parties has a perfected Lien on the Mortgaged
Property.
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"MORTGAGEE POLICIES" has the meaning assigned to that term in Section
3.1(a)(iv)(B).
"MORTGAGED PROPERTY" shall have the meaning assigned to such term in
Section 4.20, and shall also include any parcel (or adjoining parcels) of real
property (including any leaseholds) acquired by any Loan Party after the Closing
Date subject to a Mortgage granted to the Administrative Agent for the benefit
of the Secured Parties pursuant to Section 5.12.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and at least one Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which any
Loan Party or any ERISA Affiliate could have liability under Section 4064 or
4069 of ERISA in the event such plan has been or were to be terminated.
"NET CASH PROCEEDS" means, with respect to any sale, lease, transfer or
other disposition of any asset or any Debt Issuance or Equity Issuance by any
Person, or any Extraordinary Receipt received by or paid to or for the account
of any Person, the aggregate amount of cash received from time to time (whether
as initial consideration or through payment or disposition of deferred
consideration) by or on behalf of such Person in connection with such
transaction after deducting therefrom only (without duplication) (a) reasonable
and customary brokerage commissions, underwriting fees and discounts, legal
fees, finder's fees and other similar out-of-pocket costs, (b) the amount of
taxes paid or reasonably estimated to be payable in connection with or as a
result of such transaction, (c) the amount of any Debt secured by a Lien on an
asset that, by the terms of such transaction, is required to be repaid upon such
disposition of such asset, in each case to the extent, but only to the extent,
that the amounts so deducted are, at the time of receipt of such cash, actually
paid to a Person that is not an Affiliate of such Person or any Loan Party or
any Affiliate of any Loan Party and are properly attributable to such
transaction or to the asset that is the subject thereof, and (d) appropriate
amounts provided or to be provided by the Borrower or any of its Subsidiaries as
a reserve, in accordance with GAAP, with respect to any liabilities associated
with such transaction and retained by the Borrower or any such Subsidiary after
such transaction and other appropriate amounts to be used by the Borrower or any
of its Subsidiaries to discharge or pay on a current basis any other liabilities
associated with such transaction; PROVIDED, HOWEVER, that for purposes of
Section 2.6(b)(i), with respect to an Asset Disposition the term "Net Cash
Proceeds" shall not include proceeds to the extent that such proceeds are
reinvested in the business of the Borrower and its Subsidiaries in a manner
consistent with the requirements of Section 6.7 hereof so long as such
application is made within 180 days after such Person's receipt of such
proceeds, or if such reinvestment is in a project authorized by the Board of
Directors of the Borrower that will take longer than 180 days to complete, the
period of time necessary to complete such project.
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"NOTE" means a Revolving Credit Note or a Swing Line Note.
"NOTICE OF BORROWING" has the meaning specified in Section 2.2(a).
"NOTICE OF ISSUANCE" has the meaning specified in Section 2.3(a).
"NOTICE OF RENEWAL" has the meaning specified in Section 2.1(c).
"NOTICE OF SWING LINE BORROWING" has the meaning specified in Section
2.2(b).
"NPL" means the National Priorities List under CERCLA.
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 9.6. Without limiting the generality of the foregoing, the Obligations
of the Loan Parties under the Loan Documents include (a) the obligation to pay
principal, interest, Letter of Credit commissions, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other amounts payable by any
Loan Party under any Loan Document, HOWEVER, (b) the obligation of any Loan
Party to reimburse any amount in respect of any of the foregoing that any Lender
Party may, after the occurrence and during the continuance of an Event of
Default, elect to pay or advance on behalf of such Loan Party, and (c) any other
obligations arising out of or under, based upon or relating to the Loan
Documents.
"OECD" means the Organization for Economic Cooperation and Development.
"OPEN YEAR" has the meaning specified in Section 4.15.
"OTHER TAXES" has the meaning specified in Section 2.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PERMITTED ACQUISITIONS" means any acquisition by the Borrower of all
or substantially all of the assets or the capital stock of any Person which
either (a) has been consented to in writing by the Administrative Agent and the
Required Lenders, or (b) complies with each of the following: (i) such Person is
engaged in substantially the same or similar line of business as the Borrower or
any of its Subsidiaries, (ii) the aggregate consideration payable in respect of
any individual acquisition shall not exceed $5,000,000 for the first year
following the Closing Date and $10,000,000 in each year thereafter, (iii) the
aggregate consideration payable in respect of acquisitions contemplated by
clause (b) of this definition shall not exceed for all such acquisitions
$15,000,000 in any twelve (12)
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month period ending on the last day of the calendar month immediately preceding
the closing of the proposed acquisition, (iv) such Person (in the reasonable
judgment of the Borrower) on a consolidated basis with its Subsidiaries being
acquired in the proposed acquisition had positive pro forma EBITDA for the
twelve (12) month period ending on the last day of the calendar month
immediately preceding the closing of the proposed acquisition, (v) after giving
effect to the proposed acquisition, the amount of the lesser of the Revolving
Credit Commitments of all Lenders and the Borrowing Base MINUS the sum of
Revolving Advances PLUS Letter of Credit Advances PLUS Swing Line Advances PLUS
the aggregate Available Amount of all Letters of Credit then outstanding shall
equal at least $10,000,000, (vi) the Borrower shall give the Administrative
Agent and the Lenders not less than fifteen (15) Business Days prior written
notice of its intention to make a Permitted Acquisition, such notice to include
the proposed amounts, date and form of the proposed transaction, a reasonable
description of the stock or assets to be acquired and the location of all
assets, a description and calculation in reasonable detail of the pro forma
adjustments to EBITDA of the target of such acquisition, and a calculation in
reasonable detail of the pro forma effect of such acquisition on matters covered
by the financial covenants contained herein, (vii) concurrently with the making
of a Permitted Acquisition consisting of assets, the Borrower shall, as
additional collateral security for the Obligations, grant to the Administrative
Agent for the ratable benefit of the Lenders, prior liens on and security
interests in any of the acquired assets by the execution and delivery to the
Administrative Agent of such agreements, instruments and documents as shall be
satisfactory in form and substance to the Administrative Agent, (viii) after
giving effect to the proposed acquisition on an historical pro forma basis,
there would not be any breach of the covenants in Article 8 hereof for the four
quarter period ended immediately prior to the proposed date of such acquisition,
and (ix) the Borrower shall not make any acquisition at any time during which an
Event of Default shall exist and be continuing or would exist after giving
effect to such acquisition.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (a) Liens for taxes, assessments and governmental charges or
levies (i) not yet delinquent or (ii) the amount or validity of which is
currently being contested in good faith by appropriate proceedings diligently
conducted and with respect to which reserves in conformity with GAAP have been
maintained or (iii) in an aggregate amount not to exceed $100,000; (b) Liens
imposed by law, such as materialmen's, mechanics', carriers', workmen's and
repairmen's Liens and other similar Liens arising in the ordinary course of
business securing obligations that are not overdue for a period of more than 60
days; or which are being contested in good faith by appropriate proceedings
diligently conducted and provisions for the payment of such Liens has been made
on the books of such Person; (c) pledges or deposits to secure obligations under
workers' compensation laws or similar legislation or to secure public or
statutory obligations (including, without limitation, pledges or deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements); PROVIDED that provisions for the payment of such Liens has been
made on the books of such Person; (d) Permitted Real Property Encumbrances, (e)
Liens arising by reason of any judgment, decree or order of any court or other
Governmental Authority, if appropriate legal proceedings which may have been
duly initiated for the review of such judgment, decree or order, are being
diligently prosecuted and shall not have been finally terminated or the period
within which such proceedings may be initiated shall not have
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expired; (f) Liens to secure the performance of bids, trade contracts (other
than for borrowed money), obligations for utilities, leases, statutory
obligations, surety and appeal bonds, performance bonds, judgment and like
bonds, replevin and similar bonds and other obligations of a like nature
incurred in the ordinary course of business; (g) Liens granted to secure
obligations in respect of any Hedge Agreements and any refinancings thereof
permitted by this Agreement; and (h) Liens (other than Liens described in
clauses (a)-(g) of this definition) imposed by operation of law in an aggregate
amount not to exceed $100,000.
"PERMITTED REAL PROPERTY ENCUMBRANCES" means, with respect to any
particular Mortgaged Property, (i) those liens, encumbrances and other matters
affecting title to any Mortgaged Property listed in the Mortgagee Policies in
respect thereof and as of the date of delivery of such Mortgagee Policies to
Administrative Agent in accordance with the terms hereof, reasonably acceptable
to the Lenders and (ii) such easements, encroachments, covenants, rights of way,
minor defects, irregularities or encumbrances on title which do not arise out of
the incurrence of any Debt and which do not impair the use of such Mortgaged
Property for the purpose for which it is held by the mortgagor thereof, or the
Lien granted to the Administrative Agent for the benefit of the Secured Parties.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"PRE-COMMITMENT INFORMATION" has the meaning specified in Section
3.1(g).
"PRIME RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the higher of:
(a) the rate of interest announced publicly by Fleet in
Boston, Massachusetts, from time to time, as Fleet's prime rate, which
is not necessarily the lowest rate made available by Fleet; or
(b) 1/2 of one percent per annum above the Federal Funds Rate.
"PRIME RATE ADVANCE" means an Advance that bears interest as provided
in Section 2.7(a)(i).
"PRO RATA SHARE" of any amount means, with respect to any Revolving
Credit Lender at any time, the product of such amount times a fraction the
numerator of which is the amount of such Lender's Revolving Credit Commitment at
such time and the denominator of which is the Revolving Credit Facility at such
time.
"RECEIVABLES" means all Receivables referred to in Section 1(c) of the
Security Agreement.
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"REDUCTION AMOUNT" has the meaning specified in Section 2.6(b)(iv).
"REGISTER" has the meaning specified in Section 11.7(d).
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Materials) or into or from any property, including, without limitation, the
movement of any Hazardous Materials through the air, soil, surface waters or
ground water.
"REMEDIAL" shall have the meaning as set forth in CERCLA at 42
U.S.C. Section 9601(24) and/or any other applicable Environmental Laws.
"REMOVAL" shall have the meaning as set forth in CERCLA at 42
U.S.C. Section 9601(23) and/or any other applicable Environmental Laws.
"REQUIRED LENDERS" means at any time Lenders owed or holding greater
than 50% of the sum of (a) the aggregate principal amount of the Advances
outstanding at such time and (b) the aggregate Available Amount of all Letters
of Credit outstanding at such time, or, if no such principal amount and no
Letters of Credit are outstanding at such time, Lenders holding greater than 50%
of the aggregate of the Revolving Credit Commitments; PROVIDED, HOWEVER, that if
any Lender shall be a Defaulting Lender at such time, there shall be excluded
from the determination of Required Lenders at such time (i) the aggregate
principal amount of the Advances owing to such Lender (in its capacity as a
Lender) and outstanding at such time, and (ii) the aggregate Revolving Credit
Commitment of such Lender at such time. For purposes of this definition, the
aggregate principal amount of Swing Line Advances owing to the Swing Line Bank,
Letter of Credit Advances owing to the Issuing Bank and the Available Amount of
each Letter of Credit shall be considered to be owed to the Revolving Credit
Lenders ratably in accordance with their respective Revolving Credit
Commitments.
"RESPONSE" shall have the meaning as set forth in CERCLA at 42 U.S.C.
Section 9601(25) and/or any other applicable Environmental Laws.
"RESPONSIBLE OFFICER" means, with respect to any Loan Party, the Chief
Executive Officer, the President, the Chief Financial Officer, any Vice
President, the Controller or the Treasurer of such Loan Party.
"RETURNS" has the meaning specified in Section 4.15.
"REVOLVING CREDIT ADVANCE" has the meaning specified in Section 2.1(a).
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"REVOLVING CREDIT AVAILABILITY" means, at any time, the lesser of (a)
the Revolving Credit Facility and (b) the Borrowing Base.
"REVOLVING CREDIT BORROWING" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the Revolving
Credit Lenders.
"REVOLVING CREDIT COMMITMENT" means, with respect to any Revolving
Credit Lender at any time, the amount set forth opposite such Lender's name on
SCHEDULE I hereto under the caption "Revolving Credit Commitment" or, if such
Lender has entered into one or more Assignments and Acceptances, set forth for
such Lender in the Register maintained by the Administrative Agent pursuant to
Section 11.7(d) as such Lender's "Revolving Credit Commitment," as such amount
may be reduced at or prior to such time pursuant to Section 2.5.
"REVOLVING CREDIT FACILITY" means, at any time, the aggregate amount of
the Revolving Credit Lenders' Revolving Credit Commitments at such time.
"REVOLVING CREDIT LENDER" means any Lender that has a Revolving Credit
Commitment.
"REVOLVING CREDIT NOTE" means a promissory note of the Borrower payable
to the order of any Revolving Credit Lender, in substantially the form of
EXHIBIT C hereto, evidencing the aggregate indebtedness of the Borrower to such
Lender resulting from the Revolving Credit Advances made by such Lender.
"REVOLVING CREDIT TERMINATION DATE" means the earlier to occur of (a)
December 31, 2002 and (b) the Termination Date.
"SECURED OBLIGATIONS" has the meaning specified in the Security
Agreement.
"SECURED PARTIES" means the Administrative Agent, the Lender Parties,
and the Hedge Banks and the other Persons the Obligations owing to which are or
are purported to be secured by the Collateral under the terms of the Collateral
Documents.
"SECURITY AGREEMENT" has the meaning specified in Section 3.1(a)(ii).
"SENIOR DEBT" means, as at any date of determination thereof, the
aggregate outstanding principal balance of all amounts borrowed pursuant to this
Credit Agreement.
"SENIOR UNSECURED NOTES" means the 11% senior notes due 2003, issued
pursuant to the Senior Unsecured Notes Indenture, as the same have been, to the
date hereof, and shall be, subject to the terms and conditions of the Loan
Documents, amended, supplemented or otherwise modified and in effect from time
to time.
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"SENIOR UNSECURED NOTE INDENTURE" means the indenture, dated as of July
29, 1993, between the Borrower, as issuer, and United States Trust Company of
New York, as trustee, pursuant to which the Senior Unsecured Notes were issued,
as the same has been, to the date hereof, and shall be, subject to the terms and
conditions of the Loan Documents, amended, supplemented or otherwise modified
and in effect from time to time.
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and no Person other than the Loan Parties and the
ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party
or any ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"SOLVENT" and "SOLVENCY" 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, without
limitation, contingent liabilities, of such Person, (b) the present fair
saleable 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 such debts and liabilities as they mature and (d) such Person is
not engaged in business or a transaction, and is not about to engage in business
or a transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities at any time
shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"STANDBY LETTER OF CREDIT" means any Letter of Credit other than a
Trade Letter of Credit.
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership,
joint venture or limited liability company or (c) the beneficial interest in
such trust or estate, is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries. Unless otherwise specified
herein, the term Subsidiary shall mean a Subsidiary of the Borrower.
"SUBSIDIARY GUARANTY" has the meaning specified Section 3.1(a)(vi).
"SURVIVING DEBT" shall have the meaning specified in Section 3.1(c).
"SWING LINE ADVANCE" means an advance made by (a) the Swing Line Bank
pursuant to Section 2.1(b), or (b) any Revolving Credit Lender pursuant to
Section 2.2(b).
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"SWING LINE BANK" has the meaning specified in the recital of parties
to this Agreement.
"SWING LINE BORROWING" means a borrowing consisting of a Swing Line
Advance made by the Swing Line Bank.
"SWING LINE FACILITY" has the meaning specified in Section 2.1(b).
"SWING LINE NOTE" means a promissory note of the Borrower payable to
the order of the Swing Line Bank, in substantially the form of EXHIBIT H hereto,
evidencing the aggregate indebtedness of the Borrower to the Swing Line Bank
resulting from the Swing Line Advances made by the Swing Line Bank.
"TAXES" has the meaning specified in Section 2.12(a).
"TERMINATION DATE" means the date of termination in whole of the
Commitments pursuant to Section 2.5 or Article 9.
"TRADE LETTER OF CREDIT" means any Letter of Credit that is issued for
the benefit of a supplier of Inventory to the Borrower or any of its
Subsidiaries to effect payment for such Inventory, the conditions to drawing
under which include the presentation to the Issuing Bank of negotiable bills of
lading, invoices and related documents sufficient, in the judgment of the
Issuing Bank, to create a valid and perfected lien on or security interest in
such Inventory, bills of lading, invoices and related documents in favor of the
Issuing Bank.
"TRANSACTION" means the transactions contemplated by the Acquisition
Documents and the Loan Documents.
"TYPE" refers to the distinction between Advances bearing interest at
the Prime Rate and Advances bearing interest at the Eurodollar Rate.
"UNUSED REVOLVING CREDIT COMMITMENT" means, with respect to any
Revolving Credit Lender, at any time, (a) such Lender's Revolving Credit
Commitment at such time MINUS (b) the sum of (i) the aggregate principal amount
of all Revolving Credit Advances and Letter of Credit Advances made by such
Lender (in its capacity as a Lender) and outstanding at such time, PLUS (ii)
such Lender's Pro Rata Share of (A) the aggregate Available Amount of all
Letters of Credit outstanding at such time and (B) the aggregate principal
amount of all Letter of Credit Advances made by the Issuing Bank pursuant to
Section 2.3(c) and outstanding at such time.
"VOTING STOCK" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.
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"WELFARE PLAN" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of which
any Loan Party could have liability.
"WITHDRAWAL LIABILITIES" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.2 COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."
SECTION 1.3 ACCOUNTING TERMS. As used herein and in any Note or other
Loan Document, and any certificate or other document made or delivered pursuant
hereto or thereto, all accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles consistent
with those applied in the preparation of the financial statements referred to in
Section 4.6 ("GAAP").
SECTION 1.4 OTHER DEFINITIONAL PROVISIONS. Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Note, any other Loan document or any certificate or other
document made or delivered pursuant hereto.
ARTICLE 2
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.1 THE ADVANCES.
(a) THE REVOLVING CREDIT ADVANCES. Each Revolving Credit Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each a "REVOLVING CREDIT ADVANCE") to the Borrower from time to time
on any Business Day during the period from the date hereof until the Revolving
Credit Termination Date in an amount for each such Advance not to exceed such
Lender's Unused Revolving Credit Commitment at such time; PROVIDED, HOWEVER,
that no Revolving Credit Lender shall have any obligation to make a Revolving
Credit Advance under this Section 2.1(a) to the extent such Revolving Credit
Advance would cause the aggregate amount of Revolving Credit Advances
outstanding (after giving effect to any immediate application of the proceeds
thereof) to exceed the Revolving Credit Availability. Each Revolving Credit
Borrowing shall be in an aggregate amount of $500,000 (unless the Swing Line
Bank has exercised discretion not to make loans pursuant to the Swing Line
Facility, in which case, such minimum aggregate amount shall be $200,000) or, if
in excess thereof, an integral multiple of $100,000 (other than, in each case, a
Borrowing the proceeds of which shall be used solely to repay or prepay in full
outstanding Swing Line Advances or outstanding Letter of Credit Advances) and
shall consist of
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Revolving Credit Advances made simultaneously by the Revolving Credit Lenders
ratably according to their Revolving Credit Commitments. Within the limits of
each Revolving Credit Lender's Unused Revolving Credit Commitment in effect from
time to time, the Borrower may borrow, repay and reborrow Revolving Credit
Advances.
(b) THE SWING LINE ADVANCES. The Borrower may request the Swing Line
Bank to make, and the Swing Line Bank shall make, on the terms and conditions
hereinafter set forth, Swing Line Advances to the Borrower from time to time on
any Business Day during the period from the date hereof until the Revolving
Credit Termination Date (i) in an aggregate amount not to exceed at any time
outstanding $5,000,000 (the "SWING LINE FACILITY") and (ii) in an amount for
each such Swing Line Borrowing not to exceed the aggregate of the Unused
Revolving Credit Commitments of the Revolving Credit Lenders at such time.
Notwithstanding the foregoing, the Swing Line Bank can refuse to make Swing Line
Advances to the Borrower by declaring that the Swing Line Facility shall not be
available for Borrowings by giving notice to the Borrower not later than the
fourth Business Day prior to the date on which such unavailability of the Swing
Line Facility shall commence. No Swing Line Advance shall be used for the
purpose of funding the payment of principal of any other Swing Line Advance.
Each Swing Line Borrowing shall be made as a Prime Rate Advance. Within the
limits of the Swing Line Facility and within the limits referred to in clause
(ii) above, so long as the Swing Line Bank, in its discretion, elects to make
Swing Line Advances, the Borrower may borrow and reborrow under this Section
2.1(b) and may repay or prepay the Swing Line Advances at such times prior to
the Termination Date, and in such integral multiples, as the Borrower may elect.
(c) LETTERS OF CREDIT. The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit for the account of
the Borrower from time to time on any Business Day during the period from the
Closing Date until sixty (60) days before the Revolving Credit Termination Date
(i) in an aggregate Available Amount for all Letters of Credit not to exceed at
any time the Issuing Bank's Letter of Credit Commitment at such time and (ii) in
an Available Amount for each such Letter of Credit not to exceed an amount equal
to the Unused Revolving Credit Commitments of the Revolving Credit Lenders at
such time. No Letter of Credit shall have an expiration date (including all
rights of the Borrower or the beneficiary to require renewal) later than the
earlier of (A) thirty (30) days before the Revolving Credit Termination Date,
(B) in the case of a Standby Letter of Credit, 365 days after the date of
issuance thereof and (C) in the case of a Trade Letter of Credit, 360 days after
the date of issuance thereof. The foregoing notwithstanding, any Standby Letter
of Credit may, by its terms, be renewable annually upon notice (a "NOTICE OF
RENEWAL") given to the Issuing Bank and the Administrative Agent on or prior to
any date for notice of renewal set forth in such Letter of Credit (but in any
event at least five (5) Business Days prior to the date of the proposed renewal
of such Standby Letter of Credit) and upon fulfillment of the applicable
conditions set forth in Article 3 PROVIDED that the terms of each Standby Letter
of Credit that is automatically renewable annually shall not permit the
expiration date (after giving effect to any renewal) of such Standby Letter of
Credit in any event to be extended to a date later than sixty (60) days before
the Revolving Credit Termination Date. If a Notice of Renewal is not given by
the Borrower pursuant to the immediately preceding sentence, such Standby Letter
of Credit shall expire
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on the date on which it otherwise would have been automatically renewed;
PROVIDED, HOWEVER, that even in the absence of receipt of a Notice of Renewal,
the Issuing Bank may, in its discretion unless instructed to the contrary by the
Administrative Agent or the Borrower, deem that a Notice of Renewal had been
timely delivered and, in such case, a Notice of Renewal shall be deemed to have
been so delivered for all purposes under this Agreement. Within the limits of
the Letter of Credit Facility, and subject to the limits referred to above, the
Borrower may request the issuance of Letters of Credit under this Section
2.1(c), repay any Letter of Credit Advances resulting from drawings under
Letters of Credit pursuant to Section 2.3(c) and request the issuance of
additional Letters of Credit under this Section 2.1(c).
SECTION 2.2 MAKING THE ADVANCES. (a) Except as otherwise provided in
Section 2.3 or, with respect to Swing Line Advances, in Section 2.2(b), each
Borrowing shall be made on notice, given not later than 12:30 P.M. (New York
time) on the third Business Day prior to the date of the proposed Borrowing in
the case of Eurodollar Rate Advances and on the first Business Day prior to the
date of the proposed Borrowing in the case of Prime Rate Advances by the
Borrower to the Administrative Agent, which shall give to each appropriate
Lender prompt notice thereof by telex or telecopier. Each such notice of a
Borrowing (a "NOTICE OF BORROWING") may be by telephone, confirmed immediately
in writing, or telex or telecopier in substantially the form of EXHIBIT D
hereto, specifying therein the requested (i) date of such Borrowing, (ii)
Facility under which such Borrowing is to be made, (iii) Type of Advances
comprising such Borrowing, (iv) aggregate amount of such Borrowing and (v) in
the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest
Period for each such Advance. Each appropriate Lender shall, before 12:30 P.M.
(New York time) on the date of such Borrowing, make available for the account of
its Applicable Lending Office to the Administrative Agent at the Administrative
Agent's Account, in same day funds, such Lender's ratable portion of such
Borrowing in accordance with the respective Commitments under the applicable
Facility of such Lender and the other appropriate Lenders. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article 3, the Administrative Agent will make
such funds available to the Borrower by crediting the Borrower's Account;
provided, HOWEVER, that in the case of any Revolving Credit Borrowing, the
Administrative Agent shall first make a portion of such funds equal to the
aggregate principal amount of any Swing Line Advances and Letter of Credit
Advances made by the Swing Line Bank, the Issuing Bank and by any other
Revolving Credit Lender and outstanding on the date of such Revolving Credit
Borrowing, PLUS interest accrued and unpaid thereon to and as of such date,
available to the Swing Line Bank, the Issuing Bank and such other Revolving
Credit Lenders for repayment of such Swing Line Advances and Letter of Credit
Advances.
(b) Each Swing Line Borrowing shall be made either (x) on notice, given
not later than 11:00 A.M. (New York time) on the date of the proposed Swing Line
Borrowing, by the Borrower to the Swing Line Bank and the Administrative Agent
or (y) pursuant to other arrangements, including, by way of example and not of
limitation, arrangements for daily repayments and borrowings on each Business
Day, which are reasonably satisfactory in form and substance to the Swing Line
Bank, the Administrative Agent and the Borrower. Each notice of a Swing Line
Borrowing pursuant to clause (x) in the immediately preceding sentence (a
"NOTICE OF SWING LINE
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BORROWING") shall be by telephone, confirmed immediately in writing, or telex or
telecopier, specifying therein the requested (i) date of such Borrowing, (ii)
amount of such Borrowing and (iii) maturity of such Borrowing (which maturity
shall be no later than the seventh day after the requested date of such
Borrowing). If, in its discretion, it elects to make a requested Swing Line
Advance, the Swing Line Bank will make the amount thereof available to the
Administrative Agent at the Administrative Agent's Account, in same day funds.
After the Administrative Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article 3, the Administrative Agent will
make such funds available to the Borrower by crediting the Borrower's Account.
Upon written demand by the Swing Line Bank, with a copy of such demand to the
Administrative Agent, each other Revolving Credit Lender shall purchase from the
Swing Line Bank, and the Swing Line Bank shall sell and assign to each such
other Revolving Credit Lender, such other Lender's Pro Rata Share of all
outstanding Swing Line Advances as of the date of such demand, by deposit to the
Administrative Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of Swing Line Advances to be
purchased by such Lender. The Borrower hereby agrees to each such sale and
assignment. Each Revolving Credit Lender agrees to purchase its Pro Rata Share
of outstanding Swing Line Advances on (i) the Business Day on which demand
therefor is made by the Swing Line Bank; PROVIDED that notice of such demand is
given not later than 3:00 P.M. (New York time) on such Business Day, or (ii) the
first Business Day next succeeding such demand if notice of such demand is given
after such time. Upon any such assignment by the Swing Line Bank to any other
Revolving Credit Lender of a portion of a Swing Line Advance, the Swing Line
Bank represents and warrants to such other Lender that the Swing Line Bank is
the legal and beneficial owner of such interest being assigned by it, but makes
no other representation or warranty and assumes no responsibility with respect
to such Swing Line Advance, the Loan Documents or any Loan Party. If and to the
extent that any Revolving Credit Lender shall not have so made the amount of
such Swing Line Advance available to the Administrative Agent, such Revolving
Credit Lender agrees to pay to the Administrative Agent, for the account of the
Swing Line Bank, forthwith on demand such amount together with interest thereon,
for each day from the date of demand by the Swing Line Bank until the date such
amount is paid to the Administrative Agent, at the Federal Funds Rate. If such
Lender shall pay to the Administrative Agent such amount for the account of the
Swing Line Bank on any Business Day, such amount so paid in respect of principal
shall constitute a Swing Line Advance made by such Lender on such Business Day
for purposes of this Agreement, and the outstanding principal amount of the
Swing Line Advance made by the Swing Line Bank shall be reduced by such amount
on such Business Day.
(c) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower may not select Eurodollar Rate Advances if the obligation of
the appropriate Lenders to make Eurodollar Rate Advances shall then be suspended
pursuant to Section 2.9 or Section 2.10, and (ii) the Eurodollar Rate Advances
made on any date may not be outstanding as part of more than ten (10) separate
Borrowings.
(d) Each Notice of Borrowing and Notice of Swing Line Borrowing shall
be irrevocable and binding on the Borrower. In the case of any Borrowing that
the related Notice of Borrowing
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specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each appropriate Lender against any loss, cost or expense incurred by
such Lender as a result of any failure to fulfill on or before the date
specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article 3, including, without limitation, any loss
(including loss of anticipated profits as reasonably determined by such Lender),
cost or expense incurred by reason of the liquidation or redeployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(e) Unless the Administrative Agent shall have received notice from an
appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) or (b) of this Section 2.2 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay or pay to the Administrative Agent
forthwith on demand such corresponding amount and to pay interest thereon, for
each day from the date such amount is made available to the Borrower until the
date such amount is repaid or paid to the Administrative Agent, at (i) in the
case of the Borrower, the interest rate applicable at such time under Section
2.7 to Advances comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender shall pay to the Administrative Agent
such corresponding amount, such amount so paid shall constitute such Lender's
Advance as part of such Borrowing for all purposes.
(f) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.
SECTION 2.3 ISSUANCE OF AND DRAWINGS AND REIMBURSEMENT UNDER LETTERS OF
CREDIT.
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(a) REQUEST FOR ISSUANCE. Each Letter of Credit shall be issued upon
notice, given not later than 12:00 P.M. (New York time) on the third Business
Day prior to the date of the proposed issuance of such Letter of Credit, by the
Borrower to the Issuing Bank, which shall give to the Administrative Agent and
each Revolving Credit Lender prompt notice thereof by telex or telecopier. Each
such notice of issuance of a Letter of Credit (a "NOTICE OF ISSUANCE") shall be
by telephone, confirmed immediately in writing, or telex or telecopier,
specifying therein the requested (i) date of such issuance (which shall be a
Business Day), (ii) Available Amount of such Letter of Credit, (iii) expiration
date of such Letter of Credit, (iv) name and address of the beneficiary of such
Letter of Credit and (v) form of such Letter of Credit, and shall be accompanied
by such application and agreement for letter of credit as the Issuing Bank may
specify to the Borrower for use in connection with such requested Letter of
Credit (a "LETTER OF CREDIT AGREEMENT"). If the requested form of such Letter of
Credit is reasonably acceptable to the Issuing Bank, the Issuing Bank will, upon
fulfillment of the applicable conditions set forth in Article 3, make such
Letter of Credit available to the Borrower at its office referred to in Section
11.2 or as otherwise agreed with the Borrower in connection with such issuance.
In the event and to the extent that the provisions of any such Letter of Credit
Agreement shall conflict with this Agreement, the provisions of this Agreement
shall govern.
(b) LETTER OF CREDIT REPORTS. The Issuing Bank shall furnish (i) to the
Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such week under all Letters of Credit, (ii) to
the Administrative Agent, the Borrower and each Revolving Credit Lender on the
first Business Day of each month a written report summarizing issuance and
expiration dates of Letters of Credit issued during the preceding month and
drawings during such month under all Letters of Credit and (iii) to the
Administrative Agent, the Borrower and each Revolving Credit Lender on the first
Business Day of each calendar quarter a written report setting forth the average
daily aggregate Available Amount during the preceding calendar quarter of all
Letters of Credit.
(c) DRAWING AND REIMBURSEMENT. The payment by the Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of a Letter of Credit Advance which
shall be a Prime Rate Advance in the amount of such draft. Each of the Borrower,
the Administrative Agent and each Revolving Credit Lender hereby acknowledges
and agrees that Letter of Credit Advances may be made, or deemed made, by the
Issuing Bank in respect of any Letter of Credit and to participate in all Letter
of Credit Advances made hereunder as provided herein. Upon written demand by the
Issuing Bank, with a copy of such demand to the Administrative Agent, each
Revolving Credit Lender shall purchase from the Issuing Bank, and the Issuing
Bank shall sell and assign to each such Revolving Credit Lender, such Lender's
Pro Rata Share of such outstanding Letter of Credit Advance as of the date of
such purchase, by making available (for the account of its Applicable Lending
Office) to the Administrative Agent (for the account of the Issuing Bank), by
deposit to the Administrative Agent's Account, in same day funds, an amount
equal to the portion of the outstanding principal amount of such Letter of
Credit Advance to be purchased by such Lender. Promptly after receipt thereof,
the Administrative Agent shall transfer such funds to the Issuing Bank. The
Borrower hereby agrees
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to each such sale and assignment. Each Revolving Credit Lender agrees to
purchase its Pro Rata Share of an outstanding Letter of Credit Advance on (i)
the Business Day on which demand therefor is made by the Issuing Bank; PROVIDED
that notice of such demand is given not later than 11:00 A.M. (New York time) on
such Business Day or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by the
Issuing Bank to any other Revolving Credit Lender of a portion of a Letter of
Credit Advance, the Issuing Bank represents and warrants to such other Lender
that the Issuing Bank is the legal and beneficial owner of such interest being
assigned by it, free and clear of any liens, but makes no other representation
or warranty and assumes no responsibility with respect to such Letter of Credit
Advance, the Loan Documents or any Loan Party. If and to the extent that any
Revolving Credit Lender shall not have so made the amount of such Letter of
Credit Advance available to the Administrative Agent, such Revolving Credit
Lender agrees to pay to the Administrative Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Issuing Bank until the date such amount is paid to the Administrative Agent, at
the Federal Funds Rate for its account or the account of the Issuing Bank, as
applicable. If such Lender shall pay to the Administrative Agent such amount for
the account of the Issuing Bank on any Business Day, such amount so paid in
respect of principal shall constitute a Letter of Credit Advance made by such
Lender on such Business Day for purposes of this Agreement, and the outstanding
principal amount of the Letter of Credit Advance made by the Issuing Bank shall
be reduced by such amount on such Business Day.
(d) FAILURE TO MAKE LETTER OF CREDIT ADVANCES. The failure of any
Lender to make any Letter of Credit Advance to be made by it on the date
specified in Section 2.3(c) shall not relieve any other Lender of its obligation
hereunder to make its Letter of Credit Advance on such date, but no Lender shall
be responsible for the failure of any other Lender to make the Letter of Credit
Advance to be made by such other Lender on such date.
SECTION 2.4 REPAYMENT OF ADVANCES.
(a) REVOLVING CREDIT ADVANCES. The Borrower shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders on
the Revolving Credit Termination Date the aggregate principal amount of the
Revolving Credit Advances then outstanding.
(b) SWING LINE ADVANCES. The Borrower shall repay to the Administrative
Agent for the account of the Swing Line Bank and each other Revolving Credit
Lender that has made a Swing Line Advance the outstanding principal amount of
each Swing Line Advance made by each of them on the earlier of the maturity date
for such Swing Line Advance (which maturity date shall be no later than the
seventh day after the requested date of such Swing Line Advance) and the
Revolving Credit Termination Date.
(c) LETTER OF CREDIT ADVANCES. (i) The Borrower shall repay to the
Administrative Agent for the account of the Issuing Bank and each other
Revolving Credit Lender that has made a Letter
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of Credit Advance on the earlier of demand and the Revolving Credit Termination
Date the outstanding principal amount of each Letter of Credit Advance made by
each of them.
(ii) The Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other agreement or instrument under all circumstances,
including, without limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or any
other agreement or instrument relating to any of the foregoing (all of
the foregoing being, collectively, the "L/C RELATED DOCUMENTS");
(B) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Borrower in
respect of any L/C Related Document or any other amendment or waiver of
or any consent to departure from all or any of the L/C Related
Documents;
(C) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or
any transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank, or
any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated transaction;
(D) any statement or any other document presented under a
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; or
(E) any exchange, release or non-perfection of any Collateral
or other collateral, or any release or amendment or waiver of or
consent to departure from any Subsidiary Guaranty or any other
guarantee, for all or any of the Obligations of the Borrower in respect
of the L/C Related Documents.
SECTION 2.5 TERMINATION OR REDUCTION OF THE COMMITMENTS.
(a) OPTIONAL. The Borrower may, upon at least three Business Days'
notice to the Administrative Agent, terminate in whole or reduce in part the
unused portions of the Unused Revolving Credit Commitments; PROVIDED, HOWEVER,
that each partial reduction of a Facility (i) shall be in an aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof, and (ii)
shall be made ratably among the appropriate Lenders in accordance with their
Commitments with respect to such Facility.
(b) MANDATORY.
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(i) The Revolving Credit Facility shall be automatically and
permanently reduced on each date on which prepayment thereof is required to be
made pursuant to Section 2.6(b)(i) or (ii) or (iii) in an amount equal to the
applicable Reduction Amount, PROVIDED that each such reduction of the Revolving
Credit Facility shall be made ratably among the Revolving Credit Lenders in
accordance with their Revolving Credit Commitments.
(ii) The Letter of Credit Facility shall be permanently reduced
from time to time on the date of each reduction in the Revolving Credit Facility
by the amount, if any, by which the amount of the Letter of Credit Facility
exceeds the Revolving Credit Facility after giving effect to such reduction of
the Revolving Credit Facility.
(iii) In the event the Closing Date shall not have occurred by
October 31, 1998, then all of the Commitments shall be automatically terminated
and this Agreement shall be of no further force or effect.
SECTION 2.6 PREPAYMENTS.
(a) OPTIONAL. The Borrower may, without premium or penalty, upon at
least One (1) Business Day's notice in the case of Prime Rate Advances and three
(3) Business Days' notice in the case of Eurodollar Rate Advances, in each case
to the Administrative Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given, the Borrower shall,
prepay the outstanding aggregate principal amount of the Advances, in whole or
ratably in part, together with accrued interest to the date of such prepayment
on the aggregate principal amount prepaid; PROVIDED, HOWEVER, that (i) each
partial prepayment shall be in an aggregate principal amount of $500,000 or an
integral multiple of $100,000 in excess thereof and (ii) no such prepayment of a
Eurodollar Rate Advance shall be made other than on the last day of an Interest
Period therefor without payment by the Borrower of the amounts provided for in
Section 11.4(c). Each prepayment made pursuant to this Section 2.6(a) shall, at
the Borrower's option, be applied to repay the Facilities in the following
manner: FIRST, to prepay Letter of Credit Advances then outstanding until such
Advances are paid in full; SECOND, to prepay Swing Line Advances then
outstanding until such Advances are paid in full; THIRD, to prepay Revolving
Credit Advances then outstanding until such Revolving Credit Advances are paid
in full; and FOURTH, deposited in the L/C Cash Collateral Account to cash
collateralize 100% of the Available Amount of the Letters of Credit then
outstanding. Upon the drawing of any Letter of Credit for which funds are on
deposit in the L/C Cash Collateral Account, such funds shall be applied to
reimburse the Issuing Bank or the Revolving Credit Lenders, as applicable.
(b) MANDATORY. (i) Within fifteen (15) days after receipt by any Loan
Party or any of its Subsidiaries of Net Cash Proceeds from Asset Dispositions
made in reliance on Section 6.4(g) hereof, the Borrower shall prepay the then
outstanding Advances in an amount equal to one-hundred percent (100%) of such
Net Cash Proceeds.
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(ii) Within fifteen (15) days after receipt by any Loan Party or
any of its Subsidiaries of Net Cash Proceeds from any Debt Issuance or Equity
Issuance, the Borrower shall prepay the then outstanding Advances in an amount
equal to, with respect to any such Debt Issuance or Equity Issuance, 100 percent
(100%) of such Net Cash Proceeds.
(iii) Within fifteen (15) days after receipt of Net Cash Proceeds
by any Loan Party or any of its Subsidiaries from any Extraordinary Receipt
received by or paid to or for the account of any Loan Party or any of its
Subsidiaries and not otherwise included in clause (i) or (ii) above, the
Borrower shall prepay the then outstanding Advances in an amount equal to one
hundred percent (100%) of such Net Cash Proceeds.
(iv) Each prepayment made pursuant to clause (i), (ii) or (iii)
shall be subject to the provisions of Section 11.4(c) and shall be applied to
prepay the Facilities in the following manner: FIRST, to prepay Letter of Credit
Advances then outstanding until such Advances are paid in full; SECOND, to
prepay Swing Line Advances then outstanding until such Advances are paid in
full; THIRD, to prepay Revolving Credit Advances then outstanding (whereupon the
Revolving Credit Facility shall be permanently reduced as set forth in Section
2.5(b)(i)) until such Revolving Credit Advances are paid in full; and FOURTH,
deposited in the L/C Cash Collateral Account to cash collateralize 100% of the
Available Amount of the Letters of Credit then outstanding. Upon the drawing of
any Letter of Credit for which funds are on deposit in the L/C Cash Collateral
Account, such funds shall be applied to reimburse the Issuing Bank or the
Revolving Credit Lenders, as applicable. The amount remaining (if any) after the
required prepayment of the Advances then outstanding and the 100% cash
collateralization of the aggregate Available Amount of Letters of Credit then
outstanding (the sum of such prepayment amounts, cash collateralization amounts
and remaining amount being referred to herein as the "REDUCTION AMOUNT") may be
retained by the Borrower. Upon the drawing of any Letter of Credit for which
funds are on deposit in the L/C Cash Collateral Account, such funds shall be
applied to reimburse the Issuing Bank or the Revolving Credit Lenders, as
applicable. Upon the termination of all of the Commitments and the payment in
full of all Obligations hereunder including, without limitation, termination or
expiration of all Letters of Credit and the payment in full of all Obligations
in respect of all Letters of Credit, then all amounts remaining on deposit in
the L/C Cash Collateral Account shall be returned to the Borrower.
(v) The Borrower shall, within fifteen (15) days following the end
of each month in each Fiscal Year, pay to the Administrative Agent for deposit
in the L/C Cash Collateral Account an amount sufficient to cause the aggregate
amount on deposit in such Account to equal the amount by which the aggregate
Available Amount of all Letters of Credit then outstanding exceeds the Letter of
Credit Facility on such Business Day.
(vi) At any time that the aggregate amount of Revolving Credit
Advances outstanding exceeds the Revolving Credit Availability, the Borrower
shall immediately repay Revolving Credit Advances to the extent necessary to
reduce the principal balance of Revolving Credit Borrowings to an amount equal
to or less than the Revolving Credit Availability.
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(vii) The foregoing notwithstanding, the provisions of this Section
2.6(b) shall not be construed to permit any Equity Issuance, Debt Issuance or
Asset Disposition otherwise prohibited under the terms of this Agreement.
(c) Notwithstanding the foregoing provisions of this Section 2.6, if at
any time any prepayment of the Loans pursuant to Sections 2.6(b)(i), (ii), (iii)
would result, after giving effect to the procedures set forth in this Agreement,
in the Borrower's incurring increased costs under Section 2.10 as a result of
Eurodollar Advances being prepaid other than on the last day of an Interest
Period with respect thereto, then, the Borrower may, so long as no Default or
Event of Default shall have occurred and be continuing, in its sole discretion,
initially (x) deposit a portion (up to 100%) of the amounts that otherwise would
have been paid in respect of such Eurodollar Advances with the Administrative
Agent (which deposit must be equal in amount to the amount of such Eurodollar
Advances not immediately prepaid) to be held as security for the obligations of
the Borrower to make such prepayment pursuant to a cash collateral agreement to
be entered into on terms reasonably satisfactory to the Administrative Agent,
with such cash collateral to be directly applied upon the first occurrence
thereafter of the last day of an Interest Period with respect to such Eurodollar
Advances (or such earlier date or dates as shall be requested by the Borrower)
or (y) make a prepayment of the Revolving Credit Advances in accordance with
subsection 2.6(a) with an amount equal to a portion (up to 100%) of the amounts
that otherwise would have been paid in respect of such Eurodollar Advances
(which prepayment, together with any deposits pursuant to clause (x) above, must
be equal in amount to the amount of such Eurodollar Advances not immediately
prepaid); provided that, notwithstanding anything in this Agreement to the
contrary, the Borrower may not request any extension of credit under the
Revolving Credit Commitments that would reduce the aggregate amount of the
available Revolving Credit Commitments to an amount that is less than the amount
of such prepayment until the related portion of such Eurodollar Advances have
been prepaid upon the first occurrence thereafter of the last day of an Interest
Period with respect to such Eurodollar Advances; PROVIDED that, in the case of
either clause (x) or (y), such unpaid Eurodollar Advances shall continue to bear
interest in accordance with Section 2.7 until such unpaid Eurodollar Advances or
the related portion of such Eurodollar Advances, as the case may be, have or has
been prepaid
SECTION 2.7 INTEREST.
(a) SCHEDULED INTEREST. The Borrower shall pay to the Administrative
Agent, for the benefit of the Lenders, interest on the unpaid principal amount
of each Advance owing to each Lender from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
(i) PRIME RATE ADVANCES. During such periods as such Advance is a
Prime Rate Advance, a rate per annum equal at all times to the sum of (x) the
Prime Rate in effect from time to time PLUS (y) the Applicable Margin for such
Advance in effect from time to time, payable in arrears quarterly on the last
Business Day of each March, June, September and December during such periods and
on the date such Prime Rate Advance shall be Converted or paid in full.
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(ii) EURODOLLAR RATE ADVANCES. During such periods as such Advance
is a Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (x) the Eurodollar Rate for such
Interest Period for such Advance PLUS (y) the Applicable Margin for such Advance
in effect on the first day of such Interest Period, payable in arrears on the
last day of such Interest Period and, if such Interest Period has a duration of
more than three months, on each day that occurs during such Interest Period
every three months from the first day of such Interest Period and on the date
such Eurodollar Rate Advance shall be Converted or paid in full.
(b) DEFAULT INTEREST. (i) With respect to any principal amount of any
Advance not paid when due by the Borrower (whether at the stated maturity, by
acceleration or otherwise), the Borrower shall pay interest on such unpaid
principal amount, in arrears on the dates referred to in clause (a)(i) or
(a)(ii) above and on demand, at a rate per annum equal at all times to 2% per
annum above the rate per annum required to be paid on such Advance pursuant to
clause (a)(i) or (a)(ii) above and (ii) with respect to the amount of any
interest, fee or other amount payable hereunder not paid when due (whether at
the stated maturity, by acceleration or otherwise) the Borrower shall pay
interest on such amount to the fullest extent permitted by law from the date
such amount shall be due until such amount shall be paid in full, in arrears on
the date such amount shall be paid in full and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid,
in the case of interest, on the Type of Advance on which such interest has
accrued pursuant to clause (a)(i) or (a)(ii) above, and, in all other cases, on
Prime Rate Advances pursuant to clause (a)(i) above.
(c) NOTICE OF INTEREST RATE. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.2(a), the Administrative Agent shall give notice
to the Borrower and each appropriate Lender of the applicable interest rate
determined by the Administrative Agent for purposes of clause (a)(i) or (ii).
SECTION 2.8 FEES.
(a) COMMITMENT FEES. The Borrower shall pay to the Administrative
Agent, for the account of the Lenders, commitment fees, from the Closing Date in
the case of each Initial Lender and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Lender, until the Revolving Credit Termination Date payable in
arrears quarterly on the last Business Day of each March, June, September and
December, commencing December 31, 1998, and on the Revolving Credit Termination
Date at a rate per annum equal to 0.50% per annum on the average daily Unused
Revolving Credit Commitment of such Lender. For purposes of this clause (a),
Swing Line Advances shall not constitute utilization of the Revolving Credit
Commitments of the Revolving Credit Lenders.
(b) LETTER OF CREDIT FEES. (i) The Borrower shall pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commission, payable in arrears quarterly on the last
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Business Day of each March, June, September and December, commencing December
31, 1998 and on the earliest to occur of the full drawing, expiration,
termination or cancellation of any such Letter of Credit and on the Revolving
Credit Termination Date, on such Lender's Pro Rata Share of the average daily
aggregate Available Amount during such quarter of all Letters of Credit
outstanding from time to time at the rate per annum equal to the Applicable
Margin then in effect for Eurodollar Advances under the Revolving Credit
Facility.
(ii) In addition to the foregoing fees described in (i) above, the
Borrower shall pay to the Issuing Bank, for its own account, (x) on the
Available Amount of each Letter of Credit, a fronting fee, for the period from
the date of issuance of such Letter of Credit to and including the termination
thereof, computed at the rate of one quarter of one percent (1/4%) per annum,
payable in arrears quarterly on the last Business Day of each March, June,
September and December of each year and on the date of termination thereof and
(y) transfer fees and other customary fees and charges in connection with the
issuance or administration of each Letter of Credit as the Borrower and the
Issuing Bank shall agree.
(c) ADMINISTRATIVE AGENT'S FEES. The Borrower shall pay to the
Administrative Agent for its own account such fees as may from time to time be
agreed between the Borrower and the Administrative Agent.
SECTION 2.9 CONVERSION OF ADVANCES.
(a) OPTIONAL. The Borrower may on any Business Day, upon notice given
to the Administrative Agent not later than 11:00 A.M. (New York time) on the
second Business Day prior to the date of the proposed Conversion and subject to
the provisions of Sections 2.7 and 2.10, Convert all or any portion of the
Advances of one Type comprising the same Borrowing into Advances of the other
Type; PROVIDED, HOWEVER, that any Conversion of Eurodollar Rate Advances into
Prime Rate Advances shall be made only on the last day of an Interest Period for
such Eurodollar Rate Advances unless the Borrower pays the amounts, if any,
provided for in Section 11.4(c), any Conversion of Prime Rate Advances into
Eurodollar Rate Advances shall be in an amount not less than the minimum amount
specified in Section 2.1(a), no Conversion of any Advances shall result in more
separate Borrowings than permitted under Section 2.2(c) and each Conversion of
Advances comprising part of the same Borrowing under any Facility shall be made
ratably among the appropriate Lenders in accordance with their Commitments under
such Facility. Each such notice of Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the Advances to
be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for such Advances. Each notice of
Conversion shall be irrevocable and binding on the Borrower.
(b) MANDATORY. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $500,000, such Advances shall,
on the last day of the existing Interest Period therefor, automatically Convert
into Prime Rate Advances.
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(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.1, the
Administrative Agent will forthwith so notify the Borrower and the appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Prime
Rate Advance.
(iii) Upon the occurrence and during the continuance of any Event
of Default and the acceleration of the Notes, interest thereon and other amounts
payable by the Borrower under this Agreement and the other Loan Documents
pursuant to Article 9, (x) each Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Prime
Rate Advance and (y) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.10 INCREASED COSTS, ETC.
(a) If, due to either (i) the introduction of or any change in reserve
requirements included in the Eurodollar Rate Reserve Percentage, 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 Party of agreeing to make or of making, funding or
maintaining Eurodollar Rate or Prime Rate Advances or of agreeing to issue or of
issuing or maintaining Letters of Credit or of agreeing to make or of making or
maintaining Letter of Credit Advances (excluding for purposes of this Section
2.10 any such increased costs resulting from (x) Taxes or Other Taxes (as to
which Section 2.12 shall govern) and (y) changes in the basis of taxation of
payments to such Lender Party but excluding changes in taxes measured by or
imposed upon the overall net income or overall gross income, or franchise taxes,
or taxes measured by or imposed upon overall capital or net worth, or branch
taxes (in the case of such capital, net worth or branch taxes, imposed in lieu
of such net income tax), of such Lender Party or its Applicable Lending Office,
branch, or any affiliate thereof; then the Borrower shall from time to time,
upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender Party additional amounts sufficient to compensate such Lender Party for
such increased cost; PROVIDED, HOWEVER, that a Lender Party claiming additional
amounts under this Section 2.10(a) agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such a designation would
avoid the need for, or reduce the amount of, such increased cost that may
thereafter accrue and would not, in the reasonable judgment of such Lender
Party, be otherwise disadvantageous to such Lender Party. A certificate
certifying (i) as to the amount of such increased cost, (ii) as to a reasonably
detailed explanation of the calculation of such increased cost and (iii) that
one of the events described in this paragraph (a) has occurred, including a
reasonably detailed description of the nature of such event, submitted to the
Borrower by such Lender Party, shall be conclusive and binding for all purposes,
absent manifest error.
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(b) If, 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
amount of capital required or reasonably expected to be maintained by any Lender
Party or any corporation controlling such Lender Party as a result of or based
upon the existence of such Lender Party's commitment to lend or to issue Letters
of Credit hereunder and other commitments of such type or the issuance or
maintenance of the Letters of Credit (or similar contingent obligations), then,
upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the Administrative Agent for
the account of such Lender Party, from time to time as specified by such Lender
Party, additional amounts sufficient to compensate such Lender Party in the
light of such circumstances, to the extent that such Lender Party reasonably
determines such increase in capital to be allocable to the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder or to
the issuance or maintenance of any Letters of Credit. A certificate as to such
amounts submitted to the Borrower by such Lender Party shall be conclusive and
binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed greater than 50% of the then aggregate unpaid principal
amount thereof notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the appropriate Lenders, whereupon (i) each such Eurodollar Rate
Advance under any Facility will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Prime Rate Advance and (ii)
the obligation of the appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower that such Lenders have determined that the circumstances
causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, 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 or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance under each
Facility under which such Lender has a Commitment will automatically, upon such
demand, Convert into a Prime Rate Advance and (ii) the obligation of the
appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist; PROVIDED, HOWEVER, that before making any such
demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Eurodollar Lending Office if the making of such a designation would allow such
Lender or its Eurodollar Lending Office to continue to perform its obligations
to make Eurodollar Rate Advances or to continue to find or maintain
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Eurodollar Rate Advances and would not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender.
SECTION 2.11 PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment hereunder and under the Notes,
irrespective of any right of counterclaim or set-off (except as otherwise
provided in Section 2.15), not later than 11:00 A.M. (New York time) on the day
when due in U.S. dollars to the Administrative Agent at the Administrative
Agent's Account in same day funds. The Administrative Agent will promptly
thereafter cause like funds to be distributed (i) if such payment by the
Borrower is in respect of principal, interest, commitment fees or any other
Obligation then payable hereunder and under the Notes to more than one Lender
Party, to such Lender Parties for the account of their respective Applicable
Lending Offices ratably in accordance with the amounts of such respective
Obligations then payable to such Lender Parties and (ii) if such payment by the
Borrower is in respect of any Obligation then payable hereunder to one Lender
Party, to such Lender Party for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 11.7(d), from and after
the effective date of such Assignment and Acceptance, the Administrative Agent
shall make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender Party assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Administrative Agent shall distribute
such funds to each Lender Party ratably in accordance with such Lender Party's
proportionate share of the principal amount of all outstanding Advances and the
Available Amount of all Letters of Credit then outstanding in repayment or
prepayment of such of the outstanding Advances or other Obligations owed to such
Lender Party, and for application to such principal installments, as the
Administrative Agent shall direct.
(c) The Borrower hereby authorizes each Lender Party, if and to the
extent payment owed to such Lender Party is not made when due hereunder or, in
the case of a Lender, under the Note held by such Lender, to charge from time to
time against any or all of the Borrower's accounts with such Lender Party any
amount so due.
(d) All computations of interest, fees and Letter of Credit commissions
shall be made by the Administrative Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Administrative Agent of an
interest rate, fee or commission hereunder shall be conclusive and binding for
all purposes, absent manifest error.
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(e) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, HOWEVER, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(f) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount then due such Lender Party. If
and to the extent the Borrower shall not have so made such payment in full to
the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
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SECTION 2.12 TAXES.
(a) Except as provided below in this subsection, any and all payments
by the Borrower hereunder or under the Notes shall be made, in accordance with
Section 2.11, free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender Party
and the Administrative Agent, net income taxes, franchise taxes, branch taxes,
taxes on doing business or taxes measured by or imposed upon the capital or net
worth of the Administrative Agent or any branch or affiliate thereof or of any
Lender Party or its Applicable Lending Office, or any branch or affiliate
thereof, in each case that are imposed (i) by the United States (ii) by the
jurisdiction under the laws of which such Lender Party or the Administrative
Agent (as the case may be), Applicable Lending Office, branch or affiliate is
organized or is located, or in which its principal executive office is located,
or any nation within which such jurisdiction is located; or (iii) by reason of
any connection between the jurisdiction imposing such tax and such Lender Party
or the Administrative Agent or such Applicable Lending Office, branch or
affiliate other than a connection arising solely from such Lender Party or the
Administrative Agent having executed, delivered or performed its obligations
under, or received payment under or enforced, this Agreement or, in the case of
such Lender Party, any Notes or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "TAXES"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Lender Party or the Administrative Agent, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.12) such Lender Party or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law PROVIDED, HOWEVER, that the
Borrower shall be entitled to deduct and withhold any Taxes and shall not be
required to increase any such amounts payable to any Lender Party that is not
organized under the laws of the United States of America or a state thereof, as
the case may be if such Lender fails to comply with the requirements of
paragraph (e) of this subsection.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from the execution, delivery or registration of this Agreement or the Notes
(hereinafter referred to as "OTHER TAXES").
(c) If the Borrower fails to pay any Taxes or Other Taxes when due to
the appropriate taxing authority, the Borrower shall indemnify each Lender Party
and the Administrative Agent for the full amount of Taxes and Other Taxes
imposed on or paid by such Lender Party or the Administrative Agent (as the case
may be) and any liability (including penalties, additions to tax, interest and
expenses) arising therefrom or with respect thereto, except with respect to any
Lender Party or the Administrative Agent, as the case may be, for such a
liability arising from such Lender Party's or the Administrative Agent's, as the
case may be, willful misconduct or gross
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negligence. This indemnification shall be made within thirty (30) days from the
date such Lender Party or the Administrative Agent, as the case may be, makes
written demand specifying in reasonable detail the basis therefor.
(d) Within thirty (30) days after the date of any payment of Taxes, the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 11.2, the original receipt of payment thereof or a certified copy of
such receipt. In the case of any payment hereunder or under the Notes by or on
behalf of the Borrower through an account or branch outside the United States or
by or on behalf of the Borrower by a payor that is not a United States person,
if the Borrower determines that no Taxes are payable in respect thereof, the
Borrower shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel acceptable to the
Administrative Agent stating that such payment is exempt from Taxes. For
purposes of this subsection (d) and subsection (e), the terms "UNITED STATES"
and "UNITED STATES PERSON" shall have the meanings specified in Section 7701 of
the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender or Initial Issuing
Bank, as the case may be, and on the date of the Assignment and Acceptance
pursuant to which it became a Lender Party in the case of each other Lender
Party, and from time to time thereafter as requested in writing by the Borrower
or the Administrative Agent (i) provide each of the Administrative Agent and the
Borrower with two (2) original Internal Revenue Service forms 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that such Lender is exempt from United States withholding
tax on payments pursuant to this Agreement or the Notes (ii) deliver to the
Borrower and the Administrative Agent two further copies of any such form on or
before the date that any such form expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrower; and (iii) obtain such extension of time for
filing and complete such forms or certifications as may reasonably be requested
by the Borrower or the Administrative Agent.
(f) For any period with respect to which a Lender Party has failed to
provide the Borrower with the appropriate form described in subsection (e)
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided, such Lender Party shall
not be entitled to indemnification under subsection (a) or (c) with respect to
Taxes imposed by the United States by reason of such failure; PROVIDED, HOWEVER,
that should a Lender Party become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender Party shall reasonably request to assist such Lender Party to recover
such Taxes.
(g) If a condition or any event occurs which would, or would upon the
passage of time or giving of notice, result in the payment of any additional
amount to any Lender Party by the Borrower pursuant to subsection 2.10 or 2.12,
such Lender Party shall promptly notify the Borrower and the Administrative
Agent and shall take such steps as may reasonably be available to it to
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mitigate the effects of such condition or event (which shall include efforts to
rebook the loans held by such Lender Party at another lending office, or through
another branch or an affiliate, of such Lender Party); PROVIDED that such Lender
Party shall not be required to take any step that, in its reasonable judgment,
would be materially disadvantageous to its business or operations or would
require it to incur additional costs (unless the Borrower agrees to reimburse
such Lender Party for the reasonable incremental out-of-pocket costs thereof).
(h) If a Lender changes its Applicable Lending Office (other than
pursuant to paragraph (g) above) and the effect of such change, as of the date
of such change, would be to cause the Borrower to become obligated to pay any
additional amount under subsection 2.10 or 2.12, the Borrower shall not be
obligated to pay such additional amount.
(i) If the Administrative Agent or any Lender Party receives a refund
directly attributable to taxes for which the Borrower has made additional
payments pursuant to subsection 2.10 or 2.12, the Administrative Agent or such
Lender Party, as the case may be, shall promptly pay such refund (together with
any interest with respect thereto received from the relevant taxing authority)
to the Borrower, PROVIDED, HOWEVER, that the Borrower agrees promptly to return
such refund (together with any interest with respect thereto due to the relevant
taxing authority) (free of all Taxes) to the Administrative Agent or the
applicable Lender Party, as the case may be, upon receipt of a notice that such
refund is required to be repaid to the relevant taxing authority.
SECTION 2.13 SHARING OF PAYMENTS, ETC. If any Lender Party shall obtain
at any time any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise) (i) on account of Obligations due and
payable to such Lender Party hereunder or under the Notes at such time in excess
of its ratable share (according to the proportion of (x) the amount of such
Obligations due and payable to such Lender Party at such time to (y) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder or under the Notes
at such time obtained by all the Lender Parties at such time or (ii) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (x) the amount of such Obligations owing to such Lender Party
at such time to (y) the aggregate amount of the Obligations owing (but not due
and payable) to all Lender Parties hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such participations in the Obligations due and payable or
owing to them, as the case may be, as shall be necessary to cause such
purchasing Lender Party to share the excess payment ratably with each of them;
PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender Party, such purchase from each
other Lender Party shall be rescinded and each such other Lender Party shall
repay to the purchasing Lender Party the purchase price to the extent of such
Lender Party's ratable share (according to the proportion of (x) the purchase
price paid to such Lender Party to (y) the aggregate purchase price paid to all
Lender Parties) of such recovery
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together with an amount equal to such Lender Party's ratable share (according to
the proportion of (x) the amount of such other Lender Party's required repayment
to (y) the total amount of such required repayments to the purchasing Lender
Party) of any interest or other amount paid or payable by the purchasing Lender
Party in respect of the total amount so recovered.
The Borrower agrees that any Lender Party so purchasing a participation from
another Lender Party pursuant to this Section 2.13 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender Party
were the direct creditor of the Borrower in the amount of such participation.
SECTION 2.14 USE OF PROCEEDS. The proceeds of the Advances and
issuances of Letters of Credit shall be available, and the Borrower shall use
such proceeds and Letters of Credit solely (a) to finance the purchase price for
the Acquisition, including any post-closing purchase price adjustments payable
in accordance with the terms of the Acquisition Documents, (b) to pay fees and
expenses incurred in connection with the Transaction, (c) to provide working
capital and finance capital expenditures for the Borrower and its Subsidiaries
and for acquisitions by the Borrower and its Subsidiaries, and (d) to refinance
certain existing indebtedness of the Borrower
SECTION 2.15 DEFAULTING LENDERS. (a) In the event that, at any one
time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower
shall be required to make any payment hereunder or under any other Loan Document
to or for the account of such Defaulting Lender, then the Borrower may, so long
as no Default shall occur or be continuing at such time and to the fullest
extent permitted by applicable law, set off and otherwise apply the obligation
of the Borrower to make such payment to or for the account of such Defaulting
Lender against the obligation of such Defaulting Lender to make such Defaulted
Advance. In the event that, on any date, the Borrower shall so set off and
otherwise apply its obligation to make any such payment against the obligation
of such Defaulting Lender to make any such Defaulted Advance on or prior to such
date, the amount so set off and otherwise applied by the Borrower shall
constitute for all purposes of this Agreement and the other Loan Documents an
Advance by such Defaulting Lender made on the date under the Facility pursuant
to which such Defaulted Advance was originally required to have been made
pursuant to Section 2.1. Such Advance shall be a Prime Rate Advance and shall be
considered, for all purposes of this Agreement, to comprise part of the
Borrowing in connection with which such Defaulted Advance was originally
required to have been made pursuant to Section 2.1, even if the other Advances
comprising such Borrowing shall be Eurodollar Rate Advances on the date such
Advance is deemed to be made pursuant to this subsection (a). The Borrower shall
notify the Administrative Agent at any time the Borrower exercises its right of
set-off pursuant to this subsection (a) and shall set forth in such notice (i)
the name of the Defaulting Lender and the Defaulted Advance required to be made
by such Defaulting Lender and (ii) the amount set off and otherwise applied in
respect of such Defaulted Advance pursuant to this subsection (a). Any portion
of such payment otherwise required to be made by the Borrower to or for the
account of such Defaulting Lender which is paid by the Borrower, after giving
effect to the amount set off and otherwise applied by the Borrower
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pursuant to this subsection (a), shall be applied by the Administrative Agent as
specified in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
the Administrative Agent or any of the other Lender Parties and (iii) the
Borrower shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such Defaulted Amount to the extent required to
pay such Defaulted Amount. In the event that the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date,
the amount so applied by the Administrative Agent shall constitute for all
purposes of this Agreement and the other Loan Documents, payment, to such
extent, of such Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Lender Parties, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent and such other Lender Parties and, if the
amount of such payment made by the Borrower shall at such time be insufficient
to pay all Defaulted Amounts owing at such time to the Administrative Agent and
the other Lender Parties, in the following order of priority:
(i) FIRST, to the Administrative Agent for any Defaulted Amount
then owing to the Administrative Agent; and
(ii) SECOND, to the Lender Parties for any Defaulted Amounts then
owing to such Lender Parties, ratably in accordance with such respective
Defaulted Amounts then owing to such Lender Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the Borrower, the Administrative Agent or any
other Lender Party shall be required to pay or distribute any amount hereunder
or under any other Loan Document to or for the account of such Defaulting
Lender, then the Borrower or such other Lender Party shall pay such amount to
the Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent shall,
to the fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow under
this subsection (c) shall be deposited by the Administrative Agent in an account
with Fleet, in the name and under the control of the Administrative Agent, but
subject to the provisions of this
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subsection (c). The terms applicable to such account, including the rate of
interest payable with respect to the credit balance of such account from time to
time, shall be Fleet's standard terms applicable to escrow accounts maintained
with it. Any interest credited to such account from time to time shall be held
by the Administrative Agent in escrow under, and applied by the Administrative
Agent from time to time in accordance with the provisions of, this subsection
(c). The Administrative Agent shall, to the fullest extent permitted by
applicable law, apply all funds so held in escrow from time to time to the
extent necessary to make any Advances required to be made by such Defaulting
Lender and to pay any amount payable by such Defaulting Lender hereunder and
under the other Loan Documents to the Administrative Agent or any other Lender
Party, as and when such Advances or amounts are required to be made or paid and,
if the amount so held in escrow shall at any time be insufficient to make and
pay all such Advances and amounts required to be made or paid at such time, in
the following order of priority:
(i) FIRST, to the Administrative Agent for any amount then due and
payable by such Defaulting Lender to the Administrative Agent hereunder;
(ii) SECOND, to the Lender Parties for any amount then due and
payable by such Defaulting Lender to such Lender Parties hereunder, ratably in
accordance with such respective amounts then due and payable to such Lender
Parties; and
(iii) THIRD, to the Borrower for any Advance then required to be
made by such Defaulting Lender pursuant to a Commitment of such Defaulting
Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents in such manner as the Administrative
Agent shall reasonably direct.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.15 are in addition to other rights and remedies that the Borrower may
have against such Defaulting Lender with respect to any Defaulted Advance and
that the Administrative Agent or any Lender Party may have against such
Defaulting Lender with respect to any Defaulted Amount.
SECTION 2.16 REMOVAL OF LENDER. In the event that any Lender Party (an
"AFFECTED LENDER") (a) demands payment of costs or additional amounts pursuant
to Section 2.10 or Section 2.12 or (b) asserts, pursuant to Section 2.10(d) that
it is unlawful for such Affected Lender to make Eurodollar Rate Advances, then
(subject to such Affected Lender's right to rescind such demand or assertion
within 10 days after the notice from the Borrower referred to below and so long
as no Event of Default exists) the Borrower may, upon 20 days' prior written
notice to such Affected Lender and the Administrative Agent, with the reasonable
assistance of the Administrative Agent, elect to cause such Affected Lender to
assign all of its rights and obligations under the Agreement
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(including, without limitation, all of its Commitment or Commitments, the
Advances owing to it and the Note or Notes held by it) to an Eligible Assignee
selected by the Borrower which is reasonably satisfactory to the Administrative
Agent, so long as such Affected Lender receives payment in full in cash of the
outstanding principal amount of all Advances made by it and all accrued and
unpaid interest thereon and all other amounts due and payable to such Affected
Lender as of the effective date of such assignment (including, without
limitation, amounts owing to such Affected Lender pursuant to Section 2.3, 2.4,
2.7, 2.8, 2.10 or 2.12) and in such case such Affected Lender agrees to make
such assignment, and such assignee shall agree to accept such assignment and
assume all the obligations of such Affected Lender hereunder, in accordance with
Section 11.7. Until the consummation of an assignment in accordance with the
foregoing provisions of this Section 2.16, the Borrower shall continue to pay to
the Affected Lender any Obligations as they become due and payable.
ARTICLE 3
CONDITIONS OF LENDING
SECTION 3.1 CONDITIONS PRECEDENT TO INITIAL EXTENSION OF CREDIT. The
obligation of each Lender to make an Advance or of the Issuing Bank to issue a
Letter of Credit on the occasion of the Initial Extension of Credit hereunder is
subject to the satisfaction of each of the following conditions precedent before
or concurrently with the Initial Extension of Credit:
(a) The Administrative Agent shall have received on or before the day
of the Initial Extension of Credit the following (except that, with respect to
the deliveries and conditions specified in paragraph (C) of clause (iv) below,
the Administrative Agent shall have received such deliveries and such conditions
shall be satisfied as soon as possible, but in any event not later than 45 days
following the Initial Extension of Credit), each dated such day (unless
otherwise specified), in form and substance reasonably satisfactory to the
Administrative Agent and the Lenders, and in sufficient copies (except for the
Notes), for each Lender Party:
(i) The Notes payable to the order of the Lenders duly executed by
the Borrower.
(ii) A security agreement in substantially the form of EXHIBIT E
granting to the Administrative Agent, for the ratable benefit of the Lenders, a
first priority security interest (subject only to Permitted Liens) in all of the
personal property and assets of the Borrower and each Guarantor described in
such Security Agreement (together with each other security agreement delivered
pursuant to Section 5.13, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms, each a "SECURITY
AGREEMENT"), duly executed by the Borrower and each Guarantor, together with:
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(A) proper, duly executed financing statements under the
Uniform Commercial Code of all jurisdictions that the Administrative
Agent may deem necessary or desirable in order to perfect and protect
the Liens and security interests created under the Security Agreement,
covering the Collateral described in the Security Agreement;
(B) completed requests for information, dated on or before the
date of the Initial Extension of Credit, listing all effective
financing statements filed that name the Borrower or any other Loan
Party as debtor, together with copies of such financing statements;
(C) evidence of the completion of all other recordings and
filings of or with respect to the Security Agreement that the
Administrative Agent may deem necessary or desirable in order to
perfect and protect the Liens created thereby;
(D) evidence of the insurance required by the terms of the
Security Agreement;
(E) copies of the Assigned Agreements, if any, referred to in
the Security Agreement, together with a consent to such assignments, if
any, in substantially the form of Exhibit C to the Security Agreement,
duly executed by each party to such Assigned Agreements other than the
Borrower;
(F) certificates representing the Pledged Shares referred to
in the Security Agreement, accompanied by undated stock powers executed
in blank and irrevocable proxies;
(G) in the case of the Borrower's Foreign Subsidiaries, all
action necessary to allow the Administrative Agent to obtain a valid
and enforceable, first priority, perfected security interest in 65% of
the stock of each Foreign Subsidiary and a memorandum to the
Administrative Agent from appropriate foreign counsel confirming that
the Administrative Agent, on behalf of the Secured Parties, has
obtained a valid and enforceable first priority perfected security
interest in the relevant Pledged Stock or outlining the steps necessary
to obtain a perfected security interest in the relevant Pledged Stock;
and
(H) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to perfect and protect
the Liens and security interests created under the Security Agreement
has been taken.
(iii) RESERVED.
(iv) (A) Fully executed counterparts of Mortgages duly executed by
the applicable Loan Party, creating a valid and enforceable first priority lien
on each Mortgaged Property listed on SCHEDULE 4.20 (subject only to Permitted
Liens) in favor of Administrative Agent (or a
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trustee acting on behalf of Administrative Agent required or desired under local
law) for the benefit of the Secured Parties;
(B) Mortgagee title insurance policies (or binding commitments
to issue such title insurance policies) which shall (1) be issued to
Administrative Agent for the benefit of the Secured Parties by title
insurance companies reasonably satisfactory to the Administrative Agent
(the "MORTGAGEE POLICIES") in amounts reasonably satisfactory to the
Administrative Agent insuring that the Mortgages are valid and
enforceable first priority mortgage liens on the respective Mortgaged
Properties, free and clear of all defects, encumbrances (except
Permitted Real Property Encumbrances) and other Liens (except Permitted
Liens), (2) be in form and substance reasonably satisfactory to the
Secured Parties, (3) include, as appropriate and as available, an
endorsement for future advances under this Agreement, the Notes and the
Mortgages and such other endorsements that the Administrative Agent in
its discretion may reasonably request, (4) not include an exception for
mechanics' liens, and (5) provide for affirmative insurance and such
reinsurance (including direct access agreements) as the Administrative
Agent in its discretion may reasonably request; and
(C) Surveys, in form and substance reasonably satisfactory to
the Administrative Agent, of each Mortgaged Property listed on SCHEDULE
4.20, dated a recent date reasonably acceptable to the Administrative
Agent, certified by a licensed professional surveyor in a manner
reasonably satisfactory to the Administrative Agent for the benefit of
the Lenders.
(v) An intellectual property security agreement in substantially
the form of EXHIBIT F hereto granting to the Administrative Agent for the
ratable benefit of the Lenders a first priority (subject only to Permitted
Liens) security interest in all of the Borrower's and each Guarantor's
intellectual property (together with each other intellectual property security
agreement delivered pursuant to Section 5.13, in each case as amended,
supplemented or otherwise modified from time to time in accordance with its
terms, each an "INTELLECTUAL PROPERTY SECURITY AGREEMENT"), duly executed by the
Borrower and each Guarantor, together with evidence that all action that the
Administrative Agent may deem necessary or desirable in order to perfect and
protect the Liens and security interests created under the Intellectual Property
Security Agreement has been taken.
(vi) A guaranty in substantially the form of EXHIBIT G hereto (as
hereafter amended, supplemented or otherwise modified from time to time in
accordance with its terms, each a "SUBSIDIARY GUARANTY"), duly executed by each
Subsidiary of the Borrower.
(vii) Certified copies of resolutions of the Board of Directors of
each Loan Party approving the Acquisition, this Agreement, the Notes, and each
other Loan Document and Acquisition Document to which it is or is to be a party.
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(viii) A copy of the charter of each Loan Party and each amendment
thereto, certified (as of a date reasonably near the date of the Initial
Extension of Credit) by the Secretary of State of the jurisdiction of its
incorporation as being a true and correct copy thereof.
(ix) A copy of a certificate of the Secretary of State of the
jurisdiction of its incorporation, dated within five (5) Business Days of the
date of the Initial Extension of Credit, listing the charter of each Loan Party
and each amendment thereto on file in its office and certifying that (A) such
amendments are the only amendments to such Loan Party's charter on file in its
office, (B) such Loan Party has paid all franchise taxes to the date of such
certificate and (C) such Loan Party is duly incorporated and in good standing
under the laws of the State of the jurisdiction of its incorporation.
(x) A copy of a certificate of the Secretary of State of each State
listed on SCHEDULE 3.1(a)(x), dated reasonably near the date of the Initial
Extension of Credit, stating that the Borrower is duly qualified and in good
standing as a foreign corporation in such State and has filed all annual reports
required to be filed to the date of such certificate.
(xi) A certificate of each Loan Party signed on behalf of such Loan
Party by a Responsible Officer and the Secretary or an Assistant Secretary of
such Loan Party, dated the date of the Initial Extension of Credit (the
statements made in such certificate shall be true on and as of the date of the
Initial Extension of Credit), certifying as to (A) the absence of any amendments
to the charter of such Loan Party since the date of the Secretary of State's
certificate referred to in Section 3.1(a)(ix), (B) a true and correct copy of
the bylaws of such Loan Party as in effect on the date of the Initial Extension
of Credit, (C) the due incorporation and good standing of such Loan Party as a
corporation organized under the laws of the jurisdiction of its incorporation,
and the absence of any proceeding for the dissolution or liquidation of such
Loan Party, (D) the truth in all material respects of the representations and
warranties contained in the Loan Documents and the Acquisition Documents as
though made on and as of the date of the Initial Extension of Credit, (E) the
absence of any event occurring and continuing, or resulting from the Initial
Extension of Credit, that constitutes a Default and (F) the names and true
signatures of the officers of such Loan Party authorized to sign this Agreement,
the Notes, each other Loan Document to which they are or are to be parties and
the other documents to be delivered hereunder and thereunder.
(xii) Such financial, business and other information regarding each
Loan Party and each such Person's Subsidiaries as the Initial Lenders shall have
reasonably requested, including, without limitation, information as to possible
contingent liabilities, tax matters, Environmental Actions, Environmental
Permits, obligations under Plans, Multiemployer Plans and Welfare Plans,
collective bargaining agreements and other arrangements with employees, audited
annual financial statements as at June 27, 1998, interim financial statements
dated the end of the most recent fiscal quarter for which financial statements
are available (or, in the event the Initial Lenders due diligence review reveals
material changes since such financial statements, as of a later date within
thirty (30) days of the day of the Initial Extension of Credit), pro forma
financial statements as to each of the
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Loan Parties and forecasts prepared by management of the Borrower, all in form
and substance reasonably satisfactory to the Initial Lenders.
(xiii) A Notice of Borrowing with respect to each Facility pursuant
to which the Borrower shall request an Initial Extension of Credit.
(xiv) A Borrowing Base Certificate evidencing, as of the Closing
Date, a Borrowing Base in an amount which is at least $10,000,000 greater than
the aggregate amount of the Initial Extension of Credit.
(b) The Initial Lenders shall be satisfied with the corporate and legal
structure and capitalization of each Loan Party and each of its Subsidiaries
after the Acquisition, including, without limitation, the terms and conditions
of the charter, by-laws and each class of capital stock of each Loan Party and
each such Subsidiary and of each agreement or instrument relating to such
structure or capitalization.
(c) The Initial Lenders shall be satisfied that all Existing Debt,
other than the Debt identified on SCHEDULE 4.18(b) (the "SURVIVING DEBT"), has
been (or, upon consummation of the Acquisition will be) prepaid, redeemed or
defeased in full or otherwise satisfied and extinguished and that all Surviving
Debt shall be on terms and conditions reasonably satisfactory to the Initial
Lenders.
(d) There shall have occurred no Material Adverse Change in the
business, condition (financial or otherwise), results of operations,
performance, properties or prospects of (i) the LeFebure Division, since March
28, 1998, or (ii) of the Borrower and its Subsidiaries, taken as a whole and
excluding the LeFebure Division, since June 26, 1998, provided, however, that
the audited financial statements of the Borrower to be provided pursuant to
Section 3.1(a)(xiii) shall not evidence a Material Adverse Change in the
business, condition (financial or otherwise), results of operations,
performance, properties or prospects of the Borrower and its Subsidiaries, taken
as a whole, since March 28, 1998.
(e) Other than the litigation described in SCHEDULE 3.1(e) (the
"DISCLOSED LITIGATION"), there shall exist no action, suit, investigation,
litigation or proceeding pending or threatened in any court or before any
arbitrator or governmental or regulatory agency or authority that could
reasonably be expected to (A) have a material adverse effect on the business,
condition (financial or otherwise), results of operations, performance,
properties or prospects of the Borrower, The LeFebure Division and the
Borrower's Subsidiaries, taken as a whole, (B) materially adversely affect the
ability of the Borrower or any Guarantor to perform its obligations under the
Loan Documents or (C) materially adversely affect the rights and remedies of the
Administrative Agent and the Lender Parties under the Loan Documents
(collectively, a "MATERIAL ADVERSE EFFECT"); and there shall have been no
Material Adverse Change in the status, or financial effect on the Borrower or
any of its Subsidiaries, of the Disclosed Litigation from that described on
SCHEDULE 3.1(e).
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(f) All material governmental and material third party consents and
approvals necessary in connection with each aspect of the Acquisition and the
Facilities shall have been obtained (without the imposition of any conditions
that are not reasonably acceptable to the Administrative Agent and shall remain
in effect; all applicable waiting periods shall have expired without any adverse
action being taken by any competent authority; and no law or regulation shall be
applicable in the reasonable judgment of the Initial Lenders that restrains,
prevents or imposes materially adverse conditions upon any aspect of the
Acquisition or the Facilities.
(g) The Administrative Agent shall have completed a due diligence
investigation of the Borrower, the other Loan parties and their respective
Subsidiaries in scope, and with results, satisfactory to the Initial Lenders;
the Borrower and each of the Guarantors shall have given the Administrative
Agent such access to their respective books and records as the Administrative
Agent may have requested (including access so as to permit the Administrative
Agent to conduct a field audit, the results of which field audit shall be
satisfactory to the Administrative Agent) upon reasonable notice in order to
carry out its investigations, appraisals and analyses, including, but not
limited to, calculation of the value of Eligible Receivables and Eligible
Inventory. All of the information (other than financial projections), taken as a
whole, provided by or on behalf of the Borrower or any of its Subsidiaries to
the Administrative Agent and the Initial Lenders prior to their commitment in
respect of the Facilities (the "PRE-COMMITMENT INFORMATION") shall be true and
correct in all material respects (it being understood that as to any such
information furnished to the Company by De La Rue, the preceding representation
is given only to the best of the Borrower's knowledge), and no development or
change shall have occurred, and no additional information shall have come to the
attention of the Administrative Agent or the Initial Lenders, that (i) has
resulted in or could reasonably be expected to result in a material change in,
or material deviation from, the Pre-Commitment Information, taken as a whole, or
(ii) has had or could reasonably be expected to have a Material Adverse Effect.
The Administrative Agent shall be reasonably satisfied with the results, taken
as a whole, of interviews conducted and other investigations made with respect
to the Borrower's relationships with its customers.
(h) The Borrower and each Guarantor shall have delivered a certificate,
in form and substance reasonably satisfactory to the Administrative Agent and
the Initial Lenders, attesting to the Solvency of the Borrower or Guarantor, as
applicable, in each case individually and together with its Subsidiaries,
immediately before and immediately after giving effect to the Transaction, from
its respective Chief Financial Officer.
(i) The Borrower shall have demonstrated to the Administrative Agent's
and the Initial Lenders' reasonable satisfaction that: (i) the operations of the
Borrower and its Subsidiaries comply in all material respects with applicable
Environmental Laws and health and safety statutes and regulations, including,
without limitation, regulations promulgated under the Federal Resource
Conservation and Recovery Act; (ii) such operations are not the subject of any
federal, state or local investigation evaluating the need for remedial action
involving an expenditure to respond to such Environmental Actions; (iii) neither
the Borrower nor any of its Subsidiaries has or could reasonably be expected to
have any material contingent liability in connection with any Environmental
Action;
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(iv) the Borrower has completed such environmental audits and investigations
(including "Phase I" and, if, in its reasonable judgment, the Administrative
Agent deems it advisable, "Phase II" environmental audits), as the
Administrative Agent may request with respect to the operations of the Borrower
and its Subsidiaries and such audits and investigations have not uncovered any
condition or conditions which could be reasonably expected to have a Material
Adverse Effect on the Borrower and its Subsidiaries.
(j) The Administrative Agent and the Initial Lenders shall be satisfied
that (i) the Borrower and its Subsidiaries will be able to meet in all material
respects their respective obligations under all employee and retiree welfare
plans, (ii) the employee benefit plans of the Borrower and its Subsidiaries are,
in all material respects, funded in accordance with the minimum statutory
requirements, (iii) no material "reportable event" (as defined in ERISA, but
excluding events for which reporting has been waived) has occurred as to any
such employee benefit plan and (iv) no termination of, or withdrawal from, any
such employee benefit plan has occurred or is contemplated that could reasonably
be expected to result in a material liability. The Borrower has delivered to the
Administrative Agent a certified copy of the employment agreement with Xxxxxx
Xxxxxxxx.
(k) The Administrative Agent and the Initial Lenders shall be
reasonably satisfied with the amount, types and terms and conditions of all
insurance maintained by or, after giving effect to the consummation of the
Acquisition, to be maintained by, the Borrower and its Subsidiaries, and the
Administrative Agent shall have received endorsements naming the Administrative
Agent, on behalf of the Lenders, as an additional insured under all insurance
policies to be maintained with respect to the properties of the Borrower and its
Subsidiaries forming any part of the Lenders' Collateral under the Security
Agreement, the other Loan Documents and the Collateral Documents.
(l) The Administrative Agent shall have received reasonably
satisfactory opinions of counsel for the Borrower and the Guarantors and local
and special counsel to the extent requested by the Administrative Agent, as to
the Transaction.
(m) There shall exist no Default or Event of Default under any of the
Loan Documents, and all legal matters incident to the Initial Extension of
Credit shall be satisfactory to counsel for the Administrative Agent.
(n) All accrued reasonable fees and expenses of the Administrative
Agent (including the reasonable fees and expenses of counsel for the
Administrative Agent and local counsel for the Administrative Agent) shall have
been paid.
(o) The Acquisition shall have been consummated (prior to the Initial
Extension of Credit) pursuant to the terms and conditions of the Acquisition
Agreement (and none of the material terms or conditions of the Acquisition
Agreement shall have been waived or modified except with the consent of the
Administrative Agent and the Required Lenders) and in compliance with all
applicable laws and with all necessary consents and approvals. The final terms
and conditions of the Acquisition Documents shall be satisfactory in all
respects to the Administrative Agent and the
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Lenders, and the Administrative Agent shall have received certified copies of
each of the Acquisition Documents, each of which shall be satisfactory to the
Lenders and in full force and effect.
(p) The Initial Lenders shall be satisfied that there are no state
takeover laws and no supermajority charter provisions applicable to the
Acquisition, or that any conditions to avoiding such restrictions have been
satisfied.
(q) All Advances made under this Agreement shall be in full compliance
with all applicable requirements of law, including, without limitation, Federal
Reserve Regulations T, U, and X.
(r) The Administrative Agent shall have received a duly executed and
delivered counterparts of landlord waivers from all landlords and leasehold
mortgage holders and bailee letters from all warehousemen and bailees with
respect to any Inventory located at a location specified on SCHEDULE 3.1(r). The
Administrative Agent shall also have received such bank consent agreements,
third party consents, intercreditor agreements or other agreements, as deemed
necessary or desirable in the Administrative Agent's reasonable discretion, to
preserve or otherwise in respect of the Administrative Agent's rights in the
Collateral.
(s) The Administrative Agent shall have received such other approvals,
opinions or documents as the Administrative Agent may reasonably request, and
all legal matters incident to such Borrowing shall be reasonably satisfactory to
counsel for the Administrative Agent.
SECTION 3.2 CONDITIONS PRECEDENT TO EACH BORROWING AND ISSUANCE. The
obligation of each appropriate Lender to make an Advance (other than a Letter of
Credit Advance made by the Issuing Bank or a Revolving Credit Lender pursuant to
Section 2.3(c) and a Swing Line Advance made by a Revolving Credit Lender
pursuant to Section 2.2(b)), and the obligation of the Issuing Bank to issue a
Letter of Credit (including the initial issuance thereof) or renew a Letter of
Credit and the right of the Borrower to request the issuance or renewal of a
Letter of Credit, shall each be subject to the further conditions precedent that
on the date of each such Borrowing or issuance or renewal:
(a) Each of the conditions precedent listed in Section 3.1 shall have
been satisfied or waived in accordance with this Agreement.
(b) The following statements shall be true in all material respects and
the Administrative Agent shall have received a certificate signed by a duly
authorized Responsible Officer of the Borrower, dated the date of such Borrowing
or issuance or renewal, stating on behalf of the Borrower that (and each of the
giving of the applicable Notice of Borrowing, Notice of Swing Line Borrowing, or
Notice of Issuance or Notice of Renewal and the acceptance by the Borrower of
the proceeds of a Borrowing or of a Letter of Credit or the renewal of a Letter
of Credit shall constitute a representation and warranty by the Borrower that
both on the date of such notice and on the date of such Borrowing or issuance or
renewal such statements are true in all material respects):
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(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date, before and
after giving effect to such Borrowing or issuance or renewal and to the
application of the proceeds therefrom, as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result from
such Borrowing or issuance or renewal or from the application of the proceeds
therefrom, that constitutes a Default;
(iii) for each Revolving Credit Advance, Swing Line Advance made by
the Swing Line Bank or issuance or renew of any Letter of Credit, the Borrowing
Base equals or exceeds the aggregate principal amount of the Revolving Credit
Advances PLUS Swing Line Advances PLUS Letter of Credit Advances PLUS the
aggregate Available Amount of all Letters of Credit then outstanding after
giving effect to such Advances or issuance or renewal, respectively; and
(iv) such Borrowing or issuance or renewal is permitted under the
Senior Unsecured Note Indenture.
(c) The Administrative Agent shall upon its request have received a
Borrowing Base Certificate, as of the date of such Borrowing or issuance or
renewal.
SECTION 3.3 DETERMINATIONS UNDER SECTION 3.1. For purposes of
determining compliance with the conditions specified in Section 3.1, each
Initial Lender shall be deemed to have consented to, approved or accepted or to
be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Initial Lenders
unless an officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received written notice from such
Initial Lender prior to the Initial Extension of Credit specifying its objection
thereto and, if the Initial Extension of Credit consists of a Borrowing, such
Initial Lender shall not have made available to the Administrative Agent such
Initial Lender's ratable portion of such Borrowing.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower represents and warrants as follows:
SECTION 4.1 ORGANIZATION. Each Loan Party (a) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (b) is duly qualified and in good standing as
a foreign corporation in each other jurisdiction in which it owns
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or leases property or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so qualify or be licensed
could not reasonably be expected to have a Material Adverse Effect and (c) has
all requisite corporate power and authority (including, without limitation, all
governmental licenses, permits and other approvals) to own or lease and operate
its properties and to carry on its business as now conducted and as proposed to
be conducted.
SECTION 4.2 SUBSIDIARIES. Set forth on SCHEDULE 4.2 hereto is a
complete and accurate list of all Subsidiaries of each Loan Party, showing as of
the date hereof (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of capital stock authorized,
and the number outstanding, on the date hereof and the percentage of the
outstanding shares of each such class owned (directly or indirectly) by such
Loan Party and the number of shares covered by all outstanding options,
warrants, rights of conversion or purchase and similar rights at the date
hereof. All of the outstanding capital stock of all of such Subsidiaries has
been validly issued, is fully paid and non-assessable and is owned by such Loan
Party or one or more of its Subsidiaries free and clear of all Liens, except
those created under the Collateral Documents.
SECTION 4.3 CORPORATE POWER, AUTHORIZATION. The execution, delivery and
performance by each Loan Party of this Agreement, the Notes, each other Loan
Document and each Acquisition Document to which it is or is to be a party, and
the consummation of the Transaction, are within such Loan Party's corporate
powers, have been duly authorized by all necessary corporate action, and do not
(a) contravene such Loan Party's charter or bylaws, (b) violate any law
(including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including, without limitation, Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (c) conflict with or result in the breach of, or
constitute a default under, any material contract, loan agreement, indenture,
mortgage, deed of trust, lease or other material instrument or agreement binding
on or affecting any Loan Party, any of its Subsidiaries or any of their
respective properties or (d) except for the Liens created under the Collateral
Documents, result in or require the creation or imposition of any Lien upon or
with respect to any of the properties of any Loan Party or any of its
Subsidiaries, except in the case of clause (c) above, for any such violations,
conflicts, breaches, defaults or Liens which would not reasonably be expected to
have a Material Adverse Effect. No Loan Party or any of its Subsidiaries is in
violation of any such law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument or
agreement, the violation or breach of which would reasonably be expected to have
a Material Adverse Effect.
SECTION 4.4 GOVERNMENTAL AUTHORIZATIONS, APPROVALS. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is or was required for (a) the due execution,
delivery, recordation, filing or performance by any Loan Party of this
Agreement, the Notes, any other Loan Document or any Acquisition Document to
which it is or is to be a party, or for the consummation of the Transaction, (b)
the grant by any Loan
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Party of the Liens granted by it pursuant to the Collateral Documents, (c) the
perfection or maintenance of the Liens created by the Collateral Documents
(including the only priority nature thereof) or (d) the exercise by the
Administrative Agent or any Lender Party of its rights under the Loan Documents
or the remedies in respect of the Collateral pursuant to the Collateral
Documents, except for the authorizations, approvals, actions, notices and
filings listed on SCHEDULE 4.4, all of which have been duly obtained, taken,
given or made and are in full force and effect. All applicable waiting periods
in connection with the Transaction have expired without any action having been
taken by any competent authority restraining, preventing or imposing materially
adverse conditions upon the Transaction or the rights of the Loan Parties or
their Subsidiaries freely to transfer or otherwise dispose of, or to create any
Lien on, any properties now owned or hereafter acquired by any of them.
SECTION 4.5 DUE EXECUTION, VALIDITY, ENFORCEABILITY. This Agreement and
each Acquisition Document has been, and each of the Notes and each other Loan
Document has been or when delivered hereunder will have been, duly executed and
delivered by each Loan Party party thereto. This Agreement and each Acquisition
Document is, and each of the Notes and each other Loan Document has been or when
delivered hereunder will be, the legal, valid and binding obligation of each
Loan Party party thereto, enforceable against such Loan Party in accordance with
its terms.
SECTION 4.6 FINANCIAL STATEMENTS. The consolidated balance sheets of
the Borrower and its Subsidiaries as at June 27, 1998 and the related
consolidated statements of income and consolidated statements of cash flows of
the Borrower and its Subsidiaries for the Fiscal Year then ended, accompanied by
an opinion of Deloitte & Touche, LLP, independent public accountants, copies of
which have been furnished to each Lender Party, fairly present in all material
respects, the Consolidated financial condition of the Borrower and its
Subsidiaries as at such dates and the Consolidated results of the operations of
the Borrower and its Subsidiaries for the period ended on such date, all in
accordance with GAAP applied on a consistent basis, and, since June 27, 1998,
there has been no Material Adverse Change.
SECTION 4.7 ACCURATE INFORMATION. None of the Information Memorandum,
any Pre-Commitment Information or any information, exhibit or report furnished
by any Loan Party to the Administrative Agent or any Lender Party in connection
with the Loan Documents or pursuant to the terms of the Loan Documents contained
any untrue statement of a material fact or omitted to state a material fact
necessary, in light of the circumstances under which they were made, to make the
statements made therein not misleading.
SECTION 4.8 LITIGATION. Other than the Disclosed Litigation, there is
no action, suit, investigation, litigation or proceeding affecting the Borrower,
any other Loan Party or any of their respective Subsidiaries, including, without
limitation, any Environmental Action, pending or threatened before any court,
governmental agency or arbitrator that could reasonably be expected to have a
Material Adverse Effect, and there has been no Material Adverse Change in the
status, or
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financial effect on any Loan Party or any of its Subsidiaries, of the Disclosed
Litigation from that described on SCHEDULE 3.1(e).
SECTION 4.9 REGULATION U. Neither the Borrower nor any other Loan Party
nor any of their respective Subsidiaries is engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock.
SECTION 4.10 ERISA.
Except as set forth in the financial statements referred to in Section
4.6 and in Article 7, neither the Borrower, any of the other Loan Parties nor
any of their respective Subsidiaries has any material liability with respect to
"expected post retirement benefit obligations" within the meaning of Statement
of Financial Accounting Standards No. 106.
SECTION 4.11 CASUALTY. Neither the business nor the properties of any
Loan Party or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that could reasonably be expected to have
a Material Adverse Effect.
SECTION 4.12 ENVIRONMENTAL MATTERS. Except as disclosed in Schedule
4.12:
(a) The operations and properties of each Loan Party and each of its
Subsidiaries (for purposes of this Section 4.12 "Loan Parties") comply in all
material respects with all applicable Environmental Laws and Environmental
Permits, past non-compliance with such Environmental Laws and Environmental
Permits has been resolved without any material ongoing obligations or costs, and
no circumstances exist that could reasonably be expected to (i) form the basis
of a material Environmental Action against any of the Loan Parties or any of
their properties or (ii) cause any such property to be subject to any material
restrictions on ownership, occupancy, use or transferability under any
applicable Environmental Law.
(b) (i) None of the properties currently or formerly owned or operated
by any of the Loan Parties is listed or have been officially proposed for
listing on the NPL or on the CERCLIS or any analogous foreign, state or local
list or is, to their knowledge, adjacent to any such property; (ii) there are no
and, to the best of the Loan Parties' knowledge, never have been any underground
or aboveground storage tanks or any surface impoundments, septic tanks, pits,
sumps or lagoons in which Hazardous Materials are being or, to the best of the
Loan Parties' knowledge, have been treated, stored or disposed on any property
currently owned or operated by any of the Loan Parties or to their knowledge, on
any property formerly owned or operated by any of the Loan Parties; (iii) there
is no asbestos or asbestos-containing material on any property currently owned
or operated by any of the Loan Parties; and (iv) Hazardous Materials have not
been released, discharged or disposed of on any property currently owned or
operated by any of the Loan Parties, or, to their knowledge,
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any property formerly owned or operated by any of the Loan Parties in violation
of any applicable Environmental Law.
(c) None of the Loan Parties are undertaking or have completed, either
individually or together with other potentially responsible parties, any
investigation, response to a request for information related to, or assessment
of, or Remedial, Response or Removal action relating to, any actual or
threatened release, discharge or disposal of Hazardous Materials at any site,
location or operation, either voluntarily or pursuant to the order of any
governmental or regulatory authority or the requirements of any Environmental
Law; and all Hazardous Materials generated, used, treated, handled or stored at,
or transported to or from, any property currently owned or operated by any of
the Loan Parties, to their knowledge, or any property formerly owned or operated
by any of the Loan Parties or have been disposed of in a manner not reasonably
expected to result in a material liability with respect to any of the Loan
Parties.
SECTION 4.13 BURDENSOME DOCUMENTS. Except as set forth on SCHEDULE
4.13, no Loan Party nor any of its Subsidiaries is a party to any indenture,
loan or credit agreement or any lease or other agreement or instrument or
subject to any charter or corporate restriction that could reasonably be
expected to have a Material Adverse Effect.
SECTION 4.14 PRIORITY OF LIENS. Except with respect to (i) Liens on
equipment constituting fixtures, (ii) reserved rights of the United States
government as required under law, (iii) Liens upon patents, patent licenses,
trademarks and trademark licenses to the extent that (a) such Liens are not
otherwise perfected by the filing of financing statements under the Uniform
Commercial Code or by the filing and acceptance thereof in the United States
Patent and Trademark Office or (b) such patents, patent licenses, trademarks and
trademark licences are not, individually or in the aggregate, material to the
business of the Borrower and its Subsidiaries taken as a whole, (iv) Liens on
uncertificated securities, (v) Liens on Collateral the perfection of which
requires filings in or other actions under the laws of jurisdictions outside of
the United States of America, any State, territory or dependency thereof or the
District of Columbia (except to the extent that such filings or other actions
have been made or taken), (vi) Liens on contracts or accounts receivable on
which the United States of America or any department, agency or instrumentality
thereof is the obligor, (vii) Liens on proceeds of accounts receivable and
Inventory, until transferred to or deposited in a Blocked Account, and (viii)
claims of creditors of Persons receiving goods included as Collateral for "sale
or return" within the meaning of Section 2-326 of the Uniform Commercial Code of
the applicable jurisdiction, and upon filing of the financing statements
delivered to the Administrative Agent by the Borrower and its Subsidiaries on
the Closing Date in the jurisdictions listed on SCHEDULE 4.14 (which financing
statements are in proper form for filing in such jurisdictions), the recording
of the Mortgages, the recording of the Intellectual Property Security Agreement,
the making of filings after the Closing Date in any other jurisdiction as may be
necessary under any requirement of law, the payment of all filing and recording
fees and Taxes due in respect of any of the foregoing, and the delivery to, and
continuing possession by, the Administrative Agent of all instruments, chattel
paper and documents a security interest in which is perfected by possession, to
the extent provided therein, the Collateral Documents, when created and
delivered, create in favor of the Xxxxxxxxxxxxxx Xxxxx,
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for the ratable benefit of the Lenders, a valid and perfected first priority
security interest (subject to Permitted Liens) in the Collateral (which
Collateral includes all of the assets and real and personal property, whether
now owned or hereafter acquired and all of the products and proceeds of any of
the foregoing, of the Borrower, and all of the outstanding capital stock of each
of the Borrower's Domestic Subsidiaries and 65% of the capital stock of each of
the Borrower's Foreign Subsidiaries), securing the payment of the Obligations,
and all filings and other actions necessary or reasonably desirable to perfect
and protect such security interest have been duly taken. The Loan Parties are
the legal and beneficial owners of the Collateral free and clear of any Lien,
except for the liens and security interests created or expressly permitted under
the Loan Documents.
SECTION 4.15 TAXES.
To the knowledge of the Borrower, each Loan Party and each of its
Subsidiaries has filed, has caused to be filed or has been included in all tax
returns (Federal, state, local and foreign) required to be filed and has paid
all (i) taxes shown thereon to be due, together with applicable interest and
penalties and (ii) all taxes shown to be due and payable on any assessments of
which it has received notice made against it or any of its property and all
other taxes imposed on it or any of its property by any Governmental Authority
and no tax Lien has been filed, and no claim is being asserted, with respect to
any such tax, other than (x) taxes with respect to which the failure to pay, in
the aggregate, would not have a Material Adverse Effect or (y) taxes the amount
or validity of which are currently being contested in good faith by appropriate
proceedings diligently conducted and with respect to which reserves in
conformity with GAAP have been maintained.
SECTION 4.16 COMPLIANCE WITH SECURITIES LAWS. No Loan Party and none
any Loan Party's Subsidiaries 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. Neither the making of any Advances, nor the issuance of any Letters of
Credit, nor the application of the proceeds or repayment thereof by the
Borrower, nor the consummation of the Transaction, will violate any provision of
such Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder or any takeover, disclosure or other federal, state or
foreign securities law or Regulations T, U or X of the Federal Reserve Board.
The Borrower is not subject to regulation under any federal, state or foreign
statute or regulation which limits its ability to incur Debt.
SECTION 4.17 SOLVENCY. Each Loan Party is, individually and together
with its Subsidiaries, Solvent.
SECTION 4.18 DEBT.
(a) Set forth on SCHEDULE 4.18(a) is a complete and accurate list of
all Existing Debt the principal amount of which is greater than $250,000,
showing as of the date hereof the principal amount outstanding thereunder, the
maturity date thereof and the amortization schedule therefor.
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(b) Set forth on SCHEDULE 4.18(b) is a complete and accurate list of
all Surviving Debt the principal amount of which is greater than $100,000,
showing as of the date hereof the principal amount outstanding thereunder, the
maturity date thereof and the amortization schedule therefor.
SECTION 4.19 NO DEFAULTS, COMPLIANCE WITH LAWS.
(a) Except as set forth on SCHEDULE 4.19 hereto, no Loan Party is in
default under any agreement, ordinance, resolution, decree, bond, note,
indenture, order or judgment to which it is a party or by which it is bound, or
any other agreement or other instrument by which any of the properties or assets
owned by it or used in the conduct of its business is affected, which default
would reasonably be expected to have a Material Adverse Effect.
(b) Each Loan Party and each professional officer, director, employee
or contractor of any of the foregoing (in so far as related to services provided
in respect of the Borrower or any Subsidiary by any such officer, director,
employee or contractor) has complied and is in compliance in all respects with
all applicable laws, ordinances and regulations, resolutions, ordinances,
decrees and other similar documents and instruments of all courts and
governmental authorities, bureaus and agencies, domestic and foreign and all
applicable Environmental Laws and Regulations, non-compliance with which could
have a Material Adverse Effect.
SECTION 4.20 OWNED REAL PROPERTY. Set forth on SCHEDULE 4.20 is a
complete and accurate list of all real property owned by any Loan Party or any
of its Subsidiaries or in which any Loan Party has an interest as a contract
vendee (except for the property owned by the Borrower or its Subsidiaries in the
country of Mexico, each a "MORTGAGED PROPERTY" and, collectively, the "MORTGAGED
PROPERTIES"). Such Loan Party or such Subsidiary has good, marketable and
insurable fee simple title to such Mortgaged Property, free and clear of all
Liens, other than Permitted Liens. Each Mortgage creates, as security for the
obligations purported to be secured thereby, a valid and enforceable perfected
security interest in and Lien on the applicable Mortgaged Property (and will
create a valid and enforceable perfected security interest in and Lien on all
fixtures and improvements related to such Mortgaged Property and affixed or
added thereto on or after the Closing Date) in favor of the Administrative Agent
(or such other trustees that may be named therein) for the benefit of the
Secured Parties, superior to and prior to the rights of all third Persons
(except that the security interest created in the Mortgaged Property may be
subject to the Permitted Liens related thereto) and subject to no other Liens
(other than Permitted Real Property Encumbrances).
SECTION 4.21 LEASED REAL PROPERTY. Set forth on SCHEDULE 4.21 is a
complete and accurate list of all leases of real property under which any Loan
Party or any of its Subsidiaries is the lessee. To the best knowledge of each
Loan Party, each such lease is the legal, valid and binding obligation of the
lessor thereof, enforceable in accordance with its terms.
SECTION 4.22 MATERIAL CONTRACTS. Set forth on SCHEDULE 4.22 is a
complete and accurate list of all Material Contracts of each Loan Party and its
Subsidiaries, showing as of the date hereof
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the parties, subject matter and term thereof. Except as could not reasonably be
expected to have a Material Adverse Effect, each such Material Contract has been
duly authorized, executed and delivered by all parties thereto, has not been
amended or otherwise modified, is in full force and effect and is binding upon
and enforceable against all parties thereto in accordance with its terms. There
exists no material default under any Material Contract by the Borrower or any of
its Subsidiaries party thereto and, to the best knowledge of each Loan Party,
there exists no default under any Material Contract by any other party thereto.
SECTION 4.23 INTELLECTUAL PROPERTY. Set forth on SCHEDULE 4.23 is a
complete and accurate list of all patents, trademarks, trade names, service
marks and copyrights, and all applications therefor and licenses thereof, of
each Loan Party or any of its Subsidiaries, showing as of the date hereof the
jurisdiction in which registered, the registration number, the date of
registration and the expiration date. To its knowledge, each Loan Party and each
of their respective Subsidiaries owns or has rights to use all patents,
trademarks, trade names, service marks, copyrights and other intellectual
property necessary to conduct its business as now or heretofore conducted by it
or proposed to be conducted by it. Each Loan Party and each of their respective
Subsidiaries conducts its business and affairs without infringement of or
interference with any patent, trademark, trade name, service xxxx, copyright or
other intellectual property of any other Person. The Intellectual Property
Security Agreement creates, as security for the obligations purported to be
secured thereby, a valid and enforceable perfected security interest in and Lien
on all of the Collateral purported to be covered thereby in favor of the
Administrative Agent for the benefit of the Secured Parties, superior to and
prior to the rights of all third Persons.
SECTION 4.24 ACQUISITION DOCUMENTS. Each Acquisition Document to which
any Loan Party or any of its respective Subsidiaries is a party has been duly
executed and delivered by such Loan Party or such Subsidiary, as the case may
be, and, to the best knowledge of the Borrower, each Acquisition Document has
been duly executed and delivered by the parties thereto other than the Borrower
and its Subsidiaries, and is in full force and effect.
SECTION 4.25 FEES. No broker's or finder's fees or commissions or any
similar fees or commissions will be payable by any Loan Party or any of its
Subsidiaries with respect to the incurrence and maintenance of the Obligations,
any other transaction contemplated by the Loan Documents or any services
rendered in connection with any such transactions. The Borrower hereby covenants
and agree to indemnify the Administrative Agent and each Lender Party against
and hold the Administrative Agent and each Lender Party harmless from any claim,
demand or liability for broker's or finder's fees or similar fees or
commissions.
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ARTICLE 5
AFFIRMATIVE COVENANTS
So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will:
SECTION 5.1 COMPLIANCE WITH LAW. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
compliance with ERISA.
SECTION 5.2 PAYMENT OF TAXES, ETC. Timely pay and discharge, and cause
each of its Subsidiaries to timely pay and discharge, (a) all taxes, assessments
and governmental charges or levies imposed upon it or upon its property and (b)
all lawful claims that, if unpaid, might by law become a Lien upon its property;
PROVIDED, HOWEVER, that the Borrower and its Subsidiaries shall not be required
to pay or discharge any such tax, assessment, charge or claim (i) that is being
contested in good faith and by proper proceedings and as to which appropriate
reserves are being maintained or (ii) with respect to which the failure to pay,
in the aggregate, would not have a Material Adverse Effect.
SECTION 5.3 COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause each
of its Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew, when legally
required, and cause each of its Subsidiaries to obtain and renew, when legally
required, all Environmental Permits reasonably necessary for its operations and
properties; and conduct, and cause each of its Subsidiaries to conduct, any
investigation, study, sampling and testing, and undertake any Removal, Remedial
or other Response action necessary to remove and clean up all Hazardous
Materials from any of its properties, in accordance with the requirements of all
Environmental Laws; PROVIDED, HOWEVER, that the Borrower and its Subsidiaries
shall not be required to undertake any such cleanup, Removal, Remedial or
Response action to the extent that its obligation to do so is being contested in
good faith and by proper proceedings and adequate reserves as determined by the
Administrative Agent are being maintained with respect to such circumstances.
SECTION 5.4 PREPARATION OF ENVIRONMENTAL REPORTS. The Borrower agrees
that the Administrative Agent may, upon reasonable prior notice, from time to
time in its reasonable discretion, retain, at the Borrower's expense, an
independent professional consultant to prepare environmental site assessment
reports for the Borrower or any of its Subsidiaries and/or to review any report
relating to Hazardous Materials prepared by or for the Borrower and, upon a
reasonable belief that the Borrower or any of its Subsidiaries has breached any
covenant or representation in any material respect with respect to environmental
matters or that there has been a material violation of Environmental Laws by the
Borrower or one of its Subsidiaries, the Administrative Agent may conduct its
own reasonable investigation of such matter at any facility or property
currently owned,
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leased, operated or used by the Borrower or one of its Subsidiaries and the
Borrower agrees to use its best efforts to obtain permission for the
Administrative Agent's professional consultant to conduct its own investigation
of any such matter at any facility or property previously owned, leased,
operated or used by the Borrower or one of its Subsidiaries. The Borrower and
its Subsidiaries hereby grant to the Administrative Agent, its employees,
consultants and contractors, the right to enter into or onto the facilities or
properties currently owned, leased, operated or used by the Borrower or its
Subsidiaries upon reasonable notice to the Borrower to perform such assessments
on such property as are reasonably necessary to conduct such a review and/or
investigation. Any such investigation of any such facility or property shall be
conducted, unless otherwise agreed to by the Borrower and the Administrative
Agent, during normal business hours and, to the extent reasonably practicable,
shall be conducted so as not to interfere with the ongoing operations at any
facility or property or to cause any damage or loss to any facility or property.
The Borrower and the Administrative Agent hereby acknowledge and agree that any
report of any investigation conducted at the request of the Administrative Agent
will be obtained and shall be used by the Administrative Agent and Lender
Parties for the purpose of internal credit decisions to monitor and police the
Advances and/or protect the Administrative Agent's and Lender Parties' security
interests in the Collateral. The Administrative Agent agrees to deliver a copy
of any such report to the Borrower with the understanding that the Borrower
acknowledges and agrees that neither the Administrative Agent nor any Lender
Party makes any representation or warranty with respect to such report and
neither the Administrative Agent nor any Lending Party will have any liability
to any Loan Party for any consequences flowing from such report or any action
which any Loan Party may take or fail to take with respect thereto.
SECTION 5.5 MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Subsidiaries to maintain, insurance pursuant to the terms and conditions set
forth in Section 11 of the Security Agreement.
SECTION 5.6 PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain, its
existence, legal structure, legal name, rights (charter and statutory), permits,
licenses, approvals, privileges and franchises.
SECTION 5.7 VISITATION RIGHTS.
(a) At any reasonable time and from time to time during normal business
hours, upon reasonable notice, permit the Administrative Agent, or, after the
occurrence of a Default, the Lender Parties, or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and books
of account of and visit the properties of the Borrower and its Subsidiaries, and
to discuss the affairs, finances and accounts of the Borrower and any such
Subsidiaries with any of their officers or directors.
(b) Permit the Administrative Agent to conduct such commercial finance
examinations and/or Collateral audits of the Borrower and its Subsidiaries
during each calendar year as the Administrative Agent may reasonably request in
all cases at the expense of the Borrower. The
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Administrative Agent shall be entitled to conduct two such audits during the
first year after the Closing Date, and one audit per year for each succeeding
year; PROVIDED, HOWEVER, during the occurrence of any Default, the
Administrative Agent or any Lender may make such audits as it may deem
appropriate.
SECTION 5.8 KEEPING OF BOOKS. Keep, and cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of the
Borrower and each Subsidiary in accordance with GAAP.
SECTION 5.9 MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its properties
that are reasonably necessary, taken as a whole, in the conduct of its business
in good working order and condition, ordinary wear and tear excepted.
SECTION 5.10 COMPLIANCE WITH TERMS OF LEASEHOLDS. Make all payments and
otherwise perform all obligations in respect of all leases of real property to
which the Borrower or any of its Subsidiaries is a party, keep such leases in
full force and effect and not allow such leases to lapse or be terminated or any
rights to renew such leases to be forfeited or canceled, notify the
Administrative Agent of any default by any party with respect to such leases and
cooperate with the Administrative Agent in all respects to cure any such
default, and cause each of its Subsidiaries to do so except, in any case, where
the failure to do so, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.11 PERFORMANCE OF MATERIAL CONTRACTS. Perform and observe,
and cause each of its Subsidiaries to perform and observe, all of the terms and
provisions of each Material Contract to be performed or observed by it,
maintain, and cause each of its Subsidiaries to maintain, each such Material
Contract in full force and effect, and enforce, and cause each of its
Subsidiaries to enforce, each such Material Contract in accordance with its
terms.
SECTION 5.12 AGREEMENT TO GRANT ADDITIONAL SECURITY.
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(a) Other than as to (i) assets or investments subject to subsections
(b), (c) or (d) below, and (ii) assets or investments subject to a Lien
expressly permitted under Sections 6.1(c), (d), (g) or (h), promptly, and in any
event within thirty (30) days after the acquisition of assets of the type that
would have constituted Collateral at the date hereof and investments of the type
that would have constituted Collateral on the date hereof, including all of the
capital stock of any direct or indirect Domestic Subsidiary of the Borrower and
65% of the capital stock of any Foreign Subsidiary, notify the Administrative
Agent of the acquisition of such assets or investments and, to the extent not
already Collateral in which the Administrative Agent has a perfected security
interest pursuant to the Collateral Documents, such assets and investments will
become additional Collateral hereunder to the extent the Administrative Agent
deems the pledge of such assets practicable (the "ADDITIONAL COLLATERAL"), and
the Borrower will, and will cause each of its direct and indirect Subsidiaries
to, take all necessary action, including the filing of appropriate financing
statements under the provisions of the UCC, applicable foreign, domestic or
local laws, rules or regulations in each of the offices where such filing is
necessary or appropriate to grant the Administrative Agent, for the benefit of
the Lenders, a perfected Lien in such Collateral (or comparable interest under
foreign law in the case of foreign Collateral).
(b) Promptly, and in any event no later than thirty (30) days after any
Person that was not a direct or indirect Domestic Subsidiary of the Borrower as
of the date hereof (and, accordingly, did not execute a Subsidiary Guaranty as
required pursuant to Section 3.1(a)(vi) hereof) becomes a direct or indirect
Domestic Subsidiary of the Borrower, such Person shall execute and deliver a
Subsidiary Guaranty or a Subsidiary Guaranty Supplement substantially in the
form of Exhibit A to the Subsidiary Guaranty, guaranteeing to the Administrative
Agent, for the benefit of the Lenders, the prompt payment, when and as due, of
all Obligations of the Loan Parties under the Loan Documents, including all
obligations under any Hedge Agreements or other hedging agreements.
(c) Promptly, and in any event no later than thirty (30) days after a
request with respect thereto, cause each Guarantor created or established after
the date hereof to grant to the Administrative Agent, for the ratable benefit of
the Lenders, a first priority Lien on all property (tangible and intangible) of
such Guarantor of a type covered under the Collateral Documents, including,
without limitation, all of the capital stock of any of its Domestic Subsidiaries
and 65% of the stock of any of its Foreign Subsidiaries, upon terms similar to
those set forth in the Collateral Documents and otherwise satisfactory in form
and substance to Administrative Agent. The Borrower shall cause each Guarantor,
at its own expense, to become a party to a Security Agreement, an Intellectual
Property Security Agreement, a Mortgage and any other Collateral Document and to
execute, acknowledge and deliver, or cause the execution, acknowledgment and
delivery of, and thereafter register, file or record in any appropriate
governmental office, any document or instrument reasonably deemed by
Administrative Agent to be necessary or desirable for the creation and
perfection of the foregoing Liens (including legal opinion, title insurance,
consents, corporate documents, UCC-1s and any additional or substitute security
agreements or mortgages or deeds of trust).
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(d) Promptly, and in any event not later than thirty (30) days after a
request with respect thereto, (i) deliver to the Administrative Agent the
original of all instruments, documents and chattel paper, and all other
Collateral of which the Administrative Agent determines it should have physical
possession in order to perfect and protect its security interest therein, duly
pledged, endorsed or assigned to the Administrative Agent without restriction;
(ii) obtain landlord waivers, in form and substance reasonably satisfactory to
the Administrative Agent, with respect to any Inventory or other Collateral
located at a location that is not owned by the Borrower or a Subsidiary; (iii)
deliver to the Administrative Agent warehouse receipts covering any portion of
the Inventory or other Collateral located in warehouses and for which warehouse
receipts are issued; (iv) when an Event of Default exists, transfer Inventory to
locations designated by the Administrative Agent; (v) if any Collateral is at
any time in the possession or control of any warehousemen, bailee or the
Borrower's agents or processors, notify the Administrative Agent thereof and
notify such person of the Administrative Agent's security interest in such
Collateral and obtain a landlord waiver or bailee letter, in form and substance
reasonably satisfactory to the Administrative Agent, from such person and
instruct such person to hold all such Collateral for the Administrative Agent's
account subject to the Administrative Agent's instructions; (vi) if at any time
any Inventory or other Collateral is located on any real property of the
Borrower which is subject to a mortgage or other Lien other than Liens created
under the Collateral Documents, obtain a mortgagee waiver, in form and substance
satisfactory to the Administrative Agent, from the holder of each mortgage or
other Lien on such real property; and (vii) take all such other actions and
obtain all such other agreements as the Administrative Agent may reasonably deem
necessary or desirable in respect of any Collateral.
(e) The security interests required to be granted pursuant to this
Section shall be granted pursuant to the Collateral Documents or, in the
Administrative Agent's discretion, such other security documentation (which
shall be substantially similar to the Collateral Documents already executed and
delivered by the Borrower and the Guarantors) as is satisfactory in form and
substance to Administrative Agent (the "ADDITIONAL COLLATERAL DOCUMENTS") and
shall constitute valid and enforceable perfected security interests prior to the
rights of all third Persons and subject to no other Liens except Liens permitted
under Section 6.1. The Additional Collateral Documents and other instruments
related thereto shall be duly recorded or filed in such manner and in such
places and at such times as are required by law to establish, perfect, preserve
and protect the Liens, in favor of Administrative Agent, for the benefit of the
Lender Parties, granted pursuant to the Additional Collateral Documents and, all
taxes, fees and other charges payable in connection therewith shall be paid in
full by the Borrower. At the time of the execution and delivery of Additional
Collateral Documents, the Borrower shall cause to be delivered to the
Administrative Agent such agreements, opinions of counsel, and other related
documents as may be reasonably requested by the Administrative Agent to assure
themselves that this Section has been complied with.
SECTION 5.13 INTEREST RATE PROTECTION. On or prior to November 30, 1998
the Borrower shall obtain and thereafter keep in effect one or more interest
rate Bank Hedge Agreements (the terms and other provisions of all such Bank
Hedge Agreements to be subject to the prior written consent of the
Administrative Agent) covering at least 50% of the Advances outstanding on the
Closing Date for an aggregate period of not less than two (2) years commencing
on the Closing Date.
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SECTION 5.14 PERFORMANCE OF ACQUISITION DOCUMENTS. Perform and observe,
or cause the relevant Subsidiary to perform and observe in all material
respects, all of the terms and provisions of each Acquisition Document to be
performed or observed by it or such Subsidiary, maintain each such Acquisition
Document in full force and effect, enforce each such Acquisition Document in
accordance with its terms, take all such action to such end as may be from time
to time reasonably requested by the Administrative Agent and, upon request of
the Administrative Agent, make such demands and requests for action or for
information and reports as the Borrower or any Subsidiary is entitled to make
under any Acquisition Document.
SECTION 5.15 YEAR 2000 COMPATIBILITY. Take all action necessary to
assure that its computer based systems, hardware and software used in each Loan
Party's business and operations are, in all material respects, able to operate
and effectively receive, transmit, process, store, retrieve or retransmit data
including dates on and after January 1, 2000, and, at the request of the
Administrative Agent, the Loan Parties shall provide evidence to the
satisfaction of the Administrative Agent of such year 2000 compatibility.
SECTION 5.16 CASH CONCENTRATION OR BLOCKED ACCOUNTS. Promptly, and in
any event not later than sixty (60) days after the Closing Date, the Borrower
will, and will cause each of its Subsidiaries, if any, to, either (i) maintain
its main cash concentration accounts with the Administrative Agent or (ii)
establish blocked accounts (collectively, the "BLOCKED ACCOUNTS") with such
banks (collectively the "COLLECTING BANKS") as are acceptable to the
Administrative Agent (subject to irrevocable instructions acceptable to the
Administrative Agent as hereinafter set forth) to which all account debtors
shall directly remit all payments on Receivables and in which the Borrower will
immediately deposit all payments made for Inventory or other payments
constituting proceeds of Collateral in the identical form in which such payment
was made, whether by cash or check. The Borrower shall irrevocably instruct each
Collecting Bank that, upon the occurrence and during the continuance of an Event
of Default, the Administrative Agent may instruct such Collecting Bank to send
by wire transfer all amounts deposited in the applicable Blocked Account(s) to
the Administrative Agent's Account or as the Administrative Agent shall direct
and that, upon receipt of any such instructions from the Administrative Agent,
such Collecting Bank shall promptly comply with all such instructions. The
occurrence of (a) an Event of Default and (b) the Administrative Agent so
instructing any Collecting Bank as provided in the immediately preceding
sentence is hereinafter referred to as a "CASH DOMINION EVENT." Prior to the
occurrence of a Cash Dominion Event, the Collecting Banks shall make all
available funds in the applicable Blocked Account(s) available to the Borrower.
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ARTICLE 6
NEGATIVE COVENANTS
So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will not, at any time, without the prior consent of the Required
Lenders:
SECTION 6.1 LIENS, ETC. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties of any character (including,
without limitation, Accounts, Inventory and other Collateral) whether now owned
or hereafter acquired, or sign or file or suffer to exist, or permit any of its
Subsidiaries to sign or file or suffer to exist, under the Uniform Commercial
Code or any other statute of any jurisdiction, a financing statement that names
the Borrower or any of its Subsidiaries as debtor, or sign or suffer to exist,
or permit any of its Subsidiaries to sign or suffer to exist, any security
agreement authorizing any secured party thereunder to file any such financing
statement, or assign, or permit any of its Subsidiaries to assign, any accounts
or other right to receive income, EXCLUDING, HOWEVER, from the operation of the
foregoing restrictions the following:
(a) Liens created under the Loan Documents;
(b) Permitted Liens;
(c) Liens securing or consisting of Debt of the Borrower and its
Subsidiaries permitted by Section 6.2(d)(i) incurred to finance the acquisition
of fixed or capital assets; PROVIDED, that such Liens shall be created no later
than the later of the date of such acquisition, and do not at any time encumber
any property other than the property financed by such Debt;
(d) Liens existing on assets or properties at the time of the
acquisition thereof by the Borrower or any of its Subsidiaries in connection
with a Permitted Acquisition which do not materially interfere with the use,
occupancy, operation and maintenance of structures existing on the property
subject thereto or extend to or cover any assets or properties of the Borrower
or such Subsidiary other than the assets or property being acquired; PROVIDED,
HOWEVER, such Lien shall not have been created or incurred in contemplation of
or in connection with the Permitted Acquisition;
(e) Liens in existence on the Closing Date with respect to Surviving
Debt;
(f) any encumbrance or restriction (including, without limitation, put
and call agreements) with respect to the Capital Stock of any joint venture or
similar arrangement pursuant to the joint venture or similar agreement with
respect to such joint venture or similar arrangements otherwise permissible
hereunder;
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(g) Liens on patents, patent applications, trademarks, trademark
applications, tradenames, copyrights, technology, know-how and processes, to the
extent such Liens arise solely from the granting of licenses to use such
property, and which do not impair the lien of the Lending Parties with respect
to such property;
(h) Liens arising in connection with Capitalized Leases permitted under
Section 6.2(d)(i); provided, that no such Lien shall extend to or cover any
Collateral or any assets other than the assets subject to such Capitalized
Leases;
(i) The replacement, extension or renewal of any Lien permitted by
clauses (c)-(h) above upon or in the same property theretofore subject thereto
in connection with the replacement, extension or renewal (without increase in
the amount or any change in any direct or contingent obligor) of the Debt
secured thereby.
(j) Liens existing on the date hereof and listed on Schedule 6.1(j)
hereto.
(k) Liens relating to Borrower's investments listed in Sections 6.5(m)
and 6.5(n); and
SECTION 6.2 DEBT. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Debt
other than:
(a) In the case of the Borrower, Debt incurred pursuant to the Loan
Documents or the Senior Unsecured Notes Indenture;
(b) Any Debt incurred to refinance the Senior Unsecured Notes; provided
that any such refinancing Debt will provide that (i) the principal amount of
such refinancing Debt does not exceed the principal amount (plus any premium and
such other reasonable expenses incurred by Borrower with respect to the
refinancing Debt) or interest rate of the Senior Unsecured Notes, (ii) such
refinancing Debt has a final maturity date later than the final maturity date
of, and has no installment of principal due prior to the maturity of the Senior
Unsecured Notes, (iii) the refinancing Debt will be unsecured, (iv) such
refinancing Debt is incurred by the Borrower, (v) such refinancing Debt will
contain no terms which will be more restrictive on the ability of the Borrower
to incur Debt than are in the Senior Unsecured Notes Indenture, and (vi) such
refinancing Debt will contain no other terms more adverse to the Lending Parties
than are contained in the Senior Unsecured Notes Indenture.
(c) In the case of any of the Subsidiaries of the Borrower, Debt owed
to the Borrower or to a wholly-owned Subsidiary of the Borrower; PROVIDED, that
such Debt shall be evidenced by a promissory note, such promissory note shall be
pledged to the Administrative Agent pursuant to the terms of the Security
Agreement and there shall be no contractual restrictions whatsoever on the
ability of such Subsidiary to repay such Debt;
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(d) In the case of the Borrower and any of its Subsidiaries:
(i) Debt of the Borrower and any of its Subsidiaries incurred to
finance or refinance the acquisition of fixed or capital assets (whether
pursuant to a loan, a Capitalized Lease or otherwise) otherwise permitted
pursuant to this Agreement, and any other Capitalized Leases, in an aggregate
principal amount not exceeding in the aggregate as to the Borrower and its
Subsidiaries $2,000,000 at any one time outstanding and which limitation
includes any Debt listed on SCHEDULE 4.18(b) hereof of the type subject to this
Section 6.2(d)(i); PROVIDED that such Debt is incurred substantially
simultaneously with such acquisition or incurred in connection with a
refinancing thereof;
(ii) Debt arising from the honoring of a check, draft or similar
instrument against insufficient funds; PROVIDED that such Debt is extinguished
within two Business Days of its incurrence; and
(iii) Debt in existence on the Closing Date and listed on SCHEDULE
4.18(b) hereof.
(iv) Debt assumed in connection with a Permitted Acquisition
provided that such Debt was existing prior to the Permitted Acquisition and was
not incurred or created in contemplation of or in connection with such Permitted
Acquisition and provided further that at the time such Debt was incurred it was
not in contravention of and such incurrence is in compliance with Section
4.03(a) of the Senior Unsecured Notes Indenture.
(v) endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business; and
(vi) Debt consisting of unsecured debt of the Borrower which is
subordinated to the Loan Documents in a manner satisfactory to the
Administrative Agent and which is issued as a portion of the consideration for a
Permitted Acquisition and at the time such Debt was incurred it was not in
contravention of and such incurrence is in compliance with Section 4.03(a) of
the Senior Unsecured Notes Indenture.
SECTION 6.3 FUNDAMENTAL CHANGES.
(a) Merge into or consolidate with any Person or permit any Person to
merge into it, or permit any of its Subsidiaries to do so, except that so long
as no Default or Event of Default shall have occurred and be continuing and so
long as no Default or Event of Default would result therefrom, any Subsidiary of
the Borrower may merge into or consolidate with any other Subsidiary of the
Borrower or the Borrower, as the case may be, provided that in the case of any
such merger or consolidation, the Person resulting from such merger or
consolidation shall be the Borrower or a wholly-owned Subsidiary of the
Borrower, as the case may be;
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(b) Liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), convey, sell, assign, lease, transfer or otherwise dispose of (or
agree to do any of the foregoing at any future time) all or substantially all of
its property, business or assets, or permit any of its Subsidiaries to do any of
the foregoing, except that any Subsidiary of the Borrower may convey, sell,
assign, lease, transfer or otherwise dispose of all of its property, business or
assets to the Borrower or any wholly-owned Subsidiary of the Borrower;
SECTION 6.4 SALES, ETC. OF ASSETS. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets or grant any option or other right to purchase,
lease or otherwise acquire any assets, except:
(a) sales of any property (including Inventory) in the ordinary course
of business;
(b) sales of obsolete, worn out or surplus property in the ordinary
course of business;
(c) as permitted by Section 6.3(b);
(d) sales of property or other assets acquired in the Acquisition;
(e) the abandonment or other disposition of patents, trademarks or
other intellectual property that are, in the reasonable judgment of the
Borrower, no longer economically practicable to maintain or useful in the
conduct of the business of the Borrower and its Subsidiaries taken as a whole;
(f) sales of assets (other than an asset included in Section 6.4(a),
(b), (c), (d), (e) or (g) the aggregate purchase price of which in any Fiscal
Year does not exceed $1,000,000;
(g) .the sale of any asset by the Borrower or any of its Subsidiaries
(other than an asset included in Section 6.4(a), (b), (c), (d), (e) or (f)) long
as (i) the purchase price paid to the Borrower or such Subsidiary for such asset
shall be no less than the fair market value of such asset at the time of such
sale, (ii) the purchase price for such asset shall be paid to the Borrower or
such Subsidiary solely in cash and (iii) the aggregate purchase price paid to
the Borrower and all of its Subsidiaries for such asset and all other assets
sold by the Borrower and its Subsidiaries (other than an asset included in
Section 6.4(a), (b), (c) or (d)) shall not exceed $15,000,000 in any twelve
month period measured from the end of the month in which such sale occurs;
PROVIDED that in the case of sales of assets pursuant to Section 6.4(g), the
Borrower shall, on the date of receipt thereof, apply the entire Net Cash
Proceeds from such sale in accordance with Section 2.6(b)(i).
SECTION 6.5 INVESTMENTS IN OTHER PERSONS. Make or hold, or permit any
of its Subsidiaries to make or hold, any Investment in any Person other than:
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(a) Investments by the Borrower and its Subsidiaries in their
Subsidiaries outstanding on the date hereof and described on SCHEDULE 4.2, and
additional investments in wholly-owned Subsidiaries of the Borrower; PROVIDED,
HOWEVER, that no more than an aggregate amount equal to $5,000,000 shall be
invested from the date hereof in Foreign Subsidiaries pursuant to this clause
6.5(a); and, PROVIDED, FURTHER, that with respect to Investments in any newly
acquired or created wholly-owned Subsidiary, any such Subsidiary shall become a
Guarantor pursuant to the terms of the Subsidiary Guaranty and an additional
grantor pursuant to the terms of the Security Agreement and Intellectual
Property Security Agreement;
(b) Loans and advances to officers, directors or employees of the
Borrower or any of its Subsidiaries (i) in the ordinary course of business for
travel and entertainment expenses, (ii) existing on the Closing Date and
described in SCHEDULE 6.5(b), (iii) made after the Closing Date for relocation
expenses in the ordinary course of business, (iv) made for other purposes in an
aggregate amount (as to the Borrower and all its Subsidiaries) of up to
$1,000,000 outstanding at any time or (v) relating to indemnification or
reimbursement of any officers, directors or employees in respect of liabilities
relating to their serving in any capacity;
(c) Investments in the nature of pledges or deposits with respect to
leases or utilities provided to third parties in the ordinary course of
business;
(d) Investments representing evidences of Debt, securities or other
property received from another Person by the Borrower or any of its Subsidiaries
in connection with any bankruptcy proceeding or other reorganization of such
other Person or as a result of foreclosure, perfection or enforcement of any
Lien or exchange for evidences of Debt, securities or other property of such
other Person held by the Borrower or any of its Subsidiaries; PROVIDED that any
such securities or other property received by the Borrower or any of its
Domestic Subsidiaries is pledged to the Administrative Agent for the benefit of
the Lenders pursuant to the Collateral Documents;
(e) Investments by the Borrower and its Subsidiaries in Cash
Equivalents;
(f) Investments by the Borrower and its Subsidiaries in Bank Hedge
Agreements permitted under Section 5.13;
(g) Investments consisting of intercompany Debt permitted under Section
6.2(c);
(h) Investments existing on the date hereof and described on SCHEDULE
6.5(h) hereto;
(i) Investments by the Borrower and its Subsidiaries in deposit
accounts opened in the ordinary course of business and otherwise in compliance
with Section 5.16;
(j) Investments by the Borrower and its Subsidiaries in joint ventures
in an aggregate amount not to exceed $2,000,000;
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(k) Investments consisting of accounts receivable and trade credit in
the ordinary course of business;
(l) Investments in the form of Permitted Acquisitions.
(m) Investments consisting of cash collateral accounts used to secure
the outstanding letters of credit of Borrower at the Closing Date; PROVIDED that
such cash collateral accounts must be liquidated within thirty days of the
Closing Date; and
(n) Investments consisting of cash collateral accounts used to secure
amounts owed to the bank which provides credit cards to Borrower's employees for
use by the employees for business expenses, in an amount not to exceed
$1,000,000.
SECTION 6.6 DIVIDENDS, ETC. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its capital stock
or any warrants, rights or options to acquire such capital stock, now or
hereafter outstanding, return any capital to its stockholders as such, make any
distribution of assets, capital stock, warrants, rights, options, obligations or
securities to its stockholders as such or issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, or permit any of its
Subsidiaries to do any of the foregoing or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for value any capital
stock of the Borrower or any warrants, rights or options to acquire such capital
stock or to issue or sell any such capital stock or any warrants, rights or
options to acquire such capital stock, except:
(a) The Borrower may declare and pay dividends and distributions
payable solely in common stock of the Borrower;
(b) A wholly-owned Subsidiary of the Borrower may declare and pay
dividends and distributions to the Borrower;
(c) For issuances of stock expressly permitted by Section 6.18.
(d) For so long as no Default or Event of Default is occurring, the
Borrower to the extent that it is required to do so by its employee stock
ownership plan may acquire, in the ordinary course of business in connection
with the retirement or termination of employees, shares of capital stock held by
the employee stock ownership plan or distributed by an employee stock ownership
plan to employees in connection with retirements or terminations of employees in
an amount not to exceed $4,500,000 in any twelve month period, such twelve month
period being calculated from the last day of the month in which such purchase is
made.
(e) For so long as no Default or Event of Default is existing, and
after giving effect to such purchase the Borrower shall meet the condition set
forth in subclause (v) under the definition of Permitted Acquisition the
Borrower may purchase capital stock from employees in connection with
retirements or terminations of employees in an aggregate amount not to exceed
$700,000 in any
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fiscal year; PROVIDED, HOWEVER, that if in any fiscal year the amount of any
such purchases are less than $700,000, the amount by which such purchases are
less than $700,000 may be carried forward to subsequent fiscal years; PROVIDED,
FURTHER, HOWEVER, that in no event may such purchases exceed $1,000,000 in any
fiscal year and in no event shall any such purchases be made within one year of
the Closing Date; provided, further, however, that with respect to any such
purchase of common stock of the Borrower (i) the purchase price for such common
stock shall not exceed the appraised value thereof as determined by an
independent appraiser retained by the Board of Directors of the Borrower each
year, and (ii) the Borrower's Board of Directors shall, prior to authorizing
any such purchase, conclude in good faith that such appraised value does not
materially exceed the then fair market value of such stock.
(f) The payment by the Borrower to Xxxxx of a management fee in an
amount not to exceed $200,000 per year.
(g) Dividends payable solely in additional shares of preferred stock
pursuant to the Borrower's outstanding Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock.
SECTION 6.7 CHANGE IN NATURE OF BUSINESS. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof.
SECTION 6.8 CHARTER AMENDMENTS. Amend, or permit any of its
Subsidiaries to amend, its certificate or articles of incorporation or bylaws if
such amendment could materially impair the interests or rights of the
Administrative Agent or any Lender Party.
SECTION 6.9 ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any material change in (a) accounting policies
or reporting practices, except as mandated by GAAP, or (b) its Fiscal Year.
SECTION 6.10 PREPAYMENTS, ETC. OF DEBT. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof (a) in any
manner, or make any payment in violation of any subordination terms of, any
Debt, other than (i) the prepayment the Advances in accordance with the terms of
this Agreement and (ii) regularly scheduled or required repayments of principal,
interest, fees and expenses or redemptions of Surviving Debt, (b) amend, modify
or change in any manner, which adversely affects the interests of the Lenders
under this Agreement, any term or condition of any Existing Debt or Surviving
Debt, or (c) permit any of its Subsidiaries to do any of the foregoing other
than to repay any Debt payable to the Borrower.
SECTION 6.11 AMENDMENT, ETC. OF ACQUISITION DOCUMENTS. Cancel or
terminate any Acquisition Document or consent to or accept any cancellation or
termination thereof, amend, modify or change in any manner any term or condition
of any Acquisition Document or give any consent, waiver or approval thereunder,
waive any default under or any breach of any term or condition of any
Acquisition Document or take any other action in connection with any Acquisition
Document that would, in any such case, impair the value of the interests or
rights of the Borrower thereunder, or would impair the interests or rights of
the Administrative Agent or any Lender Party, or permit any of its Subsidiaries
to do any of the foregoing.
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SECTION 6.12 AMENDMENT, ETC. OF MATERIAL CONTRACTS. Cancel or terminate
any Material Contract or consent to or accept any cancellation or termination
thereof, amend or otherwise modify any Material Contract or give any consent,
waiver or approval thereunder, waive any default under or breach of any Material
Contract or take any other action in connection with any Material Contract that
would materially impair the value of the interests or rights of the Borrower
thereunder, or permit any of its Subsidiaries to do any of the foregoing.
SECTION 6.13 NEGATIVE PLEDGE. Enter into, suffer to exist or permit any
Subsidiary to enter into or suffer to exist any agreement other than (a) this
Agreement, the other Loan Documents and any related documents and (b) any
purchase money mortgages, acquisition agreements, Capitalized Leases or
operating leases of real property entered into in the ordinary course of
business which are otherwise permitted hereunder, which prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien in favor of the Lenders in respect of obligations and
liabilities under this Agreement, any Notes or any other Loan Documents upon any
of its property, assets or revenues, whether now owned or hereafter acquired.
SECTION 6.14 PARTNERSHIPS, NEW SUBSIDIARIES.
(a) Become a general partner in any general or limited partnership or
joint venture, or permit any of its Subsidiaries to do so, or
(b) Create any new Subsidiary, unless such newly created Subsidiary
shall become a Guarantor pursuant to the terms of Section 5.12(b) hereof and an
additional grantor pursuant to the terms of the Security Agreement and
Intellectual Property Security Agreement and all shares of the capital stock of
such Subsidiary are pledged to the Administrative Agent pursuant to the Security
Agreement.
SECTION 6.15 TRANSACTIONS WITH AFFILIATES. Permit any Subsidiary to or
itself will not conduct any business or enter into any transaction or series of
similar transactions (including, in each case, the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate of
the Borrower or any legal or beneficial owner of 5% or more of any class of
capital stock of the Borrower or with an Affiliate of any such owner (other than
any employee stock ownership plan for the benefit of the Borrower's or a
Subsidiary's employees) unless the terms of such business, transaction or series
of transactions are (i) set forth in writing, (ii) at least as favorable to the
Borrower or such Subsidiary as terms that would be obtainable at the time for a
comparable transaction or series of similar transactions in arm's-length
dealings with an unrelated third person and (iii) the Board of Directors has, by
resolution, determined in good faith that the criteria set forth in clause (ii)
are satisfied; PROVIDED, HOWEVER, that the foregoing will not prohibit the
following:
(a) Payment by the Borrower to Xxxxx of a management fee in an amount
not to exceed $200,000 per year;
(b) Any of the actions otherwise permitted by Sections 6.5 or 6.6;
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(c) Any issuance of securities or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Borrower's
Board of Directors, in each case as otherwise permitted hereunder; or
(d) Payment of reasonable fees to directors of the Borrower or its
Subsidiaries who are not employees of the Borrower or its Subsidiaries.
SECTION 6.16 SPECULATIVE TRANSACTIONS. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or derivatives or any similar speculative transactions, except
for Bank Hedge Agreements expressly permitted under Section 5.13.
SECTION 6.17 CAPITAL EXPENDITURES. Make, or permit any of its
Subsidiaries to make, any Capital Expenditures that would cause the aggregate of
all such Capital Expenditures made by the Borrower and its Subsidiaries in any
period set forth below to exceed the amount set forth below for such period.
PERIOD AMOUNT
------ ----------
Fiscal Year 1999 $4,000,000
Fiscal Year 2000 $5,000,000
Fiscal Year 2001 $5,000,000
Fiscal Year 2002 $5,000,000
Beginning of Fiscal Year 2002 to December 31, 2002 $3,000,000
; PROVIDED, HOWEVER, that amounts permitted to be expended in a Fiscal Year that
are not expended in such fiscal year, but not in excess of fifty (50%) percent
of such prior year's unused amount (not including any amount permitted to be
carried forward from a prior year) shall be permitted to be expended in (but
only in) the subsequent fiscal year.
SECTION 6.18 ISSUANCE OF STOCK. The Borrower will not permit any of its
Subsidiaries to, directly or indirectly, issue, sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or any Subsidiary
of the Borrower, except (a) to the Borrower, (b) to qualify directors if
required by applicable law and (c) as set forth in SCHEDULE 6.18.
ARTICLE 7
REPORTING REQUIREMENTS
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So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will furnish to the Administrative Agent and Lender Parties:
SECTION 7.1 DEFAULT NOTICE. As soon as possible and in any event within
two (2) Business Days after a Responsible Officer of the Borrower obtains
knowledge of the occurrence of any Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect, a statement of a
Responsible Officer of the Borrower setting forth details of such Default or
event, development or occurrence and the action that the Borrower has taken and
proposes to take with respect thereto.
SECTION 7.2 MONTHLY FINANCIALS. As soon as available and in any event
within thirty (30) days after the end of each month which is not a fiscal
quarter end, and within forty-five (45) days in the case of the end of each of
the first two months after the Closing Date which are not fiscal quarter ends,
an unaudited Consolidated balance sheet of the Borrower and its Subsidiaries, as
of the end of such month and an unaudited Consolidated statement of income and
an unaudited Consolidated statement of cash flows of the Borrower and its
Subsidiaries, and consolidating statements of income of the Borrower and its
Subsidiaries, for the period commencing at the end of the previous month and
ending with the end of such month and Consolidated statement of income and an
unaudited Consolidated statement of cash flows of the Borrower and its
Subsidiaries, and consolidating statements of income of the Borrower and its
Subsidiaries, for the period commencing at the end of the previous Fiscal Year
and ending with the end of such month, setting forth in each case in comparative
form the corresponding figures for the corresponding period of the prior Fiscal
Year, all in reasonable detail and duly certified by the chief financial officer
of the Borrower.
SECTION 7.3 QUARTERLY FINANCIALS. As soon as available and in any event
within forty-five (45) days after the end of each fiscal quarter of each Fiscal
Year, an unaudited Consolidated balance sheet of the Borrower and its
Subsidiaries, and consolidating balance sheets of the Borrower and its
Subsidiaries, as of the end of such quarter and an unaudited Consolidated
statement of income and an unaudited Consolidated statement of cash flows of the
Borrower and its Subsidiaries, and consolidating statements of income and
consolidating statements of cash flows of the Borrower and its Subsidiaries, for
the period commencing at the end of the previous fiscal quarter and ending with
the end of such fiscal quarter and an unaudited Consolidated statement of income
and an unaudited Consolidated statement of cash flows of the Borrower and its
Subsidiaries and consolidating statements of income and consolidating statements
of cash flows of the Borrower and its Subsidiaries for the period commencing at
the end of the previous Fiscal Year and ending with the end of such fiscal
quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding period of the preceding Fiscal Year and the
corresponding figures from the budgets for such period and for the Fiscal Year
which includes such period, all in reasonable detail and duly certified by the
Chief Financial Officer of the Borrower as having been prepared in accordance
with GAAP (subject to normal year-end audit adjustments), together with (i) a
certificate of said officer stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that the Borrower has taken and proposes to
take
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with respect thereto and (ii) a schedule in form satisfactory to the
Administrative Agent of the computations used by the Borrower in determining
compliance with the financial covenants contained in Article 8, PROVIDED, that
in the event of any change in GAAP used in the preparation of such financial
statements, the Borrower shall also provide, if necessary for the determination
of compliance with Article 8, a statement of reconciliation conforming such
financial statements to GAAP.
SECTION 7.4 ANNUAL FINANCIALS. As soon as available and in any event
within ninety (90) days after the end of each Fiscal Year, a copy of the annual
audit report for such year for the Borrower and its Subsidiaries, including
therein a Consolidated balance sheet of the Borrower and its Subsidiaries, and
consolidating balance sheets of Borrower and its Subsidiaries, as of the end of
such Fiscal Year and a Consolidated statement of income and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries, and consolidating
statements of income and consolidating statements of cash flows of the Borrower
and its Subsidiaries, for such Fiscal Year, in each case setting forth in
comparative form the corresponding figures for the prior Fiscal Year and the
corresponding figures from the budget for such Fiscal Year and in each case
accompanied (in the case of such Consolidated financial statements) by an
opinion acceptable to the Administrative Agent of Deloitte & Touche LLP or other
independent certified public accountants of recognized national standing
acceptable to the Administrative Agent, with the consent of the Required
Lenders, together with (a) a letter of such accounting firm to the
Administrative Agent and Lender Parties stating that in the course of the
regular audit of the business of the Borrower and its Subsidiaries, which audit
was conducted by such accounting firm in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the opinion of such accounting
firm, a Default has occurred and is continuing, a statement as to the nature
thereof, (b) a schedule in form satisfactory to the Administrative Agent of the
computations used by such accountants in determining, as of the end of such
Fiscal Year, compliance with the covenants contained in Article 8, PROVIDED,
that in the event of any change in GAAP used in the preparation of such
financial statements, the Borrower shall also provide, if necessary for the
determination of compliance with Article 8, a statement of reconciliation
conforming such financial statements to GAAP and (c) a certificate of the Chief
Financial Officer of the Borrower stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that the Borrower has taken and proposes to
take with respect thereto.
SECTION 7.5 ANNUAL FORECASTS. As soon as available and in any event no
later than ninety (90) days after the end of each Fiscal Year, (i) forecasts
prepared by management of the Borrower, including balance sheets, income
statements and cash flow statements on a quarterly basis, and (ii) a business
plan, in each case for the Fiscal Year following such Fiscal Year then ended and
in form reasonably satisfactory to the Administrative Agent.
SECTION 7.6 ERISA EVENTS AND ERISA REPORTS. (i) Promptly and in any
event within twenty (20) days after any Loan Party or any ERISA Affiliate knows
or has reason to know that any ERISA Event has occurred, a statement of the
Chief Financial Officer of the Borrower describing
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such ERISA Event and the action, if any, that such Loan Party or such ERISA
Affiliate has taken and proposes to take with respect thereto and (ii) on the
date any records, documents or other information must be furnished to the PBGC
with respect to any Plan pursuant to Section 4010 of ERISA, a copy of such
records, documents and information.
SECTION 7.7 PLAN TERMINATIONS. Promptly and in any event within five
(5) Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any Plan or
correspondence from the PBGC indicating it is considering termination of any
Plan.
SECTION 7.8 ACTUARIAL REPORTS. Promptly upon receipt thereof by any
Loan Party or any ERISA Affiliate, a copy of the annual actuarial valuation
report for each Plan with an Insufficiency.
SECTION 7.9 PLAN ANNUAL REPORTS. Promptly and in any event within
thirty (30) days after the filing thereof with the Internal Revenue Service,
copies of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Plan with an Insufficiency.
SECTION 7.10 RESERVED.
SECTION 7.11 MULTIEMPLOYER PLAN AND ESOP NOTICES. Promptly and in any
event within thirty (30) days after receipt thereof by any Loan Party or any
ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of each notice
concerning, or other correspondence with respect to, (i) the imposition of
Withdrawal Liability by any such Multiemployer Plan, (ii) the reorganization or
termination, within the meaning of Title IV of ERISA, of any such Multiemployer
Plan, (iii) the amount of liability incurred, or that may be incurred, by such
Loan Party or any ERISA Affiliate in connection with any event described in
clause (i) or (ii), or (iv) the status of the preferred stock of the Mosler
Employee Stock Ownership Plan.
SECTION 7.12 LITIGATION. Promptly after the commencement thereof,
notice of all material actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission, board,
bureau, agency or instrumentality, Federal, state, local or foreign, affecting
any Loan Party or any of its Subsidiaries in which the amount involved (not
covered by insurance) exceeds $1 million and that would reasonably be expected
to have a Material Adverse Effect and, promptly after the occurrence thereof,
notice of any disapproval of the proposed settlement in the case entitled FORD
ET AL. X. XXXXXX, INC., Case No. C-1-93-0322 or any Material Adverse Change in
the status or the financial effect on any Loan Party or any of its Subsidiaries
of the Disclosed Litigation from that described on SCHEDULE 3.1(e).
SECTION 7.13 SECURITIES REPORTS. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports that
any Loan Party or any of its Subsidiaries sends to its stockholders, and copies
of all regular, periodic and special reports, and all registration statements,
that any Loan Party or any of its Subsidiaries files with the Securities and
Exchange Commission or any other governmental authority or with any national
securities exchange.
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SECTION 7.14 CREDITOR REPORTS. Promptly after the furnishing thereof,
copies of any statement or report furnished to any other holder of the
securities of any Loan Party or of any of its Subsidiaries pursuant to the terms
of any indenture, loan or credit agreement or similar agreement or instrument
and not otherwise required to be furnished to the Lender Parties pursuant to any
other clause of this Article 7.
SECTION 7.15 AGREEMENT NOTICES. Promptly upon receipt thereof, copies
of all notices, requests and other documents received by any Loan Party or any
of its Subsidiaries under or pursuant to any Material Contract or indenture,
loan or credit agreement or similar agreement or instrument regarding or related
to any breach or default by any party thereto or any event that could materially
impair the value of the interests or the rights of any Loan Party or any of its
Subsidiaries or otherwise have a Material Adverse Effect and copies of any
amendment, modification or waiver of any provision of any Contract or indenture,
loan or credit agreement or similar agreement or indenture and, from time to
time upon request by the Administrative Agent, such information and reports
regarding the foregoing as the Administrative Agent may reasonably request.
SECTION 7.16 REVENUE AGENT REPORTS. Within ten (10) days after receipt,
copies of all Revenue Agent Reports (Internal Revenue Service Form 886), or
other written proposals of the Internal Revenue Service, that propose, determine
or otherwise set forth any adjustments to the Federal income tax liability of
the affiliated group (within the meaning of Section 1504(a)(1) of the Internal
Revenue Code) of which the Borrower is a member aggregating $250,000 or more.
SECTION 7.17 ENVIRONMENTAL CONDITIONS. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could reasonably be expected to
have a Material Adverse Effect.
SECTION 7.18 REAL PROPERTY. Upon the request, from time to time, of the
Administrative Agent, promptly and in any event within thirty (30) days after
any such request, a report supplementing SCHEDULES 4.20 and 4.21 hereto,
including an identification of all real and leased property disposed of by the
Borrower or any of its Subsidiaries during such Fiscal Year, a list and
description of all real property acquired or leased during such Fiscal Year and
a description of such other changes in the information included in such
Schedules as may be necessary for such Schedules to remain accurate and complete
in all respects.
SECTION 7.19 INSURANCE. Upon the request, from time to time, of the
Administrative Agent, promptly and in any event within thirty (30) days after
any such request, a report summarizing the insurance coverage (specifying type,
amount and carrier) in effect for each Loan Party and its Subsidiaries and
containing such additional information as the Administrative Agent may
reasonably request.
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SECTION 7.20 BORROWING BASE CERTIFICATE. As soon as available and in
any event within thirty (30) Business Days after the end of each month, a
Borrowing Base Certificate, as at the end of the previous month, certified by a
Responsible Officer of the Borrower.
SECTION 7.21 MANAGEMENT LETTERS. As soon as available and in any event
within five (5) Business Days after the receipt thereof, copies of any
"management letter" or similar letter received by the Borrower or its Board of
Directors (or any Committee thereof) from its independent public accountants.
SECTION 7.22 OTHER INFORMATION. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries or the
Collateral as the Administrative Agent or any Lender Party (through the
Administrative Agent) may from time to time reasonably request.
ARTICLE 8
FINANCIAL COVENANTS
So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will:
Section 8.1 MINIMUM EBITDA. Maintain for each period set forth below
EBITDA at not less than the respective amounts set forth below PROVIDED,
HOWEVER, that with respect to the first two full fiscal quarters ending after
the Closing Date, EBITDA shall be calculated as provided at the end of this
Article 8:
FOUR FISCAL QUARTERS ENDING ON OR ABOUT: MINIMUM EBITDA
---------------------------------------- --------------
March 31, 1999 $25,000,000
June 30, 1999 $25,000,000
September 30, 1999 $27,500,000
December 31, 1999 $30,000,000
March 31, 2000 $30,000,000
June 30, 2000 $35,000,000
September 30, 2000 $35,000,000
December 31, 2000 $35,000,000
March 31, 2001 $35,000,000
June 30, 2001 $35,000,000
September 30, 2001 $35,000,000
December 31, 2001 $35,000,000
March 31, 2002 $35,000,000
June 30, 2002 $35,000,000
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September 30, 2002 $35,000,000
December 31, 2002 $35.000,000
Section 8.2 CONSOLIDATED SENIOR DEBT TO EBITDA RATIO. Maintain as of
the end of each fiscal quarter of the Borrower a ratio of Consolidated Senior
Debt to EBITDA for the most recently completed four fiscal quarters of the
Borrower of not more than the ratio set forth below; PROVIDED, HOWEVER, that
with respect to the first two full fiscal quarters ending after the Closing
Date, EBITDA shall be calculated as provided at the end of this Article 8:
FOUR FISCAL QUARTERS ENDING ON OR ABOUT: RATIO
---------------------------------------- -----
March 31, 1999 2.50
June 30, 1999 2.50
September 30, 1999 2.25
December 31, 1999 2.00
March 31, 2000 1.75
June 30, 2000 1.75
September 30, 2000 1.75
December 31, 2000 1.75
March 31, 2001 1.75
June 30, 2001 1.25
September 30, 2001 1.25
December 31, 2001 1.25
March 31, 2002 1.25
June 30, 2002 1.25
September 30, 2002 1.25
December 31, 2002 1.25
Section 8.3 CONSOLIDATED FUNDED DEBT TO EBITDA. Maintain as of the end
of each fiscal quarter of the Borrower a ratio of Consolidated Funded Debt to
EBITDA for the most recently completed four fiscal quarters of the Borrower of
not more than the ratio set forth below; PROVIDED, HOWEVER, that with respect to
the second full fiscal quarters ending after the Closing Date, EBITDA shall be
calculated as provided at the end of this Article 8:
FOUR FISCAL QUARTERS ENDING ON OR ABOUT: RATIO
---------------------------------------- -----
June 30, 1999 6.95
September 30, 1999 6.50
December 31, 1999 5.75
March 31, 2000 5.75
June 30, 2000 4.75
September 30, 2000 4.75
December 31, 2000 4.75
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March 31, 2001 4.75
June 30, 2001 4.50
September 30, 2001 4.50
December 31, 2001 4.50
March 31, 2002 4.50
June 30, 2002 4.00
September 30, 2002 4.00
December 31, 2002 4.00
Section 8.4 INTEREST COVERAGE RATIO. Maintain as of each date set forth
below, a ratio of (i) EBITDA for the most recently completed four fiscal
quarters of the Borrower to (ii) Consolidated cash Interest Expense for the same
period of not less than the ratio set forth below for such period (PROVIDED,
HOWEVER, that with respect to the first two full fiscal quarters ending after
the Closing Date, EBITDA and Consolidated cash Interest Expense shall be
calculated as provided at the end of this Article 8) :
FOUR FISCAL QUARTERS ENDING ON OR ABOUT: RATIO
---------------------------------------- -----
March 31, 1999 1.40
June 30, 1999 1.40
September 30, 1999 1.50
December 31, 1999 1.50
March 31, 2000 1.50
June 30, 2000 1.85
September 30, 2000 1.85
December 31, 2000 1.85
March 31, 2001 1.85
June 30, 2001 2.00
September 30, 2001 2.00
December 31, 2001 2.00
March 31, 2002 2.00
June 30, 2002 2.00
September 30, 2002 2.00
December 31, 2002 2.00
With respect to each of SECTION 8.1, SECTION 8.2, SECTION 8.3 and SECTION 8.4,
as to the first two full fiscal quarters ending after the Closing Date, EBITDA
or Consolidated cash Interest Expense shall be calculated on an annualized
basis, including all EBITDA or Consolidated cash Interest Expense for the
quarter ending on or about December 31, 1998 such that (a) with respect to the
first full fiscal quarter ending after the Closing Date, EBITDA or Consolidated
cash Interest Expense shall be calculated by multiplying EBITDA or Consolidated
cash Interest Expense for the period from September 30, 1998 to the end of such
fiscal quarter by 2, and (b) with respect to the first two full fiscal quarters
ending after the Closing Date, EBITDA or Consolidated cash Interest Expense
shall
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be calculated by multiplying EBITDA or Consolidated cash Interest Expense for
the period from September 30, 1998 to the end of such fiscal quarter by 4/3.
ARTICLE 9
EVENTS OF DEFAULT
If any of the following ("EVENTS OF DEFAULT") shall occur and be
continuing:
SECTION 9.1 PAYMENT. (a) The Borrower shall fail to pay any principal
of any Advance when the same shall become due and payable or (b) the Borrower
shall fail to pay any interest on any Advance, or any Loan Party shall fail to
make any other payment under any Loan Document, in each case under this clause
(b) within two (2) Business Days after the same becomes due and payable; or
SECTION 9.2 REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made by any Loan Party (or any of its officers) under or in connection
with any Loan Document shall prove to have been incorrect in any material
respect when made or confirmed; or
SECTION 9.3 CERTAIN COVENANTS. The Borrower shall fail to perform or
observe any term, covenant or agreement contained in Section 2.14, 5.5, 5.6,
5.7, 5.12, 5.13, 5.14, 5.16, Article 6 or Article 8; or
SECTION 9.4 OTHER COVENANTS. Any Loan Party shall fail to perform any
other term, covenant or agreement contained in any Loan Document on its part to
be performed or observed if such failure shall remain unremedied for thirty (30)
days after the earlier of the date on which (a) a Responsible Officer of any
Loan Party becomes aware of such failure or (b) written notice thereof shall
have been given to the Borrower by the Administrative Agent or any Lender Party;
or
SECTION 9.5 OTHER DEFAULTS. Any Loan Party or any of its Subsidiaries
shall fail to pay any principal of, premium or interest on or any other amount
payable in respect of any Debt that is outstanding in a principal or notional
amount of at least $1 million either individually or in the aggregate (but
excluding Debt outstanding hereunder) of such Loan Party or such Subsidiary (as
the case may be), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise); or any other
event shall occur or condition shall exist under any agreement or instrument
relating to any such Debt, in each case if the effect of such event or condition
is to accelerate, or to permit the acceleration of, the maturity of such Debt or
otherwise to cause, or to permit the holder thereof to cause, such Debt to
mature; or any such Debt shall be declared to be due and payable or required to
be prepaid or redeemed (other than by a regularly scheduled required prepayment
or redemption), purchased or defeased, or an offer to prepay, redeem, purchase
or defease such Debt shall be required to be made, in each case prior to the
stated maturity thereof; or
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SECTION 9.6 BANKRUPTCY, ETC. Any Loan Party or any of its Subsidiaries
shall generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be instituted
by or against any Loan Party or any of its Subsidiaries seeking to adjudicate it
a bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it) that is being diligently contested by it in good
faith, either such proceeding shall remain undismissed or unstayed for a period
of thirty (30) days or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the appointment
of a receiver, trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur, or any Loan Party or any of its
Subsidiaries shall take any corporate action to authorize any of the actions set
forth above in this Section 9.6; or
SECTION 9.7 JUDGMENTS.
(a) Any judgment or order for the payment of money in excess of $1
million (other than such a judgment or order which is fully covered by insurance
for which the appropriate insurer has acknowledged responsibility in writing)
shall be rendered against any Loan Party or any of its Subsidiaries and either
(i) enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be a period of ninety (90) consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(b) Any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that is reasonably likely to have a
Material Adverse Effect; or]
SECTION 9.8 LOAN DOCUMENTS. Any material provision of any Loan Document
after delivery thereof shall for any reason cease to be valid and binding on or
enforceable against any Loan Party which is party to it, or any such Loan Party
shall so state in writing; or
SECTION 9.9 LIENS. Any Collateral Document after delivery thereof shall
for any reason cease to or otherwise not create a valid and perfected first and
only priority lien on and security interest in the Collateral purported to be
covered thereby; or
SECTION 9.10 CHANGE OF CONTROL. Any Change of Control shall occur; or
SECTION 9.11 ERISA EVENTS.
(a) Any ERISA Event shall have occurred with respect to a Plan and the
sum (determined as of the date of occurrence of the last such ERISA Event) of
the Insufficiency of such
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Plan and the Insufficiency of any and all other Plans with respect to which an
ERISA Event shall have occurred and then exist (or the liability of the Loan
Parties and the ERISA Affiliates related to such ERISA Events) would reasonably
be expected to result in a Material Adverse Effect; or
(b) Any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Loan Parties and the
ERISA Affiliates as Withdrawal Liability (determined as of the date of such
notification), would reasonably be expected to result in a Material Adverse
Effect; or
(c) Any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and as a result of such reorganization or termination the aggregate annual
contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years of such Multiemployer Plans immediately preceding the plan year in which
such reorganization or termination occurs by an amount that would reasonably be
expected to result in a Material Adverse Effect; or
SECTION 9.12 BORROWING BASE DEFICIENCY. Any Borrowing Base Deficiency
shall occur and be continuing which is not eliminated by the Borrower's
prepayment within seven (7) Business Days of then outstanding Swing Line
Advances and Revolving Credit Advances in an amount sufficient to eliminate such
Borrowing Base Deficiency; or
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitments of each appropriate Lender (other than the Commitment in
respect of Letter of Credit Advances by the Issuing Bank or a Revolving Credit
Lender pursuant to Section 2.3(c) and Swing Line Advances by a Revolving Credit
Lender pursuant to Section 2.2(b)) and of the Issuing Bank to issue Letters of
Credit to be terminated, whereupon the same shall forthwith terminate, and (ii)
shall at the request, or may with the consent, of the Required Lenders, (A) by
notice to the Borrower, declare the Notes, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Notes, all such interest and all such
other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower and (B) by notice to each party required
under the terms of any agreement in support of which a Standby Letter of Credit
is issued, request that all Obligations under such agreement be declared to be
due and payable; PROVIDED, HOWEVER, that in the event of an actual or deemed
entry of an order for relief with respect to any Loan Party or any of its
Subsidiaries under the Federal Bankruptcy Code, (x) the obligation of each
Lender to make Advances (other than Letter of Credit Advances by the Issuing
Bank or a Revolving Credit Lender pursuant to Section 2.3(c) and Swing Line
Advances by a Revolving Credit Lender pursuant to Section 2.2(b)) and of the
Issuing Bank to issue Letters of Credit shall automatically be terminated and
(y) the Notes, all such interest and all such amounts
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shall automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.
If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Article 9
or otherwise, make demand upon the Borrower to, and forthwith upon such demand
the Borrower will, pay to the Administrative Agent on behalf of the Lender
Parties in same day funds at the Administrative Agent's office designated in
such demand, for deposit in the L/C Cash Collateral Account, an amount equal to
the aggregate Available Amount of all Letters of Credit then outstanding. If at
any time the Administrative Agent determines that any funds held in the L/C Cash
Collateral Account are subject to any right or claim of any Person other than
the Administrative Agent and the Lender Parties or that the total amount of such
funds is less than the aggregate Available Amount of all Letters of Credit, the
Borrower will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held in the L/C
Cash Collateral Account, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held in the
L/C Cash Collateral Account that the Administrative Agent determines to be free
and clear of any such right and claim.
ARTICLE 10
THE ADMINISTRATIVE AGENT
SECTION 10.1 AUTHORIZATION AND ACTION. Each Lender Party (in its
capacities as a Lender, the Issuing Bank, the Swing Line Bank and any Hedge
Bank) hereby appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
and discretion as are reasonably incidental thereto. As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Notes), the Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
PROVIDED, HOWEVER, that the Administrative Agent shall not be required to take
any action that exposes the Administrative Agent to personal liability or that
is contrary to this Agreement, any other Loan Document or applicable law. The
Administrative Agent agrees to give to each Lender Party prompt notice of each
notice given to it by the Borrower pursuant to the terms of this Agreement. The
Administrative Agent shall not be a trustee or fiduciary for any Lender.
SECTION 10.2 AGENT'S RELIANCE, ETC. Neither the Administrative Agent
nor any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by
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it or them under or in connection with the Loan Documents, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, the Administrative Agent: (a) may treat the payee
of any Note as the holder thereof until the Administrative Agent receives and
accepts an Assignment and Acceptance entered into by the Lender that is the
payee of such Note, as assignor, and an Eligible Assignee, as assignee, as
provided in Section 11.7; (b) may consult with legal counsel (including counsel
for any Loan Party), 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 Party and shall
not be responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the 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 any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 10.3 FLEET AND AFFILIATES. With respect to its Commitments, the
Advances made by it and the Notes issued to it, Fleet shall have the same rights
and powers under the Loan Documents as any other Lender Party and may exercise
the same as though it were not the Administrative Agent; and the term "Lender
Party" or "Lender Parties" shall, unless otherwise expressly indicated, include
Fleet in its individual capacity. Fleet and its affiliates may accept deposits
from, lend money to, act as trustee under indentures of, accept investment
banking engagements from and generally engage in any kind of business with, any
Loan Party, any of its Subsidiaries and any Person who may do business with or
own securities of any Loan Party or any such Subsidiary, all as if Fleet were
not the Administrative Agent and without any duty to account therefor to the
Lender Parties.
SECTION 10.4 LENDER PARTY CREDIT DECISION. Each Lender Party
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender Party and based on the financial
statements referred to in Section 4.6 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender Party also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender Party 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.
XXXXXXX 00.0 XXXXXXXXXXXXXXX.
00
000
(x) Each Lender Party severally agrees to indemnify the Administrative
Agent (to the extent not promptly reimbursed by the Borrower) from and against
such Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of any of the Loan Documents or any action taken or
omitted by the Administrative Agent under any of the Loan Documents; PROVIDED,
HOWEVER, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender Party agrees to reimburse the Administrative Agent promptly upon demand
for its ratable share of any costs and expenses (including, without limitation,
fees and expenses of counsel) payable by the Borrower under Section 11.4, to the
extent that the Administrative Agent is not promptly reimbursed for such costs
and expenses by the Borrower.
(b) Each Lender Party severally agrees to indemnify the Issuing Bank
(to the extent not promptly reimbursed by the Borrower) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Issuing Bank in any way
relating to or arising out of any of the Loan Documents or any action taken or
omitted by the Issuing Bank under any of the Loan Documents; PROVIDED, HOWEVER,
that no Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Issuing Bank's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender Party
agrees to reimburse the Issuing Bank promptly upon demand for its ratable share
of any costs and expenses (including, without limitation, fees and expenses of
counsel) payable by the Borrower under Section 11.4, to the extent that the
Issuing Bank is not promptly reimbursed for such costs and expenses by the
Borrower.
(c) For purposes of Sections 10.5(a) and 10.5(b), the Lender Parties'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (ii) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit outstanding at such time, and (iii) their respective Unused Revolving
Credit Commitments at such time; PROVIDED, that the aggregate principal amount
of Swing Line Advances owing to the Swing Line Bank and Letter of Credit
Advances owing to the Issuing Bank shall be considered to be owed to the
Revolving Credit Lenders ratably in accordance with their respective Revolving
Credit Commitments. In the event that any Defaulted Advance shall be owing by
any Defaulting Lender at any time, such Lender Party's Commitment with respect
to the Facility under which such Defaulted Advance was required to have been
made shall be considered to be unused for purposes of this Section 10.5 to the
extent of the amount of such Defaulted Advance. The failure of any Lender Party
to reimburse the Administrative Agent or the Issuing Bank, as the case may be,
promptly upon demand for its ratable share of any amount required to be paid by
the Lender Parties
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to the Administrative Agent or the Issuing Bank, as the case may be, as provided
herein shall not relieve any other Lender Party of its obligation hereunder to
reimburse the Administrative Agent or the Issuing Bank, as the case may be, for
its ratable share of such amount, but no Lender Party shall be responsible for
the failure of any other Lender Party to reimburse the Administrative Agent or
the Issuing Bank, as the case may be, for such other Lender Party's ratable
share of such amount. Without prejudice to the survival of any other agreements
of any Lender Party hereunder, the agreement and obligations of each Lender
Party contained in this Section 10.5 shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
SECTION 10.6 SUCCESSOR ADMINISTRATIVE AGENTS. The Administrative Agent
may resign as to any or all of the Facilities at any time by giving written
notice thereof to the Lender Parties and the Borrower and may be removed as to
all of the Facilities at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders shall have the right
to appoint a successor Administrative Agent as to such of the Facilities as to
which the Administrative Agent has resigned or been removed. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Lender Parties, appoint a successor Administrative
Agent, which shall be a Lender which is a commercial bank organized under the
laws of the United States or of any State thereof and having a combined capital
and surplus of at least $250,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent as to all of
the Facilities and upon the execution and filing or recording of such financing
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as the Required Lenders may request, in order to
continue the perfection of the Liens granted or purported to be granted by the
Collateral Documents, such successor Administrative Agent shall succeed to and
become vested with all the rights, powers, discretion, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative Agent shall
be discharged from all of its duties and obligations under this Agreement and
the other Loan Documents. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent as to less
than all of the Facilities and upon the execution and filing or recording of
such financing statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Administrative Agent
shall succeed to and become vested with all the rights, powers, discretion,
privileges and duties of the retiring Administrative Agent as to such
Facilities, other than with respect to funds transfers and other similar aspects
of the administration of Borrowings under such Facilities, issuances of Letters
of Credit (notwithstanding any resignation as Administrative Agent with respect
to the Letter of Credit Facility) and payments by the Borrower in respect of
such Facilities, and the retiring Administrative Agent shall be discharged from
its duties and obligations under this Agreement as to such Facilities, other
than as aforesaid. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent as to all of the Facilities, the
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provisions of this Article 10 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent as to any
Facilities under this Agreement.
SECTION 10.7 EVENTS OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge of the occurrence of a Default (other than the
non-payment of principal of or interest on Loans) unless the Administrative
Agent has received notice from a Lender or the Borrower specifying such Default
and stating that such notice is a "Notice of Default". In the event that the
Administrative Agent receives such a notice of the occurrence of a Default, the
Administrative Agent shall give notice thereof to the Lenders (and shall give
each Lender notice of each such non-payment). The Administrative Agent shall
(subject to Section 10.1(b) hereof) take such action with respect to such
Default as shall be directed by the Required Lenders.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement or the Notes or any other Loan Document, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed (or, in the case of the Collateral
Documents, consented to) by the Required Lenders and Revolving Credit Lenders
holding greater than 50% of the aggregate Revolving Credit Commitments, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; PROVIDED, HOWEVER, that (a) no amendment,
waiver or consent shall, unless in writing and signed by all of the Lenders
(other than any Lender Party that is, at such time, a Defaulting Lender), do any
of the following at any time: (i) change the percentage of (A) the Commitments,
(B) the aggregate unpaid principal amount of the Advances or (C) the aggregate
Available Amount of outstanding Letters of Credit that, in each case, shall be
required for the Lenders or any of them to take any action hereunder; (ii)
release all or substantially all of the Collateral in any transaction or series
of related transactions or permit the creation, incurrence, assumption or
existence of any Lien on any material portion of the Collateral in any
transaction or series of related transactions to secure any liabilities or
obligations other than Obligations owing to the Secured Parties under the Loan
Documents; (iii) release any of the Guarantors from their Subsidiary Guaranty;
(iv) amend this Section 11.1; or (v) limit the liability of any Loan Party under
any of the Loan Documents; (b) no amendment, waiver or consent shall, unless in
writing and signed by the Required Lenders and each Lender that has a Commitment
under the Revolving Credit Facility if affected by such amendment, waiver or
consent, (i) increase the Commitments of such Lender or subject such Lender to
any additional obligations, (ii) reduce the principal of, or interest on, the
Notes held by such Lender or any fees or other amounts payable hereunder to such
Lender, (iii) change any date fixed for any payment of principal of, or interest
on, the Notes held by such Lender or any fees or other amounts payable hereunder
to such Lender or (iv) change the order of application of any prepayment set
forth in Section 2.6 in any manner that materially affects such Lender;
PROVIDED, FURTHER, that no
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amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Bank or the Issuing Bank, as the case may be, in addition to the Lenders
required above to take such action, affect the rights or obligations of the
Swing Line Bank or the Issuing Bank, as the case may be, under this Agreement or
any other Loan Document; and PROVIDED, FURTHER, that no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above to take such action, affect the rights or
duties of the Administrative Agent under this Agreement or any other Loan
Document.
Any waiver and any amendment, supplement or modification pursuant to
this subsection 11.1 shall apply to each of the Lenders and shall be binding
upon the Loan Parties, the Lenders, the Administrative Agent and all future
holders of the Loans. In the case of any waiver, each of the Loan Parties, the
Lenders and the Administrative Agent shall be restored to their former position
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereon.
SECTION 11.2 NOTICES ETC. All notices and other communications provided
for hereunder shall be in writing (including telegraphic, telecopy or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered,
(a) if to the Borrower:
Mosler Inc.
0000 Xxxx Xxxxxxxxx
Xxxxxxxx, Xxxx 000000000
Attention: Xxxxxx Xxxx
Facsimile No.: (000)000-0000
and
Xxxxx & Company
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, XX
. Facsimile: (000) 000-0000
With a copy (which shall not constitute notice
hereunder) to:
Debevoise & Xxxxxxxx
. 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
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(b) if to the Administrative Agent:
Fleet National Bank
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Winston & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(c) if to any Initial Lender or the Initial Issuing Bank, at its
Domestic Lending Office specified opposite its name on SCHEDULE I attached
hereto.
(d) if to any other Lender Party, at its Domestic Lending Office
specified in the Assignment and Acceptance pursuant to which it became a Lender
Party;
or, as to the Borrower or the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the other parties and,
as to each other party, at such other address as shall be designated by such
party in a written notice to the Borrower and the Administrative Agent. All such
notices and communications shall, when mailed by certified mail, return receipt
requested, telegraphed, telecopied or telexed, be effective 3 days after
mailing, upon delivery to the telegraph company, upon transmission by telecopier
or upon confirmation by telex answerback, respectively, except that notices and
communications to the Administrative Agent pursuant to Article 2, 3 or 10 shall
not be effective until received by the Administrative Agent. Delivery by
telecopier of an executed counterpart of this Agreement, the Notes or any other
Loan Document or of any Exhibit hereto or thereto or of any amendment or waiver
of any provision thereof shall be as effective as delivery of a manually
executed counterpart thereof.
SECTION 11.3 NO WAIVER; REMEDIES. No failure on the part of any Lender
Party or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder or under any Note or under any other Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law or in equity.
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SECTION 11.4 COSTS AND EXPENSES.
(a) The Borrower agrees to pay on demand (i) all reasonable costs and
expenses of the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of the Loan
Documents (including, without limitation, (A) all reasonable due diligence,
collateral review, syndication (including printing, distribution and bank
meetings), transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses, and (B) the fees and
expenses of counsel for the Administrative Agent with respect thereto, with
respect to advising the Administrative Agent as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
costs and expenses of the Administrative Agent and the Lender Parties in
connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation or any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally or otherwise (including, without
limitation, the fees and expenses of counsel for the Administrative Agent and
each Lender Party with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender Party and each of their respective Affiliates
and their respective officers, directors, trustees, employees, agents, advisors,
successors and assigns (each, an "INDEMNIFIED PARTY") from and against any and
all claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of, or in connection with the preparation for
a defense of, any investigation, litigation or proceeding arising out of,
related to or in connection with (i) the Transaction, (ii) the Facilities, the
actual or proposed use of the proceeds of the Advances or the Letters of Credit
by the Borrower or any of its Subsidiaries or other Affiliates and any of the
other transactions contemplated by the Loan Documents, or (iii) the actual or
alleged presence of Hazardous Materials on any property of any Loan Party or any
of its Subsidiaries or any Environmental Action relating in any way to any Loan
Party or any of its Subsidiaries, in each case whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, officers, employees, stockholders or creditors or an Indemnified
Party or any Indemnified Party is otherwise a party thereto and whether or not
the Transaction is consummated, except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct or (y) has arisen from claims made or legal
proceedings commenced against such Indemnified Party by any securityholder or
creditor thereof arising out of and based upon rights afforded any such
securityholder or creditor solely in its capacity as such. Notwithstanding the
foregoing, except as provided in clause (ii) of Section 11.4(a), the Borrower
shall have no obligation under this Section 11.4 to the Indemnified Parties
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with respect to any tax, levy, impost, duty, charge, fee, deduction or
withholding imposed, levied, collected, withheld or assessed by any governmental
authority. The Borrower also agrees not to assert any claim against the
Administrative Agent, any Lender Party or any of their respective Affiliates, or
any of their respective officers, directors, employees, attorneys and agents, on
any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the Facilities, the actual or
proposed use of the proceeds of the Advances or the Letters of Credit, the Loan
Documents or any of the Transaction, other than claims for direct, as opposed to
consequential, damages.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a result
of a payment or Conversion pursuant to Section 2.9(b)(i) or 2.10(d) or a
prepayment pursuant to Section 2.6(a) or (b), acceleration of the maturity of
the Notes pursuant to Article 9 or for any other reason, the Borrower shall,
upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender Party any amounts required to compensate such Lender Party for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
re-employment of deposits or other funds required by any Lender Party to fund or
maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent, in its sole
discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
11.4 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
Notwithstanding the foregoing, the Borrower shall have no obligation under this
Section 11.4 with respect to any taxes, levies, imposts, deductions, charges or
withholdings or any liabilities with respect thereto.
SECTION 11.5 RIGHT OF SET-OFF. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Article 9 to authorize the Administrative
Agent to declare the Notes due and payable pursuant to the provisions of Article
9, each Lender Party and each of its respective Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and otherwise apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender Party or such Affiliate to or for the credit or the
account of the Borrower or any of its Subsidiaries against any and all of the
Obligations of the Borrower now or hereafter existing under this Agreement and
the Note or Notes (if any) held by such
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Lender Party, irrespective of whether such Lender Party shall have made any
demand under this Agreement or such Note or Notes and although such obligations
may be unmatured. Each Lender Party agrees promptly to notify the Borrower and
the Administrative Agent after any such set-off and application; PROVIDED,
HOWEVER, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender Party and its respective
Affiliates under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Lender Party
and its respective Affiliates may have at law, in equity or otherwise.
SECTION 11.6 BINDING EFFECT. This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have been notified by each Initial Lender
and the Initial Issuing Bank that each such Initial Lender and the Initial
Issuing Bank has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent and each Lender Party and
their respective successors and assigns, except that the Borrower shall not have
the right to assign any of its rights hereunder or any interest herein without
the prior written consent of the Lender Parties.
SECTION 11.7 ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment or Commitments, the Advances
owing to it and the Note or Notes held by it); PROVIDED, HOWEVER, that except
(i) in the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $5,000,000, (ii) no such assignments shall be permitted
without the prior consent of the Administrative Agent (which may be withheld for
any reason) until the Administrative Agent shall have notified the Lender
Parties that syndication of the Commitments hereunder has been completed, but in
any event not later than 90 days following the Closing Date, (iii) no such
assignment shall be permitted if, immediately after giving effect thereto, the
Borrower would be required to make payments to or on behalf of the assignee
Lender Party pursuant to Section 2.10(a) or (b) and the assignor Lender Party
was not, at the time of such assignment, entitled to receive any payment
pursuant to Section 2.10(a) or (b), and (iv) the parties to each such assignment
shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment and a processing and recordation fee of
$3,000. The Documentation Agent may assign such position to any Lender Party
with the consent of the Borrower which consent will not be unreasonably
withheld.
(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to
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such Assignment and Acceptance, have the rights and obligations of a Lender or
Issuing Bank, as the case may be, hereunder and (y) the Lender or Issuing Bank
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's or Issuing Bank's rights and obligations under this
Agreement, such Lender or Issuing Bank shall cease to be a party hereto).
Notwithstanding the foregoing, no Assignee, which as of the date of any
assignment to it pursuant to this Section 11.7(b) would be entitled to receive
any greater payment under Section 2.10 or 2.12 than the assigning Lender would
have been entitled to receive as of such date under such subsection with respect
to the rights assigned, shall be entitled to receive such payments unless the
Borrower has expressly consented in writing to waive the benefit of this
provision at the time of the assignment.
(c) By executing and delivering an Assignment and Acceptance, the
Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.6 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, such assigning Lender Party or
any other Lender Party 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; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender or Issuing Bank, as the case may be.
(d) The Administrative Agent shall maintain at its address referred to
in Section 11.2 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lender Parties and the Commitment under each
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Facility of, and principal amount of the Advances owing under each Facility to,
each Lender Party from time to time (the "REGISTER"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Administrative Agent and the Lender Parties may
treat each Person whose name is recorded in the Register as a Lender Party
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender Party at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment and the appropriate processing and reconciliation fee, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of EXHIBIT A hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Borrower. In the case of any
assignment by a Lender, within five (5) Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note or Notes a new Note to
the order of such Eligible Assignee in an amount equal to the Commitment assumed
by it under a Facility pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment hereunder under such Facility, a new
Note to the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of EXHIBIT C hereto.
Any Notes surrendered by the assigning Lender Party shall be returned by the
Administrative Agent to the Borrower marked "cancelled." The date of the
effectiveness of any assignment hereunder shall be determined pursuant to the
terms and provisions of the relevant Assignment and Acceptance.
(f) The Issuing Bank may assign to an Eligible Assignee all of its
rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; PROVIDED, HOWEVER, that (i) each such assignment shall
be to an Eligible Assignee and (ii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $3,000.
(g) Each Lender Party may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes, if any, held by it); PROVIDED, HOWEVER, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the
other Lender Parties shall continue to deal solely and directly with such Lender
Party in connection with such Lender Party's rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment, waiver or other modification of any
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provision of this Agreement or any other Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver, modification or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation, or release
all or substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.7, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; PROVIDED, HOWEVER, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party. The Borrower agrees that each Lender
shall be entitled to the benefits of Sections 2.10, 2.12 and 11.4 without regard
to whether it has granted any participating interest, and that all amounts
payable to a Lender under Sections 2.10, 2.12 and 11.4 shall be determined as if
such Lender had not granted any such participating interests. No assignment or
participation made or purported to be made to any transferee shall be effective
without the prior written consent of the Borrower if it would require the
Borrower to make any filing with any governmental authority or qualify any
Advance or Note under the laws of any jurisdiction, and the Borrower shall be
entitled to request and receive such information and assurances as it may
reasonably request from any Lender Party or any transferee to determine whether
any such filing or qualification is required or whether any assignment or
participation is otherwise in accordance with applicable law.
(i) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may (i) at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System, or (ii) assign all or any portion of its rights or
obligations under the Loan Documents to any Affiliate thereof.
SECTION 11.8 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be as effective as delivery of a manually executed counterpart
of this Agreement.
SECTION 11.9 NO LIABILITY OF THE ISSUING BANK. The Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. Neither the Issuing
Bank nor any of its officers, directors, employees or agents shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or
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genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (c) payment by the Issuing Bank against presentation of documents that
do not comply with the terms of a Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the Letter of Credit;
or (d) any other circumstances whatsoever in making or failing to make payment
under any Letter of Credit, except that the Borrower shall have a claim against
the Issuing Bank, and the Issuing Bank shall be liable to the Borrower, to the
extent of any direct, but not consequential, damages suffered by the Borrower
that the Borrower proves were caused by (i) the Issuing Bank's willful
misconduct or gross negligence in determining whether documents presented under
any Letter of Credit comply with the terms of the Letter of Credit or (ii) the
Issuing Bank's willful failure to make lawful payment under a Letter of Credit
after the presentation to it of a draft and certificates strictly complying with
the terms and conditions of the Letter of Credit. In furtherance and not in
limitation of the foregoing, the Issuing Bank may accept documents that appear
on their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
SECTION 11.10 CONFIDENTIALITY. Neither the Administrative Agent nor any
Lender Party shall disclose any Confidential Information to any Person without
the consent of the Borrower, other than (a) to the Administrative Agent's or
such Lender Party's Affiliates and their officers, directors, employees, agents
and advisors and to actual or prospective Eligible Assignees and participants,
and then only on a confidential basis, (b) as required by any law, rule or
regulation or judicial process and (c) as requested or required by any state,
federal or foreign authority or examiner regulating banks or banking; and
PROVIDED that, in the case of clauses (b) and (c), the Administrative Agent or
such Lender Party shall, unless prohibited by any requirement of law, notify the
Borrower of any disclosure if reasonably practicable under such circumstances.
SECTION 11.11 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.12 INTEGRATION. This Agreement and the other Loan Documents
represent the entire agreement of each of the Loan Parties party hereto, the
Administrative Agent and the Lender Parties with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by any of the Loan Parties party hereto, the Administrative Agent or any Lender
Party relative to the subject matter hereof not expressly set forth or referred
to herein or in the other Loan Documents.
SECTION 11.13 JURISDICTION, ETC.
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(a) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN
NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY
LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY
LENDER PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS IN THE COURTS OF ANY
JURISDICTION.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
SECTION 11.14 GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS (OTHER THAN THE MORTGAGES WHICH SHALL BE GOVERNED BY THE LAW OF
THE JURISDICTION WHERE THE PROPERTY COVERED THEREBY IS LOCATED) SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO ITS RULES PERTAINING TO CONFLICTS OF LAWS
OTHER THAN GENERAL OBLIGATIONS LAW SECTION 5-1401.
SECTION 11.15 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE LOAN
PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDER PARTIES IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF THE
ADMINISTRATIVE AGENT
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OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
MOSLER INC.
by: /s/ Xxxxxx Xxxxxxxx
-------------------------------
Title: President - CEO
-----------------------------
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT,
AS INITIAL ISSUING BANK,
AS SWING LINE BANK, AND
AS DOCUMENTATION AGENT
By: /a/ Xxxxx X. Xxxxxxxx
-------------------------------
Title: Managing Director
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INITIAL LENDERS
FLEET NATIONAL BANK
By: /a/ Xxxxx X. Xxxxxxxx
-------------------------------
Title: Managing Director
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KEY CORPORATE CAPITAL INC.
By: /s/ Xxxx Xxxxxx
-------------------------------
Title: Vice President
-----------------------------
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------
Title: Vice President
-----------------------------
THE PROVIDENT BANK
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Title: Vice President
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