EXHIBIT 4.1
FIRST AMENDED AND RESTATED
CREDIT AGREEMENT
THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT, dated as of January
29, 1999, is by and among OMEGA CABINETS, LTD., a Delaware corporation ("Omega")
and PANTHER TRANSPORT, INC., an Iowa corporation ("Panther" and, collectively
with Omega and any other party that becomes a party hereto pursuant to Section
6.5, the "Borrowers"), the banks which are signatories hereto (individually, a
"Bank" and, together with any Persons that become a party hereto pursuant to
Section 9.6, the "Banks"), U.S. BANK NATIONAL ASSOCIATION, a national banking
association, one of the Banks, as agent for the Banks (in such capacity, the
"Agent"), and THE FIRST NATIONAL BANK OF CHICAGO, one of the Banks, as
documentation agent for the Banks (in such capacity the "Documentation Agent").
WHEREAS, the Borrowers are parties to that certain Credit Agreement
dated as of June 13, 1997, as amended by the First Amendment to Credit Agreement
dated as of September 25, 1998 (the "Existing Credit Agreement"); and
WHEREAS, Omega, "Kitchen Craft" (as defined below) and the
shareholders of Kitchen Craft have entered into the "Master Transaction
Agreement (Kitchen Craft)" (as defined below) dated as of January 29, 1999
pursuant to which Omega will purchase certain of the assets and all of the stock
of Kitchen Craft;
WHEREAS, in connection with the acquisition of Kitchen Craft, Omega
has requested certain financing from the Banks; and
WHEREAS, the Borrowers, the Banks and the Agent desire to amend and
restate the Existing Credit Agreement in its entirety.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
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DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Defined Terms. As used in this Agreement the following
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terms shall have the following respective meanings (and such meanings shall be
equally applicable to both the singular and plural form of the terms defined, as
the context may require):
"Acquisition": Any transaction or series of transactions by which
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either Borrower acquires, either directly or through an Affiliate or Subsidiary
or otherwise, (a) any or all of the stock or other securities of any class of
any Person or (b) a substantial portion of the assets, or a division or line of
business of any Person.
"Acquisition (Kitchen Craft)": The purchase by Omega, through one or
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more Subsidiaries of certain of the assets and all of the issued and outstanding
capital stock of Kitchen Craft pursuant to the Master Transaction Agreement
(Kitchen Craft).
"Acquisition Closing Date (Kitchen Craft)": January 29, 1999, or such
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other date as may be proposed by the Borrowers and agreed to by the Banks on
which all the conditions in the Acquisition Documents have been satisfied or
(with the consent of the Banks), waived.
"Acquisition Closing Date Balance Sheet (Kitchen Craft)": The
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consolidated pro forma balance sheet of Omega and its Subsidiaries as of the
Acquisition Closing Date (Kitchen Craft), reflecting the assets, liabilities and
stockholders' equity of Omega and its Subsidiaries as of such date, based on the
financial statements of Omega and its Subsidiaries and of Kitchen Craft and its
Subsidiaries as of November 21, 1998, adjusted to reflect the effect of the
Acquisition (Kitchen Craft), the Term Loan B Advance and any revolving loans
made to finance the Acquisition (Kitchen Craft), and any other financing
obtained by Omega and its Subsidiaries to finance any part of the Acquisition
(Kitchen Craft).
"Acquisition Documents (Kitchen Craft)": The Master Transaction
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Agreement (Kitchen Craft), and all other agreements, instruments, certificates
and other documents executed and delivered pursuant to or in connection
therewith, as the same may be supplemented, amended or otherwise modified.
"Adjusted Eurodollar Rate": With respect to each Interest Period
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applicable to a Eurodollar Rate Advance, the rate (rounded upward, if necessary,
to the next one hundredth of one percent) determined by dividing the Eurodollar
Rate for such Interest Period by 1.00 minus the Eurodollar Reserve Percentage.
"Advance": Any portion of the outstanding Revolving Loans or Term
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Loans by a Bank as to which one of the available interest rate options and, if
pertinent, an Interest Period, is applicable. An Advance may be a Eurodollar
Rate Advance or a Base Rate Advance.
"Affiliate": When used with reference to any Person, (a) each Person
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that, directly or indirectly, controls, is controlled by or is under common
control with, the Person referred to, (b) each Person which beneficially owns or
holds, directly or indirectly, ten percent or more of any class of voting stock
of the Person referred to (or if the Person referred to is not a corporation,
five percent or more of the equity interest), (c) each Person, ten percent or
more of the voting stock (or if such Person is not a corporation, ten percent or
more of the equity interest) of which is beneficially owned or held, directly or
indirectly, by the Person referred to, and (d) each of such Person's officers,
directors, joint venturers and partners. The term control
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(including the terms "controlled by" and "under common control with") means the
possession, directly, of the power to direct or cause the direction of the
management and policies of the Person in question.
"Agent": As defined in the opening paragraph hereof.
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"Aggregate Revolving Commitment Amounts": As of any date, the sum of
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the Revolving Commitment Amounts of all the Banks.
"Allocable Share": As of any date of determination, the ratio of the
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outstanding principal balance of the Term Loan A or Term Loan B hereunder, or
the CIBC Term Loan(s), as applicable, to the aggregate principal amount of all
outstanding Indebtedness of the Borrowers under the each of the Term Loans
hereunder and the CIBC Term Loan(s).
"Applicable Lending Office": For each Bank and for each type of
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Advance, the office of such Bank identified as such Bank's Applicable Lending
Office on the signature pages hereof or such other domestic or foreign office of
such Bank (or of an Affiliate of such Bank) as such Bank may specify from time
to time, by notice given pursuant to Section 9.4, to the Agent and the Borrowers
as the office by which its Advances of such type are to be made and maintained.
"Applicable Margin": Subject to the last two sentences of this
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definition, with respect to the period beginning five days after the day the
financial statements and compliance certificate required by Sections 5.1(c) and
(d) with respect to a month are delivered and ending on the date five days after
the date such financial statements and compliance certificate for the next month
are actually delivered (unless such financial statements are not delivered when
required, in which case ending on the date such delivery was required), shall
mean the percentage specified as applicable to Base Rate Advances or Eurodollar
Rate Advances, as appropriate, for the Cash Flow Leverage Ratio calculated for
the twelve months ending as of the end of the month to end immediately prior to
the date of determination:
Revolving Note and Term Note A:
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Cash Flow Eurodollar Base
Leverage Ratio Rate Advances Rate Advances
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Less than or equal to 2.50:1 1.25% 0.25%
Greater than 2.50:1 but less
than or equal to 3.5:1 1.75% 0.75%
Greater than 3.50:1 but less
than 4.5:1 2.25% 1.25%
Greater than or equal to
4.5:1 2.50% 1.50%
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Term Note B:
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Cash Flow Eurodollar Base
Leverage Ratio Rate Advances Rate Advances
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Less than or equal to 2.50:1 1.50% 0.50%
Greater than 2.50:1 but less
than or equal to 3.5:1 2.00% 1.00%
Greater than 3.50:1 but less
than 4.5:1 2.50% 1.50%
Greater than or equal to
4.5:1 2.75% 1.75%
During the period beginning on the Closing Date and ending on the date five days
after the financial statements and compliance certificate for the period ending
June 30, 1999 are delivered pursuant to Sections 5.1(c) and (d), and for any
subsequent period beginning on a day the financial statements and compliance
certificate required by Sections 5.1(c) and (d) with respect to a month are
required to be but are not delivered and ending five days after the date such
financial statements and compliance certificate are delivered, the Applicable
Margin shall be as specified for a Cash Flow Leverage Ratio greater than or
equal to 4.5:1.
"Assignee": As defined in Section 9.6(c).
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"BII": Bulrad Illinois, Inc., an Illinois corporation.
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"Bank": As defined in the opening paragraph hereof.
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"Base Rate": As of any date of determination, the greater of: (i) the
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Reference Rate, or (ii) a rate equal to one half of one per cent (0.5%) per
annum above 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 that day by the Board, or if not so published,
as determined for any day by the Agent based on quotations received by the Agent
from federal funds brokers of recognized standing selected by the Agent. For
purposes of determining any interest rate hereunder or under any other Loan
Document which is based on the Base Rate, such interest rate shall change as and
when the Base Rate shall change.
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"Base Rate Advance": An Advance with respect to which the interest
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rate is determined by reference to the Base Rate.
"Board": The Board of Governors of the Federal Reserve System or any
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successor thereto.
"Bondholders": The holders of the Permanent Subordinated High Yield
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Debt.
"Borrower Loan Documents": This Agreement, the Notes and any of the
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Security Documents to be executed by either Borrower.
"Borrowers": As defined in the opening paragraph hereof.
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"Business Day": Any day (other than a Saturday, Sunday or legal
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holiday in the State of Minnesota) on which national banks are permitted to be
open in Minneapolis, Minnesota.
"Canadian Facilities": The Facilities owned by Kitchen Craft and
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commonly described as ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, and
approximately 7.6 acres at the corner of Springfield Street and ▇▇▇▇▇▇▇▇,
Winnipeg, Manitoba.
"Canadian Lenders": The lenders party to the CIBC Loan Documents.
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"Capital Expenditures": For any period, the sum of all amounts that
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would, in accordance with GAAP, be included as additions to property, plant and
equipment on a consolidated statement of cash flows for Omega during such
period, in respect of (a) the acquisition, construction, improvement,
replacement or betterment of land, buildings, machinery, equipment or of any
other fixed assets or leaseholds, (b) to the extent related to and not included
in (a) above, materials, contract labor (excluding expenditures properly
chargeable to repairs or maintenance in accordance with GAAP), and (c) other
capital expenditures and other uses recorded as capital expenditures or similar
terms having substantially the same effect.
"Capitalized Lease": A lease of (or other agreement conveying the
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right to use) real or personal property with respect to which at least a portion
of the rent or other amounts thereon constitute Capitalized Lease Obligations.
"Capitalized Lease Obligations": As to any Person, the obligations of
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such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real or personal property which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP (including Statement of Financial Accounting
Standards No. 13 of the Financial Accounting Standards Board), and, for purposes
of this Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP (including such Statement No.
13).
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"Cash Flow Leverage Ratio": For any period of determination, the
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ratio of
(a) the aggregate principal amount of all outstanding Indebtedness of
Omega and its Subsidiaries as of the last day of that period,
to
(b) EBITDA for such period,
in each case determined as to Omega and its Subsidiaries on a consolidated basis
in accordance with GAAP; provided, however, that for any period of determination
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including the Acquisition Closing Date (Kitchen Craft), the EBITDA (Kitchen
Craft) for the period from the beginning of such measurement period to the
Acquisition Closing Date (Kitchen Craft) shall be added to the EBITDA of Omega
and its Subsidiaries on a pro forma basis.
"Change of Control": The occurrence, after the Closing Date, of any
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of the following circumstances: (a) Mezzanine Lending Associates III, L.P. and
its Affiliates, collectively, not owning, directly or indirectly, securities of
Holdings representing more than 50% of all securities of Holdings entitled to
vote in the election of directors; or (b) nominees of Mezzanine Lending
Associates III, L.P. and its Affiliates ceasing for any reason to constitute a
majority of the Board of Directors of Holdings (other than by reason of death,
disability or scheduled retirement), or (c) Holdings ceases to own 100% of the
issued and outstanding stock of Omega.
"CIBC": Canadian Imperial Bank of Commerce.
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"CIBC Loan Documents": Collectively, that certain Credit Agreement of
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even date hereof by and among 3578275 Canada Inc., New Kitchen Craft, CIBC, as
agent, and the other banks party thereto, in the original principal amount of
C$37,000,000, as guaranteed by Omega, and all related documents as the same may
hereafter be amended, supplemented, extended, restated or otherwise modified
from time to time.
"CIBC Term Loan": The term loan in the original principal amount of
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C$22,000,000 made pursuant to the CIBC Loan Documents.
"Closing Date": January 29, 1999.
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"Code": The Internal Revenue Code of 1986, as amended.
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"Collateral Agent": U.S. Bank, in its capacity as collateral agent
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pursuant to the Security Documents.
"Collateral Assignment": The Omega Collateral Assignment
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(Trademarks).
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"Commitments": The Revolving Commitments and the Term Loan B
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Commitment.
"Contingent Obligation": With respect to any Person at the time of
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any determination, without duplication, any guaranty or other obligation,
contingent or otherwise, of such Person with respect to any Indebtedness of any
other Person (the "primary obligor") in any manner, whether directly or
otherwise: (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or to purchase (or to advance or supply funds
for the purchase of) any direct or indirect security therefor, (b) to purchase
property, securities or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness, (c) to maintain working
capital, equity capital or other financial statement condition of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or
otherwise to protect the owner thereof against loss in respect thereof, or (d)
entered into for the purpose of assuring in any manner the owner of such
Indebtedness of the payment of such Indebtedness or to protect the owner against
loss in respect thereof; provided, that the term "Contingent Obligation" shall
not include endorsements for collection or deposit, in each case in the ordinary
course of business.
"Current Assets": As of any date, the consolidated current assets of
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Omega and its Subsidiaries, determined in accordance with GAAP.
"Current Liabilities": As of any date, the consolidated current
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liabilities of Omega and its Subsidiaries, determined in accordance with GAAP,
but excluding any current liabilities for borrowed money.
"Default": Any event which, with the giving of notice (whether such
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notice is required under Section 7.1, or under some other provision of this
Agreement, or otherwise) or lapse of time, or both, would constitute an Event of
Default.
"Default Rate": As defined in Section 2.5(iii).
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"Documentary Letter of Credit": A Letter of Credit which requires
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that the drafts thereunder be accompanied by a document of title covering or
securing title to the goods acquired with the proceeds of such drafts.
"Documentation Agent": as defined in the first paragraph hereof.
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"EBITDA": For any period of determination, the consolidated net
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income of Omega and its Subsidiaries before deductions for income taxes,
Interest Expense, depreciation and amortization, all as determined in accordance
with GAAP; provided, however that: (i) any transactional fees and other expenses
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incurred in connection with this Agreement or the transactions pursuant to the
CIBC Loan Documents, or the Kitchen Craft Acquisition Documents and deducted
from Omega and its Subsidiaries' income, as determined in accordance with GAAP,
with respect to a period of determination shall be added back in determining
EBITDA for
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that period; and (ii) all non-cash compensation expenses recorded during a
period in connection with the granting of options shall be added back in
determining EBITDA for that period.
"EBITDA (Kitchen Craft)": For any period of determination, the
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consolidated net income of Kitchen Craft and its Subsidiaries before deductions
for income taxes, Interest Expense, depreciation and amortization, all as
determined in accordance with GAAP; provided, however, that (i) any
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transactional fees and other expenses incurred in connection with this Agreement
or the transactions pursuant to the CIBC Loan Documents or the Kitchen Craft
Acquisition Documents and deducted from Kitchen Craft and its Subsidiaries'
income, as determined in accordance with GAAP, with respect to a period of
determination shall be added back in determining EBITDA (Kitchen Craft) for that
period; (ii) all non-cash compensation expenses recorded during a period in
connection with the granting of options shall be added back in determining
EBITDA (Kitchen Craft) for that period, and (iii) any charitable contributions
made in excess of C$100,000 per year shall be added back in determining EBITDA
(Kitchen Craft) for that period.
"ERISA": The Employee Retirement Income Security Act of 1974, as
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amended.
"ERISA Affiliate": Any trade or business (whether or not
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incorporated) that is a member of a group of which Omega or any of its
Subsidiaries is a member and which is treated as a single employer under Section
414 of the Code.
"Eurodollar Business Day": A Business Day which is also a day for
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trading by and between banks in United States dollar deposits in the interbank
Eurodollar market and a day on which banks are open for business in New York
City.
"Eurodollar Rate": With respect to each Interest Period applicable to
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a Eurodollar Rate Advance, the average offered rate for deposits in United
States dollars (rounded upward, if necessary, to the nearest 1/16 of 1%) for
delivery of such deposits on the first day of such Interest Period, for the
number of days in such Interest Period, which appears on the Telerate page 3750
as of 11:00 a.m., London time (or such other time as of which such rate appears)
two Eurodollar Business Days prior to the first day of such Interest Period, or
the rate for such deposits determined by the Agent at such time based on such
other published service of general application as shall be selected by the Agent
for such purpose (including without limitation the Reuters Screen LIBO page);
provided, that in lieu of determining the rate in the foregoing manner, the
Agent may determine the rate based on rates at which United States dollar
deposits are offered to the Agent in the interbank Eurodollar market at such
time for delivery in Immediately Available Funds on the first day of such
Interest Period in an amount approximately equal to the Advance by the Bank to
which such Interest Period is to apply (rounded upward, if necessary, to the
nearest 1/16 of 1%). "Reuters Screen LIBO page" means the display designated as
page "LIBO" on the Reuters Monitor Money Rate Screen (or such other page as may
replace the LIBO page on such service for the purpose of displaying London
interbank offered rates of major banks for United States dollar deposits), and
"Telerate page 3750" means the display designated as such on Telerate System
Incorporated (or such other page as may replace page
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3750 or that service for the purpose of displaying London interbank offered
rates of major banks for U.S. Dollar deposits).
"Eurodollar Rate Advance": An Advance with respect to which the
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interest rate is determined by reference to the Adjusted Eurodollar Rate.
"Eurodollar Reserve Percentage": As of any day, that percentage
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(expressed as a decimal) which is in effect on such day, as prescribed by the
Board for determining the maximum reserve requirement (including any basic,
supplemental or emergency reserves) for a member bank of the Federal Reserve
System, with deposits comparable in amount to those held by the Agent, in
respect of "Eurocurrency Liabilities" as such term is defined in Regulation D of
the Board. The rate of interest applicable to any outstanding Eurodollar Rate
Advances shall be adjusted automatically on and as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Event of Default": Any event described in Section 7.1.
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"Excess Cash Flow": As of each Fiscal Year End, beginning with the
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1998 Fiscal Year End, determined for the period of four consecutive fiscal
quarters ending on such Fiscal Year End on a consolidated basis for Omega and
its Subsidiaries in accordance with GAAP (but excluding Kitchen Craft from such
determination for fiscal year 1998), the remainder of
(a) the sum, without duplication, of (i) EBITDA for such period, (ii)
extraordinary cash income, if any, business interruption insurance
proceeds, if any, and cash gains attributable to sales of assets out of the
ordinary course of business (but net of taxes, expenses and reserves for
indemnification), if any, during such period to the extent that any such
extraordinary cash income, such insurance proceeds or such cash gain is not
included in EBITDA for such period, and (iii) the net reduction, if any, in
Working Capital during such period, minus
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(b) the sum, without duplication, of (i) tax expenses paid in cash or
accrued by Omega during such period, (ii) the aggregate amount of Capital
Expenditures, if any (but only to the extent such Capital Expenditures were
permissible under Section 6.10) during such period, (iii) Interest Expense
accrued during such period (whether or not paid during such period), (iv)
the aggregate principal amount of Omega's consolidated Indebtedness
scheduled to mature during the relevant period that is paid in cash during
the relevant period, (v) the aggregate principal amount of optional
prepayments of any of the Term Loans hereunder and the CIBC Term Loan
during the relevant period, (vi) the net increase, if any, in Working
Capital during such period, and (viii) the aggregate amount of Restricted
Payments, if any, to Holdings (but only to the extent such Restricted
Payments were permissible under Section 6.7) during such period.
"Exchangeable Shares": Certain non-voting shares of common stock of KC
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Holdings (and, after the amalgamation thereof with Kitchen Craft, New Kitchen
Craft) held by
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certain Kitchen Craft employees and members of management, the aggregate value
of which, as of the Closing Date shall not exceed C$6,050,000, which shall be
exchangeable for shares of the Stock of Holdings after the Closing Date.
"Facility": Any and all real property (including, without limitation,
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all buildings or other improvements located thereon) now or hereafter owned,
leased, operated or used by Omega or any of its Subsidiaries.
"Fiscal Year End": With respect to any calendar year, the day in
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December of that year or January of the next year that is the last day of a
fiscal year of Omega.
"Fixed Charge Coverage Ratio": For any period of four fiscal
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quarters, the ratio of
(a) EBITDA for such period minus the sum of (i) the aggregate amount
of Capital Expenditures incurred other than those described in Section
6.10(b), if any (but only to the extent such Capital Expenditures were
permissible under Section 6.10) during such period and (ii) taxes paid in
cash by Omega and its Subsidiaries,
to
(b) the sum of Interest Expense (excluding any non-cash amortized
deferred financing charges during such period) and all required principal
payments with respect to the consolidated Indebtedness of Omega and its
Subsidiaries
in each case determined for said period on a consolidated basis in accordance
with GAAP.
"GAAP": Generally accepted accounting principles set forth in the
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opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of any date of
determination.
"High Yield Subordinated Permanent Debt": The $100,000,000 Senior
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Subordinated Notes due 2007 issued by Omega pursuant to the Indenture dated as
of July 18, 1997 by and among Omega (as an original party and as successor by
merger to HomeCrest Corporation), Panther and The Chase Manhattan Bank, as
trustee.
"High Yield Subordinated Permanent Loan Documents": Collectively, the
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Indenture, a subordinated note, guaranty from Panther, an offering document and
all related documents, as the same may hereafter be amended, supplemented,
extended, restated or otherwise modified from time to time, pursuant to which
the High Yield Subordinated Permanent
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Debt was issued by Omega and placed pursuant to Rule 144A by ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
and Citicorp Securities, Inc.
"Holding Account": A deposit account belonging to the Agent for the
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benefit of the Banks into which the Borrowers may be required to make deposits
pursuant to Section 2.6(a) or 7.2 of this Agreement, such account to be under
the sole dominion and control of the Agent and not subject to withdrawal by the
Borrowers, with any amounts therein to be held for application by the Agent
toward payment of any outstanding Letters of Credit when drawn upon. The Holding
Account shall be a money market savings account or substantial equivalent (or
other appropriate investment medium as the Borrowers may from time to time
request and to which the Agent in its sole discretion shall have consented) and
shall bear interest in accordance with the terms of similar accounts held by the
Agent for its customers. No Borrower is obligated to make deposits into the
Holding Account except as provided in Section 2.6(a) or 7.2.
"Holding Company": A Subsidiary of Omega that owns no assets other
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than Stock of other Subsidiaries of Omega and has no Indebtedness.
"Holdings": Omega Holdings, Inc., a Delaware corporation.
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"Holdings Documents": Collectively, the Holdings Guaranty and the
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Holdings Pledge Agreement, and any reaffirmations thereof executed in accordance
with Section 5.12 herein.
"Holdings Guaranty": An Amended and Restated Guaranty, in form and
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substance satisfactory to the Agent, whereby Holdings guarantees payment of the
Obligations, as the same may hereafter be amended, supplemented, extended,
restated or otherwise modified from time to time.
"Holdings Pledge Agreement": An Amended and Restated Pledge
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Agreement, in form and substance satisfactory to the Agent, whereby Holdings
pledges all of its stock in Omega and any other Subsidiaries of Holdings to the
Agent for the benefit of the Banks, to secure the Obligations and the Holdings
Guaranty, as the same may hereafter be amended, supplemented, extended, restated
or otherwise modified from time to time.
"Immediately Available Funds": Funds with good value on the day and
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in the city in which payment is received.
"Indebtedness": With respect to any Person at the time of any
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determination, all obligations which in accordance with GAAP are required to be
classified upon the balance sheet of such Person as liabilities, in any event
including, without duplication: (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (c) all obligations of such Person upon which
interest charges are customarily paid or accrued, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person,
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(e) all obligations of such Person issued or assumed as the deferred purchase
price of property or services, (f) all obligations of others secured by any Lien
on property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Capitalized Lease Obligations of such
Person, (h) all obligations of such Person in respect of interest rate
protection agreements, (i) all obligations of such Person, actual or contingent,
as an account party in respect of letters of credit or bankers' acceptances, (j)
all obligations of any partnership or joint venture as to which such Person is
or may become personally liable, (k) all obligations of a trust or other entity
formed or utilized in connection with the securitization of assets of such
Person and (l) all Contingent Obligations of such Person.
"Indemnification Agreement" has the meaning given to it in the
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Existing Credit Agreement.
"Indenture": That certain indenture dated as of June 13, 1997 among
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the Borrowers, Holdings and Chase Manhattan Bank, as trustee.
"Indiana Amendment to Mortgage": An Amendment to Mortgage, Security
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Agreement, Assignment of Leases and Rents and Fixture Financing Statement
amending the Indiana Mortgage.
"Indiana Facility": The Facility owned by Omega and commonly
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described as ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, the legal description
of which is attached hereto as Exhibit 1.1-1.
"Indiana Mortgage": The Mortgage, Security Agreement, Assignment of
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Leases and Rents and Fixture Financing Statement dated as of June 13, 1997,
whereby Omega granted the Agent, for the benefit of the Banks, a Lien in the
Indiana Facility, as the same may hereafter be amended, supplemented, extended,
restated or otherwise modified from time to time.
"Intellectual Property": As defined in Section 4.12.
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"Intercreditor Agreement": The Intercreditor Agreement by and among
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the Agent, the Banks, CIBC and the other banks party to the CIBC Loan Documents,
in form and substance acceptable to the Lenders (as defined therein), executed
by a duly authorized officer of each of the Lenders and dated the date hereof.
"Interest Coverage Ratio": For any period of four fiscal quarters,
-----------------------
the ratio of (a) EBITDA, to (b) Interest Expense (excluding any non-cash
amortized deferred financing charges during such period), in each case
determined for said period in accordance with GAAP.
"Interest Expense": For any period of determination, the aggregate
----------------
consolidated amount, without duplication, of interest paid, accrued or scheduled
to be paid in respect of any consolidated Indebtedness of Omega and its
Subsidiaries, including (a) all but the principal component of payments in
respect of conditional sale contracts, Capitalized Leases and other title
- 12 -
retention agreements, (b) commissions, discounts and other fees and charges with
respect to letters of credit and bankers' acceptance financings and (c) net
costs under interest rate protection agreements, in each case determined in
accordance with GAAP.
"Interest Period": With respect to each Eurodollar Rate Advance, the
---------------
period commencing on the date of such Advance or on the last day of the
immediately preceding Interest Period, if any, applicable to an outstanding
Advance and ending one, two, three or six months thereafter, as Omega, on behalf
of the Borrowers, may elect in the applicable notice of borrowing, continuation
or conversion; provided that:
-------------
(a) Any Interest Period that would otherwise end on a day which is
not a Eurodollar Business Day shall be extended to the next succeeding
Eurodollar Business Day unless such Eurodollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Eurodollar Business Day;
(b) Any Interest Period that begins on the last Eurodollar Business
Day of a calendar month (or a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Eurodollar Business Day of a calendar month; and
(c) Any Interest Period applicable to an Advance on a Revolving Loan
that would otherwise end after the Revolving Commitment Ending Date shall
end on the Revolving Commitment Ending Date, and any Interest Period
applicable to an Advance on a Term Loan that would otherwise end after the
scheduled maturity of such Term Loan shall end on such maturity.
Interest Periods shall be selected so that the installment payments on the Term
Notes can be paid without having to pay a Eurodollar Rate Advance prior to the
last day of the Interest Period applicable thereto. No more than ten Interest
Periods may exist at any one time.
"Investment": Except as provided in the next sentence, the
----------
acquisition, purchase, making or holding of any stock or other security, any
loan, advance, contribution to capital, extension of credit, any acquisitions of
real or personal property (other than real and personal property acquired in the
ordinary course of business) and any purchase or commitment or option to
purchase stock or other debt or equity securities of or any interest in another
Person or any integral part of any business or the assets comprising such
business or part thereof. "Investment" shall not include: (i) trade and
customer accounts receivable for property leased, goods furnished, inventory
sold or services rendered in the ordinary course of business and payable in
accordance with customary trade terms; (ii) deposits, advances or prepayments to
suppliers for property leased, goods furnished, inventory sold or services
rendered in the ordinary course of business and payable in accordance with
customary trade terms; (iii) advances to employees, employee drawing accounts
and similar expenditures made in the ordinary course of business and on a basis
consistent with the employer's past practices; (iv) stock or other securities
acquired in connection with the satisfaction of, or to secure, Indebtedness
acquired in the ordinary course of
- 13 -
business; or (v) demand deposits in banks or similar financial institutions. The
amount of any Investment shall be the original cost of such Investment plus the
cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment.
"Iowa Amendment to Mortgage": An Amendment to Mortgage, Security
--------------------------
Agreement, Assignment of Leases and Rents and Fixture Financing Statement
amending the Iowa Mortgage.
"Iowa Facility": Collectively, the Facilities owned by Omega and
-------------
commonly described as ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇,
the legal description of which is attached hereto as Exhibit 1.1-2.
"Iowa Mortgage": The Mortgage, Security Agreement, Assignment of
-------------
Leases and Rents and Fixture Financing Statement, dated as of June 13, 1997,
whereby Omega granted the Agent, for the benefit of the Banks, a Lien in the
Iowa Facility, as the same may hereafter be amended, supplemented, extended,
restated or otherwise modified from time to time.
"KC Canada": 3578275 Canada Inc., a Canadian corporation.
---------
"KC Holdings": Omega Kitchen Craft Holdings Corp., a Delaware
-----------
corporation,
"Kitchen Craft": Kitchen Craft of Canada Ltd., a corporation governed
-------------
by the Canada Business Corporations Act.
"Kitchen Craft Note": That certain promissory note evidencing the
------------------
Kitchen Craft loan in the initial principal amount of $25,000,000 pursuant to
which Omega is making an unsecured loan to KC Canada to effectuate the
Acquisition (Kitchen Craft), together with any related documents, as the same
may hereafter be amended, supplemented, extended, restated or otherwise modified
from time to time, in form and substance acceptable to the Agent, dated as of
the date hereof, made by KC Canada on the Acquisition Closing Date (Kitchen
Craft), payable to Omega.
"Lender": As defined in the Intercreditor Agreement.
------
"Letter of Credit": An irrevocable letter of credit issued by the
----------------
Agent pursuant to this Agreement for the account of the Borrowers.
"Letter of Credit Fee": As defined in Section 2.15.
--------------------
"Lien": With respect to any Person, any security interest, mortgage,
----
pledge, lien, charge, encumbrance, title retention agreement or analogous
instrument or device (including the interest of each lessor under any
Capitalized Lease), in, of or on any assets or properties of such Person, now
owned or hereafter acquired, whether arising by agreement or operation of law.
- 14 -
"Loan": A Revolving Loan or a Term Loan.
----
"Loan Documents": This Agreement, the Notes and the Security
--------------
Documents.
"Majority Lenders": As defined in the Intercreditor Agreement.
----------------
"Master Transaction Agreement (Kitchen Craft)": That certain Master
--------------------------------------------
Transaction Agreement dated as of January 29, 1999 by and among KC Canada, as
buyer, Holdings, the shareholders of Kitchen Craft and its Subsidiaries, as
sellers, and certain employees, as in effect on the date hereof.
"Material Adverse Effect": A material adverse effect on the financial
-----------------------
condition, business, operations or prospects of Holdings and the Borrowers,
taken as a whole.
"Mortgages": Collectively, the Indiana, Iowa, and Tennessee
---------
Mortgages, amended as provided for herein.
"Multiemployer Plan": A multiemployer plan, as such term is defined
------------------
in Section 4001 (a) (3) of ERISA, which is maintained (on the Closing Date,
within the five years preceding the Closing Date, or at any time after the
Closing Date) for employees of Omega or any ERISA Affiliate.
"New Kitchen Craft": Kitchen Craft, after the amalgamation of KC
-----------------
Canada with Kitchen Craft.
"Note": A Term Note or a Revolving Note.
----
"Obligations": The Borrowers' obligations in respect of the due and
-----------
punctual payment of principal and interest on the Loans, Notes and Unpaid
Drawings when and as due, whether by acceleration or otherwise and all fees
(including Revolving Commitment Fees), expenses, indemnities, reimbursements and
other obligations of the Borrowers under this Agreement or any other Borrower
Loan Document, in all cases whether now existing or hereafter arising or
incurred.
"Omega": As defined in the opening paragraph hereof.
-----
"Omega Collateral Assignment (Trademarks)": A Collateral Assignment
----------------------------------------
of Trademarks in form and substance satisfactory to the Agent from Omega to the
Agent for the benefit of the Banks, as the same may hereafter be amended,
supplemented, extended, restated or otherwise modified from time to time.
"Omega KC US": Omega Kitchen Craft U.S. Corp., a Delaware corporation.
-----------
- 15 -
"Operating Lease": Any lease of real or personal property other than
---------------
a Capitalized Lease.
"Panther": As defined in the opening paragraph hereof.
-------
"PBGC": The Pension Benefit Guaranty Corporation, established
----
pursuant to Subtitle A of Title IV of ERISA, and any successor thereto or to the
functions thereof.
"Person": Any natural person, corporation, partnership, limited
------
partnership, limited liability company, joint venture, firm, association, trust,
unincorporated organization, government or governmental agency or political
subdivision or any other entity, whether acting in an individual, fiduciary or
other capacity.
"Plan": Each employee benefit plan (whether in existence on the
----
Closing Date or thereafter instituted), as such term is defined in Section 3 of
ERISA, maintained for the benefit of employees, officers or directors of the
Borrower or of any ERISA Affiliate.
"Pledge Agreements": Collectively, (i) the Amended and Restated Pledge
----------------
Agreement whereby Omega pledges all of its Stock in its U.S. Subsidiaries, (ii)
the Amended and Restated Pledge Agreement whereby Holdings pledges all of its
Stock in Omega, (iii) the Pledge Agreement whereby KC Holdings pledges sixty-
five percent of the Stock in New Kitchen Craft (excluding the Exchangeable
Shares), all of the Stock of Omega KC U.S., and the Kitchen Craft Note, (iv) the
Pledge Agreement whereby Omega KC U.S. pledges all of its Stock in its U.S.
Subsidiaries, and (v) any Subsidiary Pledge Agreement pursuant to which any
Subsidiary of Omega pledges its Stock in another Subsidiary of Omega, in each
case to the Collateral Agent for the benefit of the Banks and the Canadian
Lenders, each in form and substance satisfactory to the Collateral Agent, and as
each of the same may hereafter be amended, supplemented, extended, restated or
otherwise modified from time to time.
"Prohibited Transaction": The respective meanings assigned to such
----------------------
term in Section 4975 of the Code and Section 406 of ERISA.
"Reference Rate": The rate of interest from time to time publicly
--------------
announced by the Agent as its "reference rate." The Agent may lend to its
customers at rates that are at, above or below the Reference Rate. For purposes
of determining any interest rate hereunder or under any other Loan Document
which is based on the Reference Rate, such interest rate shall change as and
when the Reference Rate shall change.
"Regulatory Change": Any change after the Closing Date in federal,
-----------------
state or foreign laws or regulations or the adoption or making after such date
of any interpretations, directives or requests applying to a class of banks
including any Bank under any federal, state or foreign laws or regulations
(whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration thereof.
- 16 -
"Reportable Event": A reportable event as defined in Section 4043 of
----------------
ERISA and the regulations issued under such Section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation has waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided that a failure to meet the minimum
--------
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any waiver in accordance with
Section 412(d) of the Code.
"Responsible Officer": Any of the President, the Chief Financial
-------------------
Officer or the Controller of Omega.
"Restricted Payments": With respect to any Borrower, collectively,
-------------------
all dividends or other distributions of any nature (including cash, securities
other than common stock of such Borrower, assets or otherwise), and all
payments, on or in respect of any class of equity securities (including
warrants, options or rights therefor) issued by such Borrower, whether such
securities are authorized or outstanding on the Closing Date or at any time
thereafter, and any redemption or purchase of, or other distribution in respect
of, any of the foregoing, whether directly or indirectly.
"Revolving Commitment": With respect to a Bank, the agreement of such
--------------------
Bank to make Revolving Loans to, and purchase risk participations in Letters of
Credit issued by the Agent for the account of, the Borrowers in an aggregate
principal amount outstanding at any time not to exceed such Bank's Revolving
Commitment Amount upon the terms and subject to the conditions and limitations
of this Agreement.
"Revolving Commitment Amount": With respect to a Bank, initially the
---------------------------
amount set opposite such Bank's name on the signature page hereof as its
Revolving Commitment Amount, but as the same may be reduced or modified from
time to time pursuant to Section 2.16 or Section 9.6.
"Revolving Commitment Ending Date": December 26, 2003.
--------------------------------
"Revolving Commitment Fees": As defined in Section 2.17(a).
-------------------------
"Revolving Loan": As defined in Section 2.1.
--------------
"Revolving Loan Date": The date of the making of any Revolving Loans
-------------------
hereunder.
"Revolving Note": An amended and restated promissory note of the
--------------
Borrowers in the form of Exhibit 1.1-3 hereto, as the same may hereafter be
amended, supplemented, extended, restated or otherwise modified from time to
time.
- 17 -
"Revolving Percentage": With respect to any Bank, the percentage
--------------------
equivalent of a fraction, the numerator of which is the Revolving Commitment
Amount of such Bank and the denominator of which is the Aggregate Revolving
Commitment Amounts.
"Security Agreements": Collectively, (i) an Amended and Restated
-------------------
Security Agreement from each Borrower and (ii) any Subsidiary Security
Agreement, pursuant to each of which the Collateral Agent is granted, for the
benefit of the Banks and the Canadian Lenders, a security interest in the
personal property described therein, as the same may hereafter be amended,
supplemented, extended, restated or otherwise modified from time to time, each
in form and substance satisfactory to the Agent.
"Security Documents": The Security Agreements, Guaranties, Pledge
------------------
Agreements, Collateral Assignment, Holdings Documents, Indemnification
Agreements and the Mortgages, as the same may hereafter be amended,
supplemented, extended, restated or otherwise modified from time to time.
"Standby Letter of Credit": A Letter of Credit that is not a
------------------------
Documentary Letter of Credit.
"Stock": All shares, interests, participation or other equivalents,
-----
however designated, of or in a corporation, whether or not voting, including but
not limited to common stock, warrants, preferred stock, convertible debentures,
and all agreements, instruments and documents convertible, in whole or in part,
into any one or more or all of the foregoing.
"Subordinated Debt": Any Indebtedness the Borrowers, now existing or
-----------------
hereafter created, incurred or arising, which is subordinated in right of
payment to the payment of the Obligations in a manner and to an extent that
Majority Lenders have approved in writing prior to the creation of such
Indebtedness (including the High Yield Subordinated Permanent Loan Documents and
any subordinated notes in form acceptable to the Agent and the Majority Lenders
delivered to members of management or employees by Holdings in connection with
its Stock put and call rights).
"Subsidiary": With respect to any Person, any corporation or other
----------
entity of which securities or other ownership interests having ordinary voting
power for the election of a majority of the board of directors or other Persons
performing similar functions are owned by the first Person, either directly or
through one or more Subsidiaries.
"Subsidiary Guaranty": A Guaranty, in form and substance satisfactory
-------------------
to the Agent, whereby any Subsidiary of Omega other than a Borrower guarantees
payment of the Obligations, as the same may hereafter be amended, supplemented,
extended, restated or otherwise modified from time to time.
"Subsidiary Pledge Agreement": A Pledge Agreement in form and
---------------------------
substance satisfactory to the Agent, whereby any Subsidiary of Omega pledges all
of (or, in the case of KC
- 18 -
Holdings, 65% of) its Stock in any Subsidiaries to the Agent for the benefit of
the Banks, as the same may hereafter be amended, supplemented, extended,
restated or otherwise modified from time to time.
"Subsidiary Security Agreement": A Security Agreement in form and
-----------------------------
substance satisfactory to the Agent whereby any Subsidiary of Omega other than
Panther grants to the Agent, for the benefit of the Banks, a security interest
in the personal property described therein to secure the Obligations, as the
same may hereafter be amended, supplemented, extended, restated or otherwise
modified from time to time.
"Tennessee Amendment to Mortgage": An Amendment to Mortgage, Security
-------------------------------
Agreement, Assignment of Leases and Rents and Fixture Financing Statement
amending the Tennessee Mortgage.
"Tennessee Facility": The Facility owned by Omega and commonly
------------------
described as ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ (▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇), ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, the legal description of which is attached hereto as Exhibit 1.1-7.
"Tennessee Mortgage": A Deed of Trust, Security Agreement and
------------------
Assignment of Leases and Rents, and including a Fixture Filing under the Uniform
Commercial Code, dated as of June 13, 1997, whereby Omega granted the Agent, for
the benefit of the Banks, a Lien in the Tennessee Facility, as the same may
hereafter be amended, supplemented, extended, restated or otherwise modified
from time to time.
"Term Loans": Term Loan A and Term Loan B.
----------
"Term Loan A": As defined in Section 2.1.
-----------
"Term Loan B": As defined in Section 2.1.
-----------
"Term Loan B Commitment": With respect to a Bank, the agreement of
----------------------
such Bank to make a Term Loan B to the Borrowers in an amount equal to such
Bank's respective Term Loan B Commitment Amount upon the terms and subject to
the conditions of this Agreement.
"Term Loan B Commitment Amounts": With respect to a Bank, the amount
------------------------------
set opposite such Bank's name on the signature pages hereof as its Term Loan B
Commitment Amount.
"Term Loan Percentage": With respect to any Bank, the percentage
--------------------
equivalent of a fraction, the numerator of which is the amount of the
outstanding Term Loans of such Bank and the denominator of which is the sum of
the Term Loans of all the Banks.
- 19 -
"Term Notes": Promissory notes of the Borrowers evidencing Term Loan
----------
A and Term Loan B in the forms of Exhibit 1.1-6(a) and 1.1-6(b) hereto, as each
of the same may hereafter be amended, supplemented, extended, restated or
otherwise modified from time to time.
"Termination Date": The earliest of (a) the Revolving Commitment
----------------
Ending Date, (b) the date on which the Revolving Commitments are terminated
pursuant to Section 7.2 hereof or (c) the date on which the Revolving Commitment
Amounts are reduced to zero pursuant to Section 2.16 hereof.
"Total Percentage": With respect to any Bank, the percentage
----------------
equivalent of a fraction, the numerator of which is the sum of the Revolving
Commitment Amount of such Bank and the outstanding Term Loans of such Bank and
the denominator of which is the sum of the Revolving Commitment Amounts and
outstanding Term Loans of all the Banks.
"Total Revolving Outstandings": As of any date of determination, the
----------------------------
sum of (a) the aggregate unpaid principal balance of Revolving Loans outstanding
on such date, (b) the aggregate maximum amount available to be drawn under
Letters of Credit outstanding on such date and (c) the aggregate amount of
Unpaid Drawings on such date.
"U.S. Bank": U.S. Bank National Association in its capacity as one of
---------
the Banks hereunder.
"U.S. Subsidiaries": Collectively, Omega KC U.S., Panther, KC Holding,
-----------------
BII and any other Person that becomes a Subsidiary of Omega and is incorporated
or otherwise organized under the laws of the United States.
"Unpaid Drawing": As defined in Section 2.11.
--------------
"Unused Revolving Commitment": With respect to any Bank as of any
---------------------------
date of determination, the amount by which such Bank's Revolving Commitment
Amount exceeds such Bank's Revolving Percentage of the Total Revolving
Outstandings on such date.
"Working Capital": As of any date of determination, the excess, if
---------------
any, of: (i) Current Assets minus the sum of cash and cash equivalents over (ii)
Current Liabilities minus the sum of interest payable and taxes payable.
Section 1.2 Accounting Terms and Calculations. Except as may be
---------------------------------
expressly provided to the contrary herein, all accounting terms used herein
shall be interpreted and all accounting determinations hereunder shall be made
in accordance with GAAP. From and after the Acquisition Closing Date (Kitchen
Craft), all such determinations for Omega and its Subsidiaries on a consolidated
basis shall include results for New Kitchen Craft from and after the Acquisition
Closing Date (Kitchen Craft). To the extent any change in GAAP affects any
computation or determination required to be made pursuant to this Agreement,
such computation or determination shall be made as if such change in GAAP had
not occurred unless Omega on
- 20 -
behalf of the Borrowers and Majority Lenders agree in writing on an adjustment
to such computation or determination to account for such change in GAAP.
Section 1.3 Computation of Time Periods. In this Agreement, in the
---------------------------
computation of a period of time from a specified date to a later specified date,
unless otherwise stated the word "from" means "from and including" and the word
"to" or "until" each means "to but excluding".
Section 1.4 Other Definitional Terms. The words "hereof", "herein"
------------------------
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. References to Sections, Exhibits, schedules and like references are
to this Agreement unless otherwise expressly provided. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". Unless the context in which used herein otherwise clearly
requires, "or" has the inclusive meaning represented by the phrase "and/or".
ARTICLE II
-----------
TERMS OF THE CREDIT FACILITIES
Part A -- Terms of Lending
---------------------------
Section 2.1 Lending Commitments. On the terms and subject to the
-------------------
conditions hereof, each Bank severally agrees to make the following lending
facilities available to the Borrowers:
2.1(a) Revolving Credit. A revolving credit facility available as
----------------
loans (each, a "Revolving Loan" and, collectively, the "Revolving Loans")
to the Borrowers on a revolving basis at any time and from time to time
from the Closing Date to the Termination Date, during which period the
Borrowers may borrow, repay and reborrow in accordance with the provisions
hereof, provided, that no Revolving Loan will be made in any amount which,
after giving effect thereto, would cause the Total Revolving Outstandings
to exceed the Aggregate Revolving Commitment Amounts. Revolving Loans made
under the existing Credit Agreement shall, from and after the Closing Date,
be Revolving Loans hereunder. Revolving Loans hereunder shall be made by
the several Banks ratably in the proportion of their respective Revolving
Commitments Amounts. Revolving Loans and any portion of the balance thereof
(in minimum amounts of $250,000, if Base Rate Advances, $1,000,000, if
Eurodollar Rate Advances, or, in either case, if more, in integral
multiples of $50,000 in excess thereof) may be obtained and maintained, at
the election of the Borrowers but subject to the limitations hereof, as
Base Rate Advances or Eurodollar Rate Advances or any combination thereof.
2.1(b) Term Loan A. A term loan from each Bank (each being a "Term
-----------
Loan A" and, collectively, the "Term A Loans") to the Borrowers, which
shall consist of the Term
- 21 -
Loans made by such Bank under the Existing Credit Agreement, which Term
Loans shall remain outstanding as Term Loan A hereunder. A Term Loan A or
any portion of the balance thereof (in minimum amounts of $250,000, if Base
Rate Advances, $1,000,000, if Eurodollar Rate Advances, or, in either case,
if more, in integral multiples of $50,000 in excess thereof) may be made,
maintained, continued and converted to Base Rate Advances or Eurodollar
Rate Advances as the Borrowers may elect in their notice of borrowing,
continuation or conversion.
2.1(c) Term Loan B. A term loan from each Bank (each being a "Term
-----------
Loan B" and, collectively, the "Term B Loans") to the Borrowers, which
shall be made in a single Advance on the Closing Date in the amount of each
Bank's Term Loan B Commitment Amount. A Term Loan B or any portion of the
balance thereof (in minimum amounts of $250,000, if Base Rate Advances,
$1,000,000, if Eurodollar Rate Advances, or, in either case, if more, in
integral multiples of $50,000 in excess thereof) may be made, maintained,
continued and converted to Base Rate Advances or Eurodollar Rate Advances
as the Borrowers may elect in their notice of borrowing, continuation or
conversion.
Section 2.2 Procedure for Loans.
-------------------
2.2(a) Procedure for Revolving Loans. Any request by the Borrowers
-----------------------------
for Revolving Loans hereunder shall be made on behalf of the Borrowers by
Omega and shall be in writing or by telephone and must be given so as to be
received by the Agent not later than 12:00 noon (Minneapolis time) two
Eurodollar Business Days prior to the requested Revolving Loan Date if the
Revolving Loans (or any portion thereof) are requested as Eurodollar Rate
Advances and not later than 12:00 noon (Minneapolis time) on the requested
Revolving Loan Date if the Revolving Loans are requested as Base Rate
Advances. Any written request for Revolving Loans shall be in the form of
Exhibit 2.2 and shall be signed by a Responsible Officer or a person
designated as authorized to make such requests in a writing signed by a
Responsible Officer. Any oral request for Revolving Loans shall be made by
a Responsible Officer or a person designated as authorized to make such
requests in a writing signed by a Responsible Officer and shall be
confirmed by a writing in the form of Exhibit 2.2 signed by a Responsible
Officer or a person designated as authorized to make such requests in a
writing signed by a Responsible Officer, which written confirmation shall
be delivered to the Agent not later than five Business Days after the date
the Revolving Loans in question are made. The Revolving Commitments of the
Banks shall be suspended from the fifth Business Day after the date the
Agent notifies Omega on behalf of the Borrowers that such written
confirmation is past due until any such past due written confirmation has
been delivered. Each request for Revolving Loans hereunder shall be
irrevocable and shall be deemed a representation by the Borrowers that on
the requested Revolving Loan Date and after giving effect to the requested
Revolving Loans the applicable conditions specified in Article III
- 22 -
(as to the initial Revolving Loans) or Section 3.2 (as to Revolving Loans
made after the Closing Date) have been and will be satisfied. Each request
for Revolving Loans hereunder shall specify (i) the requested Revolving
Loan Date, (ii) the aggregate amount of Revolving Loans to be made on such
date which shall be in a minimum amount of $250,000, if Base Rate Advances,
$1,000,000, if Eurodollar Rate Advances, or, in either case, if more, in
integral multiples of $50,000 in excess thereof, (iii) whether such
Revolving Loans are to be funded as Base Rate Advances or Eurodollar Rate
Advances (and, if such Revolving Loans are to be made with more than one
applicable interest rate choice, specifying the amount to which each
interest rate choice is applicable) and (iv) in the case of Eurodollar Rate
Advances, the duration of the initial Interest Period applicable thereto.
The Agent may rely on any telephone request for Revolving Loans hereunder
which it believes in good faith to be genuine; and the Borrowers hereby
waive the right to dispute the Agent's record of the terms of such
telephone request (unless the Agent receives written notice from Omega on
behalf of the Borrowers, containing terms that vary from the terms of such
telephone request, before the Revolving Loans requested by such telephone
request are disbursed to the Borrowers). The Agent shall promptly notify
each other Bank of the receipt of such request, the matters specified
therein, and of such Bank's ratable share of the requested Revolving Loans.
On the date of the requested Revolving Loans, each Bank shall provide its
share of the requested Revolving Loans to the Agent in Immediately
Available Funds not later than 3:00 p.m., Minneapolis time. Unless the
Agent determines that any applicable condition specified in Article III has
not been satisfied, the Agent will make available to Omega, on behalf of
the Borrowers, at the Agent's principal office in Minneapolis, Minnesota in
Immediately Available Funds not later than 4:00 p.m. (Minneapolis time) on
the requested Revolving Loan Date the amount of the requested Revolving
Loans. Each Borrower shall be deemed to have requested, and the Banks shall
fund, Revolving Loans to pay Revolving Commitment Unpaid Drawings on the
terms described in Section 2.14, but, notwithstanding anything to the
contrary contained in this Section 2.2(a), the Borrowers shall not be
deemed to have made any representation regarding compliance with, nor be
required to comply with, the conditions precedent contained in Article III
with respect to any such Revolving Loans pursuant to Section 2.14. If the
Agent has made a Revolving Loan to the Borrowers on behalf of a Bank but
has not received the amount of such Revolving Loan from such Bank by the
time herein required, such Bank shall pay interest to the Agent on the
amount so advanced at the overnight Federal Funds rate from the date of
such Revolving Loan to the date funds are received by the Agent from such
Bank, such interest to be payable with such remittance from such Bank of
the principal amount of such Revolving Loan (provided, however, that the
Agent shall not make any Revolving Loan on behalf of a Bank if the Agent
has received prior notice from such Bank that it will not make such
Revolving Loan). If the Agent does not receive payment from such Bank by
the next Business Day after the date of any Revolving Loan, the Agent shall
be entitled to recover such Revolving
- 23 -
Loan, with interest thereon at the rate (or rates) then applicable to such
Revolving Loan, from the Borrowers, which shall pay such amounts to the
Agent within three Business Days after the Agent makes demand therefor,
without prejudice to the Agent's and the Borrower's rights against such
Bank. If such Bank pays the Agent the amount herein required with interest
at the overnight Federal Funds rate before the Agent has recovered from the
Borrowers, such Bank shall be entitled to the interest payable by the
Borrowers with respect to the Revolving Loan in question accruing from the
date the Agent made such Revolving Loan.
2.2(b) Procedure for Term Loan B. Not later than 12:00 noon
-------------------------
(Minneapolis time) two Eurodollar Business Days prior to the requested
Closing Date if the Term Loan B is requested as Eurodollar Rate Advances
and not later than 12:00 noon (Minneapolis time) one Business Day prior to
the requested Closing Date if the Term Loan B is requested as Base Rate
Advances, Omega on behalf of the Borrowers shall request the Term Loan B by
telephone, confirmed by a writing in the form of Exhibit 2.2 signed by a
Responsible Officer or a person designated as authorized to make such
requests in a writing signed by a Responsible Officer, which written
confirmation shall be delivered to the Agent not later than the Closing
Date. Such notice of borrowing shall be irrevocable and shall be deemed a
representation by the Borrowers that on the Closing Date and after giving
effect to the Term Loan B the applicable conditions specified in Article
III have been and will be satisfied. Such notice of borrowing shall
specify (i) the requested Closing Date, (ii) whether the Term Loan B is to
be funded as Eurodollar Rate Advance or Base Rate Advance, and (iii) in the
case of Eurodollar Rate Advance, the duration of the initial Interest
Period applicable thereto. The Agent shall promptly notify each Bank of
the receipt of such notice and the matters specified therein. On the
requested Closing Date, each Bank shall provide to the Agent the amount of
such Bank's Term Loan Percentage of the Term Loan B in Immediately
Available Funds not later than 11:00 a.m., Minneapolis time. Unless the
Agent determines that any applicable condition specified in Article III has
not been satisfied, the Agent will make the proceeds of the Term Loan B
available to Omega on behalf of the Borrowers at the Agent's main office on
the Closing Date. If the Agent has disbursed a portion of a Term Loan B to
the Borrowers on behalf of a Bank but has not received the amount of such
disbursement from such Bank by the time herein required, such Bank shall
pay interest to the Agent on the amount so advanced at the overnight
Federal Funds rate from the date of such disbursement to the date funds are
received by the Agent from such Bank, such interest to be payable with such
remittance from such Bank of the principal amount of such disbursement
(provided, however, that the Agent shall not disburse any portion of a Term
Loan B on behalf of a Bank if the Agent has received prior notice from such
Bank that it will not fund such portion). If the Agent does not receive
payment from such Bank by the next Business Day after the date of any
disbursement of any portion of a Term Loan B, the Agent shall be entitled
to recover such disbursement, with interest thereon at the rate (or rates)
then applicable to the such Term Loan B, from the Borrowers, which shall
pay such amounts to the Agent within three Business Days after the Agent
makes demand therefor, without prejudice to the Agent's and the Borrowers'
rights against such Bank. If such Bank pays
- 24 -
the Agent the amount herein required with interest at the overnight Federal
Funds rate before the Agent has recovered from the Borrowers, such Bank
shall be entitled to the interest payable by the Borrowers with respect to
the disbursement in question accruing from the date the Agent made such
disbursement.
Section 2.3 Notes. The Revolving Loans of each Bank shall be
-----
evidenced by a single Amended and Restated Revolving Note payable to the order
of such Bank in a principal amount equal to such Bank's Revolving Commitment
Amount originally in effect. The Term Loans of each Bank shall be evidenced by
an Amended and Restated Term Note A or a Term Note B, as applicable, each
payable to the order of such Bank in the principal amount equal to such Bank's
Term Loans outstanding after the disbursement of the Term Loan B on the Closing
Date. Upon receipt of each Bank's Notes from the Borrowers, the Agent shall mail
such Notes to such Bank. Each Bank shall enter in its ledgers and records the
amount of its Term Loans and each Revolving Loan, the various Advances made,
converted or continued and the payments made thereon, and each Bank is
authorized by the Borrowers to enter on a schedule attached to its Term Note or
Revolving Note, as appropriate, a record of such Term Loans, Revolving Loans,
Advances and payments; provided, however that the failure by any Bank to make
any such entry or any error in making such entry shall not limit or otherwise
affect the obligations of the Borrowers hereunder and on the Notes, and, in all
events, the principal amounts owing by the Borrowers in respect of the Revolving
Notes shall be the aggregate amount of all Revolving Loans made by the Banks
less all payments of principal thereof made by the Borrowers and the principal
amount owing by the Borrowers in respect of the Term Notes shall be the
aggregate amount of all Term Loans made by the Banks less all payments of
principal thereof made by the Borrowers.
Section 2.4 Conversions and Continuations. On the terms and subject
-----------------------------
to the limitations hereof, the Borrowers shall have the option at any time and
from time to time to convert all or any portion of the Advances into Base Rate
Advances or Eurodollar Rate Advances, or to continue a Eurodollar Rate Advance
as such; provided, however that a Eurodollar Rate Advance may be converted or
continued only on the last day of the Interest Period applicable thereto and no
Advance may be converted to or continued as a Eurodollar Rate Advance if a
Default or Event of Default has occurred and is continuing on the proposed date
of continuation or conversion. Advances may be converted to, or continued as,
Eurodollar Rate Advances only in aggregate amount of the Advances of all Banks
so converted or continued of $250,000, if Base Rate Advances, $1,000,000, if
Eurodollar Rate Advances, or, in either case, if more, in integral multiples of
$50,000 in excess thereof Omega, on behalf of the Borrowers, shall give the
Agent written notice of any continuation or conversion of any Advances and such
notice must be given so as to be received by the Agent not later than 12:00 noon
(Minneapolis time) two Eurodollar Business Days prior to requested date of
conversion or continuation in the case of the continuation of, or conversion to,
Eurodollar Rate Advances and on the date of the requested continuation of or
conversion to Base Rate Advances. Each such notice shall specify (a) the amount
to be continued or converted, (b) the date for the continuation or conversion
(which must be (i) the last day of the preceding Interest Period for any
continuation or conversion of Eurodollar Rate Advances, and (ii) a Eurodollar
Business Day in the case of continuations as
- 25 -
or conversions to Eurodollar Rate Advances and a Business Day in the case of
conversions to Base Rate Advances), and (c) in the case of conversions to or
continuations as Eurodollar Rate Advances, the Interest Period applicable
thereto. Any notice given by Omega under this Section shall be irrevocable. If
Omega shall fail to notify the Agent of the continuation of any Eurodollar Rate
Advances within the time required by this Section, such Advances shall, on the
last day of the Interest Period applicable thereto, automatically be converted
into Base Rate Advances of the same principal amount. Except to the extent
provided in Sections 2.21 and 2.23, all conversions and continuation of Advances
must be made uniformly and ratably among the Banks. (E.g., when continuing a
two-month Eurodollar Rate Advance of one Bank to a three-month Eurodollar Rate
Advance, the Borrower must simultaneously continue all two-month Eurodollar Rate
Advances of all Banks having Interest Periods ending on the date of continuation
as three-month Eurodollar Rate Advances.)
Section 2.5 Interest Rates, Interest Payments and Default Interest.
------------------------------------------------------
Interest shall accrue and be payable on the Loans as follows:
(i) Subject to paragraph (iii) below, each Eurodollar Rate Advance
shall bear interest on the unpaid principal amount thereof during the
Interest Period applicable thereto at a rate per annum equal to the sum of
(A) the Adjusted Eurodollar Rate for such Interest Period, plus (B) the
Applicable Margin.
(ii) Subject to paragraph (iii) below, each Base Rate Advance shall
bear interest on the unpaid principal amount thereof at a varying rate per
annum equal to the sum of (A) the Base Rate, plus (B) the Applicable
Margin.
(iii) Upon the occurrence and during the continuation of any Event of
Default, each Advance shall, at the option of the Majority Lenders, bear
interest at the "Default Rate," which shall be (A) during the balance of
any Interest Period applicable to such Advance, at a rate per annum equal
to the sum of the rate applicable to such Advance during such Interest
Period plus 2.0%, and (B) otherwise, at a rate per annum equal to the sum
of (1) the Base Rate, plus (2) the Applicable Margin for Base Rate
Advances, plus (3) 2.0%.
(iv) Interest shall be payable (A) with respect to each Eurodollar
Rate Advance having an Interest Period of three months or less, on the last
day of the Interest Period applicable thereto; (B) with respect to any
Eurodollar Rate Advance having an Interest Period greater than three
months, on the last day of the Interest Period applicable thereto and on
each day that would have been the last day of the Interest Period for such
Advance had successive Interest Periods of three months duration been
applicable to such Advance; (C) with respect to any Base Rate Advance, on
the last day of each month; (D) with respect to all Advances, upon any
permitted prepayment (on the amount prepaid); and (E) with respect to all
Advances, on the Termination Date; provided that interest under Section 2.5
(iii) shall be payable upon written demand by the Agent.
- 26 -
Section 2.6 Repayment and Mandatory Prepayments.
-----------------------------------
2.6(a) The Revolving Loans. The unpaid principal balance of all
-------------------
Revolving Notes, together with all accrued and unpaid interest thereon,
shall be due and payable on the Termination Date. If at any time Total
Revolving Outstandings exceed the Aggregate Revolving Commitment Amounts,
the Borrowers shall immediately repay to the Agent for the account of the
Banks the amount of such excess. Any such payments shall be applied first
against Base Rate Advances and then to Eurodollar Rate Advances in order
starting with the Eurodollar Rate Advances having the shortest time to the
end of the applicable Interest Period. If, after payment of all
outstanding Advances, the Total Revolving Outstandings still exceed the
Aggregate Revolving Commitment Amounts, the remaining amount paid by the
Borrowers shall be placed in the Holding Account.
2.6(b) The Term Loans A. The remaining principal balance of the
----------------
Term Loans A shall be payable as follows:
(i) on each of April 3, 1999 and July 2, 1999, $1,000,000;
(ii) on each of October 1, 1999, December 31, 1999, March 31,
2000 and June 30, 2000, $1,375,000;
(iii) on each of September 29, 2000, December 29, 2000, March 30,
2001 and June 29, 2001, $1,500,000;
(iv) on each of September 28, 2001, December 28, 2001, March 29,
2002 and June 28, 2002, $1,875,000;
(v) on each of September 25, 2002, December 27, 2002, March 28,
2003 and June 27, 2003, $2,250,000; and
(vi) on each of September 26, 2003 and December 26, 2003,
$2,750,000, and, on December 26, 2003, any other amount then
remaining unpaid with respect to the Term A Loans;
provided, however that if the aggregate principal amount outstanding under
-----------------
Term Loan A as of the date any principal payment is due is less than the
amount specified for such date in the table above, then the principal
amount payable on such date shall be such amount outstanding.
2.6(c) The Term Loan B. The principal of the Term Loan B shall be
---------------
payable in four equal quarterly installments, on March 31, June 30,
September 30 and December 31, 2004, in an aggregate amount of $6,250,000,
and, on
- 27 -
December 31, 2004, any other amount then remaining unpaid with respect to
Term Loan B; provided, however that if the aggregate principal amount
-----------------
outstanding under the Term Loan B as of the date any principal payment is
due is less than the amount specified for such date in the table above,
then the principal amount payable on such date shall be such amount
outstanding.
2.6(d) Excess Cash Flow. On or before the 90th day after the
----------------
1998 Fiscal Year End, the Borrowers shall prepay the Term Loan A by an
amount equal to 75% of the Excess Cash Flow for the four consecutive fiscal
quarters ending on the 1998 Fiscal Year End. On or before the 90th day
after each subsequent Fiscal Year End, the Borrowers shall prepay to the
Agent for the benefit of the Banks, and Omega shall cause New Kitchen Craft
to prepay to CIBC, as applicable, the Allocable Share of 75% of the Excess
Cash Flow for the four consecutive fiscal quarters ending on such Fiscal
Year End, for application to each of the Term Loans hereunder and the CIBC
Term Loan.
2.6(e) Proceeds of Equity or Debt. Commencing the first day
--------------------------
after the Closing Date, within one Business Day following the receipt
thereof, the Borrowers shall prepay to the Agent for the benefit of the
Banks, and Omega shall cause New Kitchen Craft to prepay to CIBC, as
applicable, the Allocable Share of an amount equal to 100% of the sum of
(i) all proceeds of any issuance of debt or equity securities (except debt
or equity securities issued to fund an acquisition that is permitted under
this Agreement, or issued to management employees and directors of Holdings
and its Subsidiaries, up to a maximum amount of $2,500,000 in the
aggregate, or issued pursuant to Section 5.15 hereof), and (ii) all
proceeds of the incurrence of any other Indebtedness (excluding
Indebtedness secured by a Lien permissible under Section 6.14(i)), by
Holdings, any Borrower or any Subsidiary of any of them, in any case net of
the actual cash expenses paid by Holdings, any Borrower or any Subsidiary
of any of them in connection with such issuance or incurrence, for
application to each of the Term Loans hereunder and the CIBC Term Loan;
provided, however that this Section 2.6(e) shall not be deemed to authorize
-----------------
any Indebtedness that would otherwise be prohibited by Section 6.13.
2.6(f) Proceeds of Asset Sales. Within one Business Day following
-----------------------
the receipt thereof, the Borrowers shall prepay to the Agent for the
benefit of the Banks, and Omega shall cause New Kitchen Craft to prepay to
CIBC, as applicable, the Allocable Share of an amount equal to 100% of all
proceeds of any sale of assets (including but not limited to Stock in
Subsidiaries, but excluding any sale of assets permitted by clauses (a),
(b) or (c) of Section 6.2), by Holdings, any Borrower or any Subsidiary of
any of them, net of the actual cash expenses and taxes paid or incurred by
Holdings, any Borrower or any Subsidiary of any of them in connection with
such sale, for application to each of the Term Loans hereunder and the CIBC
Term Loan; provided, however that this Section 2.6(f)
-----------------
- 28 -
shall not be deemed to authorize any sale or other transfer that would
otherwise be prohibited by Section 6.2.
2.6(g) Application of Prepayments. Any mandatory prepayments made
--------------------------
to the Banks pursuant to this Section 2.6 shall be applied to the Term
Loans until the Term Loans are paid in full and then to the Revolving
Loans. Any mandatory prepayments of the Term Loans shall be applied to the
installments due thereunder pro rata to the amount of each such
installment. Any prepayments under Sections 2.6(c), (d) or (e) that are
applied to Revolving Loans shall reduce the Revolving Commitments by the
same amount. Amounts prepaid on the Term Loans under this Section 2.6, or
prepaid under the Revolving Loans and resulting in a reduction of the
Revolving Commitments under this Section 2.6, may not be reborrowed.
2.6(h) Allocation of Payments. Amounts paid or prepaid on the
----------------------
Revolving Loans under this Section 2.6 shall be made to the Agent for the
account of each Bank in proportion to its share of outstanding Revolving
Loans or Term Loans, as applicable.
Section 2.7 Optional Prepayments.
--------------------
2.7(a) Terms of Optional Prepayments. No optional prepayment of
-----------------------------
the Term Loans can be made unless Omega, on behalf of the Borrowers, gives
the Agent three Business Days prior written notice of such prepayment. No
optional prepayment of the Revolving Loans can be made unless Omega gives
the Agent written notice of such prepayment no later than 12:00 noon
(Minneapolis time) on the date of the prepayment. Subject to the foregoing
notice requirement, the Borrowers may prepay Base Rate Advances, in whole
or in part, at any time, without premium or penalty. Except upon an
acceleration following an Event of Default or upon termination of the
Revolving Commitments in whole, the Borrowers may pay Eurodollar Rate
Advances only: (i) on the last day of the Interest Period applicable
thereto, or (ii) if such prepayment is accompanied by all amounts payable
under Section 2.25 as a result of such prepayment. Any optional prepayment
must be accompanied by accrued and unpaid interest on the amount prepaid.
Each partial prepayment of the Revolving Loans shall be in an aggregate
amount for all the Banks of $100,000 or an integral multiple of $50,000 in
excess thereof. Each partial prepayment of the Term Loans shall be in an
aggregate amount for all the Banks of $1,000,000 or an integral multiple of
$50,000 in excess thereof. Amounts paid (unless following an acceleration
or upon termination of the Revolving Commitments in whole) or prepaid on
Advances on the Revolving Loans under this Section 2.7 may be reborrowed
upon the terms and subject to the conditions and limitations of this
Agreement. Amounts prepaid on the Term Loans may not be reborrowed.
Amounts paid or prepaid on the Revolving Loans under this Section 2.7 shall
be for the account of each Bank in
- 29 -
proportion to its share of outstanding Revolving Loans. Amounts paid or
prepaid on the Term Loans under this Section 2.7 shall be for the account
of each Bank in proportion to its share of outstanding Term Loans. Optional
prepayments of the Term Loans shall be applied to the installments due
thereunder in the inverse order of their maturity.
2.7(b) Allocation of Prepayments. All prepayments on the Term
-------------------------
Loans hereunder and on the CIBC Term Loan shall be made based on the
Allocable Share of the Term Loans hereunder and the outstanding CIBC Term
Loan.
Part B -- Terms of the Letter of Credit Facility
-------------------------------------------------
Section 2.8 Letters of Credit. The Borrowers hereby request the
-----------------
Agent, and the Agent agrees, upon the terms and subject to the conditions of
this Agreement, to issue Letters of Credit for the account of the Borrowers from
time to time between the Closing Date and the Termination Date in such amounts
as Omega, on behalf of the Borrowers, shall request up to an aggregate amount at
any time outstanding not exceeding $2,000,000; provided that no Letter of Credit
will be issued in any amount which, after giving effect to such issuance, would
cause Total Revolving Outstandings to exceed the Aggregate Revolving Commitment
Amounts.
Section 2.9 Procedures for Letters of Credit. Each request for a
--------------------------------
Letter of Credit shall be made by Omega on behalf of the Borrowers in writing,
by facsimile transmission or electronic conveyance received by the Agent by 2:00
p.m., Minneapolis time, on a Business Day which is not less than two Business
Days prior to the requested date of issuance (which shall also be a Business
Day). Each request for a Letter of Credit shall be deemed a representation by
the Borrowers that on the date of issuance of such Letter of Credit and after
giving effect thereto the applicable conditions specified in Article III (with
respect to any Letter of Credit issued on the Closing Date) or Section 3.2 (with
respect to any Letter of Credit issued after the Closing Date) have been and
will be satisfied. The Agent may require that such request be made on such
letter of credit application and reimbursement agreement form as the Agent may
from time to time specify, along with satisfactory evidence of the authority and
incumbency of the officials of Omega making such request. The Agent shall
promptly notify the other Banks of the receipt of the request and the matters
specified therein. On the date of each issuance of a Letter of Credit the Agent
shall send notice to the other Banks of such issuance.
Section 2.10 Terms of Letters of Credit. Letters of Credit shall be
--------------------------
issued in support of obligations of any Borrower incurred in the ordinary course
of their respective businesses. All Letters of Credit must expire not later
than the Business Day preceding the Revolving Commitment Ending Date. No Letter
of Credit may have a term longer than 12 months.
Section 2.11 Agreement to Repay Letter of Credit Drawings. If the
--------------------------------------------
Agent has received documents purporting to draw under a Letter of Credit that
the Agent believes conform to the requirements of the Letter of Credit, or if
the Agent has decided that it will comply with
- 30 -
Omega's written or oral request or authorization on behalf of the Borrowers to
pay a drawing on any Letter of Credit that the Agent does not believe conforms
to the requirements of the Letter of Credit, it will notify Omega of that fact.
The Borrowers shall reimburse the Agent by 10:00 a.m. (Minneapolis time) on the
day on which such drawing is to be paid in Immediately Available Funds in an
amount equal to the amount of such drawing. Any amount by which the Borrowers
have failed to reimburse the Agent for the full amount of such drawing by 11:00
a.m. on the date on which the Agent in its notice indicated that it would pay
such drawing, until reimbursed from the proceeds of Loans pursuant to Section
2.14 or out of funds available in the Holding Account, is an "Unpaid Drawing."
Section 2.12 Obligations Absolute. The obligations of the Borrowers
--------------------
under Section 2.11 to repay the Agent for any amount drawn on any Letter of
Credit and to repay the Banks for any Revolving Loans or Term Loans made under
Section 2.14 to cover Unpaid Drawings shall be absolute, unconditional and
irrevocable, shall continue for so long as any Letter of Credit is outstanding
notwithstanding any termination of this Agreement, and shall be paid strictly in
accordance with the terms of this Agreement, under all circumstances whatsoever,
including without limitation the following circumstances:
(a) Any lack of validity or enforceability of any Letter of Credit;
(b) The existence of any claim, setoff, defense or other right which
any Borrower may have or claim at any time against any beneficiary,
transferee or holder of any Letter of Credit (or any Person for whom any
such beneficiary, transferee or holder may be acting), the Agent or any
Bank or any other Person, whether in connection with a Letter of Credit,
this Agreement, the transactions contemplated hereby, or any unrelated
transaction; or
(c) Any statement or any other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
whatsoever.
Neither the Agent nor any Bank nor officers, directors or employees of any
thereof shall be liable or responsible for, and the obligations of the Borrowers
to the Agent and the Banks shall not be impaired by:
(i) The use which may be made of any Letter of Credit or for any
acts or omissions of any beneficiary, transferee or holder
thereof in connection therewith;
(ii) The validity, sufficiency or genuineness of documents, or
of any endorsements thereon, even if such documents or
endorsements should, in fact, prove to be in any or all
respects invalid, insufficient, fraudulent or forged;
- 31 -
(iii) The acceptance by the Agent of documents that appear on
their face to be in order, without responsibility for
further investigation, regardless of any notice or
information to the contrary; or
(iv) Any other action of the Agent in making or failing to make
payment under any Letter of Credit if in good faith and in
conformity with U.S. or foreign laws, regulations or
customs applicable thereto.
Notwithstanding the foregoing, each Borrower shall have a claim against the
Agent, and the Agent shall be liable to such Borrower, to the extent, but only
to the extent, of any direct, as opposed to consequential, damages suffered by
such Borrower which such Borrower proves were caused by the Agent's willful
misconduct or gross negligence in determining whether documents presented under
any Letter of Credit comply with the terms thereof.
Section 2.13 Increased Cost for Letters of Credit. If any Regulatory
------------------------------------
Change shall either (a) impose, modify or make applicable any reserve, deposit,
capital adequacy or similar requirement against Letters of Credit issued by the
Agent or any Bank's obligation to make Advances to cover Unpaid Drawings, or (b)
shall impose on any Bank any other conditions affecting this Agreement or any
Letter of Credit; and the result of any of the foregoing is to increase the cost
to the Agent or any Bank of issuing or maintaining any Letter of Credit or such
Bank's obligation to make Advances to cover Unpaid Drawings, or reduce the
amount of any sum received or receivable by the Agent or any Bank hereunder,
then, upon demand (which demand shall be given by the Agent or Bank affected by
such increased cost or reduction promptly after it determines such increased
cost or reduction) to Omega, on behalf of the Borrowers, by the Agent or such
Bank, the Borrowers shall pay to the Agent or such Bank the additional amount or
amounts as will compensate the Agent or such Bank for such increased cost or
reduction. A certificate of the Agent or a Bank claiming compensation under
this Section, setting forth the additional amount or amounts to be paid to it
hereunder and stating in reasonable detail the basis for the charge and the
method of computation, shall be conclusive in the absence of manifest error. In
determining such amount, the Agent or Bank shall use reasonable averaging and
attribution methods. Failure on the part of the Agent or a Bank to demand
compensation for any increased costs or reduction in amounts received or
receivable with respect to any period shall not constitute a waiver of the
Agent's or that Bank's rights to demand compensation for any increased costs or
reduction in amounts received or receivable in any subsequent period (subject to
the limitation contained in the third preceding sentence). No Bank shall be
entitled to compensation otherwise payable under this Section 2.13 for any
period more than six months prior to the date on which the Bank first notifies
Omega of the change resulting in the increased cost.
Section 2.14 Loans to Cover Unpaid Drawings. Whenever any Unpaid
------------------------------
Drawing exists for which there are not then funds in the Holding Account to
cover the same, the Agent shall give the other Banks notice to that effect,
specifying the amount thereof, in which event each Bank is authorized (and the
Borrowers do hereby so authorize each Bank) to, and shall, make a Revolving Loan
(as a Base Rate Advance) to the Borrowers in an amount equal to such
- 32 -
Bank's Revolving Percentage of the amount of the Revolving Commitment Unpaid
Drawing. The Agent shall notify each Bank by 11:00 a.m. (Minneapolis time) on
the date an Unpaid Drawing occurs of the amount of the Revolving Loan to be made
by such Bank. Notices received after such time shall be deemed to have been
received on the next Business Day. Each Bank shall then make such Revolving Loan
(regardless of noncompliance with the applicable conditions precedent specified
in Article III hereof and regardless of whether an Event of Default then exists)
and each Bank shall provide the Agent with the proceeds of such Revolving Loan
in Immediately Available Funds, at the office of the Agent, not later than 2:00
p.m. (Minneapolis time) on the day on which such Bank received such notice (or,
in the case of notices received after 11:00 a.m., Minneapolis time, is deemed to
have received such notice). The Agent shall apply the proceeds of such Revolving
Loans directly to reimburse itself for such Unpaid Drawing. If any portion of
any such amount paid to the Agent should be recovered by or on behalf of any
Borrower from the Agent in bankruptcy, by assignment for the benefit of
creditors or otherwise, the loss of the amount so recovered shall be ratably
shared between and among the Banks in the manner contemplated by Section 8.11
hereof. If at the time the Banks make funds available to the Agent pursuant to
the provisions of this Section, a Default or Event of Default shall exist, the
Borrowers shall pay to the Agent for the account of the Banks interest on the
funds so advanced at the Default Rate. If for any reason any Bank is unable to
make a Revolving Loan to the Borrowers to reimburse the Agent for an Unpaid
Drawing, then such Bank shall immediately purchase from the Agent a risk
participation in such Unpaid Drawing, at par, in an amount equal to such Bank's
Revolving Percentage of the Unpaid Drawing if it is a Revolving Commitment
Unpaid Drawing. In consideration of and in furtherance of the foregoing, each
Bank hereby unconditionally and absolutely agrees to pay to the Agent, for the
Agent's own account, such Bank's Revolving Percentage of each Unpaid Drawing
(before deducting the amount of any Revolving Loans made by other Banks to
reimburse the Agent for such Unpaid Drawing). The Agent shall promptly notify
each Bank that is unable to make a Revolving Loan to reimburse the Agent for an
Unpaid Drawing of that Bank's Revolving Percentage of such Unpaid Drawing. Each
Bank shall pay to the Agent, not later than 2:00 P.M. (Minneapolis time) on the
date it receives such notice, such Bank's Revolving Percentage of such Unpaid
Drawing.
Section 2.15 Letter of Credit Fees. For each Letter of Credit
---------------------
issued, the Borrowers shall pay to the Agent for the account of the Banks, in
advance payable on the date of issuance, a fee (a "Letter of Credit Fee") in an
amount: (x) determined by applying a per annum rate equal to the Applicable
Margin for Eurodollar Rate Advances consisting of the Revolving Loans as of the
date of issuance to the original face amount of any Standby Letter of Credit for
the period from the date of issuance to the scheduled expiration date of such
Standby Letter of Credit, and (y) determined by applying a per annum rate equal
to the Applicable Margin for Eurodollar Rate Advance consisting of the Revolving
Loans as of the date of issuance to the original face amount of any Documentary
Letter of Credit for the period from the date of issuance to the scheduled
expiration date of such Documentary Letter of Credit. In addition to the Letter
of Credit Fee, the Borrowers shall pay to the Agent, for its own account, on
demand, all issuance, amendment, drawing and other fees regularly charged by the
Agent to its letter of credit customers, and all out-of-pocket expenses incurred
by the Agent in connection with the issuance, amendment, administration or
payment of any Letter of Credit.
- 33 -
Part C -- General
--------------------
Section 2.16 Optional Reduction of Revolving Commitment Amounts or
-----------------------------------------------------
Termination of Revolving Commitments. The Borrowers may, at any time, upon not
------------------------------------
less than five Business Days prior written notice from Omega, on behalf of the
Borrowers, to the Agent, reduce the Revolving Commitment Amounts, ratably, with
any such reduction in a minimum aggregate amount for all the Banks of
$1,000,000, or, if more, in an integral multiple of $250,000 in excess thereof;
provided, however, that the Borrowers may not at any time reduce the Aggregate
-------- -------
Revolving Commitment Amounts below the Total Revolving Outstandings. The
Borrowers may, at any time when no Letters of Credit are outstanding, upon not
less than five Business Days prior written notice from Omega, on behalf of the
Borrowers, to the Agent, terminate the Revolving Commitments in their entirety.
Upon termination of the Revolving Commitments pursuant to this Section, the
Borrowers shall pay to the Agent for the account of the Banks the full amount of
all outstanding Advances, all accrued and unpaid interest thereon, all unpaid
Revolving Commitment Fees accrued to the date of such termination, any
indemnities payable with respect to Advances pursuant to Section 2.25 and all
other unpaid obligations of the Borrowers to the Agent and the Banks hereunder.
Any optional reduction of Revolving Commitment Amounts or termination of
Revolving Commitments hereunder or pursuant to the CIBC Loan Documents shall be
made ratably between the outstanding Revolving Commitments hereunder and the
outstanding CIBC commitments.
Section 2.17 Revolving Commitment and Agent's Fees.
-------------------------------------
(a) The Borrowers shall pay to the Agent for the account of each Bank
fees (the "Revolving Commitment Fees") in an amount determined by applying
a rate of one half of one percent (0.5%) per annum to the average daily
Unused Revolving Commitment of such Bank for the period from the Closing
Date to the Termination Date. Such Revolving Commitment Fees are payable
quarterly in arrears, on the days principal payments are scheduled on the
Term Loans, and on the Termination Date.
(b) The Borrowers shall pay to the Agent, for the Agent's own
account, a yearly agent's fee in the amount provided in a side letter dated
April 27, 1997 from the Agent to Omega Merger Corp. The agent's fee shall
be payable quarterly in advance, on days principal payments are scheduled
on the Term A Loans. No Bank (other than the Agent) shall be entitled to
any portion of such agent's fee.
(c) On the Closing Date, the Borrowers shall pay to the Agent, for the
Agent's own account, a closing fee in the amount provided in a side letter
dated January 11, 1999 from the Agent. No Bank (other than the Agent) shall
be entitled to any portion of such agent's fee, except as separately agreed
between the Agent and such Bank.
Section 2.18 Computation. Revolving Commitment Fees and Letter of
-----------
Credit Fees and interest on Revolving Loans and Term Loans shall be computed on
the basis of actual
- 34 -
days elapsed (or, in the case of Letter of Credit Fees which are paid in
advance, actual days to elapse) and a year of 360 days.
Section 2.19 Payments. Payments and prepayments of principal of, and
--------
interest on, the Notes and all fees, expenses and other obligations under this
Agreement payable to the Agent or the Banks shall be made without setoff or
counterclaim in Immediately Available Funds not later than 12:00 noon
(Minneapolis time) on the dates called for under this Agreement and the Notes to
the Agent at its main office in Minneapolis, Minnesota. Funds received after
such time shall be deemed to have been received on the next Business Day. The
Agent will promptly distribute in like funds to each Bank its ratable share of
each such payment of principal, interest, Revolving Commitment Fees and Letter
of Credit Fees received, by the Agent for the account of the Banks. Whenever
any payment to be made hereunder or on the Notes shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time, in the case of a payment of
principal, shall be included in the computation of any interest on such
principal payment.
Section 2.20 Use of Loan Proceeds. The proceeds of the Term Loan B
--------------------
shall be used in connection with the Acquisition (Kitchen Craft), including the
making by Omega of the loan to KC Canada evidenced by the Kitchen Craft Note,
and to pay certain existing Indebtedness of Omega and its Subsidiaries,
including Kitchen Craft, as described on Exhibit 6.13. The payments described
in the preceding sentence shall be made on the Closing Date. The proceeds of
any subsequent Revolving Loans shall be used for the Borrowers' general business
purposes in a manner not in conflict with any of the Borrowers' covenants in
this Agreement.
Section 2.21 Adjusted Eurodollar Rate Not Ascertainable, Etc. If, on
-----------------------------------------------
or prior to the date for determining the Adjusted Eurodollar Rate in respect of
the Interest Period for any Eurodollar Rate Advance, any Bank determines (which
determination shall be conclusive and binding, absent error) that:
(a) deposits in dollars (in the applicable amount) are not being made
available to such Bank in the relevant market for such Interest Period, or
(b) the Adjusted Eurodollar Rate will not adequately and fairly
reflect the cost to such Bank of funding or maintaining Eurodollar Rate
Advances for such Interest Period,
such Bank shall forthwith give written notice to Omega, on behalf of the
Borrowers, and the other Banks specifying the facts giving rise to such
determination, whereupon the obligation of such Bank to make or continue, or to
convert any Advances to, Eurodollar Rate Advances shall be suspended until such
Bank notifies Omega, on behalf of the Borrowers, and the Agent that the
circumstances giving rise to such suspension no longer exist. While any such
suspension continues, all further Advances by such Bank shall be made as Base
Rate Advances. No such suspension shall affect the interest rate then in effect
during the applicable Interest Period for any Eurodollar Rate Advance
outstanding at the time such suspension is imposed.
- 35 -
Section 2.22 Increased Cost. If any Regulatory Change:
--------------
(a) shall subject any Bank (or its Applicable Lending Office) to any
tax, duty or other charge with respect to its Eurodollar Rate Advances, its
Notes or its obligation to make Eurodollar Rate Advances or shall change
the basis of taxation of payment to any Bank (or its Applicable Lending
Office) of the principal of or interest on its Eurodollar Rate Advances or
any other amounts due under this Agreement in respect of its Eurodollar
Rate Advances or its obligation to make Eurodollar Rate Advances (except
for changes in the rate of tax on the overall net income of such Bank or
its Applicable Lending Office imposed by the jurisdiction in which such
Bank's principal office or Applicable Lending Office is located); or
(b) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board, but excluding with respect to any
Eurodollar Rate Advance any such requirement to the extent included in
calculating the applicable Adjusted Eurodollar Rate) against assets of,
deposits with or for the account of, or credit extended by, any Bank's
Applicable Lending Office or shall impose on any Bank (or its Applicable
Lending Office) or the interbank Eurodollar market any other condition
affecting its Eurodollar Rate Advances, its Notes or its obligation to make
Eurodollar Rate Advances;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making or maintaining any Eurodollar Rate
Advance, or to reduce the amount of any sum received or receivable by such Bank
(or its Applicable Lending Office) under this Agreement or under its Notes,
then, within 30 days after written demand by such Bank (with a copy to the
Agent), the Borrowers shall pay to such Bank such additional amount or amounts
as will compensate such Bank for such increased cost or reduction. Each Bank
will promptly notify Omega, on behalf of the Borrowers, and the Agent in writing
of any event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate
of any Bank claiming compensation under this Section, setting forth the
additional amount or amounts to be paid to it hereunder and stating in
reasonable detail the basis for the charge and the method of computation, shall
be conclusive in the absence of error. In determining such amount, any Bank may
use any reasonable averaging and attribution methods. Failure on the part of
any Bank to demand compensation for any increased costs or reduction in amounts
received or receivable with respect to any Interest Period shall not constitute
a waiver of such Bank's rights to demand compensation for any increased costs or
reduction in amounts received or receivable in any subsequent Interest Period.
No Bank shall be entitled to compensation otherwise payable under this Section
2.22 for any period more than six months prior to the date on which such Bank
first notifies Omega, on behalf of the Borrowers, of the change resulting in the
increased cost.
- 36 -
Section 2.23 Illegality. If any Regulatory Change shall make it
----------
unlawful or impossible for any Bank to make, maintain or fund any Eurodollar
Rate Advances, such Bank shall notify Omega, on behalf of the Borrowers, and the
Agent in writing, whereupon the obligation of such Bank to make or continue, or
to convert any Advances to, Eurodollar Rate Advances shall be suspended until
such Bank notifies Omega, on behalf of the Borrowers, and the Agent that the
circumstances giving rise to such suspension no longer exist. Before giving any
such notice, such Bank shall designate a different Applicable Lending Office if
such designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank
determines that it may not lawfully continue to maintain any Eurodollar Rate
Advances to the end of the applicable Interest Periods, all of the affected
Advances shall be automatically converted to Base Rate Advances as of the date
of such Bank's notice, and upon such conversion the Borrowers shall indemnify
such Bank in accordance with Section 2.25.
Section 2.24 Capital Adequacy. In the event that any Regulatory
----------------
Change reduces or shall have the effect of reducing the rate of return on any
Bank's capital or the capital of its parent corporation (by an amount such Bank
deems material) as a consequence of its Commitments and/or its Loans and/or any
Letters of Credit or any Bank's obligations to make Advances to cover Letters of
Credit to a level below that which such Bank or its parent corporation could
have achieved but for such Regulatory Change (taking into account such Bank's
policies and the policies of its parent corporation with respect to capital
adequacy), then the Borrowers shall, within 30 days after written notice and
demand to Omega, on behalf of the Borrowers, from such Bank (with a copy to the
Agent), pay to such Bank additional amounts sufficient to compensate such Bank
or its parent corporation for such reduction. Any determination by such Bank
under this Section and any certificate as to the amount of such reduction that
states in reasonable detail the basis for the amount requested and the method of
computation of such amount that is given to Omega, on behalf of the Borrowers,
by such Bank shall be final, conclusive and binding for all purposes, absent
error. No Bank shall be entitled to compensation otherwise payable under this
Section 2.24 for any period more than six months prior to the date on which such
Bank first notifies Omega, on behalf of the Borrowers, of the change resulting
in the reduced rate of return.
Section 2.25 Funding Losses; Eurodollar Rate Advances. The Borrowers
-------------- ------------------------
shall compensate each Bank, upon its written request to Omega, on behalf of the
Borrowers, for all losses, expenses and liabilities (including any interest paid
by such Bank to lenders of funds borrowed by it to make or carry Eurodollar Rate
Advances to the extent not recovered by such Bank in connection with the re-
employment of such funds and including loss of anticipated profits) which such
Bank may sustain: (i) if for any reason, other than a default by such Bank, a
funding of a Eurodollar Rate Advance does not occur on the date specified
therefor in Omega's request or notice as to such Advance under Section 2.2 or
2.4, or (ii) if, for whatever reason (including, but not limited to,
acceleration of the maturity of Advances following an Event of Default), any
repayment of a Eurodollar Rate Advance, or a conversion pursuant to Section
2.23, occurs on any day other than the last day of the Interest Period
applicable thereto. A Bank's
- 37 -
written request for compensation shall set forth the basis for the amount
requested and the method of computation and shall be final, conclusive and
binding, absent error.
Section 2.26 Discretion of Banks as to Manner of Funding. Each Bank
-------------------------------------------
shall be entitled to fund and maintain its funding of Eurodollar Rate Advances
in any manner it may elect, it being understood, however, that for the purposes
of this Agreement all determinations hereunder (including, but not limited to,
determinations under Section 2.25) shall be made as if such Bank had actually
funded and maintained each Eurodollar Rate Advances during the Interest Period
for such Advance through the purchase of deposits having a maturity
corresponding to the last day of the Interest Period and bearing an interest
rate equal to the Eurodollar Rate for such Interest Period.
Section 2.27 Withholding Taxes.
-----------------
(a) Banks to Submit Forms. Each Bank represents to the Borrowers and
---------------------
the Agent that, as of the date it becomes a Bank and at all times
thereafter, it is either (i) a corporation organized under the laws of the
United States or any State thereof or (ii) entitled to complete exemption
from United States withholding tax imposed on or with respect to any
payments, including fees, to be made pursuant to this Agreement (x) under
an applicable provision of a tax convention to which the United States is a
party or (y) because it is acting through a branch, agency or office in the
United States and any payment to be received by it hereunder is effectively
connected with a trade or business in the United States. Each Bank that is
not a United States person (as such term is defined in Section 7701(a)(30)
of the Code) shall submit to the Borrowers and the Agent, on or before the
later of the Closing Date or the day on which such Bank becomes a Bank,
duly completed and signed copies of either Form 1001 (relating to such Bank
and entitling it to a complete exemption from withholding on all payments
to be received by such Bank hereunder) or Form 4224 (relating to all
payments to be received by such Bank hereunder) of the United States
Internal Revenue Service. Thereafter and from time to time, each such Bank
shall submit to the Borrowers and the Agent such additional duly completed
and signed copies of one or the other of such Forms (or such successor
Forms as shall be adopted from time to time by the relevant United States
taxing authorities) as may be (i) reasonably requested by the Borrowers or
the Agent and (ii) required and permitted under then-current United States
law or regulations to avoid United States withholding taxes on payments in
respect of all payments to be received by such Bank hereunder. Upon the
request of the Borrowers or the Agent, each Bank that is a United States
person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Borrowers and the Agent a certificate in such form as is
reasonably satisfactory to the Borrowers and the Agent to the effect that
it is such a United States person.
(b) Inability of a Bank. If any Bank that is not a United States
-------------------
person (as such term is defined in Section 7701(a)(30) of the Code)
determines that, as a result of any Regulatory Change, the Borrowers are
required by law or regulation to make any deduction, withholding or backup
withholding of any taxes, levies, imposts, duties, fees,
- 38 -
liabilities or similar charges of the United States of America, any
possession or territory of the United States of America (including the
Commonwealth of Puerto Rico) or any area subject to the jurisdiction of the
United States of America ("U.S. Taxes") from any payments to a Bank
------------
pursuant to any Loan Document in respect of the Obligations payable to such
Bank then or thereafter outstanding, the amount payable will be increased
to the amount which, after deduction from such increased amount of all U.S.
Taxes required to be withheld or deducted therefrom, will yield the amount
required under any Loan Document to be paid with respect thereto; provided,
--------
that the Borrowers shall not be required to pay any additional amount
pursuant to this Section 2.27(b) to any Bank (i) that is not, either on the
date this Agreement is executed by such Bank or on the date such Bank
becomes such under Section 9.6(c), either (x) entitled to submit Form 1001
(relating to such Bank and entitling it to a complete exemption from
withholding on all payments to be received by such Bank hereunder) or Form
4224 (relating to all payments to be received by such Bank hereunder) or
(y) a United States person (as such term is defined in Section 7701(a)(30)
of the Code), or (ii) that has failed to submit any form or certificate
that it was required to file pursuant to subsection (a) and entitled to
file under applicable law or (iii) arising from such Bank's failure to
comply with any certification, identification or other similar requirement
under United States income tax laws or regulations (including backup
withholding) to establish entitlement to exemption from such U.S. Taxes;
and provided, further, that if a Bank, as a result of any amount paid by
-------- -------
the Borrowers to such Bank pursuant to this Section 2.27, shall realize a
tax credit or refund, which tax credit or refund would not have been
realized but for the Borrowers' payment of such amount, such Bank shall pay
to the Borrowers an amount equal to such tax credit or refund. Each Bank
may determine the portion, if any, of any tax credit or refund attributable
to the Borrowers' payments using such attribution and accounting methods as
such Bank reasonably selects, and such Bank's determination of the portion
of any tax credit or refund attributable to the Borrowers' payments shall
be conclusive in the absence of manifest error. The obligation of the
Borrowers under this Section 2.27(b) shall survive the payment in full of
the Obligations and the termination of the Commitments of such Bank.
(c) Substitution of Bank. In the event the Borrowers are required
--------------------
pursuant to this Section 2.27 to pay any additional amount to any Bank,
such Bank shall, if no Event of Default has occurred and is continuing,
upon the request of the Borrowers to such Bank and the Agent, assign,
pursuant to and in accordance with the provisions of Section 9.6, all of
its rights and obligations under this Agreement and under the Notes to
another Bank or an Assignee selected by the Borrowers and reasonably
satisfactory to the Agent, in consideration for (i) the payment by such
assignee to the assigning Bank of the principal of, and interest accrued
and unpaid to the date of such assignment on, the Note or Notes of such
Bank, (ii) the payment by the Borrowers to the assigning Bank of any and
all other amounts owing to such Bank under any provision of this Agreement
accrued and unpaid to the date of such assignment and (iii) the Borrowers'
release of the assigning Bank from any further obligation or liability
under this Agreement. Notwithstanding anything to the contrary in this
Section 2.27(c), in no event shall the replacement of any
- 39 -
Bank result in a decrease in the aggregate Commitments without the written
consent of the Majority Lenders.
ARTICLE III
------------
CONDITIONS PRECEDENT
Section 3.1 Conditions of Initial Transaction. The making of the
---------------------------------
Term Loan B and any Revolving Loans to be made upon the Closing Date shall be
subject to the prior or simultaneous fulfillment of the following conditions:
3.1(a) Documents. The Agent shall have received the following in
---------
sufficient counterparts (except for the Notes) for each Bank:
(i) An Amended and Restated Revolving Note, an Amended and Restated
Term Note A and a Term Note B drawn to the order of each Bank executed by a
duly authorized officer of each Borrower and dated the Closing Date.
(ii) An Amended and Restated Security Agreement from Omega and an
Amended and Restated Pledge Agreement from Omega, each executed by a duly
authorized officer of Omega and dated the Closing Date.
(iii) Share certificates representing all of the issued and
outstanding shares of Omega KC US and KC Holdings, and undated stock powers
for such certificates, duly executed in blank.
(iv) Share certificates representing sixty-five percent (65%) of the
issued and outstanding shares of New Kitchen Craft and undated stock powers
for such certificates, duly executed in blank.
(v) The Kitchen Craft Note.
(vi) An Amended and Restated Security Agreement from Panther, executed
by a duly authorized officer (or officers) of Panther, and dated the
Closing Date.
(vii) A Pledge Agreement from each of Omega KC US and KC Holdings,
executed by a duly authorized officer (or officers) of KC Holdings or Omega
KC US, as applicable, and dated the Closing Date.
(viii) An Amended and Restated Holdings Guaranty and an Amended and
Restated Holdings Pledge Agreement, each executed by a duly authorized
officer (or officers) of Holdings and dated the Closing Date.
- 40 -
(ix) Written opinions of Ropes & ▇▇▇▇, counsel to the Borrowers, and
Nyemaster, Goode, Voigts, West, Hansell & O'Brien, special Iowa counsel to
the Banks, addressed to the Banks and dated the Closing Date, covering the
matters set forth in Exhibit 3.1 hereto.
(x) Copies of the corporate resolutions of each of Holdings, each
Borrower, Omega KC US, KC Holdings and BII, authorizing the execution,
delivery and performance of the Loan Documents and the Kitchen Craft
Acquisition Documents to which it is a party, certified as of the Closing
Date by the Secretary or an Assistant Secretary of such Person.
(xi) An incumbency certificate showing the names and titles and
bearing the signatures of the officers of Holdings, each Borrower, Omega KC
US, KC Holdings and BII authorized to execute the Loan Documents to which
it is a party and, in the case of the Borrowers, to request Loans, Letters
of Credit and conversions and continuations of Advances hereunder,
certified as of the Closing Date by the Secretary or an Assistant Secretary
of such Person.
(xii) A copy of the Certificate or Articles of Incorporation for each
Borrower, Holdings, Omega KC US, KC Holdings and BII with all amendments
thereto, certified by the appropriate governmental official of the
jurisdiction of its incorporation as of a date not more than 20 days prior
to the Closing Date.
(xiii) A copy of the bylaws of each Borrower, Holdings, Omega KC US,
KC Holdings and BII certified as of the Closing Date by the Secretary or an
Assistant Secretary of the relevant Borrower or Holdings.
(xiv) A certificate of good standing for Omega in the States of
Delaware and Iowa, certified by the appropriate governmental officials as
of a date not more than 20 days prior to the Closing Date.
(xv) A certificate of good standing for Holdings in the State of
Delaware, certified by the appropriate governmental officials as of a date
not more than 20 days prior to the Closing Date.
(xvi) A certificate of good standing for Panther in the States of
Iowa, California, Illinois, Minnesota, Ohio and Pennsylvania, certified by
the appropriate governmental officials as of a date not more than 20 days
prior to the Closing Date.
- 41 -
(xvii) A certificate of good standing for KC Holdings in the State of
Delaware, certified by the appropriate governmental officials as of a date
not more than 20 days prior to the Closing Date.
(xviii) A certificate of good standing for Omega KC US in the State of
Delaware, certified by the appropriate governmental officials as of a date
not more than 20 days prior to the Closing Date.
(xix) A certificate of good standing for BII in the State of Illinois,
certified by the appropriate governmental officials as of a date not more
than 20 days prior to the Closing Date.
(xx) Financing statements (Form UCC-1) or amendments to financing
statements as described on Exhibit 5.16 as "UCC Financing Statements and
Amendments Prepared," to be filed under the Uniform Commercial Code of the
applicable jurisdictions to perfect the Liens purported to be created under
each of the Security Agreements.
(xxi) Completed requests for information concerning Liens against
Holdings, Omega and its Subsidiaries as described on Exhibit 5.16 as "UCC
Searches Received."
(xxii) A certificate dated the Closing Date of the chief executive
officer or chief financial officer of each Borrower certifying as to the
matters set forth in Sections 3.2 (a) and 3.2 (b) below.
(xxiii) The Indiana Amendment to Mortgage, the Iowa Amendment to
Mortgage and the Tennessee Amendment to Mortgage.
(xxiv) Title Commitments downdating the title insurance policies
currently issuing the Mortgages.
(xxv) An Intercreditor Agreement by and among the Lenders in form and
substance acceptable to the Agent and the Majority Lenders, executed by a
duly authorized officer of each of the Lenders and dated the Closing Date.
(xxvi) Evidence of that the Borrowers maintain all insurance coverage
required by Section 5.3 hereof.
(xxvii) A letter from the Borrowers directing the Agent as to the
disbursement of the Term Loan B Advance and any Revolving Loans to be used
to finance the Acquisition (Kitchen Craft).
- 42 -
(xxviii) A certificate of the chief financial officer or president of
Omega substantially in the form of Exhibit 1.1-5 and such other
documentation as the Agent may request with respect to the solvency and
financial condition of Omega and its Subsidiaries immediately before and
after giving effect to the Kitchen Craft Acquisition, making the Term Loan
B hereunder, and any other financing obtained by Omega and its Subsidiaries
or Kitchen Craft to finance all or any portion of the Acquisition (Kitchen
Craft), and the other transactions contemplated by this Agreement.
(xxix) The Agent shall have received from Omega a certificate dated
the Closing Date of the chief executive officer or chief financial officer
of Omega certifying that:
(A) The Master Transaction Agreement (Kitchen Craft) in the form
delivered to the Agent, remains in full force and effect, without
modification or amendment and embodies the entire agreement and
understanding between the parties thereto with respect to the matters
therein, and
(B) All conditions to the closing of the Acquisition (Kitchen
Craft) are satisfied or waived.
(xxx) The Agent shall have received from Omega:
(A) Copies of all agreements and documents related to the
Acquisition (Kitchen Craft), including all amendments thereof and
supplements thereto, all of which shall be in form and substance
satisfactory to the Banks, together with a certificate of an officer
of Omega certifying that (x) such copies are true and correct and (y)
such documents in the respective forms certified to the Banks, remain
in full force and effect without supplement, amendment or other
modification.
(B) A written environmental review, audit, assessment or report
("Environmental Audit"), in form and substance reasonably acceptable
to the Banks, by Project Performance Corp., setting forth the results
of an investigation of the Canadian Facilities according to a scope of
work previously provided to counsel for the Agent.
(C) The Acquisition Closing Date Balance Sheet (Kitchen
Craft).
(D) Statements of forecasted consolidated income and cash flow
for Omega and its Subsidiaries, and a forecasted consolidated balance
sheet of Omega and its Subsidiaries, together with supporting
assumptions, in the forms previously furnished by Omega to the Banks.
- 43 -
(E) Evidence satisfactory to the Agent that all indebtedness of
Kitchen Craft other than Indebtedness permitted to remain outstanding
after the Closing Date pursuant to the Credit Agreement shall have
been repaid or will be repaid with the proceeds of the Term Loan B to
be made on the Closing Date.
(F) Copies of the CIBC Loan Documents, all of which shall be in
form and substance satisfactory to the Agent and the Majority Lenders,
together with (x) a certificate of an officer of Omega certifying that
(x) such copies are true and correct and (y) such documents in the
respective forms certified to the Banks remain in full force and
effect without supplement, amendment or other modification, and (y)
and evidence satisfactory to the Agent that all conditions to the
making of the initial CIBC loans thereunder have been satisfied.
(G) Evidence satisfactory to the Agent that Omega has obtained
the consent of the Bondholders of the High Yield Permanent
Subordinated Debt to the transactions described hereunder (including,
without limitation, a waiver of the requirement that Kitchen Craft
guarantee the High Yield Permanent Subordinated Debt).
3.1(b) Additional Conditions.
---------------------
(i) The Agent shall have received for itself and for the account of
the Banks all fees and other amounts due and payable by the Borrowers on or
prior to the Closing Date, including the fees payable on the Closing Date
pursuant to Section 2.17, and the reasonable fees and expenses of counsel
to the Agent payable pursuant to Section 9.2.
(ii) ▇▇▇▇▇▇ Capital Corporation and certain shareholders of Kitchen
Craft identified on Exhibit 3.1(b) hereto shall have contributed not less
than C$26,200,000 in cash and in common equity to Holdings or KC Holdings
as set forth on Schedule 3.1(b) hereto, in order for KC Holdings to pay the
cash equity component of the Acquisition (Kitchen Craft) costs, and the
proceeds of all such equity shall be used to consummate the Acquisition
(Kitchen Craft) and to pay transaction fees.
(iii) In the event the total cash costs of the Acquisition
(Kitchen Craft) exceed C$93,500,000, excluding any working capital
adjustments to the purchase price, such excess shall be financed with
additional cash equity provided by funds managed by ▇▇▇▇▇▇ Capital
Corporation.
(iv) In the event the total transaction costs relating to the
Acquisition (Kitchen Craft) exceed C$6,500,000, excluding any transaction
fees to be
- 44 -
borne by the selling stockholders, such excess shall be financed with
additional cash equity provided by funds managed by ▇▇▇▇▇▇ Capital
Corporation.
3.1(c) Compliance. The Borrowers shall have performed and
----------
complied with all agreements, terms and conditions contained in this
Agreement required to be performed or complied with by the Borrowers prior
to or simultaneously with the Closing Date.
3.1(d) Security Documents. All Security Documents (or financing
------------------
statements with respect thereto) shall have been appropriately filed or
recorded to the satisfaction of the Agent; any pledged collateral and
certificates of title shall have been duly delivered to the Agent; any
title insurance required by the Agent (with endorsements required by the
Agent) shall have been obtained and be satisfactory to the Agent; and the
priority and perfection of the Liens created by the Security Documents
shall have been established to the satisfaction of the Agent and its
counsel.
3.1(e) Other Matters. All corporate and legal proceedings
-------------
relating to the Borrowers, Holdings and the Subsidiaries of Omega and all
instruments and agreements in connection with the transactions contemplated
by this Agreement shall be satisfactory in scope, form and substance to the
Agent, the Banks and the Agent's special counsel, and the Agent shall have
received all information and copies of all documents, including records of
corporate proceedings, as any Bank or such special counsel may reasonably
have requested in connection therewith, such documents where appropriate to
be certified by proper corporate or governmental authorities.
Section 3.2 Conditions Precedent to all Loans and Letters of Credit.
-------------------------------------------------------
The obligation of the Banks to make any Loans hereunder (including Term Loan B
and any Revolving Loans to be made upon the Closing Date), and of the Agent to
issue each Letter of Credit shall be subject to the fulfillment of the following
conditions:
3.2(a) Representations and Warranties. The representations and
------------------------------
warranties contained in Article IV shall be true and correct in all
material respects on and as of the Closing Date and on the date of each
Revolving Loan or Term Loan or the date of issuance of each Letter of
Credit, with the same force and effect as if made on such date.
3.2(b) No Default. No Default or Event of Default shall have
----------
occurred and be continuing on the Closing Date, on the date of each
Revolving Loan or Term Loan or on the date of issuance of each Letter of
Credit or will exist after giving effect to the Loans made on such date or
the Letter of Credit so issued.
- 45 -
3.2(c) Notices and Requests. The Agent shall have received Omega's
--------------------
request for such Loans as required under Section 2.2 or its application for
such Letters of Credit specified under Section 2.9.
ARTICLE IV
-----------
REPRESENTATIONS AND WARRANTIES
To induce the Banks to enter into this Agreement and to make Loans
hereunder and to induce the Agent to issue Letters of Credit, the Borrowers
represent and warrant to the Banks:
Section 4.1 Organization, Standing, Etc. Each Borrower is a
---------------------------
corporation duly incorporated and validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority to carry on its business as now conducted, to
enter into this Agreement and to issue the Notes and to perform its obligations
under the Borrower Loan Documents to be executed by it. Holdings is a
corporation duly incorporated and validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority to carry on its business as now conducted and to
perform its obligations under the Holdings Documents. Each of Holdings and the
Borrowers (a) holds all certificates of authority, licenses and permits
necessary to carry on its business as presently conducted in each jurisdiction
in which it is carrying on such business, except where the failure to hold such
certificates, licenses or permits would not have a Material Adverse Effect, and
(b) is duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character of the properties owned, leased or operated
by it or the business conducted by it makes such qualification necessary and the
failure so to qualify would permanently preclude Holdings or such Borrower from
enforcing its rights with respect to any assets or expose Holdings or such
Borrower to any liability, which in any case would have a Material Adverse
Effect.
Section 4.2 Authorization and Validity. The execution, delivery and
--------------------------
performance by each Borrower of the Borrower Loan Documents to be executed by it
have been duly authorized by all necessary corporate action by that Borrower,
and this Agreement constitutes, and the Notes and other Borrower Loan Documents
to be executed by that Borrower when executed will constitute, the legal, valid
and binding obligations of that Borrower, enforceable against that Borrower in
accordance with their respective terms, subject to limitations as to
enforceability which might result from bankruptcy, insolvency, moratorium and
other similar laws affecting creditors' rights generally and subject to
limitations on the availability of equitable remedies. The execution, delivery
and performance by Holdings of the Holdings Documents have been duly authorized
by all necessary corporate action by Holdings, and the Holdings Documents when
executed will constitute, the legal, valid and binding obligations of Holdings,
enforceable against Holdings in accordance with their respective terms, subject
to limitations as to enforceability which might result from bankruptcy,
insolvency, moratorium and other similar
- 46 -
laws affecting creditors' rights generally and subject to limitations on the
availability of equitable remedies.
Section 4.3 No Conflict; No Default. The execution, delivery and
-----------------------
performance by each Borrower of the Borrower Loan Documents to be executed by it
will not (a) violate any provision of any law, statute, rule or regulation or
any order, writ, judgment, injunction, decree, determination or award of any
court, governmental agency or arbitrator presently in effect having
applicability to that Borrower, (b) violate or contravene any provision of the
Certificate or Articles of Incorporation or bylaws of that Borrower, or (c)
result in a breach of or constitute a default under any indenture, loan or
credit agreement or any other agreement, lease or instrument to which that
Borrower is a party or by which it or any of its properties may be bound or
result in the creation of any Lien thereunder (other than Liens securing the
Obligations). The execution, delivery and performance by Holdings of the
Holdings Documents will not (a) violate any provision of any law, statute, rule
or regulation or any order, writ, judgment, injunction, decree, determination or
award of any court, governmental agency or arbitrator presently in effect having
applicability to Holdings, (b) violate or contravene any provision of the
Certificate of Incorporation or bylaws of Holdings, or (c) result in a breach of
or constitute a default under any indenture, loan or credit agreement or any
other agreement, lease or instrument to which Holdings is a party or by which it
or any of its properties may be bound or result in the creation of any Lien
thereunder (other than Liens securing the Obligations). Neither Holdings nor
any Borrower is in default under or in violation of any such law, statute, rule
or regulation, order, writ, judgment, injunction, decree, determination or award
or any such indenture, loan or credit agreement or other agreement, lease or
instrument in any case in which the consequences of such default or violation
could have a Material Adverse Effect.
Section 4.4 Government Consent. No order, consent, approval,
------------------
license, authorization or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority is required
on the part of Holdings or any Borrower to authorize, or is required in
connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, the Holdings Documents, the
Acquisition Documents (Kitchen Craft), CIBC Loan Documents, or the Borrower Loan
Documents, except for any necessary filing or recordation of or with respect to
any of the Security Documents.
Section 4.5 Financial Statements and Condition. Omega's audited
----------------------------------
consolidated financial statements as at December 28, 1997 and its unaudited
financial statements as at November 21, 1998, and Holdings' unaudited financial
statements as at November 21, 1998, as heretofore furnished to the Banks, have
been prepared in accordance with GAAP on a consistent basis (except for the
absence of footnotes and subject to year-end audit adjustments as to the interim
statements) and fairly present the financial condition of Holdings and the
Borrowers as at such dates and the results of their operations and changes in
financial position for the respective periods then ended. As of the dates of
such financial statements, neither Holdings nor any Borrower had any material
obligation, contingent liability, liability for taxes or long-term lease
obligation which is not reflected in such financial statements or in the notes
thereto. Since December 28, 1997, there has been no Material Adverse Change.
The projections dated
- 47 -
December 16, 1998 provided to the Banks are the Borrowers' good faith estimate,
as of the date on which they were prepared, of future performance of the
Borrowers, were prepared in good faith by the Borrowers and are based on good
faith estimates and assumptions of management of the Borrowers as of the date on
which they were prepared, which the Borrowers believe to have been reasonable at
the time such projections were prepared and as of the Closing Date, it being
recognized by the Agent and the Banks that such projections are not to be viewed
as facts and that actual results during the period covered by such projections
may differ from projected results.
Section 4.6 Litigation. There are no actions, suits or proceedings
----------
pending or, to the knowledge of the Borrowers, threatened against or affecting
Holdings or any Borrower or any of their properties before any court or
arbitrator, or any governmental department, board, agency or other
instrumentality which is reasonably likely to be determined adversely to
Holdings or a Borrower in a manner that would have a Material Adverse Effect or
a material adverse effect on the ability of Holdings or any Borrower to perform
its obligations under the Loan Documents.
Section 4.7 Environmental, Health and Safety Laws. There does not
-------------------------------------
exist any violation by Holdings or any Borrower of any applicable federal, state
or local law, rule or regulation or order of any government, governmental
department, board, agency or other instrumentality relating to environmental,
pollution, health or safety matters which will or threatens to impose a material
liability on Holdings or a Borrower or which would require a material
expenditure by Holdings or a Borrower to cure. Neither Holdings nor any
Borrower has received any notice to the effect that any part of its operations
or properties is not in material compliance with any such law, rule, regulation
or order or notice that it or its property is the subject of any governmental
investigation evaluating whether any remedial action is needed to respond to any
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.
Section 4.8 ERISA. Each Plan is in substantial compliance with all
-----
applicable requirements of ERISA and the Code and with all material applicable
rulings and regulations issued under the provisions of ERISA and the Code
setting forth those requirements. No Reportable Event has occurred and is
continuing with respect to any Plan. All of the minimum funding standards
applicable to such Plans have been satisfied and there exists no event or
condition which would reasonably be expected to result in the institution of
proceedings to terminate any Plan under Section 4042 of ERISA. With respect to
each Plan subject to Title IV of ERISA, as of the most recent valuation date for
such Plan, the present value (determined on the basis of reasonable assumptions
employed by the independent actuary for such Plan and previously furnished in
writing to the Banks) of such Plan's projected benefit obligations did not
exceed the fair market value of such Plan's assets.
Section 4.9 Federal Reserve Regulations. Neither Holdings nor any
---------------------------
Borrower is engaged principally or as one of its important activities in the
business of extending credit for the purpose of purchasing or carrying margin
stock (as defined in Regulation U of the Board). The
- 48 -
value of all margin stock owned by each Borrower does not constitute more than
25% of the value of the assets of that Borrower.
Section 4.10 Title to Property; Leases; Liens; Subordination. Each
-----------------------------------------------
of Holdings and the Borrowers has (a) insurable title to its real properties and
(b) good and sufficient title to, or valid, subsisting and enforceable leasehold
interest in, its other material properties, including all material real
properties, other properties and assets, referred to as owned by Holdings and
the Borrowers in the most recent financial statements referred to in Section 4.5
(other than property disposed of since the date of such financial statements in
the ordinary course of business). None of such properties is subject to a Lien,
except as allowed under Section 6.14. No Borrower has subordinated any of its
rights under any obligation owing to it to the rights of any other person.
Holdings does not own any properties or assets, tangible or intangible, other
than the Stock of Omega and rights under contracts to which Holdings is a party
that are listed on Exhibit 6.8. Each of Omega KC US and KC Holdings is a Holding
Company.
Section 4.11 Taxes. Holdings and each Borrower has filed all
-----
federal, state and local tax returns required to be filed and has paid or made
provision for the payment of all taxes due and payable pursuant to such returns
and pursuant to any assessments made against it or any of its property and all
other taxes, fees and other charges imposed on it or any of its property by any
governmental authority (other than taxes, fees or charges the amount or validity
of which is currently being contested in good faith by appropriate proceedings
and with respect to which reserves in accordance with GAAP have been provided on
the books of the Borrowers). No tax Liens have been filed (except for Liens
arising in the ordinary course of business with respect to real property taxes
that are not past due) and no material claims are being asserted with respect to
any such taxes, fees or charges. The charges, accruals and reserves on the
books of the Borrowers in respect of taxes and other governmental charges have
been determined in accordance with GAAP and except as reflected in such accruals
no Borrower knows of any proposed material tax assessment against it or
Holdings.
Section 4.12 Intellectual Property. Holdings and each Borrower owns,
---------------------
has the right to use, or otherwise has the rights to, their data bases, all
patents, trademarks, trade names, copyrights, technology, know-how and processes
used in or necessary for the conduct of its business as currently conducted that
are material to the financial condition, business or operations of Holdings and
the Borrowers, taken as a whole (collectively, "Intellectual Property"), and, as
of the Closing Date, all patented or registered Intellectual Property and patent
applications and applications for registration of any Intellectual Property are
identified on Exhibit 4.12. As of the Closing Date, all patented or registered
Intellectual Property is duly and properly registered, filed or issued in the
appropriate office and jurisdictions and for such registrations, filing or
issuances. Except as disclosed in Exhibit 4.12, to the best of the Borrowers'
knowledge, no material claim has been asserted by any Person challenging or
questioning the use, validity or effectiveness of any Intellectual Property.
Except as disclosed in Exhibit 4.12, to the best of the Borrowers' knowledge,
the use of such Intellectual Property by Holdings and the Borrowers does not
infringe the rights of any Person except to the extent such infringement
(including, but not
- 49 -
limited to, any damages that may be payable to the opposing party of Holdings or
a Borrower in an infringement action) is not reasonably expected to have a
Material Adverse Effect.
Section 4.13 Burdensome Restrictions. Neither Holdings nor any
-----------------------
Borrower is a party to or otherwise bound by any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
charter, corporate or partnership restriction which would foreseeably have a
Material Adverse Effect or a material adverse effect on the ability of Holdings
or any Borrower to carry out its obligations under any Loan Document.
Section 4.14 Force Majeure. Since the date of the most recent
-------------
financial statement referred to in Section 4.5, there has been no Material
Adverse Effect as the result of any fire or other casualty, strike, lockout, or
other labor trouble, embargo, sabotage, confiscation, condemnation, riot, civil
disturbance, activity of armed forces or act of God.
Section 4.15 Investment Company Act. Neither Holdings nor any
----------------------
Borrower is an "investment company" or a company "controlled" by an investment
company within the meaning of the Investment Company Act of 1940, as amended.
Section 4.16 Public Utility Holding Company Act. Neither Holdings
----------------------------------
nor any Borrower is a "holding company" or a "subsidiary company" of a holding
company or an "affiliate" of a holding company or of a subsidiary company of a
holding company within the meaning of the Public Utility Holding Company Act of
1935, as amended.
Section 4.17 Retirement Benefits. Except as required under Section
-------------------
4980B of the Code, Section 601 of ERISA or applicable state law, neither
Holdings nor any Borrower is obligated to provide post-retirement medical or
insurance benefits with respect to employees or former employees.
Section 4.18 Full Disclosure. Neither this Agreement nor any other
---------------
Loan Document, report, instrument or certificate delivered by any Borrower or
Holdings pursuant to this Agreement contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements contained therein not misleading.
Section 4.19 Subsidiaries. Exhibit 4.19 sets forth as of the date of
------------
this Agreement a list of all Subsidiaries of Omega and the number and percentage
of the shares of each class of capital stock owned beneficially or of record by
Omega or any Subsidiary therein, and the jurisdiction of incorporation of each
Subsidiary.
Section 4.20 Perfection of Liens. Each Security Document creates the
-------------------
Lien it purports to create upon the properties and interests specifically
described therein. The descriptions of properties and interests in the Security
Documents and any related financing statements are adequate for the purpose of
such instruments and for perfection of the Liens of the Collateral Agent. As to
any Security Documents which are Security Agreements, the filing of the Uniform
Commercial Code financing statements delivered by Holdings and the Borrowers to
the
- 50 -
Collateral Agent in the filing offices listed thereon will perfect the Liens
created under such Security Agreements to the extent such Liens are capable of
being perfected by filing financing statements under the Uniform Commercial Code
as in effect in the state in which the collateral subject to such Liens is
located. The filing of the Mortgages in the filing offices listed thereon
perfected the Liens created thereby. The filing of the Omega Collateral
Assignment in the United States Office of Patents and Trademarks perfected the
Liens created thereunder.
Section 4.21 Facilities. As of the Closing Date, Holdings, Omega and
----------
the Subsidiaries of Omega do not have any owned Facilities other than the
Canadian, Indiana, Iowa and Tennessee Facilities, and Holdings, Omega and the
U.S. Subsidiaries do not have any leased Facilities other than those described
on Exhibit 4.21.
Section 4.22 Affiliates. Except for Holdings, its Subsidiaries,
----------
▇▇▇▇▇▇ Capital Corporation, certain Affiliates of ▇▇▇▇▇▇ Capital Corporation and
the officers and directors of Holdings and its Subsidiaries, Omega has no
Affiliates.
Section 4.23 Labor. None of the employees of Holdings, Omega or any
-----
U.S. Subsidiary of Omega is subject to any collective bargaining agreement, and
there are no strikes, work stoppages, election or decertification petitions or
proceedings, unfair labor charges, equal employment opportunity proceedings,
wage payment or material unemployment compensation proceedings, material
workmen's compensation proceedings or other material labor or employee-related
controversies pending or threatened involving Holdings or any Borrower and any
of its employees, except for any of the foregoing which would not in the
aggregate have a Material Adverse Effect.
Section 4.24 Solvency. As of the Closing Date, each Borrower has
--------
capital sufficient to carry on its business and transactions and all businesses
and transactions in which it is about to engage and is solvent and able to pay
its debts as they mature and each Borrower owns property the fair saleable value
of which is greater than the amount required to pay that Borrower's
Indebtedness. No transfer of property is being made and no Indebtedness is
being incurred in connection with the transactions contemplated by this
Agreement with the intent to hinder, delay or defraud either present or future
creditors of any Borrower or any Affiliate. On the Closing Date, after giving
effect to the Acquisition (Kitchen Craft) and the financing transactions
contemplated in connection therewith, the conclusions set out in the certificate
described in Section 3.1(a)(xxviii) are true and correct.
Section 4.25 Corporate Names. Except as disclosed on Exhibit 4.25,
---------------
as of the Closing Date, Holdings and the Borrowers have no assumed corporate
names and the Borrowers are not doing business under any corporate name other
than those set out in the first paragraph hereof.
Section 4.26 Insurance. Exhibit 4.26 sets forth a complete and
---------
accurate description of all policies of insurance that will be in effect as of
the Closing Date for the Borrowers and the U.S. Subsidiaries of Omega. As of
the Closing Date, Omega and its U.S.
- 51 -
Subsidiaries are adequately insured under such policies, no notice of
cancellation has been received with respect to such policies and Omega and its
U.S. Subsidiaries are in compliance with all conditions contained in such
policies.
Section 4.27 Year 2000. Omega and its Subsidiaries have reviewed and
---------
assessed their respective business operations and computer systems and
applications and those of its respective Subsidiaries to address the "year 2000
problem" (that is, that computer applications and equipment used by Omega and
its Subsidiaries and directly, or indirectly through third parties, may be
unable to properly perform date-sensitive functions before, during and after
January 1, 2000). Based on that review and assessment, Omega and its
Subsidiaries reasonably believe that the year 2000 problem will not result in a
Material Adverse Effect.
Section 4.28 CIBC Loan Documents. All representations and warranties
-------------------
made by KC Canada or New Kitchen Craft pursuant to the CIBC Loan Documents are
and shall continue to be true and correct in all material respects at all
material times.
ARTICLE V
----------
AFFIRMATIVE COVENANTS
Until any obligation of the Banks hereunder to make the Term Loans and
Revolving Loans and of the Agent to issue Letters of Credit shall have expired
or been terminated and the Notes and all of the other Obligations (except for
contingent indemnity and other contingent Obligations not yet due and payable)
have been paid in full and all outstanding Letters of Credit shall have expired
or the liability of the Agent thereon shall have otherwise been discharged,
unless the Majority Lenders shall otherwise consent in writing:
Section 5.1 Financial Statements and Reports. The Borrowers will
--------------------------------
furnish to the Banks:
5.1(a) As soon as available and in any event within 90 days after the
end of each fiscal year of Omega, the consolidated financial statements of
Omega and its Subsidiaries consisting of at least statements of income,
cash flow and changes in stockholders' equity, and a consolidated balance
sheet as at the end of such year, setting forth in each case in comparative
form corresponding figures from the previous annual audit, the audited
financial statements and consolidated balance sheet certified without
qualification by Ernst & Young LLP or other independent certified public
accountants of recognized national standing selected by the Borrowers and
acceptable to the Agent, together with (i) any management letters,
management reports or other supplementary comments or reports to Omega or
its board of directors furnished by such accountants, (ii) a letter from
such accountants addressed to the Banks acknowledging that the Banks are
extending credit in reliance on such financial statements and authorizing
such reliance, and (iii) comparable consolidating financial statements of
Omega and its Subsidiaries, accompanied by a certificate signed by the
chief financial officer of Omega stating that such financial
- 52 -
statements present fairly the financial condition of Omega and each of its
Subsidiaries and have been prepared in accordance with GAAP.
5.1(b) Together with the audited financial statements required under
Section 5.1 (a), a statement by the accounting firm performing such audit
to the effect that it has reviewed this Agreement and that in the course of
performing its examination no facts have come to its attention that caused
it to believe that any Default or Event of Default exists, or, if such
Default or Event of Default exists, describing its nature.
5.1(c) As soon as available and in any event within 30 days after the
end of each month, unaudited consolidated and consolidating statements of
income, cash flow and changes in stockholders' equity for Omega and its
Subsidiaries for such month and for the period from the beginning of such
fiscal year to the end of such month, and a consolidated balance sheet of
Omega as at the end of such month, setting forth in comparative form
figures for the corresponding period for the preceding fiscal year and for
the budget for such period for the current year, accompanied by a
certificate signed by the chief financial officer of Omega stating that
such financial statements present fairly the financial condition of Omega
and its Subsidiaries and that the same have been prepared in accordance
with GAAP (except for the absence of footnotes and subject to year-end
audit adjustments as to the interim statements).
5.1(d) As soon as practicable and in any event within 30 days after
the end of each month, a Compliance Certificate in the form attached hereto
as Exhibit 5.1 (d) signed by the chief financial officer of Omega
demonstrating in reasonable detail compliance (or noncompliance, as the
case may be) with the Section 6.18 and, with respect to any month that
happens to be the end of a fiscal quarter, Sections 6.16 and 6.17, as at
the end of the month immediately preceding the month in which such
certificate is due and stating that as at the end of such immediately
preceding month there did not exist any Default or Event of Default or, if
such Default or Event of Default existed, specifying the nature and period
of existence thereof and what action the Borrowers propose to take with
respect thereto.
5.1(e) As soon as practicable and in any event within 60 days after
the beginning of each fiscal year of Omega, statements of forecasted
consolidated income, cash flow and changes in stockholders' equity for
Omega and its Subsidiaries for each fiscal month in such fiscal year and a
forecasted consolidated and consolidating balance sheet of Omega and its
Subsidiaries, together with supporting assumptions, as at the end of each
fiscal month in such fiscal year, all in reasonable detail and reasonably
satisfactory in scope to Majority Lenders.
5.1(f) Promptly upon any Responsible Officer of Omega becoming aware
of any Default or Event of Default, a notice describing the nature thereof
and what action the Borrowers propose to take with respect thereto.
- 53 -
5.1(g) Promptly upon any Responsible Officer of Omega becoming aware
of the occurrence, with respect to any Plan, of any Reportable Event or any
Prohibited Transaction, a notice specifying the nature thereof and what
action the Borrowers propose to take with respect thereto, and, when
received, copies of any notice from PBGC of intention to terminate or have
a trustee appointed for any Plan.
5.1(h) Promptly upon the mailing or filing thereof, copies of all
financial statements, reports and proxy statements mailed to Holdings'
shareholders, and copies of all registration statements, periodic reports
and other documents filed with the Securities and Exchange Commission (or
any successor thereto) or any national securities exchange.
5.1(i) As soon as practicable following each Fiscal Year End, and in
any event within 90 days of such Fiscal Year End, a certificate in the form
attached hereto as Exhibit 5.1(i) signed by the chief financial officer of
Omega, containing a calculation of the Excess Cash Flow for the fiscal year
ended on such Fiscal Year End.
5.1(j) As soon as available and in any event within 90 days after the
end of each fiscal year of Holdings, the consolidated financial statements
of Holdings and the Borrowers consisting of at least statements of income,
cash flow and changes in stockholders' equity, and a consolidated balance
sheet as at the end of such year, setting forth in each case in comparative
form corresponding figures from the previous annual audit, certified
without qualification by Ernst & Young LLP or other independent certified
public accountants of recognized national standing selected by Holdings and
acceptable to the Agent, together with (i) any management letters,
management reports or other supplementary comments or reports to Holdings
or its board of directors furnished by such accountants and (ii) a letter
from such accountants addressed to the Banks acknowledging that the Banks
are extending credit in reliance on such financial statements and
authorizing such reliance.
5.1(k) As soon as available and in any event within 30 days after the
end of each fiscal quarter of Holdings, unaudited consolidated statements
of income, cash flow and changes in stockholders' equity for Holdings and
the Borrowers for such fiscal quarter and for the period from the beginning
of such fiscal year to the end of such fiscal quarter, and a consolidated
balance sheet of Holdings as at the end of such fiscal quarter, setting
forth in comparative form figures for the corresponding period for the
preceding fiscal year, accompanied by a certificate signed by the chief
financial officer of Holdings stating that such financial statements
present fairly the financial condition of Holdings and the Borrowers and
that the same have been prepared in accordance with GAAP (except for the
absence of footnotes and subject to year-end audit adjustments as to the
interim statements).
5.1(l) Promptly upon the transmission or receipt thereof by any of
the Borrowers or Holdings, copies of all notices, certificates and reports
sent by or to any of the Borrowers, Holdings or New Kitchen Craft under any
of the High Yield Subordinated
- 54 -
Permanent Loan Documents, the CIBC Loan Documents (specifically including
but not limited to any selection of an interest rate based on LIBOR or a
LIBOR interest period), or under any other agreement relating to
Indebtedness for money borrowed or any Capitalized Lease if the aggregate
unpaid principal amount with respect to such Indebtedness or Capitalized
Lease is equal to or greater than $750,000.
5.1(m) From time to time, such other information regarding the
business, operation and financial condition of the Borrowers and Holdings
as any Bank may reasonably request.
Section 5.2 Corporate Existence. Each Borrower will maintain, and
-------------------
cause Holdings and each Subsidiary of Omega to maintain: (a) its corporate
existence in good standing under the laws of its jurisdiction of incorporation,
and (b) its qualification to transact business in each jurisdiction where
failure so to qualify would permanently preclude that Borrower, Holdings or that
Subsidiary from enforcing its rights with respect to any material asset or would
expose that Borrower, Holdings or that Subsidiary to any material liability;
provided, however, that nothing herein shall prohibit the merger or liquidation
of any Subsidiary allowed under Section 6.1.
Section 5.3 Insurance. Each Borrower shall maintain, and shall cause
---------
Holdings and each Subsidiary of Omega to maintain, with financially sound and
reputable insurance companies such insurance as may be required by law, by any
Mortgage executed by such Borrower, and such other insurance in such amounts and
against such hazards as is customary in the case of reputable firms engaged in
the same or similar business and similarly situated.
Section 5.4 Payment of Taxes and Claims. Each Borrower shall file,
---------------------------
and cause Holdings and each Subsidiary of Omega to file, all tax returns and
reports which are required by law to be filed by it and will pay, and cause
Holdings and each Subsidiary of Omega to pay, before they become delinquent all
taxes, assessments and governmental charges and levies imposed upon it or its
property and all claims or demands of any kind (including but not limited to
those of suppliers, mechanics, carriers, warehouses, landlords and other like
Persons) which, if unpaid, might result in the creation of a Lien upon its
property; provided that the foregoing items need not be paid if they are being
contested in good faith by appropriate proceedings, and as long as the relevant
Borrower's, Holdings' or such Subsidiary's title to its property is not
materially adversely affected, its use of such property in the ordinary course
of its business is not materially interfered with, adequate reserves with
respect thereto have been set aside on the relevant Borrower's, Holdings' or
such Subsidiary's books in accordance with GAAP, and the relevant Borrower,
Holdings or such Subsidiary pays any of the foregoing items before the claimant
with respect thereto forecloses on or otherwise enforces any such Lien on the
relevant Borrower's, Holdings' or such Subsidiary's property.
Section 5.5 Inspection. Each Borrower shall permit, and shall cause
----------
Holdings and each Subsidiary of Omega to permit, any Person designated by the
Agent (at the request of the Agent or any Bank) to visit and inspect any of the
properties, corporate books and financial
- 55 -
records of the Borrowers, Holdings and each Subsidiary of Omega, to examine and
to make copies of the books of accounts and other financial records of the
Borrowers, Holdings and each Subsidiary of Omega, and to discuss the affairs,
finances and accounts of the Borrowers, Holdings and each Subsidiary of Omega
with, and to be advised as to the same by, the officers of the Borrowers,
Holdings and each Subsidiary of Omega at such reasonable times and intervals as
the Agent or such Bank may designate. The first visit, inspection or examination
by the Agent during each calendar year shall be at the Borrowers' expense.
Except as provided in the previous sentence, so long as no Event of Default
exists, the expenses of the Agent or the Banks for such visits, inspections and
examinations shall be at the expense of the Agent and the Banks, but any such
visits, inspections and examinations made while any Event of Default is
continuing shall be at the expense of the Borrowers.
Section 5.6 Maintenance of Properties, Licenses and Permits. Each
-----------------------------------------------
Borrower will maintain, and cause Holdings and each Subsidiary of Omega to
maintain, its properties used or useful in the conduct of its business in good
condition, repair and working order, and supplied with all necessary equipment
(except for property that is no longer useful or becomes obsolete or is disposed
of in the ordinary course of business in accordance with Section 6.2(a)), make,
and cause Holdings and each Subsidiary of Omega to make, all necessary repairs,
renewals, replacements, betterments and improvements thereto, and maintain, and
cause Holdings and each Subsidiary of Omega to maintain, all licenses and
permits with respect to such properties or the activities such properties are
used for, all as may be necessary so that the business carried on in connection
therewith may be properly conducted at all times.
Section 5.7 Books and Records. Each Borrower will keep, and will
-----------------
cause Holdings and each Subsidiary of Omega to keep, adequate and proper records
and books of account as to its dealings, business and affairs.
Section 5.8 Compliance. Each Borrower will comply, and will cause
----------
Holdings and each Subsidiary of Omega to comply, in all material respects with
all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, and all material leases, material contracts
or other material agreements to which it is a party (including but not limited
to the High Yield Subordinated Permanent Loan Documents, the CIBC Loan
Documents, the Kitchen Craft Note, and the Acquisition Documents (Kitchen
Craft)); provided, however, that failure so to comply shall not be a breach of
this covenant if such failure does not have, or is not reasonably expected to
have, a Material Adverse Effect and the relevant Borrower, Holdings or such
Subsidiary is acting in good faith and with reasonable dispatch to cure such
noncompliance.
Section 5.9 Notice of Litigation. The Borrowers will give prompt
--------------------
written notice to the Agent of the commencement of any action, suit or
proceeding before any court or arbitrator or any governmental department, board,
agency or other instrumentality affecting a Borrower, Holdings or any Subsidiary
of Omega or any property of the Borrower, Holdings or such Subsidiary or to
which a Borrower, Holdings or such Subsidiary is a party in which an adverse
determination or result could have a Material Adverse Effect or a material
adverse effect on the
- 56 -
ability of any Borrower or Holdings to perform its obligations under this
Agreement and the other Loan Documents, stating the nature and status of such
action, suit or proceeding.
Section 5.10 ERISA. Each Borrower will maintain, and cause Holdings
-----
and each U.S. Subsidiary of Omega to maintain, each Plan in material compliance
with all material applicable requirements of ERISA and of the Code and with all
applicable rulings and regulations issued under the provisions of ERISA and of
the Code and will not and not permit any of the ERISA Affiliates to (a) engage
in any transaction in connection with which any Borrower or any of the ERISA
Affiliates would be subject to either a civil penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code, in either
case in an amount exceeding $100,000, (b) fail to make full payment when due of
all amounts which, under the provisions of any Plan, any Borrower or any ERISA
Affiliate is required to pay as contributions thereto, or permit to exist any
accumulated funding deficiency (as such term is defined in Section 302 of ERISA
and Section 412 of the Code), whether or not waived, with respect to any Plan in
an aggregate amount exceeding $100,000 or (c) fail to make any payments in an
aggregate amount exceeding $100,000 to any Multiemployer Plan that any Borrower
or any of the ERISA Affiliates may be required to make under any agreement
relating to such Multiemployer Plan or any law pertaining thereto.
Section 5.11 Environmental Matters; Reporting. Each Borrower will
--------------------------------
observe and comply with, and cause Holdings and each Subsidiary of Omega to
observe and comply with, all laws, rules, regulations and orders of any
government or government agency relating to health, safety, pollution, hazardous
materials or other environmental matters to the extent non-compliance could
result in a material liability or otherwise have a Material Adverse Effect.
Omega will give the Agent prompt written notice of any violation as to any
environmental matter by any Borrower, Holdings or any Subsidiary of Omega and of
the commencement of any judicial or administrative proceeding relating to
health, safety or environmental matters (a) in which an adverse determination or
result could result in the revocation of or have a material adverse effect on
any operating permits, air emission permits, water discharge permits, hazardous
waste permits or other permits held by a Borrower, Holdings or any Subsidiary of
Omega which are material to the operations of a Borrower, Holdings or any
Subsidiary of Omega, or (b) which will or threatens to impose a material
liability on a Borrower, Holdings or any Subsidiary of Omega to any Person or
which will require a material expenditure by the Borrower Holdings or any such
Subsidiary to cure any alleged problem or violation.
Section 5.12 Reaffirmation of Guaranties and Pledge Agreement. When
------------------------------------------------
so requested by the Agent from time to time, Omega will promptly cause Holdings,
and any other Person who may hereafter guaranty the Obligations or any part
thereof, or who has or may hereafter pledge certain collateral to execute and
deliver to the Agent reaffirmations of their respective Guaranties or Pledge
Agreements in such forms as the Agent may require.
Section 5.13 Further Assurances. Promptly upon request by the
------------------
Collateral Agent or the Agent, each Borrower shall promptly correct, and cause
Holdings or any Subsidiary of Omega to correct, any defect or error that may be
discovered in any Loan Document or in the
- 57 -
execution, acknowledgment or recordation thereof. Promptly upon request by the
Collateral Agent or the Agent, each Borrower also shall do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and re-
register, any and all deeds, conveyances, mortgages, deeds of trust, trust
deeds, assignments, estoppel certificates, financing statements and
continuations thereof, notices of assignment, transfers, certificates,
assurances and other instruments, and cause Holdings to do any of the foregoing,
as the Collateral Agent or the Agent may reasonably require from time to time in
order: (a) to perfect and maintain the validity, effectiveness and priority of
any security interests intended to be created by the Loan Documents including,
without limitation, the delivery of a landlord waiver from any landlord required
by the Collateral Agent or the Agent; and (b) to assure, convey, grant, assign,
transfer, preserve, protect and confirm unto the Banks the rights granted now or
hereafter intended to be granted to the Banks under any Loan Document or under
any other instrument executed in connection with any Loan Document or that the
any Borrower, Holdings or any Subsidiary of Omega may be or become bound to
convey, mortgage or assign to the Collateral Agent for the benefit of the Banks
and the Canadian Lenders in order to carry out the intention or facilitate the
performance of the provisions of any Loan Document. Each Borrower shall furnish
to the Banks evidence satisfactory to the Agent and the Collateral Agent of
every such recording, filing or registration.
Section 5.14 Bank Accounts and Lockboxes. The Borrowers agree to
---------------------------
maintain, and to cause each of Holdings and each U.S. Subsidiary of Omega to
maintain, at all times on and after the Closing Date, (i) lockbox accounts (to
which the Borrowers,' Holdings' and such Subsidiaries' account debtors will be
instructed to make payment, and from which funds will be transferred as
collected to the Borrowers' or such Subsidiary's cash concentration or
operations account) with the Agent, The First National Bank of Chicago, or one
or more banks acceptable to the Agent that have signed an acknowledgment (in
form and substance satisfactory to the Agent) of the assignment of such accounts
to the Agent, and (ii) all of its other bank accounts, including but not limited
to its primary operational accounts and cash concentration accounts, with the
Agent. Service charges for any accounts maintained at the Agent shall be
payable as provided in separate agreements between the Borrowers and the Agent.
Section 5.15 Equity Contribution. Within 90 days after the Closing
-------------------
Date Omega shall cause managers of New Kitchen Craft, or ▇▇▇▇▇▇ Capital
Corporation or its Affiliates, to contribute additional cash equity to Holdings
in an amount not less than C$300,000, which shall be contributed to New Kitchen
Craft for the purpose of repaying certain advances made under the CIBC Loan
Documents.
Section 5.16 Post-Closing Deliveries. The Borrowers shall, or shall
-----------------------
cause Holdings or the applicable Subsidiary of Omega to, execute and deliver to
the Agent or the Collateral Agent the following documents and instruments within
the period prescribed therefor:
(a) within 30 days after the date hereof, an amendment to the Omega
Collateral Assignment in form and substance satisfactory to the Collateral
Agent;
- 58 -
(b) within 60 days after the request of the Agent or the Collateral
Agent made as soon as practical after the Closing Date, such consents,
waivers and agreements of lien holders, lessors, subcontractors and third
parties as the Agent or the Collateral Agent may reasonably request with
respect to any Collateral;
(c) as soon as possible and in any event within 60 days after the
completion of the construction under way as of the Closing Date on the Iowa
Facility, affidavits from all subcontractors who have performed services on
the Iowa Facility to the effect that such subcontractors have been paid all
obligations owed to them as of the date thereof and such indemnity
agreements from Omega and its general contractor as the issuer of title
insurance may require in connection with insurance for mechanic's liens;
(d) as soon as possible and in any event within 75 days after the
completion of such construction, an ALTA/ACSM Land Title Survey for the
Iowa Facility;
(e) within 10 Business Days after the Closing Date, the financing
statements (Form UCC-1) or amendments to financing statements described on
Exhibit 5.16 as "Pending UCC Financing Statements and Amendments"; and
(f) within 10 Business Days after the Closing Date, completed requests
for information concerning Liens against Holdings, Omega and its
Subsidiaries as described on Exhibit 5.16 as "Pending UCC Searches."
ARTICLE VI
-----------
NEGATIVE COVENANTS
Until any obligation of the Banks hereunder to make the Term Loans and
Revolving Loans and of the Agent to issue Letters of Credit shall have expired
or been terminated and the Notes and all of the other Obligations (except for
contingent indemnity and other contingent Obligations not yet due and payable)
have been paid in full and all outstanding Letters of Credit shall have expired
or the liability of the Agent thereon shall have otherwise been discharged,
unless the Majority Lenders shall otherwise consent in writing:
Section 6.1 Merger. No Borrower will merge or consolidate or enter
------
into any analogous reorganization or transaction with any Person or liquidate,
windup or dissolve itself (or suffer any liquidation or dissolution) or permit
Holdings or any Subsidiary of Omega to do any of the foregoing; provided,
--------
however, that any Subsidiary of Omega (including New Kitchen Craft, Omega KC US,
-------
KC Holdings, BII or Panther) may be merged with or liquidated into Omega or any
wholly-owned Subsidiary of Omega (if Omega or such wholly-owned Subsidiary of
Omega is the surviving corporation).
- 59 -
Section 6.2 Disposition of Assets. The Borrowers will not, and will
---------------------
not permit Holdings or any Subsidiary of Omega to, directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of (whether in one
transaction or a series of transactions) any property (including accounts and
notes receivable, with or without recourse) or enter into any agreement to do
any of the foregoing, including but not limited to any sale-leaseback
transaction, except:
6.2(a) dispositions of inventory, or used, worn-out or surplus
equipment, all in the ordinary course of business;
6.2(b) the sale of equipment or other tangible assets to the extent
that such assets are exchanged for credit against the purchase price of
similar replacement assets, or the proceeds of such sale are applied with
reasonable promptness to the purchase price of such replacement assets; and
6.2(c) dispositions of property (other than those authorized by
subsections 6.2(a) and (b)) during the term of this Agreement whose net
book value as of the time of each such disposition does not exceed $500,000
in the aggregate.
Section 6.3 Plans. The Borrowers will not permit, and will not allow
-----
Holdings or any U.S. Subsidiary of Omega to permit, any event to occur or
condition to exist which would permit any Plan to terminate under any
circumstances which would cause the Lien provided for in Section 4068 of ERISA
to attach to any assets of any Borrower, Holdings or any such U.S. Subsidiary;
and the Borrowers will not permit, as of the most recent valuation date for any
Plan subject to Title IV of ERISA, the present value (determined on the basis of
reasonable assumptions employed by the independent actuary for such Plan and
previously furnished in writing to the Banks) of such Plan's projected benefit
obligations to exceed the fair market value of such Plan's assets.
Section 6.4 Change in Nature of Business. The Borrowers will not,
----------------------------
and will not permit Holdings or any Subsidiary of Omega to, engage in any
business other than the manufacture, sale and delivery of kitchen, bath and
other home cabinetry and related products, and other activities incidental
thereto.
Section 6.5 Subsidiaries; Acquisitions. After the Closing Date, the
--------------------------
Borrowers will not, and will not permit Holdings or any Subsidiary of Omega to:
(a) form or acquire any corporation or other entity which would thereby become a
Subsidiary of Holdings or Omega; (b) sell, transfer or otherwise convey any
interest in a Subsidiary (except for transfers to the Borrower or a wholly-owned
Subsidiary thereof); or (c) acquire all or a material portion of the assets of
another Person; provided, however that any Borrower or any Subsidiary thereof:
-----------------
(i) may form a new Subsidiary and transfer assets thereto so long as
such new Subsidiary (A) is a wholly-owned Subsidiary of such Borrower, and
(B) prior to the transfer of any assets thereto, either (1) executes and
delivers to the Agent an agreement in the form
- 60 -
attached hereto as Exhibit 6.5 whereby such Subsidiary becomes a Borrower
hereunder and a Security Agreement in substantially the form delivered by
Panther, together with documents similar to those required with respect to
Panther pursuant to Sections 3.1(a)(xv) through 3.1(a)(xxiv) and 3.1(b) of
the Existing Credit Agreement, as appropriate or (2) executes and delivers
to the Agent a Subsidiary Guaranty and a Subsidiary Security Agreement
granting the Agent a security interest in all the assets of such new
Subsidiary for the benefit of the Banks (or, if such new Subsidiary is a
Holding Company, executes and delivers to the Agent a Subsidiary Pledge
Agreement), together with documents similar to those required with respect
to Panther pursuant to Sections 3.1(a)(xv) through 3.1(a)(xxiv) and 3.1(b)
of the Existing Credit Agreement, as appropriate and (C) does not acquire
all or a material portion of the assets of any Person other than Omega and
its wholly-owned Subsidiaries, or if it does acquire the assets of another
Person, it complies with clause (ii) below; and
(ii) may acquire all or a material portion of the Stock, assets or
liabilities of another Person (collectively, "Acquisitions"), if and only
if each of the following conditions is satisfied: (A) the aggregate
borrowings under the Revolving Notes by the Borrowers and their
Subsidiaries in connection with all Acquisitions does not exceed
$5,000,000; (B) after giving effect to any proposed Acquisition, the
Borrowers shall be in compliance with all covenants on a pro forma basis
---------
and no Default or Event of Default exists at the time of, or shall exist as
a result of, such Acquisition; (C) Omega, on behalf of the Borrowers,
executes and delivers to the Agent pro forma calculations demonstrating in
---------
reasonable detail that the Borrowers would have complied with Sections 6.16
through 6.18 had the Acquisition been consummated prior to the end of the
most recently ended fiscal quarter, and that based on the Borrowers'
projections, the Borrowers will comply with Sections 6.16 through 6.18 at
the end of the current fiscal quarter, after giving effect to the
Acquisition; (D) if the Acquisition involves the formation or acquisition
of a new Subsidiary, the new Subsidiary complies with clause (i) above; (E)
the Acquisition is undertaken in accordance with all applicable laws,
rules, regulations, orders, writs, judgments, injunctions, decrees and
awards to which any party to the Acquisition may be subject; and (F) if the
Acquisition involves the acquisition of an existing corporation or
partnership, the written consent to or approval of such Acquisition is
obtained from the board of directors or equivalent governing body of the
Person being acquired prior to any tender or other offer for the capital
stock or equivalent equity interest in such Person being acquired.
Section 6.6 Negative Pledges; Subsidiary Restrictions. The Borrowers
-----------------------------------------
will not, and will not permit Holdings or any Subsidiary of Omega to, enter into
any agreement, bond, note or other instrument with or for the benefit of any
Person other than the Banks which would (i) prohibit a Borrower, Holdings or
such Subsidiary from granting, or otherwise limit the ability of a Borrower,
Holdings or such Subsidiary to grant, to the Banks any Lien on any assets or
properties of a Borrower, Holdings or such Subsidiary, or (ii) require a
Borrower, Holdings or such Subsidiary to ▇▇▇▇▇ ▇ ▇▇▇▇ to any other Person if the
Borrower, Holdings or such Subsidiary grants any Lien to the Banks, provided,
---------
however, that the foregoing shall not apply to any
-------
- 61 -
negative pledge required of New Kitchen Craft pursuant to the CIBC Loan
Documents. The Borrowers will not permit Holdings or any Subsidiary of Omega to
place or allow any restriction, directly or indirectly, on the ability of such
Subsidiary to (a) pay to Omega dividends or any distributions on or with respect
to such Subsidiary's capital stock or (b) make loans or other cash payments to
the Borrowers.
Section 6.7 Restricted Payments. The Borrowers will not make any
-------------------
Restricted Payments, except that any Subsidiary of Omega may make Restricted
Payments to Omega, and provided no Event of Default has occurred and is
continuing, Omega may make the following Restricted Payments: (x) dividends to
Holdings to fund cash payments to members of Holdings' management or employees
under Holdings' Stock call rights and repurchase obligations; provided, however
-----------------
that the aggregate amount of dividends under this Section 6.7(x) and any
intercompany loans to Holdings in lieu thereof may not exceed $2,500,000 per
year.
Section 6.8 Transactions with Affiliates. Except as set forth on
----------------------------
Exhibit 6.8, the Borrowers will not, and will not permit Holdings or any
Subsidiary of Omega to, enter into any transaction with any Affiliate of Omega
or Holdings, except upon fair and reasonable terms no less favorable to the
Borrower, Holdings or such Subsidiary than would obtain in a comparable arm's-
length transaction with a Person not an Affiliate; and provided that the
--------
aggregate amount paid to BCC Industrial Services, Inc. pursuant to the
management agreement described on Exhibit 6.8 may not exceed $450,000 during any
fiscal year, but no such management fees shall be paid (but may continue to
accrue) after the occurrence and during the continuance of an Event of Default.
Section 6.9 Accounting Changes. The Borrowers will not, and will not
------------------
permit Holdings or any Subsidiary or Omega to, make any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change the fiscal year of any Borrower, Holdings or any Subsidiary, except that
the Borrowers may adopt a 53 week fiscal year for the fiscal years ending on
January 2, 1999 and January 1, 2005 and may conform the fiscal year and other
accounting practices of any Subsidiary acquired after the Closing Date to the
fiscal year and other accounting practices of the Borrowers. The Borrowers
shall all have the same fiscal year at all times.
Section 6.10 Capital Expenditures. The Borrowers will not, and will
--------------------
not permit Holdings or any Subsidiary of Omega to, make Capital Expenditures in
an amount in any fiscal year on a consolidated basis (a) exceeding $7,500,000,
plus, (b) during the 1999 fiscal year, the Borrowers may make additional Capital
----
Expenditures in connection with construction and development of a new rough mill
operation at the Iowa Facility in an aggregate amount not to exceed $5,500,000.
Section 6.11 Subordinated Debt. The Borrowers will not, and will not
-----------------
permit Holdings or any Subsidiary of Omega to (a) make any scheduled payment of
the principal of or interest on any Subordinated Debt which would be prohibited
by the terms of such Subordinated Debt and any related subordination agreement;
(b) directly or indirectly make any prepayment on
- 62 -
or purchase, redeem or defease any Subordinated Debt or offer to do so (whether
such prepayment, purchase or redemption, or offer with respect thereto, is
voluntary or mandatory); (c) amend or cancel the subordination provisions
applicable to any Subordinated Debt; (d) take or omit to take any action if as a
result of such action or omission the subordination of such Subordinated Debt,
or any part thereof, to the Obligations would be terminated, impaired or
adversely affected; or (e) omit to give the Agent prompt notice of any notice
received from any holder of Subordinated Debt, or any trustee therefor, or of
any default under any agreement or instrument relating to any Subordinated Debt
by reason whereof such Subordinated Debt might become or be declared to be due
or payable.
Section 6.12 Investments. The Borrowers will not, and will not
-----------
permit Holdings or any Subsidiary of Omega to, acquire for value, make, have or
hold any Investments, except:
6.12(a) Investments existing on the date of this Agreement and listed
on Exhibit 6.12(a) attached hereto.
6.12(b) Travel advances to management personnel and employees in the
ordinary course of business.
6.12(c) Investments in readily marketable direct obligations issued
or guaranteed by the United States or any agency thereof and supported by
the full faith and credit of the United States.
6.12(d) Certificates of deposit or bankers' acceptances issued by any
commercial bank organized under the laws of the United States or any State
thereof which has (i) combined capital and surplus of at least
$100,000,000, and (ii) a credit rating with respect to its unsecured
indebtedness from a nationally recognized rating service that is
satisfactory to the Agent.
6.12(e) Commercial paper given a rating of at least A-1 or P-1 by a
nationally recognized rating service.
6.12(f) Repurchase agreements relating to securities issued or
guaranteed as to principal and interest by the United States of America.
6.12(g) Investments in shares of a money market fund that invests
solely in Investments of the types described in clauses 6.12(c), (d), (e)
and (f).
6.12(h) Investments in Kitchen Craft, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇, ▇▇▇, ▇▇ ▇▇▇▇▇▇ and New Kitchen Craft, and other Subsidiaries of Omega
acquired after the Closing Date in transactions that comply with Section
6.5.
6.12(i) Intercompany loans and advances permitted by Section 6.13(f).
- 63 -
6.12(j) Advances to management personnel and employees made within 90
days after the Closing Date to enable such management personnel and
employees to purchase Stock of Holdings as set forth on Exhibit 6.12(j).
6.12(k) Any other Investment; provided that the maximum aggregate
cost of all Investments authorized by this clause 6.12(k) shall not exceed
$100,000.
Any Investments under clauses (c), (d), (e), (f) or (g) above must mature within
one year of the acquisition thereof by the Borrower or a Subsidiary.
Section 6.13 Indebtedness. The Borrowers will not, and will not
------------
permit Holdings or any Subsidiary of Omega to, incur, create, issue, assume or
suffer to exist any Indebtedness, except:
6.13(a) The Obligations.
6.13(b) Current Liabilities incurred in the ordinary course of
business.
6.13(c) Indebtedness existing on the date of this Agreement and
disclosed on Exhibit 6.13 hereto, but not including any extension or
refinancing thereof.
6.13(d) Indebtedness secured by Liens permitted under Section 6.14
hereof.
6.13(e) Indebtedness outstanding under the High Yield Subordinated
Permanent Loan Documents, and Indebtedness outstanding under subordinated
notes issued by Holdings in connection with the exercise of Stock
repurchases, puts or calls, if and only if the form of such subordinated
notes has been approved in writing by the Agent and the Majority Lenders.
6.13(f) Indebtedness with respect to intercompany loans and advances:
(i) from a Subsidiary or Holdings to Omega or a Subsidiary of Omega; (ii)
from Omega to a Borrower hereunder; (iii) to Kitchen Craft for intercompany
loans and advances other than the Kitchen Craft Note in an aggregate amount
at any one time outstanding not to exceed $5,000,000; and (iv) from Omega
or a Subsidiary of Omega in lieu of Restricted Payments to Holdings that
would have been permitted by Section 6.7.
6.13(g) Indebtedness incurred by Kitchen Craft and Omega, as
guarantor, pursuant to the CIBC Loan Documents.
6.13(h) Indebtedness incurred by Holdings, as guarantor of Omega KC
Canada pursuant to the Master Transaction Agreement.
6.13(i) Indebtedness incurred by Kitchen Craft pursuant to the
Kitchen Craft Note.
- 64 -
6.13(j) Indebtedness with respect to judgments and awards that do not
constitute an Event of Default.
6.13(k) Indebtedness with respect to unfunded pension liabilities
with respect to Plans so long as such liabilities do not violate Section
5.10 or Section 6.3.
6.13(l) Indebtedness with respect to Contingent Obligations permitted
by Section 6.15.
6.13(m) Indebtedness not authorized by any of the preceding clauses
of this Section 6.13, provided that the aggregate principal amount
outstanding of all Indebtedness authorized by this clause 6.13(m) shall not
exceed $100,000 at any time.
Section 6.14 Liens. The Borrowers will not, and will not permit
-----
Holdings or any Subsidiary of Omega to, create, incur, assume or suffer to exist
any Lien, or enter into, or make any commitment to enter into, any arrangement
for the acquisition of any property through conditional sale, lease-purchase or
other title retention agreements, with respect to any property now owned or
hereafter acquired by the Borrowers, Holdings or a Subsidiary, except:
6.14(a) Liens granted to the Agent and the Banks under the Security
Documents to secure the Obligations.
6.14(b) Liens existing on the date of this Agreement and disclosed on
Exhibit 6.14 hereto.
6.14(c) Liens granted on assets of Kitchen Craft to secure the
obligations under the CIBC Loan Documents.
6.14(d) Deposits or pledges to secure payment of workers'
compensation, unemployment insurance, old age pensions or other social
security obligations, in the ordinary course of business of the Borrowers
or a Subsidiary of Omega.
6.14(e) Liens for taxes, fees, assessments and governmental charges
not delinquent or to the extent that payment therefor shall not at the time
be required to be made in accordance with the provisions of Section 5.4.
6.14(f) Liens of carriers, warehousemen, mechanics and materialmen,
and other like Liens arising in the ordinary course of business, for sums
not due or to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of Section 5.4.
6.14(g) Liens incurred or deposits or pledges made or given in
connection with, or to secure payment of, indemnity, performance or other
similar bonds.
- 65 -
6.14(h) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights
and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided that (i) such deposit account is
-------- ----
not a dedicated cash collateral account and is not subject to restriction
against access by the depositor in excess of those set forth by regulations
promulgated by the Board, and (ii) such deposit account is not intended by
the depositor to provide collateral to the depository institution.
6.14(i) Encumbrances in the nature of zoning restrictions, easements
and rights or restrictions of record on the use of real property and
landlord's Liens under leases on the premises rented, which do not
materially detract from the value of such property or materially impair the
use thereof in the business of a Borrower, Holdings or a Subsidiary of
Omega.
6.14(j) The interest of any lessor under any Capitalized Lease
entered into after the Closing Date or purchase money Liens on property
acquired after the Closing Date; provided that (i) the Indebtedness secured
-------------
thereby is otherwise permitted by this Agreement, (ii) such Liens are
limited to the property acquired and do not secure Indebtedness other than
the related Capitalized Lease Obligations or the purchase price of such
property, and (iii) the aggregate amount of Indebtedness secured by such
Liens outstanding at any time does not exceed $3,000,000.
6.14(k) Liens created by operation of law that secure judgments and
awards that do not constitute an Event of Default.
Section 6.15 Contingent Liabilities. The Borrowers will not, and
----------------------
will not permit Holdings or any Subsidiary of Omega to, be or become liable on
any Contingent Obligations, other than as set forth on Exhibit 6.15 and any
Contingent Obligations of a Borrower or Holdings for Indebtedness of a Borrower
if and only if such Indebtedness is permitted by Section 6.13.
Section 6.16 Interest Coverage Ratio. Omega will not permit the
-----------------------
Interest Coverage Ratio, as of the last day of any fiscal quarter, for the four
consecutive fiscal quarters ending on that date, to be less than the ratios
specified below for the periods specified below:
Minimum Interest
Fiscal Quarter Ending: Coverage Ratio
---------------------- --------------
On or before October 2, 1999 1.65 to 1.0
After October 2, 1999, but on or 1.9 to 1.0
before September 30, 2000
After September 30, 2000, but on or 2.0 to 1.0
before September 29, 2001
After September 29, 2001, but on or 2.2 to 1.0
before September 28, 2002
After September 28, 2002, but on or 2.4 to 1.0
before September 27, 2003
After September 27, 2003 2.7 to 1.0.
- 66 -
Section 6.17 Fixed Charge Coverage Ratio. Omega will not permit the
---------------------------
Fixed Charge Coverage Ratio of the Borrowers, as of the last day of any fiscal
quarter ending on or prior to October 2, 1999, for the four consecutive fiscal
quarters ending on that date, to be less than: (i) 1.05 to 1.0; and (ii) 1.1 to
1.0, for any fiscal quarter ending after October 2, 1999.
Section 6.18 Cash Flow Leverage Ratio. Omega will not permit the
------------------------
Cash Flow Leverage Ratio of the Borrowers, as of the last day of any fiscal
month, for the period of twelve consecutive months ending on that date, to be
greater than the ratios specified below for the periods specified below:
Period: Maximum Cash
Flow Leverage Ratio.
--------------------------------- --------------------
On or before May 29, 1999 5.3 to 1.0
After May 29, 1999, but on or 4.9 to 1.0
before November 27, 1999
After November 27, 1999, but on or 4.7 to 1.0
before November 25, 2000
After November 25, 2000, but on or 4.25 to 1.0
before November 24, 2001
After November 24, 2001, but on or 3.9 to 1.0
before November 23, 2002
After November 23, 2002 3.45 to 1.0.
Section 6.19 Loan Proceeds. Omega will not, and will not permit
-------------
Holdings or any Subsidiary of Omega to, use any part of the proceeds of any
Loans or Advances directly or indirectly, and whether immediately, incidentally
or ultimately, (a) to purchase or carry margin stock (as defined in Regulation U
of the Board) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund Indebtedness originally incurred for such
purpose or (b) for any purpose which entails a violation of, or which is
inconsistent with, the provisions of Regulations G, U or X of the Board.
Section 6.20 Loan Payments. Omega will not, and will not permit
-------------
Kitchen Craft to, make any reductions or prepayments, whether mandatory or
optional, under the CIBC Loan Documents that do not comply with Section 2.6,
Section 2.7 or Section 2.16 hereunder, as applicable.
Section 6.21 Operating Leases. Omega will not, and will not permit
----------------
Holdings or any Subsidiary of Omega to, become liable in any way, whether
directly or by assignment or as a guarantor or other surety, for the obligations
of the lessee under any Operating Lease, unless (a)
- 67 -
immediately after giving effect to the incurrence of liability with respect to
such Operating Lease, the aggregate Operating Lease Payments per fiscal year of
Holdings, Omega and its Subsidiaries under all Operating Leases then in effect
will not exceed a maximum of $4,000,000 and (b) neither a Borrower, Holdings nor
any Subsidiary of Omega provides any down payment or other equity payment to the
lessor (i.e., the leased asset is 100% financed).
Section 6.22 Corporate Documents; Certain Material Contracts. The
-----------------------------------------------
Borrowers will not, and will not permit Holdings or any Subsidiary of Omega to,
amend or modify any of (i) its certificate or articles of incorporation, charter
or bylaws, or (ii) the CIBC Loan Documents, the Kitchen Craft Note, the Kitchen
Craft Acquisition Documents, and the High Yield Subordinated Permanent Loan
Documents, in each case in any way that materially adversely affects the Banks.
Section 6.23 Acquisition Expenses. The Borrowers shall not, and
--------------------
shall not permit Kitchen Craft and any other Subsidiary of Omega, to incur
transaction expenses in excess of C$6,500,000 in connection with the Acquisition
(Kitchen Craft), excluding transaction fees to be borne by selling shareholders
and any equity contributions provided by ▇▇▇▇▇▇ Capital Corporation pursuant to
Section 3.1(b) hereto.
Section 6.24 Other Indebtedness. Except as expressly authorized by
------------------
Section 6.11, the Borrowers will not, and will not permit Holdings or any
Subsidiary of Omega to, make any voluntary or optional payment, prepayment,
redemption, defeasance or acquisition for value of any Indebtedness for borrowed
money other than the Obligations or Indebtedness authorized by Section 6.13(b),
6.13(f) or, subject to Section 6.20, Section 6.13(g), or amend or modify any of
the payment terms of any Indebtedness for borrowed money other than the
Obligations in any way adverse to the Banks.
ARTICLE VII
------------
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default. The occurrence of any one or more of
-----------------
the following events shall constitute an Event of Default:
7.1(a) The Borrowers shall fail to: (i) make when due, whether by
acceleration or otherwise, any payment of principal of any Loan, Note or
Unpaid Drawing; or (ii) make within two Business Days of the date due,
whether by acceleration or otherwise, any payment of interest on any Note
or Unpaid Drawing, or any other Obligation required to be made to the Agent
or any Bank pursuant to this Agreement.
7.1(b) Any representation or warranty made by or on behalf of any
Borrower, Holdings or any Subsidiary of Omega in this Agreement or any
other Loan Document or by or on behalf of any Borrower, any Subsidiary of
Omega or Holdings in any certificate, statement, report or document
herewith or hereafter furnished to any Bank or the Agent
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pursuant to this Agreement or any other Loan Document shall prove to have
been false or misleading in any material respect on the date as of which
the facts set forth are stated or certified.
7.1(c) Any Borrower shall fail to comply with Sections 2.7, 2.16,
5.1(f), 5.2, 5.14, 5.15 or 5.16 hereof or any Section of Article VI hereof.
7.1(d) Any Borrower shall fail to comply with any other agreement,
covenant, condition, provision or term contained in this Agreement (other
than those hereinabove set forth in this Section 7.1) and such failure to
comply shall continue for 30 calendar days after whichever of the following
dates is the earlier to occur of: (i) the date a Borrower gives notice of
such failure to the Agent or the Banks, or (ii) the date the Agent or any
Bank gives written notice of such failure to Omega.
7.1(e) Any default (however denominated or defined), other than
Events of Default described in other clauses of this Section 7.1, shall
occur under any Security Document and any cure period applicable thereto
shall expire, or, if no cure period is specified in such Security Document
with respect to a failure to comply with the provisions thereof, if such
failure to comply shall continue for 30 calendar days after whichever of
the following dates is the earlier to occur of: (i) the date a Borrower
gives notice of such failure to the Agent or the Banks, or (ii) the date
the Agent or any Bank gives written notice of such failure to Omega.
7.1(f) Any Borrower, Holdings or any Subsidiary of Omega shall become
insolvent or shall generally not pay its debts as they mature or shall
apply for, shall consent to, or shall acquiesce in the appointment of a
custodian, trustee or receiver of any Borrower, Holdings or any Subsidiary
of Omega or for a substantial part of the property thereof or, in the
absence of such application, consent or acquiescence, a custodian, trustee
or receiver shall be appointed for any Borrower, Holdings or any Subsidiary
of Omega or for a substantial part of the property thereof and shall not
be discharged within 60 days, or the Borrower, Holdings or any Subsidiary
of Omega shall make an assignment for the benefit of creditors.
7.1(g) Any bankruptcy, reorganization, debt arrangement or other
proceedings under any bankruptcy or insolvency law shall be instituted by
or against any Borrower, Holdings or any Subsidiary of Omega, and, if
instituted against any Borrower, Holdings or any Subsidiary of Omega, shall
have been consented to or acquiesced in by any Borrower, Holdings or any
Subsidiary of Omega, or shall remain undismissed for 60 days, or an order
for relief shall have been entered against any Borrower, Holdings or any
Subsidiary of Omega.
7.1(h) Any dissolution or liquidation proceeding not permitted by
Section 6.1 shall be instituted by or against any Borrower or any
Subsidiary of Omega or any dissolution or liquidation proceeding shall be
instituted by or against Holdings, and, if
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instituted against any Borrower, Holdings or any Subsidiary of Omega, shall
be consented to or acquiesced in by any Borrower, such Subsidiary or
Holdings or shall remain for 60 days undismissed.
7.1(i) A judgment or judgments for the payment of money in excess of
the sum of $100,000 in the aggregate shall be rendered against any
Borrower, Holdings or any Subsidiary of Omega and either (i) the judgment
creditor executes on such judgment or (ii) such judgment remains unpaid or
undischarged for more than 60 days from the date of entry thereof or such
longer period during which execution of such judgment shall be stayed
during an appeal from such judgment.
7.1(j) The maturity of any material Indebtedness of any Borrower
(other than Indebtedness under this Agreement), Holdings or any Subsidiary
of Omega, including but not limited to Indebtedness under any of the CIBC
Loan Documents and the High Yield Subordinated Permanent Loan Documents,
shall be accelerated, or the Borrower, Holdings or any Subsidiary of Omega
shall fail to pay any such material Indebtedness when due (after the lapse
of any applicable grace period) or, in the case of such Indebtedness
payable on demand, when demanded (after the lapse of any applicable grace
period), or any event shall occur or condition shall exist and shall
continue for more than the period of grace, if any, applicable thereto and
shall have the effect of causing, or permitting the holder of any such
Indebtedness or any trustee or other Person acting on behalf of such holder
to cause, such material Indebtedness to become due prior to its stated
maturity or to realize upon any collateral given as security therefor. For
purposes of this Section, Indebtedness of the Borrower, Holdings or any
Subsidiary of Omega shall be deemed "material" if it exceeds $750,000 as to
any item of Indebtedness or in the aggregate for all items of Indebtedness
with respect to which any of the events described in this Section 7.1(j)
has occurred.
7.1(k) Any execution or attachment shall be issued whereby any
substantial part of the property of any Borrower or any Subsidiary of Omega
shall be taken or attempted to be taken and the same shall not have been
vacated or stayed within 30 days after the issuance thereof.
7.1(l) Holdings shall repudiate or purport to revoke the Holdings
Guaranty, or the Holdings Guaranty for any reason shall cease to be in full
force and effect or shall be judicially declared null and void.
7.1(m) Any Security Document shall, at any time, cease to be in full
force and effect or shall be judicially declared null and void, or the
validity or enforceability thereof shall be contested by any Borrower or
Holdings, or the Agent or the Banks shall cease to have a valid and
perfected security interest having the priority contemplated thereunder in
all of the collateral described therein, other than by action or inaction
of the Agent or the Banks if (i) the aggregate value of the collateral
affected by any of the foregoing exceeds
- 70 -
$100,000 and (ii) any of the foregoing shall remain unremedied for ten days
or more after receipt of notice thereof by the Borrower from the Agent.
7.1(n) Any Change of Control shall occur.
7.1(o) Any Borrower or Holdings is required, pursuant to the terms of
any instrument governing any Subordinated Debt, to make one or more offers
to redeem, repurchase, prepay or defease any Subordinated Debt prior to its
stated maturity.
Section 7.2 Remedies. If (a) any Event of Default described in
--------
Sections 7.1(f), (g) or (h) shall occur with respect to any Borrower , the
Commitments shall automatically terminate and the Notes and all other
Obligations shall automatically become immediately due and payable, and the
Borrowers shall without demand pay into the Holding Account an amount equal to
the aggregate face amount of all outstanding Letters of Credit; or (b) any other
Event of Default shall occur and be continuing, then, upon receipt by the Agent
of a request in writing from the Majority Lenders, the Agent shall take any of
the following actions so requested: (i) declare the Commitments terminated,
whereupon the Commitments shall terminate, (ii) declare the outstanding unpaid
principal balance of the Notes, the accrued and unpaid interest thereon and all
other Obligations to be forthwith due and payable, whereupon the Notes, all
accrued and unpaid interest thereon and all such Obligations shall immediately
become due and payable, in each case without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived, anything in
this Agreement or in the Notes to the contrary notwithstanding, and (iii) demand
that the Borrowers pay into the Holding Account an amount equal to the aggregate
face amount of all outstanding Letters of Credit. Upon the occurrence of any of
the events described in clause (a) of the preceding sentence, or upon the
occurrence of any of the events described in clause (b) of the preceding
sentence when so requested by the Majority Lenders, the Agent may exercise all
rights and remedies under any of the Loan Documents, and enforce all rights and
remedies under any applicable law.
Section 7.3 Offset. In addition to the remedies set forth in Section
------
7.2, upon the occurrence of any Event of Default and thereafter while the same
be continuing, each Borrower hereby irrevocably authorizes each Bank to set off
any Obligations owed to such Bank against all deposits and credits of that
Borrower with, and any and all claims of that Borrower against, such Bank. Such
right shall exist whether or not such Bank shall have made any demand hereunder
or under any other Loan Document, whether or not the Obligations, or any part
thereof, or deposits and credits held for the account of the Borrower is or are
matured or unmatured, and regardless of the existence or adequacy of any
collateral, guaranty or any other security, right or remedy available to such
Bank or the Banks. Each Bank agrees that, as promptly as is reasonably possible
after the exercise of any such setoff right, it shall notify Omega of its
exercise of such setoff right; provided, however, that the failure of such Bank
to provide such notice shall not affect the validity of the exercise of such
setoff rights. Nothing in this Agreement shall be deemed a waiver or
prohibition of or restriction on any Bank to all rights of banker's Lien, setoff
and counterclaim available pursuant to law.
- 71 -
ARTICLE VIII
-------------
THE AGENT
The following provisions shall govern the relationship of the Agent
with the Banks.
Section 8.1 Appointment and Authorization. Each Bank appoints and
-----------------------------
authorizes the Agent to take such action as agent on its behalf and to exercise
such respective powers under the Loan Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto. Neither the Agent nor any of its directors, officers or employees
shall be liable for any action taken or omitted to be taken by it under or in
connection with the Loan Documents, except for its own gross negligence or
willful misconduct. The Agent shall act as an independent contractor in
performing its obligations as Agent hereunder and nothing herein contained shall
be deemed to create any fiduciary relationship among or between the Agent, the
Borrowers or the Banks.
Section 8.2 Note Holders. The Agent may treat the payee of any Note
------------
as the holder thereof until written notice of transfer shall have been filed
with it, signed by such payee and in form satisfactory to the Agent.
Section 8.3 Consultation With Counsel. The Agent may consult with
-------------------------
legal counsel selected by it and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
Section 8.4 Loan Documents. The Agent shall not be under a duty to
--------------
examine or pass upon the validity, effectiveness, genuineness or value of any of
the Loan Documents or any other instrument or document furnished pursuant
thereto, and the Agent shall be entitled to assume that the same are valid,
effective and genuine and what they purport to be.
Section 8.5 U.S. Bank and Affiliates. With respect to its
------------------------
Commitments and the Loans made by it, U.S. Bank shall have the same rights and
powers under the Loan Documents as any other Bank and may exercise the same as
though it were not the Agent consistent with the terms thereof, and U.S. Bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrowers, Holdings and the Subsidiaries of
either as if it were not the Agent.
Section 8.6 Action by Agent. Except as may otherwise be expressly
---------------
stated in this Agreement, the Agent shall be entitled to use its discretion with
respect to exercising or refraining from exercising any rights which may be
vested in it by, or with respect to taking or refraining from taking any action
or actions which it may be able to take under or in respect of, the Loan
Documents. The Agent 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 Majority Lenders, and such instructions shall be binding
upon all holders of Notes; provided, however,
- 72 -
that the Agent shall not be required to take any action which exposes the Agent
to personal liability or which is contrary to the Loan Documents or applicable
law. The Agent shall incur no liability under or in respect of any of the Loan
Documents by acting upon any notice, consent, certificate, warranty or other
paper or instrument believed by it to be genuine or authentic or to be signed by
the proper party or parties and to be consistent with the terms of this
Agreement.
Section 8.7 Credit Analysis. Each Bank has made, and shall continue
---------------
to make, its own independent investigation or evaluation of the operations,
business, property and condition, financial and otherwise, of the Borrowers and
Holdings in connection with entering into this Agreement and has made its own
appraisal of the creditworthiness of the Borrowers and Holdings. Except as
explicitly provided herein, the Agent has no duty or responsibility, either
initially or on a continuing basis, to provide any Bank with any credit or other
information with respect to such operations, business, property, condition or
creditworthiness, whether such information comes into its possession on or
before the first Event of Default or at any time thereafter.
Section 8.8 Notices of Event of Default, Etc. In the event that the
--------------------------------
Agent shall have acquired actual knowledge of any Event of Default or Default,
the Agent shall promptly give notice thereof to the Banks.
Section 8.9 Indemnification. Each Bank agrees to indemnify the
---------------
Agent, as Agent (to the extent not reimbursed by the Borrowers), ratably
according to such Bank's share of the aggregate Revolving and Term Loan
Commitment Amounts from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on or
incurred by the Agent in any way relating to or arising out of the Loan
Documents or any action taken or omitted by the Agent under the Loan Documents,
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or willful
misconduct. No payment by any Bank under this Section shall relieve the
Borrowers of any of their obligations under this Agreement.
Section 8.10 Payments and Collections. All funds received by the
------------------------
Agent in respect of any payments made by any Borrower on the Term Notes shall be
distributed forthwith by the Agent among the Banks, in like currency and funds
as received, ratably according to each Bank's Term Loan Percentage. All funds
received by the Agent in respect of any payments made by any Borrower on the
Revolving Notes, Revolving Commitment Fees or Letter of Credit Fees shall be
distributed forthwith by the Agent among the Banks, in like currency and funds
as received, ratably according to each Bank's Revolving Percentage. After any
Event of Default has occurred, all funds received by the Agent, whether as
payments by a Borrower or as realization on collateral or on any guaranties,
shall (except as may otherwise be required by law) be distributed as provided in
the Intercreditor Agreement.
- 73 -
Section 8.11 Sharing of Payments. If any Bank shall receive and
-------------------
retain any payment, voluntary or involuntary, whether by setoff, application of
deposit balance or security, or otherwise, in respect of the Obligations in
excess of such Bank's share thereof as determined under this Agreement, then
such Bank shall purchase from the other Banks for cash and at face value and
without recourse, such participation in the Notes held by such other Banks as
shall be necessary to cause such excess payment to be shared ratably as
aforesaid with such other Banks; provided, that if such excess payment or part
thereof is thereafter recovered from such purchasing Bank, the related purchases
from the other Banks shall be rescinded ratably and the purchase price restored
as to the portion of such excess payment so recovered, but without interest.
Subject to the participation purchase obligation above, each Bank agrees to
exercise any and all rights of setoff, counterclaim or banker's lien first fully
against any Notes and participations therein held by such Bank, next to any
other Indebtedness of the Borrowers to such Bank arising under or pursuant to
this Agreement and to any participations held by such Bank in Indebtedness of
the Borrower arising under or pursuant to this Agreement, and only then to any
other Indebtedness of the Borrowers to such Bank.
Section 8.12 Advice to Banks. The Agent shall forward to the Banks
---------------
copies of all notices, financial reports and other communications received
hereunder from the Borrowers by it as Agent, excluding, however, notices,
reports and communications which by the terms hereof are to be furnished by the
Borrowers directly to each Bank.
Section 8.13 Resignation. If at any time U.S. Bank shall deem it
-----------
advisable, in its sole discretion, it may submit to each of the Banks and Omega
a written notification of its resignation as Agent under this Agreement, such
resignation to be effective upon the appointment of a successor Agent, but in no
event later than 30 days from the date of such notice. Upon submission of such
notice, the Majority Lenders may appoint a successor Agent.
ARTICLE IX
----------
MISCELLANEOUS
Section 9.1 Modifications. Notwithstanding any provisions to the
-------------
contrary herein, any term of this Agreement may be amended with the written
consent of the Borrowers; provided that no amendment, modification or waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure therefrom by any Borrower or other party thereto shall in any event be
effective unless the same shall be in writing and signed by the Majority
Lenders, or all of the Lenders as provided in Section 2.1 of the Intercreditor
Agreement, and then such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
(The Agent may enter into amendments or modifications of, and grant consents and
waivers to departure from the provisions of, those Loan Documents to which the
Banks are not signatories without the Banks joining therein, provided the Agent
--------
has first obtained the separate prior written consent to such amendment,
modification, consent or waiver from the Majority Lenders.) Notwithstanding the
forgoing, no such amendment, modification, waiver or consent shall:
- 74 -
9.1(a) Reduce the rate or extend the time of payment of interest
thereon, or reduce the amount of the principal thereof, or modify any of
the provisions of any Note with respect to the payment or repayment
thereof, without the consent of the holder of each Note so affected; or
9.1(b) Increase the amount or extend the time of any Commitment of
any Bank, without the consent of such Bank; or
9.1(c) Reduce the rate or extend the time of payment of any fee
payable to a Bank, without the consent of the Bank affected; or
9.1(d) Amend any provision of this Agreement relating to the Agent in
its capacity as Agent without the consent of the Agent; or
9.1(e) Amend any provision of this Agreement relating to the issuance
of Letters of Credit without the consent of the Agent.
Section 9.2 Expenses. Whether or not the transactions contemplated
--------
hereby are consummated, the Borrowers agree to reimburse the Agent upon demand
for all reasonable out-of-pocket expenses paid or incurred by the Agent
(including filing and recording costs and reasonable fees and expenses of ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ LLP, counsel to the Agent) in connection with the negotiation,
preparation, approval, review, execution, delivery, administration, amendment,
modification and interpretation of this Agreement and the other Loan Documents
and any commitment letters or term sheets relating thereto. The Borrowers shall
also reimburse the Agent and each Bank upon demand for all reasonable out-of-
pocket expenses (including reasonable expenses of legal counsel) paid or
incurred by the Agent or any Bank in connection with the collection and
enforcement of this Agreement and any other Loan Document. The obligations of
the Borrowers under this Section shall survive any termination of this
Agreement.
Section 9.3 Waivers, etc. No failure on the part of the Agent or the
------------
holder of a Note to exercise and no delay in exercising any power or right
hereunder or under any other Loan Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
The remedies herein and in the other Loan Documents provided are cumulative and
not exclusive of any remedies provided by law.
Section 9.4 Notices. Except when telephonic notice is expressly
-------
authorized by this Agreement, any notice or other communication to any party in
connection with this Agreement shall be in writing and shall be sent by manual
delivery, telegram, telex, facsimile transmission, overnight courier or United
States mail (postage prepaid) addressed to such party at the address specified
on the signature page hereof, or at such other address as such party shall have
specified to the other party hereto in writing. All periods of notice shall be
measured from the date of delivery thereof if manually delivered, from the date
of sending thereof if sent by telegram, telex or facsimile transmission, from
the first Business Day after the date of sending if
- 75 -
sent by overnight courier, or from three days after the date of mailing if
mailed; provided, however, that any notice to the Agent or any Bank under
Article II hereof shall be deemed to have been given only when received by the
Agent or such Bank.
Section 9.5 Taxes. The Borrowers agree to pay, and save the Agent
-----
and the Banks harmless from all liability for, any stamp or similar taxes which
may be payable with respect to the execution or delivery of this Agreement or
the issuance of the Notes, which obligation of the Borrowers shall survive the
termination of this Agreement.
Section 9.6 Successors and Assigns; Disposition of Loans;
---------------------------------------------
Transferees.
-----------
9.6(a) This Agreement shall be binding upon and inure to the benefit
of the Borrowers, the Banks, the Agent, all future holders of the Notes,
and their respective successors and assigns, except that the Borrowers may
not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Bank.
9.6(b) Any Bank may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or
more banks or other entities ("Participants") participating interests in
------------
any Revolving Loan, Term Loan or other Obligation owing to such Bank, any
Revolving Note or Term Note held by such Bank, and any Revolving Commitment
or Term Loan Commitment of such Bank, or any other interest of such Bank
hereunder. In the event of any such sale by a Bank of participating
interests to a Participant, (i) such Bank's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged,
(ii) such Bank shall remain solely responsible for the performance thereof,
(iii) such Bank shall remain the holder of any such Revolving Note or Term
Note for all purposes under this Agreement, (iv) the Borrowers and the
Agent shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement and
(v) the agreement pursuant to which such Participant acquires its
participating interest herein shall provide that such Bank shall retain the
sole right and responsibility to enforce the Obligations, including,
without limitation the right to consent or agree to any amendment,
modification, consent or waiver with respect to this Agreement or any other
Loan Document, provided that such agreement may provide that such Bank will
--------
not consent or agree to any such amendment, modification, consent or waiver
with respect to the matters set forth in Sections 9.1(a) - (c), or to any
release of all or substantially all of the collateral, without the prior
consent of such Participant. The Borrowers agree that if amounts
outstanding under this Agreement, the Revolving Notes, the Term Notes and
the Loan Documents are due and unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have, to the extent permitted by
applicable law, the right of setoff in respect of its participating
interest in amounts owing under this Agreement and any
- 76 -
Revolving Note, Term Note or other Loan Document to the same extent as if
the amount of its participating interest were owing directly to it as a
Bank under this Agreement or any Revolving Note, Term Note or other Loan
Document; provided, that such right of setoff shall be subject to the
--------
obligation of such Participant to share with the Banks, and the Banks agree
to share with such Participant, as provided in subsection 8.11. The
Borrowers also agree that each Participant shall be entitled to the
benefits of Sections 2.13, 2.21, 2.22, 2.23, 2.24, 2.25, 9.2 and 9.12 with
respect to its participation in the Revolving Commitments, Term Loan
Commitments, Revolving Loans and Term Loans; provided, that no Participant
--------
shall be entitled to receive any greater amount pursuant to such Sections
than the transferor Bank would have been entitled to receive in respect of
the amount of the participation transferred by such transferor Bank to such
Participant had no such transfer occurred.
9.6(c) Each Bank may, from time to time, with the consent of the
Agent and the Borrowers (none of which consents shall be unreasonably
withheld), assign to other lenders ("Assignees") part of the Indebtedness
---------
evidenced by any Revolving Note then held by that Bank, together with
equivalent proportions of its Revolving Commitment, and any Term Note then
held by that Bank and its Term Loan Commitment pursuant to written
agreements executed by such assigning Bank, such Assignee(s), the Borrower
and the Agent in substantially the form of Exhibit 9.6, which agreements
shall specify in each instance the portion of the Obligations evidenced by
the Revolving Notes and Term Notes which is to be assigned to each Assignee
and the portion of the Revolving Commitment and Term Loan Commitment of
such Bank to be assumed by each Assignee (each, an "Assignment Agreement");
provided, however, that the assigning Bank must pay to the Agent a
-------- -------
processing and recordation fee of $3,000 and that each Assignment must be
for an aggregate amount of $5,000,000 or more (or the entire amount of the
assigning Bank's Revolving Commitment and Term Loan, if lesser). Upon the
execution of each Assignment Agreement by the assigning Bank, the relevant
Assignee, the Borrowers and the Agent, payment to the assigning Bank by
such Assignee of the purchase price for the portion of the Obligations
being acquired by it and receipt by Omega of a copy of the relevant
Assignment Agreement, (x) such Assignee lender shall thereupon become a
"Bank" for all purposes of this Agreement with a Revolving Commitment and a
Term Loan Commitment in the amount set forth in such Assignment Agreement
and with all the rights, powers and obligations afforded a Bank under this
Agreement, (y) such assigning Bank shall have no further liability for
funding the portion of its Revolving Commitment assumed by such Assignee
and (z) the address for notices to such Assignee shall be as specified in
the Assignment Agreement executed by it. Concurrently with the execution
and delivery of each Assignment Agreement, the assigning Bank shall
surrender to the Agent the Revolving Note and Term Note a portion of which
is being assigned, and the Borrowers shall execute and deliver a Revolving
Note and a Term Note to the Assignee in the amount of its Revolving
Commitment and its Term Loan Commitment, respectively, and a new Revolving
Note and Term Note to the assigning Bank in the amount of its Revolving
Commitment and Term Loan Commitment, respectively, after giving effect to
the reduction occasioned by such assignment, all such Notes to constitute
"Revolving Notes" and "Term Notes" for all purposes of this Agreement and
of the other Loan Documents.
- 77 -
9.6(d) The Borrowers shall not be liable for any costs incurred by
the Banks in effecting any participation or assignment.
9.6(e) Each Bank may disclose to any Assignee or Participant and to
any prospective Assignee or Participant any and all financial information
in such Bank's possession concerning the Borrowers, Holdings or any
Subsidiaries or Omega which has been delivered to such Bank by or on behalf
of the Borrowers, Holdings or any Subsidiaries of Omega pursuant to this
Agreement or which has been delivered to such Bank by or on behalf of the
Borrowers, Holdings or any Subsidiaries of Omega in connection with such
Bank's credit evaluation of the Borrowers prior to entering into this
Agreement, provided that prior to disclosing such information, such Bank
--------
shall first obtain the agreement of such prospective Assignee or
Participant to comply with the provisions of Section 9.7.
Section 9.7 Confidentiality of Information. The Agent and each Bank
------------------------------
shall use reasonable efforts to assure that information about the Borrower and
its operations, affairs and financial condition, not generally disclosed to the
public or to trade and other creditors, which is furnished to the Agent or such
Bank pursuant to the provisions hereof is used only for the purposes of this
Agreement and any other relationship between any Bank and the Borrower and shall
not be divulged to any Person other than the Banks, their Affiliates and their
respective officers, directors, employees and agents, except: (a) to their
attorneys and accountants, (b) in connection with the enforcement of the rights
of the Banks hereunder and under the Notes, the Guaranties and the Security
Documents or otherwise in connection with applicable litigation, (c) in
connection with assignments and participations and the solicitation of
prospective assignees and participants referred to in the immediately preceding
Section, provided that the disclosing Bank complies with Subsection 9.6(e), and
(d) as may otherwise be required or requested by any regulatory authority
having jurisdiction over any Bank or by any applicable law, rule, regulation or
judicial process, in the opinion of such Bank's counsel, such opinion concerning
the making of such disclosure to be binding on the parties hereto. No Bank
shall incur any liability to the Borrower by reason of any disclosure expressly
permitted by this Section 9.7.
Section 9.8 Governing Law and Construction. THE VALIDITY,
------------------------------
CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT
TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE
UNITED STATES APPLICABLE TO NATIONAL BANKS. Whenever possible, each provision
of this Agreement and the other Loan Documents and any other statement,
instrument or transaction contemplated hereby or thereby or relating hereto or
thereto shall be interpreted in such manner as to be effective and valid under
such applicable law (except that certain aspects of the Security Documents shall
be governed by the law of the state in which the collateral subject to the
Security Document is located, or, in the case of the Collateral Assignments, by
federal law), but, if any provision of this Agreement, the other Loan Documents
or any other statement, instrument or transaction contemplated hereby or thereby
or relating hereto or thereto shall be held to be
- 78 -
prohibited or invalid under such applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement, the other Loan Documents or any other statement, instrument or
transaction contemplated hereby or thereby or relating hereto or thereto.
Section 9.9 Consent to Jurisdiction. AT THE OPTION OF THE AGENT,
-----------------------
THIS AGREEMENT AND THE OTHER BORROWER LOAN DOCUMENTS MAY BE ENFORCED IN ANY
FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN OR ▇▇▇▇▇▇ COUNTY,
MINNESOTA; AND EACH BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH
COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN
THE EVENT THAT A BORROWER COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE
UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE
RELATIONSHIP CREATED BY THIS AGREEMENT, THE AGENT AT ITS OPTION SHALL BE
ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES
ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE
LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.
Section 9.10 Waiver of Jury Trial. EACH OF THE BORROWERS , THE AGENT
--------------------
AND THE BANKS IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 9.11 Survival of Agreement. All representations, warranties,
---------------------
covenants and agreement made by the Borrowers herein or in the other Borrower
Loan Documents and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be deemed to have been relied upon by the Banks and shall survive
the making of the Loans by the Banks and the execution and delivery to the Banks
by the Borrowers of the Notes, regardless of any investigation made by or on
behalf of the Banks, and shall continue in full force and effect as long as any
Obligation is outstanding and unpaid and so long as the Commitments have not
been terminated; provided, however, that the obligations of the Borrowers under
Section 9.2, 9.5, 9.7 and 9.12 shall survive payment in full of the Obligations
and the termination of the Commitments.
Section 9.12 Indemnification. The Borrowers hereby agree to defend,
---------------
protect, indemnify and hold harmless the Agent and the Banks and their
respective Affiliates and the directors, officers, employees, attorneys and
agents of the Agent and the Banks and their respective Affiliates (each of the
foregoing being an "Indemnitee" and all of the foregoing being collectively the
"Indemnitees") from and against any and all claims, actions, damages,
liabilities, judgments, costs and expenses (including all reasonable fees and
disbursements of counsel which may be incurred in the investigation or defense
of any matter) imposed upon, incurred by or
- 79 -
asserted against any Indemnitee, whether direct, indirect or consequential and
whether based on any federal, state, local or foreign laws or regulations
(including securities laws, environmental laws, commercial laws and
regulations), under common law or on equitable cause, or on contract or
otherwise:
(a) by reason of, relating to or in connection with the execution,
delivery, performance or enforcement of any Loan Document, any commitments
relating thereto, the creation of a Lien in favor of the Agent or the Banks
under any Loan Document, or any transaction contemplated by any Loan
Document; or
(b) by reason of, relating to or in connection with any credit
extended or used under the Loan Documents or any act done or omitted by any
Person, or the exercise of any rights or remedies thereunder, including the
acquisition of any collateral by the Banks by way of foreclosure of the
Lien thereon, deed or ▇▇▇▇ of sale in lieu of such foreclosure or
otherwise;
provided, however, that the Borrowers shall not be liable to any Indemnitee for
any portion of such claims, damages, liabilities and expenses resulting from
such Indemnitee's gross negligence or willful misconduct. In the event this
indemnity is unenforceable as a matter of law as to a particular matter or
consequence referred to herein, it shall be enforceable to the full extent
permitted by law.
This indemnification applies, without limitation, to any act,
omission, event or circumstance existing or occurring on or prior to the later
of the Termination Date or the date of payment in full of the Obligations,
including specifically Obligations arising under clause (b) of this Section.
The indemnification provisions set forth above shall be in addition to any
liability the Borrowers may otherwise have. Without prejudice to the survival
of any other obligation of the Borrowers hereunder the indemnities and
obligations of the Borrowers contained in this Section shall survive the payment
in full of the other Obligations.
Section 9.13 Captions. The captions or headings herein and any table
--------
of contents hereto are for convenience only and in no way define, limit or
describe the scope or intent of any provision of this Agreement.
Section 9.14 Entire Agreement. This Agreement and the other Borrower
----------------
Loan Documents embody the entire agreement and understanding between the
Borrowers, the Agent and the Banks with respect to the subject matter hereof and
thereof. This Agreement supersedes all prior agreements and understandings
relating to the subject matter hereof. Nothing contained in this Agreement or
in any other Loan Document, expressed or implied, is intended to confer upon any
Persons other than the parties hereto any rights, remedies, obligations or
liabilities hereunder or thereunder.
- 80 -
Section 9.15 Counterparts. This Agreement may be executed in any
------------
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 9.16 Borrower Acknowledgments. The Borrowers hereby
------------------------
acknowledge that (a) they have been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents, (b)
neither the Agent nor any Bank has any fiduciary relationship to the Borrowers,
the relationship being solely that of debtor and creditor, (c) no joint venture
exists between the Borrowers and the Agent or any Bank, and (d) neither the
Agent nor any Bank undertakes any responsibility to the Borrowers to review or
inform the Borrowers of any matter in connection with any phase of the business
or operations of the Borrowers and the Borrowers shall rely entirely upon their
own judgment with respect to their business, and any review, inspection or
supervision of, or information supplied to, the Borrowers by the Agent or any
Bank is for the protection of the Banks and neither the Borrowers nor any third
party is entitled to rely thereon.
Section 9.17 Relationship Among Borrowers.
----------------------------
9.17 (a) JOINT AND SEVERAL LIABILITY. EACH BORROWER AGREES THAT IT
---------------------------
IS LIABLE, JOINTLY AND SEVERALLY WITH EACH OTHER BORROWER, FOR THE PAYMENT
OF ALL OBLIGATIONS OF THE BORROWERS UNDER THIS AGREEMENT, AND THAT THE
BANKS AND THE AGENT CAN ENFORCE SUCH OBLIGATIONS AGAINST ANY OR ALL
BORROWERS, IN THE BANKS' OR THE AGENT'S SOLE AND UNLIMITED DISCRETION.
9.17(b) Waivers of Defenses. The obligations of the Borrowers
-------------------
hereunder shall not be released, in whole or in part, by any action or
thing which might, but for this provision of this Agreement, be deemed a
legal or equitable discharge of a surety or guarantor, other than
irrevocable payment and performance in full of the Obligations (except for
contingent indemnity and other contingent Obligations not yet due and
payable) at a time after any obligation of the Banks hereunder to make the
Term Loans and Revolving Loans and of the Agent to issue Letters of Credit
shall have expired or been terminated and all outstanding Letters of Credit
shall have expired or the liability of the Agent thereon shall have
otherwise been discharged. No Borrower shall be exonerated with respect to
its liabilities under this Agreement by any act or thing except irrevocable
payment and performance of the Obligations, it being the purpose and intent
of this Agreement that the Obligations constitute the direct and primary
obligations of each Borrower and that the covenants, agreements and all
obligations of each Borrower hereunder be absolute, unconditional and
irrevocable. Each Borrower shall be and remain liable for any deficiency
remaining after foreclosure of any mortgage, deed of trust or security
agreement securing all or any part of the Obligations, whether or not the
liability of any other Person for such deficiency is discharged pursuant to
statute, judicial decision or otherwise.
- 81 -
9.17(c) Other Transactions. The Banks and the Agent are expressly
------------------
authorized to exchange, surrender or release with or without consideration
any or all collateral and security which may at any time be placed with it
by the Borrowers or by any other Person on behalf of the Borrowers, or to
forward or deliver any or all such collateral and security directly to the
Borrowers for collection and remittance or for credit. No invalidity,
irregularity or unenforceability of any security for the Obligations or
other recourse with respect thereto shall affect, impair or be a defense to
the Borrowers' obligations under this Agreement. The liabilities of each
Borrower hereunder shall not be affected or impaired by any failure, delay,
neglect or omission on the part of any Bank or the Agent to realize upon
any of the Obligations of any other Borrower to the Banks or the Agent, or
upon any collateral or security for any or all of the Obligations, nor by
the taking by any Bank or the Agent of (or the failure to take) any
guaranty or guaranties to secure the Obligations, nor by the taking by any
Bank or the Agent of (or the failure to take or the failure to perfect its
security interest in or other lien on) collateral or security of any kind.
No act or omission of any Bank or the Agent, whether or not such action or
failure to act varies or increases the risk of, or affects the rights or
remedies of a Borrower, shall affect or impair the obligations of the
Borrowers hereunder.
9.17(d) Actions Not Required. Each Borrower, to the extent permitted
--------------------
by applicable law, hereby waives any and all right to cause a marshaling of
the assets of any other Borrower or any other action by any court or other
governmental body with respect thereto or to cause any Bank or the Agent to
proceed against any security for the Obligations or any other recourse
which any Bank or the Agent may have with respect thereto and further
waives any and all requirements that any Bank or the Agent institute any
action or proceeding at law or in equity, or obtain any judgment, against
any other Borrower or any other Person, or with respect to any collateral
security for the Obligations, as a condition precedent to making demand on
or bringing an action or obtaining and/or enforcing a judgment against,
such Borrower under this Agreement.
9.17(e) No Subrogation. Notwithstanding any payment or payments made
--------------
by any Borrower hereunder or any setoff or application of funds of any
Borrower by any Bank or the Agent, such Borrower shall not be entitled to
be subrogated to any of the rights of any Bank or the Agent against any
other Borrower or any other guarantor or any collateral security or
guaranty or right of offset held by any Bank or the Agent for the payment
of the Obligations, nor shall such Borrower seek or be entitled to seek any
contribution or reimbursement from any other Borrower or any other
guarantor in respect of payments made by such Borrower hereunder, until all
amounts owing to the Banks and the Agent by the Borrowers on account of the
Obligations are irrevocably paid in full. If any amount shall be paid to a
Borrower on account of such subrogation rights at any time when all of the
Obligations shall not have been irrevocably paid in full, such amount shall
be held by that Borrower in trust for the Banks and the Agent, segregated
from other funds of that Borrower, and shall, forthwith upon receipt by the
Borrower, be turned over to the Agent in the exact form received by the
Borrower (duly indorsed by the Borrower
- 82 -
to the Agent, if required), to be applied against the Obligations, whether
matured or unmatured, in such order as the Agent may determine.
9.17(f) Application of Payments. Any and all payments upon the
-----------------------
Obligations made by the Borrowers or by any other Person, and/or the
proceeds of any or all collateral or security for any of the Obligations,
may be applied by the Banks on such items of the Obligations as the Banks
may elect.
9.17(g) Recovery of Payment. If any payment received by the Banks or
-------------------
the Agent and applied to the Obligations is subsequently set aside,
recovered, rescinded or required to be returned for any reason (including,
without limitation, the bankruptcy, insolvency or reorganization of a
Borrower or any other obligor), the Obligations to which such payment was
applied shall, to the extent permitted by applicable law, be deemed to have
continued in existence, notwithstanding such application, and each Borrower
shall be jointly and severally liable for such Obligations as fully as if
such application had never been made. References in this Agreement to
amounts "irrevocably paid" or to "irrevocable payment" refer to payments
that cannot be set aside, recovered, rescinded or required to be returned
for any reason.
9.17(h) Borrowers' Financial Condition. Each Borrower is familiar
------------------------------
with the financial condition of the other Borrowers, and each Borrower has
executed and delivered this Agreement based on that Borrower's own judgment
and not in reliance upon any statement or representation of the Bank. The
Banks and the Agent shall have no obligation to provide any Borrower with
any advice whatsoever or to inform any Borrower at any time of the Bank's
actions, evaluations or conclusions on the financial condition or any other
matter concerning the Borrowers.
9.17(i) Bankruptcy of the Borrowers. Each Borrower expressly agrees
---------------------------
that, to the extent permitted by applicable law, the liabilities and
obligations of that Borrower under this Agreement shall not in any way be
impaired or otherwise affected by the institution by or against any other
Borrower or any other Person of any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or any other similar
proceedings for relief under any bankruptcy law or similar law for the
relief of debtors and that any discharge of any of the Obligations pursuant
to any such bankruptcy or similar law or other law shall not diminish,
discharge or otherwise affect in any way the obligations of that Borrower
under this Agreement, and that upon the institution of any of the above
actions, such obligations shall be enforceable against that Borrower.
9.17(j) Limitation; Insolvency Laws. As used in this Section
---------------------------
9.17(j): (a) the term "Applicable Insolvency Laws" means the laws of the
United States of America or of any State, province, nation or other
governmental unit relating to bankruptcy, reorganization, arrangement,
adjustment of debts, relief of debtors, dissolution, insolvency, fraudulent
transfers or conveyances or other similar laws (including, without
limitation, 11 U. S. C. (S)547, (S)548, (S)550 and other "avoidance"
provisions of Title 11 of the United Stated
- 83 -
Code) as applicable in any proceeding in which the validity and/or
enforceability of this Agreement against Panther and any other party that
becomes a party hereto pursuant to Section 6.5, or any Specified Lien is in
issue; and (b) "Specified Lien" means any security interest, mortgage, lien
or encumbrance granted by Panther securing the Obligations, in whole or in
part. Notwithstanding any other provision of this Agreement, if, in any
proceeding, a court of competent jurisdiction determines that with respect
to Panther and any other party that becomes a party hereto pursuant to
Section 6.5, this Agreement or any Specified Lien would, but for the
operation of this Section, be subject to avoidance and/or recovery or be
unenforceable by reason of Applicable Insolvency Laws, this Agreement and
each such Specified Lien shall be valid and enforceable against Panther and
any other party that becomes a party hereto pursuant to Section 6.5, as
applicable, only to the maximum extent that would not cause this Agreement
or such Specified Lien to be subject to avoidance, recovery or
unenforceability. To the extent that any payment to, or realization by, the
Banks or the Agent on the Obligations exceeds the limitations of this
Section and is otherwise subject to avoidance and recovery in any such
proceeding, the amount subject to avoidance shall in all events be limited
to the amount by which such actual payment or realization exceeds such
limitation, and this Agreement as limited shall in all events remain in
full force and effect and be fully enforceable against Panther. This
Section is intended solely to reserve the rights of the Banks and the Agent
hereunder against Panther and any other party that becomes a party hereto
pursuant to Section 6.5, in such proceeding to the maximum extent permitted
by Applicable Insolvency Laws and neither the Borrowers, any guarantor of
the Obligations nor any other Person shall have any right, claim or defense
under this Section that would not otherwise be available under Applicable
Insolvency Laws in such proceeding.
Section 9.18. Waiver of Stock Restriction. Pursuant to Section 6 of
---------------------------
the Bylaws of Panther ("Section 6"), no share of Stock of Panther may be sold,
transferred or assigned without such Stock first being offered for sale to
Panther pursuant to the terms and conditions set forth in Section 6. Each of
Omega, as sole shareholder of the Stock of Panther, and Panther hereby
irrevocably waive any rights and privileges it may have pursuant to Section 6,
solely to the extent necessary to permit the pledge to the Agent, for the
benefit of the Banks, by Omega of such Stock to secure the Obligations and the
realization of the Agent's rights (pursuant to the terms and conditions of the
Pledge Agreement executed by Omega) of the Agent's and the Banks' rights in such
Stock upon the occurrence and during the continuation of an Event of Default.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
- 84 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
OMEGA CABINETS, LTD.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Title Vice President
---------------------
PANTHER TRANSPORT, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Title Vice President
---------------------
Address for Borrowers:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇)▇▇▇-▇▇▇▇
SIGNATURE PAGE TO CREDIT AGREEMENT
- 85 -
Commitment Amounts
------------------
Revolving Term A Term B
--------- ------ ------
$6,666,666.67 $11,833,333.33 $8,000,000.00
U.S. BANK NATIONAL
ASSOCIATION, formerly known as
First Bank National Association,
In its individual corporate
capacity and as Agent
By /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------
▇▇▇▇ ▇▇▇▇▇
Vice President
Address:
U.S. Bank Place
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇, MPFP 0702
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
$2,882,883.33 $5,117,117.92 $-0-
THE FIRST NATIONAL BANK OF
CHICAGO, as Documentation Agent
and as one of the Banks,
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Title: Officer
---------------------------
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
$4,666,666.67 $8,283,333.33 $7,000,000.00
SIGNATURE PAGE TO CREDIT AGREEMENT
- 86 -
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
By: /s/ M. ▇▇▇▇▇ ▇▇▇▇▇ III
------------------------------
Name: M. ▇▇▇▇▇ ▇▇▇▇▇ III
----------------------------
Title: Vice President
---------------------------
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
$4,333,333.33 $7,691,666.67 $10,000,000.00
BANKBOSTON N.A.,
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Title: Vice President
-----------------------------
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
SIGNATURE PAGE TO CREDIT AGREEMENT
- 87 -
$1,450,450.00 $2,574,548.75 $-0-
CIBC, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------
Title: Executive Director
-------------------------------
Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇ ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
SIGNATURE PAGE TO CREDIT AGREEMENT
- 88 -
