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Exhibit 10.10
EXECUTION COPY
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CREDIT AGREEMENT
DATED AS OF
JULY 8, 1999
AMONG
▇▇▇▇▇▇▇ & SYLVAN POOLS CORPORATION
AS BORROWER
THE LENDING INSTITUTIONS NAMED THEREIN
AS LENDERS
NATIONAL CITY BANK
AS A LENDER, THE LETTER OF CREDIT ISSUER,
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS AND TERMS...........................................................................1
1.1. Certain Defined Terms...........................................................................1
1.2. Computation of Time Periods....................................................................18
1.3. Accounting Terms...............................................................................18
1.4. Terms Generally................................................................................19
SECTION 2. AMOUNT AND TERMS OF LOANS......................................................................19
2.1. Commitments for Loans..........................................................................19
2.2. Minimum Borrowing Amounts, etc.; Pro Rata Borrowings...........................................19
2.3. Notice of Borrowing............................................................................20
2.4. Disbursement of Funds..........................................................................20
2.5. Notes; Loan Accounts...........................................................................21
2.6. Conversions....................................................................................21
2.7. Interest.......................................................................................22
2.8. Selection and Continuation of Interest Periods.................................................24
2.9. Increased Costs, Illegality, etc...............................................................25
2.10. Breakage Compensation..........................................................................26
2.11. Change of Lending Office; Replacement of Lenders...............................................27
SECTION 3. LETTERS OF CREDIT..............................................................................27
3.1. Letters of Credit..............................................................................27
3.2. Letter of Credit Requests: Notices of Issuance.................................................28
3.3. Agreement to Repay Letter of Credit Drawings...................................................29
3.4. Letter of Credit Participations................................................................29
3.5. Increased Costs................................................................................31
3.6. Guaranty of Letter of Credit Obligations of Other Letter of Credit Obligors...................31
SECTION 4. FEES; COMMITMENTS..............................................................................33
4.1. Fees...........................................................................................33
4.2. Voluntary Termination/Reduction of Commitments.................................................34
4.3. Mandatory Adjustments of Commitments, etc......................................................34
4.4. Extension of Maturity Date.....................................................................35
SECTION 5. PAYMENTS.......................................................................................35
5.1. Voluntary Prepayments..........................................................................35
5.2. Scheduled Repayments and Mandatory Prepayments.................................................36
5.3. Method and Place of Payment....................................................................37
5.4. Net Payments...................................................................................38
5.5. Late Charges...................................................................................39
SECTION 6. CONDITIONS PRECEDENT...........................................................................39
6.1. Conditions Precedent at Closing Date...........................................................39
6.2. Conditions Precedent to All Credit Events......................................................42
SECTION 7. REPRESENTATIONS AND WARRANTIES.................................................................43
7.1. Corporate Status, etc..........................................................................43
7.2. No Subsidiaries at Closing Date, etc...........................................................43
7.3. Corporate Power and Authority, etc.............................................................43
7.4. No Violation...................................................................................43
7.5. Governmental Approvals.........................................................................43
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7.6. Litigation.....................................................................................44
7.7. Use of Proceeds; Margin Regulations............................................................44
7.8. Financial Statements, etc......................................................................44
7.9. No Material Adverse Change.....................................................................45
7.10. Tax Returns and Payments.......................................................................45
7.11. Title to Properties, etc.......................................................................45
7.12. Lawful Operations, etc.........................................................................45
7.13. Environmental Matters..........................................................................45
7.14. Compliance with ERISA..........................................................................45
7.15. Intellectual Property, etc.....................................................................46
7.16. Investment Company.............................................................................46
7.17. Year 2000 Computer Matters.....................................................................46
7.18. Existing Indebtedness..........................................................................46
7.19. Burdensome Contracts; Labor Relations..........................................................46
7.20. Security Interests.............................................................................47
7.21. Split-Off Documents, etc.......................................................................47
7.22. True and Complete Disclosure...................................................................47
SECTION 8. AFFIRMATIVE COVENANTS..........................................................................48
8.1. Reporting Requirements.........................................................................48
8.2. Books, Records and Inspections.................................................................50
8.3. Insurance......................................................................................51
8.4. Payment of Taxes and Claims....................................................................51
8.5. Corporate Franchises...........................................................................51
8.6. Adequate Repair................................................................................51
8.7. Compliance with Statutes, etc..................................................................52
8.8. Compliance with Environmental Laws.............................................................52
8.9. Fiscal Years, Fiscal Quarters..................................................................53
8.10. Hedge Agreements, etc..........................................................................53
8.11. Certain Subsidiaries to Join in Subsidiary Guaranty............................................53
8.12. Additional Security; Further Assurances........................................................54
8.13. Casualty and Condemnation......................................................................56
8.14. Landlord/Mortgagee Waivers; Bailee Letters.....................................................56
8.15. Most Favored Covenant Status...................................................................56
8.16. Senior Debt....................................................................................57
SECTION 9. NEGATIVE COVENANTS.............................................................................57
9.1. Changes in Business............................................................................57
9.2. Consolidation, Merger, Acquisitions, Asset Sales, etc..........................................57
9.3. Liens..........................................................................................59
9.4. Indebtedness...................................................................................59
9.5. Advances, Investments, Loans and Guaranty Obligations..........................................60
9.6. Dividends and Other Restricted Payments........................................................61
9.7. Required Minimum Consolidated Net Worth........................................................62
9.8. Consolidated Total Debt/Consolidated EBITDA Ratio..............................................63
9.9. Interest Coverage Ratio........................................................................63
9.10. Fixed Charge Coverage Ratio....................................................................63
9.11. Consolidated Capital Expenditures..............................................................64
9.12. Limitation on Subsidiary Indebtedness..........................................................64
9.13. Limitation on Certain Restrictive Agreements...................................................64
9.14. Prepayments and Refinancings of Other Debt, etc................................................64
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9.15. Transactions with Affiliates...................................................................65
9.16. Modifications of Tax Sharing or Transition or Transition Agreements, etc.......................65
9.17. Plan Terminations, Minimum Funding, etc........................................................65
SECTION 10. EVENTS OF DEFAULT..............................................................................65
10.1. Events of Default..............................................................................65
10.2. Acceleration, etc..............................................................................67
10.3. Application of Liquidation Proceeds............................................................68
SECTION 11. THE ADMINISTRATIVE AGENT.......................................................................69
11.1. Appointment....................................................................................69
11.2. Delegation of Duties...........................................................................69
11.3. Exculpatory Provisions.........................................................................69
11.4. Reliance by Administrative Agent...............................................................69
11.5. Notice of Default..............................................................................70
11.6. Non-Reliance...................................................................................70
11.7. Indemnification................................................................................70
11.8. The Administrative Agent in Individual Capacity................................................71
11.9. Successor Administrative Agent.................................................................71
11.10. Other Agents...................................................................................71
SECTION 12. MISCELLANEOUS..................................................................................71
12.1. Payment of Expenses etc........................................................................71
12.2. Right of Setoff................................................................................72
12.3. Notices........................................................................................73
12.4. Benefit of Agreement...........................................................................73
12.5. No Waiver: Remedies Cumulative.................................................................75
12.6. Payments Pro Rata; Sharing of Setoffs, etc.....................................................75
12.7. Calculations: Computations.....................................................................76
12.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.........................76
12.9. Counterparts...................................................................................77
12.10. Effectiveness; Integration.....................................................................77
12.11. Headings Descriptive...........................................................................77
12.12. Amendment or Waiver............................................................................77
12.13. Survival of Indemnities........................................................................79
12.14. Domicile of Loans..............................................................................79
12.15. Confidentiality................................................................................79
12.16. Lender Register................................................................................80
12.17. Limitations on Liability of the Letter of Credit Issuers.......................................80
12.18. General Limitation of Liability................................................................80
12.19. No Duty........................................................................................80
12.20. Lenders and Agent Not Fiduciary to Borrower, etc...............................................81
12.21. Survival of Representations and Warranties.....................................................81
12.22. Severability...................................................................................81
12.23. Independence of Covenants......................................................................81
12.24. Interest Rate Limitation.......................................................................81
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ANNEX I - INFORMATION AS TO LENDERS
ANNEX II - DESCRIPTION OF EXISTING INDEBTEDNESS
ANNEX III - DESCRIPTION OF EXISTING LIENS
ANNEX IV - DESCRIPTION OF EXISTING ADVANCES, LOANS,
INVESTMENTS AND GUARANTEES
ANNEX V - DESCRIPTION OF LETTERS OF CREDIT DEEMED
ISSUED UNDER THE CREDIT AGREEMENT
EXHIBIT A - FORM OF NOTE
EXHIBIT B-1 - FORM OF NOTICE OF BORROWING
EXHIBIT B-2 - FORM OF NOTICE OF CONVERSION
EXHIBIT B-3 - FORM OF LETTER OF CREDIT REQUEST
EXHIBIT C-1 - FORM OF SUBSIDIARY GUARANTY
EXHIBIT C-2 - FORM OF SECURITY AGREEMENT
EXHIBIT C-3 - FORM OF PLEDGE AGREEMENT
EXHIBIT C-4 - FORM OF CLOSING DATE MORTGAGE
EXHIBIT C-5 - FORM OF LANDLORD WAIVER
EXHIBIT C-6 - FORM OF MORTGAGEE WAIVER
EXHIBIT C-7 - FORM OF BAILEE WAIVER
EXHIBIT D-1 - FORM OF OPINION OF SPECIAL COUNSEL TO THE BORROWER
EXHIBIT D-2 - FORM OF SOLVENCY CERTIFICATE
EXHIBIT E - FORM OF ASSIGNMENT AGREEMENT
EXHIBIT F - FORM OF SECTION 5.4(b)(ii) CERTIFICATE
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of July 8, 1999, among the following:
(i) ▇▇▇▇▇▇▇ & SYLVAN POOLS CORPORATION, an Ohio corporation
(herein, together with its successors and assigns, the "BORROWER");
(ii) the lending institutions signatory hereto (each a
"LENDER" and collectively, the "LENDERS"); and
(iii) NATIONAL CITY BANK, a national banking association, as a
Lender, the Letter of Credit Issuer, the administrative agent (the
"ADMINISTRATIVE AGENT") and as the collateral agent (the "COLLATERAL
AGENT"):
PRELIMINARY STATEMENTS:
(1) Unless otherwise defined herein, all capitalized terms used herein
and defined in section 1 are used herein as so defined.
(2) The Borrower has applied to the Lenders for credit facilities in
order to provide working capital, acquisition financing and funds for other
lawful purposes.
(3) Subject to and upon the terms and conditions set forth herein, the
Lenders are willing to make available to the Borrower the credit facilities
provided for herein.
NOW, THEREFORE, it is agreed:
SECTION 1. DEFINITIONS AND TERMS.
1.1. CERTAIN DEFINED TERMS. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
"ACQUISITION" shall mean and include (i) any acquisition on a going
concern basis (whether by purchase, lease or otherwise) of any facility and/or
business operated by any person who is not a Subsidiary of the Borrower, and
(ii) acquisitions of a majority of the outstanding equity or other similar
interests in any such person (whether by merger, stock purchase or otherwise).
"ADDITIONAL SECURITY DOCUMENT" shall have the meaning provided in
section 8.12(b).
"ADJUSTED EURODOLLAR RATE" shall mean with respect to each Interest
Period for a Eurodollar Loan, (A) either (i) the rate per annum for deposits in
Dollars of amounts in same day funds comparable to the outstanding principal
amount of the Eurodollar Loan for which an interest rate is then being
determined for a maturity most nearly comparable to such Interest Period which
appears on page 3750 of the Telerate Screen as of 11:00 A.M. (London time) on
the date which is two Business Days prior to the commencement of such Interest
Period, or (ii) if such a rate does not appear on such page, an interest rate
per annum equal to the average (rounded upward to the nearest whole multiple of
1/16 of 1% per annum, if such average is not such a multiple) of the rate per
annum at which deposits in Dollars are offered to each of the Reference Banks by
prime banks in the London interbank Eurodollar market for deposits of amounts in
Dollars in same day funds comparable to the outstanding principal amount of the
Eurodollar Loan for which an interest rate is then being determined with
maturities comparable to the Interest Period to be applicable to such Eurodollar
Loan, determined as of 11:00 A.M. (London time) on the date which is two
Business Days prior to the commencement of such Interest Period, in each case
divided (and rounded upward to the nearest whole multiple of 1/16th of 1%) by
(B) a percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves and without benefit of credits for
proration, exceptions or offsets which may be available from time to time)
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applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any successor category
of liabilities under Regulation D).
"ADMINISTRATIVE AGENT" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to section 11.9.
"AFFILIATE" shall mean, with respect to any person, any other person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such person, or, in the case of any Lender which is an
investment fund, the investment advisor thereof and any investment fund having
the same investment advisor. A person shall be deemed to control a second person
if such first person possesses, directly or indirectly, the power (i) to vote
10% or more of the securities having ordinary voting power for the election of
directors or managers of such second person or (ii) to direct or cause the
direction of the management and policies of such second person, whether through
the ownership of voting securities, by contract or otherwise. Notwithstanding
the foregoing, (x) a director, officer or employee of a person shall not, solely
by reason of such status, be considered an Affiliate of such person; and (y)
neither the Administrative Agent nor any Lender shall in any event be considered
an Affiliate of the Borrower or any other Credit Party or any of their
respective Subsidiaries.
"AGREEMENT" shall mean this Credit Agreement, as the same may be from
time to time further modified, amended and/or supplemented.
"APPLICABLE COMMITMENT FEE RATE" shall have the meaning provided in
section 5.1(a).
"APPLICABLE EURODOLLAR MARGIN" shall have the meaning provided in
section 2.7(g).
"APPLICABLE LENDING OFFICE" shall mean, with respect to each Lender,
(i) such Lender's Domestic Lending Office in the case of Borrowings consisting
of Prime Rate Loans and (ii) such Lender's Eurodollar Lending Office in the case
of Borrowings consisting of Eurodollar Loans.
"APPLICABLE PRIME RATE MARGIN" shall have the meaning provided in
section 2.7(g).
"ASSET SALE" shall mean the sale, transfer or other disposition
(including by means of Sale and Lease-Back Transactions, and by means of
mergers, consolidations, and liquidations of a corporation, partnership or
limited liability company of the interests therein of the Borrower or any
Subsidiary) by the Borrower or any Subsidiary to any person other than the
Borrower or any Subsidiary of any of their respective assets, PROVIDED that the
term Asset Sale specifically excludes (i) any sales, transfers or other
dispositions of inventory, or obsolete or excess furniture, fixtures, equipment
or other property, real or personal, tangible or intangible, in each case in the
ordinary course of business, and (ii) any Event of Loss.
"ASSIGNMENT AGREEMENT" shall mean an Assignment Agreement substantially
in the form of Exhibit E hereto.
"AUTHORIZED OFFICER" shall mean any officer or employee of the Borrower
designated as such in writing to the Administrative Agent by the Borrower.
"BANKRUPTCY CODE" shall have the meaning provided in section 10.1(h).
"BORROWER" shall have the meaning provided in the first paragraph of
this Agreement.
"BORROWING" shall mean the incurrence of Loans consisting of one Type
of Loan, by the Borrower from all of the Lenders on a PRO RATA basis on a given
date (or resulting from Conversions or Continuations on a given date), having in
the case of Eurodollar Loans the same Interest Period.
"BUSINESS DAY" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the city in which the Payment Office is located a legal holiday or a day on
which banking institutions are authorized by law or other governmental actions
to close and (ii) with respect
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to all notices and determinations in connection with, and payments of principal
and interest on, Eurodollar Loans, any day which is a Business Day described in
clause (i) and which is also a day for trading by and between banks in U.S.
dollar deposits in the interbank Eurodollar market.
"CAPITAL LEASE" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that person.
"CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities identified as "capital lease
obligations" (or any similar words) on a consolidated balance sheet of the
Borrower and its Subsidiaries prepared in accordance with GAAP.
"CASH EQUIVALENTS" shall mean any of the following:
(i) securities issued or directly and fully guaranteed or
insured by the United States of America or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the
United States of America is pledged in support thereof) having
maturities of not more than one year from the date of acquisition;
(ii) U.S. dollar denominated time deposits, certificates of
deposit and bankers' acceptances of (x) any Lender or (y) any bank
whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the
equivalent thereof (any such bank, an "APPROVED BANK"), in each case
with maturities of not more than three months from the date of
acquisition;
(iii) commercial paper issued by any Lender or Approved Bank
or by the parent company of any Lender or Approved Bank and commercial
paper issued by, or guaranteed by, any industrial or financial company
with a short- term commercial paper rating of at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each
thereof, from S&P or Moody's, as the case may be, and in each case
maturing within 90 days after the date of acquisition;
(iv) fully collateralized repurchase agreements entered into
with any Lender or Approved Bank having a term of not more than 30 days
and covering securities described in clause (i) above;
(v) investments in money market funds substantially all the
assets of which are comprised of securities of the types described in
clauses (i) through (iv) above;
(vi) investments in money market funds access to which is
provided as part of "sweep" accounts maintained with a Lender or an
Approved Bank;
(vii) investments in industrial development revenue bonds
which (A) "re-set" interest rates not less frequently than quarterly,
(B) are entitled to the benefit of a remarketing arrangement with an
established broker dealer, and (C) are supported by a direct pay letter
of credit covering principal and accrued interest which is issued by an
Approved Bank; and
(viii) investments in pooled funds or investment accounts
consisting of investments of the nature described in the foregoing
clause (vii).
"CASH PROCEEDS" shall mean, with respect to (i) any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as and
when so received) received by the Borrower and/or any Subsidiary from such Asset
Sale, and (ii) any Event of Loss, the aggregate cash payments, including all
insurance proceeds and proceeds of any award for condemnation or taking,
received in connection with such Event of Loss.
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"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 ET SEQ.
"CHANGE OF CONTROL" shall mean and include any of the following:
(i) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted the
Borrower's Board of Directors (together with any new directors (x)
whose election by the Borrower's Board of Directors was, or (y) whose
nomination for election by the Borrower's shareholders was (prior to
the date of the proxy or consent solicitation relating to such
nomination), approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the beginning of such
period or whose election or nomination for election was previously so
approved), shall cease for any reason to constitute a majority of the
directors then in office;
(ii) any person or group (as such term is defined in section
13(d)(3) of the 1934 Act), other than the Borrower, any trustee or
other fiduciary holding securities under an employee benefit plan of
the Borrower, or any members of the Current Holder Group, shall
acquire, directly or indirectly, beneficial ownership (within the
meaning of Rule 13d-3 and 13d-5 of the ▇▇▇▇ ▇▇▇) of more than 35%, on a
fully diluted basis, of the economic or voting interest in the
Borrower's capital stock;
(iii) the shareholders of the Borrower approve a merger or
consolidation of the Borrower with any other person, OTHER than a
merger or consolidation which would result in the voting securities of
the Borrower outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted or
exchanged for voting securities of the surviving or resulting entity)
more than 75% of the combined voting power of the voting securities of
the Borrower or such surviving or resulting entity outstanding after
such merger or consolidation;
(iv) the shareholders of the Borrower approve a plan of
complete liquidation of the Borrower or an agreement or agreements for
the sale or disposition by the Borrower of all or substantially all of
the Borrower's assets; and/or
(v) any "change in control" or any similar term as defined in
any of the indentures, credit agreements or other instruments governing
any Indebtedness of the Borrower or any of its Subsidiaries with an
outstanding principal amount, or providing for commitments to lend in
an outstanding principal amount, of at least $1,000,000 (or the
equivalent amount in any other currency).
As used in this definition, the term"CURRENT HOLDER GROUP" shall mean (i) Essef
Corporation, (ii) those persons who at the Closing Date are descendants of ▇▇▇▇
▇. ▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (or their family members), or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (or
his family members), (iii) those other persons who are officers and directors of
the Borrower at the later of the Effective Date or the Closing Date, (iv) the
spouses, heirs, legatees, descendants and blood relatives to the third degree of
consanguinity of any such person, (v) the executors and administrators of the
estate of any such person, and any court appointed guardian of any such person,
and (vi any trust, family partnership or similar investment entity for the
benefit of any such person referred to in the foregoing clauses (i), (ii), (iii)
and (iv) or any other persons (including for charitable purposes), so long as
one or more members of the Current Holder Group has the exclusive or a joint
right to control the voting and disposition of securities held by such trust,
family partnership or other investment entity.
"CLOSING DATE" shall mean the date, on or after the Effective Date,
upon which the conditions specified in section 6.1 are satisfied.
"CLOSING DATE CERTIFICATE" shall have the meaning provided in section
6.1(o). If subsequent to the Closing Date the Borrower shall complete any
Acquisition, it may deliver to the Lenders a substitute certificate which gives
pro forma effect to such Acquisition, for any periods prior to the date of the
Acquisition which are covered by the Closing Date Certificate, in the
computations included in the Closing Date Certificate, and such substitute
certificate shall immediately upon such delivery to the Lenders constitute the
Closing Date Certificate for purposes of this Agreement
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"CLOSING DATE MORTGAGE" shall have the meaning provided in section
6.1(c).
"CLOSING DATE MORTGAGED PROPERTY" shall have the meaning provided in
section 6.1(k).
"CLOSING DATE MORTGAGE POLICY" shall have the meaning provided in
section 6.1(k).
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the Effective
Date and any subsequent provisions of the Code, amendatory thereof, supplemental
thereto or substituted therefor.
"COLLATERAL" shall mean any collateral covered by any Security
Document.
"COLLATERAL AGENT" shall mean the Administrative Agent acting as
Collateral Agent for the Lenders pursuant to the Security Documents.
"COMMITMENT" shall mean, with respect to each Lender, the amount set
forth opposite such Lender's name in Annex I hereto as its "Commitment" as the
same may be reduced from time to time pursuant to section 4.2, 4.3 and/or 10.2
or adjusted from time to time as a result of assignments to or from such Lender
pursuant to section 12.4.
"COMMITMENT FEE" shall have the meaning provided in section 4.1(a).
"CONFIDENTIAL INFORMATION MEMORANDUM" shall have the meaning provided
in section 7.8(c).
"CONSOLIDATED AMORTIZATION EXPENSE" shall mean, for any period, all
amortization expenses of the Borrower and its Subsidiaries, all as determined
for the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including in all events amounts expended or capitalized under Capital Leases
and Synthetic Leases but excluding any amount representing capitalized interest)
by the Borrower and its Subsidiaries during that period that, in conformity with
GAAP, are or are required to be included in the property, plant or equipment
reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries.
"CONSOLIDATED DEPRECIATION EXPENSE" shall mean, for any period, all
depreciation expenses of the Borrower and its Subsidiaries, all as determined
for the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED EBIT" shall mean, for any period, Consolidated Net Income
for such period; PLUS (A) the sum of the amounts for such period included in
determining such Consolidated Net Income of (i) Consolidated Interest Expense,
(ii) Consolidated Income Tax Expense, (iii) amortization or write-off of
deferred financing costs and charges for prepayment penalties on prepayment of
Indebtedness, and (iv) extraordinary and other non-recurring non-cash losses and
charges; LESS (B) gains on sales of assets and other extraordinary gains and
other non-recurring [NON-CASH] gains; all as determined for the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP, EXCEPT that in
computing Consolidated Net Income for purposes of this definition, there shall
be excluded therefrom (x) the income (or loss) of any entity (other than
Subsidiaries of the Borrower) in which the Borrower or any of its Subsidiaries
has a joint or minority interest, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or any of its
Subsidiaries during such period, and (y) the income of any Subsidiary of the
Borrower to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary; and PROVIDED that, notwithstanding anything to the contrary
contained herein, the Borrower's Consolidated EBIT for any Testing Period shall
(x) include the appropriate financial items for any person or business unit
which has been acquired by the Borrower for any portion of such Testing Period
prior to the date of acquisition, and (y) exclude the
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appropriate financial items for any person or business unit which has been
disposed of by the Borrower, for the portion of such Testing Period prior to the
date of disposition.
"CONSOLIDATED EBITDA" shall mean, for any period, Consolidated EBIT for
such period; PLUS the sum (without duplication) of the amounts for such period
included in determining such Consolidated EBIT of (i) Consolidated Depreciation
Expense, and (ii) Consolidated Amortization Expense, all as determined for the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP;
PROVIDED that, notwithstanding anything to the contrary contained herein, the
Borrower's Consolidated EBITDA for any Testing Period shall (x) include the
appropriate financial items for any person or business unit which has been
acquired by the Borrower for any portion of such Testing Period prior to the
date of acquisition, and (y) exclude the appropriate financial items for any
person or business unit which has been disposed of by the Borrower, for the
portion of such Testing Period prior to the date of disposition.
"CONSOLIDATED INCOME TAX EXPENSE" shall mean, for any period, all
provisions for taxes based on the net income of the Borrower or any of its
Subsidiaries (including, without limitation, any additions to such taxes, and
any penalties and interest with respect thereto), all as determined for the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, total
interest expense (including that which is capitalized, that which is
attributable to Capital Leases and the pre-tax equivalent of dividends payable
on Redeemable Preferred Stock) of the Borrower and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of the Borrower
and its Subsidiaries including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and net costs
under Hedge Agreements, BUT EXCLUDING, HOWEVER, any amortization or write-off of
deferred financing costs and any charges for prepayment penalties on prepayment
of Indebtedness.
"CONSOLIDATED NET INCOME" shall mean for any period, the net income (or
loss), without deduction for minority interests, of the Borrower and its
Subsidiaries on a consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP.
"CONSOLIDATED NET WORTH" shall mean at any time for the determination
thereof all amounts which, in conformity with GAAP, would be included under the
caption "total stockholders' equity" (or any like caption) on a consolidated
balance sheet of the Borrower as at such date, PROVIDED that in no event shall
Consolidated Net Worth include any amounts in respect of Redeemable Stock.
"CONSOLIDATED TOTAL ASSETS" shall mean with respect to any person at
any date of determination the net book value of all assets which would appear on
a consolidated balance sheet of such person and its consolidated Subsidiaries at
such date which is prepared in accordance with GAAP.
"CONSOLIDATED TOTAL DEBT" shall mean the sum (without duplication) of
all Indebtedness of the Borrower and of each of its Subsidiaries, all as
determined on a consolidated basis, PROVIDED that if the aggregate outstanding
principal amount of the Subordinated TBD Note is $5,000,000 or less, then
Consolidated Total Debt shall be computed without regard to such aggregate
principal amount of the Subordinated TBD Note.
"CONTINUE", "CONTINUATION" and "CONTINUED" each refers to a
continuation of Eurodollar Loans for an additional Interest Period as provided
in section 2.8.
"CONVERT", "CONVERSION" and "CONVERTED" each refers to a conversion of
Loans of one Type into Loans of another Type, pursuant to section 2.6, 2.8(b),
2.9 or 5.2.
"CREDIT DOCUMENTS" shall mean this Agreement, the Notes, the
Subsidiary Guaranty, the Security Documents and any Letter of Credit Document.
"CREDIT EVENT" shall mean the making of any Loans and/or the issuance
of any Letter of Credit.
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"CREDIT PARTY" shall mean the Borrower and each of its Subsidiaries and
Affiliates which is a party to any Credit Document.
"DEFAULT" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"DEFAULTING LENDER" shall mean any Lender with, respect to which a
Lender Default is in effect.
"DESIGNATED HEDGE AGREEMENT" shall mean any Hedge Agreement to which
the Borrower or any of its Subsidiaries is a party which, pursuant to (x) a
written instrument signed by the Administrative Agent and (y) the following
provisions, has been designated as a Designated Hedge Agreement so that the
Borrower's or Subsidiaries's counterparty's credit exposure thereunder will be
entitled to share in the benefits of the Subsidiary Guaranty and the Security
Documents to the extent the Subsidiary Guaranty and such Security Documents
provide guarantees or security for creditors of the Borrower or any Subsidiary
under Designated Hedge Agreements:
(i) The Administrative Agent may, without the approval or
consent of the Lenders, designate a Hedge Agreement as a Designated
Hedge Agreement if the counterparty is a Lender or an Affiliate of a
Lender and the maximum credit exposure of such counterparty under such
Hedge Agreement to the Borrower and its Subsidiaries is reasonably
determined by the Administrative Agent, in accordance with its own
customary valuation practices, not to exceed $2,500,000.
(ii) If, however, the counterparty is not a Lender or an
Affiliate of a Lender, or such credit exposure is so determined by the
Administrative Agent to be greater than $2,500,000, the Administrative
Agent shall only designate the Hedge Agreement involving such
counterparty as a Designated Hedge Agreement if the Administrative
Agent is instructed to do so by the Required Lenders.
(iii) The Administrative Agent will not designate any Hedge
Agreement as a Designated Hedge Agreement without the approval, consent
or instructions of the Required Lenders, UNLESS the Administrative
Agent reasonably determines, at the time of such designation and after
giving effect thereto, in accordance with its own customary valuation
practices, that the maximum aggregate credit exposure to the Borrower
and its Subsidiaries of all counterparties under all Designated Hedge
Agreements is not more than $2,500,000.
(iv) The Administrative Agent may impose as a condition to any
designation of a Designated Hedge Agreement a requirement that the
counterparty enter into an intercreditor or similar agreement with the
Administrative Agent under which recoveries from the Borrower and its
Subsidiaries with respect to such Designated Hedge Agreement will be
shared in a manner consistent with the provisions of section 10.3
hereof.
"DOLLARS", "U.S. DOLLARS" and the sign "$" each means lawful money of
the United States.
"DOMESTIC LENDING OFFICE" shall mean, with respect to any Lender, the
office of such Lender specified as its Domestic Lending Office in Annex I hereto
or in the Assignment Agreement pursuant to which it became a Lender, or such
other office of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary organized under the
laws of the United States of America, any State thereof, the District of
Columbia, or any United States possession, the chief executive office and
principal place of business of which is located in, and which conducts the
majority of its business within, the United States of America and its
territories and possessions.
"EFFECTIVE DATE" shall have the meaning provided in section 12.10.
"ELIGIBLE TRANSFEREE" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in SEC
Regulation D), in each case which
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(i) is not disapproved in writing by the Borrower in a notice
given to a requesting Lender and the Administrative Agent, specifying
the reasons for such disapproval, within five Business Days following
the giving of notice to the Borrower of the identity of any proposed
transferee (any such disapproval by the Borrower must be reasonable),
PROVIDED that the Borrower shall not be entitled to exercise the
foregoing right of disapproval if and so long as any Event of Default
shall have occurred and be continuing; and
(ii) is not a direct competitor of the Borrower or engaged in
the same or similar principal lines of business as the Borrower and its
Subsidiaries considered as a whole, or is not an Affiliate of any such
competitor of the Borrower and its Subsidiaries.
"ENVIRONMENTAL CLAIMS" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, written claims,
liens, notices of non-compliance or violation, investigations or proceedings
relating in any way to any Environmental Law or any permit issued under any such
law (hereafter "CLAIMS"), including, without limitation, (i) any and all Claims
by governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (ii) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the storage, treatment or Release (as defined
in CERCLA) of any Hazardous Materials or arising from alleged injury or threat
of injury to health, safety or the environment.
"ENVIRONMENTAL LAW" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy and rule of common
law now or hereafter in effect and in each case as amended, and any binding and
enforceable judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment issued to or
rendered against the Borrower or any of its Subsidiaries relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. ss. 2601 ET SEQ.; the Clean Air Act, 42 U.S.C. ss. 7401 ET SEQ.; the Safe
Drinking Water Act, 42 U.S.C. ss. 3803 ET SEQ.; the Oil Pollution Act of 1990,
33 U.S.C. ss. 2701 ET SEQ.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. ss. 11001 ET SEQ., the Hazardous Material
Transportation Act, 49 U.S.C. ss. 1801 ET SEQ. AND the Occupational Safety and
Health Act, 29 U.S.C. ss. 651 ET SEQ. (to the extent it regulates occupational
exposure to Hazardous Materials); and any state and local or foreign
counterparts or equivalents, in each case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the
Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA AFFILIATE" shall mean each person (as defined in section 3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" (i) within the meaning of section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary of
the Borrower being or having been a general partner of such person.
"EURODOLLAR LENDING OFFICE" shall mean, with respect to any Lender, the
office of such Lender specified as its Eurodollar Lending Office in Annex I
hereto or in the Assignment Agreement pursuant to which it became a Lender, or
such other office or offices for Eurodollar Loans of such Lender as such Lender
may from time to time specify to the Borrower and the Administrative Agent.
"EURODOLLAR LOANS" shall mean each Loan bearing interest at the rates
provided in section 2.7(b).
"EVENT OF DEFAULT" shall have the meaning provided in section 10.1.
"EVENT OF LOSS" shall mean, with respect to any property, (i) the
actual or constructive total loss of such property or the use thereof, resulting
from destruction, damage beyond repair, or the rendition of such property
permanently unfit for normal use from any casualty or similar occurrence
whatsoever, (ii) the destruction or damage of a portion of such property from
any casualty or similar occurrence whatsoever under circumstances in which such
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14
damage cannot reasonably be expected to be repaired, or such property cannot
reasonably be expected to be restored to its condition immediately prior to such
destruction or damage, within 90 days after the occurrence of such destruction
or damage, (iii) the condemnation, confiscation or seizure of, or requisition of
title to or use of, any property, or (iv) in the case of any property located
upon a Leasehold, the termination or expiration of such Leasehold.
"EXISTING INDEBTEDNESS" shall have the meaning provided in section
7.18.
"EXISTING INDEBTEDNESS AGREEMENTS" shall have the meaning provided in
section 7.18.
"EXISTING LETTER OF CREDIT" shall have the meaning provided in section
3.1(d).
"FACING FEE" shall have the meaning provided in section 4.1(c).
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"FEES" shall mean all amounts payable pursuant to, or referred to in,
section 4.1.
"FINANCIAL PROJECTIONS" shall have the meaning provided in section
7.8(c).
"FIXED CHARGE COVERAGE RATIO" shall mean, for any Testing Period, the
ratio of
(i) Consolidated EBITDA for such Testing Period,
TO
(ii) the sum of (A) Consolidated Interest Expense, (B)
Consolidated Income Tax Expense, (C) Consolidated Capital Expenditures,
(D) scheduled or mandatory repayments, prepayments or redemptions of
the principal of Indebtedness and the stated or liquidation value of
Redeemable Stock (including required reductions in committed credit
facilities), (E) without duplication of any amount included under the
preceding clause (D), scheduled payments representing the principal
portion of Capitalized Leases and Synthetic Leases, and (F) the sum of
all Restricted Payments by the Borrower, if any, in each case on a
consolidated basis for the Borrower and its Subsidiaries for such
Testing Period;
PROVIDED that, notwithstanding anything to the contrary contained herein, the
Borrower's Fixed Charge Coverage Ratio for any Testing Period shall be computed
by giving effect to (x) the inclusion of the appropriate financial items for any
person or business unit which has been acquired by the Borrower for any portion
of such Testing Period prior to the date of acquisition, and (y) the exclusion
of the appropriate financial items for any person or business unit which has
been disposed of by the Borrower, for the portion of such Testing Period prior
to the date of disposition.
"FOREIGN SUBSIDIARY" shall mean any Subsidiary (i) which is not
incorporated in the United States and substantially all of whose assets and
properties are located, or substantially all of whose business is carried on,
outside the United States, or (ii) substantially all of whose assets consist of
Subsidiaries that are Foreign Subsidiaries as defined in clause (i) of this
definition.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of section 9,
including defined terms as used therein, are subject (to the extent provided
therein) to sections 1.3 and 12.7(a).
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"GUARANTY OBLIGATIONS" shall mean as to any person (without
duplication) any obligation of such person guaranteeing any Indebtedness
("PRIMARY INDEBTEDNESS") of any other person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such person, whether or not contingent, (a) to purchase any such
primary Indebtedness or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary Indebtedness or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary Indebtedness of the
ability of the primary obligor to make payment of such primary Indebtedness, or
(d) otherwise to assure or hold harmless the owner of such primary Indebtedness
against loss in respect thereof, PROVIDED, HOWEVER, that the term Guaranty
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary Indebtedness in respect of which such Guaranty Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such person is required to perform
thereunder) as determined by such person in good faith.
"HEDGE AGREEMENT" shall mean (i) any interest rate swap agreement, any
interest rate cap agreement, any interest rate collar agreement or other similar
agreement or arrangement designed to protect against fluctuations in interest
rates, and (ii) any currency swap agreement, forward currency purchase agreement
or similar agreement or arrangement designed to protect against fluctuations in
currency exchange rates.
"HAZARDOUS MATERIALS" shall mean (i) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (ii) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "restricted hazardous materials", "extremely hazardous
wastes", "restrictive hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants" or "pollutants", or words of similar meaning and regulatory
effect, under any applicable Environmental Law.
"INDEBTEDNESS" of any person shall mean without duplication:
(i) all indebtedness of such person for borrowed money;
(ii) all bonds, notes, debentures and similar debt securities
of such person;
(iii) the deferred purchase price of capital assets which in
accordance with GAAP would be shown on the liability side of the
balance sheet of such person;
(iv) the face amount of all letters of credit issued for the
account of such person and, without duplication, all drafts drawn
thereunder;
(v) all obligations, contingent or otherwise, of such person
in respect of bankers' acceptances;
(vi) all Indebtedness of a second person secured by any Lien
on any property owned by such first person, whether or not such
indebtedness has been assumed;
(vii) all Capitalized Lease Obligations of such person;
(viii) the present value, determined on the basis of the
implicit interest rate, of all basic rental obligations under all
Synthetic Leases of such person;
(ix) all obligations of such person to pay a specified
purchase price for goods or services whether or not delivered or
accepted, I.E., take-or-pay and similar obligations;
(x) all net obligations of such person under Hedge Agreements;
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(xi) the full outstanding balance of trade receivables, notes
or other instruments sold with full recourse (and the portion thereof
subject to potential recourse, if sold with limited recourse), other
than in any such case any thereof sold solely for purposes of
collection of delinquent accounts;
(xii) the stated value, or liquidation value if higher, of all
Redeemable Stock of such person; and
(xiii) all Guaranty Obligations of such person;
PROVIDED that (x) neither trade payables nor other similar accrued expenses, in
each case arising in the ordinary course of business, nor obligations in respect
of insurance policies or performance or surety bonds which themselves are not
guarantees of Indebtedness (nor drafts, acceptances or similar instruments
evidencing the same nor obligations in respect of letters of credit supporting
the payment of the same), shall constitute Indebtedness; and (y) the
Indebtedness of any person shall in any event include (without duplication) the
Indebtedness of any other entity (including any general partnership in which
such person is a general partner) to the extent such person is liable thereon as
a result of such person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide expressly
that such person is not liable thereon.
"INTEREST COVERAGE RATIO" shall mean, for any Testing Period, the ratio
of (i) Consolidated EBIT to (ii) Consolidated Interest Expense, in each case on
a consolidated basis for the Borrower and its Subsidiaries for such Testing
Period; PROVIDED that, notwithstanding anything to the contrary contained
herein:
(i) for purposes of computing the Interest Coverage Ratio for
any Testing Period which includes a fiscal quarter during which or
prior to which the Closing Date occurred, such ratio shall be computed
as if the Consolidated Total Debt outstanding immediately following the
Closing Date had been outstanding throughout such fiscal quarter and
had borne interest at the interest rate which is or would have been
applicable hereunder to Eurodollar Loans with an Interest Period of one
month incurred on the Closing Date; and
(ii) the Borrower's Interest Coverage Ratio for any Testing
Period shall be computed by giving effect to (x) the inclusion of the
appropriate financial items for any person or business unit which has
been acquired by the Borrower for any portion of such Testing Period
prior to the date of acquisition, including the pro forma interest
expense for such period on the Indebtedness incurred to finance such
acquisition, and (y) the exclusion of the appropriate financial items
for any person or business unit which has been disposed of by the
Borrower, for the portion of such Testing Period prior to the date of
disposition.
"INTEREST PERIOD" with respect to any Eurodollar Loan shall mean the
interest period applicable thereto, as determined pursuant to section 2.8.
"LEASEHOLDS" of any person means all the right, title and interest of
such person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"LENDER" shall have the meaning provided in the first paragraph of this
Agreement.
"LENDER DEFAULT" shall mean (i) the refusal (which has not been
retracted) of a Lender in violation of the requirements of this Agreement to
make available its portion of any incurrence of Loans or to fund its portion of
any unreimbursed payment under section 3.4(c) or (ii) a Lender having notified
the Administrative Agent and/or the Borrower that it does not intend to comply
with the obligations under section 2.1 and/or section 3.4(c), in the case of
either (i) or (ii) as a result of the appointment of a receiver or conservator
with respect to such Lender at the direction or request of any regulatory agency
or authority.
"LENDER REGISTER" shall have the meaning provided in section 12.16.
"LETTER OF CREDIT" shall have the meaning provided in section 3.1(a).
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"LETTER OF CREDIT DOCUMENTS" shall have the meaning specified in
section 3.2(a).
"LETTER OF CREDIT FEE" shall have the meaning provided in section
4.1(b).
"LETTER OF CREDIT ISSUER" shall mean (i) in respect of each Existing
Letter of Credit, the Lender that has issued same as of the Effective Date; and
(ii) in respect of any other Letter of Credit, (1) NCB, and/or (2) such other
Lender that is requested, and agrees, to so act by the Borrower, and is approved
by the Administrative Agent.
"LETTER OF CREDIT OBLIGOR" shall have the meaning provided in section
3.1(a).
"LETTER OF CREDIT OUTSTANDINGS" shall mean, at any time, the sum,
without duplication, of (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings.
"LETTER OF CREDIT REQUEST" shall have the meaning provided in section
3.2(a).
"LIEN" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement or any lease
in the nature thereof).
"LOAN" shall have the meaning provided in section 2.1.
"MARGIN STOCK" shall have the meaning provided in Regulation U.
"MATERIAL ADVERSE EFFECT" shall mean any or all of the following: (i)
any material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of, when used with reference
to the Borrower and/or any of its Subsidiaries, the Borrower and its
Subsidiaries, taken as a whole, or when used with reference to any other person,
such person and its Subsidiaries, taken as a whole, as the case may be; (ii) any
material adverse effect on the ability of the Borrower or any other Credit Party
to perform its obligations under the Credit Documents to which it is a party;
(iii) any material adverse effect on the ability of the Borrower and its
Subsidiaries, taken as a whole, to pay their liabilities and obligations as they
mature or become due; or (iv) any material adverse effect on the validity,
effectiveness or enforceability, as against any Credit Party, of any of the
Credit Documents to which it is a party.
"MATERIAL SUBSIDIARY" shall mean, at any time, with reference to any
person, any Subsidiary of such person (i) that has assets at such time
comprising 5% or more of the consolidated assets of such person and its
Subsidiaries, or (ii) whose operations in the current fiscal year are expected
to, or whose operations in the most recent fiscal year did (or would have if
such person had been a Subsidiary for such entire fiscal year), represent 5% or
more of the consolidated earnings before interest, taxes, depreciation and
amortization of such person and its Subsidiaries for such fiscal year.
"MATURITY DATE" shall mean the third anniversary of the Closing Date,
unless extended in accordance with section 4.4, or such earlier date on which
the Total Commitment is terminated.
"MERGER AGREEMENT" shall mean the Agreement and Plan of Merger the form
of which is attached as an Annex or Exhibit to the Registration Statement.
"MINIMUM BORROWING AMOUNT" shall mean (i) for Prime Rate Loans,
$100,000, with minimum increments thereafter of $100,000, and (ii) for
Eurodollar Loans, $500,000, with minimum increments thereafter of $100,000.
"MOODY'S" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. and its
successors.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan, as defined in
section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions or has within any of the
preceding three plan years made or accrued an obligation to make contributions.
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"MULTIPLE EMPLOYER PLAN" shall mean an employee benefit plan, other
than a Multiemployer Plan, to which the Borrower or any ERISA Affiliate, and one
or more employers other than the Borrower or an ERISA Affiliate, is making or
accruing an obligation to make contributions or, in the event that any such plan
has been terminated, to which the Borrower or an ERISA Affiliate made or accrued
an obligation to make contributions during any of the five plan years preceding
the date of termination of such plan.
"NCB" shall mean National City Bank, a national banking association,
together with its successors and assigns.
"NET CASH PROCEEDS" shall mean, with respect to (i) any Asset Sale, the
Cash Proceeds resulting therefrom net of (A) reasonable and customary expenses
of sale incurred in connection with such Asset Sale, and other reasonable and
customary fees and expenses incurred, and all state, and local taxes paid or
reasonably estimated to be payable by such person, as a consequence of such
Asset Sale and the payment of principal, premium and interest of Indebtedness
(other than the Obligations) secured by the asset which is the subject of the
Asset Sale and required to be, and which is, repaid under the terms thereof as a
result of such Asset Sale, (B) amounts of any distributions payable to holders
of minority interests in the relevant person or in the relevant property or
assets and (C) incremental federal, state and local income taxes paid or payable
as a result thereof; and (ii) any Event of Loss, the Cash Proceeds resulting
therefrom net of (A) reasonable and customary expenses incurred in connection
with such Event of Loss, and local taxes paid or reasonably estimated to be
payable by such person, as a consequence of such Event of Loss and the payment
of principal, premium and interest of Indebtedness (other than the Obligations)
secured by the asset which is the subject of the Event of Loss and required to
be, and which is, repaid under the terms thereof as a result of such Event of
Loss, (B) amounts of any distributions payable to holders of minority interests
in the relevant person or in the relevant property or assets and (C) incremental
federal, state and local income taxes paid or payable as a result thereof.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.
"NON-DEFAULTING LENDER" shall mean each Lender other than a Defaulting
Lender.
"NOTE" shall have the meaning provided in section 2.5(a).
"NOTICE OF BORROWING" shall have the meaning provided in section
2.3(a).
"NOTICE OF CONVERSION" shall have the meaning provided in section 2.6.
"NOTICE OFFICE" shall mean the office of the Administrative Agent at
National City Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention:
Agent Services Division (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇), or such other office,
located in a city in the United States Eastern Time Zone, as the Administrative
Agent may designate to the Borrower from time to time.
"OBLIGATIONS" shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing by the
Borrower or any other Credit Party to the Administrative Agent, the Collateral
Agent, any Lender or any Letter of Credit Issuer pursuant to the terms of this
Agreement or any other Credit Document.
"OPERATING LEASE" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is not accounted for as a Capital Lease on the balance
sheet of that person.
"PARTICIPANT" shall have the meaning provided in section 3.4(a).
"PAYMENT OFFICE" shall mean the office of the Administrative Agent at
National City Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention:
Agent Services (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇), or such other office, located in a
city in the United States Eastern Time Zone, as the Administrative Agent may
designate to the Borrower from time to time.
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"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to section 4002 of ERISA, or any successor thereto.
"PERCENTAGE" shall mean at any time for any Lender with a Commitment,
the percentage obtained by dividing such Lender's Commitment by the Total
Commitment, PROVIDED, that if the Total Commitment has been terminated, the
Percentage for each Lender shall be determined by dividing such Lender's
Commitment immediately prior to such termination by the Total Commitment
immediately prior to such termination.
"PERMITTED ACQUISITION" shall mean and include any Acquisition as to
which all of the following conditions are satisfied:
(i) such Acquisition involves a line or lines of business the
principal activities of which consist of the design, construction,
installation and/or renovation of "in ground" swimming pools, and spas,
in the United States, including ancillary sales and service activities
related to pools and spas, UNLESS the Required Lenders specifically
approve or consent to such Acquisition in writing;
(ii) such Acquisition is not actively opposed by the Board of
Directors (or similar governing body) of the selling person or the
person whose equity interests are to be acquired, UNLESS all of the
Lenders specifically approve or consent to such Acquisition in writing;
(iii) the aggregate cash consideration for such Acquisition
and all other Acquisitions completed during the preceding 12 months,
including the principal amount of any assumed Indebtedness and (without
duplication) any Indebtedness of any acquired person or persons, does
not exceed $10,000,000, UNLESS the Required Lenders specifically
approve or consent to such Acquisition in writing;
(iv) the Borrower would, after giving effect to such
Acquisition, on a PRO FORMA basis, be in compliance with the financial
covenants contained in sections 9.8, 9.9 and 9.10; and
(v) at least 14 days prior to the completion of such any such
transaction involving cash consideration, including the principal
amount of any assumed Indebtedness and (without duplication) any
Indebtedness of any acquired person or persons, in excess of
$2,500,000, the Borrower shall have delivered to the Lenders financial
statements for the person or business to be acquired for the most
recent fiscal year and any subsequent fiscal periods which have been
completed and for which financial statements are available;
PROVIDED, that the term Permitted Acquisition specifically excludes (x) any
loans, advances or minority investments otherwise permitted pursuant to section
9.5, and (y) expenditures (including the purchase of adjacent land) to expand
existing or future properties of the Borrower or any Subsidiary.
"PERMITTED LIENS" shall mean Liens permitted by section 9.3.
"PERSON" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"PLAN" shall mean any multiemployer or single-employer plan as defined
in section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute by) the Borrower or a Subsidiary of the
Borrower or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Borrower, or a Subsidiary of
the Borrower or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"PLEDGE AGREEMENT" shall mean a pledge agreement substantially in the
form attached as Exhibit C-3 hereto.
"PRIME RATE" shall mean, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum shall at
all times be equal to the greater of (i) the rate of interest established by NCB
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in Cleveland, Ohio, from time to time, as its prime rate, whether or not
publicly announced, which interest rate may or may not be the lowest rate
charged by it for commercial loans or other extensions of credit; and (ii) the
Federal Funds Effective Rate in effect from time to time PLUS 1/2 of 1% per
annum.
"PRIME RATE LOAN" shall mean each Loan bearing interest at the rate
provided in section 2.7(a).
"PROHIBITED TRANSACTION" shall mean a transaction with respect to a
Plan that is prohibited under section 4975 of the Code or section 406 of ERISA
and not exempt under section 4975 of the Code or section 408 of ERISA.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. ss. 6901 ET SEQ.
"REAL PROPERTY" of any person shall mean all of the right, title and
interest of such person in and to land, improvements and fixtures, including
Leaseholds.
"REDEEMABLE STOCK" shall mean with respect to any person any capital
stock or similar equity interests of such person that (i) is by its terms
subject to mandatory redemption, in whole or in part, pursuant to a sinking
fund, scheduled redemption or similar provisions, at any time prior to the
latest Maturity Date; or (ii) otherwise is required to be repurchased or retired
on a scheduled date or dates, upon the occurrence of any event or circumstance,
at the option of the holder or holders thereof, or otherwise, at any time prior
to the latest Maturity Date under this Agreement, other than any such repurchase
or retirement occasioned by a "change of control" or similar event.
"REFERENCE BANKS" shall mean (i) NCB and (ii) any other Lender or
Lenders selected as a Reference Bank by the Administrative Agent and the
Required Lenders, PROVIDED, that if any of such Reference Banks is no longer a
Lender, such other Lender or Lenders as may be selected by the Administrative
Agent acting on instructions from the Required Lenders.
"REGISTRATION STATEMENT" shall mean the Registration Statement on Form
S-4, Registration No. 333-78731, filed by Essef Corporation with the SEC, as
amended by Amendment No. 1 thereto filed with the SEC on June 23, 1999, and as
otherwise amended and in effect prior to the Effective Date.
"REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"REGULATION U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"REPORTABLE EVENT" shall mean an event described in section 4043 of
ERISA or the regulations thereunder with respect to a Plan, other than those
events as to which the notice requirement is waived under subsections .22, .23,
.25, .27, .28, .29, .30, .31, .32, .34, .35, .62, .63, .64, .65 or .67 of PBGC
Regulation section 4043.
"REQUIRED LENDERS" shall mean Non-Defaulting Lenders whose outstanding
Loans and Unutilized Commitments constitute at least 66+2/3% of the sum of the
total outstanding Loans and Unutilized Commitments of Non-Defaulting Lenders
(PROVIDED that, for purposes hereof, neither the Borrower, nor any of its
Affiliates, shall be included in (i) the Lenders holding such amount of the
Loans or having such amount of the Unutilized Commitments, or (ii) determining
the aggregate unpaid principal amount of the Loans or Unutilized Commitments).
"RESTRICTED PAYMENT" shall mean (i) any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Borrower or any Subsidiary, or (ii) any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such shares of capital stock of
the Borrower or any option, warrant or other right to acquire any such shares of
capital stock of the Borrower.
"SALE AND LEASE-BACK TRANSACTION" shall mean any arrangement with any
person providing for the leasing by the Borrower or any Subsidiary of the
Borrower of any property (except for temporary leases for a term, including
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any renewal thereof, of not more than one year and except for leases between the
Borrower and a Subsidiary or between Subsidiaries), which property has been or
is to be sold or transferred by the Borrower or such Subsidiary to such person.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., and its successors.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC REGULATION D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"SECTION 5.4(b)(ii) CERTIFICATE" shall have the meaning provided in
section 5.4(b)(ii).
"SECURITY AGREEMENT" shall have the meaning provided in section 6.1(c).
"SECURITY DOCUMENTS" shall mean the Security Agreement, the Pledge
Agreement, each Closing Date Mortgage, and each other document pursuant to which
any Lien or security interest is granted by any Credit Party to the Collateral
Agent as security for any of the Obligations.
"SPLIT-OFF TRANSACTIONS" shall mean and include the following
transactions, as more fully described in the Registration Statement, and any
other transactions described in the Registration Statement which are related
thereto: (i) the distribution of all outstanding shares of the capital stock of
the Borrower to the shareholders of Essef Corporation; (ii) the declaration and
payment by the Borrower to Essef Corporation of a cash dividend in the amount of
$17,000,000, which amount may be (x) increased by the amount by which the
Borrower's net assets on June 30, 1999 exceed $40,836,000, and (y) decreased by
the amount by which the merger tax benefits realized by Pentair as described in
the Registration Statement exceeds $4,200,000; (iii) the issuance by the
Borrower to Pentair of the Subordinated TBD Note; and (iv) the forgiveness by
Essef Corporation of any intercompany liabilities owed by the Borrower or any of
its Subsidiaries, and/or the treatment of any such liabilities as a contribution
to the capital of the Borrower.
"STANDARD PERMITTED LIENS" shall mean the following:
(i) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith and by appropriate proceedings for which
adequate reserves (in the good faith judgment of the management of the
Borrower) have been established;
(ii) Liens in respect of property or assets imposed by law
which were incurred in the ordinary course of business, such as
carriers', warehousemen's, materialmen's and mechanics' Liens and other
similar Liens arising in the ordinary course of business, which do not
in the aggregate materially detract from the value of such property or
assets or materially impair the use thereof in the operation of the
business of the Borrower or any Subsidiary;
(iii) Liens created by this Agreement or the other Credit
Documents;
(iv) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under section
10.1(g);
(v) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security; and mechanic's Liens, carrier's Liens, and other Liens to
secure the performance of tenders, statutory obligations, contract
bids, government contracts, performance and return-of-money bonds and
other similar obligations, incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed
money), whether pursuant to statutory requirements, common law or
consensual arrangements;
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(vi) Leases or subleases granted to others not interfering in
any material respect with the business of the Borrower or any of its
Subsidiaries and any interest or title of a lessor under any lease not
in violation of this Agreement;
(vii) easements, rights-of-way, zoning or other restrictions,
charges, encumbrances, defects in title, prior rights of other persons,
and obligations contained in similar instruments, in each case which do
not involve, and are not reasonably expected to involve at any future
time, either individually or in the aggregate, (A) a substantial and
prolonged interruption or disruption of the business activities of the
Borrower and its Subsidiaries considered as an entirety, or (B) a
Material Adverse Effect;
(viii) Liens arising from the rights of lessors under leases
(including financing statements regarding property subject to lease)
not in violation of the requirements of this Agreement, PROVIDED that
such Liens are only in respect of the property subject to, and secure
only, the respective lease (and any other lease with the same or an
affiliated lessor); and
(ix) rights of consignors of goods, whether or not perfected
by the filing of a financing statement under the UCC.
"STATED AMOUNT" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions or other
requirements for drawing could then be met).
"SUBSIDIARY" of any person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.
"SUBSIDIARY GUARANTOR" shall mean any Subsidiary which is a party to
the Subsidiary Guaranty.
"SUBSIDIARY GUARANTY" shall mean a guaranty substantially in the form
attached as Exhibit C-1 hereto.
"SUBORDINATED INDEBTEDNESS" shall mean (i) the Subordinated TBD Note,
and (ii) any other Indebtedness which has been subordinated to the Obligations
in such manner and to such extent as the Administrative Agent (acting on
instructions from the Required Lenders) may require.
"SUBORDINATED TBD NOTE" shall mean the senior subordinated promissory
note of the Borrower issued pursuant to Section 4.b of the Tax Sharing
Agreement, which promissory note shall contain the terms set forth in Exhibit A
to the Tax Sharing Agreement and otherwise shall contain the subordination
provisions that have been determined by all of the Lenders to be acceptable as
contemplated by section 6.1(m), and such term shall include any promissory
notes, similarly subordinated, which are issued in exchange therefor or
replacement thereof. The Subordinated TBD Note shall be considered outstanding
on the Closing Date, even though it may not be issued until a later date as
provided in the Tax Sharing Agreement.
"SYNTHETIC LEASE" shall mean any lease (i) which is accounted for by
the lessee as an Operating Lease, and (ii) under which the lessee is intended to
be the "owner" of the leased property for Federal income tax purposes.
"TAX SHARING AGREEMENT" shall mean the Tax Sharing Agreement the form
of which is attached as an Annex or Exhibit to the Registration Statement.
"TESTING PERIOD" shall mean for any determination a single period
consisting of the four consecutive fiscal quarters of the Borrower then last
ended (whether or not such quarters are all within the same fiscal year), EXCEPT
that if a particular provision of this Agreement indicates that a Testing Period
shall be of a different specified
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duration, such Testing Period shall consist of the particular fiscal quarter or
quarters then last ended which are so indicated in such provision.
"TITLE COMPANY" shall have the meaning provided in section 6.1(k).
"TOTAL COMMITMENT" shall mean the sum of the Commitments of the
Lenders.
"TRANSITION AGREEMENT" shall mean the Transition Agreement the form of
which is attached as an Annex or Exhibit to the Registration Statement.
"TYPE" shall mean any type of Loan determined with respect to the
interest option applicable thereto, I.E., a Prime Rate Loan or a Eurodollar
Loan.
"UCC" shall mean the Uniform Commercial Code.
"UNCOLLATERALIZED PROPERTY" shall have the meaning provided in section
8.12(a).
"UNFUNDED CURRENT LIABILITY" of any Plan shall mean the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"UNITED STATES" and "U.S." each means United States of America.
"UNPAID DRAWING" shall have the meaning provided in section 3.3(a).
"UNUTILIZED COMMITMENT" for any Lender at any time shall mean the
excess of (i) such Lender's Commitment at such time, OVER (ii) the sum of (x)
the principal amount of Loans made by such Lender and outstanding at such time
and (y) such Lender's Percentage of Letter of Credit Outstandings at such time.
"UNUTILIZED TOTAL COMMITMENT" shall mean, at any time, the excess of
(i) the Total Commitment at such time, OVER (ii) the sum of (x) the aggregate
principal amount of all Loans then outstanding plus (y) the aggregate Letter of
Credit Outstandings at such time.
"WHOLLY-OWNED SUBSIDIARY" shall mean each Subsidiary of the Borrower at
least 95% of whose capital stock, equity interests and partnership interests,
other than director's qualifying shares or similar interests, are owned directly
or indirectly by the Borrower.
"WRITTEN", "WRITTEN" or "IN WRITING" shall mean any form of written
communication or a communication by means of telex, facsimile transmission,
telegraph or cable.
1.2. COMPUTATION OF TIME PERIODS. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each means "to
but excluding".
1.3. ACCOUNTING TERMS. Except as otherwise specifically provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; PROVIDED that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision of section 8 or 9 hereof to eliminate the effect of
any change occurring after the Effective Date in GAAP or in the application
thereof to such provision (or if the Administrative Agent notifies the Borrower
that the Required Lenders request an amendment to any such provision hereof for
such purposes), regardless of whether any such notice is given before or after
such change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance with the requirements of this
Agreement.
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1.4. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any person shall be construed to include such person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to sections, Annexes
and Exhibits shall be construed to refer to sections of, and Annexes and
Exhibits to, this Agreement, and (e) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all real
property, tangible and intangible assets and properties, including cash,
securities, accounts and contract rights, and interests in any of the foregoing.
SECTION 2. AMOUNT AND TERMS OF LOANS.
2.1. COMMITMENTS FOR LOANS. Subject to and upon the terms and
conditions herein set forth, each Lender severally agrees to make a loan or
loans (each a "LOAN" and, collectively, the "LOANS") to the Borrower, which
Loans shall be drawn in accordance with the following provisions:
(a) Loans may be incurred by the Borrower at any time and from
time to time on and after the Closing Date and prior to the Maturity
Date;
(b) except as otherwise provided, Loans may, at the option of
the Borrower, be incurred and maintained as, or Converted into, Loans
which are Prime Rate Loans or Eurodollar Loans, in each case
denominated in Dollars, PROVIDED that all Loans made as part of the
same Borrowing shall, unless otherwise specifically provided herein,
consist of Loans of the same Type;
(c) Loans may be repaid or prepaid and reborrowed in
accordance with the provisions hereof; and
(d) Loans made by any Lender shall not exceed for such Lender
at any time outstanding that aggregate principal amount which, when
added to the product at such time of (i) such Lender's Percentage,
TIMES (ii) the aggregate Letter of Credit Outstandings, equals the
Commitment of such Lender at such time.
In addition, and notwithstanding the foregoing, the maximum aggregate principal
amount of Loans which may be incurred and outstanding at any time, when taken
together with all other Consolidated Total Debt at the time outstanding, may not
exceed the maximum aggregate principal amount of Consolidated Total Debt which
could be outstanding without violating the requirements of section 9.8, based on
the most recent computation of Consolidated EBITDA contained in the Closing Date
Certificate or a certificate delivered pursuant to section 8.1(c).
2.2. MINIMUM BORROWING AMOUNTS, ETC.; PRO RATA BORROWINGS. (a) The
aggregate principal amount of each Borrowing by the Borrower shall not be less
than the Minimum Borrowing Amount. More than one Borrowing may be incurred by
the Borrower on any day, PROVIDED that (i) if there are two or more Borrowings
on a single day by the Borrower which consist of Eurodollar Loans, each such
Borrowing shall have a different initial Interest Period, and (ii) at no time
shall there be more than 19 Borrowings of Eurodollar Loans outstanding
hereunder.
(b) All Borrowings shall be made by the Lenders PRO RATA on the basis
of their respective Commitments. It is understood that no Lender shall be
responsible for any default by any other Lender in its obligation to make Loans
hereunder and that each Lender shall be obligated to make the Loans provided to
be made by it hereunder, regardless of the failure of any other Lender to
fulfill its Commitment hereunder.
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2.3. NOTICE OF BORROWING. (a) Whenever the Borrower desires to incur
Loans, it shall give the Administrative Agent at its Notice Office,
(A) BORROWINGS OF EURODOLLAR LOANS: prior to 12:00 noon (local
time at its Notice Office), at least three Business Days' prior written
or telephonic notice (in the case of telephonic notice, promptly
confirmed in writing if so requested by the Administrative Agent) of
each Borrowing of Eurodollar Loans to be made hereunder, or
(B) BORROWINGS OF PRIME RATE LOANS: prior to 12:00 noon (local
time at its Notice Office) on the proposed date thereof written or
telephonic notice (in the case of telephonic notice, promptly confirmed
in writing if so requested by the Administrative Agent) of each
Borrowing of Prime Rate Loans to be made hereunder.
Each such notice (each such notice, a "NOTICE OF BORROWING") shall (if requested
by the Administrative Agent to be confirmed in writing), be substantially in the
form of Exhibit B-1, and in any event shall be irrevocable and shall specify:
(i) the aggregate principal amount of the Loans to be made pursuant to such
Borrowing; (ii) the date of the Borrowing (which shall be a Business Day); (iii)
whether the Borrowing shall consist of Prime Rate Loans or Eurodollar Loans; and
(iv) if the requested Borrowing consists of Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Administrative Agent shall
promptly give each Lender written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing, of such Lender's proportionate
share thereof and of the other matters covered by the Notice of Borrowing
relating thereto.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent may act prior to receipt of written confirmation without
liability upon the basis of such telephonic notice believed by the
Administrative Agent in good faith to be from an Authorized Officer of the
Borrower entitled to give telephonic notices under this Agreement on behalf of
the Borrower. In each such case, the Administrative Agent's record of the terms
of such telephonic notice shall be conclusive absent manifest error.
2.4. DISBURSEMENT OF FUNDS. (a) No later than 2:00 P.M. (local time at
the Payment Office) on the date specified in each Notice of Borrowing, each
Lender will make available its PRO RATA share, if any, of each Borrowing
requested to be made on such date in the manner provided below. All amounts
shall be made available to the Administrative Agent in U.S. dollars and
immediately available funds at the Payment Office and the Administrative Agent
promptly will make available to the Borrower by depositing to its account at the
Payment Office the aggregate of the amounts so made available in the type of
funds received.
(b) Unless the Administrative Agent shall have been notified by any
Lender prior to the date of Borrowing that such Lender does not intend to make
available to the Administrative Agent its portion of the Borrowing or Borrowings
to be made on such date, the Administrative Agent may assume that such Lender
has made such amount available to the Administrative Agent on such date of
Borrowing, and the Administrative Agent, in reliance upon such assumption, may
(in its sole discretion and without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Lender and the Administrative
Agent has made available same to the Borrower, the Administrative Agent shall be
entitled to recover such corresponding amount from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (x) if paid by such Lender, the overnight Federal Funds
Effective Rate or (y) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with section 2.7, for the respective Loans
(but without any requirement to pay any amounts in respect thereof pursuant to
section 2.10).
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(c) Nothing herein and no subsequent termination of the Commitments
pursuant to section 4.2 or 4.3 shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment hereunder and in existence from time to
time or to prejudice any rights which the Borrower may have against any Lender
as a result of any default by such Lender hereunder.
2.5. NOTES; LOAN ACCOUNTS. (A) FORMS OF NOTES. The Borrower's
obligation to pay the principal of, and interest on, the Loans made to it by
each Lender shall be evidenced by a promissory note of the Borrower
substantially in the form of Exhibit A with blanks appropriately completed in
conformity herewith (each a "NOTE" and, collectively, the "NOTES").
(b) TERMS OF NOTES. The Note issued by the Borrower to a Lender shall:
(i) be executed by the Borrower; (ii) be payable to the order of such Lender and
be dated on or prior to the Closing Date; (iii) be in a principal amount equal
to such Lenders Commitment; (iv) be payable in the principal amount of the Loans
evidenced thereby; (v) mature on the Maturity Date; (vi) bear interest as
provided in section 2.7 in respect of the Prime Rate Loans or Eurodollar Loans,
as the case may be, evidenced thereby; (vii) be subject to mandatory prepayment
as provided in section 5.2; and (viii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(c) LOAN ACCOUNTS OF LENDERS. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(d) LOAN ACCOUNTS OF ADMINISTRATIVE AGENT. The Administrative Agent
shall maintain accounts in which it shall record (i) the amount of each Loan
made hereunder, the Type thereof, and the Interest Period and applicable
interest rate if such Loan is a Eurodollar Loan, (ii) the amount of any
principal due and payable or to become due and payable from the Borrower to each
Lender hereunder, and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(e) EFFECT OF LOAN ACCOUNTS, ETC. The entries made in the accounts
maintained pursuant to section 2.5(c) and (d) shall be PRIMA FACIE evidence of
the existence and amounts of the obligations recorded therein; PROVIDED, that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligation of the
Borrower to repay or prepay the Loans in accordance with the terms of this
Agreement.
(f) ENDORSEMENTS OF AMOUNTS ON NOTES PRIOR TO TRANSFER. Each Lender
will, prior to any transfer of any of the Notes issued to it by the Borrower,
endorse on the reverse side thereof or the grid attached thereto the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in any such notation shall not affect the Borrower's obligations in
respect of such Loans.
2.6. CONVERSIONS. The Borrower shall have the option to Convert on any
Business Day all or a portion at least equal to the applicable Minimum Borrowing
Amount of the outstanding principal amount of its Loans of one Type into a
Borrowing or Borrowings of another Type of Loans which can be made hereunder,
PROVIDED that:
(a) no partial Conversion of a Borrowing of Eurodollar Loans
shall reduce the outstanding principal amount of the Eurodollar Loans
made pursuant to such Borrowing to less than the Minimum Borrowing
Amount applicable thereto;
(b) any Conversion of Eurodollar Loans into Prime Rate Loans
shall be made on, and only on, the last day of an Interest Period for
such Eurodollar Loans;
(c) Prime Rate Loans may only be Converted into Eurodollar
Loans if no Default under section 10.1(a) or Event of Default is in
existence on the date of the Conversion unless the Required Lenders
otherwise agree;
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(d) Prime Rate Loans may not be Converted into Eurodollar
Loans during any period when such Conversion is not permitted under
section 2.9; and
(e) Borrowings of Eurodollar Loans resulting from this section
2.6 shall conform to the requirements of section 2.2.
Each such Conversion shall be effected by the Borrower giving the Administrative
Agent at its Notice Office, prior to 12:00 noon (local time at such Notice
Office), at least three Business Days', in the case of Conversion into a
Eurodollar Loans (or prior to 12:00 noon (local time at such Notice Office) same
Business Day's, in the case of a Conversion into Prime Rate Loans), prior
written notice (or telephonic notice promptly confirmed in writing if so
requested by the Administrative Agent) (each a "NOTICE OF CONVERSION"),
substantially in the form of Exhibit B-2, specifying the Loans to be so
converted, the Type of Loans to be converted into and, if to be converted into a
Borrowing of Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Lender prompt notice of any
such proposed Conversion affecting any of its Loans. For the avoidance of doubt,
the prepayment or repayment of any Loans out of the proceeds of other Loans by
the Borrower is not considered a Conversion of Loans into other Loans.
2.7. INTEREST. (a) INTEREST ON PRIME RATE LOANS. During such periods as
a Loan is a Prime Rate Loan, it shall bear interest at a fluctuating rate per
annum which shall at all times be equal to the Prime Rate then in effect PLUS
the Applicable Prime Rate Margin for such Loan.
(b) INTEREST ON EURODOLLAR LOANS. During such periods as a Loan is a
Eurodollar Loan, it shall bear interest at a rate per annum which shall at all
times during an Interest Period therefor be the relevant Adjusted Eurodollar
Rate for such Eurodollar Loan for such Interest Period PLUS the Applicable
Eurodollar Margin for such Loan.
(c) DEFAULT INTEREST. Notwithstanding the above provisions, if a
Default under section 10.1(a) or Event of Default is in existence, all
outstanding amounts of principal in respect of each Loan shall bear interest,
payable on demand, at a rate per annum equal to 2% per annum above the interest
rate which is or would be applicable from time to time pursuant to section
2.7(a). If any amount (other than the principal of the Loans) payable by the
Borrower under the Credit Documents is not paid when due, such amount shall bear
interest, payable on demand, at a rate per annum equal to 2% per annum above the
interest rate which is or would be applicable from time to time pursuant to
section 2.7(a).
(d) ACCRUAL AND PAYMENT OF INTEREST. Interest shall accrue from and
including the date of any Borrowing to but excluding the date of any prepayment
or repayment thereof and shall be payable:
(i) in respect of each Prime Rate Loan, quarterly in arrears
on the last Business Day of each March, June, September and December;
and
(ii) in respect of each Eurodollar Loan, on the last day of
each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on the dates which are successively
three months after the commencement of such Interest Period; and
(iii) on any repayment, prepayment or Conversion (on the
amount repaid, prepaid or Converted), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) COMPUTATIONS OF INTEREST. All computations of interest hereunder
shall be made in accordance with section 12.7(b).
(f) INFORMATION AS TO INTEREST RATES. The Administrative Agent upon
determining the interest rate for any Borrowing shall promptly notify the
Borrower (on behalf of any applicable Borrower) and the Lenders thereof. Each
Reference Bank agrees to furnish the Administrative Agent timely information for
the purpose of determining the Adjusted Eurodollar Rate for any Borrowing
consisting of Eurodollar Loans. If any one or more of
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the Reference Banks shall not timely furnish such information, the
Administrative Agent shall determine the Adjusted Eurodollar Rate on the basis
of timely information furnished by the remaining Reference Banks.
(g) INTEREST RATE MARGINS. As used herein the terms "APPLICABLE PRIME
RATE MARGIN" and "APPLICABLE EURODOLLAR MARGIN" shall mean the particular rate
per annum determined by the Administrative Agent in accordance with the Pricing
Grid Table which appears below, based on the Borrower's ratio of Consolidated
Total Debt to Consolidated EBITDA, as computed in accordance with section 9.8
hereof, and such Pricing Grid Table, and the following provisions:
(i) Initially, until changed hereunder in accordance with the
following provisions, the Applicable Prime Rate Margin will be 37.50
basis points per annum, and the Applicable Eurodollar Margin will be
187.50 basis points per annum.
(ii) Commencing with the fiscal quarter of the Borrower ended
on or nearest to September 30, 1999, and continuing with each fiscal
quarter thereafter, the Administrative Agent will determine the
Applicable Prime Rate Margin or Applicable Eurodollar Margin in
accordance with the Pricing Grid Table, based on the Borrower's ratio
of (x) Consolidated Total Debt as of the end of the fiscal quarter, to
(y) Consolidated EBITDA for the Testing Period ended on the last day of
the fiscal quarter, as computed in accordance with section 9.8 hereof,
and identified in such Pricing Grid Table. Changes in the Applicable
Prime Rate Margin or Applicable Eurodollar Margin based upon changes in
such ratio shall become effective on the first day of the month
following the receipt by the Administrative Agent pursuant to section
8.1(a) or (b) of the financial statements of the Borrower, accompanied
by the certificate and calculations referred to in section 8.1(c),
demonstrating the computation of such ratio, based upon the ratio in
effect at the end of the applicable period covered (in whole or in
part) by such financial statements. After a certificate has been
delivered pursuant to the first sentence of section 8.1(c) for a
particular fiscal quarter, no replacement or substitute certificate for
the same fiscal quarter of the nature contemplated by the second
sentence of section 8.1(c) shall be given effect for purposes of the
above provisions.
(A) Notwithstanding the above provisions, during any period
when (1) the Borrower has failed to timely deliver its consolidated
financial statements referred to in section 8.1(a) or (b), accompanied
by the certificate and calculations referred to in section 8.1(c), (2)
a Default under section 10.1(a) has occurred and is continuing, or (3)
an Event of Default has occurred and is continuing, the Applicable
Prime Rate Margin and the Applicable Eurodollar Margin shall be the
highest rate per annum indicated therefor in the Pricing Grid Table,
regardless of the Borrower's ratio of Consolidated Total Debt to
Consolidated EBITDA at such time.
(iii) Any changes in the Applicable Prime Rate Margin or
Applicable Eurodollar Margin shall be determined by the Administrative
Agent in accordance with the above provisions and the Administrative
Agent will promptly provide notice of such determinations to the
Borrower and the Lenders. Any such determination by the Administrative
Agent pursuant to this section 2.7(g) shall be conclusive and binding
absent manifest error.
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PRICING GRID TABLE
(EXPRESSED IN BASIS POINTS)
RATIO OF APPLICABLE PRIME APPLICABLE APPLICABLE
CONSOLIDATED TOTAL DEBT RATE MARGIN EURODOLLAR MARGIN COMMITMENT FEE
TO RATE
CONSOLIDATED EBITDA
greater than or equal to 2.50 to 1.00 62.50 212.50 50.00
greater than or equal to 2.00 to 1.00 and less than 2.50 to 1.00 37.50 187.50 50.00
greater than or equal to 1.50 to 1.00 and less than 2.00 to 1.00 12.50 162.50 37.50
less than 1.50 to 1.00 -0- 137.50 37.50
2.8. SELECTION AND CONTINUATION OF INTEREST PERIODS. (a) The Borrower
shall have the right
(x) at the time it gives a Notice of Borrowing or Notice of
Conversion in respect of the making of, Conversion into, a Borrowing of
Eurodollar Loans, to select in such Notice the Interest Period to be
applicable to such Borrowing, and
(y) prior to 12:00 noon (local time at the Notice Office) on
the third Business Day prior to the expiration of an Interest Period
applicable to a Borrowing under a Facility of Eurodollar Loans, to
elect by giving the Administrative Agent written or telephonic notice
(in the case of telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent) to Continue all or the Minimum
Borrowing Amount of the principal amount of such Loans as one or more
Borrowings of Eurodollar Loans and to select the Interest Period to be
applicable to any such Borrowing (any such notice, a "NOTICE OF
CONTINUATION"),
which Interest Period shall, at the option of the Borrower, be a one, two, three
or six month period; PROVIDED, that notwithstanding anything to the contrary
contained above, the Borrower's right to select an Interest Period or to effect
any Continuation shall be subject to the applicable provisions of section 2.9
and to the following:
(i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing (the date
of a Borrowing resulting from a Conversion or Continuation shall be the
date of such Conversion or Continuation) and each Interest Period
occurring thereafter in respect of such Borrowing shall commence on the
day on which the next preceding Interest Period expires;
(ii) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, PROVIDED that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day;
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(iv) no Interest Period for any Eurodollar Loan may be
selected which would end after the Maturity Date;
(v) each Borrowing resulting from a Continuation shall be in
at least the Minimum Borrowing Amount applicable thereto; and
(vi) no Interest Period may be elected at any time when a
Default under section 10.1(a) or an Event of Default is then in
existence unless the Required Lenders otherwise agree.
(b) If upon the expiration of any Interest Period the Borrower has
failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to Convert such Borrowing to Prime Rate Loans
effective as of the expiration date of such current Interest Period.
2.9. INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that (x) in the
case of clause (i) below, the Administrative Agent or (y) in the case of clauses
(ii) and (iii) below, any Lender, shall have determined on a reasonable basis
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
(i) on any date for determining the Adjusted Eurodollar Rate
for any Interest Period, that, by reason of any changes arising after
the Effective Date affecting the interbank Eurodollar market, adequate
and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of Adjusted Eurodollar
Rate; or
(ii) at any time, that such Lender shall incur increased costs
or reductions in the amounts received or receivable hereunder in an
amount which such Lender deems material with respect to any Eurodollar
Loans (other than any increased cost or reduction in the amount
received or receivable resulting from the imposition of or a change in
the rate of taxes or similar charges) because of any change since the
Effective Date in any applicable law, governmental rule, regulation,
guideline, order or request (whether or not having the force of law),
or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation,
guideline, order or request (such as, for example, but not limited to,
a change in official reserve requirements, but, in all events,
excluding reserves includable in the Adjusted Eurodollar Rate pursuant
to the definition thereof); or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Lender in
good faith with any change since the Effective Date in any law,
governmental rule, regulation, guideline or order, or the
interpretation or application thereof, or would conflict with any
thereof not having the force of law but with which such Lender
customarily complies or has become impracticable as a result of a
contingency occurring after the Effective Date which materially
adversely affects the interbank Eurodollar market;
THEN, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on or promptly following such date or time
and (y) within 10 Business Days of the date on which such event no longer exists
give notice (by telephone confirmed in writing) to the Borrower and to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to such notice by the Administrative
Agent no longer exist, and any Notice of Borrowing, Notice of Conversion or
Notice of Continuation given by the Borrower with respect to Eurodollar Loans
which have not yet been incurred, Converted or Continued shall be deemed
rescinded by the Borrower or, in the case of a Notice of Borrowing, shall, at
the option of the Borrower, be deemed converted into a Notice of Borrowing for
Prime Rate Loans to be made on the date of Borrowing contained in such Notice of
Borrowing, (y) in the case of clause (ii) above, the Borrower shall pay to such
Lender, upon written demand therefor, such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender shall determine) as shall be required to compensate such Lender,
for such increased costs or reductions in amounts receivable hereunder (a
written notice as to the additional
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amounts owed to such Lender, showing the basis for the calculation thereof,
which basis must be reasonable, submitted to the Borrower by such Lender shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto) and (z) in the case of clause (iii) above, the Borrower shall take one
of the actions specified in section 2.9(b) as promptly as possible and, in any
event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in section 2.9(a)(ii) or (iii), the Borrower may (and in
the case of a Eurodollar Loan affected pursuant to section 2.9(a)(iii) the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, by giving the Administrative Agent telephonic notice
(confirmed promptly in writing) thereof on the same date that the Borrower was
notified by a Lender pursuant to section 2.9(a)(ii) or (iii), cancel said
Borrowing, convert the related Notice of Borrowing into one requesting a
Borrowing of Prime Rate Loans or require the affected Lender to make its
requested Loan as a Prime Rate Loan, or (ii) if the affected Eurodollar Loan is
then outstanding, upon at least one Business Day's notice to the Administrative
Agent, require the affected Lender to Convert each such Eurodollar Loan into a
Prime Rate Loan, PROVIDED that if more than one Lender is affected at any time,
then all affected Lenders must be treated the same pursuant to this section
2.9(b).
(c) If any Lender shall have determined that after the Effective Date,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged by law with the interpretation or administration thereof, or
compliance by such Lender or its parent corporation with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank, or comparable agency, in each case made
subsequent to the Effective Date, has or would have the effect of reducing by an
amount reasonably deemed by such Lender to be material the rate of return on
such Lender's or its parent corporation's capital or assets as a consequence of
such Lender's commitments or obligations hereunder to a level below that which
such Lender or its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's or
its parent corporation's policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or its parent corporation for
such reduction. Each Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this section 2.9(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth, in
reasonable detail, the basis of the calculation of such additional amounts,
which basis must be reasonable, although the failure to give any such notice
shall not release or diminish any of the Borrower's obligations to pay
additional amounts pursuant to this section 2.9(c) upon the subsequent receipt
of such notice.
(d) Notwithstanding anything in this Agreement to the contrary, (i) no
Lender shall be entitled to compensation or payment or reimbursement of other
amounts under section 2.9, 3.5 or 5.4 for any amounts incurred or accruing more
than 180 days prior to the giving of notice to the Borrower of additional costs
or other amounts of the nature described in such sections, and (ii) no Lender
shall demand compensation for any reduction referred to in section 2.9(c) or
payment or reimbursement of other amounts under section 3.5 or 5.4 if it shall
not at the time be the general policy or practice of such Lender to demand such
compensation, payment or reimbursement in similar circumstances under comparable
provisions of other credit agreements.
2.10. BREAKAGE COMPENSATION. The Borrower shall compensate each
applicable Lender, upon its written request (which request shall set forth the
detailed basis for requesting and the method of calculating such compensation),
for all reasonable losses, costs, expenses and liabilities (including, without
limitation, any loss, cost, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Lender
to fund its Eurodollar Loans) which such Lender may sustain: (i) if for any
reason (other than a default by such Lender or the Administrative Agent) a
Borrowing of Eurodollar Loans does not occur on a date specified therefor in a
Notice of Borrowing, Notice of Conversion or Notice of Continuation (whether or
not withdrawn by the Borrower or deemed withdrawn pursuant to section 2.9(a));
(ii) if any repayment, prepayment or Conversion of any of its Eurodollar Loans
occurs on a date which is not the last day of an Interest Period applicable
thereto; (iii) if any prepayment of any of its Eurodollar Loans is not made on
any date specified in a notice of prepayment given by the Borrower; (iv) as a
result of an assignment by a Lender of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto pursuant to a request by the
Borrower pursuant to section 2.11(b); or (v) as a
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consequence of (x) any other default by the Borrower to repay or prepay its
Eurodollar Loans when required by the terms of this Agreement or (y) an election
made pursuant to section 2.9(b). Such loss, cost, expense and liability to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the interest rate
that would have been applicable to such Loan, for the period from the date of
such event to the last day of the then current Interest Period therefor (or, in
the case of a failure to effect a Borrowing, Conversion or Continuation, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such request within 10 days after receipt thereof.
2.11. CHANGE OF LENDING OFFICE; REPLACEMENT OF LENDERS. (a) Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
section 2.9(a)(ii) or (iii), section 2.9(c) or section 3.5 with respect to such
Lender, it will, if requested by the Borrower, use reasonable efforts (subject
to overall policy considerations of such Lender) to designate another Applicable
Lending Office for any Loans or Commitment affected by such event, PROVIDED that
such designation is made on such terms that such Lender and its Applicable
Lending Office suffer no economic, legal or regulatory disadvantage, with the
object of avoiding the consequence of the event giving rise to the operation of
any such section.
(b) If any Lender requests any compensation, reimbursement or other
payment under section 2.9(a)(ii) or (iii), section 2.9(c) or section 3.5 with
respect to such Lender, or if any Lender is a Defaulting Lender, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with the restrictions contained in section 12.4(c)), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); PROVIDED that (i) the Borrower shall have received the
prior written consent of the Administrative Agent and each Letter of Credit
Issuer, which consent shall not be unreasonably withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts,
including any breakage compensation under section 2.10 hereof), and (iii) in the
case of any such assignment resulting from a claim for compensation,
reimbursement or other payments required to be made under section 2.9(a)(ii) or
(iii), section 2.9(c) or section 3.5 with respect to such Lender, such
assignment will result in a reduction in such compensation, reimbursement or
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
(c) Nothing in this section 2.11 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in section 2.9
or 3.5.
SECTION 3. LETTERS OF CREDIT.
3.1. LETTERS OF CREDIT. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
at any time and from time to time on or after the Closing Date and prior to the
date that is 60 Business Days prior to the Maturity Date to issue, for the
account of the Borrower or any of its Subsidiaries (the Borrower or any such
Subsidiary, a "LETTER OF CREDIT OBLIGOR"), in support of worker compensation,
liability insurance, releases of contract retention obligations, contract
performance guarantee requirements and other bonding obligations of the Borrower
or any such other Letter of Credit Obligor incurred in the ordinary course of
its business, and such other standby obligations of the Borrower and the other
Letter of Credit Obligors that are acceptable to the Letter of Credit Issuer,
and subject to and upon the terms and conditions herein set forth, such Letter
of Credit Issuer agrees to issue from time to time, irrevocable standby letters
of credit denominated and
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payable in Dollars in such form as may be approved by such Letter of Credit
Issuer and the Administrative Agent (each such letter of credit (and each
Existing Letter of Credit described in section 3.1(d)), a "LETTER OF CREDIT" and
collectively, the "LETTERS OF CREDIT").
(b) Notwithstanding the foregoing: (i) no Letter of Credit shall be
issued, and the Stated Amount of any outstanding Letter of Credit shall not be
increased, if after giving effect thereto the Letter of Credit Outstandings
would exceed either (x) $3,000,000 or (y) when added to the aggregate principal
amount of all Loans then outstanding, an amount equal to the Total Commitment at
such time; (ii) no individual Letter of Credit (other than any Existing Letter
of Credit) shall be issued which has an initial Stated Amount less than $50,000
unless such lesser Stated Amount is acceptable to the Letter of Credit Issuer;
and (iii) each Letter of Credit shall have an expiry date (including any renewal
periods) occurring not later than the earlier of (A) one year from the date of
issuance thereof, unless a longer period is approved by the relevant Letter of
Credit Issuer and Lenders (other than any Defaulting Lender) holding a majority
of the Total Commitment, and (B) 15 Business Days prior to the Maturity Date, in
each case on terms acceptable to the Administrative Agent and the relevant
Letter of Credit Issuer.
(c) Notwithstanding the foregoing, in the event a Lender Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless either: (i) such Letter of Credit Issuer has entered into
arrangements satisfactory to it and the Borrower to eliminate such Letter of
Credit Issuer's risk with respect to the participation in Letters of Credit of
the Defaulting Lender or Lenders, including by cash collateralizing such
Defaulting Lender's or Lenders' Percentage of the Letter of Credit Outstandings;
or (ii) the issuance of such Letter of Credit, taking into account the potential
failure of the Defaulting Lender or Lenders to risk participate therein, will
not cause the Letter of Credit Issuer to incur aggregate credit exposure
hereunder with respect to Loans and Letter of Credit Outstandings in excess of
its Commitment, and the Borrower has undertaken, for the benefit of such Letter
of Credit Issuer, pursuant to an instrument satisfactory in form and substance
to such Letter of Credit Issuer, not to thereafter incur Loans or Letter of
Credit Outstandings hereunder which would cause the Letter of Credit Issuer to
incur aggregate credit exposure hereunder with respect to Loans and Letter of
Credit Outstandings in excess of its Commitment.
(d) Annex V hereto contains a description of all letters of credit
outstanding on, and to continue in effect after, the Closing Date. Each such
letter of credit issued by a bank that is or becomes a Lender under this
Agreement on the Effective Date (each, an "EXISTING LETTER OF CREDIT") shall
constitute a "Letter of Credit" for all purposes of this Agreement, issued, for
purposes of section 3.4(a), on the Closing Date, and the Borrower, the
Administrative Agent and the applicable Lenders hereby agree that, from and
after such date, the terms of this Agreement shall apply to such Letters of
Credit, superseding any other agreement theretofore applicable to them to the
extent inconsistent with the terms hereof.
3.2. LETTER OF CREDIT REQUESTS: NOTICES OF ISSUANCE. (a) Whenever it
desires that a Letter of Credit be issued, the Borrower shall give the
Administrative Agent and the Letter of Credit Issuer written or telephonic
notice (in the case of telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent) which, if in the form of written notice
shall be substantially in the form of Exhibit B-3, or transmit by electronic
communication (if arrangements for doing so have been approved by the Letter of
Credit Issuer), prior to 12:00 noon (local time at its Notice Office) at least
three Business Days (or such shorter period as may be acceptable to the relevant
Letter of Credit Issuer) prior to the proposed date of issuance (which shall be
a Business Day) (each a "LETTER OF CREDIT REQUEST"), which Letter of Credit
Request shall include such supporting documents that such Letter of Credit
Issuer customarily requires in connection therewith (including, in the case of a
Letter of Credit for an account party other than the Borrower, an application
for, and if applicable a reimbursement agreement with respect to, such Letter of
Credit). Any such documents executed in connection with the issuance of a Letter
of Credit, including the Letter of Credit itself, are herein referred to as
"LETTER OF CREDIT DOCUMENTS". In the event of any inconsistency between any of
the terms or provisions of any Letter of Credit Document and the terms and
provisions of this Agreement respecting Letters of Credit, the terms and
provisions of this Agreement shall control. The Administrative Agent shall
promptly notify each Lender of each Letter of Credit Request.
(b) Each Letter of Credit Issuer shall, on the date of each issuance of
a Letter of Credit by it, give the Administrative Agent, each applicable Lender
and the Borrower written notice of the issuance of such Letter of Credit,
accompanied by a copy to the Administrative Agent of the Letter of Credit or
Letters of Credit issued by it. Each Letter of Credit Issuer shall provide to
the Administrative Agent a quarterly (or monthly if requested by any
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applicable Lender) summary describing each Letter of Credit issued by such
Letter of Credit Issuer and then outstanding and an identification for the
relevant period of the daily aggregate Letter of Credit Outstandings represented
by Letters of Credit issued by such Letter of Credit Issuer.
3.3. AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The Borrower
hereby agrees to reimburse (or cause any Letter of Credit Obligor for whose
account a Letter of Credit was issued to reimburse) each Letter of Credit
Issuer, by making payment directly to such Letter of Credit Issuer in
immediately available funds at the payment office of such Letter of Credit
Issuer, for any payment or disbursement made by such Letter of Credit Issuer
under any Letter of Credit (each such amount so paid or disbursed until
reimbursed, an "UNPAID DRAWING") immediately after, and in any event on the date
on which, such Letter of Credit Issuer notifies the Borrower (or any such other
Letter of Credit Obligor for whose account such Letter of Credit was issued) of
such payment or disbursement (which notice to the Borrower (or such other Letter
of Credit Obligor) shall be delivered reasonably promptly after any such payment
or disbursement), such payment to be made in Dollars, with interest on the
amount so paid or disbursed by such Letter of Credit Issuer, to the extent not
reimbursed prior to 1:00 P.M. (local time at the payment office of the Letter of
Credit Issuer) on the date of such payment or disbursement, from and including
the date paid or disbursed to but not including the date such Letter of Credit
Issuer is reimbursed therefor at a rate per annum which shall be the rate then
applicable to Loans which are Prime Rate Loans (plus an additional 2% per annum
if not reimbursed on the date of such payment or disbursement), any such
interest also to be payable on demand.
(b) The Borrower's obligation under this section 3.3 to reimburse, or
cause another Letter of Credit Obligor to reimburse, each Letter of Credit
Issuer with respect to Unpaid Drawings (including, in each case, interest
thereon) shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower or any other Letter of Credit Obligor may have or have had against such
Letter of Credit Issuer, the Administrative Agent, any other Letter of Credit
Issuer or any Lender, including, without limitation, any defense based upon the
failure of any drawing under a Letter of Credit to conform to the terms of the
Letter of Credit or any non-application or misapplication by the beneficiary of
the proceeds of such drawing, PROVIDED, HOWEVER that the Borrower shall not be
obligated to reimburse, or cause another Letter of Credit Obligor to reimburse,
a Letter of Credit Issuer for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of such Letter of Credit
Issuer.
3.4. LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon the issuance
by a Letter of Credit Issuer of any Letter of Credit (and on the Closing Date
with respect to any Existing Letter of Credit), such Letter of Credit Issuer
shall be deemed to have sold and transferred to each Lender, and each such
Lender (each a "PARTICIPANT") shall be deemed irrevocably and unconditionally to
have purchased and received from such Letter of Credit Issuer, without recourse
or warranty, an undivided interest and participation, to the extent of such
Lender's Percentage, in such Letter of Credit, each substitute letter of credit,
each drawing made thereunder, the obligations of the Borrower under this
Agreement with respect thereto (although Letter of Credit Fees shall be payable
directly to the Administrative Agent for the account of the Lenders as provided
in section 4.1(b) and the Participants shall have no right to receive any
portion of any fees of the nature contemplated by section 4.1(c) or (d)), the
obligations of any Letter of Credit Obligor under any Letter of Credit Documents
pertaining thereto, and any security for, or guaranty pertaining to, any of the
foregoing. Upon any change in the Commitments of the Lenders pursuant to section
12.4(c), it is hereby agreed that, with respect to all outstanding Letters of
Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participations pursuant to this section 3.4 to reflect the new Percentages of
the assigning and assignee Lender.
(b) In determining whether to pay under any Letter of Credit, a Letter
of Credit Issuer shall not have any obligation relative to the Participants
other than to determine that any documents required to be delivered under such
Letter of Credit have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by a Letter of Credit Issuer under or in connection with any Letter
of Credit if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for such Letter of Credit Issuer any resulting
liability.
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(c) In the event that a Letter of Credit Issuer makes any payment under
any Letter of Credit and the Borrower shall not have reimbursed (or caused any
applicable Letter of Credit Obligor to reimburse) such amount in full to such
Letter of Credit Issuer pursuant to section 3.3(a), such Letter of Credit Issuer
shall promptly notify the Administrative Agent, and the Administrative Agent
shall promptly notify each Participant of such failure, and each Participant
shall promptly and unconditionally pay to the Administrative Agent for the
account of such Letter of Credit Issuer, the amount of such Participant's
Percentage of such payment in Dollars and in same day funds, PROVIDED, HOWEVER,
that no Participant shall be obligated to pay to the Administrative Agent its
Percentage of such unreimbursed amount for any wrongful payment made by such
Letter of Credit Issuer under a Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of
such Letter of Credit Issuer. If the Administrative Agent so notifies any
Participant required to fund a payment under a Letter of Credit prior to 11:00
A.M. (local time at its Notice Office) on any Business Day, such Participant
shall make available to the Administrative Agent for the account of the relevant
Letter of Credit Issuer such Participant's Percentage of the amount of such
payment on such Business Day in same day funds. If and to the extent such
Participant shall not have so made its Percentage of the amount of such payment
available to the Administrative Agent for the account of the relevant Letter of
Credit Issuer, such Participant agrees to pay to the Administrative Agent for
the account of such Letter of Credit Issuer, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Administrative Agent for the account of such Letter of
Credit Issuer at the Federal Funds Effective Rate. The failure of any
Participant to make available to the Administrative Agent for the account of the
relevant Letter of Credit Issuer its Percentage of any payment under any Letter
of Credit shall not relieve any other Participant of its obligation hereunder to
make available to the Administrative Agent for the account of such Letter of
Credit Issuer its Percentage of any payment under any Letter of Credit on the
date required, as specified above, but no Participant shall be responsible for
the failure of any other Participant to make available to the Administrative
Agent for the account of such Letter of Credit Issuer such other Participant's
Percentage of any such payment.
(d) Whenever a Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the Participants
pursuant to section 3.4(c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its Percentage thereof, in U.S. dollars and in same
day funds, an amount equal to such Participant's Percentage of the principal
amount thereof and interest thereon accruing after the purchase of the
respective participations, as and to the extent so received.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of each Letter of Credit Issuer with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off defense or other
right which the Borrower (or any other Letter of Credit Obligor) may
have at any time against a beneficiary named in a Letter of Credit, any
transferee of any Letter of Credit (or any person for whom any such
transferee may be acting), the Administrative Agent, any Letter of
Credit Issuer, any Lender, or other person, whether in connection with
this Agreement, any Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying
transaction between the Borrower (or any other Letter of Credit
Obligor) and the beneficiary named in any such Letter of Credit), other
than any claim which the Borrower (or any other Letter of Credit
Obligor which is the account party with respect to a Letter of Credit)
may have against any applicable Letter of Credit Issuer for gross
negligence or wilful misconduct of such Letter of Credit Issuer in
making payment under any applicable Letter of Credit;
(iii) any draft, certificate or other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
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(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents: or
(v) the occurrence of any Default or Event of Default.
(f) To the extent the Letter of Credit Issuer is not indemnified by the
Borrower, the Participants will reimburse and indemnify the Letter of Credit
Issuer, in proportion to their respective Percentages, for and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by the Letter of Credit Issuer
in performing its respective duties in any way related to or arising out of its
issuance of Letters of Credit, PROVIDED that no Participants shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements resulting from the
Letter of Credit Issuer's gross negligence or willful misconduct.
3.5. INCREASED COSTS. If after the Effective Date, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Letter of Credit Issuer or any Lender with any
request or directive (whether or not having the force of law) by any such
authority, central bank or comparable agency (in each case made subsequent to
the Effective Date) shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against Letters of
Credit issued by such Letter of Credit Issuer or such Lender's participation
therein, or (ii) shall impose on such Letter of Credit Issuer or any Lender any
other conditions affecting this Agreement, any Letter of Credit or such Lender's
participation therein; and the result of any of the foregoing is to increase the
cost to such Letter of Credit Issuer or such Lender of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Letter of Credit Issuer or such Lender hereunder
(other than any increased cost or reduction in the amount received or receivable
resulting from the imposition of or a change in the rate of taxes or similar
charges), then, upon demand to the Borrower by such Letter of Credit Issuer or
such Lender (a copy of which notice shall be sent by such Letter of Credit
Issuer or such Lender to the Administrative Agent), the Borrower shall pay to
such Letter of Credit Issuer or such Lender such additional amount or amounts as
will compensate any such Letter of Credit Issuer or such Lender for such
increased cost or reduction. A certificate submitted to the Borrower by any
Letter of Credit Issuer or any Lender, as the case may be (a copy of which
certificate shall be sent by such Letter of Credit Issuer or such Lender to the
Administrative Agent), setting forth, in reasonable detail, the basis for the
determination of such additional amount or amounts necessary to compensate any
Letter of Credit Issuer or such Lender as aforesaid shall be conclusive and
binding on the Borrower absent manifest error, although the failure to deliver
any such certificate shall not release or diminish any of the Borrower's
obligations to pay additional amounts pursuant to this section 3.5. Reference is
hereby made to the provisions of section 2.10(d) for certain limitations upon
the rights of a Letter of Credit Issuer or Lender under this section.
3.6. GUARANTY OF LETTER OF CREDIT OBLIGATIONS OF OTHER LETTER OF CREDIT
OBLIGORS. (a) The Borrower hereby unconditionally guarantees, for the benefit of
the Administrative Agent and the Lenders, the full and punctual payment of the
Obligations of each other Letter of Credit Obligor under each Letter of Credit
Document to which such other Letter of Credit Obligor is now or hereafter
becomes a party. Upon failure by any such other Letter of Credit Obligor to pay
punctually any such amount, the Borrower shall forthwith on demand by the
Administrative Agent pay the amount not so paid at the place and in the currency
and otherwise in the manner specified in this Agreement or any applicable Letter
of Credit Document.
(b) As a separate, additional and continuing obligation, the Borrower
unconditionally and irrevocably undertakes and agrees, for the benefit of the
Administrative Agent and the Lenders, that, should any amounts not be
recoverable from the Borrower under section 3.6(a) for any reason whatsoever
(including, without limitation, by reason of any provision of any Credit
Document or any other agreement or instrument executed in connection therewith
being or becoming void, unenforceable, or otherwise invalid under any applicable
law) then, notwithstanding any notice or knowledge thereof by any Lender, the
Administrative Agent, any of their respective Affiliates, or any other person,
at any time, the Borrower as sole, original and independent obligor, upon demand
by the Administrative Agent, will make payment to the Administrative Agent, for
the account of the Lenders and the
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Administrative Agent, of all such obligations not so recoverable by way of full
indemnity, in such currency and otherwise in such manner as is provided in the
Credit Documents.
(c) The obligations of the Borrower under this section shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by the
occurrence, one or more times, of any of the following:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect to any obligation of any other Letter of Credit
Obligor under any Letter of Credit Document, by operation of law or
otherwise;
(ii) any modification or amendment of or supplement to this
Agreement, any Note or any other Credit Document;
(iii) any release, non-perfection or invalidity of any direct
or indirect security for any obligation of the Borrower under this
Agreement, any Note or any other Credit Document or of any other Letter
of Credit Obligor under any Letter of Credit Document;
(iv) any change in the corporate existence, structure or
ownership of any other Letter of Credit Obligor or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting any
other Letter of Credit Obligor or its assets or any resulting release
or discharge of any obligation of any other Letter of Credit Obligor
contained in any Letter of Credit Document;
(v) the existence of any claim, set-off or other rights which
the Borrower may have at any time against any other Letter of Credit
Obligor, the Administrative Agent, any Lender or any other person,
whether in connection herewith or any unrelated transactions;
(vi) any invalidity or unenforceability relating to or against
any other Letter of Credit Obligor for any reason of any Letter of
Credit Document, or any provision of applicable law or regulation
purporting to prohibit the payment by any other Letter of Credit
Obligor of any Obligations in respect of any Letter of Credit; or
(vii) any other act or omission to act or delay of any kind by
any other Letter of Credit Obligor, the Administrative Agent, any
Lender or any other person or any other circumstance whatsoever which
might, but for the provisions of this section, constitute a legal or
equitable discharge of the Borrower's obligations under this section.
(d) The Borrower's obligations under this section shall remain in full
force and effect until the Commitments shall have terminated and the principal
of and interest on the Notes and all other amounts payable by the Borrower under
the Credit Documents and by any other Letter of Credit Obligor under the Letter
of Credit Documents shall have been paid in full. If at any time any payment of
any of the Obligations of any other Letter of Credit Obligor in respect of any
Letter of Credit Documents is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of such other Letter
of Credit Obligor, the Borrower's obligations under this section with respect to
such payment shall be reinstated at such time as though such payment had been
due but not made at such time.
(e) The Borrower irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any person against any other
Letter of Credit Obligor or any other person, or against any collateral or
guaranty of any other person.
(f) Until the indefeasible payment in full of all of the Obligations
and the termination of the Commitments of the Lenders hereunder, the Borrower
shall have no rights, by operation of law or otherwise, upon making any payment
under this section to be subrogated to the rights of the payee against any other
Letter of Credit Obligor with respect to such payment or otherwise to be
reimbursed, indemnified or exonerated by any other Letter of Credit Obligor in
respect thereof.
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(g) In the event that acceleration of the time for payment of any
amount payable by any other Letter of Credit Obligor under any Letter of Credit
Document is stayed upon insolvency, bankruptcy or reorganization of such other
Letter of Credit Obligor, all such amounts otherwise subject to acceleration
under the terms of any applicable Letter of Credit Document shall nonetheless be
payable by the Borrower under this section forthwith on demand by the
Administrative Agent.
SECTION 4. FEES; COMMITMENTS.
4.1. FEES. (a) COMMITMENT FEES. (i) The Borrower agrees to pay to the
Administrative Agent fees ("COMMITMENT FEES") for the account of each
Non-Defaulting Lender for the period from and including the Closing Date to, but
not including, the Maturity Date, computed for each day at a rate per annum
equal to the Applicable Commitment Fee Rate for such day on the amount of such
Lender's Unutilized Commitment for such day. Commitment Fees shall be due and
payable in arrears on the last Business Day of each March, June, September and
December and on the Maturity Date.
(ii) As used herein the term "APPLICABLE COMMITMENT FEE RATE" shall
mean the particular rate per annum determined by the Administrative Agent in
accordance with the Pricing Grid Table which appears in section 2.7(g), based on
the Borrower's ratio of Consolidated Total Debt to Consolidated EBITDA, as
computed in accordance with section 9.8 hereof, and such Pricing Grid Table, and
the following provisions:
(A) Initially, until changed hereunder in accordance with the
following provisions, the Applicable Commitment Fee Rate will be 50.00
basis points per annum.
(B) Commencing with the fiscal quarter of the Borrower ended
on or nearest to September 30, 1999, and continuing with each fiscal
quarter thereafter, the Administrative Agent will determine the
Applicable Commitment Fee Rate in accordance with the Pricing Grid
Table, based on the Borrower's ratio of (x) Consolidated Total Debt as
of the end of the fiscal quarter, to (y) Consolidated EBITDA for the
Testing Period ended on the last day of the fiscal quarter, as computed
in accordance with section 9.8 hereof, and identified in such Pricing
Grid Table. Changes in the Applicable Commitment Fee Rate based upon
changes in such ratio shall become effective on the first day of the
month following the receipt by the Administrative Agent pursuant to
section 8.1(a) or (b) of the financial statements of the Borrower,
accompanied by the certificate and calculations referred to in section
8.1(c), demonstrating the computation of such ratio, based upon the
ratio in effect at the end of the applicable period covered (in whole
or in part) by such financial statements. After a certificate has been
delivered pursuant to the first sentence of section 8.1(c) for a
particular fiscal quarter, no replacement or substitute certificate for
the same fiscal quarter of the nature contemplated by the second
sentence of section 8.1(c) shall be given effect for purposes of the
above provisions.
(C) Notwithstanding the above provisions, during any period
when (1) the Borrower has failed to timely deliver its consolidated
financial statements referred to in section 8.1(a) or (b), accompanied
by the certificate and calculations referred to in section 8.1(c), (2)
a Default under section 10.1(a) has occurred and is continuing, or (3)
an Event of Default has occurred and is continuing, the Applicable
Commitment Fee Rate shall be the highest rate per annum indicated
therefor in the Pricing Grid Table, regardless of the Borrower's ratio
of Consolidated Total Debt to Consolidated EBITDA at such time.
(D) Any changes in the Applicable Commitment Fee rate shall be
determined by the Administrative Agent in accordance with the above
provisions and the Administrative Agent will promptly provide notice of
such determinations to the Borrower and the Lenders. Any such
determination by the Administrative Agent pursuant to this section
4.1(a)(ii) shall be conclusive and binding absent manifest error.
(b) LETTER OF CREDIT FEES. The Borrower agrees to pay to the
Administrative Agent, for the account of each Non-Defaulting Lender, PRO RATA on
the basis of its Percentage, a fee in respect of each Letter of Credit (the
"LETTER OF CREDIT FEE"), computed for each day at the rate per annum equal to
the Applicable Eurodollar Margin then
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in effect on the Stated Amount of all Letters of Credit outstanding on such day.
Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on
the last Business Day of each March, June, September and December and on the
date when the Total Commitment expires or is terminated and no Letters of Credit
remain outstanding. The Borrower also agrees to pay to the Administrative Agent,
for the account of each Non-Defaulting Lender, PRO RATA on the basis of its
Percentage, additional Letter of Credit Fees, on demand, at the rate of 200
basis points per annum, on the Stated Amount of each Letter of Credit, for any
period when a Default under section 10.1(a) or Event of Default is in existence.
(c) FACING FEES. The Borrower to pay directly to each Letter of Credit
Issuer a fee in respect of each Letter of Credit issued by it (a "FACING FEE"),
computed for each day at the rate of 1/8 of 1% per annum on the Stated Amount of
such Letter of Credit issued by such Letter of Credit Issuer which is
outstanding on such day. Accrued Facing Fees shall be due and payable quarterly
in arrears on the last Business Day of each March, June, September and December
and on the date on which the Total Commitment expires or is terminated and no
Letters of Credit remain outstanding.
(d) ADDITIONAL CHARGES OF LETTER OF CREDIT ISSUER. The Borrower agrees
to pay directly to each Letter of Credit Issuer upon each issuance of, drawing
under, and/or amendment, extension, renewal or transfer of, a Letter of Credit
issued by it such amount as shall at the time of such issuance, drawing,
amendment, extension, renewal or transfer be the administrative or processing
charge which such Letter of Credit Issuer is customarily charging for issuances
of, drawings under or amendments, extensions, renewals or transfers of, letters
of credit issued by it.
(e) OTHER FEES. The Borrower shall pay to the Administrative Agent, on
the Effective Date and thereafter, for its or their own account and/or for
distribution to the Lenders, such fees as heretofore agreed by the Borrower and
the Administrative Agent.
(f) COMPUTATIONS OF FEES. All computations of Fees shall be made in
accordance with section 12.7(b).
4.2. VOLUNTARY TERMINATION/REDUCTION OF COMMITMENTS. Upon at least
three Business Days' prior written notice (or telephonic notice confirmed in
writing) to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the
Borrower shall have the right to:
(a) terminate the Total Commitment, PROVIDED that (i) all
outstanding Loans are contemporaneously prepaid in accordance with
section 5.1, and (ii) either (A) no Letters of Credit remain
outstanding, or (B) the Borrower shall contemporaneously either (x)
cause all outstanding Letters of Credit to be surrendered for
cancellation (any such Letters of Credit to be replaced by letters of
credit issued by other financial institutions acceptable to each Letter
of Credit Issuer and the Required Lenders), or (y) the Borrower shall
pay to the Administrative Agent an amount in cash and/or Cash
Equivalents equal to 100% of the Letter of Credit Outstandings and the
Administrative Agent shall hold such payment as security for the
reimbursement obligations of the Borrower and any other Letter of
Credit Obligor in respect of Letters of Credit pursuant to a cash
collateral agreement to be entered into in form and substance
reasonably satisfactory to the Administrative Agent, each Letter of
Credit Issuer and the Borrower (which shall permit certain investments
in Cash Equivalents satisfactory to the Administrative Agent, each
Letter of Credit Issuer and the Borrower until the proceeds are applied
to the secured obligations); and/or
(b) partially and permanently reduce the Unutilized Total
Commitment, PROVIDED that (i) any such reduction shall apply to
proportionately and permanently reduce the Commitment of each of the
Lenders; (ii) any partial reduction of the Unutilized Total Commitment
pursuant to this section 4.2(b) shall be in the amount of at least
$2,000,000 (or, if greater, in integral multiples of $1,000,000).
4.3. MANDATORY ADJUSTMENTS OF COMMITMENTS, ETC. (a) The Total
Commitment (and the Commitment of each Lender) shall terminate on September 30,
1999, UNLESS the Closing Date has occurred on or prior to such date.
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(b) The Total Commitment shall terminate (and the Commitment of each
Lender shall terminate) on the earlier of (x) the Maturity Date and (y) the date
on which a Change of Control occurs.
(c) If (1) the initial Borrowing under the Credit Agreement occurs, (2)
the principal amount of the Subordinated TBD Note, as originally issued, exceeds
$10,000,000, and (3) the Administrative Agent delivers to the Borrower written
notice to the effect that the Lenders desire to modify certain of the terms of
the Credit Agreement, THEN (i) the Borrower will, during the 30 day period
beginning 45 days following the Closing Date negotiate in good faith with the
Lenders concerning all modifications to the terms of this Agreement which the
Lenders indicate they wish to make, as indicated in a written summary of
proposed changes to be prepared by the Administrative Agent (with the
concurrence of all of the Lenders) and delivered to the Borrower and the Lenders
at or near the beginning of such period; and (ii) if by the end of such period
this Agreement has not been amended in a manner satisfactory to the Lenders to
reflect such proposed changes, at and as of the end of the such period the Total
Commitment shall terminate (and the Commitment of each Lender shall terminate).
(d) The Total Commitment shall be permanently reduced, without premium
or penalty, at the time that any mandatory prepayment of Loans would be made
pursuant to section 5.2(b), (c), (d) or (e) if Loans were then outstanding in
the full amount of the Total Commitment, in an amount equal to the required
prepayment of principal of Loans which would be required to be made in such
circumstance. Any such reduction shall apply to proportionately and permanently
reduce the Commitment of each of the Lenders. The Borrower will provide at least
three Business Days' prior written notice (or telephonic notice confirmed in
writing) to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), of any
reduction of the Total Commitment pursuant to this section 4.3(d), specifying
the date and amount of the reduction.
4.4. EXTENSION OF MATURITY DATE. At any time after January 1, 2001 and
during the 30 day period following delivery by the Borrower pursuant to section
8.1(a) of its consolidated financial statements for its fiscal year then most
recently ended, and annually thereafter during the 30 day period following
delivery by the Borrower of its consolidated financial statements pursuant to
section 8.1(a), the Borrower may request the Administrative Agent to determine
if all of the Lenders are then willing to extend the Maturity Date for a single
additional year. If the Borrower so requests, the Administrative Agent will so
advise the Lenders. If all of the Lenders in their sole discretion are all
willing to so extend the Maturity Date, after taking into account such
considerations (including, without limitation, the then maturity date of the
Subordinated TBD Note) as any Lender may deem relevant, the Borrower, the
Administrative Agent and all of the Lenders (including each Letter of Credit
Issuer) shall execute and deliver a definitive written instrument so extending
the Maturity Date. No such extension of the Maturity Date shall be valid or
effective for any purpose unless such definitive written instrument is so signed
and delivered within 60 days following the giving by the Administrative Agent of
notice to the Lenders that the Borrower has requested such an extension.
SECTION 5. PAYMENTS.
5.1. VOLUNTARY PREPAYMENTS. The Borrower shall have the right to prepay
any of its Loans, in whole or in part, without premium or penalty (EXCEPT as
specified below), from time to time on the following terms and conditions:
(a) the Borrower shall give the Administrative Agent at the
Notice Office written or telephonic notice (in the case of telephonic
notice, promptly confirmed in writing if so requested by the
Administrative Agent) of its intent to prepay the Loans, the amount of
such prepayment and (in the case of Eurodollar Loans) the specific
Borrowing(s) pursuant to which made, which notice shall be received by
the Administrative Agent by
(i) 12:00 noon (local time at the Notice Office)
three Business Days prior to the date of such prepayment, in
the case of any prepayment of Eurodollar Loans, or
(ii) 12:00 noon (local time at the Notice Office) on
the date of such prepayment, in the case of any prepayment of
Prime Rate Loans,
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and which notice shall promptly be transmitted by the Administrative
Agent to each of the affected Lenders;
(b) in the case any partial prepayment of any Borrowing, such
partial prepayment shall be in an aggregate principal of at least
$100,000 or an integral multiple of $100,000 in excess thereof, in the
case of any Borrowing comprised of Prime Rate Loans, and at least
$500,000 or an integral multiple of $100,000 in excess thereof, in the
case of any Borrowing comprised of Eurodollar Loans;
(c) no partial prepayment of any Loans made pursuant to a
Borrowing shall reduce the aggregate principal amount of such Loans
outstanding pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount applicable thereto;
(d) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied PRO RATA among such Loans; and
(e) each prepayment of Eurodollar Loans pursuant to this
section 5.1 on any date other than the last day of the Interest Period
applicable thereto shall be accompanied by any amounts payable in
respect thereof under section 2.10.
5.2. SCHEDULED REPAYMENTS AND MANDATORY PREPAYMENTS. The Loans shall be
subject to mandatory repayment or prepayment in accordance with the following
provisions:
(a) MANDATORY PREPAYMENT IF OUTSTANDING LOANS AND LETTER OF
CREDIT OUTSTANDINGS EXCEED TOTAL COMMITMENT. If on any date (after
giving effect to any other payments on such date) the sum of (i) the
aggregate outstanding principal amount of Loans PLUS (ii) the aggregate
amount of Letter of Credit Outstandings, exceeds the Total Commitment
as then in effect, the Borrower shall prepay on such date that
principal amount of Loans and, after Loans have been paid in full,
Unpaid Drawings, in an aggregate amount at least equal to such excess
and conforming in the case of partial prepayments of Loans to the
requirements as to the amounts of partial prepayments of Loans which
are contained in section 5.1. If, after giving effect to the prepayment
of Loans and Unpaid Drawings, the aggregate amount of Letter of Credit
Outstandings exceeds the Total Commitment as then in effect, the
Borrower shall pay to the Administrative Agent an amount in cash and/or
Cash Equivalents equal to such excess and the Administrative Agent
shall hold such payment as security for the reimbursement obligations
of the Borrower and the other Letter of Credit Obligors in respect of
Letters of Credit pursuant to a cash collateral agreement to be entered
into in form and substance reasonably satisfactory to the
Administrative Agent, each Letter of Credit Issuer and the Borrower
(which shall permit certain investments in Cash Equivalents
satisfactory to the Administrative Agent, each Letter of Credit Issuer
and the Borrower until the proceeds are applied to the secured
obligations).
(b) MANDATORY PREPAYMENT---CERTAIN PROCEEDS OF ASSET SALES. If
the Borrower and its Subsidiaries have received cumulative Net Cash
Proceeds after March 31, 1999, from one or more Asset Sales of at least
$5,000,000, not later than the third Business Day following the date of
receipt of any Net Cash Proceeds in excess of such amount, an amount,
conforming to the requirements as to the amount of partial prepayments
contained in section 5.1, at least equal to 100% of the Net Cash
Proceeds then received in excess of such amount from any Asset Sale and
also conforming to the requirements as to amount of partial prepayments
contained in section 5.1, shall be applied as a mandatory prepayment of
principal of the outstanding Loans.
(c) MANDATORY PREPAYMENT---CERTAIN PROCEEDS OF EQUITY SALES.
Not later than the Business Day following the date of the receipt by
the Borrower and/or any Subsidiary of the cash proceeds (net of
underwriting discounts and commissions, placement agent fees and other
customary fees and costs associated therewith) from any sale or
issuance of equity securities by the Borrower or any Subsidiary after
the Closing Date (other than (i) any inter-company sale to the Borrower
or any Subsidiary and (ii) any grant, sale or issuance to management,
employees (or key employees) or directors pursuant to stock option,
stock purchase or similar plans for the benefit of management,
employees (key employees) or directors generally), the Borrower will
prepay the principal of the outstanding Loans, in an aggregate amount,
conforming to the
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requirements as to the amounts of partial prepayments contained in
section 5.1, which is not less than (x) 50% of such net proceeds, or
(y) if less, an amount equal to the then aggregate outstanding
principal amount of the outstanding Loans, if any.
(d) MANDATORY PREPAYMENT---CERTAIN PROCEEDS OF DEBT
SECURITIES. Not later than the Business Day following the date of the
receipt by the Borrower of the cash proceeds (net of underwriting
discounts and commissions, placement agent fees and other customary
fees and costs associated therewith) from any sale or issuance of debt
securities by the Borrower after the Closing Date in an underwritten
public offering, Rule 144A offering, or private placement with one or
more institutional investors, the Borrower will prepay the principal of
the outstanding Loans, in an aggregate amount, conforming to the
requirements as to the amounts of partial prepayments contained in
section 5.1, which is not less than (x) 100% of such net proceeds, or
(y) if less, an amount equal to the then aggregate outstanding
principal amount of the outstanding Loans, if any. For the avoidance of
doubt, it is noted that the issuance of the Subordinated TBD Note will
not give rise to any required prepayment of the Loans pursuant to this
section 5.2(d).
(e) MANDATORY PREPAYMENT---CERTAIN PROCEEDS OF AN EVENT OF
LOSS. If during any fiscal year of the Borrower, the Borrower and its
Subsidiaries have received cumulative Cash Proceeds during such fiscal
year from one or more Events of Loss of at least $1,000,000, not later
than the third Business Day following the date of receipt of any Cash
Proceeds in excess of such amount, an amount, conforming to the
requirements as to the amount of partial prepayments contained in
section 5.1, at least equal to 100% of the Net Cash Proceeds then
received in excess of such amount from any Event of Loss, shall be
applied as a mandatory prepayment of principal of the outstanding
Loans, if any.
(f) MANDATORY PREPAYMENT---CHANGE OF CONTROL. On the date of
which a Change of Control occurs, notwithstanding anything to the
contrary contained in this Agreement, no further Borrowings shall be
made and the then outstanding principal amount of all Loans, if any,
and other Obligations, shall become due and payable and shall be
prepaid in full, together with accrued interest and Fees, and the
Borrower shall contemporaneously either (i) cause all outstanding
Letters of Credit to be surrendered for cancellation (any such Letters
of Credit to be replaced by letters of credit issued by other financial
institutions acceptable to the Required Lenders), or (ii) the Borrower
shall pay to the Administrative Agent an amount in cash and/or Cash
Equivalents equal to 100% of the Letter of Credit Outstandings and the
Administrative Agent shall hold such payment as security for the
reimbursement obligations of the Borrower and the other Letter of
Credit Obligors in respect of Letters of Credit pursuant to a cash
collateral agreement to be entered into in form and substance
reasonably satisfactory to the Administrative Agent, each Letter of
Credit Issuer and the Borrower (which shall permit certain investments
in Cash Equivalents satisfactory to the Administrative Agent, each
Letter of Credit Issuer and the Borrower until the proceeds are applied
to the secured obligations).
(g) PARTICULAR LOANS TO BE PREPAID. With respect to each
repayment or prepayment of Loans required by this section 5.2, the
Borrower shall designate the Types of Loans which are to be repaid or
prepaid and the specific Borrowing(s) pursuant to which such repayment
or prepayment is to be made, PROVIDED that (i) the Borrower shall first
so designate all Loans that are Prime Rate Loans and Eurodollar Loans
with Interest Periods ending on the date of repayment or prepayment
prior to designating any other Eurodollar Loans for repayment or
prepayment, (ii) if the outstanding principal amount of Eurodollar
Loans made pursuant to a Borrowing is reduced below the applicable
Minimum Borrowing Amount as a result of any such repayment or
prepayment, then all the Loans outstanding pursuant to such Borrowing
shall be converted into Prime Rate Loans, and (iii) each repayment and
prepayment of any Loans made pursuant to a Borrowing shall be applied
PRO RATA among such Loans. In the absence of a designation by the
Borrower as described in the preceding sentence, the Administrative
Agent shall, subject to the above, make such designation in its sole
discretion with a view, but no obligation, to minimize breakage costs
owing under section 2.10. Any repayment or prepayment of Eurodollar
Loans pursuant to this section 5.2 shall in all events be accompanied
by such compensation as is required by section 2.10.
5.3. METHOD AND PLACE OF PAYMENT. (a) Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable (based on its PRO RATA share)
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account of the Lenders entitled thereto, not later than 12:00 noon (local time
at the Payment Office) on the date when due and shall be made at the Payment
Office in immediately available funds and in lawful money of the United States
of America, it being understood that written notice by the Borrower to the
Administrative Agent to make a payment from the funds in the Borrower's account
at the Payment Office shall constitute the making of such payment to the extent
of such funds held in such account. Any payments under this Agreement which are
made later than 12:00 noon (local time at the Payment Office) shall be deemed to
have been made on the next succeeding Business Day. Whenever any payment to be
made hereunder shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, Unpaid Drawings,
interest and Fees then due hereunder and an Event of Default is not then in
existence, such funds shall be applied (i) FIRST, towards payment of interest
and Fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and Fees then due to such parties, and
(ii) SECOND, towards payment of principal and Unpaid Drawings then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and Unpaid Drawings then due to such parties.
5.4. NET PAYMENTS. (a) All payments made by the Borrower hereunder,
under any Note or any other Credit Document, will be made without setoff,
counterclaim or other defense. Except as otherwise provided for in section
5.4(c), all such payments will be made free and clear of, and without deduction
or withholding for, any present or future United States withholding taxes. The
Borrower will furnish to the Administrative Agent within 45 days after the date
of any withholding or deduction on account of United States withholding taxes
certified copies of tax receipts, or other evidence satisfactory to the Lender,
evidencing payment thereof by the Borrower.
(b) Each Lender that is not a United States person (as such term is
defined in section 7701(a)(30) of the Code) for Federal income tax purposes
agrees to provide to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the cases of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to section 12.4 (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer and such Lender is in compliance with the provisions of
this section 5.4(b)), on the date of such assignment or transfer to such Lender,
(i) two accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001 (or successor forms) certifying to such Lender's entitlement
to a complete exemption from United States withholding tax with respect to
payments to be made under this Agreement, any Note or any other Credit Document,
or (ii) if the Lender is not a "bank" within the meaning of section 881(c)(3)(A)
of the Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit F (any such certificate, a "SECTION 5.4(B)(II) CERTIFICATE") and (y) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 (or successor form) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement, any Note or any other Credit Document.
In addition, each Lender agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the Borrower and the Administrative Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a
Section 5.4(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement, any Note or any other Credit Document,
or it shall immediately notify the Borrower and the Administrative Agent of its
inability to deliver any such Form or Certificate, in which case such Lender
shall not be required to deliver any such Form or Certificate pursuant to this
section 5.4(b).
(c) Notwithstanding anything to the contrary contained in section
5.4(a), the Borrower shall be entitled, to the extent it is required to do so by
law, to deduct or withhold income or other similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined in section
7701(a)(30) of the Code) for United States federal income tax purposes and which
has not provided to the Borrower such forms that establish a complete exemption
from such deduction or withholding (i) if such Lender has not provided to the
Borrower the Internal Revenue Service forms required to be provided to the
Borrower pursuant to
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section 5.4(b), or (ii) in the case of a payment other than interest, to a
Lender described in clause (ii) of section 5.2(b) above, to the extent that such
forms do not establish a complete exemption from withholding of such taxes.
5.5. LATE CHARGES. If any principal of any Loan or the amount of any
Unpaid Drawing is not paid within 10 days after the Administrative Agent shall
have given the Borrower notice of demand for the payment of the same or within
10 days after any Event of Default described in section 10.1(h) in respect of
the Borrower shall have occurred, or if any interest on any Loan is not paid
within 10 days after the same becomes due, THEN and in any such case the
Administrative Agent shall have the right to assess a late charge, payable by
the Borrower upon demand, in an amount equal to the greater of $20.00 or 5% of
the amount not timely paid. Any such late charge shall be for the account of the
Lenders for the benefit of whom such amount was not timely paid and shall be in
addition to any other amounts payable by the Borrower under the Credit
Documents.
SECTION 6. CONDITIONS PRECEDENT.
6.1. CONDITIONS PRECEDENT AT CLOSING DATE. The obligation of the
Lenders to make Loans, and of any Letter of Credit Issuer to issue Letters of
Credit, is subject to the satisfaction of each of the following conditions on
the Closing Date:
(a) EFFECTIVENESS; NOTES. On or prior to the Closing Date, (i)
the Effective Date shall have occurred and (ii) there shall have been
delivered to the Administrative Agent for the account of each Lender
each appropriate Note executed by the Borrower, in each case, in the
amount, maturity and as otherwise provided herein.
(b) FEES, ETC. The Borrower shall have paid or caused to be
paid all fees required to be paid by it on or prior to such date
pursuant to section 4.1 hereof and all reasonable fees and expenses of
the Administrative Agent and of special counsel to the Administrative
Agent which have been invoiced on or prior to such date in connection
with the preparation, execution and delivery of this Agreement and the
other Credit Documents and the consummation of the transactions
contemplated hereby and thereby.
(c) OTHER CREDIT DOCUMENTS. The Borrower shall have duly
executed and delivered and there shall be in full force and effect, and
original counterparts shall have been delivered to the Administrative
Agent, in sufficient quantities for the Lenders, of, (i) the Security
Agreement (as modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, the "SECURITY
AGREEMENT"), substantially in the form attached hereto as Exhibit C-2;
and (ii) the mortgage (as modified, amended or supplemented from time
to time in accordance with the terms thereof and hereof, the "CLOSING
DATE MORTGAGE"), substantially in the form attached hereto as Exhibit
C-4, encumbering the Borrower's Doylestown, Pennsylvania facilities.
(d) CHARTER AND REGULATIONS; GOOD STANDING. The Administrative
Agent shall have received, in sufficient quantity for the
Administrative Agent and the Lenders, (i) a copy of the articles of
incorporation of the Borrower, including any amendments or restatements
thereof, certified as of a recent date by the Secretary of State or
other governmental official of the jurisdiction of its formation, (ii)
a copy of the Code of Regulations of the Borrower, certified as true,
correct and in full force and effect by the Secretary or an Assistant
Secretary of the Borrower; and (iii) a copy of a certificate of good
standing for the Borrower, issued as of a recent date by the Secretary
of State or other governmental official of the jurisdiction of its
formation.
(e) CORPORATE RESOLUTIONS AND APPROVALS. The Administrative
Agent shall have received, in sufficient quantity for the
Administrative Agent and the Lenders, certified copies of the
resolutions of the Board of Directors of the Borrower, approving the
Credit Documents to which the Borrower is or may become a party, and of
all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to the execution, delivery
and performance by the Borrower of the Credit Documents to which it is
or may become a party.
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(f) INCUMBENCY CERTIFICATE. The Administrative Agent shall
have received, in sufficient quantity for the Administrative Agent and
the Lenders, a certificate of the Secretary or an Assistant Secretary
of the Borrower, certifying the names and true signatures of the
officers of the Borrower authorized to sign the Credit Documents to
which the Borrower is a party and any other documents to which the
Borrower is a party which may be executed and delivered in connection
herewith.
(g) OPINION OF COUNSEL. On the Closing Date, the
Administrative Agent shall have received an opinion, addressed to the
Administrative Agent and each of the Lenders and dated the Closing
Date, from Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., special counsel to the
Borrower, substantially in the form of Exhibit D-1 hereto and covering
such other matters incident to the transactions contemplated hereby as
the Administrative Agent may reasonably request, such opinion to be in
form and substance satisfactory to the Administrative Agent.
(h) RECORDATION OF SECURITY DOCUMENTS, DELIVERY OF COLLATERAL,
TAXES, ETC. The Security Documents (or proper notices or financing
statements in respect thereof) shall have been duly recorded, published
and filed in such manner and in such places as is required by law to
establish, perfect, preserve and protect the rights and security
interests of the parties thereto and their respective successors and
assigns, all collateral items required to be physically delivered to
the Collateral Agent thereunder shall have been so delivered,
accompanied by any appropriate instruments of transfer, and all taxes,
fees and other charges then due and payable in connection with the
execution, delivery, recording, publishing and filing of such
instruments and the issue and delivery of the Notes shall have been
paid in full.
(i) EVIDENCE OF INSURANCE. The Collateral Agent shall have
received certificates of insurance and other evidence, satisfactory to
it, of compliance with the insurance requirements of this Agreement and
the Security Documents.
(j) SEARCH REPORTS. The Administrative Agent shall have
received completed requests for information on Form UCC-11, or search
reports from one or more commercial search firms acceptable to the
Administrative Agent, listing all of the effective financing statements
filed against the Borrower in any jurisdiction in which the Borrower
maintains an office or in which any Collateral of the Borrower is
located, together with copies of such financing statements.
(k) COMMITMENT FOR TITLE POLICY AND OTHER DOCUMENTS RELATING
TO CLOSING DATE MORTGAGED PROPERTY. As to the Real Property subjected
to the Lien of the Closing Date Mortgage (the "CLOSING DATE MORTGAGED
PROPERTY"), the Collateral Agent shall have received:
(i) a commitment in standard form for an American
Land Title Association ( ALTA) mortgagee title insurance
policy (the "CLOSING DATE MORTGAGE POLICY"), issued by a title
insurance company reasonably satisfactory to the Collateral
Agent (a "TITLE COMPANY"), which when issued would meet the
requirements of section 8.12(f);
(ii) a title report issued by the Title Company with
respect thereto, dated not more than 30 days prior to the
Closing Date and satisfactory in form and substance to the
Administrative Agent;
(iii) copies of all recorded documents listed as
exceptions to title or otherwise referred to in the Closing
Date Mortgage Policy or in such title report;
(iv) evidence, which may be in the form of a letter
or other certification from the Title Company or from an
insurance broker, surveyor, engineer or other provider, as to
whether (1) the Closing Date Mortgaged Property is a Flood
Hazard Property, and (2) the community in which such Flood
Hazard Property is located is participating in the National
Flood Insurance Program, and if the Closing Date Mortgaged
Property is a Flood Hazard Property, evidence that the
Borrower has obtained flood insurance in respect of such Flood
Hazard Property to the extent
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required under the applicable regulations of the Board of
Governors of the Federal Reserve System; and
(v) a certificate of the Borrower identifying any
Phase I, Phase II or other environmental report received in
draft or final form by any Credit Party during the five year
period prior to the Closing Date with respect to the Closing
Date Mortgaged Property and/or the operations conducted
therefrom, or stating that no such draft or final form reports
have been requested or received by or on behalf of the
Borrower (or its counsel), together with true and correct
copies of all such environmental reports so listed (in draft
form, if not finalized); and all such environmental reports
shall be satisfactory in form and substance to the
Administrative Agent.
In addition, the Borrower shall have paid or caused to be paid, or
otherwise duly provided for the payment of, all costs and expenses
payable in connection with all of such actions, including but not
limited to (x) all mortgage, intangibles or similar taxes or fees,
however characterized, payable in respect of this Agreement, the
execution and delivery of the Notes, the Closing Date Mortgage or any
of the other Credit Documents or the recording of any of the same or
any other documents related thereto; and (y) all expenses and premiums
of the Title Company in connection with the issuance of such policy or
policies of title insurance and to all costs and expenses required for
the recording of the Closing Date Mortgage or any other Credit
Documents or any other related documents in the appropriate public
records.
(l) EXISTING LINE OF CREDIT. Contemporaneously with the
Closing Date, the Borrower shall have terminated its existing line of
credit with NCB in the amount of $5,000,000 and prepaid any borrowings
thereunder.
(m) SPLIT-OFF TRANSACTIONS, ETC. Contemporaneously with or
prior to the Closing Date, the Split-Off Transactions shall have been
completed as contemplated by the Registration Statement. There shall
have been no material change in or modification or waiver of any of the
terms, conditions or provisions of the Split-Off Transactions or any of
the documents pertaining thereto which shall have been made or become
effective subsequent to the date the Registration Statement and copies
of any of such documents were furnished to the Administrative Agent and
the Lenders pursuant to section 7.21 hereof, which is not acceptable to
the Administrative Agent or any Lender, in its sole discretion. Each of
the conditions precedent to the obligations of Essef Corporation and/or
the Borrower to consummate the Split-Off Transactions which is
contained in any of the documents pertaining thereto shall have been
fulfilled (without any material waiver thereto not acceptable to the
Administrative Agent or any Lender as provided above) to the
satisfaction of the Administrative Agent and each of the Lenders.
Without limiting the generality of the foregoing, the
Split-Off Transactions shall have been consummated in compliance with
the terms of the documents pertaining thereto and all applicable laws,
and all material governmental and third party approvals in connection
with the completion of the Split-Off Transactions contemplated by the
Registration Statement and such documents shall have been obtained and
remain in effect, and all applicable waiting periods under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and
the regulations thereunder, and under any other applicable laws or
regulations, shall have expired without any action being taken by any
competent authority (including any court having jurisdiction) which
restrains or prevents such transactions or imposes, in the judgment of
the Required Lenders, materially adverse conditions upon the
consummation of the Split-Off Transactions or the continued operation
by the Borrower of its businesses.
The proposed or definitive form of the Subordinated TBD Note
shall have been delivered to the Lenders and the subordination
provisions contained therein shall be acceptable in form and substance
to all of the Lenders.
Each of the Administrative Agent and the Lenders shall have
received such evidence as it may reasonably require as to satisfaction
of the conditions specified in this section 6.1(m).
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(n) MATERIAL LITIGATION. The Administrative Agent and each of
the Lenders shall be satisfied, in its sole respective discretion, that
there are no actions, suits, proceedings or governmental investigations
pending or threatened (i) which seek to restrain, impose restrictions
or burdens on, require divestitures as a consequence of, or otherwise
challenge the fairness, validity or effectiveness of, the merger of
Essef Corporation described in the Registration Statement, or any of
the Split-Off Transactions; (ii) that have, or might have if adversely
determined, a Material Adverse Effect on the Borrower, or (iii) which
question the validity or enforceability of any of the Credit Documents,
or of any action to be taken by the Borrower pursuant to any of the
Credit Documents.
(o) CLOSING DATE CERTIFICATE AS TO PRO FORMA PROJECTED MAXIMUM
CONSOLIDATED TOTAL DEBT AT SEPTEMBER 30, 1999. The Borrower shall have
delivered to the Administrative Agent, in sufficient quantities for the
Lenders, a certificate (the "CLOSING DATE CERTIFICATE") of a
responsible financial officer as to the computation of the maximum
aggregate principal amount of Consolidated Debt which could be
outstanding at September 30, 1999, based on a ratio of (i) Consolidated
Total Debt to (ii) the projected pro forma Consolidated EBITDA for the
Testing Period ended September 30, 1999, determined on the basis of the
projected financial information contained in the Financial Projections
and after giving effect to the Split- Off Transactions, of 3.00 to
1.00, and the Closing Date Certificate shall be satisfactory in form
and substance to each of the Lenders.
(p) SOLVENCY CERTIFICATE. The Administrative Agent shall have
received, in sufficient quantities for the Lenders, a duly executed
solvency certificate substantially in the form attached hereto as
Exhibit D-2, and such certificate shall be satisfactory in form and
substance to each of the Lenders.
(q) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings and all documents incidental to the transactions
contemplated hereby shall be satisfactory in substance and form to the
Administrative Agent and the Lenders and the Administrative Agent and
its special counsel and the Lenders shall have received all such
counterpart originals or certified or other copies of such documents as
the Administrative Agent or its special counsel or any Lender may
reasonably request.
6.2. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The obligations of the
Lenders to make each Loan and/or of a Letter of Credit Issuer to issue each
Letter of Credit is subject, at the time thereof, to the satisfaction of the
following conditions:
(a) NOTICE OF BORROWING, ETC. The Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of section
2.3 with respect to the incurrence of Loans or a Letter of Credit
Request meeting the requirement of section 3.2 with respect to the
issuance of a Letter of Credit.
(b) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of
each Credit Event and also after giving effect thereto, (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties of the Credit Parties contained herein or in the other
Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties had
been made on and as of the date of such Credit Event, except to the
extent that such representations and warranties expressly relate to an
earlier specified date, in which case such representations and
warranties shall have been true and correct in all material respects as
of the date when made.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Lenders that all of
the applicable conditions specified in section 6.1 and/or 6.2, as the case may
be, have been satisfied as of the times referred to in sections 6.1 and 6.2. All
of the certificates, legal opinions and other documents and papers referred to
in this section 6, unless otherwise specified, shall be delivered to the
Administrative Agent for the account of each of the Administrative Agent and the
Lenders and, except for the Notes, in sufficient counterparts for the
Administrative Agent and the Lenders, and the Administrative Agent will promptly
distribute to the Lenders their respective Notes and the copies of such other
certificates, legal opinions and documents.
Each Lender hereby severally confirms that, in making its own
respective credit analysis and determination whether to enter into or otherwise
become a party to this Agreement, (i) it has relied primarily on the financial
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condition and results of operations of the Borrower, (ii) it has determined that
the execution and delivery of the Closing Date Mortgage and any other Mortgages
for the Obligations, which is required by the terms and conditions of this
Agreement and the other Credit Documents, is being required only out of an
"ABUNDANCE OF CAUTION", as such term is used in Subpart C-Appraisals, of the
regulations issued by the Comptroller of the Currency, 12 C.F.R. ss.
34.43(a)(3), and (iii) accordingly, it has also determined that it is not
necessary, in light of its respective credit analysis and determination, to
require the Borrower to deliver or cause to be delivered to the Administrative
Agent or the Lenders at or prior to the Closing Date any appraisal covering the
Closing Date Mortgaged Property or other supporting documentation relating to
the Closing Date Mortgaged Property meeting the appraisal and other
documentation requirements of the Financial Institutions Recovery, Reform and
Enforcement Act of 1989, as amended, or any regulations, orders, directives or
advisory communications promulgated or issued with respect thereto, or any other
legal requirements, policies or procedures applicable to such Lender.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to make
the Loans, and/or to issue and/or to participate in the Letters of Credit
provided for herein, the Borrower makes the following representations and
warranties to, and agreements with, the Lenders, all of which shall survive the
execution and delivery of this Agreement and each Credit Event:
7.1. CORPORATE STATUS, ETC. The Borrower (i) is a duly organized or
formed and validly existing corporation, in good standing under the laws of the
jurisdiction of its formation and has the corporate power and authority to own
its property and assets and to transact the business in which it is engaged and
presently proposes to engage, and (ii) has duly qualified and is authorized to
do business in all jurisdictions where it is required to be so qualified except
where the failure to be so qualified would not have a Material Adverse Effect.
7.2. NO SUBSIDIARIES AT CLOSING DATE, ETC. As of the date hereof, and
as of the Closing Date, the Borrower has no Subsidiary.
7.3. CORPORATE POWER AND AUTHORITY, ETC. The Borrower has the corporate
power and authority to execute, deliver and carry out the terms and provisions
of the Credit Documents to which it is party and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Credit Documents to which it is party. The Borrower has duly executed and
delivered each Credit Document to which it is party and each Credit Document to
which it is party constitutes the legal, valid and binding agreement or
obligation of the Borrower enforceable in accordance with its terms, except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
7.4. NO VIOLATION. Neither the execution, delivery and performance by
the Borrower of the Credit Documents to which it is party nor compliance with
the terms and provisions thereof (i) will contravene any provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality applicable to the Borrower or its properties and
assets, (ii) will conflict with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (other than the Liens created pursuant to the Security Documents) upon any
of the property or assets of the Borrower pursuant to the terms of any
promissory note, bond, debenture, indenture, mortgage, deed of trust, credit or
loan agreement, or any other material agreement or other instrument, to which
the Borrower is a party or by which it or any of its property or assets are
bound or to which it may be subject, or (iii) will violate any provision of the
articles of incorporation or code of regulations of the Borrower.
7.5. GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required as a
condition to (i) the execution, delivery and performance by the Borrower of any
Credit Document to which it is a party, or (ii) the legality, validity, binding
effect or enforceability of any Credit Document to which the Borrower is a
party, EXCEPT for the filing and
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recording of financing statements and other documents, and the completion of any
Lien registrations, which are necessary in order to perfect the Liens created by
the Security Documents.
7.6. LITIGATION. There are no actions, suits or proceedings pending or,
to, the knowledge of the Borrower, threatened with respect to the Borrower (i)
that have, or could reasonably be expected to have, a Material Adverse Effect,
or (ii) which question the validity or enforceability of any of the Credit
Documents, or of any action to be taken by the Borrower pursuant to any of the
Credit Documents.
7.7. USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of all Loans
and Credit Events shall be utilized for lawful purposes not inconsistent with
the requirements of this Agreement.
(b) No part of the proceeds of any Credit Event will be used directly
or indirectly to purchase or carry Margin Stock, or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock, in violation of any
of the provisions of Regulation T, U or X of the Board of Governors of the
Federal Reserve System. The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. At no time
would more than 25% of the value of the assets of the Borrower or of the
Borrower and its consolidated Subsidiaries that are subject to any "arrangement"
(as such term is used in section 221.2(g) of such Regulation U) hereunder be
represented by Margin Stock.
7.8. FINANCIAL STATEMENTS, ETC. (a) The Borrower has furnished to the
Lenders and the Administrative Agent complete and correct copies of (i) the
audited balance sheets of the Borrower as of December 31, 1998 and December 31,
1997 and the related audited statements of income, shareholders' equity, and
cash flows of the Borrower for the fiscal periods then ended, accompanied by the
unqualified report thereon of the Borrower's independent accountants; and (ii)
the condensed balance sheet of the Borrower as of March 31, 1999, and the
related condensed statements of income and of cash flows of the Borrower for the
fiscal period then ended. All such financial statements have been prepared in
accordance with GAAP, consistently applied (except as stated therein), and
fairly present, in all material respects, the financial position of the Borrower
as of the respective dates indicated and the results of its operations and cash
flows for the respective periods indicated, subject in the case of any such
financial statements which are unaudited, to the absence of notes thereto and to
normal audit adjustments, none of which will involve a Material Adverse Effect.
The Borrower did not have, as of the date of the latest financial statements
referred to above, and will not have as of the Closing Date after giving effect
to the consummation of the Split-Off Transactions and the incurrence of Loans
hereunder, any material or significant contingent liability or liability for
taxes, long-term lease or unusual forward or long-term commitment that is not
reflected in the foregoing financial statements or the notes thereto in
accordance with GAAP and which in any such case is material in relation to the
business, operations, properties, assets or condition (financial or otherwise)
of the Borrower.
(b) The Borrower has received consideration which is the reasonable
equivalent value of the obligations and liabilities that the Borrower has
incurred to the Administrative Agent and the Lenders. The Borrower has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage, is solvent and able to pay its
debts as they mature, and owns property having a value, both at fair valuation
and at present fair salable value, greater than the amount required to pay the
Borrower's debts; and the Borrower is not entering into the Credit Documents
with the intent to hinder, delay or defraud its creditors. For purposes of this
section 7.8(b), "DEBT" means any liability on a claim, and "CLAIM" means (x)
right to payment whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured; or (y) right to an equitable remedy for
breach of performance if such breach gives rise to a payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured.
(c) The Borrower has delivered or caused to be delivered to the Lenders
prior to the execution and delivery of this Agreement (i) a copy of the
Registration Statement as filed (with Exhibits) with the SEC, which contains a
general description of the business and affairs of the Borrower (giving effect
to the Split-Off Transactions), (ii) a confidential information brochure dated
June 1999 prepared by the Administrative Agent (with assistance from the
Borrower) which contains information with respect to the business, properties
and operations of the Borrower (the "CONFIDENTIAL INFORMATION MEMORANDUM"), and
(iii) financial projections prepared by management of the Borrower for the
Borrower for the fiscal years 1999-2002, which are included as Part VIII of the
Confidential
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Information Memorandum, and which take into account the Split-Off Transactions
(the "FINANCIAL PROJECTIONS"). The Financial Projections were prepared on behalf
of the Borrower in good faith after taking into account historical levels of
business activity of the Borrower, known trends, including general economic
trends, and all other information, assumptions and estimates considered by
management of the Borrower to be pertinent thereto; PROVIDED, that no
representation or warranty is made as to the impact of future general economic
conditions or as to whether the Borrower's projected consolidated results as set
forth in the Financial Projections will actually be realized. No facts are known
to the Borrower at the date hereof which, if reflected in the Financial
Projections, would result in a material adverse change in the assets,
liabilities, results of operations or cash flows reflected therein.
7.9. NO MATERIAL ADVERSE CHANGE. Since December 31, 1998, there has
been no change in the condition, business or affairs of the Borrower, or its
properties and assets considered as an entirety, EXCEPT FOR (i) changes incident
to the completion of the Split-Off Transactions, as contemplated hereby,
including the incurrence of the additional Indebtedness contemplated hereby to
be incurred to finance and support the Split-Off Transactions, and (ii) other
changes none of which, individually or in the aggregate, has had or could
reasonably be expected to have, a Material Adverse Effect.
7.10. TAX RETURNS AND PAYMENTS. The Borrower has filed all federal
income tax returns and all other material tax returns, domestic and foreign,
required to be filed by it and has paid all material taxes and assessments
payable by it which have become due, other than those not yet delinquent and
except for those contested in good faith. The Borrower has established on its
books such charges, accruals and reserves in respect of taxes, assessments, fees
and other governmental charges for all fiscal periods as are required by GAAP.
The Borrower knows of no proposed assessment for additional federal, foreign or
state taxes for any period, or of any basis therefor, which, individually or in
the aggregate, taking into account such charges, accruals and reserves in
respect thereof as the Borrower has made, could reasonably be expected to have a
Material Adverse Effect.
7.11. TITLE TO PROPERTIES, ETC. The Borrower has good and marketable
title, in the case of real property, and good title (or valid Leaseholds, in the
case of any leased property), in the case of all other property, to all of its
properties and assets free and clear of Liens other than Liens permitted by
section 9.3. The interests of the Borrower in the properties reflected in the
most recent balance sheet referred to in section 7.8, taken as a whole, were
sufficient, in the judgment of the Borrower, as of the date of such balance
sheet for purposes of the ownership and operation of the businesses conducted by
the Borrower.
7.12. LAWFUL OPERATIONS, ETC. Except for known situations or incidents
which are reserved for on the most recent balance sheet referred to in section
7.8 or which, if not so reserved, would not reasonably be expected to have a
Material Adverse Effect, the Borrower is in full compliance with all material
requirements imposed by law, whether federal, state or local (exclusive of
requirements imposed by Environmental Laws, as to which representations are made
in section 7.13).
7.13. ENVIRONMENTAL MATTERS. (a) Except for any matters which,
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect, to the best of the Borrower's knowledge: (i) the
Borrower is in full compliance with all material requirements imposed by
Environmental Laws; and (ii) all licenses, permits, registrations or approvals
required for the business of the Borrower under any Environmental Law have been
secured and the Borrower is in substantial compliance therewith. There are no
Environmental Claims pending or, to the best knowledge of the Borrower,
threatened wherein an unfavorable decision, ruling or finding would reasonably
be expected to have a Material Adverse Effect.
(b) Hazardous Materials have not at any time been (i) generated, used,
treated or stored on, or transported to or from, any Real Property of the
Borrower or (ii) released on any such Real Property, in each case where such
occurrence or event is not in compliance with Environmental Laws and would be
reasonably likely to have a Material Adverse Effect.
7.14. COMPLIANCE WITH ERISA. Compliance by the Borrower with the
provisions hereof and Credit Events contemplated hereby will not involve any
prohibited transaction within the meaning of ERISA or section 4975 of the Code.
The Borrower (i) has fulfilled all obligations under minimum funding standards
of ERISA and the Code with respect to each Plan that is not a Multiemployer Plan
or a Multiple Employer Plan, (ii) has satisfied all
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respective contribution obligations in respect of each Multiemployer Plan and
each Multiple Employer Plan, (iii) is in compliance in all material respects
with all other applicable provisions of ERISA and the Code with respect to each
Plan, each Multiemployer Plan and each Multiple Employer Plan, and (iv) has not
incurred any liability under the Title IV of ERISA to the PBGC with respect to
any Plan, any Multiemployer Plan, any Multiple Employer Plan, or any trust
established thereunder. No Plan or trust created thereunder has been terminated,
and there have been no Reportable Events, with respect to any Plan or trust
created thereunder or with respect to any Multiemployer Plan or Multiple
Employer Plan, which termination or Reportable Event will or would reasonably be
expected to result in the termination of such Plan, Multiemployer Plan or
Multiple Employer Plan and give rise to a material liability of the Borrower or
any ERISA Affiliate in respect thereof. Neither the Borrower nor any ERISA
Affiliate is at the date hereof, or has been at any time within the two years
preceding the date hereof, an employer required to contribute to any
Multiemployer Plan or Multiple Employer Plan, or a "contributing sponsor" (as
such term is defined in section 4001 of ERISA) in any Multiemployer Plan or
Multiple Employer Plan. Neither the Borrower nor any ERISA Affiliate has any
contingent liability with respect to any post-retirement "welfare benefit plan"
(as such term is defined in ERISA) except as has been disclosed to the Lenders
in writing.
7.15. INTELLECTUAL PROPERTY, ETC. The Borrower has obtained or has the
right to use all material patents, trademarks, service marks, trade names,
copyrights, licenses and other rights with respect to the foregoing necessary
for the present and planned future conduct of its business, without any known
conflict with the rights of others, EXCEPT for such patents, trademarks, service
marks, trade names, copyrights, licenses and rights, the loss of which, and such
conflicts, which in any such case individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect.
7.16. INVESTMENT COMPANY ACT, ETC. The Borrower is not subject to
regulation with respect to the creation or incurrence of Indebtedness under the
Investment Company Act of 1940, as amended, the Interstate Commerce Act, as
amended, the Federal Power Act, as amended, the Public Utility Holding Company
Act of 1935, as amended, or any applicable state public utility law.
7.17. YEAR 2000 COMPUTER MATTERS. (a) The Borrower has (i) conducted a
review and assessment of all areas of its business that could be adversely
affected by the "Y2K ISSUE" (that is, the risk that computer applications used
by the Borrower may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999), which review and assessment has included written inquiry of the
Borrower's key suppliers and vendors, (ii) developed a plan and timeline for
addressing the Y2K issue prior to December 31, 1999, including linkages with key
suppliers and vendors on a timely basis, and (iii) implemented that plan
substantially in accordance with that timetable.
(b) Based on such review and program, (i) the Borrower reasonably
believes that the Y2K issue is not reasonably likely to have a Material Adverse
Effect, (ii) the Borrower reasonably anticipates that all computer applications
that are material to its business will on a timely basis be able to perform
properly date-sensitive functions for all dates before and after January 1, 2000
(i.e., be "Y2K COMPLIANT"), and (iii) the Borrower reasonably believes that each
of such key suppliers and vendors will on a timely basis be Y2K compliant in all
material respects that affect the Borrower.
7.18. EXISTING INDEBTEDNESS. Annex II sets forth a true and complete
list, as of the date or dates set forth therein, of all Indebtedness of the
Borrower which (i) has an outstanding principal amount of at least $50,000, or
may be incurred pursuant to existing commitments or lines of credit, or (ii) is
secured by any Lien on any property of the Borrower and which will be
outstanding on the Closing Date after giving effect to any Borrowing hereunder
which is expected to be made on the Closing Date, other than the Indebtedness
created under the Credit Documents (all such Indebtedness, whether or not in a
principal amount meeting such threshold and required to be so listed on Annex
II, herein the "EXISTING INDEBTEDNESS"). The Borrower has provided to the
Administrative Agent prior to the date of execution hereof true and complete
copies (or summary descriptions) of all agreements and instruments governing the
Indebtedness listed on Annex II (the "EXISTING INDEBTEDNESS AGREEMENTS").
7.19. BURDENSOME CONTRACTS; LABOR RELATIONS. The Borrower (i) is not
subject to any burdensome contract, agreement, corporate restriction, judgment,
decree or order, (ii) is not a party to any labor dispute affecting any
bargaining unit or other group of employees generally, (iii) is not subject to
any material strike, slow down,
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workout or other concerted interruptions of operations by employees of the
Borrower, or by employees of independent contractors or subcontractors working
on projects undertaken by the Borrower, whether or not relating to any labor
contracts, (iv) is not subject to any significant pending or, to the knowledge
of the Borrower, threatened, unfair labor practice complaint, before the
National Labor Relations Board, and (v) is not subject to any significant
pending or, to the knowledge of the Borrower, threatened, grievance or
significant arbitration proceeding arising out of or under any collective
bargaining agreement, (vi) is not subject to any significant pending or, to the
knowledge of the Borrower, threatened, significant strike, labor dispute,
slowdown or stoppage, and (vii) is not, to the knowledge of the Borrower,
involved or subject to any union representation organizing or certification
matter with respect to the employees of the Borrower, EXCEPT (with respect to
any matter specified in any of the above clauses), for such matters as,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
7.20. SECURITY INTERESTS. Once executed and delivered, and until
terminated in accordance with the terms thereof, each of the Security Documents
creates, as security for the obligations purported to be secured thereby, a
valid and enforceable perfected security interest in and Lien on all of the
Collateral subject thereto from time to time, in favor of the Collateral Agent
for the benefit of the Secured Creditors referred to in the Security Documents,
superior to and prior to the rights of all third persons and subject to no other
Liens, EXCEPT that the Collateral under the Security Documents may be subject to
Permitted Liens. No filings or recordings are required in order to perfect the
security interests created under any Security Document except for filings or
recordings required in connection with any such Security Document which shall
have been made, or for which satisfactory arrangements have been made, upon or
prior to the execution and delivery thereof. All recording, stamp, intangible or
other similar taxes required to be paid by any person under applicable legal
requirements or other laws applicable to the property encumbered by the Security
Documents in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement thereof have been paid.
7.21. SPLIT-OFF DOCUMENTS, ETC. The Borrower has delivered to the
Administrative Agent and the Lenders prior to the Effective Date true, correct
and complete copies of the Registration Statement (including Exhibits) and all
other material documents pertinent to the completion of the Split-Off
Transactions, to the extent such documents are not Exhibits to the Registration
Statement. Such documents so furnished constitute all of the material agreements
between Essef Corporation and the Borrower relating to the Split-Off
Transactions. Each such document which has been executed and delivered as of the
Effective Date is, and each such document which is executed and delivered at the
time of the consummation of the Split-Off Transactions will be at such time, the
legal, valid and binding agreement or obligation of each party thereto,
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law). At and as of the Closing Date, the Split-Off Transactions
shall have been consummated in accordance, in all material respects, with the
applicable documents and in compliance, in all material respects, with all
applicable laws.
7.22. TRUE AND COMPLETE DISCLOSURE. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the Borrower
or any of its Subsidiaries in writing to the Administrative Agent or any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated herein, other than the Financial Projections (as to which
representations are made only as provided in section 7.8), is, and all other
such factual information (taken as a whole) hereafter furnished by or on behalf
of such person in writing to any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided, except that any such
future information consisting of financial projections prepared by the Borrower
is only represented herein as being based on good faith estimates and
assumptions believed by such persons to be reasonable at the time made, it being
recognized by the Lenders that such projections as to future events are not to
be viewed as facts and that actual results during the period or periods covered
by any such projections may differ materially from the projected results.
Notwithstanding the above provisions of this section 7.22, to the extent that
the representations and warranties contained in this section 7.22 relate to the
factual information contained in the Confidential Information Memorandum, such
representations and warranties are made only to the best knowledge of the
Borrower.
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SECTION 8. AFFIRMATIVE COVENANTS.
The Borrower hereby covenants and agrees that on the Effective Date and
thereafter so long as this Agreement is in effect and until such time as the
Total Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder and
under the other Credit Documents, have been paid in full:
8.1. REPORTING REQUIREMENTS. The Borrower will furnish to each Lender
and the Administrative Agent:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available and in
any event within 90 days after the close of each fiscal year of the
Borrower, the consolidated and consolidating balance sheets of the
Borrower and its consolidated Subsidiaries as at the end of such fiscal
year and the related consolidated and consolidating statements of
income, of stockholders' equity and of cash flows for such fiscal year,
in each case setting forth comparative figures for the preceding fiscal
year, all in reasonable detail and accompanied by the opinion with
respect to such consolidated financial statements of independent public
accountants of recognized national standing selected by the Borrower,
which opinion shall be unqualified and shall (i) state that such
accountants audited such consolidated financial statements in
accordance with generally accepted auditing standards, that such
accountants believe that such audit provides a reasonable basis for
their opinion, and that in their opinion such consolidated financial
statements present fairly, in all material respects, the consolidated
financial position of the Borrower and its consolidated subsidiaries as
at the end of such fiscal year and the consolidated results of their
operations and cash flows for such fiscal year in conformity with
generally accepted accounting principles, or (ii) contain such
statements as are customarily included in unqualified reports of
independent accountants in conformity with the recommendations and
requirements of the American Institute of Certified Public Accountants
(or any successor organization).
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and
in any event within 45 days after the close of each of the quarterly
accounting periods in each fiscal year of the Borrower, the unaudited
consolidated and consolidating balance sheets of the Borrower and its
consolidated Subsidiaries as at the end of such quarterly period and
the related unaudited consolidated and consolidating statements of
income and of cash flows for such quarterly period and/or for the
fiscal year to date, and setting forth, in the case of such unaudited
consolidated statements of income and of cash flows, comparative
figures for the related periods in the prior fiscal year, and which
shall be certified on behalf of the Borrower by the Chief Financial
Officer or other Authorized Officer of the Borrower, subject to changes
resulting from normal year-end audit adjustments.
(c) OFFICER'S COMPLIANCE CERTIFICATES. At the time of the
delivery of the financial statements provided for in sections 8.1(a)
and (b), a certificate on behalf of the Borrower of the Chief Financial
Officer or other Authorized Officer of the Borrower to the effect that,
to the best knowledge of the Borrower, no Default or Event of Default
exists or, if any Default or Event of Default does exist, specifying
the nature and extent thereof and the actions the Borrower proposes to
take with respect thereto, which certificate shall set forth the
calculations required to establish compliance with the provisions of
sections 9.4(c), 9.7, 9.8, 9.9, 9.10, 9.11 and 9.13 of this Agreement.
If after the Borrower delivers a certificate pursuant to this section
8.1(c) for any fiscal period, the Borrower completes an Acquisition,
the Borrower may deliver another certificate pursuant to this section
8.1(c) for the same fiscal period which gives pro forma effect to such
Acquisition for the period prior to the date of the Acquisition which
is covered by such fiscal period or prior periods, in the manner
contemplated by the definition of Consolidated EBITDA and other
applicable defined terms, in the computations establishing compliance
with such sections.
(d) MONTHLY FINANCIAL STATEMENTS. As soon as practicable and
in any event within 30 days after the end of each calendar month,
monthly financial information reflecting the results of operations of
the Borrower and its Subsidiaries for such calendar month, in the form
customarily prepared by management for its internal use and otherwise
reasonably satisfactory in scope and form to the Administrative Agent.
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(e) BUDGETS AND FORECASTS. Not later than 30 days following
the commencement of any fiscal year of the Borrower and its
Subsidiaries, a consolidated budget in reasonable detail for each of
the four fiscal quarters of such fiscal year, and (if and to the extent
prepared by management of the Borrower) for any subsequent fiscal
years, as customarily prepared by management for its internal use,
setting forth, with appropriate discussion, the forecasted balance
sheet, income statement, operating cash flows and capital expenditures
of the Borrower and its Subsidiaries for the period covered thereby,
and the principal assumptions upon which forecasts and budget are
based.
(f) NOTICE OF DEFAULT, LITIGATION OR CERTAIN MATTERS INVOLVING
MAJOR CUSTOMERS OR SUPPLIERS. Promptly, and in any event within three
Business Days, in the case of clause (i) below, or five Business Days,
in the case of clause (ii) or (iii) below, after the Borrower or any of
its Subsidiaries obtains knowledge thereof, notice of
(i) the occurrence of any event which constitutes a
Default or Event of Default, which notice shall specify the
nature thereof, the period of existence thereof and what
action the Borrower proposes to take with respect thereto,
(ii) the commencement of, or any other material
development concerning, any litigation or governmental or
regulatory proceeding pending against the Borrower or any of
its Subsidiaries, if the same involves any reasonable
possibility of having a Material Adverse Effect, and
(iii) any significant adverse change (in the
Borrower's reasonable judgment) in the Borrower's or any
Subsidiary's relationship with, or any significant event or
circumstance which is in the Borrower's reasonable judgment
likely to adversely affect the Borrower's or any Subsidiary's
relationship with, (A) any customer (or related group of
customers) representing more than 10% of the Borrower's
consolidated revenues during its most recent fiscal year, or
(B) any supplier which is material to the operations of the
Borrower and its Subsidiaries considered as an entirety.
(g) ERISA. Promptly, and in any event within 10 days after the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate knows
of the occurrence of any of the following, the Borrower will deliver to
each of the Lenders a certificate on behalf of the Borrower of an
Authorized Officer of the Borrower setting forth the full details as to
such occurrence and the action, if any, that the Borrower, such
Subsidiary or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed
with or by the Borrower, the Subsidiary, the ERISA Affiliate, the PBGC,
a Plan participant or the Plan administrator with respect thereto:
(i) that a Reportable Event has occurred with respect
to any Plan;
(ii) the institution of any steps by the Borrower,
any ERISA Affiliate, the PBGC or any other person to terminate
any Plan;
(iii) the institution of any steps by the Borrower or
any ERISA Affiliate to withdraw from any Plan;
(iv) the institution of any steps by the Borrower or
any Subsidiary to withdraw from any Multiemployer Plan or
Multiple Employer Plan, if such withdrawal could result in
withdrawal liability (as described in Part 1 of Subtitle E of
Title IV of ERISA) in excess of $1,000,000;
(v) a non-exempt "prohibited transaction" within the
meaning of section 406 of ERISA in connection with any Plan;
(vi) that a Plan has an Unfunded Current Liability
exceeding $500,000;
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(vii) any material increase exceeding $1,000,000 in
the contingent liability of the Borrower or any Subsidiary
with respect to any post-retirement welfare liability; or
(viii) the taking of any action by, or the
threatening of the taking of any action by, the Internal
Revenue Service, the Department of Labor or the PBGC with
respect to any of the foregoing.
(h) ENVIRONMENTAL MATTERS. Promptly upon, and in any event
within 10 Business Days after, an officer of the Borrower or any of its
Subsidiaries obtains knowledge thereof, notice of one or more of the
following environmental matters: (i) any pending or overtly threatened
in writing material Environmental Claim against the Borrower or any of
its Subsidiaries or any Real Property owned or operated by the Borrower
or any of its Subsidiaries; (ii) any condition or occurrence on or
arising from any Real Property owned or operated by the Borrower or any
of its Subsidiaries that (A) results in material noncompliance by the
Borrower or any of its Subsidiaries with any applicable Environmental
Law or (B) would reasonably be expected to form the basis of a material
Environmental Claim against the Borrower or any of its Subsidiaries or
any such Real Property; (iii) any condition or occurrence on any Real
Property owned, leased or operated by the Borrower or any of its
Subsidiaries that would reasonably be expected to cause such Real
Property to be subject to any material restrictions on the ownership,
occupancy, use or transferability by the Borrower or any of its
Subsidiaries of such Real Property under any Environmental Law; and
(iv) the taking of any material removal or remedial action in response
to the actual or alleged presence of any Hazardous Material on any Real
Property owned, leased or operated by the Borrower or any of its
Subsidiaries as required by any Environmental Law or any governmental
or other administrative agency. All such notices shall describe in
reasonable detail the nature of the Environmental Claim, the Borrower's
or such Subsidiary's response thereto and the potential exposure in
dollars, if known or reasonably quantifiable, of the Borrower and its
Subsidiaries with respect thereto.
(i) SEC REPORTS AND REGISTRATION STATEMENTS. Promptly after
transmission thereof or other filing with the SEC, copies of all
registration statements (other than the exhibits thereto and any
registration statement on Form S-8 or its equivalent) and all annual,
quarterly or current reports that the Borrower or any of its
Subsidiaries files with the SEC on Form 10-K, 10-Q or 8-K (or any
successor forms).
(j) ANNUAL AND QUARTERLY REPORTS, PROXY STATEMENTS AND OTHER
REPORTS DELIVERED TO STOCKHOLDERS GENERALLY. Promptly after
transmission thereof to its stockholders, copies of all annual,
quarterly and other reports and all proxy statements that the Borrower
furnishes to its stockholders generally.
(k) AUDITORS' INTERNAL CONTROL COMMENT LETTERS, ETC. Promptly
upon receipt thereof, a copy of each letter or memorandum commenting on
internal accounting controls and/or accounting or financial reporting
policies followed by the Borrower and/or any of its Subsidiaries, which
is submitted to the Borrower by its independent accountants in
connection with any annual or interim audit made by them of the books
of the Borrower or any of its Subsidiaries.
(l) OTHER INFORMATION. With reasonable promptness, such other
information or documents (financial or otherwise) relating to the
Borrower or any of its Subsidiaries as any Lender may reasonably
request from time to time.
8.2. BOOKS, RECORDS AND INSPECTIONS. The Borrower will, and will cause
each of its Subsidiaries to, (i) keep proper books of record and account, in
which full and correct entries shall be made of all financial transactions and
the assets and business of the Borrower or such Subsidiaries, as the case may
be, in accordance with GAAP; and (ii) permit, upon at least two Business Days'
notice to the Chief Financial Officer of the Borrower, officers and designated
representatives of the Administrative Agent or any of the Lenders to visit and
inspect any of the properties or assets of the Borrower and any of its
Subsidiaries in whomsoever's possession (but only to the extent the Borrower or
such Subsidiary has the right to do so to the extent in the possession of
another person), to examine the books of account of the Borrower and any of its
Subsidiaries, and make copies thereof and take extracts therefrom, and to
discuss the affairs, finances and accounts of the Borrower and of any of its
Subsidiaries with, and
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be advised as to the same by, its and their officers and independent accountants
and independent actuaries, if any, all at such reasonable times and intervals
and to such reasonable extent as the Administrative Agent or any of the Lenders
may request.
8.3. INSURANCE. (a) The Borrower will, and will cause each of its
Subsidiaries to, (i) maintain insurance coverage by such insurers and in such
forms and amounts and against such risks as are generally consistent with the
insurance coverage maintained by the Borrower and its Subsidiaries at the date
hereof, and (ii) forthwith upon any Lender's written request, furnish to such
Lender such information about such insurance as such Lender may from time to
time reasonably request, which information shall be prepared in form and detail
satisfactory to such Lender and certified by an Authorized Officer of the
Borrower.
(b) The Borrower will, and will cause each of its Subsidiaries which is
a Credit Party to, at all times keep their respective property which is subject
to the Lien of any Security Document insured in favor of the Collateral Agent,
and all policies or certificates (or certified copies thereof) with respect to
such insurance (and any other insurance maintained by the Borrower or any such
Subsidiary) (i) shall be endorsed to the Collateral Agent's satisfaction for the
benefit of the Collateral Agent (including, without limitation, by naming the
Collateral Agent as loss payee (with respect to Collateral) or, to the extent
permitted by applicable law, as an additional insured), (ii) shall state that
such insurance policies shall not be canceled without 30 days' prior written
notice thereof (or 10 days' prior written notice in the case of cancellation for
the non-payment of premiums) by the respective insurer to the Collateral Agent,
(iii) shall provide that the respective insurers irrevocably waive any and all
rights of subrogation with respect to the Collateral Agent and the Lenders, and
(iv) shall in the case of any such certificates or endorsements in favor of the
Collateral Agent, be delivered to or deposited with the Collateral Agent. In no
event shall the Borrower be required to deposit the actual insurance policies
with the Collateral Agent. The Administrative Agent shall deliver copies of any
certificates of insurance to a Lender upon such Lender's reasonable request.
(c) If the Borrower or any of its Subsidiaries shall fail to maintain
all insurance in accordance with this section 8.3, or if the Borrower or any of
its Subsidiaries shall fail to so endorse and deliver or deposit all
endorsements or certificates with respect thereto, the Administrative Agent
and/or the Collateral Agent shall have the right (but shall be under no
obligation), upon prior written notice to the Borrower, to procure such
insurance and the Borrower agrees to reimburse the Administrative Agent or the
Collateral Agent, as the case may be, on demand, for all costs and expenses of
procuring such insurance.
8.4. PAYMENT OF TAXES AND CLAIMS. The Borrower will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, could
become a Lien or charge upon any properties of the Borrower or any of its
Subsidiaries; PROVIDED that neither the Borrower nor any of its Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim which
is being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP; and PROVIDED,
FURTHER, that the Borrower will not be considered to be in default of any of the
provisions of this sentence if the Borrower or any Subsidiary fails to pay any
such amount which, individually or in the aggregate, is immaterial. Without
limiting the generality of the foregoing, the Borrower will, and will cause each
of its Subsidiaries to, pay in full all of its wage obligations to its employees
in accordance with the Fair Labor Standards Act (29 U.S.C. sections 206-207) and
any comparable provisions of applicable law.
8.5. CORPORATE FRANCHISES. The Borrower will do, and will cause each of
its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its corporate existence, rights and authority,
PROVIDED that nothing in this section 8.5 shall be deemed to prohibit (i) any
transaction permitted by section 9.2; (ii) the termination of existence of any
Subsidiary if (A) the Borrower determines that such termination is in its best
interest and (B) such termination is not adverse in any material respect to the
Lenders; or (iii) the loss of any rights, authorities or franchises if the loss
thereof, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
8.6. ADEQUATE REPAIR. The Borrower will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept
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in adequate repair, working order and condition, normal wear and tear excepted,
and that from time to time there are made in such properties and equipment all
needful and proper repairs, renewals, replacements, extensions, additions,
betterments and improvements, thereto, to the extent and in the manner customary
for companies in similar businesses.
8.7. COMPLIANCE WITH STATUTES, ETC. The Borrower will, and will cause
each of its Subsidiaries to, comply, in all material respects, with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, other than those (i)
the noncompliance with which would not have, and which would not be reasonably
expected to have, a Material Adverse Effect; and/or (ii) imposed by
Environmental Laws, as to which section 8.8 shall be applicable.
8.8. COMPLIANCE WITH ENVIRONMENTAL LAWS. Without limitation of the
covenants contained in section 8.7 hereof,
(a) The Borrower will comply, and will cause each of its
Subsidiaries to comply, in all material respects, with all
Environmental Laws applicable to the ownership, lease or use of all
Real Property now or hereafter owned, leased or operated by the
Borrower or any of its Subsidiaries, and will promptly pay or cause to
be paid all costs and expenses incurred in connection with such
compliance, EXCEPT to the extent that such compliance with
Environmental Laws is being contested in good faith and by appropriate
proceedings and for which adequate reserves have been established to
the extent required by GAAP, and an adverse outcome in such proceedings
is not reasonably expected to have a Material Adverse Effect.
(b) The Borrower will keep or cause to be kept, and will cause
each of its Subsidiaries to keep or cause to be kept, all such Real
Property free and clear of any Liens imposed pursuant to such
Environmental Laws which are not permitted under section 9.3.
(c) Neither the Borrower nor any of its Subsidiaries will
generate, use, treat, store, release or dispose of, or permit the
generation, use, treatment, storage, release or disposal of, Hazardous
Materials on any Real Property now or hereafter owned, leased or
operated by the Borrower or any of its Subsidiaries or transport or
permit the transportation of Hazardous Materials to or from any such
Real Property other than in compliance with applicable Environmental
Laws and in the ordinary course of business, except for such
noncompliance as would not have, and which would not be reasonably
expected to have, a Material Adverse Effect.
(d) If required to do so under any applicable order of any
governmental agency, the Borrower will undertake, and cause each of its
Subsidiaries to undertake, any clean up, removal, remedial or other
action necessary to remove and clean up any Hazardous Materials from
any Real Property owned, leased or operated by the Borrower or any of
its Subsidiaries in accordance with, in all material respects, the
requirements of all applicable Environmental Laws and in accordance
with, in all material respects, such orders of all governmental
authorities, except to the extent that the Borrower or such Subsidiary
is contesting such order in good faith and by appropriate proceedings
and for which adequate reserves have been established to the extent
required by GAAP.
(e) In the event the Administrative Agent notifies the
Borrower that the Required Lenders have determined on the basis of an
environmental report or assessment delivered by the Borrower pursuant
to the provisions of section 6.1(k), or otherwise, that the Closing
Date Mortgage should be released and discharged because of substantial
concerns of the Required Lenders with respect to environmental matters
revealed in such environmental report or assessment, or otherwise
recognized by the Required Lenders, the Required Lenders may cause the
Collateral Agent to release and discharge the Closing Date Mortgage,
SUBJECT to any later determination by the Required Lenders notified to
the Borrower by the Administrative Agent that an Additional Security
Document in the form of a mortgage, deed of trust or similar instrument
covering the Closing Date Mortgaged Property should be executed and
delivered hereunder.
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(f) At the written request of the Administrative Agent or the
Required Lenders, which request shall specify in reasonable detail the
basis therefor, at any time and from time to time after the Lenders
receive notice under section 8.1(h) for any Environmental Claim
involving potential expenditures by the Borrower or any of its
Subsidiaries in excess of $1,000,000 in the aggregate for any
particular Real Property, the Borrower will provide, at its sole cost
and expense, an environmental site assessment report concerning any
such Real Property now or hereafter owned, leased or operated by the
Borrower or any of its Subsidiaries, prepared by an environmental
consulting firm reasonably acceptable to the Administrative Agent,
indicating the presence or absence of Hazardous Materials and the
potential cost of any removal or a remedial action in connection with
any Hazardous Materials on such Real Property. If the Borrower fails to
provide the same within 90 days after such request was made, the
Administrative Agent may order the same, and the Borrower shall grant
and hereby grants, to the Administrative Agent and the Lenders and
their agents, access to such Real Property and specifically grants the
Administrative Agent and the Lenders an irrevocable non-exclusive
license, subject to the rights of tenants, to undertake such an
assessment, all at the Borrower's expense.
8.9. FISCAL YEARS, FISCAL QUARTERS. If the Borrower shall change any of
its or any of its Subsidiaries' fiscal years or fiscal quarters (other than the
fiscal year or fiscal quarters of a person which becomes a Subsidiary, made at
the time such person becomes a Subsidiary to conform to the Borrower's fiscal
year and fiscal quarters), the Borrower will promptly, and in any event within
30 days following any such change, deliver a notice to the Administrative Agent
and the Lenders describing such change and any material accounting entries made
in connection therewith and stating whether such change will have any impact
upon any financial computations to be made hereunder, and if any such impact is
foreseen, describing in reasonable detail the nature and extent of such impact.
If the Required Lenders determine that any such change will have any impact upon
any financial computations to be made hereunder which is adverse to the Lenders,
the Borrower will, if so requested by the Administrative Agent, enter into an
amendment to this Agreement, in form and substance reasonably satisfactory to
the Administrative Agent and the Required Lenders, modifying any of the
financial covenants or related provisions hereof in such manner as the Required
Lenders determine is necessary to eliminate such adverse effect.
8.10. HEDGE AGREEMENTS, ETC. If the Borrower determines to enter into
any Hedge Agreement, it may do so, and if any Subsidiary of the Borrower
determines to enter into any Hedge Agreement, the Borrower will ensure that it
does so, but only if such Hedge Agreement is entered into in compliance with the
following requirements: (i) the principal purpose of such Hedge Agreement,
insofar as the Borrower or any Subsidiary is concerned, is to provide protection
to the Borrower or any such Subsidiary from fluctuations and other changes in
interest rates and currency exchange rates, as and to the extent considered
reasonably necessary by the Borrower; (ii) such Hedge Agreement does not expose
the Borrower or its Subsidiaries to predominantly speculative risks unrelated to
the amount of assets, Indebtedness or other liabilities intended to be subject
to coverage on a notional basis under such Hedge Agreement and any other Hedge
Agreements related thereto; and (iii) in the case of any Hedge Agreement entered
into after the Effective Date, prior to the entry into such Hedge Agreement the
Borrower shall have furnished to the Administrative Agent the proposed form
thereof (including any proposed pricing or other material terms).
8.11. CERTAIN SUBSIDIARIES TO JOIN IN SUBSIDIARY GUARANTY. (a) In the
event that at any time after the Closing Date
(x) the Borrower has any Subsidiary (other than a Foreign
Subsidiary as to which section 8.11(b) applies) which is not a party to
the Subsidiary Guaranty, or
(y) an Event of Default shall have occurred and be continuing
and the Borrower has any Subsidiary which is not a party to the
Subsidiary Guaranty,
the Borrower will notify the Administrative Agent in writing of such event,
identifying the Subsidiary in question and referring specifically to the rights
of the Administrative Agent and the Lenders under this section. The Borrower
will, within 30 days following request therefor from the Administrative Agent
(who may give such request on its own initiative or upon request by the Required
Lenders), cause such Subsidiary to deliver to the Administrative Agent, in
sufficient quantities for the Lenders, (i) the Subsidiary Guaranty, if the
Subsidiary Guaranty has not previously
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been executed and delivered, (ii) if the Subsidiary Guaranty has previously been
executed and delivered, a joinder supplement, reasonably satisfactory in form
and substance to the Administrative Agent and the Required Lenders, duly
executed by such Subsidiary, pursuant to which such Subsidiary joins in the
Subsidiary Guaranty as a guarantor thereunder, and (ii) if such Subsidiary is a
corporation, resolutions of the Board of Directors of such Subsidiary, certified
by the Secretary or an Assistant Secretary of such Subsidiary as duly adopted
and in full force and effect, authorizing the execution and delivery of such
joinder supplement, or if such Subsidiary is not a corporation, such other
evidence of the authority of such Subsidiary to execute such joinder supplement
as the Administrative Agent may reasonably request.
(b) Notwithstanding the foregoing provisions of this section 8.11 or
the provisions of section 8.12 hereof, the Borrower shall not, unless an Event
of Default shall have occurred and be continuing, be required to pledge (or
cause to be pledged) more than 65% of the stock or other equity interests in any
first tier Foreign Subsidiary, or any of the stock or other equity interests in
any other Foreign Subsidiary, or to cause a Foreign Subsidiary to join in the
Subsidiary Guaranty or to become a party to the Security Agreement or any other
Security Document, if (i) to do so would subject the Borrower to liability for
additional United States income taxes by virtue of section 956 of the Code in an
amount the Borrower considers material, and (ii) the Borrower provides the
Administrative Agent with documentation, including computations prepared by the
Borrower's internal tax officer, its independent accountants or tax counsel,
reasonably acceptable to the Required Lenders, in support thereof.
8.12. ADDITIONAL SECURITY; FURTHER ASSURANCES. (a) In the event that at
any time after the Closing Date the Borrower or any of its Subsidiaries owns or
holds an interest in any Real Property, assets, stock, securities or any other
property or interest, located within or outside of the United States or arising
out of business conducted from any location within or outside the United States,
which is not at the time included in the Collateral and is not subject to a
Permitted Lien securing Indebtedness (all of the foregoing, "UNCOLLATERALIZED
PROPERTY"), the Borrower will notify the Administrative Agent in writing of such
event, identifying the Uncollateralized Property in question and referring
specifically to the rights of the Administrative Agent and the Lenders under
this section 8.12; PROVIDED that notwithstanding the foregoing, the Borrower
need not notify the Administrative Agent under this section 8.12(a) of any
leasehold interest which is acquired or held by the Borrower or any Subsidiary
unless the same involves a nominal or bargain purchase price option.
(b) The Borrower will, or will cause an applicable Subsidiary to,
within 30 days following request by the Collateral Agent (who may make such
request on its own initiative or upon instructions from the Required Lenders),
grant the Collateral Agent for the benefit of the Secured Creditors (as defined
in the Security Documents) security interests and mortgages or deeds of trust,
pursuant to the Pledge Agreement or other new documentation (each an "ADDITIONAL
SECURITY DOCUMENT") or joinder in any existing Security Document to which it is
not already a party, in all of the Uncollateralized Property as to which the
Administrative Agent has notified the Borrower that the same is required to be
included in the Collateral, SUBJECT to obtaining any required consents from
third parties (including third party lessors and co-venturers) necessary to be
obtained for the granting of a Lien on any particular Uncollateralized Property
(with the Borrower hereby agreeing to use, and to cause its Subsidiaries to use,
reasonable best efforts to obtain such consents), and ALSO SUBJECT to the
provisions of section 8.11(b).
(c) Each Additional Security Document (i) shall be granted pursuant to
documentation reasonably satisfactory in form and substance to the
Administrative Agent, which documentation shall in the case of Real Property
owned in fee be accompanied by such Phase I environmental reports or
assessments, a mortgage policy of title insurance (subject to a standard survey
exception), and other supporting documentation requested by and reasonably
satisfactory in form and substance to the Administrative Agent; and (ii) shall
constitute a valid and enforceable perfected Lien upon the interests or
properties so included in the Collateral, superior to and prior to the rights of
all third persons and subject to no other Liens except those permitted by
section 9.3 or otherwise agreed by the Administrative Agent at the time of
perfection thereof and (in the case of Real Property or interests therein) such
other encumbrances as may be set forth in the mortgage policy, if any, relating
to such Additional Security Document which shall be delivered to the Collateral
Agent together with such Additional Security Document and which shall be
satisfactory in form and substance to the Collateral Agent and the
Administrative Agent. The Borrower, at its sole cost and expense, will cause
each Additional Security Document or instruments related thereto to be duly
recorded or filed in such manner and in such places as are required by law to
establish, perfect, preserve and protect the Liens created thereby required to
be granted pursuant to the Additional Security Document, and will
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pay or cause to be paid in full all taxes, fees and other charges payable in
connection therewith. Furthermore, the Borrower shall cause to be delivered to
the Collateral Agent such opinions of local counsel, appraisals, title
insurance, environmental assessments, consents of landlords, lien waivers from
landlords or mortgagees and other related documents as may be reasonably
requested by the Collateral Agent in connection with the execution, delivery and
recording of any Additional Security Document, all of which documents shall be
in form and substance reasonably satisfactory to the Collateral Agent and the
Administrative Agent, except that no leasehold Mortgage, title insurance or
surveys shall be required for any leasehold properties (unless the lessee has a
nominal or bargain purchase option).
(d) The Borrower will, and will cause each of its Subsidiaries to, at
the expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, and other
assurances or instruments and take such further steps relating to the Collateral
covered by any of the Security Documents as the Collateral Agent may reasonably
require. If at any time the Collateral Agent determines, based on applicable
law, that all applicable taxes (including, without limitation, mortgage
recording taxes or similar charges) were not paid in connection with the
recordation of any mortgage or deed of trust, the Borrower shall promptly pay
the same upon demand.
(e) The Borrower will if requested by any Lender at any time, in order
to meet any legal requirement applicable to such Lender, provide to the
Collateral Agent and the Lenders, at the sole cost and expense of the Borrower,
appraisals and other supporting documentation relating to any Closing Date
Mortgage or any mortgage or deed of trust delivered as an Additional Security
Document hereunder, as specified by any Lender, meeting the appraisal and other
documentation requirements of the Real Estate Reform Amendments of the Financial
Institution Reform, Recovery and Enforcement Act of 1989, as amended, or any
other legal requirements applicable to any Lender, which in the case of any such
appraisal shall be prepared by one or more valuation firms of national standing,
acceptable to the Required Lenders, utilizing appraisal standards satisfying
such Amendments, Act or other legal requirements.
(f) The Borrower will, within 60 days following the Closing Date, cause
to be delivered to the Collateral Agent the Closing Date Mortgage Policy, with
all premiums thereon fully paid, in an insured amount not less than the amount
reasonably required therefor by the Administrative Agent (taking into account
the estimated value of the property involved), insuring fee simple title to the
Closing Date Mortgaged Property vested in the Borrower and assuring the
Collateral Agent that the Closing Date Mortgage creates a valid and enforceable
first priority mortgage lien on the Closing Date Mortgaged Property encumbered
thereby, subject only to a standard survey exception, which Closing Date
Mortgage Policy (1) shall include an endorsement for mechanics' liens, for
revolving, "variable rate" and future advances under this Agreement and for any
other matters reasonably requested by the Administrative Agent and (2) shall
provide for affirmative insurance and such reinsurance as the Administrative
Agent may reasonably request, all of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent.
(g) For the avoidance of doubt, the Borrower shall have no obligation
to cause to be delivered any survey of any Real Property which is covered by the
Closing Date Mortgage or any mortgage, deed of trust or similar instrument
constituting an Additional Security Document so as to permit a title company to
eliminate by endorsement the "survey exception" to the title policy for such
Real Property.
(h) Notwithstanding the foregoing provisions of this section 8.12, in
the event the Administrative Agent notifies the Borrower that the Required
Lenders have determined on the basis of an environmental report or assessment
delivered by the Borrower pursuant to the provisions of section 8.12(c) that an
Additional Security Document encumbering any particular Real Property should not
be delivered under this section 8.12, the Borrower shall be relieved of its
obligation in this section 8.12 to deliver or cause to be delivered an
Additional Security Document in the form of a mortgage, deed of trust or similar
instrument covering such Real Property, SUBJECT to any later determination by
the Required Lenders notified to the Borrower by the Administrative Agent that
an Additional Security Document in the form of a mortgage, deed of trust or
similar instrument covering such Real Property should be executed and delivered
hereunder.
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(i) As promptly as practicable after the date (i) any Credit Party has
any Collateral located in a jurisdiction as to which the Administrative Agent
shall not previously have received a lien search report listing all effective
UCC financing statements and other Liens filed against such Credit Party in such
jurisdiction and containing copies of all such effective UCC financing
statements and other Lien documents, (ii) any person first becomes a Credit
Party, or (iii) any UCC financing statement or Security Document is filed
against any Credit Party to perfect security interests granted pursuant to the
Security Agreement or any other Security Document, the Borrower will, at its
expense, cause to be delivered to the Administrative Agent and the Lenders
search reports listing all effective UCC financing statements and other Lien
documents filed against such person or Credit Party in each applicable
jurisdiction and containing copies of all such effective UCC financing
statements and other Lien documents. In addition, whenever requested by the
Administrative Agent, but not more frequently than once in any 12-month period,
the Borrower will promptly provide the Administrative Agent and the Lenders with
such new or updated title, lien, judgment, patent, trademark and UCC financing
statement searches or reports as to the Borrower or any of its Subsidiaries, or
any Collateral of any Credit Party, as the Administrative Agent may specify to
the Borrower in its request.
(j) The Collateral Agent is authorized, without the consent of any of
the Lenders, to (i) enter into any modification of any Security Document which
the Collateral Agent reasonably believes is required to conform to the mandatory
requirements of local law, or to local customs followed by financial
institutions with respect to similar collateral documents involving property
located in any particular jurisdiction, (ii) in the case of any Security
Document relating to property located in a particular jurisdiction which imposes
a tax with respect to such Security Document based on the amount of the
obligations secured thereby, expressly limit the amount of such secured
obligations which are secured by such property to such amount as, in the
Collateral Agent's good faith judgment, is appropriate so that the amount of
such tax is reasonable in light of the estimated value of the property located
in such jurisdiction, and/or (iii) designate the amount of title insurance
coverage for any title insurance policy provided hereunder in an amount
reasonably believed by the Collateral Agent to be representative of the fair
value of the property covered thereby.
(k) The Borrower will provide the Administrative Agent with sufficient
copies of each Additional Security Document and any additional supporting
documents delivered in connection therewith for distribution of copies thereof
to the Lenders, and the Administrative Agent will promptly so distribute such
copies.
8.13. CASUALTY AND CONDEMNATION. (a) The Borrower will promptly (and in
any event within 10 days) furnish to the Administrative Agent and the Lenders
written notice of any Event of Loss involving any property included in the
Collateral which is reasonably believed to be in excess of $500,000.
(b) If any Event of Loss results in Net Proceeds (whether in the form
of insurance proceeds, a condemnation award or otherwise), a portion or all of
which is required to be applied as a prepayment of the Loans or to the
rebuilding or restoration of any affected property pursuant to section 5.2, the
Collateral Agent is authorized to collect such Net Proceeds and, if received by
any Credit Party, the Borrower will, or will cause any applicable Credit Party,
to pay over such Net Proceeds to the Collateral Agent.
8.14. LANDLORD/MORTGAGEE WAIVERS; BAILEE LETTERS. If requested to do so
by the Administrative Agent, acting on instructions from the Required Lenders,
the Borrower will promptly (and in any event within 60 days following any such
request) obtain, and thereafter the Borrower will maintain in effect, (a)
waivers from landlords and mortgagees having any interest in any Real Property
on which any tangible items of Collateral, having a minimum value as specified
by the Administrative Agent in such request, are located, substantially in the
form attached hereto as Exhibits C-5 and C-6, or otherwise reasonably acceptable
to the Administrative Agent, and (b) bailee letters, substantially in the form
attached hereto as Exhibit C-7, or otherwise reasonably acceptable to the
Administrative Agent, from persons unrelated to any of the Credit Parties who
are parties to the Security Agreement to whom any tangible items of Collateral
having a minimum value as specified by the Administrative Agent in such request,
have been delivered for storage, use in the manufacture of products for the
Borrower and its Subsidiaries, consignment or similar purposes.
8.15. MOST FAVORED COVENANT STATUS. Should the Borrower at any time
after the Effective Date, issue or guarantee any unsecured Indebtedness
denominated in U.S. dollars for money borrowed or represented by bonds,
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notes, debentures or similar securities in an aggregate amount exceeding
$2,000,000, to any lender or group of lenders acting in concert with one
another, or one or more institutional investors, pursuant to a loan agreement,
credit agreement, note purchase agreement, indenture, guaranty or other similar
instrument, which agreement, indenture, guaranty or instrument, includes
affirmative or negative business or financial covenants (or any events of
default or other type of restriction which would have the practical effect of
any affirmative or negative business or financial covenant, including, without
limitation, any "put" or mandatory prepayment of such Indebtedness upon the
occurrence of a "change of control") which are applicable to the Borrower, other
than those set forth herein or in any of the other Credit Documents, the
Borrower shall promptly so notify the Administrative Agent and the Lenders and,
if the Administrative Agent shall so request by written notice to the Borrower
(after a determination has been made by the Required Lenders that any of the
above-referenced documents or instruments contain any such provisions, which
either individually or in the aggregate, are more favorable to the holders of
such unsecured Indebtedness than any of the provisions set forth herein), the
Borrower, the Administrative Agent and the Lenders shall promptly amend this
Agreement to incorporate some or all of such provisions, in the discretion of
the Administrative Agent and the Required Lenders, into this Agreement and, to
the extent necessary and reasonably desirable to the Administrative Agent and
the Required Lenders, into any of the other Credit Documents, all at the
election of the Administrative Agent and the Required Lenders.
8.16. SENIOR DEBT. The Borrower will at all times ensure that (i) the
claims of the Lenders in respect of the Obligations of the Borrower will in all
respects rank prior to the claims of every unsecured creditor of the Borrower,
and (ii) any Indebtedness of the Borrower which is subordinated in any manner to
the claims of any other creditor of the Borrower will be subordinated in like
manner to such claims of the Lenders.
SECTION 9. NEGATIVE COVENANTS.
The Borrower hereby covenants and agrees that on the Effective Date and
thereafter for so long as this Agreement is in effect and until such time as the
Total Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder and
under the other Credit Documents, have been paid in full:
9.1. CHANGES IN BUSINESS. Neither the Borrower nor any of its
Subsidiaries will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Borrower and its Subsidiaries, would involve any substantial business
activities which are not directly related to the design, construction,
installation and renovation of "in ground" swimming pools, and spas, including
ancillary sales and service activities related to pools and spas, in the United
States, .
9.2. CONSOLIDATION, MERGER, ACQUISITIONS, ASSET SALES, ETC. The
Borrower will not, and will not permit any Subsidiary to, (1) wind up, liquidate
or dissolve its affairs, (2) enter into any transaction of merger or
consolidation, (3) make or otherwise effect any Acquisition, (4) sell or
otherwise dispose of any of its property or assets outside the ordinary course
of business, or otherwise make or otherwise effect any Asset Sale, or (5) agree
to do any of the foregoing at any future time, EXCEPT that the following shall
be permitted:
(a) CERTAIN INTERCOMPANY MERGERS, ETC. If no Default or Event
of Default shall have occurred and be continuing or would result
therefrom,
(i) the merger, consolidation or amalgamation of any
Subsidiary of the Borrower with or into the Borrower, PROVIDED
the Borrower is the surviving or continuing or resulting
corporation;
(ii) the merger, consolidation or amalgamation of any
Subsidiary of the Borrower with or into another Subsidiary of
the Borrower, PROVIDED that the surviving or continuing or
resulting corporation is a Wholly-Owned Subsidiary of the
Borrower;
(iii) the liquidation, winding up or dissolution of
any Subsidiary of the Borrower; and
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(iv) the transfer or other disposition of any
property by the Borrower to any Wholly- Owned Subsidiary or by
any Subsidiary to the Borrower or any other Wholly-Owned
Subsidiary of the Borrower;
shall each be permitted, if after giving effect thereto at least 60% of
the Consolidated Total Assets of the Borrower are owned directly by the
Borrower and not indirectly through Subsidiaries.
(b) OTHER MERGERS, ETC. INVOLVING THE BORROWER. The Borrower
may consolidate or merge with any other corporation, or sell, transfer
or otherwise dispose of all or substantially all of the property and
assets of the Borrower and its Subsidiaries to any person, if (i) the
surviving, continuing or resulting corporation of such merger or
consolidation (if other than the Borrower) or the acquiring person
unconditionally assumes the obligations of the Borrower under the
Credit Documents pursuant to an assumption agreement in form and
substance reasonably satisfactory to the Required Lenders, (ii) no
Event of Default has occurred and is continuing or would result
therefrom, (iii) no Change of Control would be occasioned thereby; and
(iv) if any such merger or consolidation is entered into for the
purpose of effecting an Acquisition, such Acquisition is permitted by
section 9.2(c).
(c) ACQUISITIONS. If no Default or Event of Default shall have
occurred and be continuing or would result therefrom, the Borrower or
any Subsidiary may make any Acquisition which is a Permitted
Acquisition, PROVIDED that all of the conditions contained in the
definition of the term Permitted Acquisition are satisfied.
(d) PERMITTED DISPOSITIONS. If no Default or Event of Default
shall have occurred and be continuing or would result therefrom, the
Borrower or any of its Subsidiaries may (i) sell any property, land or
building (including any related receivables or other intangible assets)
to any person which is not a Subsidiary of the Borrower, or (ii) sell
the entire capital stock (or other equity interests) and Indebtedness
of any Subsidiary owned by the Borrower or any other Subsidiary to any
person which is not a Subsidiary of the Borrower, or (iii) permit any
Subsidiary to be merged or consolidated with a person which is not an
Affiliate of the Borrower, or (iv) consummate any other Asset Sale with
a person who is not a Subsidiary of the Borrower; PROVIDED that:
(a) the consideration for such transaction represents
fair value (as determined by management of the Borrower), and
at least 90% of such consideration consists of cash,
(b) in the case of any such transaction involving
consideration in excess of $1,000,000, at least five Business
Days prior to the date of completion of such transaction the
Borrower shall have delivered to the Administrative Agent an
officer's certificate executed on behalf of the Borrower by an
Authorized Officer of the Borrower, which certificate shall
contain (1) a description of the proposed transaction, the
date such transaction is scheduled to be consummated, the
estimated purchase price or other consideration for such
transaction, (2) a certification that no Default or Event of
Default has occurred and is continuing, or would result from
consummation of such transaction, and (3) which shall (if
requested by the Administrative Agent) include a certified
copy of the draft or definitive documentation pertaining
thereto; and
(c) contemporaneously with the completion of such
transaction the Borrower prepays its Loans if and to the
extent required by section 5.2 hereof.
(e) LEASES. The Borrower or any of its Subsidiaries may enter
into leases of property or assets not constituting Acquisitions,
PROVIDED such leases are not otherwise in violation of this Agreement.
(f) CAPITAL EXPENDITURES: The Borrower and it Subsidiaries
shall be permitted to make any Consolidated Capital Expenditures
permitted pursuant to section 9.11.
(g) PERMITTED INVESTMENTS. The Borrower and it Subsidiaries
shall be permitted to make the investments permitted pursuant to
section 9.5.
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To the extent the Required Lenders (or all of the Lenders, or all of the Lenders
(other than any Defaulting Lender), as applicable, as shall be required by
section 12.12) waive the provisions of this section 9.2 with respect to the
sale, transfer or other disposition of any Collateral, or any Collateral is
sold, transferred or disposed of as permitted by this section 9.2, (i) such
Collateral shall be sold, transferred or disposed of free and clear of the Liens
created by the respective Security Documents; (ii) if such Collateral includes
all of the capital stock of a Subsidiary which is a party to the Subsidiary
Guaranty or whose stock is pledged pursuant to the Pledge Agreement, such
capital stock shall be released from the Pledge Agreement and such Subsidiary
shall be released from the Subsidiary Guaranty; and (iii) the Administrative
Agent and the Collateral Agent shall be authorized to take actions deemed
appropriate by them in order to effectuate the foregoing.
9.3. LIENS. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of the Borrower or any such Subsidiary whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with or without
recourse to the Borrower or any of its Subsidiaries, other than for purposes of
collection of delinquent accounts in the ordinary course of business) or assign
any right to receive income, or file or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute, EXCEPT that the foregoing restrictions shall not
apply to:
(a) STANDARD PERMITTED LIENS: the Standard Permitted Liens;
(b) EXISTING LIENS, ETC.: Liens (i) in existence on the
Effective Date which are listed, and the Indebtedness secured thereby
and the property subject thereto on the Effective Date described, in
Annex III, or (ii) arising out of the refinancing, extension, renewal
or refunding of any Indebtedness secured by any such Liens, PROVIDED
that the principal amount of such Indebtedness is not increased and
such Indebtedness is not secured by any additional assets;
(c) PURCHASE MONEY LIENS: Liens (i) which are placed upon
fixed or capital assets, acquired, constructed or improved by the
Borrower or any Subsidiary, PROVIDED that (A) such Liens secure
Indebtedness permitted by section 9.4(c), (B) such Liens and the
Indebtedness secured thereby are incurred prior to or within 120 days
after such acquisition or the completion of such construction or
improvement, (C) the Indebtedness secured thereby does not exceed 100%
of the cost of acquiring, constructing or improving such fixed or
capital assets; and (D) such Liens shall not apply to any other
property or assets of the Borrower or any Subsidiary; or (ii) arising
out of the refinancing, extension, renewal or refunding of any
Indebtedness secured by any such Liens, PROVIDED that the principal
amount of such Indebtedness is not increased and such Indebtedness is
not secured by any additional assets; and
(d) LIENS ON ACQUIRED PROPERTIES: any Lien (i) existing on any
property or asset prior to the acquisition thereof by the Borrower or
any Subsidiary, or existing on any property or asset of any person that
becomes a Subsidiary after the date hereof prior to the time such
person becomes a Subsidiary; PROVIDED that (A) such Lien secures
Indebtedness permitted by section 9.4(c), (B) such Lien is not created
in contemplation of or in connection with such acquisition or such
person becoming a Subsidiary, as the case may be, (C) such Lien shall
not attach or apply to any other property or assets of the Borrower or
any Subsidiary, (D) such Lien shall secure only those obligations which
it secures on the date of such acquisition or the date such person
becomes a Subsidiary, as the case may be; or (ii) arising out of the
refinancing, extension, renewal or refunding of any Indebtedness
secured by any such Liens, PROVIDED that the principal amount of such
Indebtedness is not increased and such Indebtedness is not secured by
any additional assets.
9.4. INDEBTEDNESS. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness of the Borrower or any of its Subsidiaries, EXCEPT:
(a) CREDIT DOCUMENTS: Indebtedness incurred under this
Agreement and the other Credit Documents;
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(b) EXISTING INDEBTEDNESS: Existing Indebtedness; and any
refinancing, extension, renewal or refunding of any such Existing
Indebtedness not involving an increase in the principal amount thereof
or a reduction of more than 10% in the remaining weighted average life
to maturity thereof (computed in accordance with standard financial
practice); PROVIDED that any Existing Indebtedness identified in Annex
II or otherwise referred to in section 6.1 as being intended to be
refinanced by Loans incurred hereunder or otherwise retired, may not be
otherwise refinanced;
(c) CERTAIN PRIORITY DEBT: to the extent not permitted by the
foregoing clauses,
(i) Indebtedness consisting of Capital Lease
Obligations of the Borrower and its Subsidiaries,
(ii) Indebtedness consisting of obligations under
Synthetic Leases of the Borrower and its Subsidiaries,
(iii) Indebtedness secured by a Lien referred to in
section 9.3(c) or 9.3(d), and
(iv) any refinancing, extension, renewal or refunding
of any such Indebtedness not involving an increase in the
principal amount thereof or a reduction of more than 10% in
the remaining weighted average life to maturity thereof
(computed in accordance with standard financial practice),
PROVIDED that (A) at the time of any incurrence thereof after the date
hereof, and after giving effect thereto, the Borrower would be in
compliance with sections 9.8, 9.9 and 9.10, and no Event of Default
shall have occurred and be continuing or would result therefrom; and
(B) the aggregate outstanding principal amount (using Capitalized Lease
Obligations in lieu of principal amount, in the case of any Capital
Lease, and using the present value, based on the implicit interest
rate, in lieu of principal amount, in the case of any Synthetic Lease)
of Indebtedness permitted by this clause (c), when taken together with
any outstanding Indebtedness permitted by clause (b) above which is
represented by a Capital Lease or a Synthetic Lease or which is secured
by any Lien, shall not exceed $2,000,000;
(d) INTERCOMPANY DEBT: the following: (i) unsecured
Indebtedness of the Borrower owed to any of its Subsidiaries, PROVIDED
such Indebtedness constitutes Subordinated Indebtedness; and (ii)
unsecured Indebtedness of any of the Borrower's Subsidiaries to the
Borrower or to another Subsidiary of the Borrower;
(e) HEDGE AGREEMENTS: Indebtedness of the Borrower and its
Subsidiaries under Hedge Agreements;
(f) SUBORDINATED TBD NOTE: Indebtedness of the Borrower
evidenced by the Subordinated TBD Note; and
(g) GUARANTY OBLIGATIONS: any Guaranty Obligations permitted
by section 9.5.
9.5. ADVANCES, INVESTMENTS, LOANS AND GUARANTY OBLIGATIONS. The
Borrower will not, and will not permit any of its Subsidiaries to, (1) lend
money or credit or make advances to any person, (2) purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, or other investment in, any person, (3) create, acquire
or hold any Subsidiary, (4) be or become a party to any joint venture or
partnership, or (5) be or become obligated under any Guaranty Obligations (other
than those which may be created in favor of the Lenders and any other benefitted
creditors under any Designated Hedge Agreements pursuant to the Credit
Documents), EXCEPT:
(a) the Borrower or any of its Subsidiaries may invest in cash
and Cash Equivalents;
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(b) any endorsement of a check or other medium of payment for
deposit or collection, or any similar transaction in the normal course
of business;
(c) the Borrower and its Subsidiaries may acquire and hold
receivables owing to them in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
(d) investments acquired by the Borrower or any of its
Subsidiaries (i) in exchange for any other investment held by the
Borrower or any such Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer
of such other investment, or (ii) as a result of a foreclosure by the
Borrower or any of its Subsidiaries with respect to any secured
investment or other transfer of title with respect to any secured
investment in default;
(e) loans and advances to employees for business-related
travel expenses, moving expenses, costs of replacement homes, business
machines or supplies, automobiles and other similar expenses, in each
case incurred in the ordinary course of business, shall be permitted;
(f) to the extent not permitted by the foregoing clauses, the
existing loans, advances, investments and guarantees described on Annex
IV hereto;
(g) investments of the Borrower and its Subsidiaries in Hedge
Agreements;
(h) existing investments in any Subsidiaries and any
additional investments in any Subsidiary which is, or which
contemporaneously with becoming a Subsidiary also becomes, a Subsidiary
Guarantor;
(i) intercompany loans and advances permitted by section
9.4(d);
(j) the Acquisitions permitted by section 9.2; and loans,
advances and investments of any person which are outstanding at the
time such person becomes a Subsidiary of the Borrower as a result of an
Acquisition permitted by section 9.2, but not any increase in the
amount thereof;
(k) any unsecured Guaranty Obligation incurred by the Borrower
or any Subsidiary with respect to (i) Indebtedness of a Wholly-Owned
Subsidiary of the Borrower which is permitted under section 9.4 without
restriction upon the ability of the Borrower or any Subsidiary to
guarantee the same, or (ii) other obligations of a Wholly-Owned
Subsidiary of the Borrower which are not prohibited by this Agreement;
and
(l) any other loans, advances, investments (whether in the
form of cash or contribution of property, and if in the form of a
contribution of property, such property shall be valued for purposes of
this clause at the fair value thereof as reasonably determined by the
Borrower), in or to any corporation, partnership, limited liability
company, joint venture or other business entity, not otherwise
permitted by the foregoing clauses, made after the end of the most
recent fiscal quarter of the Borrower for which financial statements
were furnished to the Lenders prior to the Effective Date (such loans,
advances and investments, collectively, "BASKET INVESTMENTS"), PROVIDED
that (i) at the time of making any such Basket Investment no Event of
Default shall have occurred and be continuing, or would result
therefrom, and (ii) the maximum cumulative amount of Basket Investments
which are so made and outstanding at any time shall not exceed an
aggregate of $2,000,000, taking into account the repayment of any loans
or advances comprising such Basket Investments.
9.6. DIVIDENDS AND OTHER RESTRICTED PAYMENTS. The Borrower will not,
and will not permit any of its Subsidiaries to, declare or make, or agree to pay
or make, directly or indirectly, any Restricted Payment, EXCEPT:
(a) the Borrower may declare and pay or make dividends or
other distributions with respect to any class of its capital stock
which are payable solely in additional shares of its common stock (or
warrants, options or other rights to acquire additional shares of its
common stock);
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(b) any Subsidiary of the Borrower may declare and pay or make
dividends or distributions ratably with respect to its capital stock;
and
(c) the Borrower may make Restricted Payments pursuant to and
in accordance with its existing stock option, stock purchase and other
benefit plans of general application to management or other employees
of the Borrower and its Subsidiaries.
9.7. REQUIRED MINIMUM CONSOLIDATED NET WORTH. (a) The Borrower will not
permit its Consolidated Net Worth, at and as of December 31, 2000, to be less
than the sum of the following:
(i) 85% of its Consolidated Net Worth as of December 31, 1999;
(ii) 75% of the Consolidated Net Income of the Borrower for
the fiscal year ended December 31, 2000, if any (there being no
reduction in the case of any such Consolidated Net Income which
reflects a deficit);
(iii) 100% of the cash proceeds (net of underwriting discounts
and commissions and other customary fees and costs associated
therewith) from any sale or issuance of equity by the Borrower during
the fiscal year ended December 31, 2000 (other than Redeemable Stock
and any sale or issuance to management or employees or employee benefit
plans pursuant to employee benefit plans of general application);
(iv) 100% of (x) the principal amount of Indebtedness or (y)
the higher of stated value or liquidation value of Redeemable Stock, as
the case may be, held by any person other than the Borrower or any of
its Subsidiaries, which is converted or exchanged during the fiscal
year ended December 31, 2000 into common stock of the Borrower or any
of its Subsidiaries; and
(v) 100% of the increase in Consolidated Net Worth
attributable to the issuance of common stock or other equity interests
(other than Redeemable Stock) during the fiscal year ended December 31,
2000 as consideration in any Acquisitions permitted under section 9.2.
(b) The Borrower will not permit its Consolidated Net Worth, at and as
of the end of any fiscal year subsequent to December 31, 2000 (any such
subsequent fiscal year, a "MEASURING YEAR"), to be less than the sum of the
following:
(i) 100% of the amount determined to be its minimum
Consolidated Net Worth at and as of the end of the preceding fiscal
year pursuant to section 9.8(a) or this section 9.8(b), as applicable;
(ii) 75% of the Consolidated Net Income of the Borrower for
the Measuring Year, if any (there being no reduction in the case of any
such Consolidated Net Income which reflects a deficit);
(iii) 100% of the cash proceeds (net of underwriting discounts
and commissions and other customary fees and costs associated
therewith) from any sale or issuance of equity by the Borrower during
the Measuring Year (other than Redeemable Stock and any sale or
issuance to management or employees or employee benefit plans pursuant
to employee benefit plans of general application);
(iv) 100% of (x) the principal amount of Indebtedness or (y)
the higher of stated value or liquidation value of Redeemable Stock, as
the case may be, held by any person other than the Borrower or any of
its Subsidiaries, which is converted or exchanged during the Measuring
Year into common stock of the Borrower or any of its Subsidiaries; and
(v) 100% of the increase in Consolidated Net Worth
attributable to the issuance of common stock or other equity interests
(other than Redeemable Stock) during the Measuring Year as
consideration in any Acquisitions permitted under section 9.2.
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9.8. CONSOLIDATED TOTAL DEBT/CONSOLIDATED EBITDA RATIO. The Borrower
will not at any time permit the ratio of (i) the amount of its Consolidated
Total Debt at such time to (ii) its Consolidated EBITDA for its Testing Period
most recently ended, to exceed the ratio specified below for any Testing Period:
TESTING PERIOD RATIO
Testing Period ended on or nearest to September 30, 1999 3.00 to 1.00
Testing Period ended on or nearest to December 31, 1999 3.00 to 1.00
Testing Period ended on or nearest to March 31, 2000 and any 2.75 to 1.00
Testing Period thereafter which ends prior to the Testing Period
specified below
Testing Period ending on or nearest to December 31, 2001 and 2.50 to 1.00
any Testing Period thereafter
9.9. INTEREST COVERAGE RATIO. The Borrower will not permit its Interest
Coverage Ratio for any Testing Period to be less than the ratio specified below:
TESTING PERIOD RATIO
Testing Period ended on or nearest to September 30, 1999 and 3.00 to 1.00
any Testing Period thereafter ending prior to the Testing Period
specified below
Testing Period ending on or nearest to March 31, 2000 and any 3.50 to 1.00
Testing Period thereafter ending prior to the Testing Period
specified below
Testing Period ending on or nearest to December 31, 2001 and 4.00 to 1.00
any Testing Period thereafter
9.10. FIXED CHARGE COVERAGE RATIO. The Borrower will not permit its
Fixed Charge Coverage Ratio for any Testing Period to be less than the ratio
specified below:
TESTING PERIOD RATIO
Testing Period ended on or nearest to June 30, 2000 and any 1.30 to 1.00
Testing Period thereafter ending prior to the Testing Period
specified below
Testing Period ended on or nearest to December 31, 2001 and 1.50 to 1.00
any Testing Period thereafter
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9.11. CONSOLIDATED CAPITAL EXPENDITURES. The Borrower will not, and
will not permit any of its Subsidiaries to, make or incur Consolidated Capital
Expenditures during any fiscal period of the Borrower in excess of the amount
specified below, EXCEPT that in the event actual Consolidated Capital
Expenditures for any fiscal period indicated below are less than such amount,
50% of the difference may be carried over to the next fiscal period indicated
below, but not any subsequent fiscal period:
FISCAL YEAR AMOUNT
Fiscal Quarter ended December 31, $1,500,000
1999
Any Fiscal Year thereafter $3,500,000
9.12. LIMITATION ON SUBSIDIARY INDEBTEDNESS. The Borrower will not
permit the aggregate principal amount (using Capitalized Lease Obligation, in
the case of a Capital Lease, or present value, in the case of a Synthetic Lease,
in lieu of principal amount) of Indebtedness of its Subsidiaries (exclusive of
(i) Indebtedness of a Subsidiary owed to the Borrower or another Subsidiary, and
(ii) Indebtedness represented by the Subsidiary Guaranty), when taken together
with Indebtedness of the Borrower permitted by section 9.4(b) or 9.4(c) which is
represented by a Capital Lease or a Synthetic Lease or which is secured by any
Lien, to exceed $2,000,000.
9.13. LIMITATION ON CERTAIN RESTRICTIVE AGREEMENTS. The Borrower will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
enter into, incur or permit to exist or become effective, any "negative pledge"
covenant or other agreement, restriction or arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of the Borrower or any
Subsidiary to create, incur or suffer to exist any Lien upon any of its property
or assets as security for Indebtedness, or (b) the ability of any such
Subsidiary to pay dividends or make any other distributions on its capital stock
or any other interest or participation in its profits owned by the Borrower or
any Subsidiary of the Borrower, or pay any Indebtedness owed to the Borrower or
a Subsidiary of the Borrower, or to make loans or advances to the Borrower or
any of the Borrower's other Subsidiaries, or transfer any of its property or
assets to the Borrower or any of the Borrower's other Subsidiaries, EXCEPT for
such restrictions existing under or by reason of (i) applicable law, (ii) this
Agreement and the other Credit Documents, (iii) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest, (iv)
customary provisions restricting assignment of any licensing agreement entered
into in the ordinary course of business, (v) customary provisions restricting
the transfer or further encumbering of assets subject to Liens permitted under
section 9.3(b) or 9.3(c), (vi) restrictions contained in the Existing
Indebtedness Agreements as in effect on the Effective Date (and any similar
restrictions contained in any agreement governing any refinancing or refunding
thereof not prohibited by this Agreement), (vii) customary restrictions
affecting only a Subsidiary of the Borrower under any agreement or instrument
governing any of the Indebtedness of a Subsidiary permitted pursuant to 9.4,
(viii) restrictions affecting any Foreign Subsidiary of the Borrower under any
agreement or instrument governing any Indebtedness of such Foreign Subsidiary
permitted pursuant to 9.4, and customary restrictions contained in "comfort"
letters and guarantees of any such Indebtedness, (ix) any document relating to
Indebtedness secured by a Lien permitted by section 9.3, insofar as the
provisions thereof limit grants of junior liens on the assets securing such
Indebtedness, and (x) any Operating Lease or Capital Lease, insofar as the
provisions thereof limit grants of a security interest in, or other assignments
of, the related leasehold interest to any other person.
9.14. PREPAYMENTS AND REFINANCINGS OF OTHER DEBT, ETC. The Borrower
will not, and will not permit any of its Subsidiaries to, make (or give any
notice in respect thereof) any voluntary or optional payment or prepayment or
redemption or acquisition for value of (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities before due
for the purpose of paying when due) or exchange of, or refinance or refund:
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(a) any Subordinated Indebtedness (other than intercompany
loans and advances among the Borrower and its Subsidiaries); or
(b) any other Indebtedness of the Borrower or its Subsidiaries
which has an outstanding principal balance (or Capitalized Lease
Obligation, in the case of a Capital Lease, or present value, based on
the implicit interest rate, in the case of a Synthetic Lease) greater
than $1,000,000 (other than the Obligations and intercompany loans and
advances among the Borrower and its Subsidiaries); PROVIDED that the
Borrower or any Subsidiary may refinance or refund any such
Indebtedness if the aggregate principal amount thereof (or Capitalized
Lease Obligation, in the case of a Capital Lease, or present value,
based on the implicit interest rate, in the case of a Synthetic Lease)
is not increased and the weighted average life to maturity thereof
(computed in accordance with standard financial practice) is not
reduced by more than 10%.
9.15. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction or series of transactions
with any Affiliate (other than, in the case of the Borrower, any Subsidiary, and
in the case of a Subsidiary, the Borrower or another Subsidiary) other than in
the ordinary course of business of and pursuant to the reasonable requirements
of the Borrower's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Borrower or such Subsidiary than would obtain in
a comparable arm's-length transaction with a person other than an Affiliate,
EXCEPT agreements and transactions with and payments to employees, officers,
directors, shareholders and other Affiliates which are either (i) entered into
in the ordinary course of business and not prohibited by any of the provisions
of this Agreement, or (ii) entered into outside the ordinary course of business,
approved by the directors or shareholders of the Borrower, and not prohibited by
any of the provisions of this Agreement.
9.16. MODIFICATIONS OF TAX SHARING OR TRANSITION OR TRANSITION
AGREEMENTS, ETC. The Borrower will not enter into any material modification of
any of the terms, conditions or provisions of the Tax Sharing Agreement or the
Transition Agreement, or grant any material consent or waiver of any of such
terms, conditions or provisions, or release or discharge any person from any
material obligations thereunder. The Borrower will take all reasonable actions
to enforce the obligations of all other parties to the Tax Sharing Agreement or
the Transition Agreement. The Borrower will promptly furnish the Administrative
Agent with copies of any amendment or other modification of, or any waiver
granted under, the Tax Sharing Agreement or the Transition Agreement.
9.17. PLAN TERMINATIONS, MINIMUM FUNDING, ETC. The Borrower will not,
and will not permit any ERISA Affiliate to, (i) terminate any Plan or Plans so
as to result in liability of the Borrower or any ERISA Affiliate to the PBGC in
excess of, in the aggregate, $1,000,000, (ii) permit to exist one or more events
or conditions which reasonably present a material risk of the termination by the
PBGC of any Plan or Plans with respect to which the Borrower or any ERISA
Affiliate would, in the event of such termination, incur liability to the PBGC
in excess of such amount in the aggregate, or (iii) fail to comply with the
minimum funding standards of ERISA and the Code with respect to any Plan.
SECTION 10. EVENTS OF DEFAULT.
10.1. EVENTS OF DEFAULT. Any of the following specified events shall
constitute an Event of Default (each an "EVENT OF DEFAULT"):
(a) PAYMENTS: the Borrower shall (i) default in the payment
when due of any principal of the Loans or any reimbursement obligation
in respect of any Unpaid Drawing; or (ii) default, and such default
shall continue for five or more Business Days, in the payment when due
of any interest on the Loans or any Fees or any other amounts owing
hereunder or under any other Credit Document; or
(b) REPRESENTATIONS, ETC.: any representation, warranty or
statement made by the Borrower or any other Credit Party herein or in
any other Credit Document or in any statement or certificate delivered
or required to be delivered pursuant hereto or thereto shall prove to
be untrue in any material respect on the date as of which made or
deemed made; or
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(c) CERTAIN NEGATIVE COVENANTS: the Borrower shall default in
the due performance or observance by it of any term, covenant or
agreement contained in sections 9.2 through 9.12, inclusive, of this
Agreement, or section 9.14 of this Agreement; or
(d) OTHER COVENANTS: the Borrower shall default in the due
performance or observance by it of any term, covenant or agreement
contained in this Agreement or any other Credit Document, other than
those referred to in section 10.1(a) or (b) or (c) above, and such
default is not remedied within 30 days after the earlier of (i) an
officer of the Borrower obtaining actual knowledge of such default and
(ii) the Borrower receiving written notice of such default from the
Administrative Agent or the Required Lenders (any such notice to be
identified as a "notice of default" and to refer specifically to this
paragraph); or
(e) CROSS DEFAULT UNDER OTHER AGREEMENTS: the Borrower or any
of its Subsidiaries shall (i) default in any payment with respect to
any Indebtedness (other than the Obligations) owed to any Lender, or
having an unpaid principal amount (or Capitalized Lease Obligation, in
the case of a Capital Lease, or present value, based on the implicit
interest rate, in the case of a Synthetic Lease) of $1,000,000 or
greater, and such default shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to
such Indebtedness, or (ii) default in the observance or performance of
any agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or
relating thereto (and all grace periods applicable to such observance,
performance or condition shall have expired), or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause any such Indebtedness to become due prior to its
stated maturity; or any such Indebtedness of the Borrower or any of its
Subsidiaries shall be declared to be due and payable, or shall be
required to be prepaid (other than by a regularly scheduled required
prepayment or redemption, prior to the stated maturity thereof), or
(iii) without limitation of the foregoing clauses, the Borrower or any
of its Subsidiaries shall default in any payment obligation under a
Designated Hedge Agreement, and such default shall continue after the
applicable grace period, if any, specified in such Designated Hedge
Agreement or any other agreement or instrument relating thereto; or
(f) OTHER CREDIT DOCUMENTS: the Subsidiary Guaranty or any
Security Document (once executed and delivered) shall cease for any
reason (other than termination in accordance with its terms) to be in
full force and effect; or any Credit Party shall default in any payment
obligation thereunder; or any Credit Party shall default in any
material respect in the due performance and observance of any other
obligation thereunder and such default shall continue unremedied for a
period of at least 30 days after notice by the Administrative Agent or
the Required Lenders; or any Credit Party shall (or seek to) disaffirm
or otherwise limit its obligations thereunder otherwise than in strict
compliance with the terms thereof; or
(g) JUDGMENTS: one or more judgments, orders or decrees shall
be entered against the Borrower and/or any of its Subsidiaries
involving a liability (other than a liability covered by insurance, as
to which the carrier has adequate claims paying ability and has not
effectively reserved its rights) of $1,000,000 or more in the aggregate
for all such judgments, orders and decrees for the Borrower and its
Subsidiaries, and any such judgments or orders or decrees shall not
have been vacated, discharged or stayed or bonded pending appeal within
30 days (or such longer period, not in excess of 60 days, during which
enforcement thereof, and the filing of any judgment lien, is
effectively stayed or prohibited) from the entry thereof; or
(h) BANKRUPTCY, ETC.: any of the following shall occur:
(i) the Borrower or any of its Material Subsidiaries
(the Borrower and each of such other persons, each a
"PRINCIPAL PARTY") shall commence a voluntary case concerning
itself under Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "BANKRUPTCY CODE"); or
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(ii) an involuntary case is commenced against any
Principal Party under the Bankruptcy Code and the petition is
not controverted within 10 days, or is not dismissed within 60
days, after commencement of the case; or
(iii) a custodian (as defined in the Bankruptcy Code)
is appointed for, or takes charge of, all or substantially all
of the property of any Principal Party; or
(iv) any Principal Party commences (including by way
of applying for or consenting to the appointment of, or the
taking of possession by, a rehabilitator, receiver, custodian,
trustee, conservator or liquidator (collectively, a
"CONSERVATOR") of itself or all or any substantial portion of
its property) any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency, liquidation, rehabilitation,
conservatorship or similar law of any jurisdiction whether now
or hereafter in effect relating to such Principal Party; or
(v) any such proceeding is commenced against any
Principal Party to the extent such proceeding is consented by
such person or remains undismissed for a period of 60 days; or
(vi) any Principal Party is adjudicated insolvent or
bankrupt; or
(vii) any order of relief or other order approving
any such case or proceeding is entered; or
(viii) any Principal Party suffers any appointment of
any conservator or the like for it or any substantial part of
its property which continues undischarged or unstayed for a
period of 60 days; or
(ix) any Principal Party makes a general assignment
for the benefit of creditors; or
(x) any corporate (or similar organizational) action
is taken by any Principal Party for the purpose of effecting
any of the foregoing; or
(i) ERISA: (i) any of the events described in clauses (i)
through (viii) of section 8.1(g) shall have occurred; or (ii) there
shall result from any such event or events the imposition of a lien,
the granting of a security interest, or a liability or a material risk
of incurring a liability; and (iii) any such event or events or any
such lien, security interest or liability, individually, and/or in the
aggregate, in the opinion of the Required Lenders, has had, or could
reasonably be expected to have, a Material Adverse Effect; or
(j) MATERIAL ADVERSE EFFECT: any event or circumstance shall
occur or exist which has a Material Adverse Effect upon the Borrower,
as compared to the business, operations, property, assets, liabilities
or condition (financial or otherwise) of the Borrower as reflected in
the financial statements and the Financial Projections referred to in
section 7.8, but taking into account in the case of the Financial
Projections any differential between the actual financial impact upon
the Borrower of the Split-Off Transactions, including, without
limitation, the actual principal amount of the Subordinated TBD Note,
and the impact of the Split-Off Transactions as assumed by the Borrower
for purposes of the preparation of the Financial Projections.
10.2. ACCELERATION, ETC. Upon the occurrence of any Event of Default,
and at any time thereafter, if any Event of Default shall then be continuing,
the Administrative Agent shall, upon the written request of the Required
Lenders, by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Administrative Agent, the
Collateral Agent or any Lender to enforce its claims against the Borrower or any
other Credit Party in any manner permitted under applicable law:
(a) declare the Total Commitment terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately without
any other notice of any kind;
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(b) declare the principal of and any accrued interest in
respect of all Loans, all Unpaid Drawings and all other Obligations
owing hereunder and under the other Credit Documents to be, whereupon
the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby
waived by the Borrower;
(c) terminate any Letter of Credit which may be terminated in
accordance with its terms;
(d) direct the Borrower to pay (and the Borrower hereby agrees
that on receipt of such notice or upon the occurrence of an Event of
Default with respect to the Borrower under section 10.1(h), it will
pay) to the Administrative Agent an amount of cash equal to the
aggregate Stated Amount of all Letters of Credit then outstanding (such
amount to be held as security for the Borrower's (and any other Letter
of Credit Obligor's) reimbursement obligations in respect thereof);
and/or
(e) exercise any other right or remedy available under any of
the Credit Documents or applicable law;
PROVIDED that, if an Event of Default specified in section 10.1(h) shall occur
with respect to the Borrower, the result which would occur upon the giving of
written notice by the Administrative Agent as specified in clauses (a) and/or
(b) above shall occur automatically without the giving of any such notice.
10.3. APPLICATION OF LIQUIDATION PROCEEDS. All monies received by the
Administrative Agent, the Collateral Agent or any Lender from the exercise of
remedies hereunder or under the other Credit Documents or under any other
documents relating to this Agreement shall, unless otherwise required by the
terms of the other Credit Documents or by applicable law, be applied as follows:
(i) FIRST, to the payment of all expenses (to the extent not
otherwise paid by the Borrower or any of the other Credit Parties)
incurred by the Administrative Agent and the Lenders in connection with
the exercise of such remedies, including, without limitation, all
reasonable costs and expenses of collection, reasonable documented
attorneys' fees, court costs and any foreclosure expenses;
(ii) SECOND, to the payment PRO RATA of interest then accrued
on the outstanding Loans;
(iii) THIRD, to the payment PRO RATA of any fees then accrued
and payable to the Administrative Agent, any Letter of Credit Issuer or
any Lender under this Agreement in respect of the Loans or the Letter
of Credit Outstandings;
(iv) FOURTH, to the payment PRO RATA of (A) the principal
balance then owing on the outstanding Loans, (B) the amounts then due
under Designated Hedge Agreements to creditors of the Borrower or any
Subsidiary, subject to confirmation by the Administrative Agent of any
calculations of termination or other payment amounts being made in
accordance with normal industry practice, and (C) the Stated Amount of
the Letter of Credit Outstandings (to be held and applied by the
Administrative Agent as security for the reimbursement obligations in
respect thereof);
(v) FIFTH, to the payment to the Lenders of any amounts then
accrued and unpaid under sections 2.9, 2.10, 3.5 and 5.4 hereof, and if
such proceeds are insufficient to pay such amounts in full, to the
payment of such amounts PRO RATA;
(vi) SIXTH, to the payment PRO RATA of all other amounts owed
by the Borrower to the Administrative Agent, to any Letter of Credit
Issuer or any Lender under this Agreement or any other Credit Document,
and to any counterparties under Designated Hedge Agreements of the
Borrower and its Subsidiaries, and if such proceeds are insufficient to
pay such amounts in full, to the payment of such amounts PRO RATA; and
(vii) FINALLY, any remaining surplus after all of the
Obligations have been paid in full, to the Borrower or to whomsoever
shall be lawfully entitled thereto.
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SECTION 11. THE ADMINISTRATIVE AGENT.
11.1. APPOINTMENT. Each Lender hereby irrevocably designates and
appoints NCB as Administrative Agent (such term to include, for the purposes of
this section 11, NCB acting as Collateral Agent) to act as specified herein and
in the other Credit Documents, and each such Lender hereby irrevocably
authorizes NCB as the Administrative Agent for such Lender, to take such action
on its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Credit Documents, together with such other powers as are reasonably
incidental thereto. The Administrative Agent agrees to act as such upon the
express conditions contained in this section 11. Notwithstanding any provision
to the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein or
in the other Credit Documents, nor any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent. The provisions of this section 11 are solely for the
benefit of the Administrative Agent, and the Lenders, and the Borrower and its
Subsidiaries shall not have any rights as a third party beneficiary of any of
the provisions hereof. In performing its functions and duties under this
Agreement, the Administrative Agent shall act solely as agent of the Lenders and
does not assume and shall not be deemed to have assumed any obligation or
relationship of agency or trust with or for the Borrower or any of its
Subsidiaries.
11.2. DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by section 11.3.
11.3. EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such person under or in connection with this Agreement (except
for its or such person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or of its Subsidiaries or any
of their respective officers contained in this Agreement, any other Credit
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Credit Document or for any failure
of the Borrower or any Subsidiary of the Borrower or any of their respective
officers to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Borrower or any of its Subsidiaries. The Administrative Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any Credit
Document or for any representations, warranties, recitals or statements made
herein or therein or made in any written or oral statement or in any financial
or other statements, instruments, reports, certificates or any other documents
in connection herewith or therewith furnished or made by the Administrative
Agent to the Lenders or by or on behalf of the Borrower or any of its
Subsidiaries to the Administrative Agent or any Lender or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
11.4. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile transmission, telex or teletype message, statement, order or
other document or conversation believed by it, in good faith, to be genuine and
correct and to have been signed, sent or made by the proper person or persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Borrower or any of its Subsidiaries), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive such advice
or concurrence of the Required
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Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Credit Documents in
accordance with a request of the Required Lenders (or all of the Lenders, or all
of the Lenders (other than any Defaulting Lender), as applicable, as to any
matter which, pursuant to section 12.12, can only be effectuated with the
consent of all Lenders, or all Lenders (other than any Defaulting Lender), as
the case may be), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.
11.5. NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders, PROVIDED that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
11.6. NON-RELIANCE. Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates have made any representations or warranties to
it and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower or any of its Subsidiaries, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to any Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent, or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and its Subsidiaries and made its own decision
to make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent, or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Borrower and its Subsidiaries.
The Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, assets, property, financial and other conditions, prospects or
creditworthiness of the Borrower or any of its Subsidiaries which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
11.7. INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent in its capacity as such ratably according to their
respective Loans and Unutilized Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, reasonable expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment of
the Obligations) be imposed on, incurred by or asserted against the
Administrative Agent in its capacity as such in any way relating to or arising
out of this Agreement or any other Credit Document, or any documents
contemplated by or referred to herein or the transactions contemplated hereby or
any action taken or omitted to be taken by the Administrative Agent under or in
connection with any of the foregoing, but only to the extent that any of the
foregoing is not paid by the Borrower, PROVIDED that no Lender shall be liable
to the Administrative Agent for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting solely from the Administrative
Agent's gross negligence or willful misconduct. If any indemnity furnished to
the Administrative Agent for any purpose shall, in the opinion of the
Administrative Agent, be insufficient or become impaired, the Administrative
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished. The
agreements in this section 11.7 shall survive the payment of all Obligations.
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11.8. THE ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower, its Subsidiaries
and their Affiliates as though not acting as Administrative Agent hereunder.
With respect to the Loans made by it and all Obligations owing to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
11.9. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as the Administrative Agent upon not less than 20 Business Days' notice
to the Lenders and the Borrower. The Administrative Agent may be removed as the
Administrative Agent for cause upon not less than 20 Business Days' notice to
the Administrative Agent and the Borrower from the Required Lenders. The
Required Lenders shall appoint from among the Lenders a successor Administrative
Agent for the Lenders, subject to prior approval by the Borrower if no Event of
Default has occurred and is continuing (such approval not to be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall include such successor agent effective upon its
appointment, and the resigning or removed Administrative Agent's rights, powers
and duties as the Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement. After the retiring or removed Administrative
Agent's resignation or removal hereunder as the Administrative Agent, the
provisions of this section 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement.
11.10. OTHER AGENTS. Any Lender identified herein as a Co-Agent,
Syndication Agent, Documentation Agent, Managing Agent, Manager, Lead Arranger,
Arranger or any other corresponding title, other than "Administrative Agent" or
"Collateral Agent", shall have no right, power, obligation, liability,
responsibility or duty under this Agreement or any other Credit Document except
those applicable to all Lenders as such. Each Lender acknowledges that it has
not relied, and will not rely, on any Lender so identified in deciding to enter
into this Agreement or in taking or not taking any action hereunder.
SECTION 12. MISCELLANEOUS.
12.1. PAYMENT OF EXPENSES ETC. (a) Whether or not the transactions
contemplated hereby are consummated, the Borrower agrees to pay (or reimburse
the Administrative Agent and the Collateral Agent for) all reasonable
out-of-pocket costs and expenses of the Administrative Agent and the Collateral
Agent in connection with the negotiation, preparation, execution and delivery of
the Credit Documents and the documents and instruments referred to therein,
including, without limitation, the reasonable fees and disbursements of ▇▇▇▇▇,
Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel to the Administrative Agent.
(b) The Borrower agrees to pay (or reimburse the Administrative Agent,
the Lenders and their Affiliates for) all reasonable out-of-pocket costs and
expenses of the Administrative Agent, the Lenders and their Affiliates in
connection with any amendment, waiver or consent relating to any of the Credit
Documents which is requested by any Credit Party, including, without limitation,
the reasonable fees and disbursements of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, special
counsel to the Administrative Agent.
(c) The Borrower agrees to pay (or reimburse the Administrative Agent,
the Lenders and their Affiliates for) all reasonable out-of-pocket costs and
expenses of the Administrative Agent, the Lenders and their Affiliates in
connection with the enforcement of any of the Credit Documents or the other
documents and instruments referred to therein, including, without limitation,
(i) the reasonable fees and disbursements of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, special
counsel to the Administrative Agent, and (ii) the reasonable fees and
disbursements of any individual counsel to any Lender (including allocated costs
of internal counsel).
(d) Without limitation of the preceding section 12.1(c), in the event
of the bankruptcy, insolvency, rehabilitation or other similar proceeding in
respect of the Borrower or any of its Subsidiaries, the Borrower agrees to pay
all costs of collection and defense, including reasonable attorneys' fees in
connection therewith and in
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connection with any appellate proceeding or post-judgment action involved
therein, which shall be due and payable together with all required service or
use taxes.
(e) The Borrower agrees to pay and hold the Administrative Agent, the
Collateral Agent and each of the Lenders harmless from and against any and all
present and future stamp and other similar taxes with respect to the foregoing
matters and save each such Agent and each of the Lenders harmless from and
against any and all liabilities with respect to or resulting from any delay or
omission (other than to the extent attributable to any such indemnified person)
to pay such taxes.
(f) The Borrower agrees to indemnify the Administrative Agent, the
Collateral Agent, each Lender, and their respective officers, directors,
trustees, employees, representatives, agents and Affiliates (collectively, the
"INDEMNITEES") from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses reasonably incurred by any of them as a
result of, or arising out of, or in any way related to, or by reason of
(i) any investigation, litigation or other proceeding (whether
or not any Lender is a party thereto) related to the entering into
and/or performance of any Credit Document or the use of the proceeds of
any Loans hereunder or the consummation of any transactions
contemplated in any Credit Document, other than any such investigation,
litigation or proceeding arising out of transactions solely between any
of the Lenders or the Administrative Agent, transactions solely
involving the assignment by a Lender of all or a portion of its Loans
and Commitments, or the granting of participations therein, as provided
in this Agreement, or arising solely out of any examination of a Lender
by any regulatory or other governmental authority having jurisdiction
over it, or
(ii) the actual or alleged presence of Hazardous Materials in
the air, surface water or groundwater or on the surface or subsurface
of any Real Property owned, leased or at any time operated by the
Borrower or any of its Subsidiaries, the release, generation, storage,
transportation, handling or disposal of Hazardous Materials at any
location, whether or not owned or operated by the Borrower or any of
its Subsidiaries, if the Borrower or any such Subsidiary could have or
is alleged to have any responsibility in respect thereof, the
non-compliance of any such Real Property with foreign, federal, state
and local laws, regulations and ordinances (including applicable
permits thereunder) applicable thereto, or any Environmental Claim
asserted against the Borrower or any of its Subsidiaries, in respect of
any such Real Property,
including, in each case, without limitation, the reasonable documented fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the person to be indemnified or of any other
Indemnitee who is such person or an Affiliate of such person). To the extent
that the undertaking to indemnify, pay or hold harmless any person set forth in
the preceding sentence may be unenforceable because it is violative of any law
or public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
12.2. RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Lender is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to the Borrower
or to any other person, any such notice being hereby expressly waived, to set
off and to appropriate and apply any and all deposits (general or special) and
any other Indebtedness at any time held or owing by such Lender (including,
without limitation, by branches, agencies and Affiliates of such Lender wherever
located) to or for the credit or the account of the Borrower against and on
account of the Obligations and liabilities of the Borrower to such Lender under
this Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations the Borrower purchased by such Lender
pursuant to section 12.4(c), and all other claims of any nature or description
arising out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Lender shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
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Each Lender agrees to promptly notify the Borrower after any such set off and
application, PROVIDED, HOWEVER, that the failure to give such notice shall not
affect the validity of such set off and application.
12.3. NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile transmission or cable communication)
and mailed, telegraphed, telexed, transmitted, cabled or delivered, if to the
Borrower, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, attention: Chief Financial
Officer (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇); if to any Lender at its address specified
for such Lender on Annex I hereto or the Assignment Agreement pursuant to which
it became a Lender hereunder; if to the Administrative Agent, at its Notice
Office; or at such other address as shall be designated by any party in a
written notice to the other parties hereto. All such notices and communications
shall be mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, and shall be effective when received.
12.4. BENEFIT OF AGREEMENT. (A) SUCCESSORS AND ASSIGNS GENERALLY. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and assigns, PROVIDED that
the Borrower may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of all the Lenders (other than any
Defaulting Lender), and, PROVIDED, FURTHER, that any assignment by a Lender of
its rights and obligations hereunder shall be effected in accordance with
section 12.4(c).
(b) PARTICIPATIONS. Notwithstanding the foregoing, each Lender may at
any time grant participations in any of its rights hereunder or under any of the
Notes to (x) another Lender that is not a Defaulting Lender or to an Affiliate
of such Lender which is a commercial bank, financial institution or other
"accredited investor" (as defined in SEC Regulation D), and (y) one or more
Eligible Transferees, PROVIDED that in the case of any such participation,
(i) the participant shall not have any rights under this
Agreement or any of the other Credit Documents, including rights of
consent, approval or waiver (the participant's rights against such
Lender in respect of such participation to be those set forth in the
agreement executed by such Lender in favor of the participant relating
thereto),
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Commitment hereunder) shall remain
unchanged,
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,
(iv) such Lender shall remain the holder of any Note for all
purposes of this Agreement, and
(v) the Borrower, the Administrative Agent, and the other
Lenders shall continue to deal solely and directly with the selling
Lender in connection with such Lender's rights and obligations under
this Agreement, and all amounts payable by the Borrower hereunder shall
be determined as if such Lender had not sold such participation, except
that the participant shall be entitled to the benefits of sections 2.9
and 2.10 of this Agreement to the extent that such Lender would be
entitled to such benefits if the participation had not been entered
into or sold,
and, PROVIDED FURTHER, that no Lender shall transfer, grant or sell any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (x) extend the final scheduled
maturity of the Loans in which such participant is participating, or reduce the
rate or extend the time of payment of interest or Fees thereon (except in
connection with a waiver of the applicability of any post-default increase in
interest rates), or reduce the principal amount thereof, or increase such
participant's participating interest in any Commitment over the amount thereof
then in effect (it being understood that a waiver of any Default or Event of
Default shall not constitute a change in the terms of any such Commitment), (y)
release all or any substantial portion of the Collateral, or release any
guarantor from its guaranty of any of the Obligations, except strictly in
accordance with the terms of the Credit Documents, or (z) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement.
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(C) ASSIGNMENTS BY LENDERS. Notwithstanding the foregoing, (x) any
Lender may assign all or a fixed portion of its Loans and/or Commitment, and its
rights and obligations hereunder, to another Lender that is not a Defaulting
Lender, or to an Affiliate of any Lender (including itself) and which is not a
Defaulting Lender and which is a commercial bank, financial institution or other
"accredited investor" (as defined in SEC Regulation D), and (y) any Lender may
assign all, or if less than all, a fixed portion, equal to at least $5,000,000
in the aggregate for the assigning Lender or assigning Lenders, of its Loans
and/or Commitment and its rights and obligations hereunder, to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Lender by execution of an Assignment Agreement, PROVIDED that
(i) in the case of any assignment of a portion of any Loans
and/or Commitment of a Lender, such Lender shall retain a minimum fixed
portion of all Loans and Commitments equal to at least $5,000,000,
(ii) at the time of any such assignment the Lender Register
shall be deemed modified to reflect the Commitments of such new Lender
and of the existing Lenders,
(iii) upon surrender of the old Notes, new Notes will be
issued, at the Borrower's expense, to such new Lender and to the
assigning Lender, such new Notes to be in conformity with the
requirements of section 2.5 (with appropriate modifications) to the
extent needed to reflect the revised Commitments,
(iv) in the case of any assignment of all or any portion of a
Commitment to any person, other than another Lender that is not a
Defaulting Lender, the consent of the Administrative Agent and each
Letter of Credit Issuer shall be required in connection with such
assignment (which consents shall not be unreasonably withheld or
delayed), and
(v) the Administrative Agent shall receive at the time of each
such assignment, from the assigning or assignee Lender, the payment of
a non-refundable assignment fee of $3,500,
and, PROVIDED FURTHER, that such transfer or assignment will not be effective
until the Assignment Agreement in respect thereof is recorded by the
Administrative Agent on the Lender Register maintained by it as provided herein.
To the extent of any assignment pursuant to this section 12.4(c) the
assigning Lender shall be relieved of its obligations hereunder with respect to
its assigned Commitments.
At the time of each assignment pursuant to this section 12.4(c) to a
person which is not already a Lender hereunder and which is not a United States
person (as such term is defined in section 7701(a)(30) of the Code) for Federal
income tax purposes, the respective assignee Lender shall provide to the
Borrower and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable a Section 5.4(b)(ii) Certificate) described in section
5.4(b). To the extent that an assignment of all or any portion of a Lender's
Commitment and related outstanding Obligations pursuant to this section 12.4(c)
would, at the time of such assignment, result in increased costs under section
2.9 from those being charged by the respective assigning Lender prior to such
assignment, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to pay any other increased costs of
the type described above resulting from changes after the date of the respective
assignment).
Nothing in this section 12.4(c) shall prevent or prohibit (i) any
Lender which is a bank, trust company or other financial institution from
pledging its Notes or Loans to a Federal Reserve Bank in support of borrowings
made by such Lender from such Federal Reserve Bank, or (ii) any Lender which is
a trust, limited liability company, partnership or other investment company from
pledging its Notes or Loans to a trustee or agent for the benefit of holders of
certificates or debt securities issued by it. No such pledge, or any assignment
pursuant to or in lieu of an enforcement of such a pledge, shall relieve the
transferor Lender from its obligations hereunder.
(d) NO SEC REGISTRATION OR BLUE SKY COMPLIANCE. Notwithstanding any
other provisions of this section 12.4, no transfer or assignment of the
interests or obligations of any Lender hereunder or any grant of participation
therein shall be permitted if such transfer, assignment or grant would require
the Borrower to file a registration statement with the SEC or to qualify the
Loans under the "Blue Sky" laws of any State.
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(e) REPRESENTATIONS OF LENDERS. Each Lender initially party to this
Agreement hereby represents, and each person that became a Lender pursuant to an
assignment permitted by this section 12.4 will, upon its becoming party to this
Agreement, represent that it is a commercial lender, other financial institution
or other "accredited" investor (as defined in SEC Regulation D) which makes or
acquires loans in the ordinary course of its business and that it will make or
acquire Loans for its own account in the ordinary course of such business,
PROVIDED that subject to the preceding sections 12.4(b) and (c), the disposition
of any promissory notes or other evidences of or interests in Indebtedness held
by such Lender shall at all times be within its exclusive control.
(f) GRANTS BY LENDERS TO SPCs. Notwithstanding anything to the contrary
contained herein, any Lender, (a "GRANTING LENDER") may grant to a special
purpose funding vehicle (an "SPC"), identified as such in writing from time to
time by the Granting Lender to the Administrative Agent, the Borrower and the
other Lenders, the option to provide to the Borrower all or any part of any Loan
that such Granting Lender would otherwise be obligated to make to the Borrower
pursuant to this Agreement; PROVIDED that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan, and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for
any indemnity or payment under this Agreement for which a Lender would otherwise
be liable for so long as, and to the extent, the Granting Lender provides such
indemnity or makes such payment. In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPC, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. In addition, notwithstanding anything to the contrary contained
in this section 12.4, any SPC may (i) with notice to, but without the prior
written consent of, the Borrower and the Administrative Agent and without paying
any processing fee therefor, assign all or a portion of its interests in any
Loans to the Granting Lender or to any financial institutions providing
liquidity and/or credit support to or for the account of such SPC to support the
funding or maintenance of Loans and (ii) disclose on a confidential basis any
non-public information relating to its Loans to any rating agency, commercial
paper dealer or provider of any surety, guarantee or credit or liquidity
enhancements to such SPC. This section 12.4(f) may not be amended without the
written consent of any Granting Lender affected thereby.
12.5. NO WAIVER: REMEDIES CUMULATIVE. No failure or delay on the part
of the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrower and the Administrative Agent or any Lender shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default or Event of Default, regardless of whether
the Administrative Agent, any Lender or the Letter of Credit Issuer may have had
notice or knowledge of such Default or Event of Default at the time. The rights
and remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Administrative Agent or any Lender would otherwise
have.
12.6. PAYMENTS PRO RATA; SHARING OF SETOFFS, ETC. (a) The
Administrative Agent agrees that promptly after its receipt of each payment from
or on behalf of the Borrower in respect of any Obligations, it shall distribute
such payment to the Lenders (other than any Lender that has expressly waived in
writing its right to receive its PRO RATA share thereof) PRO RATA based upon
their respective shares, if any, of the Obligations with respect to which such
payment was received. As to any such payment received by the Administrative
Agent prior to 1:00 P.M. (local time at the Payment Office) in funds which are
immediately available on such day, the Administrative Agent will use all
reasonable efforts to distribute such payment in immediately available funds on
the same day to the Lenders as aforesaid.
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(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, THEN such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations to such Lenders in such amount as shall result in a proportional
participation by all of the Lenders in such amount, PROVIDED that (i) if all or
any portion of such excess amount is thereafter recovered from such Lender, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest, and (ii) the provisions of this section
12.6(b) shall not be construed to apply to any payment made by the Borrower
pursuant to and in accordance with the express terms of this Agreement, or any
payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in Letters of Credit to any
assignee or participant pursuant to section 12.4, other than to the Borrower or
any Subsidiary or Affiliate thereof (as to which the provisions of this section
12.6(b) shall apply). The Borrower consents to the foregoing and agrees, to the
extent it may effectively do so under applicable law, that any Lender acquiring
a participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding sections 12.6(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Lenders which are not Defaulting Lenders, as opposed to
Defaulting Lenders.
(d) If any Lender shall fail to make any payment required to be made by
it to the Administrative Agent pursuant to section 2.4(b) or 3.4(c), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision of this Agreement), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations to the Administrative Agent under such sections until all such
unsatisfied obligations are fully paid.
12.7. CALCULATIONS: COMPUTATIONS. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders); PROVIDED, that if at any time the computations
determining compliance with section 9 utilize accounting principles different
from those utilized in the financial statements furnished to the Lenders, such
computations shall set forth in reasonable detail a description of the
differences and the effect upon such computations.
(b) All computations of interest on Eurodollar Loans hereunder and all
computations of Commitment Fees, Letter of Credit Fees and other Fees hereunder
shall be made on the actual number of days elapsed over a year of 360 days
consisting of twelve 30-day months, and all computations of interest on Prime
Rate Loans hereunder shall be made on the actual number of days elapsed over a
year of 365 or 366 days, as applicable.
12.8. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF OHIO. TO THE FULLEST
EXTENT PERMITTED BY LAW, THE BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE STATE
OF OHIO GOVERNS THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS. Any legal
action or proceeding with respect to this Agreement or any other Credit Document
may be brought in the Court of Common Pleas of Cuyahoga County, Ohio, or of the
United States for the Northern District of Ohio, and, by execution and delivery
of this Agreement, the Borrower hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The Borrower hereby further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the Borrower at its
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address for notices pursuant to section 12.3, such service to become effective
30 days after such mailing or at such earlier time as may be provided under
applicable law. Nothing herein shall affect the right of the Administrative
Agent or any Lender to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Borrower in any
other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in section 12.8(a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO HEREBY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.
12.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same agreement. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10. EFFECTIVENESS; INTEGRATION. This Agreement shall become
effective on the date (the "EFFECTIVE DATE") on which the Borrower and each of
the Lenders shall have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to the Administrative Agent at the
Notice Office of the Administrative Agent or, in the case of the Lenders, shall
have given to the Administrative Agent telephonic (confirmed in writing),
written telex or facsimile transmission notice (actually received) at such
office that the same has been signed and mailed to it. This Agreement, the other
Credit Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent, for its own account and benefit and/or for the
account, benefit of, and distribution to, the Lenders, constitute the entire
contract among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof or thereof.
12.11. HEADINGS DESCRIPTIVE. The headings of the several sections and
other portions of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
12.12. AMENDMENT OR WAIVER. (a) Neither this Agreement nor any terms
hereof may be amended, changed, waived or otherwise modified UNLESS such
amendment, change, waiver or other modification is in writing and signed by the
Borrower and the Administrative Agent, and also signed (or consented to in
writing by) the Required Lenders, PROVIDED that
(i) no change, waiver or other modification shall:
(A) increase the Commitment of any Lender hereunder,
without the written consent of such Lender;
(B) extend or postpone the Maturity Date provided for
herein, extend or postpone the expiration date of any Letter
of Credit as to which such Lender is a Participant pursuant to
section 3.4 beyond the latest expiration date for a Letter of
Credit provided for herein, or extend or
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postpone any scheduled expiration or termination date
provided for herein which is applicable to a Commitment of any
Lender, without the written consent of such Lender;
(C) reduce the principal amount of any Loan made by
any Lender, or reduce the rate or extend the time of payment
of, or excuse the payment of, interest thereon (other than as
a result of waiving the applicability of any post-default
increase in interest rates), without the written consent of
such Lender;
(D) reduce the amount of any Unpaid Drawing as to
which any Lender is a Participant as provided in section 3.4,
or reduce the rate or extend the time of payment of, or excuse
the payment of, interest thereon (other than as a result of
waiving the applicability of any post-default increase in
interest rates), without the written consent of such Lender;
or
(E) reduce the rate or extend the time of payment of,
or excuse the payment of, any Fees to which any Lender is
entitled hereunder, without the written consent of such
Lender; and
(ii) no change, waiver or other modification termination
shall, without the written consent of each Lender (other than a
Defaulting Lender) affected thereby,
(A) release the Borrower from any obligations as a
guarantor of any other Letter of Credit Obligor's obligations
under any Credit Document;
(B) release any Credit Party from the Subsidiary
Guaranty, EXCEPT in connection with a transaction permitted by
section 9.2(d);
(C) release all or any substantial portion of the
Collateral, EXCEPT in connection with a transaction permitted
by section 9.2(d);
(D) change the definition of the term "Change of
Control" or any of the provisions of section 4.3 or 5.2 which
are applicable upon a Change of Control;
(E) amend, modify or waive any provision of this
section 12.12, or section 10.3, 11.7, 12.1, 12.4, 12.6 or
12.7(b), or any other provision of any of the Credit Documents
pursuant to which the consent or approval of all Lenders, or a
number or specified percentage or other required grouping of
Lenders, is by the terms of such provision explicitly
required;
(F) reduce the percentage specified in, or otherwise
modify, the definition of Required Lenders; or
(G) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this
Agreement.
Any waiver, consent, amendment or other modification with respect to this
Agreement given or made in accordance with this section 12.12 shall be effective
only in the specific instance and for the specific purpose for which it was
given or made.
(b) No provision of section 3 or 11 may be amended without the consent
of (x) any Letter of Credit Issuer adversely affected thereby or (y) the
Administrative Agent, respectively.
(c) Anything in this Agreement to the contrary notwithstanding, no
waiver or modification of any provision of this Agreement that has the effect
(either immediately or at some future time) of enabling the Borrower to satisfy
a condition precedent contained in section 6 to the making of a Loan or the
issuance of a Letter of Credit shall be effective against any Lender, UNLESS the
Required Lenders shall have consented in writing to such waiver or modification.
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(d) The Administrative Agent and the Collateral Agent will not enter
into any amendment, change, waiver, discharge or termination of any of the other
Credit Documents, EXCEPT as specifically provided therein or as authorized as
contemplated by a written request or consent of the Required Lenders (or all of
the Lenders, or all of the Lenders (other than any Defaulting Lender), as
applicable, as to any matter which, pursuant to this section 12.12, can only be
effectuated with the written consent of all Lenders, or all Lenders (other than
any Defaulting Lender), as the case may be).
12.13. SURVIVAL OF INDEMNITIES. All indemnities set forth herein
including, without limitation, in section 2.9, 2.10, 3.5, 11.7 or 12.1 shall
survive the execution and delivery of this Agreement and the making and
repayment of Loans.
12.14. DOMICILE OF LOANS. Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender, PROVIDED that the Borrower shall not be responsible for costs arising
under section 2.9 resulting from any such transfer (other than a transfer
pursuant to section 2.11) to the extent not otherwise applicable to such Lender
prior to such transfer.
12.15. CONFIDENTIALITY. (a) Each of the Administrative Agent, the
Collateral Agent, the Letter of Credit Issuers and the Lenders agrees to
maintain the confidentiality of the Confidential Information (as defined below),
EXCEPT that Confidential Information may be disclosed (1) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the persons to whom
such disclosure is made will be informed of the confidential nature of such
Confidential Information and instructed to keep such Confidential Information
confidential), (2) to any direct or indirect contractual counterparty in any
swap, hedge or similar agreement (or to any such contractual counterparty's
professional advisor), so long as such contractual counterparty (or such
professional advisor) agrees to be bound by the provisions of this section
12.15, (3) to the extent requested by any regulatory authority, (4) to the
extent required by applicable laws or regulations or by any subpoena or similar
legal process, it being understood and agreed that unless prohibited by law or
court order any such person will use reasonable efforts to advise the Borrower
reasonably in advance of any required disclosure to be made pursuant to
subpoena, discovery proceedings in any litigation or governmental investigation
or any court order, (5) to any other party to this Agreement, (6) to any other
creditor of the Borrower or any other Credit Party which is a direct or intended
beneficiary of any of the Credit Documents, (7) in connection with the exercise
of any remedies hereunder or under any of the other Credit Documents, or any
suit, action or proceeding relating to this Agreement or any of the other Credit
Documents or the enforcement of rights hereunder or thereunder, (8) subject to
an agreement containing provisions substantially the same as those of this
section 12.15, to any assignee of or participant in, or any prospective assignee
of or participant in, any of its rights or obligations under this Agreement, (9)
with the consent of the Borrower, or (10) to the extent such Confidential
Information (i) becomes publicly available other than as a result of a breach of
this section 12.15, or (ii) becomes available to the Administrative Agent, the
Collateral Agent, any Letter of Credit Issuer or any Lender on a nonconfidential
basis from a source other than the Borrower without a duty of confidentiality to
the Borrower being violated.
(b) For the purposes of this section 12.15, "CONFIDENTIAL INFORMATION"
means all information received from or on behalf of the Borrower and/or its
Subsidiaries, or obtained by the Administrative Agent, the Collateral Agent, any
Letter of Credit Issuer or any Lender based on an inspection or review of the
books and records of the Borrower and/or its Subsidiaries, relating to the
Borrower, its Subsidiaries or their business, other than any such information
that is available to the Administrative Agent, the Collateral Agent, any Letter
of Credit Issuer or any Lender on a nonconfidential basis prior to disclosure by
the Borrower; PROVIDED that, in the case of information received or obtained
from or on behalf of the Borrower and/or any of its Subsidiaries after the date
hereof, such information is clearly identified at the time of delivery or the
time obtained as confidential.
(c) Any person required to maintain the confidentiality of Confidential
Information as provided in this section 12.15 shall be considered to have
complied with its obligation to do so if such person has exercised the same
degree of care to maintain the confidentiality of such Confidential Information
as such person would accord to its own confidential information. The Borrower
hereby agrees that the failure of the Administrative Agent, the Collateral
Agent, any Letter of Credit Issuer or any Lender to comply with the provisions
of this section 12.15 shall not relieve the Borrower, or any other Credit Party,
of any of its obligations under this Agreement or any of the other Credit
Documents.
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12.16. LENDER REGISTER. The Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this section
12.16, to maintain a register (the "LENDER REGISTER") on or in which it will
record the names and addresses of the Lenders, and the Commitments from time to
time of each of the Lenders, the Loans made to the Borrower by each of the
Lenders and each repayment and prepayment in respect of the principal amount of
such Loans of each such Lender. Failure to make any such recordation, or (absent
manifest error) any error in such recordation, shall not affect the Borrower's
obligations in respect of such Loans. With respect to any Lender, the transfer
of the Commitment of such Lender and the rights to the principal of, and
interest on, any Loan made pursuant to such Commitment shall not be effective
until such transfer is recorded on the Lender Register maintained by the
Administrative Agent with respect to ownership of such Commitment and Loans and
prior to such recordation all amounts owing to the transferor with respect to
such Commitment and Loans shall remain owing to the transferor. The registration
of assignment or transfer of all or part of any Commitments and Loans shall be
recorded by the Administrative Agent on the Lender Register only upon the
acceptance by the Administrative Agent of a properly executed and delivered
Assignment Agreement pursuant to section 12.4(c). The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this section 12.16, except to the extent attributable to the gross negligence or
wilful misconduct of the Administrative Agent. The Lender Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
12.17. LIMITATIONS ON LIABILITY OF THE LETTER OF CREDIT ISSUERS. The
Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letters of
Credit. Neither any Letter of Credit Issuer nor any of its officers or directors
shall be liable or responsible for: (a) the use which may be made of any Letter
of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
or of any endorsement thereon, even if such documents should prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (c) payment by a
Letter of Credit Issuer against presentation of documents that do not comply
with the terms of a Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, EXCEPT that the Borrower (or a Subsidiary which is the account party
in respect of the Letter of Credit in question) shall have a claim against a
Letter of Credit Issuer, and a Letter of Credit Issuer shall be liable to the
Borrower (or such Subsidiary), to the extent of any direct, but not
consequential, damages suffered by the Borrower (or such Subsidiary) which the
Borrower (or such Subsidiary) proves were caused by (i) such Letter of Credit
Issuer's willful misconduct or gross negligence in determining whether documents
presented under a Letter of Credit comply with the terms of such Letter of
Credit or (ii) such Letter of Credit Issuer's willful failure to make lawful
payment under any Letter of Credit after the presentation to it of documentation
strictly complying with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing, a Letter of Credit Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation.
12.18. GENERAL LIMITATION OF LIABILITY. No claim may be made by the
Borrower, any Lender, the Administrative Agent, any Letter of Credit Issuer or
any other person against the Administrative Agent, any Letter of Credit Issuer,
or any other Lender or the Affiliates, directors, officers, employees, attorneys
or agents of any of them for any damages other than actual compensatory damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement or
any of the other Credit Documents, or any act, omission or event occurring in
connection therewith; and each of the Borrower, each Lender, the Administrative
Agent and each Letter of Credit Issuer hereby, to the fullest extent permitted
under applicable law, waives, releases and agrees not to ▇▇▇ or counterclaim
upon any such claim for any special, consequential or punitive damages, whether
or not accrued and whether or not known or suspected to exist in its favor.
12.19. NO DUTY. All attorneys, accountants, appraisers, consultants and
other professional persons (including the firms or other entities on behalf of
which any such person may act) retained by the Administrative Agent or any
Lender with respect to the transactions contemplated by the Credit Documents
shall have the right to act exclusively in the interest of the Administrative
Agent or such Lender, as the case may be, and shall have no duty of disclosure,
duty of loyalty, duty of care, or other duty or obligation of any type or nature
whatsoever to the Borrower, to any of its Subsidiaries, or to any other person,
with respect to any matters within the scope of such
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representation or related to their activities in connection with such
representation. The Borrower agrees, on behalf of itself and its Subsidiaries,
not to assert any claim or counterclaim against any such persons with regard to
such matters, all such claims and counterclaims, now existing or hereafter
arising, whether known or unknown, foreseen or unforeseeable, being hereby
waived, released and forever discharged.
12.20. LENDERS AND AGENT NOT FIDUCIARY TO BORROWER, ETC. The
relationship among the Borrower and its Subsidiaries, on the one hand, and the
Administrative Agent, each Letter of Credit Issuer and the Lenders, on the other
hand, is solely that of debtor and creditor, and the Administrative Agent, each
Letter of Credit Issuer and the Lenders have no fiduciary or other special
relationship with the Borrower and its Subsidiaries, and no term or provision of
any Credit Document, no course of dealing, no written or oral communication, or
other action, shall be construed so as to deem such relationship to be other
than that of debtor and creditor.
12.21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties herein shall survive the making of Loans and the issuance of
Letters of Credit hereunder, the execution and delivery of this Agreement, the
Notes and the other documents the forms of which are attached as Exhibits
hereto, the issue and delivery of the Notes, any disposition thereof by any
holder thereof, and any investigation made by the Administrative Agent or any
Lender or any other holder of any of the Notes or on its behalf. All statements
contained in any certificate or other document delivered to the Administrative
Agent or any Lender or any holder of any Notes by or on behalf of the Borrower
or of its Subsidiaries pursuant hereto or otherwise specifically for use in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower hereunder, made as of the
respective dates specified therein or, if no date is specified, as of the
respective dates furnished to the Administrative Agent or any Lender.
12.22. SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
12.23. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action, event, condition or
circumstance is not permitted by any of such covenants, the fact that it would
be permitted by an exception to, or would otherwise be within the limitations or
restrictions of, another covenant, shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or event, condition or
circumstance exists.
12.24. INTEREST RATE LIMITATION. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the "CHARGES"), shall exceed the maximum
lawful rate (the "MAXIMUM RATE") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Prime Rate to the date of repayment, shall have
been received by such Lender.
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first above
written.
▇▇▇▇▇▇▇ & SYLVAN POOLS CORPORATION NATIONAL CITY BANK,
INDIVIDUALLY AS A LENDER AND AS THE LETTER OF
CREDIT ISSUER, AND IN ITS CAPACITY AS THE
ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
BY:
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
EXECUTIVE VICE PRESIDENT
& CHIEF FINANCIAL OFFICER By:
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
VICE PRESIDENT
THE HUNTINGTON NATIONAL BANK FIRSTAR BANK, NATIONAL ASSOCIATION
BY:_______________________________ BY:_______________________________
TITLE: TITLE:
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