$52,500,000
AMENDED AND RESTATED CREDIT AGREEMENT
Originally dated as of September 23, 1997
Amended and Restated as of March 16, 1998
among
BINKS XXXXX CORPORATION,
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I: DEFINITIONS
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
1.3 Supplemental Disclosure . . . . . . . . . . . . . . . . . . . . . .26
1.4 Amendment and Restatement of Original Credit Agreement. . . . . . .27
ARTICLE II: THE EXISTING LOANS AND SUPPLEMENTAL LOAN FACILITY
2.1. Existing Loans. . . . . . . . . . . . . . . . . . . . . . . . . . .27
2.2 Supplemental Loans. . . . . . . . . . . . . . . . . . . . . . . . .27
2.3 [Intentionally Blank] . . . . . . . . . . . . . . . . . . . . . . .28
2.4 [Intentionally Blank].. . . . . . . . . . . . . . . . . . . . . . .28
2.5 Optional Payments; Mandatory Prepayments. . . . . . . . . . . . . .28
2.6 Reduction of Commitments. . . . . . . . . . . . . . . . . . . . . .30
2.7 Method of Borrowing . . . . . . . . . . . . . . . . . . . . . . . .31
2.8 Notice of Borrowing; Floating Rate Applicable to All Obligations. .31
2.9 Minimum Amount of Each Supplemental Advance . . . . . . . . . . . .31
2.10 [Intentionally Blank] . . . . . . . . . . . . . . . . . . . . . . .31
2.11 Default Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . .31
2.12 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . .31
2.13 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
2.14 Telephonic Notices. . . . . . . . . . . . . . . . . . . . . . . . .32
2.15 Promise to Pay; Interest; Interest Payment Dates;
Interest and Fee Basis; Taxes; Loan and Control Accounts . . . .32
2.16 Notification of Supplemental Advances, Interest Rates,
Prepayments and Aggregate Supplemental Loan Commitment
Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . .36
2.17 Lending Installations . . . . . . . . . . . . . . . . . . . . . . .36
2.18 Non-Receipt of Funds by the Agent . . . . . . . . . . . . . . . . .36
2.19 Termination Date. . . . . . . . . . . . . . . . . . . . . . . . . .37
2.20 Replacement of Certain Lenders. . . . . . . . . . . . . . . . . . .37
2.21 Collection Account Arrangements . . . . . . . . . . . . . . . . . .38
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 Obligation to Issue Letters of Credit . . . . . . . . . . . . . . .39
3.2 Types and Amounts of Letters of Credit. . . . . . . . . . . . . . .39
3.3 Conditions with respect to Letters of Credit. . . . . . . . . . . .39
3.4 Procedure for Issuance of Letters of Credit . . . . . . . . . . . .40
3.5 Participation in Letters of Credit. . . . . . . . . . . . . . . . .40
3.6 Reimbursement Obligation. . . . . . . . . . . . . . . . . . . . . .41
3.7 Letter of Credit Fees. . . . . . . . . . . . . . . . . . . . . . .41
3.8 Issuing Bank Reporting Requirements.. . . . . . . . . . . . . . . .41
3.9 Indemnification; Exoneration. . . . . . . . . . . . . . . . . . . .42
3.10 Cash Collateral . . . . . . . . . . . . . . . . . . . . . . . . . .43
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ARTICLE IV: CHANGE IN CIRCUMSTANCES
4.1 Yield Protection. . . . . . . . . . . . . . . . . . . . . . . . . .43
4.2 Changes in Capital Adequacy Regulations . . . . . . . . . . . . . .44
4.3 [Intentionally Blank] . . . . . . . . . . . . . . . . . . . . . . .45
4.4 [Intentionally Blank].. . . . . . . . . . . . . . . . . . . . . . .45
4.5 Lender Statements; Survival of Indemnity. . . . . . . . . . . . . .45
ARTICLE V: CONDITIONS PRECEDENT
5.1 Initial Supplemental Advances and Letters of Credit . . . . . . . .45
5.2 Each Supplemental Advance and Letter of Credit. . . . . . . . . . .47
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
6.1 Organization; Corporate Powers. . . . . . . . . . . . . . . . . . .47
6.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
6.3 No Conflict; Governmental Consents. . . . . . . . . . . . . . . . .48
6.4 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . .49
6.5 No Material Adverse Change. . . . . . . . . . . . . . . . . . . . .49
6.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
6.7 Litigation; Loss Contingencies and Violations . . . . . . . . . . .50
6.8 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . .50
6.9 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
6.10 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . .51
6.11 Securities Activities . . . . . . . . . . . . . . . . . . . . . . .52
6.12 Material Agreements . . . . . . . . . . . . . . . . . . . . . . . .52
6.13 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . .52
6.14 Assets and Properties . . . . . . . . . . . . . . . . . . . . . . .52
6.15 Statutory Indebtedness Restrictions . . . . . . . . . . . . . . . .52
6.16 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
6.17 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . .53
6.18 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . .53
6.19 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
ARTICLE VII : COVENANTS
7.1 Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
7.2 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . .59
7.3 Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . .63
7.4 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . .71
7.5 Sale Initiative . . . . . . . . . . . . . . . . . . . . . . . . . .73
ARTICLE VIII: DEFAULTS
8.1 Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
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ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES
9.1 Termination of Commitments; Acceleration . . . . . . . . . . . . .79
9.2 Defaulting Lender. . . . . . . . . . . . . . . . . . . . . . . . .79
9.3 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . .81
9.4 Preservation of Rights . . . . . . . . . . . . . . . . . . . . . .82
ARTICLE X: GENERAL PROVISIONS
10.1 Survival of Representations. . . . . . . . . . . . . . . . . . . .83
10.2 Governmental Regulation. . . . . . . . . . . . . . . . . . . . . .83
10.3 Performance of Obligations . . . . . . . . . . . . . . . . . . . .83
10.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
10.5 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . .84
10.6 Several Obligations; Benefits of this Agreement. . . . . . . . . .84
10.7 Expenses; Indemnification. . . . . . . . . . . . . . . . . . . . .84
10.8 Numbers of Documents . . . . . . . . . . . . . . . . . . . . . . .87
10.9 Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . .87
10.10 Severability of Provisions . . . . . . . . . . . . . . . . . . . .87
10.11 Nonliability of Lenders. . . . . . . . . . . . . . . . . . . . . .87
10.12 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . .88
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL. . . . . .88
10.14 No Strict Construction . . . . . . . . . . . . . . . . . . . . . .89
ARTICLE XI: THE AGENT
11.1 Appointment; Nature of Relationship. . . . . . . . . . . . . . . .89
11.2 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90
11.3 General Immunity . . . . . . . . . . . . . . . . . . . . . . . . .90
11.4 No Responsibility for Loans,
Creditworthiness, Collateral, Recitals, Etc. . . . . . . . . .90
11.5 Action on Instructions of Required Creditors . . . . . . . . . . .91
11.6 Employment of Agents and Counsel . . . . . . . . . . . . . . . . .91
11.7 Reliance on Documents; Counsel . . . . . . . . . . . . . . . . . .91
11.8 The Agent's Reimbursement and Indemnification. . . . . . . . . . .91
11.9 Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . . .92
11.10 Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . .92
11.11 Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . .92
11.12 Collateral Documents . . . . . . . . . . . . . . . . . . . . . . .93
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93
12.2 Ratable Payments . . . . . . . . . . . . . . . . . . . . . . . . .93
12.3 Application of Payments. . . . . . . . . . . . . . . . . . . . . .93
12.4 Relations Among Lenders. . . . . . . . . . . . . . . . . . . . . .94
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ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . .95
13.2 Participations. . . . . . . . . . . . . . . . . . . . . . . . . . .95
13.3 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . .96
13.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . .97
13.5 Dissemination of Information. . . . . . . . . . . . . . . . . . . .99
13.6 Guaranty Terminations and Pledge Releases . . . . . . . . . . . . .99
ARTICLE XIV: NOTICES
14.1 Giving Notice . . . . . . . . . . . . . . . . . . . . . . . . . . .99
14.2 Change of Address . . . . . . . . . . . . . . . . . . . . . . . . .99
ARTICLE XV: WAIVERS
ARTICLE XVI: COUNTERPARTS
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EXHIBITS AND SCHEDULES
EXHIBITS
EXHIBIT A -- Existing Obligations and Supplemental Commitments
(Definitions)
EXHIBIT B -- Form of Supplemental Note
(Definitions)
EXHIBIT C -- Form of Borrowing Notice (Section 2.8)
EXHIBIT D -- Form of Request for Letter of Credit (Section 3.3)
EXHIBIT E -- Form of Assignment and Acceptance Agreement
(Sections 2.20 and 13.3)
EXHIBIT F -- Form of Borrower's Counsel's Opinion
(Section 5.1)
EXHIBIT G -- List of Closing Documents
(Section 5.1)
EXHIBIT H -- Form of Officer's Certificate
(Sections 5.2 and 7.1(A)(iv))
EXHIBIT I -- Form of Compliance Certificate
(Sections 5.2 and 7.1(A)(iv))
EXHIBIT J -- Form of Borrowing Base Certificate (Definitions)
EXHIBIT K -- Form of Waiver and Second Amendment to Note Purchase
Agreement (Section 7.3(N))
DISCLOSURE -- Disclosure Letter (Definitions)
LETTER
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SCHEDULES
Schedule 1.1.1 -- Permitted Existing Contingent Obligations (Definitions)
Schedule 1.1.2 -- Permitted Existing Indebtedness (Definitions)
Schedule 1.1.3 -- Permitted Existing Investments (Definitions)
Schedule 1.1.4 -- Permitted Existing Liens (Definitions)
Schedule 1.1.5 -- Mortgages (Definitions)
Schedule 6.3 -- Conflicts; Governmental Consents (Section 6.3)
Schedule 6.7 -- Litigation; Loss Contingencies (Section 6.7)
Schedule 6.8 -- Subsidiaries (Section 6.8)
Schedule 6.9 -- ERISA (Section 6.9)
Schedule 6.16 -- Insurance (Section 6.16)
Schedule 6.18 -- Environmental Matters (Section 6.18)
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AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement dated as of March 16, 1998 is
entered into among Binks Xxxxx Corporation, a Delaware corporation, the
institutions from time to time parties hereto as Lenders, whether by execution
of this Agreement or an Assignment Agreement pursuant to SECTION 13.3, and The
First National Bank of Chicago, in its capacity as contractual representative
for itself and the other Lenders. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
1.1 CERTAIN DEFINED TERMS. In addition to the terms defined above, the
following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined.
As used in this Agreement:
"ACCOUNT DEBTOR" means the account debtor or obligor with respect to any of
the Receivables and/or the prospective purchaser with respect to any contract
right, and/or any party who enters into or proposes to enter into any contract
or other arrangement with the Borrower or SEI.
"ACQUISITION" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (i) acquires any going business or all or substantially all
of the assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage of voting power) of the outstanding
equity interests of another Person.
"AFFECTED LENDER" is defined in SECTION 2.20 hereof.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of greater than ten percent (10%) or more of any class of voting
securities (or other voting interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
Capital Stock, by contract or otherwise.
"AGENT" means First Chicago in its capacity as contractual representative
for itself and the Lenders pursuant to ARTICLE XI hereof and any successor Agent
appointed pursuant to ARTICLE XI hereof.
"AGGREGATE SUPPLEMENTAL LOAN COMMITMENT" means the aggregate of the
Supplemental Loan Commitments of all the Lenders, as reduced from time to time
pursuant to the terms hereof. The initial Aggregate Supplemental Loan
Commitment is Seven Million and 00/100 Dollars ($7,000,000.00).
"AGREEMENT" means this Amended and Restated Credit Agreement, as it may be
amended, restated or otherwise modified and in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles as in effect as of the Original Closing Date, applied in a manner
consistent with that used in preparing the financial statements referred to in
SECTION 6.4(B)(1) of the Original Credit Agreement, PROVIDED, HOWEVER, that with
respect to the calculation of financial ratios and other financial tests
required by this Agreement, "Agreement Accounting Principles" means generally
accepted accounting principles as in effect as of the date of this Agreement,
applied in a manner consistent with that used in preparing the financial
statements referred to in SECTION 6.4(A) hereof.
"ALTERNATE BASE RATE" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Corporate Base Rate for such day and
(ii) the sum of (a) the Federal Funds Effective Rate for such day and (b) one-
half of one percent (0.5%) per annum.
"APPLICABLE FLOATING RATE MARGIN" means (a) with respect to the
Supplemental Loans and Reimbursement Obligations, one percent (1.00%) per annum;
and (b) with respect to all other Obligations, one-half of one-percent (0.50%)
per annum.
"ARRANGER"means First Chicago Capital Markets, Inc., in its capacity as the
arranger for the loan transaction evidenced by this Agreement.
"ASSET SALE" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a sale-leaseback transaction, and including the sale or
other transfer of any of the Equity Interests of any Subsidiary of such Person).
"ASSET SALE PREPAYMENT" is defined in SECTION 2.5(B)(i)(a) hereof.
"ASSIGNMENT AGREEMENT" means an assignment and acceptance agreement entered
into in connection with an assignment pursuant to SECTION 13.3 hereof in
substantially the form of EXHIBIT E.
"AUTHORIZED OFFICER" means any of the President or Chief Financial Officer
of the Borrower, acting singly.
2
"BENEFIT PLAN" means a defined benefit plan as defined in SECTION 3(35) of
ERISA (other than a Multiemployer Plan) in respect of which the Borrower or any
other member of the Controlled Group is, or within the immediately preceding six
(6) years was, an "employer" as defined in SECTION 3(5) of ERISA.
"XXXXX" is defined in SECTION 7.5 hereof.
"BORROWER" means Binks Xxxxx Corporation, a Delaware corporation, together
with its successors and assigns, including a debtor-in-possession on behalf of
the Borrower.
"BORROWING BASE" means, as of any date of calculation, an amount, as set
forth on the most current Borrowing Base Certificate delivered to the Agent,
equal to: (i) one hundred percent (100%) of the Gross Amount of Eligible
Receivables; PLUS (ii) one hundred percent (100%) of the Gross Amount of
Eligible Inventory; PLUS (iii) (a) solely for the period from the Effective Date
through March 31, 1998, $18,000,000 and (b) thereafter, $20,000,000 MINUS (iv)
the aggregate amount of the Rental Reserve, if any, at such time.
"BORROWING BASE CERTIFICATE" means a certificate, in substantially the form
of EXHIBIT J attached hereto and made a part hereof, setting forth the Borrowing
Base and the component calculations thereof (with Inventory reports being
updated monthly on an actual basis not later than twenty (20) days after the
close of each calendar month and weekly on a cost-of-goods sold basis).
"BORROWING DATE" means a date on which a Supplemental Advance is made
hereunder.
"BORROWING NOTICE" is defined in SECTION 2.8 hereof.
"BUSINESS ACTIVITY REPORT" means (A) a Notice of Business Activities Report
from the State of Minnesota, Department of Revenue, (B) a Notice of Business
Activities Report from the State of New Jersey, Division of Taxation, or (C) any
similar report required by any other State relating to the ability of the
Borrower or its Subsidiaries to enforce their accounts receivable claims against
account debtors located in any such state.
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which banks
are open for business in Chicago, Illinois and New York, New York.
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
Capitalized Leases and Permitted Purchase Money Indebtedness) by the Borrower
and its Subsidiaries during that period that, in conformity with Agreement
Accounting Principles, are required to be included in or reflected by the
property, plant, equipment or similar fixed asset accounts reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other
3
equivalents (however designated) of corporate stock, (iii) in the case of a
partnership, partnership -interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
"CAPITALIZED LEASE" of a Person means any lease of property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected against
currency fluctuations for any such deposits with a term of more than ninety (90)
days); (iii) shares of money market, mutual or similar funds having assets in
excess of $100,000,000 and the investments of which are limited to investment
grade securities (i.e., securities rated at least Baa by Xxxxx'x Investors
Service, Inc. or at least BBB by Standard & Poor's Ratings Group); and (iv)
commercial paper of United States and foreign banks and bank holding companies
and their subsidiaries and United States and foreign finance, commercial
industrial or utility companies which, at the time of acquisition, are rated A-1
(or better) by Standard & Poor's Ratings Group or P-1 (or better) by Xxxxx'x
Investors Services, Inc.; PROVIDED that the maturities of such Cash Equivalents
shall not exceed 365 days.
"CHANGE" is defined in SECTION 4.2 hereof.
"CHANGE OF CONTROL" means an event or series of events by which:
(a) any "person" or "group" (as such terms are used in SECTIONS 13(d)
and 14(d) of the Exchange Act), becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall
be deemed to have "beneficial ownership" of all securities that such person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of 50% or more of
the combined voting power of the Borrower's Capital Stock ordinarily having
the right to vote at an election of directors; or
(b) during any period of twelve (12) consecutive calendar months,
individuals: (i) who were directors of the Borrower on the first day of
such period, or (ii) whose election or nomination for election to the
board of directors of the Borrower was recommended or approved by at least
a majority of the directors then still in office who were directors of the
Borrower on the first day of such period, or whose election or nomination
for election
4
was so approved, shall cease to constitute a majority of the board of
directors of the Borrower; or
(c) the Borrower consolidates with or merges into another corporation
or conveys, transfers or leases all or substantially all of its property to
any Person, or any corporation consolidates with or merges into the
Borrower, in either event pursuant to a transaction in which the
outstanding Capital Stock of the Borrower is reclassified or changed into
or exchanged for cash, securities or other property.
"CLAIMS" is defined in Section 10.7(D) hereof.
"CLOSING DATE" means the date on which this Amended and Restated Credit
Agreement is executed by the parties hereto.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"COLLATERAL" means all property and interests in property now owned or
hereafter acquired by the Borrower or any of its Subsidiaries in or upon which a
security interest, lien or mortgage is granted to the Agent, for the benefit of
the Holders of Secured Obligations, or to the Agent, for the benefit of the
Lenders, whether under the Security Agreements, the Mortgages, the Intellectual
Property Security Agreements, the Pledge Agreements, under any of the other
Collateral Documents or under any of the other Loan Documents.
"COLLATERAL AGENT" has the meaning ascribed to that term in the Collateral
Sharing Agreement.
"COLLATERAL DOCUMENTS" means all agreements, instruments and documents
executed in connection with this Agreement, including, without limitation, the
Security Agreements, the Mortgages, the Collection Account Agreements, the
Intellectual Property Security Agreements, the Pledge Agreements, the Collateral
Sharing Agreement and all other security agreements, subordination agreements,
pledges, powers of attorney, assignments, contracts, financing statements and
all other written matter whether heretofore, now, or hereafter executed by or on
behalf of the Borrower or any of its Subsidiaries and delivered to the Agent or
any of the Lenders, together with all agreements and documents referred to
therein or contemplated thereby.
"COLLATERAL SHARING AGREEMENT" means that certain Amended and Restated
Collateral Sharing Agreement dated of even date herewith among the Agent, the
Lenders and the Noteholder, as the same may from time to time be further
amended, modified, supplemented and or restated.
"COLLECTION ACCOUNT" means each lock-box and blocked depository account
maintained by the Borrower and each Subsidiary which has executed a Subsidiary
Security Agreement,
5
subject to a Collection Account Agreement, for the collection of Receivables and
other proceeds of Collateral.
"COLLECTION ACCOUNT AGREEMENT" means a written agreement among the
Borrower, any of its Subsidiaries, the Collateral Agent, and, as applicable,
each of the banks at which the Borrower or such Subsidiary maintains a
Collection Account.
"COLLECTION ACCOUNT BLOCKAGE DATE" means the date, following the occurrence
of a Default on which the Collateral Agent or the Required Lenders, in the
Collateral Agent's or the Required Lenders' sole discretion, instruct(s) any
financial institution party to a Collection Account Agreement as described in
the applicable Collection Account Agreement to remit, during the continuance of
such Default, all amounts deposited in the Collection Account to the Collateral
Agent or as the Collateral Agent shall direct.
"COMMISSION" means the Securities and Exchange Commission and any Person
succeeding to the functions thereof.
"COMMITMENT" means, for each Lender, collectively, such Lender's
Supplemental Loan Commitment.
"CONFIDENTIAL INFORMATION" is defined in SECTION 13.4 hereof.
"CONSOLIDATED TANGIBLE ASSETS" means the total assets of the Borrower and
its Subsidiaries on a consolidated basis, but excluding therefrom all items that
are treated as intangibles under Agreement Accounting Principles.
"CONSOLIDATED NET WORTH" is defined in SECTION 7.4(A) hereof.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBS"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.
"CONTINGENT OBLIGATION", as applied to any Person, means any Contractual
Obligation, contingent or otherwise, of that Person with respect to any
Indebtedness of another or other obligation or liability of another, including,
without limitation, any such Indebtedness, obligation or liability of another
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable, including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase, repurchase, or otherwise
acquire such Indebtedness, obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make payment other than for value received.
6
"CONTRACTUAL OBLIGATION", as applied to any Person, means any material
provision of any equity or debt securities issued by that Person or any
indenture, mortgage, deed of trust, security agreement, pledge agreement,
guaranty, contract, undertaking, agreement or instrument, in any case in
writing, to which that Person is a party or by which it or any of its properties
is bound, or to which it or any of its properties is subject, with obligations
in excess of $1,000,000.
"CONTROLLED GROUP" means the group consisting of (i) any corporation which
is a member of the same controlled group of corporations (within the meaning of
SECTION 414(b) of the Code) as the Borrower; (ii) a partnership or other trade
or business (whether or not incorporated) which is under common control (within
the meaning of SECTION 414(c) of the Code) with the Borrower; and (iii) a member
of the same affiliated service group (within the meaning of SECTION 414(m) of
the Code) as the Borrower, any corporation described in CLAUSE (i) above or any
partnership or trade or business described in CLAUSE (ii) above.
"CONTROLLED SUBSIDIARY" of any Person means a Subsidiary of such Person (i)
90% or more of the total Equity Interests or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more wholly-owned Subsidiaries of such Person and (ii) of
which such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies, whether through the ownership
of voting securities, by agreement or otherwise.
"CORPORATE BASE RATE" means the corporate base rate of interest announced
by First Chicago from time to time, changing when and as said corporate base
rate changes.
"CURE LOAN" is defined in SECTION 9.2(iii) hereof.
"CUSTOMARY PERMITTED LIENS" means:
(i) Liens (other than Environmental Liens and Liens in favor of the
IRS or the PBGC) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or (if foreclosure,
distraint, sale or other similar proceedings shall not have been commenced)
which are being contested in good faith by appropriate proceedings properly
instituted and diligently conducted and with respect to which adequate
reserves or other appropriate provisions are being maintained in accordance
with Agreement Accounting Principles;
(ii) statutory Liens of landlords and Liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other similar Liens
imposed by law created in the ordinary course of business for amounts not
yet due or which are being contested in good faith by appropriate
proceedings properly instituted and diligently conducted and with respect
to which adequate reserves or other appropriate provisions are being
maintained in accordance with Agreement Accounting Principles;
(iii) Liens (other than Environmental Liens and Liens in favor of the
IRS or the PBGC) incurred or deposits made in the ordinary course of
business in connection with
7
workers' compensation, unemployment insurance or other types of social
security benefits or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money), surety, appeal
and performance bonds; PROVIDED that (A) all such Liens do not in the
aggregate materially detract from the value of the Borrower's or such
Subsidiary's assets or property taken as a whole or materially impair the
use thereof in the operation of the businesses taken as a whole, and (B)
all Liens securing bonds to stay judgments or in connection with appeals do
not secure at any time an aggregate amount exceeding $1,000,000;
(iv) Liens arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar charges or encumbrances on the use
of real property which do not in any case materially detract from the value
of the property subject thereto or interfere with the ordinary conduct of
the business of the Borrower or any of its Subsidiaries;
(v) Liens of attachment or judgment with respect to judgments, writs
or warrants of attachment, or similar process against the Borrower or any
of its Subsidiaries which do not constitute a Default under SECTION 8.1(H)
hereof; and
(vi) any interest or title of the lessor in the property subject to
any operating lease entered into by the Borrower or any of its Subsidiaries
in the ordinary course of business.
"DEFAULT" means an event described in ARTICLE VIII hereof.
"DESIGNATED PREPAYMENT" is defined in SECTION 2.5(B)(i)(f) hereof.
"DISCLOSED DISPUTES" has the meaning given that term in SECTION 1(a) of the
Disclosure Letter.
"DISCLOSURE LETTER" means that certain disclosure letter dated of even date
herewith issued by the Borrower and acknowledged and consented to by the Agent,
the Lenders and the Noteholder, as the same may from time to time be amended,
modified, supplemented or restated with the consent of the Required Creditors.
"DISPUTE RESOLUTION COSTS" has the meaning given than term in SECTION 1(a)
of the Disclosure Letter.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the Existing Loan Termination Date.
"DOL" means the United States Department of Labor and any Person succeeding
to the functions thereof.
8
"DOLLAR" and "$" means dollars in the lawful currency of the United States.
"EBITDA" is defined in SECTION 7.4(A) hereof.
"EFFECTIVE DATE" means the date on which all conditions to effectiveness of
this Agreement in accordance with the terms of SECTION 5.1 have been satisfied
or waived in accordance with the terms hereof.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under the laws of
the United States or any State thereof, and having total assets in excess of
$5,000,000,000, or an Affiliate thereof; (b) a savings and loan association or
savings bank organized under the laws of the United States or any State thereof,
and having total assets in excess of $5,000,000,000; (c) a commercial bank
organized under the laws of any other country that is a member of the OECD or
has concluded special lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow or of the Cayman Islands or a
political subdivision of any of such country, and having total assets in excess
of $20,000,000,000, so long as such bank is acting through a branch or agency
located in the United States; (d) an insurance company (as defined in Section
2(13) of the Securities Act) that in the aggregate owns and invests on a
discretionary basis, at least $100,000,000 in securities of issuers that are not
affiliated with such insurance company; or (e) any broker or dealer acquiring
such interest as a Transferee for its own account that agrees in writing (for
the benefit of the Borrower) that it shall not, directly or indirectly, act to
effect a Change of Control or acquire all or substantially all of the assets of
the Borrower or any Subsidiary; PROVIDED, HOWEVER, that the foregoing shall not
adversely affect the rights of such acquiring entity to exercise any remedies
under this Agreement or the other Loan Documents available to the holders of
Obligations generally.
"ELIGIBLE INVENTORY" means Inventory of the Borrower or SEI which is held
for sale or lease or furnished under any contract of service by the Borrower or
SEI which shall not at any time be rendered ineligible as a result of the
criteria set forth below. The following Inventory is not Eligible Inventory:
(i) (to the extent not provided for by reserves described in the
definition of the Gross Amount of Eligible Inventory) Inventory which is
(a) obsolete, not in good condition or not either usable or saleable in the
ordinary course of the Borrower's or SEI's business or (b) does not meet
all material standards imposed by any Governmental Authority having
regulatory authority over such item of Inventory, its use or its sale but
only to the extent such standards materially adversely affect the use or
sale of such Inventory and only while such Inventory fails to meet such
standards;
(ii) Inventory consisting of packaging material, supplies or
demonstration goods;
(iii) Inventory which (a) is consigned to a third party for sale or
(b) is on consignment from a third party to the Borrower or SEI for sale;
(iv) Inventory which consists of goods in transit;
9
(v) Inventory which is subject to a Lien (to the extent of the
obligation secured by such Lien) in favor of any Person other than the
Collateral Agent unless such Lien is permitted under the terms of this
Agreement, is subordinate to the Lien of the Collateral Agent and only for
so long as the holder of such Lien has not begun any judicial or non-
judicial enforcement of its rights or remedies with respect thereto;
(vi) Inventory with respect to which the Collateral Agent does not
have a first and valid fully-perfected security interest other than solely
as a result of an action or failure to act on the part of the Collateral
Agent;
(vii) Inventory which is not located either (a) on the Borrower's or
SEI's owned premises in the United States listed on Schedule 2 to the
Security Agreement or (b) in other owned or leased premises, warehouses or
with bailees or consignees in the United States not listed on Schedule 2 to
the Security Agreement or permitted to be established under the Security
Agreement, in each case in connection with which the Collateral Agent shall
have received landlord, mortgagee, consignee, bailee and/or warehousemen's
access and lien waiver agreements, as applicable, in each case in form and
substance reasonably acceptable to the Agent;
(viii) Inventory which is evidenced by a Receivable; and
(ix) Inventory which is not materially in conformity with the
representations and warranties made by the Borrower or SEI to the Agent
with respect thereto whether contained in this Agreement or the Security
Agreements;
PROVIDED, HOWEVER, Inventory at leased premises which would be rendered
ineligible solely by virtue of the landlord's lien and failure to enter
into a landlord's agreement shall be treated as Eligible Inventory so long
as there has been reserved against the Borrowing Base an amount equal to
three (3) month's rent for such location (the "RENTAL RESERVE"); PROVIDED,
it shall be the Borrower's option whether to establish the Rental Reserve
with respect to any location or to treat the Inventory at such location in
its entirety as ineligible..
"ELIGIBLE RECEIVABLES" means Receivables created by the Borrower or SEI in
the ordinary course of its business arising out of the sale of goods or
rendition of services by the Borrower or SEI, which Receivables are not rendered
ineligible by the criteria set forth below. The following Receivables are not
Eligible Receivables:
(i) Receivables which remain unpaid 120 days after the date of the
original applicable invoice;
(ii) all Receivables owing by a single Account Debtor (including a
Receivable which remains unpaid fewer than 120 days after the date of the
original applicable invoice) if 50% of the balance owing by such Account
Debtor to the Borrower and SEI, calculated without taking into account any
credit balances of such Account Debtor, remains unpaid
10
120 days after the date of the original applicable invoice or has otherwise
become ineligible;
(iii) Receivables with respect to which the Account Debtor is a
director, officer, employee, Subsidiary or Affiliate of the Borrower or
SEI;
(iv) Receivables with respect to which the Account Debtor is any
federal Governmental Authority, the United States of America, or, in each
case, any department, agency or instrumentality thereof, unless with
respect to any such Account, the Borrower or SEI, as applicable, has
complied to the Agent's reasonable satisfaction with the provisions of the
Federal Assignment of Claims Act or other applicable statutes, including,
without limitation, executing and delivering to Agent all statements of
assignment and/or notification which are in form and substance reasonably
acceptable to Agent and which are deemed reasonably necessary by Agent to
effectuate the assignment to the Collateral Agent of such Accounts on
behalf of the Holders of Secured Obligations;
(v) Receivables with respect to which the Account Debtor is any state
or municipal Governmental Authority or any agency or instrumentality
thereof;
(vi) Receivables not denominated in U.S. Dollars or with respect to
which the Account Debtor is not a resident of the United States unless the
Account Debtor has supplied the Borrower or SEI, as applicable, with an
irrevocable letter of credit, issued by a financial institution reasonably
satisfactory to the Agent, sufficient to cover such Receivable in form and
substance reasonably satisfactory to the Agent;
(vii) Receivables with respect to which the Account Debtor has (a)
asserted a counterclaim, (b) a right of setoff or (c) a receivable owing
from the Borrower or SEI but only to the extent of such counterclaim,
setoff or receivable;
(viii) Receivables with respect to which the Collateral Agent does not
have a first and valid fully perfected and enforceable security interest
other than solely as a result of an action or failure to act on the part of
the Collateral Agent;
(ix) Receivables with respect to which the Account Debtor is the
subject of bankruptcy or a similar insolvency proceeding or has made an
assignment for the benefit of creditors or whose assets have been conveyed
to a receiver, trustee or assignee for the benefit of creditors;
(x) Receivables with respect to which the Account Debtor's obligation
to pay the Receivable is conditional upon the Account Debtor's approval or
is otherwise subject to any repurchase obligation or return right, as with
sales made on a xxxx-and-hold, guaranteed sale, sale-and-return, sale on
approval (except with respect to Receivables in connection with which
Account Debtors are entitled to return Inventory on the basis of the
quality of such Inventory) or consignment basis;
11
(xi) Receivables with respect to which the Account Debtor is located
in New Jersey or Minnesota (or any other jurisdiction which adopts a
statute or other requirement with respect to which any Person that obtains
business from within such jurisdiction or is otherwise subject to such
jurisdiction's tax law requiring such Person to file a Business Activity
Report or make any other required filings in a timely manner in order to
enforce its claims in such jurisdiction's courts or arising under such
jurisdiction's laws); PROVIDED, HOWEVER, such Receivables shall nonetheless
be eligible if the Borrower or SEI, as applicable, has filed a Business
Activity Report (or other applicable report) with the applicable state
office or is qualified to do business in such jurisdiction and, at the time
the Receivable was created, was qualified to do business in such
jurisdiction or had on file with the applicable state office a current
Business Activity Report (or other applicable report);
(xii) Receivables with respect to which the Account Debtor's
obligation does not constitute its legal, valid and binding obligation,
enforceable against it in accordance with its terms, but only to the extent
such Receivable is not legal, valid, binding and enforceable;
(xiii) Receivables with respect to which the Borrower or SEI has not
yet shipped the applicable goods, performed the applicable service or
issued the applicable invoice, including, without limitation, Receivables
consisting of progress xxxxxxxx;
(xiv) any Receivable which is not materially in conformity with the
representations and warranties made by the Borrower or SEI, as applicable,
to the Agent with respect thereto whether contained in this Agreement or
the Security Agreements; and
(xv) Receivables in connection with which the Borrower or SEI, as
applicable, has not complied with all material requirements contained in
the charter and by-laws or other organizational or governing documents of
the Borrower or SEI, and any law, rule or regulation, or determination of
an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon the Borrower or SEI or any of its property or
to which the Borrower or SEI or any of its property is subject, including,
without limitation, all laws, rules, regulations and orders of any
Governmental Authority or judicial authority relating to truth in lending,
billing practices, fair credit reporting, equal credit opportunity, debt
collection practices and consumer debtor protection, applicable to such
Receivable (or any related contracts) but only to the extent such non-
compliance materially adversely affects the collectibility of such
Receivables.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law derived from or relating to foreign, federal, state and
local laws or regulations relating to or addressing pollution or protection of
the environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601 ET SEQ., the Occupational Safety and Health Act of
1970, 29 U.S.C. Section 651 ET SEQ., and the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. Section
12
6901 ET SEQ., in each case including any amendments thereto, any successor
statutes, and any regulations or guidance promulgated thereunder, and any state
or local equivalent thereof.
"ENVIRONMENTAL LIEN" means a lien in favor of any Governmental Authority
for (a) any liability under Environmental, Health or Safety Requirements of Law,
or (b) damages arising from, or costs incurred by such Governmental Authority in
response to, a Release or threatened Release of a Contaminant into the
environment.
"ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement of
law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"EXCLUDED ASSET SALES" means Asset Sales consisting of any of the
following: (a) sales of Receivables sold by the Borrower's foreign Subsidiaries
in the ordinary course of such Subsidiary's business and consistent with its
past practices, (b) those Asset Sales permitted pursuant to Section 7.3(B)(i)
and (ii) and (c) Asset Sales involving the assets of one or more of the
Borrower's Subsidiaries in Belgium, Mexico and Italy to the extent the aggregate
Net Cash Proceeds thereof do not exceed the approximated amounts set forth with
respect thereto in the projections attached as EXHIBIT A to the Disclosure
Letter.
"EXISTING LOANS" means all outstanding Term Loans, Revolving Loans and
Swing Line Loans made under the Original Credit Agreement and outstanding on the
Effective Date.
"EXISTING LOAN TERMINATION DATE" means the earlier of (a) September 30,
1999 and (b) the date of acceleration of the Existing Loans pursuant to SECTION
9.1 hereof.
"EXISTING OBLIGATIONS" means, at any particular time, the outstanding
principal amount of the Existing Loans at such time.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately 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 at approximately 10:00 a.m. (Chicago
time) on such day on
13
such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent in its sole discretion.
"FINANCING" means, with respect to any Person, the issuance or sale by such
Person of any Equity Interests of such Person or any Indebtedness consisting of
debt securities of such Person.
"FIRST CHICAGO" means The First National Bank of Chicago, in its individual
capacity, and its successors.
"FLOATING RATE" means, for any day for all Obligations, a rate per annum
equal to the Alternate Base Rate for such day, changing when and as the
Alternate Base Rate changes, PLUS the Applicable Floating Rate Margin.
"GOVERNMENTAL ACTS" is defined in SECTION 3.9(A) hereof.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GROSS AMOUNT OF ELIGIBLE INVENTORY" means Eligible Inventory valued at the
lower of cost determined on a first-in-first-out basis (determined in accordance
with Agreement Accounting Principles, consistently applied) or market value less
the value of reserves which have been recorded by the Borrower or SEI with
respect to obsolete, slow-moving or excess Inventory or are otherwise
established by the Borrower or SEI in accordance with Agreement Accounting
Principles.
"GROSS AMOUNT OF ELIGIBLE RECEIVABLES" means the outstanding face amount of
Eligible Receivables, determined in accordance with Agreement Accounting
Principles, consistently applied, less (i) all finance charges, late fees and
other fees that are unearned, (ii) the value of any accrual which has been
recorded by the Borrower with respect to downward price adjustments, and (iii)
any other reserves established by the Borrower or SEI in accordance with
Agreement Accounting Principles.
"GROSS NEGLIGENCE" means recklessness, or actions taken or omitted with
conscious indifference to or the complete disregard of consequences. Gross
Negligence does not mean the absence of ordinary care or diligence, or an
inadvertent act or inadvertent failure to act. If the term "gross negligence"
is used with respect to the Agent or any Lender or any indemnitee in any of the
other Loan Documents, it shall have the meaning set forth herein.
"GUARANTY" means that certain Guaranty dated as of the Original Closing
Date and reaffirmed of even date herewith executed by SEI in favor of the Agent,
for the ratable benefit of the Lenders, as it may be amended, modified,
supplemented and/or restated (including to add new Guarantors), and as in effect
from time to time.
14
"HEDGING AGREEMENTS" is defined in SECTION 7.3(Q) hereof.
"HEDGING OBLIGATIONS" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"HOLDERS OF SECURED OBLIGATIONS" has the meaning given that term in the
Collateral Sharing Agreement.
"INDEBTEDNESS" of any Person means, without duplication, such Person's (a)
obligations for borrowed money, (b) obligations representing the deferred
purchase price of property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), (c) obligations, whether or not assumed, secured by Liens or payable out
of the proceeds or production from property or assets now or hereafter owned or
acquired by such Person, (d) obligations which are evidenced by notes,
acceptances or other instruments, (e) Capitalized Lease Obligations, (f)
Contingent Obligations, (g) obligations with respect to letters of credit, (h)
Hedging Obligations and (i) Off Balance Sheet Liabilities. The amount of
Indebtedness of any Person at any date shall be without duplication (i) the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability of any such Contingent Obligations at such date
and (ii) in the case of Indebtedness of others secured by a Lien to which the
property or assets owned or held by such Person is subject, the lesser of the
fair market value at such date of any asset subject to a Lien securing the
Indebtedness of others and the amount of the Indebtedness secured.
"INDEMNIFIED MATTERS" is defined in SECTION 10.7(B) hereof.
"INDEMNITEES" is defined in SECTION 10.7(B) hereof.
"INTELLECTUAL PROPERTY SECURITY AGREEMENTS" means those certain Patent
Security Agreements and/or Trademark Security Agreements of even date herewith
executed by the Borrower and SEI, respectively, in favor of the Collateral Agent
for the benefit of the Holders of Secured Obligations as amended, restated or
otherwise modified from time to time.
"INTEREST EXPENSE" is defined in SECTION 7.4(A) hereof.
"INVENTORY" means, with respect to any Person, any and all goods,
including, without limitation, goods in transit, wheresoever located, whether
now owned or hereafter acquired by such Person, which are held for sale or
lease, furnished under any contract of service or held as raw
15
materials, work in process or supplies, and all materials used or consumed in
such Person's business, and shall include all rights, title and interest of such
Person on any property the sale or other disposition of which has given rise to
Receivables and which has been returned to or repossessed or stopped in transit
by such Person.
"INVESTMENT" means, with respect to any Person, (i) any purchase or other
acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person, (ii) any purchase by that Person
of all or substantially all of the assets of a business conducted by another
Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.
"ISSUANCE PREPAYMENTS" is defined in Section 2.5(B)(i)(b) hereof.
"ISSUING BANKS" means First Chicago, LaSalle National Bank and any other
Lender which, at the Borrower's request, agrees, in each such Lender's sole
discretion, to become an Issuing Bank for the purpose of issuing Letters of
Credit, and their respective successors and assigns, in each case in such
Lender's separate capacity as an issuer of Letters of Credit pursuant to SECTION
3.1. The designation of any Lender as an Issuing Bank after the date hereof
shall be subject to the prior written consent of the Agent.
"L/C DRAFT" means a draft drawn on an Issuing Bank pursuant to a Letter of
Credit.
"L/C INTEREST" shall have the meaning ascribed to such term in SECTION 3.5
hereof.
"L/C OBLIGATIONS" means, without duplication, an amount equal to the sum of
(i) the aggregate of the amount then available for drawing under each of the
Letters of Credit, (ii) the face amount of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the applicable Issuing Bank, (iii) the aggregate outstanding amount of all
Reimbursement Obligations at such time and (iv) the aggregate face amount of all
Letters of Credit requested by the Borrower but not yet issued (unless the
request for an unissued Letter of Credit has been denied).
"LENDERS" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"LENDING INSTALLATION" means, with respect to a Lender or the Agent, any
office, branch, subsidiary or affiliate of such Lender or the Agent.
16
"LETTER OF CREDIT" means the letters of credit to be issued by the Issuing
Banks pursuant to SECTION 3.1 hereof.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
"LOAN(S)" means, with respect to a Lender, (a) such Lender's Existing Loans
and (b) such Lender's portion of any Supplemental Advance made pursuant to
SECTION 2.2 hereof, as applicable, and collectively all Existing Loans and
Supplemental Loans.
"LOAN ACCOUNT" is defined in SECTION 2.15(F) hereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Guaranty, the
Collateral Documents and all other documents, instruments and agreements
executed in connection therewith or contemplated thereby, as the same may be
amended, restated or otherwise modified and in effect from time to time.
"MARGIN STOCK" shall have the meaning ascribed to such term in Regulation
U.
"MASTER NOTE AGREEMENT" means that certain Master Note Agreement dated as
of November 30, 1993 pursuant to which the Borrower issued the Senior Notes, as
amended by the Waiver and First Amendment dated September 22, 1997 and by the
Waiver and Second Amendment dated as of the date hereof, as the same may from
time to time be further amended, modified, supplemented or restated in
compliance with the terms of this Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries, taken as a whole,
(b) the ability of the Borrower or any of its Subsidiaries to perform their
respective obligations under the Loan Documents in any material respect, (c) the
ability of the Lenders or the Agent to enforce in any material respect the
Obligations or (d) the ability of the Lenders, or the Agent to enforce in any
material respect the Obligations or their rights with respect to a material
amount of the Collateral.
"MATERIAL SUBSIDIARIES" means, on the date of any determination thereof,
each Subsidiary having (i) assets as of the immediately preceding "Subsidiary
Test Date" (as defined herein) with a book value equal to or greater than
$15,000,000 or (ii) gross revenues for the period of 12 consecutive months ended
as of the immediately preceding Subsidiary Test Date equal to or greater than
$15,000,000. "Subsidiary Test Date" means the last day of each fiscal quarter
and the last day of each fiscal year, calculated as of the date of delivery of
the financial statements required to be delivered pursuant to SECTION 7.1(A)(ii)
and SECTION 7.1(A)(iii).
"MAXIMUM AMOUNT" means (i) $67,500,000 minus (ii) the sum of Designated
Prepayments (other than Tax Prepayments).
17
"MORTGAGES" means collectively the fee mortgages and leasehold mortgages
granted to the Collateral Agent with respect to certain real estate of the
Borrower, as further identified in SCHEDULE 1.1.5 to this Agreement, together
with any additional fee or leasehold mortgages executed and delivered pursuant
to the terms of this Agreement or the Security Agreements.
"MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in SECTION
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by either the Borrower or any member of the Controlled
Group.
"NET CASH PROCEEDS" means, with respect to any Asset Sale by any Person,
(a) cash (freely convertible into United States dollars) received by such Person
or any Subsidiary of such Person from such Asset Sale (including cash received
as consideration for the assumption or incurrence of liabilities incurred in
connection with or in anticipation of such Asset Sale), after (i) provision for
all income or other taxes measured by or resulting from such Asset Sale which
such Person pays in cash or reasonably estimates to be payable in cash during
the applicable tax year (after taking into account the entire tax filing posture
of the recipient of the proceeds from such Asset Sale), (ii) payment of all
brokerage commissions and other fees and expenses related to such Asset Sale,
(iii) repayment of Indebtedness secured by a Lien on any asset disposed of in
such Asset Sale or which is or may be required (by the express terms of the
instrument governing such Indebtedness or by applicable law) to be repaid in
connection with such Asset Sale (including payments made to obtain or avoid the
need for the consent of any holder of such Indebtedness), and (iv) deduction of
appropriate amounts to be provided by such Person or a Subsidiary of such Person
as a reserve, in accordance with Agreement Accounting Principles, against any
liabilities associated with the assets sold or disposed of in such Asset Sale
and retained by such Person or a Subsidiary of such Person after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with the assets sold or disposed of in
such Asset Sale; and (b) cash payments in respect of any other consideration
received by such Person or any Subsidiary of such Person from such Asset Sale
upon receipt of such cash payments by such Person or such Subsidiary.
"NET INCOME" is defined in SECTION 7.4(A) hereof.
"NON PRO RATA LOAN" is defined in SECTION 9.2 hereof.
"NOTEHOLDER" means Equitable Life Assurance Society of the United States,
as the signatory to the Master Note Agreement, and its successors and assigns.
"NOTES" means (a) the Revolving Notes and Term Notes issued pursuant to the
Original Credit Agreement and (b) the Supplemental Loan Notes issued pursuant to
this Agreement, in each case as the same may from time to time be amended,
modified, supplemented or restated.
"NOTICE OF ASSIGNMENT" is defined in SECTION 13.3(B) hereof.
18
"OBLIGATIONS" means all Loans, L/C Obligations, advances, debts,
liabilities, obligations, covenants and duties owing by the Borrower to the
Agent, any Lender, the Arranger, any Affiliate of the Agent or any Lender, or
any Indemnitee, of any kind or nature, present or future, arising under this
Agreement, the Notes or any other Loan Document, whether or not evidenced by any
note, guaranty or other instrument, whether or not for the payment of money,
whether arising by reason of an extension of credit, loan, guaranty,
indemnification, or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, attorneys' fees and
disbursements, paralegals' fees (in each case whether or not allowed), and any
other sum chargeable to the Borrower under this Agreement or any other Loan
Document.
"OFF BALANCE SHEET LIABILITIES" of a Person means (a) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to accounts or notes receivable sold by such Person or any of its Subsidiaries,
(b) any liability under any sale and leaseback transactions which do not create
a liability on the consolidated balance sheet of such Person, (c) any liability
under any financing lease or so-called "synthetic" lease transaction, or (d) any
obligations arising with respect to any other transaction which is the
functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheets of such Person and its
Subsidiaries.
"ORIGINAL CLOSING DATE" means September 23, 1997.
"ORIGINAL CREDIT AGREEMENT" means the Credit Agreement dated as of
September 23, 1997 among the Borrower, the financial institutions parties
thereto and the Agent.
"OTHER TAXES" is defined in SECTION 2.15(E)(ii) hereof.
"PARTICIPANTS" is defined in SECTION 13.2(A) hereof.
"PAYMENT DATE" means the 15th day of each month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERMITTED EXISTING CONTINGENT OBLIGATIONS" means the Contingent
Obligations of the Borrower and its Subsidiaries identified as such on SCHEDULE
1.1.1.
"PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the Borrower
and its Subsidiaries identified as such on SCHEDULE 1.1.2 to this Agreement.
"PERMITTED EXISTING INVESTMENTS" means the Investments of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.3 to this Agreement.
"PERMITTED EXISTING LIENS" means the Liens on assets of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.4 to this Agreement.
19
"PERMITTED PURCHASE MONEY INDEBTEDNESS" is defined in SECTION 7.3(A)(viii)
hereof.
"PERMITTED REFINANCING INDEBTEDNESS" means any replacement, renewal,
refinancing or extension of any Indebtedness permitted by this Agreement that
(i) does not exceed the aggregate principal amount (plus accrued interest and
any applicable premium and associated fees and expenses) of the Indebtedness
being replaced, renewed, refinanced or extended, (ii) does not have a Weighted
Average Life to Maturity at the time of such replacement, renewal, refinancing
or extension that is less than the Weighted Average Life to Maturity of the
Indebtedness being replaced, renewed, refinanced or extended, (iii) does not
rank at the time of such replacement, renewal, refinancing or extension senior
to the Indebtedness being replaced, renewed, refinanced or extended, and (iv)
does not contain terms (including, without limitation, terms relating to
security, amortization, interest rate, premiums, fees, covenants, event of
default and remedies) materially less favorable to the Borrower or to the
Lenders than those applicable to the Indebtedness being replaced, renewed,
refinanced or extended.
"PERSON" means any individual, corporation, firm, enterprise, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company or other entity of any kind, or any
government or political subdivision or any agency, department or instrumentality
thereof.
"PLAN" means an employee benefit plan defined in SECTION 3(3) of ERISA in
respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
SECTION 3(5) of ERISA.
"PLEDGE AGREEMENTS" means (a) the Shares Accounts Pledge Agreement dated as
of November 21, 1997 executed by the Borrower in favor of the Collateral Agent,
with respect to 65% of the outstanding Capital Stock of Xxxxx, X.X., (b) the
Equitable Share Charge dated as of November 21, 1997 executed by the Borrower in
favor of the Collateral Agent, with respect to 65% of the outstanding Capital
Stock of Xxxxx-Xxxxx Limited, (c) the Pledge Agreement dated the date hereof
executed by the Borrower in favor of the Collateral Agent with respect to 65% of
the outstanding Capital Stock of Binks Xxxxx Canada, Ltd. and (d) the Pledge
Agreement dated the date hereof executed by the Borrower in favor of the
Collateral Agent with respect to 100% of the outstanding Capital Stock of Xxxxx
Electrostatic, Inc., in each case as the same may from time to time be amended,
modified, supplemented or restated.
"PRIORITY OBLIGATIONS" is defined in the Collateral Sharing Agreement.
"PRO RATA SHARE" means, with respect to any Lender, the percentage obtained
by dividing (A) the sum of such Lender's Existing Loans and Supplemental Loan
Commitment at such time (in each case, as adjusted from time to time in
accordance with the provisions of this Agreement) by (B) the sum of the
aggregate amount of all of the Existing Loans and the Aggregate Supplemental
Loan Commitment at such time; PROVIDED, HOWEVER, if all of the Commitments are
terminated pursuant to the terms of this Agreement, then "Pro Rata Share" means
the percentage obtained by dividing (x) the sum of such Lender's Loans and L/C
Obligations, by (y) the aggregate amount of all Loans and L/C Obligations.
20
"PURCHASERS" is defined in SECTION 13.3(A) hereof.
"RATABLE OBLIGATIONS" is defined in the Collateral Sharing Agreement.
"RECEIVABLE(S)" means, with respect to any Person, all of such Person's
presently existing and hereafter arising or acquired accounts, accounts
receivable, and all present and future rights of such Person to payment for
goods sold or leased or for services rendered (except those evidenced by
instruments or chattel paper), whether or not they have been earned by
performance, and all rights in any merchandise or goods which any of the same
may represent, and all rights, title, security and guaranties with respect to
each of the foregoing, including, without limitation, any right of stoppage in
transit.
"REGISTER" is defined in SECTION 13.3(C) hereof.
"REGULATION G" means Regulation G of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by nonbank, nonbroker lenders for the purpose of purchasing
or carrying margin stock (as defined therein).
"REGULATION T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying Margin
Stock applicable to member banks of the Federal Reserve System.
"REGULATION X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"REIMBURSEMENT OBLIGATION" is defined in SECTION 3.6 hereof.
"RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Contaminants through or in the
air, soil, surface water or groundwater.
"RELEASEES" is defined in SECTION 10.7(D) hereof.
"RELEASORS" is defined in SECTION 10.7(D) hereof.
21
"RENTAL RESERVE" is defined in the definition of Eligible Inventory above.
"REPLACEMENT LENDER" is defined in SECTION 2.20 hereof.
"REPORTABLE EVENT" means a reportable event as defined in SECTION 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of SECTION 4043(a) of ERISA that it be notified within 30 days after
such event occurs, PROVIDED, HOWEVER, that a failure to meet the minimum funding
standards of SECTION 412 of the Code and of SECTION 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either SECTION 4043(a) of ERISA or SECTION 412(d)
of the Code.
"REQUIRED CREDITORS" has the meaning given that term in the Collateral
Sharing Agreement.
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the aggregate,
are greater than fifty percent (50%); PROVIDED, HOWEVER, that, if any of the
Lenders shall have failed to fund its Pro Rata Share of (i) any Supplemental
Loan requested by the Borrower or (ii) any Supplemental Loan required to be made
in connection with reimbursement for any L/C Obligations and any such failure
has not been cured, then for so long as such failure continues, "REQUIRED
LENDERS" means Lenders (excluding all Lenders whose failure to fund their
respective Pro Rata Shares of such Supplemental Loans has not been so cured)
whose Pro Rata Shares represent greater than fifty percent (50%) of the
aggregate Pro Rata Shares of such Lenders; PROVIDED FURTHER, HOWEVER, that, if
the Commitments have been terminated pursuant to the terms of this Agreement,
"REQUIRED LENDERS" means Lenders (without regard to such Lenders' performance of
their respective obligations hereunder) whose aggregate Pro Rata Shares are
greater than fifty percent (50%).
"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws or
other organizational or governing documents of such Person, and any law, rule or
regulation, or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject including,
without limitation, the Securities Act of 1933, the Securities Exchange Act of
0000, Xxxxxxxxxxx X, X, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or permit or environmental, labor,
employment, occupational safety or health law, rule or regulation, including
Environmental, Health or Safety Requirements of Law.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution, direct
or indirect, on account of any Equity Interests of the Borrower now or hereafter
outstanding, except a dividend payable solely in the Borrower's Capital Stock
(other than Disqualified Stock) or in options, warrants or other rights to
purchase such Capital Stock, (ii) any redemption, retirement, purchase or other
acquisition for value, direct or indirect, of any Equity Interests of the
Borrower or any of its Subsidiaries now or hereafter outstanding, other than in
exchange for, or out of the proceeds
22
of, the substantially concurrent sale (other than to a Subsidiary of the
Borrower) of other Equity Interests of the Borrower (other than Disqualified
Stock), (iii) any redemption, purchase, retirement, defeasance, prepayment or
other acquisition for value, direct or indirect, of any Indebtedness other than
the Obligations, and (iv) any payment of a claim for the rescission of the
purchase or sale of, or for material damages arising from the purchase or sale
of, any Indebtedness (other than the Obligations) or any Equity Interests of the
Borrower or any of the Borrower's Subsidiaries, or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission.
"RESTRUCTURING EXPENSES" is defined in SECTION 7.4(A) hereof.
"RISK-BASED CAPITAL GUIDELINES" is defined in SECTION 4.2 hereof.
"SALE INITIATIVE" is defined in SECTION 7.5 hereof.
"SALE INITIATIVE PREPAYMENT" is defined in SECTION 2.5(B)(i)(a) hereof.
"SECURED OBLIGATIONS" is defined in the Credit Agreement.
"SECURITY AGREEMENTS" means those certain Security Agreements of even date
herewith executed by the Borrower and SEI, respectively, in favor of the
Collateral Agent for the benefit of the Holders of Secured Obligations as
amended, restated or otherwise modified from time to time.
"SEI" means Xxxxx Electrostatic, Inc., a Connecticut corporation, together
with its successors and assigns, including a debtor-in-possession on behalf of
Xxxxx Electrostatic, Inc.
"SENIOR NOTES" means those certain Senior Notes due December 6, 2008,
issued by the Borrower in the aggregate principal amount of $15,000,000 pursuant
to the Master Note Agreement.
"SHARING PERIOD" means the period from the Effective Date until the first
date on which the aggregate amount of "Asset Sale Prepayments", "Subsidiary
Prepayments" and "Issuance Prepayments" (each as defined in SECTION 2.5) equals
or exceeds $1,000,000
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"SOLVENT" means, when used with respect to any Person, that at the time of
determination:
(i) the fair value of its assets (both at fair valuation and at
present fair saleable value) is equal to or in excess of the total amount
of its liabilities, including, without limitation, contingent liabilities;
and
(ii) it is then able and expects to be able to pay its debts as they
mature; and
23
(iii) it has capital sufficient to carry on its business as conducted
and as proposed to be conducted.
With respect to contingent liabilities (such as litigation, guarantees and
pension plan liabilities), such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represent the amount which can be reasonably be expected to become an actual or
matured liability.
"SPECIFIED DEFAULTS" is defined in ARTICLE XV hereof.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" means a Subsidiary
of the Borrower.
"SUBSIDIARY PREPAYMENTS" is defined in SECTION 2.5(B)(i)(c) hereof.
"SUPPLEMENTAL ADVANCE" means a borrowing hereunder consisting of the
aggregate amount of the several Supplemental Loans made by the Lenders to the
Borrower.
"SUPPLEMENTAL CREDIT AVAILABILITY" means, at any particular time, the least
of (A) the amount by which the Aggregate Supplemental Loan Commitment at such
time exceeds the Supplemental Credit Obligations at such time; (B) the amount by
which the Borrowing Base at such time exceeds the sum of (i) the Supplemental
Credit Obligations at such time, (ii) the Existing Obligations at such time and
(iii) the outstanding principal amount of the Senior Notes at such time and (C)
the amount by which the Maximum Amount at such time exceeds the sum of (i) the
Supplemental Credit Obligations at such time, (ii) the outstanding principal
balance of the Existing Loans at such time and (iii) the outstanding principal
amount of the Senior Notes at such time.
"SUPPLEMENTAL CREDIT OBLIGATIONS" means, at any particular time, the sum of
(i) the outstanding principal amount of the Supplemental Loans at such time,
PLUS (ii) the outstanding L/C Obligations at such time.
"SUPPLEMENTAL LOAN" is defined in SECTION 2.2 hereof.
"SUPPLEMENTAL LOAN COMMITMENT" means, for each Lender, the obligation of
such Lender to make Supplemental Loans and to purchase participations in Letters
of Credit not exceeding the amount set forth on EXHIBIT A to this Agreement
opposite its name thereon under the heading "Supplemental Loan Commitment" or
the signature page of the assignment and acceptance by which it became a Lender,
as such amount may be modified from time to time
24
pursuant to the terms of this Agreement or to give effect to any applicable
assignment and acceptance.
"SUPPLEMENTAL LOAN TERMINATION DATE" means the earlier of (a) September 30,
1999 and (b) the date of termination of the Aggregate Supplemental Loan
Commitment pursuant to SECTION 2.6 hereof or pursuant to SECTION 9.1 hereof.
"SUPPLEMENTAL NOTE" means a promissory note, in substantially the form of
EXHIBIT B hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Supplemental Loan Commitment, including any
amendment, restatement, modification, renewal or replacement of such
Supplemental Note.
"TAX PREPAYMENT" is defined in SECTION 2.5(B)(i)(d) hereof.
"TAXES" is defined in Section 2.15(E)(i) hereof.
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in SECTION
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Borrower or any member of the Controlled Group; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under SECTION 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
SECTION 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which might constitute
grounds under SECTION 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Benefit Plan; or (vi) the partial or complete
withdrawal of the Borrower or any member of the Controlled Group from a
Multiemployer Plan.
"TRANSFER DEFAULT" means:
(a) the occurrence of any Default under any of clauses (A) or (E) through
(K) of SECTION 8.1;
(b) the occurrence of any Default under SECTION 8.1(B)(ii) as a result of
the Borrower's breach of SECTION 7.1(I) and such breach shall continue
unremedied for ten (10) Business Days after notice thereof is given to the
Borrower by the Agent or any Lender (such 10-day period ending on the 10th day
following the giving of such notice whether or not such notice was given prior
to the expiration of the two Business Day grace period contained in SECTION
8.1(B)(ii));
(c) the occurrence of any Default under SECTION 8.1(B)(iii);
(d) the occurrence of any Default under SECTION 8.1(C) arising out of any
breach of the representations and warranties made under SECTION 6.4 or SECTION
6.10; or
25
(e) the occurrence of any Default under SECTION 8.1(D) arising out of any
breach of the provisions of SECTION 7.1(A) and such breach shall continue
unremedied for thirty (30) days after notice thereof is given to the Borrower by
the Agent or any Lender (such 30-day period ending on the 30th day following the
giving of such notice whether or not such notice was given prior to the
expiration of the 30-day grace period contained in SECTION 8.1(D)).
"TRANSFEREE" is defined in SECTION 13.5 hereof.
"UNFUNDED LIABILITIES" means (i) in the case of Single Employer Plans, the
amount (if any) by which the present value of all vested nonforfeitable benefits
under all Single Employer Plans exceeds the fair market value of all such Plan
assets allocable to such benefits, all determined as of the then most recent
valuation date for such Plans, and (ii) in the case of Multiemployer Plans, the
withdrawal liability that would be incurred by the Controlled Group if all
members of the Controlled Group completely withdrew from all Multiemployer
Plans.
"UNMATURED DEFAULT" means an event which, but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"WEIGHTED AVERAGE LIFE TO MATURITY" means when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. Any accounting terms used in this
Agreement which are not specifically defined herein shall have the meanings
customarily given them in accordance with generally accepted accounting
principles in existence as of the date hereof.
1.2 REFERENCES. The existence throughout the Agreement of references to
the Borrower's Subsidiaries is for a matter of convenience only. Any references
to Subsidiaries of the Borrower set forth herein shall not in any way be
construed as consent by the Agent or any Lender to the establishment,
maintenance or acquisition of any Subsidiary, except as may otherwise be
permitted hereunder.
1.3 SUPPLEMENTAL DISCLOSURE. At any time at the request of the Agent and
at such additional times as the Borrower determines, the Borrower shall
supplement each schedule or representation herein or in the other Loan Documents
with respect to any matter hereafter arising which, if existing or occurring at
the date of this Agreement, would have been required to be set forth or
described in such schedule or as an exception to such representation or which is
necessary to correct any information in such schedule or representation which
has been rendered inaccurate thereby. Unless any such supplement to such
schedule or representation discloses the existence or occurrence of events,
facts or circumstances which are not prohibited by the terms of this Agreement
or any other Loan Documents, such supplement to such schedule or representation
26
shall not be deemed an amendment thereof unless expressly consented to in
writing by Agent and the Required Lenders, and no such amendments, except as the
same may be consented to in a writing which expressly includes a waiver, shall
be or be deemed a waiver by the Agent or any Lender of any Default disclosed
therein.
1.4 AMENDMENT AND RESTATEMENT OF ORIGINAL CREDIT AGREEMENT. The Borrower,
the Lenders, the Agent and the Issuing Banks agree that, upon (i) the execution
and delivery of this Agreement by each of the parties hereto and (ii)
satisfaction (or waiver by the Agent and all of the Lenders) of the conditions
precedent set forth in SECTION 5.1, the terms and provisions of the Original
Credit Agreement shall be and hereby are amended, superseded and restated in
their entirety by the terms and provisions of this Agreement. This Agreement is
not intended to and shall not constitute a novation of the Original Credit
Agreement or the indebtedness created thereunder. All outstanding Letters of
Credit shall continue as Letters of Credit under (and shall be governed by the
terms of) this Agreement. All Existing Loans made to the Borrower under the
Original Credit Agreement which remain outstanding on the Effective Date shall
constitute and shall continue as Loans under (and shall be governed by the terms
of) this Agreement. The commitments of each Lender that is a party to the
Original Credit Agreement shall, on the Effective Date, automatically be deemed
amended to constitute such Lender's Commitment hereunder.
ARTICLE II: THE EXISTING LOANS AND SUPPLEMENTAL LOAN FACILITY
2.1. EXISTING LOANS. Pursuant to the terms of the Original Credit
Agreement each Lender made Loans to the Borrower, which Loans remain outstanding
as of the date of this Agreement in the amount for each Lender as set forth the
amount set forth on EXHIBIT A to this Agreement opposite its name thereon under
the heading "Existing Loans". On the Existing Loan Termination Date, the
Borrower shall repay in full the outstanding principal balance of the Existing
Loans. In addition to the scheduled payment of the Existing Loans on the
Existing Loan Termination Date, the Borrower (a) may make the voluntary
prepayments described in SECTION 2.5(A) for credit against the Existing Loans
pursuant to SECTION 2.5(A) and (b) shall make the mandatory prepayments
prescribed in SECTION 2.5(B) for credit against the Existing Loans, if
applicable, pursuant to SECTION 2.5(B). No repayment or prepayments of any
Existing Loan shall be reborrowed once repaid.
2.2 SUPPLEMENTAL LOANS. Upon the satisfaction of the conditions precedent
set forth in SECTIONS 5.1 and 5.2, from and including the date of this Agreement
and prior to the Supplemental Loan Termination Date, each Lender severally and
not jointly agrees, on the terms and conditions set forth in this Agreement, to
make revolving loans to the Borrower from time to time, in Dollars, in an amount
not to exceed such Lender's Pro Rata Share of Supplemental Credit Availability
at such time (each individually, a "SUPPLEMENTAL LOAN" and, collectively, the
"SUPPLEMENTAL LOANS"); PROVIDED, HOWEVER, (a) at no time shall the Supplemental
Credit Obligations exceed the Aggregate Supplemental Commitment; (b) at no time
shall the sum of (i) the Existing Obligations, (ii) the Supplemental Credit
Obligations and (iii) the outstanding principal balance of the Senior Notes
exceed the Borrowing Base at such time and (c) at no time
27
shall the sum of (i) the Existing Obligations, (ii) the Supplemental Credit
Obligations and (iii) the outstanding principal balance of the Senior Notes
exceed the Maximum Amount at such time. Subject to the terms of this Agreement,
the Borrower may borrow, repay and reborrow Supplemental Loans at any time prior
to the Supplemental Loan Termination Date. On the Supplemental Loan Termination
Date, the Borrower shall repay in full the outstanding principal balance of the
Supplemental Loans. Each Supplemental Advance under this SECTION 2.2 shall
consist of Supplemental Loans made by each Lender ratably in proportion to such
Lender's respective Pro Rata Share.
2.3 [Intentionally Blank]
2.4 [Intentionally Blank].
2.5 OPTIONAL PAYMENTS; MANDATORY PREPAYMENTS.
(A) OPTIONAL PAYMENTS. The Borrower may from time to time repay or
prepay, without penalty or premium all or any part of outstanding Supplemental
Loans and Existing Loans; PROVIDED, that any prepayment of the Existing Loans
shall constitute a permanent reduction and may not be reborrowed.
(B) MANDATORY PREPAYMENTS.
(i) MANDATORY PREPAYMENTS OF SECURED OBLIGATIONS.
(a) Upon the consummation of any Asset Sale, other than Excluded
Asset Sales, by the Borrower or any Subsidiary of the Borrower where such
Asset Sale results in Net Cash Proceeds individually for such transaction
equal to or greater than $50,000 or where all such Asset Sales results in
Net Cash Proceeds in the aggregate for all such transactions since the date
hereof equal to or greater than $150,000, except as provided in the second
sentence of this SECTION 2.5(B)(i)(a), within five (5) Business Days after
the Borrower's or any of its Subsidiaries' (i) receipt of any Net Cash
Proceeds from any such Asset Sale, or (ii) conversion to cash or Cash
Equivalents of non-cash proceeds (whether principal or interest and
including securities, release of escrow arrangements or lease payments)
received from any Asset Sale, the Borrower shall make a mandatory
prepayment of the Secured Obligations ("ASSET SALE PREPAYMENTS") in an
amount equal to (1) fifty percent (50%) of such Net Cash Proceeds or such
proceeds converted from non-cash to cash or Cash Equivalents received
during the Sharing Period and (2) ninety percent (90%) of such Net Cash
Proceeds or such proceeds converted from non-cash to cash or Cash
Equivalents received after the Sharing Period. Net Cash Proceeds of Asset
Sales of equipment with respect to which the Borrower or any Subsidiary
shall have given the Agent written notice of its intention to replace the
equipment sold within four (4) months following such sale shall not be
subject to the prepayment requirements of the first sentence of this
SECTION 2.5(B)(i)(a) unless and to the extent that such applicable period
shall have expired without such equipment replacement having been made or
unless prior to such time a Default shall have occurred and is continuing.
The provisions of this clause
28
(a) shall govern only those asset sales of a type and magnitude currently
permitted under the terms of this Agreement. To the extent that the
Borrower shall seek and obtain the consent of the Required Creditors
pursuant to SECTION 7.5(g) permitting any other sale, transfer or other
disposition of any Subsidiary of the Borrower, or any business line of the
Borrower or other material transaction in connection with the Sale
Initiative, the Borrower shall make a mandatory prepayment of the Secured
Obligations in an amount equal to one-hundred percent (100%) of the Net
Cash Proceeds from such sale, transfer or other disposition or such lesser
amount as shall be required to pay the Secured Obligations in full ("SALE
INITIATIVE PREPAYMENTS").
(b) Upon the consummation of any Financing by the Borrower or SEI,
within five (5)Business Days after the Borrower's or SEI's receipt of any
Net Cash Proceeds from such Financing, the Borrower shall make a mandatory
prepayment ("ISSUANCE PREPAYMENTS") of the Secured Obligations in an amount
equal to (1) fifty percent (50%) of such Net Cash Proceeds received during
the Sharing Period and (2) ninety percent (90%) of such Net Cash Proceeds
received after the Sharing Period.
(c) Except as set forth in clauses (i) through (v) below, upon the
receipt by the Borrower of any funds from any repatriation or other payment
of monies from any of the Borrower's foreign subsidiaries (whether as a
dividend, loan, return of capital or otherwise), within five (5) Business
Days after the Borrower's receipt of such funds, the Borrower shall make a
mandatory prepayment ("SUBSIDIARY PREPAYMENT") of the Secured Obligations
in an amount equal to (1) fifty percent (50%) of such amounts received
during the Sharing Period and (2) ninety percent (90%) of such amounts
received after the Sharing Period; PROVIDED, no such mandatory prepayment
of the Secured Obligations shall be required out of (i) the approximately
$4,250,000 which the Borrower has previously received or which the Borrower
anticipates will be received from Xxxxx X.X., (ii) amounts received by the
Borrower as a reimbursement for expenses incurred by the Borrower on behalf
of a Subsidiary, (iii) payments received from a Subsidiary as a result of
its repayment, in the ordinary course, of intercompany Receivables incurred
in the ordinary course of its business; (iv) amounts received from
intercompany management or guaranty fees in amounts not in excess of the
amount set forth in the financial information attached as EXHIBIT A to the
Disclosure Letter; and (v) amounts received from the liquidation of Binks
International (Italia) S.r.l. in the amount of approximately $500,000.
(d) Upon the receipt by the Borrower or SEI of the proceeds of any
federal, state or local tax refunds, the Borrower shall make a mandatory
prepayment of the Secured Obligations in an amount equal to one-hundred
(100%) of the amount so received ("TAX PREPAYMENTS").
(e) Nothing in this SECTION 2.5(B)(i) shall be construed to
constitute the Lenders' consent to any transaction referred to in CLAUSES
(a) through (c) above which is not expressly permitted by the terms of this
Agreement.
29
(f) Each mandatory prepayment required by CLAUSES (a) through (d) of
this SECTION 2.5(B) shall be referred to herein as a "DESIGNATED
PREPAYMENT". Designated Prepayments shall be paid to the Collateral Agent
for application in accordance with the terms of the Collateral Sharing
Agreement. Proceeds from Designated Prepayments paid by the Collateral
Agent to the Agent shall be allocated and applied in the following order of
priority so long as (1) no Default has occurred hereunder, (2) no Event of
Default (as defined in the Master Note Agreement) has occurred under the
Master Note Agreement and (3) no "Agreement Default" (as defined in the
Collateral Sharing Agreement) has occurred under the terms of any agreement
governing any other Priority Obligations:
(I) ratably to the accrued and unpaid interest on the
Supplemental Loans, interest on the Reimbursement Obligations and
to accrued and unpaid fees on account of Letters of Credit;
(II) ratably to the unpaid principal amount of the Supplemental
Loans and to principal on the Reimbursement Obligations (which
prepayment, other than as a result of a Tax Prepayment, shall result
in a permanent reduction by such amount in the Aggregate Supplemental
Loan Commitment and ratably to each Lender's Supplemental Loan
Commitment);
(III) to the extent any L/C Obligations are contingent,
deposited with the Agent as cash collateral in respect of such L/C
Obligations; and
(IV) to the other Secured Obligations in the order set forth in
the Collateral Sharing Agreement;
PROVIDED, if such Designated Prepayment is made after the occurrence and
during the continuance of any such Default, Event of Default or other
"Agreement Default" (as defined in the Collateral Sharing Agreement), such
Designated Prepayment shall be applied in accordance with the terms of the
Collateral Sharing Agreement.
(ii) MANDATORY PREPAYMENTS OF SUPPLEMENTAL LOANS. In addition to
repayments under SECTION 2.5(B)(i), if at any time and for any reason the (a)
the Supplemental Credit Obligations exceed the Aggregate Supplemental Commitment
or (b) the sum of (i) the Existing Obligations, (ii) the Supplemental Credit
Obligations and (iii) the outstanding principal balance of the Senior Notes
exceed either the Borrowing Base or the Maximum Amount, the Borrower shall
immediately make a mandatory prepayment of the Supplemental Credit Obligations
(or if the Supplemental Obligations have been paid in full, the other Secured
Obligations) in an amount equal to such excess. In addition, if Supplemental
Credit Availability is at any time less than the amount of contingent L/C
Obligations outstanding at any time, the Borrower shall deposit cash collateral
with the Agent in an amount equal to the amount by which such L/C Obligations
exceed such Supplemental Credit Availability.
2.6 REDUCTION OF COMMITMENTS. The Borrower may permanently reduce the
Aggregate Supplemental Loan Commitment in whole, or in part ratably among the
Lenders, in an aggregate minimum amount of $500,000 and integral multiples of
$100,000 in excess of that amount (unless
30
the Aggregate Supplemental Loan Commitment is reduced in whole), upon at least
one Business Day's written notice to the Agent, which notice shall specify the
amount of any such reduction; PROVIDED, HOWEVER, that the amount of the
Aggregate Supplemental Loan Commitment may not be reduced below the aggregate
principal amount of the outstanding Supplemental Credit Obligations. In
addition, the Aggregate Supplemental Loan Commitment shall be automatically
reduced in connection with Designated Prepayments on the terms set forth in
SECTION 2.5 above.
2.7 METHOD OF BORROWING. Not later than 2:00 p.m. (Chicago time) on each
Borrowing Date, each Lender shall make available its Supplemental Loan, in funds
immediately available in Chicago to the Agent at its address specified pursuant
to ARTICLE XIV. The Agent will promptly make the funds so received from the
Lenders available to the Borrower at the Agent's aforesaid address.
2.8 NOTICE OF BORROWING; FLOATING RATE APPLICABLE TO ALL OBLIGATIONS. The
Borrower shall give the Agent irrevocable notice in substantially the form of
EXHIBIT C hereto (a "BORROWING NOTICE") not later than 12:00 noon (Chicago time)
on the Borrowing Date of each Supplemental Advance specifying: (i) the
Borrowing Date (which shall be a Business Day) of such Supplemental Advance and
(ii) the aggregate amount of such Supplemental Advance. From and after the
Effective Date, all Obligations shall bear interest from and including the date
of the making of the applicable Supplemental Advance (or from the Effective Date
for the Existing Obligations) or incurrence of the Obligation to (but not
including) the date of repayment thereof at the Floating Rate, changing when and
as such Floating Rate changes. Changes in the rate of interest on the
Obligations will take effect simultaneously with each change in the Alternate
Base Rate.
2.9 MINIMUM AMOUNT OF EACH SUPPLEMENTAL ADVANCE. Each Supplemental
Advance (other than a Supplemental Advance to repay a Reimbursement Obligation)
shall be in the minimum amount of $250,000 (and in multiples of $100,000 if in
excess thereof), PROVIDED, HOWEVER, that any Supplemental Advance may be in the
amount of the remaining Supplemental Credit Availability.
2.10 [Intentionally Blank]
2.11 DEFAULT RATE. After the occurrence and during the continuance of a
Default, at the option of the Agent or at the direction of the Required Lenders,
the interest rate(s) applicable to the Obligations and the fees payable under
SECTION 3.7 with respect to Letters of Credit shall be increased by two percent
(2.0%) per annum above the Floating Rate, as applicable.
2.12 METHOD OF PAYMENT. All payments of principal, interest, fees,
commissions and L/C Obligations hereunder shall be made, without setoff,
deduction or counterclaim, in immediately available funds to the Agent at the
Agent's address specified pursuant to ARTICLE XIV, or at any other Lending
Installation of the Agent specified in writing by the Agent tothe Borrower, by
2:00 p.m. (Chicago time) on the date when due and shall be made ratably among
the Lenders (unless such amount is not to be shared ratably in accordance with
the terms hereof). Each payment delivered to the Agent for the account of any
Lender shall be delivered promptly by the Agent to
31
such Lender in the same type of funds which the Agent received at its address
specified pursuant to ARTICLE XIV or at any Lending Installation specified in a
notice received by the Agent from such Lender. The Borrower authorizes the
Agent to charge the account of the Borrower maintained with First Chicago for
each payment of principal, interest, fees, commissions and L/C Obligations as it
becomes due hereunder.
2.13 NOTES. Each Lender is authorized to record the principal amount of
each of its Loans and each repayment with respect to its Loans on the schedule
attached to its respective Notes; PROVIDED, HOWEVER, that the failure to so
record shall not affect the Borrower's obligations under any such Note.
2.14 TELEPHONIC NOTICES. The Borrower authorizes the Lenders and the
Agent to extend Supplemental Advances and to transfer funds based on telephonic
notices made by any person or persons the Agent or any Lender in good faith
believes to be acting on behalf of the Borrower. The Borrower agrees to deliver
promptly to the Agent a written confirmation, signed by an Authorized Officer,
if such confirmation is requested by the Agent or any Lender, of each telephonic
notice. If the written confirmation differs in any material respect from the
action taken by the Agent and the Lenders, (i) the telephonic notice shall
govern absent manifest error and (ii) the Agent or the Lender, as applicable,
shall promptly notify the Authorized Officer who provided such confirmation of
such difference.
2.15 PROMISE TO PAY; INTEREST; INTEREST PAYMENT DATES; INTEREST AND FEE
BASIS; TAXES; LOAN AND CONTROL ACCOUNTS.
(A) PROMISE TO PAY. The Borrower unconditionally promises to pay when due
the principal amount of each Loan and all other Obligations incurred by it, and
to pay all unpaid interest accrued thereon, in accordance with the terms of this
Agreement and the Notes.
(B) INTEREST PAYMENT DATES. Interest accrued on each Loan shall be
payable on each Payment Date, commencing with April 15, 1998 and at maturity
(whether by acceleration or otherwise). Interest accrued on the principal
balance of all other Obligations shall be payable in arrears (i) on the last day
of each calendar month, commencing on the first such day following the
incurrence of such Obligation, (ii) upon repayment thereof in full or in part,
and (iii) if not theretofore paid in full, at the time such other Obligation
becomes due and payable (whether by acceleration or otherwise).
(C) FEES.
(i) CLOSING FEE. On the Effective Date, the Borrower shall pay to the
Agent, for the account of the Lenders in accordance with their Pro Rata Shares,
a closing fee in the amount set forth in SECTION 1 of SCHEDULE 2.15 to the
Disclosure Letter.
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(ii) DEFERRED CLOSING FEE. In addition, the Borrower shall pay to the
Agent, for the account of the Lenders in accordance with their Pro Rata Shares,
a deferred closing fee at the times and in the amounts set forth in SECTION 2 of
SCHEDULE 2.15 to the Disclosure Letter.
(iii) DEFERRED FACILITY FEE. In addition, the Borrower shall pay to the
Agent, for the account of the Lenders in accordance with their Pro Rata Shares,
a deferred facility fee at the times and in the amounts set forth in SECTION 3
of SCHEDULE 2.15 to the Disclosure Letter.
(iv) The Borrower agrees to pay to the Agent for the sole account of the
Agent and the Arranger (unless otherwise agreed between the Agent and the
Arranger and any Lender) the fees set forth in the letter agreement between the
Agent and the Borrower dated July 23, 1997, payable at the times and in the
amounts set forth therein.
(D) INTEREST AND FEE BASIS. Interest and fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be payable
for the day an Obligation is incurred but not for the day of any payment on the
amount paid if payment is received prior to 2:00 p.m. (Chicago time) at the
place of payment. If any payment of principal of or interest on a Loan or any
payment of any other Obligations shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest, fees and commissions.
(E) TAXES.
(i) Any and all payments by the Borrower hereunder shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings or any liabilities with respect
thereto including those arising after the date hereof as a result of the
adoption of or any change in any law, treaty, rule, regulation, guideline or
determination of a Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority but excluding, in the case of
each Lender and the Agent, such taxes (including income taxes, franchise taxes
and branch profit taxes) as are imposed on or measured by such Lender's or
Agent's, as the case may be, income by the United States of America or any
Governmental Authority of the jurisdiction under the laws of which such Lender
or Agent, as the case may be, is organized or maintains a Lending Installation
(all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings, and liabilities which the Agent or a Lender determines to be
applicable to this Agreement, the other Loan Documents, the Supplemental Loan
Commitments, the Loans or the Letters of Credit being hereinafter referred to as
"TAXES"). If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder or under the other Loan Documents to any
Lender or the Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this SECTION 2.15(E)) such Lender or the Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions, and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law. If a
withholding tax of the United States of America or any other Governmental
Authority shall be or become applicable (y) after
33
the date of this Agreement, to such payments by the Borrower made to the Lending
Installation or any other office that a Lender may claim as its Lending
Installation, or (z) after such Lender's selection and designation of any other
Lending Installation, to such payments made to such other Lending Installation,
such Lender shall use reasonable efforts to make, fund and maintain its Loans
through another Lending Installation of such Lender in another jurisdiction so
as to reduce the Borrower's liability hereunder, if the making, funding or
maintenance of such Loans through such other Lending Installation of such Lender
does not, in the judgment of such Lender, otherwise adversely affect such Loans,
or obligations under the Supplemental Loan Commitments or such Lender.
(ii) In addition, the Borrower agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges, or similar
levies which arise from any payment made hereunder, from the issuance of Letters
of Credit hereunder, or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement, the other Loan Documents, the
Supplemental Loan Commitments, the Loans or the Letters of Credit (hereinafter
referred to as "OTHER TAXES").
(iii) The Borrower indemnifies each Lender and the Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any Governmental Authority on amounts payable under this
SECTION 2.15(E)) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within thirty (30) days
after the date such Lender or the Agent (as the case may be) makes written
demand therefor. A certificate as to any additional amount payable to any
Lender or the Agent under this SECTION 2.15(E) submitted to the Borrower and the
Agent (if a Lender is so submitting) by such Lender or the Agent shall show in
reasonable detail the amount payable and the calculations used to determine such
amount and shall, absent manifest error, be final, conclusive and binding upon
all parties hereto. With respect to such deduction or withholding for or on
account of any Taxes and to confirm that all such Taxes have been paid to the
appropriate Governmental Authorities, the Borrower shall promptly (and in any
event not later than thirty (30) days after receipt) furnish to each Lender and
the Agent such certificates, receipts and other documents as may be required (in
the judgment of such Lender or the Agent) to establish any tax credit to which
such Lender or the Agent may be entitled.
(iv) Within thirty (30) days after the date of any payment of Taxes or
Other Taxes by the Borrower, the Borrower shall furnish to the Agent the
original or a certified copy of a receipt evidencing payment thereof.
(v) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this SECTION 2.15(E) shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of this
Agreement.
34
(vi) Without limiting the obligations of the Borrower under this SECTION
2.15(E), each Lender that is not created or organized under the laws of the
United States of America or a political subdivision thereof shall deliver to the
Borrower and the Agent on or before the Effective Date, or, if later, the date
on which such Lender becomes a Lender pursuant to SECTION 13.3, a true and
accurate certificate executed in duplicate by a duly authorized officer of such
Lender, in a form satisfactory to the Borrower and the Agent, to the effect that
such Lender is capable under the provisions of an applicable tax treaty
concluded by the United States of America (in which case the certificate shall
be accompanied by two executed copies of Form 1001 of the IRS) or under SECTION
1442 of the Code (in which case the certificate shall be accompanied by two
copies of Form 4224 of the IRS) of receiving payments of interest hereunder
without deduction or withholding of United States federal income tax. Each such
Lender further agrees to deliver to the Borrower and the Agent from time to time
a true and accurate certificate executed in duplicate by a duly authorized
officer of such Lender substantially in a form satisfactory to the Borrower and
the Agent, before or promptly upon the occurrence of any event requiring a
change in the most recent certificate previously delivered by it to the Borrower
and the Agent pursuant to this SECTION 2.15(E)(vi). Further, each Lender which
delivers a certificate accompanied by Form 1001 of the IRS covenants and agrees
to deliver to the Borrower and the Agent within fifteen (15) days prior to
January 1, 1998, and every third (3rd) anniversary of such date thereafter on
which this Agreement is still in effect, another such certificate and two
accurate and complete original signed copies of Form 1001 (or any successor form
or forms required under the Code or the applicable regulations promulgated
thereunder), and each Lender that delivers a certificate accompanied by Form
4224 of the IRS covenants and agrees to deliver to the Borrower and the Agent
within fifteen (15) days prior to the beginning of each subsequent taxable year
of such Lender during which this Agreement is still in effect, another such
certificate and two accurate and complete original signed copies of IRS Form
4224 (or any successor form or forms required under the Code or the applicable
regulations promulgated thereunder). Each such certificate shall certify as to
one of the following:
(a) that such Lender is capable of receiving payments of
interest hereunder without deduction or withholding of United States
of America federal income tax;
(b) that such Lender is not capable of receiving payments of
interest hereunder without deduction or withholding of United States
of America federal income tax as specified therein but is capable of
recovering the full amount of any such deduction or withholding from a
source other than the Borrower and will not seek any such recovery
from the Borrower; or
(c) that, as a result of the adoption of or any change in any
law, treaty, rule, regulation, guideline or determination of a
Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority after the date such
Lender became a party hereto, such Lender is not capable of receiving
payments of interest hereunder without deduction or withholding of
United States of America federal income tax as specified therein and
that it is not capable of recovering the full amount of the same from
a source other than the Borrower.
35
Each Lender shall promptly furnish to the Borrower and the Agent such additional
documents as may be reasonably required by the Borrower or the Agent to
establish any exemption from or reduction of any Taxes or Other Taxes required
to be deducted or withheld and which may be obtained without undue expense to
such Lender.
(F) LOAN ACCOUNT. Each Lender shall maintain in accordance with its usual
practice an account or accounts (a "LOAN ACCOUNT") evidencing the Obligations of
the Borrower to such Lender owing to such Lender from time to time, including
the amount of principal and interest payable and paid to such Lender from time
to time hereunder and under the Notes.
(G) CONTROL ACCOUNT. The Register maintained by the Agent pursuant to
SECTION 13.3(C) shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the date
and amount of each Supplemental Advance, (ii) the effective date and amount of
each Assignment Agreement delivered to and accepted by it and the parties
thereto pursuant to SECTION 13.3, (iii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder or under the Notes, (iv) the amount of any sum received by the Agent
from the Borrower hereunder and each Lender's share thereof, and (v) all other
appropriate debits and credits as provided in this Agreement, including, without
limitation, all fees, charges, expenses and interest.
(H) ENTRIES BINDING. The entries made in the Register and each Loan
Account shall be presumptive evidence, absent manifest error, unless the
Borrower objects in writing to information contained in the Register and each
Loan Account within sixty (60) days of the Borrower's receipt of such
information in written form.
2.16 NOTIFICATION OF SUPPLEMENTAL ADVANCES, INTEREST RATES, PREPAYMENTS
AND AGGREGATE SUPPLEMENTAL LOAN COMMITMENT REDUCTIONS. Promptly after receipt
thereof, the Agent will notify each Lender of the contents of each Aggregate
Supplemental Loan Commitment reduction notice, Borrowing Notice, and repayment
notice received by it hereunder. The Agent will give each Lender prompt notice
of each change in the Alternate Base Rate.
2.17 LENDING INSTALLATIONS. Each Lender may book its Loans or Letters of
Credit at any Lending Installation selected by such Lender and may change its
Lending Installation from time to time. All terms of this Agreement shall apply
to any such Lending Installation and the Notes shall be deemed held by each
Lender for the benefit of such Lending Installation. Each Lender may, by
written or facsimile notice to the Agent and the Borrower, designate a Lending
Installation through which Loans will be made by it and for whose account Loan
payments and/or payments of L/C Obligations are to be made.
2.18 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the
36
intended recipient in reliance upon such assumption. If such Lender or the
Borrower, as the case may be, has not in fact made such payment to the Agent,
the recipient of such payment shall, on demand by the Agent, repay to the Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to (i) in the case of payment by a Lender, the Federal Funds Effective
Rate for such day or (ii) in the case of payment by the Borrower, the Floating
Rate.
2.19 TERMINATION DATE. This Agreement shall be effective until the later
to occur of the Existing Loan Termination Date and the Supplemental Loan
Termination Date. Notwithstanding the termination of this Agreement, until all
of the Obligations (other than contingent indemnity obligations) shall have been
fully and indefeasibly paid and satisfied, all financing arrangements among the
Borrower and the Lenders shall have been terminated and all of the Letters of
Credit shall have expired, been canceled or terminated, all of the rights and
remedies under this Agreement and the other Loan Documents shall survive and the
Agent and/or Collateral Agent shall be entitled to retain its security interest
in and to all existing and future Collateral for the benefit of itself and the
Holders of Secured Obligations.
2.20 REPLACEMENT OF CERTAIN LENDERS. In the event a Lender ("AFFECTED
LENDER") shall have: (i) failed to fund its Pro Rata Share of any Supplemental
Advance requested by the Borrower, or to fund a Supplemental Advance in order to
repay Reimbursement Obligations, which such Lender is obligated to fund under
the terms of this Agreement and which failure has not been cured, (ii) requested
compensation from the Borrower under SECTIONS 2.15(E), 4.1 or 4.2 to recover
Taxes, Other Taxes or other additional costs incurred by such Lender which are
not being incurred generally by the other Lenders or (iii) has invoked SECTION
10.2, then, in any such case, the Borrower or the Agent may make written demand
on such Affected Lender (with a copy to the Agent in the case of a demand by the
Borrower and a copy to the Borrower in the case of a demand by the Agent) for
the Affected Lender to assign, and such Affected Lender shall use its best
efforts to assign pursuant to one or more duly executed Assignments Agreements
five (5) Business Days after the date of such demand, to one or more financial
institutions that comply with the provisions of SECTION 13.3(A) which the
Borrower or the Agent, as the case may be, shall have engaged for such purpose
("REPLACEMENT LENDER"), all of such Affected Lender's rights and obligations
under this Agreement and the other Loan Documents (including, without
limitation, its Supplemental Loan Commitment, all Loans owing to it, all of its
participation interests in existing Letters of Credit, and its obligation to
participate in additional Letters of Credit hereunder) in accordance with
SECTION 13.3. The Agent agrees, upon the occurrence of such events with respect
to an Affected Lender and upon the written request of the Borrower, to use its
reasonable efforts to obtain the commitments from one or more financial
institutions to act as a Replacement Lender. The Agent is authorized to execute
one or more of such assignment agreements as attorney-in-fact for any Affected
Lender failing to execute and deliver the same within five (5) Business Days
after the date of such demand. Further, with respect to such assignment the
Affected Lender shall have concurrently received, in cash, all amounts due and
owing to the Affected Lender hereunder or under any other Loan Document,
including, without limitation, the aggregate outstanding principal amount of the
Loans owed to such Lender, together with accrued interest thereon through the
date of such assignment, amounts payable under SECTIONS 2.15(E),
37
4.1, and 4.2 with respect to such Affected Lender and compensation payable under
SECTION 2.15(C) in the event of any replacement of any Affected Lender under
CLAUSE (ii) of this SECTION 2.20; PROVIDED that upon such Affected Lender's
replacement, such Affected Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of SECTIONS 2.15(E), 4.1, 4.2, 4.4, and
10.7, as well as to any fees accrued for its account hereunder and not yet paid,
and shall continue to be obligated under SECTION 11.8. Upon the replacement of
any Affected Lender pursuant to this SECTION 2.20, the provisions of SECTION 9.2
shall continue to apply with respect to Loans which are then outstanding with
respect to which the Affected Lender failed to fund its Pro Rata Share and which
failure has not been cured.
2.21 COLLECTION ACCOUNT ARRANGEMENTS. (a) All collections of
Receivables included in the Collateral and other proceeds of Collateral
shall be deposited in (i) a deposit account with the Agent over which the
Collateral Agent has dominion and control following a Collection Account
Blockage Date or (b) a Collection Account with any other financial
institution which is subject to a Collection Account Agreement or pursuant
to another similar arrangement for the collection of such amounts
established by the Borrower or SEI, as applicable, and the Collateral
Agent, and all amounts in such accounts shall be transferred in accordance
with the provisions of the respective Collection Account Agreements. The
Borrower and SEI shall at all times maintain lock-box services agreements
with the Collateral Agent or banks which are parties to Collection Account
Agreements and to which lock-boxes Account Debtors with respect to the
Borrower's or SEI's Receivables shall directly remit all payments on
Receivables. Any of the foregoing collections received by the Borrower or
SEI and not so deposited, shall be deemed to have been received by the
Borrower or SEI, as applicable, as the Collateral Agent's trustee and, upon
such entity's receipt thereof, the Borrower shall or shall cause SEI to
immediately transfer all such amounts into a Collection Account in their
original form. Such deposits in the Collection Accounts shall be remitted
to the Collateral Agent, the Borrower or its Subsidiaries or as the
Collateral Agent may direct, all in accordance with the provisions of the
Collection Account Agreements.
(b) Following the Collection Account Blockage Date and during the
continuance of a Default giving rise thereto, (i) all payments received by
the Collateral Agent, all collections of Receivables included in the
Collateral received by the Collateral Agent, and all proceeds of other
Collateral received by the Collateral Agent, whether through payment or
otherwise, will be the sole property of the Collateral Agent for the
benefit of the Holders of Secured Obligations and will be deemed received
by the Collateral Agent for application to the Secured Obligations in
accordance with the terms of the Collateral Sharing Agreement, and amounts
received by the Agent pursuant to the terms of the Collateral Sharing
Agreement for application to the Obligations will be deemed received by the
Agent for application to the Obligations in accordance with the terms of
this Agreement and the Collateral Sharing Agreement.
(c) Notwithstanding anything herein or in the Security Agreement to
the contrary, the Borrower shall have a period of 30 days following the
date hereof to (i) enter into a Collection Account Agreement with
Centennial Bank, 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx
00
Xxxxx, Xxxxxx 00000 or transfer the collections and collection account
arrangements with respect thereto from such bank to another which is party
to a Collection Account Agreement.
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 OBLIGATION TO ISSUE LETTERS OF CREDIT. Subject to the terms and
conditions of this Agreement and in reliance upon the representations,
warranties and covenants of the Borrower herein set forth, each Issuing Bank
hereby agrees to issue for the account of the Borrower through such Issuing
Bank's branches as it and the Borrower may jointly agree, one or more Letters of
Credit denominated in Dollars in accordance with this ARTICLE III, from time to
time after the date hereof.
3.2 TYPES AND AMOUNTS OF LETTERS OF CREDIT. No Issuing Bank shall have
any obligation to and no Issuing Bank shall:
(i) issue any Letter of Credit if on the date of issuance,
before or after giving effect to the Letter of Credit requested
hereunder, (a) the Supplemental Credit Obligations at such time would
exceed the Aggregate Supplemental Commitment; (b) the sum of (i) the
Existing Obligations, (ii) the Supplemental Credit Obligations and
(iii) the outstanding principal balance of the Senior Notes at such
time would exceed the Borrowing Base at such time, (c) the sum of (i)
the Existing Obligations, (ii) the Supplemental Credit Obligations and
(iii) the outstanding principal balance of the Senior Notes at such
time would exceed the Maximum Amount at such time, or (d) the
aggregate outstanding amount of the L/C Obligations would exceed
$5,000,000; or
(ii) issue any Letter of Credit which has an expiration date
later than the date which is the earlier of one (1) year after the
date of issuance thereof or five (5) Business Days immediately
preceding the Supplemental Loan Termination Date.
3.3 CONDITIONS WITH RESPECT TO LETTERS OF CREDIT. In addition to being
subject to the satisfaction of the conditions contained in SECTIONS 5.1 and 5.2,
the obligation of an Issuing Bank to issue any Letter of Credit is subject to
the satisfaction in full of the following conditions:
(i) the Borrower shall have delivered to the applicable Issuing
Bank at such times and in such manner as such Issuing Bank may
reasonably prescribe, a request for issuance of such Letter of Credit
in substantially the form of EXHIBIT D hereto, duly executed
applications for such Letter of Credit, and such other documents,
instructions and agreements as may be required pursuant to the terms
thereof, and the proposed Letter of Credit shall be reasonably
satisfactory to such Issuing Bank as to form and content; and
39
(ii) as of the date of issuance no order, judgment or decree of
any court, arbitrator or Governmental Authority shall purport by its
terms to enjoin or restrain the applicable Issuing Bank from issuing
such Letter of Credit and no law, rule or regulation applicable to
such Issuing Bank and no request or directive (whether or not having
the force of law) from a Governmental Authority with jurisdiction over
such Issuing Bank shall prohibit or request that such Issuing Bank
refrain from the issuance of Letters of Credit generally or the
issuance of that Letter of Credit.
3.4 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. (a) Subject to the
terms and conditions of this ARTICLE III and provided that the applicable
conditions set forth in SECTIONS 5.1 and 5.2 hereof have been satisfied, the
applicable Issuing Bank shall, on the requested date, issue a Letter of Credit
on behalf of the Borrower in accordance with such Issuing Bank's usual and
customary business practices and, in this connection, such Issuing Bank may
assume that the applicable conditions set forth in SECTION 5.2 hereof have been
satisfied unless it shall have received notice to the contrary from the Agent or
a Lender or has knowledge that the applicable conditions have not been met.
(b) The applicable Issuing Bank shall give the Agent written or telex
notice, or telephonic notice confirmed promptly thereafter in writing, of the
issuance of a Letter of Credit, PROVIDED, HOWEVER, that the failure to provide
such notice shall not result in any liability on the part of such Issuing Bank.
(c) No Issuing Bank shall extend or amend any Letter of Credit unless the
requirements of this SECTION 3.4 are met as though a new Letter of Credit was
being requested and issued.
3.5 PARTICIPATION IN LETTERS OF CREDIT. Immediately upon the issuance of
each Letter of Credit hereunder, each Lender shall be deemed to have
automatically, irrevocably and unconditionally purchased and received from the
applicable Issuing Bank an undivided interest and participation in and to each
such Letter of Credit, the obligations of the Borrower in respect thereof, and
the liability of such Issuing Bank thereunder ( a "L/C INTEREST") in an amount
equal to the amount available for drawing under such Letter of Credit multiplied
by such Lender's Pro Rata Share. The applicable Issuing Bank shall give to each
Lender notice in the event that the Borrower fails to reimburse the applicable
Issuing Bank with respect to any L/C Draft or any other draw on a Letter of
Credit pursuant to the provisions SECTION 3.6, and each Lender shall promptly
and unconditionally pay to the Agent for the account of the applicable Issuing
Bank, in immediately available funds, an amount equal to such Lender's Pro Rata
Share of the amount of such payment or draw. The obligation of each Lender to
reimburse the Issuing Banks under this SECTION 3.5 shall be unconditional,
continuing, irrevocable and absolute. In the event that any Lender fails to
make payment to the Agent of any amount due under this SECTION 3.5, the Agent
shall be entitled to receive, retain and apply against such obligation the
principal and interest otherwise payable to such Lender hereunder until the
Agent receives such payment from such Lender or such obligation is otherwise
fully satisfied; PROVIDED, HOWEVER, that nothing contained in this sentence
shall relieve such Lender of its obligation to reimburse the applicable Issuing
Bank for such amount in accordance with this SECTION 3.5.
40
3.6 REIMBURSEMENT OBLIGATION. The Borrower agrees unconditionally,
irrevocably and absolutely to pay immediately to reimburse the applicable
Issuing Bank for the amount of each drawing under or pursuant to a Letter of
Credit or an L/C Draft related thereto (such obligation of the Borrower to
reimburse the Agent for an advance made under a Letter of Credit or L/C Draft
being hereinafter referred to as a "REIMBURSEMENT OBLIGATION" with respect to
such Letter of Credit or L/C Draft), each such reimbursement to be made by the
Borrower no later than the Business Day on which the applicable Issuing Bank
makes payment of each such L/C Draft or, in the case of any other draw on a
Letter of Credit, the date specified in the demand of such Issuing Bank. If the
Borrower at any time fails to repay a Reimbursement Obligation pursuant to this
SECTION 3.6, the Borrower shall be deemed to have elected to borrow Supplemental
Loans from the Lenders, as of the date of the advance giving rise to the
Reimbursement Obligation, equal in amount to the amount of the unpaid
Reimbursement Obligation. Such Supplemental Loans shall be made as of the date
of the payment giving rise to such Reimbursement Obligation, automatically,
without notice and without any requirement to satisfy the conditions precedent
otherwise applicable to a Supplemental Advance. The proceeds of such
Supplemental Loans shall be used to repay such Reimbursement Obligation. If,
for any reason, the Borrower fails to repay a Reimbursement Obligation on the
day such Reimbursement Obligation arises and, for any reason, the Lenders are
unable to make or have no obligation to make Supplemental Loans, then such
Reimbursement Obligation shall bear interest from and after such day, until paid
in full, at the Floating Rate applicable to Supplemental Loans.
3.7 LETTER OF CREDIT FEES. The Borrower agrees to pay:
(i) monthly, in arrears, to the Agent for the ratable benefit of the
Lenders, except as set forth in SECTION 9.2, a letter of credit fee at a
rate per annum equal to one and three-quarters percent (1.75%) on the
average daily outstanding face amount available for drawing under all
Letters of Credit;
(ii) monthly, in arrears, to the Agent for the sole account of each
Issuing Bank, a letter of credit fronting fee at such percentage rate as
may be agreed between the Borrower and each Issuing Bank on the average
daily outstanding face amount available for drawing under all Letters of
Credit issued by such Issuing Bank; and
(iii) to the Agent for the benefit of each Issuing Bank, all
customary fees and other issuance, amendment, document examination,
negotiation and presentment expenses and related charges in connection with
the issuance, amendment, presentation of L/C Drafts, and the like
customarily charged by such Issuing Banks with respect to standby and
commercial Letters of Credit, including, without limitation, standard
commissions with respect to commercial Letters of Credit, payable at the
time of invoice of such amounts.
3.8 ISSUING BANK REPORTING REQUIREMENTS. In addition to the notices
required by SECTION 3.4(b), each Issuing Bank shall, no later than the tenth
Business Day following the last day of each month, provide to the Agent, upon
the Agent's request, schedules, in form and substance reasonably satisfactory to
the Agent, showing the date of issue, account party, amount, expiration date and
the reference number of each Letter of Credit issued by it outstanding at any
time during
41
such month and the aggregate amount payable by the Borrower during such month.
In addition, upon the request of the Agent, each Issuing Bank shall furnish to
the Agent copies of any Letter of Credit and any application for or
reimbursement agreement with respect to a Letter of Credit to which the Issuing
Bank is party and such other documentation as may reasonably be requested by the
Agent. Upon the request of any Lender, the Agent will provide to such Lender
information concerning such Letters of Credit.
3.9 INDEMNIFICATION; EXONERATION. (A) In addition to amounts payable as
elsewhere provided in this ARTICLE III, the Borrower hereby agrees to protect,
indemnify, pay and save harmless the Agent, each Issuing Bank and each Lender
from and against any and all liabilities and costs which the Agent, such Issuing
Bank or such Lender may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit other than, in the case of
the applicable Issuing Bank, as a result of its Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, or (ii) the failure of the applicable Issuing Bank to honor a
drawing under a Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future DE JURE or DE FACTO Governmental
Authority (all such acts or omissions herein called "GOVERNMENTAL ACTS").
(B) As among the Borrower, the Lenders, the Agent and the Issuing Banks,
the Borrower assumes all risks of the acts and omissions of, or misuse of such
Letter of Credit by, the beneficiary of any Letters of Credit. In furtherance
and not in limitation of the foregoing, subject to the provisions of the Letter
of Credit applications and Letter of Credit reimbursement agreements executed by
the Borrower at the time of request for any Letter of Credit, neither the Agent,
any Issuing Bank nor any Lender shall be responsible (in the absence of Gross
Negligence or willful misconduct in connection therewith, as determined by the
final judgment of a court of competent jurisdiction): (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
the Letters of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of a
Letter of Credit to comply duly with conditions required in order to draw upon
such Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex, or
other similar form of teletransmission or otherwise; (v) for errors in
interpretation of technical trade terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of a Letter of Credit of the proceeds of any
drawing under such Letter of Credit; and (viii) for any consequences arising
from causes beyond the control of the Agent, the Issuing Banks and the Lenders,
including, without limitation, any Governmental Acts. None of the above shall
affect, impair, or prevent the vesting of any Issuing Bank's rights or powers
under this SECTION 3.9.
(C) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by any Issuing
Bank under or in connection
42
with the Letters of Credit or any related certificates shall not, in the absence
of Gross Negligence or willful misconduct, as determined by the final judgment
of a court of competent jurisdiction, put the applicable Issuing Bank, the Agent
or any Lender under any resulting liability to the Borrower or relieve the
Borrower of any of its obligations hereunder to any such Person.
(D) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this SECTION 3.9 shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of this
Agreement.
3.10 CASH COLLATERAL. Notwithstanding anything to the contrary herein or
in any application for a Letter of Credit, after the occurrence and during the
continuance of a Default, the Borrower shall, upon the Agent's demand, deliver
to the Agent for the benefit of the Lenders and the Issuing Banks, cash, or
other collateral of a type satisfactory to the Required Lenders, having a value,
as reasonably determined by such Lenders, equal to the aggregate outstanding L/C
Obligations. In addition, if the Supplemental Credit Availability is at any
time less than the amount of contingent L/C Obligations outstanding at any time,
the Borrower shall deposit cash collateral with the Agent in an amount equal to
the amount by which such L/C Obligations exceed such Supplemental Credit
Availability. Any such collateral shall be held by the Agent in a separate
account appropriately designated as a cash collateral account in relation to
this Agreement and the Letters of Credit and retained by the Agent for the
benefit of the Lenders and the Issuing Banks as collateral security for the
Borrower's obligations in respect of this Agreement and each of the Letters of
Credit and L/C Drafts. Such amounts shall be applied to reimburse the Issuing
Banks for drawings or payments under or pursuant to Letters of Credit or L/C
Drafts or if no such reimbursement is required, to payment of such of the other
Secured Obligations as the Agent shall determine in accordance with the terms of
the Collateral Sharing Agreement. If no Default shall be continuing, amounts
remaining in any cash collateral account established pursuant to this SECTION
3.10 which are not to be applied to reimburse an Issuing Bank for amounts
actually paid or to be paid by such Issuing Bank in respect of a Letter of
Credit or L/C Draft, shall be returned to the Borrower (after deduction of the
Agent's expenses incurred in connection with such cash collateral account).
ARTICLE IV: CHANGE IN CIRCUMSTANCES
4.1 YIELD PROTECTION. If any law or any governmental or quasi-
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) adopted after the date of this Agreement and having
general applicability to all banks within the jurisdiction in which such Lender
operates (excluding, for the avoidance of doubt, the effect of and phasing in of
capital requirements or other regulations or guidelines passed prior to the date
of this Agreement), or any interpretation or application thereof by any
Governmental Authority charged with the interpretation or application thereof,
or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation to any
tax, duty, charge or withholding on or from payments due from the Borrower
(excluding federal
43
taxation of the overall net income of any Lender or applicable Lending
Installation), or changes the basis of taxation of payments to any Lender
in respect of its Loans, its L/C Interests, the Letters of Credit or other
amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation with respect to its
Loans, L/C Interests or the Letters of Credit, or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of making,
funding or maintaining the Loans, the L/C Interests or the Letters of
Credit or reduces any amount received by any Lender or any applicable
Lending Installation in connection with Loans or Letters of Credit, or
requires any Lender or any applicable Lending Installation to make any
payment calculated by reference to the amount of Loans or L/C Interests
held or interest received by it or by reference to the Letters of Credit,
by an amount deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender of
making, renewing or maintaining its Loans, L/C Interests or Letters of Credit or
to reduce any amount received under this Agreement, then, within thirty (30)
days after receipt by the Borrower of written demand by such Lender pursuant to
SECTION 4.5, the Borrower shall, upon receipt of a written statement setting
forth the basis for calculating such additional amounts, pay such Lender that
portion of such increased expense incurred or reduction in an amount received
which such Lender determines is attributable to making, funding and maintaining
its Loans, L/C Interests, Letters of Credit and its Supplemental Loan
Commitment.
4.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines (i)
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a "Change" (as defined below), and (ii) such
increase in capital will result in an increase in the cost to such Lender of
maintaining its Loans, L/C Interests, the Letters of Credit or its obligation to
make Loans hereunder, then, within 15 days after receipt by the Borrower of
written demand by such Lender pursuant to SECTION 4.5, the Borrower shall pay
such Lender the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender reasonably
determines is attributable to this Agreement, its Loans, its L/C Interests, the
Letters of Credit or its obligation to make Loans hereunder (after taking into
account such Lender's policies as to capital adequacy). "CHANGE" means (i) any
change after the date of this Agreement in the "Risk-Based Capital Guidelines"
(as defined below) excluding, for the avoidance of doubt, the effect of any
phasing in of such Risk-Based Capital Guidelines or any other capital
requirements passed prior to the date hereof, or (ii) any adoption of or change
in any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the date of this Agreement and having general applicability to all banks
and financial institutions within the jurisdiction in which such Lender operates
which affects the amount of capital required or expected to be maintained by any
Lender or any Lending
44
Installation or any corporation controlling any Lender. "RISK-BASED CAPITAL
GUIDELINES" means (i) the risk-based capital guidelines in effect in the United
States on the date of this Agreement, including transition rules, and (ii) the
corresponding capital regulations promulgated by regulatory authorities outside
the United States implementing the July 1988 report of the Basle Committee on
Banking Regulation and Supervisory Practices Entitled "International Convergence
of Capital Measurements and Capital Standards," including transition rules, and
any amendments to such regulations adopted prior to the date of this Agreement.
4.3 [Intentionally Blank].
4.4 [Intentionally Blank].
4.5 LENDER STATEMENTS; SURVIVAL OF INDEMNITY. Each Lender requiring
compensation pursuant to SECTION 2.15(E) or to this ARTICLE IV shall use its
reasonable efforts to notify the Borrower and the Agent in writing of any
Change, law, policy, rule, guideline or directive giving rise to such demand for
compensation not later than ninety (90) days following the date upon which the
responsible account officer of such Lender knows or should have known of such
Change, law, policy, rule, guideline or directive. Any demand for compensation
pursuant to this ARTICLE IV shall be in writing and shall state the amount due,
if any, under SECTION 4.1 or 4.2 and shall set forth in reasonable detail the
calculations upon which such Lender determined such amount. Such written demand
shall be rebuttably presumed correct for all purposes. The obligations of the
Borrower under SECTIONS 4.1 and 4.2 shall survive payment of the Obligations and
termination of this Agreement.
ARTICLE V: CONDITIONS PRECEDENT
5.1 INITIAL SUPPLEMENTAL ADVANCES AND LETTERS OF CREDIT. The Lenders
shall not be required to make the initial Supplemental Loans or issue any
Letters of Credit unless the Borrower has furnished to the Agent each of the
following, with sufficient copies for the Lenders, all in form and substance
satisfactory to the Agent and the Lenders:
(1) Copies of the Articles of Incorporation of the Borrower, together
with all amendments and a certificate of good standing, both certified by
the appropriate governmental officer in its jurisdiction of incorporation;
(2) Copies, certified by the Secretary or Assistant Secretary of the
Borrower, of its By-Laws and of its Board of Directors' resolutions (and
resolutions of other bodies, if any are deemed necessary by counsel for any
Lender) authorizing the execution of the Loan Documents;
(3) An incumbency certificate, executed by the Secretary or Assistant
Secretary of the Borrower, which shall identify by name and title and bear
the signature of the officers of the Borrower authorized to sign the Loan
Documents and to make loans hereunder,
45
upon which certificate the Lenders shall be entitled to rely until informed
of any change in writing by the Borrower;
(4) A certificate, in form and substance satisfactory to the Agent,
signed by the chief financial officer of the Borrower, stating that on
Effective Date, after taking into account the waivers set forth herein, no
Default or Unmatured Default has occurred and is continuing;
(5) A written opinion of the Borrower's and SEI's counsel, addressed
to the Agent and the Lenders, in form and substance reasonably satisfactory
to the Agent and the Lenders (which shall cover, among other things,
authority, legality, validity, binding effect and enforceability of the
documents and perfection of the liens) together with such corporate
resolutions, certificates and other documents as the Agent shall
reasonably require;
(6) Supplemental Notes payable to the order of each of the applicable
Lenders;
(7) The Waiver and Second Amendment to the Master Note Agreement, in
form and substance reasonably satisfactory to the Agent and the Lenders;
(8) Payment of all accrued interest and fees under the Original
Credit Agreement as of the date hereof on the Existing Loans;
(9) Payment of all fees payable to the Agent on behalf of the Lenders
as of the Effective Date;
(10) Reimbursement of all expenses incurred prior to the Effective
Date payable by the Borrower to the Agent and the Lenders;
(11) Fully executed copies of the Collateral Sharing Agreement on
terms acceptable to the Agent and the Lenders;
(12) Satisfactory evidence that the Collateral Agent holds a
perfected, first priority lien in substantially all of the Collateral which
may be perfected by filing a UCC financing statement, by possession, by
recording the fee Mortgages or by obtaining a certificate of insurance and
loss payable endorsement, subject to no other liens except for liens
permitted under the Credit Agreement and Note Purchase Agreement.
(13) Documentation pursuant to which the Master Factoring Agreement
entered into on February 11, 1998 between Reservoir Capital Corporation and
the Borrower is terminated, all "Assigned Accounts" are reassigned to the
Borrower and all liens on any assets of the Borrower by Reservoir Capital
Corporation are released (it being understood that the initial Supplemental
Loans shall be used to repay amounts owing to Reservoir Capital
Corporation).
46
(14) Evidence that Binks Xxxxx Ltd. shall have further amended its
Articles of Association in the manner contemplated by Section 4.1 of the
Equitable Share Charge between Borrower and the Agent dated as of November
21, 1997.
(15) A Borrowing Base Certificate for the week ended March 6, 1998.
(16) The monthly financial statements of the Borrower and its
consolidated Subsidiaries for the month ended January 31, 1998.
(17) Such other documents as the Agent or any Lender or its counsel
may have reasonably requested, including, without limitation all of the
documents reflected on the List of Closing Documents attached as EXHIBIT G
to this Agreement.
5.2 EACH SUPPLEMENTAL ADVANCE AND LETTER OF CREDIT. The Lenders shall not
be required to make any Supplemental Advance or issue any Letter of Credit,
unless on the applicable Borrowing Date, or in the case of a Letter of Credit,
the date on which the Letter of Credit is to be issued, after taking into
account the waivers set forth in ARTICLE XV hereof:
(i) There exists no Default or Unmatured Default; and
(ii) The representations and warranties contained in ARTICLE VI are
true and correct as of such Borrowing Date except for changes in the
Schedules to this Agreement reflecting transactions permitted by this
Agreement.
Each Borrowing Notice with respect to each such Supplemental Advance and
the letter of credit application with respect to a Letter of Credit shall
constitute a representation and warranty by the Borrower that the conditions
contained in SECTIONS 5.2(i) and (ii) have been satisfied. Any Lender may
require a duly completed officer's certificate in substantially the form of
EXHIBIT H hereto and/or a duly completed compliance certificate in substantially
the form of EXHIBIT I hereto as a condition to making a Supplemental Advance.
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this Agreement
and to make the Loans and the other financial accommodations to the Borrower and
to issue the Letters of Credit described herein, the Borrower represents and
warrants as follows to each Lender and the Agent as of the Closing Date, and
thereafter on each date as required by SECTION 5.2:
6.1 ORGANIZATION; CORPORATE POWERS. The Borrower, SEI and each of their
respective Material Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (ii) is duly qualified to do business as a foreign corporation and
is in good standing under the laws of each jurisdiction in which failure to be
so qualified and in good standing could not reasonably be expected to have a
Material Adverse Effect, and (iii) has all requisite corporate power and
authority to own, operate and encumber its
47
property and to conduct its business as presently conducted and as proposed to
be conducted other than any failure under CLAUSE (i) or (iii) the effect of
which is not reasonably likely to impair in any material respect the conduct of
the Borrower's business, or the business of the Borrower and its Subsidiaries
taken as a whole or the ability of the Borrower's or its Subsidiaries' ability
to perform their obligations under the Loan Documents.
6.2 AUTHORITY.
(A) The Borrower and each of its Subsidiaries that is a party thereto has
the requisite corporate power and authority to execute, deliver and perform each
of the Loan Documents.
(B) The execution, delivery and performance of each of the Loan Documents
and the consummation of the transactions contemplated thereby, have been duly
approved by the respective boards of directors and, if necessary, the
shareholders of the Borrower and each of its Subsidiaries that is a party
thereto, and such approvals have not been rescinded. No other corporate action
or proceedings on the part of the Borrower or such Subsidiaries are necessary to
consummate such transactions.
(C) Each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party has been duly executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms (except as enforceability may be limited by
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally), and no unmatured default, default or breach of any covenant
by any such party exists thereunder.
6.3 NO CONFLICT; GOVERNMENTAL CONSENTS. The execution, delivery and
performance of each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party do not and will not (i) conflict with the certificate or
articles of incorporation or by-laws of the Borrower or any such Subsidiary,
(ii) constitute a tortious interference with any Contractual Obligation of any
Person or conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under any Requirement of Law
(including, without limitation, any Environmental Property Transfer Act) or
Contractual Obligation of the Borrower or any such Subsidiary, or require
termination of any Contractual Obligation, except such interference, breach,
default or termination which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, (iii) with respect to
the Loan Documents, constitute a tortious interference with any Contractual
Obligation of any Person or conflict with, result in a breach of or constitute
(with or without notice or lapse of time or both) a default under any
Requirement of Law (including, without limitation, any Environmental Property
Transfer Act) or Contractual Obligation of the Borrower or any such Subsidiary,
or require termination of any Contractual Obligation, except such interference,
breach, default or termination which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, (iv) result in or
require the creation or imposition of any Lien whatsoever upon any of the
property or assets of the Borrower or any such Subsidiary, other than Liens
permitted or created by the Loan Documents, or (v) require any approval of the
Borrower's or any such Subsidiary's Board of Directors or shareholders except
such as have been obtained. Except as set forth on SCHEDULE 6.3
48
to this Agreement, the execution, delivery and performance of each of the
Transaction Documents to which the Borrower or any of its Subsidiaries is a
party do not and will not require any registration with, consent or approval of,
or notice to, or other action to, with or by any Governmental Authority,
including under any Environmental Property Transfer Act, except filings,
consents or notices which have been made, obtained or given, or which, if not
made, obtained or given, individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect.
6.4 FINANCIAL STATEMENTS.
(A) Attached as EXHIBIT B to the Disclosure Letter are the Borrower's
consolidated unaudited financial statements for the Borrower's fiscal year ended
November 30, 1997. Such historical financial statements were prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present the financial condition of the Borrower and its Subsidiaries
as of the dates thereof and the results of operations for the periods covered
thereby.
(B) The projections and assumptions expressed in the projections attached
as EXHIBIT A to the Disclosure Letter were prepared in good faith and represent
management's opinion based on the information available to the Borrower at the
time so furnished.
6.5 NO MATERIAL ADVERSE CHANGE. Since the Closing Date, there has
occurred no change in the business, properties, condition (financial or
otherwise) or results of operations of the Borrower or the Borrower and its
Subsidiaries taken as a whole or any other event which has had or could
reasonably be expected to have a Material Adverse Effect.
6.6 TAXES.
(A) TAX EXAMINATIONS. Except as described in SECTION 4 of the Disclosure
Letter, all material deficiencies which have been asserted against the Borrower
or any of the Borrower's Subsidiaries as a result of any federal, state, local
or foreign tax examination for each taxable year in respect of which an
examination has been conducted have been fully paid or finally settled or are
being contested in good faith, and as of the Closing Date no issue has been
raised by any taxing authority in any such examination which, by application of
similar principles, reasonably can be expected to result in assertion by such
taxing authority of a material deficiency for any other year not so examined
which has not been reserved for in the Borrower's consolidated financial
statements to the extent, if any, required by Agreement Accounting Principles.
Except as permitted pursuant to SECTION 7.2(D), neither the Borrower nor any of
the Borrower's Subsidiaries anticipates any material tax liability with respect
to the years which have not been closed pursuant to applicable law.
(B) PAYMENT OF TAXES. All tax returns and reports of the Borrower and its
Subsidiaries required to be filed have been timely filed, and all material
taxes, assessments, fees and other governmental charges thereupon and upon their
respective property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid except those items which
are being contested in good faith and have been reserved for in accordance with
49
Agreement Accounting Principles. The Borrower has no knowledge of any proposed
tax assessment against the Borrower or any of its Subsidiaries that will have or
could reasonably be expected to have a Material Adverse Effect.
(C) For purposes of this SECTION 6.6, "material" means any noncompliance
or basis for liability which could reasonably be likely to subject the Borrower
or the Borrower's Subsidiaries to liability, individually or in the aggregate
for the Borrower and its Subsidiaries in excess of $1,000,000.
6.7 LITIGATION; LOSS CONTINGENCIES AND VIOLATIONS. Except as set forth in
SCHEDULE 6.7 to this Agreement, there is no action, suit, proceeding,
arbitration or (to the Borrower's knowledge) investigation before or by any
Governmental Authority or private arbitrator pending or, to the Borrower's
knowledge, threatened against the Borrower or any of its Subsidiaries or any
property of any of them which will have or could reasonably be expected to have
a Material Adverse Effect. Except as set forth in SCHEDULE 6.7, there is no
material loss contingency within the meaning of Agreement Accounting Principles
which has not been reflected in the consolidated financial statements of the
Borrower prepared and delivered pursuant to SECTION 6.4(A) or SECTION 7.1(A) for
the fiscal period during which such material loss contingency was incurred.
Neither the Borrower nor any of its Subsidiaries is (A) in violation of any
applicable Requirements of Law which violation will have or could reasonably be
expected to have a Material Adverse Effect, or (B) subject to or in default with
respect to any final judgment, writ, injunction, restraining order or order of
any nature, decree, rule or regulation of any court or Governmental Authority
which will have or could reasonably be expected to have a Material Adverse
Effect.
6.8 SUBSIDIARIES. SCHEDULE 6.8 to this Agreement (i) contains a
description of the corporate structure of the Borrower, its Subsidiaries and any
other Person in which the Borrower or any of its Subsidiaries holds an Equity
Interest; and (ii) accurately sets forth (A) the correct legal name, the
jurisdiction of incorporation and the jurisdictions in which each of the
Borrower and the direct and indirect domestic Subsidiaries and Material
Subsidiaries which are foreign Subsidiaries of the Borrower is qualified to
transact business as a foreign corporation, (B) for every domestic Subsidiary
and for each foreign Subsidiary which is a Material Subsidiary, the authorized,
issued and outstanding shares of each class of Capital Stock of each of such
Subsidiaries and the owners of such shares (both as of the Closing Date and on a
fully-diluted basis), (C) for each foreign Subsidiary which is not a Material
Subsidiary, the percentage of ownership by the Borrower of such Subsidiary's
Capital Stock, and (D) a summary of the direct and indirect partnership, joint
venture, or other Equity Interests, if any, of the Borrower and each Subsidiary
of the Borrower in any Person that is not a corporation. The outstanding
Capital Stock of the Borrower and each of the Borrower's Material Subsidiaries
is duly authorized, validly issued, fully paid and nonassessable.
6.9 ERISA. Except as disclosed on SCHEDULE 6.9, no Benefit Plan has
incurred any accumulated funding deficiency (as defined in SECTIONS 302(a)(2) of
ERISA and 412(a) of the Code) whether or not waived. Neither the Borrower nor
any member of the Controlled Group has incurred any liability to the PBGC which
remains outstanding other than the payment of premiums, and there are no premium
payments which have become due which are unpaid.
50
SCHEDULE B to the most recent annual report filed with the IRS with respect to
each Benefit Plan is complete and accurate. Since the date of each such
SCHEDULE B, there has been no material adverse change in the funding status or
financial condition of the Benefit Plan relating to such SCHEDULE B. Neither
the Borrower nor any member of the Controlled Group has (i) failed to make a
required contribution or payment to a Multiemployer Plan or (ii) made a complete
or partial withdrawal under SECTIONS 4203 or 4205 of ERISA from a Multiemployer
Plan. Neither the Borrower nor any member of the Controlled Group has failed to
make a required installment or any other required payment under Section 412 of
the Code on or before the due date for such installment or other payment.
Neither the Borrower nor any member of the Controlled Group is required to
provide security to a Benefit Plan under SECTION 401(a)(29) of the Code due to a
Plan amendment that results in an increase in current liability for the plan
year. Except for benefits provided to a select group of management employees
which in any event are not material, neither the Borrower nor any of its
Subsidiaries maintains or contributes to any employee welfare benefit plan
within the meaning of SECTION 3(1) of ERISA which provides benefits to employees
after termination of employment other than as required by Section 601 of ERISA.
Each Plan which is intended to be qualified under Section 401(a) of the Code as
currently in effect is so qualified, and each trust related to any such Plan is
exempt from federal income tax under Section 501(a) of the Code as currently in
effect. The Borrower and all Subsidiaries are in compliance in all material
respects with the responsibilities, obligations and duties imposed on them by
ERISA and the Code with respect to all Plans. Neither the Borrower nor any of
its Subsidiaries nor any fiduciary of any Plan has engaged in a nonexempt
prohibited transaction described in SECTIONS 406 of ERISA or 4975 of the Code
which could reasonably be expected to subject the Borrower to liability in
excess of $1,000,000. Neither the Borrower nor any member of the Controlled
Group has taken or failed to take any action which would constitute or result in
a Termination Event, which action or inaction could reasonably be expected to
subject the Borrower and its Subsidiaries to liability, individually or in the
aggregate, in excess of $1,000,000. Neither the Borrower nor any Subsidiary is
subject to any liability under SECTIONS 4063, 4064, 4069, 4204 or 4212(c) of
ERISA and no other member of the Controlled Group is subject to any liability
under SECTIONS 4063, 4064, 4069, 4204 or 4212(c) of ERISA which could reasonably
be expected to subject the Borrower and its Subsidiaries to liability,
individually or in the aggregate, in excess of $1,000,000. Neither the Borrower
nor any of its Subsidiaries has, by reason of the transactions contemplated
hereby, any obligation to make any payment to any employee pursuant to any Plan
or existing contract or arrangement.
6.10 ACCURACY OF INFORMATION. The information, exhibits and reports
(other than those marked "Draft" "Subject to Review" or words of similar intent
or meaning) furnished by or on behalf of the Borrower and any of its
Subsidiaries to the Agent or to any Lender in connection with the negotiation
of, or compliance with, the Loan Documents, the representations and warranties
of the Borrower and its Subsidiaries contained in the Loan Documents, and all
certificates and documents delivered to the Agent and the Lenders pursuant to
the terms thereof, taken as a whole, do not contain as of the date furnished any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained herein or therein, in light of the
circumstances under which they were made, not materially misleading.
51
6.11 SECURITIES ACTIVITIES. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
6.12 MATERIAL AGREEMENTS. Neither the Borrower nor any Subsidiary is a
party to any Contractual Obligation or subject to any charter or other corporate
restriction which individually or in the aggregate will have or could reasonably
be expected to have a Material Adverse Effect. Except as set forth in SCHEDULE
6.7, has received notice or has knowledge that (i) it is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Contractual Obligation applicable to it, or (ii) any
condition exists which, with the giving of notice or the lapse of time or both,
would constitute a default with respect to any such Contractual Obligation, in
each case, except where such default or defaults, if any, individually or in the
aggregate will not have or could not reasonably be expected to have a Material
Adverse Effect.
6.13 COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their respective
businesses, in each case where the failure to so comply individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
6.14 ASSETS AND PROPERTIES. The Borrower and each of its Subsidiaries has
good and marketable title to substantially all of its assets and properties
(tangible and intangible, real or personal) owned by it or a valid leasehold
interest in substantially all of its leased assets (except insofar as
marketability may be limited by any laws or regulations of any Governmental
Authority affecting such assets), and all such assets and property are free and
clear of all Liens, except Liens permitted under SECTION 7.3(C). Substantially
all of the assets and properties owned by, leased to or used by the Borrower
and/or each such Subsidiary of the Borrower are in adequate operating condition
and repair, ordinary wear and tear excepted. Neither this Agreement nor any
other Transaction Document, nor any transaction contemplated under any such
agreement, will affect any right, title or interest of the Borrower or such
Subsidiary in and to any of such assets in a manner that would have or could
reasonably be expected to have a Material Adverse Effect.
6.15 STATUTORY INDEBTEDNESS RESTRICTIONS. Neither the Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or the
Investment Company Act of 1940, or any other federal or state statute or
regulation which limits its ability to incur indebtedness or its ability to
consummate the transactions contemplated hereby.
6.16 INSURANCE. SCHEDULE 6.16 to this Agreement accurately sets forth as
of the date hereof all insurance policies and programs currently in effect with
respect to the respective properties and assets and business of the Borrower and
SEI, specifying for each such policy and program, (i) the amount thereof,
(ii) the risks insured against thereby, (iii) the name of the insurer and each
insured party thereunder, (iv) the policy or other identification number
thereof, (v) the expiration date thereof, (vi) the annual premium with respect
thereto and (vii) describes any reserves, relating to any self-insurance program
that is in effect. Such insurance policies and
52
programs and the other policies and programs maintained with respect to the
Borrower's other Subsidiaries reflect coverage that is reasonably consistent
with prudent industry practice.
6.17 LABOR MATTERS.
As of the Closing Date, no attempt to organize the employees of the
Borrower, and no labor disputes, strikes or walkouts affecting the operations of
the Borrower or any of its Subsidiaries, is pending, or, to the Borrower's
knowledge, threatened, planned or contemplated.
6.18 ENVIRONMENTAL MATTERS. (A) Except as disclosed on SCHEDULE 6.18 to
this Agreement and except to the limited extent set forth in SECTION 3 of the
Disclosure Letter:
(i) the operations of the Borrower and its Subsidiaries comply in all
material respects with Environmental, Health or Safety Requirements of Law;
(ii) the Borrower and its Subsidiaries have all permits, licenses or
other authorizations required under Environmental, Health or Safety
Requirements of Law and are in material compliance with such permits;
(iii) neither the Borrower, any of its Subsidiaries nor any of their
respective present property or operations, or, to the best of, the
Borrower's or any of its Subsidiaries' knowledge, any of their respective
past property or operations, are subject to or the subject of, any
investigation known to the Borrower or any of its Subsidiaries, any
judicial or administrative proceeding, order, judgment, decree, settlement
or other agreement respecting: (A) any material violation of
Environmental, Health or Safety Requirements of Law; (B) any material
remedial action; or (C) any material claims or liabilities arising from the
Release or threatened Release of a Contaminant into the environment;
(iv) there is not now, nor to the best of the Borrower's or any of
its Subsidiaries' knowledge has there ever been on or in the property of
the Borrower or any of its Subsidiaries, in material violation of
Environmental, Health or Safety Requirements of Law, any landfill, waste
pile, underground storage tanks, aboveground storage tanks, surface
impoundment or hazardous waste storage facility of any kind, any
polychlorinated biphenyls (PCBs) used in hydraulic oils, electric
transformers or other equipment, or any asbestos containing material which
in any such instance or all such instances in the aggregate is in material
violation of Environmental, Health or Safety Requirements of Law; and
(v) neither the Borrower nor any of its Subsidiaries has any material
liability in connection with any Release or threatened Release of a
Contaminant into the environment.
(B) For purposes of this SECTION 6.18 "material" means any noncompliance
or basis for liability which could reasonably be likely to subject the Borrower
or the Borrower's Subsidiaries to liability, individually or in the aggregate,
in excess of $5,000,000.
53
6.19 SOLVENCY. After giving effect to (i) the Loans to be made on the
Closing Date or such other date as Loans requested hereunder are made, (ii) the
other transactions contemplated by this Agreement and (iii) the payment and
accrual of all transaction costs with respect to the foregoing, the Borrower and
its Subsidiaries taken as a whole are Solvent.
ARTICLE VII : COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than contingent indemnity obligations) and termination of all Letters of
Credit, unless the Required Lenders shall otherwise give prior written consent:
7.1 REPORTING. The Borrower shall:
(A) FINANCIAL REPORTING. Furnish to the Lenders:
(i) MONTHLY REPORTS. As soon as practicable and in any event within
thirty (30) days after the end of each month (other than the months ending
February 28, May 31, August 31 and November 30), the consolidated and
consolidating balance sheet of the Borrower and its Subsidiaries as at the
end of such month and the related consolidated and consolidating statements
of income and cash flows of the Borrower and its Subsidiaries for such
fiscal month and for the period from the beginning of the then current
fiscal year to the end of such fiscal month, certified by the chief
financial officer of the Borrower on behalf of the Borrower as fairly
presenting the consolidated and consolidating financial position of the
Borrower and its Subsidiaries as at the dates indicated and the results of
their operations and cash flows for the periods indicated in accordance
with Agreement Accounting Principles, subject to normal year-end
adjustments.
(ii) QUARTERLY REPORTS. As soon as practicable, and in any event
within forty-five (45) days after the end of each of the first three fiscal
quarters in each fiscal year, the consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as at the end of such period and
the related consolidated and consolidating statements of income and cash
flows of the Borrower and its Subsidiaries for such fiscal quarter and for
the period from the beginning of the then current fiscal year to the end of
such fiscal quarter, certified by the chief financial officer of the
Borrower on behalf of the Borrower as fairly presenting the consolidated
and consolidating financial position of the Borrower and its Subsidiaries
as at the dates indicated and the results of their operations and cash
flows for the periods indicated in accordance with Agreement Accounting
Principles, subject to normal year-end adjustments.
(iii) ANNUAL REPORTS. As soon as practicable, and in any event
within (i) five (5) Business Days of the date hereof with respect to the
fiscal year ended November 30, 1997 and (ii) for each other fiscal year,
within ninety (90) days after the end of each such fiscal year, (a) the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
end
54
end of such fiscal year and the related consolidated statements of income,
stockholders' equity and cash flows of the Borrower and its Subsidiaries
for such fiscal year, and in comparative form the corresponding figures for
the previous fiscal year along with consolidating schedules in form and
substance sufficient to calculate the financial covenants set forth in
SECTION 7.4 and (b) an audit report on the items listed in CLAUSE (a)
hereof (other than the consolidating schedules) of independent certified
public accountants of recognized national standing, which audit report
shall be unqualified and shall state that such financial statements fairly
present the consolidated financial position of the Borrower and its
Subsidiaries as at the dates indicated and the results of their operations
and cash flows for the periods indicated in conformity with Agreement
Accounting Principles and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards. The deliveries made
pursuant to this CLAUSE (iii) shall be accompanied by (x) any management
letter identifying material weaknesses in internal accounting controls
prepared by the above-referenced accountants and available at the time of
delivery of the financial statements delivered under this CLAUSE (iii), (y)
a certificate of such accountants that, in the course of their examination
necessary for their certification of the foregoing, they have obtained no
knowledge of any Default or Unmatured Default, or if, in the opinion of
such accountants, any Default or Unmatured Default shall exist, stating the
nature and status thereof; PROVIDED, notwithstanding the foregoing, the
certificate required under clause (y) with respect to the fiscal year ended
November 30, 1997 shall be required to be made within five (5) Business
Days of the date hereof. In the event any management letter identifying
material weaknesses in internal accounting controls prepared by the above-
referenced accountants is delivered to the Borrower at any other time, the
Borrower shall promptly, but in any event within ten (10) Business Days of
the delivery thereof to the Borrower, deliver a copy thereof to the Agent
and the Lenders.
(iv) OFFICER'S CERTIFICATE. Together with each delivery of any
financial statement (a) pursuant to CLAUSES (i), (ii) and (iii) of this
SECTION 7.1(A), an Officer's Certificate of the Borrower, substantially in
the form of EXHIBIT H attached hereto and made a part hereof, stating that
no Default or Unmatured Default exists, or if any Default or Unmatured
Default exists, stating the nature and status thereof and (b) a compliance
certificate, substantially in the form of EXHIBIT I attached hereto and
made a part hereof, signed by the Borrower's Chief Financial Officer or
Treasurer, setting forth calculations for the period then ended for SECTION
2.5(B), if applicable, which demonstrate compliance with the provisions of
SECTION 7.3(B) and SECTION 7.4.
(v) BUDGETS; BUSINESS PLANS; FINANCIAL PROJECTIONS. As soon as
practicable and in any event not later than thirty (30) days after the
beginning of each fiscal year commencing with the fiscal year beginning
December 1, 1998, a copy of the plan and forecast (including a projected
balance sheet, income statement and a statement of cash flow) of the
Borrower and its Subsidiaries for the upcoming fiscal year.
(B) NOTICE OF DEFAULT. Promptly upon any of the chief executive officer,
chief operating officer, chief financial officer, treasurer or controller of the
Borrower obtaining knowledge (i) of
55
any condition or event which constitutes a Default or Unmatured Default, or
becoming aware that any Lender or Agent has given any written notice with
respect to a claimed Default or Unmatured Default under this Agreement, or (ii)
that any Person has given any written notice to the Borrower or any Subsidiary
of the Borrower or taken any other action with respect to a claimed default or
event or condition of the type referred to in SECTION 8.1(E), deliver to the
Agent and the Lenders an Officer's Certificate specifying (a) the nature and
period of existence of any such claimed default, Default, Unmatured Default,
condition or event, (b) the notice given or action taken by such Person in
connection therewith, and (c) what action the Borrower has taken, is taking and
proposes to take with respect thereto.
(C) LAWSUITS. (i) Promptly upon the Borrower obtaining knowledge of the
institution of, or written threat of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Borrower or any of its
Subsidiaries or any property of the Borrower or any of its Subsidiaries not
previously disclosed pursuant to SECTION 6.7, which action, suit, proceeding,
governmental investigation or arbitration exposes, or in the case of multiple
actions, suits, proceedings, governmental investigations or arbitrations arising
out of the same general allegations or circumstances which expose, in the
Borrower's reasonable judgment, the Borrower or any of its Subsidiaries to
liability in an amount aggregating $1,000,000 or more (exclusive of claims
covered by insurance policies of the Borrower or any of its Subsidiaries unless
the insurers of such claims have disclaimed coverage or reserved the right to
disclaim coverage on such claims and exclusive of claims covered by the
indemnity of a financially responsible indemnitor in favor of the Borrower or
any of its Subsidiaries unless the indemnitor has disclaimed or reserved the
right to disclaim coverage thereof), give written notice thereof to the Agent
and the Lenders and provide such other information as may be reasonably
available to enable each Lender and the Agent and its counsel to evaluate such
matters; (ii) promptly upon obtaining knowledge thereof, advise the Agent and
the Lenders of any material developments in any such actions, suits,
proceedings, governmental investigations, arbitrations or threatened actions
covered by a report delivered pursuant to clause (i) (provided such disclosure
would not jeopardize any attorney-client privilege) and (iii) in addition to the
requirements set forth in CLAUSE (i) and CLAUSE (ii) of this SECTION 7.1(C),
upon request of the Agent or the Required Lenders, promptly give written notice
of the status of any action, suit, proceeding, governmental investigation or
arbitration covered by a report delivered pursuant to CLAUSE (i) above and
provide such other information as may be reasonably available to it that would
not jeopardize any attorney-client privilege by disclosure to the Lenders to
enable each Lender and the Agent and its counsel to evaluate such matters.
(D) ERISA NOTICES. Deliver or cause to be delivered to the Agent and the
Lenders, at the Borrower's expense, the following information and notices as
soon as reasonably possible, and in any event:
(i) (a) within fifteen (15) Business Days after the Borrower obtains
knowledge that a Termination Event has occurred, a written statement of the
chief financial officer of the Borrower describing such Termination Event
and the action, if any, which the Borrower has taken, is taking or proposes
to take with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto and (b)
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within fifteen (15) Business Days after any member of the Controlled Group
obtains knowledge that a Termination Event has occurred which could
reasonably be expected to subject the Borrower to liability in excess of
$1,000,000, a written statement of the chief financial officer of the
Borrower describing such Termination Event and the action, if any, which
the member of the Controlled Group has taken, is taking or proposes to take
with respect thereto, and when known, any action taken or threatened by the
IRS, DOL or PBGC with respect thereto;
(ii) within fifteen (15) Business Days after the Borrower or any of
its Subsidiaries obtains knowledge that a prohibited transaction (defined
in SECTIONS 406 of ERISA and SECTION 4975 of the Code) has occurred, a
statement of the chief financial officer of the Borrower describing such
transaction and the action which the Borrower or such Subsidiary has taken,
is taking or proposes to take with respect thereto;
(iii) within fifteen (15) Business Days after the material increase
in the benefits of any existing Plan or the establishment of any new
Benefit Plan or the commencement of, or obligation to commence,
contributions to any Benefit Plan or Multiemployer Plan to which the
Borrower or any member of the Controlled Group was not previously
contributing, notification of such increase, establishment, commencement or
obligation to commence and the amount of such contributions;
(iv) within fifteen (15) Business Days after the Borrower or any of
its Subsidiaries receives notice of any unfavorable determination letter
from the IRS regarding the qualification of a Plan under SECTION 401(a) of
the Code, copies of each such letter;
(v) within fifteen (15) Business Days after the establishment of any
foreign employee benefit plan or the commencement of, or obligation to
commence, contributions to any foreign employee benefit plan to which the
Borrower or any Subsidiary was not previously contributing, notification of
such establishment, commencement or obligation to commence and the amount
of such contributions;
(vi) within fifteen (15) Business Days of request of any Lender,
copies of each annual report (form 5500 series), including SCHEDULE B
thereto, filed with respect to each Benefit Plan;
(vii) within fifteen (15) Business Days of request of any Lender,
each actuarial report for any Benefit Plan or Multiemployer Plan and each
annual report for any Multiemployer Plan, copies of each such report;
(viii) within fifteen (15) Business Days after the filing thereof
with the IRS, a copy of each funding waiver request filed with respect to
any Benefit Plan and all communications received by the Borrower or a
member of the Controlled Group with respect to such request;
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(ix) within fifteen (15) Business Days after receipt by the Borrower
or any member of the Controlled Group of the PBGC's intention to terminate
a Benefit Plan or to have a trustee appointed to administer a Benefit Plan,
copies of each such notice;
(x) within fifteen (15) Business Days after receipt by the Borrower
or any member of the Controlled Group of a notice from a Multiemployer Plan
regarding the imposition of withdrawal liability, copies of each such
notice;
(xi) within fifteen (15) Business Days after the Borrower or any
member of the Controlled Group fails to make a required installment or any
other required payment under SECTION 412 of the Code on or before the due
date for such installment or payment, a notification of such failure; and
(xii) within fifteen (15) Business Days after the Borrower or any
member of the Controlled Group knows or has reason to know that (a) a
Multiemployer Plan has been terminated, (b) the administrator or plan
sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan,
or (c) the PBGC has instituted or will institute proceedings under SECTION
4042 of ERISA to terminate a Multiemployer Plan.
(E) LABOR MATTERS. Notify the Agent and the Lenders in writing, promptly
upon the Borrower's learning thereof, of (i) any material labor dispute to which
the Borrower or any of its Material Subsidiaries may become a party, including,
without limitation, any strikes, lockouts or other disputes relating to such
Persons' plants and other facilities and (ii) any Worker Adjustment and
Retraining Notification Act liability incurred with respect to the closing of
any plant or other facility of the Borrower or any of its Material Subsidiaries.
(F) OTHER INDEBTEDNESS. Deliver to the Agent (i) a copy of each regular
report, notice or communication regarding potential or actual defaults
(including any accompanying officer's certificate) delivered by or on behalf of
the Borrower or any of its Subsidiaries to the holders of funded Indebtedness
which has an outstanding principal balance of $5,000,000 or more pursuant to the
terms of the agreements governing such Indebtedness, such delivery to be made at
the same time and by the same means as such notice or other communication is
delivered to such holders, and (ii) a copy of each notice received by the
Borrower or any of its Subsidiaries from the holders of funded Indebtedness
pursuant to the terms of such Indebtedness, such delivery to be made promptly
after such notice or other communication is received by the Borrower or
Subsidiary, as applicable.
(G) OTHER REPORTS. Deliver or cause to be delivered to the Agent and the
Lenders copies of all financial statements, reports and notices, if any, sent or
made available generally by the Borrower to its securities holders or filed with
the Commission by the Borrower, all press releases made available generally by
the Borrower or any of the Borrower's Subsidiaries to the public concerning
material developments in the business of the Borrower or any such Subsidiary and
all notifications received from the Commission by the Borrower or its
Subsidiaries pursuant to the Securities Exchange Act of 1934 and the rules
promulgated thereunder.
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(H) ENVIRONMENTAL NOTICES. As soon as possible and in any event within ten
(10) days after receipt by the Borrower, deliver to the Agent and the Lenders a
copy of (i) any notice or claim to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of the Release by the
Borrower, any of its Subsidiaries, or any other Person of any Contaminant into
the environment, and (ii) any notice alleging any violation of any
Environmental, Health or Safety Requirements of Law by the Borrower or any of
its Subsidiaries if, in either case, such notice or claim relates to an event
which could reasonably be expected to subject the Borrower and its Subsidiaries
to liability individually or in the aggregate in excess of $1,000,000.
(I) BORROWING BASE CERTIFICATE. As soon as practicable, and in any event
within three (3) Business Days after the close of each calendar week, the
Borrower shall provide the Agent and the Lenders with a Borrowing Base
Certificate, together with such supporting documents as the Agent reasonably
deems desirable, all certified as being true and correct by the chief financial
officer or treasurer of the Borrower.
(J) OTHER INFORMATION. Other than in connection with the Sale Initiative
which shall be governed exclusively by the provisions of SECTION 7.5 below,
promptly upon receiving a request therefor from the Agent, prepare and deliver
to the Agent and the Lenders such other information with respect to the
Borrower, any of its Subsidiaries, or the Collateral, including, without
limitation, schedules identifying and describing the Collateral and any
dispositions thereof or any Asset Sale or Financing (and the use of the Net Cash
Proceeds thereof), as from time to time may be reasonably requested by the
Agent.
7.2 AFFIRMATIVE COVENANTS.
(A) CORPORATE EXISTENCE, ETC. Except as permitted pursuant to SECTION
7.3(I), the Borrower shall, and shall cause each of its Subsidiaries to, at all
times maintain its corporate existence and preserve and keep, or cause to be
preserved and kept, in full force and effect its rights and franchises material
to its businesses; PROVIDED HOWEVER, that nothing in this SECTION 7.2(A) shall
prevent the Borrower from discontinuing the operation and corporate existence
of, and liquidating its Subsidiaries in Italy and Mexico.
(B) CORPORATE POWERS; CONDUCT OF BUSINESS. The Borrower shall, and shall
cause each of its Subsidiaries to, qualify and remain qualified to do business
in each jurisdiction in which the nature of its business requires it to be so
qualified and where the failure to be so qualified will have or could reasonably
be expected to have a Material Adverse Effect. The Borrower will, and will
cause each Subsidiary to, carry on and conduct its business in substantially the
same manner and in substantially the same fields of enterprise as it is
presently conducted; PROVIDED HOWEVER, that nothing in this SECTION 7.2(B) shall
prevent the Borrower from discontinuing the operation and corporate existence
of, and liquidating its Subsidiaries in Italy and Mexico.
(C) COMPLIANCE WITH LAWS, ETC. The Borrower shall, and shall cause its
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, properties, assets or
operations of such Person unless failure to comply could not reasonably be
expected to have a Material Adverse Effect and (b) obtain as needed all permits
59
necessary for its operations and maintain such permits in good standing unless
failure to obtain such permits could not reasonably be expected to have a
Material Adverse Effect.
(D) PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. The Borrower shall
pay, and cause each of its Subsidiaries to pay, (i) all taxes, assessments and
other governmental charges imposed upon it or on any of its properties or assets
or in respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, and (ii) all material claims (including,
without limitation, claims for labor, services, materials and supplies, but
excluding claims in connection with the Disclosed Disputes which shall be
governed by the terms of the Disclosure Letter) for sums which have become due
and payable and which by law have or may become a Lien (other than a Lien
permitted by SECTION 7.3(C)) upon any of the Borrower's or such Subsidiary's
property or assets, prior to the time when any penalty or fine shall be incurred
with respect thereto; PROVIDED, HOWEVER, that no such taxes, assessments and
governmental charges referred to in CLAUSE (i) above or claims referred to in
CLAUSE (ii) above (and interest, penalties or fines relating thereto) need be
paid if being contested in good faith by appropriate proceedings diligently
instituted and conducted and if such reserve or other appropriate provision, if
any, as shall be required in conformity with Agreement Accounting Principles
shall have been made therefor.
(E) INSURANCE. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full force
and effect, the insurance policies and programs required by SECTION 6.16 of this
Agreement as reflect coverage that is reasonably consistent with prudent
industry practice.
(F) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The Borrower
shall permit and cause each of the Borrower's Subsidiaries to permit, any
authorized representative(s) designated by either the Agent or any Lender to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine, audit, check and make copies of their respective
financial and accounting records, books, journals, orders, receipts and any
correspondence and other data relating to their respective businesses or the
transactions contemplated hereby (including, without limitation, in connection
with environmental compliance, hazard or liability), and to discuss their
affairs, finances and accounts with their officers and upon prior written notice
to Borrower, independent certified public accountants, all upon reasonable
notice (provided no prior notice shall be required if the Agent or any of the
Lenders has a good faith reason to believe that the books and records of the
Borrower or its Subsidiaries are not being maintained in accordance with the
requirements of this Agreement) and at such reasonable times during normal
business hours, as often as may be reasonably requested; PROVIDED, HOWEVER, the
terms of this CLAUSE (F) shall not be applicable to information regarding the
Sale Initiative, which shall be governed exclusively by the provisions of
SECTION 7.5. The Borrower shall keep and maintain, and cause each of the
Borrower's Subsidiaries to keep and maintain, in all material respects, proper
books of record and account in which entries in conformity with Agreement
Accounting Principles shall be made of all dealings and transactions in relation
to their respective businesses and activities. If a Default has occurred and is
continuing, the Borrower, upon the Agent's request, shall turn over copies of
any such records to the Agent or its representatives and, upon
60
any Lender's request, the Agent shall turn over copies of any such records to
such Lender or its representatives.
(G) ERISA COMPLIANCE. The Borrower shall, and shall cause each of the
Borrower's Subsidiaries to, establish, maintain and operate all Plans to comply
in all material respects with the provisions of ERISA, the Code, all other
applicable laws, and the regulations and interpretations thereunder and the
respective requirements of the governing documents for such Plans.
(H) MAINTENANCE OF PROPERTY. The Borrower shall cause all property used
or useful in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, that nothing in this SECTION 7.2(H) shall prevent the
Borrower from discontinuing the operation or maintenance of any of such property
if such discontinuance is, in the judgment of the Borrower, desirable in the
conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Agent or the Lenders.
(I) ENVIRONMENTAL COMPLIANCE. Except as set forth on SCHEDULE 6.18 the
Borrower and its Subsidiaries shall comply with all Environmental, Health or
Safety Requirements of Law, except where noncompliance will not have or is not
reasonably likely to subject the Borrower or any of its Subsidiaries to
liability, individually or in the aggregate, in excess of $5,000,000.
(J) USE OF PROCEEDS. The Borrower shall use the proceeds of the
Supplemental Loans and Letters of Credit to (i) repay indebtedness to Reservoir
Capital Corporation, (ii) for the ordinary course working capital and other
ordinary course business needs of the Borrower and SEI, (iii) for Capital
Expenditures to the extent permitted under this Agreement; (iv) for the
Borrower's and SEI's ordinary course spot F/X needs and (v) for the payment of
Dispute Resolution Costs in an aggregate amount for all Disclosed Disputes not
to exceed the amount specified in SECTION 1(a) of the Disclosure Letter. The
Borrower will not, nor will it permit any Subsidiary to, use any of the proceeds
of the Loans to purchase or carry any Margin Stock or to consummate any
Acquisition.
(K) INSURANCE MATTERS
(i) INSURANCE AND CONDEMNATION PROCEEDS. The Borrower directs (and shall
cause SEI to direct) all insurers under policies of property damage, boiler and
machinery and business interruption insurance and payors of any condemnation
claim or award relating to its property to pay all proceeds payable under such
policies or with respect to such claim or award for any loss with respect to the
Collateral directly to the Collateral Agent, for the benefit of the Collateral
Agent and the Holders of the Secured Obligations. Each such policy shall
contain a long-form loss-payable endorsement naming the Collateral Agent as loss
payee, which endorsement shall be in form and substance reasonably acceptable to
the Agent. The Collateral Agent shall, upon receipt of such proceeds apply such
proceeds in accordance with the terms of the Collateral
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Sharing Agreement and upon receipt from the Collateral Agent the Agent shall
apply any amounts received by it as though it was a Designated Prepayment in the
order indicated in SECTION 2.5(B) provided the amount thereof shall not reduce
the Aggregate Supplemental Loan Commitment; PROVIDED, that the Collateral Agent
shall pay to the Borrower or SEI, as applicable, such portion of the proceeds
(up to an aggregate amount not to exceed $500,000) as may be reasonably
necessary to restore or repair the affected business or property which may be
used by the Borrower or SEI for such purposes; PROVIDED FURTHER, however, that
(i) the Collateral Agent shall not pay over such proceeds if a Default has
occurred and (ii) if, after receiving any of such proceeds but prior to
restoring or repairing such affected property or business a Default shall occur,
the Borrower shall pay over (or cause SEI to pay over) such proceeds to the
Collateral Agent for application as though a Designated Prepayment was received.
(ii) INSURANCE REPORTING. Presently the Borrower and SEI maintain their
property insurance programs on a contract year commencing July of each year.
Not later than August of each year (or such other date that is one-month after
the beginning of the applicable insurance contract year) commencing August 1998,
deliver to the Agent and the Lenders (i) a report in form and substance
reasonably satisfactory to the Agent and the Lenders outlining all material
property, business interruption and liability insurance coverage maintained as
of the date of such report by the Borrower and its Subsidiaries and the duration
of such coverage and (ii) a certificate of the chief financial officer or
treasurer of the Borrower that all premiums with respect to such coverage have
been paid when due.
(iii) The Borrower shall maintain for itself and its Subsidiaries, or
shall cause each of its Subsidiaries to maintain in full force and effect the
insurance policies and programs listed on SCHEDULE 6.16 to this Agreement or
substantially similar policies and programs or other policies and programs as
reflect coverage that is reasonably consistent with prudent industry practice.
The Borrower shall deliver to the Agent endorsements (y) to all "All Risk"
physical damage insurance policies on all of the tangible real and personal
property and assets constituting part of the Collateral and business
interruption insurance policies naming the Collateral Agent loss payee, and (z)
to all general liability and other liability policies naming the Collateral
Agent an additional insured. In the event the Borrower or any of its
Subsidiaries, at any time or times hereafter shall fail to obtain or maintain
any of the policies or insurance required herein or to pay any premium in whole
or in part relating thereto, then the Agent, without waiving or releasing any
obligations or resulting Default hereunder, may at any time or times thereafter
(but shall be under no obligation to do so) obtain and maintain such policies of
insurance and pay such premiums and take any other action with respect thereto
which the Agent deems advisable. All sums so disbursed by the Agent shall
constitute part of the Secured Obligations, payable as provided in this
Agreement and the Collateral Sharing Agreement.
(L) POST-CLOSING EFFORTS. The Borrower and SEI shall use their reasonable
best efforts during the period from the date hereof through the date that is 30
days hereafter to attempt to obtain the landlord consents to the leasehold
Mortgages and the landlord waivers, bailee waivers and consignee waivers for the
Borrower's and SEI's collateral locations from the third parties which have been
sent such agreements prior to the date hereof.
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7.3 NEGATIVE COVENANTS.
(A) INDEBTEDNESS. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:
(i) the Obligations;
(ii) Indebtedness evidenced by the Senior Notes;
(iii) Permitted Existing Indebtedness and Permitted Refinancing
Indebtedness;
(iv) Indebtedness in respect of obligations secured by Customary
Permitted Liens;
(v) Indebtedness constituting Contingent Obligations permitted by
SECTION 7.3(E);
(vi) Indebtedness arising from intercompany loans (a) from any
Subsidiary to the Borrower or any wholly-owned Subsidiary and (b)
intercompany loans from the Borrower to its Subsidiaries permitted under
SECTION 7.3(S);
(vii) Indebtedness in respect of Hedging Obligations permitted under
SECTION 7.3(Q);
(viii) secured or unsecured purchase money Indebtedness (including
Capitalized Leases) incurred by the Borrower or any of its Subsidiaries
after the Original Closing Date to finance the acquisition of fixed assets,
if (1) at the time of such incurrence, no Default or Unmatured Default has
occurred and is continuing or would result from such incurrence, (2) such
Indebtedness has a scheduled maturity and is not due on demand, (3) such
Indebtedness does not exceed the lower of the fair market value or the cost
of the applicable fixed assets on the date acquired, (4) such Indebtedness
does not exceed (a) $500,000 in the aggregate outstanding at any time for
the Borrower and SEI and (b) $3,500,000 in the aggregate outstanding at
any time for the Borrower's Subsidiaries other than SEI, and (5) any Lien
securing such Indebtedness is permitted under SECTION 7.3(C) (such
Indebtedness being referred to herein as "PERMITTED PURCHASE MONEY
INDEBTEDNESS");
(ix) Indebtedness with respect to surety, appeal and performance
bonds obtained by the Borrower or any of its Subsidiaries in the ordinary
course of business;
(x) (a) Indebtedness in respect of judgments or awards other than in
connection with the Disclosed Disputes which have been in force for less
than the applicable appeal period so long as execution is not levied
thereunder (or in respect of which the Borrower or its Subsidiary, as
applicable, shall at the time in good faith be prosecuting an appeal or
proceedings for review and in respect of which a stay of execution shall
have been obtained pending such appeal or review) and which does not, in
the aggregate, exceed
63
$1,000,000 and (b) Indebtedness in respect of judgments or awards in
connection with the Disclosed Disputes to the extent permitted in SECTION
1(b) of the Disclosure Letter; and
(xi) Indebtedness incurred by the Borrower's foreign Subsidiaries in
addition to that referred to elsewhere in this SECTION 7.3(A) in an
outstanding principal amount not to exceed $5,000,000 in the aggregate at
any time for the Borrowers' foreign Subsidiaries.
(B) SALES OF ASSETS. Neither the Borrower nor any of its Subsidiaries
shall sell, assign, transfer, lease, convey or otherwise dispose of any
property, whether now owned or hereafter acquired, or any income or profits
therefrom, or enter into any agreement to do so, except:
(i) sales of Inventory and other assets in the ordinary course of
business;
(ii) the disposition in the ordinary course of business of equipment
that is obsolete, excess or no longer useful in the Borrower's or its
Subsidiaries' business;
(iii) the sale of Binks de Mexico, S.A. de C.V.'s Mexico City
facility;
(iv) the disposition of assets of Binks International (Italia) S.r.l.
in connection with its liquidation;
(v) the sale of the real property of the Borrower's Belgian
Subsidiary;
(vi) sales of Inventory which consists of obsolete Inventory, excess
Inventory or Inventory relating to discontinued lines of business;
(vii) sales, assignments or other transfers of Receivables by one or
more of the Borrower's foreign Subsidiaries in the ordinary course of its
business consistent with past practice;
(viii) sales, assignments, transfers, leases, conveyances or other
dispositions of other assets (other than Receivables by Borrower or SEI or
the stock or substantially all of the assets of Xxxxx X.X.) to Persons
which are not Affiliates of the Borrower if the value of such assets
(which, for these purposes, shall mean the greater of such assets' book
value at the time of sale or other disposition or the proceeds realized by
the Borrower or its Subsidiaries from the sale or disposition of such
assets), when added to the value of all other assets sold or disposed of by
the Company and its Subsidiaries under this CLAUSE (viii) (or clause (v) of
this Section under the Original Credit Agreement) after the Original Date,
does not exceed ten percent (10%) of the Borrower's Consolidated Tangible
Assets determined at the end of the fiscal year immediately preceding that
in which such transaction is proposed to be entered into; and
(ix) sales of a portion of the Borrower's business or assets and/or
one or more of the Borrower's Subsidiaries or their assets consented to by
the Required Creditors in connection with the Sale Initiative pursuant to
the terms of SECTION 7.5(g) and permitted under the terms of the Note
Purchase Agreement.
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(C) LIENS. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or permit to exist any Lien on or
with respect to any of their respective property or assets except:
(i) Liens in favor of the Collateral Agent to secure the Secured
Obligations;
(ii) Permitted Existing Liens;
(iii) Customary Permitted Liens;
(iv) purchase money Liens (including the interest of a lessor under a
Capitalized Lease and Liens to which any property is subject at the time of
the Borrower's acquisition thereof) securing Permitted Purchase Money
Indebtedness; PROVIDED that such Liens shall not apply to any property of
the Borrower or its Subsidiaries other than that purchased or subject to
such Capitalized Lease;
(v) mortgages, pledges or security interests on the properties or
assets of a Subsidiary in favor of the Borrower or in favor of any other
Subsidiary;
(vi) Liens created pursuant to applications or reimbursement
arrangements pertaining to Letters of Credit which encumber only the goods,
or documents of title covering the goods, which are sold or shipped in the
transaction for which such Letters of Credit were issued;
(vii) any attachment or judgment Liens (a) with respect to a
judgments other than in connection with the Disclosed Disputes not
exceeding $1,000,000 in the aggregate, unless the judgment(s) it secures
shall not, within 30 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall not have been discharged
within 30 days after the expiration of any such stay and (b) with respect
to attachment or judgment Liens in connection with the Disclosed Disputes
in an amount not to exceed in the aggregate the amount set forth in SECTION
1(b)of the Disclosure Letter provided such judgments are stayed or not
being enforced and any judgment or attachment Lien in connection therewith
is subordinate to the Lien of the Collateral Agent and is stay and not
being enforced; and
(viii) other Liens securing Indebtedness not to exceed $500,000 in
the aggregate.
In addition, neither the Borrower nor any of its Subsidiaries shall become a
party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit the creation of a Lien on any of its properties or
other assets with an aggregate fair market value of $1,000,000 or more in favor
of the Collateral Agent for the benefit of itself and the Holders of Secured
Obligations, as collateral for the Obligations; PROVIDED that any agreement,
note, indenture or other instrument in connection with Permitted Purchase Money
Indebtedness (including Capitalized Leases) may prohibit the creation of a Lien
in favor of the Collateral Agent
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for the benefit of itself and the Holders of Secured Obligations on the items of
property obtained with the proceeds of such Permitted Purchase Money
Indebtedness.
(D) INVESTMENTS. Except to the extent permitted pursuant to PARAGRAPH (G)
below, neither the Borrower nor any of its Subsidiaries shall directly or
indirectly make or own any Investment except:
(i) Investments in Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater than the
amount thereof on the Original Closing Date;
(iii) Investments in trade receivables or received in connection with
the bankruptcy or reorganization of suppliers and customers or in
settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;
(iv) Investments consisting of deposit accounts maintained by the
Borrower;
(v) Investments consisting of non-cash consideration from a sale,
assignment, transfer, lease, conveyance or other disposition of property
permitted by SECTION 7.3(B);
(vi) Investments consisting of (a) intercompany loans from any
Subsidiary to the Borrower or any other Subsidiary permitted by SECTION
7.3(A)(vi) and (b) intercompany loans from the Borrower to its Subsidiaries
permitted under SECTION 7.3(S);
(vii) Investments resulting from the conversion by the Borrower of
intercompany loans made by it to its Belgian Subsidiary and previously
reserved for on the Borrower's financial statements to equity in an
aggregate amount not to exceed $2,000,000;
(viii) Investments resulting from leasehold improvements not to
exceed an aggregate amount of $1,000,000;
(ix) Investments resulting from advances to employees made in the
ordinary course of business which are (a) outstanding as of the date hereof
and shown on SCHEDULE 1.1.3 (but not any relending of such amounts once
repaid) and (b) additional advances, not to exceed an aggregate of
$100,000, made from time to time after the date hereof; and
(x) Investments in addition to those referred to elsewhere in this
SECTION 7.3(D) in an amount not to exceed $1,000,000 in the aggregate at
any time outstanding;
PROVIDED, HOWEVER, that the Investments described in CLAUSES (vi)(b), (vii),
(ix) and (x) above shall not be permitted to be made at a time when either a
Default or an Unmatured Default shall have occurred and be continuing or would
result therefrom.
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(E) CONTINGENT OBLIGATIONS. Neither the Borrower nor any of its
Subsidiaries shall directly or indirectly create or become or be liable with
respect to any Contingent Obligation, except: (i) recourse obligations resulting
from endorsement of negotiable instruments for collection in the ordinary course
of business; (ii) Permitted Existing Contingent Obligations; (iii) obligations,
warranties, and indemnities, not relating to Indebtedness of any Person, which
have been or are undertaken or made in the ordinary course of business and,
except for product warranties extended to Subsidiaries or Affiliates of the
Borrower in the ordinary course of business and consistent with warranties given
to non-Affiliated parties, not for the benefit of or in favor of an Affiliate of
the Borrower or such Subsidiary; (iv) additional Contingent Obligations which do
not exceed $1,000,000 in the aggregate at any time; (v) Contingent Obligations
with respect to surety, appeal and performance bonds obtained by the Borrower or
any Subsidiary in the ordinary course of business; (vi) Contingent Obligations
of Borrower in respect of any Subsidiary; and (vii) contingent obligations
arising from any guaranty executed by a Subsidiary of the indebtedness evidenced
by the Senior Notes if such Subsidiary has also executed a Guaranty in
connection with the Obligations and provided the obligations under such guaranty
shall be governed by the terms of the Collateral Sharing Agreement.
(F) RESTRICTED PAYMENTS. Neither the Borrower nor any of its Subsidiaries
shall declare or make any Restricted Payment, except:
(i) Restricted Payments made in connection with the defeasance,
redemption or repurchase of any Indebtedness with the Net Cash Proceeds of
Permitted Refinancing Indebtedness;
(ii) mandatory payments of interest, principal or premium, if any, due
on the Senior Notes in accordance with repayment provisions in effect with
respect to such Indebtedness as of the Closing Date;
(iii) Restricted Payments made in connection with the Disclosed
Disputes in an amount which when aggregated with all other Dispute
Resolution Costs paid do not, in the aggregate, exceed the amount set forth
in Section 1(a) of the Disclosure Letter provided no Default or Unmatured
Default has occurred and is continuing at the date of declaration or
payment thereof or would result therefrom;
(iv) Restricted Payments of any Subsidiary of the Borrower to the
Borrower or to another Subsidiary of the Borrower; and
(v) Restricted Payments with respect to Indebtedness of any foreign
Subsidiary of the Borrower consisting of regularly scheduled payments and
mandatory prepayments.
(G) CONDUCT OF BUSINESS; SUBSIDIARIES. Neither the Borrower nor any of
its Subsidiaries shall engage in any business other than the businesses engaged
in by the Borrower on the date hereof and any business or activities which are
substantially similar, related or incidental thereto. Except as permitted
pursuant to SECTION 7.3(D)(viii), the Borrower shall not create, acquire or
67
capitalize any Subsidiary after the date hereof. The Borrower shall not and
shall not permit any Subsidiaries to enter into or make any Acquisitions.
(H) TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. Neither the Borrower
nor any of its Subsidiaries shall directly or indirectly enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with any holder or
holders of any of the Equity Interests of the Borrower holding in excess of 5.0%
of the fully-diluted aggregate amount of Equity Interests outstanding, or with
any Affiliate of the Borrower which is not its Subsidiary, on terms that are
less favorable to the Borrower or any of its Subsidiaries, as applicable, than
those that might be obtained in an arm's length transaction at the time from
Persons who are not such a holder or Affiliate, except for Restricted Payments
permitted by SECTION 7.3(F) and Investments permitted by SECTION 7.3(D).
(I) RESTRICTION ON FUNDAMENTAL CHANGES. Except as set forth in SECTION 4
of the Disclosure Letter and except as permitted pursuant to a transaction
approved by the Required Creditors under SECTION 7.5(g), neither the Borrower
nor any of its Subsidiaries shall enter into any merger or consolidation, or
liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), or
convey, lease, sell, transfer or otherwise dispose of, in one transaction or
series of transactions, all or substantially all of the Borrower's or any such
Subsidiary's business or property, whether now or hereafter acquired, except (i)
transactions permitted under SECTIONS 7.3(B) or 7.3(G), (ii) mergers,
consolidations, or amalgamations of a Subsidiary of the Borrower with and into
the Borrower (with the Borrower as the surviving corporation) or with another
Subsidiary of the Borrower, (iii) any liquidation of any Subsidiary of the
Borrower into the Borrower or another Subsidiary of the Borrower and (iv) the
liquidation of Binks International (Italia) S.r.l.
(J) SALES AND LEASEBACKS. Neither the Borrower nor any of its
Subsidiaries shall become liable, directly, by assumption or by Contingent
Obligation, with respect to any lease, whether an operating lease or a
Capitalized Lease, of any property (whether real or personal or mixed) (i) which
it or one of its Subsidiaries sold or transferred or is to sell or transfer to
any other Person, or (ii) which it or one of its Subsidiaries intends to use for
substantially the same purposes as any other property which has been or is to be
sold or transferred by it or one of its Subsidiaries to any other Person in
connection with such lease, unless in either case the sale involved is not
prohibited under SECTION 7.3(B) and the lease involved is not prohibited under
SECTION 7.3(A).
(K) MARGIN REGULATIONS. Neither the Borrower nor any of its Subsidiaries,
shall use all or any portion of the proceeds of any credit extended under this
Agreement to purchase or carry Margin Stock.
(L) ERISA. The Borrower shall not
(i) engage, or permit any of its Subsidiaries to engage, in any
prohibited transaction described in SECTIONS 406 of ERISA or 4975 of the
Code for which a statutory
68
or class exemption is not available or a private exemption has not been
previously obtained from the DOL;
(ii) permit to exist any accumulated funding deficiency (as defined
in SECTIONS 302 of ERISA and 412 of the Code), with respect to any Benefit
Plan, whether or not waived;
(iii) fail, or permit any Controlled Group member to fail, to pay
timely required contributions or annual installments due with respect to
any waived funding deficiency to any Benefit Plan;
(iv) terminate, or permit any Controlled Group member to terminate,
any Benefit Plan which would result in any liability of the Borrower or any
Controlled Group member under Title IV of ERISA which liability could
reasonably be expected to have a Material Adverse Effect;
(v) fail to make any contribution or payment to any Multiemployer
Plan which the Borrower or any Controlled Group member may be required to
make under any agreement relating to such Multiemployer Plan, or any law
pertaining thereto;
(vi) fail, or permit any Controlled Group member to fail, to pay any
required installment or any other payment required under SECTION 412 of the
Code on or before the due date for such installment or other payment; or
(vii) amend, or permit any Controlled Group member to amend, a Plan
resulting in an increase in current liability for the plan year such that
the Borrower or any Controlled Group member is required to provide security
to such Plan under SECTION 401(a)(29) of the Code.
(M) CORPORATE DOCUMENTS. Neither the Borrower nor any of its Material
Subsidiaries shall amend, modify or otherwise change any of the terms or
provisions in any of their respective constituent documents as in effect on the
date hereof in any manner adverse to the interests of the Lenders, without the
prior written consent of the Required Creditors, which consent shall not be
unreasonably withheld or delayed.
(N) OTHER INDEBTEDNESS. The Borrower shall not amend, supplement or
otherwise modify the terms of the Senior Notes or the Master Note Agreement in
any way that would be materially less advantageous to the Borrower or materially
adverse to the Lenders, including, without limitation, with respect to amount,
maturity, amortization, interest rate, premiums, fees, covenants, events of
default, remedies and dividend provisions, except for the Waiver and Second
Amendment to the Master Note Agreement substantially in the form of EXHIBIT K to
be entered into as of the Closing Date.
(O) FISCAL YEAR. The Borrower shall not change its fiscal year for
accounting or tax purposes from a period consisting of the 12-month period
ending on the last day of November of each year.
69
(P) SUBSIDIARY COVENANTS. The Borrower will not, and will not permit any
Subsidiary to, create or otherwise cause to become effective any material
consensual encumbrance or material restriction of any kind on the ability of any
Subsidiary to pay dividends or make any other distribution on its stock, or make
any other Restricted Payment, pay any Indebtedness or other Obligation owed to
the Borrower or any other Subsidiary, make loans or advances or other
Investments in the Borrower or any other Subsidiary, or sell, transfer or
otherwise convey any of its property to the Borrower or any other Subsidiary;
PROVIDED nothing herein shall restrict the ability of any foreign Subsidiary to
capitalize retained earnings in the ordinary course of business if required in
connection with the incurrence of Indebtedness provided the maximum amount of
retained earnings capitalized from and after the Original Closing Date shall not
exceed $7,500,000 in the aggregate for all of the Borrower's foreign
Subsidiaries..
(Q) HEDGING OBLIGATIONS. The Borrower shall not and shall not permit any
of its Subsidiaries to enter into any interest rate, commodity or foreign
currency exchange, swap, collar, cap or similar agreements evidencing Hedging
Obligations, other than interest rate, foreign currency or commodity exchange,
swap, collar, cap or similar agreements entered into by the Borrower or its
Subsidiaries pursuant to which the Borrower or such Subsidiary has hedged its
actual interest rate, foreign currency or commodity exposure. Such permitted
hedging agreements entered into by the Borrower and its Subsidiaries and any
Lender or any affiliate of any Lender are sometimes referred to herein as
"HEDGING AGREEMENTS." In the event a Lender or any of its Affiliates elects to
enter into any Hedging Agreement with the Borrower or any of its Subsidiaries,
the obligations of the Borrower and such Subsidiaries with respect to such
Hedging Agreement shall be Secured Obligations secured by the Collateral.
(R) CHANGE OF DEPOSIT ACCOUNTS. The Borrower shall not, and shall not
permit SEI to, establish or maintain any deposit account with any bank or other
financial institution other than (i) the Agent and its Affiliates, (ii) those
which have entered into a Collection Account Agreement in form and substance
acceptable to the Agent, (iii) for the first 30 days following the date hereof,
the account maintained with Centennial Bank, 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx
Xxxxx, Xxxxxx 00000, and (iv) other disbursement accounts maintained by the
Borrower or SEI PROVIDED the maximum amount of any individual account shall not
exceed [$100,000] and the maximum amount of all such accounts shall not exceed
[$300,000].
(S) INTERCOMPANY LOANS FROM THE BORROWER TO ITS SUBSIDIARIES. The
Borrower shall not and shall not permit SEI to make any loans to or Investments
in any of its Subsidiaries other than (i) loans by the Borrower to SEI or by SEI
to the Borrower; (ii) intercompany loans by the Borrower or SEI to any other
Subsidiary of the Borrower in the amount outstanding as of the date hereof and
set forth on SCHEDULE 6.3(S). Other than the loans outstanding on the date
hereof from the Borrower to its Belgian Subsidiary, all loans by the Borrower to
its Subsidiaries or by SEI to the Borrower or any other Subsidiary shall be
evidenced by promissory notes pledged to the Collateral Agent pursuant to the
terms of the Security Agreement executed by the Borrower which provide that (i)
a Default under this Agreement shall constitute a default under such promissory
note entitling the Borrower to accelerate the payment thereof and (ii) if any
acceleration of the Obligations under this Agreement shall occur, the
obligations under such
70
promissory note shall immediately become due and payable without any election or
action on the part of the Borrower or SEI, as applicable.
7.4 FINANCIAL COVENANTS. The Borrower shall comply with the following:
(A) DEFINED TERMS FOR FINANCIAL COVENANTS. The following terms used in
this Agreement shall have the following meanings (such meanings to be
applicable, except to the extent otherwise indicated in a definition of a
particular term, both to the singular and the plural forms of the terms
defined):
"CONSOLIDATED NET WORTH" means, at a particular date, for any Person, (a)
all amounts which would be included under shareholders' equity for such Person
and its consolidated Subsidiaries, calculated without giving effect to any
foreign currency translation adjustments, PLUS (b) [the sum of (i)] the
liabilities recognized relating to the Dispute Resolution Costs to the extent
permitted under SECTION 1 of the Disclosure Letter but only to the extent such
amounts exceed the projected amounts therefor contained in the projections
attached as EXHIBIT A to the Disclosure Letter, and (ii) Restructuring Expenses
incurred during the period from December 1, 1997 through September 30, 1999 in a
maximum amount not to exceed $7,750,000 to the extent such amount exceeds
$6,420,000 and to the extent deducted in computing Net Income, in each case
determined in accordance with Agreement Accounting Principles
"EBITDA" means, for any period, on a consolidated basis for the Borrower
and its Subsidiaries, the sum of the amounts for such period, WITHOUT
DUPLICATION, of (i) Net Income, PLUS (ii) Interest Expense, PLUS (iii) charges
against income for foreign, federal, state and local taxes to the extent
deducted in computing Net Income, PLUS (iv) depreciation expense to the extent
deducted in computing Net Income, PLUS (v) amortization expense, including,
without limitation, amortization of goodwill and other intangible assets to the
extent deducted in computing Net Income, PLUS (vi) other non-cash charges
classified as long-term deferrals in accordance with Agreement Accounting
Principles to the extent deducted in computing Net Income, PLUS (vii) other
extraordinary non-cash charges to the extent deducted in computing Net Income
MINUS (viii) extraordinary non-cash gains to the extent included in computing
Net Income, PLUS (ix) Restructuring Expenses incurred during the period from
December 1, 1997 through September 30, 1999 in a maximum amount not to exceed
$7,750,000 to the extent deducted in computing Net Income, PLUS (x) the non-cash
charges relating to the Dispute Resolution Costs, to the extent permitted under
the terms of SECTION 1 of the Disclosure Letter and to the extent deducted in
computing Net Income.
"INTEREST EXPENSE" means, for any period, the total interest expense of the
Borrower and its consolidated Subsidiaries, whether paid or accrued (including
the interest component of Capitalized Leases, commitment and letter of credit
fees), but excluding interest expense not payable in cash (including
amortization of discount), all as determined in conformity with Agreement
Accounting Principles.
71
"NET INCOME" means, for any period, the net earnings (or loss) after taxes
of the Borrower and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with Agreement
Accounting Principles.
"RESTRUCTURING EXPENSES" means the expenses of the types and in the amounts
not to exceed those set forth in EXHIBIT E to the Disclosure Letter.
(B) MINIMUM CUMULATIVE EBITDA. Borrower shall maintain EBITDA, as
determined as of the last day of each fiscal quarter of the Borrower set forth
below for the cumulative period beginning December 1, 1997 and ending on such
date, of at least the amount set forth below opposite the date in which such
quarter ends:
Applicable Period Minimum EBITDA
------------------------------------------------------------------------------
December 1, 1997 through February 28, 1998 ($1,500,000)
------------------------------------------------------------------------------
December 1, 1997 through May 31, 1998 $0
------------------------------------------------------------------------------
December 1, 1997 through August 31, 1998 $2,000,000
------------------------------------------------------------------------------
December 1, 1997 through November 31, 1998 $8,500,000
------------------------------------------------------------------------------
December 1, 1997 through February 28, 1999 $9,000,000
------------------------------------------------------------------------------
December 1, 1997 through May 31, 1999 $11,000,000
------------------------------------------------------------------------------
December 1, 1997 through August 31, 1999 $14,500,000
(C) MINIMUM BORROWER CONSOLIDATED NET WORTH. The Borrower shall not permit
the Consolidated Net Worth of the Borrower and its consolidated Subsidiaries at
any time during any of the applicable months set forth below to be less than the
amount set forth opposite such month below:
------------------------------------------------------------------------------
Applicable Month Minimum Consolidated Net Worth
------------------------------------------------------------------------------
February 1998 $27,100,000
------------------------------------------------------------------------------
March 1998 $25,600,000
------------------------------------------------------------------------------
April 1998 $23,000,000
------------------------------------------------------------------------------
May 1998 $21,800,000
------------------------------------------------------------------------------
June 1998 $21,300,000
------------------------------------------------------------------------------
July 1998 $21,100,000
------------------------------------------------------------------------------
72
------------------------------------------------------------------------------
Applicable Month Minimum Consolidated Net Worth
------------------------------------------------------------------------------
August 1998 $21,300,000
------------------------------------------------------------------------------
September 1998 $20,975,000
------------------------------------------------------------------------------
October 1998 $21,930,000
------------------------------------------------------------------------------
November 1998 $23,750,000
------------------------------------------------------------------------------
December 1998 $22,800,000
------------------------------------------------------------------------------
January 1999 $22,600,000
------------------------------------------------------------------------------
February 1999 $22,500,000
------------------------------------------------------------------------------
March 1999 $22,300,000
------------------------------------------------------------------------------
April 1999 $22,800,000
------------------------------------------------------------------------------
May 1999 $23,500,000
------------------------------------------------------------------------------
June 1999 $23,850,000
------------------------------------------------------------------------------
July 1999 $24,500,000
------------------------------------------------------------------------------
August 1999 $25,500,000
------------------------------------------------------------------------------
September 1999 $26,900,000
------------------------------------------------------------------------------
(D) MINIMUM XXXXX X.X. NET WORTH. The Borrower shall not permit the
Consolidated Net Worth of Xxxxx X.X. and its consolidated Subsidiaries at any
time during any of the applicable period set forth below to be less than the
amount set forth opposite such period below:
------------------------------------------------------------------------------
Applicable Months Minimum Consolidated Net Worth
------------------------------------------------------------------------------
February 1, 1998 through November 30, 1998 $12,750,000
------------------------------------------------------------------------------
December 1, 1998 and thereafter $14,150,000
------------------------------------------------------------------------------
(E) CAPITAL EXPENDITURES. The Borrower will not, nor will it permit SEI
to, expend, or be committed to expend, for Capital Expenditures at any time from
the date hereof through the Existing Loan Termination Date on a cumulative basis
in excess of $1,000,000.
7.5 SALE INITIATIVE. The Borrower has prior to the Effective Date engaged
Xxxxxxx Xxxxx & Co., L.L.P. ("XXXXX") to pursue a sale of the Borrower and its
Subsidiaries (the "SALE
------------------------------------------------------------------------------
73
INITIATIVE"). A true and accurate copy of the engagement letter between the
Borrower and Xxxxx is attached as EXHIBIT C to the Disclosure Letter. In
connection therewith:
(a) The Borrower shall at all times hereafter maintain the Xxxxx
engagement (or an engagement with another reputable investment bank reasonably
acceptable to the Required Creditors (in which event all references herein to
Xxxxx shall be to such replacement investment bank)) as an active engagement to
pursue a sale of the Borrower and its Subsidiaries.
(b) The Borrower and Xxxxx shall, prior to April 6, 1998, prepare a
customary offering memorandum (a copy of which shall be promptly provided to the
Lenders and the Agent on or prior to such date) and a list of potential buyers
(to be provided to the Borrower only) to be contacted in connection with the
Sale Initiative.
(c) Subject to the fiduciary duties of the Board of Directors of the
Borrower, the Borrower and Xxxxx shall conduct negotiations with potential
buyers and bidders selected for definitive purchase agreements and closing to
occur in an expedited manner.
(d) The Borrower and Xxxxx shall provide periodic reporting to the Agent
and the Lenders on a frequency and in a form and scope mutually acceptable to
the Borrower, Xxxxx, the Lenders and the Agent setting forth the efforts Since
the last periodic report to accomplish the Sale Initiative. Without limiting
the foregoing, the Borrower and Xxxxx shall be required to promptly advise the
Agent, the Lenders and the Noteholder of any material delay from the time line
attached as EXHIBIT D to the Disclosure Letter and an explanation of the reasons
for such delay. Notwithstanding any of the foregoing, neither the Borrower nor
Xxxxx shall be required to disclose the identities of any potential purchasers
until the Board of Directors of the Borrower shall have approved execution of a
letter of intent or understanding or a definitive purchase agreement with such
potential purchaser. Without otherwise limiting the provisions of SECTION 13.4,
Confidential Information received by the Agent and the Lenders in connection
herewith shall be governed by the confidentiality terms set forth in SECTION
13.4 below.
(e) On or prior to November 30, 1998, (i) the Board of Directors of the
Borrower shall have approved a sale or series of sale transactions in connection
with the Sale Initiative, the aggregate net cash proceeds of which sale or
series of sale transactions shall be sufficient to repay all of the Secured
Obligations (calculated with respect to the Senior Notes at the estimated
redemption price) in full and (ii) shall have delivered to the Agent and the
Lenders a copy of the binding letter of intent, commitment, purchase agreement
or similar document or agreement with respect to such transaction or series of
transactions.
(f) Borrower and its Subsidiaries and their respective Board of Directors
and officers shall at all times fully cooperate with the process identified by
Xxxxx to accomplish the Sale Initiative in an effort to consummate the Sale
Initiative in an expeditious manner and on a basis consistent with the fiduciary
duties of the Board of Directors of the Borrower.
(g) Upon request by the Borrower in connection with the Sale Initiative,
the Required Creditors may consent (which consent shall not be unreasonably
withheld or delayed) to allow the
74
Borrower to enter into one or more transactions involving the sale, transfer or
other disposition of a Subsidiary of the Borrower, or a business line of the
Borrower or to make some other material asset disposition or transaction in
connection with the Sale Initiative which is not expressly permitted under
CLAUSES (i) through (viii) of SECTION 7.3(B); PROVIDED that (i) each of the
Lenders have been provided, sufficiently in advance of such transaction in order
to make a reasonably informed decision in respect thereof, with such information
regarding the transaction and the impact thereof on the Borrower and the Sale
Initiative as shall be reasonably requested by the Lenders in connection
therewith, (ii) the Net Cash Proceeds thereof are applied to the repayment of
the Secured Obligations in accordance with SECTION 2.5. Any of the Lenders will
have the right to require, as a condition to its consent to such transaction,
that the Borrower obtain from Xxxxx a fairness opinion reasonably acceptable to
the Required Lenders with respect to such transaction evidencing the fairness of
such transaction to the Borrower's shareholders, a copy of which shall be
provided to each of the Lenders. In addition, it is expressly understood and
agreed that any Lender may withhold its consent to any such transaction if (i)
any portion of the consideration (other than assumption of liabilities (other
than the Secured Obligations which may not be assumed)) for such transaction is
non-cash or (ii) the transaction involves the Borrower or a Subsidiary on the
one hand and an Affiliate of the Borrower or a Subsidiary on the other.
ARTICLE VIII: DEFAULTS
8.1 DEFAULTS. Each of the following occurrences shall constitute a
Default under this Agreement:
(A) FAILURE TO MAKE PAYMENTS WHEN DUE. The Borrower shall (i) fail to pay
when due any Reimbursement Obligation or any of the Obligations consisting of
principal with respect to the Loans or (ii) shall fail to pay within five (5)
Business Days of the date when due any of the other Obligations under this
Agreement or the other Loan Documents.
(B) BREACH OF CERTAIN COVENANTS. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower under:
(i) SECTIONS 7.2(F), SECTION 7.2(J), 7.2(K)(i), or 7.2(K)(iii) and
such failure shall continue unremedied for ten (10) Business Days;
(ii) SECTION 7.1(I) and such failure shall continue unremedied for
two (2) Business Days; or
(iii) SECTIONS 7.3, 7.4, or 7.5 .
(C) BREACH OF REPRESENTATION OR WARRANTY. Any representation or warranty
made or deemed made by the Borrower to the Agent or any Lender herein or by the
Borrower or any of its Subsidiaries in any of the other Loan Documents or in any
statement or certificate at any time given by any such Person pursuant to any of
the Loan Documents shall be false or misleading in any material respect on the
date as of which made (or deemed made).
75
(D) OTHER DEFAULTS. The Borrower shall default in the performance of or
compliance with any term contained in this Agreement (other than as covered by
PARAGRAPHS (A), (B) or (C) of this SECTION 8.1), or the Borrower or any of its
Subsidiaries shall default in the performance of or compliance with any term
contained in any of the other Loan Documents, and such default shall continue
for thirty (30) days after the earlier of (1) written notice thereof has been
given to the Borrower; and (2) any member of senior executive management of the
Borrower has "Knowledge" (as hereinafter defined) of such Default. For purposes
hereof and CLAUSE (Q) below, "Knowledge" means with respect to any Person, the
actual knowledge, after due inquiry, of any fact or circumstance or any fact or
circumstance of which such Person should have known, with respect to any of the
(A) chairman of the board of directors, chief executive officer, chief financial
officer, chief operating officer, executive vice president for operations,
treasurer and/or controller of the Borrower (or persons performing the functions
typically performed by persons with such titles) and (B) the senior corporate
executive officers and chairman of the board of each Material Subsidiary of the
Borrower; provided, however, with respect to Requirements of Law and other
matters regulated by any Governmental Authority the list of Persons in CLAUSES
(A) and (B) shall include the persons primarily responsible for monitoring and
ensuring compliance with such Requirements of Law and other regulatory matters
or Persons succeeding to their respective duties as employees of such Person as
of the Closing Date.
(E) DEFAULT AS TO OTHER INDEBTEDNESS.
(i) SENIOR NOTE DEFAULTS. The Borrower or any of its Subsidiaries
shall fail to pay any part of the principal of, the premium, if any, or the
interest on, or any other payment of money due under the Senior Notes
beyond any period of grace provided with respect thereto; or any breach,
default or event of default shall occur, or any other condition shall exist
under any instrument, agreement or indenture pertaining to the Senior
Notes, beyond any period of grace, if any, provided with respect thereto,
if the effect thereof is to cause an acceleration, mandatory redemption, a
requirement that the Borrower offer to purchase the Indebtedness evidenced
by the Senior Notes or other required repurchase of such Indebtedness, or
permit the Noteholder to accelerate the maturity of any such Indebtedness
or require a redemption or other repurchase of such Indebtedness; or any
such Indebtedness evidenced by the Senior Notes shall be otherwise declared
to be due and payable (by acceleration or otherwise) or required to be
prepaid, redeemed or otherwise repurchased by the Borrower or any of its
Subsidiaries (other than by a regularly scheduled required prepayment and
other than any prepayment required under Section 3.1(a) of the Master Note
Agreement) prior to the stated maturity thereof.
(ii) OTHER INDEBTEDNESS. The Borrower or any of its Subsidiaries
shall fail to pay any part of the principal of, the premium, if any, or the
interest on, or any other payment of money due under any Indebtedness
(other than Indebtedness hereunder), beyond any period of grace provided
with respect thereto, which individually or together with other such
Indebtedness as to which any such failure exists has an aggregate
outstanding principal amount in excess of $1,000,000; or any breach,
default or event of default shall occur, or any other condition shall exist
under any instrument, agreement or indenture pertaining to any such
Indebtedness having such aggregate outstanding principal amount,
76
beyond any period of grace, if any, provided with respect thereto, if the
effect thereof is to cause an acceleration, mandatory redemption, a
requirement that the Borrower offer to purchase such Indebtedness or other
required repurchase of such Indebtedness, or permit the holder(s) of such
Indebtedness to accelerate the maturity of any such Indebtedness or require
a redemption or other repurchase of such Indebtedness; or any such
Indebtedness shall be otherwise declared to be due and payable (by
acceleration or otherwise) or required to be prepaid, redeemed or otherwise
repurchased by the Borrower or any of its Subsidiaries (other than by a
regularly scheduled required prepayment) prior to the stated maturity
thereof.
(F) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) An involuntary case shall be commenced against the Borrower or
any of the Borrower's Material Subsidiaries and the petition shall not be
dismissed, stayed, bonded or discharged within sixty (60) days after
commencement of the case; or a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of the Borrower or any
of the Borrower's Material Subsidiaries in an involuntary case, under any
applicable bankruptcy, insolvency or other similar law now or hereinafter
in effect; or any other similar relief shall be granted under any
applicable federal, state, local or foreign law.
(ii) A decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over the Borrower or any
of the Borrower's Material Subsidiaries or over all or a substantial part
of the property of the Borrower or any of the Borrower's Material
Subsidiaries shall be entered; or an interim receiver, trustee or other
custodian of the Borrower or any of the Borrower's Material Subsidiaries or
of all or a substantial part of the property of the Borrower or any of the
Borrower's Material Subsidiaries shall be appointed or a warrant of
attachment, execution or similar process against any substantial part of
the property of the Borrower or any of the Borrower's Material Subsidiaries
shall be issued and any such event shall not be stayed, dismissed, bonded
or discharged within sixty (60) days after entry, appointment or issuance.
(G) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. The Borrower or
any of the Borrower's Material Subsidiaries shall (i) commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (ii) consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, (iii) consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property, (iv) make any assignment for the benefit of creditors or
(v) take any corporate action to authorize any of the foregoing.
(H) JUDGMENTS AND ATTACHMENTS. Any money judgment(s) (other than a money
judgment covered by insurance as to which the insurance company has not
disclaimed or reserved the right to disclaim coverage), writ or warrant of
attachment, or similar process against the Borrower or any of its Material
Subsidiaries or any of their respective assets, involving in any single case or
in
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the aggregate an amount in excess of (i) $1,000,000 with respect to matters
other than the Disclosed Disputes or (ii) with respect to the Disclosed
Disputes, the amounts set forth in the SECTION 1(b) of the Disclosure Letter, is
or are entered and shall remain undischarged, unvacated, unbonded or unstayed
for a period of sixty (60) days or in any event later than fifteen (15) days
prior to the date of any proposed sale thereunder.
(I) DISSOLUTION. Any order, judgment or decree shall be entered against
the Borrower decreeing its involuntary dissolution and such order shall remain
undischarged and unstayed for a period in excess of sixty (60) days; or the
Borrower shall otherwise dissolve or cease to exist except as specifically
permitted by this Agreement.
(J) LOAN DOCUMENTS; FAILURE OF SECURITY. At any time, for any reason, (i)
any Loan Document as a whole that materially affects the ability of the Agent,
the Collateral Agent or any of the Lenders to enforce the Obligations or enforce
their rights against the Collateral ceases to be in full force and effect and
Borrower fails to cure any defect within ten (10) Business Days of written
notice thereof by Agent to Borrower; (ii) the Borrower or any of the Borrower's
Material Subsidiaries which is a party to any Loan Document seeks to repudiate
its obligations under any Loan Document; (iii) Liens with respect to any
material portion of the Collateral intended to be created by the Collateral
Documents are invalid or unperfected other than solely as a result of an action
or failure to act on the part of the Collateral Agent, (iv) the Borrower or any
such Subsidiary seeks to render any Liens on the Collateral, invalid and
unperfected, or (v) Liens on any material portion of the Collateral shall not
have the priority contemplated by this Agreement or the Loan Documents other
than solely as a result of an action or failure to act on the part of the
Collateral Agent. When the phrase "priority contemplated by this Agreement or
the Loan Documents" is used, it is meant by the parties to provide that (a) any
failure on the part of the Borrower or SEI to obtain lien waiver agreements from
landlords, bailees, consignees, or warehousemen with respect to such third
parties as are in existence as of the date hereof shall not constitute a Default
under this clause (J) and (b) so long as the Borrower and SEI are in compliance
with any baskets provided in this Agreement and the other Loan Documents it
shall not constitute a Default under this clause (J).
(K) TERMINATION EVENT. Any Termination Event occurs which the Required
Lenders believe is reasonably likely to subject the Borrower to liability in
excess of $1,000,000.
(L) WAIVER OF MINIMUM FUNDING STANDARD. If the plan administrator of any
Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and the Agent reasonably
believes the substantial business hardship upon which the application for the
waiver is based could reasonably be expected to subject either the Borrower or
any Controlled Group member to liability in excess of $1,000,000 .
(M) CHANGE OF CONTROL. A Change of Control shall occur.
(N) HEDGING AGREEMENTS. Nonpayment by the Borrower or any Subsidiary of
the Borrower of any obligation under any Hedging Agreement or the declared
default by the
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Borrower or any Subsidiary of the Borrower of any material term, provision or
condition contained in any such Hedging Agreement.
(O) ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE 6.18, the
Borrower or any of its Material Subsidiaries shall be the subject of any
proceeding or investigation pertaining to (i) the Release by the Borrower or any
of its Material Subsidiaries of any Contaminant into the environment, (ii) the
liability of the Borrower or any of its Material Subsidiaries arising from the
Release by any other Person of any Contaminant into the environment, or (iii)
any violation of any Environmental, Health or Safety Requirements of Law which
by the Borrower or any of its Material Subsidiaries, which, in any case, has or
is reasonably likely to subject the Borrower to liability in excess of
$5,000,000.
(P) GUARANTOR REVOCATION. Any guarantor of the Obligations shall
terminate or revoke any of its obligations under the applicable guarantee
agreement or breach any of the material terms of such guarantee agreement.
(Q) TERMINATION OF ADVISORS' ENGAGEMENTS. The engagement by the Borrower
of Xxxxx to sell the company shall have been terminated by any Person without
the prompt engagement of a replacement investment bank reasonably acceptable to
the Agent and the Lenders or the engagement by the Borrower of Xxxxx-Xxxxxxxx
without the prompt engagement of another reputable financial consultant
reasonably acceptable to the Agent and the Lenders shall have occurred.
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with SECTION 9.3.
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES
9.1 TERMINATION OF COMMITMENTS; ACCELERATION. If any Default described in
SECTION 8.1(F) or 8.1(G) occurs with respect to the Borrower, the obligations of
the Lenders to make Loans hereunder and the obligation of any Issuing Banks to
issue Letters of Credit hereunder shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Agent or any Lender. If any other Default occurs, the
Required Lenders may terminate or suspend the obligations of the Lenders to make
Loans hereunder and the obligation of the Issuing Banks to issue Letters of
Credit hereunder, or declare the Obligations to be due and payable, or both,
whereupon the Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which the Borrower
expressly waives.
9.2 DEFAULTING LENDER. In the event that any Lender fails to fund its Pro
Rata Share of any Supplemental Advance requested or deemed requested by the
Borrower, which such Lender is obligated to fund under the terms of this
Agreement (the funded portion of such Supplemental Advance being hereinafter
referred to as a "NON PRO RATA LOAN"), until the earlier of such
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Lender's cure of such failure and the termination of the Supplemental Loan
Commitments, the proceeds of all amounts thereafter repaid to the Agent by the
Borrower and otherwise required to be applied to such Lender's share of all
other Obligations pursuant to the terms of this Agreement shall be advanced to
the Borrower by the Agent on behalf of such Lender to cure, in full or in part,
such failure by such Lender, but shall nevertheless be deemed to have been paid
to such Lender in satisfaction of such other Obligations. Notwithstanding
anything in this Agreement to the contrary:
(i) the foregoing provisions of this SECTION 9.2 shall apply
only with respect to the proceeds of payments of Obligations;
(ii) any such Lender shall be deemed to have cured its failure
to fund its Pro Rata Share of any Supplemental Advance at such time as
an amount equal to such Lender's original Pro Rata Share of the
requested principal portion of such Supplemental Advance is fully
funded to the Borrower, whether made by such Lender itself or by
operation of the terms of this SECTION 9.2, and whether or not the Non
Pro Rata Loan with respect thereto has been repaid, converted or
continued;
(iii) amounts advanced to the Borrower to cure, in full or in
part, any such Lender's failure to fund its Pro Rata Share of any
Supplemental Advance ("CURE LOANS") shall bear interest at the rate
applicable to the Supplemental Loans and for all other purposes of
this Agreement shall be treated as if they were Supplemental Loans;
(iv) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to
its desired application, all repayments of principal of the
Obligations shall be applied FIRST, ratably to all Non Pro Rata Loans,
SECOND, ratably to Supplemental other than those constituting Non Pro
Rata Loans or Cure Loans and, THIRD, ratably to Cure Loans;
(v) for so long as and until the earlier of any such Lender's
cure of the failure to fund its Pro Rata Share of any Supplemental
Advance and the termination of the Supplemental Loan Commitments, the
term "Required Lenders" for purposes of this Agreement shall mean
Lenders (excluding all Lenders whose failure to fund their respective
Pro Rata Shares of such Supplemental Advance have not been so cured)
whose Pro Rata Shares represent greater than fifty percent (50%) of
the aggregate Pro Rata Shares of such Lenders; and
(vi) for so long as and until any such Lender's failure to fund
its Pro Rata Share of any Supplemental Advance is cured in accordance
with SECTION 9.2(ii), (A) such Lender shall not be entitled to, and
Borrower shall not be obligated to pay, any commitment fees with
respect to its Supplemental Loan Commitment and (B) such Lender shall
not be entitled to any letter of credit fees.
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9.3 AMENDMENTS. Any term, covenant, agreement or condition of this
Agreement or of the Notes relating to administrative or other miscellaneous,
non-remunerative matters particular to this Agreement (as to which the
Noteholder could not reasonably be expected to wish to request a similar
amendment or waiver under the Master Note Agreement) may, with the consent of
the Borrower, be amended or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), by one
or more substantially concurrent written instruments signed by the Required
Lenders; PROVIDED that only with the consent of the Required Creditors and the
Borrower, and only if the Borrower shall concurrently enter into a substantially
similar amendment or waiver with respect to the Master Note Agreement, a waiver
or amendment may be affected for the purpose of (1) adding terms or provisions
favorable to the Lenders under this Agreement and the Noteholder under the
Master Note Agreement or (2) (A) modifying any affirmative covenants, negative
covenants or financial covenants set forth in Article VII of this Agreement,
Article 7 of the Master Note Agreement or in the Collateral Documents (so long
as such modification does not involve one of the Unanimous Voting Matters), (B)
modifying any of the representations and warranties contained in this Agreement,
the Master Note Agreement or any of the Collateral Documents (so long as such
modification does not involve one of the Unanimous Voting Matters), (C) waiving
any Default under this Agreement or any "Event of Default" under and as defined
in the Master Note Agreement relating solely to such affirmative covenants,
negative covenants, financial covenants, representations or warranties or (D)
waiving any other Default under this Agreement or any "Event of Default" under
and as defined in the Master Note Agreement (so long as such Default or Event of
Default does not involve one of the Unanimous Voting Matters); PROVIDED,
FURTHER, HOWEVER, in no event shall any such amendments or waivers of this
Agreement or the Master Note Agreement including, without limitation, the
Disclosure Letter provisions applicable thereto, involving any of the items in
clauses (i) through (xiii) below be effective without the consent of each Lender
or, if applicable, the Noteholder affected thereby:
(i) change any maturity date or any other date fixed for any payment
of principal of, or interest on, the Secured Obligations or any fees or
other amounts payable to such Lender or Noteholder;
(ii) reduce the principal amount of any Secured Obligations or the
rate of interest thereon or any fees, prepayment charges or other amounts
payable to such Lender or the Noteholder;
(iii) change the definition of "Required Lenders", "Required
Creditors" or "Majority Holders" (as defined in the Master Note Agreement)
or any other term used to designate the applicable percentage in this
Agreement, the Master Note Agreement or any Collateral Documents, as
applicable to act on specified matters;
(iv) increase the amount of the Supplemental Loan Commitment of any
Lender or otherwise increase the principal amount which may be borrowed
under this Agreement (other than as a result of a change of the Borrowing
Base or the components thereof which is not covered by the terms of clause
(ix) below);
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(v) permit the Borrower to assign its rights with respect to the
Secured Obligations;
(vi) amend this SECTION 9.3, the provisions of SECTION 30 of the
Collateral Sharing Agreement or SECTION 15.2 of the Master Note Agreement;
(vii) other than in connection with a transaction permitted by the
terms of the Credit Agreement (including, without limitation SECTION 7.3(B)
or SECTION 7.5(g)) and the Master Note Agreement, release any Collateral.
(viii) change the definition of "Make Whole Premium" (as defined in
the Master Note Agreement) or "Priority Obligations", "Ratable Obligations"
or "Secured Obligations" (each as defined in the Collateral Sharing
Agreement) or change the order of priority of payments as among the
Priority Obligations, the Ratable Obligations and the Make Whole Premium,
if any, with respect to the Senior Notes or among the Ratable Obligations;
(ix) change (a) the dollar amount set forth in clause (iii) of the
definition of Borrowing Base, (b) either of the percentages used in
clauses (i) or (ii) in determining the Borrowing Base, (c) the definition
of the Maximum Amount, or (d) the types of assets which are included in the
Borrowing Base (i.e., expand the Borrowing Base to permit any assets other
than Receivables and Inventory to have loan value); provided this clause
(ix)(d) shall not apply to the eligibility criteria applied to Receivables
and Inventory.
(x) amend SECTION 7.3(F)(ii), SECTION 7.3(N) or the terms of any of
CLAUSES (a), (b) or (e) of SECTION 7.5.
(xi) amend any indemnity provision of the Credit Agreement, Loan
Documents, Master Note Agreement or other related documents, instruments or
agreements.
(xii) amend SECTION 6.4 or 6.10 of this Agreement or consent to any
waiver of any Default as a result of a material misrepresentation under
such Sections or any "Event of Default" under the Master Note Agreement as
a result of a material misrepresentation under SECTION 2.4 or SECTION 2.5
of the Master Note Agreement; or
(xiii) waive any Default occurring under CLAUSES (F), (G) or (I) of
SECTION 8.1 of this Agreement or CLAUSES (f), (g), or (i) of SECTION 12.1.
No amendment of any provision of this Agreement relating to (a) the Agent shall
be effective without the written consent of the Agent or (b) the Issuing Banks
shall be effective without the written consent of the Issuing Banks. The Agent
may waive payment of the fee required under SECTION 13.3(B) without obtaining
the consent of any of the Lenders.
9.4 PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any
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Default or an acquiescence therein, and the making of a Loan or the issuance of
a Letter of Credit notwithstanding the existence of a Default or the inability
of the Borrower to satisfy the conditions precedent to such Loan or issuance of
such Letter of Credit shall not constitute any waiver or acquiescence. Any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Required Creditors
required pursuant to SECTION 9.3, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent and the
Lenders until the Obligations have been paid in full.
ARTICLE X: GENERAL PROVISIONS
10.1 SURVIVAL OF REPRESENTATIONS. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.
10.2 GOVERNMENTAL REGULATION. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 PERFORMANCE OF OBLIGATIONS. The Borrower agrees that the Agent or
Collateral Agent may, but shall have no obligation to (i) at any time, pay or
discharge taxes, liens, security interests or other encumbrances levied or
placed on or threatened against any Collateral and (ii) after the occurrence
and during the continuance of a Default make any other payment or perform any
act required of the Borrower or any of its Subsidiaries under any Loan
Document or take any other action which the Agent in its discretion deems
necessary or desirable to protect or preserve the Collateral, including,
without limitation, any action to (y) effect any repairs or obtain any
insurance called for by the terms of any of the Loan Documents and to pay all
or any part of the premiums therefor and the costs thereof and (z) pay any
rents payable by the Borrower which are more than 30 days past due, or as to
which the landlord has given notice of termination, under any lease. The
Agent shall use its reasonable efforts to give the Borrower notice of any
action taken under this SECTION 10.3 prior to the taking of such action or
promptly thereafter provided the failure to give such notice shall not affect
the Borrower's obligations in respect thereof. The Agent shall use its
reasonable efforts to give the Lenders notice of any action taken under this
SECTION 10.3 prior to the taking of such action or promptly thereafter and
shall obtain the consent of the Required Lenders to any such action which
involves amounts in excess of $50,000; provided the failure to give such
notice shall not affect the Lenders' obligations in respect thereof for
amounts under $50,000 for which the Lenders have not received such notice or
shall not have provided consent. The Borrower agrees to pay the Agent, upon
demand, the principal amount of all funds advanced by the Agent (in its
capacity as Agent or Collateral Agent) under this SECTION 10.3, together with
interest thereon at the rate from time to time applicable to the Supplemental
Loans from the date of such advance until the outstanding principal balance
thereof is paid in full. If the Borrower fails to make payment in respect of
any such advance under this SECTION 10.3
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within three (3) Business Days after the date the Borrower receives written
demand therefor from the Agent, the Agent shall promptly notify each Lender
and each Lender agrees, subject to the third sentence of this SECTION 10.3,
that it shall thereupon make available to the Agent, in Dollars in
immediately available funds, the amount equal to such Lender's Pro Rata Share
of such advance. If such funds are not made available to the Agent by such
Lender within one (1) Business Day after the Agent's demand therefor, the
Agent will be entitled to recover any such amount from such Lender together
with interest thereon at the Federal Funds Effective Rate for each day during
the period commencing on the date of such demand and ending on the date such
amount is received. The failure of any Lender to make available to the Agent
its Pro Rata Share of any such unreimbursed advance under this SECTION 10.3
shall neither relieve any other Lender of its obligation hereunder to make
available to the Agent such other Lender's Pro Rata Share of such advance on
the date such payment is to be made nor increase the obligation of any other
Lender to make such payment to the Agent. All outstanding principal of, and
interest on, advances made under this SECTION 10.3 shall constitute
Obligations secured by the Collateral until paid in full by the Borrower.
10.4 HEADINGS. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
10.5 ENTIRE AGREEMENT. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agent and the Lenders and supersede all
prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof.
10.6 SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to which
the Agent or Collateral Agent is authorized to act as such). The failure of any
Lender to perform any of its obligations hereunder shall not relieve any other
Lender from any of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns.
10.7 EXPENSES; INDEMNIFICATION.
(A) EXPENSES. The Borrower shall reimburse the Agent, Collateral Agent,
the Arranger and the Lenders for any reasonable costs, internal charges and out-
of-pocket expenses (including reasonable attorneys' and paralegals' fees and
time charges of attorneys and paralegals, which attorneys and paralegals may be
employees of the Agent, Collateral Agent, Arranger or Lender) paid or incurred
by the Agent, Collateral Agent, Arranger or the Lenders in connection with the
preparation, negotiation, execution and delivery of the Loan Documents. The
Borrower shall reimburse the Agent, Collateral Agent and the Arranger (but not
the Lenders) for any reasonable costs, internal charges and out-of-pocket
expenses (including reasonable attorneys' and paralegals' fee and time charges
of attorneys and paralegals fees, which attorneys and paralegal's may be the
employees of the Agent, Collateral Agent or Arranger) paid or incurred by the
Agent, Collateral
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Agent or Arranger in connection with the syndication, review, amendment,
modification, and administration of the Loan Documents. The Borrower also
agrees to reimburse the Agent, Collateral Agent, the Arranger and the Lenders
for any reasonable costs, internal charges and out-of-pocket expenses
(including reasonable attorneys' and paralegals' fees and time charges of
attorneys and paralegals for the Agent, the Collateral Agent, the Arranger
and the Lenders, which attorneys and paralegals may be employees of the
Agent, Collateral Agent, the Arranger or the Lenders) paid or incurred by the
Agent, Collateral Agent, the Arranger or any Lender in connection with
matters relating to the Sale Initiative, in connection with any restructuring
or workout relating to this Agreement and the Obligations, and in connection
with the collection of the Obligations and enforcement of the Loan Documents.
In addition to expenses set forth above, the Borrower agrees to reimburse
the Agent or Collateral Agent, promptly after request therefor, for each
audit, or other business analysis performed by or for the benefit of the
Lenders in connection with this Agreement or the other Loan Documents in an
amount equal to the Agent's or Collateral Agent's then reasonable customary
charges for each person employed to perform such audit or analysis (which
charges may be based upon internal charges if employees of the Agent or its
Affiliates are utilized or which may be based upon the amount charges to the
Agent or Collateral Agent if an third party performs the work) (provided, the
Borrower shall not be required to reimburse the Agent in an amount in excess
of $25,000 in connection with reviews conducted during any consecutive
twelve-month period which are conducted at a time when no Default has
occurred under the Credit Agreement), PLUS all reasonable costs and expenses
(including without limitation, reasonable travel expenses) incurred by the
Agent or Collateral Agent (or their agents) in the performance of such audit
or analysis. The Agent, Collateral Agent, Arranger or Lender requesting
reimbursement under this SECTION 10.7(A) shall provide the Borrower (with a
copy to the Agent) with a detailed statement of all reimbursements requested
under this SECTION 10.7(A).
(B) INDEMNITY. The Borrower further agrees to defend, protect, indemnify,
and hold harmless the Agent, the Collateral Agent, the Arranger and each and all
of the Lenders and each of their respective Affiliates, and each of such
Agent's, Collateral Agent's, Arranger's, Lender's, or Affiliate's respective
officers, directors, employees, attorneys and agents (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth in ARTICLE V) (collectively, the
"INDEMNITEES") from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, reasonable costs and
expenses of any kind or nature whatsoever (including, without limitation, the
reasonable fees and disbursements of counsel for such Indemnitees in connection
with any investigative, administrative or judicial proceeding, whether or not
such Indemnitees shall be designated a party thereto), imposed on, incurred by,
or asserted against such Indemnitees in any manner relating to or arising out
of:
(i) this Agreement, the other Loan Documents, or any act, event or
transaction related or attendant thereto or to the making of the Loans, and
the issuance of and participation in Letters of Credit hereunder, the
management of such Loans or Letters of Credit, the use or intended use of
the proceeds of the Loans or Letters of Credit hereunder, or any of the
other transactions contemplated by the Loan Documents; or
85
(ii) any liabilities, obligations, responsibilities, losses, damages,
personal injury, death, punitive damages, economic damages, consequential
damages, treble damages, intentional, willful or wanton injury, damage or
threat to the environment, natural resources or public health or welfare,
costs and expenses (including, without limitation, reasonable attorney,
expert and consulting fees and costs of investigation, feasibility or
remedial action studies), fines, penalties and monetary sanctions,
interest, direct or indirect, known or unknown, absolute or contingent,
past, present or future relating to violation of any Environmental, Health
or Safety Requirements of Law arising from or in connection with the past,
present or future operations of the Borrower, its Subsidiaries or any of
their respective predecessors in interest, or, the past, present or future
environmental, health or safety condition of any respective property of the
Borrower or its Subsidiaries, the presence of asbestos-containing materials
at any respective property of the Borrower or its Subsidiaries or the
Release or threatened Release of any Contaminant into the environment
(collectively, the "INDEMNIFIED MATTERS");
PROVIDED, HOWEVER, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters arising from and to the extent
caused by or resulting from the willful misconduct or Gross Negligence of such
Indemnitee or breach of contract by such Indemnitee with respect to the Loan
Documents, in each case, as determined by the final non-appealed judgment of a
court of competent jurisdiction. If the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrower shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable law, to the
payment and satisfaction of all Indemnified Matters incurred by the Indemnitees.
(C) WAIVER OF CERTAIN CLAIMS; SETTLEMENT OF CLAIMS. The Borrower further
agrees to assert no claim against any of the Indemnitees on any theory of
liability seeking consequential, special, indirect, exemplary or punitive
damages in an amount which exceeds $100,000. No settlement shall be entered
into by the Borrower or any if its Subsidiaries with respect to any claim,
litigation, arbitration or other proceeding relating to or arising out of the
transactions evidenced by this Agreement or the other Loan Documents (whether or
not the Agent or any Lender or any Indemnitee is a party thereto) unless such
settlement releases all Indemnitees from any and all liability with respect
thereto.
(D) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN CONSIDERATION OF
THE AGENT'S AND THE LENDERS' EXECUTION OF THIS AGREEMENT, THE BORROWER, AND BY
ITS REAFFIRMATION, SEI, ON BEHALF OF THEMSELVES AND EACH OF THEIR SUCCESSORS AND
ASSIGNS (COLLECTIVELY, THE "RELEASORS"), DO HEREBY FOREVER RELEASE, DISCHARGE
AND ACQUIT THE AGENT, THE COLLATERAL AGENT, THE ARRANGER, EACH LENDER, EACH
ISSUING BANK AND EACH OF THEIR RESPECTIVE PARENTS, SUBSIDIARIES AND AFFILIATE
CORPORATIONS OR PARTNERSHIPS, AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
PARTNERS, TRUSTEES, SHAREHOLDERS, AGENTS, ATTORNEYS AND EMPLOYEES, AND THEIR
RESPECTIVE SUCCESSORS, HEIRS AND ASSIGNS (COLLECTIVELY, THE "RELEASEES") OF AND
FROM ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, RESPONSIBILITIES, DISPUTES,
CAUSES OF ACTION (WHETHER AT LAW OR EQUITY),
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INDEBTEDNESS AND OBLIGATIONS (COLLECTIVELY, "CLAIMS"), OF EVERY TYPE, KIND,
NATURE, DESCRIPTION OR CHARACTER, INCLUDING, WITHOUT LIMITATION, ANY SO-CALLED
"LENDER LIABILITY" CLAIMS OR DEFENSES, AND IRRESPECTIVE OF HOW, WHY OR BY REASON
OF WHAT FACTS, WHETHER SUCH CLAIMS HAVE HERETOFORE ARISEN, ARE NOW EXISTING OR
HEREAFTER ARISE, OR WHICH COULD, MIGHT, OR MAY BE CLAIMED TO EXIST, OF WHATEVER
KIND OR NAME, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, LIQUIDATED OR
UNLIQUIDATED, EACH AS THOUGH FULLY SET FORTH HEREIN AT LENGTH, WHICH IN ANY WAY
ARISE OUT OF, ARE CONNECTED WITH OR IN ANY WAY RELATE TO ACTIONS OR OMISSIONS
WHICH OCCURRED ON OR PRIOR TO THE DATE HEREOF WITH RESPECT TO THE BORROWER, THE
OBLIGATIONS, THIS AGREEMENT, THE ORIGINAL CREDIT AGREEMENT, ANY LOAN DOCUMENT OR
ANY THIRD PARTIES LIABLE IN WHOLE OR IN PART FOR THE OBLIGATIONS. EACH OF THE
RELEASORS FURTHER AGREES TO INDEMNIFY THE RELEASEES AND HOLD EACH OF THE
RELEASEES HARMLESS FROM AND AGAINST ANY AND ALL SUCH CLAIMS WHICH MIGHT BE
BROUGHT AGAINST ANY OF THE RELEASEES ON BEHALF OF ANY PERSON OR ENTITY,
INCLUDING, WITHOUT LIMITATION, OFFICERS, DIRECTORS, AGENTS, TRUSTEES, CREDITORS
OR SHAREHOLDERS OF ANY OF THE RELEASORS. FOR PURPOSES OF THE RELEASE CONTAINED
IN THIS PARAGRAPH, ANY REFERENCE TO ANY RELEASOR SHALL MEAN AND INCLUDE, AS
APPLICABLE, SUCH PERSON'S OR PERSONS' SUCCESSORS AND ASSIGNS, INCLUDING,
WITHOUT LIMITATION, ANY RECEIVER, TRUSTEE OR DEBTOR-IN-POSSESSION, ACTING ON
BEHALF OF SUCH PARTIES.
(E) SURVIVAL OF AGREEMENTS. The obligations and agreements of the
Borrower under this SECTION 10.7 shall survive the termination of this
Agreement.
10.8 NUMBERS OF DOCUMENTS. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
10.9 ACCOUNTING. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
10.10 SEVERABILITY OF PROVISIONS. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
10.11 NONLIABILITY OF LENDERS. The relationship between the Borrower and
the Lenders, the Agent and Collateral Agent shall be solely that of borrower and
lender. Neither the Agent, the Collateral Agent nor any Lender shall have any
fiduciary responsibilities to the Borrower. Neither the Agent, the Collateral
Agent nor any Lender undertakes any responsibility to the Borrower to review or
inform the Borrower of any matter in connection with any phase of the Borrower's
business or operations.
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10.12 GOVERNING LAW. THE AGENT ACCEPTS THIS AGREEMENT, ON BEHALF OF
ITSELF AND THE LENDERS, AT CHICAGO, ILLINOIS BY ACKNOWLEDGING AND AGREEING TO IT
THERE. ANY DISPUTE BETWEEN THE BORROWER AND THE AGENT OR ANY LENDER ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICTS
OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS.
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF
THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY
BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO WAIVES IN ALL
DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE AGENT, OR ANY
LENDER SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A
COURT IN ANY LOCATION TO ENABLE SUCH PERSON (1) TO OBTAIN PERSONAL JURISDICTION
OVER THE BORROWER, (2) TO REALIZE ON THE COLLATERAL OR (3) IN ORDER TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE BORROWER
AGREES THAT OTHER THAN IN A PROCEEDING BROUGHT PURSUANT TO SUBSECTION (A) ABOVE,
IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY
SUCH PERSON PURSUANT TO THIS SUBSECTION (B) TO REALIZE ON THE COLLATERAL OR ANY
OTHER SECURITY FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
IN FAVOR OF SUCH PERSON. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO
THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING
DESCRIBED IN THIS SUBSECTION (B).
(C) VENUE. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW
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OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(E) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY
HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF
SECTION 10.7 AND THIS SECTION 10.13, WITH ITS COUNSEL.
10.14 NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement and the other Loan
Documents. In the event an ambiguity or question of intent or interpretation
arises, this Agreement and each of the other Loan Documents shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
ARTICLE XI: THE AGENT
11.1 APPOINTMENT; NATURE OF RELATIONSHIP. The First National Bank of
Chicago is appointed by the Lenders as the Agent hereunder, the Collateral Agent
under the Collateral Documents and the Agent and/or Collateral Agent, as
applicable, under each other Loan Document. References to the Agent in this
ARTICLE XI shall include references to the Agent in its capacity as Collateral
Agent. Each of the Lenders irrevocably authorizes the Agent to act as the
contractual representative of such Lender with the rights and duties expressly
set forth herein and in the other Loan Documents. The Agent agrees to act as
such contractual representative upon the express conditions contained in this
ARTICLE XI. Notwithstanding the use of the defined term "Agent" or "Collateral
Agent'" it is expressly understood and agreed that the Agent shall not have any
fiduciary responsibilities to any Lender by reason of this Agreement and that
the Agent is merely acting as the representative of the Lenders with only those
duties as are expressly set forth
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in this Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not assume any fiduciary duties
to any of the Lenders, (ii) is a "representative" of the Lenders within the
meaning of SECTION 9-105 of the Uniform Commercial Code and (iii) is acting as
an independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders agrees to assert no claim against the Agent on any agency theory or any
other theory of liability for breach of fiduciary duty, all of which claims each
Lender waives.
11.2 POWERS. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties or fiduciary duties to the Lenders, or any
obligation to the Lenders to take any action hereunder or under any of the other
Loan Documents except any action specifically provided by the Loan Documents
required to be taken by the Agent. Without limiting the foregoing, the Agent is
hereby authorized to execute and deliver the Collateral Documents and the
Collateral Sharing Agreement, in each case, in substantially the same form as
last distributed to the Lenders prior to the Closing Date and shall be
authorized to enter into amendments thereto on behalf of each of the Lenders
upon the direction of or with the consent of the Required Creditors. Each
Lender authorizes the Agent to enter, as Collateral Agent, into each of the
Collateral Documents to which it is a party and to take all action contemplated
by such documents. Each Lender agrees that no Lender shall have the right
individually to seek to realize upon the security granted by any Collateral
Document, it being understood and agreed that such rights and remedies may be
exercised solely by the Collateral Agent for the benefit of the Holders of
Secured Obligations upon the terms of the Collateral Documents.
11.3 GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is found in a final judgment by a court of
competent jurisdiction to have arisen from and to the extent of the Gross
Negligence, willful misconduct or breach of this Agreement or any other Loan
Documents by such Person.
11.4 NO RESPONSIBILITY FOR LOANS, CREDITWORTHINESS, COLLATERAL, RECITALS,
ETC. Neither the Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(i) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction of any condition specified in ARTICLE V, except receipt of items
required to be delivered solely to the Agent; (iv) the existence or possible
existence of any Default or Unmatured Default or (v) the validity, effectiveness
or genuineness of any Loan Document or any other instrument or writing furnished
in connection therewith. The Agent shall not be responsible to any Lender for
any recitals, statements, representations or warranties herein or in any of the
other Loan Documents, for the perfection or priority of any of the Liens on any
of the Collateral, or for the execution, effectiveness, genuineness, validity,
legality, enforceability, collectibility, or sufficiency of this Agreement or
any of the other Loan Documents or the transactions
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contemplated thereby, or for the financial condition of any guarantor of any or
all of the Obligations, the Borrower or any of its Subsidiaries.
11.5 ACTION ON INSTRUCTIONS OF REQUIRED CREDITORS. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Creditors, and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders. The Agent shall be
fully justified in failing or refusing to take any action hereunder and under
any other Loan Document unless it shall first be indemnified to its satisfaction
by the Lenders (and, if applicable the Noteholder) pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
11.6 EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of its
duties as the Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document; PROVIDED, HOWEVER, it is expressly understood and agreed that the
expense reimbursement provisions of SECTION 10.7(A) shall not be applicable to
the expenses for such counsel to the extent such expenses do not arise out of
any action or omission on the part of the Borrower or any of its Subsidiaries or
any request of the Borrower or its Subsidiaries hereunder or under any of the
Loan Documents.
11.7 RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent; PROVIDED, HOWEVER, it is expressly understood and
agreed that the expense reimbursement provisions of SECTION 10.7(A) shall not be
applicable to the expenses for counsel rendering such opinion to the extent it
relates to matters other than resulting from any action or omission on the part
of the Borrower or any of its Subsidiaries or any request of the Borrower or its
Subsidiaries hereunder or under any of the Loan Documents.
11.8 THE AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective Pro
Rata Shares (i) for any amounts not reimbursed by the Borrower for which the
Agent is entitled to reimbursement by the Borrower under the Loan Documents,
(ii) for any other expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof
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or of any such other documents, provided that no Lender shall be liable for any
of the foregoing to the extent any of the foregoing is found in a final non-
appealable judgment by a court of competent jurisdiction to have arisen from the
Gross Negligence or willful misconduct of the Agent.
11.9 RIGHTS AS A LENDER. With respect to its Supplemental Loan
Commitment, Loans made by it, Letters of Credit issued by it and the Notes
issued to it, the Agent shall have the same rights and powers hereunder and
under any other Loan Document as any Lender or Issuing Bank and may exercise the
same as through it were not the Agent, and the term "Lender" or "Lenders,"
"Issuing Bank" or "Issuing Banks" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. The Agent may accept deposits
from, lend money to, and generally engage in any kind of trust, debt, equity or
other transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Borrower or any of its Subsidiaries in which such
Person is not prohibited hereby from engaging with any other Person.
11.10 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Collateral Agent, the
Arranger or any other Lender and based on the financial statements prepared by
the Borrower and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and the other Loan Documents. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent, the Collateral Agent,
the Arranger or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement and the other Loan
Documents.
11.11 SUCCESSOR AGENT. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint, on behalf of the Borrower and
the Lenders, a successor Agent (which successor Agent shall also succeed to the
position of Collateral Agent). If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty days after the retiring Agent's giving notice of resignation, then
the retiring Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent and Collateral Agent. Notwithstanding anything herein to the
contrary, so long as no Default has occurred and is continuing, each such
successor Agent shall be subject to approval by the Borrower, which approval
shall not be unreasonably withheld or delayed. Such successor Agent shall be a
commercial bank having capital and retained earnings of at least $500,000,000.
Upon the acceptance of any appointment as the Agent hereunder (and Collateral
Agent under the other Loan Documents) by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and Collateral Agent, and the
retiring Agent and Collateral Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article XI shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Agent and/or Collateral Agent
hereunder and under the other Loan Documents.
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11.12 Collateral Documents. Each Lender authorizes the Agent as
Collateral Agent to enter into each of the Collateral Documents to which it is a
party and to take all action contemplated by such documents. Each Lender agrees
that no Lender shall have the right individually to seek to realize upon the
security granted by any Collateral Document, it being understood and agreed that
such rights and remedies may be exercised solely by the Collateral Agent for the
benefit of the Holders of Secured Obligations upon the terms of the Collateral
Documents.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 SETOFF. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if any Default occurs and is continuing, any
indebtedness from any Lender to the Borrower (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.
12.2 RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
SECTIONS 4.1, 4.2 or 4.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Holders of Secured Obligations share in the benefits of
such collateral ratably in proportion to the obligations owing to them. In case
any such payment is disturbed by legal process, or otherwise, appropriate
further adjustments shall be made.
12.3 APPLICATION OF PAYMENTS. Subject to the provisions of SECTION 9.2,
the Agent shall, unless otherwise specified at the direction of the Required
Lenders which direction shall be consistent with the last sentence of this
SECTION 12.3, apply all payments and prepayments in respect of any Obligations
and all proceeds of Collateral in respect of the Obligations in the following
order:
(A) first, to pay interest on and then principal of any portion of
the Loans which the Agent may have advanced on behalf of any Lender for
which the Agent has not then been reimbursed by such Lender or the
Borrower;
(B) second, to pay interest on and then principal of any advance made
under SECTION 10.3 for which the Agent has not then been paid by the
Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Agent or Collateral Agent;
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(D) fourth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders and the issuer(s) of
Letters of Credit;
(E) fifth, to pay interest and fees in respect of Supplemental Loans,
Credit Support Obligations, Letters of Credit and other Priority
Obligations;
(F) sixth, to the ratable payment or prepayment of principal
outstanding on the Priority Obligations;
(G) seventh, to provide required cash collateral, if required pursuant
to SECTION 3.10 and
(H) eighth, to the ratable payment of all Ratable Obligations as
provided in the Collateral Sharing Agreement.
The order of priority set forth in this SECTION 12.3 and the related provisions
of this Agreement and the Collateral Sharing Agreement are set forth solely to
determine the rights and priorities of the Agent, the Lenders, the issuer(s) of
Letters of Credit as among themselves or between such parties and the
Noteholder. The order of priority set forth in CLAUSES (D) through (H) of this
SECTION 12.3 may at any time and from time to time be changed by the Required
Creditors without necessity of notice to or consent of or approval by the
Borrower, or any other Person. The order of priority set forth in CLAUSES (A)
through (C) of this SECTION 12.3 may be changed only with the prior written
consent of the Agent.
12.4 RELATIONS AMONG LENDERS.
(A) Except with respect to the exercise of set-off rights of any Lender in
accordance with SECTION 12.1, the proceeds of which are applied in accordance
with this Agreement and the Collateral Sharing Agreement, and except as set
forth in the following sentence, each Lender agrees that it will not take any
action, nor institute any actions or proceedings, against the Borrower or any
other obligor hereunder or with respect to any Collateral or any Loan Document,
including, without limitation, under the Collateral Documents or the Collateral
Sharing Agreement, without the prior written consent of the Required Creditors
or, as may be provided in this Agreement or the other Loan Documents, at the
direction of the Agent.
(B) The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein in
case of the Agent or Collateral Agent) authorized to act for, any other Lender.
The Agent shall have the exclusive right on behalf of the Lenders to enforce on
the payment of the principal of and interest on any Loan after the date such
principal or interest has become due and payable pursuant to the terms of this
Agreement.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
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13.1 SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower, the
Agent, the Collateral Agent, the Arranger, the Issuing Banks and the Lenders and
their respective successors and assigns, except that (i) the Borrower shall not
have the right to assign its rights or obligations under the Loan Documents and
(ii) any assignment by any Lender must be made in compliance with Section 13.3
hereof. Notwithstanding CLAUSE (ii) of this SECTION 13.1, any Lender may at any
time, without the consent of the Borrower or the Agent, assign all or any
portion of its rights under this Agreement and its Notes to a Federal Reserve
Bank; PROVIDED, HOWEVER, that no such assignment shall release the transferor
Lender from its obligations hereunder. The Agent may treat the payee of any
Note as the owner thereof for all purposes hereof unless and until such payee
complies with SECTION 13.3 hereof in the case of an assignment thereof or, in
the case of any other transfer, a written notice of the transfer is filed with
the Agent. Any assignee or transferee of a Note agrees by acceptance thereof to
be bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the holder of any Note, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor.
13.2 PARTICIPATIONS.
(A) PERMITTED PARTICIPANTS; EFFECT. Subject to the terms set forth in
this SECTION 13.2, any Lender (including any Lender which becomes a party hereto
in connection with an assignment permitted pursuant to SECTION 13.3) may, in the
ordinary course of its business and in accordance with applicable law, at any
time sell to one or more banks or other entities (collectively, "PARTICIPANTS")
participating interests in any Loan owing to such Lender, any Note held by such
Lender, any Supplemental Loan Commitment of such Lender, any L/C Interest of
such Lender or any other interest of such Lender under the Loan Documents on a
pro rata or non-pro rata basis. Notice of such participation to the Borrower
and the Agent shall be required prior to any participation becoming effective
with respect to a Participant which is not a Holder of Secured Obligations or an
Affiliate thereof. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan Documents
shall remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the holder of any such Note for all purposes under the Loan Documents, all
amounts payable by the Borrower under this Agreement shall be determined as if
such Lender had not sold such participating interests, and the Borrower and the
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents except that,
for purposes of ARTICLE IV hereof, the Participants shall be entitled to the
same rights as if they were Lenders.
(B) VOTING RIGHTS. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Loan, Letter of Credit or Supplemental Loan
Commitment in which such Participant has an interest which forgives principal,
interest or fees or reduces the interest rate or fees payable pursuant to the
terms of this Agreement with respect to any such Loan, Letter of Credit or
Supplemental Loan
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Commitment, postpones any date fixed for any regularly-scheduled payment of
principal of, or interest or fees on, any such Loan, Letter of Credit or
Supplemental Loan Commitment, or releases all or substantially all of the
Collateral, if any, securing any such Loan or Letter of Credit. In the event
any Lender desires to sell a participation and grant to the Participant any
greater voting rights than set forth above, it shall not be permitted to do so
without the prior written consent of the Borrower, which consent shall not be
unreasonably withheld or delayed.
(C) BENEFIT OF SETOFF. The Borrower agrees that each Participant shall be
deemed to have the right of setoff provided in SECTION 12.1 hereof in respect to
its participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, PROVIDED that each Lender shall retain the
right of setoff provided in SECTION 12.1 hereof with respect to the amount of
participating interests sold to each Participant except to the extent such
Participant exercises its right of setoff. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff provided in
SECTION 12.1 hereof, agrees to share with each Lender (and, if applicable under
the Collateral Sharing Agreement, the Noteholder), any amount received pursuant
to the exercise of its right of setoff, such amounts to be shared in accordance
with SECTION 12.2 hereof and SECTION 8 of the Collateral Sharing Agreement as if
each Participant were a Lender.
13.3 ASSIGNMENTS.
(A) PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary course of its
business and in accordance with applicable law and the provisions of this
SECTION 13.3, assign all or a portion of its rights and obligations under this
Agreement (including, without limitation, its Supplemental Loan Commitment, all
Loans owing to it, all of its participation interests in existing Letters of
Credit and its obligation to participate in additional Letters of Credit
hereunder) as follows:
(i) at any time to one or more of the Holders of Secured Obligations
(or an Affiliate thereof) or one or more Eligible Assignees;
(ii) at any time to one or more Persons consented to by the
Borrower (which consent shall not be unreasonably withheld or delayed);
(iii) following the occurrence of a Transfer Default or at any
time after November 30, 1998, to any other banks or other entities (the
purchasing entities under clauses (i) through (iii) being herein
collectively, the "PURCHASERS").
Each assignment shall be of a constant, and not a varying, ratable percentage of
all of the assigning Lender's rights and obligations under this Agreement. Such
assignment shall be substantially in the form of EXHIBIT E hereto and shall not
be permitted hereunder unless such assignment is either for all of such Lender's
rights and obligations under the Loan Documents or, without the prior written
consent of the Agent, involves loans and commitments in an aggregate amount of
at least $5,000,000 (which minimum amount may be waived by the Required
Lenders).
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The consent of the Agent shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Lender or an Affiliate
thereof.
(B) EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Agent of a notice of
assignment, substantially in the form attached as APPENDIX I to EXHIBIT E hereto
(a "NOTICE OF ASSIGNMENT"), together with any consent required by SECTION
13.3(A) hereof, and (ii) payment of a $3,500 fee to the Agent for processing
such assignment, such assignment shall become effective on the effective date
specified in such Notice of Assignment. The Notice of Assignment shall contain
a representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment, Loans and L/C Obligations under the
applicable assignment agreement are "plan assets" as defined under ERISA and
that the rights and interests of the Purchaser in and under the Loan Documents
will not be "plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser, if not already a Lender, shall for all purposes be a
Lender party to this Agreement and any other Loan Documents executed by the
Lenders and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party hereto, and no
further consent or action by the Borrower, the Lenders or the Agent shall be
required to release the transferor Lender with respect to the percentage of the
Aggregate Supplemental Loan Commitment, Loans and Letter of Credit
participations assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this SECTION 13.3(B), the transferor
Lender, the Agent and the Borrower shall make appropriate arrangements so that
replacement Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their Supplemental Loan Commitment and their
Existing Loans, as adjusted pursuant to such assignment.
(C) THE REGISTER. The Agent shall maintain at its address referred to in
SECTION 14.1 a copy of each assignment delivered to and accepted by it pursuant
to this SECTION 13.3 and a register (the "REGISTER") for the recordation of the
names and addresses of the Lenders and the Supplemental Loan Commitment of and
principal amount of the Loans owing to, each Lender from time to time and
whether such Lender is an original Lender or the assignee of another Lender
pursuant to an assignment under this SECTION 13.3. The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower and each of its Subsidiaries, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The 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.
13.4 CONFIDENTIALITY. For purposes of this SECTION 13.4, "Confidential
Information" means information delivered or presented to the Agent or the
Lenders by or on behalf of the Borrower or its Subsidiaries in connection with
the transactions contemplated by or otherwise pursuant to this Agreement and the
other Loan Documents that is proprietary in nature and that was either (a)
delivered or presented in connection with the Sale Initiative or (b) clearly
marked or labeled or otherwise adequately identified when received as being
confidential information of the Borrower or such Subsidiary; PROVIDED that such
term does not include information that:
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(i) was publicly known or otherwise known to the Agent or any of the
Lenders, as applicable, prior to the time of such disclosure;
(ii) subsequently becomes publicly known to the Agent or any of the
Lenders other than through disclosure by or on behalf of the Borrower or
any of its Subsidiaries;
(iii) otherwise becomes known to the Agent or any of the Lenders other
than through a disclosure by or on behalf of the Borrower or its
Subsidiaries; or
(iv) constitutes financial statements delivered to the Agent or any of
the Lenders under SECTION 7.1 that are otherwise publicly available.
Subject to SECTION 13.5, the Agent and the Lenders shall hold all Confidential
Information in accordance with such Person's customary procedures adopted by
such Person in good faith to protect confidential information of third parties
delivered to it and in accordance with safe and sound banking practices;
PROVIDED that the Agent and the Lenders, in any event may deliver or disclose
the Confidential Information to:
(1) the Agent, any other Lender or the Noteholder;
(2) a prospective Transferee in connection with the contemplated
participation or assignment permitted under the terms hereof to the extent
reasonably required in connection therewith if such prospective Transferee
has agreed in writing prior to its receipt of such Confidential Information
to be bound by the terms of this SECTION 13.4;
(3) the Agent's or any Lender's officers, trustees, employees,
agents, attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the Loans);
(4) the Agent's or any Lender's financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this SECTION
13.4;
(5) as required or requested by any Governmental Authority or
representative thereof having jurisdiction over the Agent or any of the
Lenders or which requires access to information about the Agent's or the
Lender's loan portfolios; or
(6) any other Person to which such delivery or disclosure may be
necessary or appropriate (A) to effect compliance with any law, rule,
regulation or order applicable to the Agent or the Lenders; (B) in response
to subpoena or other legal process; (C) in connection with any litigation
to which the Agent or any Lender is a party; or (D) if any Default has
occurred and is continuing, to the extent the Agent or any Lender may
reasonably determine such delivery and disclosure may be necessary or
appropriate in the enforcement or for the protection of the rights and
remedies under this Agreement and the other Loan Documents.
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In no event shall the Agent or any Lender be obligated or required to return any
materials furnished by the Borrower; PROVIDED, HOWEVER, each prospective
Transferee shall be required to agree that if it does not become a participant
or assignee it shall return all materials furnished to it by or on behalf of the
Borrower in connection with this Agreement; PROVIDED, FURTHER, however if any
such disclosure is to be made pursuant to legal process, the Agent or Lender, as
applicable, which may make such disclosure shall use its reasonable efforts to
notify the Borrower of such legal process prior to making such disclosure,
provided the failure to provide such notice shall not result in any liability on
the part of such Person.
13.5 DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender to
disclose to any permitted Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "TRANSFEREE") and
any prospective Transferee any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries; PROVIDED that prior to any such
disclosure, such prospective Transferee shall agree to preserve in accordance
with SECTION 13.4 the confidentiality of any confidential information described
therein.
13.6 GUARANTY TERMINATIONS AND PLEDGE RELEASES. Each of the Lenders,
Issuing Banks and the Agent agrees that upon the consummation of any transaction
involving the sale of all or substantially all of the assets or stock of a
Material Subsidiary, which sale is permitted pursuant to the terms of SECTION
7.3(B), the Agent, for itself and on behalf of the Lenders and the Issuing
Banks, shall release and terminate the Guaranty with respect to such Material
Subsidiary which is the subject of such transaction or, as applicable, release
the stock of such Material Subsidiary from the pledge to the Agent.
ARTICLE XIV: NOTICES
14.1 GIVING NOTICE. Except as otherwise permitted by SECTION 2.14 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes).
14.2 CHANGE OF ADDRESS. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XV: WAIVERS
Effective as of the Effective Date, the Borrower's non-compliance with the
following provisions of the Original Credit Agreement for the periods specified
(the "SPECIFIED DEFAULTS") is hereby waived:
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(a) Noncompliance with the provisions of SECTION 7.1(A) of the Credit Agreement
requiring, without limitation, delivery of the Borrower's unaudited
consolidating and consolidated financial information for the fiscal quarter
ended November 30, 1997, together with an Officer's Certificate and
compliance certificate on or prior to January 15, 1998 and plan and
forecast for the fiscal year ending November 30, 1998;
(b) Noncompliance with the provisions of SECTION 7.1(A) of the Original Credit
Agreement requiring, without limitation, delivery of the Borrower's audited
consolidating and consolidated financial information for the year ended
November 30, 1997, together with an Officer's Certificate, compliance
certificate, audit report, management letters (if any) and accountant's
certificate on or prior to March 2, 1998; PROVIDED, HOWEVER, such waiver
shall remain effective only if such items are delivered on or prior to the
date that is five (5) Business Days after the date hereof;
(c) Noncompliance with the provisions of SECTION 7.3(F)(vi) (Restricted
Payments) of the Original Credit Agreement as a result of the Borrower's
payment of a dividend on December 24, 1997 after the occurrence and during
the continuance of an Unmatured Default;
(d) Noncompliance with the provisions of SECTION 7.3(M) of the Original Credit
Agreement resulting from the amendment by Binks Xxxxx Ltd. of its Articles
of Association;
(e) Noncompliance with the provisions of SECTION 7.3(S) of the Original Credit
Agreement prior to the date hereof resulting from the failure to evidence
intercompany indebtedness with the promissory note(s) required thereunder;
(f) Noncompliance as of November 30, 1997 and February 28, 1998 with the
provisions of SECTION 7.4(A) of the Original Credit Agreement;
(g) Noncompliance as of November 30, 1997 and February 28, 1998 with the
provisions of SECTION 7.4(B) (Maximum Leverage Ratio) of the Original
Credit Agreement;
(h) Noncompliance as of November 30, 1997 and February 28, 1998 with the
provisions of SECTION 7.4(C) (Minimum Consolidated Tangible Net Worth) of
the Original Credit Agreement;
(i) Noncompliance for the periods ending November 30, 1997 and February 28,
1998 with the provisions of SECTION 7.4(D) (Minimum Interest Expense
Coverage Ratio) of the Credit Agreement;
(j) Noncompliance prior to the date hereof with the provisions of SECTION
7.1(B) of the Original Credit Agreement requiring, without limitation, the
delivery of an Officer's Certificate concerning Defaults or Unmatured
Defaults;
100
(k) Noncompliance prior to the date hereof with the provisions of SECTION
7.1(C) of the Original Credit Agreement requiring, without limitation,
written notice of certain lawsuits or actions not previously disclosed and
which are disclosed on SCHEDULE 6.7;
(l) Noncompliance prior to the date hereof with the provisions of SECTION
7.1(G) of the Original Credit Agreement requiring, without limitation,
delivery to the Lenders of certain press releases;
(m) Noncompliance prior to the date hereof with the provisions of SECTION
7.2(A) requiring each Subsidiary to maintain its corporate existence with
respect to the Borrower's Subsidiaries in Mexico and Italy.
(n) Noncompliance prior to the date hereof with the provisions of SECTION
7.2(C) of the Original Credit Agreement requiring, without limitation,
payment of taxes as a result of the Borrower's failure to pay its real
estate taxes for its property in Oregon which have been paid prior to the
date hereof and material claims with respect to the Disclosed Disputes;
(o) Default under SECTION 8.1(E)(i) of the Original Credit Agreement resulting
from the defaults under the Note Purchase Agreement which are being waived
as of the date of this Agreement pursuant to the Waiver and Second
Amendment thereto; and
(p) Other Defaults which may have resulted prior to the date hereof from the
facts and matters which are within the actual knowledge of each of the
Lenders, where "actual knowledge" means facts known to the Lenders' loan
officers which had significant involvement in credit decisions involving
the Borrower provided neither the Agent nor any Lenders shall have any duty
of inquiry with respect thereto.
Each of the Agent and the Lenders represents that it does not have "actual
knowledge" (as defined above) as of the date hereof of any Defaults or Unmatured
Defaults other than those set forth above.
ARTICLE XVI: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Agent and the Lenders
and each party has notified the Agent by telex or telephone, that it has taken
such action.
[Remainder of This Page Intentionally Blank]
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the date first above written.
BINKS XXXXX CORPORATION,
as the Borrower
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President, Chief Financial Officer
Address:
0000 Xxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone No.: 847/000-0000
Facsimile No.: 847/671-5690
THE FIRST NATIONAL BANK OF
CHICAGO, as Agent and as a Lender
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------
Title: -----------------------
Address:
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx
Telephone No.: 312/000-0000
Facsimile No.: 312/732-1775
LASALLE NATIONAL BANK, as a Lender
By: /s/ Xxx XxXxxxx
------------------------------
Name: Xxx XxXxxxx
Title:
Address:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx XxXxxxx
Telephone No.: 312/000-0000
Facsimile No.: 312/904-8169
COMERICA BANK, as a Lender
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title:
Address:
000 Xxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx
Telephone No.: 313/000-0000
Facsimile No.: 313/222-5706
XXXXXX TRUST AND SAVINGS BANK,
as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Address:
000 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone No.: 312/000-0000
Facsimile No.: 312/765-1724
