EXHIBIT 10.1
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of November 26, 1997 among DESA
INTERNATIONAL, INC., a Delaware corporation (the "Borrower"), DESA HOLDINGS
CORPORATION, a Delaware corporation (the "Parent Guarantor"), the banks,
financial institutions and other institutional lenders listed on the signature
pages hereof as the Initial Lenders (the "Initial Lenders"), NATIONSBANK, N.A.
("NationsBank"), as the initial issuing bank (in such capacity, the "Initial
Issuing Bank"), NATIONSBANK, as the swing line bank (in such capacity, the
"Swing Line Bank"), NATIONSBANK, as administrative agent (together with any
successor appointed pursuant to Article VII, the "Administrative Agent") for the
Lender Parties and the other Secured Parties (each as hereinafter defined),
NATIONSBANC XXXXXXXXXX SECURITIES, INC. ("NMSI"), as syndication agent (in such
capacity, the "Syndication Agent") for the Lender Parties, UBS SECURITIES LLC
("UBS Securities"), as documentation agent (in such capacity, the "Documentation
Agent") for the Lender Parties, and NMSI and UBS SECURITIES, as co-arrangers (in
such capacity, the "Co-Arrangers").
PRELIMINARY STATEMENTS
(1) X.X. Childs Equity Partners, L.P., a Delaware limited
partnership ("Childs"), has entered into a Recapitalization Agreement dated as
of October 8, 1997 and amended and restated as of November 25, 1997 (the
"Recapitalization Agreement") with the Parent Guarantor and the Sellers (defined
and listed therein), pursuant to which the Childs Investors (as hereinafter
defined), together with certain Institutional Investors (as hereinafter
defined), intend to purchase, in connection with a proposed recapitalization
(the "Recapitalization"), certain shares of the Parent Guarantor's common stock
(both voting and nonvoting), $0.01 par value (collectively, the "Parent
Guarantor Common Stock"), warrants to purchase up to an additional 3.52% of the
Parent Guarantor's nonvoting common stock (on a fully diluted basis) and shares
of Parent Guarantor's 12% senior redeemable exchangeable pay-in-kind preferred
stock (the "Parent Guarantor Preferred Stock").
(2) Pursuant to the Recapitalization Agreement, after giving
effect to the Recapitalization, the Management Investors (as hereinafter
defined) and certain of the Sellers referred to therein will retain a certain
number of shares of Parent Guarantor Common Stock.
(3) The Borrower has requested that concurrently with the
consummation of the Recapitalization, the Lender Parties lend to the Borrower up
to $195,000,000 (i) to finance in part the Recapitalization, (ii) to pay fees
and expenses incurred in connection therewith, (iii) to refinance the
outstanding principal balance of certain Debt (as hereinafter defined) of the
Borrower in existence on the date of the Initial Extension of Credit (as
hereinafter defined) and (iv) from time to time, to finance certain acquisitions
and for other general corporate purposes of
the Parent Guarantor and its Subsidiaries. The Lender Parties have indicated
their willingness to agree to lend such amounts on the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"Accepting Lenders" has the meaning specified in Section 2.06(c).
"Acquisition Advance" has the meaning specified in Section 2.01(d).
"Acquisition Availability Date" means the earlier of (a) November 26,
1999 and (b) the date of termination in whole of the Acquisition Commitments
pursuant to Section 2.05 or 6.01.
"Acquisition Borrowing" means a borrowing consisting of simultaneous
Acquisition Advances of the same Type made by the Acquisition Lenders.
"Acquisition Commitment" means, with respect to any Acquisition Lender
at any time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Acquisition Commitment" or, if such Lender has entered
into one or more Assignments and Acceptances, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 9.07(d) as
such Lender's "Acquisition Commitment", as such amount may be reduced at or
prior to such time pursuant to Section 2.05.
"Acquisition Facility" means, at any time, the aggregate amount of the
Acquisition Lenders' Acquisition Commitments at such time.
"Acquisition Lender" means any Lender that has an Acquisition
Commitment.
"Acquisition Note" means a promissory note of the Borrower payable to
the order of any Acquisition Lender, in substantially the form of Exhibit A-1
hereto, evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Acquisition Advances made by such Lender.
"Acquisition Reduction Amount" has the meaning specified in Section
2.06(b)(vii)(B).
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"Acquisition Termination Date" means the earlier of (a) November 26,
2003 and (b) the date of termination in whole of the Acquisition Commitments
pursuant to Section 2.05 or 6.01.
"Adjusted Funded Debt" means, with respect to the Parent Guarantor and
its Subsidiaries at any date of determination, (a) all Funded Debt of the Parent
Guarantor and its Subsidiaries outstanding on such date, after excluding
therefrom (solely to the extent otherwise included in the determination of
Funded Debt of the Parent Guarantor and its Subsidiaries at such date) all
intercompany Debt among the Parent Guarantor and its Subsidiaries outstanding on
such date and all of the Debt evidenced by the Parent Guarantor Preferred Stock
on such date less (b) the aggregate amount of all cash on deposit in the Cash
Collateral Account, the L/C Cash Collateral Account and the Blocked Accounts on
such date less (c) the aggregate principal amount of all Junior Exchange Notes
and all Debt incurred pursuant to Section 5.02(b)(i)(E) outstanding on such
date; provided that, solely for purposes of this definition, the aggregate
principal amount of all Working Capital Advances, Letter of Credit Advances and
Swing Line Advances outstanding on any date of determination shall be deemed to
be (i) solely in the case of the first three Measurement Periods occurring after
the date of the Initial Extension of Credit, the lesser of (A) the average of
the aggregate principal amount of all Working Capital Advances, Letter of Credit
Advances and Swing Line Advances and all Revolving Loans that have been
outstanding during the consecutive 12 month period ended on such date and (B)
$8,000,000 and (ii) in the case of each Measurement Period occurring thereafter,
the average of the aggregate principal amount of all Working Capital Advances,
Letter of Credit Advances and Swing Line Advances that have been outstanding
during the consecutive 12 month period ended on such date.
"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with NationsBank at
its office at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Account
No. 136621-0000000, Attention: CCS/Agency Services Unit, Reference: Desa
International.
"Advance" means an Acquisition Advance, a Term A Advance, a Term B
Advance, a Working Capital Advance, a Swing Line Advance or a Letter of Credit
Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling", "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 5% or more of the Voting Stock of such Person or
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.
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"Agents" means, collectively, the Administrative Agent, the
Documentation Agent, the Syndication Agent and the Co-Arrangers.
"Alternate Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be equal to
the higher of:
(a) the rate of interest announced publicly by
NationsBank, N.A., in New York, New York, from time to time, as the NationsBank
prime rate; and
(b) 0.50% per annum above the Federal Funds Rate.
"Alternate Base Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(i).
"Applicable Lending Office" means (a) with respect to each Lender, such
Lender's Domestic Lending Office in the case of an Alternate Base Rate Advance
and such Lender Party's Eurodollar Lending Office in the case of a Eurodollar
Rate Advance and (b) with the Issuing Bank, its Domestic Lending Office for all
purposes of this Agreement.
"Applicable Margin" means (a) at any time during the period from the
date of this Agreement through the earlier of (i) the date on which the
Consolidated financial statements of the Parent Guarantor and its Subsidiaries
for the quarter ending May 30, 1998 are delivered to the Lenders pursuant to
Section 5.03(c) and (ii) July 15, 1998, 1.250% per annum for Alternate Base Rate
Advances and 2.250% per annum for Eurodollar Rate Advances in the case of the
Term A Facility and the Working Capital Facility and 1.625% per annum for
Alternate Base Rate Advances and 2.625% per annum for Eurodollar Rate Advances
in the case of the Term B Facility and the Acquisition Facility and (b) at any
time and from time to time thereafter, a percentage per annum equal to the
applicable percentage set forth below for the Performance Level set forth below:
Alternate Eurodollar Alternate
Base Rate Rate Base Eurodollar
Advances Advances Rate Rate
Under Term Under Term Advances Advances
A and A and Under Term Under Term
Working Working B and B and
Performance Capital Capital Acquisition Acquisition
Level Facilities Facilities Facilities Facilities
----- ---------- ---------- ---------- ----------
I 0.500% 1.500% 1.125% 2.125%
II 0.750% 1.750% 1.125% 2.125%
III 1.000% 2.000% 1.375% 2.375%
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IV 1.250% 2.250% 1.625% 2.625%
V 1.500% 2.500% 1.875% 2.875%
== ===== ===== ===== =====
For purposes of clause (b) of the immediately preceding sentence, the Applicable
Margin for each Alternate Base Rate Advance shall be determined by reference to
the Performance Level in effect from time to time and the Applicable Margin for
each Eurodollar Rate Advance shall be determined by reference to the Performance
Level in effect on the first day of each Interest Period for such Advance.
"Applicable Percentage" means, with respect to the fees set forth in
Section 2.08(a), (a) at any time during the period from the date of this
Agreement through the earlier of (i) the date on which the Consolidated
financial statements of the Parent Guarantor and its Subsidiaries for the
quarter ending May 30, 1998 are delivered to the Lenders pursuant to Section
5.03(c) and (ii) July 15, 1998, 0.500% per annum and (b) at any time and from
time to time thereafter, a percentage per annum equal to the applicable
percentage set forth below for the Performance Level set forth below:
Performance Level Commitment Fee
----------------- --------------
I 0.325%
II 0.375%
III 0.375%
IV 0.500%
V 0.500%
== =====
For purposes of clause (b) of the immediately preceding sentence, the Applicable
Percentage for the Commitment Fee shall be determined by reference to the
Performance Level in effect from time to time.
"Application Date" has the meaning specified in Section
2.06(b)(iii)(A).
"Appropriate Lender" means, at any time, with respect to (a) the
Acquisition Facility, the Term A Facility, the Term B Facility or the Working
Capital Facility, a Lender that has a Commitment with respect to such Facility
at such time, (b) the Letter of Credit Facility, (i) the Issuing Bank and (ii)
if the other Working Capital Lenders have made Letter of Credit Advances
pursuant to Section 2.03(c) that are outstanding at such time, each such other
Working Capital Lender and (c) the Swing Line Facility, (i) the Swing Line Bank
and (ii) if the other Working Capital Lenders have made Swing Line Advances
pursuant to Section 2.02(b) that are outstanding at such time, each such other
Working Capital Lender.
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"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender Party and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 9.08 and in substantially the
form of Exhibit C hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such time
(assuming compliance at such time with all conditions to drawing).
"Bank Hedge Agreement" means any interest rate Hedge Agreement required
or permitted under Article V that is entered into by and between the Borrower
and any Hedge Bank.
"Blocked Accounts" has the meaning specified in the Security Agreement.
"Borrower" has the meaning specified in the recital of parties to this
Agreement.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with NationsBank, at its office at X.X. Xxx 000000, Xxxxxx, Xxxxx
00000-0000, Account No. 3750901773, Transient No. 11000012, Attention: Funds
Transfer Department.
"Borrowing" means an Acquisition Borrowing, a Term A Borrowing, a Term
B Borrowing, a Swing Line Borrowing or a Working Capital Borrowing.
"Borrowing Base Certificate" means a certificate, in substantially the
form of Exhibit H hereto, duly certified by the chief financial officer (or
person performing similar functions) of the Borrower.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in New York City and, if the applicable Business
Day relates to any Eurodollar Rate Advances, on which dealings are carried on in
the London interbank market.
"Capital Expenditures" means, for any Person for any period, the sum
(without duplication) of (a) all expenditures made, directly or indirectly, by
such Person or any of its Subsidiaries during such period for equipment, fixed
assets, real property or improvements, or for replacements or substitutions
therefor or additions thereto, that have been or should be, in accordance with
GAAP, reflected as additions to property, plant or equipment on a Consolidated
balance sheet of such Person and (b) the aggregate principal amount of all Debt
(including Obligations under Capitalized Leases) assumed or incurred in
connection with any such expenditures. For purposes of this definition, the
purchase price of equipment that is purchased simultaneously with the trade in
of existing equipment or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of such purchase price less
the credit granted by the seller of such equipment for the equipment being
traded in at such time or the amount of such proceeds, as the case may be.
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"Capitalized Leases" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"Cash Collateral Account" has the meaning specified in the Security
Agreement.
"Cash Equivalents" means any of the following, to the extent owned by
the Borrower or any of its Subsidiaries free and clear of all Liens other than
Liens created under the Collateral Documents and having a maturity of not
greater than 12 months from the date of issuance thereof: (a) readily marketable
direct obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that is a
Lender Party or a member of the Federal Reserve System that issues (or the
parent of which issues) commercial paper rated as described in clause (c), is
organized under the laws of the United States or any state thereof and has
combined capital and surplus of at least $1 billion, (c) commercial paper in an
aggregate amount of no more than $2,500,000 per issuer outstanding at any time,
issued by any corporation organized under the laws of any state of the United
States and rated at least "Prime-1" (or the then equivalent grade) by Xxxxx'x
Investors Service, Inc. or "A-1" (or the then equivalent grade) by Standard &
Poor's Ratings Services, (d) Investments, classified in accordance with GAAP, as
current assets of the Borrower or any of its Subsidiaries, in money market
investment programs registered under the Investment Company Act of 1940, as
amended, which are administered by financial institutions that have the highest
rating obtainable from either Xxxxx'x Investors Services, Inc. or Standard &
Poor's Rating Services, and the portfolios of which are limited solely to
Investments of the character and quality described in clauses (a), (b) and (c)
of this definition, or (e) Investments in the WCMA Working Capital Management
Account at Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Inc. in accordance with the
past business practices of the Borrower and in an aggregate amount of no more
than $7,500,000.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental Protection
Agency.
"Childs" has the meaning specified in the Preliminary Statements to
this Agreement.
"Childs Investors" means the Equity Investors set forth in Part A of
Schedule II.
"Clean-Up Period" means a period of 30 consecutive days occurring
between January 1 and May 30 in each calendar year, commencing January 1, 1998.
"Co-Arrangers" has the meaning specified in the recital of parties to
this Agreement.
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"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Administrative Agent for the benefit of the Secured
Parties.
"Collateral Documents" means, collectively, the Security Agreement, the
Intellectual Property Security Agreement, the Mortgages and any other agreement
that creates or purports to create a Lien in favor of the Administrative Agent
for the benefit of the Secured Parties.
"Commitment" means an Acquisition Commitment, a Term A Commitment, a
Term B Commitment, a Working Capital Commitment or a Letter of Credit
Commitment.
"Commitment Date" has the meaning specified in Section 2.06(b)(iii)(A).
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Consolidated Cash Interest Expense" means, with respect to any Person
for any period, all interest expense (net of interest income) paid or payable on
all Funded Debt of such Person and its Subsidiaries for such period, determined
on a Consolidated basis and in accordance with GAAP for such period, including,
without limitation, (a) in the case of the Borrower, (i) interest expense paid
or payable in respect of Funded Debt resulting from Advances and (ii) all fees
paid or payable pursuant to Section 2.08(a), (b) the interest component of all
Obligations in respect of Capitalized Leases, (c) commissions, discounts and
other fees and charges paid or payable in connection with letters of credit
(including, without limitation, the Letters of Credit) and (d) the net payment,
if any, paid or payable in connection with Hedge Agreements less the net credit,
if any, received in connection with Hedge Agreements, but excluding, in each
case, (A) any amortization of original issue discount, (B) the interest portion
of any deferred payment obligation and (C) any other interest not payable in
cash.
"Consolidated EBITDA" means, with respect to any Person for any period,
(a) the net income (or net loss) of such Person and its Subsidiaries for such
period plus (b) the sum of each of the following expenses that have been
deducted from the determination of the net income (or net loss) of such Person
and its Subsidiaries for such period: (i) all interest expense of such Person
and its Subsidiaries for such period, (ii) all income tax expense (whether
federal, state, local, foreign or otherwise) of such Person and its Subsidiaries
for such period, (iii) all depreciation expense of such Person and its
Subsidiaries for such period, (iv) all amortization expense of such Person and
its Subsidiaries for such period and (v) all extraordinary losses deducted in
determining the net income (or net loss) of such Person and its Subsidiaries for
such period less all extraordinary gains added in determining the net income (or
net loss) of such Person and its Subsidiaries for such period plus (c) in the
case of the Parent Guarantor and its Subsidiaries to the extent otherwise
deducted from the net income (or net loss) thereof, (i) all fees paid pursuant
to the terms of the Management Agreements to the extent otherwise permitted
under Section 5.01(l), (ii) all costs and expenses incurred in connection with
the consummation of the Recapitalization and the Facilities and (iii) all
noncash dividends accrued on the Parent
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Guarantor Preferred Stock in accordance with the terms thereof on the date of
this Agreement, in each of the foregoing cases determined on a Consolidated
basis and in accordance with GAAP for such period.
"Conversion", "Convert" and "Converted" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.09 or
2.10.
"Current Assets" of any Person means all assets of such Person that
would, in accordance with GAAP, be classified as current assets of a company
conducting a business the same as or similar to that of such Person, after
deducting adequate reserves in each case in which a reserve is proper in
accordance with GAAP.
"Current Liabilities" of any Person means (a) all Debt of such Person
that by its terms is payable on demand or matures within one year after the date
of determination (excluding any Debt renewable or extendible, at the option of
such Person, to a date more than one year from such date or arising under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such date) and (b) all
other items (including taxes accrued as estimated) that in accordance with GAAP
would be classified as current liabilities of such Person.
"Debt" of any Person means (a) all indebtedness of such Person for
borrowed money, (b) all Obligations of such Person for the deferred purchase
price of property or services (other than trade payables not overdue by more
than 90 days incurred in the ordinary course of such Person's business), (c) all
Obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all Obligations of such Person created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Obligations of such Person as lessee under
Capitalized Leases, (f) all Obligations, contingent or otherwise, of such Person
under acceptance, letter of credit or similar facilities, (g) all Obligations of
such Person to purchase, redeem, retire, defease or otherwise make any payment
in respect of any capital stock of or other ownership or profit interest in such
Person or any other Person or any warrants, rights or options to acquire such
capital stock, valued, in the case of Redeemable Preferred Stock, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (h) all Obligations of such Person in respect of Hedge Agreements,
(i) all Debt of others referred to in clauses (a) through (h) above or clause
(j) below guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an agreement (i)
to pay or purchase such Debt or to advance or supply funds for the payment or
purchase of such Debt, (ii) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such Debt or to assure the holder of such Debt
against loss, (iii) to supply funds to or in any other manner invest in the
debtor (including any agreement to pay for property or services irrespective of
whether such property is received or such services are rendered) or (iv)
otherwise
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to assure a creditor against loss, and (j) all Debt referred to in clauses (a)
through (h) above of another Person secured by (or for which the holder of such
Debt has an existing right, contingent or otherwise, to be secured by) any Lien
on property (including, without limitation, accounts and contract rights) owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Debt; provided that until such time as any such Person has
declared a dividend on any class of its capital stock or a dividend on any such
class shall otherwise have become payable, the accrued and unpaid dividends on
such class shall not constitute Debt for purposes of this Agreement.
"Declining Lender" has the meaning specified in Section 2.06(c).
"Default" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or time elapse
or both.
"Defaulted Advance" means, with respect to any Lender Party at any
time, the portion of any Advance required to be made by such Lender Party to the
Borrower pursuant to Section 2.01 or 2.02 at or prior to such time which has not
been made by such Lender Party or by the Administrative Agent for the account of
such Lender Party pursuant to Section 2.02(e) as of such time. In the event that
a portion of a Defaulted Advance shall be deemed made pursuant to Section
2.15(a), the remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section 2.01 on the
same date as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender Party at any time,
any amount required to be paid by such Lender Party to the Administrative Agent
or any other Lender Party hereunder or under any other Loan Document at or prior
to such time which has not been so paid as of such time, including, without
limitation, any amount required to be paid by such Lender Party to (a) the Swing
Line Bank pursuant to Section 2.02(b) to purchase a portion of a Swing Line
Advance made by the Swing Line Bank, (b) the Issuing Bank pursuant to Section
2.03(c) to purchase a portion of a Letter of Credit Advance made by the Issuing
Bank, (c) the Administrative Agent pursuant to Section 2.02(e) to reimburse the
Administrative Agent for the amount of any Advance made by the Administrative
Agent for the account of such Lender Party, (d) any other Lender Party pursuant
to Section 2.13 to purchase any participation in Advances owing to such other
Lender Party and (e) the Administrative Agent or the Issuing Bank pursuant to
Section 7.05 to reimburse the Administrative Agent or the Issuing Bank for such
Lender Party's ratable share of any amount required to be paid by the Lender
Parties to the Administrative Agent or the Issuing Bank as provided therein. In
the event that a portion of a Defaulted Amount shall be deemed paid pursuant to
Section 2.15(b), the remaining portion of such Defaulted Amount shall be
considered a Defaulted Amount originally required to be paid hereunder or under
any other Loan Document on the same date as the Defaulted Amount so deemed paid
in part.
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"Defaulting Lender" means, at any time, any Lender Party that, at such
time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any
action or be the subject of any action or proceeding of a type described in
Section 6.01(f).
"Documentation Agent" has the meaning specified in the recital of
parties to this Agreement.
"Domestic Lending Office" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender Party, as the case may be, or such other office of such
Lender Party as such Lender Party may from time to time specify to the Borrower
and the Administrative Agent.
"Eligible Assignee" means (a) with respect to any Facility (other than
the Letter of Credit Facility), (i) a Lender; (ii) an Affiliate of a Lender;
(iii) a commercial bank organized under the laws of the United States, or any
state thereof, and having total assets in excess of $500,000,000; (iv) a savings
and loan association or savings bank organized under the laws of the United
States, or any state thereof, and having total assets in excess of $500,000,000;
(v) 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 a political subdivision of any such country, and having total assets in
excess of $500,000,000, so long as such bank is acting through a branch or
agency located in the United States; (vi) the central bank of any country that
is a member of the OECD; (vii) a finance company, insurance company or other
financial institution or fund (whether a corporation, partnership, trust or
other entity) that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and having total assets
in excess of $500,000,000; and (viii) any other Person approved by the
Administrative Agent and, unless a Default under Section 6.01(a) or 6.01(f) or
an Event of Default has occurred and is continuing at the time any assignment is
proposed to be effected in accordance with Section 9.07, the Borrower, such
approval not to be unreasonably withheld or delayed, and (b) with respect to the
Letter of Credit Facility, a Person that is an Eligible Assignee under subclause
(iii) or (v) of clause (a) of this definition and is approved by the
Administrative Agent and, unless a Default under Section 6.01(a) or 6.01(f) or
an Event of Default has occurred and is continuing at the time any assignment is
proposed to be effected in accordance with Section 9.07, the Borrower, such
approval not to be unreasonably withheld or delayed; provided, however, that
neither any Loan Party nor any Affiliate of a Loan Party shall qualify as an
Eligible Assignee.
"Eligible Collateral" means, collectively, Eligible Inventory and
Eligible Receivables.
"Eligible Inventory" means the gross dollar value (valued at the lower
of cost or market value, on a first-in-first-out basis) of (x) the inventory of
the Borrower which conforms to the representations and warranties contained in
the Security Agreement, less any supplies (other than raw materials) or
promotional, marketing or shipping materials, goods returned by customers
-11-
(other than goods returned in the ordinary course of business representing
unsold inventory which remains marketable at cost or greater), goods rejected by
customers, goods to be returned to suppliers, goods and other inventory that are
obsolete, unusable or otherwise unavailable for sale and, at any time and from
time to time on and after February 23, 1998, goods and other inventory located
on leaseholds (other than public warehouses leased by the Borrower on a monthly
basis) as to which the lessor has not entered into an agreement providing the
Administrative Agent with the right to receive notices of default and the right
to take possession of such goods or other inventory, and less any reserves
required in accordance with GAAP for special order goods, market value declines
and xxxx and hold (deferred shipment) sales, (y) any inventory to be purchased
by the Borrower to the extent such inventory is supported by a Letter of Credit
and (z) any inventory of DESA Europe or DESA Canada stored outside the United
States, to the extent the same meets the requirements of clause (x) above (with
necessary reference changes and except that same may be owned by DESA Europe or
DESA Canada and stored outside of the United States, and are not subject to the
liens created under the Security Agreement), in an aggregate amount not to
exceed $5,000,000; provided that, notwithstanding the foregoing provisions of
this definition, the Administrative Agent may, in its reasonable discretion
following an audit field examination conducted (solely at the expense of the
Borrower) by a qualified independent auditor and based upon its analysis of
factors and circumstances arising after the date of this Agreement that may
affect all or any portion of the goods and other inventory of the Borrower and
its Subsidiaries or the value thereof, and upon at least five Business Days'
notice to the Borrower of its intention to do so, exclude one or more other
types of goods or other inventory from Eligible Inventory for all purposes of
this Agreement.
"Eligible Receivable" means (x) the gross amount of the accounts
receivable of the Borrower and DESA Canada which conform to the representations
and warranties contained herein and in the Security Agreement (with necessary
reference changes in the case of DESA Canada and except that the accounts
receivable of DESA Canada are owned by, and owed to, DESA Canada and are not
subject to the liens created pursuant to the Security Agreement), less any
returns, discounts, claims, credits and allowances of any nature (whether
issued, owing, granted or outstanding) and less reserves for any other matter
affecting the creditworthiness of account debtors owing any of the accounts
receivable (including, without limitation, accounts receivable owing from any
Person that shall take or be the subject of any action or proceeding of the type
described in Section 6.01(f)) and excluding (i) governmental sales (except to
the extent supported by a letter of credit issued by an issuer satisfactory to
the Administrative Agent), (ii) xxxx and hold (or deferred shipment)
transactions, guaranteed sales, sales-or-return, sales on approval or on a
consignment basis or sales subject to any right of return, setoff or chargeback,
(iii) contracts or sales to any Affiliate of the Borrower or to the Parent
Guarantor or any of its Subsidiaries and (iv) all accounts receivable which have
not been paid in full within 60 days of the due date thereof and (y) the gross
amount of those accounts receivable of DESA Europe where the payment of at least
75% of the amount of the respective accounts receivable is assured pursuant to
credit insurance issued by an insurer acceptable to the Administrative Agent,
which insurance is in full force and effect; provided that, notwithstanding the
foregoing provisions of
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this definition, the Administrative Agent may, in its reasonable discretion
following an audit field examination conducted (and solely at the expense of the
Borrower) by a qualified independent auditor and based upon its analysis of
factors and circumstances arising after the date of this Agreement that may
affect all or any portion of the accounts receivable of the Borrower and its
Subsidiaries or the value thereof, and upon at least five Business Days' notice
to the Borrower of its intention to do so, exclude one or more other types of
accounts receivable from Eligible Receivables for all purposes of this
Agreement.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of noncompliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to public or
employee health or safety or the environment, including, without limitation, (a)
by any governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental or
regulatory authority or third party for damages, contribution, indemnification,
cost recovery, compensation or injunctive relief.
-13-
"Environmental Law" means any federal, state, local or foreign statute,
law, ordinance, rule, regulation, code, order, writ, judgment, injunction or
decree, or judicial or agency interpretation, policy or guidance having the
force or effect of law, relating to pollution or protection of the environment,
public or employee health or safety, or natural resources, including, without
limitation, those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Equipment" has the meaning specified in Section 1(a) of the Security
Agreement.
"Equity Investors" means, collectively, the Childs Investors, the
Institutional Investors and the Management Investors.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under common
control with any Loan Party, within the meaning of Section 414 of the Internal
Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the PBGC
or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA (without
regard to subsection (2) of such Section) are met with respect to a contributing
sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA
is reasonably expected to occur with respect to such Plan within the following
30 days; (b) the application for a minimum funding waiver with respect to a
Plan; (c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA); (d) the cessation of operations at a facility of any Loan Party or any
ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e)
the withdrawal by any Loan Party or any ERISA Affiliate from a Multiple Employer
Plan during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a lien under
Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the
adoption of an amendment to a Plan requiring the provision of security to such
Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to
administer, such Plan.
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"Eurocurrency Liabilities" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing, an interest rate per annum
equal to the rate per annum obtained by dividing (a) the rate per annum
appearing on page 3750 (or any successor page) of the Dow Xxxxx Telerate Screen
as the London interbank offered rate for deposits in U.S. dollars at 11:00 A.M.
(London time) two Business Days before the first day of such Interest Period and
for a period equal to such Interest Period; provided that, if for any reason
such rate is not available, the term "Eurodollar Rate" shall mean, for any
Interest Period for all Eurodollar Rate Advances comprising part of the same
Borrowing, the rate per annum appearing on Reuters Screen LIBO Page as the
London interbank offered rate for deposits in U.S. dollars at approximately
11:00 A.M. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period (and, if more than
one rate is specified on Reuters Screen LIBO Page at such time, the applicable
rate shall be the arithmetic mean of all such rates), by (b) a percentage equal
to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" means, for any Interest Period for
all Eurodollar Rate Advances comprising part of the same Borrowing, the reserve
percentage applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Rate Advances is determined) having a term equal to such Interest
Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excess Cash Flow" means, for any period, the sum (without duplication)
of (a) Consolidated net income (or loss) of the Parent Guarantor and its
Subsidiaries for such period plus (b) the aggregate amount of all noncash
charges deducted in arriving at such Consolidated
-15-
net income (or loss) plus (c) if there was a net increase in Consolidated
Current Liabilities of the Parent Guarantor and its Subsidiaries during such
period, the amount of such net increase plus (d) if there was a net decrease in
Consolidated Current Assets (excluding cash and Cash Equivalents) of the Parent
Guarantor and its Subsidiaries during such period, the amount of such net
decrease less (e) the aggregate amount of all noncash credits included in
arriving at such Consolidated net income (or loss) less (f) if there was a net
decrease in Consolidated Current Liabilities of the Parent Guarantor and its
Subsidiaries during such period, the amount of such net decrease less (g) if
there was a net increase in Consolidated Current Assets (excluding cash and Cash
Equivalents) of the Parent Guarantor and its Subsidiaries during such period,
the amount of such net increase less (h) an amount equal to the amount of all
Capital Expenditures of the Parent Guarantor and its Subsidiaries paid in cash
during such period to the extent otherwise permitted by this Agreement less (i)
an amount equal to the aggregate amount of all Required Principal Payments made
during such period to the extent otherwise permitted by this Agreement, together
with any optional prepayments of Term Advances or Acquisition Advances made
during such period in accordance with Section 2.06(a), less (j) to the extent
not otherwise excluded from the calculation of Excess Cash Flow for such period,
an amount equal to the net gain, if any, attributable to the sale, lease,
transfer or other disposition of property and assets of the Parent Guarantor and
its Subsidiaries and included in determining the Consolidated net income (or
loss) of the Parent Guarantor and its Subsidiaries for such period less (k) an
amount equal to the aggregate amount of all dividends and other distributions on
the Parent Guarantor Stock paid in cash during such period to the extent
otherwise permitted under this Agreement.
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business, including,
without limitation, tax refunds, pension plan reversions, proceeds of insurance
(other than proceeds of business interruption insurance to the extent such
proceeds constitute compensation for lost earnings), condemnation awards (and
payments in lieu thereof), indemnity payments in respect of loss or damage to
equipment, fixed assets or real property and payments in respect of judgments or
settlements of litigation or proceedings; provided, however, that an
Extraordinary Receipt shall not include cash receipts received from proceeds of
insurance, condemnation awards (or payments in lieu thereof), indemnity payments
or payments in respect of judgments or settlements of litigation or proceedings
to the extent that such proceeds, awards or payments to the extent otherwise
permitted under the Loan Documents are applied (or in respect of which
expenditures were previously incurred) to replace or repair the equipment, fixed
assets or real property in respect of which such proceeds were received in
accordance with the terms of the Loan Documents, so long as such application is
made within 12 months after the occurrence of such damage or loss.
"Facility" means the Acquisition Facility, the Term A Facility, the
Term B Facility, the Working Capital Facility, the Swing Line Facility or the
Letter of Credit Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as
-16-
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day for such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.
"Fiscal Year" means a fiscal year of the Borrower and its Subsidiaries
ending on the Saturday closest to February 28 in any calendar year.
"Fixed Charge Coverage Ratio" means, with respect to the Parent
Guarantor and its Subsidiaries for any Measurement Period, the ratio of (a) (i)
Consolidated EBITDA of the Parent Guarantor and its Subsidiaries for such period
less (ii) solely in the case of the first three Measurement Periods occurring
after the date of the Initial Extension of Credit, the lesser of (A) the
aggregate amount of all Capital Expenditures made by the Parent Guarantor and
its Subsidiaries since the date of the Initial Extension of Credit and, in the
case of each Measurement Period occurring thereafter, the aggregate amount of
all Capital Expenditures made by the Parent Guarantor and its Subsidiaries
during such period, and (B) $4,000,000 to (b) the sum of (i) solely in the case
of the first three Measurement Periods occurring after the date of the Initial
Extension of Credit, all Consolidated Cash Interest Expense of the Parent
Guarantor and its Subsidiaries since the date of the Initial Extension of
Credit, and, in the case of each Measurement Period occurring thereafter, all
Consolidated Cash Interest Expense of the Parent Guarantor and its Subsidiaries
for such period, (ii) solely in the case of the first three Measurement Periods
occurring after the date of the Initial Extension of Credit, the aggregate
amount of all Required Principal Payments made (or required to be made) by the
Parent Guarantor and its Subsidiaries during the period commencing on the date
of the Initial Extension of Credit and ending on November 30, 1998, and, in the
case of each Measurement Period occurring thereafter, the aggregate amount of
all Required Principal Payments made by the Parent Guarantor and its
Subsidiaries during such period, and (iii) the aggregate amount of all dividends
and other distributions on the Parent Guarantor Stock made in cash by the Parent
Guarantor during such period to the extent otherwise permitted by this
Agreement.
"Foreign Corporation" means any Foreign Subsidiary that constitutes a
"controlled foreign corporation" under Section 957 of the Internal Revenue Code.
"Foreign Subsidiary" means, at any time, any of the direct or indirect
Subsidiaries of the Parent Guarantor (other than the Borrower) that are
organized outside of the laws of the United States or any state or other
political subdivision thereof at such time.
"Funded Debt" of any Person means Debt in respect of the Advances, in
the case of the Borrower, and all other Debt of such Person that by its terms
matures more than one year after the date of determination or matures within one
year from such date but is renewable or extendible, at the option of such
Person, to a date more than one year after such date or arises under a revolving
credit or similar agreement that obligates the lender or lenders to extend
credit
-17-
during a period of more than one year after such date, including, without
limitation, all amounts of Funded Debt of such Person required to be paid or
prepaid within one year after the date of determination.
"Funded Facilities" means, at any date of determination, the aggregate
principal amount of all Term Advances and Acquisition Advances outstanding on
such date.
"GAAP" has the meaning specified in Section 1.03.
"Guaranteed Obligations" has the meaning specified in Section 8.01.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous, toxic
or words of similar import under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
"Hedge Bank" means any Lender Party or any of its Affiliates, in its
capacity as a party to a Bank Hedge Agreement.
"Indemnified Party" has the meaning specified in Section 9.04(b).
"Information Memorandum" means the information memorandum dated
November 1997 used by the Administrative Agent in connection with the
syndication of the Commitments.
"Initial Extension of Credit" means the earlier to occur of (a) the
initial Borrowing and (b) the initial issuance of a Letter of Credit hereunder.
"Initial Issuing Bank" has the meaning specified in the recital of
parties to this Agreement.
"Initial Lenders" has the meaning specified in the recital of parties
to this Agreement.
"Initial Pledged Debt" has the meaning specified in the Security
Agreement.
"Initial Pledged Shares" has the meaning specified in the Security
Agreement.
"Institutional Investors" means the Equity Investors set forth in Part
C of Schedule II hereto.
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"Insufficiency" means, with respect to any Plan, the amount, if any, of
its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"Intellectual Property Security Agreement" has the meaning specified in
Section 3.01(j)(ix).
"Interest Coverage Ratio" means, with respect to the Parent Guarantor
and its Subsidiaries for any Measurement Period, the ratio of (a) Consolidated
EBITDA of the Parent Guarantor and its Subsidiaries for such period to (b)
solely in the case of the first three Measurement Periods occurring after the
date of the Initial Extension of Credit, all Consolidated Cash Interest Expense
of the Parent Guarantor and its Subsidiaries since the date of the Initial
Extension of Credit, and, in the case of each Measurement Period occurring
thereafter, all Consolidated Cash Interest Expense of the Parent Guarantor and
its Subsidiaries for such period.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such Eurodollar
Rate Advance or the date of the Conversion of any Alternate Base Rate Advance
into such Eurodollar Rate Advance and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and, thereafter, each
subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of each such Interest
Period shall be one, two, three or six months, as the Borrower may, upon notice
received by the Administrative Agent not later than 12:00 Noon (Charlotte, North
Carolina time) on the third Business Day prior to the first day of such Interest
Period, select; provided, however, that:
(a) the Borrower may not select any Interest Period
with respect to any Eurodollar Rate Advance under a Facility that ends after any
principal repayment installment date for such Facility unless, after giving
effect to such selection, the aggregate principal amount of Alternate Base Rate
Advances and of Eurodollar Rate Advances having Interest Periods that end on or
prior to such principal repayment installment date for such Facility shall be at
least equal to the aggregate principal amount of Advances under such Facility
due and payable on or prior to such date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing shall be of the
same duration;
(c) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day,
provided, however, that, if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding Business Day; and
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there is no numerically
corresponding day in the calendar
-19-
month that succeeds such initial calendar month by the number of months equal to
the number of months in such Interest Period, such Interest Period shall end on
the last Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Inventory" has the meaning specified in Section 1(b) of the Security
Agreement.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock or other ownership or
profit interest, warrants, rights, options, obligations or other securities of
such Person, any capital contribution to such Person or any other investment in
such Person, including, without limitation, any arrangement pursuant to which
the investor incurs Debt of the types referred to in clause (i) or (j) of the
definition of "Debt" in respect of such Person.
"IP Security Agreement Supplement" has the meaning specified in the
Intellectual Property Security Agreement.
"Issuing Bank" means the Initial Issuing Bank and each Eligible
Assignee to which the Letter of Credit Commitment hereunder has been assigned
pursuant to Section 9.07.
"Junior Exchange Notes" means the 12% Junior Subordinated Notes of the
Parent Guarantor due 2009, in each case in the form of Exhibit A to the
certificate of designation for the Parent Guarantor Preferred Stock, issued upon
the exchange of all of the outstanding Parent Guarantor Preferred Stock pursuant
to Section 5 of such certificate of designation.
"L/C Cash Collateral Account" has the meaning specified in the Security
Agreement.
"L/C Related Documents" has the meaning specified in Section
2.04(e)(ii)(A).
"Lender/Agent Indemnified Costs" has the meaning specified in Section
7.05(a).
"Lender/Issuing Bank Indemnified Costs" has the meaning specified in
Section 7.05(b).
"Lender Party" means any Lender, the Issuing Bank or the Swing Line
Bank.
"Lenders" means the Initial Lenders and each Person that shall become a
Lender hereunder pursuant to Section 9.07.
"Letter of Credit" has the meaning specified in Section 2.01(f).
-20-
"Letter of Credit Advance" means an advance made by the Issuing Bank or
any Working Capital Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.03(a).
"Letter of Credit Commitment" means, with respect to the Issuing Bank
at any time, the amount set forth opposite the Issuing Bank's name on Schedule I
hereto under the caption "Letter of Credit Commitment" or, if the Issuing Bank
has entered into one or more Assignments and Acceptances, set forth for the
Issuing Bank in the Register maintained by the Administrative Agent pursuant to
Section 9.07(d) as the Issuing Bank's "Letter of Credit Commitment", as such
amount may be reduced at or prior to such time pursuant to Section 2.05.
"Letter of Credit Facility" means, at any time, an amount equal to the
amount of the Issuing Bank's Letter of Credit Commitment at such time, as such
amount may be reduced at or prior to such time pursuant to Section 2.05.
"Lien" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
"Loan Documents" means (a) for purposes of this Agreement and the Notes
and any amendment or modification hereof or thereof and for all other purposes
other than for purposes of the Parent Guaranty, the Subsidiary Guaranties and
the Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) the Parent
Guaranty, (iv) the Subsidiary Guaranties, (v) the Collateral Documents and (vi)
each Letter of Credit Agreement and (b) for purposes of the Parent Guaranty, the
Subsidiary Guaranties and the Collateral Documents and all other purposes not
otherwise included in clause (a) of this definition, (i) this Agreement, (ii)
the Notes, (iii) the Subsidiary Guaranties, (iv) the Parent Guaranty, (v) the
Collateral Documents, (vi) each Letter of Credit Agreement and (vii) each Bank
Hedge Agreement, in each case as amended, supplemented or otherwise modified
from time to time.
"Loan Parties" means the Borrower, the Parent Guarantor and each
Subsidiary Guarantor.
"Loan Value" means, as at any date on which the amount thereof is being
determined, an amount equal to the sum of 85% of Eligible Receivables and 65% of
Eligible Inventory, each as determined from the Borrowing Base Certificate most
recently delivered pursuant to Section 5.03(r); provided that during the period
from January 1 to May 31 in each year, the Loan Value of all Eligible Collateral
shall be deemed to be an amount equal to the greater of (i) $15,000,000 and (ii)
the sum of 85% of Eligible Receivables and 65% of Eligible Inventory, each as
determined from the Borrowing Base Certificate most recently delivered pursuant
to Section 5.03(r).
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"Management Agreements" means, collectively, (a) the Management
Agreement dated as of November 26, 1997 among X.X. Childs Associates L.P., the
Parent Guarantor and the Borrower and (b) the Management Agreement dated as of
November 26, 1997 among UBS Management, Inc., the Parent Guarantor and the
Borrower, in each case, as such agreement may be amended, supplemented or
otherwise modified in accordance with their terms, but to the extent permitted
hereunder.
"Management Investors" means the Equity Investors set forth in Part B
of Schedule II hereto.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in the
assets, business, condition (financial or otherwise), operations, performance,
properties or prospects of the Parent Guarantor and its Subsidiaries, taken as a
whole.
"Material Adverse Effect" means a material adverse effect on (a) the
assets, business, condition (financial or otherwise), operations, performance,
properties or prospects of the Parent Guarantor and its Subsidiaries, taken as a
whole, (b) the rights and remedies of the Administrative Agent or any Lender
Party under any Loan Document or any Related Document or (c) the ability of any
Loan Party to perform its Obligations under any Loan Document or any Related
Document to which it is or is to be a party.
"Material Subsidiary" means, at any date of determination, any
Subsidiary of the Parent Guarantor that, either individually or, together with
its Subsidiaries, taken as a whole, (a) accounted for more than 5% of the
consolidated revenues of the Parent Guarantor and its Subsidiaries for the most
recently completed Fiscal Year prior to such date, (b) owned more than 5% of the
Consolidated assets of the Parent Guarantor and its Subsidiaries as of the last
day of the most recently completed Fiscal Year prior to such date or (c)
accounted for more than 5% of the Consolidated net earnings of the Parent
Guarantor and its Subsidiaries for the most recently completed Fiscal Year prior
to such date, in each case as reflected on the most recently completed
Consolidated financial statements of the Parent Guarantor and its Subsidiaries
delivered to the Lenders pursuant to Section 5.03(b), 5.03(c) or 5.03(d) prior
to such date and determined in accordance with GAAP for such period.
"Measurement Period" means, at any date of determination, the most
recently completed four consecutive fiscal quarters of the Parent Guarantor on
or immediately prior to such date; provided, however, that (a) the calculation
of Capital Expenditures in subclause (a)(ii)(A) of the Fixed Charge Coverage
Ratio or any calculation of Consolidated Cash Interest Expense for the first
Measurement Period ending after the date of the Initial Extension of Credit
shall be multiplied by four, (b) the calculation of Capital Expenditures in
subclause (a)(ii)(A) of the Fixed Charge Coverage Ratio or any calculation of
Consolidated Cash Interest Expense for the second Measurement Period ending
after the date of the Initial Extension of Credit shall be
-22-
multiplied by two and (c) the calculation of Capital Expenditures in subclause
(a)(ii)(A) of the Fixed Charge Coverage Ratio or any calculation of Consolidated
Cash Interest Expense for the third Measurement Period ending after the date of
the Initial Extension of Credit shall be multiplied by 1.33.
"Mortgage" has the meaning specified in Section 3.01(j)(x).
"Mortgage Policy" has the meaning specified in Section 3.01(j)(x)(B).
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and at least one Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which any
Loan Party or any ERISA Affiliate could have liability under Section 4064 or
4069 of ERISA in the event such plan has been or were to be terminated.
"NationsBank" has the meaning specified in the recital of parties to
this Agreement.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any asset or the sale or issuance of any Debt or capital
stock or other ownership or profit interest, any securities convertible into or
exchangeable for capital stock or other ownership or profit interest or any
warrants, rights, options or other securities to acquire capital stock or other
ownership or profit interest by any Person, or any Extraordinary Receipt
received by or paid to or for the account of any Person, the aggregate amount of
cash received from time to time (whether as initial consideration or through
payment or disposition of deferred consideration) by or on behalf of such Person
in connection with such transaction after deducting therefrom only (without
duplication) (a) brokerage commissions, underwriting fees and discounts, legal
fees, finder's fees and other similar fees and commissions, (b) the amount of
taxes payable in connection with or as a result of such transaction and (c) the
amount of any Debt permitted by Section 5.02(b) (other than Debt incurred under
the Loan Documents) and secured by a Lien on such asset that, by the terms of
such transaction, is required to be repaid upon such disposition, in each case
to the extent, but only to the extent, that the amounts so deducted are properly
attributable to such transaction or to the asset that is the subject thereof and
are, in the case of clauses (a) and (c), at the time of receipt of such cash,
actually paid to a Person that is not an Affiliate of such Person or any Loan
Party or any Affiliate of any Loan Party and, in the case of clause (b), on the
earlier of the dates on which the tax return covering such taxes is filed or
required to be filed, actually paid to a Person that is not an Affiliate of such
Person or any Loan Party or any Affiliate of any Loan Party, provided that if
the amount deducted pursuant to clause
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(b) above is greater than the amount actually so paid, the amount of such excess
shall constitute "Net Cash Proceeds".
"NMSI" has the meaning specified in the recital of parties to this
Agreement.
"Note" means an Acquisition Note, a Term A Note, a Term B Note or a
Working Capital Note.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Default" has the meaning specified in Section 7.06.
"Notice of Issuance" has the meaning specified in Section 2.03(a).
"Notice of Renewal" has the meaning specified in Section 2.01(f).
"Notice of Swing Line Borrowing" has the meaning specified in Section
2.02(b).
"Notice of Termination" has the meaning specified in Section 2.01(f).
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(f). Without limiting the generality of the foregoing, the
Obligations of the Loan Parties under the Loan Documents include (a) the
obligation to pay principal, interest, Letter of Credit commissions, charges,
expenses, fees, reasonable attorneys' fees and disbursements, indemnities and
other amounts payable by any Loan Party under any Loan Document and (b) the
obligation of any Loan Party to reimburse any amount in respect of any of the
foregoing that any Lender Party, in its sole discretion, may elect to pay or
advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and Development.
"Open Year" has the meaning specified in Section 4.01(aa).
"Other Taxes" has the meaning specified in Section 2.12(b).
"Parent Guarantor" has the meaning specified in the recital of parties
to this Agreement.
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"Parent Guarantor Common Stock" has the meaning specified in the
Preliminary Statements to this Agreement.
"Parent Guarantor Preferred Stock" has the meaning specified in the
Preliminary Statements to this Agreement.
"Parent Guarantor Stock" means, collectively, the Parent Guarantor
Common Stock and the Parent Guarantor Preferred Stock.
"Parent Guaranty" has the meaning specified in Section 8.01.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Performance Level" means Performance Level I, Performance Level II,
Performance Level III, Performance Level IV or Performance Level V, as the
context may require. For purposes of determining the Performance Level at any
date of determination, no change in the Performance Level shall be effective
until three Business Days after the date on which the Administrative Agent
receives Consolidated financial statements of the Parent Guarantor and its
Subsidiaries pursuant to (and satisfying all of the requirements of) Section
5.03(c) or 5.03(d) reflecting such change and the related certificate pursuant
to Section 5.03(d); provided, however, that if the Parent Guarantor has not
submitted to the Administrative Agent all of the information required under this
definition as and when required under Section 5.03(c) or 5.03(d), as the case
may be, the Performance Level shall be deemed to be at Performance Level V for
so long as such information has not been submitted.
"Performance Level I" means, at any date of determination, that the
Parent Guarantor and its Subsidiaries shall have maintained a Senior Leverage
Ratio of less than 2.00:1 as of the last day of the most recently completed
Measurement Period prior to such date.
"Performance Level II" means, at any date of determination, that (a)
the Performance Level does not meet the requirements of Performance Level I and
(b) the Parent Guarantor and its Subsidiaries shall have maintained a Senior
Leverage Ratio of less than 2.50:1 as of the last day of the most recently
completed Measurement Period prior to such date.
"Performance Level III" means, at any date of determination, that (a)
the Performance Level does not meet the requirements of Performance Level I or
Performance Level II and (b) the Parent Guarantor and its Subsidiaries shall
have maintained a Senior Leverage Ratio of less than 3.00:1 as of the last day
of the most recently completed Measurement Period prior to such date.
"Performance Level IV" means, at any date of determination, that (a)
the Performance Level does not meet the requirements of Performance Level I,
Performance Level II or Performance Level III and (b) the Parent Guarantor and
its Subsidiaries shall have maintained a
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Senior Leverage Ratio of less than 3.50:1 as of the last day of the most
recently completed Measurement Period prior to such date.
"Performance Level V" means, at any date of determination, that the
Performance Level does not meet the requirements of Performance Level I,
Performance Level II, Performance Level III or Performance Level IV.
"Permitted Encumbrances" has the meaning specified in the Mortgages.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (a) Liens for taxes, assessments and governmental charges or
levies to the extent not otherwise required to be paid under Section 5.01(b);
(b) Liens imposed by law, such as materialmen's, mechanics', carriers',
workmen's and repairmen's Liens and other similar Liens arising in the ordinary
course of business securing obligations (other than Debt for borrowed money) (i)
that are not overdue for a period of more than 60 days or (ii) the amount,
applicability or validity of which are being contested in good faith and by
appropriate proceedings diligently conducted and with respect to which the
Parent Guarantor has established reserves in accordance with GAAP; (c) pledges
or deposits to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations; (d) Liens securing the
performance of, or payment in respect of, bids, tenders, government contracts
(other than for the repayment of borrowed money), surety and appeal bonds and
other obligations of a similar nature incurred in the ordinary course of
business; (e) any interest or title of a lessor or sublessor and any restriction
or encumbrance to which the interest or title of such lessor or sublessor may be
subject that is incurred in the ordinary course of business and, either
individually or when aggregated with all other Permitted Liens in effect on any
date of determination, could not be reasonably expected to have a Material
Adverse Effect; (f) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in connection with the
importation of goods; and (g) Permitted Encumbrances and other easements, rights
of way and other encumbrances on title to real property that do not render title
to the property encumbered thereby unmarketable or materially adversely affect
the use of such property for its present purposes or materially interfere with
the ordinary course of business of the Parent Guarantor or any of its
Subsidiaries.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Preferred Stock" means, with respect to any corporation, capital stock
issued by such corporation that is entitled to a preference or priority over any
other capital stock issued by such corporation upon any distribution of such
corporation's assets, whether by dividend or upon liquidation.
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"Prepayment Amount" has the meaning specified in Section 2.06(c).
"Prepayment Date" has the meaning specified in Section 2.06(c).
"Pro Rata Share" of any amount means, with respect to any Working
Capital Lender at any time, the product of such amount times a fraction the
numerator of which is the amount of such Lender's Working Capital Commitment at
such time and the denominator of which is the Working Capital Facility at such
time.
"Quarterly Payment Date" means the last Business Day of each February,
May, August and November, commencing February 27, 1998.
"Recapitalization" has the meaning specified in the Preliminary
Statements to this Agreement.
"Recapitalization Agreement" has the meaning specified in the
Preliminary Statements to this Agreement.
"Receipt Date" has the meaning specified in Section 2.06(c).
"Receivables" has the meaning specified in Section 1(c) of the Security
Agreement.
"Redeemable" means, with respect to any capital stock or other
ownership or profit interest, Debt or other right or Obligation, any such right
or Obligation that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation of a sinking fund or otherwise,
or upon the occurrence of a condition not solely within the control of the
issuer or (b) is redeemable at the option of the holder.
"Reduction Amount" has the meaning specified in Section 2.06(b)(vi)(A).
"Register" has the meaning specified in Section 9.07(d).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Related Documents" means the Recapitalization Agreement, the
Subordinated Note Documents, the Shareholders Agreement and the Management
Agreements.
"Required Lenders" means at any time Lenders owed or holding at least a
majority in interest of the sum of (a) the aggregate principal amount of the
Advances outstanding at such time, (b) the aggregate Available Amount of all
Letters of Credit outstanding at such time, (c) the aggregate unused Commitments
under the Term A Facility and the Term B Facility at such time and (d) the
aggregate Unused Acquisition Commitments and Unused Working Capital
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Commitments at such time; provided, however, that, if any Lender shall be a
Defaulting Lender at such time, there shall be excluded from the determination
of Required Lenders at such time (A) the aggregate principal amount of the
Advances owing to such Lender (in its capacity as a Lender) and outstanding at
such time, (B) such Lender's Pro Rata Share of the aggregate Available Amount of
all Letters of Credit issued by such Lender and outstanding at such time, (C)
the aggregate unused Term A Commitment and Term B Commitment of such Lender at
such time and (D) the Unused Acquisition Commitment and Unused Working Capital
Commitment of such Lender at such time. For purposes of this definition, the
aggregate principal amount of Swing Line Advances owing to the Swing Line Bank
and of Letter of Credit Advances owing to the Issuing Bank and the Available
Amount of each Letter of Credit shall be considered to be owed to the Working
Capital Lenders ratably in accordance with their respective Working Capital
Commitments.
"Required Principal Payments" means, with respect to any Person for any
period, the sum of all regularly scheduled principal payments or redemptions and
all required prepayments, repurchases, redemptions or similar acquisitions for
value of outstanding Funded Debt made during such period.
"Revolving Loans" has the meaning specified in the Amended and Restated
Credit Agreement dated as of January 12, 1996 among the Borrower, the Parent
Guarantor, the banks and other financial institutions from time to time party
thereto and Bankers Trust Company, as agent thereunder, as such agreement may
have been further amended, supplemented or otherwise modified to the date
hereof.
"Secured Obligations" has the meaning specified in the Security
Agreement.
"Secured Parties" means, collectively, the Administrative Agent, the
Lender Parties and the Hedge Banks.
"Security Agreement" has the meaning specified in Section
3.01(j)(viii).
"Senior Leverage Ratio" means, with respect to the Parent Guarantor and
its Subsidiaries at any date of determination, the ratio of (a) (i) Adjusted
Funded Debt at such date less (ii) the sum of (A) the aggregate principal amount
of all Subordinated Notes outstanding on such date and (B) the aggregate
principal amount of all Debt incurred pursuant to Section 5.02(b)(iv)(F)
outstanding on such date to (b) Consolidated EBITDA of the Parent Guarantor and
its Subsidiaries for the most recently completed Measurement Period on or prior
to such date.
"Stockholders Agreement" means the Stockholders Agreement dated as of
November 26, 1997 by and among the Parent Guarantor and the Equity Investors, as
amended, supplemented or otherwise modified from time to time in accordance with
its terms, but only to the extent permitted hereunder.
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"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and no Person other than the Loan Parties and the
ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party
or any ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Standby Letter of Credit" means any Letter of Credit issued under the
Letter of Credit Facility, other than a Trade Letter of Credit.
"Subordinated Note Documents" means the agreements, indentures,
guarantees and instruments which govern the Subordinated Notes, as the same may
be amended, modified or otherwise supplemented from time to time in accordance
with the provisions of this Agreement.
"Subordinated Notes" means the 9-7/8% senior subordinated notes of the
Borrower due 2007 in an aggregate principal amount of $130,000,000 issued and
sold (or to be issued and sold) on or prior to the Effective Date pursuant to
the terms of the Subordinated Note Documents.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership,
joint venture or limited liability company or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries.
"Subsidiary Guaranties" has the meaning specified in Section
5.01(o)(i).
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"Subsidiary Guarantor" means any subsidiary, direct or indirect, of the
Parent Guarantor that executes a Subsidiary Guaranty in accordance with the
terms of the Loan Documents.
"Surviving Debt" has the meaning specified in Section 3.01(f).
"Swing Line Advance" means an advance made by (a) the Swing Line Bank
pursuant to Section 2.01(e) or (b) any Working Capital Lender pursuant to
Section 2.02(b).
"Swing Line Bank" has the meaning specified in the recital of parties
to this Agreement.
"Swing Line Borrowing" means a borrowing consisting of a Swing Line
Advance made by the Swing Line Bank.
"Swing Line Facility" has the meaning specified in Section 2.01(e).
"Syndication Agent" has the meaning specified in the recital of parties
to this Agreement.
"Taxes" has the meaning specified in Section 2.12(a).
"Term A Advance" has the meaning specified in Section 2.01(a).
"Term A Borrowing" means a borrowing consisting of simultaneous Term A
Advances of the same Type made by the Term A Lenders.
"Term A Commitment" means, with respect to any Term A Lender at any
time, the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Term A Commitment" or, if such Lender has entered into one or
more Assignments and Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 9.07(d) as such
Lender's "Term A Commitment", as such amount may be reduced at or prior to such
time pursuant to Section 2.05.
"Term A Facility" means, at any time, the aggregate amount of the Term
A Lenders' Term A Commitments at such time.
"Term A Lender" means any Lender that has a Term A Commitment.
"Term A Note" means a promissory note of the Borrower payable to the
order of any Term A Lender, in substantially the form of Exhibit A-2 hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from the
Term A Advance made by such Lender.
"Term A Termination Date" means the earlier of (a) November 26, 2003
and (b) the date of termination in whole of the Term A Commitments pursuant to
Section 2.05 or 6.01.
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"Term Advances" means, collectively, the Term A Advances and the Term B
Advances.
"Term B Advance" has the meaning specified in Section 2.01(b).
"Term B Borrowing" means a borrowing consisting of simultaneous Term B
Advances of the same Type made by the Term B Lenders.
"Term B Commitment" means, with respect to any Term B Lender at any
time, the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Term B Commitment" or, if such Lender has entered into one or
more Assignments and Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 9.07(d) as such
Lender's "Term B Commitment", as such amount may be reduced at or prior to such
time pursuant to Section 2.05.
"Term B Facility" means, at any time, the aggregate amount of the Term
B Lenders' Term B Commitments at such time.
"Term B Lender" means any Lender that has a Term B Commitment.
"Term B Note" means a promissory note of the Borrower payable to the
order of any Term B Lender, in substantially the form of Exhibit A-3 hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from the
Term B Advance made by such Lender.
"Term B Termination Date" means the earlier of (a) November 26, 2004
and (b) the date of termination in whole of the Term B Commitments pursuant to
Section 2.05 or 6.01.
"Term Facilities" means, collectively, the Term A Facility and the Term
B Facility.
"Total Leverage Ratio" means, with respect to the Parent Guarantor and
its Subsidiaries at any date of determination, the ratio of (a) Adjusted Funded
Debt at such date to (b) Consolidated EBITDA of the Parent Guarantor and its
Subsidiaries for the most recently completed Measurement Period on or prior to
such date.
"Trade Letter of Credit" means any Letter of Credit that is issued
under the Letter of Credit Facility for the benefit of a supplier of Inventory
to the Borrower or any of its Subsidiaries to effect payment for such Inventory.
"Type" refers to the distinction between Advances bearing interest at
the Alternate Base Rate and Advances bearing interest at the Eurodollar Rate.
"UBS Securities" has the meaning specified in the recital of parties to
this Agreement.
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"Unfunded Facilities" means, from time to time, the Working Capital
Commitments plus Acquisition Commitments minus Acquisition Advances then
outstanding.
"Unused Acquisition Commitment" means, with respect to any Acquisition
Lender at any time, (a) such Lender's Acquisition Commitment at such time minus
(b) the aggregate principal amount of all Acquisition Advances made by such
Lender and outstanding at such time.
"Unused Working Capital Commitment" means, with respect to any Working
Capital Lender at any time, (a) such Lender's Working Capital Commitment at such
time minus (b) the sum of (i) the aggregate principal amount of all Working
Capital Advances, Swing Line Advances and Letter of Credit Advances made by such
Lender (in its capacity as a Lender) and outstanding at such time, plus (ii)
such Lender's Pro Rata Share of (A) the aggregate Available Amount of all
Letters of Credit outstanding at such time, (B) the aggregate principal amount
of all Letter of Credit Advances made by the Issuing Bank pursuant to Section
2.03(c) and outstanding at such time and (C) the aggregate principal amount of
all Swing Line Advances made by the Swing Line Bank pursuant to Section 2.01(e)
and outstanding at such time.
"Voting Equity Interests" has the meaning specified in Section
5.01(o)(iii).
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of which
any Loan Party could have liability.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
"Working Capital Advance" has the meaning specified in Section 2.01(c).
"Working Capital Borrowing" means a borrowing consisting of
simultaneous Working Capital Advances of the same Type made by the Working
Capital Lenders.
"Working Capital Commitment" means, with respect to any Working Capital
Lender at any time, the amount set forth opposite such Lender's name on Schedule
I hereto under the caption "Working Capital Commitment" or, if such Lender has
entered into one or more Assignments and Acceptances, set forth for such Lender
in the Register maintained by the Administrative Agent pursuant to Section
9.07(d) as such Lender's "Working Capital Commitment", as such amount may be
reduced at or prior to such time pursuant to Section 2.05.
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"Working Capital Facility" means, at any time, the aggregate amount of
the Working Capital Lenders' Working Capital Commitments at such time.
"Working Capital Lender" means any Lender that has a Working Capital
Commitment.
"Working Capital Note" means a promissory note of the Borrower payable
to the order of any Working Capital Lender, in substantially the form of Exhibit
A-4 hereto, evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Working Capital Advances made by such Lender.
"Working Capital Termination Date" means the earlier of (a) the Term A
Termination Date and (b) the date of termination in whole of the Working Capital
Commitments pursuant to Section 2.05 or 6.01.
SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) The Term A Advances. Each Term
A Lender severally agrees, on the terms and conditions hereinafter set forth, to
make a single advance (a "Term A Advance") to the Borrower on any Business Day
during the period from the date hereof until December 31, 1997 in an amount not
to exceed such Lender's Term A Commitment at such time. The Term A Borrowing
shall consist of Term A Advances made simultaneously by the Term A Lenders
ratably according to their Term A Commitments. Amounts borrowed under this
Section 2.01(a) and repaid or prepaid may not be reborrowed.
(b) The Term B Advances. Each Term B Lender severally agrees,
on the terms and conditions hereinafter set forth, to make a single advance (a
"Term B Advance") to the Borrower on the same Business Day that the Term A
Advances are made pursuant to Section 2.01(a) during the period from the date
hereof until December 31, 1997 in an amount not to exceed such Lender's Term B
Commitment at such time. The Term B Borrowing shall consist of Term B Advances
made simultaneously by the Term B Lenders ratably according to their
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Term B Commitments. Amounts borrowed under this Section 2.01(b) and repaid or
prepaid may not be reborrowed.
(c) The Working Capital Advances. Each Working Capital Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each, a "Working Capital Advance") to the Borrower from time to time
on any Business Day during the period from the date hereof until the Working
Capital Termination Date in an amount for each such Advance not to exceed such
Lender's Unused Working Capital Commitment at such time. Each Working Capital
Borrowing shall be in an aggregate amount of $1,500,000 or an integral multiple
of $250,000 in excess thereof (other than a Borrowing the proceeds of which
shall be used solely to repay or prepay in full outstanding Swing Line Advances
or outstanding Letter of Credit Advances) and shall consist of Working Capital
Advances made simultaneously by the Working Capital Lenders ratably according to
their Working Capital Commitments. Within the limits of each Working Capital
Lender's Unused Working Capital Commitment in effect from time to time, the
Borrower may borrow under this Section 2.01(c), prepay pursuant to Section
2.06(a) and reborrow under this Section 2.01(c).
(d) The Acquisition Advances. Subject to Section 2.14(b), each
Acquisition Lender severally agrees, on the terms and conditions hereinafter set
forth, to make advances (each, an "Acquisition Advance") to the Borrower from
time to time on any Business Day during the period from the date hereof until
the Acquisition Availability Date in an amount for each such Advance not to
exceed such Lender's Unused Acquisition Commitment at such time. Each
Acquisition Borrowing shall be in a minimum amount of $1,000,000 and shall
consist of Acquisition Advances made simultaneously by the Acquisition Lenders
ratably according to their Acquisition Commitments. Amounts borrowed under this
Section 2.01(d) and repaid or prepaid may not be reborrowed.
(e) The Swing Line Advances. The Borrower may request the
Swing Line Bank to make, and the Swing Line Bank severally agrees, on the terms
and conditions hereinafter set forth, to make Swing Line Advances to the
Borrower from time to time on any Business Day during the period from the date
hereof until the Working Capital Termination Date (i) in an aggregate amount not
to exceed at any time outstanding $5,000,000 (the "Swing Line Facility") and
(ii) in an amount for each such Swing Line Borrowing not to exceed the aggregate
amount of the Unused Working Capital Commitments of the Working Capital Lenders
at such time. No Swing Line Advance shall be used for the purpose of funding the
payment of principal of any other Swing Line Advance. Each Swing Line Borrowing
shall be in an amount of $100,000 or an integral multiple of $50,000 in excess
thereof and shall be made as a Alternate Base Rate Advance. Within the limits of
the Swing Line Facility and within the limits referred to in clause (ii) above,
the Borrower may borrow under this Section 2.01(d), repay pursuant to Section
2.04(d) or prepay pursuant to Section 2.06(a) and reborrow under this Section
2.01(d).
(f) Letters of Credit. The Issuing Bank agrees, on the terms
and conditions hereinafter set forth, to issue letters of credit containing
terms and conditions requested by the
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Borrower and reasonably acceptable to the Issuing Bank (the "Letters of Credit")
for the account of the Borrower from time to time on any Business Day during the
period from the date hereof until 30 days before the Working Capital Termination
Date (i) in an aggregate Available Amount for all Letters of Credit not to
exceed at any time the Issuing Bank's Letter of Credit Commitment at such time
and (ii) in an Available Amount for each such Letter of Credit not to exceed the
lesser of (1) the Letter of Credit Facility at such time and (2) the Unused
Working Capital Commitments of the Working Capital Lenders at such time. No
Letter of Credit shall have an expiration date (including all rights of the
Borrower or the beneficiary to require renewal) later than the earlier of ten
days before the Working Capital Termination Date and (A) in the case of a
Standby Letter of Credit, one year after the date of issuance thereof, but may
by its terms be renewable annually upon notice (a "Notice of Renewal") given to
the Issuing Bank and the Administrative Agent on or prior to any date for notice
of renewal set forth in such Letter of Credit but in any event at least three
Business Days prior to the date of the proposed renewal of such Standby Letter
of Credit and upon fulfillment of the applicable conditions set forth in Article
III unless the Issuing Bank has notified the Borrower (with a copy to the
Administrative Agent) on or prior to the date for notice of termination set
forth in such Letter of Credit but in any event at least 30 Business Days prior
to the date of automatic renewal of its election not to renew such Standby
Letter of Credit (a "Notice of Termination") and (B) in the case of a Trade
Letter of Credit, 60 days after the date of issuance thereof; provided that the
terms of each Standby Letter of Credit that is automatically renewable annually
shall (x) require the Issuing Bank that issued such Standby Letter of Credit to
give the beneficiary named in such Standby Letter of Credit notice of any Notice
of Termination, (y) permit such beneficiary, upon receipt of such notice, to
draw under such Standby Letter of Credit prior to the date such Standby Letter
of Credit otherwise would have been automatically renewed and (z) not permit the
expiration date (after giving effect to any renewal) of such Standby Letter of
Credit in any event to be extended to a date later than ten days before the
Working Capital Termination Date. If either a Notice of Renewal is not given by
the Borrower or a Notice of Termination is given by the Issuing Bank pursuant to
the immediately preceding sentence, such Standby Letter of Credit shall expire
on the date on which it otherwise would have been automatically renewed;
provided, however, that even in the absence of receipt of a Notice of Renewal
the Issuing Bank may in its discretion, unless instructed to the contrary by the
Administrative Agent or the Borrower, deem that a Notice of Renewal had been
timely delivered and in such case, a Notice of Renewal shall be deemed to have
been so delivered for all purposes under this Agreement. Within the limits of
the Letter of Credit Facility, and subject to the limits referred to above, the
Borrower may request the issuance of Letters of Credit under this Section
2.01(e), repay any Letter of Credit Advances resulting from drawings thereunder
pursuant to Section 2.03(c) and request the issuance of additional Letters of
Credit under this Section 2.01(e).
(g) Clean-Up. Notwithstanding the provisions of Sections
2.01(c) and 2.01(e), no Borrowings may be made under Section 2.01(c) or 2.01(e)
and no Letters of Credit shall be issued during any Clean-Up Period, unless the
sum of the aggregate principal amount of Working Capital Advances, Letter of
Credit Advances and Swing Line Advances outstanding (or
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to be outstanding) after giving effect to such Borrowing or such issuance, as
the case may be, shall not exceed $15,000,000.
SECTION 2.02. Making the Advances. (a) Except as otherwise
provided in Section 2.02(b) or 2.03, each Borrowing shall be made on notice,
given not later than 12:00 Noon (Charlotte, North Carolina time) on the third
Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances, or the first Business Day
prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Alternate Base Rate Advances, by the Borrower to the
Administrative Agent, which shall give to each Appropriate Lender prompt notice
thereof by telecopier. Each such notice of a Borrowing (a "Notice of Borrowing")
shall be by telephone, confirmed immediately in writing, or by telecopier, in
substantially the form of Exhibit B hereto, specifying therein the requested (i)
date of such Borrowing (which shall be a Business Day), (ii) Facility under
which such Borrowing is to be made, (iii) Type of Advances comprising such
Borrowing, (iv) aggregate amount of such Borrowing and (v) in the case of a
Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for
each such Advance. Each Appropriate Lender shall, before 11:00 A.M. (Charlotte,
North Carolina time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such Lender's ratable portion
of such Borrowing in accordance with the respective Commitments under the
applicable Facility of such Lender and the other Appropriate Lenders. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower by crediting the Borrower's Account;
provided, however, that in the case of any Working Capital Borrowing, the
Administrative Agent shall first make a portion of such funds equal to the
aggregate principal amount of any Swing Line Advances and Letter of Credit
Advances made by the Swing Line Bank or the Issuing Bank, as the case may be,
and by any other Working Capital Lender and outstanding on the date of such
Working Capital Borrowing, plus interest accrued and unpaid thereon to and as of
such date, available to the Swing Line Bank or the Issuing Bank, as the case may
be, and such other Working Capital Lenders for repayment of such Swing Line
Advances and Letter of Credit Advances.
(b) Each Swing Line Borrowing shall be made on notice, given
not later than 12:00 Noon (Charlotte, North Carolina time) on the date of the
proposed Swing Line Borrowing, by the Borrower to the Swing Line Bank and the
Administrative Agent. Each such notice of a Swing Line Borrowing (a "Notice of
Swing Line Borrowing") shall be by telephone, confirmed immediately in writing,
or by telecopier, in form and substance reasonably satisfactory to the
Administrative Agent and the Swing Line Bank, specifying therein the requested
(i) date of such Borrowing (which shall be a Business Day), (ii) amount of such
Borrowing and (iii) maturity of such Borrowing (which maturity shall be no later
than the seventh day after the requested date of such Borrowing). Upon
fulfillment of the applicable conditions set forth in Article III, the Swing
Line Bank will make the amount thereof available to the Administrative Agent at
the Administrative Agent's Account, in same day funds. After the Administrative
Agent's receipt of
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such funds, the Administrative Agent will make such funds available to the
Borrower by crediting the Borrower's Account. Upon written demand by the Swing
Line Bank, with a copy of such demand to the Administrative Agent, each other
Working Capital Lender shall purchase from the Swing Line Bank, and the Swing
Line Bank shall sell and assign to each such other Working Capital Lender, such
other Lender's Pro Rata Share of such outstanding Swing Line Advance as of the
date of such demand, by making available for the account of its Applicable
Lending Office to the Administrative Agent for the account of the Swing Line
Bank, by deposit to the Administrative Agent's Account, in same day funds, an
amount equal to the portion of the outstanding principal amount of such Swing
Line Advance to be purchased by such Lender. The Borrower hereby agrees to each
such sale and assignment. Each Working Capital Lender agrees to purchase its Pro
Rata Share of an outstanding Swing Line Advance on (i) the Business Day on which
demand therefor is made by the Swing Line Bank, (so long as notice of such
demand is given not later than 12:00 Noon (Charlotte, North Carolina time) on
such Business Day) or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by the
Swing Line Bank to any other Working Capital Lender of a portion of a Swing Line
Advance, the Swing Line Bank represents and warrants to such other Lender that
the Swing Line Bank is the legal and beneficial owner of such interest being
assigned by it, but makes no other representation or warranty and assumes no
responsibility with respect to such Swing Line Advance, the Loan Documents or
any Loan Party. If and to the extent that any Working Capital Lender shall not
have so made the amount of such Swing Line Advance available to the
Administrative Agent, such Working Capital Lender agrees to pay to the
Administrative Agent forthwith on demand such amount, together with interest
thereon, for each day from the date of demand by the Swing Line Bank until the
date such amount is paid to the Administrative Agent, at the Federal Funds Rate.
If such Working Capital Lender shall pay to the Administrative Agent such amount
for the account of the Swing Line Bank on any Business Day, such amount so paid
in respect of principal shall constitute a Swing Line Advance made by such
Working Capital Lender on such Business Day for all purposes of this Agreement,
and the outstanding principal amount of the Swing Line Advance made by the Swing
Line Bank shall be reduced by such amount on such Business Day.
(c) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
any Borrowing if the aggregate amount of such Borrowing is less than $1,000,000
or if the obligation of the Appropriate Lenders to make Eurodollar Rate Advances
shall then be suspended pursuant to Section 2.09 or Section 2.10 and (ii) the
Acquisition Advances may not be outstanding as part of more than six separate
Borrowings, the Term A Advances may not be outstanding as part of more than
three separate Borrowings, the Term B Advances may not be outstanding as part of
more than three separate Borrowings and the Working Capital Advances made on any
date may not be outstanding as part of more than ten separate Borrowings.
(d) Each Notice of Borrowing and Notice of Swing Line
Borrowing shall be irrevocable and binding on the Borrower. In the case of any
Borrowing that the related Notice of Borrowing specifies is to be comprised of
Eurodollar Rate Advances, if the Borrower fails to
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fulfill on or before the date specified in such Notice of Borrowing for such
Borrowing the applicable conditions set forth in Article III and the Advance to
be made by any Appropriate Lender as part of such Borrowing, as a result of such
failure, is not made on such date, the Borrower will pay to the Administrative
Agent for such Appropriate Lender an amount equal to the present value
(calculated in accordance with this Section 2.02(d)) of interest for the
Interest Period specified in such Notice of Borrowing on the amount of such
Advance, at a rate per annum equal to the excess of (a) the Eurodollar Rate that
would have been in effect for such Interest Period over (b) the Eurodollar Rate
applicable on the date of determination to a deemed Interest Period ending on
the last day of such Interest Period. The present value of such additional
interest shall be calculated by discounting the amount of such interest for each
day in the Interest Period specified in such Notice of Borrowing from such day
to the date of such repayment or termination at an interest rate per annum equal
to the interest rate determined pursuant to the immediately preceding sentence,
and by adding all such amounts for all such days during such period. The
determination by the Administrative Agent of such amount of interest shall be
conclusive and binding, absent manifest error.
(e) Unless the Administrative Agent shall have received notice
from an Appropriate Lender prior to the date of any Borrowing under a Facility
under which such Lender has a Commitment that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Administrative Agent, such
Lender and the Borrower severally agree to repay or pay to the Administrative
Agent forthwith on demand such corresponding amount and to pay interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid or paid to the Administrative Agent, at (i) in
the case of the Borrower, the interest rate applicable at such time under
Section 2.07 to Advances comprising such Borrowing and (ii) in the case of such
Lender, the Federal Funds Rate. If such Lender shall pay to the Administrative
Agent such corresponding amount, such amount so paid shall constitute such
Lender's Advance as part of such Borrowing for all purposes of this Agreement.
(f) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be
issued upon notice, given not later than 12:00 Noon (Charlotte, North Carolina
time) on the third Business Day prior to the
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date of the proposed issuance of such Letter of Credit, by the Borrower to the
Issuing Bank, which shall give to the Administrative Agent and each Working
Capital Lender prompt notice thereof by telecopier. Each such notice of issuance
of a Letter of Credit (a "Notice of Issuance") shall be by telephone, confirmed
immediately in writing, or by telecopier, specifying therein the requested (i)
date of such issuance (which shall be a Business Day), (ii) Available Amount of
such Letter of Credit, (iii) expiration date of such Letter of Credit, (iv) name
and address of the beneficiary of such Letter of Credit and (v) form of such
Letter of Credit, and shall be accompanied by such application and agreement for
letter of credit as the Issuing Bank may specify to the Borrower for use in
connection with such requested Letter of Credit (a "Letter of Credit
Agreement"). If the requested form of such Letter of Credit is acceptable to the
Issuing Bank in its sole discretion, the Issuing Bank will, upon fulfillment of
the applicable conditions set forth in Article III, make such Letter of Credit
available to the Borrower at its office referred to in Section 9.02 or as
otherwise agreed with the Borrower in connection with such issuance. In the
event and to the extent that the provisions of any Letter of Credit Agreement
shall conflict with this Agreement, the provisions of this Agreement shall
govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish
(i) to the Administrative Agent on the first Business Day of each week a written
report summarizing issuance and expiration dates of Letters of Credit issued
during the previous week and drawings during such week under all Letters of
Credit, (ii) to each Working Capital Lender on the first Business Day of each
month a written report summarizing issuance and expiration dates of Letters of
Credit issued during the preceding month and drawings during such month under
all Letters of Credit and (iii) to the Administrative Agent and each Working
Capital Lender on the first Business Day of each calendar quarter a written
report setting forth the average daily aggregate Available Amount during the
preceding calendar quarter of all Letters of Credit.
(c) Drawing and Reimbursement. The payment by the Issuing Bank
of a draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by the Issuing Bank of a Letter of Credit Advance,
which shall be a Alternate Base Rate Advance, in the amount of such draft. Upon
written demand by the Issuing Bank, with a copy of such demand to the
Administrative Agent, each Working Capital Lender shall purchase from the
Issuing Bank, and the Issuing Bank shall sell and assign to each such Working
Capital Lender, such Lender's Pro Rata Share of such outstanding Letter of
Credit Advance as of the date of such purchase, by making available for the
account of its Applicable Lending Office to the Administrative Agent for the
account of the Issuing Bank, by deposit to the Administrative Agent's Account,
in same day funds, an amount equal to the portion of the outstanding principal
amount of such Letter of Credit Advance to be purchased by such Lender. Promptly
after receipt thereof, the Administrative Agent shall transfer such funds to the
Issuing Bank. The Borrower hereby agrees to each such sale and assignment. Each
Working Capital Lender agrees to purchase its Pro Rata Share of an outstanding
Letter of Credit Advance on (i) the Business Day on which demand therefor is
made by the Issuing Bank (so long as notice of such demand is given not later
than 12:00 Noon (Charlotte, North Carolina time) on such Business Day) or (ii)
the first Business Day next succeeding such demand if notice of such demand is
given after such
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time. Upon any such assignment by the Issuing Bank to any other Working Capital
Lender of a portion of a Letter of Credit Advance, the Issuing Bank represents
and warrants to such other Lender that the Issuing Bank is the legal and
beneficial owner of such interest being assigned by it, free and clear of any
liens, but makes no other representation or warranty and assumes no
responsibility with respect to such Letter of Credit Advance, the Loan Documents
or any Loan Party. If and to the extent that any Working Capital Lender shall
not have so made the amount of such Letter of Credit Advance available to the
Administrative Agent, such Working Capital Lender agrees to pay to the
Administrative Agent forthwith on demand such amount together with interest
thereon, for each day from the date of demand by the Issuing Bank until the date
such amount is paid to the Administrative Agent, at the Federal Funds Rate for
its account or the account of the Issuing Bank, as applicable. If such Working
Capital Lender shall pay to the Administrative Agent such amount for the account
of the Issuing Bank on any Business Day, such amount so paid in respect of
principal shall constitute a Letter of Credit Advance made by such Working
Capital Lender on such Business Day for purposes of this Agreement, and the
outstanding principal amount of the Letter of Credit Advance made by the Issuing
Bank shall be reduced by such amount on such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of
any Working Capital Lender to make the Letter of Credit Advance to be made by it
on the date specified in Section 2.03(c) shall not relieve any other Working
Capital Lender of its obligation hereunder to make its Letter of Credit Advance
on such date, but no Working Capital Lender shall be responsible for the failure
of any other Working Capital Lender to make the Letter of Credit Advance to be
made by such other Working Capital Lender on such date.
SECTION 2.04. Repayment of Advances. (a) Acquisition Advances.
The Borrower shall repay to the Administrative Agent for the ratable account of
the Acquisition Lenders on the following dates an amount equal to the percentage
indicated for such date of the aggregate amount of Acquisition Advances
outstanding on the Acquisition Availability Date (after giving effect to any
prepayments thereof on the Acquisition Availability Date) (which amounts shall
be reduced as a result of the application of further prepayments in accordance
with the order of priority set forth in Section 2.06):
Quarterly Payment Date Percentage
---------------------- ----------
February, 2000 6.25%
May, 2000 6.25%
August, 2000 2.5%
November, 2000 10%
February, 2001 6.25%
May, 2001 6.25%
August, 2001 2.5%
November, 2001 10%
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February, 2002 6.25%
May, 2002 6.25%
August, 2002 2.5%
November, 2002 10%
February, 2003 6.25%
May, 2003 6.25%
August, 2003 2.5%
November, 2003 10%
provided, however, that the final principal installment shall be repaid on the
Acquisition Termination Date and in any event shall be in an amount equal to the
aggregate principal amount of the Acquisition Advances outstanding on such date.
(b) Term A Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Term A Lenders the aggregate
outstanding principal amount of the Term A Advances on the following dates in
the amounts indicated for such dates (which amounts shall be reduced as a result
of the application of prepayments in accordance with the order of priority set
forth in Section 2.06):
Quarterly Payment Date Amount
---------------------- ------
February, 1998 $875,000
May, 1998 875,000
August, 1998 350,000
November, 1998 1,400,000
February, 1999 1,625,000
May, 1999 1,625,000
August, 1999 650,000
November, 1999 2,600,000
February, 2000 2,500,000
May, 2000 2,500,000
August, 2000 1,000,000
November, 2000 4,000,000
February, 2001 2,500,000
May, 2001 2,500,000
August, 2001 1,000,000
November, 2001 4,000,000
February, 2002 2,500,000
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May, 2002 2,500,000
August, 2002 1,000,000
November, 2002 4,000,000
February, 2003 2,500,000
May, 2003 2,500,000
August, 2003 1,000,000
November 31, 2003 4,000,000
provided, however, that the final principal installment shall be repaid on the
Term A Termination Date and in any event shall be in an amount equal to the
aggregate principal amount of the Term A Advances outstanding on such date.
(c) Term B Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Term B Lenders the aggregate
outstanding principal amount of the Term B Advances on the following dates in
the amounts indicated for such dates (which amounts shall be reduced as a result
of the application of prepayments in accordance with the order of priority set
forth in Section 2.06):
Quarterly Payment Date Amount
---------------------- ------
February, 1998 $250,000
May, 1998 250,000
August, 1998 250,000
November, 1998 250,000
February, 1999 250,000
May, 1999 250,000
August, 1999 250,000
November, 1999 250,000
February, 2000 250,000
May, 2000 250,000
August, 2000 250,000
November, 2000 250,000
February, 2001 250,000
May, 2001 250,000
August, 2001 250,000
November, 2001 250,000
February, 2002 250,000
May, 2002 250,000
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August, 2002 250,000
November, 2002 250,000
February, 2003 250,000
May, 2003 250,000
August, 2003 250,000
November, 2003 250,000
February, 2004 17,600,000
May, 2004 4,400,000
August, 2004 4.400,000
November, 2004 17,600,000
provided, however, that the final principal installment shall be repaid on the
Term B Termination Date and in any event shall be in an amount equal to the
aggregate principal amount of the Term B Advances outstanding on such date.
(d) Working Capital Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Working Capital Lenders on
the Working Capital Termination Date the aggregate outstanding principal amount
of the Working Capital Advances then outstanding.
(e) Swing Line Advances. The Borrower shall repay to the
Administrative Agent for the account of the Swing Line Bank and each other
Working Capital Lender that has made a Swing Line Advance the outstanding
principal amount of each Swing Line Advance made by each of them on the earlier
of (i) the maturity date specified in the applicable Notice of Swing Line
Borrowing (which maturity shall be no later than the 30th day after the
requested date of such Swing Line Borrowing) and (ii) the Working Capital
Termination Date.
(f) Letter of Credit Advances. (i) The Borrower shall repay to
the Administrative Agent for the account of the Issuing Bank and each other
Working Capital Lender that has made a Letter of Credit Advance the outstanding
principal amount of each Letter of Credit Advance made by each of them on the
earlier of (A) the date of demand therefor and (B) the Working Capital
Termination Date.
(ii) The Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other agreement or instrument under all circumstances,
including, without limitation, the following circumstances (it being understood
that any such payment by the Borrower is without prejudice to, and does not
constitute a waiver
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of, any rights the Borrower might have or might acquire as a result of the
payment by the Issuing Bank of any draft or the reimbursement by the Borrower
thereof):
(A) any lack of validity or enforceability of any Loan Document, any
Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (all of the foregoing being, collectively, the "L/C
Related Documents");
(B) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of any
L/C Related Document or any other amendment or waiver of or any consent to
departure from all or any L/C Related Document;
(C) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any transferee of a
Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank or any other Person, whether in
connection with the transactions contemplated by the L/C Related Documents or
any unrelated transaction;
(D) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;
(E) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit, unless such draft or certificate is
substantially different from the applicable form specified by such Letter of
Credit;
(F) any exchange, release or nonperfection of any Collateral or other
collateral, or any release or amendment or waiver of or consent to departure
from the Parent Guaranty, any Subsidiary Guaranty or any other guarantee, for
all or any of the Obligations of the Borrower in respect of the L/C Related
Documents; or
(G) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower may, upon at least five Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the unused portions
of the Acquisition Commitments, the Term A Commitments, the Term B Commitments,
the Letter of Credit Facility and the Unused Working Capital Commitments;
provided, however, that each partial reduction of a Facility shall be in an
aggregate amount of $2,500,000 or an integral multiple of $500,000 in excess
thereof.
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(b) Mandatory. (i) On the date of the Term A Borrowing, after
giving effect to such Term A Borrowing, and from time to time thereafter upon
each repayment or prepayment of the Term A Advances, the aggregate Term A
Commitments of the Term A Lenders shall be automatically and permanently
reduced, on a pro rata basis, by an amount equal to the amount by which the
aggregate Term A Commitments immediately prior to such repayment or prepayment
exceed the aggregate unpaid principal amount of the Term A Advances then
outstanding.
(ii) On the date of the Term B Borrowing, after giving effect
to such Term B Borrowing, and from time to time thereafter upon each repayment
or prepayment of the Term B Advances, the aggregate Term B Commitments of the
Term B Lenders shall be automatically and permanently reduced, on a pro rata
basis, by an amount equal to the amount by which the aggregate Term B
Commitments immediately prior to such repayment or prepayment exceed the
aggregate unpaid principal amount of the Term B Advances then outstanding.
(iii) The Working Capital Facility shall be automatically and
permanently reduced on each date on which prepayment thereof is required to be
made pursuant to clause (i), (ii) or (iii) of Section 2.06(b) by an amount equal
to the applicable Reduction Amount.
(iv) (A) Prior to the Acquisition Availability Date, the
Acquisition Facility shall be automatically and permanently reduced on each date
on which prepayment thereof is required to be made pursuant to clause (i), (ii)
or (iii) of Section 2.06(b) by an amount equal to the applicable Acquisition
Reduction Amount and (B) thereafter from time to time upon each repayment or
prepayment of the Acquisition Advances, the aggregate Acquisition Commitments of
the Acquisition Lenders shall be automatically and permanently reduced, on a pro
rata basis, by an amount equal to the amount by which the aggregate Acquisition
Commitments immediately prior to such repayment or prepayment exceed the
aggregate unpaid principal amount of the Acquisition Advances then outstanding.
(v) The Swing Line Facility shall be automatically and
permanently reduced from time to time on the date of each reduction in the
Working Capital Facility by the amount, if any, by which the amount of the Swing
Line Facility exceeds the Working Capital Facility after giving effect to such
reduction of the Working Capital Facility.
(vi) The Letter of Credit Facility shall be automatically and
permanently reduced from time to time on the date of each reduction in the
Working Capital Facility by the amount, if any, by which the amount of the
Letter of Credit Facility exceeds the Working Capital Facility after giving
effect to such reduction of the Working Capital Facility.
(c) Application of Commitment Reductions. Upon each reduction
of any of the Facilities pursuant to this Section 2.05, the Commitment of each
of the Appropriate Lenders under such Facility shall be reduced by such Lender's
ratable share of the amount by which such
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Facility is reduced in accordance with the Appropriate Lenders' respective
Commitments with respect to such Facility.
SECTION 2.06. Prepayments. (a) Optional. The Borrower may,
upon at least one Business Day's notice in the case of Alternate Base Rate
Advances and three Business Days' notice in the case of Eurodollar Rate
Advances, in each case to the Administrative Agent received not later than 12:00
Noon (Charlotte, North Carolina time) stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the outstanding aggregate principal amount of the Advances
comprising part of the same Borrowing in whole or ratably in part, together with
accrued interest to the date of such prepayment on the aggregate principal
amount prepaid; provided, however, that (x) each partial prepayment (other than
prepayments of Swing Line Advances) shall be in an aggregate principal amount of
$1,000,000 or an integral multiple of $500,000 in excess thereof and (y) if any
prepayment of a Eurodollar Rate Advance shall be made other than on the last day
of an Interest Period therefor, the Borrower shall also pay any amounts owing
pursuant to Section 9.04(c). Each such prepayment of any Advances (other than
Swing Line Advances or Working Capital Advances) shall be applied ratably to the
Funded Facilities and to the principal installments thereof first, in order of
maturity to the principal installments that are due within the 12 months
following the date of such prepayment, and second, ratably to the remaining
principal installments thereof.
(b) Mandatory. (i) The Borrower shall, on the earlier of (A)
the third Business Day following each date on which the Parent Guarantor
delivers the audited Consolidated financial statements of the Parent Guarantor
and its Subsidiaries pursuant to Section 5.03(d) and (B) 96 days after the end
of each Fiscal Year, commencing with the Fiscal Year ended February 27, 1999,
prepay an aggregate principal amount of the Advances comprising part of the same
Borrowings equal to 50% of the remainder of (1) Excess Cash Flow for such Fiscal
Year minus (2) $500,000. Each such prepayment shall be applied ratably to the
Funded Facilities and to the principal installments thereof first, in order of
maturity to the principal installments that are due within the 12 months
following the date of such prepayment, and second, ratably to the remaining
principal installments thereof. To the extent that no Advances in respect of the
Funded Facilities remain outstanding, prepayments shall be applied permanently
to reduce the Unfunded Facilities as set forth in clause (vii) below.
(ii) The Borrower shall, on the date of receipt of the Net
Cash Proceeds by any Loan Party or any of its Subsidiaries from (A) the sale,
lease, transfer or other disposition of any assets of any Loan Party or any of
its Subsidiaries (other than any sale, lease, transfer or other disposition of
assets pursuant to clause (i), (ii), (iii) or (v) of Section 5.02(d)), (B) the
incurrence or issuance by any Loan Party or any of its Subsidiaries of any Debt
(other than Debt incurred or issued pursuant to clause (i), (ii), (iii) and (iv)
of Section 5.02(b)), (C) the sale or issuance by any Loan Party or any of its
Subsidiaries of any capital stock (or other equity or ownership or profit
interest), any securities convertible into or exchangeable for any capital stock
(or other equity or ownership or profit interest) or any warrants, rights or
options to
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acquire any capital stock (or other equity or ownership or profit interest)
(other than the sale or issuance of any additional Parent Guarantor Stock (or
any warrants, rights or options to acquire additional Parent Guarantor Stock)
(1) to any of the Childs Investors or (2) to any of the Equity Investors in
consideration for any capital contribution made thereby in cash pursuant to
Section 5.02(e)(viii)) and (D) any Extraordinary Receipt received by or paid to
or for the account of any Loan Party or any of its Subsidiaries and not
otherwise included in clause (A), (B) or (C) above, prepay an aggregate
principal amount of the Advances comprising part of the same Borrowings equal to
the amount of such Net Cash Proceeds; provided that, so long as no Default under
Section 6.01(a) or 6.01(f) or Event of Default has occurred and is continuing,
the Borrower may defer making any prepayment otherwise required under this
Section 2.06(b)(ii) until the aggregate Net Cash Proceeds received by the Loan
Parties and their Subsidiaries under this Section 2.06(b)(ii), whether as a
result of one or more transactions covered hereby, equals at least $1,000,000
(although during such deferral period, the Borrower may apply all or any part of
such aggregate amount to prepay Working Capital Advances and may, subject to the
fulfillment of the conditions set forth in Section 3.02, reborrow such amounts
(which amounts, to the extent originally constituting Net Cash Proceeds, shall
be deemed to retain their original character as Net Cash Proceeds when so
reborrowed) for application as required by this Section 2.06); provided,
however, that, upon the occurrence of a Default under Section 6.01(a) or 6.01(f)
or an Event of Default, the Borrower shall immediately prepay Advances in the
amount of all Net Cash Proceeds received by the Borrower that are required to be
applied to prepay Advances by this Section 2.06 (without giving effect to the
immediately preceding proviso) but which have not previously been so applied.
Each such prepayment shall be applied ratably to the Funded Facilities and to
the principal installments thereof first, in order of maturity to the principal
installments that are due within the 12 months following the date of such
prepayment, and second, ratably to the remaining principal installments thereof.
To the extent that no Advances in respect of the Funded Facilities remain
outstanding, prepayments shall be applied permanently to reduce the Unfunded
Facilities as set forth in clause (vii) below.
(iii) Notwithstanding any of the other provisions of this
Section 2.06,
(A) if, following the occurrence of any "Asset Sale" (as defined in the
indenture for the Subordinated Notes), the Borrower is required to commit by a
particular date (a "Commitment Date") to apply or to cause any of its
Subsidiaries to apply an amount equal to any of the "Net Proceeds" (as defined
in the indenture for the Subordinated Notes) thereof in a particular manner, or
to apply or to cause any of its Subsidiaries to apply by a particular date (an
"Application Date") an amount equal to any such "Net Proceeds" in a particular
manner, in either case in order to excuse the Borrower from being required to
make an offer to redeem or to repurchase all or a portion of the Subordinated
Notes as a result of such "Asset Sale", and the Borrower shall have failed to so
commit or to so apply, or to have caused any of its Subsidiaries to so commit or
to so apply, an amount equal to such "Net Proceeds" at least 30 days before the
Commitment Date or the Application Date, as the case may be, or
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(B) if the Borrower at any other time shall have failed to apply or to
commit, or to have caused any of its Subsidiaries to apply or to commit, an
amount equal to any such "Net Proceeds", and within 30 days thereafter assuming
no further application or commitment of an amount equal to such "Net Proceeds",
the Borrower would otherwise be required to make an offer to redeem or to
repurchase all or a portion of the Subordinated Notes as a result of such "Asset
Sale",
then, in either such case, the Borrower shall immediately apply or cause to be
applied to the prepayment of the aggregate principal amount of Advances
comprising part of the same Borrowings an amount equal to the amount of such
"Net Proceeds" required to excuse the Borrower from making any such offer of
redemption or repurchase. Each such prepayment shall be applied ratably to the
Funded Facilities and to the principal installments thereof first, in order of
maturity to the principal installments that are due within the 12 months
following the date of such prepayment, and second, ratably to the remaining
principal installments thereof. To the extent that no Advances in respect of the
Funded Facilities remain outstanding, prepayments shall be applied permanently
to reduce the Unfunded Facilities as set forth in clause (vii) below.
(iv) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Working Capital Advances comprising part of
the same Borrowings and the Letter of Credit Advances and the Swing Line
Advances equal to the amount by which (A) the sum of (x) the aggregate principal
amount of the Working Capital Advances, the Letter of Credit Advances and the
Swing Line Advances then outstanding plus (y) the aggregate Available Amount of
all Letters of Credit then outstanding exceeds (B) the lesser of (x) the Working
Capital Facility and (y) the Loan Value of all Eligible Collateral on such
Business Day.
(v) The Borrower shall, on each Business Day, pay to the
Administrative Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such L/C Cash Collateral
Account to equal the amount by which the aggregate Available Amount of all
Letters of Credit then outstanding exceeds the Letter of Credit Facility on such
Business Day.
(vi) The Borrower shall pay to the Administrative Agent, on
the first day of each Clean-Up Period, an amount equal to the amount by which
the aggregate principal amount of the Working Capital Advances, the Letter of
Credit Advances and the Swing Line Advances then outstanding exceeds
$15,000,000, to be applied to prepay such outstanding Working Capital Advances,
the Letter of Credit Advances and the Swing Line Advances.
(vii) (A) Prepayments of the Working Capital Facility made
pursuant to clause (i), (ii), (iii), (iv) or (vi) above shall be first applied
to prepay Letter of Credit Advances then outstanding until such Advances are
paid in full, second applied to prepay Swing Line Advances then outstanding
until such Advances are paid in full, third applied to prepay Working Capital
Advances then outstanding comprising part of the same Borrowings until such
Advances are paid in full and fourth deposited in the L/C Cash Collateral
Account to cash collateralize 100%
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of the Available Amount of the Letters of Credit then outstanding; and, in the
case of prepayments of the Working Capital Facility required pursuant to clause
(i), (ii) or (iii) above, the amount remaining (if any) after the prepayment in
full of the Working Capital Advances then outstanding and the cash
collateralization of the aggregate Available Amount of Letters of Credit then
outstanding (the sum of such prepayment amounts, cash collateralization amounts
and remaining amounts being referred to herein as the "Reduction Amount") may be
retained by the Borrower for use in its business and operations in the ordinary
course, and the Working Capital Facility shall be permanently reduced as set
forth in Section 2.05(b)(iv). Upon the drawing of any Letter of Credit for which
funds are on deposit in the L/C Cash Collateral Account, such funds shall be
applied to reimburse the Issuing Bank or Working Capital Lenders, as applicable.
(B) In the case of prepayments of the Acquisition Facility
required pursuant to clause (i) or (ii) above, the amount remaining (if any)
after the prepayment in full of the Acquisition Advances then outstanding (the
sum of such prepayment amounts and remaining amount being referred to herein as
the "Acquisition Reduction Amount") may be retained by the Borrower for use in
its business and operations in the ordinary course, and the Working Capital
Facility shall be permanently reduced as set forth in Section 2.05(b)(v).
(viii) All prepayments under this subsection (b) shall be made
together with (A) accrued interest to the date of such prepayment on the
principal amount prepaid and (B) in the case of any such prepayment of a
Eurodollar Rate Advance on a date other than the last day of an Interest Period
therefor, any amounts owing in respect of such Eurodollar Rate Advance pursuant
to Section 9.04(c).
(c) Application of Prepayments; Term B Opt-Out. With respect
to any prepayment of the Funded Facilities, the Administrative Agent shall
ratably pay such Facilities; provided, however, that any Term B Lender, at its
option, may elect not to accept such prepayment, in which event the provisions
of the next sentence shall apply. Upon receipt by the Administrative Agent of
any prepayment, the amount of the prepayment that is available to prepay the
Term B Advances (subject to the proviso to the immediately preceding sentence)
shall be deposited in the Cash Collateral Account (the "Prepayment Amount"),
pending application of such amount on the Prepayment Date as set forth below and
promptly after such receipt (the date of such receipt being the "Receipt Date"),
the Administrative Agent shall give written notice to the Term B Lenders of the
amount available to prepay the Term B Advances and the date on which such
prepayment shall be made (the "Prepayment Date"), which date shall be 10 days
after the Receipt Date. Any Lender declining such prepayment (a "Declining
Lender") shall give written notice to the Administrative Agent by 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day immediately preceding the
Prepayment Date. On the Prepayment Date, an amount equal to that portion of the
Prepayment Amount accepted by the Term B Lenders other than the Declining
Lenders (such Lenders being the "Accepting Lenders") to prepay Term B Advances
owing to such Accepting Lenders shall be withdrawn from the Cash Collateral
Account and applied to prepay Term Advances owing to such Accepting Lenders on a
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pro rata basis. Any amounts that would otherwise have been applied to prepay
Advances under the Funded Facilities owing to Declining Lenders shall instead be
applied ratably to prepay the remaining Advances under the Funded Facilities as
provided in Sections 2.06(a) and (b); provided further that on prepayment in
full of Advances under the Funded Facilities owing to Lenders other than
Declining Lenders, the remainder of any Prepayment Amount shall be applied
ratably to prepay Term B Advances owing to Declining Lenders.
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender from the date of such Advance until such principal amount shall be paid
in full, at the following rates per annum:
(i) Alternate Base Rate Advances. During such periods as such
Advance is an Alternate Base Rate Advance, a rate per annum equal at all times
to the sum of (A) the Alternate Base Rate in effect from time to time plus (B)
the Applicable Margin for such Type of Advance in effect from time to time,
payable in arrears quarterly on each Quarterly Payment Date during such periods
and on the date such Alternate Base Rate Advance shall be Converted or paid in
full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during
each Interest Period for such Advance to the sum of (A) the Eurodollar Rate for
such Interest Period for such Advance plus (B) the Applicable Margin for such
Type of Advance in effect from time to time, payable in arrears on the last day
of such Interest Period and, if such Interest Period has a duration of more than
three months, on each day that occurs during such Interest Period every three
months from the first day of such Interest Period and on the date such
Eurodollar Rate Advance shall be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the
continuance of a Default under Section 6.01(a) or 6.01(f), the Borrower shall
pay interest on (i) the unpaid principal amount of each Advance owing to each
Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii)
above and on demand, at a rate per annum equal at all times to 2% per annum
above the rate per annum required to be paid on such Advance pursuant to clause
(a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by law, the
amount of any interest, fee or other amount payable hereunder that is not paid
when due, from the date such amount shall be due until such amount shall be paid
in full, payable in arrears on the date such amount shall be paid in full and on
demand, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid, in the case of interest, on the Type of Advance
on which such interest has accrued pursuant to clause (a)(i) or (a)(ii) above,
and, in all other cases, on Alternate Base Rate Advances pursuant to clause
(a)(i) above.
(c) Notice of Interest Rate. Promptly after receipt of a
Notice of Borrowing pursuant to Section 2.02(a), the Administrative Agent shall
give notice to the Borrower and each
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Appropriate Lender of the applicable interest rate determined by the
Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay
to the Administrative Agent for the account of the Appropriate Lenders (i) a
working capital commitment fee, from the date hereof in the case of each Initial
Lender and from the effective date specified in the Assignment and Acceptance
pursuant to which it became a Working Capital Lender in the case of each other
Working Capital Lender until the Term A Termination Date and (ii) an acquisition
commitment fee, from the date hereof in the case of each Initial Lender and from
the effective date specified in the Assignment and Acceptance pursuant to which
it became an Acquisition Lender in the case of each other Acquisition Lender
until the Acquisition Availability Date, and, in the case of clauses (i) and
(ii), payable in arrears on the date of the Initial Extension of Credit
hereunder, thereafter on each Quarterly Payment Date and on the Term A
Termination Date or the Acquisition Availability Date, respectively, at the
Applicable Percentage in effect from time to time on the average daily unused
portion of the Facilities.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to
the Administrative Agent for the account of each Working Capital Lender a
commission, payable in arrears quarterly on each Quarterly Payment Date, on the
earliest to occur of the full drawing expiration, termination or cancellation of
any such Letter of Credit and on the Working Capital Termination Date, on such
Lender's Pro Rata Share of the average daily aggregate Available Amount during
such quarter of (i) all Standby Letters of Credit outstanding from time to time
at a rate equal to the Applicable Margin at such time for Eurodollar Rate
Advances under the Working Capital Facility and (2) all Trade Letters of Credit
outstanding at such time at a rate equal to 0.50% per annum.
(ii) The Borrower shall pay to the Issuing Bank, for its own
account, (A) a fronting fee, payable in arrears quarterly on each Quarterly
Payment Date and on the Term A Termination Date, on the average daily amount of
its Letter of Credit Commitment during such quarter, from the date hereof until
the Working Capital Termination Date, at the rate of 0.25% per annum and (B)
such other commissions, fronting fees, transfer fees and other fees and charges
in connection with the issuance or administration of each Letter of Credit as
the Borrower and the Issuing Bank shall agree.
(c) Agents' Fees. The Borrower shall pay to each of the Agents
for their own accounts such fees as may from time to time be agreed between the
Borrower, on the one hand, and the Administrative Agent and, if applicable, such
other Agent, on the other hand.
SECTION 2.09. Conversion of Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Administrative Agent
not later than 12:00 Noon (Charlotte, North Carolina time) on the third Business
Day prior to the date of the proposed Conversion and subject to the provisions
of Section 2.10, Convert all or any portion of the Advances of one Type
comprising the same Borrowing into Advances of the other Type;
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provided, however, that any Conversion of Eurodollar Rate Advances into
Alternate Base Rate Advances shall be made only on the last day of an Interest
Period for such Eurodollar Rate Advances, any Conversion of Alternate Base Rate
Advances into Eurodollar Rate Advances shall be in an amount not less than the
minimum amount specified in Section 2.02(c), no Conversion of any Advances shall
result in more separate Borrowings than permitted under Section 2.02(c) and each
Conversion of Advances comprising part of the same Borrowing under any Facility
shall be made ratably among the Appropriate Lenders in accordance with their
Commitments under such Facility. Each such notice of Conversion shall, within
the restrictions specified above, specify (i) the date of such Conversion, (ii)
the Advances to be Converted and (iii) if such Conversion is into Eurodollar
Rate Advances, the duration of the initial Interest Period for such Advances.
Each notice of Conversion shall be irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $1,000,000, such
Advances shall automatically Convert into Alternate Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Alternate
Base Rate Advance.
(iii) Upon the occurrence and during the continuance of any
Default under Section 6.01(a) or 6.01(f) or an Event of Default, (x) each
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Alternate Base Rate Advance and (y) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining Letters of Credit or of agreeing to make or
of making or maintaining Letter of Credit Advances (excluding for purposes of
this Section 2.10 any such increased costs resulting from (i) Taxes or Other
Taxes (as to which Section 2.12 shall govern) and (ii) changes in the basis of
taxation of overall net income or overall gross income by the United States or
by the foreign jurisdiction or state under the laws of which such Lender Party
is organized or has its Applicable Lending Office or any political subdivision
thereof), then the Borrower shall from time to time, upon demand by such Lender
Party (with a copy of such
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demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender Party additional amounts sufficient to compensate such
Lender Party for such increased cost; provided, however, that the Borrower shall
not be responsible for costs under this Section 2.10(a) arising more than 90
days prior to receipt by the Borrower of the certificate from the affected
Lender pursuant to this Section 2.10(a) with respect to such costs; and provided
further that a Lender Party claiming additional amounts under this Section
2.10(a) agrees to use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such a designation would avoid the need for, or
reduce the amount of, such increased cost that may thereafter accrue and would
not, in the reasonable judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party. A certificate as to the amount of such
increased cost (together with a schedule setting forth in reasonable detail the
calculation thereof), submitted to the Borrower by such Lender Party, shall be
conclusive and binding for all purposes, absent manifest error. In determining
such amount, such Lender Party may use any reasonable averaging and attribution
methods.
(b) If, due to either (i) the introduction of or any change in
or in the interpretation of any law or regulation or (ii) the compliance with
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by any Lender Party or
corporation controlling such Lender Party as a result of or based upon the
existence of such Lender Party's commitment to lend or to issue Letters of
Credit hereunder and other commitments of such type or the issuance or
maintenance of the Letters of Credit (or similar contingent obligations), then,
upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the Administrative Agent for
the account of such Lender Party, from time to time as specified by such Lender
Party, additional amounts sufficient to compensate such Lender Party in the
light of such circumstances, to the extent that such Lender Party reasonably
determines such increase in capital to be allocable to the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder or to
the issuance or maintenance of any Letters of Credit; provided, however, that
the Borrower shall not be responsible for costs under this Section 2.10(b)
arising more than 90 days prior to receipt by the Borrower of the certificate
from the affected Lender pursuant to this Section 2.10(b) with respect to such
costs. A certificate as to such amounts (together with a schedule setting forth
in reasonable detail the calculation thereof) submitted to the Borrower by such
Lender Party shall be conclusive and binding for all purposes, absent manifest
error. In determining such amount, such Lender Party may use any reasonable
averaging and attribution methods.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed at least a majority of the then aggregate unpaid
principal amount of Eurodollar Rate Advances under such Facility notify the
Administrative Agent that the Eurodollar Rate for any Interest Period for such
Advances will not adequately reflect the cost to such Lenders of making, funding
or maintaining their Eurodollar Rate Advances for such Interest Period, the
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Administrative Agent shall forthwith so notify the Borrower and the Appropriate
Lenders, whereupon (i) each such Eurodollar Rate Advance under any Facility will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Alternate Base Rate Advance and (ii) the obligation of the
Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrower that such Lenders have determined that the circumstances causing such
suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance under each
Facility under which such Lender has a Commitment will automatically, upon such
demand, Convert into a Alternate Base Rate Advance and (ii) the obligation of
the Appropriate Lenders under each such Facility to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative Agent
shall notify the Borrower that such Lender has determined that the circumstances
causing such suspension no longer exist; provided, however, that, before making
any such demand, such Lender agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to designate a
different Eurodollar Lending Office if the making of such a designation would
allow such Lender or its Eurodollar Lending Office to continue to perform its
obligations to make Eurodollar Rate Advances or to continue to fund or maintain
Eurodollar Rate Advances and would not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender.
SECTION 2.11. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes, irrespective of any right
of counterclaim or set-off (except as otherwise provided in Section 2.15), not
later than 12:00 Noon (Charlotte, North Carolina time) on the day when due (or,
in the case of payments made by the Parent Guarantor pursuant to Section 8.01,
on the date of demand therefor) in U.S. dollars to the Administrative Agent at
the Administrative Agent's Account in same day funds. The Administrative Agent
will promptly thereafter cause like funds to be distributed (i) if such payment
by the Borrower is in respect of principal, interest, commitment fees or any
other Obligation then payable hereunder and under the Notes to more than one
Lender Party, to such Lender Parties for the account of their respective
Applicable Lending Offices ratably in accordance with the amounts of such
respective Obligations then payable to such Lender Parties and (ii) if such
payment by the Borrower is in respect of any Obligation then payable hereunder
to one Lender Party, to such Lender Party for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 9.07(d),
from and after the effective date of such Assignment and Acceptance, the
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Administrative Agent shall make all payments hereunder and under the Notes in
respect of the interest assigned thereby to the Lender Party assignee
thereunder, and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) If the Administrative Agent receives funds for application
to the Obligations under the Loan Documents under circumstances for which the
Loan Documents do not specify the Advances or the Facility to which, or the
manner in which, such funds are to be applied, the Administrative Agent may, but
shall not be obligated to, elect to distribute such funds to each Lender Party
ratably in accordance with such Lender Party's proportionate share of the
principal amount of all outstanding Advances and the Available Amount of all
Letters of Credit then outstanding, in repayment or prepayment of such of the
outstanding Advances or other Obligations owed to such Lender Party, and for
application to such principal installments, as the Administrative Agent shall
direct.
(c) The Borrower hereby authorizes each Lender Party, if and
to the extent payment owed to such Lender Party is not made when due hereunder
or, in the case of a Lender, under the Note held by such Lender, to charge from
time to time against any or all of the Borrower's accounts with such Lender
Party any amount so due. Each of the Lender Parties hereby agrees to notify the
Borrower promptly after any such setoff and application shall be made by such
Lender Party; provided, however, that the failure to give such notice shall not
affect the validity of such charge.
(d) All computations of interest, fees and Letter of Credit
commissions shall be made by the Administrative Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest,
fees or commissions are payable. Each determination by the Administrative Agent
of an interest rate, fee or commission hereunder shall be conclusive and binding
for all purposes, absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or commitment fee, as
the case may be; provided, however, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(f) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to any Lender
Party hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each
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such Lender Party on such due date an amount equal to the amount then due such
Lender Party. If and to the extent the Borrower shall not have so made such
payment in full to the Administrative Agent, each such Lender Party shall repay
to the Administrative Agent forthwith on demand such amount distributed to such
Lender Party together with interest thereon, for each day from the date such
amount is distributed to such Lender Party until the date such Lender Party
repays such amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the Parent
Guarantor or the Borrower hereunder or under the Notes shall be made, in
accordance with Section 2.11, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender Party and the Administrative Agent, taxes that are imposed on its
overall net income by the United States and taxes that are imposed on its
overall net income (and franchise taxes imposed in lieu thereof) by the state or
foreign jurisdiction under the laws of which such Lender Party or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Lender Party, taxes that are
imposed on its overall net income (and franchise taxes imposed in lieu thereof)
by the state or foreign jurisdiction of such Lender Party's Applicable Lending
Office or any political subdivision thereof (all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities in respect of
payments hereunder or under the Notes being hereinafter referred to as "Taxes").
If the Parent Guarantor or the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under any Note to any
Lender Party or the Administrative Agent, (i) the sum payable shall be increased
as may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.12) such
Lender Party or the Administrative Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Parent Guarantor or the Borrower shall make such deductions and (iii) the
Parent Guarantor or the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Parent Guarantor or the Borrower hereby
agree to pay any present or future stamp, documentary, excise, property or
similar taxes, charges or levies that arise from any payment made hereunder or
under the Notes or from the execution, delivery or registration of, performing
under, or otherwise with respect to, this Agreement or the Notes (hereinafter
referred to as "Other Taxes").
(c) Each of the Parent Guarantor and the Borrower shall
indemnify each Lender Party and the Administrative Agent for and hold it
harmless against the full amount of Taxes and Other Taxes, and for the full
amount of taxes of any kind imposed by any jurisdiction on amounts payable under
this Section 2.12, imposed on or paid by such Lender Party or the Administrative
Agent (as the case may be) and any liability (including penalties, additions to
tax, interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be
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made within 30 days from the date such Lender Party or the Administrative Agent
(as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Parent Guarantor or the Borrower, as the case may be, shall furnish to the
Administrative Agent, at its address referred to in Section 9.02, the original
or a certified copy of a receipt evidencing such payment, to the extent such a
receipt is issued therefor, or other written proof of payment thereof that is
reasonably satisfactory to the Administrative Agent. In the case of any payment
hereunder or under the Notes by or on behalf of the Parent Guarantor or the
Borrower through an account or branch outside the United States or by or on
behalf of the Parent Guarantor or the Borrower by a payor that is not a United
States person, if the Parent Guarantor or the Borrower determines that no Taxes
are payable in respect thereof, the Parent Guarantor or the Borrower shall
furnish, or shall cause such payor to furnish, to the Administrative Agent, at
its address referred to in Section 9.02, an opinion of counsel acceptable to the
Administrative Agent stating that such payment is exempt from Taxes. For
purposes of this subsection (d) and subsection (e), the terms "United States"
and "United States person" shall have the meanings specified in Section 7701 of
the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each Initial Lender or
the Initial Issuing Bank, as the case may be, and on the date of the Assignment
and Acceptance pursuant to which it becomes a Lender Party in the case of each
other Lender Party, and from time to time thereafter as requested in writing by
the Parent Guarantor (but only so long thereafter as such Lender Party remains
lawfully able to do so), provide each of the Administrative Agent and the Parent
Guarantor with two original Internal Revenue Service forms 1001 or 4224 or (in
the case of a Lender Party that has certified in writing to the Administrative
Agent that it is not a "bank" as defined in Section 881(c)(3)(A) of the Internal
Revenue Code) form W-8 (and, if such Lender Party delivers a form W-8, a
certificate representing that such Lender Party is not a "bank" for purposes of
Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the
Parent Guarantor or the Borrower and is not a controlled foreign corporation
related to the Parent Guarantor or the Borrower (within the meaning of Section
864(d)(4) of the Internal Revenue Code)), as appropriate, or any successor or
other form prescribed by the Internal Revenue Service, certifying that such
Lender Party is exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to this Agreement or the Notes or, in the
case of a Lender Party providing a form W-8, certifying that such Lender Party
is a foreign corporation, partnership, estate or trust. If the forms provided by
a Lender Party at the time such Lender Party first becomes a party to this
Agreement indicate a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Lender Party provides the appropriate form certifying that
a lesser rate applies, whereupon withholding tax at such lesser rate only shall
be considered excluded from Taxes for periods governed by such form; provided,
however, that, if at the date of the Assignment and Acceptance pursuant to
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which a Lender Party becomes a party to this Agreement, the Lender Party
assignor was entitled to payments under subsection (a) in respect of United
States withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Lender Party
assignee on such date. If any form or document referred to in this subsection
(e) requires the disclosure of information, other than information necessary to
compute the tax payable and information required on the date hereof by Internal
Revenue Service form 1001 or, 4224 or W-8 (or the related certificate described
above), that the Lender Party reasonably considers to be confidential, the
Lender Party shall give notice thereof to the Parent Guarantor and shall not be
obligated to include in such form or document such confidential information.
(f) For any period with respect to which a Lender Party has
failed to provide the Parent Guarantor with the appropriate form described in
subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which a form originally was required to be provided
or if such form otherwise is not required under subsection (e) above), such
Lender Party shall not be entitled to indemnification under subsection (a) or
(c) with respect to Taxes imposed by the United States by reason of such
failure; provided, however, that should a Lender Party become subject to Taxes
because of its failure to deliver a form required hereunder, the Parent
Guarantor and/or the Borrower shall take such steps as such Lender Party shall
reasonably request to assist such Lender Party to recover such Taxes.
(g) Any Lender Party claiming any additional amounts payable
pursuant to this Section 2.12 agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party.
SECTION 2.13. Sharing of Payments, Etc. If any Lender Party
shall obtain at any time any payment, whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise (other than pursuant to
Section 2.10, 2.12, 9.04 or 9.07), (a) on account of Obligations due and payable
to such Lender Party hereunder and under the Notes at such time in excess of its
ratable share (according to the proportion of (i) the amount of such Obligations
due and payable to such Lender Party at such time (other than pursuant to
Section 2.10, 2.12, 9.04 or 9.07) to (ii) the aggregate amount of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time) of payments on account of the Obligations due and payable to all
Lender Parties hereunder and under the Notes at such time obtained by all the
Lender Parties at such time or (b) on account of Obligations owing (but not due
and payable) to such Lender Party hereunder and under the Notes at such time
(other than pursuant to Section 2.10, 2.12, 9.04 or 9.07) in excess of its
ratable share (according to the proportion of (i) the amount of such Obligations
owing to such Lender Party at such time (other than pursuant to Section 2.10,
2.12, 9.04 or 9.07) to (ii) the aggregate amount of the Obligations owing (but
not
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due and payable) to all Lender Parties hereunder and under the Notes at such
time) of payments on account of the Obligations owing (but not due and payable)
to all Lender Parties hereunder and under the Notes at such time obtained by all
of the Lender Parties at such time, such Lender Party shall forthwith purchase
from the other Lender Parties such participations in the Obligations due and
payable or owing to them, as the case may be, as shall be necessary to cause
such purchasing Lender Party to share the excess payment ratably with each of
them; provided, however, that, if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender Party, such purchase from each
other Lender Party shall be rescinded and such other Lender Party shall repay to
the purchasing Lender Party the purchase price to the extent of such Lender
Party's ratable share (according to the proportion of (i) the purchase price
paid to such Lender Party to (ii) the aggregate purchase price paid to all
Lender Parties) of such recovery together with an amount equal to such Lender
Party's ratable share (according to the proportion of (i) the amount of such
other Lender Party's required repayment to (ii) the total amount so recovered
from the purchasing Lender Party) of any interest or other amount paid or
payable by the purchasing Lender Party in respect of the total amount so
recovered. The Borrower agrees that any Lender Party so purchasing a
participation from another Lender Party pursuant to this Section 2.13 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender Party were the direct creditor of the Borrower in the amount of
such participation.
SECTION 2.14. Use of Proceeds. (a) The proceeds of the
Advances (other than the Acquisition Advances) and issuances of Letters of
Credit shall be available (and the Borrower agrees that it shall use such
proceeds and Letters of Credit) solely (i) to finance in part the
Recapitalization, (ii) to pay fees and expenses incurred in connection
therewith, (iii) to refinance all of the Debt of the Borrower in existence on
the date of the Initial Extension of Credit (other than the Surviving Debt of
the Borrower) and (iv) from time to time, to provide working capital and for
other general corporate purposes of the Parent Guarantor and its Subsidiaries.
(b) The proceeds of the Acquisition Advances shall be
available (and the Borrower agrees that it shall use such proceeds) solely to
finance all or a portion of the purchase price of the Investments permitted
pursuant to the provisions of Section 5.02(e)(viii).
SECTION 2.15. Defaulting Lenders. (a) In the event that, at
any time, (i) any Lender Party shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to the Borrower and (iii) the
Borrower shall be required to make any payment hereunder or under any other Loan
Document to or for the account of such Defaulting Lender, then the Borrower may,
so long as no Default shall occur or be continuing at such time and to the
fullest extent permitted by applicable law, set off and otherwise apply the
Obligation of the Borrower to make such payment to or for the account of such
Defaulting Lender against the obligation of such Defaulting Lender to make such
Defaulted Advance. In the event that, on any date, the Borrower shall so set off
and otherwise apply its obligation to make any such payment against the
obligation of such Defaulting Lender to make any such Defaulted Advance on or
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prior to such date, the amount so set off and otherwise applied by the Borrower
shall constitute for all purposes of this Agreement and the other Loan Documents
an Advance by such Defaulting Lender made on the date under the Facility
pursuant to which such Defaulted Advance was originally required to have been
made pursuant to Section 2.01. Such Advance shall be a Alternate Base Rate
Advance and shall be considered, for all purposes of this Agreement, to comprise
part of the Borrowing in connection with which such Defaulted Advance was
originally required to have been made pursuant to Section 2.01, even if the
other Advances comprising such Borrowing shall be Eurodollar Rate Advances on
the date such Advance is deemed to be made pursuant to this subsection (a). The
Borrower shall notify the Administrative Agent at any time the Borrower
exercises its right of set-off pursuant to this subsection (a) and shall set
forth in such notice (A) the name of the Defaulting Lender and the Defaulted
Advance required to be made by such Defaulting Lender and (B) the amount set off
and otherwise applied in respect of such Defaulted Advance pursuant to this
subsection (a). Any portion of such payment otherwise required to be made by the
Borrower to or for the account of such Defaulting Lender which is paid by the
Borrower, after giving effect to the amount set off and otherwise applied by the
Borrower pursuant to this subsection (a), shall be applied by the Administrative
Agent as specified in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any time, (i) any Lender Party shall
be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount
to the Administrative Agent or any of the other Lender Parties and (iii) the
Borrower shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such Defaulted Amount to the extent required to
pay such Defaulted Amount. In the event that the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date,
the amount so applied by the Administrative Agent shall constitute for all
purposes of this Agreement and the other Loan Documents payment, to such extent,
of such Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Lender Parties, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent and such other Lender Parties and, if the
amount of such payment made by the Borrower shall at such time be insufficient
to pay all Defaulted Amounts owing at such time to the Administrative Agent and
the other Lender Parties, in the following order of priority:
(i) first, to the Administrative Agent for any Defaulted
Amount then owing to the Administrative Agent; and
(ii) second, to any other Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in accordance with such
respective Defaulted Amounts then owing to such other Lender Parties.
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Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any time, (i) any Lender Party shall
be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted
Advance or a Defaulted Amount and (iii) the Borrower, the Administrative Agent
or any other Lender Party shall be required to pay or distribute any amount
hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then the Borrower or such other Lender Party shall pay such
amount to the Administrative Agent to be held by the Administrative Agent, to
the fullest extent permitted by applicable law, in escrow or the Administrative
Agent shall, to the fullest extent permitted by applicable law, hold in escrow
such amount otherwise held by it. Any funds held by the Administrative Agent in
escrow under this subsection (c) shall be deposited by the Administrative Agent
in an account with NationsBank, in the name and under the control of the
Administrative Agent, but subject to the provisions of this subsection (c). The
terms applicable to such account, including the rate of interest payable with
respect to the credit balance of such account from time to time, shall be
NationsBank's standard terms applicable to escrow accounts maintained with it.
Any interest credited to such account from time to time shall be held by the
Administrative Agent in escrow under, and applied by the Administrative Agent
from time to time in accordance with the provisions of, this subsection (c). The
Administrative Agent shall, to the fullest extent permitted by applicable law,
apply all funds so held in escrow from time to time to the extent necessary to
make any Advances required to be made by such Defaulting Lender and to pay any
amount payable by such Defaulting Lender hereunder and under the other Loan
Documents to the Administrative Agent or any other Lender Party, as and when
such Advances or amounts are required to be made or paid and, if the amount so
held in escrow shall at any time be insufficient to make and pay all such
Advances and amounts required to be made or paid at such time, in the following
order of priority:
(i) first, to the Administrative Agent for any amount then due
and payable by such Defaulting Lender to the Administrative Agent hereunder;
(ii) second, to any other Lender Parties for any amount then
due and payable by such Defaulting Lender to such other Lender Parties
hereunder, ratably in accordance with such respective amounts then due and
payable to such other Lender Parties; and
(iii) third, to the Borrower for any Advance then required to
be made by such Defaulting Lender pursuant to a Commitment of such Defaulting
Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such
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time under this Agreement and the other Loan Documents ratably in accordance
with the respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under
this Section 2.15 are in addition to other rights and remedies that the Borrower
may have against such Defaulting Lender with respect to any Defaulted Advance
and that the Administrative Agent or any Lender Party may have against such
Defaulting Lender with respect to any Defaulted Amount.
SECTION 2.16. Removal of Lender. In the event that any Lender
Party demands payment of costs or additional amounts pursuant to Section 2.10 or
Section 2.12 or asserts, pursuant to Section 2.10(d) that it is unlawful for
such Lender Party to make Eurodollar Rate Advances, then (subject to such Lender
Party's right to rescind such demand or assertion within 10 days after the
notice from the Borrower referred to below) the Borrower may, upon 20 days'
prior written notice to such Lender Party and the Administrative Agent, elect to
cause such Lender Party to assign its Advances and Commitments in full to one or
more Persons selected by the Borrower so long as (a) each such Person satisfies
criteria of an Eligible Assignee and is reasonably satisfactory to the
Administrative Agent, (b) such Lender Party receives payment in full in cash of
the outstanding principal amount of all Advances made by it and all accrued and
unpaid interest thereon and all other amounts due and payable to such Lender
Party as of the date of such assignment (including without limitation amounts
owing pursuant to Sections 2.10, 2.12, 2.15 and 9.04), and (c) such Lender Party
agrees to make such assignment, and each such Lender Party assignee agrees to
accept such assignment and to assume all obligations of such Lender Party
hereunder, in accordance with Section 9.07.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial Extension of
Credit. The obligation of each Lender to make an Advance or of the Issuing Bank
to issue a Letter of Credit on the occasion of the Initial Extension of Credit
hereunder is subject to the satisfaction of the following conditions precedent
before or concurrently with the Initial Extension of Credit:
(a) The Recapitalization shall have been consummated strictly in
accordance with the terms of the Recapitalization Agreement, without any waiver
or amendment not consented to by the Lender Parties of any term, provision or
condition set forth therein, and in compliance with all applicable laws; the
aggregate purchase price for the Recapitalization, together with the amounts
necessary to (i) repay in full all of the Debt of the Borrower in existence on
the date of the Initial Extension of Credit (other than the Surviving Debt) and
(ii) pay all fees and expenses related to the Recapitalization, shall not exceed
$338,500,000.
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(b) The Recapitalization Agreement shall be in full force and effect.
(c) The Lender Parties shall be satisfied with the corporate and legal
structure and capitalization of each Loan Party and each of its Subsidiaries,
including the terms and conditions of the charter, bylaws and each class of
capital stock of each Loan Party and each such Subsidiary and of each agreement
or instrument relating to such structure or capitalization.
(d) The Parent Guarantor shall have received at least $91,415,000 in
gross cash proceeds from the sale of the Parent Guarantor Stock to the Equity
Investors, consisting of at least $73,815,000 from the issuance and sale of the
Parent Guarantor Common Stock and $17,600,000 from the issuance and sale of the
Parent Guarantor Preferred Stock; and the Lender Parties shall be satisfied with
the terms and conditions of all of the foregoing, including the certificate of
designation for the Parent Guarantor Preferred Stock.
(e) The Borrower shall have received at least $130,000,000 in gross
cash proceeds from the sale of the Subordinated Notes, and the Lender Parties
shall be satisfied with the terms and conditions of the Subordinated Note
Documents.
(f) The Lender Parties shall be satisfied that all of the Debt of the
Parent Guarantor and its Subsidiaries in existence on the date of the Initial
Extension of Credit, other than the Debt identified on Schedule 4.01(hh) hereto
(the "Surviving Debt"), has been or concurrently with the Initial Extension of
Credit hereunder will be prepaid, redeemed or defeased in full or otherwise
satisfied and extinguished and that all of the Surviving Debt shall be on terms
and conditions satisfactory to the Lender Parties.
(g) Before giving effect to the Recapitalization and the other
transactions contemplated by this Agreement, there shall have occurred no
Material Adverse Change since February 28, 1997.
(h) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i) could be
reasonably likely to have a Material Adverse Effect or (ii) purports to affect
the legality, validity or enforceability of the Recapitalization, this
Agreement, any Note, any other Loan Document, any Related Document or the
consummation of the transactions contemplated hereby.
(i) The Borrower shall have paid all accrued fees and expenses of the
Administrative Agent and the Lender Parties (including the accrued fees and
expenses of counsel to the Administrative Agent and local counsel to the Lender
Parties).
(j) The Administrative Agent shall have received on or before the day
of the Initial Extension of Credit the following, each dated such day (unless
otherwise specified), in form and
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substance satisfactory to the Administrative Agent and the Lender Parties
(unless otherwise specified) and (except for the Notes) in sufficient copies for
each Lender Party:
(i) The Notes payable to the order of the Lenders.
(ii) Certified copies of the resolutions of the Board
of Directors of the Borrower, the Parent Guarantor and each other Loan Party
approving the Recapitalization, this Agreement, the Notes, each other Loan
Document and each Related Document to which it is or is to be a party, and of
all documents evidencing other necessary corporate action and governmental and
other third party approvals and consents, if any, with respect to the
Recapitalization, this Agreement, the Notes, each other Loan Document and each
Related Document.
(iii) A copy of the charter of the Borrower, the
Parent Guarantor and each other Loan Party and each amendment thereto, certified
(as of a date reasonably near the date of the Initial Extension of Credit) by
the Secretary of State of the jurisdiction of its incorporation thereof as being
a true and correct copy thereof.
(iv) A copy of a certificate of the Secretary of
State of the jurisdiction of incorporation of the Borrower, the Parent Guarantor
and each of the Loan Parties, dated reasonably near the date of the Initial
Extension of Credit, listing the certificate or articles of incorporation of
such Person and each amendment thereto on file in the office of such Secretary
of State and certifying that (A) such amendments are the only amendments to such
Person's certificate or articles of incorporation on file in its office, (B)
such Person has paid all franchise taxes (or the equivalent thereof) to the date
of such certificate and (C) such Person is duly organized and is in good
standing under the laws of the jurisdiction of its incorporation.
(v) A copy of the certificate of the Secretary of
State of each jurisdiction in which the Borrower, the Parent Guarantor or any of
the Loan Parties is qualified or licensed as a foreign corporation, except where
the failure to so qualify or be licensed, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
in each case dated reasonably near the date of the Initial Extension of Credit
and stating that such Person is duly qualified and in good standing as a foreign
corporation in such jurisdiction and has filed all annual reports required to be
filed, and has paid all franchise taxes (or the equivalent thereof) required to
be paid, in such jurisdiction to the date of such certificate.
(vi) A certificate of the Borrower, the Parent
Guarantor and each other Loan Party, signed on behalf of the Borrower, the
Parent Guarantor or such other Loan Party by its President or a Vice President
and its Secretary or any Assistant Secretary, dated the date of the Initial
Extension of Credit (the statements made in which certificate shall be true on
and as of the date of the Initial Extension of Credit), certifying as to (A) the
absence of any amendments to the charter of the Borrower, the Parent Guarantor
or such other Loan Party since the date of the Secretary of State's certificate
referred to in Section 3.01(j)(iv), or any steps taken by the
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board of directors (or persons performing similar functions) or the shareholders
of the Borrower, the Parent Guarantor or such other Loan Party to effect or
authorize any further amendment, supplement or other modification thereto; (B)
the accuracy and completeness of the bylaws of the Borrower, the Parent
Guarantor or such other Loan Party as in effect on the date on which the
resolutions of the board of directors (or persons performing similar functions)
of such Person referred to in clause (ii) of this Section 3.01(j) were adopted
and on the date of the Initial Extension of Credit (a copy of which shall be
attached to such certificate); (C) the due incorporation and good standing of
the Borrower, the Parent Guarantor or such other Loan Party as a Person
organized under the laws of the jurisdiction of its incorporation, and the
absence of any proceeding (either pending or contemplated) for the dissolution,
liquidation or other termination of the existence of such Person or any of their
respective Subsidiaries; (D) the absence of any change in the jurisdiction of
incorporation of the Borrower, the Parent Guarantor or such other Loan Party or,
except as part of the Recapitalization, (i) any merger, consolidation or other
similar transaction directly or indirectly involving the Borrower, the Parent
Guarantor or such other Loan Party or (ii) any issuance or sale of any shares of
capital stock of (or other ownership or profit interests in) the Borrower, the
Parent Guarantor or such other Loan Party, in each case since February 28, 1997;
(E) the accuracy in all material respects of the representations and warranties
made by the Borrower, the Parent Guarantor or such other Loan Party in the Loan
Documents to which it is or is to be a party as though made on and as of the
date of the Initial Extension of Credit, before and after giving effect to all
of the Borrowings and the issuance of all of the Letters of Credit to be made on
such date and to the application of proceeds, if any, therefrom; and (F) the
absence of any event occurring and continuing, or resulting from any of the
Borrowings or the issuance of any of the Letters of Credit to be made on the
date of the Initial Extension of Credit or the application of proceeds, if any,
therefrom, that would constitute a Default.
(vii) A certificate of the Secretary or an Assistant
Secretary of the Borrower, the Parent Guarantor and each other Loan Party
certifying the names and true signatures of the officers of the Borrower, the
Parent Guarantor or such other Loan Party authorized to sign this Agreement, the
Notes, each other Loan Document and each Related Document to which they are or
are to be parties and the other documents to be delivered hereunder and
thereunder.
(viii) A security agreement, in substantially the
form of Exhibit D hereto (together with each other security agreement delivered
pursuant to Section 5.01(o), in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms, the "Security
Agreement"), duly executed by the Parent Guarantor and the Borrower, together
with:
(A) certificates representing the Initial
Pledged Shares referred to therein, accompanied by undated stock powers, duly
executed in blank, and instruments evidencing the Initial Pledged Debt referred
to therein, duly indorsed in blank,
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(B) proper termination statements (Form
UCC-3 or a comparable form) under the Uniform Commercial Code of all
jurisdictions that the Administrative Agent may deem necessary or desirable in
order to terminate or amend existing liens on and security interests in the
Collateral described in the Security Agreement, in each case completed in a
manner satisfactory to the Lender Parties and duly executed by the appropriate
secured party,
(C) proper financing statements (Form UCC-1
or a comparable form) under the Uniform Commercial Code of all jurisdictions
that the Administrative Agent may deem necessary or desirable in order to
perfect and protect the liens and security interests created or purported to be
created under the Security Agreement, covering the Collateral described in the
Security Agreement, in each case completed in a manner satisfactory to the
Lender Parties and duly executed by the Parent Guarantor or the Borrower, as
applicable,
(D) completed requests for information,
dated on or before the date of the Initial Extension of Credit, listing all
effective financing statements filed in the jurisdictions referred to in clause
(C) above that name the Parent Guarantor or the Borrower as debtor, together
with copies of such
other financing statements,
(E) evidence of the insurance required by
the terms of the Security Agreement, and
(F) evidence that all of the other actions
(including, without limitation, the completion of all other recordings and
filings of or with respect to the Security Agreement) that the Administrative
Agent may deem necessary or desirable in order to perfect and protect the liens
and security interests created under the Security Agreement have been taken or
will be taken in accordance with the terms of the Loan Documents.
(ix) An intellectual property security agreement, in
substantially the form of Exhibit E hereto (together with each other
intellectual property security agreement delivered pursuant to Section 5.01(o),
in each case as amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Intellectual Property Security Agreement"), duly
executed by the Parent Guarantor and the Borrower, together with evidence that
all actions that the Administrative Agent may deem necessary or desirable in
order to perfect and protect the first priority liens and security interests
created under the Intellectual Property Security Agreement have been taken or
will be taken in accordance with the terms of the Loan Documents.
(x) Deeds of trust, trust deeds, mortgages, leasehold
mortgages and leasehold deeds of trust, in substantially the form of Exhibit F
hereto, covering the properties listed on Schedule 3.01(j)(x) (together with
each other mortgage delivered pursuant to Section 5.01(o), in each case as
amended, supplemented or otherwise modified from time to time in accordance with
their terms, the "Mortgages"), in each case duly executed by the Borrower,
together with:
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(A) evidence that counterparts of the
Mortgages have been duly recorded on or before the day of the Initial Extension
of Credit in all filing or recording offices that the Administrative Agent may
deem necessary or desirable in order to create a valid first and subsisting Lien
on the property described therein in favor of the Secured Parties and that all
filing and recording taxes and fees have been paid (or arrangements have been
made for the payment thereof promptly following the Initial Extension of Credit
in a manner satisfactory to the Administrative Agent),
(B) fully paid American Land Title
Association Lender's Extended Coverage title insurance policies (the "Mortgage
Policies") in form and substance, with endorsements and in amount acceptable to
the Administrative Agent, issued, coinsured and reinsured by title insurers
acceptable to the Administrative Agent, insuring the Mortgages to be valid first
and subsisting Liens on the property described therein, free and clear of all
defects (including, but not limited to, mechanics' and materialmen's Liens) and
encumbrances, other than Permitted Encumbrances, and providing for such other
affirmative insurance (including endorsements for future advances under the Loan
Documents and for mechanics' and materialmen's Liens) and such coinsurance and
direct access reinsurance as the Administrative Agent may deem necessary or
desirable,
(C) such consents and agreements of lessors
and other third parties, and such estoppel letters and other confirmations, as
the Administrative Agent may deem necessary or desirable,
(D) evidence of the insurance required by
the terms of the Mortgages, and
(E) evidence that all other action that the
Administrative Agent may deem necessary or desirable in order to create valid
first and subsisting Liens on the property described in the Mortgages has been
taken.
(xi) Certified copies of each of the Related
Documents, duly executed by the parties thereto and in form and substance
satisfactory to the Lender Parties, together with all agreements, instruments
and other documents delivered in connection therewith.
(xii) Such financial, business and other information
regarding each Loan Party and its Subsidiaries as the Lender Parties shall have
requested, including, without limitation, information as to possible contingent
liabilities, tax matters, environmental matters, obligations under Plans,
Multiemployer Plans and Welfare Plans, collective bargaining agreements and
other arrangements with employees, audited Consolidated financial statements of
the Parent Guarantor and its Subsidiaries as of, and for the period ended,
February 28, 1997, interim Consolidated financial statements of the Parent
Guarantor and its Subsidiaries as of, and for the period ended, October 4, 1997,
pro forma Consolidated financial statements of the Parent Guarantor and its
Subsidiaries (which, among other things, reflect estimated purchase price
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accounting adjustments in regard to the Recapitalization) and projections
prepared by management of the Parent Guarantor, in form and substance
satisfactory to the Lender Parties, of income statements and cash flow
statements on a monthly basis through February 28, 1998 and on an annual basis
for each year thereafter until the Term B Termination Date.
(xiii) Letters and certificates, in substantially the
form of Exhibit G-1, G-2 and G-3 hereto, attesting to the Solvency of the Parent
Guarantor and the Borrower, in the case of such certificates, individually, and,
in each case, together with its Subsidiaries, taken as a whole, immediately
before and immediately after giving effect to the Recapitalization and the other
transactions contemplated hereby, from the chief financial officer (or person
performing similar functions) of each of the Parent Guarantor and the Borrower
and from Appraisal Economics.
(xiv) An environmental assessment report, in form and
substance reasonably satisfactory to the Lender Parties, from EMG Inc., as to
any hazards, costs or liabilities under Environmental Laws to which any Loan
Party or any of its Subsidiaries may be subject, the amount and nature of which
and the Borrower's plans with respect to which shall be reasonably acceptable to
the Lender Parties, together with evidence, in form and substance reasonably
satisfactory to the Lender Parties, that all applicable Environmental Laws in
connection with the Recapitalization shall have been complied with.
(xv) A letter, in form and substance satisfactory to
the Administrative Agent, from the Parent Guarantor and the Borrower to Ernst &
Young LLP, its independent certified public accountants, advising such
accountants that the Administrative Agent and the Lender Parties have been
authorized to exercise all rights of the Parent Guarantor and the Borrower to
require such accountants to disclose any and all financial statements and any
other information of any kind that they may have with respect to the Parent
Guarantor and its Subsidiaries and directing such accountants to comply with any
reasonable request of the Administrative Agent or any Lender Party for such
information.
(xvi) Evidence of insurance naming the Administrative
Agent as insured and loss payee with such responsible and reputable insurance
companies or associations, and in such amounts and covering such risks, as is
satisfactory to the Lender Parties, including, without limitation, product
liability and business interruption insurance.
(xvii) Certified copies of each employment agreement
and other compensation arrangement with each executive officer of any Loan Party
or any of its Subsidiaries.
(xviii) A Borrowing Base Certificate.
(xix) One or more Notices of Borrowing for each
Borrowing to be made, and/or one or more Notices of Issuance for each Letter of
Credit to be issued, on the date of the Initial Extension of Credit.
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(xx) (A) A favorable opinion of Xxxxxxxx & Worcester,
counsel for the Parent Guarantor and the Borrower, in substantially the form of
Exhibit I-1 hereto, and addressing such other matters as any Lender Party
through the Administrative Agent may reasonably request, and (B) a letter from
Xxxxxxxx & Worcester, counsel for the Parent Guarantor and the Borrower,
addressed to the Administrative Agent and each of the Lender Parties and
otherwise in form and substance reasonably satisfactory to the Administrative
Agent, stating that the Administrative Agent and each such Lender Party may rely
upon the favorable opinion of such counsel being delivered in connection with
the issuance and sale of the Subordinated Notes, together with a copy of such
opinion (which shall be in form and substance satisfactory to the Lender
Parties).
(xxi) A favorable opinion of (A) Xxxxxxxxxx, Xxxxxx &
Xxxx, PLC, local counsel to the Lender Parties in Tennessee, in substantially
the form of Exhibit I-2 hereto, and (B) Xxxxx, Xxxx & Xxxxxxx, local counsel to
the Lender Parties in Kentucky, in substantially the form of Exhibit I-3 hereto,
and, in either case, addressing such other matters as any Lender Party through
the Administrative Agent may reasonably request.
(xxii) A letter from Weil, Gotshal & Xxxxxx, special
counsel for the Parent Guarantor and the Borrower, addressed to the
Administrative Agent and each of the Lender Parties and otherwise in form and
substance reasonably satisfactory to the Administrative Agent, stating that the
Administrative Agent and each such Lender Party may rely upon the favorable
opinion of such counsel being delivered in connection with the issuance and sale
of the Subordinated Notes, together with a copy of such opinion (which shall be
in form and substance satisfactory to the Lender Parties).
(xxiii) A favorable opinion of Xxxxxx & Xxxxxxx LLP,
intellectual property counsel to the Lender Parties, in substantially the form
of Exhibit I-4 hereto, and addressing such other matters as any Lender Party
through the Administrative Agent may reasonably request.
(xxiv) A favorable opinion of Shearman & Sterling,
counsel for the Administrative Agent, in form and substance satisfactory to the
Administrative Agent.
SECTION 3.02. Conditions Precedent to Each Borrowing and
Issuance. The obligation of each Appropriate Lender to make an Advance (other
than a Letter of Credit Advance made by the Issuing Bank or a Working Capital
Lender pursuant to Section 2.03(c) and a Swing Line Advance made by a Working
Capital Lender pursuant to Section 2.02(b)) on the occasion of each Borrowing
(including the Initial Extension of Credit), and the obligation of the Issuing
Bank to issue a Letter of Credit (including the initial issuance of a Letter of
Credit hereunder) or to renew a Letter of Credit and the right of the Borrower
to request a Swing Line Borrowing, shall be subject to the further conditions
precedent that on the date of such Borrowing, issuance or renewal (a) the
following statements shall be true (and each of the giving of the applicable
Notice of Borrowing, Notice of Swing Line Borrowing, Notice of Issuance or
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Notice of Renewal and the acceptance by the Borrower of the proceeds of such
Borrowing or the issuance or renewal of such Letter of Credit, as the case may
be, shall constitute a representation and warranty by the Borrower that both on
the date of such notice and on the date of such Borrowing, issuance or renewal
such statements are true):
(i) the representations and warranties contained in each Loan Document
are correct in all material respects on and as of such date, before and after
giving effect to such Borrowing, issuance or renewal and to the application of
the proceeds therefrom, as though made on and as of such date, other than any
such representations or warranties that, by their terms, refer to a specific
date other than the date of such Borrowing, issuance or renewal, in which case
as of such specific date;
(ii) no event has occurred and is continuing, or would result from such
Borrowing, issuance or renewal or from the application of the proceeds, if any,
therefrom, that constitutes a Default; and
(iii) for each Working Capital Advance or Swing Line Advance made by
the Swing Line Bank or issuance or renewal of any Letter of Credit, the
aggregate Loan Values of all Eligible Collateral exceeds the aggregate principal
amount of (A) the Working Capital Advances, the Swing Line Advances and Letter
of Credit Advances to be outstanding plus (B) the aggregate Available Amount of
all Letters of Credit to be outstanding, after giving effect to such Advance,
issuance or renewal, respectively; and (b) the Administrative Agent shall have
received such other approvals, opinions or documents as any Appropriate Lender
through the Administrative Agent may reasonably request.
SECTION 3.03. Additional Conditions to Each Acquisition
Borrowing. The obligation of each Acquisition Lender to make an Acquisition
Advance on the occasion of each Acquisition Borrowing is, in addition to the
conditions set forth in Section 3.02, subject to the satisfaction of the
following conditions precedent that on the date of such Borrowing:
(a) the Administrative Agent shall have received a certificate of the
Borrower, signed by its president or chief financial officer (or person
performing similar functions) and dated the date of the Notice of Borrowing with
respect to the proposed Acquisition Borrowing, setting forth in reasonable
detail the proposed use of the proceeds of such Acquisition Borrowing;
(b) the Administrative Agent shall have received a certificate of the
chief financial officer (or person performing similar functions) or the
president of the Borrower, in form and substance satisfactory to the
Administrative Agent, certifying that after giving effect to such Acquisition
Borrowing, (i) the Borrower is Solvent and (ii) the Borrower is in compliance
with Section 5.02(e)(viii) (together with a schedule in form satisfactory to the
Administrative Agent of the computations used by the Borrower in determining
compliance therewith); and
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(c) the Administrative Agent shall have received on or before the day
of such Acquisition Borrowing evidence that all actions that the Administrative
Agent may deem necessary or desirable in order to perfect and protect the Liens
created under the Collateral Documents has been taken.
SECTION 3.04. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
Party prior to the Initial Extension of Credit specifying its objection thereto,
and if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender
Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Parent
Guarantor and the Borrower. Each of the Parent Guarantor and the Borrower
represents and warrants as follows:
(a) Each Loan Party (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed,
except where the failure to so qualify or be licensed is not reasonably likely
to have a Material Adverse Effect, and (iii) has all requisite corporate power
and authority (including, without limitation, all governmental licenses, permits
and other approvals) to own or lease and operate its properties and to carry on
its business as now conducted and as proposed to be conducted. All of the
outstanding capital stock of the Borrower and Parent Guarantor has been validly
issued, is fully paid and non-assessable and is owned by the Parent Guarantor,
in the case of the Borrower, and by the Persons listed on Schedule II hereto in
the amounts specified on Schedule II hereto, in the case of the Parent
Guarantor, free and clear of all Liens, except those created under the
Collateral Documents.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of each Loan Party, showing as of the date hereof (as
to each such Subsidiary) the jurisdiction of its incorporation, the number of
shares of each class of capital stock authorized, and the number outstanding, on
the date hereof and the percentage of the outstanding shares of each such class
owned (directly or indirectly) by such Loan Party and the number of shares
covered by all outstanding options, warrants, rights of conversion or purchase
and similar rights
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at the date hereof. All of the outstanding capital stock of all of such
Subsidiaries has been validly issued, is fully paid and non-assessable and is
owned by such Loan Party or one or more of its Subsidiaries free and clear of
all Liens, except those created under the Loan Documents or as disclosed in such
Schedule. Each such Subsidiary (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed,
except where the failure to so qualify or be licensed is not reasonably likely
to have a Material Adverse Effect, and (iii) has all requisite corporate power
and authority (including, without limitation, all governmental licenses, permits
and other approvals) to own or lease and operate its properties and to carry on
its business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by each Loan Party of this
Agreement, the Notes, each other Loan Document and each Related Document to
which it is or is to be a party, and the consummation of the Recapitalization
and the other transactions contemplated hereby, are within such Loan Party's
corporate powers, have been duly authorized by all necessary corporate action,
and do not (i) contravene such Loan Party's charter or bylaws, (ii) violate any
law (including, without limitation, the Securities Exchange Act of 1934), rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting any
Loan Party, any of its Subsidiaries or any of their properties or (iv) except
for the Liens created under the Loan Documents, result in or require the
creation or imposition of any Lien upon or with respect to any of the properties
of any Loan Party or any of its Subsidiaries. No Loan Party or any of its
Subsidiaries is in violation of any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which is reasonably likely to have a
Material Adverse Effect.
(d) No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other third
party is required for (i) the due execution, delivery, recordation, filing or
performance by any Loan Party of this Agreement, the Notes, any other Loan
Document or any Related Document to which it is or is to be a party, or for the
consummation of the Recapitalization or the other transactions contemplated
hereby, (ii) the grant by any Loan Party of the Liens granted by it pursuant to
the Collateral Documents, (iii) the perfection or maintenance of the Liens
created under the Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Administrative Agent or any Lender Party of
its rights under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents, except for the authorizations, approvals,
actions, notices and filings listed on Schedule 4.01(d), all those set forth on
Part A of Schedule 4.01(d) of which have been duly obtained, taken, given or
made and are in full force and effect or will be duly
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obtained, taken, given or made in accordance with the terms of such Schedule
and, thereafter, will be in full force and effect. All applicable waiting
periods in connection with the Recapitalization and the other transactions
contemplated hereby have expired without any action having been taken by any
competent authority restraining, preventing or imposing materially adverse
conditions upon the Recapitalization or the rights of the Loan Parties or their
Subsidiaries freely to transfer or otherwise dispose of, or to create any Lien
on, any properties now owned or hereafter acquired by any of them.
(e) This Agreement has been, and each of the Notes, each other Loan
Document and each Related Document when delivered hereunder will have been, duly
executed and delivered by each Loan Party party thereto. This Agreement is, and
each of the Notes, each other Loan Document and each Related Document when
delivered hereunder will be, the legal, valid and binding obligation of each
Loan Party party thereto, enforceable against such Loan Party in accordance with
its terms.
(f) The Consolidated balance sheet of the Parent Guarantor and its
Subsidiaries as at February 28, 1997, and the related Consolidated statements of
income and cash flows of the Parent Guarantor and its Subsidiaries for the
Fiscal Year then ended, accompanied by an opinion of Ernst & Young LLP,
independent public accountants of the Parent Guarantor, and the interim
Consolidated balance sheet of the Parent Guarantor and its Subsidiaries as at
October 4, 1997, and the related Consolidated statements of income and cash
flows of the Parent Guarantor and its Subsidiaries for the seven months then
ended, duly certified by the chief financial officer (or person performing
similar functions) of the Parent Guarantor, copies of which have been furnished
to each Lender Party, fairly present, subject, in the case of said balance sheet
as at October 4, 1997, and said statements of income and cash flows for the
seven months then ended, to normal year-end audit adjustments, the Consolidated
financial condition of the Parent Guarantor and its Subsidiaries as at such
dates and the Consolidated results of the operations of the Parent Guarantor and
its Subsidiaries for the periods ended on such dates, all in accordance with
generally accepted accounting principles applied on a consistent basis. Since
February 28, 1997, there has been no Material Adverse Change.
(g) The pro forma Consolidated balance sheet of the Parent Guarantor
and its Subsidiaries as at October 4, 1997, and the related pro forma
Consolidated statements of income and cash flows of the Parent Guarantor and its
Subsidiaries for the seven months then ended, duly certified by the chief
financial officer (or person performing similar functions) of the Parent
Guarantor, copies of which have been furnished to each Lender Party, fairly
present the pro forma Consolidated financial condition of the Parent Guarantor
and its Subsidiaries as at such date and the pro forma Consolidated results of
operations of the Parent Guarantor and its Subsidiaries for the period ended on
such date, in each case giving effect to the Recapitalization and the other
transactions contemplated hereby.
(h) The projected Consolidated balance sheets, income statements and
cash flows statements of the Parent Guarantor and its Subsidiaries delivered to
the Lender Parties pursuant
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to Section 3.01(j)(xii) or 5.03(e) were prepared in good faith on the basis of
the assumptions stated therein, which assumptions were fair in the light of
conditions existing at the time of delivery of such projections, and
represented, at the time of delivery, each of the Parent Guarantor's and the
Borrower's best estimate of its future financial performance.
(i) Neither the Information Memorandum nor any other information,
exhibit or report furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender Party in connection with the negotiation of
the Loan Documents or pursuant to the terms of the Loan Documents contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements made therein, in light of the circumstances in
which any such statements were made, not misleading.
(j) There is no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries, including any Environmental
Action, pending or threatened before any court, governmental agency or
arbitrator that (i) is reasonably likely to have a Material Adverse Effect or
(ii) purports to affect the legality, validity or enforceability of the
Recapitalization, this Agreement, any Note, any other Loan Document or any
Related Document or the consummation of the transactions contemplated hereby.
(k) No proceeds of any Advance or drawings under any Letter of Credit
will be used to acquire any equity security of a class that is registered
pursuant to Section 12 of the Securities Exchange Act of 1934.
(l) The Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying Margin Stock, and no proceeds of any
Advance or any drawing under any Letter of Credit will be used to purchase or
carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock.
(m) Following application of the proceeds of each Advance or drawing
under each Letter of Credit, not more than 25% of the value of the assets
(either of the Borrower only or of the Borrower and its Subsidiaries on a
Consolidated basis) subject to the provisions of Section 5.02(a) or 5.02(d) or
subject to any restriction contained in any agreement or instrument between the
Borrower and any Lender Party or any Affiliate of any Lender Party relating to
Debt and within the scope of Section 6.01(e) will be Margin Stock.
(n) Set forth on Schedule 4.01(n) hereto is a complete and accurate
list of all Plans, Multiemployer Plans and Welfare Plans.
(o) No ERISA Event has occurred or is reasonably expected to occur with
respect to any Plan that has resulted in or is reasonably expected to result in
a material liability of any Loan Party or any ERISA Affiliate.
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(p) As of the last annual actuarial valuation date, the funded current
liability percentage, as defined in Section 302(d)(8) of ERISA, of each Plan
exceeds 90%, and there has been no material adverse change in the funding status
of any such Plan since such date.
(q) Schedule B (Actuarial Information) to the most recent annual report
(Form 5500 Series) for each Plan, copies of which have been filed with the
Internal Revenue Service and furnished to the Lender Parties, is complete and
accurate and fairly presents the funding status of such Plan and, since the date
of such Schedule B, there has been no material adverse change in such funding
status.
(r) Neither any Loan Party nor any ERISA Affiliate has incurred or is
reasonably expected to incur any Withdrawal Liability to any Multiemployer Plan
that could reasonably be expected to result in any material liability of any
Loan Party or any ERISA Affiliates.
(s) Neither any Loan Party nor any ERISA Affiliate has been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of ERISA,
and no such Multiemployer Plan is reasonably expected to be in reorganization or
to be terminated, within the meaning of Title IV of ERISA.
(t) Neither the business nor the properties of any Loan Party or any of
its Subsidiaries are affected by any fire, explosion, accident, strike, lockout
or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or
of the public enemy or other casualty (whether or not covered by insurance) that
would be reasonably likely to have a Material Adverse Effect.
(u) Except as set forth on Schedule 4.01(u), the operations and
properties of each Loan Party and each of its Subsidiaries comply with all
applicable Environmental Laws and Environmental Permits except for
non-compliance that would not be reasonably likely to have a Material Adverse
Effect, all past non-compliance with such Environmental Laws and Environmental
Permits has been resolved without material ongoing obligations or costs, and, to
the knowledge of the Loan Parties after reasonable inquiry, no circumstances
exist that would be reasonably likely to (i) form the basis of an Environmental
Action against any Loan Party or any of its Subsidiaries or any of their
properties that could have a Material Adverse Effect or (ii) cause any such
property to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law that could have a Material Adverse
Effect.
(v) Except as set forth on Schedule 4.01(v), none of the properties
currently or formerly owned or operated by any Loan Party or any of its
Subsidiaries is listed or, to the knowledge of the Loan Parties after reasonable
inquiry, proposed for listing on the NPL or on the CERCLIS or any analogous
foreign, state or local list or, to the knowledge of the Loan Parties after
reasonable inquiry, is adjacent to any such property; to the knowledge of the
Loan Parties after reasonable inquiry, there are no and never have been any
underground or
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aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps
or lagoons in which Hazardous Materials are being or have been treated, stored
or disposed on any property currently owned or operated by any Loan Party or any
of its Subsidiaries or, on any property formerly owned or operated by any Loan
Party or any of its Subsidiaries during the time such property was owned or
operated by such Loan Party or Subsidiary; there is no asbestos or
asbestos-containing material on any property currently owned or operated by any
Loan Party or any of its Subsidiaries in a quantity or condition that would
reasonably be likely to result in a Material Adverse Effect; and Hazardous
Materials have not been released, discharged or disposed of on any property
currently owned or operated by any Loan Party or any of its Subsidiaries, or on
any property formerly owned or operated by any Loan Party or any of its
Subsidiaries during the time such property was owned or operated by such Loan
Party or Subsidiary, except releases, discharges or disposals that would not be
reasonably likely to result in a Material Adverse Effect.
(w) Neither any Loan Party nor any of its Subsidiaries is undertaking,
and has not completed, either individually or together with other potentially
responsible parties, any investigation or assessment or remedial or response
action relating to any actual or threatened release, discharge or disposal of
Hazardous Materials at any site, location or operation, either voluntarily or
pursuant to the order of any governmental or regulatory authority or the
requirements of any Environmental Law; and all Hazardous Materials generated,
used, treated, handled or stored at, or transported to or from, any property
currently or formerly owned or operated by any Loan Party or any of its
Subsidiaries which have been disposed of have been done so in a manner not
reasonably expected to result in a Material Adverse Effect.
(x) Neither any Loan Party nor any of its Subsidiaries is a party to
any indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction that would be
reasonably likely to have a Material Adverse Effect.
(y) The Collateral Documents create a valid and perfected first
priority security interest in the Collateral, securing the payment of the
Secured Obligations, and all filings and other actions necessary or desirable to
perfect and protect such security interest have been duly taken. The Loan
Parties are the legal and beneficial owners of the Collateral free and clear of
any Lien, except for the liens and security interests created or permitted under
the Loan Documents.
(z) Each Loan Party and each of its Subsidiaries and Affiliates has
filed, has caused to be filed or has been included in all federal and state tax
returns and all other material tax returns (local, foreign or otherwise)
required to be filed and has paid all taxes, assessments, levies, fees and other
charges shown thereon (or on any assessments received by any such Person or of
which any such Person has been notified) to be due and payable, together with
applicable interest and penalties, except for any such taxes, assessments,
levies, fees and other charges the amount, applicability or validity of which is
being contested in good faith and by appropriate
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proceedings diligently conducted and with respect to which such Loan Party or
such Subsidiary, as the case may be, has established appropriate and adequate
reserves in accordance with GAAP.
(aa) Set forth on Schedule 4.01(aa) hereto is a complete and accurate
list, as of the date hereof, of each taxable year of each Loan Party and each of
its Subsidiaries and Affiliates for which federal income tax returns have been
filed and for which the expiration of the applicable statute of limitations for
assessment or collection has not occurred by reason of extension or otherwise
(each, an "Open Year").
(bb) As of the date hereof, no issues have been raised by the Internal
Revenue Service in any manner whatsoever, whether by proposed adjustment or
otherwise, with respect to the federal income tax liability of the Loan Parties
or any of their respective Subsidiaries and Affiliates for any Open Years. No
issues have been raised by the Internal Revenue Service in respect of Open Years
that, in the aggregate, would be reasonably likely to have a Material Adverse
Effect.
(cc) As of the date hereof, no issues have been raised by any state,
local or foreign taxing authority in any manner whatsoever, whether by proposed
adjustment or otherwise, with respect to the state, local and foreign tax
liability of the Loan Parties or any of their respective Subsidiaries and
Affiliates. No issues have been raised by such taxing authorities that, in the
aggregate, would be reasonably likely to have a Material Adverse Effect.
(dd) No "ownership change" as defined in Section 382(g) of the Internal
Revenue Code, and no event that would result in the application of the "separate
return limitation year" or "consolidated return change of ownership" limitations
under the federal income tax consolidated return regulations, has occurred with
respect to the Parent Guarantor or the Borrower since December 1, 1992, except
for the Recapitalization.
(ee) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended. Neither the making of any Advances,
nor the issuance of any Letters of Credit, nor the application of the proceeds
or repayment thereof by the Borrower, nor the consummation of the other
transactions contemplated hereby, will violate any provision of such Act or any
rule, regulation or order of the Securities and Exchange Commission thereunder.
(ff) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(gg) Set forth on Schedule 4.01(gg) hereto is a complete and accurate
list of all Debt of the Parent Guarantor and its Subsidiaries in existence on
the date of the Initial Extension of Credit (other than Surviving Debt), showing
as of the date hereof the principal amount outstanding thereunder.
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(hh) Set forth on Schedule 4.01(hh) hereto is a complete and accurate
list as of the date hereof of all Surviving Debt, showing, as of such date, each
Loan Party and/or each of its Subsidiaries party thereto, the principal amount
outstanding thereunder, the interest rate, if any, thereon, the scheduled
maturity date thereof and the amortization schedule, if any, therefor.
(ii) Set forth on Schedule 4.01(ii) hereto is a complete and accurate
list as of the date hereof of all real property owned by any Loan Party or any
of its Subsidiaries, showing, as of such date, the street address, county or
other relevant jurisdiction, state and record owner thereof. Each Loan Party or
such Subsidiary has good, marketable and insurable fee simple title to such real
property, free and clear of all Liens, other than Liens created or permitted by
the Loan Documents.
(jj) Set forth on Schedule 4.01(jj) hereto is a complete and accurate
list as of the date hereof of all leases of real property under which any Loan
Party or any of its Subsidiaries is the lessee, showing, as of such date, the
street address, county or other relevant jurisdiction, state, lessor and lessee.
Each such lease is, to the knowledge of such Loan Party, the legal, valid and
binding obligation of the lessor thereof, enforceable in accordance with its
terms.
(kk) Set forth on Schedule 4.01(kk) hereto is a complete and accurate
list as of the date hereof of all Investments (other than Investments in Cash
Equivalents) held by any Loan Party or any of its Subsidiaries, showing, as of
such date, the amount, obligor or issuer and maturity, if any, thereof.
(ll) Set forth on Schedule 4.01(ll) hereto is a complete and accurate
list as of the date hereof of all patents, trademarks, trade names, service
marks and copyrights, and all applications therefor and licenses thereof, of
each Loan Party or any of its Subsidiaries, showing, as of such date, the
jurisdiction in which registered, the registration number, the date of
registration and the expiration date.
(mm) All of the Subsidiaries of the Parent Guarantor constitute
"Restricted Subsidiaries" (as defined in the indenture for the Subordinated
Notes) for all purposes of the Subordinated Note Documents.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, each of the Parent Guarantor and the
Borrower will:
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(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
compliance with ERISA.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, (i)
all taxes, assessments and governmental charges or levies imposed upon it or
upon its property and (ii) all lawful claims that, if unpaid, might by law
become a Lien upon its property; provided, however, that neither the Parent
Guarantor nor any of its Subsidiaries shall be required to pay or discharge any
such tax, assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being maintained
in accordance with GAAP, unless and until any Lien resulting therefrom attaches
to its property and collection, execution, levy or foreclosure proceedings shall
have been commenced with respect thereto.
(c) Compliance with Environmental Laws. Comply, and cause each of its
Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew, and cause each
of its Subsidiaries to obtain and renew, all Environmental Permits material to
its operations and properties; and conduct, and cause each of its Subsidiaries
to conduct, any investigation, study, sampling and testing, and undertake any
cleanup, removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance with (but only to
the extent required by) the requirements of all Environmental Laws; provided,
however, that neither the Parent Guarantor nor any of its Subsidiaries shall be
required to undertake any such cleanup, removal, remedial or other action to the
extent that its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained in accordance
with GAAP with respect to such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Parent Guarantor or such Subsidiary
operates.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its existence,
legal structure, legal name, rights (charter and statutory), permits, licenses,
approvals, privileges and franchises; provided, however, that the Parent
Guarantor and its Subsidiaries may consummate any merger or consolidation
otherwise permitted under Section 5.02(c); and provided further, however, that
neither the Parent Guarantor nor any of its Subsidiaries shall be required to
preserve any right, permit, license, approval, privilege or franchise if the
board of directors of the Parent Guarantor or such Subsidiary shall determine in
good faith that the preservation thereof is no longer desirable in the conduct
of the business of the Parent Guarantor or such Subsidiary, as the case
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may be, and that the loss thereof could not reasonably be expected to have a
Material Adverse Effect.
(f) Visitation Rights. At any reasonable time and from time to time,
permit the Administrative Agent or any of the Lender Parties or any agents or
representatives thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Parent
Guarantor and any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Parent Guarantor and any of its Subsidiaries with any of their
officers or directors and with their independent public accountants; provided
that, so long as no Default under Section 6.01(a) or 6.01(f) or Event of Default
has occurred and is continuing, the Administrative Agent or such Lender Party
shall give the Borrower prior notice of its discussions with such independent
public accountants and the opportunity, at its option, to participate in such
discussions.
(g) Preparation of Environmental Reports. At the request of the
Administrative Agent from time to time but in any event not more than once in
any two-year period for any real property or any leasehold interest in real
property of the Borrower or any of its Subsidiaries following:
(i) the acquisition or proposed acquisition of such real property
interest (whether fee or leasehold);
(ii) the occurrence of any event or circumstance that causes the
Administrative Agent or any of the Lender Parties to reasonably believe that
Hazardous Materials may be present on such real property in any manner or
quantity that, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect; or
(iii) the occurrence and during the continuance of an Event of Default,
provide to the Lenders within 60 days after such request, at the expense of the
Borrower, an environmental site assessment report for each of the real
properties of the Borrower or any of its Subsidiaries described in such request,
prepared by an environmental consulting firm reasonably acceptable to the
Administrative Agent, indicating the presence or absence of Hazardous Materials
and the estimated cost of any compliance, removal or remedial action in
connection with any Hazardous Materials on such real properties. Without
limiting the generality of the immediately preceding sentence, if the
Administrative Agent determines at any time that a material risk exists that any
such report will not be provided within the time referred to above, the
Administrative Agent may retain, upon at least three Business Days' prior
written notice to the Borrower, an environmental consulting firm to prepare such
report at the reasonable expense of the Borrower, and the Borrower hereby
grants, and agrees to cause each of its Subsidiaries that owns any of the real
property described in such request to grant, at the time of such request, to the
Administrative Agent, the Lender Parties, such firm and any agents or
representatives
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thereof an irrevocable nonexclusive license, subject to the rights of tenants,
to enter onto any such real property to undertake such an assessment.
(h) Keeping of Books. Keep, and cause each of its Subsidiaries to keep,
proper books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of the Parent
Guarantor and each such Subsidiary in accordance with generally accepted
accounting principles in effect from time to time.
(i) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties that
are used or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
(j) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real property to
which the Borrower or any of its Subsidiaries is a party, keep such leases in
full force and effect and not allow such leases to lapse or be terminated or any
rights to renew such leases to be forfeited or cancelled, notify the
Administrative Agent of any default by any party with respect to any such leases
of which the Borrower or any such Subsidiary has knowledge and cooperate with
the Administrative Agent in all respects to cure any such default, and cause
each of its Subsidiaries to do so except, in any case, where the failure to do
so, either individually or in the aggregate, would not be reasonably likely to
have a Material Adverse Effect.
(k) Performance of Related Documents. Perform and observe all of the
terms and provisions of each Related Document to be performed or observed by it,
maintain each such Related Document in full force and effect, enforce such
Related Document in accordance with its terms, take all such action to such end
as may be from time to time reasonably requested by the Administrative Agent
and, upon request of the Administrative Agent, make to each other party to each
such Related Document such demands and requests for information and reports or
for action as the Borrower is entitled to make under such Related Document.
(l) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates on terms that are fair and reasonable and
no less favorable to the Parent Guarantor or such Subsidiary than it would
obtain in a comparable arm's-length transaction with a Person not an Affiliate,
other than so long as no Default under Section 5.04, 6.01(a) or 6.01(f) has
occurred and is continuing, aggregate fees of up to $240,000 in any calendar
year payable in accordance with the terms of the Management Agreements, as in
effect on the date of this Agreement.
(m) Conditions Subsequent to the Date of the Initial Extension of
Credit. (i) As promptly as practicable after the date of the Initial Extension
of Credit, furnish to the Administrative Agent, acknowledgment copies or stamped
receipt copies of all of the Uniform Commercial Code termination statements or
the equivalent thereof referred to in Section 3.01(j)(viii)(B) and of all of the
Uniform Commercial Code financing statements or the equivalent thereof referred
to in Sections 3.01(j)(viii)(C).
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(ii) As promptly as practicable and in any event on or prior to January
21, 1998, (A) establish and thereafter maintain, and cause each of its
Subsidiaries party to (or required to be party to) any of the Collateral
Documents, if any, to establish and thereafter maintain, one or more Blocked
Accounts with NationsBank or one or more other banks selected by the Borrower or
the applicable Subsidiary and reasonably acceptable to the Administrative Agent
which have accepted the assignment of the Blocked Accounts maintained thereby to
the Administrative Agent pursuant to the terms of the Security Agreement and the
respective Blocked Account Letters referred to therein; and (B) on and after
January 21, 1998, cause all of the proceeds of the Collateral (including,
without limitation, all proceeds of Receivables) to be deposited directly into
one of the Blocked Accounts.
(n) Covenant to Give Security. Upon the request of the Administrative
Agent following the occurrence and during the continuance of a Default, and at
the expense of the Borrower, (i) within 10 days after such request, furnish to
the Administrative Agent a description of the real and personal properties of
the Borrower and its Subsidiaries in detail satisfactory to the Administrative
Agent, (ii) within 15 days after such request, duly execute and deliver to the
Administrative Agent mortgages, pledges, assignments and other security
agreements, as specified by and in form and substance satisfactory to the
Administrative Agent, securing payment of all the Obligations of the Borrower
under the Loan Documents and constituting Liens on all such properties, (iii)
within 30 days after such request, take whatever action (including, without
limitation, the recording of mortgages, the filing of Uniform Commercial Code
financing statements, the giving of notices and the endorsement of notices on
title documents) may be necessary or advisable in the reasonable opinion of the
Administrative Agent to vest in the Administrative Agent (or in any
representative of the Administrative Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the mortgages,
pledges, assignments and other security agreements delivered pursuant to this
Section 5.01(n), enforceable against all third parties in accordance with their
terms, (iv) within 60 days after such request, deliver to the Administrative
Agent a signed copy of a favorable opinion, addressed to the Administrative
Agent, of counsel for the Borrower acceptable to the Administrative Agent as to
the matters contained in clauses (i), (ii) and (iii) above, as to such
mortgages, pledges, assignments and other security agreements being legal, valid
and binding obligations of the Borrower and its Subsidiaries, enforceable in
accordance with their terms, and as to such other matters as the Administrative
Agent may reasonably request, (v) as promptly as practicable after such request,
deliver to the Administrative Agent Mortgage Policies as to each parcel of real
property subject to such request and (vi) at any time and from time to time,
promptly execute and deliver any and all further instruments and documents and
take all such other action as the Administrative Agent may deem desirable in
obtaining the full benefits of, or in preserving the Liens of, such security
agreements.
(o) Additional Loan Parties. Cause each newly organized or acquired
Subsidiary of the Parent Guarantor (whether direct or indirect), prior to or
concurrently with any Investment by any of the Loan Parties or any of their
Subsidiaries therein:
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(i) to execute and deliver to the Administrative Agent, on behalf of
the Secured Parties, (A) if such Subsidiary is a wholly owned U.S. Subsidiary or
wholly owned Foreign Subsidiary (other than a Foreign Corporation) of one or
more of the Loan Parties and their Subsidiaries, (1) a Security Agreement
Supplement, an IP Security Agreement Supplement and/or, if necessary or in the
reasonable opinion of the Administrative Agent desirable (and requested thereby)
to properly create and perfect a lien and security interest in the capital stock
(or other ownership or profit interests) in, or the property and assets of, such
Subsidiary, one or more other mortgages, security agreements or pledge
agreements (or other similar documents), in form and substance reasonably
satisfactory to the Lender Parties, and (2) a guaranty, in substantially the
form of Exhibit I hereto (as amended, supplemented or otherwise modified from
time to time in accordance with its terms, a "Subsidiary Guaranty"), (B) if such
Subsidiary is a Foreign Corporation or a non-wholly owned Subsidiary thereof,
such documentation as may be necessary or in the reasonable opinion of the
Administrative Agent desirable (and requested thereby) to properly create and
perfect a lien and security interest in the capital stock (or other ownership or
profit interests) in such Subsidiary as required under clause (iii) of this
Section 5.01(o) and (C) in each case, such other agreements, instruments,
certificates or documents as the Administrative Agent may reasonably request, in
each case in form and substance reasonably satisfactory to the Lender Parties;
(ii) if such Subsidiary is a wholly owned U.S. Subsidiary or wholly
owned Foreign Subsidiary (other than a Foreign Corporation) of one or more of
the Loan Parties and their Subsidiaries, such Subsidiary and the owners of all
of the capital stock (or other ownership or profit interests) therein shall have
taken or shall take all of the other actions that may be necessary or that the
Administrative Agent may reasonably deem desirable in order (A) to perfect and
protect any Liens granted under the Collateral Documents, the Security Agreement
Supplement, the IP Security Agreement Supplement and, if applicable, the other
mortgages, security agreements and pledge agreements referred to in clause (i)
of this Section 5.01(o) and (B) to enable the Administrative Agent and the
Lender Parties to exercise and enforce their rights and remedies under the Loan
Documents;
(iii) if such Subsidiary is a Foreign Corporation or a non-wholly owned
Subsidiary thereof, such Subsidiary and each of the Loan Parties that owns any
of the capital stock (or other ownership or profit interests) therein shall have
taken or shall take all of the other actions that may be necessary or that the
Administrative Agent may reasonably deem desirable and may request in order to
perfect and protect any Liens granted or intended to be granted under the
Collateral Documents in (A) if such Subsidiary is a Foreign Corporation, 66% of
the capital stock (or other ownership or profit interests) in such Subsidiary
entitled to vote (within the meaning of Treasury Regulation Section
1.956-2(c)(2) promulgated under the Internal Revenue Code) (the "Voting Equity
Interests") (on a fully diluted basis) or, if less, all of the Voting Equity
Interests in such Subsidiary owned by the Loan Parties, and all of the capital
stock (or other ownership or profit interests) in such Subsidiary not entitled
to vote (within the meaning of Treasury Regulation Section 1.956-2(c)(2)
promulgated under the Internal Revenue Code) now or hereafter owned by the Loan
Parties; provided, however, that, if, as a result of any changes in
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the tax laws of the United States after the date of this Agreement, the pledge
by any of the Loan Parties of any additional capital stock (or other ownership
or profit interests) in such Foreign Corporation to the Administrative Agent, on
behalf of itself and the other Secured Parties, would not result in an increase
in the aggregate net consolidated tax liabilities of the Parent Guarantor and
its Subsidiaries, then, promptly after the changes in such laws, all such
additional capital stock (or other ownership or profit interests) therein shall
be pledged to the Administrative Agent, on behalf of the Secured Parties,
pursuant to the terms and conditions of the Collateral Documents and/or one or
more additional pledge agreements (or other similar documents), in form and
substance reasonably acceptable to the Lenders and (B) if such Subsidiary is a
non-wholly owned Subsidiary of one or more of the Loan Parties, all of the
capital stock (or other ownership or profit interests) therein owned by one or
more of the Loan Parties; and
(iv) upon the reasonable request of the Administrative Agent, signed
copies of one or more favorable opinions of special and appropriate local and/or
foreign counsel for such Subsidiary and, if appropriate, counsel for each of the
owners of the capital stock (or other ownership or profit interests) therein as
the Administrative Agent shall reasonably request, addressed to the
Administrative Agent, on behalf of the Secured Parties, and reasonably
acceptable to the Administrative Agent and each of the other Secured Parties, as
to the Subsidiary Guaranty, the Security Agreement Supplement, the IP Security
Agreement Supplement, the mortgages, the security agreements and/or the pledge
agreements (or other similar documents) referred to in clause (i) of this
Section 5.01(o) being the legal, valid and binding obligations of such
Subsidiary or such owners of the capital stock (or other ownership or profit
interests) therein, as the case may be, enforceable against such Subsidiary or
each such owner in accordance with their respective terms, as to the creation,
perfection and priority of the liens and security interests created or purported
to be created therein and as such other matters as the Administrative Agent, or
any of the Lender Parties through the Administrative Agent, may reasonably
request.
SECTION 5.02. Negative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, neither the Parent Guarantor nor the
Borrower will, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on or
with respect to any of its properties of any character (including, without
limitation, accounts) whether now owned or hereafter acquired, or sign or file
or suffer to exist, or permit any of its Subsidiaries to sign or file or suffer
to exist, under the Uniform Commercial Code (or any similar law) of any
jurisdiction, a financing statement (or the equivalent thereof) that names the
Parent Guarantor or any of its Subsidiaries as debtor, or sign or suffer to
exist, or permit any of its Subsidiaries to sign or suffer to exist, any
security agreement authorizing any secured party thereunder to file any such
financing statement, or assign, or permit any of its Subsidiaries to assign, any
accounts or other right to receive income, excluding, however, from the
operation of the foregoing restrictions the following:
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(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) in the case of the Borrower and its
Subsidiaries, Liens existing on the date hereof and described on Schedule
5.02(a)(iii) hereto;
(iv) purchase money Liens upon or in real property or
equipment acquired or held by the Borrower or any of its Subsidiaries in the
ordinary course of business to secure the purchase price of such property or
equipment or to secure Debt incurred solely for the purpose of financing the
acquisition, construction or improvement of any such property or equipment to be
subject to such Liens, or Liens existing on any such property or equipment at
the time of its acquisition (other than any such Liens created in contemplation
of such acquisition that do not secure the purchase price of such real property
or equipment), or extensions, renewals or replacements of any of the foregoing
for the same or a lesser amount; provided, however, that no such Lien shall
extend to or cover any property other than the real property or equipment being
acquired, constructed or improved, and no such extension, renewal or replacement
shall extend to or cover any real property or equipment not theretofore subject
to the Lien being extended, renewed or replaced; and provided further that the
aggregate principal amount of the Debt secured by Liens permitted by this clause
(iv) shall not exceed the amount permitted under Section 5.02(b)(iv)(B) at any
time outstanding and that any such Debt shall not otherwise be prohibited by the
terms of the Loan Documents;
(v) Liens arising in connection with Capitalized
Leases permitted under Section 5.02(b)(iv)(C) and not otherwise prohibited by
the terms of the Loan Documents; provided that no such Lien shall extend to or
cover any property or assets other than the property and assets subject to such
Capitalized Leases;
(vi) Liens upon any of the property and assets (other
than any capital stock (or other ownership or profit interests) in any Person)
existing at the time such property or asset is purchased or otherwise acquired
by the Parent Guarantor or any of its Subsidiaries; provided that any such Lien
was not created in contemplation of such purchase or other acquisition and does
not extend to or cover any property or assets other than the property or asset
being so purchased or otherwise acquired; and provided further that any Debt or
other Obligations secured by such Liens shall otherwise be expressly permitted
under Section 5.02(b)(iv)(E) and shall not otherwise be prohibited under the
terms of the Loan Documents; and
(vii) Liens upon any of the property and assets
(other than any capital stock (or other ownership or profit interests) in any
Person) of a Person and its Subsidiaries existing at the time such Person is
merged into or consolidated with any of the Subsidiaries of the Parent
Guarantor, or becomes a Subsidiary of the Parent Guarantor, in accordance with
the terms of the Loan Documents; provided that such Lien was not created in
contemplation of such merger, consolidation or acquisition and does not extend
to or cover any property or assets other than
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property and assets of the Person and its Subsidiaries being so merged into or
consolidated with such Subsidiary or being acquired by the Parent Guarantor or
such Subsidiary, as the case may be; and provided further that any Debt or other
Obligations secured by such Lien shall otherwise be expressly permitted under
Section 5.02(b)(iv)(E) and shall not otherwise be prohibited under the terms of
the Loan Documents.
(b) Debt. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries to create, incur, assume or suffer to exist, directly or
indirectly, any Debt other than:
(i) in the case of the Parent Guarantor,
(A) Debt under the Loan Documents,
(B) Debt evidenced by the Parent Guarantor
Preferred Stock,
(C) the guarantee of the Subordinated Notes,
as in effect on the date of this Agreement,
(D) Debt evidenced by the Junior Exchange
Notes, and
(E) unsecured Debt to one or more sellers of
property and assets acquired by the Borrower or any of its Subsidiaries pursuant
to Section 5.02(e)(viii) in an aggregate principal amount not to exceed
$2,500,000 at any time outstanding, provided that, with respect to any such Debt
issued or incurred pursuant to this subclause (i)(E), (v) such Debt shall have a
stated maturity or redemption date that is at least one year after the scheduled
Term B Termination Date, (w) such Debt shall not be guaranteed or otherwise
supported by any of the other Loan Parties or any of their respective
Subsidiaries, (x) such Debt shall be subordinated to all of the Obligations of
the Parent Guarantor under or in respect of the Loan Documents to at least the
same extent as the Junior Exchange Notes, (y) the other terms and conditions of
such Debt (and of any agreement entered into and of any instrument issued in
connection therewith) shall be no less favorable to the Parent Guarantor or any
of its Subsidiaries or to the Administrative Agent and Lender Parties than the
terms of the Loan Documents and (z) immediately before and immediately after
giving pro forma effect to such Debt, no Default shall have occurred and be
continuing;
(ii) in the case of the Borrower,
(A) Debt under the Subordinated Notes in an
aggregate principal amount not to exceed $130,000,000; provided, however, that
the terms and conditions of any Subordinated Note Documents entered into after
the Initial Extension of Credit shall be reasonably satisfactory to the Required
Lenders, and
(B) Debt in respect of interest rate Hedge
Agreements entered into from time to time by the Borrower with counterparties
that are Lender Parties or Affiliates of any of the Lender
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Parties at the time any such interest rate Hedge Agreement is entered into in an
aggregate notional amount not to exceed (A) 50% of the aggregate Commitments
under the Term Facilities at the time any such interest rate Hedge Agreement is
entered into less (B) the aggregate notional amount of all interest rate Hedge
Agreements that constitute Investments made under Section 5.02(e)(v) at such
time, provided that all such interest rate Hedge Agreements shall be
nonspeculative in nature (including, without limitation, with respect to the
term and purpose thereof);
(iii) Debt owed to the Borrower by any Subsidiary of
the Borrower or Debt owed to a wholly owned U.S. Subsidiary of the Borrower by
the Borrower or any of its Subsidiaries, provided that any such Debt shall be
(A) evidenced by a promissory note, (B) pledged to the Administrative Agent, on
behalf of the Secured Parties, pursuant to the terms of the Security Agreement,
(C) subject to the applicable requirements of Section 5.02(e) and (D) in the
case of any such Debt owed by the Borrower, subordinated to all of the
Obligations of the Borrower under or in respect of the Loan Documents on terms
reasonably satisfactory to the Lender Parties; and
(iv) in the case of the Borrower and any of its
Subsidiaries,
(A) Debt under the Loan Documents,
(B) Debt secured by Liens permitted by
Section 5.02(a)(iv) in an aggregate principal amount not to exceed, when
aggregated with the principal amount of all Debt incurred under subclauses
(iv)(C) and (iv)(E) of this Section 5.02(b), $7,500,000 at any time outstanding,
(C) Capitalized Leases in an aggregate
principal amount not to exceed, when aggregated with the principal amount of all
Debt incurred under subclauses (iv)(B) and (iv)(E) of this Section 5.02(b),
$7,500,000 at any time outstanding,
(D) the Surviving Debt,
(E) Debt existing at the time that any
property or asset is purchased or otherwise acquired by the Borrower or any of
its Subsidiaries and secured solely by such property or asset, or that any
Person (other than Parent Guarantor or any of its Subsidiaries) is merged into
or consolidated with any of the Subsidiaries of the Parent Guarantor, or becomes
a Subsidiary of the Parent Guarantor, in accordance with the terms of the Loan
Documents, in an aggregate principal amount not to exceed the lesser of (1) the
amount of the aggregate Unused Acquisition Commitments at the time any such Debt
is incurred and (2) when aggregated with the principal amount of all Debt
incurred under subclauses (iv)(B) and (iv)(C) of this Section 5.02(b),
$7,500,000, provided that (x) no such Debt shall be incurred in contemplation of
any such purchase or other acquisition or any such merger, consolidation or
acquisition and (y) immediately before and immediately after giving pro forma
effect to such Debt, no Default shall have occurred and be continuing,
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(F) unsecured Debt not otherwise permitted
under this Section 5.02(b) incurred in the ordinary course of business and in an
aggregate amount not to exceed $5,000,000 at any time outstanding,
(G) unsecured Debt in respect of financing
provided to the Borrower by its insurance brokers solely for the purpose of
funding the insurance premiums of the Borrower and its Subsidiaries, provided,
however, that the aggregate amount of such Debt at any time outstanding shall
not exceed the amount of insurance premiums refundable upon termination of any
insurance premiums so financed,
(H) guarantees by the wholly owned
Subsidiaries of the Borrower of the Subordinated Notes, so long as (1) each such
Subsidiary is party to a Subsidiary Guaranty at or prior to the date on which it
enters into such guarantee and (2) the Obligations of such Subsidiary under such
guarantee are subordinated to the Obligations of such Subsidiary under the
applicable Subsidiary Guaranty to at least the same extent as the Obligations of
the Borrower under the Subordinated Note Documents are subordinated to the
Obligations of the Borrower under the Loan Documents, and
(I) indorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of
business.
(c) Merger, Etc. Merge into or consolidate with any Person or permit
any Person to merge into it, or permit any of its Subsidiaries to do so, except
that any Subsidiary of the Borrower may merge into or consolidate with any other
Subsidiary of the Borrower, provided that, in the case of any such merger or
consolidation, the Person formed by such merger or consolidation shall be a
wholly owned Subsidiary of the Borrower and immediately after giving effect
thereto, no event shall occur and be continuing that constitutes a Default.
(d) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose
of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise
dispose of, any assets, or grant any option or other right to purchase, lease or
otherwise acquire any assets, except:
(i) in the case of the Borrower and its Subsidiaries, sales of
Inventory, and the licensing of patents and trademarks of the Borrower and its
Subsidiaries to manufacturers of their Inventory, in each case in the ordinary
course of its business;
(ii) in the case of the Borrower and its Subsidiaries, sales
or other disposals of obsolete or worn-out equipment or other assets in the
ordinary course of business;
(iii) in the case of the Borrower and its Subsidiaries, in a
transaction otherwise permitted under Section 5.02(c);
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(iv) sales of assets by the Borrower or any of its
Subsidiaries for cash and for fair value in an aggregate amount not to exceed
$2,500,000 in any Fiscal Year, provided that the Borrower shall, on the third
Business Day following the date of the receipt by the Borrower or any of its
Subsidiaries of the Net Cash Proceeds from such sale, prepay the Advances
pursuant to, and in the amount and order of priority set forth in, Section
2.06(b)(ii), and provided further that immediately before and immediately after
giving pro forma effect to any such sale, no Default shall have occurred and be
continuing; and
(v) sales or other transfers of assets from the Borrower or
any of its Subsidiaries to the Borrower or a wholly owned domestic Subsidiary of
the Borrower, provided that, prior to such sale or other transfer, such wholly
owned domestic Subsidiary shall be or shall become a party to the Security
Agreement and shall have executed and delivered to the Administrative Agent a
Subsidiary Guaranty.
(e) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than:
(i) Investments by the Parent Guarantor in the Borrower;
(ii) Investments by the Borrower and its Subsidiaries
outstanding on the date hereof and described on Schedule 4.01(kk) hereto;
(iii) loans and advances to employees in the ordinary course
of the business of the Borrower and its Subsidiaries as presently conducted in
an aggregate principal amount not to exceed $100,000 at any time outstanding;
(iv) Investments by the Borrower and its Subsidiaries in Cash
Equivalents;
(v) in the case of the Borrower, Investments in respect of
interest rate Hedge Agreements entered into from time to time by the Borrower
with one or more counterparties that are Lender Parties or Affiliates of any of
the Lender Parties at the time any such interest rate Hedge Agreement is entered
into in an aggregate notional amount not to exceed (A) 50% of the aggregate
Commitments under the Term Facilities at the time any such interest rate Hedge
Agreement is entered into less (B) the aggregate notional amount of any interest
rate Hedge Agreements that constitute Debt incurred under Section 5.02(b)(ii)(B)
at such time; provided that all such interest rate Hedge Agreements shall be
nonspeculative in nature (including, without limitation, with respect to the
term and purpose thereof);
(vi) Investments by (A) the Borrower in any of its wholly
owned U.S. Subsidiaries, (B) any of the wholly owned U.S. Subsidiaries of the
Borrower in the Borrower or any other wholly owned U.S. Subsidiary of the
Borrower or (C) the Borrower or any of its wholly owned U.S. Subsidiaries in one
or more non-wholly owned U.S. Subsidiaries of the
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Borrower or Foreign Subsidiaries in an aggregate amount for all such Investments
not to exceed $1,000,000 at any time;
(vii) Investments by the Borrower or any of its Subsidiaries
in their respective customers or suppliers in an aggregate amount for all such
Investments not to exceed $1,000,000 at any time;
(viii) Investments by the Borrower and its wholly owned U.S.
Subsidiaries in one or more newly acquired or created wholly owned U.S.
Subsidiaries thereof with the proceeds of the Acquisition Advances or capital
contributions made by, or the proceeds received from issuance and sale of
additional Parent Guarantor Stock to, one or more of the Equity Investors,
provided that, with respect to any such Investment made pursuant to this clause
(viii):
(1) any such newly acquired or created wholly owned
U.S. Subsidiary of the Borrower shall comply with all of the applicable
requirements of Section 5.01(o);
(2) any business acquired or invested in shall be in
the specialty tool business, the home heating and cooling products business, the
home security products business, the shed manufacturing business and/or the home
comfort products business;
(3) such newly acquired or created wholly owned U.S.
Subsidiary of the Borrower shall not have any material contingent liabilities
(as determined in good faith by the board of directors of the Borrower); and
(4) (x) immediately before and after giving pro forma
effect to such Investment, no Default shall have occurred and be continuing and
(y) immediately after giving effect to such Investment, the Parent Guarantor and
its Subsidiaries shall be in pro forma compliance with all of the covenants set
forth in Section 5.04, such compliance to be determined after giving effect to
all pro forma cost savings of the Parent Guarantor and its Subsidiaries to be
recognized as a result of such Investment and on the basis of the Consolidated
financial statements of the Parent Guarantor and its Subsidiaries most recently
delivered to the Lender Parties pursuant to Section 5.03(c) or 5.03(d) as though
such Investment had been made as of the beginning of the fiscal period covered
thereby, and all of the requirements set forth in this subclause (4) shall be
certified by the chief financial officer (or person performing similar
functions) of the Borrower in a certificate, in form and substance reasonably
satisfactory to the Administrative Agent, and delivered to the Administrative
Agent, on behalf of the Lender Parties, prior to making such Investment; and
(ix) the acceptance of promissory notes received as payment, in whole
or in part, of the purchase price of shares of the Parent Guarantor Common Stock
sold to officers, directors
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and employees of the Parent Guarantor and its Subsidiaries pursuant to Section
5.02(f)((i)(B) in an aggregate principal amount not to exceed $500,000 at any
time.
(f) Dividends, Etc. Declare or pay any dividends, or purchase, redeem,
retire, defease or otherwise acquire for value any of its capital stock or any
warrants, rights or options to acquire such capital stock, now or hereafter
outstanding, return any capital to its stockholders as such, make any
distribution of assets, capital stock, warrants, rights, options, obligations or
securities to its stockholders as such or issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, or permit any of its
Subsidiaries to do any of the foregoing, or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for value any capital
stock of the Parent Guarantor or any warrants, rights or options to acquire such
capital stock or to issue or sell any capital stock or any warrants, rights or
options to acquire such capital stock, except that, so long as no Default shall
have occurred and be continuing at the time of any action described in clauses
(i) through (iii) below or would result therefrom, (i) the Parent Guarantor may
(A) declare and pay dividends and distributions payable only in Parent Guarantor
Common Stock, (B) issue and sell shares of the Parent Guarantor Common Stock to
officers, directors and employees of the Parent Guarantor and its Subsidiaries
so long as (1) the gross proceeds received from any such issuance and sale are
at least equal to the fair market value of the shares being so issued and sold,
determined at the time of such issuance and sale, (2) all of the consideration
received from any such issuance and sale shall be in cash or in promissory notes
otherwise permitted to be accepted under Section 5.02(e)(ix), (3) such issuance
and sale would not result in a Change of Control and (4) the Borrower shall, on
the date of receipt of the Net Cash Proceeds from any such issuance and sale,
prepay the Advances pursuant to, and in the order or priority set forth in,
Section 2.06(b)(ii), (C) issue and sell additional shares of the Parent
Guarantor Stock so long as (1) the gross proceeds received from any such
issuance and sale are at least equal to the fair market value of the shares
being so issued and sold, determined at the time of such issuance and sale, (2)
all of the consideration received from any such issuance and sale shall be in
cash, (3) such issuance and sale would not result in a Change of Control and (4)
the Borrower shall, on the date of receipt of the Net Cash Proceeds from any
such issuance and sale, prepay the Advances pursuant to, and in the order or
priority set forth in, Section 2.06(b)(ii) and (D) repurchase shares of Parent
Guarantor Common Stock from its employees and former employees in an aggregate
amount not to exceed $500,000 in any Fiscal Year and (ii) the Borrower may
declare and pay dividends and distributions to the Parent Guarantor (A) in order
to permit the consummation of the Recapitalization, (B) to permit the repurchase
of shares referred to in the foregoing subclause (i)(C) in an aggregate amount
not to exceed $500,000 in any Fiscal Year and (C) for operating expenses in any
aggregate amount not to exceed $100,000 in any Fiscal Year and (iii) any
Subsidiary of the Borrower may (A) declare and pay cash dividends to the
Borrower and (B) declare and pay cash dividends to any other wholly owned
Subsidiary of the Borrower of which it is a Subsidiary.
(g) Change in Nature of Business. (i) In the case of the Parent
Guarantor, engage in any business or activity other than (A) holding the capital
stock of the Borrower and (B) entering into, and performing its obligations
under, the Loan Documents and the Related Documents and
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(ii) in the case of the Borrower and its Subsidiaries, engage in, or permit any
of its Subsidiaries to engage in, any business other than the specialty tool
business, the home heating and cooling products business, the home security
products business, the shed manufacturing business and/or the home comfort
products business.
(h) Charter Amendments. Amend, or permit any of its Subsidiaries to
amend, its certificate of incorporation or bylaws.
(i) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as required or permitted by generally accepted
accounting principles or (ii) Fiscal Year.
(j) Prepayments, Etc. of Debt. (i) Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or make
any payment in violation of any subordination terms of, any Debt, other than (A)
the prepayment of the Advances in accordance with the terms of this Agreement,
(B) so long as no Default shall have occurred and be continuing or shall occur
as a result thereof, the prepayment, redemption, purchase, defeasance or other
satisfaction of Debt of any Person existing at the time such Person is being
acquired by the Borrower or any of its Subsidiaries to the extent that such
prepayment, redemption, purchase, defeasance or other satisfaction is required
by the terms of such Debt; provided that the acquisition of such Person is
otherwise expressly permitted under the terms of the Loan Documents, and (C) so
long as no Default shall have occurred and be continuing or shall occur as a
result thereof, any regularly scheduled or required repayments or redemptions of
Surviving Debt; (ii) amend, modify or change in any manner any term or condition
of any Surviving Debt; or (iii) permit any of its Subsidiaries to do any of the
foregoing other than to prepay any Debt payable to the Borrower.
(k) Amendment, Etc. of Related Documents. Cancel or terminate any
Related Document or consent to or accept any cancellation or termination
thereof, amend, modify or change in any manner any term or condition of any
Related Document or give any consent, waiver or approval thereunder, waive any
default under or any breach of any term or condition of any Related Document,
agree in any manner to any other amendment, modification or change of any term
or condition of any Related Document or take any other action in connection with
any Related Document, in any such case, that would be materially more onerous to
the Parent Guarantor or the Borrower thereunder or that would impair the rights
or interests of the Administrative Agent or any Lender Party, or permit any of
its Subsidiaries to do any of the foregoing.
(l) Negative Pledge. Enter into or suffer to exist, or permit any of
its Subsidiaries to enter into or suffer to exist, any agreement prohibiting or
conditioning the creation or assumption of any Lien upon any of its property or
assets other than (i) in favor of the Secured Parties, (ii) in connection with
the Debt outstanding under the Subordinated Note Documents and (iii) any Debt
outstanding on the date any Person first becomes a Subsidiary of the
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Borrower; provided that such agreement was not created in contemplation of the
acquisition of such Person and does not extend to or cover any property or
assets other than property and assets of the Person becoming such Subsidiary.
(m) Partnerships, Etc. Become a general partner in any general or
limited partnership or joint venture, or permit any of its Subsidiaries to do
so, other than any Subsidiary the sole assets of which consist of its interest
in such partnership or joint venture.
(n) Speculative Transactions. Engage, or permit any of its Subsidiaries
to engage, in any transaction involving commodity options or futures contracts
or any similar speculative transactions (including, without limitation,
take-or-pay contracts) except for (i) the interest rate Hedge Agreement existing
on the date of this Agreement and set forth on Schedule 4.01(kk) hereto and (ii)
interest rate Hedge Agreements permitted under Section 5.02(b)(ii)(B) or
5.02(e)(v).
(o) Capital Expenditures. Make, or permit any of its Subsidiaries to
make, any Capital Expenditures that would cause the aggregate of all such
Capital Expenditures made by the Borrower and its Subsidiaries in any Fiscal
Year set forth below to exceed the sum of (i) the amount of Excess Cash Flow for
the immediately preceding Fiscal Year not required to be applied to the
prepayment of Advances under Section 2.06(b)(i) and (ii) the amount set forth
below for such Fiscal Year.
Fiscal Year Ending In Amount
--------------------- ------
1999 $4,000,000
2000 4,000,000
2001 4,000,000
2002 4,000,000
2003 4,000,000
2004 4,000,000
In addition to the amounts set forth in clauses (i) and (ii) above, if, at the
end of any Fiscal Year set forth above, the amount specified above for such
Fiscal Year exceeds the amount of Capital Expenditures made by the Borrower and
its Subsidiaries during such Fiscal Year (the amount of such excess being the
"Excess Amount"), the Borrower and its Subsidiaries shall be entitled to make
additional Capital Expenditures in the succeeding Fiscal Year in an amount equal
to the lesser of (i) the Excess Amount and (ii) the amount specified in clause
(ii) above for such prior Fiscal Year.
SECTION 5.03. Reporting Requirements. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any
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Commitment hereunder, the Parent Guarantor and/or Borrower will furnish to the
Lender Parties:
(a) Default Notice. As soon as possible and in any event within two
Business Days after any Loan Party or any senior officer thereof has knowledge
of the occurrence of each Default or any event, development or occurrence
reasonably likely to have a Material Adverse Effect continuing on the date of
such statement, a statement of the chief financial officer (or person performing
similar functions) of the Borrower setting forth details of such Default and the
action that the Borrower has taken and proposes to take with respect thereto.
(b) Monthly Financials. As soon as available and in any event within 30
days after the end of each month, a Consolidated balance sheet of the Parent
Guarantor and its Subsidiaries as of the end of such month, and Consolidated
statements of income and cash flows of the Parent Guarantor and its Subsidiaries
for the period commencing at the end of the previous month and ending with the
end of such month, and Consolidated statements and cash flows of the Parent
Guarantor and its Subsidiaries for the period commencing at the end of the
previous Fiscal Year and ending with the end of such month, setting forth in
each case in comparative form the corresponding figures for the corresponding
month of the immediately preceding Fiscal Year, all in reasonable detail and
duly certified by the chief financial officer (or person performing similar
functions) of the Parent Guarantor.
(c) Quarterly Financials. As soon as available and in any event within
45 days after the end of each of the first three quarters of each Fiscal Year, a
Consolidated balance sheet of the Parent Guarantor and its Subsidiaries as of
the end of such quarter, and Consolidated statements of income and cash flows of
the Parent Guarantor and its Subsidiaries for the period commencing at the end
of the previous quarter and ending with the end of such quarter, and
Consolidated statements of income cash flows of the Parent Guarantor and its
Subsidiaries for the period commencing at the end of the previous Fiscal Year
and ending with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding period of the
immediately preceding Fiscal Year, all in reasonable detail and duly certified
(subject to normal year-end audit adjustments) by the chief financial officer
(or person performing similar functions) of the Parent Guarantor as having been
prepared in accordance with GAAP, together with (i) a certificate of said
officer stating that no Default has occurred and is continuing or, if a Default
has occurred and is continuing, a statement as to the nature thereof and the
action that the Parent Guarantor or the Borrower, as the case may be, has taken
and proposes to take with respect thereto and (ii) a schedule in form
satisfactory to the Administrative Agent of the computations used by the Parent
Guarantor and the Borrower in determining compliance with the covenants
contained in Sections 5.02(o) and 5.04, provided that, in the event of any
change in GAAP used in the preparation of such financial statements, the Parent
Guarantor shall also provide, if necessary for the determination of compliance
with Section 5.02(o) and/or 5.04, a statement of reconciliation conforming such
financial statements to GAAP.
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(d) Annual Financials. As soon as available and in any event within 90
days after the end of each Fiscal Year, a copy of the annual audit report for
such year for the Parent Guarantor and its Subsidiaries, including therein a
Consolidated balance sheet of the Parent Guarantor and its Subsidiaries as of
the end of such Fiscal Year and Consolidated statements of income and cash flows
of the Parent Guarantor and its Subsidiaries for such Fiscal Year, in each case
accompanied by an opinion acceptable to the Required Lenders of Ernst & Young
LLP or other independent public accountants of recognized national standing or
otherwise acceptable to the Required Lenders, together with (i) a schedule in
form satisfactory to the Administrative Agent of the computations used by such
accountants in determining, as of the end of such Fiscal Year, compliance with
the covenants contained in Sections 5.02(o) and 5.04, provided that, in the
event of any change in GAAP used in the preparation of such financial
statements, the Parent Guarantor shall also provide, if necessary for the
determination of compliance with Section 5.02(o) or 5.04, a statement of
reconciliation conforming such financial statements to GAAP and (iii) a
certificate of the chief financial officer (or person performing similar
functions) of the Parent Guarantor stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that the Parent Guarantor or the Borrower, as
the case may be, has taken and proposes to take with respect thereto.
(e) Annual Projections. As soon as available and in any event no later
than 30 days after the end of each Fiscal Year, projections prepared by
management of the Parent Guarantor, in form satisfactory to the Administrative
Agent, of balance sheets, income statements and cash flow statements on a
monthly basis for the Fiscal Year following such Fiscal Year then ended and on
an annual basis for each Fiscal Year thereafter until the Term B Termination
Date.
(f) ERISA Events and ERISA Reports. Promptly and in any event within 10
days after any Loan Party or any ERISA Affiliate knows or has reason to know
that any ERISA Event has occurred, a statement of the chief financial officer
(or person performing similar functions) of the Parent Guarantor or Borrower
describing such ERISA Event and the action, if any, that such Loan Party or such
ERISA Affiliate has taken and proposes to take with respect thereto and (ii) on
the date any records, documents or other information must be furnished to the
PBGC with respect to any Plan pursuant to Section 4010 of ERISA, a copy of such
records, documents and information.
(g) Plan Terminations. Promptly and in any event within two Business
Days after receipt thereof by any Loan Party or any ERISA Affiliate, copies of
each notice from the PBGC stating its intention to terminate any Plan or to have
a trustee appointed to administer any Plan.
(h) Actuarial Reports. Promptly upon receipt thereof by any Loan Party
or any ERISA Affiliate, a copy of the annual actuarial valuation report for each
Plan the funded current liability percentage (as defined in Section 302(d)(8) of
ERISA) of which is less than 90% or the unfunded current liability of which
exceeds $5,000,000.
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(i) Multiemployer Plan Notices. Promptly and in any event within five
Business Days after receipt thereof by any Loan Party or any ERISA Affiliate
from the sponsor of a Multiemployer Plan, copies of each notice concerning (i)
the imposition of Withdrawal Liability by any such Multiemployer Plan, (ii) the
reorganization or termination, within the meaning of Title IV of ERISA, of any
such Multiemployer Plan or (iii) the amount of liability incurred, or that may
be incurred, by such Loan Party or any ERISA Affiliate in connection with any
event described in clause (i) or (ii) above.
(j) Litigation. Promptly after the commencement thereof, notice of all
actions, suits, investigations, litigation and proceedings before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, affecting any Loan Party or any of its Subsidiaries of the
type described in Section 3.01(h).
(k) Securities Reports. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports that any Loan
Party or any of its Subsidiaries sends to its public stockholders, copies of all
regular, periodic and special reports, and all registration statements, that any
Loan Party or any of its Subsidiaries files with the Securities and Exchange
Commission or any governmental authority that may be substituted therefor, or
with any national securities exchange, and copies of all private placement or
offering memoranda pursuant to which securities of any Loan Party or any of its
Subsidiaries that are exempt from registration under the Securities Act are
proposed to be issued and sold thereby.
(l) Creditor Reports. Promptly after the furnishing or receipt thereof,
copies of any statement or report furnished to or received by any other holder
of the securities of any Loan Party or any of its Subsidiaries pursuant to the
terms of any indenture, loan or credit or similar agreement with amounts
outstanding or having commitments to extend credit in an aggregate principal
amount of at least $1,000,000 (including, without limitation, any amendments,
waivers or consents given or requested in respect thereof, any notices of
default, acceleration or redemption delivered thereunder, any designations of
Subsidiaries thereof as "Unrestricted Subsidiaries" or the equivalent thereof
under the terms thereof, and any compliance certificates or fairness opinions
delivered in connection therewith) and not otherwise required to be furnished to
the Lender Parties pursuant to any other clause of this Section 5.03.
(m) Agreement Notices. Promptly upon the furnishing or receipt thereof,
copies of all notices, requests and other documents received by any Loan Party
or any of its Subsidiaries under or pursuant to any Related Document related to
any breach or default by any party thereto or any other event that could
reasonably be expected to have a Material Adverse Effect, and copies of any
amendment, modification or waiver of any provision of any Related Document and,
from time to time upon request by the Administrative Agent, such information and
reports regarding the Related Documents as the Administrative Agent may
reasonably request.
(n) Revenue Agent Reports. Within 10 days after receipt thereof, copies
of all Revenue Agent Reports (Internal Revenue Service Form 886), or other
written proposals of the
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Internal Revenue Service, that propose, determine or otherwise set forth
positive adjustments to the federal income tax liability of the affiliated group
(within the meaning of Section 1504(a)(1) of the Internal Revenue Code) of which
the Parent Guarantor or the Borrower is a member aggregating $2,500,000 or more.
(o) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
non-compliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could reasonably be expected to
(i) have a Material Adverse Effect or (ii) cause any property described in the
Mortgages to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law that could reasonably be expected to
have a Material Adverse Effect.
(p) Real Property. As soon as available and in any event within 30 days
after the end of each Fiscal Year, a report supplementing Schedules 4.01(ii) and
4.01(jj) hereto, including an identification of all real and leased property
disposed of by the Borrower or any of its Subsidiaries during such Fiscal Year,
a list and description (including the street address, county or other relevant
jurisdiction, state, record owner and book value thereof, and in the case of
leases of property, lessor and lessee thereof) of all real property acquired or
leased by the Borrower or any of its Subsidiaries during such Fiscal Year and a
description of such other changes in the information included in such Schedules
as may be necessary for such Schedules to be accurate and complete.
(q) Insurance. As soon as available and in any event within 30 days
after the end of each Fiscal Year, a report summarizing the insurance coverage
(specifying type, amount and carrier) in effect for the Borrower and its
Subsidiaries and containing such additional information as any Lender Party
(through the Administrative Agent) may reasonably specify.
(r) Borrowing Base Certificate. As soon as available and in any event
within 15 days after the end of each fiscal month, a Borrowing Base Certificate,
as at the end of the previous month (or the previous week, if furnished more
often than monthly), certified by the chief financial officer (or person
performing similar functions) of the Borrower; provided, however, that for the
months of June, July, August and September in each year, a Borrowing Base
Certificate may be delivered on a weekly basis.
(s) Other Information. Such other information respecting the business,
condition (financial or otherwise), operations, performance, properties or
prospects of any Loan Party or any of its Subsidiaries as any Lender Party
(through the Administrative Agent) may from time to time reasonably request.
SECTION 5.04. Financial Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, the Parent Guarantor will:
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(a) Total Leverage Ratio. Maintain a Total Leverage Ratio as of the
last day of each Measurement Period of not more than the amount set forth below
for each Measurement Period set forth below:
Measurement Period
Ending In Ratio
--------- -----
February 1998 6.25:1
May 1998 6.25:1
August 1998 6.25:1
November 1998 6.25:1
February 1999 6.00:1
May 1999 5.85:1
August 1999 5.85:1
November 1999 5.85:1
February 2000 5.25:1
May 2000 5.25:1
August 2000 5.25:1
November 2000 5.25:1
February 2001 4.50:1
May 2001 4.50:1
August 2001 4.50:1
November 2001 4.50:1
February 2002 and 4.25:1
thereafter
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(b) Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio
as of the last day of each Measurement Period of not less than the amount set
forth below for each Measurement Period set forth below:
Measurement Period
Ending In Ratio
--------- -----
February 1998 1.25:1
May 1998 1.25:1
August 1998 1.25:1
November 1998 1.25:1
February 1999 1.25:1
May 1999 1.25:1
August 1999 1.25:1
November 1999 1.25:1
February 2000 1.25:1
May 2000 and 1.30:1
thereafter
(c) Interest Coverage Ratio. Maintain an Interest Coverage Ratio as of
the last day of each Measurement Period of not less than the amount set forth
below for each Measurement Period set forth below:
Measurement Period
Ending In Ratio
February 1998 1.75:1
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May 1998 1.75:1
August 1998 1.75:1
November 1998 1.75:1
February 1999 1.75:1
May 1999 1.85:1
August 1999 1.85:1
November 1999 2.00:1
February 2000 2.00:1
May 2000 2.25:1
August 2000 2.25:1
November 2000 and 2.50:1
thereafter
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any Advance
when the same shall become due and payable or (ii) the Borrower shall fail to
pay any interest on any Advance, or any Loan Party shall fail to make any other
payment under any Loan Document, in each case under this clause (ii) within
three Business Days after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to have
been incorrect in any material respect when made; or
(c) any Loan Party shall fail to perform or observe any term, covenant
or agreement contained in Section 2.14, 5.01(e), 5.01(f), 5.01(g), 5.01(l),
5.01(m), 5.01(n) or 5.01(o), 5.02, 5.03 or 5.04; or
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(d) any Loan Party shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or observed
if such failure shall remain unremedied for 30 days; or
(e) (i) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect of
one or more items of Debt of the Loan Parties and their Subsidiaries (excluding
Debt outstanding hereunder) that is outstanding in an aggregate principal or
notional amount of at least $3,500,000 when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in the agreements or instruments relating to all such Debt; or
(ii) any other event shall occur or condition shall exist under the agreements
or instruments relating to one or more items of Debt of the Loan Parties and
their Subsidiaries (excluding Debt outstanding hereunder) that is outstanding in
an aggregate principal or notional amount of at least $3,500,000, and such other
event or condition shall continue after the applicable grace period, if any,
specified in all such agreements or instruments, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt or otherwise to cause, or to permit the holder thereof to cause, such
Debt to mature; or (iii) one or more items of Debt of the Loan Parties and their
Subsidiaries (excluding Debt outstanding hereunder) that is outstanding in an
aggregate principal or notional amount of at least $3,500,000 shall be declared
to be due and payable or required to be prepaid or redeemed (other than by a
regularly scheduled or required prepayment or redemption), purchased or
defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be
required to be made, in each case prior to the stated maturity thereof; or
(f) any Loan Party or any of the Material Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against any
Loan Party or any of the Material Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it) that is being diligently contested by it in good
faith, either such proceeding shall remain undismissed or unstayed for a period
of 45 days or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur; or any Loan Party or any of the
Material Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in this subsection (f); or
(g) one or more judgments or orders for the payment of money in excess
of $3,500,000 shall be rendered against any Loan Party or any of its
Subsidiaries and either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or
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order or (ii) there shall be any period of 15 consecutive days during which a
stay of enforcement of any such judgment or order, by reason of a pending appeal
or otherwise, shall not be in effect; or
(h) one or more nonmonetary judgments or orders shall be rendered
against any Loan Party or any of its Subsidiaries that is reasonably likely to
have a Material Adverse Effect, and there shall be any period of 10 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(i) any provision of any Loan Document after delivery thereof pursuant
to Section 3.01 or 5.01(o) shall for any reason cease to be valid and binding on
or enforceable against any Loan Party intended to be a party to it, or any such
Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to Section
3.01 or 5.01(o) shall for any reason (other than pursuant to the terms thereof)
cease to create a valid and perfected first priority lien on and security
interest in the Collateral purported to be covered thereby; or
(k) (i) the Childs Investors shall at any time for any reason cease to
be the record and beneficial owner of the number of shares of Voting Stock
representing at least 40% of the combined voting power of all of the Voting
Stock of the Parent Guarantor (on a fully diluted basis); (ii) any "person" or
"group" (each as used in Section 13(d)(3) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended) becomes the "beneficial owner" (as defined in
Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of (A) Voting
Stock in the Parent Guarantor (including through securities convertible into or
exchangeable for such Voting Stock) representing a percentage of the combined
voting power of all of the Voting Stock in the Parent Guarantor (on a fully
diluted basis) that is equal to or greater than the percentage of such combined
voting power legally and beneficially owned by the Childs Investors (on a fully
diluted basis) or (B) shares of capital stock (or other ownership or profit
interests) in the Parent Guarantor representing a percentage of the capital
stock (or other ownership or profit interests) in the Parent Guarantor (on a
fully diluted basis) outstanding at such time that is equal to or greater than
the aggregate shares of capital stock (or other ownership or profit interests)
in the Parent Guarantor legally and beneficially owned by the Childs Investors
(on a fully diluted basis) at such time; (iii) any Person or two or more Persons
acting in concert other than the Childs Investors shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of the power to
exercise, directly or indirectly, a controlling influence over the management or
policies of the Parent Guarantor; (iv) (A) Childs shall cease to have the
ability to appoint at least one-half of the members of the board of directors of
the Parent Guarantor or (ii) any "person" or "group" (each as used in Sections
13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) other
than Childs shall otherwise acquire the ability, directly or indirectly, to
elect a majority of the board of directors of the Parent Guarantor; or (v) with
respect to any pledge or other security agreement covering all or any portion of
the shares of capital stock of (or other
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ownership or profit interests in) the Parent Guarantor that are owned
beneficially and of record by any of the Equity Investors or their nominees
(other than up to 40% of the issued and outstanding capital stock of (or other
ownership or profit interests in) the Parent Guarantor (on a fully diluted
basis)), any secured party or pledgee thereunder shall become the holder of
record of any such shares (except in the case of a registration of the pledge of
such shares (or other interests) to such secured party or pledgee solely in its
capacity as a pledgee) or shall receive dividends or other cash or cash
equivalent distributions (including, without limitation, stock repurchases) in
respect thereof, or shall proceed to exercise voting or other consensual rights
in respect thereof (whether by proxy, voting or other similar arrangement or
otherwise), or shall otherwise commence to realize upon such shares (or other
interests); or
(l) the Parent Guarantor shall fail to own 100% of the capital stock of
the Borrower; or
(m) any ERISA Event shall have occurred with respect to a Plan and the
sum (determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other Plans with
respect to which an ERISA Event shall have occurred and then exist (or the
liability of the Loan Parties and the ERISA Affiliates related to such ERISA
Event) exceeds $3,500,000; or
(n) any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Loan Parties and the
ERISA Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds $3,500,000 or requires payments exceeding $1,000,000 per
annum; or
(o) any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and as a result of such reorganization or termination the aggregate annual
contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years of such Multiemployer Plans immediately preceding the plan year in which
such reorganization or termination occurs by an amount exceeding $1,000,000;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the obligation of each Appropriate Lender to make Advances (other than
Letter of Credit Advances by the Issuing Bank or a Working Capital Lender
pursuant to Section 2.03(c) and Swing Line Advances by a Working Capital Lender
pursuant to Section 2.02(b)) and of the Issuing Bank to issue Letters of Credit
to be terminated, whereupon the same shall forthwith terminate, and (ii) shall
at the request, or may with the consent, of the Required Lenders, by notice to
the Borrower, declare the
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Notes, all interest thereon and all other amounts payable under this Agreement
and the other Loan Documents to be forthwith due and payable, whereupon the
Notes, all such interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower; provided, however,
that, in the event of an actual or deemed entry of an order for relief with
respect to the Borrower under the Federal Bankruptcy Code, (x) the obligation of
each Lender to make Advances (other than Letter of Credit Advances by the
Issuing Bank or a Working Capital Lender pursuant to Section 2.03(c) and Swing
Line Advances by a Working Capital Lender pursuant to Section 2.02(b)) and of
the Issuing Bank to issue Letters of Credit shall automatically be terminated
and (y) the Notes, all such interest and all such amounts shall automatically
become and be due and payable, without presentment, demand, protest or any
notice of any kind, all of which are hereby expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay to the Administrative Agent on behalf of the
Lender Parties in same day funds at the Administrative Agent's office designated
in such demand, for deposit in the L/C Cash Collateral Account, an amount equal
to the aggregate Available Amount of all Letters of Credit then outstanding. If
at any time the Administrative Agent determines that any funds held in the L/C
Cash Collateral Account are subject to any right or claim of any Person other
than the Administrative Agent and the Lender Parties or that the total amount of
such funds is less than the aggregate Available Amount of all Letters of Credit,
the Borrower will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held in the L/C
Cash Collateral Account, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held in the
L/C Cash Collateral Account that the Administrative Agent determines to be free
and clear of any such right and claim.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender Party (in
its capacities as a Lender, the Swing Line Bank (if applicable), the Issuing
Bank (if applicable) and a potential Hedge Bank) hereby irrevocably appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement and the other
Loan Documents as are delegated to the Administrative Agent by the terms hereof
and thereof, together with such powers and discretion as are reasonably
incidental thereto. The Administrative Agent, its affiliates and its or its
affiliates' directors, officers, agents or employees shall not have any duties
or responsibilities, except those expressly set forth in this
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Agreement and shall not be a trustee or fiduciary for any Lender Party. As to
any matters not expressly provided for by the Loan Documents (including, without
limitation, enforcement or collection of the Notes), the Administrative Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding upon all Lender Parties and all holders
of Notes; provided, however, that the Administrative Agent shall not be required
to take any action that exposes the Administrative Agent to personal liability
or that is contrary to this Agreement, any Loan Document or applicable law or
unless the Administrative Agent shall first be indemnified to its satisfaction
by the Lender Parties against any and all liability and expense which may be
incurred by the Administrative Agent by reason of taking any such action. Each
Lender Party (in its capacities as a Lender, the Swing Line Bank (if
applicable), the Issuing Bank (if applicable) and a potential Hedge Bank) hereby
agrees that none of the Agents other than the Administrative Agent shall have
any duties under this Agreement. The Administrative Agent agrees to give to each
Lender Party prompt notice of each notice given to it by the Parent Guarantor or
the Borrower pursuant to the terms of this Agreement.
SECTION 7.02. Administrative Agent's Reliance, Etc. None of
the Administrative Agent, its affiliates, nor any of its or its affiliates'
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Administrative Agent:
(a) may treat the payee of any Note as the holder thereof until the
Administrative Agent receives and accepts an Assignment and Acceptance entered
into by the Lender that is the payee of such Note, as assignor, and an Eligible
Assignee, as assignee, as provided in Section 8.07; (b) may consult with and
rely upon legal counsel (including counsel for any Loan Party), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender Party and shall not be responsible to any Lender
Party for any recitals, statements, warranties or representations (whether
written or oral) made in or in connection with the Loan Documents or any
certificate or other document referred to or provided for in, or received by any
of them under, any Loan Document; (d) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of any Loan Document on the part of any Loan Party or to inspect the
property (including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; (f) shall not be required to initiate or
conduct any litigation or collection proceedings under any Loan Document; (g)
shall be entitled to rely upon any certification, notice, instrument, writing or
other communication (including, without limitation, any thereof by telephone or
telecopy) believed by it to be genuine and correct and to have been signed, sent
or made by or on behalf of the proper
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Person or Persons; and (h) shall incur no liability under or in respect of any
Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopy or telex) believed by
it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. NationsBank and Affiliates. With respect to its
Commitments, the Advances made by it and the Notes issued to it, NationsBank
shall have the same rights and powers under the Loan Documents as any other
Lender Party and may exercise the same as though it were not the Administrative
Agent; and the term "Lender Party" or "Lender Parties" shall, unless otherwise
expressly indicated, include NationsBank in its individual capacity. NationsBank
(and any successor acting as Administrative Agent) and its affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from, accept fees and other consideration from,
and generally engage in any kind of business with, any Loan Party, any of its
Subsidiaries and any Person who may do business with or own securities of any
Loan Party or any such Subsidiary, all as if NationsBank were not the
Administrative Agent and without any duty to account therefor to the Lender
Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon any Agent or
any other Lender Party and based on the financial statements referred to in
Section 4.01 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 Loan Documents. Each Lender Party also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender
Party and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the Loan Documents. Except for notices, reports
and other documents and information expressly required to be furnished to the
Lender Parties by the Administrative Agent hereunder, none of the Agents shall
have any duty or responsibility to provide any Lender Party with any credit or
other information concerning the affairs, financial condition or business of any
Loan Party or any of its Subsidiaries or Affiliates that may come into the
possession of such Agent or any of its affiliates.
SECTION 7.05. Indemnification. (a) Each Lender Party severally
agrees to indemnify the Administrative Agent (to the extent not promptly
reimbursed by the Borrower) from and against such Lender Party's ratable share
(determined as provided below) of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against the Administrative Agent in any way relating to or arising out
of the Loan Documents or any action taken or omitted by the Administrative Agent
under the Loan Documents (including any of the foregoing arising from the
negligence of the Administrative Agent) (collectively, the "Lender/Agent
Indemnified Costs"); provided, however, that no Lender Party shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or willful misconduct as determined in a
final, nonappealable judgment by a court of competent
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jurisdiction. In the case of any claim, investigation, litigation or proceeding
giving rise to any Lender/Agent Indemnified Costs, the indemnification provided
by the Lender Parties under this Section 7.05(a) shall apply whether or not any
such claim, investigation, litigation or proceeding is brought by the
Administrative Agent, any of the other Agents, any of the other Lender Parties
or a third party. Without limitation of the foregoing, each Lender Party agrees
to reimburse the Administrative Agent promptly upon demand for its ratable share
of any costs and expenses (including, without limitation, fees and expenses of
counsel) payable by the Borrower under Section 9.04, to the extent that the
Administrative Agent is not promptly reimbursed for such costs and expenses by
the Borrower. For purposes of this Section 7.05(a), the Lender Parties'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (a) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (b) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit outstanding at such time, (c) the aggregate unused portions of their
respective Acquisition Commitments, Term A Commitments and Term B Commitments at
such time and (d) their respective Unused Working Capital Commitments at such
time; provided that the aggregate principal amount of Swing Line Advances owing
to the Swing Line Bank and of Letter of Credit Advances owing to the Issuing
Bank shall be considered to be owed to the Working Capital Lenders ratably in
accordance with their respective Working Capital Commitments. In the event that
any Defaulted Advance shall be owing by any Defaulting Lender at any time, such
Lender Party's Commitment with respect to the Facility under which such
Defaulted Advance was required to have been made shall be considered to be
unused for purposes of this Section 7.05(a) to the extent of the amount of such
Defaulted Advance. The failure of any Lender Party to reimburse the
Administrative Agent promptly upon demand for its ratable share of any amount
required to be paid by the Lender Party to the Administrative Agent as provided
herein shall not relieve any other Lender Party of its obligation hereunder to
reimburse the Administrative Agent for its ratable share of such amount, but no
Lender Party shall be responsible for the failure of any other Lender Party to
reimburse the Administrative Agent for such other Lender Party's ratable share
of such amount. Without prejudice to the survival of any other agreement of any
Lender Party hereunder, the agreement and obligations of each Lender Party
contained in this Section 7.05(a) shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
(b) Each Lender Party severally agrees to indemnify the
Issuing Bank (to the extent not promptly reimbursed by the Borrower) from and
against such Lender Party's ratable share (determined as provided below) of any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the Issuing
Bank in any way relating to or arising out of the Loan Documents or any action
taken or omitted by the Issuing Bank under the Loan Documents (including any of
the foregoing arising from the negligence of the Issuing Bank) (collectively,
the "Lender/Issuing Bank Indemnified Costs"); provided, however, that no Lender
Party shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Issuing Bank's gross negligence or willful misconduct. In the
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case of any claim, investigation, litigation or proceeding giving rise to any
Lender/Issuing Bank Indemnified Costs, the indemnification provided by the
Lender Parties under this Section 7.05(b) shall apply whether or not any such
claim, investigation, litigation or proceeding is brought by the Administrative
Agent, any of the other Agents, any of the other Lender Parties or a third
party. Without limitation of the foregoing, each Lender Party agrees to
reimburse the Issuing Bank promptly upon demand for its ratable share of any
costs and expenses (including, without limitation, fees and expenses of counsel)
payable by the Borrower under Section 9.04, to the extent that the Issuing Bank
is not promptly reimbursed for such costs and expenses by the Borrower. For
purposes of this Section 7.05(b), the Lender Parties' respective ratable shares
of any amount shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and owing to
the respective Lender Parties, (b) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time,
(c) the Unused Acquisition Commitment, Term A Commitments and Term B Commitments
at such time plus (d) their respective Unused Working Capital Commitments at
such time; provided that the aggregate principal amount of Swing Line Advances
owing to the Swing Line Bank and of Letter of Credit Advances owing to the
Issuing Bank shall be considered to be owed to the Working Capital Lenders
ratably in accordance with their respective Working Capital Commitments. In the
event that any Defaulted Advance shall be owing by any Defaulting Lender at any
time, such Lender Party's Commitment with respect to the Facility under which
such Defaulted Advance was required to have been made shall be considered to be
unused for purposes of this Section 7.05(b) to the extent of the amount of such
Defaulted Advance. The failure of any Lender Party to reimburse the Issuing Bank
promptly upon demand for its ratable share of any amount required to be paid by
the Lender Parties to the Issuing Bank as provided herein shall not relieve any
other Lender Party of its obligation hereunder to reimburse the Issuing Bank for
its ratable share of such amount, but no Lender Party shall be responsible for
the failure of any other Lender Party to reimburse the Issuing Bank for such
other Lender Party's ratable share of such amount. Without prejudice to the
survival of any other agreement of any Lender Party hereunder, the agreement and
obligations of each Lender Party contained in this Section 7.05(b) shall survive
the payment in full of principal, interest and all other amounts payable
hereunder and under the other Loan Documents.
SECTION 7.06. Successor Administrative Agent. The
Administrative Agent may resign as to any or all of the Facilities at any time
by giving written notice thereof to the Lender Parties and the Borrower and may
be removed as to all of the Facilities at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Administrative Agent as to such of
the Facilities as to which the Administrative Agent has resigned or been
removed. If no successor Administrative Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lender Parties, appoint a
successor Administrative Agent, which shall be a commercial bank organized under
the laws of the United States or of any state thereof and having a combined
capital and surplus of at least $250,000,000.
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Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent as to all of the Facilities and upon the
execution and filing or recording of such financing statements, or amendments
thereto, and such amendments or supplements to the Mortgages, and such other
instruments or notices, as may be necessary or desirable, or as the Required
Lenders may request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent as to less
than all of the Facilities and upon the execution and filing or recording of
such financing statements, or amendments thereto, and such amendments or
supplements to the Mortgages, and such other instruments or notices, as may be
necessary or desirable, or as the Required Lenders may request, in order to
continue the perfection of the Liens granted or purported to be granted by the
Collateral Documents, such successor Administrative Agent shall succeed to and
become vested with all the rights, powers, discretion, privileges and duties of
the retiring Administrative Agent as to such Facilities, other than with respect
to funds transfers and other similar aspects of the administration of Borrowings
under such Facilities, issuances of Letters of Credit (notwithstanding any
resignation as Administrative Agent with respect to the Letter of Credit
Facility) and payments by the Borrower in respect of such Facilities, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement as to such Facilities, other than as aforesaid.
After any retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent as to all of the Facilities, the provisions of this Article
VII shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent as to any Facilities under this Agreement.
SECTION 7.07. Defaults. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of a Default unless the
Administrative Agent has received written notice from a Lender Party or the
Borrower specifying such Default and stating that such notice is a "Notice of
Default". In the event that the Administrative Agent receives such a Notice of
Default, the Administrative Agent shall give prompt notice thereof to the Lender
Parties. The Administrative Agent shall (subject to Article VI) take such action
with respect to such Default as shall reasonably be directed by the Required
Lenders; provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interest of the Lender
Parties.
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ARTICLE VIII
PARENT GUARANTY
SECTION 8.01. Parent Guaranty. The Parent Guarantor
unconditionally and irrevocably guarantees (the undertaking by the Parent
Guarantor under this Article VIII being the "Parent Guaranty") the punctual
payment when due, whether at scheduled maturity or at a date fixed for
prepayment or by acceleration, demand or otherwise, of all of the Obligations of
each of the other Loan Parties now or hereafter existing under or in respect of
the Loan Documents (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premium, fees, indemnification payments,
contract causes of action, costs, expenses or otherwise (such Obligations being
the "Guaranteed Obligations"), and agrees to pay any and all expenses
(including, without limitation, reasonable fees and expenses of counsel)
incurred by the Administrative Agent or any of the other Secured Parties in
enforcing any rights under this Parent Guaranty. Without limiting the generality
of the foregoing, the Parent Guarantor's liability shall extend to all amounts
that constitute part of the Guaranteed Obligations and would be owed by any of
the other Loan Parties to the Administrative Agent or any of the other Secured
Parties under or in respect of the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.
SECTION 8.02. Guaranty Absolute. The Parent Guarantor
guarantees that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Administrative Agent or any other Secured Party with respect
thereto. The Obligations of the Parent Guarantor under this Guaranty are
independent of the Guaranteed Obligations or any other Obligations of any Loan
Party under the Loan Documents, and a separate action or actions may be brought
and prosecuted against the Parent Guarantor to enforce this Parent Guaranty,
irrespective of whether any action is brought against any other Loan Party or
whether any other Loan Party is joined in any such action or actions. The
liability of the Parent Guarantor under this Parent Guaranty shall be absolute,
unconditional and irrevocable irrespective of, and the Parent Guarantor hereby
irrevocably waives any defenses it may now or hereafter have in any way relating
to, any and all of the following:
(a) any lack of validity or enforceability of any Loan Document or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other Obligations
of any Loan Party under the Loan Documents, or any other amendment or waiver of
or any consent to departure from any Loan Document, including, without
limitation, any increase in the Guaranteed Obligations resulting from the
extension of additional credit to any Loan Party or any of its Subsidiaries or
otherwise;
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(c) any taking, exchange, release or nonperfection of any Collateral,
or any taking, release or amendment or waiver of or consent to departure from
any Subsidiary Guaranty or any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any manner of application of Collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any Collateral for all or any of the Guaranteed Obligations or
any other Obligations of any Loan Party under the Loan Documents, or any other
property and assets of any other Loan Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate structure
or existence of any other Loan Party or any of its Subsidiaries;
(f) any failure of the Administrative Agent or any other Secured Party
to disclose to any Loan Party any information relating to the financial
condition, operations, properties or prospects of any other Loan Party now or
hereafter known to the Administrative Agent or such other Secured Party, as the
case may be (the Parent Guarantor waiving any duty on the part of the Secured
Parties to disclose such information);
(g) the failure of any other Subsidiary of the Parent Guarantor or any
other Person to execute a Subsidiary Guaranty or any other guarantee or
agreement of the release or reduction of the liability of any of the other Loan
Parties or any other guarantor or surety with respect to the Guaranteed
Obligations; or
(h) any other circumstance (including, without limitation, any statute
of limitations or any existence of or reliance on any representation by the
Administrative Agent or any other Secured Party) that might otherwise constitute
a defense available to, or a discharge of, the Parent Guarantor, any other Loan
Party or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Administrative Agent or any other Secured
Party or by any other Person upon the insolvency, bankruptcy or reorganization
of any other Loan Party or otherwise, all as though such payment had not been
made.
SECTION 8.03. Waivers and Acknowledgments. (a) The Parent
Guarantor hereby unconditionally and irrevocably waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Parent Guaranty, and any requirement that the
Administrative Agent or any other Secured Party protect, secure, perfect or
insure any Lien or any property or assets subject thereto or exhaust any right
or take any action against any other Loan Party or any other Person or any
Collateral.
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(b) The Parent Guarantor hereby unconditionally waives any right to
revoke this Parent Guaranty, and acknowledges that this Parent Guaranty is
continuing in nature and applies to all Guaranteed Obligations, whether existing
now or in the future.
(c) The Parent Guarantor hereby unconditionally and irrevocably waives
(i) any defense arising by reason of any claim or defense based upon an election
of remedies by the Secured Parties which in any manner impairs, reduces,
releases or otherwise adversely affects the subrogation, reimbursement,
exoneration, contribution or indemnification rights of the Parent Guarantor or
other rights to proceed against any of the other Loan Parties, any other
guarantor or any other Person or any Collateral, and (ii) any defense based on
any right of setoff or counterclaim against or in respect of the Parent
Guarantor's obligations hereunder.
(d) The Parent Guarantor acknowledges that the Administrative Agent
may, without notice to or demand upon the Parent Guarantor and without affecting
the liability of the Parent Guarantor under this Parent Guaranty, foreclose
under any Mortgage by nonjudicial sale, and the Parent Guarantor hereby waives
any defense to the recovery by the Administrative Agent and the other Secured
Parties against the Parent Guarantor of any deficiency after such nonjudicial
sale and any defense or benefits that may be afforded by applicable law.
(e) The Parent Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated by the
Loan Documents and that the waivers set forth in Section 8.02 and this Section
8.03 are knowingly made in contemplation of such benefits.
SECTION 8.04. Subrogation. The Parent Guarantor hereby
unconditionally and irrevocably agrees not to exercise any rights that it may
now have or may hereafter acquire against any other Loan Party or any other
insider guarantor that arise from the existence, payment, performance or
enforcement of its Obligations under this Parent Guaranty or under any other
Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Administrative Agent or any other
Secured Party against such other Loan Party or any other insider guarantor or
any Collateral, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the right
to take or receive from such other Loan Party or any other insider guarantor,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right, until
such time as all of the Guaranteed Obligations and all other amounts payable
under this Parent Guaranty shall have been paid in full in cash, all of the
Letters of Credit shall have expired, terminated or been cancelled and the
Commitments and all of the Bank Hedge Agreements shall have expired or
terminated. If any amount shall be paid to the Parent Guarantor in violation of
the immediately preceding sentence at any time prior to the latest of (a) the
payment in full in cash of all of the Guaranteed Obligations and all other
amounts payable under this Parent Guaranty, (b) the full drawing, termination,
expiration or cancellation of all Letters of Credit, (c) the expiration or
termination of all of the Bank Hedge
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Agreements and (d) the Term B Termination Date, such amount shall be held in
trust for the benefit of the Administrative Agent and the other Secured Parties
and shall forthwith be paid to the Administrative Agent to be credited and
applied to the Guaranteed Obligations and all other amounts payable under this
Parent Guaranty, whether matured or unmatured, in accordance with the terms of
the Loan Documents, or to be held as Collateral for any Guaranteed Obligations
or other amounts payable under this Parent Guaranty thereafter arising. If (i)
the Parent Guarantor shall pay to the Administrative Agent all or any part of
the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this Parent Guaranty shall have been paid in full in cash,
(iii) all of the Letters of Credit shall have expired, terminated or been
cancelled, (iv) all of the Bank Hedge Agreements shall have expired or been
terminated and (v) the Term B Termination Date shall have occurred, the
Administrative Agent and the other Secured Parties will, at the Parent
Guarantor's request and expense, execute and deliver to the Parent Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer of subrogation to the Parent Guarantor of an
interest in the Guaranteed Obligations resulting from the payment made by the
Parent Guarantor.
SECTION 8.05. Continuing Guarantee; Assignments. This Parent
Guaranty is a continuing guaranty and shall (a) remain in full force and effect
until the latest of (i) the payment in full in cash of all of the Guaranteed
Obligations and all other amounts payable under this Guaranty, (ii) the full
drawing, termination, expiration or cancellation of all Letters of Credit, (iii)
the expiration or termination of all Bank Hedge Agreements and (iv) the Term B
Termination Date, (b) be binding upon the Parent Guarantor and its successors
and assigns and (c) inure to the benefit of, and be enforceable by, the
Administrative Agent and the other Secured Parties and their respective
successors, transferees and assigns. Without limiting the generality of clause
(c) of the immediately preceding sentence, any Lender Party may assign or
otherwise transfer all or any portion of its rights and obligations under this
Agreement (including, without limitation, all or any portion of its Commitment
or Commitments, the Advances owing to it and the Notes held by it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender Party under this Article VIII
or otherwise, in each case as provided in Section 9.07.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or any Notes or any other Loan Document, nor consent
to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that (a) no amendment,
waiver or consent shall, unless in writing and signed by all of the Lenders
(other than any Lender that is, at such time, a
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Defaulting Lender), do any of the following at any time: (i) waive any of the
conditions specified in Section 3.01 or, in the case of the Initial Extension of
Credit, Section 3.02, (ii) change the number of Lenders or the percentage of (x)
the Commitments, (y) the aggregate unpaid principal amount of the Advances or
(z) the aggregate Available Amount of outstanding Letters of Credit that, in
each case, shall be required for the Lenders or any of them to take any action
hereunder, (iii) release all or substantially all of the Collateral in any
transaction or series of related transactions or permit the creation,
incurrence, assumption or existence of any Lien on all or substantially all of
the Collateral in any transaction or series of related transactions to secure
any Obligations other than Obligations owing to the Secured Parties under the
Loan Documents, (iv) release or otherwise limit the liability of the Parent
Guarantor under Article VIII, or at any time after one or more Subsidiary
Guaranties are in effect, release or otherwise limit the liability of all or
substantially all of the Subsidiary Guarantors under the Subsidiary Guaranties,
or (v) amend this Section 9.01; and (b) no amendment, waiver or consent shall,
unless in writing and signed by the Required Lenders and each Lender that has a
Commitment under the Term A Facility, the Term B Facility, the Working Capital
Facility or the Acquisition Facility if affected by such amendment, waiver or
consent, (i) increase the Commitments of such Lender or subject such Lender to
any additional obligations, (ii) reduce the principal of, or interest on, the
Advances payable to such Lender or any fees or other amounts payable hereunder
to such Lender, (iii) postpone any date fixed for any payment of principal of,
or interest on, the Advances payable to such Lender or any fees or other amounts
payable hereunder to such Lender or (iv) change the order of application of any
prepayment set forth in Section 2.06 in any manner that materially affects such
Lender; provided further that no amendment, waiver or consent shall, unless in
writing and signed by the Swing Line Bank or the Issuing Bank, as the case may
be, in addition to the Lenders required above to take such action, affect the
rights or obligations of the Swing Line Bank or the Issuing Bank, as the case
may be, under this Agreement; and provided further that no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above to take such action, affect the rights or
duties of the Administrative Agent under this Agreement.
SECTION 9.02. Notices, Etc. (a) All notices and other
communications provided for hereunder shall be in writing (including telegraphic
or telecopy communication) and mailed, telegraphed, telecopied or delivered, if
to the Parent Guarantor or the Borrower, at its address c/o Desa International,
Inc., 0000 Xxxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxx 00000, Attention:
President; if to any Initial Lender or the Initial Issuing Bank, at its Domestic
Lending Office or Applicable Lending Office, respectively, specified opposite
its name on Schedule I hereto; if to any other Lender Party, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender Party; and if to the Administrative Agent, at its address at 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxx Xxxxxxxxx;
or, as to the Borrower or the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the other parties and,
as to each other party, at such other address as shall be designated by such
party in a written notice to the Borrower and the Administrative Agent. All such
notices and communications shall, when mailed, telegraphed or telecopied, be
effective when deposited in the mails, delivered to the telegraph company or
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transmitted by telecopier, respectively, except that notices and communications
to the Administrative Agent pursuant to Article II, III or VII shall not be
effective until received by the Administrative Agent. Delivery by telecopier of
an executed counterpart of any amendment or waiver of any provision of this
Agreement or the Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed counterpart
thereof.
(b) If any notice required under this Agreement or any of the
other Loan Documents is permitted to be made, and is made, by telephone, actions
taken or omitted to be taken in reliance thereon by the Administrative Agent or
any of the Lender Parties shall be binding upon the Borrower and each of the
other Loan Parties notwithstanding any inconsistency between the notice provided
by telephone and any subsequent writing in confirmation thereof provided to the
Administrative Agent or such Lender Party; provided that any such action taken
or omitted to be taken by the Administrative Agent or such Lender Party shall
have been in good faith and in accordance with the terms of this Agreement.
SECTION 9.03. No Waiver; Remedies. No failure on the part of
any Lender Party or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 9.04. Costs and Expenses. (a) The Borrower agrees to
pay on demand (i) all costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents (including, without limitation,
(A) all due diligence, collateral review, syndication, transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and expenses and (B) the reasonable fees and expenses of counsel
for the Administrative Agent with respect thereto, with respect to advising the
Administrative Agent as to its rights and responsibilities, or the perfection,
protection or preservation of rights or interests, under the Loan Documents,
with respect to negotiations with any Loan Party or with other creditors of any
Loan Party or any of its Subsidiaries arising out of any Default or any events
or circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all costs and expenses of the
Administrative Agent and the Lender Parties in connection with the enforcement
of the Loan Documents, whether in any action, suit or litigation, any
bankruptcy, insolvency or other similar proceeding affecting creditors' rights
generally (including, without limitation, the reasonable fees and expenses of
counsel for the Administrative Agent and each Lender Party with respect
thereto).
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender Party and each of their Affiliates and their
officers, directors, trustees,
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employees, agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) (i) the Facilities, the actual
or proposed use of the proceeds of the Advances or the Letters of Credit, the
Loan Documents or any of the transactions contemplated thereby, including,
without limitation, any acquisition or proposed acquisition (including, without
limitation, the Recapitalization and any of the other transactions contemplated
hereby) by the Equity Investors or any of their Subsidiaries or Affiliates of
all or any portion of the stock or substantially all the assets of the Borrower
or any of its Subsidiaries or (ii) the actual or alleged presence of Hazardous
Materials on any property of any Loan Party or any of its Subsidiaries or any
Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 9.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are consummated.
The Borrower also agrees not to assert any claim against the Administrative
Agent, any Lender Party or any of their Affiliates, or any of their respective
officers, directors, trustees, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to the Facilities, the actual or proposed use of the
proceeds of the Advances or the Letters of Credit, the Loan Documents or any of
the transactions contemplated thereby.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender Party other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.09(b)(i) or
2.10(d), acceleration of the maturity of the Notes pursuant to Section 6.01 or
for any other reason, the Borrower shall pay to the Administrative Agent for
such Lender Party an amount equal to the present value (calculated in accordance
with this Section 9.04(c)) of interest for the remaining portion of the relevant
Interest Period on the amount of such Advance, at a rate per annum equal to the
excess of (a) the Eurodollar Rate that would have been in effect for such
Interest Period over (b) the Eurodollar Rate applicable on the date of
determination to a deemed Interest Period ending on the last day of such
Interest Period. The present value of such additional interest shall be
calculated by discounting the amount of such interest for each day in the
relevant Interest Period from such day to the date of such repayment or
termination at an interest rate per annum equal to the interest rate determined
pursuant to the immediately preceding sentence, and by adding all such amounts
for all such days during such period. The determination by the Administrative
Agent of such amount of interest shall be conclusive and binding, absent
manifest error.
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(d) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Loan Party by the Administrative Agent or any
Lender Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement
of any Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
9.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
SECTION 9.05. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender Party and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender Party or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the Obligations of the Borrower now or hereafter existing under this
Agreement and the Note or Notes (if any) held by such Lender Party, irrespective
of whether such Lender Party shall have made any demand under this Agreement or
such Note or Notes and although such obligations may be unmatured. Each Lender
Party agrees promptly to notify the Borrower after any such set-off and
application; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
Party and its respective Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender Party and its respective Affiliates may have.
SECTION 9.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Parent Guarantor, the Borrower
and the Administrative Agent and when the Administrative Agent shall have been
notified by each Initial Lender and the Initial Issuing Bank that such Initial
Lender and the Initial Issuing Bank has executed it and thereafter shall be
binding upon and inure to the benefit of the Parent Guarantor, the Borrower, the
Administrative Agent and each Lender Party and their respective successors and
assigns, except that neither the Parent Guarantor nor the Borrower shall have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lender Parties.
SECTION 9.07. Assignments and Participations. (a) Each Lender
may and, if demanded by the Borrower (following a demand to such Lender pursuant
to Section 2.16), will assign to one or more Eligible Assignees all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment or Commitments, the Advances
owing to it and the Note or Notes held by it); provided, however, that (i) each
such
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assignment shall be of a uniform, and not a varying, percentage of all rights
and obligations under and in respect of one or more Facilities, (ii) except in
the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $5,000,000, (iii) each such assignment shall be to an
Eligible Assignee, (iv) each such assignment made as a result of a demand by the
Borrower pursuant to this Section 9.07(a) shall be arranged by the Borrower
after consultation with the Administrative Agent and shall be either an
assignment of all of the rights and obligations of the assigning Lender under
this Agreement or an assignment of a portion of such rights and obligations made
concurrently with another such assignment or other such assignments that
together cover all of the rights and obligations of the assigning Lender under
this Agreement, (v) no Lender shall be obligated to make any such assignment as
a result of a demand by the Borrower pursuant to this Section 9.07(a) unless and
until such Lender shall have received one or more payments from either the
Borrower or one or more Eligible Assignees in an aggregate amount at least equal
to the aggregate outstanding principal amount of the Advances owing to such
Lender, together with accrued interest thereon to the date of payment of such
principal amount and all other amounts payable to such Lender under this
Agreement and (vi) the parties to each such assignment shall execute and deliver
to the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,500.
(b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender or
Issuing Bank, as the case may be, hereunder and (y) the Lender or Issuing Bank
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (other than its rights under Sections 2.10, 2.12 and 9.04 (and other
similar provisions of the other Loan Documents that are specified under the
terms of such other Loan Documents to survive the payment in full of the
Obligations of the Loan Parties under or in respect of the Loan Documents) to
the extent any claim thereunder relates to an event arising prior to such
assignment) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's or Issuing Bank's rights and obligations under this
Agreement, such Lender or Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
the Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
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connection with this Agreement or any other Loan Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, this Agreement or any other Loan
Document or any other instrument or document furnished pursuant hereto or
thereto; (ii) such assigning Lender Party makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or any other Loan Party or the performance or observance by any Loan
Party of any of its obligations under any Loan Document or any other instrument
or document furnished pursuant thereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such assigning
Lender Party or any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers and discretion under the Loan Documents as
are delegated to the Administrative Agent by the terms hereof, together with
such powers and discretion as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender or Issuing Bank, as the case may be.
(d) The Administrative Agent, acting for this purpose (but
only for this purpose) as the agent of the Borrower, shall maintain at its
address referred to in Section 9.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lender Parties and the Commitment under each Facility of,
and principal amount of the Advances owing under each Facility to, each Lender
Party from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lender Parties shall treat each
Person whose name is recorded in the Register as a Lender Party hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower or any Lender Party at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender Party and an assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrower. In the case of any assignment by a Lender, within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Note or Notes a new Note to the
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order of such Eligible Assignee in an amount equal to the Commitment assumed by
it under a Facility pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment hereunder under such Facility, a new
Note to the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit X-0, X-0,
X-0 or A-4 hereto, as the case may be.
(f) The Issuing Bank may assign to an Eligible Assignee all
of its rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) each such assignment shall
be to an Eligible Assignee and (ii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $3,500.
(g) Each Lender Party may sell participations to one or more
Persons (other than any Loan Party or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it); provided, however, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the
other Lender Parties shall continue to deal solely and directly with such Lender
Party in connection with such Lender Party's rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, postpone any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, release or otherwise limit the liability of the Parent Guarantor
under Article VIII, or at any time after one or more Subsidiary Guaranties are
in effect, release or otherwise limit the liability of all or substantially all
of the Subsidiary Guarantors under the Subsidiary Guaranties, or release all or
substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower or any other Loan Party
furnished to such Lender Party by or on behalf of the Borrower.
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(i) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it and the Note or Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
SECTION 9.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.09. No Liability of the Issuing Bank. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
the Issuing Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against the Issuing Bank, and the Issuing Bank shall
be liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were caused by (i) the
Issuing Bank's willful misconduct or gross negligence in determining whether
documents presented under any Letter of Credit comply with the terms of the
Letter of Credit or (ii) the Issuing Bank's willful failure to make lawful
payment under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 9.10. Confidentiality. Neither the Administrative
Agent nor any Lender Party shall disclose any Confidential Information to any
Person without the consent of the Borrower, other than (a) to the Administrative
Agent's or such Lender Party's Affiliates and their officers, directors,
employees, agents and advisors and to actual or prospective Eligible Assignees
and participants, and then only on a confidential basis, (b) as required by any
law, rule or regulation or judicial process and (c) as requested or required by
any state, federal or foreign authority or examiner regulating banks or banking.
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SECTION 9.11. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
SECTION 9.12. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
New York.
[The remainder of this page left intentionally blank]
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SECTION 9.13. Waiver of Jury Trial. Each of the Parent
Guarantor, the Borrower, the Administrative Agent and the Lender Parties
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to any of the Loan Documents, the Advances or the actions of the
Administrative Agent or any Lender Party in the negotiation, administration,
performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
The Borrower
DESA INTERNATIONAL, INC.
By
Name:
Title:
The Parent Guarantor
DESA HOLDINGS CORPORATION
By
Name:
Title:
The Agents
NATIONSBANK, N.A., as
Administrative Agent
By
Name:
Title:
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NATIONSBANC XXXXXXXXXX
SECURITIES, INC., as Co-Arranger and
Syndication Agent
By
Name:
Title:
UBS SECURITIES LLC, as Co-Arranger
and Documentation Agent
By
Name:
Title:
By
Name:
Title:
The Initial Lenders
NATIONSBANK, N.A.
By
Name:
Title:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By
Name:
Title:
By
Name:
Title:
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XXXXXX FINANCIAL, INC.
By
Name:
Title:
IMPERIAL BANK, CALIFORNIA
BANKING CORPORATION
By
Name:
Title:
BANKBOSTON, N.A.
By
Name:
Title:
DRESDNER BANK AG NEW YORK
AND GRAND CAYMAN BRANCHES
By
Name:
Title:
By
Name:
Title:
FIRST SOURCE FINANCIAL LLP
BY FIRST SOURCE FINANCIAL, INC.
By
Name:
Title:
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FLEET NATIONAL BANK
By
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION
By
Name:
Title:
NATIONAL CITY BANK
By
Name:
Title:
SANWA BUSINESS CREDIT
CORPORATION
By
Name:
Title:
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COMERICA BANK
By
Name:
Title:
XXX XXXXXX AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By
Name:
Title:
PRIME INCOME TRUST
By
Name:
Title:
PILGRIM AMERICA PRIME RATE
TRUST
By
Name:
Title:
BOEING CAPITAL CORPORATION
By
Name:
Title:
CITIBANK, N.A.
By
Name:
Title:
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BANK POLSKA KASA OPIEKI S.A. -
PEKAO S.A. GROUP, NEW YORK BRANCH
By
Name:
Title:
PARIBAS CAPITAL FUNDING LLC
By
Name:
Title:
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EXECUTION COPY
$195,000,000
CREDIT AGREEMENT
Dated as of November 26, 1997
Among
DESA INTERNATIONAL, INC.
as Borrower
and
DESA HOLDINGS CORPORATION
as Parent Guarantor
and
NATIONSBANK, N.A.
as Initial Issuing Bank, Swing Line Bank and Administrative Agent
and
UBS SECURITIES LLC
as Co-Arranger and Documentation Agent
and
NATIONSBANC XXXXXXXXXX SECURITIES, INC.
as Co-Arranger and Syndication Agent
T A B L E O F C O N T E N T S
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms 2
1.02. Computation of Time Periods 36
1.03. Accounting Terms 36
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances 36
2.02. Making the Advances 39
2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit 42
2.04. Repayment of Advances 44
2.05. Termination or Reduction of the Commitments 48
2.06. Prepayments 49
2.07. Interest 54
2.08. Fees 54
2.09. Conversion of Advances 55
2.10. Increased Costs, Etc. 56
2.11. Payments and Computations 58
2.12. Taxes 60
2.13. Sharing of Payments, Etc. 62
2.14. Use of Proceeds 63
2.15. Defaulting Lenders 63
2.16. Removal of Lender 66
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to Initial Extension of Credit 67
3.02. Conditions Precedent to Each Borrowing and Issuance 75
3.03. Additional Conditions to Each Acquisition Borrowing 76
3.04. Determinations Under Section 3.01 77
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Parent Guarantor and the Borrower 77
ARTICLE V
COVENANTS OF THE BORROWER
5.01. Affirmative Covenants 85
5.02. Negative Covenants 92
5.03. Reporting Requirements 102
5.04. Financial Covenants 107
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default 109
6.02. Actions in Respect of the Letters of Credit upon Default 113
ARTICLE VII
THE AGENTS
7.01. Authorization and Action 114
7.02. Administrative Agent's Reliance, Etc. 114
7.03. NationsBank and Affiliates 115
7.04. Lender Party Credit Decision 116
7.05. Indemnification 116
7.06. Successor Administrative Agent 118
7.07. Defaults 119
ARTICLE VIII
PARENT GUARANTY
8.01. Parent Guaranty 119
8.02. Guaranty Absolute 120
8.03. Waivers and Acknowledgments 121
8.04. Subrogation 122
8.05. Continuing Guarantee; Assignments 123
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ARTICLE IX
MISCELLANEOUS
9.01. Amendments, Etc. 124
9.02. Notices, Etc. 125
9.03. No Waiver; Remedies 126
9.05. Right of Set-off 128
9.06. Binding Effect 128
9.07. Assignments and Participations 128
9.08. Execution in Counterparts 132
9.09. No Liability of the Issuing Bank 132
9.10. Confidentiality 133
9.11. Jurisdiction, Etc. 133
9.12. Governing Law 134
9.13. Waiver of Jury Trial 135
-iv-
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule II - Equity Investors
Schedule 3.01(j)(x) - Property Covered by Mortgage
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Governmental Approvals
Schedule 4.01(n) - Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(u) - Environmental Laws and Environmental Permits
Schedule 4.01(v) - Hazardous Materials, Etc.
Schedule 4.01(aa) - Open Years
Schedule 4.01(gg) - Existing Debt
Schedule 4.01(hh) - Surviving Debt
Schedule 4.01(ii) - Real Property Owned
Schedule 4.01(jj) - Real Property Leased
Schedule 4.01(kk) - Existing Investments
Schedule 4.01(ll) - Intellectual Property
Schedule 5.02(a)(iii) - Existing Liens
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EXHIBITS
Exhibit A-1 - Form of Acquisition Note
Exhibit A-2 - Form of Term A Note
Exhibit A-3 - Form of Term B Note
Exhibit A-4 - Form of Working Capital Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E - Form of Intellectual Property Security Agreement
Exhibit F - Form of Mortgage
Exhibit G-1 - Form of Solvency Certificate of the Parent Guarantor
Exhibit G-2 - Form of Solvency Certificate of the Borrower
Exhibit G-3 - Form of Solvency Opinion of Appraisal Economics
Exhibit H - Form of Borrowing Base Certificate
Exhibit I-1 - Form of Opinion of Borrower's Counsel
Exhibit I-2 - Form of Opinion of Kentucky Local Counsel
Exhibit I-3 - Form of Opinion of Tennessee Local Counsel
Exhibit I-4 - Form of Opinion of Intellectual Property Counsel
Exhibit J - Form of Subsidiary Guaranty
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