EXHIBIT 10.2
LONG-TERM MULTICURRENCY CREDIT AGREEMENT
DATED AS OF NOVEMBER4, 1998,
AMONG
ANICOM, INC.,
THE LENDERS
PARTY HERETO,
AND
XXXXXX TRUST AND SAVINGS BANK,
INDIVIDUALLY AND AS AGENT
TABLE OF CONTENTS
SECTION DESCRIPTION PAGE
SECTION 1. THE REVOLVING CREDITS.
Section 1.1. The Revolving Credit.
Section 1.2. The Revolving Credit Notes.
Section 1.3. Letters of Credit
Section 1.4. Manner and Disbursement of Loans.
Section 1.5. Extensions of the Revolving Commitments
SECTION 2. Interest and Change In Circumstances.
Section 2.1. Interest Rate Options.
Section 2.2 Minimum LIBOR Portion Amounts.
Section 2.3. Computation of Interest.
Section 2.4. Manner of Rate Selection.
Section 2.5. Change of Law.
Section 2.6. Unavailability of Deposits or Inability to Ascertain
Adjusted LIBOR.
Section 2.7. Taxes and Increased Costs.
Section 2.8. Change in Capital Adequacy Requirements.
Section 2.9. Funding Indemnity
Section 2.10.L ending Branch.
Section 2.11. Discretion of Lenders as to Manner of Funding.
SECTION 3. Fees, Prepayments, Terminations, and Applications.
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Section 3.1. Fees.
Section 3.2. Prepayments.
Section 3.3. Terminations.
Section 3.4 Place and Application of Payments.
Section 3.5. Notations.
SECTION 4. Guaranties.
Section 4.1. Subsidiary Guaranties
SECTION 5. Definitions; Interpretation.
Section 5.1. Definitions.
Section 5.2. Interpretation.
SECTION 6. Representations and Warranties.
Section 6.1. Organization and Qualification
Section 6.2. Subsidiaries
Section 6.3. Corporate Authority and Validity of Obligations
Section 6.4. Use of Proceeds; Margin Stock
Section 6.5. Financial Reports
Section 6.6. No Material Adverse Change
Section 6.7. Full Disclosure
Section 6.8. Good Title
Section 6.9. Litigation and Other Controversies
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Section 6.10. Taxes
Section 6.11. Approvals
Section 6.12. Affiliate Transactions
Section 6.13. Investment Company; Public Utility Holding Company
Section 6.14. ERISA
Section 6.15. Compliance with Laws
Section 6.16. Other Agreements
Section 6.17. No Default
Section 6.18. Year 2000 Compliance
SECTION 7. Conditions Precedent
Section 7.1. All Advances.
Section 7.2. Initial Advance
Section 7.3. Termination of Existing Credit Agreement
Section 7.4. November 19th as Earliest Effective Date
SECTION 8. Covenants
Section 8.1. Corporate Existence; Subsidiaries
Section 8.2. Maintenance of Properties
Section 8.3. Taxes and Assessments
Section 8.4. Insurance
Section 8.5. Financial Reports
Section 8.6. Current Ratio
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Section 8.7. Interest Coverage Ratio
Section 8.8. Tangible Net Worth
Section 8.9. Debt to Earnings Ratio
Section 8.10. Leverage Ratio
Section 8.11. Indebtedness for Borrowed Money
Section 8.12. Liens
Section 8.13. Investments, Loans, Advances and Guaranties
Section 8.14. Acquisitions
Section 8.15. Sales and Leasebacks
Section 8.16. Dividends and Certain Other Restricted Payments
Section 8.17. Mergers, Consolidations and Sales
Section 8.18. ERISA
Section 8.19. Compliance with Laws
Section 8.20. Burdensome Contracts With Affiliates
Section 8.21 No Changes in Fiscal Year
Section 8.22. Inspection and Field Audit
Section 8.23. Formation of Subsidiaries
Section 8.24. Subordinated Indebtedness
Section 8.25. Use of Proceeds
Section 8.26. Year 2000 Compliance
Section 8.27. European Monetary Union
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SECTION 9. Events of Default and Remedies
Section 9.1. Events of Default.
Section 9.2. Non-Bankruptcy Defaults.
Section 9.3. Bankruptcy Defaults
Section 9.4. Collateral for Undrawn Letters of Credit
SECTION 10. The Agent.
Section 10.1. Appointment and Authorization.
Section 10.2. Rights as a Lender
Section 10.3 Standard of Care
Section 10.4. Costs and Expenses
Section 10.5. Indemnity
SECTION 11. Miscellaneous.
Section 11.1. Withholding Taxes
Section 11.2. Non-Business Days.
Section 11.3. No Waiver, Cumulative Remedies.
Section 11.4. Waivers, Modifications and Amendments
Section 11.5. Costs and Expenses
Section 11.6. Documentary Taxes.
Section 11.7. Survival of Representations.
Section 11.8. Survival of Indemnities.
Section 11.9. Participations
Section 11.10. Assignment Agreements
Section 11.11. Notices
Section 11.12. Construction
Section 11.13. Headings
Section 11.14. Severability of Provisions.
Section 11.15. Counterparts.
Section 11.16. Entire Understanding
Section 11.17. Currency
Section 11.18. Currency Equivalence
Section 11.19. Binding Nature, Governing Law, Etc
Section 11.20. Submission to Jurisdiction; Waiver of Jury Trial
Signature
Exhibit A - Revolving Credit Note
Exhibit B - Compliance Certificate
Exhibit C - Subordinated Indebtedness
Exhibit D - Subordination Provisions Applicable to Subordinated Debt
Exhibit E - Form of Guaranty Schedule 6.2 - Subsidiaries
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LONG-TERM MULTICURRENCY CREDIT AGREEMENT
To each of the Lenders party hereto:
Ladies and Gentlemen:
The undersigned, Anicom, Inc., a Delaware corporation (the "Company"),
applies to you for your several commitments, subject to the terms and conditions
hereof and on the basis of the representations and warranties hereinafter set
forth, to extend credit to the Company, all as more fully hereinafter set forth.
SECTION 1. The Revolving Credits.
Section 1.1. The Revolving Credit. Subject to the terms and conditions
hereof, each Lender severally agrees to extend a revolving credit (the
"Revolving Credit") to the Company which may be availed of by the Company from
time to time during the period from and including the date hereof to but not
including the Revolving Credit Termination Date, at which time the commitments
of the Lenders to extend credit under the Revolving Credit shall expire. The
maximum amount of the Revolving Credit which each Lender agrees to extend to the
Company shall be as set forth opposite such Lender's signature hereto under the
heading "Revolving Credit Commitment" or as otherwise provided in Section 11.10
hereof, as such amount may be reduced pursuant hereto. The Revolving Credit may
be utilized by the Company in the form of Loans and Letters of Credit, all as
more fully hereinafter set forth, provided that (i) the aggregate Original
Dollar Amount of Loans and Letters of Credit outstanding at any one time shall
not exceed the Revolving Credit Commitments and (ii) the aggregate Original
Dollar Amount of Loans denominated in Alternative Currencies shall not exceed
$15,000,000. During the period from and including the date hereof to but not
including the Revolving Credit Termination Date, the Company may use the
Revolving Credit Commitments by borrowing, repaying and reborrowing Loans in
whole or in part and/or by having the Agent issue Letters of Credit, having such
Letters of Credit expire or otherwise terminate without having been drawn upon
or, if drawn upon, reimbursing the Agent for each such drawing, and having the
Agent issue new Letters of Credit, all in accordance with the terms and
conditions of this Agreement. For purposes of this Agreement, where a
determination of the unused or available amount of the Revolving Credit
Commitments is necessary, the Original Dollar Amount of Loans outstanding under
the Revolving Credit and Letters of Credit shall be deemed to utilize the
Revolving Credit Commitments. The obligations of the Lenders hereunder are
several and not joint, and no Lender shall under any circumstances be obligated
to extend credit under the Revolving Credit in excess of its Revolving Credit
Commitment. Section 1.2. The Revolving Credit Notes. Subject to the terms and
conditions hereof, the Revolving Credit may be availed of by the Company in the
form of loans (individually a "Loan" and collectively the "Loans") in U.S.
Dollars or an Alternative Currency. Each Borrowing of Loans under the Revolving
Credit shall be made ratably by the Lenders in accordance with their Percentages
of the Revolving Credit Commitments. All Loans made by a Lender under the
Revolving Credit shall be made against and evidenced by a single Long-Term
Revolving Credit Note of the Company (individually a "Note" and collectively the
"Notes") payable to the order of such Lender in the amount of its Revolving
Credit Commitment, with each Note to be in the form (with appropriate
insertions) attached hereto as Exhibit A. Each Note shall be dated the date of
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issuance thereof, be expressed to bear interest as set forth in Section 2
hereof, and be expressed to mature on the Revolving Credit Termination Date.
Without regard to the principal amount of each Note stated on its face, the
actual principal amount at any time outstanding and owing by the Company on
account thereof shall be the sum of all advances then or theretofore made
thereon less all payments of principal actually received.
Section 1.3. Letters of Credit.
(a) General Terms. Subject to the terms and conditions hereof, the
Revolving Credit may be availed of by the Company in the form of standby and
commercial letters of credit issued by the Agent for the account of the Company
in U.S. Dollars (individually a "Letter of Credit" and collectively the "Letters
of Credit"), provided that the aggregate amount of Letters of Credit issued and
outstanding hereunder shall not at any time exceed the lesser of (i) $10,000,000
and (ii) the excess (if any) of the Revolving Credit Commitments over the
aggregate Original Dollar Amount of Loans then outstanding. For purposes of this
Agreement, a Letter of Credit shall be deemed outstanding as of any time in an
amount equal to the maximum amount which could be drawn thereunder under any
circumstances and over any period of time plus any unreimbursed drawings then
outstanding with respect thereto. If and to the extent any Letter of Credit
expires or otherwise terminates without having been drawn upon, the availability
under the Revolving Credit Commitments shall to such extent be reinstated. The
Letters of Credit shall be issued by the Agent, but each Lender shall be
obligated to reimburse the Agent for such Lender's Percentage of the amount of
each draft drawn under a Letter of Credit in accordance wit h this Section
1.3 and, accordingly, each Letter of Credit shall be deemed to utilize the
Revolving Credit Commitments of all Lenders pro rata in accordance with their
Percentages thereof.
(b) Term. Each Letter of Credit issued hereunder shall expire not later
than the earlier of (i) twelve (12) months from the date of
issuance (or be cancelable not later than twelve (12) months from the
date of issuance and each renewal) or (ii) the Revolving Credit
Termination Date. In the event the Agent issues any Letter of Credit with an
expiration date that is automatically extended unless the Agent gives notice
that the expiration date will not so extend beyond its then scheduled expiration
date, the Agent will give such notice of non-renewal before the time necessary
to prevent such automatic extension if before such required notice date (i)
he expiration date of such Letter of Credit if so extended would be after
the Revolving Credit Termination Date, (ii) the Revolving Credit
Commitments have terminated or (iii) an Event of Default exists and the
Required Lenders have given the Agent instructions not to so permit the
extension of the expiration date of such Letter of Credit.
(c) General Characteristics. Each Letter of Credit issued hereunder
shall be payable in U.S. Dollars, conform to the general requirements of the
Agent for the issuance of standby or commercial letters of credit , as the case
may be, as to form and substance, and be a letter of credit which the Agent may
lawfully issue.
(d) Applications. At the time the Company requests each Letter of
Credit to be issued (or prior to the first issuance of a Letter of Credit in the
case of a continuing application), the Company shall execute and deliver to the
Agent an application for such Letter of Credit in the form then customarily
prescribed by the Agent (individually an "Application" and collectively the
"Applications"). Subject to the other provisions of this subsection, the
obligation of the Company
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to reimburse the Agent for drawings under a Letter of Credit shall be governed
by the Application for such Letter of Credit. Anything contained in the
Applications to the contrary notwithstanding, (i) in the event the Agent
is not reimbursed by the Company for the amount the Agent pays on any draft
drawn under a Letter of Credit issued hereunder by 1:00 p.m. (Chicago time) on
the date when such drawing is paid, the obligation of the Company to reimburse
the Agent for the amount of such draft paid shall bear interest (which the
Company hereby promises to pay on demand) from and after the date the draft is
paid until payment in full thereof at a fluctuating rate per annum determined by
adding 2% to the Domestic Rate as from time to time in effect (computed on the
basis of a year of 360 days for the actual number of days elapsed), (ii)
the Company shall pay fees in connection with each Letter of Credit as set
forth in Section 3 hereof, (iii) except as otherwise provided in
Section 3.4 hereof, prior to the occurrence of a Default or an Event of
Default the Agent will not call for additional collateral security for the
obligations of the Company under the Applications, and (iv) except as
otherwise provided in Section 3.4 hereof, prior to the occurrence of a
Default or an Event of Default the Agent will not call for the funding of a
Letter of Credit by the Company prior to being presented with a draft drawn
thereunder (or, in the event the draft is a time draft, prior to its due date).
The Company hereby irrevocably authorizes the Agent to charge any of the
Company's deposit accounts maintained with the Agent for the amount necessary to
reimburse the Agent for any drafts drawn under Letters of Credit issued
hereunder.
(e) Change in Laws. If the Agent or any Lender shall determine in good
faith that any change in any applicable law, regulation or guideline (including,
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) or any new law, regulation or guideline, or any interpretation
of any of the foregoing by any governmental authority charged with the
administration thereof or any central bank or other fiscal, monetary or other
authority having jurisdiction over the Agent or such Lender (whether or not
having the force of law), shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against the Letters of Credit, or the
Agent's or such Lender's or the Company's liability with respect
thereto; or
(ii) impose on the Agent or such Lender any penalty with
respect to the foregoing or any other condition regarding this
Agreement, the Applications or the Letters of Credit;
and the Agent or such Lender shall determine in good faith that the result of
any of the foregoing is to increase the cost (whether by incurring a cost or
adding to a cost) to the Agent or such Lender of issuing, maintaining or
participating in the Letters of Credit hereunder (without benefit of, or credit
for, any prorations, exemptions, credits or other offsets available under any
such laws, regulations, guidelines or interpretations thereof), then the Company
shall pay on demand to the Agent or such Lender from time to time as specified
by the Agent or such Lender such additional amounts as the Agent or such Lender
shall determine are sufficient to compensate and indemnify it for such increased
cost. If the Agent or any Lender makes such a claim for compensation, it shall
provide the Company (with a copy to the Agent in the case of any Lender) a
certificate setting forth the computation of the increased cost as a result of
any event mentioned herein in reasonable detail and such certificate shall be
conclusive if reasonably determined.
(f) Participations in Letters of Credit. Each Lender shall participate
on a pro rata basis in accordance with its Percentage of the Revolving Credit
Commitments in the Letters of Credit
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issued by the Agent, which participation shall automatically arise upon the
issuance of each Letter of Credit. Each Lender unconditionally agrees that in
the event the Agent is not immediately reimbursed by the Company for the amount
paid by the Agent on any draft presented under a Letter of Credit, then in that
event such Lender shall pay to the Agent such Lender's Percentage of the amount
of each draft so paid and in return such Lender shall automatically receive an
equivalent percentage participation in the rights of the Agent to obtain
reimbursement from the Company for the amount of such draft, together with
interest thereon as provided for herein. The obligations of the Lenders to the
Agent under this subsection shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever and shall not be subject to any
set-off, counterclaim or defense to payment which any Lender may have or have
had against the Company, the Agent, any other Lender or any other party
whatsoever. In the event that any Lender fails to honor its obligation to
reimburse the Agent for its Percentage of the amount of any such draft, then in
that event the defaulting Lender shall have no right to participate in any
recoveries from the Company in respect of such draft.
Section 1.4. Manner and Disbursement of Loans. (a) Notice to the Agent
and the Lenders. The Company shall give written or telephonic notice to the
Agent (which notice shall be irrevocable once given and, if given by telephone,
shall be promptly confirmed in writing) by no later than 11:00 a.m. (Chicago
time) on the date the Company requests that any Borrowing of Loans be made to it
under the Revolving Credit Commitments, and the Agent shall promptly notify each
Lender of the Agent's receipt of each such notice. Each such notice shall
specify the date of the Borrowing of Loans requested (which must be a Business
Day and which date shall be at least three Business Days subsequent to the date
of such notice in the case of any Loans constituting a LIBOR Portion denominated
in U.S. Dollars and at least four Business Days subsequent to the date of such
notice in the case of any Loans constituting a LIBOR Portion denominated in an
Alternative Currency), the type of Loan being requested, and the amount of such
Borrowing. Each Borrowing of Loans shall initially constitute part of the
Domestic Rate Portion except to the extent the Company has otherwise timely
elected that such Borrowing, or any part thereof, constitute part of a LIBOR
Portion as provided in Section 2 hereof. The Company agrees that the
Agent may rely upon any written or telephonic notice given by any person the
Agent in good faith believes is an Authorized Representative without the
necessity of independent investigation and, in the event any telephonic notice
conflicts with the written confirmation, such telephonic notice shall govern if
the Agent and the Lenders have acted in reliance thereon.
(b) Disbursement of Loans. Not later than 1:00 p.m. (Chicago
time) on the date specified for any Borrowing of Loans to be made hereunder
(other than a Borrowing of Loans to the extent constituting a LIBOR Portion
denominated in an Alternative Currency), each Lender shall make the proceeds of
its Loan comprising part of such Borrowing available to the Agent in Chicago,
Illinois in immediately available funds to the Agent in Chicago. Each Lender
shall make the proceeds of each Loan constituting a LIBOR Portion denominated in
an Alternative Currency at such office as the Agent has previously specified in
a notice to such Lender in such funds which are then customary for the
settlement of international transactions in such currency and no later than such
local time as is necessary for such funds to be received and transferred to the
Company for same day value on the date the Loan is to be made. Subject to the
provisions of Section 7 hereof, the proceeds
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of each Lender's Loan denominated in U.S. Dollars shall be made available to the
Company at the office of the Agent in Chicago, Illinois, and the proceeds of
each Lender's Loans denominated in an Alternative Currency shall be made
available to the Company at such office as the Agent has previously agreed to
with the Company, in each case in the type of funds received by the Agent from
the Lenders. Unless the Agent shall have been notified by a Lender by no later
than such time as would be necessary for such Lender to make the proceeds of its
Loan available to the Agent on the date a Borrowing is to be made hereunder that
such Lender does not intend to make the proceeds of its Loan available to the
Agent, the Agent may assume that such Lender has made such proceeds available to
the Agent on such date and the Agent may in reliance upon such assumption make
available to the Company a corresponding amount. If such corresponding amount is
not in fact made available to the Agent by such Lender and the Agent has made
such amount available to the Company, the Agent shall be entitled to receive
such amount from such Lender forthwith upon the Agent's demand, together with
interest thereon in respect of each day during the period commencing on the date
such amount was made available to the Company and ending on but excluding the
date the Agent recovers such amount at a rate per annum equal to the effective
rate charged to the Agent for overnight federal funds transactions with member
banks of the federal reserve system, or in the case of a Loan denominated in an
Alternative Currency, the Overnight Foreign Currency Rate, for each day as
determined by the Agent (or in the case of a day which is not a Business Day,
then for the preceding day). If such amount is not received from such Lender by
the Agent immediately upon demand, the Company will, on demand, repay to the
Agent the proceeds of such Loan attributable to such Lender with interest
thereon at a rate per annum equal to the interest rate applicable to the
relevant Loan, but without such payment being considered a payment or prepayment
of a LIBOR Portion, so that the Company will have no liability under Section<-1-
32>2.9 hereof with respect to such payment.
(c) Company's Failure to Notify. In the event the Company fails to give
notice pursuant to Section 1.4(a) above of a Borrowing equal to the
amount for which the Company is obligated to reimburse the Agent for a drawing
which the Agent has paid on a Letter of Credit (a "Reimbursement Obligation")
and has not notified the Agent by 12:00 noon (Chicago time) on the day such
Reimbursement Obligation becomes due that the Company intends to repay such
Reimbursement Obligation through funds not borrowed under this Agreement, the
Company shall be deemed to have requested a Borrowing of Loans constituting a
Domestic Rate Portion on such day in the amount of the Reimbursement Obligation
then due, subject to Section 7 hereof, which Borrowing shall be applied
to pay the Reimbursement Obligation then due.
Section 1.5. Extensions of the Revolving Commitments. The Company may
advise the Agent in writing of its desire to extend the Revolving Credit
Termination Date for an additional 364 days; provided (i) such
request is made no later than 90 days prior to the date on which such
Revolving Credit Termination Date is scheduled to occur, (ii) not more
than one such request for the extension of a Termination Date may be made in any
one calendar year and (iii) in no event shall the Revolving Credit
Termination Date be extended beyond June 30, 2003. The Agent shall
promptly notify the Lenders of each such request. Each Lender shall notify the
Agent in writing within 45 days after such Lender receives such notice
from the Agent, whether such Lender in its sole discretion agrees to such
extension (each such Lender agreeing to such extension being
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hereinafter referred to as a "Consenting Lender"). In the event that a Lender
shall fail to so notify the Agent within such 45day period, whether it agrees to
such extension, such Lender shall be deemed to have refused to grant the
requested extension. Upon receipt by the Agent of the consent of all the Lenders
within such 45day period, the Revolving Credit Termination Date or Dates shall
be automatically extended for 364 days. In the event the Company and all
the Lenders do not consent to the requested extension of the Revolving Credit
Termination Date, such Revolving Credit Termination Date shall take place as
scheduled. SECTION 2. Interest and Change In Circumstances.
Section 2.1. Interest Rate Options.
(a) Portions. Subject to the terms and conditions of this Section,
portions of the principal indebtedness evidenced by the Notes (all of the
indebtedness evidenced by the Notes bearing interest at the same rate for the
same period of time being hereinafter referred to as a "Portion") may, at the
option of the Company, bear interest with reference to the Domestic Rate
("Domestic Rate Portions") or with reference to the Adjusted LIBOR ("LIBOR
Portions"), and Portions may be converted from time to time from one basis to
another. All of the indebtedness evidenced by a particular class of Notes which
is not part of a LIBOR Portion shall constitute a single Domestic Rate Portion.
LIBOR Portions may be denominated in U.S. Dollars or an Alternative Currency,
but Domestic Rate Portions must be denominated in U.S. Dollars only. All of the
indebtedness evidenced by Notes of the same type which bears interest with
reference to a particular Adjusted LIBOR for a particular Interest Period and is
denominated in a particular currency shall constitute a single LIBOR Portion.
There shall not be more than five (5) LIBOR Portions applicable to the
Notes outstanding at any one time, and each Lender shall have a ratable interest
in each Portion based on its Percentage. Anything contained herein to the
contrary notwithstanding, the obligation of the Lenders to create, continue or
effect by conversion any LIBOR Portion shall be conditioned upon the fact that
at the time no Default or Event of Default shall have occurred and be
continuing. The Company hereby promises to pay interest on each Portion at the
rates and times specified in this Section 2.
(b) Domestic Rate Portion. Each Domestic Rate Portion shall bear
interest at the rate per annum determined by adding the Applicable Margin to the
Domestic Rate as in effect from time to time, provided that if a Domestic Rate
Portion or any part thereof is not paid when due (whether by lapse of time,
acceleration or otherwise) such Portion shall bear interest, whether before or
after judgment, until payment in full thereof at the rate per annum determined
by adding 2% to the interest rate which would otherwise be applicable thereto
from time to time. Interest on each Domestic Rate Portion shall be payable
quarterly in arrears on the last day of each March, June, September and December
in each year (commencing December 31, 1998) and at maturity of the
applicable Notes, and interest after maturity (whether by lapse of time,
acceleration or otherwise) shall be due and payable upon demand. Any change in
the interest rate on the Domestic Rate Portions resulting from a change in the
Domestic Rate shall be effective on the date of the relevant change in the
Domestic Rate.
(c) LIBOR Portions. Each LIBOR Portion shall bear interest for each
Interest Period selected therefor at a rate per annum determined by adding the
Applicable LIBOR Margin to the Adjusted LIBOR for such Interest Period, provided
that if any LIBOR Portion is not paid when due
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(whether by lapse of time, acceleration or otherwise) such Portion shall bear
interest, whether before or after judgment, until payment in full thereof (i) if
such Portion is denominated in U.S. Dollars at the rate per annum determined by
adding 2% to the interest rate which would otherwise be applicable thereto
through the end of the Interest Period then applicable thereto, and effective at
the end of such Interest Period such LIBOR Portion shall automatically be
converted into and added to the Domestic Rate Portion and shall thereafter bear
interest at the interest rate applicable to such Domestic Rate Portion after
default and (ii) if such Portion is denominated in an Alternative
Currency, at the rate per annum determined by adding 2% to the interest rate
which would otherwise be applicable thereto at the time of such default until
the end of the Interest Period applicable thereto and, thereafter, at a rate per
annum equal to the sum of the Applicable Margin plus 2% plus the Overnight
Foreign Currency Rate. Interest on each LIBOR Portion shall be due and payable
on the last day of each Interest Period applicable thereto and, with respect to
any Interest Period applicable to a LIBOR Portion in excess of 3 months, on the
date occurring every 3 months after the date such Interest Period began and at
the end of such Interest Period, and interest after maturity (whether by lapse
of time, acceleration or otherwise) shall be due and payable upon demand. The
Company shall notify the Agent on or before 11:00 a.m. (Chicago time) on the
fourth Business Day preceding the end of an Interest Period applicable to a
LIBOR Portion whether such LIBOR Portion is to continue as a LIBOR Portion in
the same currency, in which event the Company shall notify the Agent of the new
Interest Period selected therefor, and in the event the Company shall fail to so
notify the Agent, such LIBOR Portion, if denominated in U.S. Dollars, shall
automatically be converted into and added to the Domestic Rate Portion as of and
on the last day of such Interest Period or, if denominated in an Alternative
Currency, shall automatically as of the last day of such Interest Period, be
continued as a LIBOR Portion in the same amount and in the same currency and
with an Interest Period of one month, subject to Section 7 hereof. The
Agent shall promptly notify each Lender of each notice received from the Company
pursuant to the foregoing provisions. Anything contained herein to the contrary
notwithstanding, the obligation of the Lenders to create, continue or effect by
conversion any LIBOR Portion shall be conditioned upon the fact that at the time
no Default or Event of Default shall have occurred and be continuing.
On the date the Company requests a Loan in an Alternative Currency, as
provided in Section 2.4, the Agent shall promptly notify each Lender of
the currency in which such Loan is requested. If a Lender determines that such
Alternative Currency is not available to it in sufficient amount and for a
sufficient term to enable it to advance or continue the Loan requested of it as
part of such LIBOR Portion and so notifies the Agent no later than 2:00<-1-
32>p.m. (Chicago time) on the same day it receives notice from the Agent of such
requested Loan, the Agent shall so notify the Company by 2:45 p.m. (Chicago
time). If the Company nevertheless desires such Loan, it must notify the Agent
by no later than 3:00 p.m. (Chicago time) on such day. If the Agent does not
receive such notice from the Company by 3:00 p.m. (Chicago time), the
Company shall automatically be deemed to have revoked its request for the Loan
and the Agent will promptly notify the Lenders of such revocation. If the
Company does give such notice by 3:00 p.m. (Chicago time), each Lender that did
not notify the Agent by 2:00 p.m. (Chicago time) that the requested Alternative
Currency is unavailable to it to fund the requested Loan shall, subject to
Section 7 hereof, make its Loan in the
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requested Alternative Currency in accordance with Section 1.4 hereof.
Each Lender that did so notify the Agent by 2:00 p.m. (Chicago time) that it
would not be able to make the Loan requested from it shall, subject to Section 7
hereof, make a Loan denominated in U.S. Dollars in the Original Dollar Amount
of, and with the same Interest Period as, the Loan such Lender was originally
requested to make. Such Loan denominated in U.S. Dollars shall be made by the
affected Lender on the same day as the other Lenders make their Loans
denominated in the applicable Alternative Currency as part of the relevant LIBOR
Portion, but shall bear interest with reference to the Adjusted LIBOR applicable
to U.S. Dollars rather than the relevant Alternative Currency for the applicable
Interest Period and shall be made available in accordance with the procedures
for disbursing U.S. Dollar Loans under Section 1.4 hereof. Any Loan made
in an Alternative Currency shall be advanced in such currency, and all payments
of principal and interest thereon shall be made in such Alternative Currency.
Section 2.2. Minimum Borrowing Amounts. Each Domestic Rate Portion
shall be in an amount equal to $500,000 or such greater amount which is an
integral multiple of $100,000. Each LIBOR Portion denominated in U.S. Dollars
shall be in an amount equal to $1,000,000 or such greater amount which is an
integral multiple of $500,000. Each LIBOR Portion denominated in an Alternative
Currency shall be in a minimum amount for which the U.S. Dollar Equivalent is
$1,000,000 and which is an integral multiple of 500,000 units of the relevant
currency or, solely in the case of a LIBOR Portion denominated in an Alternative
Currency being continued in the same currency, if less, the same amount of such
currency.
Section 2.3. Computation of Interest. All interest on the Loans
constituting part of the Domestic Rate Portion shall be computed on the basis of
a year of 365 or 366 days, as the case may be, for the actual number of days
elapsed. All interest on the Loans constituting all or part of a LIBOR Portion
shall be computed on the basis of a year of 360 days for the actual number of
days elapsed.
Section 2.4. Manner of Rate Selection. The Company shall notify
the Agent by 11:00 a.m. (Chicago time) at least 3 Business Days prior to the
date upon which the Company requests that any LIBOR Portion denominated in U.S.
Dollars be created or that any part of a LIBOR Portion otherwise denominated or
any part of a Domestic Rate Portion be converted into a LIBOR Portion
denominated in U.S. Dollars and (iii) by 12:00 Noon (Chicago time) at
least 4 Business Days prior to the date upon which the Company requests that any
LIBOR Portion denominated in an Alternative Currency be created or that any part
of a LIBOR Portion otherwise denominated or any part of a Domestic Rate Portion
be converted into a LIBOR Portion denominated in an Alternative Currency. Each
such notice shall specify in each instance the amount of the Portion being
created or converted and in the case of the creation of or conversion into any
LIBOR Portion, the Interest Period selected therefor and the currency in which
such Portion is to be denominated. If any request is made to convert a LIBOR
Portion into another type of Portion available hereunder, such conversion shall
only be made so as to become effective as of the last day of the Interest Period
applicable thereto. All requests for the creation, continuance and conversion of
Portions under this Agreement shall be irrevocable. Such requests may be written
or oral and the Agent is hereby authorized to honor telephonic requests for
creations, continuances and conversions received by it from any person the Agent
in good faith believes to be an Authorized Representative without the
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necessity of independent investigation, the Company hereby indemnifying the
Agent and the Lenders from any liability or loss ensuing from so acting. The
Agent shall give prompt notice to the Lenders of any notice it receives pursuant
to this Section and will give prompt notice to each Lender of the Overnight
Foreign Currency Rate as soon as it is set. The Agent shall determine the
interest rate applicable to each LIBOR Portion and the Original Dollar Amount of
such Portions denominated in an Alternative Currency, and a reasonable
determination thereof by the Agent shall be conclusive and binding except in the
case of manifest error or willful misconduct. The Original Dollar Amount of each
LIBOR Portion denominated in an Alternative Currency shall be determined or
redetermined, as applicable, effective as of the first day of each Interest
Period applicable to such Portion. The Agent shall give notice to the Company
and each Lender of the interest rate applicable to each LIBOR Portion and, if
such LIBOR Portion is denominated in an Alternative Currency, shall give notice
to the Company and each Lender of the Original Dollar Amount thereof.
Section 2.5. Change of Law. Notwithstanding any other provisions of
this Agreement or any Note, if at any time any Lender shall determine in good
faith that any change in applicable laws, treaties or regulations or in the
interpretation thereof makes it unlawful for such Lender to create or continue
to maintain any LIBOR Portions in the relevant currency, it shall promptly so
notify the Agent (which shall in turn promptly notify the Company and the other
Lenders) and the obligation of such Lender to create, continue or maintain any
such LIBOR Portion in such currency under this Agreement shall terminate until
it is no longer unlawful for such Lender to create, continue or maintain such
LIBOR Portion. The Company, on demand, shall, if the continued maintenance of
any such LIBOR Portion is unlawful, thereupon prepay the outstanding principal
amount of the affected LIBOR Portion, together with all interest accrued thereon
and all other amounts payable to the affected Lender with respect thereto under
this Agreement; provided, however, that the Company may elect to convert the
principal amount of the affected Portion into another type of Portion available
hereunder, subject to the terms and conditions of this Agreement.
Section 2.6. Unavailability of Deposits or Inability to Ascertain
Adjusted LIBOR. Notwithstanding any other provision of this Agreement or any
Note, if prior to the commencement of any Interest Period, the Required Lenders
shall determine in good faith that (i) deposits in the applicable
currency in the amount of any LIBOR Portion scheduled to be outstanding in such
currency during such Interest Period are not readily available to such Lenders
in the relevant market or (ii) by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for ascertaining
Adjusted LIBOR Rate or (iii)currency control or other exchange
regulations are imposed in the country in which an Alternative Currency is
issued with the result that different types of such currency are issued or
(iv) in the determination of the Agent, a U.S. Dollar Equivalent of an
Alternative Currency is not readily calculable, then (x) such Lenders
shall promptly give notice thereof to the Agent (which shall in turn promptly
notify the Company and the other Lenders), (y) the obligations of the
Lenders to create, continue or effect by conversion any such LIBOR Portion in
such amount and for such Interest Period shall terminate until deposits in such
amount, in such currency and for the Interest Period selected by the Company
shall again be readily available in the relevant market and adequate and
reasonable means exist for
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ascertaining Adjusted LIBOR Rate or the U.S. Dollar Equivalent of such affected
currency, as the case may be and (z) within five (5) Business Days of
receipt of such notice from the Agent, the Company shall repay all Loans in such
affected currency or convert such Loans into Loans denominated in U.S. Dollars
or another Alternative Currency, subject to the other terms set forth in this
Agreement.
Section 2.7. Taxes and Increased Costs. With respect to any LIBOR
Portion, if any Lender shall determine in good faith that any change in any
applicable law, treaty, regulation or guideline (including, without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) or any new
law, treaty, regulation or guideline, or any interpretation of any of the
foregoing by any governmental authority charged with the administration thereof
or any central bank or other fiscal, monetary or other authority having
jurisdiction over such Lender or its lending branch or the LIBOR Portions
contemplated by this Agreement (whether or not having the force of law), shall:
(i) impose, increase, or deem applicable any reserve, special
deposit or similar requirement against assets held by, or deposits in
or for the account of, or loans by, or any other acquisition of funds
or disbursements by, such Lender which is not in any instance already
accounted for in computing the interest rate applicable to such LIBOR
Portion;
(ii) subject such Lender, any LIBOR Portion or a Note to the
extent it evidences such a Portion to any tax (including, without
limitation, any United States interest equalization tax or similar tax
however named applicable to the acquisition or holding of debt
obligations and any interest or penalties with respect thereto), duty,
charge, stamp tax, fee, deduction or withholding in respect of this
Agreement, any LIBOR Portion or a Note to the extent it evidences such
a Portion, except such taxes as may be measured by the overall net
income or gross receipts of such Lender or its lending branches and
imposed by the jurisdiction, or any political subdivision or taxing
authority thereof, in which such Lender's principal executive office or
its lending branch is located;
(iii) change the basis of taxation of payments of principal and
interest due from the Company to such Lender hereunder or under a Note
to the extent it evidences any LIBOR Portion (other than by a change in
taxation of the overall net income or gross receipts of such Lender or
its lending branches); or
(iv) impose on such Lender any penalty with respect to the
foregoing or any other condition regarding this Agreement, any LIBOR
Portion, or its disbursement, or a Note to the extent it evidences any
LIBOR Portion;
and such Lender shall determine in good faith that the result of any of the
foregoing is to increase the cost (whether by incurring a cost or adding to a
cost) to such Lender of creating or maintaining any LIBOR Portion hereunder or
to reduce the amount of principal or interest received or receivable by such
Lender (without benefit of, or credit for, any prorations, exemption, credits or
other offsets available under any such laws, treaties, regulations, guidelines
or interpretations thereof), then the Company shall pay on demand to the Agent
for the account of such Lender from time to time as specified by such Lender
such additional amounts as such Lender shall reasonably determine are sufficient
to compensate and indemnify it for such increased cost or reduced amount;
provided, however, that the Company shall not be obligated to pay any such
amount or amounts
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to the extent such additional cost or payment was incurred or paid by such
Lender more than ninety (90) days prior to the date of the delivery of
the certificate referred to in the immediately following sentence (nothing
herein to impair or otherwise affect the Company's liability hereunder for costs
or payments subsequently incurred or paid by such Lender). If a Lender makes
such a claim for compensation, it shall provide to the Company (with a copy to
the Agent) a certificate setting forth the computation of the increased cost or
reduced amount as a result of any event mentioned herein in reasonable detail
and such certificate shall be conclusive if reasonably determined.
Section 2.8. Change in Capital Adequacy Requirements. If any Lender
shall determine that the adoption after the date hereof of any applicable law,
rule or regulation regarding capital adequacy, or any change in any existing
law, rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by such Lender
(or any of its branches) or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's or such
corporation's capital, as the case may be, as a consequence of such Lender's
obligations hereunder or for the credit which is the subject matter hereof to a
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to liquidity and capital adequacy)
by an amount deemed by such Lender to be material, then from time to time,
within fifteen (15) days after demand by such Lender, the Company shall
pay to the Agent for the account of such Lender such additional amount or
amounts reasonably determined by such Lender as will compensate such Lender for
such reduction; provided, however, that the Company shall not be obligated to
compensate such Lender to the extent its rate of return was so reduced more than
ninety (90) days prior to the date of such demand (nothing herein to
impair or otherwise affect the Company's liability hereunder to compensate for
subsequent reductions in such Lender's rate of return).
Section 2.9. Funding Indemnity. In the event any Lender shall incur any
loss, cost or expense (including, without limitation, any loss (including loss
of profit), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired or contracted to be acquired by
such Lender to fund or maintain its part of any LIBOR Portion or the relending
or reinvesting of such deposits or other funds or amounts paid or prepaid to
such Lender) as a result of:
(i) any payment of a LIBOR Portion on a date other than the
last day of the then applicable Interest Period for any reason, whether
before or after default, and whether or not such payment is required by
any provisions of this Agreement; or
(ii) any failure by the Company to create, borrow, continue or
effect by conversion a LIBOR Portion on the date specified in a notice
given pursuant to this Agreement;
then, upon the demand of such Lender, the Company shall pay to the Agent for the
account of such Lender such amount as will reimburse such Lender for such loss,
cost or expense. If a Lender requests such a reimbursement, it shall provide to
the Company (with a copy to the Agent) a
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certificate setting forth the computation of the loss, cost or expense giving
rise to the request for reimbursement in reasonable detail and such certificate
shall be conclusive if reasonably determined; provided, however, that the
Company shall not be obligated to pay any such amount or amounts to the extent
such loss, cost or expense was incurred by such Lender more than ninety (90)<-1-
32>days prior to the date of the delivery of such certificate (nothing herein to
impair or otherwise affect the Company's liability hereunder to compensate for
any subsequent loss, cost, or expense incurred by such Lender).
Section 2.10. Lending Branch. Each Lender may, at its option, elect to
make, fund or maintain its pro rata share of the Loans hereunder at the
branches, offices, subsidiaries or affiliates specified on the signature pages
hereof or on any Assignment Agreement executed and delivered pursuant to
Section 11.10 hereof or at such of its branches, offices, subsidiaries or
affiliates as such Lender may from time to time elect. All the terms of this
Agreement shall only apply to any such branch, office, subsidiary or affiliates
and the Loans and Notes issued hereunder shall be deemed held by each Lender for
the benefit of any such branch, office, subsidiary or affiliate. To the extent
reasonably possible, a Lender shall designate an alternate branch or funding
office with respect to its pro rata share of the LIBOR Portions to reduce any
liability of the Company to such Lender under Section 2.7 hereof or to
avoid the unavailability of an interest rate option under Section 2.6
hereof, so long as such designation is not otherwise disadvantageous to the
Lender.
Section 2.11. Discretion of Lenders as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, each Lender
shall be entitled to fund and maintain its funding of all or any part of its
Notes in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder (including, without
limitation, determinations under Sections 2.6, 2.7 and 2.9 hereof) shall
be made as if each Lender had actually funded and maintained each LIBOR Portion
during each Interest Period applicable thereto through the purchase of deposits
in U.S. Dollars or the applicable Alternative Currency, as the case may be, for
such LIBOR Portion, in the relevant market in the amount of such Lender's pro
rata share of such LIBOR Portion, having a maturity corresponding to such
Interest Period, denominated in the relevant currency and bearing an interest
rate equal to the LIBOR Rate, as the case may be, for such Interest Period.
SECTION 3. Fees, Prepayments, Terminations, and Applications.
Section 3.1. Fees.
(a) Commitment Fee. For the period from and including the date hereof
to but not including the Revolving Credit Termination Date, the Company shall
pay to the Agent for the account of the Lenders a commitment fee at the rate
equal to the Applicable Margin in effect from time to time (computed on the
basis of a year of 360 days for the actual number of days elapsed) on the
average daily Unused Revolving Credit Commitments. Such commitment fee shall be
payable quarterly in arrears on the last day of each March, June, September and
December in each year (commencing December 31, 1998) and on the Revolving
Credit Termination Date.
(b) Letter of Credit Fees. On the date of issuance of each Letter of
Credit, and as condition thereto, and quarterly in arrears thereafter, the
Company shall pay to the Agent for the account of itself and the Lenders a
letter of credit fee computed at the rate per annum (computed on the basis of a
year of 360 days for the actual number of days elapsed) equal to the Applicable
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Margin in effect from time to time for LIBOR Portions on the maximum amount of
the related Letter of Credit which is scheduled to be outstanding during the
immediately succeeding twelve (12) months. In addition to the letter of
credit fee called for above, the Company further agrees to pay to the Agent for
its own account such processing and transaction fees and charges as the Agent
from time to time customarily imposes in connection with any amendment,
cancellation, negotiation and/or payment of letters of credit and drafts drawn
thereunder.
(c) Agent's Fee. On June 30, 1999 and on the date occurring on
each anniversary of such date when any credit, or commitment to extend credit,
is outstanding hereunder, the Company shall pay to the Agent, for its own use
and benefit, an Agent's fee as mutually agreed upon by the Company and the
Agent.
Section 3.2. Prepayments.
(a) Voluntary Prepayments.
(i) Domestic Rate Portions. The Company shall have the privilege of
prepaying in whole or in part (but if in part, then in a minimum amount of
$500,000 or such greater amount which is an integral multiple of $100,000) the
Domestic Rate Portion of any Note at any time upon notice to the Agent prior to
11:00 a.m. (Chicago time) on the date fixed for prepayment.
(ii) LIBOR Portions. The Company may prepay any LIBOR Portion of any
Note only on the last date of the then applicable Interest Period, in whole or
in part (but if in part, then: (x) if such Portion is denominated in U.S.
Dollars, in an amount not less than $1,000,000 or such greater amount which is
an integral multiple of $100,000, (y) if such Portion is denominated in
an Alternative Currency, an amount for which the U.S. Dollar Equivalent is not
less than $1,000,000 and which is an integral multiple of 100,000 units of the
relevant currency and (z) in all cases in an amount such that the minimum
amount required for LIBOR Portion denominated in such currency pursuant to
Section 2.2 hereof remains outstanding after giving effect to such
payment), upon notice to the Agent (which notice shall be irrevocable once
given, must be received by the Agent no later than 11:00 a.m. (Chicago
time) on the date fixed for prepayment in the case of a prepayment of the
Domestic Rate Portion and on the third Business Day preceding the date of any
such prepayment of a LIBOR Portion denominated in U.S. Dollars or the fourth
Business Day preceding the date of any such prepayment of a LIBOR Portion
denominated in the Alternative Currency, and in each case shall specify the
principal amount to be repaid). Any such prepayment shall be effected by payment
of the principal amount to be prepaid and accrued interest thereon to the end of
the applicable Interest Period.
(iii) Generally. In the case of a prepayment by the Company under
Section 3.2(a), (i) any notice of prepayment by the Company received by
the Agent subsequent to 11:00 a.m. (Chicago time) on a given day shall be
treated as though received at the opening of business on the next Business Day,
(ii) the Agent shall promptly notify the Lenders of any notice of prepayment by
the Company, (iii) the Company shall prepay the relevant amount by paying to the
Agent for the account of the Lenders the principal amount to be prepaid and
(x) if such a prepayment prepays the Notes in full and is accompanied by
the termination in whole of the Revolving Credit Commitments, accrued interest
thereon to the date of prepayment and (y) any amounts due to the Lenders
under Section 2.9 hereof.
(b) Mandatory Prepayments. (i) The Company covenants and agrees that
if at any time
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the sum of the then aggregate Original Dollar Amount of Loans then outstanding
denominated in Alternative Currencies shall be in excess of $15,000,000, the
Company shall, no later than three (3) Business Days after the Agent's
demand, pay over the amount of such excess to the Agent for the ratable benefit
of the Lenders as and for a mandatory prepayment on the Notes until payment in
full thereof. Each such prepayment shall be accompanied by accrued interest on
the amount prepaid to the date of prepayment plus any amounts due to the Lenders
under Section 2.9 hereof. The Lenders acknowledge and agree that, upon
such demand by the Agent, the Company may, subject to Section 7 hereof, request
a Borrowing of Loans in order to provide it the funds necessary to repay such
excess. The Company shall be responsible for making such arrangements with the
Lenders as shall be necessary to repay such excess. Unless and to the extent a
Lender in its discretion agrees otherwise, nothing in this Section shall impair
or otherwise affect the Company's obligation to repay a Loan made by such Lender
denominated in an Alternative Currency, nor obligate a Lender to accept
repayment of a Loan made by such Lender denominated in an Alternative Currency,
in a currency other than such Alternative Currency.
(ii) The Company covenants and agrees that if at any time the sum of the
greater of (x) the aggregate Original Dollar Amount of all Loans and Letters of
Credit and (y) the U.S. Dollar Equivalent of all Loans and Letters of Credit
exceeds the Revolving Credit Commitments then in effect, the Company shall
immediately and without notice or demand pay over the amount of the excess to
the Agent for the ratable benefit of the Lenders as and for a mandatory
prepayment on the Notes until payment in full thereof. Each such prepayment
shall be accompanied by accrued interest on the amount prepaid to the date of
prepayment plus any amounts due to the Lenders under Section 2.9 hereof.
Section 3.3. Terminations. The Company shall have the
right at any time and from time to time, upon 5 Business Days' prior notice to
the Agent (which shall promptly so notify the Lenders), to ratably terminate
without premium or penalty and in whole or in part (but if in part, then in an
aggregate amount not less than $1,000,000 or such greater amount which is an
integral multiple of $500,000) the Revolving Credit Commitments; provided,
however, that (i) the Revolving Credit Commitments may not be reduced to an
amount less than the aggregate Original Dollar Amount of the Loans and Letters
of Credit then outstanding and (ii) the Company shall have no right to terminate
the Revolving Credit Commitments unless the corresponding commitments of the
lenders party to the ShortTerm Credit Agreement have been terminated in full.
Any termination of the Revolving Credit Commitments pursuant to this Section may
not be reinstated.
Section 3.4. Place and Application of Payments. All payments of
principal, interest, fees and all other Obligations payable hereunder and under
the other Loan Documents shall be made to the Agent at its office at 000 Xxxx
Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx (or at such other place as the Agent may
specify) on the date any such payment is due and payable. Payments received by
the Agent after 11:00 a.m. (Chicago time) shall be deemed received as of the
opening of business on the next Business Day. All such payments shall be made
(i) in the case of U.S. Dollars, in immediately available funds at the place of
payment, or (ii) in the case of amounts payable hereunder in an Alternative
Currency, in such funds then customary for settlement of international
transactions in such currency. All such payments shall be made without set-off
or counterclaim and without reduction for, and free from, any and all present or
future taxes, levies, imposts, duties,
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fees, charges, deductions, withholdings, restrictions and conditions of any
nature imposed by any government or any political subdivision or taxing
authority thereof (but excluding any taxes imposed on or measured by the net
income of any Lender). Except as herein provided, all payments shall be received
by the Agent for the ratable account of the Lenders and shall be promptly
distributed by the Agent ratably to the Lenders. Principal payments (including
prepayments) on the Notes shall first be applied to the Domestic Rate Portion of
such Notes until payment in full thereof, with any balance applied to LIBOR
Portions of such Notes in the order in which their Interest Periods expire.
Anything contained herein to the contrary notwithstanding, all payments
and collections received in respect of the Obligations, in each instance, by the
Agent or any of the Lenders after the occurrence of an Event of Default shall be
remitted to the Agent and distributed as follows:
(a) first, to the payment of any outstanding costs and
expenses incurred by the Agent in protecting, preserving or enforcing
rights under this Agreement or any of the other Loan Documents, and in
any event including all costs and expenses of a character which the
Company has agreed to pay under Section 11.4 hereof (such funds
to be retained by the Agent for its own account unless it has
previously been reimbursed for such costs and expenses by the Lenders,
in which event such amounts shall be remitted to the Lenders to
reimburse them for payments theretofore made to the Agent);
(b) second, to the payment of any outstanding interest or
other fees or amounts due under this Agreement or any of the other Loan
Documents other than for principal, pro rata as among the Agent and the
Lenders in accord with the amount of such interest and other fees or
amounts owing each;
(c) third, to the payment of the principal of the Notes and
any liabilities in respect of unpaid drawings under the Letters of
Credit, pro rata as among the Lenders in accord with the then
respective unpaid principal balances of the Notes and the then unpaid
liabilities in respect of unpaid drawings under the Letters of Credit;
(d) fourth, to the Agent, to be held as collateral security
for any undrawn Letters of Credit, until the Agent is holding an amount
of cash equal to the then outstanding amount of all Letters of Credit;
(e) fifth, to the Agent and the Lenders pro rata in accord
with the amounts of any other indebtedness, obligations or liabilities
of the Company owing to them and secured by the Collateral Documents
unless and until all such indebtedness, obligations and liabilities
have been fully paid and satisfied; and
(f) sixth, to the Company or to whoever the Agent reasonably
determines to be lawfully entitled thereto.
Section 3.5. Notations. Each Loan made against a Note, the status of
all amounts evidenced by a Note as constituting part of the Domestic Rate
Portion or a LIBOR Portion, and, in the case of any LIBOR Portion, the rates of
interest and Interest Periods applicable to such Portion, and the currency in
which such Portion is denominated, shall be recorded by the relevant Lender on
its books and records or, at its option in any instance, endorsed on a schedule
to the applicable Note of such Lender and the unpaid principal balance and
status, rate, Interest Periods and currency so recorded or endorsed by such
Lender shall be prima facie evidence in any court
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or other proceeding brought to enforce such Note of the principal amount
remaining unpaid thereon, the status of the Loan or Loans evidenced thereby, the
currency in which such Loans were denominated, and the interest rates and
Interest Periods applicable thereto; provided that the failure of a Lender to
record any of the foregoing shall not limit or otherwise affect the obligation
of the Company to repay the principal amount of each Note together with accrued
interest thereon.
SECTION 4. Guaranties.
Section 4.1. Subsidiary Guaranties. The Loans and other Obligations shall
be guaranteed by each Material Subsidiary pursuant to a written guaranty from
such Material Subsidiary in form and substance reasonably acceptable to the
Required Lenders; provided that no such guaranty shall be required from Anicom
Canada so long as 65% of the capital stock of Anicom Canada is pledged to secure
the Obligations under the Pledge Agreement.
SECTION 5. Definitions; Interpretation.
Section 5.1. Definitions. The following terms when used herein shall have
the following meanings:
"Acquisition" means (i) the acquisition of all or any
substantial part of the assets, property or business of any other person, firm
or corporation, or (ii) any acquisition of a majority of common stock,
warrants or other equity securities of any firm or corporation.
"Adjusted LIBOR" means a rate per annum determined by the Agent in
accordance with the following formula:
Adjusted LIBOR = LIBOR
--------------------------
100%-Reserve Percentage
"Reserve Percentage" means, for the purpose of computing Adjusted LIBOR, the
maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental or other special reserves) imposed by the
Board of Governors of the Federal Reserve System (or any successor) under
Regulation D on Eurocurrency liabilities (as such term is defined in Regulation
D) for the applicable Interest Period as of the first day of such Interest
Period, but subject to any amendments to such reserve requirement by such Board
or its successor, and taking into account any transitional adjustments thereto
becoming effective during such Interest Period. For purposes of this definition,
LIBOR Portions shall be deemed to be Eurocurrency liabilities as defined in
Regulation D without benefit of or credit for prorations, exemptions or offsets
under Regulation D. "LIBOR" means, for each Interest Period, (a)the LIBOR
Index Rate for such Interest Period, if such rate is available, and
(b) if the LIBOR Index Rate cannot be determined, the arithmetic average
of the rates of interest per annum (rounded upward, if necessary, to the nearest
1/100th of 1%) at which deposits in U.S. Dollars, or the relevant Alternative
Currency, as appropriate, in immediately available funds are offered to the
Agent at 11:00 a.m. (London, England time) 2 Business Days before the
beginning of such Interest Period by 3 or more major banks in the interbank
eurodollar market selected by the Agent for a period equal to such Interest
Period and in an amount equal or comparable to the applicable LIBOR Portion
scheduled to be outstanding from the Agent during such Interest Period. "LIBOR
Index Rate" means, for any Interest Period, the rate per annum (rounded upwards,
if necessary, to the next higher one hundred-thousandth of a percentage point)
for deposits in U.S. Dollars, or the relevant Alternative Currency, as
appropriate, for a period equal to such Interest Period which appears on the
Telerate Page 3740 or Telerate Page 3750 as appropriate for such
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currency as of 11:00 a.m. (London, England time) on the date 2 Business
Days before the commencement of such Interest Period. "Telerate Page 3740" or
"Telerate Page 3750" means each of the displays designated as "Page 3740" or
"Page 3750" respectively on the Telerate Service (or such other page as may
replace Page 3740 or Page 3750 on that service or such other service as may be
nominated by the British Bankers' Association as the information vendor for the
purpose of displaying British Banker's Association Interest Settlement Rates for
U.S. Dollar deposits). Each determination of LIBOR made by the Agent shall be
conclusive and binding on the Company and the Lenders absent manifest error.
"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for the purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise.
"Agent" means Xxxxxx Trust and Savings Bank and any successor thereto
appointed pursuant to Section 10.1 hereof.
"Agreement" means this Credit Agreement, as the same may be amended,
modified or restated from time to time in accordance with the terms hereof.
"Alternative Currency" means, subject to the provisions of Section 2.6
hereof, Canadian Dollars, French Francs, Pounds Sterling, Deutsche Marks,
Italian Lira and any other currency (other than U.S. Dollars) approved by each
Lender, so long as such currencies are freely transferable and convertible into
U.S. Dollars in the international interbank market and are traded and readily
available to each Lender in the London interbank market.
"Anicom Canada" means Anicom Multimedia Wiring Systems Incorporated, a
corporation organized under the laws of Nova Scotia, Canada.
"Applicable Margin" shall mean with respect to the Commitment Fee and
each type of Portion specified below the rate specified for such Obligation in
the chart below, subject to quarterly adjustment as hereinafter provided:
Applicable Applicable Applicable
When Following Margin Margin For Margin
Status Exists For For LIBOR For
any Margin Domestic Portions Is: Commitment
Determination Rate Portion Fee Is:
Date Is:
Level I Status (0.50%) .50% .125%
Level II Status (0.50%) .75% .15 %
Level III Status (0.50%) .875% .1875%
Level IV Status (0.25%) 1.00% .25 %
-21-
provided, however, that all of the foregoing percentages set forth in the chart
above are subject to the following:
(i) on or before the date that is ten (10) Business
Days after the latest date by which the Company is required to deliver
a Compliance Certificate to the Agent for a given quarterly accounting
period pursuant to Section 8.5(c) hereof (each date that is ten
Business Days after the latest date by which the Company is required to
deliver a Compliance Certificate to the Agent being herein referred to
as the "Margin Determination Date"), the Agent shall determine whether
Level I Status, Level II Status, Level III Status or Level IV Status
exists as of the close of the applicable quarterly accounting period
(each, a "quarterly test period") and shall also determine the Interest
Coverage Ratio and Debt to Earnings Ratio as of such close, in each
case based upon such Compliance Certificate and the financial
statements delivered to the Agent under Section 8.5 hereof for
such quarterly test period, and shall promptly notify the Company of
such determination and of any change in the Applicable Margin resulting
therefrom;
(ii) the Applicable Margin for the Loans shall be the rate set
forth in the chart above, after giving effect to adjustments pursuant
to clause (iii) of this proviso below, unless the Interest
Coverage Ratio as of the close of such quarterly test period is less
than 2.5 to 1.0. In such event, the Applicable Margin for the
Loans in each case shall be .0625% above the rate otherwise specified
hereunder (after giving effect to adjustments pursuant to such clause
(iii) hereof);
(iii) the Applicable Margin for the Loans shall be the rate set
forth in the chart above, after giving effect to adjustments pursuant
to clause (ii) of this proviso above, unless the Debt to
Earnings Ratio as of the close of the relevant quarterly test period is
greater than 2.75 to 1.0. In such event, the Applicable Margin for the
Loans in each case shall be .25% above the rate otherwise specified
hereunder (after giving effect to adjustments pursuant to such clause
(ii) hereof);
(iv) any change in the Applicable Margin (except for such a
change pursuant to clause (iii) hereof) shall be effective as of
such Margin Determination Date, with such new Applicable Margin to
continue in effect until the next Margin Determination Date. If the
Company has not delivered a Compliance Certificate by the date such
Compliance Certificate is required to be delivered under Section<-1-
32>8.5 hereof, until a Compliance Certificate is delivered before the
next Margin Determination Date, the Applicable Margin shall be the
Applicable Margin for Level IV Status as if the Debt to Earnings Ratio
as calculated for purposes of clause (iii) above were greater
than 2.75 to 1.0. If the Company subsequently delivers a Compliance
Certificate before the next Margin Determination Date, the Applicable
Margin established by such Compliance Certificate shall take effect
from the date ten (10) Business Days after the date of such
delivery and remain effective until the
-22-
next Margin Determination Date; and
(v) the initial Applicable Margin in effect through the first
Margin Determination Date shall be the Applicable Margin for Level I
Status.
"Application" is defined in Section 1.3 hereof.
"Assignment Agreements" is defined in Section 11.10 hereof.
"Authorized Representative" means those persons shown on the list of
officers provided by the Company pursuant to Section 7.2(a) hereof or on
any update of any such list provided by the Company to the Agent, or any further
or different officer of the Company so named by any Authorized Representative of
the Company in a written notice to the Agent.
"Borrowing" means the total of Loans of a single type made to the
Company by all the Lenders on a single date, and if such Loans are to be part of
a LIBOR Portion, for a single Interest Period. Borrowings of Loans are made and
maintained ratably from each of the Lenders according to their Percentages of
the applicable Commitments.
"Business Day" means any day other than a Saturday or Sunday on which
banks are not authorized or required to close in Chicago, Illinois and, when
used with respect to LIBOR Portions, a day on which banks are also dealing in
U.S. Dollar deposits or the relevant Alternative Currency in London, England and
Nassau, Bahamas and if the applicable Business Day relates to the borrowing or
payment of a LIBOR Portion denominated in an Alternative Currency, on which
banks and foreign exchange markets are open for business in the city where
disbursements of or payments on such Portion are to be made.
"Canadian Debt" means the indebtedness of Anicom Canada arising from a
loan made by the Canadian Lender in an aggregate principal amount equal to the
U.S. Dollar equivalent of $35,000,000 to finance a like amount of the purchase
price payable by Anicom Canada for the Texcan Acquisition.
"Canadian Dollar" means the lawful currency of Canada.
"Canadian Lender" means a commercial bank in Canada.
"Capital Lease" means any lease of Property which in accordance with
GAAP is required to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligation" means the amount of the liability shown
on the balance sheet of any Person in respect of a Capital Lease determined in
accordance with GAAP.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"Company" is defined in the introductory paragraph hereof.
"Compliance Certificate" is defined in Section 8.5 hereof.
"Consolidated Net Income" means, for any period, the net income (or net
loss) of the Company and its Subsidiaries for such period computed on a
consolidated basis in accordance with GAAP, including without limitation
interest income and, without limiting the foregoing, after deduction from gross
income of all expenses and reserves, including reserves for all taxes on or
measured by income, but excluding any extraordinary profits and also excluding
any taxes on such profits.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the
-23-
Company or any of its Subsidiaries, are treated as a single employer under
Section 414 of the Code. "Convertible Preferred Stock" shall
mean the Series B Convertible Preferred Stock issued
by the Company on September 21, 1998.
"Current Ratio" means, as of any time the same is to be determined, the
ratio of current assets of the Company and its Subsidiaries to current
liabilities of the Company and its Subsidiaries, all as determined on a
consolidated basis in accordance with GAAP consistently applied, but, in any
event subject to the following restrictions and limitations:
(a) current liabilities for such purposes shall include all
loans outstanding hereunder and under the Short-Term Credit Agreement
which mature within one year of such date of determination;
(b) current liabilities for such purposes shall exclude all
Special Post-Closing Acquisition Liabilities; and
(c) current assets for such purposes shall include all
prepaid expenses. "Debt to Earnings Ratio" means, as of any time the
same is to be determined, the ratio of
Total Funded Debt at such time to EBITDA for the four fiscal quarters of the
Company then ended. "Default" means any event or condition the
occurrence of which would, with the passage
of time or the giving of notice, or both, constitute an Event of Default.
"Deutsche Xxxx" means the lawful currency of the Federal Republic of
Germany.
"Domestic Rate" means, for any day, the greater of (i) the rate of
interest announced by the Agent from time to time as its prime commercial rate,
as in effect on such day (it being understood and agreed that such rate may not
be the Agent's best or lowest rate); and (ii) the sum of (x) the rate determined
by the Agent to be the average (rounded upwards, if necessary, to the next
higher 1/100 of 1%) of the rates per annum quoted to the Agent at approximately
10:00 a.m. (Chicago time) (or as soon thereafter as is practicable) on such day
(or, if such day is not a Business Day, on the immediately preceding Business
Day) by two or more Federal funds brokers selected by the Agent for the sale to
the Agent at face value of Federal funds in an amount equal or comparable to the
principal amount owed to the Agent for which such rate is being determined, plus
(y) 1/2 of 1%.
"Domestic Rate Portions" is defined in Section 2.1(a) hereof.
"EBIT" means, for any period, Consolidated Net Income for such period
plus all amounts deducted in arriving at such Consolidated Net Income amount for
such period for Interest Expense and for foreign, federal, state and local
income tax expense.
"EBITDA" means, for any period, EBIT for such period plus (i) all
amounts deducted in arriving at such EBIT in respect of all amounts properly
charged for depreciation of fixed assets and amortization of Capital Leases and
intangible assets during such period on the books of the Company and its
Subsidiaries and (ii) (to the extent such period includes the third fiscal
quarter of the fiscal year of the Company ended on or about December 31,
1998) all the Fiscal 1998 Charges during such period, all as determined in
accordance with GAAP.
"EMU" means economic and monetary union as contemplated in the Treaty
on European Union.
"EMU Commencement" means the date of commencement of the third stage of
EMU (which at the date hereof is expected to be on January 1, 1999) or
the date on which circumstances arise which (in the opinion of the Agent) have
substantially the same effect and result in substantially the
-24-
same consequences as commencement of the third stage of EMU as contemplated by
the Treaty on European Union.
"EMU Legislation" means legislative measures of the European Council
for the introduction of, changeover to or operation of a single or unified
European currency (whether known as the "euro" or otherwise), being in part the
implementation of the third stage of EMU.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"Euro" means the single currency of Euro Members of the European Union.
"Euro Member" means each state described as a "participating member
state" in any EMU
Legislation.
"Euro Unit" means the currency unit of the Euro.
"Event of Default" means any event or condition identified as such in
Section 9.1 hereof.
"Existing Lenders" means Xxxxxx Trust and Savings Bank, The First
National Bank of Chicago and LaSalle National Bank.
"Existing Credit Agreement" means the Credit Agreement dated as of
June 30, 1998, among the Company, Xxxxxx Trust and Savings Bank, as Agent
and the Existing Lenders, as amended and supplemented.
"Fiscal 1998 Charges" means up to $5,158,000 of the charges taken by
the Companyagainst its earnings in the third fiscal quarter of its fiscal year
ended on or about December 31, 1998 for the Company's costs (including internal
costs) related to the Texcan Acquisition (including the consolidation of
redundant facilities).
"French Franc" means the lawful currency of the Republic of France.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied by the Company and its Subsidiaries on a basis consistent
with the preparation of the Company's most recent financial statements furnished
to the Lenders pursuant to Section 6.5 hereof.
"Guarantor" means each Material Subsidiary (other than, subject to
Section 4.1, Anicom Canada) of the Company that executes and delivers to the
Agent a Guaranty Agreement.
"Guaranty Agreement" means each guaranty issued by a Material
Subsidiary (other than, subject to Section 4.1, Anicom Canada) to the
Agent guaranteeing all or any Obligations.
"Indebtedness for Borrowed Money" means for any Person (without
duplication) (i) all indebtedness created, assumed or incurred in any
manner by such Person representing money borrowed (including by the issuance of
debt securities), (ii) all indebtedness for the deferred purchase price
of property or services (other than trade accounts payable arising in the
ordinary course of business which are not more than sixty (60) days past
due), (iii) all indebtedness secured by any Lien upon Property of such
Person, whether or not such Person has assumed or become liable for the payment
of such indebtedness, (iv) all Capitalized Lease Obligations of such
Person and (v) all obligations of such Person on or with respect to
letters of credit, bankers' acceptances and other extensions of credit whether
or not representing obligations for borrowed money.
"Intangible Assets" means, as of any time the same is to be determined,
goodwill, patents, trademarks, copyrights and franchises of the Company and its
Subsidiaries (including, without limitation, unamortized debt discount and
expense, organization costs and deferred research and development expense)
determined on a consolidated basis in accordance with GAAP.
-25-
"Interest Expense" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to Capitalized
Lease Obligations and all amortization of debt discount and expense) of the
Company and its Subsidiaries for such period as computed on a consolidated basis
in accordance with GAAP.
"Interest Period" means, with respect to any LIBOR Portion, the period
commencing on, as the case may be, the creation, continuation or conversion date
with respect to such LIBOR Portion and ending 1, 2, 3 or 6 months thereafter as
selected by the Company in its notice as provided herein; provided that, all of
the foregoing provisions relating to Interest Periods are subject to the
following:
(i) if any Interest Period would otherwise end on a day which
is not a Business Day, that Interest Period shall be extended to the
next succeeding Business Day, unless in the case of an Interest Period
for a LIBOR Portion the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) no Interest Period may extend beyond the final maturity
date of the relevant Notes;
(iii) the interest rate to be applicable to each Portion for
each Interest Period shall apply from and including the first day of
such Interest Period to but excluding the last day thereof; and
(iv) no Interest Period may be selected if after giving effect
thereto the Company will be unable to make a principal payment
scheduled to be made during such Interest Period without paying part of
a LIBOR Portion on a date other than the last day of the Interest
Period applicable thereto.
For purposes of determining an Interest Period, a month means a period starting
on one day in a calendar month and ending on a numerically corresponding day in
the next calendar month, provided, however, if an Interest Period begins on the
last day of a month or if there is no numerically corresponding day in the month
in which an Interest Period is to end, then such Interest Period shall end on
the last Business Day of such month.
"Italian Lira" means the lawful currency of the Republic of Italy.
"Lender" means Xxxxxx Trust and Savings Bank, the other signatories
hereto (other than the Company) and all other lenders becoming parties hereto
pursuant to Section 11.10 hereof.
"Letter of Credit" is defined in Section 1.3 hereof.
"Leverage Ratio" means, as of any time the same is to be determined,
the ratio of Total Funded Debt of the Company and its Subsidiaries to Total
Capitalization of the Company and its Subsidiaries, all as determined on a
consolidated basis in accordance with GAAP.
"Level I Status" shall mean, for any Margin Determination Date,
that as of the close of the quarterly test period with reference to which such
Margin Determination Date was set, the Pricing Leverage Ratio is less than or
equal to 10%.
"Level II Status" shall mean, for any Margin Determination Date, that
as of the close of the quarterly test period with reference to which such Margin
Determination Date was set, the Pricing Leverage Ratio is greater than 10% but
less than or equal to 20%.
"Level III Status" shall mean, for any Margin Determination Date, that
as of the close of the
-26-
quarterly test period with reference to which such Margin Determination Date was
set, the Pricing Leverage Ratio is greater than 20% but less than or equal to
30%.
"Level IV Status" shall mean, for any Margin Determination Date, that
as of the close of the quarterly test period with reference to which such Margin
Determination Date was set, the Pricing Leverage Ratio is greater than 30%.
"LIBOR Portions" means and includes LIBOR Portions, unless the context
in which such term is used shall otherwise require.
"LIBOR Portions" is defined in Section 2.1(a) hereof.
"Lien" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.
"Loan Documents" means this Agreement, the Notes, the Assignment
Agreements and each other instrument or document to be delivered hereunder or
thereunder or otherwise in connection therewith.
"Loans" is defined is Section 1.2 hereof.
"Material Subsidiary" means any Subsidiary which has, as of the close
of any completed fiscal year of the Company (commencing with the Company's
fiscal year ending December 31, 0000), XXXXXX for any such fiscal year (directly
and together with its subsidiaries) greater than 7% of the EBITDA of the Company
and its Subsidiaries for any such fiscal year on a consolidated basis in
accordance with GAAP.
"Non-Material Subsidiary" means each Subsidiary other than a Material
Subsidiary.
"Notes" is defined in Section 1.2 hereof.
"Obligations" means all obligations of the Company to pay principal and
interest on the Loans, all reimbursement obligations owing under the
Applications, all fees and charges payable hereunder, and all other payment
obligations of the Company arising under or in relation to any Loan Document, in
each case whether now existing or hereafter arising, due or to become due,
direct or indirect, absolute or contingent, and howsoever evidenced, held or
acquired.
"Original Dollar Amount" means at any time the same is to be determined
(x) in relation to any LIBOR Portion denominated in an Alternative
Currency, the U.S. Dollar Equivalent of such Portion on the first day of the
Interest Period then applicable thereto (the day on which such Portion was most
recently created, continued or effected by conversion) and (y) in
relation to any other Portion, the amount thereof in U.S. Dollars.
"Overnight Foreign Currency Rate" shall mean for any amount payable in
a currency other than U.S. Dollars, the rate of interest per annum as determined
by the Agent (rounded upwards, if necessary, to the nearest whole multiple of
one-sixteenth of one percent (1/16 of 1%)) at which overnight or weekend
deposits of the appropriate currency (or, if such amount due remains unpaid more
than three Business Days, then for such period of time not longer than six
months as the Agent may elect in its absolute discretion) for delivery in
immediately available and freely transferable funds would be offered by the
Agent to major banks in the interbank market upon request of such major banks
for the applicable period as determined above and in an amount comparable to the
unpaid principal amount of the related Loan (or, if the Agent is not placing
deposits in such currency in the interbank market, then the Agent's cost of
funds in such currency for such period).
-27-
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"Percentage" means, for each Lender, the percentage of the Revolving
Credit Commitments represented by such Lender's Revolving Credit Commitment or,
if the Revolving Credit Commitments have been terminated, the percentage held by
such Lender (including through participation interest in Letters of Credit
pursuant to Section 1.3 hereof) of the aggregate principal amount of all
outstanding Obligations.
"Person" means an individual, partnership, corporation, association,
trust, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof.
"Plan" means any employee pension benefit plan covered by Title<-1-
32>IV of ERISA or subject to the minimum funding standards under Section<-1-
32>412 of the Code that either (i) is maintained by a member of the
Controlled Group for employees of a member of the Controlled Group, or (ii)<-1-
32>is maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions.
"Pledge Agreement" means that certain Pledge Agreement dated as of even
date herewith between the Company and the Agent.
"Portion" is defined in Section 2.1(a) hereof.
"Pounds Sterling" means the lawful currency of the United Kingdom.
"Pricing Leverage Ratio" means, as of any time the same is to be
determined, the ratio of Total Funded Debt to Total Capitalization of the
Company and its Subsidiaries, all as determined on a consolidated basis in
accordance with GAAP.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Put/Call Agreement" means any contract whereby the Company obligates
itself to purchase the Canadian Debt from the Canadian Lender.
"Reimbursement Obligation" is defined in Section 1.4(c) hereof.
"Required Lenders" means, as of the date of determinations thereof,
those Lenders holding at least 66-2/3% of the Revolving Credit Commitments or,
in the event that no Revolving Credit Commitments are outstanding hereunder,
holding at least 66-2/3% in aggregate principal amount of the Loans and credit
risk on the Letters of Credit outstanding hereunder.
"Revolving Credit" is defined in Section 1.1 hereof.
"Revolving Credit Commitments" means the commitments of the Lenders to
extend credit under the Revolving Credit in the amounts set forth opposite their
signatures hereto under the heading "Revolving Credit Commitment" and opposite
their signatures on Assignment Agreements delivered pursuant to Section
11.10 hereof under the heading "Revolving Credit Commitment", as such amounts
may be reduced pursuant hereto.
"Revolving Credit Note" is defined in Section 1.2 hereof.
"Revolving Credit Termination Date" means June 30, 2001, or such
earlier date on which the Revolving Credit Commitments are terminated in whole
pursuant to Section 3.3, 9.2 or 9.3
-28-
hereof, or such later date to which the Revolving Credit Termination Date is
extended pursuant to Section 1.5 hereof.
"Shareholders' Equity" means, as of any time the same is to be
determined, the sum (without duplication) of (i) shareholders' equity
(including all capital stock, additional paid-in-capital and retained earnings
after deducting treasury stock, but excluding minority interests in
subsidiaries) which would appear on the balance sheet of the Company and its
Subsidiaries plus (to the extent not included in such Shareholders' Equity)
(ii) the Convertible Preferred Stock, all as determined on a consolidated
basis in accordance with GAAP.
"SEC" means the Securities and Exchange Commission or any successor
agency thereto.
"Short-Term Credit Agreement" means that certain ShortTerm Credit
Agreement dated as of even date herewith among the Company, Xxxxxx Trust and
Savings Bank, individually and as agent, The First National Bank of Chicago,
LaSalle National Bank, Bank of America National Trust and Savings Association
and the other lenders from time to time party thereto, as amended and
supplemented from time to time.
"Special Post-Closing Acquisition Liabilities" means as of any time,
those liabilities established by the Company after making an Acquisition which
survive such Acquisition associated with the Property or Person so acquired, or
the employees of such Person, to the extent (i) such liabilities are
reflected as a current liability in accordance with GAAP on a consolidated
balance sheet of the Company and its Subsidiaries, (ii) the creation of
such liabilities is offset by a concurrent debit of like amount in accordance
with GAAP to the goodwill of the Company and its Subsidiaries and (iii)
such liabilities have been reasonably described in the most recent Compliance
Certificate submitted to the Agent.
"Subordinated Indebtedness" means, as of any time the same is to be
determined, indebtedness of the Company or any Subsidiary subordinated in right
of payment to the Obligations, pursuant to documentation containing interest
rates, payment terms, maturities, amortization schedules, covenants, defaults,
remedies, subordination provisions and other material terms in form and
substance satisfactory to the Lenders. The Lenders further acknowledge and agree
that subordination provisions in the form or substantially the form annexed
hereto as Exhibit D constitute subordination provisions satisfactory in
form and substance to the Lenders.
"Subsidiary" means any corporation or other Person more than 50% of the
outstanding ordinary voting shares or other equity interests of which is at the
time directly or indirectly owned by the Company, by one or more of its
Subsidiaries, or by the Company and one or more of its Subsidiaries.
"Tangible Net Worth" means, as of any time the same is to be
determined, Shareholders' Equity less the sum of (i) all notes receivable
from officers and employees of the Company and its Subsidiaries and (ii)
Intangible Assets.
"Texcan" means, collectively, Texcan Cables, Inc., a Nevada
corporation, Texcan Cables International, Inc., a Nevada corporation and Texcan
Cables Limited, a Canadian corporation.
"Texcan Acquisition" means the acquisition of all or substantially all
of the assets of Texcan by Anicom Canada on September 21, 1998 pursuant
to that certain Asset Purchase Agreement dated as of September 21, 1998
between the Company, Anicom Canada and Texcan.
"Total Capitalization" means the sum of Total Funded Debt and
Shareholders' Equity.
-29-
"Total Funded Debt" means, at any time the same is to be determined,
the aggregate of all Indebtedness for Borrowed Money of the Company and its
Subsidiaries at such time, plus all Indebtedness for Borrowed Money of any other
Person which is directly or indirectly guaranteed by the Company or any of its
Subsidiaries or which the Company or any of its Subsidiaries has agreed
(contingently or otherwise) to purchase or otherwise acquire or in respect of
which the Company or any of its Subsidiaries has otherwise assured a creditor
against loss.
"Treaty on European Union" means the Treaty of Rome of March 25,
1957, as amended by the Single European Act of 1986 and the Maastricht Treaty
(which was signed at Maastricht on February 7, 1992, and came into force
on November 1, 1993, as amended from time to time).
"Unfunded Vested Liabilities" means, for any Plan at any time, the
amount (if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
"Unused Revolving Credit Commitments" means, at any time, the
difference between the Revolving Credit Commitments then in effect and the
aggregate outstanding Original Dollar Amount of Loans and Letters of Credit.
"U.S. Dollars" and "$" means the lawful currency of the United States
of America.
"U.S. Dollar Equivalent" means the amount of U.S. Dollars which would
be realized by converting an Alternative Currency into U.S. Dollars in the spot
market at the exchange rate quoted by the Agent, at approximately 11:00 a.m.
(London time) two Business Days prior to the date on which a computation thereof
is required to be made, to major banks in the interbank foreign exchange market
for the purchase of U.S. Dollars for such Alternative Currency.
"Welfare Plan" means a "welfare plan" as defined in Section 3(1) of
ERISA.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the issued
and outstanding shares of capital stock (other than directors' qualifying shares
as required by law) or other equity interests are owned by the Company and/or
one or more Wholly-Owned Subsidiaries within the meaning of this definition.
"Year 2000 Problem" means any significant risk that computer hardware,
software, or equipment containing embedded microchips essential to the business
or operations of the Company or any of the Subsidiaries will not, in the case of
dates or time periods occurring after December 31, 1999, function at
least as efficiently and reliably as in the case of times or time periods
occurring before January 1, 2000, including the making of accurate leap
year calculations.
Section 5.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"hereof", "herein", and "hereunder" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, it shall be done in
accordance with GAAP except where such principles are inconsistent with the
specific provisions of this Agreement.
-30-
SECTION 6. Representations and Warranties.
The Company represents and warrants to the Agent and the Lenders as
follows:
Section 6.1. Organization and Qualification. The Company is duly
organized, validly existing and in good standing as a corporation under the laws
of the State of Delaware, has full and adequate corporate power to own its
Property and conduct its business as now conducted, and is duly licensed or
qualified and in good standing in each jurisdiction in which the nature of the
business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying.
Section 6.2. Subsidiaries. Each Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, as the case may be, has full and adequate power to
own its Property and conduct its business as now conducted, and is duly licensed
or qualified and in good standing in each jurisdiction in which the nature of
the business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to obtain such
authorization, license or qualification would not result in a material adverse
change in the business, financial condition or Properties of the Company and its
Subsidiaries. Schedule 6.2 hereto identifies each Subsidiary, the
jurisdiction of its incorporation or organization, as the case may be, the
percentage of issued and outstanding shares of each class of its capital stock
or other equity interests owned by the Company and the Subsidiaries and, if such
percentage is not 100% (excluding directors' qualifying shares as required by
law), a description of each class of its authorized capital stock and other
equity interests and the number of shares of each class issued and outstanding.
All of the outstanding shares of capital stock and other equity interests of
each Subsidiary are validly issued and outstanding and fully paid and
nonassessable and all such shares and other equity interests indicated on
Schedule 6.2 as owned by the Company or a Subsidiary are owned,
beneficially and of record, by the Company or such Subsidiary free and clear of
all Liens. There are no outstanding commitments or other obligations of any
Subsidiary to issue, and no options, warrants or other rights of any Person to
acquire, any shares of any class of capital stock or other equity interests of
any Subsidiary. Each Subsidiary that is a Material Subsidiary is so noted on
Schedule 6.2 hereto. Each Material Subsidiary is a Guarantor except to the
extent Section 4.1 or Section 8.1(b) hereof does not yet require such
Subsidiary to be a Guarantor.
Section 6.3. Corporate Authority and Validity of Obligations.
(a)The Company has full right and authority to enter into this Agreement and the
other Loan Documents, to make the borrowings herein provided for, to issue its
Notes in evidence thereof, and to perform all of its obligations hereunder and
under the other Loan Documents. The Loan Documents delivered by the Company have
been duly authorized, executed and delivered by the Company and constitute valid
and binding obligations of the Company enforceable in accordance with their
terms except as enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting creditors' rights generally and
general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law); and this
Agreement and the other Loan Documents do not, nor does the performance or
observance by the Company of any of the matters and things herein or therein
provided for, contravene or constitute a default under any provision of law or
any judgment, injunction, order or decree binding upon the Company or any
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provision of the charter, articles of incorporation or by-laws of the Company or
any covenant, indenture or agreement of or affecting the Company or any of its
Properties, or result in the creation or imposition of any Lien on any Property
of the Company.
(b) Guarantors. Each Guarantor has full right and authority to enter
into any Loan Documents it has executed and to perform all of its obligations
thereunder. The Loan Documents delivered by each Guarantor have been duly
authorized, executed and delivered by such Guarantor and constitute valid and
binding obligations of such Guarantor enforceable in accordance with their terms
except as enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting creditors' rights generally and general
principles of equity (regardless of whether the application of such principles
is considered in a proceeding in equity or at law); and such Loan Documents do
not, nor does the performance or observance by such Guarantor of any of the
matters and things herein or therein provided for, contravene or constitute a
default under any provision of law or any judgment, injunction, order or decree
binding upon the Company or any Guarantor or any provision of the charter,
articles of incorporation or by-laws of the Company or any Guarantor or any
covenant, indenture or agreement of or affecting the Company or any Guarantor or
any of their Properties, or result in the creation or imposition of any Lien on
any Property of the Company or any Guarantor.
Section 6.4. Use of Proceeds; Margin Stock. The Company shall use the
proceeds of the Loans and other extensions of credit made available hereunder
solely for its general working capital purposes and for such other legal and
proper purposes as are consistent with all applicable laws. Neither the Company
nor any Subsidiary is engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System),
and no part of the proceeds of any Loan or any other extension of credit made
hereunder will be used to purchase or carry any such margin stock or to extend
credit to others for the purpose of purchasing or carrying any such margin
stock.
Section 6.5. Financial Reports. The consolidated balance sheet of the
Company and its Subsidiaries as at December 31, 1997, and the related
consolidated statements of income, retained earnings and cash flows of the
Company and its Subsidiaries for the fiscal year then ended, and accompanying
notes thereto, which financial statements are accompanied by the audit report of
PricewaterhouseCoopers LLP, independent public accountants, and the unaudited
interim consolidated balance sheet of the Company and its Subsidiaries as at
June 30, 1998, and the related consolidated statements of income and cash
flows of the Company and its Subsidiaries for the six (6) months then
ended, heretofore furnished to the Lenders, fairly present the consolidated
financial condition of the Company and its Subsidiaries as at said dates and the
consolidated results of their operations and cash flows for the periods then
ended in conformity with generally accepted accounting principles applied on a
consistent basis. Neither the Company nor any Subsidiary has contingent
liabilities which are material to it other than as indicated on such financial
statements or, with respect to future periods, on the financial statements
furnished pursuant to Section 8.5 hereof.
Section 6.6. No Material Adverse Change. Since June 30, 1998,
there has been no change in the condition (financial or otherwise) or business
prospects of the Company or any Subsidiary except those occurring in the
ordinary course of business, none of which individually or in the aggregate have
been materially adverse.
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Section 6.7. Full Disclosure. The statements and information furnished
to the Lenders in connection with the negotiation of this Agreement and the
other Loan Documents and the commitments by the Lenders to provide all or part
of the financing contemplated hereby do not contain any untrue statements of a
material fact or omit a material fact necessary to make the material statements
contained herein or therein not misleading, the Lenders acknowledging that as to
any projections furnished to Lenders, the Company only represents that the same
were prepared on the basis of information and estimates the Company believed to
be reasonable.
Section 6.8. Good Title. The Company and its Subsidiaries each have
good and defensible title to their assets as reflected on the most recent
consolidated balance sheet of the Company and its Subsidiaries furnished to the
Lenders (except for sales of assets by the Company and its Subsidiaries in the
ordinary course of business), subject to no Liens other than such thereof as are
permitted by Section 8.12 hereof.
Section 6.9. Litigation and Other Controversies. There is no litigation
or governmental proceeding or labor controversy pending, nor to the knowledge of
the Company threatened, against the Company or any Subsidiary which if adversely
determined would (a) impair the validity or enforceability of, or impair
the ability of the Company to perform its obligations under, this Agreement or
any other Loan Document or (b) result in any material adverse change in
the financial condition, Properties, business or operations of the Company or
any Subsidiary.
Section 6.10. Taxes. All tax returns required to be filed by the Company
or any Subsidiary in any jurisdiction have, in fact, been filed, and all taxes,
assessments, fees and other governmental charges upon the Company or any
Subsidiary or upon any of their respective Properties, income or franchises,
which are shown to be due and payable in such returns, have been paid. The
Company does not know of any proposed additional tax assessment against it or
its Subsidiaries for which adequate provision in accordance with GAAP has not
been made on its accounts. Adequate provisions in accordance with GAAP for taxes
on the books of the Company and each Subsidiary have been made for all open
years, and for its current fiscal period.
Section 6.11. Approvals. No authorization, consent, license, or
exemption from, or filing or registration with, any court or governmental
department, agency or instrumentality, nor any approval or consent of the
stockholders of the Company or any other Person, is or will be necessary to the
valid execution, delivery or performance by the Company of this Agreement or any
other Loan Document.
Section 6.12. Affiliate Transactions. Neither the Company nor any
Subsidiary is a party to any contracts or agreements with any of its Affiliates
(other than with Wholly-Owned Subsidiaries) on terms and conditions which are
less favorable to the Company or such Subsidiary than would be usual and
customary in similar contracts or agreements between Persons not affiliated with
each other; provided that the foregoing shall not be deemed to apply to (i)
the Put/Call Agreement or any other contracts or agreements entered into
pursuant to the Put/Call Agreement and (ii) (if the Canadian Debt is purchased
by an Affiliate of the Company) the contracts and agreements constituting the
Canadian Debt.
Section 6.13. Investment Company; Public Utility Holding Company. Neither the
Company nor any Subsidiary is an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended, or a "public
-33-
utility holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
Section 6.14. ERISA. The Company and each other member of its Controlled
Group has fulfilled its obligations under the minimum funding standards of and
is in compliance in all material respects with ERISA and the Code to the extent
applicable to it and has not incurred any liability to the PBGC or a Plan under
Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA. Neither the Company nor any Subsidiary has any
contingent liabilities with respect to any post-retirement benefits under a
Welfare Plan, other than liability for continuation coverage described in
article 6 of Title I of ERISA.
Section 6.15. Compliance with Laws. The Company and each of its
Subsidiaries are in compliance with the requirements of all federal, state and
local laws, rules and regulations applicable to or pertaining to their
Properties or business operations (including, without limitation, the
Occupational Safety and Health Act of 1970, the Americans with Disabilities Act
of 1990, and laws and regulations establishing quality criteria and standards
for air, water, land and toxic or hazardous wastes and substances),
non-compliance with which could have a material adverse effect on the financial
condition, Properties, business or operations of the Company or any Subsidiary.
Neither the Company nor any Subsidiary has received notice to the effect that
its operations are not in compliance with any of the requirements of applicable
federal, state or local environmental, health and safety statutes and
regulations or are the subject of any governmental investigation evaluating
whether any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which non-compliance or
remedial action could have a material adverse effect on the financial condition,
Properties, business or operations of the Company or any Subsidiary.
Section 6.16. Other Agreements. Neither the Company nor any Subsidiary
is in default under the terms of any covenant, indenture or agreement of or
affecting the Company, any Subsidiary or any of their Properties, which default
if uncured would have a material adverse effect on the financial condition,
Properties, business or operations of the Company or any Subsidiary.
Section 6.17. No Default. No Default or Event of Default has occurred and
is continuing.
Section 6.18. Year 2000 Compliance. The Company and its Subsidiaries hav
conducted a comprehensive review and assessment of their computer applications,
and have made such inquiry of their respective material suppliers, service
vendors (including data processors) and customers as the Company or relevant
Subsidiary (as the case may be) deem appropriate, with respect to any defect in
computer software, data bases, hardware, controls and peripherals related to the
occurrence of the year 2000 or the use of any date after December 31, 1999, in
connection therewith. Based on the foregoing review, assessment and inquiry, the
Company believes that no such defect could reasonably be expected to have a
material adverse effect on the financial condition, Properties, business or
operations of the Company and its Subsidiaries taken as a whole.
SECTION 7. Conditions Precedent.
The obligation of the Lenders to make any Loan or of the Agent to issue
any Letter of Credit under this Agreement is subject to the following conditions
precedent:
Section 7.1. All Advances. As of the time of the making of each extension
of credit (including the initial extension of credit) hereunder:
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(a) each of the representations and warranties set forth in
Section 6 hereof and in the other Loan Documents shall be true
and correct as of such time, except to the extent the same expressly
relate to an earlier date;
(b) the Company shall be in full compliance with all of the
terms and conditions of this Agreement and of the other Loan Documents,
and no Default or Event of Default shall have occurred and be
continuing or would occur as a result of making such extension of
credit;
(c) after giving effect to such extension of credit, (i)<-1-
32>neither the aggregate Original Dollar Amount nor the U.S. Dollar
Equivalent of all Loans under the Revolving Credit and Letters of
Credit outstanding under this Agreement shall exceed the Revolving
Credit Commitments then in effect and (ii) the aggregate
Original Dollar Amount of all Loans denominated in Alternative
Currencies shall not exceed $15,000,000;
(d) in the case of the issuance of any Letter of Credit, the
Agent shall have received a properly completed Application therefor
together with the fees called for hereby; and
(e) such extension of credit shall not violate any order,
judgment or decree of any court or other authority or any provision of
law or regulation applicable to the Agent or any Lender (including,
without limitation, Regulation U of the Board of Governors of
the Federal Reserve System) as then in effect.
The Company's request for any Loan or Letter of Credit shall constitute its
warranty as to the facts specified in subsections (a) through (d), both
inclusive, above.
Section 7.2. Initial Advance. At or prior to the making of the initial
extension of credit hereunder, the following conditions precedent shall also
have been satisfied:
(a) the Agent shall have received the following for the
account of the Lenders (each to be properly executed and completed) and
the same shall have been approved as to form and substance by the
Agent:
(i) the Notes;
(ii) the Guaranty Agreements;
(iii) copies (executed or certified, as may be
appropriate) of all legal documents or proceedings taken in
connection with the execution and delivery of this Agreement
and the other Loan Documents to the extent the Agent or its
counsel may reasonably request; and
(iv) an incumbency certificate containing the name,
title and genuine signatures of each of the Company's
Authorized Representatives.
(b) the Agent shall have received the initial fees (if any)
called for hereby; (c) each Lender shall have received such
certifications as it may require in order
to satisfy itself as to the financial condition of the Company and its
Subsidiaries, and the lack of material contingent liabilities of the
Company and its Subsidiaries;
(d) legal matters incident to the execution and delivery of
this Agreement and the other Loan Documents and to the transactions
contemplated hereby shall be satisfactory to each Lender and its
counsel; and the Agent shall have received for the account of the
Lenders the written opinion of counsel for the Company in form and
substance satisfactory
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to the Lender and its counsel; and
(e) the Agent shall have received for the account of the
Lenders such other agreements, instruments, documents, certificates and
opinions as the Agent or the Lenders may reasonably request.
Section 7.3. Termination of Existing Credit Agreement. Each of the
Company and the Existing Lenders consent to the termination of the "Revolving
Credit Commitments" under the Existing Credit Agreement effective on the date
the conditions set forth in Section 7.2 hereof are satisfied,
notwithstanding the notice requirements for such termination set forth in
Section 3.3 of the Existing Credit Agreement. The Existing Credit
Agreement shall terminate and all amounts payable thereunder, including accrued
and unpaid facility fees payable under Section 3.1 thereof, shall be
payable, and the facility fee payable under Section 3.1 hereof shall
begin to accrue, on the date that this Agreement has been executed by all the
parties hereto and the conditions set forth in Section 7.2 hereof have
been satisfied.
Section 7.4. November 19 as Earliest Effective Date. Notwithstanding anything
herein to the contrary, this Agreement shall not in any event take effect any
earlier than November 19, 1998.
SECTION 8. Covenants.
The Company agrees that, so long as any credit is available to or in
use by the Company hereunder, except to the extent compliance in any case or
cases is waived in writing by the Required Lenders:
Section 8.1. Corporate Existence; Subsidiaries. (a) The Company shall,
and shall cause each Subsidiary to, preserve and maintain its corporate
existence. The Company will preserve and keep in force and effect, and cause
each Subsidiary to preserve and keep in force and effect, all licenses, permits
and franchises necessary to the proper conduct of its business. Notwithstanding
anything contained herein to the contrary, so long as no Default or Event of
Default has occurred and is continuing, the Company may dissolve any
Non-Material Subsidiary so long as such dissolution would not result in a
material adverse change in the business, financial condition or Properties of
the Company and its Subsidiaries or impair the rights or benefits of the Lenders
under the Loan Documents.
(b) The Company shall cause each Material Subsidiary (other than,
subject to Section 4.1, Anicom Canada), whether now or hereafter
existing, to furnish the Agent (i) a Guaranty Agreement from such
Material Subsidiary in the form or substantially in the form attached hereto as
Exhibit E hereto or in such other form as is reasonably satisfactory to the
Agent and the Required Lenders as to form and substance, and (ii)<-1-
32>documentation acceptable to the Agent similar to in form and scope to that
described in Sections 7.2(a)(ii), 7.2(a)(iii), 7.2(a)(iv), 7.2(c), 7.2(d)
and 7.2(e) but relating to such Guarantor and its Guaranty Agreement.
Section 8.2. Maintenance of Properties. The Company will maintain,
preserve and keep its Properties in good repair, working order and condition
(ordinary wear and tear excepted) and will from time to time make all needful
and proper repairs, renewals, replacements, additions and betterments thereto so
that at all times the efficiency thereof shall be fully preserved and
maintained, and will cause each Subsidiary to do so in respect of Property owned
or used by it.
Section 8.3. Taxes and Assessments. The Company will duly pay and
discharge, and will cause each Subsidiary to duly pay and discharge, all taxes,
rates, assessments, fees and governmental
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charges upon or against it or its Properties, in each case before the same
become delinquent and before penalties accrue thereon, unless and to the extent
that the same are being contested in good faith and by appropriate proceedings
which prevent enforcement of the matter under contest and adequate reserves are
provided therefor.
Section 8.4. Insurance. The Company will insure and keep insured, and
will cause each Subsidiary to insure and keep insured, with good and responsible
insurance companies, all insurable Property owned by it which is of a character
usually insured by Persons similarly situated and operating like Properties
against loss or damage from such hazards and risks, and in such amounts, as are
insured by Persons similarly situated and operating like Properties; and the
Company will insure, and cause each Subsidiary to insure, such other hazards and
risks (including employers' and public liability risks) with good and
responsible insurance companies as and to the extent usually insured by Persons
similarly situated and conducting similar businesses. The Company will upon
request of the Agent and any Lender furnish a certificate setting forth in
summary form the nature and extent of the insurance maintained pursuant to this
Section.
Section 8.5. Financial Reports. (a) The Company will, and will cause
each Subsidiary to, maintain a standard system of accounting in accordance with
GAAP and will furnish to the Agent, each Lender and each of their duly
authorized representatives such information respecting the business and
financial condition of the Company and its Subsidiaries as the Agent or such
Lender may reasonably request; and without any request, will furnish to the
Lenders:
(i) within 50 days after the end of each of the first three
quarterly fiscal periods of the Company, a copy of the Company's Form
10-Q Report filed with the SEC;
(ii) within 120 days after the end of each fiscal year of the
Company, a copy of the Company's Form 10-K Report filed with the SEC,
including a copy of the annual audit report of the Company and the
Subsidiaries for such year with accompanying financial statements,
prepared by the Company and certified by PricewaterhouseCoopers LLP or
any other independent public accountants of recognized national
standing selected by the Company and satisfactory to the Required
Lenders, in accordance with GAAP;
(iii) not later than 10 days after the receipt thereof, a copy
of any final management letters on internal accounting controls for the
Company or any Subsidiary prepared by its independent public
accountants;
(iv) promptly after sending or filing thereof, copies of all
proxy statements, financial statements and reports which the Company
sends to its shareholders, and copies of all other regular, periodic
and special reports and all registration statements which the Company
files with the SEC or any successor thereto, or with any national
securities exchange;
(v) promptly after knowledge thereof shall have come to the
attention of any responsible officer of the Company, written notice of
any threatened or pending litigation or governmental proceeding or
labor controversy against the Company or any Subsidiary which, if
adversely determined, would materially and adversely effect the
financial condition, Properties, business or operations of the Company
or any Subsidiary or of the occurrence of any Default or Event of
Default hereunder; and
(vi) as soon as possible and in any event within 10 day
after the date on which
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(X) a Non-Material Subsidiary becomes a Material Subsidiary,
(Y) the Company or any Subsidiary establishes or acquires any
Subsidiary or (Z) any Subsidiary is dissolved or otherwise
merged out of existence, the Company shall furnish the Lenders an
updated Schedule 6.2 reflecting such event. (b) In the event the
Company is no longer required to file Form 10-Q and 10-K Reports
with the SEC, the Company need not furnish such Reports to the Lenders, but
shall nonetheless provide the Lenders the financial statements previously
contained in such Reports by the times required by subsections (a)(i) and (ii)
above.
(c) Each of the financial statements furnished to the Lenders pursuant
to clauses (a) or (b) of this Section shall be accompanied by a written
certificate in the form attached hereto as Exhibit B (the "Compliance
Certificate") signed by the chief financial officer of the Company to the effect
that to the best of the chief financial officer's knowledge and belief no
Default or Event of Default has occurred during the period covered by such
statements or, if any such Default or Event of Default has occurred during such
period, setting forth a description of such Default or Event of Default and
specifying the action, if any, taken by the Company to remedy the same. Such
certificate shall also set forth the calculations supporting such statements in
respect of Sections 8.6, 8.7, 8.8, 8.9 and 8.10 of this Agreement and
identify the Special Post-Closing Acquisition Liabilities then reflected in
computing compliance with such Section 8.6.
(d) Solely for the purposes of determining the Company's compliance
with the Existing Credit Agreement at the end of the third fiscal quarter of the
Company ended September 30, 1998, the Company's compliance with the
Existing Credit Agreement during such period shall be determined as if all
references in the Existing Credit Agreement to the Fiscal 1997 Charges (as
identified and defined therein) included not only such Fiscal 1997 Charges but
also the Fiscal 1998 Charges identified and defined in this Agreement.
Section 8.6. Current Ratio. The Company will at all times maintain a
Current Ratio of not less than 1.40 to 1.00.
Section 8.7. Interest Coverage Ratio. The Company will, as of the last
day of each fiscal quarter of the Company, maintain the ratio (the "Interest
Coverage Ratio") of EBIT for the four fiscal quarters of the Company then ended
to Interest Expense for the same four fiscal quarters then ended of not less
than 2.0 to 1.0; provided, however, that if an Acquisition permitted by
Section 8.14 hereof occurs at any time during such period, the Interest
Coverage Ratio shall be calculated on a pro forma basis to include the EBIT and
Interest Expense of the Person or assets so acquired for the entire period as if
such Acquisition had taken place on the first day of such period, all as
reasonably calculated by the Company (the expected cost savings relating to the
EBIT of the Person or assets so acquired may be incorporated in these
calculations to the extent they are readily quantifiable and verifiable, in a
manner consistent with the Company's prior pro forma calculations included with
SEC filings in connection with its prior acquisitions).
Section 8.8. Tangible Net Worth. The Company will, as of the last day
of each fiscal quarter of the Company, maintain Tangible Net Worth at not less
than the Minimum Required Amount. For purposes of this Section 8.8, the
term "Minimum Required Amount" shall mean, as of any time, the sum of: (i)
$25,000,000; plus (ii) fifty percent (50%) of Consolidated Net Income
for each fiscal quarter of the Company (if Consolidated Net Income for such
fiscal quarter is
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positive) completed on or after April 1, 1997.
Section 8.9. Debt to Earnings Ratio. The Company will, as of the last
day of each fiscal quarter of the Company, maintain the Debt to Earnings Ratio
at not greater than 3.5 to 1.0; provided, however, that if an Acquisition
permitted by Section 8.14 hereof occurs at any time during the four
fiscal quarter period over which EBITDA is measured to determine the Debt to
Earnings Ratio, such Debt to Earnings Ratio shall be calculated on a pro forma
basis to include the EBITDA of the Person or assets so required for the entire
period as if such Acquisition had taken place on the first day of such period,
all as reasonably calculated by the Company (the expected cost savings relating
to the EBITDA of the Person or assets so acquired may be incorporated in these
calculations to the extent they are readily quantifiable and verifiable and
based on reasonable assumptions).
Section 8.10. Leverage Ratio. The Company will, as of the last day of
each fiscal quarter of the Company, maintain the Leverage Ratio at not more than
0.40 to 1.00.
Section 8.11. Indebtedness for Borrowed Money. The Company will not, nor
will it permit any Subsidiary to, issue, incur, assume, create or have
outstanding any Indebtedness for Borrowed Money; provided, however, that the
foregoing provisions shall not restrict nor operate to prevent:
(a) the indebtedness of the Company on the Notes and other
Obligations;
(b) Capitalized Lease Obligations in an aggregate amount
not to exceed $1,500,000 at any one time outstanding;
(c) Capitalized Lease Obligations of any Subsidiary which has
become a Subsidiary as a result of an Acquisition permitted by
Section 8.14 hereof if such Capitalized Lease Obligation was
entered into prior to the Acquisition of such Subsidiary and was not
created in contemplation of such Acquisition;
(d) purchase money indebtedness secured by Liens permitted by
Section 8.12(d) hereof in an aggregate amount not to exceed
$2,000,000 at any one time outstanding;
(e) purchase money indebtedness (other than purchase money
indebtedness permitted by Section 8.11(d) hereof) of any Subsidiary
which has become a Subsidiary as a result of an Acquisition permitted
by Section 8.14 hereof if such indebtedness was created prior to
the Acquisition of such Subsidiary and was not created in contemplation
of such Acquisition;
(f) the currently outstanding indebtedness described on
Exhibit C hereof if and so long as such indebtedness is
Subordinated Indebtedness;
(g) unsecured Subordinated Indebtedness incurred to finance
Acquisitions permitted by Section 8.14 hereof;
(h) the Canadian Debt;
(i) indebtedness under the Short-Term Credit Agreement if
and so long as the Revolving Credit Commitments are fully utilized
hereunder; and
(j) indebtedness not otherwise permitted by this Section
aggregating not more than $500,000 at any one time outstanding.
Section 8.12. Liens. The Company will not, nor will it permit any
Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by the Company or any Subsidiary; provided, however, that this
Section shall not apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's
compensation,
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unemployment insurance, old age benefits, social security obligations,
taxes, assessments, statutory obligations or other similar charges,
good faith cash deposits in connection with tenders, contracts or
leases to which the Company or any Subsidiary is a party or other cash
deposits required to be made in the ordinary course of business,
provided in each case that the obligation is not for borrowed money and
that the obligation secured is not overdue or, if overdue, is being
contested in good faith by appropriate proceedings which prevent
enforcement of the matter under contest and adequate reserves have been
established therefor;
(b) mechanics', workmen's, materialmen's, landlords',
carriers', or other similar Liens arising in the ordinary course of
business with respect to obligations which are not due or which are
being contested in good faith by appropriate proceedings which prevent
enforcement of the matter under contest;
(c) the pledge of assets for the purpose of securing an
appeal, stay or discharge in the course of any legal proceeding,
provided that the aggregate amount of liabilities of the Company and
its Subsidiaries secured by a pledge of assets permitted under this
clause, including interest and penalties thereon, if any, shall not be
in excess of $1,000,000 at any one time outstanding; and
(d) purchase money Liens securing indebtedness permitted by
Section 8.11(d) hereof in respect of equipment now owned or
hereafter acquired by the Company or any Subsidiary (not extending to
any other Property), or Liens on equipment so acquired (not extending
to any other Property) existing at the time of acquisition thereof, or
renewals, extensions and refundings of any such Liens (not extending to
any other Property), provided that the principal amount of indebtedness
secured by any such Lien shall not exceed 80% of the cost or fair
market value, whichever is less, of the Property covered by such Lien
at the time of the creation thereof or the acquisition of such
Property.
Section 8.13. Investments, Loans, Advances and Guaranties. The Company
will not, nor will it permit any Subsidiary to, directly or indirectly, make,
retain or have outstanding any investments (whether through purchase of stock or
obligations or otherwise) in, or loans or advances (other than for travel
advances and other similar cash advances made to employees in the ordinary
course of business) to, any other Person, or be or become liable as endorser,
guarantor, surety or otherwise for any debt, obligation or undertaking of any
other Person, or otherwise agree to provide funds for payment of the obligations
of another, or supply funds thereto or invest therein or otherwise assure a
creditor of another against loss or apply for or become liable to the issuer of
a letter of credit which supports an obligation of another, or subordinate any
claim or demand it may have to the claim or demand of any other Person;
provided, however, that the foregoing provisions shall not apply to nor operate
to prevent:
(a) investments in direct obligations of the United States of
America or of any agency or instrumentality thereof whose obligations
constitute full faith and credit obligations of the United States of
America, provided that any such obligations shall mature within one
year of the date of issuance thereof;
(b) investments in commercial paper (including as such,
investments in short-term corporate borrowings against tax-advantaged
preferred stock) rated at least P1
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by Xxxxx'x Investors Services, Inc. and at least A1 by Standard &
Poor's Corporation maturing within 270 days of the date of issuance
thereof;
(c) investments in certificates of deposit issued by any
United States commercial Agent having capital and surplus of not less
than $100,000,000 which have a maturity of one year or less;
(d) endorsement of items for deposit or collection of
commercial paper received in the ordinary course of business;
(e) Acquisitions of Subsidiaries permitted by Section
8.14 hereof; (f) investments in obligations of a state, a
territory, or a possession of the United
States, or any political subdivision of any of the foregoing or of the
District of Columbia as described in Section 103(a) of the Code
if these investments are graded in the highest major grade as
determined by at least one national rating service or are credit
enhanced by credit enhancers whose credit is rated not less than A-1 by
Standard & Poor's Corporation or P-1 by Xxxxx'x Investors Services,
Inc.;
(g) the Company's guaranty of indebtedness of Wholly-Owned
Subsidiaries incurred to finance Acquisitions permitted by Section
8.14 hereof if and so long as such guaranty is Subordinated
Indebtedness;
(h) guaranties by Subsidiaries of the Obligations;
(i) the Put/Call Agreement if and so long as the Canadian
Debt is not held by an Affiliate of the Company; and
(j) investments, loans, advances and guarantees not otherwise
permitted by this Section aggregating not more than $2,000,000 at any
one time outstanding.
In determining the amount of investments, loans, advances and guarantees
permitted under this Section, investments shall always be taken at the original
cost thereof (regardless of any subsequent appreciation or depreciation
therein), loans and advances shall be taken at the principal amount thereof then
remaining unpaid and guarantees shall be taken at the amount of obligations
guaranteed thereby.
Section 8.14. Acquisitions. The Company will not, and will not permit
any Subsidiary to, make or commit to make any Acquisitions; provided however,
that the Company and any Wholly-Owned Subsidiary each may make Acquisitions if:
(i) the Company or such Subsidiary acquires by reason of such Acquisition
either (x) assets used or useful in a business which is the same or
similar to that currently conducted by the Company or (y) the capital
stock of a corporation or any other equity interest of any partnership or other
firm engaged in such a same or similar business and after giving effect to such
Acquisition, the corporation, partnership or other such firm so acquired becomes
a Wholly-Owned Subsidiary; (ii) no Default or Event of Default exists or
would exist at the time of or after giving effect to such Acquisition; (iii)
the Company provides the Lenders a statement, certified as true and correct
by its chief financial officer, which represents and warrants that, after giving
effect to such Acquisition, the Company will, on a pro forma basis, continue to
comply through the Termination Date with Sections 8.6, 8.7, 8.8, 8.9,
8.10 and 8.11 hereof, such certificate to be accompanied by supporting financial
projections based on reasonable assumptions; (iv) the Board of Directors
or other governing body of such Person whose property or voting stock is being
so acquired has approved the terms of such Acquisition; and (v) the
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Company has provided the Lenders such financial and other information regarding
the Person whose property or voting stock is being so acquired, including
historical financial statements, and a description of such Person, as the Agent
or any Lender may reasonably request.
Section 8.15. Sales and Leasebacks. The Company will not, nor will it
permit any Subsidiary to, enter into any arrangement with any bank, insurance
company or any other lender or investor providing for the leasing by the Company
or any Subsidiary of any Property theretofore owned by it and which has been or
is to be sold or transferred by such owner to such lender or investor.
Section 8.16. Dividends and Certain Other Restricted Payments. (a)
Restricted Dividends. The Company will not during any fiscal year declare or pay
any dividends on or make any other distributions in respect of any class or
series of its capital stock (other than dividends payable solely in its capital
stock) (each such non-excepted declaration or payment of dividends being herein
collectively called a "Restricted Payment") if at the time of such Restricted
Payment or immediately after giving effect thereto, any Event of Default or
Default shall occur or be continuing.
(b) Restricted Repayments. The Company will not during any fiscal year
directly or indirectly purchase, redeem or otherwise acquire or retire any of
its capital stock (except out of the proceeds of, or in exchange for, a
substantially concurrent issue and sale of its capital stock) (each such
non-exempted purchase, redemption, retirement and distribution in respect to
capital stock being herein collectively called a "Restricted Redemption") if at
the time of such Restricted Redemption or immediately after giving effect
thereto, any Event of Default or Default shall occur or be continuing; provided
that the Company shall not directly or indirectly purchase, redeem or otherwise
acquire or retire any of its capital stock (except out of the proceeds of, or in
exchange for, a substantially concurrent issue and sale of its capital stock) in
excess of 5% of its capital stock during any fiscal year.
Section 8.17. Mergers, Consolidations and Sales. The Company will not,
nor will it permit any Subsidiary to, be a party to any merger or consolidation,
or sell, transfer, lease or otherwise dispose of all or any substantial part of
its Property (except for sales of inventory in the ordinary course of business),
or in any event sell or discount (with or without recourse) any of its notes or
accounts receivable; provided, however, that this Section shall not apply to nor
operate to prohibit (i) the merger of any Subsidiary acquired as a result
of an Acquisition permitted by Section 8.14 hereof with and into the
Company or any Wholly-Owned Subsidiary or (ii) the sale of assets which
are no longer used or useful in the ordinary course of the Company's business. A
sale or disposition of assets of the Company shall be deemed substantial for the
foregoing purposes (i) if such assets are sold below the book value of
such assets, and such assets constituted 10% or more of the total assets of the
Company or (ii) such assets constituted 20% or more of the total assets
of the Company.
Section 8.18. ERISA. The Company will, and will cause each Subsidiary
to, promptly pay and discharge all obligations and liabilities arising under
ERISA of a character which if unpaid or unperformed might result in the
imposition of a Lien against any of its Properties. The Company will, and will
cause each Subsidiary to, promptly notify the Agent of (i) the occurrence
of any reportable event (as defined in ERISA) with respect to a Plan, (ii)
receipt of any notice from the PBGC of its intention to seek termination of
any Plan or appointment of a trustee therefor, (iii) its
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intention to terminate or withdraw from any Plan, and (iv) the occurrence
of any event with respect to any Plan which would result in the incurrence by
the Company or any Subsidiary of any material liability, fine or penalty, or any
material increase in the contingent liability of the Company or any Subsidiary
with respect to any post-retirement Welfare Plan benefit.
Section 8.19. Compliance with Laws. The Company will, and will cause
each Subsidiary to, comply in all respects with the requirements of all federal,
state and local laws, rules, regulations, ordinances and orders applicable to or
pertaining to the Properties or business operations of the Company or any
Subsidiary, non-compliance with which could have a material adverse effect on
the financial condition, Properties, business or operations of the Company or
any Subsidiary or could result in a Lien upon any of their Property.
Section 8.20. Burdensome Contracts With Affiliates. The Company will
not, nor will it permit any Subsidiary to, enter into any contract, agreement or
business arrangement with any of its Affiliates on terms and conditions which
are less favorable to the Company or such Subsidiary than would be usual and
customary in similar contracts, agreements or business arrangements between
Persons not affiliated with each other, other than (i) any contract, agreement
or business arrangement with any Person which becomes a Subsidiary as a result
of an Acquisition permitted by Section 8.14 hereof after the date hereof if such
contract, agreement or arrangement was entered into prior to the acquisition of
such Subsidiary and such contract, agreement or arrangement was not created in
contemplation of such Acquisition, (ii) the Put/Call Agreement and
(iii) (if the Canadian Debt is purchased by an Affiliate of the Company)
the contracts and agreements constituting the Canadian Debt.
Section 8.21. No Changes in Fiscal Year. Neither the Company nor any
Subsidiary will change its fiscal year from its present basis without the prior
written consent of the Agent.
Section 8.22. Inspection and Field Audit. The Company will, and will
cause each Subsidiary to, permit the Agent and its duly authorized
representatives and agents to visit and inspect any of the Properties, corporate
books and financial records of the Company and each Subsidiary, to examine and
make copies of the books of accounts and other financial records of the Company
and each Subsidiary, and to discuss the affairs, finances and accounts of the
Company and each Subsidiary with, and to be advised as to the same by, its
officers and independent public accountants (and by this provision the Company
authorizes such accountants to discuss with the Agent the finances and affairs
of the Company and of each Subsidiary) with reasonable notice to the Company and
at such reasonable times and reasonable intervals as the Agent may designate.
After the occurrence of an Event of Default, the Company shall pay for all costs
and expenses incurred by the Agent in connection with any such visitation or
inspection.
Section 8.23. Formation of Subsidiaries. Except for existing
Subsidiaries designated on Schedule 6.2 hereto and Subsidiaries acquired
in Acquisitions or formed to effect Acquisitions in each case permitted by
Section 8.14 hereof, the Company will not, and will not permit any
Subsidiary to, form or acquire any Subsidiary without the prior written consent
of the Agent.
Section 8.24. Subordinated Indebtedness. The Company shall not, and shall
not permit any Subsidiary to:
(a) amend or modify any of the terms or conditions relating
to any Subordinated Indebtedness;
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(b) make any voluntary prepayment on, or effect any voluntary
redemption of, any Subordinated Indebtedness (other than the prepayment
by Anicom Canada of certain indebtedness pursuant to the Put/Call
Agreement) if any Loans are outstanding at the time of or after giving
effect to such prepayment or redemption; or
(c) make any other payment on account of any Subordinated
Indebtedness which is prohibited under the terms of any instrument or
agreement subordinating such indebtedness to the Obligations.
Section 8.25. Use of Proceeds. The proceeds of the initial advance
hereunder shall be used to pay the Company's indebtedness under the Existing
Credit Agreement.
Section 8.26. Year 2000 Compliance. The Company shall take all
actions necessary and commit adequate resources to assure that its computerbased
and other systems (and those of all Subsidiaries) are able to effectively
process dates, including dates before, on and after January 1, 2000,
without experiencing any Year 2000 Problem that could cause a material
adverse effect on the business or financial affairs of the Company (or of the
Company and its Subsidiaries taken on a consolidated basis). At the request of
the Agent, the Company will provide the Agent with written assurances and
substantiations (including, but not limited to, the results of internal or
external audit reports prepared in the ordinary course of business) reasonably
acceptable to the Agent as to the capability of the Company and its Subsidiaries
to conduct its and their businesses and operations before, on and after
January 1, 2000, without experiencing a Year 2000 Problem causing
a material adverse effect on the business or financial affairs of the Company
(or of the Company and its Subsidiaries taken on a consolidated basis).
Section 8.27. European Monetary Union. (a) If, as a result of the
EMU Commencement, (i) any Alternative Currency ceases to be lawful
currency of the state issuing the same and is replaced by the Euro or (ii)
any Alternative Currency and the Euro are at the same time both recognized by
the central bank or comparable governmental authority of the state issuing such
currency as lawful currency of such state, then any amount payable hereunder by
any party hereto in such Alternative Currency (including, without limitation,
any Loan to be made under this Agreement) shall instead be payable in the Euro
and the amount so payable shall be determined by redenominating or converting
such amount into the Euro at the exchange rate officially fixed by the European
Central Bank for the purpose of implementing the EMU, provided, that to the
extent any EMU Legislation provides that an amount denominated either in the
Euro or in the applicable Alternative Currency can be paid either in Euros or in
the applicable Alternative Currency, each party to this Agreement shall be
entitled to pay or repay such amount in Euros or in the applicable Alternative
Currency. Prior to the occurrence of the event or events described in clause<-1-
32>(i) or (ii) of the preceding sentence, each amount payable hereunder in any
such Alternative Currency will, except as otherwise provided herein, continue to
be payable only in that Alternative Currency.
(b) The Company shall from time to time, at the request of the Agent,
pay to the Agent for the account of each Lender the amount of any cost or
increased cost incurred by, or of any reduction in any amount payable to or in
the effective return on its capital to, or of interest or other return foregone
by, such Lender or any holding company of such Lender as a result of the
introduction of, changeover to or operation of the Euro in any applicable state
to the extent attributable to such Lender's obligations hereunder or for the
credit which is the subject matter hereof.
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(c) With respect to the payment of any amount denominated in the Euro
or in any Alternative Currency, the Agent shall not be liable to the Company or
any of the Lenders in any way whatsoever for any delay, or the consequences of
any delay, in the crediting to any account of any amount required by this
Agreement to be paid by the Agent if the Agent shall have taken all relevant
steps to achieve, on the date required by this Agreement, the payment of such
amount in immediately available, freely transferable, cleared funds (in the Euro
Unit or, as the case may be, in any Alternative Currency) to the account with
the bank in the principal financial center in the Euro Member which the Company
or, as the case may be, any Lender shall have specified for such purpose. In
this paragraph (c), "all relevant steps" means all such steps as may be
prescribed from time to time by the regulations or operating procedures of such
clearing or settlement system as the Agent may from time to time determine for
the purpose of clearing or settling payments of the Euro.
(d) If the basis of accrual of interest or fees expressed in this
Agreement with respect to the currency of any state that becomes a Euro Member
shall be inconsistent with any convention or practice in the London interbank
market for the basis of accrual of interest or fees in respect of the Euro, such
convention or practice shall replace such expressed basis effective as of and
from the date on which such state becomes a Euro Member; provided, that if any
Loan in the currency of such state is outstanding immediately prior to such
date, such replacement shall take effect, with respect to such Loan, at the end
of the then current Interest Period.
(e) In addition, this Agreement (including, without limitation, the
definition of LIBOR Portions) will be amended to the extent determined by the
Agent (acting reasonably and in consultation with the Company) to be necessary
to reflect such EMU Commencement and change in currency and to put the Lenders
and the Company in the same position, so far as possible, that they would have
been in if such implementation and change in currency had not occurred. Except
as provided in the foregoing provisions of this Section 8.27, no such
implementation or change in currency nor any economic consequences resulting
therefrom shall (i) give rise to any right to terminate prematurely,
contest, cancel, rescind, alter, modify or renegotiate the provisions of this
Agreement or (ii) discharge, excuse or otherwise affect the performance
of any obligations of the Company under this Agreement, any Notes or any other
Loan Documents.
SECTION 9. Events of Default and Remedies.
Section 9.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" hereunder:
(a) default in the payment when due of all or any part of the
principal of or interest on any Note (whether at the stated maturity
thereof or at any other time provided for in this Agreement) or of any
reimbursement obligation owing under any Application or of any fee or
other Obligation payable by the Company hereunder or under any other
Loan Document; or
(b) default in the observance or performance of any covenant
set forth in Sections 8.5, 8.6, 8.7, 8.8, 8.9, 8.10, 8.11, 8.13,
8.14, 8.15, 8.16, 8.17, 8.24 or 8.25 hereof; or
(c) default in the observance or performance of any other
provision hereof or of any other Loan Document which is not remedied
within ten (10) days after the earlier of (i) the date on
which such failure shall first become known to any officer of the
Company
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or (ii) written notice thereof is given to the Company by the Agent or
any Lender; or
(d) any representation or warranty made by the Company
herein or in any other Loan Document, or in any statement or
certificate furnished by it pursuant hereto or thereto, or in
connection with any extension of credit made hereunder,
proves untrue in any material respect as of the
date of the issuance or making thereof; or
(e) any event occurs or condition exists (other than those
described in subsections (a) through (d) above) which is
specified as an event of default under any of the other Loan Documents,
or any of the Loan Documents shall for any reason not be or shall cease
to be in full force and effect, or any of the Loan Documents is
declared to be null and void; or
(f) default shall occur under any Indebtedness for Borrowed
Money issued, assumed or guaranteed by the Company or any Subsidiary,
or under any indenture, agreement or other instrument under which the
same may be issued, and such default shall continue for a period of
time sufficient to permit the acceleration of the maturity of any such
Indebtedness for Borrowed Money (whether or not such maturity is in
fact accelerated), or any such Indebtedness for Borrowed Money shall
not be paid when due (whether by lapse of time, acceleration or
otherwise); or
(g) any judgment or judgments, writ or writs, or warrant or
warrants of attachment, or any similar process or processes in an
aggregate amount in excess of $1,000,000 in excess of amounts covered
by insurance from an insurer which has acknowledged its liability
thereon shall be entered or filed against the Company or any Subsidiary
or against any of their Property and which remains unvacated, unbonded,
unstayed or unsatisfied for a period of sixty (60) days; or
(h) the Company or any member of its Controlled Group shall
fail to pay when due an amount or amounts aggregating in excess
$500,000 which it shall have become liable to pay to the PBGC or to a
Plan under Title IV of ERISA; or notice of intent to terminate a
Plan or Plans having aggregate Unfunded Vested Liabilities in excess of
$500,000 (collectively, a "Material Plan") shall be filed under
Title IV of ERISA by the Company or any other member of its
Controlled Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title
IV of ERISA to terminate or to cause a trustee to be appointed to
administer any Material Plan or a proceeding shall be instituted by a
fiduciary of any Material Plan against the Company or any member of its
Controlled Group to enforce Section 515 or 4219(c)(5) of ERISA
and such proceeding shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any Material
Plan must be terminated; or
(i) dissolution or termination of the existence of the
Company or any Subsidiary; or
(j) the Company or any Subsidiary shall (i) have
entered involuntarily against it an order for relief under the United
States Bankruptcy Code, as amended, (ii) not pay, or admit in
writing its inability to pay, its debts generally as they become due,
(iii) make an assignment for the benefit of creditors, (iv)
apply for, seek, consent to, or acquiesce in, the
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appointment of a receiver, custodian, trustee, examiner, liquidator or
similar official for it or any substantial part of its Property,
(v) institute any proceeding seeking to have entered against it
an order for relief under the United States Bankruptcy Code, as
amended, to adjudicate it insolvent, or seeking dissolution, winding
up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed
against it, (vi) take any corporate action in furtherance of any
matter described in parts (i) through (v) above, or (vii)
fail to contest in good faith any appointment or proceeding
described in Section 9.1(k) hereof; or
(k) a custodian, receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Company or any Subsidiary
or any substantial part of any of their Property, or a proceeding
described in Section 9.1(j)(v) shall be instituted against the
Company or any Subsidiary, and such appointment continues undischarged
or such proceeding continues undismissed or unstayed for a period of 60
days.
Section 9.2. Non-Bankruptcy Defaults. When any Event of Default described
in subsection (a) through (i), both inclusive, of Section 9.1 has
occurred and is continuing, the Agent shall, upon the request of the Required
Lenders, by notice to the Company, take one or more of the following actions:
(a) terminate the obligations of the Lenders to extend any
further credit hereunder on the date (which may be the date thereof)
stated in such notice;
(b) declare the principal of and the accrued interest on the
Notes to be forthwith due and payable and thereupon the Notes,
including both principal and interest and all fees, charges and other
Obligations payable hereunder and under the other Loan Documents, shall
be and become immediately due and payable without further demand,
presentment, protest or notice of any kind; and
(c) enforce any and all rights and remedies available to it
under the Loan Documents or applicable law.
Section 9.3. Bankruptcy Defaults. When any Event of Default described
in subsection (j) or (k) of Section 9.1 has occurred and is
continuing, then the Notes, including both principal and interest, and all fees,
charges and other Obligations payable hereunder and under the other Loan
Documents, shall immediately become due and payable without presentment, demand,
protest or notice of any kind, and the obligations of the Lenders to extend
further credit pursuant to any of the terms hereof shall immediately terminate.
In addition, the Agent may exercise any and all remedies available to it under
the Loan Documents or applicable law.
Section 9.4. Collateral for Undrawn Letters of Credit. When any Event
of Default, other than an Event of Default described in subsection (j) or
(k) of Section 9.1, has occurred and is continuing, the Company shall,
upon demand of the Agent (which demand shall be made upon the request of the
Required Lenders), and when any Event of Default described in subsection
(j) or (k) of Section 9.1 has occurred the Company shall, without
notice or demand from the Agent, immediately pay to the Agent the full amount of
each Letter of Credit then outstanding, the Company agreeing to immediately make
such payment and acknowledging and agreeing that the
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Agent and the Lenders would not have an adequate remedy at law for failure of
the Company to honor any such demand and that the Agent and the Lenders shall
have the right to require the Company to specifically perform such undertaking
whether or not any draws have been made under any such Letters of Credit.
SECTION 10. The Agent.
Section 10.1. Appointment and Authorization. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers hereunder and under the other Loan Documents as are
designated to the Agent by the terms hereof and thereof together with such
powers as are reasonably incidental thereto. The Lenders expressly agree that
the Agent is not acting as a fiduciary of the Lenders in respect of the Loan
Documents, the Company or otherwise, and nothing herein or in any of the other
Loan Documents shall result in any duties or obligations on the Agent or any of
the Lenders except as expressly set forth herein. The Agent may resign at any
time by sending 20 days prior written notice to the Company and the Lenders. In
the event of any such resignation, the Required Lenders may appoint a new agent
after consultation with the Company, which shall succeed to all the rights,
powers and duties of the Agent hereunder and under the other Loan Documents. Any
resigning Agent shall be entitled to the benefit of all the protective
provisions hereof with respect to its acts as an agent hereunder, but no
successor Agent shall in any event be liable or responsible for any actions of
its predecessor. If the Agent resigns and no successor is appointed, the rights
and obligations of such Agent shall be automatically assumed by the Required
Lenders and the Company shall be directed to make all payments due each Lender
hereunder directly to such Lender.
Section 10.2. Rights as a Lender. The Agent has and reserves all of the
rights, powers and duties hereunder and under the other Loan Documents as any
Lender may have and may exercise the same as though it were not the Agent and
the terms "Lender" or "Lenders" as used herein and in all of such documents
shall, unless the context otherwise expressly indicates, include the Agent in
its individual capacity as a Lender.
Section 10.3. Standard of Care. The Lenders acknowledge that they have
received and approved copies of the Loan Documents and such other information
and documents concerning the transactions contemplated and financed hereby as
they have requested to receive and/or review. The Agent makes no representations
or warranties of any kind or character to the Lenders with respect to the
validity, enforceability, genuineness, perfection, value, worth or
collectibility hereof or of the Notes or any of the other Obligations or of any
of the other Loan Documents. Neither the Agent nor any director, officer,
employee, agent or representative thereof (including any security trustee
therefor) shall in any event be liable for any clerical errors or errors in
judgment, inadvertence or oversight, or for action taken or omitted to be taken
by it or them hereunder or under the other Loan Documents or in connection
herewith or therewith except for its or their own gross negligence or willful
misconduct. The Agent shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, certificate,
warranty, instruction or statement (oral or written) of anyone (including anyone
in good faith believed by it to be authorized to act on behalf of the Company),
unless it has actual knowledge of the untruthfulness of same. The Agent may
execute any of its duties hereunder by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Lenders for the default or
misconduct of any such agents or
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attorneys-in-fact selected with reasonable care. The Agent shall be entitled to
advice of counsel concerning all matters pertaining to the agencies hereby
created and its duties hereunder, and shall incur no liability to anyone and be
fully protected in acting upon the advice of such counsel. The Agent shall be
entitled to assume that no Default or Event of Default exists unless notified to
the contrary by a Lender. The Agent shall in all events be fully protected in
acting or failing to act in accord with the instructions of the Required
Lenders. The Agent shall in all cases be fully justified in failing or refusing
to act hereunder unless it shall be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by the
Agent by reason of taking or continuing to take any such action. The Agent may
treat the owner of any Note as the holder thereof until written notice of
transfer shall have been filed with the Agent signed by such owner in form
satisfactory to the Agent. Each Lender acknowledges that it has independently
and without reliance on the Agent or any other Lender and based upon such
information, investigations and inquiries as it deems appropriate made its own
credit analysis and decision to extend credit to the Company. It shall be the
responsibility of each Lender to keep itself informed as to the creditworthiness
of the Company and the Agent shall have no liability to any Lender with respect
thereto.
Section 10.4. Costs and Expenses. Each Lender agrees to reimburse the
Agent for all costs and expenses suffered or incurred by the Agent or any
security trustee in performing its duties hereunder and under the other Loan
Documents, or in the exercise of any right or power imposed or conferred upon
the Agent hereby or thereby, to the extent that the Agent is not promptly
reimbursed for same by the Company, all such costs and expenses to be borne by
the Lenders ratably in accordance with the amounts of their respective Revolving
Credit Commitments.
Section 10.5. Indemnity. The Lenders shall ratably indemnify and hold
the Agent, and its directors, officers, employees, agents and representatives
(including as such any security trustee therefor) harmless from and against any
liabilities, losses, costs and expenses suffered or incurred by them hereunder
or under the other Loan Documents or in connection with the transactions
contemplated hereby or thereby, regardless of when asserted or arising, except
to the extent they are promptly reimbursed for the same by the Company and
except to the extent that any event giving rise to a claim was caused by the
gross negligence or willful misconduct of the party seeking to be indemnified.
SECTION 11. Miscellaneous.
Section 11.1. Withholding Taxes.
(a) Payments Free of Withholding. Except as otherwise required by law
and subject to Section 11.1(b) hereof, each payment by the Company under
this Agreement and under any other Loan Document shall be made without
withholding for or on account of any present or future taxes (other than overall
net income taxes on the recipient) imposed by or within the jurisdiction in
which the Company is domiciled, any jurisdiction from which the Company makes
any payment, or (in each case) any political subdivision or taxing authority
thereof or therein. If any such withholding is so required, the Company shall
make the withholding, pay the amount withheld to the appropriate governmental
authority before penalties attach thereto or interest accrues thereon and
forthwith pay such additional amount as may be necessary to ensure that the net
amount actually received by each Lender and the Agent free and clear of such
taxes (including such taxes on such additional amount)
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is equal to the amount which that Lender or the Agent (as the case may be) would
have received had such withholding not been made. If the Agent or any Lender
pays any amount in respect of any such taxes, penalties or interest, the Company
shall reimburse the Agent or such Lender for that payment on demand in the
currency in which such payment was made. If the Company pays any such taxes,
penalties or interest, it shall deliver official tax receipts evidencing that
payment or certified copies thereof to the Lender or Agent on whose account such
withholding was made (with a copy to the Agent if not the recipient of the
original) on or before the thirtieth day after payment.
(b) U.S. Withholding Tax Exemptions. Each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the
Code) shall submit to the Company and the Agent on or before the earlier of the
date the initial Borrowing is made hereunder and 30 days after the date hereof,
two duly completed and signed copies of either Form 1001 (relating to such
Lender and entitling it to a complete exemption from withholding under the Code
on all amounts to be received by such Lender, including fees, pursuant to the
Loan Documents and the Loans) or Form 4224 (relating to all amounts to be
received by such Lender, including fees, pursuant to the Loan Documents and the
Loans) of the United States Internal Revenue Service. Thereafter and from time
to time, each Lender shall submit to the Company and the Agent such additional
duly completed and signed copies of one or the other of such Forms (or such
successor forms as shall be adopted from time to time by the relevant United<-1-
32>States taxing authorities) as may be (i) requested by the Company in a
written notice, directly or through the Agent, to such Lender and (ii)<-1-
32>required under then-current United States law or regulations to avoid or
reduce United States withholding taxes on payments in respect of all amounts to
be received by such Lender, including fees, pursuant to the Loan Documents or
the Loans.
(c) Inability of Lenders to Submit Forms. If any Lender determines, as
a result of any change in applicable law, regulation or treaty, or in any
official application or interpretation thereof, that it is unable to submit to
the Company or the Agent any form or certificate that such Lender is obligated
to submit pursuant to subsection (b) of this Section 11.1 or that
such Lender is required to withdraw or cancel any such form or certificate
previously submitted or any such form or certificate otherwise becomes
ineffective or inaccurate, such Lender shall promptly notify the Company and
Agent of such fact and the Lender shall to that extent not be obligated to
provide any such form or certificate and will be entitled to withdraw or cancel
any affected form or certificate, as applicable.
Section 11.2. Non-Business Days. If any payment hereunder becomes due
and payable on a day which is not a Business Day, the due date of such payment
shall be extended to the next succeeding Business Day on which date such payment
shall be due and payable. In the case of any payment of principal falling due on
a day which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in effect,
which accrued amount shall be due and payable on the next scheduled date for the
payment of interest.
Section 11.3. No Waiver, Cumulative Remedies. No delay or failure on the
part of any Lender or on the part of any holder of any of the Obligations in the
exercise of any power or right shall operate as a waiver thereof or as an
acquiescence in any default, nor shall any single or partial exercise of any
power or right preclude any other or further exercise thereof or the exercise of
any other power or right. The rights and remedies hereunder of the Lenders and
any of the holders of
-50-
the Obligations are cumulative to, and not exclusive of, any rights or remedies
which any of them would otherwise have.
Section 11.4. Waivers, Modifications and Amendments. Any provision
hereof or of any of the other Loan Documents may be amended, modified, waived or
released and any Default or Event of Default and its consequences may be
rescinded and annulled upon the written consent of the Required Lenders;
provided, however, that without the consent of all Lenders no such amendment,
modification or waiver shall increase the amount or extend the term of any
Lender's Revolving Credit Commitment or reduce the amount of any principal of or
interest rate applicable to, or extend the maturity of, any Obligation owed to
it or reduce the amount of the fees to which it is entitled hereunder or change
this Section or change the definition of "Required Lenders" or change the number
of Lenders required to take any action hereunder or under any of the other Loan
Documents or permit the Company to assign any of its rights hereunder or release
any Guarantor from its obligations under its Guaranty. No amendment,
modification or waiver of the Agent's protective provisions shall be effective
without the prior written consent of the Agent.
Section 11.5. Costs and Expenses. The Company agrees to pay on demand
the costs and expenses of the Agent in connection with the negotiation,
preparation, execution and delivery of this Agreement, the other Loan Documents
and the other instruments and documents to be delivered hereunder or thereunder,
and in connection with the transactions contemplated hereby or thereby, and in
connection with any consents hereunder or waivers or amendments hereto or
thereto, including the fees and expenses of Messrs. Xxxxxxx and Xxxxxx, counsel
for the Agent, with respect to all of the foregoing (whether or not the
transactions contemplated hereby are consummated; provided, however, in no event
shall the Company's obligation to reimburse the Agent for such fees (exclusive
of such counsel's expenses and disbursements) in connection with the
negotiation, preparation, execution and delivery of this Agreement and the other
Loan Documents to be delivered as a condition precedent to initial funding of
the credit contemplated hereby exceed $20,000. The Company further agrees to pay
to Agent and the Lenders and any other holders of the Obligations all costs and
expenses (including court costs, the allocated costs of inhouse counsel and
outside attorneys' fees), if any, incurred or paid by the Agent, the Lenders or
any other holders of the Obligations in connection with any Default or Event of
Default or in connection with the enforcement of this Agreement or any of the
other Loan Documents or any other instrument or document delivered hereunder or
thereunder. The Company further agrees to indemnify and save the Lenders, the
Agent and any security trustee for the Lenders harmless from any and all
liabilities, losses, costs and expenses incurred by the Lenders or the Agent in
connection with any action, suit or proceeding brought against the Agent, or any
security trustee or any Lender by any Person (but excluding attorneys' fees for
litigation solely between the Lenders to which the Company is not a party) which
arises out of the transactions contemplated or financed hereby or out of any
action or inaction by the Agent, any security trustee or any Lender hereunder or
thereunder, except for such thereof as is caused by the gross negligence or
willful misconduct of the party seeking to be indemnified. The provisions of
this Section and the protective provisions of Section 2 hereof shall
survive payment of the Obligations.
Section 11.6. Documentary Taxes. The Company agrees to pay on demand any
documentary, stamp or similar taxes payable in respect of this Agreement or any
other Loan
-51-
Document, including interest and penalties, in the event any such taxes are
assessed, irrespective of when such assessment is made and whether or not any
credit is then in use or available hereunder.
Section 11.7. Survival of Representations. All representations and
warranties made herein or in any of the other Loan Documents or in certificates
given pursuant hereto or thereto shall survive the execution and delivery of
this Agreement and the other Loan Documents, and shall continue in full force
and effect with respect to the date as of which they were made as long as any
credit is in use or available hereunder.
Section 11.8. Survival of Indemnities. All indemnities and other
provisions relative to reimbursement to the Agent and the Lenders of amounts
sufficient to protect the yield of the Agent and the Lenders with respect to the
Loans and Letters of Credit, including, but not limited to, Sections 1.3,
2.7, and 2.9 hereof, shall survive the termination of this Agreement and the
payment of the Obligations.
Section 11.9. Participations. Any Lender may grant participations in its
extensions of credit hereunder to any other Lender or other lending institution
(a "Participant"), provided that (i) no Participant shall thereby acquire
any direct rights under this Agreement, (ii) no Lender shall agree with a
Participant not to exercise any of such Lender's rights hereunder without the
consent of such Participant except for rights which under the terms hereof may
only be exercised by all Lenders and (iii) no sale of a participation in
extensions of credit shall in any manner relieve the selling Lender of its
obligations hereunder. Section 11.10. Assignment Agreements. Each Lender
may, from time to time upon at least 5 Business Days' prior written notice to
the Agent, assign to other commercial lenders part of its rights and obligations
under this Agreement (including without limitation the indebtedness evidenced by
the Notes then owned by such assigning Lender, together with an equivalent
proportion of its Revolving Credit Commitments to make Loans hereunder) pursuant
to written agreements executed by such assigning Lender, such assignee lender or
lenders, the Company and the Agent, which agreements shall specify in each
instance the portion of the indebtedness evidenced by the Notes which is to be
assigned to each such assignee lender and the portion of the Revolving Credit
Commitments of the assigning Lender to be assumed by it (the "Assignment
Agreements"); provided, however, that (i) each such assignment shall be
of a constant, and not a varying, percentage of the assigning Lender's rights
and obligations under this Agreement and the assignment shall cover the same
percentage of such Lender's Revolving Credit Commitments, Loans, Notes and
credit risk with respect to Letters of Credit; (ii) each such assignment
shall be made by a Lender which is a lender under the Short-Term Credit
Agreement and shall be made contemporaneously with an assignment of the same
percentage of such Lender's rights and obligations with respect to the
Short-Term Credit Agreement; (iii) unless the Agent otherwise consents,
the aggregate amount of the Revolving Credit Commitments, Loans, Notes and
credit risk with respect to Letters of Credit of the assigning Lender being
assigned pursuant to each such assignment (determined as of the effective date
of the relevant Assignment Agreement) shall in no event be less than $5,000,000
and shall be an integral multiple of $1,000,000; (iv) the Agent and the
Company must each consent, which consent shall not be unreasonably withheld, to
each such assignment to a party which was not an original signatory of this
Agreement; and (v) the assigning Lender must pay to the Agent a
processing and recordation fee of $3,000 and any out-of-pocket
-52-
attorneys' fees and expenses incurred by the Agent in connection with such
Assignment Agreement. Upon the execution of each Assignment Agreement by the
assigning Lender thereunder, the assignee lender thereunder, the Company and the
Agent and payment to such assigning Lender by such assignee lender of the
purchase price for the portion of the indebtedness of the Company being acquired
by it, (i) such assignee lender shall thereupon become a "Lender" for all
purposes of this Agreement with Revolving Credit Commitments in the amounts set
forth in such Assignment Agreement and with all the rights, powers and
obligations afforded a Lender hereunder, (ii) such assigning Lender shall
have no further liability for funding the portion of its Revolving Credit
Commitments assumed by such other Lender and (iii) the address for
notices to such assignee Lender shall be as specified in the Assignment
Agreement executed by it. Concurrently with the execution and delivery of such
Assignment Agreement, the Company shall execute and deliver Notes to the
assignee Lender in the respective amounts of its Revolving Credit Commitments
under the Revolving Credit and new Notes to the assigning Lender in the
respective amounts of its Revolving Credit Commitments under the Revolving
Credit after giving effect to the reduction occasioned by such assignment, all
such Notes to constitute "Notes" for all purposes of this Agreement and of the
other Loan Documents. Section 11.11. Notices. Except as otherwise
specified herein, all notices hereunder shall be in writing (including, without
limitation, notice by telecopy) and shall be given to the relevant party at its
address or telecopier number set forth below, in the case of the Company, or on
the appropriate signature page hereof, in the case of the Lenders and the Agent,
or such other address or telecopier number as such party may hereafter specify
by notice to the Agent and the Company given by United States certified or
registered mail, by telecopy or by other telecommunication device capable of
creating a written record of such notice and its receipt. Notices hereunder to
the Company shall be addressed to:
to the Company at:
0000 Xxxxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy (in case of notices of default) to:
Xxxxxx Xxxxxx & Zavis
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
to the Agent at:
Xxxxxx Trust and Savings Bank
X.X. Xxx 000
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-53-
Each such notice, request or other communication shall be effective (i)
if given by telecopier, when such telecopy is transmitted to the telecopier
number specified in this Section and a confirmation of such telecopy has been
received by the sender, (ii) if given by mail, five (5) days after
such communication is deposited in the mail, certified or registered with return
receipt requested, addressed as aforesaid or (iii) if given by any other
means, when delivered at the addresses specified in this Section; provided that
any notice given pursuant to Section 1 or Section 2 hereof shall
be effective only upon receipt. Section 11.12. Construction. The parties
hereto acknowledge and agree that this Agreement and the other Loan Documents
shall not be construed more favorably in favor of one than the other based upon
which party drafted the same, it being acknowledged that all parties hereto
contributed substantially to the negotiation of this Agreement and the other
Loan Documents. NOTHING CONTAINED HEREIN SHALL BE DEEMED OR CONSTRUED TO PERMIT
ANY ACT OR OMISSION WHICH IS PROHIBITED BY THE TERMS OF ANY OF THE OTHER LOAN
DOCUMENTS, THE COVENANTS AND AGREEMENTS CONTAINED HEREIN BEING IN ADDITION TO
AND NOT IN SUBSTITUTION FOR THE COVENANTS AND AGREEMENTS CONTAINED IN THE OTHER
LOAN DOCUMENTS. Section 11.13. Headings. Section headings used in this
Agreement are for convenience of reference only and are not a part of this
Agreement for any other purpose. Section 11.14. Severability of
Provisions. Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction. All rights, remedies and powers provided in this
Agreement and the other Loan Documents may be exercised only to the extent that
the exercise thereof does not violate any applicable mandatory provisions of
law, and all the provisions of this Agreement and the other Loan Documents are
intended to be subject to all applicable mandatory provisions of law which may
be controlling and to be limited to the extent necessary so that they will not
render this Agreement or the other Loan Documents invalid or unenforceable.
Section 11.15 Counterparts. This Agreement may be executed in any number
of counterparts, and by different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument. Section<-1- 32>11.16. Entire
Understanding. This Agreement together with the other Loan Documents constitute
the entire understanding of the parties with respect to the subject matter
hereof and any prior agreements, whether written or oral, with respect thereto
are superseded hereby except for prior understandings related to fees payable to
the Agent upon the initial closing of the transactions contemplated hereby.
Section 11.17. Currency. Each reference in this Agreement to U.S. Dollars
or to an Alternative Currency (the "relevant currency") is of the essence. To
the fullest extent permitted by law, the obligation of the Company in respect of
any amount due in the relevant currency under this Agreement shall,
notwithstanding any payment in any other currency (whether pursuant to a
-54-
judgment or otherwise), be discharged only to the extent of the amount in the
relevant currency that the Agent or Lender entitled to receive such payment may,
in accordance with normal banking procedures, purchase with the sum paid in such
other currency (after any premium and costs of exchange) on the Business Day
immediately following the day on which such party receives such payment. If the
amount in the relevant currency so purchased for any reason falls short of the
amount originally due in the relevant currency, the Company shall pay such
additional amounts, in the relevant currency, as may be necessary to compensate
for the shortfall. Any obligations of the Company not discharged by such payment
shall, to the fullest extent permitted by applicable law, be due as a separate
and independent obligation and, until discharged as provided herein, shall
continue in full force and effect. Section 11.18. Currency Equivalence.
If for the purposes of obtaining judgment in any court it is necessary to
convert a sum due from the Company on the Obligations in the currency expressed
to be payable herein or under the Notes (the "specified currency") into another
currency, the parties agree that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Agent could purchase the
specified currency with such other currency on the Business Day preceding that
on which final judgment is given. The obligation of the Company in respect of
any such sum due to the Agent or any Lender on the Obligations shall,
notwithstanding any judgment in a currency other than the specified currency, be
discharged only to the extent that on the Business Day following receipt by the
Agent or such Lender, as applicable, of any sum adjudged to be so due in such
other currency, the Agent or such Lender, as applicable, may in accordance with
normal banking procedures purchase the specified currency with such other
currency. If the amount of the specified currency so purchased is less than the
sum originally due to the Agent or such Lender in the specified currency, the
Company agrees, as a separate obligation and notwithstanding any such judgment,
to indemnify the Agent or such Lender, as the case may be, against such loss,
and if the amount of the specified currency so purchased exceeds the amount
originally due to the Agent or such Lender in the specified currency, the Agent
or such Lender, as the case may be, agrees to remit such excess to the Company.
Section 11.19. Binding Nature, Governing Law, Etc. This Agreement shall
be binding upon the Company and its successors and assigns, and shall inure to
the benefit of the Agent and the Lenders and the benefit of their successors and
assigns, including any subsequent holder of an interest in the Obligations. The
Company may not assign its rights hereunder without the written consent of the
Lenders. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. Section
11.20. Submission to Jurisdiction; Waiver of Jury Trial. The Company hereby
submits to the nonexclusive jurisdiction of the United States District Court for
the Northern District of Illinois and of any Illinois State court sitting in the
City of Chicago for purposes of all legal proceedings arising out of or relating
to this Agreement, the other Loan Documents or the transactions contemplated
hereby or thereby. The Company irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum. THE COMPANY, THE AGENT, AND EACH LENDER HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.
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Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall constitute a contract between us for the uses and purposes
hereinabove set forth.
Dated as of this 4th day of November, 1998.
ANICOM, INC.
By
Name:
Title:
-56-
Accepted and Agreed to at Chicago, Illinois as of the day and year last
above written.
Each of the Lenders hereby agrees with each other Lender that if it should
receive or obtain any payment (whether by voluntary payment, by realization upon
collateral, by the exercise of rights of set-off or banker's lien, by
counterclaim or cross action, or by the enforcement of any rights under this
Agreement, any of the other Loan Documents or otherwise) in respect of the
Obligations in a greater amount than such Lender would have received had such
payment been made to the Agent and been distributed among the Lenders as
contemplated by Section 3.4 hereof then in that event the Lender receiving such
disproportionate payment shall purchase for cash without recourse from the other
Lenders an interest in the Obligations of the Company to such Lenders in such
amount as shall result in a distribution of such payment as contemplated by
Section 3.4 hereof. In the event any payment made to a Lender and shared with
the other Lenders pursuant to the provisions hereof is ever recovered from such
Lender, the Lenders receiving a portion of such payment hereunder shall restore
the same to the payor Lender, but without interest. Amount and Percentage of
Commitments:
Revolving Credit
Commitment:
$17,500,000
XXXXXX TRUST AND SAVINGS BANK
By
Its Vice President
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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Revolving Credit
Commitment:
$16,250,000
THE FIRST NATIONAL BANK OF CHICAGO
By
Its
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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Revolving Credit
Commitment:
$16,250,000
LASALLE NATIONAL BANK
By
Its
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-59-
Revolving Credit
Commitment:
$10,000,000
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By
Its
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-60-
EXHIBIT A
ANICOM, INC.
LONG-TERM MULTICURRENCY REVOLVING CREDIT NOTE
Chicago, Illinois
______________, 199___
On the Revolving Credit Termination Date, for value received, the
undersigned, ANICOM, INC., a Delaware corporation (the "Company"), hereby
promises to pay to the order of ____________________ (the "Lender"), at the
principal office of Xxxxxx Trust and Savings Bank in Chicago, Illinois (or in
the case of any LIBOR Portions denominated in an Alternative Currency, at such
office as the Agent has previously notified the Company in the currency of such
LIBOR Portions in accordance with Section 3.4 of the Credit Agreement),
the aggregate unpaid principal amount of all Loans owing from the Company to the
Lender under the Revolving Credit provided for in the Credit Agreement
hereinafter mentioned.
This Note evidences loans constituting part of a "Domestic Rate
Portion" and "LIBOR Portions" as such terms are defined in that certain
Long-Term Multicurrency Credit Agreement dated as of November 4, 1998,
between the Company, Xxxxxx Trust and Savings Bank, individually and as Agent
thereunder, and the other Lenders which are now or may from time to time
hereafter become parties thereto (said Credit Agreement, as the same may be
amended, modified or restated from time to time, being referred to herein as the
"Credit Agreement") made and to be made to the Company by the Lender under the
Revolving Credit provided for under the Credit Agreement, and the Company hereby
promises to pay interest at the office described above on each loan evidenced
hereby at the rates and at the times and in the manner specified therefor in the
Credit Agreement.
Each loan made under the Revolving Credit provided for in the Credit
Agreement by the Lender to the Company against this Note, any repayment of
principal hereon, the status of each such loan from time to time as part of the
Domestic Rate Portion or a LIBOR Portion and, in the case of any LIBOR Portion,
the currency thereof, the interest rate and Interest Period applicable thereto
shall be endorsed by the holder hereof on a schedule to this Note or recorded on
the books and records of the holder hereof (provided that such entries shall be
endorsed on a schedule to this Note prior to any negotiation hereof). The
Company agrees that in any action or proceeding instituted to collect or enforce
collection of this Note, the entries so endorsed on a schedule to this Note or
recorded on the books and records of the holder hereof shall be prima facie
evidence of the unpaid principal balance of this Note, the status of each such
loan from time to time as part of the Domestic Rate Portion or a LIBOR Portion,
and, in the case of any LIBOR Portion, the currency thereof, the interest rate
and Interest Period applicable thereto.
This Note is issued by the Company under the terms and provisions of
the Credit Agreement, and this Note and the holder hereof are entitled to all of
the benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity, voluntary prepayments
may be made hereon, and certain prepayments are required to be made hereon, all
in the events, on the terms and with the effects provided in the Credit
Agreement. All capitalized terms used herein without definition shall have the
same meanings herein as such terms are defined in the Credit Agreement.
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The Company hereby promises to pay all costs and expenses (including
attorneys' fees) suffered or incurred by the holder hereof in collecting this
Note or enforcing any rights in any collateral therefor. The Company hereby
waives presentment for payment and demand. THIS NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF ILLINOIS
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
ANICOM, INC.
By:
Name:
Title:
-62-
EXHIBIT B
COMPLIANCE CERTIFICATE
To: Xxxxxx Trust and Savings Bank, as Agent
under, and the Lenders party to, the
Credit Agreement described below
This Compliance Certificate is furnished to the Agent and the Lenders
pursuant to that certain Long-Term Multicurrency Credit Agreement dated as of
November 4, 1998, by and among Anicom, Inc. (the "Company") and you (the
"Credit Agreement"). Unless otherwise defined herein, the terms used in this
Compliance Certificate have the meanings ascribed thereto in the Credit
Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _________________________________ of the
Company; 2. I have reviewed the terms of the Credit Agreement and I
have made, or have caused
to be made under my supervision, a detailed review of the transactions and
conditions of the Company and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or the occurrence of
any event which constitutes a Default or Event of Default during or at the end
of the accounting period covered by the attached financial statements or as of
the date of this Certificate, except as set forth below;
4. The financial statements required by Section 8.5 of the
Credit Agreement and being furnished to you concurrently with this Certificate
are true, correct and complete as of the date and for the periods covered
thereby; and
5. The Attachment hereto sets forth financial data and computations
evidencing the Company's compliance with certain covenants of the Credit
Agreement, all of which data and computations are, to the best of my knowledge,
true, complete and correct and have been made in accordance with the relevant
Sections of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which the Company has taken, is taking, or
proposes to take with respect to each such condition or event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The foregoing certifications, together with the computations set forth
in the Attachment hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this _________ day of
__________________ 19___.
------------------------------
------------------------------
------------------------------
------------------------------
--------------------------------------------------------------------------------
(Print or Type Name) (Title)
-63-
ATTACHMENT TO COMPLIANCE CERTIFICATE
ANICOM, INC.
Compliance Calculations for Long-Term Multicurrency Credit Agreement
Dated as of November 4, 1998
Calculations as of _____________, 19___
---------------------------------------------------------------------------
A. CURRENT RATIO (SECTION 8.6)
1. Total current assets (including prepaid expenses) ___________
2. Total current liabilities ___________
3. Special Post-Closing Acquisition Liabilities ___________
4. Line 2 minus Line 3
("Current Ratio") ___________
6. As listed in Section 8.6, the Current Ratio
shall not be less than 1:40 : 1
7. Company is in Compliance?
(Circle Yes or No) Yes/No
B. INTEREST COVERAGE RATIO (SECTION 8.7)
1. Consolidated Net Income as defined ___________
2. Amounts deducted in arriving at
Consolidated Net Income in respect of
(a) Interest Expense ___________
(b) Federal, state and local
income taxes ___________
3. Sum of Lines 1, 2(a) and 2(b)
("EBIT") ___________
4. Interest Expense ___________
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5. Ratio of EBIT (Line 3)
to Interest Expense (Line 4) ("Interest
Coverage Ratio") :1
6. As listed in Section 8.7, for the date of this
Certificate, the Interest Coverage
Ratio shall not be less than 2.0 : 1
7. Company is in compliance?
(Circle yes or no) Yes/No
C. TANGIBLE NET WORTH (SECTION 8.8)
1. Shareholders' Equity __________
2. Less
(a) Notes receivable
from officers and
employees ____________
(b) Intangible Assets ____________
3. Line 1 minus Lines 2(a) and
2(b)
("Tangible Net Worth") __________
4. As required by Section 8.8,
Tangible Net Worth must not be less than
Minimum Required Amount
(a) Consolidated Net Income ___________
(b) .50 X Line 4(a) ___________
(c) Line 4(b) plus the $_________ ___________
Minimum Required
Amount for the immediately
preceding fiscal quarter
("Minimum Required Amount")
5. Company is in compliance? (Circle yes or no) Yes/No
==========
D. DEBT TO EARNINGS RATIO (SECTION 8.9)
1. Total Funded Debt _________
2. EBITDA (Line B3 plus amounts charged
for depreciation, amortization and
Fiscal 1998 Charges) ___________
3. Ratio of Line 1 to Line 2
("Debt to Earnings Ratio") : 1
4. As listed in Section 8.9,
Debt to Earnings Ratio
must not be greater than 3.5 : 1
5. Company is in compliance? (Circle yes or no) Yes/No
E. LEVERAGE RATIO (SECTION 8.10)
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1. Total Funded Debt ____________
2. Shareholders' Equity ____________
3. Line 1 plus Line 2 ____________
4. Total Capitalization
(from Line E3 above) ____________
5. Ratio of Line 1 to Line 4
("Leverage Ratio") :1
7. As listed in Section 8.10, for
the date of this Certificate,
the Leverage Ratio shall not
be greater than
0.40 :1
8. Company is in compliance?
(Circle yes or no) Yes/No
F. SPECIAL POST-CLOSING ACQUISITION LIABILITIES
The following summarizes the Special Post-Closing Acquisition Liabilities
used in computing compliance with the current ratio (Section 8.6):
------------------------------------------------------------------------------
Nature of Reserves Date Credited Amount
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EXHIBIT C
SUBORDINATED INDEBTEDNESS
BALANCE AS
INSTRUMENT INTEREST RATE OF 6/30/98 MATURITY
Note payable to Xxxxxx 8.55% $1,000,000 In an installment
Brzustewicz on March 12,
1999
Note payable to Xxxxx xxxxx $440,213 In monthly
Xxxxxxx installments
through July 1,
2002
Notes payable to Xxxxxxx 8.00% $166,667 In an installment
Xxxxxxx on October 27,
1998
Note payable to Xxxxx 6.77% to 8.00% $300,000 On demand
Xxxxxxx
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EXHIBIT D
SUBORDINATION PROVISIONS APPLICABLE TO
SUBORDINATED DEBT
(a) The indebtedness evidenced by the subordinated notes1/* and any
renewals or extensions thereof (hereinafter called "Subordinated Indebtedness"),
shall at all times be wholly subordinate and junior in right of payment to any
and all credit and other indebtedness, obligations and liabilities of the
Company to the lenders (collectively the "Lenders") and their agent (each, an
"Agent") under or in connection with (i) that certain Multicurrency
Long-Term Credit Agreement dated as of November 4, 1998 by and among the
Company, Xxxxxx Trust and Savings Bank, individually ("Xxxxxx") and as Agent for
the Lenders thereunder and other Lenders from time to time party thereto and
(ii) that certain Short-Term Credit Agreement dated as of November 4,
1998 by and among the Company, Xxxxxx Trust and Savings Bank, individually and
as Agent for the Lenders thereunder and other Lenders from time to time party
thereto, in each case howsoever evidenced, whether now existing or hereafter
created or arising, whether direct or indirect, absolute or contingent, or joint
or several, as any of the same may be modified, supplemented or amended from
time to time (hereinafter called "Superior Indebtedness"), in the manner and
with the force and effect hereafter set forth:
(1) In the event of any liquidation, dissolution or winding
up of the Company of in the event of any execution sale, receivership,
insolvency, bankruptcy, liquidation, readjustment, reorganization or
other similar proceeding relative to the Company or its properties,
then in any such event the holders of any and all Superior Indebtedness
shall be preferred in the payment of their claims over the holder or
holders of the Subordinated Indebtedness, and such Superior
Indebtedness shall be first paid and satisfied in full before any
payment or distribution of any kind or character, whether in cash,
property or securities shall be made upon the Subordinated
Indebtedness; and in any such event any dividend or distribution of any
kind or character, whether in cash, property or securities which shall
be made upon or in respect of the Subordinated Indebtedness, or any
renewals or extensions hereof, shall be paid over to the holders of
such Superior Indebtedness, pro rata, for application in payment
thereof unless and until such Superior Indebtedness shall have been
paid and satisfied in full;
(2) Without limiting any of the other provisions hereof, in
the event that the Subordinated Indebtedness is declared or becomes due
and payable because of the occurrence of any event of default hereunder
(or under the agreement or indenture, as appropriate) or for any other
reason other than at the option of the Company, under circumstances
when the foregoing clause (1) shall not be applicable, the holders of
the
--------
1
* Or debentures or other designation as may be appropriate.
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Subordinated Indebtedness shall be entitled to payments only after
there shall first have been paid in full all Superior Indebtedness
outstanding at the time the Subordinated Indebtedness so becomes due
and payable because of any such event, or payment shall have been
provided for in a manner satisfactory to the holders of such Superior
Indebtedness;
(3) No payment on account of principal of, premium, if any,
or interest on the Subordinated Indebtedness shall be made, nor shall
any assets be applied to the purchase or other acquisition or
retirement of the Subordinated Indebtedness, unless full payment of
amounts then due on all Superior Indebtedness has been made or duly
provided for, and no payment on account of principal of, premium, if
any, or interest on the Subordinated Indebtedness shall be made, nor
shall any assets be applied to the purchase or other acquisition or
retirement of the Subordinated Indebtedness, if at the time of such
payment or application or immediately after giving effect thereto,
there shall exist a default in the payment of any amount due on any
Superior Indebtedness;
(4) If there shall have occurred a default (other than a
default in the payment of any amount due) with respect to any issue of
Superior Indebtedness, as defined therein or in the instrument under
which the same has been issued, permitting the holders thereof, after
notice or lapse of time, or both, to accelerate the maturity thereof,
and any such holders as constitute a sufficient number or hold a
sufficient amount of such Superior Indebtedness as to have the right to
so accelerate the maturity thereof (the "Notifying Debtholders") shall
give written notice of the default to the Company (a "Default Notice"),
then, unless and until such default shall have been cured or waived, no
payment on account of principal of, premium, if any, or interest on the
Subordinated Indebtedness shall be made, nor shall any assets be
applied to the purchase or other acquisition or retirement of the
Subordinated Indebtedness, at any time during the 180 days immediately
following the delivery of the Default Notice to the Company (the
"Blockage Period"); provided that if, during the Blockage Period the
Notifying Debtholders shall have accelerated the maturity of the
Superior Indebtedness held by such Notifying Debtholders, or shall have
taken such action as is necessary under the governing agreement or
instrument to accelerate the maturity of such Superior Indebtedness
(subject only to the expiration of a grace period not exceeding 30
days), then the Blockage Period shall be extended for any such grace
period and thereafter for so long as such acceleration shall continue
to be in effect and judicial proceedings shall be pending with respect
thereto, the Notifying Debtholders shall be in the process of
foreclosing or otherwise collecting or realizing on collateral for such
Superior Indebtedness or the Notifying Debtholders shall otherwise be
pursuing collection procedures in good faith. At the expiration of such
Blockage Period, (i) the Company shall, absent the occurrence prior to
payment thereof by the Company of any event set forth in Section 1 or 3
hereof, pay to the holders of the Subordinated Indebtedness all amounts
which would have been payable other than by reason of acceleration
during the Blockage Period and (ii) if the default referred to in the
Default Notice shall continue to exist and shall not have been waived,
then the Notifying Debtholders shall be permitted to submit a new
Default Notice respecting such event of default. If, during any
Blockage Period, a subsequent Default Notice is served respecting an
event or events of default which were in existence and known
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to such Notifying Debtholder on the first day of the pre-existing
Blockage Period, then the Blockage period triggered by the subsequent
Default Notice shall terminate at the same time as the pre-existing
Blockage Period;
(5) Any holders of Subordinated Indebtedness shall not
without the prior written consent of the holders of the Superior
Indebtedness take any collateral for any Subordinated Indebtedness,
whether from the Company or any other party, nor take any guaranties
for any Subordinated Indebtedness, from any party, in each case if and
so long as the terms of any of the Superior Indebtedness prohibit such
liens or guaranties. Without limiting the effect of any of the other
provisions of this Agreement, any interest in or lien on any assets or
properties of the Company or any other party which may (notwithstanding
the foregoing agreement) be held or hereafter acquired by or on behalf
of any holder of Subordinated Indebtedness as security for any
Subordinated Indebtedness is and shall be absolutely and
unconditionally subject and subordinate in all respects to any security
interest or lien which may be held or hereafter acquired by or on
behalf of the holders of Superior Indebtedness in the same such assets
or properties as security for any Superior Indebtedness notwithstanding
the time of attachment of any interest therein or lien thereon or the
filing of any financing statement or any other priority provided by law
or by agreement; and
(6) The holders of Subordinated Indebtedness shall not take
any action to enforce collection of the Subordinated Indebtedness or to
foreclose or otherwise realize upon any security or guaranty given to
secure or guaranty the Subordinated Indebtedness and the Company and
any such guarantor shall not make any payment in respect of the
Subordinated Indebtedness, in each case during any Blockage Period, or
otherwise unless the Company shall, 180 days prior to the taking of any
such action, have provided the holders of Superior Indebtedness with
notice of the occurrence of the default giving rise to such action. Any
provisions of this Section 6 to the contrary notwithstanding, the
restriction contained in this Section shall no longer apply upon the
first to occur of the following: (i) the institution of
bankruptcy proceedings by or against the Company; (ii) the
acceleration of the Superior Indebtedness; or (iii) the payment
or other satisfaction of all of the Superior Indebtedness. The holders
of the Subordinated Indebtedness agree to accept a cure from the
Lenders of any default with respect to any Subordinated Indebtedness
(with the same force and effect as if such cure were timely provided by
the Company or the appropriate obligor) at any time during the period
during which the holders of the Subordinated Indebtedness agree not to
act pursuant to this Section and if any such default is cured during
any such period shall be rescinded and annulled all with the same
effect as though such default had not occurred and the rate of interest
on such Subordinated Indebtedness shall accrue during such period at
the applicable predefault rate.
(7) The holders of Subordinated Indebtedness undertake and
agree for the benefit of each holder of Superior Indebtedness to
execute, verify, deliver and file any proofs of claim, consents,
assignments or other instruments which any holder of Superior
Indebtedness may at any time require in order to prove and realize upon
any rights or claims pertaining to the subordinated notes and to
effectuate the full benefit of the subordination contained herein; and
upon failure of the holder of any subordinated note so to do, any such
holder of
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Superior Indebtedness shall be deemed to be irrevocably appointed the
agent and attorney-in-fact of the holder of such note to execute,
verify, deliver and file any such proofs of claim, consents,
assignments or other instrument.
(8) No right of any holder of any Superior Indebtedness to
enforce subordination as herein provided shall at any time or in any
way be affected or impaired by any failure to act on the part of the
Company or the holders of Superior Indebtedness, or by any
noncompliance by the Company with any of the terms, provisions and
covenants of the subordinated notes or the agreement under which they
are issued, regardless of any knowledge thereof that any such holder of
Superior Indebtedness may have or be otherwise charged with.
(9) The Company agrees, for the benefit of the holders of
Superior Indebtedness, that in the event that any subordinated note is
declared due and payable before its expressed maturity because of the
occurrence of a default hereunder, (i) the Company will provide
prompt notice in writing of such happening to the holders of Superior
Indebtedness and (ii) a holder of any Superior Indebtedness may
declare the same to be immediately due and payable, regardless of the
expressed maturity thereof.
(10) To the extent that the Company makes any payment on the
Superior Indebtedness which is subsequently invalidated, declared to be
fraudulent or preferential, set aside or is required to be repaid to a
trustee, receiver or any other party under any bankruptcy act, state or
Federal law, common law or equitable cause (such payment being
hereinafter referred to as a "Voided Payment"), then to the extent of
such Voided Payment that portion of the Superior Indebtedness which had
been previously satisfied by such Voided Payment shall be revived and
continue in full force and effect as if such Voided Payment has never
been made. In the event that a Voided Payment is recovered from the
holders of the Superior Indebtedness, a default in the payment of
Superior Indebtedness specified in paragraph (a)(3) of these
subordination provisions shall be deemed to have existed and to be
continuing from the date of the initial receipt by the holders of the
Superior Indebtedness of such Voided Payment until the full amount of
such Voided Payment is fully and finally restored to the holder of the
Superior Indebtedness and until such time these subordination
provisions shall be in full force and effect.
(11) In the event that any payment or distribution of assets
is made to any holder of subordinated notes in contravention of these
subordination provisions, such payment or distribution shall be
received and held by such holder in trust for the benefit of the
holders of the then outstanding Superior Indebtedness and shall,
forthwith upon receipt thereof, be paid or distributed to the holders
of the Superior Indebtedness, pro rata, for application in payment
thereof.
(12) The foregoing provisions are solely for the purpose of
defining the relative rights of the holders of Superior Indebtedness on
the one hand, and the holders of the Subordinated Indebtedness on the
other hand, and nothing herein shall impair, as between the Company and
the holders of the Subordinated Indebtedness, the obligation of the
Company, which is unconditional and absolute, to pay the principal of
and premium, if any, and interest on the Subordinated Indebtedness in
accordance with their terms, nor shall
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anything herein prevent the holders of the Subordinated Indebtedness
from exercising all remedies otherwise permitted by applicable law or
hereunder upon default hereunder, subject to the rights of the holders
of Superior Indebtedness as herein provided for.
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EXHIBIT E
GUARANTY
This Guaranty Agreement, dated as of ____________, ____, made by
____________ _________________________________, a _________________ organized
under the laws of _________________ (the "Guarantor");
WITNESSETH:
WHEREAS, Anicom, Inc., a Delaware corporation (the "Borrower"), Xxxxxx
Trust and Savings Bank ("Xxxxxx"), individually and as Agent (Xxxxxx acting as
such agent and any successor or successors to Xxxxxx in such capacity being
hereinafter referred to as the "Agent") and the lenders from time to time party
thereto (Xxxxxx and such other lenders being hereinafter referred to
collectively as the "Lenders" and individually as a "Lender") have entered into
a Multicurrency LongTerm Credit Agreement dated as of November 4, 1998 (such
Credit Agreement as the same may from time to time hereafter be modified or
amended being hereinafter referred to as the "Credit Agreement") pursuant to
which the Lenders have extended various credit facilities to the Borrower (the
Agent and the Lenders being hereinafter referred to collectively as the
"Guaranteed Creditors" and individually as a "Guaranteed Creditor"); and
WHEREAS, the Borrower owns and holds all or substantially all of the
issued and outstanding common capital stock of the Guarantor; and
WHEREAS, it is a condition to the extension of credit by the Lenders
under the Credit Agreement that the Guarantor shall have executed and delivered
this Guaranty; and
WHEREAS, the Borrower has provided and will continue to provide the
Guarantor with business, technical and financial support beneficial to the
proper conduct of the Guarantor's business and the Guarantor will obtain
benefits as a result of the extensions of credit to the Borrower under the
Credit Agreement; and, accordingly, the Guarantor desires to enter into this
Guaranty in order to satisfy the condition described in the preceding paragraph;
and
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to the Guarantor, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby makes the following representations and
warranties to the Guaranteed Creditors and hereby covenants and agrees with the
Guaranteed Creditors as follows:
1. The Guarantor hereby unconditionally and irrevocably guarantees to
the Guaranteed Creditors, the due and punctual payment of all present and future
indebtedness of the Borrower evidenced by or arising out of the Credit Documents
(as hereinafter defined), including, but not limited to, (a) the due and
punctual payment of principal of and interest on all notes issued by the
Borrower under the Credit Agreement and any and all notes issued in extension or
renewal thereof or in substitution or replacement therefor (collectively the
"Notes") as and when the same shall become due and payable, whether at stated
maturity, by acceleration or otherwise, and (b) the full and prompt performance
and payment when due of any and all other indebtedness, obligations and
liabilities, whether now existing or hereafter arising, of the Borrower to the
Guaranteed Creditors under or arising out of the Credit Agreement, the Notes,
Credit Agreement and each guaranty executed by another subsidiary of the
Borrower in connection with the Credit Agreement being hereinafter collectively
referred to as the "Credit Documents"). The indebtedness, obligations and
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liabilities described in the immediately preceding clauses (a) and (b) are
hereinafter referred to as the "Guaranteed Obligations". In case of failure by
Borrower punctually to pay any indebtedness guaranteed hereby, the Guarantor
hereby unconditionally agrees to make such payment or to cause such payment to
be made punctually as and when the same shall become due and payable, whether at
stated maturity, by acceleration or otherwise, and as if such payment were made
by the Borrower.
2. The obligations of the Guarantor under this Guaranty shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower or of any other
guarantor under the Credit Agreement or any other Credit Document or by
operation of law or otherwise;
(b) any modification or amendment of or supplement to the
Credit Agreement or any other Credit Document;
(c) any change in the corporate existence, structure or
ownership of (including any of the foregoing arising from any merger,
consolidation, amalgamation or similar transaction), or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting, the
Borrower, any other guarantor, or any of their respective assets, or
any resulting release or discharge of any obligation of the Borrower or
of any other guarantor contained in any Credit Document (it being
understood and agreed that the term "Borrower" as used herein shall
mean and include any corporation, partnership, association or any other
entity or organization resulting from a merger, consolidation,
amalgamation or similar transaction involving the Borrower);
(d) the existence of any claim, set-off or other rights which
the Guarantor may have at any time against any Guaranteed Creditor or
any other person, whether or not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or
demand or any exercise of, or failure to exercise, any rights or
remedies against the Borrower, any other guarantor, any other person or
any of their respective properties;
(f) any application of any sums by whomsoever paid or
howsoever realized to any obligation of the Borrower regardless of what
obligations of the Borrower remain unpaid;
(g) any invalidity or unenforceability relating to or against
the Borrower or any other guarantor for any reason of the Credit
Agreement or of any other Credit Document or any provision of
applicable law or regulation purporting to prohibit the payment by the
Borrower or any other guarantor of the principal of or interest on any
Note or any other amount payable by it under the Credit Documents; or
(h) any other act or omission to act or delay of any kind by
any Guaranteed Creditor or any other person or any other circumstance
whatsoever that might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the obligations of the
Guarantor hereunder.
In order to hold the Guarantor liable hereunder, there shall be no obligation on
the part of the Guaranteed Creditors, at any time, to resort for payment to the
Borrower or any other guarantor, or
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resort to any collateral, security, property, liens or other rights or remedies
whatsoever, and the Guaranteed Creditors shall have the right to enforce this
Guaranty irrespective of whether or not other proceedings or steps seeking
resort or realization upon or from any of the foregoing are pending.
3. The Guarantor's obligations hereunder shall remain in full force
and effect until all commitments by the Guaranteed Creditors to extend credit to
the Borrower are terminated and the principal of and interest on the Notes and
all other amounts payable by the Borrower under the Credit Agreement and all
other Credit Documents shall have been paid in full. If at any time any payment
of the principal of or interest on any Note or any other amount payable by the
Borrower under the Credit Documents is rescinded or must be otherwise restored
or returned upon the insolvency, bankruptcy or reorganization of the Borrower or
of any other guarantor, or otherwise, the Guarantor's obligations hereunder with
respect to such payment shall be reinstated at such time as though such payment
had become due but had not been made at such time.
4. (a)
The Guarantor irrevocably waives acceptance hereof, presentment, demand, protest
and any notice not provided for herein, as well as any requirement that at any
time any action be taken by the Agent, any Lender or any other person against
the Borrower, another guarantor or any other person.
(b) The Guarantor hereby agrees not to exercise or enforce any right of
exoneration, contribution, reimbursement, recourse or subrogation available to
the Guarantor against the Borrower or any other guarantor, or as to any security
therefor, unless and until all commitments by the Guaranteed Creditors to extend
credit to the Borrower are terminated and the principal of and interest on the
Notes and all other amounts payable by the Borrower under the Credit Agreement
and all other Credit Documents shall have been paid in full; and the payment by
the Guarantor of any of its obligations hereunder shall not in any way entitle
the Guarantor to any right, title or interest (whether by way of subrogation or
otherwise) in and to any of the Guaranteed Obligations or any proceeds thereof
or any security therefor unless and until all commitments by the Guaranteed
Creditors to extend credit to the Borrower are terminated and the principal of
and interest on the Notes and all other amounts payable by the Borrower under
the Credit Agreement and all other Credit Documents shall have been paid in
full.
5. Notwithstanding any other provision hereof, the right of recovery
of the Guaranteed Creditors against the Guarantor hereunder shall not exceed
$1.00 less than the amount which would render the Guarantor's obligations
hereunder void or voidable under applicable law, including without limitation
fraudulent conveyance law.
6. If acceleration of the time for payment of any amount payable by
the Borrower under the Credit Agreement or any other Credit Document is stayed
upon the insolvency, bankruptcy or reorganization of the Borrower, all such
amounts otherwise subject to acceleration under the terms of the Credit
Agreement or the other Credit Documents shall nonetheless be payable by the
Guarantor forthwith on demand by the Agent made at the request of the Guaranteed
Creditors.
7. Any payment of a Guaranteed Obligation required to be made pursuant
to this Guaranty shall be made in the currency which such Guaranteed Obligation
is required to be made in pursuant to the Credit Agreement or such other Credit
Document giving rise to such Guaranteed Obligation.
8. This Guaranty shall be binding upon the Guarantor and its
successors and assigns and
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shall inure to the benefit of the Guaranteed Creditors and their successors and
assigns. Any Guaranteed Creditor may, to the extent permitted by the Credit
Agreement, sell, transfer or assign its rights in the Guaranteed Obligations
held by it, or any part thereof, or grant participations therein; and in that
event, each and every immediate and successive assignee or transferee of, or
holder or participant in, all or any part of the Guaranteed Obligations, shall
have the right to enforce this Guaranty, by suit or otherwise, for the benefit
of such assignee, transferee, holder or participant as fully as if such assignee
or transferee, holder or participant were herein by name specifically given such
rights, powers and benefits; but each Guaranteed Creditor shall have an
unimpaired right to enforce this Guaranty for its own benefit or for the benefit
of any such participant as to so much of the Guaranteed Obligations that it has
not sold, assigned or transferred.
9. The Guarantor acknowledges that executed (or conformed) copies of
the Credit Agreement and the other Credit Documents have been made available to
its principal executive officers and such officers are familiar with the
contents thereof.
10. Any acknowledgment or new promise, whether by payment of principal
or interest or otherwise and whether by the Borrower, or others (including the
Guarantor), with respect to any of the Guaranteed Obligations shall, if the
statute of limitations in favor of the Guarantor against the Guaranteed
Creditors shall have commenced to run, toll the running of such statute of
limitations, and if the period of such statute of limitations shall have
expired, prevent the operation of such statute of limitations.
11. The records of the Agent and each Lender as to the unpaid balance
of the Guaranteed Obligations at any time and from time to time shall be prima
facie evidence thereof without further or other proof for all purposes,
including the enforcement of this Guaranty and any collateral therefor.
12. Except as otherwise required by law, each payment by the Guarantor
hereunder shall be made without withholding for or on account of any present or
future taxes (other than overall net income taxes on the recipient) imposed by
or within the jurisdiction in which the Guarantor is domiciled, any jurisdiction
from which the Guarantor makes any payment, or (in each case) any political
subdivision or taxing authority thereof or therein. If any such withholding is
so required, the Guarantor shall make the withholding, pay the amount withheld
to the appropriate governmental authority before penalties attach thereto or
interest accrues thereon and forthwith pay such additional amount as may be
necessary to ensure that the net amount actually received by each Guaranteed
Creditor free and clear of such taxes (including such taxes on such additional
amount) is equal to the amount which that Guaranteed Creditor would have
received had such withholding not been made. If any Guaranteed Creditor pays any
amount in respect of any such taxes, penalties or interest the Guarantor shall
reimburse the Guaranteed Creditor for that payment on demand in the currency in
which such payment was made. If the Guarantor pays any such taxes, penalties or
interest, it shall deliver official tax receipts evidencing that payment or
certified copies thereof to the Guaranteed Creditor on whose account such
withholding was made (with a copy to the Agent if not the recipient of the
original) on or before the thirtieth day after payment. If any Guaranteed
Creditor determines it has received or been granted a credit against or relief
or remission for, or repayment of, any taxes paid or payable by it because of
any taxes, penalties or interest paid by the Guarantor and evidenced by such a
tax receipt, such Guaranteed Creditor shall, to the extent it can do so without
prejudice
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to the retention of the amount of such credit, relief, remission or repayment,
pay to the Guarantor as applicable, such amount as such Guaranteed Creditor
determines is attributable to such deduction or withholding and which will leave
such Guaranteed Creditor (after such payment) in no better or worse position
than it would have been in if the Guarantor had not been required to make such
deduction or withholding. Nothing herein shall interfere with the right of each
Guaranteed Creditor to arrange its tax affairs in whatever manner it thinks fit
nor oblige any Guaranteed Creditor to disclose any information relating to its
tax affairs or any computations in connection with such taxes.
13. Each reference in the Credit Agreement or any other Credit Document
to U.S. Dollars or to an alternative currency (the "relevant currency") is of
the essence. To the fullest extent permitted by law, the obligation of the
Guarantor in respect of any amount due in the relevant currency under the Credit
Agreement shall, notwithstanding any payment in any other currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in the relevant currency that the Guaranteed Creditor entitled to receive
such payment may, in accordance with normal banking procedures, purchase with
the sum paid in such other currency (after any premium and costs of exchange) on
the business day immediately following the day on which such Guaranteed Creditor
receives such payment. If the amount of the relevant currency so purchased is
less than the sum originally due to such Guaranteed Creditor in the relevant
currency, the Guarantor agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify such Guaranteed Creditor against such loss, and if
the amount of the specified currency so purchased exceeds the sum of (a) the
amount originally due to the relevant Guaranteed Creditor in the specified
currency plus (b) any amounts shared with other Guaranteed Creditors as a result
of allocations of such excess as a disproportionate payment to such Guaranteed
Creditor under Section 3.4 of the Credit Agreement, such Guaranteed
Creditor agrees to remit such excess to the Guarantor.
14. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF ILLINOIS (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS), in which
State it shall be performed by the Guarantor.
15. The obligation of the Guarantor hereunder shall be absolute and
unconditional under all circumstances and irrespective of the validity or the
enforceability of the Guaranteed Obligations and irrespective of any present or
future law of any government or of any agency thereof purporting to reduce,
amend or otherwise affect any of the Guaranteed Obligations. To the extent that
the Guarantor or any of its properties or revenues has or hereafter may acquire
any right of immunity from suit, judgment or execution, the Guarantor hereby
irrevocably waives such right of immunity in respect of its obligations
hereunder and in respect of any action or proceeding, wherever brought, to
enforce any judgment against the Guarantor for breach of any of such
obligations.
16. The Guarantor hereby submits to the nonexclusive jurisdiction of
the United States District Court for the Northern District of Illinois and of
any Illinois State court sitting in the City of Chicago for purposes of all
legal proceedings arising out of or relating to this Guaranty, the Credit
Agreement, the other Credit Documents or the transactions contemplated hereby or
thereby, and consents to the service of process by registered or certified mail
out of any such court or by service of process on the Borrower (now at
_________________________________
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_________________________________________________) which the Guarantor hereby
irrevocably appoints as its agent to receive, for it and on its behalf, service
of process in any action or proceeding in Illinois. Such service shall be deemed
completed on delivery to such process agent (whether or not it is forwarded to
and received by the Guarantor) provided that notice of such service of process
is given by the Guaranteed Creditors to the Guarantor. If, for any reason, such
process agent ceases to be able to act as such, the Guarantor irrevocably agrees
to appoint a substitute process agent acceptable to the Agent and to deliver to
the Agent a copy of the new agent's acceptance of that appointment within thirty
days. Nothing contained herein shall affect the right of the Guaranteed
Creditors to serve legal process in any other manner or to bring any proceeding
hereunder in any jurisdiction where the Guarantor may be amenable to suit. The
Guarantor irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. Final
judgment (a certified or exemplified copy of which shall be conclusive evidence
of the fact and of the amount of any indebtedness of the Guarantor to the
Guaranteed Creditors therein described) against the Guarantor in any such legal
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment. The Guarantor, the Agent, and each Lender
hereby irrevocably waives any and all right to trial by jury in any legal
proceeding arising out of or relating to the Guaranty, any Credit Document or
the transactions contemplated hereby or thereby.
17. The Guarantor shall at all times and from time to time do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged and
delivered all and singular every such further act, deed, transfer, assignment,
assurance, document and instrument as the Agent or any Lender may reasonably
require for the better accomplishing and effectuating of this Guaranty and the
provisions contained herein, and every officer of the Agent and the Lenders and
each of them are irrevocably appointed attorneys or attorney to execute in the
name and on behalf of the Guarantor any document or instrument for the said
purpose.
18. Except as otherwise defined herein, terms used herein and defined
in the Credit Agreement shall be used herein as so defined.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty Agreement to
be executed and delivered as of the date first above written.
By
Its
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SCHEDULE 6.2
MATERIAL SUBSIDIARIES
JURISDICTION OF PERCENTAGE
NAME Incorporation Ownership
Anicom Multimedia Wiring Canada 100%
Systems, Incorporated
NON-MATERIAL SUBSIDIARIES
JURISDICTION OF PERCENTAGE
NAME Incorporation Ownership
Xxxxxx Xxxx Supply Company, New York 100%
Inc.2/(
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Anicom-Carolina, Inc.* Delaware 100%
Anicom-Norfolk, Inc.* Delaware 100%
Anicom-Security, Inc.* Delaware 100%
Northern Wire & Cable, Inc.* Delaware 100%
Northern Connectivity Corp.* Michigan 100%
3022504 Nova Scotia Limited Canada 100%
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2 The company is in the process of liquidating these Subsidiaries.
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