EXHIBIT 10.28
================================================================================
CREDIT AGREEMENT
DATED AS OF MAY 17, 2000
AMONG
▇▇▇▇▇ HOLDINGS, INC.
AND
▇▇▇▇▇ ACQUISITION CORPORATION,
AS BORROWERS,
LASALLE BANK NATIONAL ASSOCIATION,
AS AGENT, ISSUING LENDER AND AS A LENDER,
AND
THE OTHER LENDERS FROM TIME TO TIME PARTY HERETO
================================================================================
TABLE OF CONTENTS
SECTION 1 DEFINITIONS.........................................................................................1
1.1 Definitions.........................................................................................1
1.2 Other Interpretive Provisions......................................................................20
SECTION 2 COMMITMENTS OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES..................21
2.1 Commitments........................................................................................21
2.1.1 Term Loan A Commitment....................................................................21
2.1.2 Term Loan B Commitment....................................................................22
2.1.3 Revolving Loan Commitment.................................................................23
2.1.4 LC Commitment.............................................................................23
2.2 Loan Procedures....................................................................................23
2.2.1 Various Types of Loans....................................................................23
2.2.2 Borrowing Procedures......................................................................23
2.2.3 Conversion and Continuation Procedures....................................................24
2.3 Letter of Credit Procedures........................................................................25
2.3.1 LC Applications...........................................................................25
2.3.2 Participations in Letters of Credit.......................................................25
2.3.3 Reimbursement Obligations.................................................................26
2.3.4 Limitation on Obligations of Issuing Lender...............................................26
2.3.5 Funding by Lenders to Issuing Lender......................................................26
2.4 Commitments Several................................................................................27
2.5 Certain Conditions.................................................................................27
2.6 Holdings as Funds Administrator....................................................................27
SECTION 3 NOTES EVIDENCING LOANS.............................................................................29
3.1 Notes..............................................................................................29
3.2 Recordkeeping......................................................................................29
SECTION 4 INTEREST...........................................................................................29
4.1 Interest Rates.....................................................................................29
4.2 Interest Payment Dates.............................................................................30
4.3 Setting and Notice of Eurodollar Rates.............................................................30
4.4 Computation of Interest............................................................................30
SECTION 5 FEES...............................................................................................30
5.1 Non-Use Fee........................................................................................30
5.2 Letter of Credit Fees..............................................................................31
5.3 Upfront Fees.......................................................................................32
5.4 Agent's Fees.......................................................................................32
SECTION 6 REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT AMOUNT AND ACQUISITION COMMITMENT
AMOUNT; PREPAYMENTS................................................................................32
6.1 Reduction or Termination of the Revolving Commitment Amount and Acquisition Commitment Amount.....32
6.1.1 Voluntary Reduction or Termination of the Revolving Commitment Amount; Voluntary
Reduction of the Term Loan A Maximum Amount................................................32
-i-
6.1.2 Mandatory Reductions of Revolving Commitment Amount and the Term Loan A Maximum Amount.....32
6.1.3 All Reductions of the Revolving Commitment Amount and the Term Loan A Maximum Amount.......33
6.2 Prepayments.......................................................................................33
6.2.1 Voluntary Prepayments......................................................................33
6.2.2 Mandatory Prepayments......................................................................33
6.3 All Prepayments....................................................................................34
SECTION 7 BANK ACCOUNTS, LOCKBOXES, APPLICATION OF PROCEEDS THEREOF..........................................34
7.2 Bank Accounts and Lockboxes........................................................................35
7.3 List of Bank Accounts and Bank Account Statements..................................................35
7.4 Proceeds of Collateral; Notices to Account Debtors; Lockbox........................................36
SECTION 8 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES....................................................36
8.1 Making of Payments.................................................................................36
8.2 Application of Certain Payments....................................................................37
8.3 Deemed Loans.......................................................................................37
8.4 Due Date Extension.................................................................................37
8.5 Setoff.............................................................................................37
8.6 Proration of Payments..............................................................................38
8.7 Taxes..............................................................................................38
SECTION 9 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS...........................................39
9.1 Increased Costs....................................................................................39
9.2 Basis for Determining Interest Rate Inadequate or Unfair...........................................40
9.3 Changes in Law Rendering Eurodollar Loans Unlawful.................................................41
9.4 Funding Losses.....................................................................................41
9.5 Right of Lenders to Fund through Other Offices.....................................................41
9.6 Discretion of Lenders as to Manner of Funding......................................................42
9.7 Mitigation of Circumstances; Replacement of Lenders................................................42
9.8 Conclusiveness of Statements; Survival of Provisions...............................................42
SECTION 10 WARRANTIES........................................................................................43
10.1 Organization......................................................................................43
10.2 Authorization; No Conflict........................................................................43
10.3 Validity and Binding Nature.......................................................................43
10.4 Financial Condition...............................................................................43
10.5 No Material Adverse Change........................................................................44
10.6 Litigation and Contingent Liabilities............................................................44
10.7 Ownership of Properties; Liens...................................................................44
10.8 Subsidiaries.....................................................................................44
10.9 Pension Plans....................................................................................44
10.10 Investment Company Act..........................................................................45
10.11 Public Utility Holding Company Act..............................................................45
10.12 Regulation U....................................................................................45
10.13 Taxes...........................................................................................45
10.14 Solvency, etc...................................................................................45
10.15 Environmental Matters...........................................................................46
10.16 Year 2000 Problem...............................................................................47
-ii-
10.17 Insurance.......................................................................................47
10.18 Real Property...................................................................................47
10.19 Information.....................................................................................47
10.20 Intellectual Property...........................................................................48
10.21 Burdensome Obligations..........................................................................48
10.22 Labor Matters...................................................................................48
10.23 No Default......................................................................................48
10.24 Acquisition and Merger Agreement; Etc...........................................................48
10.25 Capitalization..................................................................................49
10.26 Incorporation of Certain Representations and Warranties.........................................49
SECTION 11 COVENANTS........................................................................................49
11.1 Reports, Certificates and Other Information......................................................50
11.1.1 Annual Report.........................................................................50
11.1.2 Interim Reports.......................................................................50
11.1.3 Compliance Certificates...............................................................51
11.1.4 Reports to the SEC and to Shareholders; Deliveries in respect of Subordinated Debt....51
11.1.5 Notice of Default, Litigation and ERISA Matters.......................................51
11.1.6 Borrowing Base Certificates...........................................................52
11.1.7 Management Reports....................................................................52
11.1.8 Projections...........................................................................52
11.1.9 Subordinated Debt Notices.............................................................53
11.1.10 Year 2000 Problem.....................................................................53
11.1.11 Other Information.....................................................................53
11.2 Books, Records and Inspections...................................................................53
11.3 Maintenance of Property; Insurance...............................................................53
11.4 Compliance with Laws; Payment of Taxes and Liabilities...........................................55
11.5 Maintenance of Existence, etc....................................................................55
11.6 Financial Covenants..............................................................................55
11.6.1 Fixed Charge Coverage Ratio...........................................................55
11.6.2 Interest Coverage Ratio...............................................................56
11.6.3 Total Debt to EBITDA Ratio............................................................57
11.6.4 Senior Debt to EBITDA Ratio...........................................................57
11.6.5 Capital Expenditures..................................................................58
11.6.6 Minimum EBITDA........................................................................58
11.7 Limitations on Debt...............................................................................59
11.8 Liens.............................................................................................60
11.9 Operating Leases..................................................................................61
11.10 Restricted Payments..............................................................................61
11.11 Mergers, Acquisitions, Consolidations, Sales.....................................................62
11.12 Modification of Organizational Documents.........................................................62
11.13 Use of Proceeds..................................................................................62
11.14 Further Assurances...............................................................................62
11.15 Transactions with Affiliates.....................................................................63
11.16 Employee Benefit Plans...........................................................................63
11.17 Environmental Matters............................................................................63
11.18 Unconditional Purchase Obligations...............................................................63
11.19 Inconsistent Agreements..........................................................................63
11.20 Business Activities..............................................................................64
11.21 Investments......................................................................................64
-iii-
11.22 Restriction of Amendments to Certain Documents...................................................65
11.23 Interest Rate Protection.........................................................................65
11.24 Fiscal Year......................................................................................65
11.25 Cancellation of Debt.............................................................................65
11.26 Other Accounts...................................................................................65
11.27 ▇▇▇▇▇ Earnout; Amended Financial Covenants; Etc..................................................66
11.28 Collateral Access Agreements.....................................................................66
SECTION 12 EFFECTIVENESS; CONDITIONS OF LENDING, ETC........................................................66
12.1 Initial Credit Extension.........................................................................66
12.1.1 Notes..................................................................................67
12.1.2 Resolutions............................................................................67
12.1.3 Consents, etc..........................................................................67
12.1.4 Incumbency and Signature Certificates..................................................67
12.1.5 Security Agreement.....................................................................67
12.1.6 Pledge Agreement.......................................................................67
12.1.7 Depositary Account Agreements..........................................................67
12.1.8 Bank Agent Accounts and Lockbox........................................................67
12.1.9 Real Estate Documents..................................................................67
12.1.10 Acquisition Agreement Assignment......................................................68
12.1.11 Subordination/Intercreditor Agreements................................................68
12.1.12 Opinions of Counsel...................................................................68
12.1.13 Insurance.............................................................................68
12.1.14 Copies of Documents...................................................................69
12.1.15 Payment of Fees.......................................................................69
12.1.16 Solvency Certificate..................................................................69
12.1.17 Pro Forma.............................................................................69
12.1.18 Search Results; Lien Terminations.....................................................69
12.1.19 Filings, Registrations and Recordings.................................................69
12.1.20 Closing Certificate...................................................................69
12.1.21 Life Insurance and Life Insurance Collateral Assignment...............................70
12.1.22 Acquisition and Merger Transaction Certificate, Consents and Permits..................70
12.1.23 Other.................................................................................70
12.2 Conditions to All Loans..........................................................................70
12.2.1 Compliance with Warranties, No Default, etc............................................70
12.2.2 Confirmatory Certificate...............................................................70
12.3.1 Conditions Satisfied...................................................................71
12.3.2 Notice.................................................................................71
12.3.3 Prairie................................................................................71
12.3.4 Use of Proceeds........................................................................71
12.3.5 Pro Forma Compliance...................................................................71
12.3.6 Subordination..........................................................................71
12.3.7 Outside Date...........................................................................72
12.3.8 Adjustment of Covenant Levels; Audited Financial Statements............................72
12.3.9 Other Deliveries.......................................................................72
SECTION 13 EVENTS OF DEFAULT AND THEIR EFFECT...............................................................72
13.1 Events of Default................................................................................72
13.1.1 Non-Payment of the Loans, etc..........................................................72
13.1.2 Non-Payment of Other Debt..............................................................73
-iv-
13.1.3 Other Material Obligations.............................................................73
13.1.4 Bankruptcy, Insolvency, etc............................................................73
13.1.5 Non-Compliance with Loan Documents.....................................................73
13.1.6 Warranties.............................................................................73
13.1.7 Pension Plans..........................................................................74
13.1.8 Judgments..............................................................................74
13.1.9 Invalidity of Collateral Documents, etc................................................74
13.1.10 Invalidity of Subordination Provisions, etc...........................................74
13.1.11 Change of Control.....................................................................74
13.1.12 Change of Management..................................................................75
13.2 Effect of Event of Default.......................................................................75
SECTION 14 THE AGENT........................................................................................76
14.1 Appointment and Authorization....................................................................76
14.2 Delegation of Duties.............................................................................76
14.3 Liability of Agent...............................................................................76
14.4 Reliance by Agent................................................................................77
14.5 Notice of Default................................................................................77
14.6 Credit Decision..................................................................................77
14.7 Indemnification..................................................................................78
14.8 Agent in Individual Capacity.....................................................................78
14.9 Successor Agent..................................................................................79
14.10 Collateral Matters..............................................................................79
SECTION 15 GENERAL..........................................................................................79
15.1 Waiver; Amendments...............................................................................79
15.2 Confirmations....................................................................................80
15.3 Notices..........................................................................................80
15.4 Computations.....................................................................................80
15.5 Regulation U.....................................................................................81
15.6 Costs, Expenses and Taxes........................................................................81
15.7 Captions.........................................................................................81
15.8 Assignments; Participations......................................................................81
15.8.1 Assignments............................................................................81
15.8.2 Participations.........................................................................83
15.9 Governing Law....................................................................................83
15.10 Counterparts....................................................................................84
15.11 Successors and Assigns..........................................................................84
15.12 Joint and Several Liability of Borrowers........................................................84
15.13 Indemnification by the Borrowers................................................................85
15.14 Nonliability of Lenders.........................................................................86
15.15 FORUM SELECTION AND CONSENT TO JURISDICTION.....................................................86
15.16 Waiver of Jury Trial............................................................................87
-v-
SCHEDULES
SCHEDULE 2.1 Lenders and Pro Rata Shares
SCHEDULE 3.1(a) Term Loans A Installments (Aggregate)
SCHEDULE 3.1(b) Term Loans B Installments (Aggregate)
SCHEDULE 7.2 Master Account; Operating Accounts; Zero Balance Accounts
SCHEDULE 7.3 List of Bank Accounts and Payroll and ▇▇▇▇▇ Cash Accounts
SCHEDULE 10.6 Litigation and Contingent Liabilities
SCHEDULE 10.8 Subsidiaries
SCHEDULE 10.15 Environmental Matters
SCHEDULE 10.17 Insurance
SCHEDULE 10.18 Real Property
SCHEDULE 10.22 Labor Matters
SCHEDULE 10.25 Capitalization
SCHEDULE 11.3 Risks and Liabilities
SCHEDULE 11.7 Existing Debt
SCHEDULE 11.8 Existing Liens
SCHEDULE 11.21 Investments
SCHEDULE 12.1 Debt to Be Repaid
SCHEDULE 13.1.11 Change of Control
SCHEDULE 15.3 Addresses for Notices
-vi-
EXHIBITS
EXHIBIT A-1 Form of Term Note A (Section 3.1)
EXHIBIT A-2 Form of Term Note B (Section 3.1)
EXHIBIT A-3 Form of Revolving Note (Section 3.1)
EXHIBIT B Form of Compliance Certificate (Section 11.1.3)
EXHIBIT C Security Agreement (Section 1.1)
EXHIBIT D Pledge Agreement (Section 1.1)
EXHIBIT E Acquisition Agreement Assignment (Section 1.1)
EXHIBIT F Form of Borrowing Base Certificate (Section 1.1)
EXHIBIT G Form of Assignment Agreement (Section 1.1)
EXHIBIT H Opinion of White & Case LLP (Section 12.1.12)
EXHIBIT I Solvency Certificate (Section 12.1.16)
EXHIBIT J Life Insurance Collateral Assignment (Section 1.1)
-vii-
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of May 17, 2000 (this "Agreement"), is
entered into among ▇▇▇▇▇ ACQUISITION CORPORATION, a New York corporation ("▇▇▇▇▇
Acquisition Co."), ▇▇▇▇▇ HOLDINGS, INC., a Delaware corporation ("Holdings")
(▇▇▇▇▇ Acquisition Co. and Holdings, together with their respective successors
and assigns permitted hereunder, including ▇▇▇▇▇ Products, Inc., a New York
corporation ("▇▇▇▇▇"), sometimes hereinafter are referred to individually as a
"Borrower" and collectively as "Borrowers"), HOLDINGS, in its capacity as funds
administrator and borrowing agent for the Borrowers (in such capacity, the
"Funds Administrator"), the financial institutions that are or from time to time
hereafter may become parties hereto (together with their respective successors
and assigns, the "Lenders"), and LASALLE BANK NATIONAL ASSOCIATION (in its
individual capacity, "LaSalle"), as the Agent for the Lenders (in such capacity,
together with its successors and assigns in such capacity, the "Agent").
WHEREAS, the Lenders have agreed to make available to the Borrowers a
revolving credit facility (which includes letters of credit) and certain term
loan facilities, all upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
SECTION 1 DEFINITIONS.
1.1 Definitions. When used herein the following terms shall have
the following meanings:
Account Debtor means any Person who is obligated to any Borrower under
an Account Receivable.
Account Receivable means, with respect to any Person, any right of such
Person to payment for goods sold or leased or for services rendered,
whether or not evidenced by an instrument or chattel paper and whether
or not yet earned by performance.
Acquisition Agreement Assignment means, a purchase agreement assignment
in substantially the form of Exhibit E.
Acquisition and Merger Transaction means the merger by ▇▇▇▇▇
Acquisition Co. with and into ▇▇▇▇▇, pursuant to which ▇▇▇▇▇ shall be
the surviving Person pursuant to the Acquisition and Merger Agreement,
and the other transactions related to and contemplated by the
Acquisition and Merger Agreement.
Acquisition and Merger Agreement means, collectively, the Agreement and
Plan of Merger dated as of May 10, 2000 among the Borrowers, ▇▇▇▇▇,
▇▇▇▇ Mnaymneh, AHD and the Sellers, together with all definitive
agreements, documents and instruments executed in connection therewith.
Adjusted Working Capital means the remainder of:
(a) the amount by which (i) the consolidated current
assets of the Borrowers and their respective Subsidiaries,
exceeds (ii) the amount of cash and cash equivalents included
in such consolidated current assets;
minus
(b) the amount by which (i) the consolidated current
liabilities of the Borrowers and their respective
Subsidiaries, exceeds (ii) the amount of short-term Debt
(including current maturities of long-term Debt) of the
Borrowers and their respective Subsidiaries included in such
consolidated current liabilities.
Affected Loan - see Section 9.3.
Affiliate of any Person means (i) any other Person which, directly or
indirectly, controls or is controlled by or is under common control
with such Person and (ii) any officer or director of such Person. A
Person shall be deemed to be "controlled by" any other Person if such
other Person possesses, directly or indirectly, power to vote five
percent (5%) or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managers
or power to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
Agent means LaSalle, in its capacity as Agent for the Lenders
hereunder, and any successor thereto in such capacity.
Agreement - see the Preamble.
AHD means American Home Direct Corp., a New York corporation.
Ancillary Acquisition means the acquisition by ▇▇▇▇ ▇▇▇▇▇▇▇▇ of ten
percent (10%) of the equity interests of AHD pursuant to the
Acquisition and Merger Agreement.
Asset Sale means the sale, lease, assignment or other transfer for
value (each a "Disposition") by any Borrower or any Subsidiary of any
Borrower to any Person
(other than to any other Borrower or any Wholly-Owned Subsidiary of any
Borrower) of any asset or right of any Borrower or any Subsidiary of
any Borrower, other than (a) the Disposition of any asset which is to
be replaced, and is in fact replaced, within one hundred eighty (180)
days after the consummation of such Disposition with another asset
performing the same or a similar function, (b) the sale or lease of
Inventory in the ordinary course of business and (c) other Dispositions
to the extent the Net Proceeds thereof do not exceed $100,000 in the
aggregate in any Fiscal Year.
Assignment Agreement - see Section 15.8.1.
Attorney Costs means, with respect to any Person, all reasonable and
documented fees and charges of any counsel to such Person, the
reasonable allocable cost of internal legal services of such Person,
all reasonable disbursements of such internal counsel and all court
costs and similar legal expenses.
Bank Accounts - see Section 7.1.
Base Rate means at any time the greater of (a) the Federal Funds Rate,
plus one-half of one percent (0.5%), and (b) the Prime Rate.
Base Rate Loan means any Loan which bears interest at or by reference
to the Base Rate.
Base Rate Margin means (i) with respect to any Revolving Loan, one and
three-quarters percent (1.75%), and (ii) with respect to any Term Loan,
two percent (2.00%).
Borrower and Borrowers - see the Preamble.
Borrowing Base means, at any time, an amount equal to eighty percent
(80%) of the unpaid amount of all Eligible Accounts Receivable at such
time.
Borrowing Base Certificate means a certificate substantially in the
form of Exhibit F.
Business Day means any day on which LaSalle is open for commercial
banking business in Chicago, Illinois and, in the case of a Business
Day which relates to a Eurodollar Loan, on which dealings are carried
on in the London interbank eurodollar market.
Capital Expenditures means all expenditures which, in accordance with
GAAP, would be required to be capitalized and shown on the consolidated
balance sheet of Borrowers
-3-
and their respective Subsidiaries, but excluding expenditures made in
connection with the replacement, substitution or restoration of assets
to the extent financed (i) from insurance proceeds (or other similar
recoveries) paid on account of the loss of or damage to the assets
being replaced or restored, (ii) with awards of compensation arising
from the taking by eminent domain or condemnation of the assets being
replaced or (iii) substantially concurrently with the proceeds from the
sale of similar assets.
Capital Lease means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by
such Person that, in conformity with GAAP, is accounted for as a
capital lease on the balance sheet of such Person.
Cash Collateralize means to deliver cash collateral to the Agent, to be
held as cash collateral for outstanding Letters of Credit, pursuant to
documentation satisfactory to the Agent. Derivatives of such term shall
have corresponding meanings.
Cash Equivalent Investment means, at any time, (a) any evidence of
Debt, maturing not more than one year after such time, issued or
guaranteed by the United States Government or any agency thereof, (b)
commercial paper, maturing not more than one year from the date of
issue, or corporate demand notes, in each case (unless issued by a
Lender or its holding company) rated at least A-l by Standard & Poor's
Ratings Group or P-l by ▇▇▇▇▇'▇ Investors Service, Inc., (c) any
certificate of deposit (or time deposits represented by such
certificates of deposit) or banker's acceptance, maturing not more than
one year after such time, or overnight Federal Funds transactions that,
in any such case, are issued or sold by LaSalle or its holding company
or by a commercial banking institution that is a member of the Federal
Reserve System and has a combined capital and surplus and undivided
profits of not less than $500,000,000 and (d) any repurchase agreement
entered into with LaSalle (or other commercial banking institution of
the stature referred to in clause (c)) which (i) is secured by a fully
perfected security interest in any obligation of the type described in
any of clauses (a) through (c) and (ii) has a market value at the time
such repurchase agreement is entered into of not less than one hundred
percent (100%) of the repurchase obligation of LaSalle (or other
commercial banking institution) thereunder.
Cash Instruments means all cash, checks, drafts and other similar
writings for the payment of money.
CERCLA - see Section 10.15(a).
Closing Date - see Section 12.1.
-4-
Code means the Internal Revenue Code of 1986, as amended.
Collateral Documents means the Security Agreement, the Acquisition
Agreement Assignment, each Mortgage, each Pledge Agreement, each
Guaranty, all Depositary Account Agreements, the Life Insurance
Collateral Assignment and any other agreement or instrument pursuant to
which any Loan Party or any other Person grants collateral to the
Agent, for the benefit of the Agent and the Lenders.
Commitment means, as to any Lender, such Lender's commitment to make
Loans, and to issue or participate in Letters of Credit, under this
Agreement. The initial amount of each Lender's Pro Rata Share of the
Revolving Commitment Amount and of the aggregate amount of the Term
Loans A and the Term Loans B is set forth on Schedule 2.1.
Computation Period means each period of four consecutive Fiscal
Quarters ending on the last day of a Fiscal Quarter commencing with the
Fiscal Quarter ending September 30, 2000.
Consolidated Net Income means, with respect to the Borrowers and their
respective Subsidiaries for any period, the net income (or loss) of the
Borrowers and their respective Subsidiaries for such period, excluding
any gains or losses from Asset Sales (and transactions of a type
described in clauses (a) and (c) of the definition of "Asset Sales"),
any extraordinary gains or losses and any gains or losses from
discontinued operations.
Controlled Group means all members of a controlled group of
corporations and all members of a controlled group of trades or
businesses (whether or not incorporated) under common control which,
together with any Borrower, are treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.
Debt of any Person means, without duplication, (a) all indebtedness for
borrowed money of such Person, whether or not evidenced by bonds,
debentures, notes or similar instruments, (b) all obligations of such
Person as lessee under Capital Leases which have been or should be
recorded as liabilities on a balance sheet of such Person in accordance
with GAAP, (c) all obligations of such Person to pay the deferred
purchase price of property or services (other than trade payables and
other current liabilities incurred in the ordinary course of business
which are not more than ninety (90) days past due unless the same are
being contested in good faith by appropriate proceedings and with
respect to which a Borrower or any of its Subsidiaries, as the case may
be, has set aside adequate reserves therefor in accordance with GAAP
-5-
consistently applied), (d) all indebtedness secured by a Lien on the
property of such Person, whether or not such indebtedness shall have
been assumed by such Person, (e) all obligations, contingent or
otherwise, with respect to the face amount of all letters of credit
(whether or not drawn) and banker's acceptances issued for the account
of such Person (including the Letters of Credit) and any other
commitments by which such Person assures a creditor against loss, (f)
all Hedging Obligations of such Person, (g) all Suretyship Liabilities
of such Person, (h) any unsatisfied obligation for liabilities pursuant
to Section 4201 of ERISA and/or any contributions pursuant to Section
4243 of ERISA with respect to all Multiemployer Pension Plans, and (i)
all Debt of any partnership of which such Person is a general partner.
Debt to Be Repaid means Debt listed on Schedule 12.1.
Depositary Account Agreement - see Section 7.1.
Depository Bank - see Section 7.1.
Designated Proceeds - see Section 6.2.2(a).
Disposal - see the definition of "Release".
Dollar and the sign "$" mean lawful money of the United States of
America.
EBITDA means, for any period, Consolidated Net Income for such period,
plus or minus, as applicable, to the extent deducted or added in
determining such Consolidated Net Income, Interest Expense, non-cash
interest expense, non-cash compensation expense, non-cash purchase
accounting adjustments, income tax expense, depreciation and
amortization (including amortization of capitalized debt issuance
costs) for such period; provided, that, notwithstanding the foregoing,
for any calculation of EBITDA that is to include all or any portion of
EBITDA for the Fiscal Quarters ended December 31, 1999 and March 31,
2000, such portion of EBITDA shall be determined as follows: (a) with
respect to the Fiscal Quarter ended December 31, 1999 or any portion
thereof, EBITDA shall be deemed to equal $739,000 (or the respective
portion of such amount determined by multiplying such amount by a
fraction, the numerator of which is the number of days during such
Fiscal Quarter included in such calculation and the denominator of
which is ninety two (92)) and (b) with respect to the Fiscal Quarter
ended March 31, 2000 or any portion thereof, EBITDA shall be deemed to
equal $1,252,000 (or the respective portion of such amount determined
by multiplying such amount by a fraction, the numerator of which is the
number of days during such Fiscal Quarter included in such calculation
and the denominator of which is ninety one (91)).
-6-
Eligible Account Receivable means an Account Receivable owing to any
Borrower (other than Holdings) which meets each of the following
requirements:
(1) it arises from the sale or lease of goods or the
rendering of services by such Borrower; and, if it arises from
the sale of goods, (a) such goods substantially comply with
such Account Debtor's specifications (if any) and have been
delivered to such Account Debtor and (b) such Borrower has
possession of, or if requested by the Agent, has delivered to
the Agent, delivery receipts evidencing such delivery;
(2) it (a) is subject to a perfected Lien in favor of
the Agent and (b) is not subject to any other assignment,
claim or Lien;
(3) it is a valid, legally enforceable and
unconditional obligation of the Account Debtor with respect
thereto, and is not subject to any counterclaim, credit,
allowance, discount, rebate or adjustment by the Account
Debtor with respect thereto, or to any claim by such Account
Debtor denying liability thereunder in whole or in part
(provided, that in the event any counterclaim, credit,
allowance, rebate or adjustment is asserted, or discount is
granted, the Account Receivable shall only be ineligible
pursuant to this clause (3) to the extent of such assertion or
discount);
(4) there is no bankruptcy, insolvency or liquidation
proceeding by or against the Account Debtor with respect
thereto;
(5) the Account Debtor with respect thereto is a
resident or citizen of, and is located within, the United
States, unless the sale or lease of goods or services giving
rise to such Account Receivable is on letter of credit,
banker's acceptance or other credit support terms reasonably
satisfactory to the Agent;
(6) it is not an Account Receivable arising from a
"sale on approval" or "consignment" or "▇▇▇▇ and hold" or
subject to any other repurchase or return agreement and is not
an Account Receivable arising from a "sale or return" under
which the Account Debtor with respect thereto has more than
sixty (60) days to return the underlying goods (it being
understood that effective upon the return of any such
underlying goods the respective Account Receivable shall cease
to be an Eligible Account Receivable);
(7) it is not an Account Receivable with respect to
which possession and/or control of the goods sold giving rise
thereto is held, maintained or
-7-
retained by any Borrower (or by any agent or custodian of any
Borrower) for the account of or subject to further and/or
future direction from the Account Debtor with respect thereto;
(8) it arises in the ordinary course of business of
such Borrower;
(9) if the Account Debtor is the United States or any
department, agency or instrumentality thereof, such Borrower
has assigned its right to payment of such Account Receivable
to the Agent pursuant to the Assignment of Claims Act of 1940,
as amended;
(10) if any Borrower maintains a credit limit for the
respective Account Debtor, the aggregate dollar amount of
Accounts Receivable due from such Account Debtor, including
such Account Receivable, does not exceed such credit limit;
(11) if such Account Receivable is evidenced by
chattel paper or an instrument, the originals of such chattel
paper or instrument shall have been endorsed and/or assigned
and delivered to the Agent in a manner satisfactory to the
Agent;
(12) such Account Receivable is not more than (a)
ninety (90) days past the due date thereof or (b) ninety (90)
days past the original invoice date thereof, in each case
according to the original terms of sale;
(13) it is not an Account Receivable with respect to
an Account Debtor that is located in any jurisdiction which
has adopted a statute or other requirement with respect to
which any Person that obtains business from within such
jurisdiction must file a notice of business activities report
or make any other required filings in a timely manner in order
to enforce its claims in such jurisdiction's courts unless
such notice of business activities report has been duly and
timely filed or such Borrower is exempt from filing such
report and has provided the Agent with satisfactory evidence
of such exemption;
(14) the Account Debtor with respect thereto is not a
Loan Party or an Affiliate of any Loan Party;
(15) it is not owed by an Account Debtor with respect
to which twenty-five percent (25%) or more of the aggregate
amount of outstanding Accounts Receivable owed at such time by
such Account Debtor is classified as ineligible under clause
(12) of this definition;
-8-
(16) if the aggregate amount of all Accounts
Receivable owed by the respective Account Debtor to all
Borrowers exceeds twenty-five percent (25%) of the aggregate
amount of all Accounts Receivable of Borrowers, then all
Accounts Receivable owed by such Account Debtor in excess of
such amount shall be deemed ineligible;
(17) if such Account Receivable is not to be
invoiced, such Account Receivable is paid within ninety (90)
days after the date service is rendered or goods are sold; and
(18) if an invoice is to be issued in connection with
such Account Receivable, such invoice is issued within thirty
(30) days after the date service is rendered or goods are
sold.
Any Account Receivable which is at any time an Eligible Account
Receivable, but which subsequently fails to meet any of the foregoing
requirements, shall forthwith cease to be an Eligible Account
Receivable until such time as the factor making such Account Receivable
ineligible shall have been cured, at which time such Account Receivable
will again be included as an Eligible Account Receivable.
Employment Agreements means employment, confidentiality and
noncompetition agreements between ▇▇▇▇▇ and each of ▇▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇.
Environmental Claims means all claims, however asserted, by any
governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any
Environmental Law, or for release or injury to the environment.
Environmental Laws means all present or future federal, state or local
laws, statutes, common law duties, rules, regulations, ordinances and
codes, together with all administrative orders, directed duties,
requests, licenses, authorizations and permits of, and agreements with,
any governmental authority, in each case relating to Environmental
Matters.
Environmental Matters means any matter arising out of or relating to
health and safety, or pollution or protection of the environment or
workplace, including any of the foregoing relating to the presence,
use, production, generation, handling, transport, treatment, storage,
disposal, distribution, discharge, release, control or cleanup of any
Hazardous Substance.
-9-
Equity Documents means, collectively, (i) the Investor Subscription
Agreements of even date herewith, in each case between or among
Holdings and certain of its shareholders, (ii) the Stockholders'
Agreement and (iii) all other related agreements, documents and
instruments executed and delivered thereunder.
ERISA means the Employee Retirement Income Security Act of 1974.
Equity Interests means all of the equity interests in a Person and all
warrants, options and other rights to acquire any equity interests in
such Person.
Eurocurrency Reserve Percentage means, with respect to any Eurodollar
Loan for any Interest Period, a percentage (expressed as a decimal)
equal to the daily average during such Interest Period of the
percentage in effect on each day of such Interest Period, as prescribed
by the FRB, for determining the aggregate maximum reserve requirements
applicable to "Eurocurrency Liabilities" pursuant to Regulation D or
any other then applicable regulation of the FRB which prescribes
reserve requirements applicable to "Eurocurrency Liabilities" as
presently defined in Regulation D.
Eurodollar Loan means any Loan which bears interest at a rate
determined by reference to the Eurodollar Rate (Reserve Adjusted).
Eurodollar Margin means (i) with respect to any Revolving Loan, three
and one-quarter percent (3.25%), and (ii) with respect to any Term
Loan, three and one-half percent (3.50%).
Eurodollar Office means, with respect to any Lender, the office or
offices of such Lender which shall be making or maintaining the
Eurodollar Loans of such Lender hereunder. A Eurodollar Office of any
Lender may be, at the option of such Lender, either a domestic or
foreign office.
Eurodollar Rate means, with respect to any Eurodollar Loan for any
Interest Period, a rate per annum equal to the offered rate for
deposits in Dollars for a period equal or comparable to such Interest
Period which appears on the Bridge Telerate page 3750 as of 11:00 A.M.
(London time) two (2) Business Days prior to the first day of such
Interest Period. "Telerate Page 3750 " means the display designated as
"Page 3750" on the Telerate Service (or such other page as may replace
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 Bankers' Association Interest Settlement
Rates for Dollar deposits).
-10-
Eurodollar Rate (Reserve Adjusted) means, with respect to any
Eurodollar Loan for any Interest Period, a rate per annum (rounded
upwards, if necessary, to the nearest 1/16th of 1%) determined pursuant
to the following formula:
Eurodollar Rate = Eurodollar Rate
---------------
(Reserve Adjusted) (1 - Eurocurrency Reserve Percentage)
Event of Default means any of the events described in Section 13.1.
Excess Cash Flow means, for any period, the remainder of
(ai EBITDA for such period,
less
(b the sum, without duplication, of (i)
scheduled repayments of principal of Term Loans actually made
during such period, plus (ii) voluntary prepayments of the
Term Loans pursuant to Section 6.2.1 during such period, plus
(iii) cash payments made in such period with respect to
Capital Expenditures, plus (iv) all federal, state, local and
foreign income taxes paid in cash by the Borrowers and their
respective Subsidiaries during such period, plus (v cash
Interest Expense of the Borrowers and their respective
Subsidiaries during such period, plus (vi) any net increase in
Adjusted Working Capital during such period, plus (vii) any
cash payments made during such period in respect of the ▇▇▇▇▇
Earnout to the extent otherwise permitted under Section
11.10(ii).
Federal Funds Rate means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York
(including any such successor publication, "H.15(519)") on the
preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if for any relevant day such rate is not so published
on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 A.M. (New
York City time) on that day by each of three leading brokers of Federal
funds transactions in New York City selected by the Agent.
Fee Letter - see Section 5.3.
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
-11-
Fiscal Year means the fiscal year of the Borrowers and their respective
Subsidiaries, which period shall be the 12-month period ending on
December 31 of each year. References to a Fiscal Year with a number
corresponding to any calendar year (e.g., "Fiscal Year 2000") refer to
the Fiscal Year ending on December 31 of such calendar year.
Fixed Charge Coverage Ratio means, for any Computation Period, the
ratio of (a) EBITDA for such period, minus the sum for such period of
all income taxes paid by the Borrower and their respective Subsidiaries
and all Capital Expenditures, to (b) the sum for such period of (i)
Interest Expense, plus (ii) required payments of principal of Funded
Debt (including the Term Loans but excluding the Revolving Loans), plus
(iii) payments of the type described in clause (iii) of Section 11.10
hereof; provided, that, with respect to each of the Computation Periods
ending September 30 and December 31, 2000, Interest Expense and
required payments of principal of Funded Debt for the purpose of the
calculation of Fixed Charge Coverage Ratio shall equal the product
obtained by multiplying, as applicable, (x) the amount of such items
for the period commencing on the Closing Date and ending on the last
day of the respective Computation Period, times (y) two or four-thirds,
respectively.
FRB means the Board of Governors of the Federal Reserve System or any
successor thereto.
Funded Debt means, as to any Person, all Debt of such Person that
matures more than one (1) year from the date of its creation (or is
renewable or extendible, at the option of such Person, to a date more
than one year from such date).
Funds Administrator - see the Preamble.
GAAP means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable
to the circumstances as of the date of determination.
Group - see Section 2.2.1.
Guaranty means a guaranty by a Subsidiary of any Borrower (other than
another Borrower), in form and substance satisfactory to the Agent.
Hazardous Substances - see Section 10.15.
-12-
Hedging Agreement means any interest rate, currency or commodity swap
agreement, cap agreement or collar agreement, and any other agreement
or arrangement designed to protect a Person against fluctuations in
interest rates, currency exchange rates or commodity prices.
Hedging Obligation means, with respect to any Person, any liability of
such Person under any Hedging Agreement.
HIG means H.I.G. KPI, Inc., a company organized under the laws of the
Cayman Islands.
HIG Management Agreement means that certain Consulting Agreement of
even date herewith between HIG Manager and Holdings, as the same from
time to time may be amended, modified, supplemented or restated in
accordance with the terms hereof.
HIG Manager means H.I.G. Capital Management L.L.C., a Delaware limited
liability company.
Holdings - see the Preamble.
Interest Coverage Ratio means, for any Computation Period, the ratio of
(a) EBITDA for such Computation Period, to (b) Interest Expense for
such Computation Period; provided, that, with respect to each of the
Computation Periods ending September 30 and December 31, 2000, Interest
Expense for the purpose of the calculation of the Interest Coverage
Ratio shall equal the product obtained by multiplying, as applicable,
(x) the amount of Interest Expense for the period commencing on the
Closing Date and ending on the last day of the respective Computation
Period, times (y) two or four-thirds, respectively.
Interest Expense means, for any period, the consolidated interest
expense of the Borrowers and their respective Subsidiaries for such
period (including all imputed interest on Capital Leases) paid in cash
net of cash interest income.
Interest Period means, as to any Eurodollar Loan, the period commencing
on the date such Loan is borrowed or continued as, or converted into, a
Eurodollar Loan and ending on the date one, two, three or six months
thereafter as selected by the Funds Administrator pursuant to Section
2.2.2 or 2.2.3, as the case may be; provided that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the following Business Day unless the result of
such extension would be to carry such Interest Period
-13-
into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(ii) any Interest Period that begins on a day for
which there is no numerically corresponding day in the
calendar month at the end of such Interest Period shall end on
the last Business Day of the calendar month at the end of such
Interest Period;
(iii) the Funds Administrator may not select any
Interest Period for a Revolving Loan which would extend beyond
the scheduled Revolving Credit Termination Date; and
(iv) the Funds Administrator may not select any
Interest Period for the Term Loans if, after giving effect to
such selection, the principal amount of the Term Loans having
Interest Periods ending after any date on which an installment
of the Term Loans is scheduled to be repaid would exceed the
principal amount of the Term Loans scheduled to be outstanding
after giving effect to such repayment.
Inventory has the meaning assigned to such term in the Uniform
Commercial Code as in effect in the State of Illinois on the date
hereof.
Investment means, relative to any Person, any investment in another
Person, whether by acquisition of any debt or equity security, by
making any loan or advance or by becoming obligated with respect to a
Suretyship Liability in respect of obligations of such other Person
(other than travel and similar advances to employees in the ordinary
course of business).
Issuing Lender means LaSalle, in its capacity as the issuer of Letters
of Credit hereunder, and its successors and assigns in such capacity.
▇▇▇▇▇ - see the Preamble.
▇▇▇▇▇ Acquisition Co. - see the Preamble.
▇▇▇▇▇ Earnout means the "▇▇▇▇▇ Earnout," as defined in the Acquisition
and Merger Agreement as in effect on the date hereof and as amended to
the extent otherwise permitted hereunder, the aggregate amount of which
shall not exceed $3,000,000.
LaSalle - see the Preamble.
-14-
LC Application means, with respect to any request for the issuance of a
Letter of Credit, a letter of credit application in the form being used
by the Issuing Lender at the time of such request for the type of
letter of credit requested.
LC Fee Rate means a per annum rate equal to three and one-quarter
percent (3.25%).
Lender - see the Preamble. References to the "Lenders" shall include
the Issuing Lender; for purposes of clarification only, to the extent
that LaSalle (or any successor Issuing Lender) may have any rights or
obligations in addition to those of the other Lenders due to its status
as Issuing Lender, its status as such will be specifically referenced.
Lender Parties means the Agent, the Lenders and any Affiliate of any
Lender that shall be a party to any Hedging Agreement with the Company
or any of its Subsidiaries.
Letter of Credit - see Section 2.1.4.
Lien means, with respect to any Person, any interest granted by such
Person in any real or personal property, asset or other right owned or
being purchased or acquired by such Person which secures payment or
performance of any obligation and shall include any mortgage, lien,
encumbrance, charge or other security interest of any kind, whether
arising by contract, as a matter of law, by judicial process or
otherwise.
Life Insurance means key-man life insurance maintained by ▇▇▇▇▇ on the
lives of ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇, in the aggregate amount of not
less than $6,000,000, in form and with insurers satisfactory to the
Agent.
Life Insurance Collateral Assignment means a collateral assignment of
life insurance policies in substantially the form of Exhibit J.
Loan Documents means this Agreement, the Notes, the Fee Letter, the LC
Applications (including any master letter of credit agreement executed
and delivered to the Issuing Lender), the Collateral Documents, the
Prairie Subordination Agreement and any Hedging Agreement between any
Borrower and any Lender.
Loan Party means each Borrower, each other Person which owes an
Obligation to the Agent and/or the Lenders under any Collateral
Document, and each Person which is the subject of a Pledge Agreement.
Loans means, collectively, Revolving Loans and Term Loans and the term
"Loan" shall mean any of the Loans.
-15-
Mandatory Prepayment Event - see Section 6.2.2(a).
Margin Stock means any "margin stock" as defined in Regulation U.
Material Adverse Effect means (a) a material adverse change in, or a
material adverse effect upon, the financial condition, operating
results, operations, assets, liabilities, business or properties of the
Borrowers taken as a whole, (b) a material impairment of the ability of
any Borrower or any Subsidiary of any Borrower to perform any of its
obligations under any Loan Document or (c) a material adverse effect
upon any substantial portion of the collateral under the Collateral
Documents or upon the legality, validity, binding effect or
enforceability against any Borrower or any Subsidiary of any Borrower
of any Loan Document.
Mortgage means a mortgage, deed of trust, leasehold mortgage or similar
instrument granting the Agent, on behalf of the Agent and the Lenders,
a Lien on real property of any Borrower or any Subsidiary of any
Borrower.
Multiemployer Pension Plan means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Borrower or any member of the
Controlled Group may have any liability.
Net Cash Proceeds means:
(a) with respect to any Asset Sale, the aggregate
cash proceeds (including cash proceeds received by way of
deferred payment of principal pursuant to a note, installment
receivable or otherwise, but only as and when received)
received by any Borrower or any Subsidiary of any Borrower
pursuant to such Asset Sale, net of (i) the direct costs
relating to such sale, transfer or other disposition
(including sales commissions and legal, accounting and
investment banking fees), (ii) taxes paid or reasonably
estimated by the Borrowers and their Subsidiaries to be
payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing
arrangements) and (iii) amounts required to be applied to the
repayment of any Debt secured by a Lien on the asset subject
to such Asset Sale (other than the Loans);
(b) with respect to any issuance of equity
securities, the aggregate cash proceeds received by any
Borrower or any Subsidiary of any Borrower pursuant to such
issuance, net of the direct costs relating to such issuance
(including sales and underwriter's commission); and
-16-
(c) with respect to any issuance of Debt, the
aggregate cash proceeds received by any Borrower or any
Subsidiary of any Borrower pursuant to such issuance, net of
the direct costs of such issuance (including up-front fees and
placement fees).
Non-Use Fee Rate means a per annum rate equal to one-half of one
percent (0.50%).
Note means each Term Note and each Revolving Note.
Obligations means all obligations of the Borrowers to pay principal and
interest on the Loans, all reimbursement obligations of the Borrowers
in respect of Letters of Credit, all Hedging Obligations, all fees and
charges payable hereunder, and all other payment obligations of any
Loan Party arising under or relating to any Loan Document, in each
case, whether direct or indirect, absolute or contingent, due or to
become due, and whether now existing or hereafter arising and howsoever
held, evidenced or acquired.
Operating Lease means any lease of (or other agreement conveying the
right to use) any real or personal property by any Borrower or any
Subsidiary of any Borrower, as lessee, other than any Capital Lease.
PBGC means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a
Multiemployer Pension Plan), and to which any Borrower or any member of
the Controlled Group may have any liability, including any liability by
reason of having been a substantial employer within the meaning of
Section 4063 of ERISA at any time during the preceding five years, or
by reason of being deemed to be a contributing sponsor under Section
4069 of ERISA.
Person means any natural person, corporation, partnership, trust,
limited liability company, association, governmental authority or unit,
or any other entity, whether acting in an individual, fiduciary or
other capacity.
Pledge Agreement means a pledge agreement in substantially the form of
Exhibit D.
Prairie means Prairie Capital Mezzanine Fund, L.P., a Delaware limited
partnership.
Prairie Subordinated Debt means the unsecured Debt incurred by the
Borrowers (other than Holdings) pursuant to the Prairie Subordinated
Debt Documents in the aggregate principal amount not to exceed
$2,500,000 or, from and after the ▇▇▇▇▇ Earnout
-17-
Payment Date, $3,500,000, plus, in either case, capitalized interest
added thereto in accordance with the terms of the Prairie Subordinated
Debt Documents, and guarantees thereof by Holdings and its
Subsidiaries, and any other Debt incurred by Holdings, the Borrowers or
any of their Subsidiaries pursuant to the Prairie Subordinated Debt
Documents.
Prairie Subordinated Debt Documents means, collectively, (i) the Note
and Warrant Purchase Agreement of even date herewith among Prairie and
the Borrowers (the "Note and Warrant Agreement"), (ii) the "Notes"
(including the "Supplement Note"), the "Guaranty" and the "Warrants"
issued thereunder (in each case as defined in the Note and Warrant
Agreement), (iii) any and all "Put Notes" (as defined in the
Subordination Agreement) and (iv) all other definitive agreements,
documents and instruments executed and delivered in connection
therewith, in each case as amended, modified, supplemented or restated
from time to time in accordance with the terms hereof and the Prairie
Subordination Agreement.
Prairie Subordination Agreement means a subordination agreement among
Prairie, the Agent and the Borrowers, in form and substance
satisfactory to the Agent.
Prime Rate means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by LaSalle as its prime
rate (whether or not such rate is actually charged by LaSalle). Any
change in the Prime Rate announced by LaSalle shall take effect at the
opening of business on the day specified in the public announcement of
such change.
Pro Rata Share means, with respect to any Lender, the percentage
specified opposite such Lender's name on Schedule 2.1 hereto, as
adjusted from time to time in accordance with the terms hereof.
RCRA - see Section 9.15.
Regulation D means Regulation D of the FRB.
Regulation U means Regulation U of the FRB.
Related Business means the direct marketing of products, including,
without limitation, septic maintenance products, to customers and the
distribution of direct to consumer card packages to consumers.
-18-
Related Transactions means the making of the Prairie Subordinated Debt
and the transactions contemplated by the Acquisition and Merger
Agreement and the other Related Transaction Agreements.
Related Transaction Agreements means, collectively, the Acquisition and
Merger Agreement, the Equity Documents, the Employment Agreements and
the Subordinated Debt Documents.
Release has the meaning specified in CERCLA and the term "Disposal" (or
"Disposed") has the meaning specified in RCRA; provided that in the
event either CERCLA or RCRA is amended so as to broaden the meaning of
any term defined thereby, such broader meaning shall apply as of the
effective date of such amendment; and provided, further, that to the
extent that the laws of a state wherein any affected property lies
establish a meaning for "Release" or "Disposal" which is broader than
is specified in either CERCLA or RCRA, such broader meaning shall
apply.
Required Lenders means, at any time, Lenders collectively having Pro
Rata Shares aggregating sixty-six and two-thirds percent (66 2/3%) or
more at such time.
Revolving Commitment Amount means $2,500,000, as reduced from time to
time pursuant to Section 6.1.
Revolving Credit Termination Date means the earlier to occur of (a)
June 30, 2006 or (b) such other date on which the Commitments terminate
pursuant to Section 6 or 13.
Revolving Loan - see Section 2.1.1.
Revolving Note - see Section 3.1.
Revolving Outstandings means, at any time, the sum of (a) the aggregate
principal amount of all outstanding Revolving Loans, plus (b) the
Stated Amount of all Letters of Credit.
SEC means the Securities and Exchange Commission or any other
governmental authority succeeding to any of the principal functions
thereof.
Security Agreement means a security agreement substantially in the form
of Exhibit ▇.
▇▇▇▇▇▇▇ means, collectively, ▇▇▇▇ ▇▇▇▇▇, an individual, and ▇▇▇▇▇▇
▇▇▇▇▇, an individual.
-19-
Senior Debt means all Debt of the Borrowers and their Subsidiaries,
other than Subordinated Debt.
Senior Debt to EBITDA Ratio means, as of the last day of any Fiscal
Quarter, the ratio of (i) Senior Debt as of such day, to (ii) EBITDA
for the Computation Period ending on such day.
Stated Amount means, with respect to any Letter of Credit at any date
of determination, (a) the maximum aggregate amount available for
drawing thereunder under any and all circumstances, plus (b) the
aggregate amount of all unreimbursed payments and disbursements under
such Letter of Credit.
Stockholders' Agreement means the Stockholders' Agreement of even date
herewith among the stockholders of Holdings from time to time party
thereto, as amended, modified, supplemented or restated from time to
time in accordance with the terms hereof.
Subordinated Debt means, collectively, (i) the Prairie Subordinated
Debt and (ii) any other unsecured Debt of any Borrower or any
Subsidiary of any Borrower which has subordination terms, covenants,
pricing and other terms which have been approved in writing by the
Required Lenders.
Subordinated Debt Documents means the agreements, documents and
instruments executed and delivered in connection with any Subordinated
Debt, including, without limitation, the Prairie Subordinated Debt
Documents.
Subsidiary means, with respect to any Person, a corporation,
partnership, limited liability company or other entity of which such
Person and/or its other Subsidiaries own, directly or indirectly, such
number of outstanding shares or other ownership interests as have more
than fifty percent (50%) of the ordinary voting power for the election
of directors or other managers of such corporation, partnership,
limited liability company or other entity. Unless the context otherwise
requires, each reference to Subsidiaries herein shall be a reference to
Subsidiaries of the Loan Parties.
Subsidiary Equity Interests shall mean all of the equity interests in
each of the Subsidiaries and all warrants, options and other rights to
acquire equity interests in any of the Subsidiaries.
Suretyship Liability means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent
or otherwise, to provide funds for payment, to
-20-
supply funds to or otherwise to invest in a debtor, or otherwise to
assure a creditor against loss) any indebtedness, obligation or other
liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of
dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation in respect of any Suretyship
Liability shall (subject to any limitation set forth therein) be deemed
to be the principal amount of the debt, obligation or other liability
supported thereby.
Term Loan means any of the Term Loans A or Term Loans B, and the term
"Term Loans" shall mean, collectively, the Term Loans A and the Term
Loans B.
Term Loan A - see Section 2.1.1; and the term "Term Loans A" shall
mean, collectively, each Term Loan A.
Term Loan B - see Section 2.1.2; and the term "Term Loans B" shall
mean, collectively, each Term Loan B.
Term Note A - see Section 3.1.
Term Note B - see Section 3.1.
Total Debt means all Debt of the Borrowers and their respective
Subsidiaries, determined on a consolidated basis.
Total Debt to EBITDA Ratio means, as of the last day of any Fiscal
Quarter, the ratio of (i) Total Debt as of such day, to (ii) EBITDA for
the Computation Period ending on such day.
Type of Loan or Borrowing - see Section 2.2.1. The types of Loans or
borrowings under this Agreement are as follows: Base Rate Loans or
borrowings and Eurodollar Loans or borrowings.
Unmatured Event of Default means any event that, if it continues
uncured, will, with lapse of time or notice or both, constitute an
Event of Default (and shall include, without limitation, any "Potential
Event of Default" (as defined in the Prairie Subordinated Debt
Documents)).
Unobtained Permits - see Section 12.1.20.
Wholly-Owned Subsidiary means, as to any Person, another Person all of
the shares of capital stock or other ownership interests of which
(except directors' qualifying shares)
-21-
are at the time directly or indirectly owned by such Person and/or
another Wholly-Owned Subsidiary of such Person.
Year 2000 Problem means the risk that computer applications and
embedded microchips in non-computing devices may be unable to recognize
and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999.
1.2 Other Interpretive Provisions. (a) The meanings of defined
terms are equally applicable to the singular and plural forms of the defined
terms.
(bi Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(ci The term "including" is not limiting and means
"including without limitation."
(di In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including."
(ei Unless otherwise expressly provided herein, (i)
references to agreements (including this Agreement) and other
contractual instruments shall be deemed to include all subsequent
amendments and other modifications thereto, but only to the extent such
amendments and other modifications are not prohibited by the terms of
any Loan Document, and (ii) references to any statute or regulation
shall be construed as including all statutory and regulatory provisions
amending, replacing, supplementing or interpreting such statute or
regulation.
(fi This Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the
same or similar matters. All such limitations, tests and measurements
are cumulative and each shall be performed in accordance with its
terms.
(gi This Agreement and the other Loan Documents are the
result of negotiations among and have been reviewed by counsel to the
Agent, the Borrowers, the Funds Administrator, the Lenders and the
other parties thereto and are the products of all parties. Accordingly,
they shall not be construed against the Agent or the Lenders merely
because of the Agent's or Lenders' involvement in their preparation.
-22-
SECTION 2 COMMITMENTS OF THE LENDERS; BORROWING,
CONVERSION AND LETTER OF CREDIT PROCEDURES.
2.1 Commitments. On and subject to the terms and conditions of
this Agreement, each of the Lenders, severally and for itself alone, agrees to
make loans to, and to issue or participate in letters of credit for the account
of, the Borrowers as follows:
2.1.1 Term Loan A Commitment. Each Lender agrees to make
term loans to the Borrowers (each such loan, a "Term Loan A"), on the
terms and conditions herein set forth, in amounts and on the additional
terms and conditions set forth below:
(a) on the Closing Date, each Lender agrees to make a
term loan to the Borrowers in such Lender's Pro Rata Share of
$8,337,878 (collectively, the "Initial Term Loans A"); and
(b) on any Business Day during the period commencing
on the first Business Day after the Closing Date through and
including September 1, 2000 (or through and excluding the date
on which the Term Loan A Maximum Amount otherwise is reduced
to zero in accordance with the terms hereof), each Lender
agrees to make additional term loans to the Borrowers in such
Lender's Pro Rata Share of the respective amounts requested by
the Borrower in accordance with Section 2.2.2 (each, a
"Subsequent Term Loan A" and collectively, the "Subsequent
Term Loans A"); provided, that, in addition to the conditions
set forth in Section 2.2.2, (i) any notice given to the Agent
in respect of any proposed borrowing of a Subsequent Term Loan
A in accordance with the terms hereof shall specifically state
that such borrowing is to be a Subsequent Term Loan A, (ii)
the Borrowers shall be permitted to borrow a Subsequent Term
Loan A no more frequently than once in any calendar week and
(iii) the aggregate amount of any Subsequent Term Loan A shall
be in an amount of at least $100,000 and an integral multiple
of $100,000 but not to exceed $500,000;
provided, further, that, subject to the penultimate sentence of this
paragraph, in the event that any or all of the conditions precedent to
the obligation of the Lenders to make any Subsequent Term Loan A shall
not have been satisfied on the respective date of funding set forth in
clause (b) above and the Lenders shall have refused to fund such
Subsequent Term Loan A, and such condition or conditions thereafter
shall have been cured or waived in writing by the Required Lenders,
then the Lenders shall make such respective Subsequent Term Loans A on
the date such condition or conditions precedent shall have been so
cured or waived. The aggregate amount of such Term Loans A (inclusive
of the Initial Term Loan A and each Subsequent Term Loan A)
-23-
shall not exceed $11,150,000 (as such amount may be reduced from time
to time in accordance with Section 6.1 prior to September 1, 2000,the
"Term Loan A Maximum Amount"; provided, that the Term Loan A Maximum
Amount automatically further shall be reduced effective on any date the
then existing Term Loan A Maximum Amount, exceeds the product obtained
by multiplying (y) the number of complete calendar weeks remaining
during the period commencing on such date and ending on September 1,
2000 (provided, that if any Subsequent Term Loan A shall have
previously been funded during the then current calendar week, such
period shall commence on the first Business Day of the immediately
succeeding calendar week), by (z) $500,000, and such automatic
reduction shall be in the amount of such excess (rounded up to the
nearest integral of $100,000). The commitments of the Lenders to make
Term Loans A shall expire concurrently with the making of the Terms
Loans A in accordance with the foregoing provisions and,
notwithstanding anything contained herein to the contrary, no Lender
shall have an obligation to fund any Subsequent Term Loans A after
September 1, 2000. Term Loans A that are subsequently repaid or prepaid
may not be reborrowed.
2.1.2 Term Loan B Commitment. Each Lender agrees to make a
loan to the Borrowers (each such loan, a "Term Loan B"), on the terms
and conditions herein set forth, on the ▇▇▇▇▇ Earnout Payment Date in
such Lender's Pro Rata Share of $2,000,000 (the "Term Loan B Maximum
Amount"). The commitments of the Lenders to make Term Loans B shall
expire concurrently on the earlier to occur of (i) the making or
disbursement of the Term Loans B in accordance with the terms hereof
and (ii) May 31, 2001. Term Loans B that are subsequently repaid or
prepaid may not be reborrowed.
2.1.3 Revolving Loan Commitment. Each Lender will make loans
on a revolving basis ("Revolving Loans"), on the terms and conditions
herein set forth, from time to time until the Revolving Credit
Termination Date in such Lender's Pro Rata Share of such aggregate
amounts as the Funds Administrator may request from all Lenders;
provided that the Revolving Outstandings will not exceed at any time
the lesser of (x) the Revolving Commitment Amount and (y) the Borrowing
Base.
2.1.4 LC Commitment. (a) The Issuing Lender will issue standby
letters of credit, in each case containing such terms and conditions as
are permitted by this Agreement and are reasonably satisfactory to the
Issuing Lender (each a "Letter of Credit"), at the request of the Funds
Administrator and for the account of the Borrowers from time to time
before the date which is 30 days prior to the Revolving Credit
Termination Date and (b) as more fully set forth in Section 2.3.2, each
Lender agrees to purchase a participation in each such Letter of
Credit; provided that (i) the aggregate Stated Amount of all Letters of
Credit shall not at any time exceed $100,000
-24-
and (ii) the Revolving Outstandings will not exceed at any time the
lesser of (x) the Revolving Commitment Amount and (y) the Borrowing
Base.
2.2 Loan Procedures.
2.2.1 Various Types of Loans. Each Revolving Loan shall be,
and each Term Loan may be divided into tranches which are, either a
Base Rate Loan or a Eurodollar Loan (each a "type" of Loan), as the
Funds Administrator shall specify in the related notice of borrowing or
conversion pursuant to Section 2.2.2 or 2.2.3. Eurodollar Loans having
the same Interest Period are sometimes called a "Group" or collectively
"Groups". Base Rate Loans and Eurodollar Loans may be outstanding at
the same time; provided that not more than four (4) different Groups of
Eurodollar Loans shall be outstanding at any one time. All borrowings,
conversions and repayments of Revolving Loans shall be effected so that
each Lender will have a pro rata share (according to its Pro Rata
Share) of all types and Groups of Loans.
2.2.2 Borrowing Procedures. The Funds Administrator shall give
written notice or telephonic notice (followed immediately by written
confirmation thereof) to the Agent of each proposed borrowing not later
than (a) in the case of a Base Rate borrowing, 11:00 A.M., Chicago
time, on the proposed date of such borrowing, and (b) in the case of a
Eurodollar borrowing, 11:00 A.M., Chicago time, at least three (3)
Business Days prior to the proposed date of such borrowing. Each such
notice shall be effective upon receipt by the Agent, shall be
irrevocable, and shall specify the date, amount and type of borrowing
and, in the case of a Eurodollar borrowing, the initial Interest Period
therefor. Promptly upon receipt of such notice, the Agent shall advise
each Lender thereof. Not later than 1:00 P.M., Chicago time, on the
date of a proposed borrowing, each Lender shall provide the Agent at
the office specified by the Agent with immediately available funds
covering such Lender's Pro Rata Share of such borrowing and, so long as
the Agent has not received written notice that the conditions precedent
set forth in Section 12 with respect to such borrowing have not been
satisfied, the Agent shall pay over the funds received by the Agent to
the Operating Account on the requested borrowing date. Each borrowing
shall be on a Business Day. Each Base Rate borrowing shall be in an
aggregate amount of at least $100,000 and an integral multiple of
$100,000, and each Eurodollar borrowing shall be in an aggregate amount
of at least $100,000 and an integral multiple of at least $100,000.
2.2.3 Conversion and Continuation Procedures. (a) Subject to
Section 2.2.1, the Funds Administrator may, upon irrevocable written
notice to the Agent in accordance with clause (b) below:
-25-
(iA elect, as of any Business Day, to convert any
Loans (or any part thereof in an aggregate amount not less
than $100,000 or a higher integral multiple of $100,000) into
Loans of the other type; or
(iiA elect, as of the last day of the applicable
Interest Period, to continue any Eurodollar Loans having
Interest Periods expiring on such day (or any part thereof in
an aggregate amount not less than $100,000 or a higher
integral multiple of $100,000) for a new Interest Period;
provided that after giving effect to any prepayment, conversion or
continuation, the aggregate principal amount of each Group of
Eurodollar Loans shall be at least $100,000 and an integral multiple of
$100,000.
(bi The Funds Administrator shall give written or
telephonic (followed immediately by written confirmation thereof)
notice to the Agent of each proposed conversion or continuation not
later than (i) in the case of conversion into Base Rate Loans, 11:00
A.M., Chicago time, on the proposed date of such conversion and (ii) in
the case of conversion into or continuation of Eurodollar Loans, 11:00
A.M., Chicago time, at least three (3) Business Days prior to the
proposed date of such conversion or continuation, specifying in each
case:
(iA the proposed date of conversion or
continuation;
(iiA the aggregate amount of Loans to be
converted or continued;
(iiiA the type of Loans resulting from the
proposed conversion or continuation; and
(ivA in the case of conversion into, or
continuation of, Eurodollar Loans, the duration of the
requested Interest Period therefor.
(ci If upon the expiration of any Interest Period
applicable to Eurodollar Loans, the Funds Administrator has failed to
select timely a new Interest Period to be applicable to such Eurodollar
Loans, the Funds Administrator shall be deemed to have elected to
convert such Eurodollar Loans into Base Rate Loans effective on the
last day of such Interest Period.
(di The Agent will promptly notify each Lender of its
receipt of a notice of conversion or continuation pursuant to this
Section 2.2.3 or, if no timely notice is provided by the Funds
Administrator, of the details of any automatic conversion.
-26-
(ei Any conversion of a Eurodollar Loan on a day other
than the last day of an Interest Period therefor shall be subject to
Section 9.4.
2.3 Letter of Credit Procedures.
2.3.1 LC Applications. The Funds Administrator shall give
notice to the Agent and the Issuing Lender of the proposed issuance of
each Letter of Credit on a Business Day which is at least three (3)
Business Days (or such lesser number of days as the Agent and the
Issuing Lender shall agree in any particular instance in their sole
discretion) prior to the proposed date of issuance of such Letter of
Credit. Each such notice shall be accompanied by an LC Application,
duly executed by the Funds Administrator on behalf of the Borrower for
whose account such Letter of Credit is to be issued, and in all
respects satisfactory to the Agent and the Issuing Lender, together
with such other documentation as the Agent or the Issuing Lender may
request in support thereof, it being understood that each LC
Application shall specify, among other things, the date on which the
proposed Letter of Credit is to be issued, the expiration date of such
Letter of Credit (which shall not be later than the earlier to occur of
(x) one year after the date of issuance thereof and (y) thirty days
prior to the scheduled Revolving Credit Termination Date) and whether
such Letter of Credit is to be transferable in whole or in part. So
long as the Issuing Lender has not received written notice that the
conditions precedent set forth in Section 12 with respect to the
issuance of such Letter of Credit have not been satisfied, the Issuing
Lender shall issue such Letter of Credit on the requested issuance
date. The Issuing Lender shall promptly advise the Agent of the
issuance of each Letter of Credit and of any amendment thereto,
extension thereof or event or circumstance changing the amount
available for drawing thereunder. In the event of any inconsistency
between the terms of any LC Application and the terms of this
Agreement, the terms of this Agreement shall control. Regardless of the
account party on any LC Application, the Borrowers shall be jointly and
severally liable for the reimbursement obligations thereunder, as more
fully set forth in Section 2.3.3 hereof.
2.3.2 Participations in Letters of Credit. Concurrently
with the issuance of each Letter of Credit, the Issuing Lender shall be
deemed to have sold and transferred to each other Lender, and each
other Lender shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Lender, without recourse or
warranty, an undivided interest and participation, to the extent of
such other Lender's Pro Rata Share of the Revolving Commitment Amount,
in such Letter of Credit and the Borrowers' reimbursement obligations
with respect thereto. For the purposes of this Agreement, the
unparticipated portion of each Letter of Credit shall be deemed to be
the Issuing Lender's "participation" therein. The Issuing Lender hereby
agrees, upon request of the Agent or any Lender, to deliver to the
Agent or such
-27-
Lender a list of all outstanding Letters of Credit issued by the
Issuing Lender, together with such information related thereto as the
Agent or such Lender may reasonably request.
2.3.3 Reimbursement Obligations. The Borrowers hereby
unconditionally and irrevocably agree, jointly and severally, to
reimburse the Issuing Lender for each payment or disbursement made by
the Issuing Lender under any Letter of Credit honoring any demand for
payment made by the beneficiary thereunder, in each case on the date
that such payment or disbursement is made. Any amount not reimbursed on
the date of such payment or disbursement shall bear interest from the
date of such payment or disbursement to the date that the Issuing
Lender is reimbursed by the Borrowers therefor, payable on demand, at a
rate per annum equal to the Base Rate from time to time in effect, plus
the Base Rate Margin from time to time in effect for Term Loans, plus,
beginning on the third (3rd) Business Day after receipt of notice from
the Issuing Lender of such payment or disbursement, two percent (2.0%).
The Issuing Lender shall notify the Funds Administrator and the Agent
whenever any demand for payment is made under any Letter of Credit by
the beneficiary thereunder; provided, that the failure of the Issuing
Lender to so notify the Funds Administrator or any Borrower shall not
affect the rights of the Issuing Lender or the Lenders in any manner
whatsoever.
2.3.4 Limitation on Obligations of Issuing Lender. In
determining whether to pay under any Letter of Credit, the Issuing
Lender shall not have any obligation to any Loan Party or any Lender
other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and appear to
comply on their face with the requirements of such Letter of Credit.
Any action taken or omitted to be taken by the Issuing Lender under or
in connection with any Letter of Credit, if taken or omitted in the
absence of gross negligence and willful misconduct, shall not impose
upon the Issuing Lender any liability to any Loan Party or any Lender
and shall not reduce or impair the Borrowers' reimbursement obligations
set forth in Section 2.3.3 or the obligations of the Lenders pursuant
to Section 2.3.5.
2.3.5 Funding by Lenders to Issuing Lender. If the Issuing
Lender makes any payment or disbursement under any Letter of Credit and
the Borrowers have not reimbursed the Issuing Lender in full for such
payment or disbursement by 11:00 A.M., Chicago time, on the date of
such payment or disbursement, or if any reimbursement received by the
Issuing Lender from the Borrowers is or must be returned or rescinded
upon or during any bankruptcy or reorganization of any Loan Party or
otherwise, each other Lender shall be obligated to pay to the Agent for
the account of the Issuing Lender, in full or partial payment of the
purchase price of its participation in such Letter of Credit, its Pro
Rata Share of such payment or
-28-
disbursement (but no such payment shall diminish the obligations of the
Borrowers under Section 2.3.3), and, upon notice from the Issuing
Lender, the Agent shall promptly notify each other Lender thereof. Each
other Lender irrevocably and unconditionally agrees to so pay to the
Agent in immediately available funds for the Issuing Lender's account
the amount of such other Lender's Percentage of such payment or
disbursement. If and to the extent any Lender shall not have made such
amount available to the Agent by 2:00 P.M., Chicago time, on the
Business Day on which such Lender receives notice from the Agent of
such payment or disbursement (it being understood that any such notice
received after noon, Chicago time, on any Business Day shall be deemed
to have been received on the next following Business Day), such Lender
agrees to pay interest on such amount to the Agent for the Issuing
Lender's account forthwith on demand, for each day from the date such
amount was to have been delivered to the Agent to the date such amount
is paid, at a rate per annum equal to (a) for the first three days
after demand, the Federal Funds Rate from time to time in effect, and
(b) thereafter, the Base Rate from time to time in effect. Any Lender's
failure to make available to the Agent its Pro Rata Share of any such
payment or disbursement shall not relieve any other Lender of its
obligation hereunder to make available to the Agent such other Lender's
Pro Rata Share of such payment, but no Lender shall be responsible for
the failure of any other Lender to make available to the Agent such
other Lender's Pro Rata Share of any such payment or disbursement.
2.4 Commitments Several. The failure of any Lender to make a
requested Loan on any date shall not relieve any other Lender of its obligation
(if any) to make a Loan on such date, but no Lender shall be responsible for the
failure of any other Lender to make any Loan to be made by such other Lender.
2.5 Certain Conditions. Notwithstanding any other provision of
this Agreement, no Lender shall have an obligation to make any Loan, or to
permit the continuation of or any conversion into any Eurodollar Loan, and the
Issuing Lender shall not have any obligation to issue any Letter of Credit, if
an Event of Default or Unmatured Event of Default exists.
2.6 Holdings as Funds Administrator.
2.6.1 The Borrowers maintain an integrated cash management
system reflecting their interdependence on one another and the mutual
benefits shared among them as a result of their respective operations.
In order to efficiently fund and operate their respective businesses
and minimize the number of borrowings which they will make under this
Agreement and thereby reduce the administrative costs and record
keeping required in connection therewith, including the necessity to
enter into and maintain separately identified and monitored borrowing
facilities, the Borrowers have requested, and the Agent and the Lenders
have agreed that, subject to Section 15.12
-29-
hereof, (i) all Loans will be advanced to and for the account of the
Borrowers on a joint and several basis to the Operating Account
identified in Section 7.2 hereof and (ii) all Letters of Credit will be
issued pursuant to requests executed by Holdings on behalf of and for
the account of Borrowers. Each Borrower hereby acknowledges that it
will be receiving a direct benefit from each Loan made and each Letter
of Credit issued pursuant to this Agreement.
2.6.2 Each Borrower hereby designates, appoints, authorizes
and empowers Holdings as its agent to act as specified in this Section
2 and each of the other Loan Documents and Holdings hereby acknowledges
such designation, authorization and empowerment, and accepts such
appointment. Each Borrower hereby irrevocably authorizes and directs
Holdings to take such action on its behalf under the respective
provisions of this Agreement and the other Loan Documents, and any
other instruments, documents and agreements referred to herein or
therein, and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required
of the Funds Administrator by the respective terms and provisions
hereof and thereof, and such other powers as are reasonably incidental
thereto, including, without limitation, to take the following actions
for and on such Borrower's behalf:
(i) to submit on behalf of each Borrower notices of
borrowing and conversions to or continuations of Eurodollar
Loans to Agent in accordance with the provisions of this
Agreement;
(ii) to receive on behalf of each Borrower the
proceeds of the Loans in accordance with the provisions of
this Agreement, such proceeds to be disbursed to or for the
account of the applicable Borrower as soon as practicable
after its receipt thereof;
(iii) to submit on behalf of each Borrower requests
for the issuance of Letters of Credit and LC Applications in
accordance with the provisions of this Agreement; and
(iv) to submit on behalf of each Borrower, Borrowing
Base Certificates, Compliance Certificates and all other
certificates, notices and other communications given or
required to be given, hereunder.
Holdings is further authorized and directed by each of the Borrowers to
take all such actions on behalf of such Borrower necessary to exercise
the specific power granted in clauses (i) through (iv) above and to
perform such other duties hereunder and under the
-30-
other Loan Documents, and deliver such documents as delegated to or
required of the Funds Administrator by the terms hereof or thereof.
2.6.3 The administration by Agent and Lenders of the
respective credit facilities under this Agreement as a co-borrowing
facility with a borrowing agent and funds administrator in the manner
set forth herein is solely as an accommodation to Borrowers and at
their request and no Lender Party shall incur any liability to any of
the Borrowers or any other Loan Party as a result thereof.
SECTION 3 NOTES EVIDENCING LOANS.
3.1 Notes. The Term Loans A of each Lender shall be evidenced by a
promissory note (each a "Term Note A") substantially in the form set forth in
Exhibit A-1, with appropriate insertions, payable to the order of such Lender in
an original principal amount equal to such Lender's Term Loan A and each such
Term Note A shall provide that the Term Loans A of such Lender shall be paid in
installments equal to such Lender's Pro Rata Share of the aggregate principal
amount of the installments of the Term Loans A as set forth on Schedule 3.1(a).
The Term Loans B of each Lender shall be evidenced by a promissory note (each a
"Term Note B") substantially in the form set forth in Exhibit A-2, with
appropriate insertions, payable to the order of such Lender in an original
principal amount equal to such Lender's Term Loan B and each such Term Note B
shall provide that the Term Loans B of such Lender shall be paid in installments
equal to such Lender's Pro Rata Share of the aggregate principal amount of the
installments of the Term Loans B as set forth on Schedule 3.1(b). The Revolving
Loans of each Lender shall be evidenced by a promissory note (each a "Revolving
Note") substantially in the form set forth in Exhibit A-3, with appropriate
insertions, payable to the order of such Lender in a face principal amount equal
to such Lender's Pro Rata Share of the Revolving Commitment Amount and each such
Revolving Note shall provide that each Revolving Loan of such Lender shall be
paid in full on the Revolving Credit Termination Date.
3.2 Recordkeeping. Each Lender shall record in its records, or at
its option on schedules attached to its Notes, the date and amount of each Loan
made by such Lender, each repayment or conversion thereof and, in the case of
each Eurodollar Loan, the dates on which each Interest Period for such Loan
shall begin and end. The aggregate unpaid principal amount so recorded shall be
rebuttable presumptive evidence of the principal amount owing and unpaid on such
Note. The failure to so record any such amount or any error in so recording any
such amount shall not, however, limit or otherwise affect the obligations of the
Borrowers hereunder or under any Note to repay the principal amount of the Loans
evidenced by such Note together with all interest accruing thereon.
-31-
SECTION 4 INTEREST.
4.1 Interest Rates. Each Borrower promises to pay, jointly and
severally, interest on the unpaid principal amount of each Loan for the period
commencing on the date of such Loan until such Loan is paid in full as follows:
(a) at all times while such Loan is a Base Rate Loan, at
a rate per annum equal to the sum of the Base Rate from time to time in
effect, plus the applicable Base Rate Margin; and
(b) at all times while such Loan is a Eurodollar Loan, at
a rate per annum equal to the sum of the Eurodollar Rate (Reserve
Adjusted) applicable to each Interest Period for such Loan, plus the
applicable Eurodollar Margin;
provided that at any time any Event of Default exists, if requested by the
Required Lenders, the interest rate applicable to each Loan shall be increased
by two percent (2.0%). Additionally, at any time any Event of Default exists all
other amounts, fees and sums owing to the Lenders under this Agreement and the
other Loan Documents and not contested in good faith by the Borrowers, if
requested by the Required Lenders and to the extent permitted under applicable
law, shall bear interest at a rate per annum equal to the sum of the Base Rate
from time to time in effect, plus two percent (2.0%).
4.2 Interest Payment Dates. Accrued interest on each Base Rate
Loan shall be payable in arrears on the last day of each month and at maturity.
Accrued interest on each Eurodollar Loan shall be payable on the last day of
each Interest Period relating to such Loan (and, in the case of a Eurodollar
Loan with a six-month Interest Period, on the three-month anniversary of the
first day of such Interest Period) and at maturity. After maturity, accrued
interest on all Loans shall be payable on demand.
4.3 Setting and Notice of Eurodollar Rates. The applicable
Eurodollar Rate for each Interest Period shall be determined by the Agent, and
notice thereof shall be given by the Agent promptly to the Funds Administrator
and each Lender. Each determination of the applicable Eurodollar Rate by the
Agent shall be conclusive and binding upon the parties hereto, in the absence of
demonstrable error. The Agent shall, upon written request of the Funds
Administrator or any Lender, deliver to the Funds Administrator or such Lender a
statement showing the computations used by the Agent in determining any
applicable Eurodollar Rate hereunder.
4.4 Computation of Interest. Interest shall be computed for the
actual number of days elapsed on the basis of a year of 360 days. The applicable
interest rate for each Base Rate Loan shall change simultaneously with each
change in the Base Rate.
-32-
SECTION 5 FEES.
5.1 Non-Use Fee. From and after the Closing Date, the Borrowers
shall pay, jointly and severally, to the Agent, for the ratable benefit of the
Lenders, a non-use fee in an amount equal to the sum of:
(a) the Revolving Commitment Amount, less the average
daily amount of the Revolving Outstandings;
(b) from the Closing Date through and including September
1, 2000, the Term Loan A Maximum Amount in effect from time to time (as
reduced from time to time in accordance with the terms hereof and by
the amount of any payments or prepayments applied to the outstanding
principal amount of the Term Loans A), less the sum of the average
daily outstanding balance of the Term Loans A; plus
(c) from the Closing Date through and including the
earlier of (i) the making or disbursement of the Term Loans B in
accordance with the terms of this Agreement and (ii) May 31, 2001, the
Term Loan B Maximum Amount (as reduced from time to time by the amount
of any payments or prepayments applied to the outstanding principal
amount of the Term Loans B), less the sum of the average daily
outstanding balance of the Term Loans B;
multiplied by the Non-Use Fee Rate in effect from time to time, such non-use fee
to be payable in arrears on the last day of each calendar quarter and on (i) the
Revolving Credit Termination Date with respect to Revolving Loans, (ii)
September 1, 2000 with respect to Term Loans A and (iii) the earlier of (y) the
making or disbursement of the Term Loans B in accordance with the terms of this
Agreement and (z) May 31, 2001 with respect to Term Loans B for any period then
ending for which such the non-use fee shall not have been paid previously. The
non-use fee shall be computed for the actual number of days elapsed on the basis
of a year of 360 days.
5.2 Letter of Credit Fees. (a) The Borrowers agree to pay, jointly
and severally, to the Agent for the account of each Lender a letter of credit
fee for each Letter of Credit equal to the LC Fee Rate in effect from time to
time of such Lender's Pro Rata Share (as adjusted from time to time) of the
undrawn amount of such Letter of Credit (computed for the actual number of days
elapsed on the basis of a year of 360 days); provided that, if requested by the
Required Lenders, the rate applicable to each Letter of Credit shall be
increased by two percent (2%) at any time that any Event of Default exists. Such
letter of credit fee shall be payable in arrears on the last day of each
calendar quarter and on the Revolving Credit
-33-
Termination Date (or such later date on which such Letter of Credit expires or
is terminated) for the period from the date of the issuance of each Letter of
Credit (or the last day on which the letter of credit fee was paid with respect
thereto) to the date such payment is due or, if earlier, the date on which such
Letter of Credit expired or was terminated.
(b) In addition, with respect to each Letter of Credit,
the Borrowers agree to pay, jointly and severally, to the Issuing Lender, for
its own account, (i) such fees and expenses as the Issuing Lender customarily
requires in connection with the issuance, negotiation, processing and/or
administration of letters of credit in similar situations and (ii) a letter of
credit fronting fee in the amount and at the times agreed to by the Funds
Administrator and the Issuing Lender.
5.3 Upfront Fees. The Borrowers agree to pay, jointly and
severally, to the Agent for the account of each Lender on the Closing Date, an
upfront fee in the amount agreed to among the Borrowers and the Agent in that
fee letter of even date herewith (the "Fee Letter").
5.4 Agent's Fees. The Borrowers agree to pay, jointly and
severally, to the Agent, such agent fees in the amount and at the times
previously agreed upon in the Fee Letter.
SECTION 6 REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT AMOUNT
AND ACQUISITION COMMITMENT AMOUNT; PREPAYMENTS.
6.1 Reduction or Termination of the Revolving Commitment Amount
and Acquisition Commitment Amount.
6.1.1 Voluntary Reduction or Termination of the Revolving
Commitment Amount; Voluntary Reduction of the Term Loan A Maximum
Amount. (a) The Funds Administrator may, from time to time on at least
five (5) Business Days' prior written notice received by the Agent
(which shall promptly advise each Lender thereof), permanently reduce
the Revolving Commitment Amount to an amount not less than the
Revolving Outstandings. Any such reduction shall be in an amount not
less than $100,000 or a higher integral multiple of $100,000.
Concurrently with any reduction of the Revolving Commitment Amount to
zero, the Borrowers shall pay all interest on such Loans, all non-use
fees and all letter of credit fees and shall Cash Collateralize in full
all obligations arising with respect to the Letters of Credit.
(b) At any time prior to September 1, 2000, the Funds
Administrator may, on at least five (5) Business Days' prior written
notice received by the Agent (which shall promptly advise each Lender
thereof), permanently reduce the Term Loan A Maximum
-34-
Amount to an amount not less than the then outstanding principal amount
of the Term Loans A. Any such reduction shall be in an amount not less
than $100,000 or a higher integral multiple of $100,000. Concurrently
with any reduction of the Term Loan A Maximum Amount to the then
outstanding principal amount of the Term Loans A, the Borrowers shall
pay all accrued but unpaid non-use fees in respect thereof.
6.1.2 Mandatory Reductions of Revolving Commitment Amount
and the Term Loan A Maximum Amount. (a) On the date of any Mandatory
Prepayment Event, the Revolving Commitment Amount shall be permanently
reduced by an amount (if any) equal to the Designated Proceeds of such
Mandatory Prepayment Event over the amount (if any) applied to prepay
Term Loans pursuant to Section 6.2.2.
(b) If, prior to September 1, 2000, the proceeds of any
prepayment are applied to the Term Loans A, then the Term Loan A
Maximum Amount shall be reduced, on a dollar-for-dollar basis, by the
amount of such prepayment.
6.1.3 All Reductions of the Revolving Commitment Amount and
the Term Loan A Maximum Amount. All reductions of the Revolving
Commitment Amount and the Term Loan A Maximum Amount shall reduce the
Commitments or the Term Loan A Maximum Amount, respectively, pro rata
among the Lenders according to their respective Pro Rata Shares.
6.2 Prepayments.
6.2.1 Voluntary Prepayments. The Borrowers may from time to
time prepay the Loans in whole or in part; provided that the Funds
Administrator shall give the Agent (which shall promptly advise each
Lender) notice thereof not later than 11:00 A.M., Chicago time, on the
day of such prepayment (which shall be a Business Day), specifying the
Loans to be prepaid and the date and amount of prepayment. Any such
partial prepayment shall be in an amount equal to $100,000 or a higher
integral multiple of $100,000.
6.2.2 Mandatory Prepayments. (a) The Borrowers shall make a
prepayment of the Loans upon the occurrence of any of the following
(each a "Mandatory Prepayment Event") at the following times and in the
following amounts (such applicable amounts being referred to as
"Designated Proceeds"):
(i) Concurrently with the receipt by any
Borrower or any Subsidiary of any Borrower of any Net Cash
Proceeds from any Asset Sale, in an amount equal to 100% of
such Net Cash Proceeds.
-35-
(ii) Concurrently with the receipt by any
Borrower or any Subsidiary of any Borrower of any Net Cash
Proceeds from any issuance of equity securities (excluding, to
the extent otherwise permitted to be made hereunder, (w) any
issuance of shares of capital stock to any current
shareholder, (x) any issuance of shares of capital stock
pursuant to any employee or director stock option program,
benefit plan or compensation program, and (y) any issuance by
any Subsidiary of any Borrower to such Borrower) in an amount
equal to 100% of such Net Cash Proceeds.
(iii) Concurrently with the receipt by any
Borrower or any Subsidiary of any Borrower of any Net Cash
Proceeds from any issuance of any Debt (excluding Debt
permitted by clauses (a) through (i) of Section 11.7,but
including any Subordinated Debt), in an amount equal to 100%
of such Net Cash Proceeds.
(iv) Within one hundred twenty (120) days after
the end of Fiscal Year 2000 and ninety (90) days after the end
of each Fiscal Year thereafter, in an amount equal to (i)
seventy-five percent (75%) of Excess Cash Flow for such Fiscal
Year if the Total Debt to EBITDA Ratio for the Computation
Period ending on December 31 of such Fiscal Year is not less
than 3.00:1.00 or (ii) fifty percent (50%) of Excess Cash Flow
for such Fiscal Year if the Total Debt to EBITDA Ratio for the
Computation Period ending on December 31 of such Fiscal Year
is less than 3.00:1.00, in each case as determined by
reference to the Compliance Certificate accompanying the
respective annual audit report and delivered for such
Computation Period in accordance with Section 11.1.3.
(v) Concurrently with the receipt by any
Borrower or any Subsidiary of any Borrower of any proceeds of
the Life Insurance, in an amount equal to 100% of such
proceeds.
(b) If on any day the Revolving Outstandings exceed the
Borrowing Base, the Borrowers shall immediately prepay Revolving Loans
and/or Cash Collateralize the outstanding Letters of Credit, or do a
combination of the foregoing, in an amount sufficient to eliminate such
excess.
(c) If, on any day on which the Revolving Commitment
Amount is reduced pursuant to Section 6.1.3, the Revolving Outstandings
exceed the Revolving Commitment Amount, the Borrowers shall immediately
prepay Revolving Loans or Cash Collateralize the outstanding Letters of
Credit, or do a combination of the foregoing, in an amount sufficient
to eliminate such excess.
-36-
6.3 All Prepayments. Each voluntary partial prepayment
shall be in a principal amount of $100,000 or a higher integral multiple of
$100,000. Any partial prepayment of a Group of Eurodollar Loans shall be subject
to the proviso to Section 2.2.3(a). Any prepayment of a Eurodollar Loan on a day
other than the last day of an Interest Period therefor shall include interest on
the principal amount being repaid and shall be subject to Section 9.4. All
prepayments of Loans shall be applied as follows: first, pro rata to the
remaining installments of the Term Loans based upon the amounts thereof, and
second, to the Revolving Loans (with a corresponding permanent reduction in the
Revolving Commitment Amount).
SECTION 7 BANK ACCOUNTS, LOCKBOXES, APPLICATION OF PROCEEDS THEREOF
7.1 Bank Account Agreements. Within ninety (90) days after the
Closing Date, each Borrower maintaining a depositary account (each a "Depositary
Account") with any bank other than the Agent (each a "Depository Bank") shall
enter into a depositary account agreement, in form and substance satisfactory to
the Agent, with the relevant Depository Bank and the Agent (each, as the same
may be amended, restated, supplemented or otherwise modified from time to time,
called a "Depositary Account Agreement"). Pursuant to the Collateral Documents,
including any Depositary Account Agreement, each Borrower shall grant to the
Agent, for the benefit of the Lender Parties, a continuing first priority lien
upon, and security interest in, the Master Account, the Agent Bank Accounts, the
Depositary Accounts and the Operating Account, respectively, in each case as
described below (collectively, the "Bank Accounts"), all funds, items,
instruments, investments, securities and other things of value at any time paid,
deposited, credited to or held in the Lockbox (as described below) or the Bank
Accounts (whether for collection, provisionally or otherwise), and all other
Property of such Borrower from time to time in the possession or under the
control of, or in transit to, any Lender Party, any Depository Bank or any
agent, bailee or custodian therefor, and all proceeds of all of the foregoing.
The Depositary Account Agreements shall each specify that throughout the term of
this Agreement, the respective Depository Bank (I) shall be
pledgee-in-possession (for the benefit of Agent, for the benefit of the Lender
Parties) of the underlying Bank Accounts of each Borrower described therein, all
Cash Instruments of each Borrower held by such Person, and all such funds,
items, instruments, investments, securities, other things of value, Property and
proceeds, (II) shall take such action as shall be specified in written notice
from the Agent to enable the Agent to exercise its rights with respect to such
lien and security interest, (III) shall forward all amounts received in such
Depositary Accounts to the Master Account through weekly sweeps (or more
frequently upon Agent's request during any Event of Default or at any time at
Funds Administrator's request), (IV) shall be entitled to exercise all and any
rights which any Lender Party may have under this Agreement and the other Loan
Documents or applicable law with respect to the Depositary Accounts of each
Borrower described therein and
-37-
such other Property, and (V) shall provide the Agent with copies of all
statements relating to the Depositary Accounts of the applicable Borrower
provided by such Person to such Borrower. Notwithstanding any provision of this
Section 7.1, no Lender Party shall have any obligation to reconcile or verify,
at any time or for any purpose, any balance in any Bank Account of any Borrower,
the Lockbox or any other account maintained by the Agent or any Depository Bank.
7.2 Bank Accounts and Lockboxes. Borrowers shall
establish, on or before the ninetieth (90th) day after the Closing Date, and
thereafter shall maintain, accounts with the Agent identified as the "Master
Account", "Operating Account" and "Zero Balance Accounts" (collectively, the
"Agent Bank Accounts"). The Borrowers shall, within ninety (90) days after the
Closing Date, establish and thereafter maintain a lockbox with the Agent (herein
called the "Lockbox"). Upon the occurrence of any Event of Default and at the
option and direction of the Required Lenders, the Agent Bank Accounts, the
Depositary Accounts and the Lockbox shall be under the sole dominion and control
of the Agent, and no Loan Party shall have any right of withdrawal therefrom.
7.3 List of Bank Accounts and Bank Account Statements.
All Bank Accounts of each Borrower and all payroll and ▇▇▇▇▇ cash accounts of
each Borrower are described on Schedule 7.3. In the event any Borrower opens any
new accounts or closes any account in accordance with the terms of this
Agreement, the Funds Administrator shall deliver to Lender a revised version of
Schedule 7.3 showing any changes thereto within three (3) Business Days of any
such change (including, without limitation, pursuant to the changes thereto
required by the terms hereof). Each Borrower shall instruct each bank (other
than the Agent, as the case may be) listed on Schedule 7.3 at which such
Borrower maintains any Bank Account to provide Agent with copies of all
statements issued by such bank with respect to such Bank Account.
7.4 Proceeds of Collateral; Notices to Account Debtors;
Lockbox. Upon establishing the Lockbox, each Borrower shall direct all its
Account Debtors to pay all Accounts Receivable and other proceeds of Collateral
directly to the Lockbox for deposit into the Master Account. In addition, each
Borrower shall take all such actions as Agent in good ▇▇▇▇▇ ▇▇▇▇▇ necessary or
appropriate to ensure that at all times on and after the date hereof all
proceeds of its Collateral (including, without limitation, all Cash Instruments)
are sent directly to the Lockbox or a Depositary Account with a Depository Bank
that is subject to a Depositary Account Agreement. If, notwithstanding the
actions provided for in the preceding sentences of this Section 7.4, any
Borrower shall receive, or any financial institution shall receive for the
account of any Borrower, any Cash Instruments, such Borrower shall, or shall
cause such financial institution to, transmit in the form received, before the
close of business on the next succeeding Business Day, all such Cash Instruments
(properly endorsed, where required, so that all items delivered may be collected
by such Person) to Agent. Borrowers shall not, and
-38-
Borrowers shall not permit or cause any such financial institution to, commingle
any Cash Instrument so received except in the Master Account, and Borrowers
shall hold separate and apart from all other Property, all such Cash Instruments
in express trust for the benefit of Agent, on behalf of the Lender Parties,
until delivery thereof is made to the Agent. Items deposited in the Lockbox, any
Bank Agent Account or any Depositary Account shall be credited to the Master
Account. Borrowers and any of their Affiliates, employees, or other Persons
acting for or in concert with Borrowers, shall, acting as trustee for Agent,
receive, as the sole and exclusive property of Agent, for the benefit of the
Lender Parties, any monies, checks, notes, drafts or any other payments relating
to and/or proceeds of Accounts Receivable or other Collateral which come into
the possession or under the control of Borrowers or any Affiliates, employees or
other Persons acting for or in concert with Borrowers, and immediately upon
receipt thereof, Borrowers or such other Persons shall remit the same or cause
the same to be deposited, in kind, into the Master Account or, at the direction
of Agent, shall remit the same, or cause the same to be remitted, in kind, to
Agent at Agent's address set forth in Section 15.3.
SECTION 8 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
8.1 Making of Payments. All payments of principal of or interest
on the Notes, and of all fees, shall be made by the Borrowers to the Agent in
immediately available funds at the office specified by the Agent not later than
noon, Chicago time, on the date due; and funds received after that hour shall be
deemed to have been received by the Agent on the following Business Day. Checks
received into the Lockbox shall be deemed to have been received three (3)
Business Days after receipt thereof to the Lockbox. The Agent shall promptly
remit to each Lender its share of all such payments received in collected funds
by the Agent for the account of such Lender. All payments under Section 9.1
shall be made by the Borrowers directly to the Lender entitled thereto.
8.2 Application of Certain Payments. Except for the payments
applied pursuant to Section 6.3, each payment of principal shall be applied,
prior to the existence of any Event of Default, to such Loans and other
Obligations as the Funds Administrator shall direct by notice to be received by
the Agent on or before the date of such payment or, in the absence of such
notice, as the Agent shall determine in its discretion. Concurrently with each
remittance to any Lender of its share of any such payment, the Agent shall
advise such Lender as to the application of such payment.
8.3 Deemed Loans. Notwithstanding any provision contained herein
to the contrary, and in addition to, and not in limitation of, any of the other
rights or remedies of the Agent and the Lenders set forth herein, at the option
and direction of Required Lenders, Agent, in order to facilitate timely payment
hereunder of all Obligations in respect of (I) payments of interest due on any
Loans, (II) payments of principal due on the Term Loans, (III) payments of
-39-
cash, fees, expenses and other Obligations due and payable by Borrowers to the
Loan Parties hereunder or under any of the other Loan Documents and (IV)
payments by Agent of any amount due and payable under any Depositary Account
Agreement or any other agreement entered into by any Lender Party in connection
with this Agreement (including, without limitation, any amount resulting from
the return, dishonor or other non-payment of items deposited with the Agent or
any Depository bank by or on behalf of Borrowers), then, whether or not there is
sufficient Borrowing Base availability, Borrowers shall be deemed automatically
to have made a request for, and upon such payment by the Lenders shall be deemed
to have made, a Base Rate Revolving Loan, in the full amount of such payment.
Borrowers acknowledge that such Revolving Loan may cause a Borrower to exceed
Borrower's Borrowing Base, in which event Borrowers shall be obligated to
immediately make a prepayment pursuant to Section 6.2.2.
8.4 Due Date Extension. If any payment of principal or interest
with respect to any of the Loans, or of any fees or other Obligations, falls due
on a day which is not a Business Day, then such due date shall be extended to
the immediately following Business Day (unless, in the case of a Eurodollar
Loan, such immediately following Business Day is the first Business Day of a
calendar month, in which case such due date shall be the immediately preceding
Business Day) and, in the case of principal, additional interest shall accrue
and be payable for the period of any such extension.
8.5 Setoff. Each Borrower agrees that the Agent and each Lender
have all rights of set-off and bankers' lien provided by applicable law, and in
addition thereto, each Borrower agrees that at any time any Event of Default
exists, the Agent and each Lender may apply to the payment of any obligations of
the Borrowers hereunder or under any other Loan Document, whether or not then
due, any and all balances, credits, deposits, accounts or moneys of any Borrower
then or thereafter with the Agent or such Lender.
8.6 Proration of Payments. If any Lender shall obtain any payment
or other recovery (whether voluntary, involuntary, by application of offset or
otherwise, but excluding any payment pursuant to Section 9.7 or 15.9 and
payments of interest on any Affected Loan) on account of principal of or
interest on any Loan (or on account of its participation in any Letter of
Credit) in excess of its pro rata share of payments and other recoveries
obtained by all Lenders on account of principal of and interest on the Loans (or
such participation) then held by them, such Lender shall purchase from the other
Lenders such participations in the Loans (or sub-participations in Letters of
Credit) held by them as shall be necessary to cause such purchasing Lender to
share the excess payment or other recovery ratably with each of them; provided
that if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery.
-40-
8.7 Taxes. All payments of principal of, and interest on, the
Loans and all other amounts payable hereunder shall be made free and clear of
and without deduction for any present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or other charges of
any nature whatsoever imposed by any taxing authority, excluding franchise taxes
and taxes imposed on or measured by any Lender's net income or receipts (all
non-excluded items being called "Taxes"). If any withholding or deduction from
any payment to be made by the any Loan Party hereunder is required in respect of
any Taxes pursuant to any applicable law, rule or regulation, then the Borrowers
will:
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment
to such authority; and
(c) pay to the Agent for the account of the Lenders such
additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount such
Lender would have received had no such withholding or deduction been
required.
Moreover, if any Taxes are directly asserted against the Agent or any Lender
with respect to any payment received by the Agent or such Lender hereunder, the
Agent or such Lender may pay such Taxes and the Borrowers will promptly pay such
additional amounts (including any penalty, interest or expense) as is necessary
in order that the net amount received by such Person after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
such Person would have received had such Taxes not been asserted.
If any Loan Party fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lenders, the required receipts or other required documentary
evidence, the Borrowers shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure. For purposes of this Section 8.6, a distribution hereunder by the
Agent or any Lender to or for the account of any Lender shall be deemed a
payment by the Borrowers.
Each Lender that (a) is organized under the laws of a jurisdiction
other than the United States of America and (b)(i) is a party hereto on the
Closing Date or (ii) becomes an assignee of an interest under this Agreement
under Section 15.8.1 after the Closing Date (unless such Lender was already a
Lender hereunder immediately prior to such assignment) shall execute and deliver
to the Funds Administrator and the Agent one or more (as the Funds Administrator
or the Agent may reasonably request) United States Internal Revenue Service
Forms 4224 or Forms 1001 or such other forms or documents, appropriately
completed, as may be applicable
-41-
to establish that such Lender is exempt from withholding or deduction of Taxes.
The Borrowers shall not be required to pay additional amounts to any Lender
pursuant to this Section 8.6 to the extent that the obligation to pay such
additional amounts would not have arisen but for the failure of such Lender to
comply with this paragraph.
SECTION 9 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS.
9.1 Increased Costs. (a) If, after the date hereof, the adoption
of, or any change in, any applicable law, rule or regulation, or any change in
the interpretation or administration of any applicable law, rule or regulation
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Lender (or
any Eurodollar Office of such Lender) with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency
(i) shall subject any Lender (or any Eurodollar Office of
such Lender) to any tax, duty or other charge with respect to its
Eurodollar Loans, any of its Notes or its obligation to make Eurodollar
Loans, or shall change the basis of taxation of payments to any Lender
of the principal of or interest on its Eurodollar Loans or any other
amounts due under this Agreement in respect of its Eurodollar Loans or
its obligation to make Eurodollar Loans (except for changes in the rate
of tax on the overall net income of such Lender or its Eurodollar
Office imposed by the jurisdiction in which such Lender's principal
executive office or Eurodollar Office is located);
(ii) shall impose, modify or deem applicable any reserve
(including any reserve imposed by the FRB, but excluding any reserve
included in the determination of interest rates pursuant to Section 4),
special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by any Lender (or any
Eurodollar Office of such Lender); or
(iii) shall impose on any Lender (or its Eurodollar Office)
any other condition affecting its Eurodollar Loans, any of its Note or
its obligation to make Eurodollar Loans;
and the result of any of the foregoing is to increase the cost to (or to impose
a cost on) such Lender (or any Eurodollar Office of such Lender) of making or
maintaining any Eurodollar Loan, or to reduce the amount of any sum received or
receivable by such Lender (or its Eurodollar Office) under this Agreement or
under any of its Notes with respect thereto, then upon demand by such Lender
(which demand shall be accompanied by a statement setting forth the basis for
such demand and a calculation of the amount thereof in reasonable detail, a copy
of which shall be furnished to the Agent), the Borrowers shall pay directly to
such Lender
-42-
such additional amount as will compensate such Lender for such increased cost or
such reduction.
(b) If any Lender shall reasonably determine that any change in,
the adoption or phase-in of, any applicable law, rule or regulation regarding
capital adequacy, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Lender or any
Person 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 controlling Person's capital as a consequence of
such Lender's obligations hereunder or under any Letter of Credit to a level
below that which such Lender or such controlling Person could have achieved but
for such change, adoption, phase-in or compliance (taking into consideration
such Lender's or such controlling Person's policies with respect to capital
adequacy) by an amount deemed by such Lender or such controlling Person to be
material, then from time to time, upon demand by such Lender (which demand shall
be accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to the Agent), the Borrowers shall pay to such Lender such additional
amount as will compensate such Lender or such controlling Person for such
reduction.
9.2 Basis for Determining Interest Rate Inadequate or Unfair. If
with respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are
not being offered to the Agent in the interbank eurodollar market for
such Interest Period, or the Agent otherwise reasonably determines
(which determination shall be binding and conclusive on the Borrowers)
that by reason of circumstances affecting the interbank eurodollar
market adequate and reasonable means do not exist for ascertaining the
applicable Eurodollar Rate; or
(b) Lenders having aggregate Pro Rata Shares of
thirty-five percent (35%) or more advise the Agent that the Eurodollar
Rate (Reserve Adjusted) as determined by the Agent will not adequately
and fairly reflect the cost to such Lenders of maintaining or funding
Eurodollar Loans for such Interest Period (taking into account any
amount to which such Lenders may be entitled under Section 9.1) or that
the making or funding of Eurodollar Loans has become impracticable as a
result of an event occurring after the date of this Agreement which in
the opinion of such Lenders materially affects such Loans;
then the Agent shall promptly notify the other parties thereof and, so long as
such circumstances shall continue, (i) no Lender shall be under any obligation
to make or convert
-43-
into Eurodollar Loans and (ii) on the last day of the current Interest Period
for each Eurodollar Loan, such Loan shall, unless then repaid in full,
automatically convert to a Base Rate Loan.
9.3 Changes in Law Rendering Eurodollar Loans Unlawful. If any
change in, or the adoption of any new, law or regulation, or any change in the
interpretation of any applicable law or regulation by any governmental or other
regulatory body charged with the administration thereof, should make it (or in
the good faith judgment of any Lender cause a substantial question as to whether
it is) unlawful for any Lender to make, maintain or fund Eurodollar Loans, then
such Lender shall promptly notify each of the other parties hereto and, so long
as such circumstances shall continue, (a) such Lender shall have no obligation
to make or convert into Eurodollar Loans (but shall make Base Rate Loans
concurrently with the making of or conversion into Eurodollar Loans by the
Lenders which are not so affected, in each case in an amount equal to the amount
of Eurodollar Loans which would be made or converted into by such Lender at such
time in the absence of such circumstances) and (b) on the last day of the
current Interest Period for each Eurodollar Loan of such Lender (or, in any
event, on such earlier date as may be required by the relevant law, regulation
or interpretation), such Eurodollar Loan shall, unless then repaid in full,
automatically convert to a Base Rate Loan. Each Base Rate Loan made by a Lender
which, but for the circumstances described in the foregoing sentence, would be a
Eurodollar Loan (an "Affected Loan") shall remain outstanding for the same
period as the Group of Eurodollar Loans of which such Affected Loan would be a
part absent such circumstances.
9.4 Funding Losses. Each Borrower hereby agrees that upon demand
by any Lender (which demand shall be accompanied by a statement setting forth
the basis for the amount being claimed, a copy of which shall be furnished to
the Agent), the Borrowers will indemnify such Lender against any net loss or
expense which such Lender may sustain or incur (including any net loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain any Eurodollar Loan), as
reasonably determined by such Lender, as a result of (a) any payment, prepayment
or conversion of any Eurodollar Loan of such Lender on a date other than the
last day of an Interest Period for such Loan (including any conversion pursuant
to Section 9.3) or (b) any failure of the Borrowers to borrow, convert or
continue any Loan on a date specified therefor in a notice of borrowing,
conversion or continuation pursuant to this Agreement. For this purpose, all
notices to the Agent pursuant to this Agreement shall be deemed to be
irrevocable.
9.5 Right of Lenders to Fund through Other Offices. Each Lender
may, if it so elects, fulfill its commitment as to any Eurodollar Loan by
causing a foreign branch or Affiliate of such Lender to make such Loan;
provided, that in such event for the purposes of this Agreement such Loan shall
be deemed to have been made by such Lender and the obligation of the Borrowers
to repay such Loan shall nevertheless be to such Lender and shall be deemed held
by it, to the extent of such Loan, for the account of such branch or Affiliate.
-44-
9.6 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 Loans in any manner
it sees fit, it being understood, however, that for the purposes of this
Agreement all determinations hereunder shall be made as if such Lender had
actually funded and maintained each Eurodollar Loan during each Interest Period
for such Loan through the purchase of deposits having a maturity corresponding
to such Interest Period and bearing an interest rate equal to the Eurodollar
Rate for such Interest Period.
9.7 Mitigation of Circumstances; Replacement of Lenders. (a) Each
Lender shall promptly notify the Funds Administrator and the Agent of any event
of which it has knowledge which will result in, and will use reasonable
commercial efforts available to it (and not, in such Lender's sole judgment,
otherwise disadvantageous to such Lender) to mitigate or avoid, (i) any
obligation by the Borrowers to pay any amount pursuant to Section 8.7 or 9.1 or
(ii) the occurrence of any circumstances described in Section 9.2 or 9.3 (and,
if any Lender has given notice of any such event described in clause (i) or (ii)
above and thereafter such event ceases to exist, such Lender shall promptly so
notify the Funds Administrator and the Agent). Without limiting the foregoing,
each Lender will designate a different funding office if such designation will
avoid (or reduce the cost to the Borrowers of) any event described in clause (i)
or (ii) of the preceding sentence and such designation will not, in such
Lender's sole judgment, be otherwise disadvantageous to such Lender.
(b) If the Borrowers become obligated to pay additional amounts to
any Lender pursuant to Section 8.6, 8.7 or 9.1, or any Lender gives notice of
the occurrence of any circumstances described in Section 9.2 or 9.3, the Funds
Administrator may designate another financial institution which is acceptable to
the Agent and the Issuing Lender in their reasonable discretion (such other
financial institution being called a "Replacement Lender") to purchase the Loans
of such Lender and such Lender's rights hereunder, without recourse to or
warranty by, or expense to, such Lender, for a purchase price equal to the
outstanding principal amount of the Loans payable to such Lender plus any
accrued but unpaid interest on such Loans and all accrued but unpaid fees owed
to such Lender and any other amounts payable to such Lender under this
Agreement, and to assume all the obligations of such Lender hereunder, and, upon
such purchase and assumption (pursuant to an Assignment Agreement), such Lender
shall no longer be a party hereto or have any rights hereunder (other than
rights with respect to indemnities and similar rights applicable to such Lender
prior to the date of such purchase and assumption) and shall be relieved from
all obligations to the Borrowers hereunder, and the Replacement Lender shall
succeed to the rights and obligations of such Lender hereunder.
9.8 Conclusiveness of Statements; Survival of Provisions.
Determinations and statements of any Lender pursuant to Section 9.1, 9.2, 9.3 or
9.4 shall be conclusive absent demonstrable error. Lenders may use reasonable
averaging and attribution methods in
-45-
determining compensation under Sections 9.1 and 9.4, and the provisions of such
Sections shall survive repayment of the Loans, cancellation of the Notes,
expiration or termination of the Letters of Credit and termination of this
Agreement.
SECTION 10 WARRANTIES.
To induce the Agent and the Lenders to enter into this Agreement and to
induce the Lenders to make Loans and issue and participate in Letters of Credit
hereunder, each Borrower warrants to the Agent and the Lenders that, before and
after giving effect to the Related Transactions:
10.1 Organization. Each Borrower, and each of its Subsidiaries, is
a corporation validly existing and in good standing under the laws of the state
of its incorporation; and each Borrower, and each of its Subsidiaries, is duly
qualified to do business in each jurisdiction where, because of the nature of
its activities or properties, such qualification is required, except for such
jurisdictions where the failure to so qualify would not have a Material Adverse
Effect.
10.2 Authorization; No Conflict. Each Borrower, and each of its
Subsidiaries, is duly authorized to execute and deliver each Loan Document to
which it is a party, each Borrower is duly authorized to borrow monies hereunder
and each Borrower, and each of its Subsidiaries, is duly authorized to perform
its obligations under each Loan Document and each Related Transaction Agreement
to which it is a party. The execution, delivery and performance by the Borrowers
and their respective Subsidiaries of this Agreement and each Loan Document and
Related Transaction Agreement to which it is a party, and the borrowings by the
Borrowers hereunder, do not and will not (a) require any consent or approval of
any governmental agency or authority (other than any consent or approval which
has been obtained and is in full force and effect), (b) conflict with (i) any
provision of law, (ii) the charter, by-laws or other organizational documents of
any Borrower or any Subsidiary of any Borrower or (iii) any agreement,
indenture, instrument or other document, in each instance, containing
obligations or requiring payments in excess of $10,000, or any judgment, order
or decree, which is binding upon the any Borrower, any Subsidiary of any
Borrower or any of their respective properties or (c) require, or result in, the
creation or imposition of any Lien on any asset of any Borrower or any
Subsidiary of any Borrower (other than Liens in favor of the Agent created
pursuant to the Collateral Documents).
10.3 Validity and Binding Nature. Each of this Agreement and each
other Loan Document and each Related Transaction Agreement to which any Borrower
or any Subsidiary of any Borrower is a party is the legal, valid and binding
obligation of such Person, enforceable against such Person in accordance with
its terms, subject to bankruptcy,
-46-
insolvency and similar laws affecting the enforceability of creditors' rights
generally and to general principles of equity.
10.4 Financial Condition. (a) The compiled year-end balance sheets
of ▇▇▇▇▇ as of December 31 of 1996, 1997 and 1998, the compiled year-end balance
sheets of AHD as of December 31 of 1997 and 1998, the compiled statements of
operations, shareholders' equity and cash flow of ▇▇▇▇▇ for each of the fiscal
years 1996, 1997 and 1998, the compiled statements of operations, shareholders'
equity and cash flow of AHD for each of the fiscal years 1997 and 1998 and an
unaudited consolidated balance sheet of ▇▇▇▇▇ and Holdings as of December 31,
1999 and unaudited consolidated statements of operations, shareholders' equity
and cash flow of ▇▇▇▇▇ and AHD for the twelve-month period then ended, copies of
which have been delivered to each Lender, were prepared in accordance with GAAP
(subject, in the case of such unaudited statements, to the absence of footnotes
and to normal year-end adjustments and adjustments on a cash basis versus
accrual basis) and present fairly the consolidated financial condition of the
Borrowers and their respective Subsidiaries as at such date and the results of
their operations for the period then ended.
(b) The pro forma consolidated balance sheet of the
Borrowers and their respective Subsidiaries as at May 15, 2000, a copy
of which has been furnished to each Lender, has been prepared using the
assumptions set forth in the notes thereto (each of which the Borrowers
consider to be reasonable) and fairly presents the pro forma
consolidated financial condition of the Borrowers and their Respective
Subsidiaries as if the Related Transactions and the other transactions
contemplated hereby to occur on the Closing Date had taken place as of
such date.
10.5 No Material Adverse Change. Since December 31, 1999, there has
been no material adverse change in the financial condition, operations, assets,
business or properties of the Borrowers and their respective Subsidiaries taken
as a whole.
10.6 Litigation and Contingent Liabilities. No litigation
(including derivative actions), arbitration proceeding or governmental
investigation or proceeding is pending or, to any Borrower's knowledge,
threatened against any Loan Party which might reasonably be expected to have a
Material Adverse Effect, except as set forth in Schedule 10.6. Other than any
liability incident to such litigation or proceedings, no Loan Party has any
material contingent liabilities not listed on Schedule 10.6 or permitted by
Section 11.7.
10.7 Ownership of Properties; Liens. Each Borrower, and each
Subsidiary of each Borrower, owns good and, in the case of real property,
marketable title to all of its material properties and assets, real and
personal, tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of
-47-
all Liens, charges and claims (including infringement claims with respect to
patents, trademarks, service marks, copyrights and the like) except as permitted
by Section 11.8.
10.8 Subsidiaries. As of the Closing Date, no Borrower has any
Subsidiaries other than those listed on Schedule 10.8.
10.9 Pension Plans. (a) During the twelve-consecutive-month period
prior to the date of the execution and delivery of this Agreement or the making
of any Loan or the issuance of any Letter of Credit, (i) no steps have been
taken to terminate any Pension Plan (other than pursuant to Section 4041(b) of
ERISA, in which case such action shall not result in any material liability,
fine or penalty) and (ii) no contribution failure has occurred with respect to
any Pension Plan sufficient to give rise to a Lien under Section 302(f) of
ERISA. No condition exists or event or transaction has occurred with respect to
any Pension Plan which could reasonably be expected to result in the incurrence
by any Borrower of any material liability, fine or penalty.
(b) All contributions (if any) have been made to any
Multiemployer Pension Plan that are required to be made by any Borrower
or any other member of the Controlled Group under the terms of the plan
or of any collective bargaining agreement or by applicable law; no Loan
Party nor any member of the Controlled Group has withdrawn or partially
withdrawn from any Multiemployer Pension Plan (other than any
withdrawal or partial withdrawal that could not reasonably be expected
to result in the incurrence by such Loan Party of any material
liability, fine or penalty), incurred any withdrawal liability with
respect to any such plan or received notice of any claim or demand for
withdrawal liability or partial withdrawal liability from any such
plan, and no condition has occurred which, if continued, could
reasonably be expected to result in a withdrawal or partial withdrawal
from any such plan; and no Borrower nor any member of the Controlled
Group has received any notice that any Multiemployer Pension Plan is in
reorganization, that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of any excise tax, that
any such plan is or has been funded at a rate less than that required
under Section 412 of the Code, that any such plan is or may be
terminated, or that any such plan is or may become insolvent.
10.10 Investment Company Act. No Borrower is an "investment company"
or a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940.
10.11 Public Utility Holding Company Act. No Borrower is a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of
-48-
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935.
10.12 Regulation U. No Borrower is engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
10.13 Taxes. Each Borrower and each Subsidiary of each Borrower has
filed all federal and other material tax returns and reports required by law to
have been filed by it and has paid all taxes and governmental charges thereby
shown to be owing, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.
10.14 Solvency, etc. On the Closing Date, and immediately prior to
and after giving effect to the issuance of each Letter of Credit and each
borrowing hereunder and the use of the proceeds thereof, (a) each Borrower's
assets will exceed its liabilities and (b) each Borrower will be solvent, will
be able to pay its debts as they mature, will own property with fair saleable
value greater than the amount required to pay its debts and will have capital
sufficient to carry on its business as then constituted.
10.15 Environmental Matters.
(a) No Violations. Except as set forth on Schedule 10.15,
to the best knowledge of the Borrowers, no Borrower, nor any operator
of any Borrower's properties, is in violation, or alleged violation, of
any judgment, decree, order, law, permit, license, rule or regulation
pertaining to environmental matters, including those arising under the
Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986 or
any other Environmental Law which (i) in any single case, requires
expenditures in any three-year period of $100,000 or more by the
Borrowers and their respective Subsidiaries in penalties and/or for
investigative, removal or remedial actions or (ii) individually or in
the aggregate otherwise might reasonably be expected to have a Material
Adverse Effect.
(b) Notices. Except as set forth on Schedule 10.15 and
for matters arising after the Closing Date, in each case none of which
could singly or in the aggregate be expected to have a Material Adverse
Effect, no Borrower has received notice from any third party, including
any Federal, state or local governmental authority: (a) that any one of
them has been identified by the U.S. Environmental Protection Agency as
a potentially responsible party under CERCLA with respect to a site
listed on the
-49-
National Priorities List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (b) that any
hazardous waste, as defined by 42 U.S.C. ss.6903(5), any hazardous
substance as defined by 42 U.S.C. ss.9601(14), any pollutant or
contaminant as defined by 42 U.S.C. ss.9601(33) or any toxic substance,
oil or hazardous material or other chemical or substance regulated by
any Environmental Law (all of the foregoing, "Hazardous Substances")
which any one of them has generated, transported or disposed of has
been found at any site at which a Federal, state or local agency or
other third party has conducted a remedial investigation, removal or
other response action pursuant to any Environmental Law; (c) that any
Borrower must conduct a remedial investigation, removal, response
action or other activity pursuant to any Environmental Law; or (d) of
any Environmental Claim.
(c) Handling of Hazardous Substances. Except as set forth
on Schedule 10.15, to the best knowledge of the Borrowers, (i) no
portion of the real property or other assets of any Borrower has been
used for the handling, processing, storage or disposal of Hazardous
Substances except in accordance in all material respects with
applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on
such properties; (ii) in the course of any activities conducted by any
Borrower or the operators of any real property of any Borrower, no
Hazardous Substances have been generated or are being used on such
properties except in accordance in all material respects with
applicable Environmental Laws; (iii) there have been no Releases or
threatened Releases of Hazardous Substances on, upon, into or from any
real property or other assets of any Borrower, which Releases singly or
in the aggregate might reasonably be expected to have a material
adverse effect on the value of such real property or assets; (iv) there
have been no Releases on, upon, from or into any real property in the
vicinity of the real property or other assets of any Borrower which,
through soil or groundwater contamination, may have come to be located
on, and which might reasonably be expected to have a material adverse
effect on the value of, the real property or other assets of any
Borrower; and (v) any Hazardous Substances generated by the Borrowers
have been transported offsite only by properly licensed carriers and
delivered only to treatment or disposal facilities maintaining valid
permits as required under applicable Environmental Laws, which
transporters and facilities have been and are operating in compliance
in all material respects with such permits and applicable Environmental
Laws.
10.16 Year 2000 Problem. The Borrowers have reviewed the areas
within their business and operations which could be adversely affected by, and
have developed a program to address on a timely basis, the Year 2000 Problem.
Based on such review, program and inquiries, the Borrowers reasonably believe
that the "Year 2000 Problem" will not have a Material Adverse Effect.
-50-
10.17 Insurance. Set forth on Schedule 10.17 is a complete and
accurate summary of the Life Insurance and the property and casualty insurance
program of the Borrowers as of the Closing Date (including the names of all
insurers, policy numbers, expiration dates, amounts and types of coverage,
annual premiums, exclusions, deductibles, self-insured retention, and a
description in reasonable detail of any self-insurance program, retrospective
rating plan, fronting arrangement or other risk assumption arrangement involving
any Borrower).
10.18 Real Property. Set forth on Schedule 10.18 is a complete and
accurate list, as of the Closing Date, of the address of all real property owned
or leased by any Borrower, together with, in the case of leased property, the
name and mailing address of the lessor of such property.
10.19 Information. All information heretofore or contemporaneously
herewith furnished in writing by any Borrower or any other Loan Party to the
Agent or any Lender for purposes of or in connection with this Agreement and the
transactions contemplated hereby is, and all written information hereafter
furnished by or on behalf of any Borrower or any other Loan Party to the Agent
or any Lender pursuant hereto or in connection herewith will be, true and
accurate in every material respect on the date as of which such information is
dated or certified, and none of such information is or will be incomplete by
omitting to state any material fact necessary to make such information not
misleading in light of the circumstances under which made (it being recognized
by the Agent and the Lenders that any projections and forecasts provided by the
Borrowers are based on good faith estimates and assumptions believed by the
Borrowers to be reasonable as of the date of the applicable projections or
assumptions and that actual results during the period or periods covered by any
such projections and forecasts may differ from projected or forecasted results).
10.20 Intellectual Property. Each Borrower, and each Subsidiary of
each Borrower, owns and possesses or has a license or other right to use all
patents, patent rights, trademarks, trademark rights, trade names, trade name
rights, service marks, service ▇▇▇▇ rights and copyrights as are necessary for
the conduct of the business of the Borrowers and their respective Subsidiaries,
without any infringement upon rights of others which could reasonably be
expected to have a Material Adverse Effect.
10.21 Burdensome Obligations. As of the Closing Date, neither any
Borrower nor any Subsidiary of any Borrower is a party to any agreement or
contract or subject to any corporate or partnership restriction which might
reasonably be expected to have a Material Adverse Effect.
10.22 Labor Matters. Except as set forth on Schedule 10.22, no
Borrower is subject to any labor or collective bargaining agreement. There are
no existing or threatened strikes, lockouts or other labor disputes involving
any Borrower that singly or in the aggregate could reasonably be expected to
have a Material Adverse Effect. Hours worked by and payment
-51-
made to employees of the Borrowers are not in violation of the Fair Labor
Standards Act or in material violation of any other material applicable law,
rule or regulation dealing with such matters.
10.23 No Default. No Event of Default or Unmatured Event of Default
exists or would result from the incurring by any Borrower of any Debt hereunder
or under any other Loan Document.
10.24 Acquisition and Merger Agreement; Etc. (a) The Borrowers have
heretofore furnished the Agent true and correct copies of the Acquisition and
Merger Agreement.
(b) Each Borrower and, to the Borrowers' knowledge, each
other party to the Acquisition and Merger Agreement has duly taken all
necessary corporate, partnership or other organizational action to
authorize the execution, delivery and performance of the Acquisition
and Merger Agreement to which it is a party and the consummation of
transactions contemplated thereby.
(c) The Acquisition and Merger Transaction will comply
with all applicable legal requirements, and all necessary governmental,
regulatory, creditor, shareholder, partner and other material consents,
approvals and exemptions required to be obtained by the Borrowers and,
to the Borrowers' knowledge, each other party to the Acquisition and
Merger Agreement have been duly obtained and will be in full force and
effect. As of the date hereof, all applicable waiting periods with
respect to the Acquisition and Merger Transaction have expired without
any action being taken by any competent governmental authority which
restrains, prevents or imposes material adverse conditions upon the
consummation of the respective Related Transactions.
(d) The execution and delivery of the Acquisition and
Merger Agreement did not, and the consummation of the Acquisition and
Merger Transaction will not, violate any statute or regulation of the
United States (including any securities law) or of any state or other
applicable jurisdiction, or any order, judgment or decree of any court
or governmental body binding on any Borrower or, to the Borrowers'
knowledge, any other party to the Acquisition and Merger Agreement, or
result in a breach of, or constitute a default under, any material
agreement, indenture, instrument or other document, or any judgment,
order or decree, to which any Borrower is a party or by which the any
Borrower is bound or, to the Borrowers' knowledge, to which any other
party to the Acquisition and Merger Agreement is a party or by which
any such party is bound.
(e) No statement or representation made in the
Acquisition and Merger Agreement by any Borrower nor, to the Borrowers'
knowledge, any other Person,
-52-
contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under
which they are made, not misleading.
10.25 Capitalization. Schedule 10.25 sets forth the authorized
equity securities of each Borrower as of the date hereof. All issued and
outstanding equity securities of each of Borrower are duly authorized and
validly issued, fully paid, non-assessable, and free and clear of all Liens
other than those in favor of the Agent, for the benefit of the Lender Parties.
All such securities were issued in compliance with all applicable state and
federal laws concerning the issuance of securities. All of the issued and
outstanding equity securities of Holdings are owned in the amounts and by the
Persons as set forth in such Schedule 10.25. Holdings owns all of the issued and
outstanding equity securities of each of the other Borrowers. Except as set
forth on Schedule 10.25, there are no pre-emptive or other outstanding rights,
options, warrants, conversion rights or other similar agreements or
understandings for the purchase or acquisition of any equity securities in any
such entity.
10.26 Incorporation of Certain Representations and Warranties. The
representations and warranties made by Borrowers in the Prairie Subordinated
Debt Documents are true and correct in all material respects and by this
reference such representations and warranties hereby are incorporated herein,
mutatis mutandis, for the benefit of the Agent and the Lenders.
SECTION 11 COVENANTS.
Until the expiration or termination of the Commitments and thereafter
until all obligations of the Borrowers hereunder and under the other Loan
Documents are paid in full and all Letters of Credit have been terminated or
cash collateralized to the satisfaction of Agent, each Borrower agrees that,
unless at any time the Required Lenders shall otherwise expressly consent in
writing, it will:
11.1 Reports, Certificates and Other Information. Furnish to the
Agent and each Lender:
11.1.1 Annual Report. Promptly when available and in any
event within 90 days after the close of each Fiscal Year: (a) a copy of
the annual audit report of the Borrowers and their respective
Subsidiaries for such Fiscal Year, including therein consolidated
balance sheets and statements of earnings and cash flows of the
Borrowers and their respective Subsidiaries as at the end of such
Fiscal Year, certified without qualification by PriceWaterhouseCoopers
or other independent auditors of recognized standing selected by the
Borrowers and reasonably acceptable to the Required Lenders,
-53-
together with (i) a written statement from such accountants to the
effect that in making the examination necessary for the signing of such
annual audit report by such accountants, nothing came to their
attention that caused them to believe that the Borrowers were not in
compliance with any provision of Sections 11.6, 11.7, 11.9 or 11.10 of
this Agreement insofar as such provision relates to accounting matters
or, if something has come to their attention that caused them to
believe that the Borrowers were not in compliance with any such
provision, describing such non-compliance in reasonable detail and (ii)
a comparison with the budget for such Fiscal Year and a comparison with
the previous Fiscal Year; and (b) consolidating balance sheets of the
Borrowers and their respective Subsidiaries as of the end of such
Fiscal Year and a consolidating statement of earnings for the Borrowers
and their respective Subsidiaries for such Fiscal Year, certified by
the Chief Financial Officer of Holdings.
11.1.2 Interim Reports. (a) Promptly when available and in
any event within 45 days after the end of each Fiscal Quarter (except
the last Fiscal Quarter of each Fiscal Year), consolidated and
consolidating balance sheets of the Borrowers and their respective
Subsidiaries as of the end of such Fiscal Quarter, together with
consolidated and consolidating statements of earnings and cash flows
for such Fiscal Quarter and for the period beginning with the first day
of such Fiscal Year and ending on the last day of such Fiscal Quarter,
together with a comparison with the corresponding period of the
previous Fiscal Year and a comparison with the budget for such period
of the current Fiscal Year, certified by the Chief Financial Officer of
Holdings; and (b) promptly when available and in any event within 45
days after the end of each month through and including November, 2000,
and 30 days after the end of each month thereafter (except, in any such
case, the last month of each Fiscal Quarter), consolidated and
consolidating balance sheets of the Borrowers and their respective
Subsidiaries as of the end of such month, together with consolidated
and consolidating statements of earnings and a consolidated statement
of cash flows for such month and for the period beginning with the
first day of such Fiscal Year and ending on the last day of such month,
together with a comparison with the corresponding period of the
previous Fiscal Year and a comparison with the budget for such period
of the current Fiscal Year, certified by the Chief Financial Officer of
Holdings.
11.1.3 Compliance Certificates. Contemporaneously with the
furnishing of a copy of each annual audit report pursuant to Section
10.1.1 and each set of quarterly statements pursuant to Section 10.1.2,
a duly completed compliance certificate in the form of Exhibit B, with
appropriate insertions, dated the date of such annual report or such
quarterly statements and signed by the Chief Financial Officer of
Holdings, containing (i) a computation of each of the financial ratios
and restrictions set forth in Section 11.6 and to the effect that such
officer has not become aware of any Event of Default or Unmatured Event
of Default that has occurred and is continuing or, if there
-54-
is any such event, describing it and the steps, if any, being taken to
cure it and (ii) a written statement of the Borrowers' management
setting forth a discussion of the Borrowers and their respective
Subsidiaries' financial condition, changes in financial condition and
results of operations.
11.1.4 Reports to the SEC and to Shareholders; Deliveries in
respect of Subordinated Debt. Promptly upon the filing or sending
thereof, copies of (i) all regular, periodic or special reports of any
Borrower filed with the SEC; copies of all registration statements of
any Borrower filed with the SEC (other than on Form S-8); and copies of
all proxy statements or other communications made to security holders
generally; and (ii) except to the extent otherwise required to be made
hereunder, all notices, certificates, reports, financial statements and
other material deliveries made by Borrowers to any holder of
Subordinated Debt to the extent delivery thereof to such holder shall
have been required by the terms of such Subordinated Debt.
11.1.5 Notice of Default, Litigation and ERISA Matters.
Promptly upon becoming aware of any of the following (but in any event
within 5 days after becoming so aware), written notice describing the
same and the steps being taken by the Borrowers affected thereby with
respect thereto:
(a) the occurrence of any Event of Default or an
Unmatured Event of Default;
(b) any litigation, arbitration or governmental
investigation or proceeding not previously disclosed by the
Borrower to the Lenders which has been instituted or, to the
knowledge of the Borrowers, is threatened against the
Borrowers or to which any of the properties of any thereof is
subject which might reasonably be expected to have a Material
Adverse Effect;
(c) the institution of any steps by any member
of the Controlled Group or any other Person to terminate any
Pension Plan, or the failure of any member of the Controlled
Group to make a required contribution to any Pension Plan (if
such failure is sufficient to give rise to a Lien under
Section 302(f) of ERISA) or to any Multiemployer Pension Plan,
or the taking of any action with respect to a Pension Plan
which could result in the requirement that any Borrower
furnish a bond or other security to the PBGC or such Pension
Plan, or the occurrence of any event with respect to any
Pension Plan or Multiemployer Pension Plan which could result
in the incurrence by any member of the Controlled Group of any
material liability, fine or penalty (including any claim or
demand for withdrawal liability or partial withdrawal from any
Multiemployer Pension Plan), or any material increase in the
-55-
contingent liability of the any Borrower with respect to any
post-retirement welfare plan benefit, or any notice that any
Multiemployer Pension Plan is in reorganization, that
increased contributions may be required to avoid a reduction
in plan benefits or the imposition of an excise tax, that any
such plan is or has been funded at a rate less than that
required under Section 412 of the Code, that any such plan is
or may be terminated, or that any such plan is or may become
insolvent;
(d) any cancellation or material change in any
insurance maintained by the any Borrower, including, without
limitation, the Life Insurance;
(e) any other event (including (i) any violation
of any Environmental Law or the assertion of any Environmental
Claim or (ii) the enactment or effectiveness of any law, rule
or regulation) which might reasonably be expected to have a
Material Adverse Effect; or
(f) the occurrence of any default or event of
default in respect of the Prairie Subordinated Debt or any
other Subordinated Debt.
11.1.6 Borrowing Base Certificates. Within thirty (30) days
of the end of each month through and including December, 2000, and
within twenty (20) days of the end of each month thereafter, a
Borrowing Base Certificate dated as of the end of such month and
executed by the Chief Financial Officer of the Funds Administrator on
behalf of the Borrowers (provided that (i) the Funds Administrator may
deliver a Borrowing Base Certificates more frequently, but regularly,
if it chooses and (ii) at any time any Event of Default exists, the
Agent may require the Funds Administrator to deliver Borrowing Base
Certificates more frequently).
11.1.7 Management Reports. Promptly upon the request of the
Agent or any Lender, copies of all detailed financial and management
reports submitted to any Borrower by independent auditors in connection
with each annual or interim audit made by such auditors of the books of
any Borrower.
11.1.8 Projections. As soon as practicable, and in any event
not later than fifteen (15) days or earlier than ninety (90) days prior
to the commencement of each Fiscal Year, financial projections for the
Borrowers and their respective Subsidiaries for such Fiscal Year and
the three (3) immediately succeeding Fiscal Years (including an
operating budget and a cash flow budget) prepared in a manner
consistent with the projections delivered by Holdings to the Lenders
prior to the Closing Date or otherwise in a manner reasonably
satisfactory to the Agent (such projections shall in any event be
prepared to forecast on a quarterly basis for the upcoming Fiscal
Year), accompanied
-56-
by a certificate of the Chief Financial Officer of Holdings to the
effect that (i) such projections were prepared by the Borrowers in good
faith, (ii) the Borrowers have a reasonable basis for the assumptions
contained in such projections and (iii) such projections have been
prepared in accordance with such assumptions.
11.1.9 Subordinated Debt Notices. Promptly from time to
time, copies of any notices (including notices of default or
acceleration) received from any holder or trustee of, under or with
respect to any Subordinated Debt.
11.1.10 Year 2000 Problem. Promptly upon the reasonable
request of the Agent or any Lender, such updated information or
documentation as may be reasonably requested from time to time
regarding the efforts of the Borrowers to address any actual or
potential Year 2000 Problem.
11.1.11 Other Information. Promptly from time to time, such
other information concerning the Borrowers and any other Loan Party as
any Lender or the Agent may reasonably request.
11.2 Books, Records and Inspections. Keep its books and records in
accordance with sound business practices sufficient to allow the preparation of
financial statements in accordance with GAAP; permit any Lender or the Agent or
any representative thereof to inspect the properties and operations of any
Borrower; and permit at any reasonable time and with reasonable notice (or at
any time without notice if any Event of Default exists), any Lender or the Agent
or any representative thereof to visit any or all of its offices, to discuss its
financial matters with its officers and its independent auditors (and each
Borrower hereby authorizes such independent auditors to discuss such financial
matters with any Lender or the Agent or any representative thereof), and to
examine (and, at the expense of the Borrowers, photocopy extracts from) any of
its books or other records; and permit the Agent and its representatives to
inspect the tangible assets of any Borrower, to perform appraisals of the
material equipment of any Borrower, and to inspect, audit, check and make copies
of and extracts from the books, records, computer data, computer programs,
journals, orders, receipts, correspondence and other data relating to Accounts
Receivable and any other collateral. All out of pocket costs and expenses of
such inspections or audits by the Agent shall be at the Borrowers' expense,
provided that so long as no Event of Default or Unmatured Event of Default
exists, the Borrowers shall not be required to reimburse the Agent for
appraisals more frequently than once each Fiscal Year.
11.3 Maintenance of Property; Insurance. (a) Keep, and cause its
Subsidiaries to keep, all property useful and necessary in the business of the
Borrowers and their Subsidiaries in good working order and condition, ordinary
wear and tear excepted.
-57-
(b) Maintain with responsible insurance companies, such
insurance as may be required by any law or governmental regulation or
court decree or order applicable to it and such other insurance, to
such extent and against such hazards and liabilities (including
business interruption), as is customarily maintained by companies
similarly situated, but which shall insure against all risks and
liabilities of the type identified on Schedule 11.3 and shall have
insured amounts no less than, and deductibles no higher than, those set
forth on such schedule; maintain the Life Insurance; and, upon request
of the Agent or any Lender, furnish to the Agent or such Lender a
certificate setting forth in reasonable detail the nature and extent of
all insurance maintained by the Borrowers, including, without
limitation, the Life Insurance. Each Borrower shall cause each issuer
of an insurance policy (other than that relating to the Life Insurance)
to provide the Agent with an endorsement (i) showing loss payable to
the Agent with respect to each policy of property or casualty insurance
and naming the Agent and each Lender as an additional insured with
respect to each policy of insurance for liability for personal injury
or property damage, (ii) providing that 30 days' notice will be given
to the Agent prior to any cancellation of, material reduction or change
in coverage provided by or other material modification to such policy
and (iii) reasonably acceptable in all other respects to the Agent.
Each Borrower shall execute and deliver to the Agent a collateral
assignment, in form and substance satisfactory to the Agent, of each
business interruption insurance policy maintained by such Borrower.
With respect to the Life Insurance, each Borrower shall (i) cause the
underlying policy to (a) be assigned to the Agent, for the benefit of
the Lender Parties, for collateral security under, and in accordance
with and to the extent required by, the Life Insurance Collateral
Assignment, and (b) provide, pursuant to endorsements in form and
substance satisfactory to the Agent, that the insurer will give the
Agent at least thirty (30) days' prior written notice of the
termination or modification of such policy and (ii) notify the Agent
within five (5) days after obtaining any new policy, describing in
detail in such notice any such new policy.
(C) UNLESS THE BORROWERS PROVIDE THE AGENT WITH EVIDENCE
OF THE INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, THE AGENT MAY
PURCHASE INSURANCE AT THE BORROWERS' EXPENSE TO PROTECT THE AGENT'S AND
THE LENDERS' INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED
NOT, PROTECT THE BORROWERS' INTERESTS. THE COVERAGE THAT THE AGENT
PURCHASES MAY NOT PAY ANY CLAIM THAT IS MADE AGAINST ANY BORROWER IN
CONNECTION WITH THE COLLATERAL. THE FUNDS ADMINISTRATOR MAY LATER
CANCEL ANY INSURANCE PURCHASED BY THE AGENT, BUT ONLY AFTER PROVIDING
THE AGENT WITH EVIDENCE THAT THE BORROWERS HAVE OBTAINED INSURANCE AS
REQUIRED BY THIS AGREEMENT. IF THE AGENT PURCHASES
-58-
INSURANCE FOR THE COLLATERAL, THE BORROWERS WILL BE RESPONSIBLE FOR THE
COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT
MAY BE IMPOSED WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE
DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF
THE INSURANCE MAY BE ADDED TO THE PRINCIPAL AMOUNT OF THE LOANS OWING
HEREUNDER. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF THE
INSURANCE ANY BORROWER MAY BE ABLE TO OBTAIN ON ITS OWN.
11.4 Compliance with Laws; Payment of Taxes and Liabilities. (a)
Comply in all material respects with all applicable laws, rules, regulations,
decrees, orders, judgments, licenses and permits, except where failure to comply
could not reasonably be expected to have a Material Adverse Effect; and (b) pay,
prior to delinquency, all taxes and other governmental charges against it or any
of its property, as well as claims of any kind which, if unpaid, might become a
Lien on any of its property; provided that the foregoing shall not require any
Borrower to pay any such tax or charge so long as it shall contest the validity
thereof in good faith by appropriate proceedings and shall set aside on its
books adequate reserves with respect thereto in accordance with GAAP.
11.5 Maintenance of Existence, etc. Maintain and preserve (a) its
existence and good standing in the jurisdiction of its organization and (b) its
qualification to do business and good standing in each jurisdiction where the
nature of its business makes such qualification necessary (except in those
instances in which the failure to be qualified or in good standing does not have
a Material Adverse Effect).
11.6 Financial Covenants.
11.6.1 Fixed Charge Coverage Ratio. Not permit the Fixed
Charge Coverage Ratio for any Computation Period set forth below to be
less than the applicable ratio set forth below for such Computation
Period:
COMPUTATION FIXED CHARGE
PERIOD ENDING COVERAGE RATIO
--------------------------------------------------------------------------------
9/30/00 1.00:1.00
--------------------------------------------------------------------------------
12/31/00 1.00:1.00
--------------------------------------------------------------------------------
3/31/01 1.05:1.00
--------------------------------------------------------------------------------
6/30/01 1.05:1.00
--------------------------------------------------------------------------------
9/30/01 1.10:1.00
--------------------------------------------------------------------------------
12/31/01 1.10:1.00
--------------------------------------------------------------------------------
3/31/02 1.10:1.00
--------------------------------------------------------------------------------
6/30/02 1.10:1.00
--------------------------------------------------------------------------------
9/30/02 1.15:1.00
--------------------------------------------------------------------------------
12/31/02 1.15:1.00
--------------------------------------------------------------------------------
3/31/03 1.15:1.00
--------------------------------------------------------------------------------
6/30/03 1.15:1.00
--------------------------------------------------------------------------------
-59-
9/30/03 1.15:1.00
--------------------------------------------------------------------------------
12/31/03 1.15:1.00
--------------------------------------------------------------------------------
3/31/04 1.15:1.00
--------------------------------------------------------------------------------
6/30/04 1.15:1.00
--------------------------------------------------------------------------------
9/30/04 1.15:1.00
--------------------------------------------------------------------------------
12/31/04 1.15:1.00
--------------------------------------------------------------------------------
3/31/05 1.15:1.00
--------------------------------------------------------------------------------
6/30/05 1.15:1.00
--------------------------------------------------------------------------------
9/30/05 1.15:1.00
--------------------------------------------------------------------------------
12/31/05 1.15:1.00
--------------------------------------------------------------------------------
3/31/06 1.15:1.00
--------------------------------------------------------------------------------
6/30/06 1.15:1.00
--------------------------------------------------------------------------------
11.6.2 Interest Coverage Ratio. Not permit the Interest
Coverage Ratio for any Computation Period set forth below to be less
than the applicable ratio set forth below for such Computation Period:
COMPUTATION
PERIOD ENDING RATIO
--------------------------------------------------------------------------------
9/30/00 2.00:1.00
--------------------------------------------------------------------------------
12/31/00 2.00:1.00
--------------------------------------------------------------------------------
3/31/01 2.00:1.00
--------------------------------------------------------------------------------
6/30/01 2.00:1.00
--------------------------------------------------------------------------------
9/30/01 2.50:1.00
--------------------------------------------------------------------------------
12/31/01 2.50:1.00
--------------------------------------------------------------------------------
3/31/02 2.50:1.00
--------------------------------------------------------------------------------
6/30/02 2.50:1.00
--------------------------------------------------------------------------------
9/30/02 3.00:1.00
--------------------------------------------------------------------------------
-60-
12/31/02 3.00:1.00
--------------------------------------------------------------------------------
3/31/03 3.00:1.00
--------------------------------------------------------------------------------
6/30/03 3.00:1.00
--------------------------------------------------------------------------------
9/30/03 3.00:1.00
--------------------------------------------------------------------------------
12/31/03 3.00:1.00
--------------------------------------------------------------------------------
3/31/04 3.00:1.00
--------------------------------------------------------------------------------
6/30/04 3.00:1.00
--------------------------------------------------------------------------------
9/30/04 3.00:1.00
--------------------------------------------------------------------------------
12/31/04 3.00:1.00
--------------------------------------------------------------------------------
3/31/05 3.00:1.00
--------------------------------------------------------------------------------
6/30/05 3.00:1.00
--------------------------------------------------------------------------------
9/30/05 3.00:1.00
--------------------------------------------------------------------------------
12/31/05 3.00:1.00
--------------------------------------------------------------------------------
3/31/06 3.00:1.00
--------------------------------------------------------------------------------
6/30/06 3.00:1.00
--------------------------------------------------------------------------------
11.6.3 Total Debt to EBITDA Ratio. Not permit the Total Debt
to EBITDA Ratio as of the last day of any Computation Period set forth
below to exceed the applicable ratio set forth below for such
Computation Period:
COMPUTATION TOTAL DEBT TO
PERIOD ENDING EBITDA
-------------------------------------------------------------------------------
9/30/00 3.60:1.00
-------------------------------------------------------------------------------
12/31/00 3.60:1.00
-------------------------------------------------------------------------------
3/31/01 3.40:1.00
-------------------------------------------------------------------------------
6/30/01 3.25:1.00
-------------------------------------------------------------------------------
9/30/01 3.10:1.00
-------------------------------------------------------------------------------
12/31/01 3.00:1.00
-------------------------------------------------------------------------------
3/31/02 2.80:1.00
-------------------------------------------------------------------------------
6/30/02 2.60:1.00
-------------------------------------------------------------------------------
9/30/02 2.45:1.00
-------------------------------------------------------------------------------
12/31/02 2.25:1.00
-------------------------------------------------------------------------------
3/31/03 2.10:1.00
-------------------------------------------------------------------------------
6/30/03 1.90:1.00
-------------------------------------------------------------------------------
9/30/03 1.75:1.00
-------------------------------------------------------------------------------
12/31/03 1.60:1.00
-------------------------------------------------------------------------------
3/31/04 1.45:1.00
-------------------------------------------------------------------------------
-61-
6/30/04 1.30:1.00
-------------------------------------------------------------------------------
9/30/04 1.15:1.00
-------------------------------------------------------------------------------
12/31/04 1.05:1.00
-------------------------------------------------------------------------------
3/31/05 0.90:1.00
-------------------------------------------------------------------------------
6/30/05 0.75:1.00
-------------------------------------------------------------------------------
9/30/05 0.60:1.00
-------------------------------------------------------------------------------
12/31/05 0.50:1.00
-------------------------------------------------------------------------------
3/31/06 0.50:1.00
-------------------------------------------------------------------------------
6/30/06 0.50:1.00
-------------------------------------------------------------------------------
11.6.4 Senior Debt to EBITDA Ratio. Not permit the Senior
Debt to EBITDA Ratio as of the last day of any Computation Period set
forth below to exceed the applicable ratio set forth below for such
Computation Period:
-------------------------------------------------------------------------------
COMPUTATION SENIOR DEBT TO
PERIOD ENDING EBITDA
-------------------------------------------------------------------------------
9/30/00 3.00:1.00
-------------------------------------------------------------------------------
12/31/00 2.95:1.00
-------------------------------------------------------------------------------
3/31/01 2.80:1.00
-------------------------------------------------------------------------------
6/30/01 2.65:1.00
-------------------------------------------------------------------------------
9/30/01 2.50:1.00
-------------------------------------------------------------------------------
12/31/01 2.40:1.00
-------------------------------------------------------------------------------
3/31/02 2.20:1.00
-------------------------------------------------------------------------------
6/30/02 2.05:1.00
-------------------------------------------------------------------------------
9/30/02 1.90:1.00
-------------------------------------------------------------------------------
12/31/02 1.75:1.00
-------------------------------------------------------------------------------
3/31/03 1.55:1.00
-------------------------------------------------------------------------------
6/30/03 1.40:1.00
-------------------------------------------------------------------------------
9/30/03 1.25:1.00
-------------------------------------------------------------------------------
12/31/03 1.10:1.00
-------------------------------------------------------------------------------
3/31/04 1.00:1.00
-------------------------------------------------------------------------------
6/30/04 0.85:1.00
-------------------------------------------------------------------------------
9/30/04 0.70:1.00
-------------------------------------------------------------------------------
12/31/04 0.60:1.00
-------------------------------------------------------------------------------
3/31/05 0.45:1.00
-------------------------------------------------------------------------------
6/30/05 0.35:1.00
-------------------------------------------------------------------------------
-62-
9/30/05 0.20:1.00
-------------------------------------------------------------------------------
12/31/05 0.20:1.00
-------------------------------------------------------------------------------
3/31/06 0.20:1.00
-------------------------------------------------------------------------------
6/30/06 0.20:1.00
-------------------------------------------------------------------------------
11.6.5 Capital Expenditures. Not permit the aggregate amount
of all Capital Expenditures made by the Borrowers in any Fiscal Year to
exceed $250,000 in the aggregate for all Borrowers and their respective
Subsidiaries.
11.6.6 Minimum EBITDA. Not permit EBITDA of Borrowers and
their respective Subsidiaries for any Computation Period set forth
below to be less than the applicable amount set froth below opposite
such Computation Period:
COMPUTATION MINIMUM
PERIOD ENDING EBITDA
-------------------------------------------------------------------------------
9/30/00 $3,700,000
-------------------------------------------------------------------------------
12/31/00 $3,800,000
-------------------------------------------------------------------------------
3/31/01 $3,900,000
-------------------------------------------------------------------------------
6/30/01 $4,000,000
-------------------------------------------------------------------------------
9/30/01 $4,100,000
-------------------------------------------------------------------------------
12/31/01 $4,200,000
-------------------------------------------------------------------------------
3/31/02 $4,300,000
-------------------------------------------------------------------------------
6/30/02 $4,500,000
-------------------------------------------------------------------------------
9/30/02 $4,600,000
-------------------------------------------------------------------------------
12/31/02 $4,800,000
-------------------------------------------------------------------------------
3/31/03 $4,900,000
-------------------------------------------------------------------------------
6/30/03 $5,100,000
-------------------------------------------------------------------------------
9/30/03 $5,200,000
-------------------------------------------------------------------------------
12/31/03 $5,400,000
-------------------------------------------------------------------------------
3/31/04 $5,500,000
-------------------------------------------------------------------------------
6/30/04 $5,600,000
-------------------------------------------------------------------------------
9/30/04 $5,700,000
-------------------------------------------------------------------------------
12/31/04 $5,800,000
-------------------------------------------------------------------------------
3/31/05 $5,900,000
-------------------------------------------------------------------------------
6/30/05 $6,000,000
-------------------------------------------------------------------------------
-63-
9/30/05 $6,100,000
-------------------------------------------------------------------------------
12/31/05 $6,200,000
-------------------------------------------------------------------------------
3/31/06 $6,300,000
-------------------------------------------------------------------------------
6/30/06 $6,300,000
-------------------------------------------------------------------------------
11.7 Limitations on Debt. Not, and not permit any Subsidiary to,
create, incur, assume or suffer to exist any Debt, except (but only to the
extent permitted under all agreements, documents and instruments applicable to
any Subordinated Debt):
(a) obligations under this Agreement and the other Loan
Documents;
(b) Debt secured by Liens permitted by Section 11.8(d),
and extensions, renewals and refinancings thereof; provided that the
aggregate amount of all such Debt at any time outstanding shall not
exceed $250,000 in the aggregate for all Borrowers;
(c) intercompany Debt among the Borrowers (other than
Holdings);
(d) Subordinated Debt;
(e) Hedging Obligations incurred for bona fide hedging
purposes and not for speculation;
(f) Debt described on Schedule 11.7 and any extension,
renewal or refinancing thereof so long as the principal amount thereof
is not increased;
(g) the Debt to Be Repaid (so long as such Debt is repaid
on the Closing Date with the proceeds of the initial Loans hereunder);
(h) Intentionally Omitted.
(i) other unsecured Debt, in addition to the Debt listed
above, in an aggregate amount not at any time exceeding $100,000 in the
aggregate for all Borrowers and their respective Subsidiaries.
11.8 Liens. Not, and not permit any Subsidiary to, create or permit
to exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except (but only to
the extent permitted under all agreements, documents and instruments applicable
to any Subordinated Debt):
(a) Liens for taxes or other governmental charges not at
the time delinquent or thereafter payable without penalty or being
contested in good faith by appropriate proceedings and, in each case,
for which it maintains adequate reserves;
-64-
(b) Liens arising in the ordinary course of business
(such as (i) Liens of carriers, warehousemen, mechanics and materialmen
and other similar Liens imposed by law and (ii) Liens incurred in
connection with worker's compensation, unemployment compensation and
other types of social security (excluding Liens arising under ERISA) or
in connection with surety bonds, bids, performance bonds and similar
obligations) for sums not overdue or being contested in good faith by
appropriate proceedings and not involving any deposits or advances or
borrowed money or the deferred purchase price of property or services
and, in each case, for which it maintains adequate reserves;
(c) Liens described on Schedule 11.8;
(d) subject to the limitation set forth in Section
11.7(b), (i) Liens arising in connection with Capital Leases (and
attaching only to the property being leased), (ii) Liens existing on
property at the time of the acquisition thereof by any Borrower (and
not created in contemplation of such acquisition) and (iii) Liens that
constitute purchase money security interests on any property securing
debt incurred for the purpose of financing all or any part of the cost
of acquiring such property, provided that any such Lien attaches to
such property within sixty (60) days of the acquisition thereof and
attaches solely to the property so acquired;
(e) attachments, appeal bonds, judgments and other
similar Liens, for sums not exceeding $250,000 in the aggregate for all
Borrowers, arising in connection with court proceedings, provided the
execution or other enforcement of such Liens is effectively stayed and
the claims secured thereby are being actively contested in good faith
and by appropriate proceedings;
(f) easements, rights of way, restrictions, minor defects
or irregularities in title and other similar Liens not interfering in
any material respect with the ordinary conduct of the business of the
Borrowers; and
(g) Liens arising under the Loan Documents.
11.9 Operating Leases. Not permit the aggregate amount of all
rental payments under Operating Leases made (or scheduled to be made) by the
Borrowers and their respective Subsidiaries (on a consolidated basis) to exceed
$250,000 in the aggregate for all Borrowers and their respective Subsidiaries in
any Fiscal Year.
11.10 Restricted Payments. Not (a) make any distribution to any of
its shareholders, (b) purchase or redeem any of its capital stock or other
equity interests or any warrants,
-65-
options or other rights in respect thereof or permit any exercise thereof, (c)
pay any management fees or similar fees to any of its shareholders or any
Affiliate thereof, (d) make any redemption, prepayment, defeasance or repurchase
of any Subordinated Debt, or make any other payment in respect thereof, or (e)
set aside funds for any of the foregoing. Notwithstanding the foregoing (but
only to the extent permitted under all agreements, documents and instruments
applicable to any Subordinated Debt):
(i) any Borrower may pay dividends or make other distributions
to any other Borrower;
(ii) so long as no Event of Default or Unmatured Event of
Default exists or would result therefrom, the Borrowers may pay the
▇▇▇▇▇ Earnout in accordance with the applicable terms of the
Acquisition and Merger Agreement in effect on the date hereof (as
amended to the extent otherwise permitted hereunder); provided, that,
in respect of the ▇▇▇▇▇ Earnout, whether or not the proceeds of Loans
are used to make such payment, the Borrowers shall have complied with
Section 12.3.8;
(iii) so long as no Event of Default or Unmatured Event of
Default exists or would result therefrom, (A) the Borrowers may pay
management fees to HIG Manager, on a quarterly basis in arrears,
pursuant to the terms of the HIG Management Agreement in an aggregate
amount not exceeding $200,000 in any Fiscal Year and (B) Holdings may
redeem employee owned stock not to exceed $100,000 in any Fiscal Year
provided that (1) after giving effect to such redemption, the Borrowers
are in compliance on a pro forma basis with the covenants set forth in
Section 11.6, recomputed for the most recent month for which financial
statements have been delivered, and (2) after giving effect to such
redemption, the lesser of (x) the Revolving Commitment Amount and (y)
the Borrowing Base, exceeds the Revolving Outstandings by not less than
$750,000; and
(iv) Borrowers may make any redemption, prepayment, defeasance
or repurchase of any of the Prairie Subordinated Debt, and may make any
other payment in respect thereof, permit the exercise of the Warrants
and issue Put Notes, in each case to the extent otherwise expressly
permitted by, and solely in accordance with and subject to the terms
of, the terms of the Prairie Subordination Agreement.
11.11 Mergers, Acquisitions, Consolidations, Sales. Not be a party
to any merger or consolidation, or purchase or otherwise acquire all or
substantially all of the assets or any stock of any class of, or any partnership
or joint venture interest in, any other Person, or, except in the ordinary
course of its business, sell, transfer, convey or lease any of its assets, or
sell or assign with or without recourse any receivables, except for the
following (but only to the extent permitted under all agreements, documents and
instruments applicable to any
-66-
Subordinated Debt): (a) any such merger, consolidation, acquisition, sale,
transfer, conveyance, lease or assignment of or by any Borrower (other than
Holdings) with any other Borrower (other than Holdings); (b) any such purchase
or other acquisition by any Borrower (other than Holdings) of the assets of any
other Borrower or any such purchase or other acquisition by any Borrower of the
stock of any other Borrower; (c) sales and other dispositions of the type
described in clauses (a), (b) and (c) of the definition of "Asset Sales;" (d)
sales and dispositions of assets (other than Subsidiary Equity Interests) for at
least fair market value (as determined by the Board of Directors of Holdings),
provided, (i) the net book value of all assets sold or otherwise disposed of in
any Fiscal Year does not exceed five percent (5%) of the net book value of the
consolidated assets of the Borrowers and their respective Subsidiaries as of the
last day of the preceding Fiscal Year and (ii) no Default or Event of Default
exists or would exist after giving effect to such sale or disposition.
11.12 Modification of Organizational Documents. Not permit the
Certificate or Articles of Incorporation, By-Laws or other organizational
documents of any Borrower or any of its Subsidiaries to be amended or modified
in any way which might reasonably be expected to materially adversely affect the
interests of the Agent or Lenders.
11.13 Use of Proceeds. Use the proceeds of (i) Revolving Loans,
Subsequent Term Loans A, and the Letters of Credit, solely for working capital,
for Capital Expenditures permitted hereunder and corporate purposes, (ii) the
Initial Term Loans A to consummate the Acquisition and Merger Transaction (other
than the Ancillary Acquisition) and to pay the Debt to Be Repaid, and (iii) Term
Loans B solely to pay up to $2,000,000 of the ▇▇▇▇▇ Earnout, in accordance with
the terms hereof; and not use or permit any proceeds of any Loan to be used,
either directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of "purchasing or carrying" any Margin Stock.
11.14 Further Assurances. Take such actions as are necessary or as
the Agent or the Required Lenders may reasonably request from time to time
(including the execution and delivery of guaranties, security agreements, pledge
agreements, mortgages, deeds of trust, financing statements and other documents,
the filing or recording of any of the foregoing, and the delivery of stock
certificates and other collateral with respect to which perfection is obtained
by possession) to ensure that (a) the obligations of the Borrowers hereunder and
under the other Loan Documents (i) are secured by substantially all of the
assets of the Borrowers, (ii) are secured by all of the Equity Interests in all
Subsidiaries of Holdings, and (iii) if not Borrowers hereunder, guaranteed by
all Subsidiaries of the Borrowers and (b) the obligations of each non-Borrower
Subsidiary under such guaranty are secured by substantially all of the assets of
such non-Borrower Subsidiary.
11.15 Transactions with Affiliates. Not enter into, or cause, suffer
or permit to exist any transaction, arrangement or contract with any of its
other Affiliates (other than among or
-67-
between Borrowers) which is on terms which are less favorable than are
obtainable from any Person which is not one of its Affiliates.
11.16 Employee Benefit Plans. Maintain each Pension Plan in
substantial compliance with all applicable requirements of law and regulations.
11.17 Environmental Matters. (a) If any Release or Disposal of
Hazardous Substances shall occur or shall have occurred on any real property or
any other assets of any Borrower, the Borrowers shall cause the prompt
containment and removal of such Hazardous Substances and the remediation of such
real property or other assets as necessary to comply with all Environmental Laws
and to preserve the value of such real property or other assets. Without
limiting the generality of the foregoing, each Borrower shall comply with any
valid Federal or state judicial or administrative order requiring the
performance at any real property of any Borrower of activities in response to
the Release or threatened Release of a Hazardous Substance.
(b) To the extent that the transportation of "hazardous
waste" as defined by RCRA is permitted by this Agreement, each Borrower shall
dispose of such hazardous waste only at licensed disposal facilities operating
in compliance with Environmental Laws.
11.18 Unconditional Purchase Obligations. Not, and not permit any of
its Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services if such contract requires that
payment be made by a Borrower regardless of whether delivery is ever made of
such materials, supplies or other property or services.
11.19 Inconsistent Agreements. Not, and not permit any of its
Subsidiaries to, enter into any agreement, other than this Agreement and the
other Loan Documents, containing any provision which would (a) be violated or
breached by any borrowing by any Borrower hereunder or by the performance by any
Borrower or any Subsidiary of any Borrower of any of its obligations hereunder
or under any other Loan Document, (b) prohibit any Borrower from granting to the
Agent, for the benefit of the Lender Parties, a Lien on any of its assets or (c)
create or permit to exist or become effective any encumbrance or restriction on
the ability of any Borrower to (i) pay dividends or make other distributions to
any Borrower, or pay any Debt owed to any Borrower, (ii) make loans or advances
to any Borrower or (iii) transfer any of its assets or properties to any
Borrower.
11.20 Business Activities. Not, and not permit any of its
Subsidiaries to, engage in any line of business other than the Related
Businesses. In addition, and notwithstanding the other provisions herein
contained, Holdings shall not engage in any business or other activities, or own
any material assets or property, other than the ownership and management of its
Subsidiaries.
-68-
11.21 Investments. Not, and not permit any of its Subsidiaries to,
make or permit to exist any Investment in any other Person, except (without
duplication) the following (but only to the extent permitted under all
agreements, documents and instruments applicable to any Subordinated Debt):
(a) contributions by any Borrower to the capital of any
other Borrower (other than Holdings);
(b) in the ordinary course of business, Investments by
any Borrower (other than Holdings) in any other Borrower (other than
Holdings), by way of intercompany loans, advances or guaranties;
(c) Intentionally Omitted;
(d) Cash Equivalent Investments;
(e) bank deposits in the ordinary course of business,
provided that the aggregate amount of all such deposits (excluding
amounts in payroll accounts or for accounts payable, in each case to
the extent that checks have been issued to third parties) which are
maintained with any bank other than the Agent or a Depository Bank
shall not at any time exceed $200,000 in the aggregate for all such
bank accounts;
(f) Investments in securities of account debtors received
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such account debtors;
(g) Investments listed on Schedule 11.21; and
(h) Investments in AHD in respect of the "Call Option,"
as defined in the Acquisition and Merger Agreement as in effect on the
date hereof; provided, that nothing contained in this Section 11.21(h)
shall be deemed to constitute consent of or approval by the Agent or
any Lender to the exercise thereof.
provided that (x) any Investment which when made complies with the requirements
of the definition of the term "Cash Equivalent Investment" may continue to be
held notwithstanding that such Investment if made thereafter would not comply
with such requirements; (y) no Investment otherwise permitted by clause (b) or
(c) shall be permitted to be made if, immediately before or after giving effect
thereto, any Event of Default or Unmatured Event of Default exists.
-69-
11.22 Restriction of Amendments to Certain Documents. Not amend or
otherwise modify, or waive any rights under (i) any Related Transaction
Agreement (other than the Prairie Subordinated Debt Documents) or the HIG
Management Agreement if, in any case, such amendment, modification or waiver
could be expected to materially and adversely affect the interests of the Agent
or the Lenders; provided, that, notwithstanding the foregoing, the Borrowers
shall not agree to any amendment, modification or waiver of any terms of the
▇▇▇▇▇ Earnout or any of the Equity Documents or (ii) any of the Subordinated
Debt Documents (including the Prairie Subordinated Debt Documents) except, with
respect to the Subordinated Debt Documents, to the extent otherwise permitted by
the terms of subordination or the related subordination agreement, as the case
may be, including, without limitation, the Prairie Subordination Agreement in
respect of the Prairie Subordinated Debt Documents.
11.23 Interest Rate Protection. Enter into, not later than thirty
(30) days after the Closing Date, an interest rate protection mechanism with a
term of at least three (3) years on an ISDA standard form with one or more
Lenders or Affiliates thereof or with counterparties reasonably acceptable to
the Agent to hedge the interest rate with respect to not less than fifty percent
(50%) of the principal amount of the Term Loans, in form and substance
reasonably satisfactory to the Agent.
11.24 Fiscal Year. Not, and not permit any of its Subsidiaries to,
change its Fiscal Year.
11.25 Cancellation of Debt. Not cancel any claim or debt owing to
and except for the cancellation of debts or claims not to exceed $100,000 in any
Fiscal Year.
11.26 Other Accounts. Not, and not permit any of its Subsidiaries
to, maintain any operating account (other than the Bank Accounts); and each
Borrower agrees that it will not maintain any bank, investment or other account
of any kind whatsoever with any other brokerage house or financial institution;
provided, however, that so long as no Event of Default shall have occurred and
be continuing, each Borrower may maintain the ▇▇▇▇▇ cash and payroll accounts
listed on Schedule 7.3 hereto at the financial institutions indicated thereon;
provided, that the aggregate amount of funds on deposit in each such ▇▇▇▇▇ cash
account shall not exceed $5,000 and each such payroll account shall not at any
time exceed the sum of all accrued payroll and payroll taxes then payable by the
applicable Borrower on account of payroll obligations of such Borrower payable
from such account; and provided, further, that (I) each Borrower shall have
irrevocably instructed the relevant financial institution, at the request of the
Agent, to provide Agent with information concerning such accounts, (II) such
financial institution shall acknowledge such instructions in writing for the
benefit of Agent and the other Lender Parties, and (III) at any time when any
Event of Default exists, each
-70-
Borrower shall, at the request of the Agent or Required Lenders, promptly cause
each such financial institution to provide Agent with reports of the balance in
each such account.
11.27 ▇▇▇▇▇ Earnout; Amended Financial Covenants; Etc. (a) Deliver
to the Agent, no later than fifteen (15) Business Days prior to the date on
which the Borrowers shall pay, or shall be obligated to pay, the ▇▇▇▇▇ Earnount,
the materials and information described in Section 12.3.8(a) and such other
financial information and materials as the Agent reasonably may request, and
enter into good faith negotiations with the Agent and the Lenders, in each such
case to effectuate the provisions of Section 12.3.8, and (b) enter into, execute
and deliver, no later than ten (10) Business Days prior to the date on which the
Borrowers shall pay, or shall be obligated to pay, the ▇▇▇▇▇ Earnount, such
agreements, documents and instruments as may be required by the Agent and the
Lenders to effectuate the provisions hereof and of Section 12.3.8, including,
without limitation, the amendment of the financial covenants contained in
Section 10.6 consistent with the terms hereof and of Section 12.3.8.
11.28 Collateral Access Agreements. Use, and cause each of its
Subsidiaries to use, its best efforts to obtain and deliver to the Agent, on or
before the forty-fifth (45th) day after the Closing Date, a Collateral Access
Agreement from the lessor under each lease of real property under which such
Person is a lessee or sublessee to the extent such Collateral Access Agreement
shall not have been obtained and delivered to the Agent on or before the Closing
Date; provided, that, if such Person shall not be able to obtain and deliver to
the Agent any such Collateral Access Agreement after using best efforts, such
Person shall deliver to the Agent, within such time period described above,
evidence reasonably satisfactory to the Agent of such Person's best efforts in
respect thereof.
SECTION 12 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
The obligation of each Lender to make its Loans and of any Issuing
Lender to issue Letters of Credit is subject to the following conditions
precedent:
12.1 Initial Credit Extension. The obligation of the Lenders to
make the initial Loans and the obligation of any Issuing Lender to issue its
initial Letter of Credit (whichever first occurs) is, in addition to the
conditions precedent specified in Section 12.2 and Section 12.3 (as applicable),
subject to the conditions precedent that (i) all Debt to Be Repaid has been (or
concurrently with the initial borrowings will be) paid in full, and that all
agreements and instruments governing the Debt to Be Repaid and that all Liens
securing such Debt to Be Repaid have been (or concurrently with the initial
borrowing will be) terminated and (2) the Agent shall have received (a)
evidence, reasonably satisfactory to the Agent, that the Borrowers have received
(x) without giving effect to the Acquisition and Merger Transaction, cash equity
contributions from HIG and its Affiliates in an amount not less than $2,700,000
-71-
and at least $1,761,000 in roll-over equity from the Sellers and (y) net cash
proceeds of not less than $2,450,000 from Prairie pursuant to the Prairie
Subordinated Debt Documents, which shall be satisfactory to the Agent in all
respects; (b) evidence, reasonably satisfactory to the Required Lenders, that
the Borrowers have completed, or concurrently with the initial credit extension
hereunder will complete, the Acquisition and Merger Transaction in accordance
with the terms of the Acquisition and Merger Agreement (without any amendment
thereto or waiver thereunder unless consented to by the Required Lenders); and
(c) all of the following, each duly executed and dated the Closing Date (or such
earlier date as shall be satisfactory to the Required Lenders), in form and
substance satisfactory to the Required Lenders (and the date on which all such
conditions precedent have been satisfied or waived in writing by the Required
Lenders is called the "Closing Date"):
12.1.1 Notes. The Notes.
12.1.2 Resolutions. Certified copies of resolutions of the
Board of Directors of each Borrower authorizing the execution, delivery
and performance by the Borrowers of this Agreement, the Notes and the
other Loan Documents and the Related Transaction Agreements to which
such Borrower is a party.
12.1.3 Consents, etc. Certified copies of all documents
evidencing any necessary corporate or partnership action, consents and
governmental approvals (if any) required for the execution, delivery
and performance by each Borrower of the documents referred to in this
Section 12.
12.1.4 Incumbency and Signature Certificates. A certificate
of the Secretary or an Assistant Secretary (or other appropriate
representative) of each Borrower certifying the names of the officer or
officers of such Borrower authorized to sign the Loan Documents to
which such Borrower is a party, together with a sample of the true
signature of each such officer (it being understood that the Agent and
each Lender may conclusively rely on each such certificate until
formally advised by a like certificate of any changes therein).
12.1.5 Security Agreement. A counterpart of the Security
Agreement executed by each of the Borrowers.
12.1.6 Pledge Agreement. Pledge Agreement executed by
Holdings, together with all items required to be delivered in
connection therewith.
12.1.7 Depositary Account Agreements. The Depositary Account
Agreements executed by each Depository Bank.
-72-
12.1.8 Bank Agent Accounts and Lockbox. Borrowers shall have
established the Bank Agent Accounts with the Agent.
12.1.9 Real Estate Documents. With respect to each parcel of
real property owned by any Borrower, if any, a duly executed Mortgage
providing for a fully perfected Lien, in favor of the Agent, in all
right, title and interest of such Borrower in such real property,
together with:
(a) an ALTA Loan Title Insurance Policy, issued
by an insurer acceptable to the Agent, insuring the Agent's
Lien on such real property and containing such endorsements as
the Agent may reasonably require (it being understood that the
amount of coverage, exceptions to coverage and status of title
set forth in such policy shall be acceptable to the Agent);
(b) copies of all documents of record concerning
such real property as shown on the commitment for the ALTA
Loan Title Insurance Policy referred to above;
(c) original or certified copies of all
insurance policies required to be maintained with respect to
such real property by this Agreement, the applicable Mortgage
or any other Loan Document;
(d) a survey certified to the Agent meeting such
standards as the Agent may reasonably establish and otherwise
reasonably satisfactory to the Agent; and
(e) a flood zone certificate or, if such
property is in a flood zone designated "A" or "V" by FEMA, a
flood insurance policy concerning such real property,
reasonably satisfactory to the Agent or satisfactory evidence
that no flood insurance is available.
Additionally, in the case of any leased real property upon the request
of the Agent, a consent, in form and substance satisfactory to the
Agent, from the owner waiving any landlord's Lien in respect of
personal property kept at the premises subject to such lease.
12.1.10 Acquisition Agreement Assignment. The Acquisition
Agreement Assignment with respect to the Acquisition and Merger
Agreement, executed by the Borrowers.
12.1.11 Subordination/Intercreditor Agreements. The Prairie
Subordinated Debt Documents and the Prairie Subordination Agreement.
-73-
12.1.12 Opinions of Counsel. (a) The opinion of White & Case
LLP, counsel to the Borrowers, substantially in the form of Exhibit H;
and (b) all opinions delivered in connection with the closing of the
Acquisition and Merger Transaction (or originals thereof accompanied by
letters which state that the Agent and the other Loan Parties may rely
thereon).
12.1.13 Insurance. Evidence satisfactory to the Required
Lenders of the existence of insurance required to be maintained
pursuant to Section 11.3(b), together with evidence that the Agent has
been named as a lender's loss payee and an additional insured on all
related insurance policies.
12.1.14 Copies of Documents. Copies, certified by the
President of Holdings, of the Related Transaction Agreements.
12.1.15 Payment of Fees. Evidence of payment by the Borrowers
of all accrued and unpaid fees, costs and expenses to the extent then
due and payable on the Closing Date, together with all Attorney Costs
of the Agent to the extent invoiced prior to the Closing Date, plus
such additional amounts of Attorney Costs as shall constitute the
Agent's reasonable estimate of Attorney Costs incurred or to be
incurred by the Agent through the closing proceedings (provided that
such estimate shall not thereafter preclude final settling of accounts
between the Borrowers and the Agent).
12.1.16 Solvency Certificate. A Solvency Certificate,
substantially in the form of Exhibit I, executed by the Chief Financial
Officer of Holdings.
12.1.17 Pro Forma. A consolidated pro forma balance sheet of
the Borrowers and their respective Subsidiaries as at the Closing Date
referenced in Section 10.4(b), consistent in all material respects with
the sources and uses of cash as previously described to the Lenders and
the forecasts previously provided to the Lenders.
12.1.18 Search Results; Lien Terminations. Certified copies
of Uniform Commercial Code Requests for Information or Copies (Form
UCC-11), or a similar search report certified by a party acceptable to
the Agent, dated a date reasonably near to the Closing Date, listing
all effective financing statements which name any Borrower, Seller or
▇▇▇▇▇ (under their present names and any previous names) as debtors and
which are filed in the jurisdictions in which filings are to be made
pursuant to the Collateral Documents, together with (i) copies of such
financing statements, (ii) executed copies of proper Uniform Commercial
Code Form UCC-3 termination statements, if any, necessary to release
all Liens and other rights of any Person in any
-74-
collateral described in the Collateral Documents previously granted by
any Person (other than Liens permitted by Section 11.8) and (iii) such
other Uniform Commercial Code Form UCC-3 termination statements as the
Required Lenders may reasonably request.
12.1.19 Filings, Registrations and Recordings. The Lenders
shall have received each document (including Uniform Commercial Code
financing statements) required by the Collateral Documents or under law
or reasonably requested by the Required Lenders to be filed, registered
or recorded in order to create in favor of the Agent, for the benefit
of the Lender Parties, a perfected Lien on the collateral described
therein, prior and superior to any other Person, in proper form for
filing, registration or recording.
12.1.20 Closing Certificate. A certificate signed by a Vice
President or an executive officer of the Borrowers dated as of the
Closing Date, affirming the matters set forth in Section 12.2.1 as of
the Closing Date.
12.1.21 Life Insurance and Life Insurance Collateral
Assignment. Copies, certified by the President of Holdings, of the
underlying Life Insurance policies, and an executed Life Insurance
Collateral Assignment, acknowledged by the insurer under the Life
Insurance policies.
12.1.22 Acquisition and Merger Transaction Certificate,
Consents and Permits. A certificate executed by a Vice President of the
Borrowers certifying the occurrence of the closing of the Acquisition
and Merger Transaction and that such transactions have been consummated
in accordance with the terms of the Acquisition and Merger Agreement
without waiver of any material condition thereof; together with
evidence satisfactory to the Required Lenders that (i) all necessary
governmental, regulatory, creditor, shareholder, partner and other
material consents, approvals and exemptions required to be obtained by
the Borrowers in connection with such transactions have been duly
obtained and are in full force and effect and (ii) all material and
necessary permits have been obtained and that, as to any material
permit not obtained at Closing ("Unobtained Permits"), the Borrowers
may legally operate in the manner in which they intend to operate until
the same is obtained without impairment or prejudice due to such permit
not having been obtained. Each Borrower agrees to use its best efforts
to obtain any Unobtained Permit as promptly as practicable, and in any
event within sixty (60) days, after the Closing Date.
12.1.23 Other. Such other documents as the Agent or any
Lender may reasonably request.
-75-
12.2 Conditions to All Loans. The obligation (a) of each Lender to
make each Loan and (b) of any Issuing Lender to issue each Letter of Credit is
subject to the following further conditions precedent that:
12.2.1 Compliance with Warranties, No Default, etc. Both
before and after giving effect to any borrowing and the issuance of any
Letter of Credit, the following statements shall be true and correct:
(a) the representations and warranties of each
Borrower and each Subsidiary of each Borrower set forth in
this Agreement and the other Loan Documents shall be true and
correct in all material respects with the same effect as if
then made (except to the extent stated to relate to a specific
earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date);
and
(b) no Event of Default or Unmatured Event of
Default shall have then occurred and be continuing.
12.2.2 Confirmatory Certificate. If requested by the Agent
or any Lender, the Agent shall have received (in sufficient
counterparts to provide one to each Lender) a certificate dated the
date of such requested Loan or Letter of Credit and signed by a duly
authorized representative of the Funds Administrator as to the matters
set out in Section 12.2.1 (it being understood that each request by the
Funds Administrator for the making of a Loan or the issuance of a
Letter of Credit shall be deemed to constitute a warranty by the
Borrowers that the conditions precedent set forth in Section 12.2.1
will be satisfied at the time of the making of such Loan or the
issuance of such Letter of Credit), together with such other documents
as the Agent or any Lender may reasonably request in support thereof.
12.3 Conditions to Terms Loans B. The obligation of each Lender to
make Term Loans B is subject to the following further conditions precedent that:
12.3.1 Conditions Satisfied. (i) All events and conditions
required for the ▇▇▇▇▇ Earnout under the terms of the Acquisition and
Merger Agreement to be due and payable shall have occurred and been
satisfied and (ii) none of the Sellers (or any other Person to whom
payment is to be made in connection with the ▇▇▇▇▇ Earnout) is in
material breach of the Acquisition and Merger Agreement;
12.3.2 Notice. A responsible officer of the Borrowers shall
have executed and delivered to the Agent, at least five (5) Business
Days prior to the date of the requested disbursement of the Term Loans
B, and on the actual date of borrowing, a certificate containing the
following representations and warranties: (i) the ▇▇▇▇▇
-76-
Earnout has been earned or realized and is due and payable in
accordance with the terms of the Acquisition and Merger Agreement, (ii)
the aggregate amount thereof is $3,000,000, and (iii) all conditions
hereunder to such borrowing have been satisfied in all respects.
12.3.3 Prairie. Prairie shall have disbursed, or
contemporaneously with the borrowing requested hereunder shall have
agreed to disburse, $1,000,000 of the ▇▇▇▇▇ Earnout in accordance with
the terms of the Prairie Subordinated Debt Documents and such amount
shall be subject to the provisions of the Prairie Subordination
Agreement.
12.3.4 Use of Proceeds. One hundred percent (100%) of the
proceeds of the Term Loans B shall be used to pay up to $2,000,000 of
the ▇▇▇▇▇ Earnout.
12.3.5 Pro Forma Compliance. After giving effect to such
borrowing, and the other transactions to be consummated in connection
therewith, the Borrowers shall be in compliance on a pro forma basis
with the covenants set forth in Section 10.6 (after giving effect to
any amendments thereto in accordance with Sections 11.7 and 12.3.8)
and, recomputed for the most recent month for which financial
statements have been delivered to the Agent.
12.3.6 Subordination. Such payment of the ▇▇▇▇▇ Earnout
shall have been otherwise permitted under the terms of the Prairie
Subordinated Debt Documents.
12.3.7 Outside Date. Such funding shall have occurred on or
before May 31, 2001.
12.3.8 Adjustment of Covenant Levels; Audited Financial
Statements. (a) The Agent and each Lender shall have received the
audited financial statements of ▇▇▇▇▇ (or the Borrowers and their
respective Subsidiaries, as the case may be) for Fiscal Year 2000, the
calculation of ▇▇▇▇▇'▇ "EBITDA" (as defined in the Acquisition and
Merger Agreement) as required by Section 8.1 of the Acquisition and
Merger Agreement and such other information, statements, certificates
and other materials upon which the calculation of the ▇▇▇▇▇ Earnout and
the determination of whether or not the ▇▇▇▇▇ Earnout is due shall have
been based, (b) the Borrowers, the Agent and the Lenders shall have
amended the financial covenants contained in Section 10.6 and the
Borrowers shall have complied with the terms and conditions of Section
11.27, and (c) the Agent shall have received evidence satisfactory to
it that the financial covenants, if any, contained in any Prairie
Subordinated Debt Document shall have been amended to levels,
thresholds or amounts, as applicable, reasonably acceptable to the
Agent and, in any event, in a manner and to levels, thresholds and
amounts necessary to cause the cushions, margins and differences (on a
percentage basis) between the levels,
-77-
thresholds and amounts of such financial covenants and the counterparts
thereof contained herein, after giving effect to such amendments, to be
equal to the cushions, margins and differences (on a percentage basis)
in effect immediately prior to giving effect to such amendments; it
being understood the desired result thereof is that the criteria and
thresholds for evaluating the financial condition and performance of
the Borrowers and their respective Subsidiaries shall be, after giving
effect to the disbursement of the Term Loans B, the additional
borrowing under the Prairie Subordinated Debt Documents and the payment
of the ▇▇▇▇▇ Earnout, reasonably equivalent to the criteria and
thresholds (on a percentage basis) contained in Section 11.6 prior to
the any such amendments and the giving of such effect.
12.3.9 Other Deliveries. The Agent shall have received such
other agreements, documents, instruments, certificates and opinions as
the Agent reasonably may request.
SECTION 13 EVENTS OF DEFAULT AND THEIR EFFECT.
13.1 Events of Default. Each of the following shall constitute an
Event of Default under this Agreement:
13.1.1 Non-Payment of the Loans, etc. Default in the payment
when due of the principal of or interest on any Loan; or default, and
continuance thereof for five (5) days, in the payment when due of any
interest, fee, reimbursement obligation with respect to any Letter of
Credit or other amount payable by any Borrower hereunder or under any
other Loan Document.
13.1.2 Non-Payment of Other Debt. (i) Any default shall
occur under the terms applicable to any Debt of any Borrower or any
Subsidiary of any Borrower in an aggregate amount (for all such Debt of
all Borrowers and their respective Subsidiaries so affected) exceeding
$150,000 and such default shall (a) consist of the failure to pay such
Debt when due, whether by acceleration or otherwise, after taking into
account any applicable grace period or (b) permit the holder or holders
thereof, or any trustee or agent for such holder or holders, to cause
such Debt to become due and payable (or require any Borrower to
purchase or redeem such Debt) prior to its expressed maturity or (ii)
any "Event of Default" (as defined in the Prairie Subordinated Debt
Documents) shall occur under the terms of the Prairie Subordinated Debt
Documents.
13.1.3 Other Material Obligations. Default in the payment
when due, or in the performance or observance of, any material
obligation of, or condition agreed to by, any Borrower or any
Subsidiary of any Borrower with respect to any material
-78-
purchase or lease of goods or services where such default, singly or in
the aggregate with all other such defaults, might reasonably be
expected to have a Material Adverse Effect.
13.1.4 Bankruptcy, Insolvency, etc. Any Borrower or any
Subsidiary of any Borrower becomes insolvent or generally fails to pay,
or admits in writing its inability or refusal to pay, debts as they
become due; or any Borrower applies for, consents to, or acquiesces in
the appointment of a trustee, receiver or other custodian for such
Borrower or Subsidiary or any property thereof, or makes a general
assignment for the benefit of creditors; or, in the absence of such
application, consent or acquiescence, a trustee, receiver or other
custodian is appointed for any Borrower or any Subsidiary of any
Borrower or for a substantial part of the property of any thereof and
is not discharged within sixty (60) days; or any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation
proceeding, is commenced in respect of any Borrower, and if such case
or proceeding is not commenced by such Borrower or Subsidiary, it is
consented to or acquiesced in by such Borrower or such Subsidiary, or
remains for thirty (30) days undismissed; or any Borrower or any
Subsidiary of any Borrower takes any action to authorize, or in
furtherance of, any of the foregoing.
13.1.5 Non-Compliance with Loan Documents. (a) Failure by
any Borrower to comply with or to perform any covenant set forth in
Sections 11.1, 11.5 through 11.13, 11.14, 11.20 through 11.23, 11.27 or
11.28; or (b) failure by any Borrower or any other Loan Party to comply
with or to perform any other provision of this Agreement, or any other
Loan Document (and not constituting an Event of Default under any other
provision of this Section 13) and continuance of such failure described
in this clause (b) for thirty (30) days.
13.1.6 Warranties. Any warranty made by any Borrower or any
other Loan Party herein or any other Loan Document is breached or is
false or misleading in any material respect, or any schedule,
certificate, financial statement, report, notice or other writing
furnished by any Borrower to the Agent or any Lender in connection
herewith is false or misleading in any material respect on the date as
of which the facts therein set forth are stated or certified.
13.1.7 Pension Plans. (i) Institution of any steps by any
Borrower or any other Person to terminate a Pension Plan if as a result
of such termination any Borrower is required to or could reasonably be
expected to be required to make a contribution to such Pension Plan, or
incurs or could reasonably be expected to incur a liability or
obligation to such Pension Plan, in excess of $250,000; (ii) a
contribution failure occurs with respect to any Pension Plan sufficient
to give rise to a Lien under
-79-
Section 302(f) of ERISA; or (iii) there shall occur any withdrawal or
partial withdrawal from a Multiemployer Pension Plan and the withdrawal
liability (without unaccrued interest) to Multiemployer Pension Plans
as a result of such withdrawal (including any outstanding withdrawal
liability that the Borrowers and the Controlled Group have incurred on
the date of such withdrawal) exceeds $250,000.
13.1.8 Judgments. Final judgments which exceed an aggregate
of $250,000 shall be rendered against the Borrowers and their
respective Subsidiaries and shall not have been paid, discharged or
vacated or had execution thereof stayed pending appeal within thirty
(30) days after entry or filing of such judgments.
13.1.9 Invalidity of Collateral Documents, etc. Any Loan
Document shall cease to be in full force and effect; or any Borrower or
any Subsidiary of any Borrower (or any Person by, through or on behalf
of any Borrower or any Subsidiary of any Borrower) shall contest in any
manner the validity, binding nature or enforceability of any Loan
Document.
13.1.10 Invalidity of Subordination Provisions, etc. Any
subordination provision in any document or instrument governing
Subordinated Debt, shall cease to be in full force and effect, or any
Borrower or any other Person (including the holder of any applicable
Subordinated Debt) shall contest in any manner the validity, binding
nature or enforceability of any such provision.
13.1.11 Change of Control. (a) After the Closing Date, any
Person or group of Persons (within the meaning of Section 13 or 14 of
the Securities Exchange Act of 1934, but excluding any "Specified
Person" (as defined below)) shall acquire beneficial ownership (within
the meaning of Rule 13d-3 promulgated under such Act) of more than
twenty-five percent (25%) of the outstanding securities (on a fully
diluted basis and taking into account any securities or contract rights
exercisable, exchangeable or convertible into equity securities) of
Holdings having voting rights in the election of directors under normal
circumstances; or (b) any "Change of Control" (as defined in the
Prairie Subordinated Debt Documents) shall occur; or (c) any Borrower
(other than Holdings) shall cease to be a Wholly-Owned Subsidiary of
Holdings (except as otherwise expressly permitted under Section
11.11(a)); or (d) a majority of the members of the Board of Directors
of Holdings shall cease to be Continuing Members; or (e) Agent, for the
benefit of the Lender Parties, shall cease at any time for any reason
to have a first priority Lien on 100% of the Subsidiary Equity
Interests of each Subsidiary of Holdings; or (f) a period of thirty
(30) consecutive days shall have elapsed during which any two of the
individuals named in Schedule 13.1.11 shall have ceased to hold
executive offices with Holdings at least equal in seniority and
responsibility to such individuals' present offices described as set
out in such Schedule
-80-
13.1.11, excluding any such individual who has been replaced by another
individual or individuals reasonably satisfactory to the Required
Lenders (it being understood that any such replacement individual shall
be deemed added to Schedule 13.1.11 on the date of approval thereof by
the Required Lenders); for purposes of the foregoing, "Continuing
Member" means a member of the Board of Directors of Holdings who either
(i) was a member of the Holdings' Board of Directors on the day before
the Closing Date and has been such continuously thereafter or (ii)
became a member of such Board of Directors after the day before the
Closing Date and whose election or nomination for election was approved
by a vote of the majority of the Continuing Members then members of the
Holdings' Board of Directors; and "Specified Person" means HIG; or (g)
HIG shall cease to own and control at least forty-five percent (45%) of
the outstanding voting stock of Holdings.
13.1.12 Change of Management. The employment of ▇▇▇▇ ▇▇▇▇▇ or
▇▇▇▇▇▇ ▇▇▇▇▇ is terminated for any reason and no replacement reasonably
satisfactory to the Required Lenders is employed by the Borrowers with
ninety (90) days after such termination.
13.2 Effect of Event of Default. If any Event of Default described
in Section 13.1.4 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and the Loans and all other Obligations
shall become immediately due and payable and the Borrowers shall become
immediately obligated to Cash Collateralize all Letters of Credit, all without
presentment, demand, protest or notice of any kind; and, if any other Event of
Default shall occur and be continuing, the Agent (upon written request of the
Required Lenders) shall declare the Commitments (if they have not theretofore
terminated) to be terminated and/or declare all Loans and all other Obligations
to be due and payable and/or demand that the Borrowers immediately Cash
Collateralize all Letters of Credit, whereupon the Commitments (if they have not
theretofore terminated) shall immediately terminate and/or all Loans and all
other Obligations shall become immediately due and payable and/or the Borrowers
shall immediately become obligated to Cash Collateralize all Letters of Credit,
all without presentment, demand, protest or notice of any kind. The Agent shall
promptly advise the Funds Administrator of any such declaration, but failure to
do so shall not impair the effect of such declaration. Notwithstanding the
foregoing, the effect as an Event of Default of any event described in Section
13.1.1 or Section 13.1.4 may be waived by the written concurrence of all of the
Lenders, and the effect as an Event of Default of any other event described in
this Section 13 may be waived by the written concurrence of the Required
Lenders. Any cash collateral delivered hereunder shall be held by the Agent
(without liability for interest thereon) and applied to Obligations arising in
connection with any drawing under a Letter of Credit. After the expiration or
termination of all Letters of Credit, such cash collateral shall be applied by
the Agent to any remaining Obligations and any excess shall be delivered to the
Funds Administrator or as a court of competent jurisdiction may elect.
-81-
SECTION 14 THE AGENT.
14.1 Appointment and Authorization. (a) Each Lender hereby
irrevocably (subject to Section 14.9) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duty or
responsibility except those expressly set forth herein, nor shall the Agent have
or be deemed to have any fiduciary relationship with any Lender Party, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
(b) Each Issuing Lender shall act on behalf of the
Lenders with respect to any Letters of Credit issued by it and the
documents associated therewith. Each Issuing Lender shall have all of
the benefits and immunities (i) provided to the Agent in this Section
14 with respect to any acts taken or omissions suffered by such Issuing
Lender in connection with Letters of Credit issued by it or proposed to
be issued by it and the applications and agreements for letters of
credit pertaining to such Letters of Credit as fully as if the term
"Agent", as used in this Section 14, included the Issuing Lender with
respect to such acts or omissions and (ii) as additionally provided in
this Agreement with respect to any Issuing Lender.
14.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
14.3 Liability of Agent. Neither the Agent nor any of its
directors, officers, employees or agents shall (i) be liable for any action
taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct), or (ii) be
responsible in any manner to any Lender Party for any recital, statement,
representation or warranty made by any Loan Party or any Affiliate of any Loan
Party, or any officer thereof, contained in this Agreement or in any other Loan
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or the
-82-
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Loan Party or
any other party to any Loan Document to perform its obligations hereunder or
thereunder. The Agent shall not be under any obligation to any Lender Party to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party or
any Affiliate of any Loan Party.
14.4 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to any Borrower), independent accountants and other experts selected by the
Agent or Required Lenders. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate and, if it so requests, confirmation from the Lenders of
their obligation to indemnify the Agent against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders.
14.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Event of Default or Unmatured Event
of Default except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Agent for the account of the Lenders, unless
the Agent shall have received written notice from a Lender or a Borrower
referring to this Agreement, describing such Event of Default or Unmatured Event
of Default and stating that such notice is a "notice of default". The Agent will
notify the Lenders of its receipt of any such notice. The Agent shall take such
action with respect to such Event of Default or Unmatured Event of Default as
may be requested by the Required Lenders in accordance with Section 13; provided
that unless and until the Agent has received any such request, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Event of Default or Unmatured Event of Default as
it shall deem advisable or in the best interest of the Lenders.
14.6 Credit Decision. Each Lender acknowledges that the Agent has
not made any representation or warranty to it, and that no act by the Agent
hereafter taken, including any review of the affairs of any Loan Party, shall be
deemed to constitute any representation or warranty by the Agent to any Lender.
Each Lender represents to the Agent that it has,
-83-
independently and without reliance upon the Agent and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of any Borrower or the Borrowers taken as a
whole, and made its own decision to enter into this Agreement and to extend
credit to the Borrowers hereunder. Each Lender also represents that it will,
independently and without reliance upon the Agent and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrowers. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
property, financial or other condition or creditworthiness of any Borrower which
may come into the possession of the Agent.
14.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the Agent and
its directors, officers, employees and agents (to the extent not reimbursed by
or on behalf of the Borrowers and without limiting the obligation of the
Borrowers to do so), pro rata, from and against any and all Indemnified
Liabilities; provided that no Lender shall be liable for any payment to any such
Person of any portion of the Indemnified Liabilities resulting from such
Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender shall reimburse the Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred
by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Borrowers. The
undertaking in this Section shall survive repayment of the Loans, cancellation
of the Notes, expiration or termination of the Letters of Credit, any
foreclosure under, or modification, release or discharge of, any or all of the
Collateral Documents, termination of this Agreement and the resignation or
replacement of the Agent.
14.8 Agent in Individual Capacity. LaSalle and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with any Borrower and their
Affiliates as though LaSalle were not the Agent or an Issuing Lender hereunder
and without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, LaSalle or its Affiliates may receive information
-84-
regarding the Borrowers or their Affiliates (including information that may be
subject to confidentiality obligations in favor of any Borrower or its
Affiliate) and acknowledge that LaSalle shall be under no obligation to provide
such information to them. With respect to their Loans (if any), LaSalle and its
Affiliates shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though LaSalle were not the Agent or
an Issuing Lender, and the terms "Lender" and "Lenders" include LaSalle and its
Affiliates, to the extent applicable, in their individual capacities.
14.9 Successor Agent. The Agent may resign as Agent upon thirty
(30) days' notice to the Lenders and may be removed at any time by the Required
Lenders. If the Agent resigns under this Agreement or is so removed, the
Required Lenders shall, with (so long as no Event of Default exists) the consent
of the Funds Administrator (which shall not be unreasonably withheld or
delayed), appoint from among the Lenders a successor Agent for the Lenders. If
no successor Agent is appointed prior to the effective date of the resignation
of the Agent, the Agent may appoint, after consulting with the Lenders and the
Funds Administrator, a successor Agent from among the Lenders. Upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor Agent, and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 14 and
Sections 15.6 and 15.13 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor Agent has accepted appointment as Agent by the date which is thirty
(30) days following a retiring Agent's notice of resignation, the retiring
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Agent hereunder until such time,
if any, as the Required Lenders appoint a successor Agent as provided for above.
14.10 Collateral Matters. The Lenders irrevocably authorize the
Agent, at its option and in its discretion, (a) to release any Lien granted to
or held by the Agent under any Collateral Document (i) upon termination of the
Commitments and payment in full of all Loans and all other obligations of the
Borrowers hereunder and the expiration or termination of all Letters of Credit;
(ii) constituting property sold or to be sold or disposed of as part of or in
connection with any disposition permitted hereunder; or (iii) subject to Section
15.1, if approved, authorized or ratified in writing by the Required Lenders; or
(b) to subordinate its interest in any collateral to any holder of a Lien on
such collateral which is permitted by clause (d)(i) or (d)(iii) of Section 11.8
(it being understood that the Agent may conclusively rely on a certificate from
the Funds Administrator in determining whether the Debt secured by any such Lien
is permitted by Section 11.7(b)). Upon request by the Agent at any time, the
Lenders will confirm in writing the Agent's authority to release, or subordinate
its interest in, particular types or items of collateral pursuant to this
Section 14.10.
-85-
SECTION 15 GENERAL.
15.1 Waiver; Amendments. No delay on the part of the Agent or any
Lender in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise by any of them of any right,
power or remedy preclude other or further exercise thereof, or the exercise of
any other right, power or remedy. No amendment, modification or waiver of, or
consent with respect to, any provision of this Agreement or the Notes shall in
any event be effective unless the same shall be in writing and signed and
delivered by Lenders having an aggregate Pro Rata Share of not less than the
aggregate Pro Rata Share expressly designated herein with respect thereto or, in
the absence of such designation as to any provision of this Agreement or the
Notes, by the Required Lenders, and then any such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No amendment, modification, waiver or consent
shall change the Pro Rata Share of any Lender without the consent of such
Lender. No amendment, modification, waiver or consent shall (i) increase the
Revolving Commitment Amount, (ii) extend the date for payment of any principal
of or interest on the Loans or any fees payable hereunder, (iii) reduce the
principal amount of any Loan, the rate of interest thereon or any fees payable
hereunder, (iv) release all or any substantial part of the collateral granted
under the Collateral Documents or (v) reduce the aggregate Pro Rata Share
required to effect an amendment, modification, waiver or consent without, in
each case, the consent of all Lenders. No provision of Section 14 or other
provision of this Agreement affecting the Agent in its capacity as such shall be
amended, modified or waived without the consent of the Agent. No provision of
this Agreement relating to the rights or duties of an Issuing Lender in its
capacity as such shall be amended, modified or waived without the consent of
such Issuing Lender.
15.2 Confirmations. The Funds Administrator and each holder of a
Note agree from time to time, upon written request received by it from the
other, to confirm to the other in writing (with a copy of each such confirmation
to the Agent) the aggregate unpaid principal amount of the Loans then
outstanding under such Note.
15.3 Notices. Except as otherwise provided in Sections 2.2.2 and
2.2.3, all notices hereunder shall be in writing (including facsimile
transmission) and shall be sent to the applicable party at its address shown on
Schedule 15.3 or at such other address as such party may, by written notice
received by the other parties, have designated as its address for such purpose.
Notices sent by facsimile transmission shall be deemed to have been given when
sent; notices sent by mail shall be deemed to have been given three (3) Business
Days after the date when sent by registered or certified mail, postage prepaid;
and notices sent by hand delivery or overnight courier service shall be deemed
to have been given when received. For purposes of Sections 2.2.2 and 2.2.3, the
Agent shall be entitled to rely on telephonic instructions from any person that
the Agent in good faith believes is an authorized officer or
-86-
employee of the Funds Administrator, and the Funds Administrator shall hold the
Agent and each other Lender Party harmless from any loss, cost or expense
resulting from any such reliance.
15.4 Computations. 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
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP, consistently applied; provided that if the Funds
Administrator notifies the Agent that the Borrowers wish to amend any covenant
in Section 11 to eliminate or to take into account the effect of any change in
GAAP on the operation of such covenant (or if the Agent notifies the Funds
Administrator that the Required Lenders wish to amend Section 11 for such
purpose), then the Borrowers' compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Funds Administrator and the Required
Lenders.
15.5 Regulation U. Each Lender represents that it in good faith is
not relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.
15.6 Costs, Expenses and Taxes. Each Borrower agrees to pay on
demand, jointly and severally, all reasonable and documented out-of-pocket costs
and expenses of the Agent (including Attorney Costs) in connection with the
preparation, execution, syndication, delivery and administration of this
Agreement, the other Loan Documents and all other documents provided for herein
or delivered or to be delivered hereunder or in connection herewith (including
any amendment, supplement or waiver to any Loan Document), and all reasonable
out-of-pocket costs and expenses (including Attorney Costs) incurred by the
Agent and each Lender after an Event of Default in connection with the
enforcement of this Agreement, the other Loan Documents or any such other
documents. In addition, each Borrower agrees to pay, jointly and severally, and
to save the Agent and the Lenders harmless from all liability for, (a) any stamp
or other taxes (excluding income taxes and franchise taxes based on net income)
which may be payable in connection with the execution and delivery of this
Agreement, the borrowings hereunder, the issuance of the Notes or the execution
and delivery of any other Loan Document or any other document provided for
herein or delivered or to be delivered hereunder or in connection herewith and
(b) any fees of any Borrower's auditors in connection with any reasonable
exercise by the Agent and the Lenders of their rights pursuant to Section 11.2.
All obligations provided for in this Section 15.6 shall survive repayment of the
Loans, cancellation of the Notes, expiration or termination of the Letters of
Credit and termination of this Agreement.
-87-
15.7 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
15.8 Assignments; Participations.
15.8.1 Assignments. Any Lender may, with the prior written
consent of the Agent, which consent shall not be required for an
assignment by a Lender to one of its Affiliates, at any time assign and
delegate to one or more commercial banks or other Persons (any Person
to whom such an assignment and delegation is to be made being herein
called an "Assignee") all or any fraction of such Lender's Loans and
Commitment (which assignment and delegation shall be of a constant, and
not a varying, percentage of all the assigning Lender's Loans and
Commitment) in a minimum aggregate amount equal to the lesser of (i)
the amount of the assigning Lender's Pro Rata Share of the Revolving
Commitment Amount, plus the unpaid amount of such Lender's Term Loans
and (ii) $5,000,000; provided that (a) no assignment and delegation may
be made to any Person if, at the time of such assignment and
delegation, the Borrowers would be obligated to pay any greater amount
under Section 8.6 or Section 9 to the Assignee than the Borrowers are
then obligated to pay to the assigning Lender under such Sections (and
if any assignment is made in violation of the foregoing, the Borrowers
will not be required to pay the incremental amounts) and (b) the
Borrowers and the Agent shall be entitled to continue to deal solely
and directly with such Lender in connection with the interests so
assigned and delegated to an Assignee until the date when all of the
following conditions shall have been met:
(x) five (5) Business Days (or such lesser
period of time as the Agent and the assigning Lender shall
agree) shall have passed after written notice of such
assignment and delegation, together with payment instructions,
addresses and related information with respect to such
Assignee, shall have been given to the Funds Administrator and
the Agent by such assigning Lender and the Assignee,
(y) the assigning Lender and the Assignee shall
have executed and delivered to the Funds Administrator and the
Agent an assignment agreement substantially in the form of
Exhibit G (an "Assignment Agreement"), together with any
documents required to be delivered thereunder, which
Assignment Agreement shall have been accepted by the Agent,
and
(z) except in the case of an assignment by a
Lender to one of its Affiliates, the assigning Lender or the
Assignee shall have paid the Agent a processing fee of $3,500.
-88-
From and after the date on which the conditions described above have
been met, (x) such Assignee shall be deemed automatically to have
become a party hereto and, to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee pursuant to
such Assignment Agreement, shall have the rights and obligations of a
Lender hereunder and (y) the assigning Lender, to the extent that
rights and obligations hereunder have been assigned and delegated by it
pursuant to such Assignment Agreement, shall be released from its
obligations hereunder. Within five (5) Business Days after
effectiveness of any assignment and delegation, the Borrowers shall
execute and deliver to the Agent (for delivery to the Assignee and the
Assignor, as applicable) new Notes in the principal amount of the
Assignee's Pro Rata Share of the Revolving Commitment Amount and the
principal amount of the Assignee's Term Loans and, if the assigning
Lender has retained a Commitment hereunder, replacement Notes in the
principal amount of the Pro Rata Share of the Revolving Commitment
Amount and the principal amount of the Term Loans retained by the
assigning Lender, as applicable (such Notes to be in exchange for, but
not in payment of, the relevant predecessor Note held by such assigning
Lender). Each such Note shall be dated the effective date of such
assignment. The assigning Lender shall ▇▇▇▇ the predecessor Note or
Notes "exchanged" and deliver it to the Funds Administrator. Accrued
interest on that part of the predecessor Note or Notes being assigned
shall be paid as provided in the Assignment Agreement. Accrued interest
and fees on that part of the predecessor Note or Notes not being
assigned shall be paid to the assigning Lender. Accrued interest and
accrued fees shall be paid at the same time or times provided herein.
Any attempted assignment and delegation not made in accordance with
this Section 15.8.1 shall be null and void.
Notwithstanding the foregoing provisions of this Section
15.8.1 or any other provision of this Agreement, any Lender may at any
time assign all or any portion of its Loans and its Note to a Federal
Reserve Lender (but no such assignment shall release any Lender from
any of its obligations hereunder).
15.8.2 Participations. Any Lender may at any time sell to
one or more commercial banks or other Persons participating interests
in any Loan owing to such Lender, the Note held by such Lender, the
Commitment of such Lender, the direct or participation interest of such
Lender in any Letter of Credit or any other interest of such Lender
hereunder (any Person purchasing any such participating interest being
herein called a "Participant"). In the event of a sale by a Lender of a
participating interest to a Participant, (x) such Lender shall remain
the holder of its Note for all purposes of this Agreement, (y) the
Borrowers, Funds Administrator and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations hereunder and (z) all amounts payable by the
Borrowers
-89-
shall be determined as if such Lender had not sold such participation
and shall be paid directly to such Lender. No Participant shall have
any direct or indirect voting rights hereunder except with respect to
any of the events described in the fourth sentence of Section 15.1.
Each Lender agrees to incorporate the requirements of the preceding
sentence into each participation agreement which such Lender enters
into with any Participant. Each Borrower agrees that if amounts
outstanding under this Agreement and the Notes are due and payable (as
a result of acceleration or otherwise), each Participant shall be
deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement, any Note and with
respect to any Letter of Credit to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under
this Agreement or such Note; provided that such right of setoff shall
be subject to the obligation of each Participant to share with the
Lenders, and the Lenders agree to share with each Participant, as
provided in Section 8.5. Each Borrower also agrees that each
Participant shall be entitled to the benefits of Section 8.6 and
Section 9 as if it were a Lender (provided that no Participant shall
receive any greater compensation pursuant to Section 8.6 or Section 9
than would have been paid to the participating Lender if no
participation had been sold).
15.9 Governing Law. This Agreement and each Note shall be a
contract made under and governed by the internal laws of the State of Illinois
applicable to contracts made and to be performed entirely within such State.
Whenever possible each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement. All obligations of the Borrowers and rights of the Agent and
the Lenders expressed herein or in any other Loan Document shall be in addition
to and not in limitation of those provided by applicable law.
15.10 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.
15.11 Successors and Assigns. This Agreement shall be binding upon
the Borrowers, Funds Administrator, Lender Parties and the Agent and their
respective successors and assigns, and shall inure to the benefit of the
Borrowers, Funds Administrator, Lender Parties and the Agent and the successors
and assigns of the Lender Parties and the Agent.
15.12 Joint and Several Liability of Borrowers. Each Borrower shall
be jointly and severally liable hereunder and under each of the other Loan
Documents with respect to all
-90-
Obligations, regardless of which Borrower actually receives the proceeds of the
Loans or the benefit of any other extensions of credit hereunder, or the manner
in which Holdings (individually or as Funds Administrator), any other Borrower,
the Agent or any Lender accounts therefor in their respective books and records.
Notwithstanding the foregoing, (i) each Borrower's obligations and liabilities
with respect to proceeds of Loans which it receives or Letters of Credit issued
for its account, and related fees, costs and expenses, and (ii) each Borrower's
obligations and liabilities arising as a result of the joint and several
liability of a Borrower hereunder with respect to proceeds of Loans received by,
or Letters of Credit issued for the account of, any other Borrower, together
with the related fees, costs and expenses, shall be separate and distinct
obligations, both of which are primary obligations of such Borrower. Neither the
joint and several liability of, nor the Liens granted to the Agent under the
Collateral Documents by, any Borrower or any other Loan Party shall be impaired
or released by (A) the failure of the Agent or any Lender, any successors or
assigns thereof, or any holder of any Note or any of the Obligations to assert
any claim or demand or to exercise or enforce any right, power or remedy against
any Borrower, any other Person, the Collateral or otherwise; (B) any extension
or renewal for any period (whether or not longer than the original period) or
exchange of any of the Obligations or the release or compromise of any
obligation of any nature of any Person with respect thereto; (C) the surrender,
release or exchange of all or any part of any property (including without
limitation the Collateral) securing payment, performance and/or observance of
any of the Obligations or the compromise or extension or renewal for any period
(whether or not longer than the original period) of any obligations of any
nature of any Person with respect to any such property; (D) any action or
inaction on the part of the Agent or any Lender, or any other event or condition
with respect to any other Borrower, including any such action or inaction or
other event or condition, which might otherwise constitute a defense available
to, or a discharge of, such other Borrower, or a guarantor or surety of or for
any or all of the Obligations; and (E) any other act, matter or thing (other
than payment or performance of the Obligations) which would or might, in the
absence of this provision, operate to release, discharge or otherwise
prejudicially affect the obligations of such or any other Borrower. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, EACH BORROWER WAIVES ALL RIGHTS AND
DEFENSES THAT SUCH BORROWER MAY HAVE BECAUSE THE BORROWERS' OBLIGATIONS UNDER
THE LOAN DOCUMENTS ARE SECURED BY REAL PROPERTY. THIS MEANS, AMONG OTHER THINGS:
(1) AGENT OR LENDERS MAY COLLECT FROM SUCH BORROWER WITHOUT FIRST FORECLOSING ON
ANY REAL OR PERSONAL PROPERTY COLLATERAL PLEDGED BY ANY OTHER BORROWER; AND (2)
IF AGENT OR LENDERS FORECLOSE ON ANY REAL PROPERTY COLLATERAL PLEDGED BY ANY
BORROWER, THEN: (A) THE AMOUNT OF THE OBLIGATIONS MAY BE REDUCED ONLY BY THE
PRICE FOR WHICH SUCH COLLATERAL IS SOLD AT THE FORECLOSURE SALE, EVEN IF SUCH
COLLATERAL IS WORTH MORE THAN THE SALE PRICE; OR (B) AGENT OR LENDERS MAY
COLLECT FROM SUCH BORROWER EVEN IF AGENT OR
-91-
LENDERS, BY FORECLOSING ON THE REAL PROPERTY COLLATERAL, HAVE DESTROYED ANY
RIGHT SUCH BORROWER MAY HAVE TO COLLECT FROM ANY OTHER BORROWER. THIS IS AN
UNCONDITIONAL AND IRREVOCABLE WAIVER OF ANY RIGHTS AND DEFENSES SUCH BORROWER
MAY HAVE BECAUSE ANY OF THE OTHER BORROWERS' OBLIGATIONS UNDER THE LOAN
DOCUMENTS ARE SECURED BY REAL PROPERTY. THESE RIGHTS AND DEFENSES INCLUDE, BUT
ARE NOT LIMITED TO, ANY RIGHTS OR DEFENSES BASED UPON SECTION 580a, 580b, 580d,
OR 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE (THE "CCP").
IN ADDITION, EACH BORROWER WAIVES ALL RIGHTS AND DEFENSES ARISING OUT
OF AN ELECTION OF REMEDIES BY AGENT OR LENDERS, EVEN THOUGH SUCH ELECTION OF
REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE, HAS DESTROYED SUCH BORROWER'S
RIGHTS BY THE OPERATION OF SECTION 580d OF THE CCP OR OTHERWISE.
15.13 Indemnification by the Borrowers. In consideration of the
execution and delivery of this Agreement by the Agent and the Lenders and the
agreement to extend the Commitments provided hereunder, each Borrower hereby
agrees, jointly and severally, to indemnify, exonerate and hold each Lender
Party and each of the officers, directors, employees, Affiliates and agents of
each Lender Party free and harmless from and against any and all actions, causes
of action, suits, losses, liabilities, damages and expenses, including Attorney
Costs (collectively, the "Indemnified Liabilities"), incurred by the Lender
Parties or any of them as a result of, or arising out of, or relating to (i) any
tender offer, merger, purchase of stock, purchase of assets (including any
Acquisition]) or other similar transaction financed or proposed to be financed
in whole or in part, directly or indirectly, with the proceeds of any of the
Loans, (ii) the use, handling, release, emission, discharge, transportation,
storage, treatment or disposal of any hazardous substance at any property owned
or leased by any Loan Party, (iii) any violation of any Environmental Laws with
respect to conditions at any property owned or leased by any Loan Party or the
operations conducted thereon, (iv) the investigation, cleanup or remediation of
offsite locations at which any Loan Party or their respective predecessors are
alleged to have directly or indirectly disposed of hazardous substances or (v)
the execution, delivery, performance or enforcement of this Agreement or any
other Loan Document by any of the Lender Parties, except for any such
Indemnified Liabilities arising on account of the applicable Lender Party's
gross negligence or willful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, each Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. All
obligations provided for in this Section 15.13 shall survive repayment of the
Loans, cancellation of the Notes, expiration or termination of the
-92-
Letters of Credit, any foreclosure under, or any modification, release or
discharge of, any or all of the Collateral Documents and termination of this
Agreement.
15.14 Nonliability of Lenders. The relationship between the
Borrowers on the one hand and the Lender Parties on the other hand shall be
solely that of borrower and lender. No Lender Party shall have any fiduciary
responsibility to any Loan Party. No Lender Party undertakes any responsibility
to any Borrower to review or inform any Borrower or any matter in connection
with any phase of any Loan Party's business or operations. Each Borrower agrees
that no Lender Party shall have liability to any Borrower (whether sounding in
tort, contract or otherwise) for losses suffered by any Loan Party in connection
with, arising out of, or in any way related to the transactions contemplated and
the relationship established by the Loan Documents, or any act, omission or
event occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought. No Lender Party shall have any liability with respect to,
and each Borrower hereby waives, releases and agrees not to ▇▇▇ for, any
special, indirect or consequential damages suffered by any Borrower in
connection with, arising out of, or in any way related to the Loan Documents or
the transactions contemplated thereby.
15.15 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE REQUIRED
LENDERS' OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. EACH
BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
-93-
15.16 WAIVER OF JURY TRIAL. EACH BORROWER AND EACH LENDER PARTY
CLAIMING HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT HEREBY WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP
EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
-94-
Delivered at Chicago, Illinois, as of the day and year first above
written.
Funds Administrator and Borrowers: ▇▇▇▇▇ HOLDINGS, INC., as a Borrower and as
Funds Administrator
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Its Vice President
-----------------------------------------
▇▇▇▇▇ ACQUISITION CORPORATION, as a Borrower
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Its Vice President
-----------------------------------------
Agent, Issuing Lender and Lenders: LASALLE BANK NATIONAL ASSOCIATION, as Agent,
Issuing Lender and as a Lender
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
SIGNATURE PAGE TO CREDIT AGREEMENT
The undersigned, ▇▇▇▇▇ Products, Inc., a New York corporation and
successor by merger to ▇▇▇▇▇ Acquisition Corporation, a New York Corporation,
hereby is executing and delivering this signature page for the purposes of
evidencing its assumption of the Obligations of its aforementioned predecessor
and agrees and acknowledges, for the benefit of the Lender Parties, as evidenced
by the signature below on its behalf, as follows: (i) it is a Borrower under the
Credit Agreement and the other Loan Documents with the same force and effect as
if originally named therein as a Borrower, the effect of which shall be, without
limitation, that (A) each reference to "Borrower" or "Borrowers" in the Credit
Agreement and the other Loan Documents shall be deemed to include it and (B) it
shall be bound by all of the terms and provisions of the Credit Agreement and
the other Loan Documents and assumes all of the obligations, liabilities and
indebtedness of its predecessor thereunder; (ii) from time to time, as and when
requested by Agent or any Lender, to execute and deliver or cause to be executed
and delivered, all such documents, instruments and agreements and to take or
cause to be taken such further or other action as Agent or such Lender
reasonably may deem necessary or desirable in order to carry out the intent and
purposes of this paragraph; and (iii) Agent and each Lender are relying on the
foregoing agreements, representations and warranties.
Dated: May 17, 2000
▇▇▇▇▇ PRODUCTS, INC., successor by merger
to ▇▇▇▇▇ Acquisition Corporation, as a Borrower
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Its Vice President
--------------------------------------------
SCHEDULE 2.1
LENDERS AND PRO RATA SHARES
PRO RATA SHARE
OF REVOLVING PRO
AMOUNT OF AMOUNT OF TERM COMMITMENT RATA
LENDER TERM LOAN A LOAN B AMOUNT SHARE
------ ----------- -------------- --------------- -----
LaSalle Bank $11,150,000 $2,000,000 $2,500,000 100%
National Association
TOTAL $11,150,000 $2,000,000 $2,500,000 100%
SCHEDULE 3.1(a)
TERM LOANS A INSTALLMENTS (Aggregate)
Date Amount
---- --------
September 30, 2000 $325,000
December 31, 2000 $325,000
March 31, 2001 $325,000
June 30, 2001 $325,000
September 30, 2001 $375,000
December 31, 2001 $375,000
March 31, 2002 $375,000
June 30, 2002 $375,000
September 30, 2002 $425,000
December 31, 2002 $425,000
March 31, 2003 $425,000
June 30, 2003 $425,000
September 30, 2003 $500,000
December 31, 2003 $500,000
March 31, 2004 $500,000
June 30, 2004 $500,000
September 30, 2004 $550,000
December 31, 2004 $550,000
March 31, 2005 $550,000
June 30, 2005 $550,000
September 30, 2005 $612,500
December 31, 2005 $612,500
March 31, 2006 $612,500
June 30, 2006 Remaining Principal Amount
* The following assumes that all of the Subsequent Term Loans A shall
have been disbursed. In the event any of the Subsequent Term Loans A
shall not have been disbursed in accordance with the terms hereof, the
scheduled installments set forth above occurring after the date on
which such of the Subsequent Term Loans A were scheduled to be
disbursed shall be reduced by the amount of such Subsequent Term Loans
A on a pro rata basis.
SCHEDULE 3.1(b)
TERM LOANS A INSTALLMENTS (Aggregate)
Percentage of outstanding principal
amount of the Term Loans on the earlier of
(i) the making or disbursement of the Term
Loans B in accordance with the terms of
Date this Agreement and (ii) May 31, 2001
---- ------------------------------------
September 30, 2001 $100,000
December 31, 2001 $100,000
March 31, 2002 $100,000
June 30, 2002 $100,000
September 30, 2002 $100,000
December 31, 2002 $100,000
March 31, 2003 $100,000
June 30, 2003 $100,000
September 30, 2003 $100,000
December 31, 2003 $100,000
March 31, 2004 $100,000
June 30, 2004 $100,000
September 30, 2004 $100,000
December 31, 2004 $100,000
March 31, 2005 $100,000
June 30, 2005 $100,000
September 30, 2005 $100,000
December 31, 2005 $100,000
March 31, 2006 $100,000
June 30, 2006 Remaining Principal Amount
FIRST AMENDMENT TO CREDIT AGREEMENT
AND OTHER LOAN DOCUMENTS
This FIRST AMENDMENT TO CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS (this
"Amendment"), dated as of December 19, 2001, is by and among ▇▇▇▇▇ HOLDINGS,
INC., a Delaware corporation ("Holdings"); ▇▇▇▇▇ PRODUCTS, INC., a New York
corporation and successor by merger to ▇▇▇▇▇ Acquisition Corporation, a New York
corporation ("▇▇▇▇▇") (Holdings and ▇▇▇▇▇ sometimes hereafter are referred to
individually as a "Borrower" and collectively as the "Borrowers"); HOLDINGS, in
its capacity as funds administrator and borrowing agent for the Borrowers (in
such capacity, the "Funds Administrator"); the financial institutions that are
parties hereto (together with any other financial institutions that become
parties to the Existing Credit Agreement described below, in each case with
their successors and assigns, individually, a "Lender" and collectively, the
"Lenders"); and LASALLE BANK NATIONAL ASSOCIATION, as a Lender and as Agent for
the "Lender Parties" (this and all other capitalized terms used but not
otherwise defined herein shall have the respective meanings ascribed to such
terms in Section 1 below).
R E C I T A L S:
A. The Borrowers, the Funds Administrator, the Agent and the
Lenders are parties to that certain Credit Agreement dated as of May 17, 2000
(as amended prior to the date hereof, the "Existing Credit Agreement"), pursuant
to which, among other things, the Lenders made certain loans and other financial
accommodations to the Borrowers.
B. The Borrowers have requested that the Lenders (i) waive
certain existing Events of Default and (ii) agree to amend the Existing Credit
Agreement in certain respects.
C. The Agent and the Lenders agree to accommodate such requests
of the Borrowers, on the terms and subject to the conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto agree as
follows:
1. Definitions. Capitalized terms used but not elsewhere defined
herein shall have the respective meanings ascribed to such terms in the Existing
Credit Agreement, as amended hereby.
2. Amendments to the Existing Credit Agreement. The Existing
Credit Agreement is amended as follows:
2.1 Section 1.1 - Substituted Definitions. Section 1.1 of
the Existing Credit Agreement is amended by substituting the following
definitions of the terms set forth below in lieu of the current
versions of such definitions contained in such Section 1.1 of the
Existing Credit Agreement:
Base Rate Margin means (a) prior to the First Amendment Closing Date:
(i) with respect to any Revolving Loan, one and three-quarters percent
(1.75%), and (ii) with respect to any Term Loan, two percent (2.00%),
and (b) from and after the First Amendment Closing Date: (i) with
respect to any Revolving Loan, two percent (2.00%), and (ii) with
respect to any Term Loan, two and one-quarter percent (2.25%);
provided, that, effective on the first day of each fiscal quarter of
the Borrowers occurring after March 31, 2003 (each such first day, an
"Adjustment Date"), through and until the next Adjustment Date
immediately thereafter, such margins described in the foregoing clauses
(b)(i) and (b)(ii) shall equal the sum of the respective percentages
therein contained, plus the percentage equivalent of the product
obtained by multiplying one-quarter (1/4) by the number of Adjustment
Dates that then shall have occurred as of such day (including the then
occurring Adjustment Date).
Eurodollar Margin means (a) prior to the First Amendment Closing Date:
(i) with respect to any Revolving Loan, three and one-quarter percent
(3.25%), and (ii) with respect to any Term Loan, three and one-half
percent (3.50%), and (b) from and after the First Amendment Closing
Date: (i) with respect to any Revolving Loan, three and one-half
percent (3.50%), and (ii) with respect to any Term Loan, three and
three-quarters percent (3.75%); provided, that, effective on the first
day of each fiscal quarter of the Borrowers occurring after March 31,
2003 (each such first day, an "Adjustment Date"), through and until the
next Adjustment Date immediately thereafter, such margins described in
the foregoing clauses (b)(i) and (b)(ii) shall equal the sum of the
respective percentages therein contained, plus the percentage
equivalent of the product obtained by multiplying one-quarter (1/4) by
the number of Adjustment Dates that then shall have occurred as of such
day (including the then occurring Adjustment Date).
Loan Documents means this Agreement, the Notes, the Fee Letter, the LC
Applications (including any master letter of credit agreement executed
and delivered to the Issuing Lender), the Collateral Documents, the
Make-Well Agreement, the Prairie Subordination Agreement and any
Hedging Agreement between any Borrower and any Lender or any Affiliate
of any Lender.
2.2 Section 1.1 - Additional Definitions. Section 1.1 of the
Existing Credit Agreement is amended further by adding the following terms and
respective definitions to such Section 1.1 in the appropriate alphabetical
order:
First Amendment means that certain First Amendment to Credit Agreement
and other Loan Documents dated as of the First Amendment Closing Date
among the Borrowers, the Funds Administrator, the Agent and the
Lenders.
First Amendment Closing Date means December 19, 2001.
2
Make-Well Agreement means that certain Make-Well Agreement
dated as of the First Amendment Closing Date by and among HIG,
HIG Investment Group II, L.P., HIG Partners II, L.P., H.I.G.
GP-II, INC., Borrowers and the Agent.
2.3 Section 6.2.2. Section 6.2.2 of the Existing Credit
Agreement is amended by adding the following clause (vi) to such
Section 6.2.2 in the appropriate numerical order:
(v) Concurrently with the receipt by any
Borrower or any Subsidiary of any Borrower of any proceeds or
other payments from HIG or any of its affiliates under the
Make-Well Agreement, in an amount equal to 100% of such
proceeds or payments.
2.4 Section 11.6.1. Section 11.6.1 of the Existing Credit
Agreement is amended by adding the following proviso to the end of such
Section 11.6.1:
;provided, that, if the Fixed Charge Coverage Ratio for any
Computation Period, commencing with the Computation Period
ending December 31, 2001, is less than the applicable ratio
set forth above, and no Unmatured Event of Default or Event of
Default exists under Section 13.1.13, no Event of Default
shall occur in respect of this Section 11.6.1 if (a) HIG
and/or any of its Affiliates makes a cash equity contribution
to Holdings (which is immediately contributed to ▇▇▇▇▇) in
accordance with the terms of the Make-Well Agreement, (b) the
dollar amount of such cash equity contribution, when added to
the numerator of the Fixed Charge Coverage Ratio for such
Computation Period, causes the Fixed Charge Coverage Ratio to
equal or exceed such applicable ratio set forth above, and (c)
Borrowers immediately make a mandatory prepayment of the Loans
and other Obligations with the proceeds thereof in accordance
with the terms of Section 6.2.2(v); provided, that, from and
after the date HIG receives demand by the Agent for any
payment under the Make-Well Agreement until the date on which
the Agent receives the proceeds of such payment to apply as a
mandatory prepayment of the Loans and the other Obligations in
accordance with the terms hereof, the Agent may, and at the
request of the Required Lenders shall, charge default interest
in accordance with Section 4.1 of the Credit Agreement.
2.5 Section 11.6.5. Section 11.6.5 of the Existing Credit
Agreement is deleted in its entirety and the following is substituted
in lieu thereof:
11.6.5 Capital Expenditures. Not permit the
aggregate amount of all Capital Expenditures made by the
Borrowers and their respective Subsidiaries to exceed (i)
during the Fiscal Year of the Borrowers and their Subsidiaries
ending December 31, 2001, $700,000, or (ii) during any Fiscal
Year thereafter, $400,000, in each case in the aggregate for
all Borrowers and their respective Subsidiaries.
2.6 Section 11.9. Section 11.9 of the Existing Credit
Agreement is deleted in its entirety and the following is substituted
in lieu thereof:
3
11.9 Operating Leases. Not permit the aggregate
amount of all rental payments under Operating Leases made (or
scheduled to be made) by the Borrowers and their respective
Subsidiaries (on a consolidated basis) to exceed (i) during
the Fiscal Years of the Borrowers and their Subsidiaries
ending December 31, 2001 and December 31, 2002, $500,000 in
either such Fiscal Year or (ii) during any Fiscal Year
thereafter, $550,000, in each such case in the aggregate for
all Borrowers and their respective Subsidiaries.
2.7 Section 13. Section 13 of the Existing Credit
Agreement is amended by adding the following Section 13.1.13 to such
Section 13 in the appropriate numerical order:
13.1.13 HIG; Make-Well Agreement. Any event
described in Section 13.1.4 shall occur in respect of HIG; or
the Make-Well Agreement shall cease to be in full force and
effect with respect to HIG; or HIG (or any Person by, through
or on behalf of HIG) shall contest in any manner the validity,
binding nature or enforceability of the Make-Well Agreement or
otherwise revoke or terminate the Make-Well Agreement; or HIG
shall fail for any reason at any time to comply with or
perform any covenant set forth in the Make-Well Agreement; or
any representation or warranty made by HIG in the Make-Well
Agreement shall be breached, false or otherwise misleading in
any respect on the date as of which the facts therein set
forth are stated or certified or otherwise reaffirmed.
2.8 Additional Representations, Warranties and Covenants.
(a) The Borrowers hereby (i) represent and
warrant to the Agent and the Lenders that (y) all obligations,
liabilities and indebtedness of the Borrowers in respect of
the ▇▇▇▇▇ Earnout have been fully paid, performed and
satisfied in full and the Borrowers have no further payment
obligations in respect thereof, and (z) all bank and similar
accounts (including, without limitation, payroll and ▇▇▇▇▇
cash accounts) maintained by any Borrower or any Subsidiary of
any Borrower as of the date hereof are listed and described on
Exhibit A hereto and (ii) agree and acknowledge that the
obligation of the Lenders to make Subsequent Term Loans A and
Term Loans B expired on September 1, 2000 and May 31, 2001,
respectively, and the Lenders have no obligations in respect
thereof.
(b) The Borrowers hereby covenant and agree to
deliver to the Agent, on or before the sixtieth (60th) day
after the Effective Date hereof, a copy of the annual audit
report of the Borrowers and their respective Subsidiaries for
the Fiscal Year ended December 31, 2000, including therein
consolidated balance sheets and statements of earnings and
cash flows of the Borrowers and their respective Subsidiaries
as at the end of such Fiscal Year, certified without
qualification by PriceWaterhouseCoopers, together with all
other deliveries required by Section 11.1.1 of the Credit
Agreement to the extent not previously delivered to the Agent.
4
(c) The parties hereto hereby agree that the
Borrowers may resume payments of management fees to HIG
Manager in accordance with, and subject to the terms of,
Section 11.10(iii) of the Credit Agreement; it being agreed
and understood that the Borrowers shall not be permitted to
make, and HIG shall not be permitted to receive or retain, any
payments in respect of accrued management fees that were not
paid in cash to HIG Manager due to the operation of such
Section 10.10(iii) (and the Borrowers hereby represent and
warrant to the Agent and the Lenders that no payments of
management fees previously were made to HIG Manager in
violation of such Section 10.10(iii) of the Credit Agreement).
(d) The Borrowers hereby agree and acknowledge
that, anything contained in the Credit Agreement to the
contrary notwithstanding, all accounts maintained by any
Borrower or any Subsidiary of any Borrower shall be required
to be subject to Depositary Account Agreements.
(e) The Borrowers agree and acknowledge that any
failure to comply on a timely basis with the terms of clause
(b), (c) or (d) of this Section 2.8 shall constitute an
immediate Event of Default, without further notice or other
action by or on behalf of the Agent, the Lenders or any of
them.
3. Conditions to Effectiveness. The effectiveness of this
Amendment shall be subject to the satisfaction of all of the following
conditions in a manner, form and substance satisfactory to the Agent:
(a) Representations and Warranties. All of the
representations and warranties of the Borrowers and each of their
respective Subsidiaries set forth in the Existing Credit Agreement, as
amended, and the other Loan Documents to the extent such Persons are
parties thereto shall be true and correct in all respects.
(b) Delivery of Documents. The following shall have been
delivered to the Agent, each duly authorized and executed and in form
and substance satisfactory to the Agent:
(1) this Amendment;
(2) the Make-Well Agreement;
(3) such evidence of the authority of HIG, the
Borrowers and each of their respective Subsidiaries to execute
and deliver this Amendment and all other Loan Documents
delivered in connection herewith as the Agent may require,
including but not limited to (i) a copy of resolutions duly
adopted by the board of directors (or other governing
authority) of each such Person, authorizing the execution by
each such Person of this Amendment and the other agreements,
documents and instruments to be executed by each such Person
pursuant to this Amendment (collectively, the "Other Amendment
Documents"), certified as
5
complete and correct by the corporate secretary or similar
officer of each such Person, (ii) a certificate of the
secretary of each Borrower and each of its Subsidiaries to the
effect that neither the articles of incorporation nor the
bylaws of such Person has been amended or modified since the
Closing Date or, if not the Closing Date, the date on which
certified copies of such documents previously were delivered
to the Agent, and (iii) certified copies of the organizational
and authority documents of HIG;
(4) to the extent not previously delivered to
the Agent, (i) a Collateral Access Agreement in respect of
each parcel of leased real Property of any Borrower or any
Subsidiary of any Borrower, (ii) for each Depositary Account
maintained by any Borrower or any Subsidiary of any Borrower,
a Depositary Account Agreement covering such Depositary
Account, and (iii) Uniform Commercial Code termination
statements or other releases as the Agent may require for each
Uniform Commercial Code financing statement of record that
does not evidence Liens permitted under the Existing Credit
Agreement, as amended;
(5) a certificate signed by the Secretary or a
Vice President of the Borrowers dated as of the First
Amendment Closing Date affirming the matters set forth in this
Section as of the First Amendment Closing Date;
(6) an amended and restated Security Agreement
by the Borrowers and their respective Subsidiaries and such
Uniform Commercial Code financing statements and so-called
in-lieu continuation financing statements as the Agent may
request;
(7) a reaffirmation of subordination agreement
by and among Prairie, the Borrowers and the Agent; and
(8) such other instruments, documents,
certificates, consents, waivers and opinions (including
opinions from White & Case, counsel to the Borrowers and their
Subsidiaries and an opinion from counsel to HIG) as the Agent
may request.
(c) Amendment to and Waivers under the Prairie
Subordinated Debt Documents. The Agent shall have received evidence
satisfactory to the Agent of Prairie's consent to this Amendment and
the transactions contemplated hereby; Prairie and the Borrowers shall
have amended the Prairie Subordinated Debt Documents in a manner, form
and substance satisfactory to Agent; and Prairie shall have waived in
writing all existing defaults and events of default under the Prairie
Subordinated Debt Documents.
(d) Payment of Fees and Expenses. The Borrowers shall
have paid (i) to the Agent a non-refundable First Amendment closing fee
in the amount of $50,000, which fee shall be deemed fully earned and
due and payable on the date hereof, and (ii) all fees
6
and expenses of the Agent and the Lenders in connection with this
Amendment, including, without limitation, reasonable attorneys' fees
and expenses.
(e) Performance; No Default. The Borrowers and each of
their respective Subsidiaries shall have performed and complied with
all agreements and conditions contained in the Existing Credit
Agreement and the other Loan Documents to be performed by or complied
with by such Persons prior to the date hereof, and no Unmatured Event
of Default or Event of Default shall exist or be created hereby.
(f) No Material Adverse Effect. No Material Adverse
Effect shall have occurred since the date of the most recent financial
statements for the Borrowers and their respective Subsidiaries received
by the Agent.
(g) Approvals. The approval and/or consent shall have
been obtained from all Persons whose approval or consent is necessary
or required to enable the Borrowers and their respective Subsidiaries
and HIG to enter into this Amendment and the Other Amendment Documents
and to perform their respective obligations hereunder and thereunder.
(h) Satisfaction of the Agent's Counsel. All legal
matters incident to the transactions contemplated hereby shall be
satisfactory to counsel for the Agent.
The date on which the foregoing conditions shall have been satisfied shall be
referred to herein as the "Effective Date."
4. References. From and after the Effective Date, all references
in the Existing Credit Agreement and the other Loan Documents to the "Credit
Agreement" shall be deemed to refer to the Existing Credit Agreement, as amended
hereby. This Amendment shall constitute a Loan Document.
5. Waiver of Certain Events of Default. The Borrower has notified
the Agent and the Lenders that the Events of Default described on Schedule I
hereto have occurred and are existing (collectively, the "Designed Defaults").
From and after the Effective Date, the Lenders shall be deemed to have waived
the Designated Defaults and their rights to pursue the remedies available to
them on account of the Designated Defaults. Further, the Lenders agree to waive
any Unmatured Event of Default or Event of Default that shall occur solely due
to the failure of the Borrowers to comply with the Fixed Charge Coverage Ratio
covenant set forth in Section 11.6.1 of the Existing Credit Agreement, as
amended, solely for the Computation Period ending September 30, 2001; provided,
that, such waiver shall automatically be rescinded and of no force or effect if
the Fixed Charge Coverage Ratio for such Computation Period shall be less than
0.75 to 1.00.
The foregoing waivers shall not be deemed a waiver of any other
Unmatured Event of Default or Event of Default which has occurred or exists
under the Existing Credit Agreement or hereafter may occur under the Existing
Credit Agreement, as amended, or to establish a custom or course of dealing
among the Borrowers, the Agent, the Lenders or any of them. Except as
7
specifically set forth herein, the Agent and the Lenders hereby expressly
reserve all of their rights and remedies under the Existing Credit Agreement, as
amended, the other Loan Documents and applicable law.
6. Representations and Warranties. Each Borrower and each
Subsidiary of each Borrower (individually, an "Obligor" and collectively, the
"Obligors") each hereby confirms to the Lender Parties that the representations
and warranties set forth in the Existing Credit Agreement, as amended, and the
other Loan Documents are true and correct in all respects as of the date hereof,
except to the extent such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties shall have been
true and correct in all respects as of such earlier date. Each Obligor further
represents and warrants to the Lender Parties that (a) it has full power and
authority to execute and deliver this Amendment and the Other Amendment
Documents and to perform its obligations hereunder and thereunder, (b) upon the
execution and delivery hereof and thereof, this Amendment and the Other
Amendment Documents will be valid, binding and enforceable upon it in accordance
with their respective terms, (c) the execution, delivery and performance of this
Amendment and/or the Other Amendment Documents do not and will not contravene,
conflict with, violate or constitute a default under (i) the articles of
incorporation or bylaws of such Obligor, or (ii) any applicable law, rule or
regulation, or any judgment, decree or order, of which such Obligor has
knowledge or any material agreement, indenture or instrument to which such
Obligor is a party or is bound or which is binding upon or applicable to all or
any portion of its property, (d) no Unmatured Event of Default or Event of
Default presently exists and (e) after giving effect to all waivers in effect on
the date hereof under the Prairie Subordinated Debt Documents, no defaults or
events of default exist thereunder.
7. Costs and Expenses. The Borrowers, jointly and severally,
agree to reimburse the Agent for all out of pocket expenses incurred in the
preparation, negotiation and execution of this Amendment and the Other Amendment
Documents and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, reasonable expenses and fees of counsel
for the Agent.
8. No Further Amendments; Ratification of Liability; Waiver;
Release. Except as amended hereby, the Existing Credit Agreement and each of the
other Loan Documents shall remain in full force and effect in accordance with
their respective terms. Each Obligor, as a debtor, grantor, pledgor, guarantor
or assignor, or in any similar capacity in which it has granted Liens or acted
as an accommodation party or guarantor, as the case may be, hereby ratifies,
confirms and reaffirms its liabilities, its payment and performance obligations
(contingent or otherwise) and its agreements under the Existing Credit Agreement
and the other Loan Documents to the extent such Person is a party thereto, all
as amended by this Amendment, and the liens and security interests granted,
created and perfected thereby, and agrees and acknowledges that (a) it has no
defenses, claims or set-offs to the enforcement of such liabilities, obligations
and agreements, (b) the Lender Parties have fully performed all obligations to
such Person which the Lender Parties may have had prior to, or have on and as
of, the date hereof and (c) other than as specifically set forth herein, no
Lender Party waives, diminishes or limits any term or condition contained in the
Existing Credit Agreement or any other Loan Document. The Lender Parties'
agreement to the terms of this Amendment or any other amendment of the
8
Existing Credit Agreement or any other Loan Document shall not be deemed to
establish or create a custom or course of dealing among the Obligors or the
Lender Parties, or any of them. This Amendment and the Other Amendment Documents
contain the entire agreement among the Obligors and the Lender Parties
contemplated by this Amendment. In consideration of the Lenders' agreements
herein contained, each Obligor, jointly and severally, hereby irrevocably
releases and forever discharges the Agent, the Lenders and their affiliates,
subsidiaries, successors, assigns, participants, directors, officers, employees,
agents, consultants and attorneys (each, a "Released Person") of and from all
damages, losses, claims, demands, liabilities, obligations, actions and causes
of action whatsoever which such Obligor or any of its Affiliates may now have or
claim to have against the Agent, the Lenders or any other Released Person on
account of or in any way touching, concerning, arising out of or founded upon
the Existing Credit Agreement, as amended, the Loan Documents and the
transactions contemplated or otherwise evidenced thereby, whether presently
known or unknown and of every nature and extent whatsoever.
9. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which, when
taken together, shall constitute one and the same instrument.
10. Further Assurances. Each Obligor covenants and agrees that it
will at any time and from time to time do, execute, acknowledge and deliver, or
will cause to be done, executed, acknowledged and delivered, all such further
acts, documents and instruments as reasonably may be required by the Agent in
order to effectuate fully the intent of this Amendment.
11. Severability. If any term or provision of this Amendment or
the application thereof to any party or circumstance shall be held to be
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, the validity, legality and enforceability of the remaining terms
and provisions of this Amendment shall not in any way be affected or impaired
thereby, and the affected term or provision shall be modified to the minimum
extent permitted by law so as most fully to achieve the intention of this
Amendment.
12. Captions. The captions in this Amendment are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Amendment or any of the provisions hereof.
13. Governing Law. This Amendment shall be a contract made under
and governed by the laws of the State of Illinois, without regard to conflict of
laws principles.
[the remainder of this page intentionally left blank]
9
Delivered at Chicago, Illinois as of the day and year first above
written.
BORROWERS:
▇▇▇▇▇ HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Its: President
-----------------------------------
▇▇▇▇▇ PRODUCTS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Its:
-----------------------------------
LENDER PARTIES:
LASALLE BANK NATIONAL
ASSOCIATION, as Agent, Issuing Lender
and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Its: Vice President
-----------------------------------
EXHIBIT A
List of Existing Bank and Similar Accounts
Union Planters Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Operating Account: ▇▇▇▇▇▇▇▇▇▇
Refund Account: ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax No.: ▇▇▇.▇▇▇.▇▇▇▇
Telephone No.: 561.750.2400
SCHEDULE I
Existing Events of Default
The following Events of Default have occurred and are continuing under
the Credit Agreement:
1. Events of Default have occurred and are continuing under
Section 13.1.5 of the Credit Agreement due to the failure of
the Borrowers to timely comply with the requirements of
Sections 7.1, 7.2 and 11.26 of the Credit Agreement;
2. Events of Default have occurred and are continuing under
Section 13.1.5 of the Credit Agreement due to the failure of
the Borrowers to timely comply with the provisions of Section
11.1.1 and 11.1.3 of the Credit Agreement in respect of the
Fiscal Year ended December 31, 2000;
3. Events of Default have occurred and are continuing under
Section 13.1.5 of the Credit Agreement due to the failure of
the Borrowers to timely comply with the provisions of clauses
(a) and (f) of Section 11.1.5 of the Credit Agreement in
respect of the Events of Default otherwise described herein;
4. Events of Default have occurred and are continuing under
Section 13.1.2 of the Credit Agreement due to the existence of
various events of defaults and defaults under the Prairie
Subordinated Debt Documents on or before the date hereof;
5. Events of Default have occurred and are continuing under
Section 13.1.5 of the Credit Agreement due to the failure of
the Borrowers to timely comply with the provisions of Sections
11.10(ii), 11.27 and 12.3.8 of the Credit Agreement due to the
making of a payment by the Borrowers in respect of the ▇▇▇▇▇
Earnout without complying with such provisions;
6. an Event of Default has occurred and is continuing under
Section 13.1.1 of the Credit Agreement due to the failure of
the Borrowers to timely comply with the provisions of Section
6.2.2(iv) in respect of the fiscal year of the Borrowers
ending December 31, 2000; and
7. an Event of Default has occurred and is continuing under
Section 13.1.5 of the Credit Agreement due to the failure of
the Borrowers to comply with the terms of Section 11.6.1 of
the Credit Agreement for the Computation Period ended June 30,
2001.
Reference to the foregoing Events of Default shall not be deemed to waive, or
otherwise construed as waiving or otherwise addressing, any other Event of
Default that has occurred, may exist or hereafter may occur or to establish a
custom or course of dealing.
SECOND AMENDMENT TO CREDIT AGREEMENT
AND OTHER LOAN DOCUMENTS
This SECOND AMENDMENT TO CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS
(this "Amendment"), dated as of March 15, 2002, is by and among ▇▇▇▇▇ HOLDINGS,
INC., a Delaware corporation ("Holdings"); ▇▇▇▇▇ PRODUCTS, INC., a New York
corporation and successor by merger to ▇▇▇▇▇ Acquisition Corporation, a New York
corporation ("▇▇▇▇▇") (Holdings and ▇▇▇▇▇ sometimes hereafter are referred to
individually as a "Borrower" and collectively as the "Borrowers"); HOLDINGS, in
its capacity as funds administrator and borrowing agent for the Borrowers (in
such capacity, the "Funds Administrator"); ▇▇▇▇▇ ACQUISITION CORPORATION, a
Delaware corporation and wholly-owned Subsidiary of Thane (the "Intermediate
Entity"); the financial institutions that are parties hereto (together with any
other financial institutions that become parties to the Existing Credit
Agreement described below, in each case with their successors and assigns,
individually, a "Lender" and collectively, the "Lenders"); and LASALLE BANK
NATIONAL ASSOCIATION, as a Lender and as "Agent" for the "Lender Parties" (this
and all other capitalized terms used but not otherwise defined herein shall have
the respective meanings ascribed to such terms in Section 1 below).
R E C I T A L S:
A. The Borrowers, the Funds Administrator, the Agent and the Lenders
are parties to that certain Credit Agreement dated as of May 17, 2000 (as
amended prior to the date hereof, the "Existing Credit Agreement"), pursuant to
which, among other things, the Lenders made certain loans and other financial
accommodations to the Borrowers.
B. The Borrowers and the Intermediate Entity have requested that
the Lenders (i) consent to certain transactions and (ii) agree to amend the
Existing Credit Agreement in certain respects.
C. The Agent and the Lenders agree to accommodate such requests
of the Borrowers, on the terms and subject to the conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto agree as
follows:
1. Definitions. Capitalized terms used but not elsewhere defined
herein shall have the respective meanings ascribed to such terms in the Existing
Credit Agreement, as amended hereby.
2. Amendments to the Existing Credit Agreement. The Existing
Credit Agreement is amended as follows:
2.1 Section 1.1 - Substituted Definitions. Section 1.1 of
the Existing Credit Agreement is amended by substituting the following
definitions of the terms set forth
below in lieu of the current versions of such definitions contained in
such Section 1.1 of the Existing Credit Agreement:
Collateral Documents means the Security Agreement, the
Acquisition Agreement Assignment, the Thane/▇▇▇▇▇ Merger
Documents Assignment, each Mortgage, each Pledge Agreement,
each Guaranty, the Intermediate Entity Guaranty, the
Intermediate Entity Pledge Agreement, the Intermediate Entity
Security Agreement, all Depositary Account Agreements, the
Life Insurance Collateral Assignment and any other agreement
or instrument pursuant to which any Loan Party or any other
Person grants collateral to the Agent, for the benefit of the
Agent and the Lenders.
LC Fee Rate means a per annum rate equal to three and
once-half percent (3.50%); provided, that, from and after
February 28, 2003, the LC Fee Rate shall be a per annum rate
equal to eight and one-half percent (8.50%).
Loan Documents means this Agreement, the Notes, the Fee
Letter, the LC Applications (including any master letter of
credit agreement executed and delivered to the Issuing
Lender), the Collateral Documents, the Make-Well Agreement,
the Thane/▇▇▇▇▇ Intercreditor Agreement, the Prairie
Subordination Agreement and any Hedging Agreement between any
Borrower and any Lender or any Affiliate of any Lender.
Loan Party means the Intermediate Entity, each Borrower, each
other Person that owes an Obligation to the Agent and/or the
Lenders under any Collateral Document, and each Person that is
the subject of a Pledge Agreement.
Make-Well Agreement means that certain Make-Well Agreement
dated as of the First Amendment Closing Date by and among HIG,
HIG Investment Group II, L.P., HIG Partners II, L.P., H.I.G.
GP-II, INC., Borrowers and the Agent, as amended and restated
by that certain Amended and Restated Make-Well Agreement dated
as of the Second Amendment Closing Date among such Persons,
and as the same further may be amended, modified, supplemented
or restated from time to time in accordance with its terms.
Related Transaction Agreements means, collectively, the
Acquisition and Merger Agreement, the Equity Documents, the
Employment Agreements, the Subordinated Debt Documents, the
HIG Subordinated Notes, if any, and the Thane/▇▇▇▇▇ Merger
Documents.
Revolving Credit Termination Date means the earlier to occur
of (a) February 28, 2003 or (b) such other date on which the
Commitments terminate pursuant to Section 6 or 13.
Subordinated Debt means, collectively, (i) the Prairie
Subordinated Debt, (ii) the unsecured Debt evidenced by the
HIG Subordinated Notes, if any, the aggregate
2
original principal amount of which shall not exceed $500,000,
and (iii) any other unsecured Debt of any Borrower or any
Subsidiary of any Borrower which has subordination terms,
covenants, pricing and other terms which have been approved in
writing by the Required Lenders.
2.2 Section 1.1 - Additional Definitions. Section 1.1 of
the Existing Credit Agreement is amended further by adding the
following terms and respective definitions to such Section 1.1 in the
appropriate alphabetical order:
HIG Subordinated Notes means, collectively, those certain
unsecured, unguaranteed subordinated notes to be issued to HIG
by ▇▇▇▇▇ in consideration of making any required fundings
under the Make-Well Agreement, together with any promissory
notes issued in substitution thereof or replacement therefor.
Intermediate Entity means ▇▇▇▇▇ Acquisition Corporation, a
Delaware corporation.
Intermediate Entity Guaranty means a guaranty, in form and
substance satisfactory to the Agent, pursuant to which the
Intermediate Entity guarantees of the Obligations.
Intermediate Entity Pledge Agreement means a pledge agreement,
in form and substance satisfactory to the Agent, pursuant to
which the Intermediate Entity pledges 100% of the Equity
Interests of Holdings to the Agent, for the benefit of the
Lender Parties, as security for the Intermediate Entity's
obligations under the Intermediate Entity Guaranty and any
other Loan Document to which it is a party.
Intermediate Entity Security Agreement means a security
agreement, in form and substance satisfactory to the Agent,
pursuant to which the Intermediate Entity grants a first
priority security interest in all of its Property to the
Agent, for the benefit of the Lender Parties, as security for
the Intermediate Entity's obligations under the Intermediate
Entity Guaranty and any other Loan Document to which it is a
party.
Second Amendment means that certain Second Amendment to Credit
Agreement and other Loan Documents dated as of the First
Amendment Closing Date among the Borrowers, the Intermediate
Entity, the Funds Administrator, the Agent and the Lenders.
Second Amendment Closing Date means March __, 2002.
Thane means Thane International, Inc., a Delaware corporation.
Thane/▇▇▇▇▇ Intercreditor Agreement means that certain
Intercreditor Agreement dated as of the Second Amendment
Closing Date among the Borrowers, the
3
Intermediate Entity, Thane, the Agent, the Thane Lender Agent
and certain Subsidiaries of Thane.
Thane/▇▇▇▇▇ Merger means the merger of Thane/▇▇▇▇▇ Merger Sub
with and into Holdings, with Holdings as the surviving entity,
pursuant to the terms of the Thane/▇▇▇▇▇ Merger Documents.
Thane/▇▇▇▇▇ Merger Agreement means that certain Agreement and
Plan of Merger dated as of March __, 2002 among Holdings,
Thane, the Intermediate Entity, the Thane/▇▇▇▇▇ Merger Sub and
each of the stockholders of Holdings listed on the signature
pages thereto.
Thane/▇▇▇▇▇ Merger Documents means, collectively, the
Thane/▇▇▇▇▇ Merger Agreement, the Thane/▇▇▇▇▇ Redemption
Agreement and all other instruments, documents and agreements
executed and delivered in connection with the consummation of
the Merger, as the same may be amended, modified, supplemented
from time to time in accordance with the terms hereof.
Thane/▇▇▇▇▇ Merger Documents Assignment means a collateral
assignment of the representations, warranties and indemnities
of the Thane/▇▇▇▇▇ Merger Documents, in form and substance
satisfactory to the Agent.
Thane/▇▇▇▇▇ Merger Sub means ▇▇▇▇▇ Holdings Acquisition
Corporation, a Delaware corporation.
Thane/▇▇▇▇▇ Redemption Agreement means that certain Redemption
Agreement dated as of March __, 2002 by and among Thane, Lease
Plan-▇▇▇▇▇ Products Investors, L.P. and Prairie.
2.3 Section 4.1. Section 4.1 of the Existing Credit
Agreement is deleted in its entirety and the following is substituted
in lieu thereof:
"4.1 Interest Rates. Each Borrower promises to
pay, jointly and severally, interest on the unpaid principal
amount of each Loan for the period commencing on the date of
such Loan until such Loan is paid in full as follows:
(a) at all times while such Loan is a
Base Rate Loan, at a rate per annum equal to the sum
of the Base Rate from time to time in effect, plus
the applicable Base Rate Margin; and
(b) at all times while such Loan is a
Eurodollar Loan, at a rate per annum equal to the sum
of the Eurodollar Rate (Reserve Adjusted) applicable
to each Interest Period for such Loan, plus the
applicable Eurodollar Margin;
4
provided that (i) the interest rate applicable to
each Loan as set forth above shall be automatically
increased by five percent (5%) and shall accrue at
such increased rate from and after February 29, 2003,
and (ii) at any time any Event of Default exists, if
requested by the Required Lenders, the interest rate
applicable to each Loan (including any increase due
to the immediately preceding clause (i)) shall be
increased by two percent (2.0%). Additionally, at any
time any Event of Default exists all other amounts,
fees and sums owing to the Lenders under this
Agreement and the other Loan Documents and not
contested in good faith by the Borrowers, if
requested by the Required Lenders and to the extent
permitted under applicable law, shall bear interest
at a rate per annum equal to the sum of the Base Rate
from time to time in effect, plus two percent (2.0%);
provided, that, to the extent permitted under
applicable law, the same shall bear interest at a
rate per annum equal to the sum of the Base Rate from
time to time in effect, plus seven percent (7.0%)
from and after February 28, 2003."
2.4 Section 10. Section 10 of the Existing Credit
Agreement is amended by adding the following Sections 10.27, 10.28 and
10.29 to such Section 10 in the appropriate numerical order:
"10.27 Thane/▇▇▇▇▇ Merger Documents.
(a) The Borrowers have heretofore
furnished the Agent true and correct copies of the
Thane/▇▇▇▇▇ Merger Documents.
(b) Each Borrower and, to the
Borrowers' knowledge, each other party to the
Thane/▇▇▇▇▇ Merger Documents has duly taken all
necessary corporate, partnership or other
organizational action to authorize the execution,
delivery and performance of the Thane/▇▇▇▇▇ Merger
Documents to which it is a party and the consummation
of transactions contemplated thereby.
(c) The Thane/▇▇▇▇▇ Merger Documents
will comply with all applicable legal requirements,
and all necessary governmental, regulatory, creditor,
shareholder, partner and other material consents,
approvals and exemptions required to be obtained by
the Borrowers and, to the Borrowers' knowledge, each
other party to the Thane/▇▇▇▇▇ Merger Documents have
been duly obtained and will be in full force and
effect. As of the Second Amendment Closing Date, all
applicable waiting periods with respect to the
Thane/▇▇▇▇▇ Merger Documents have expired without any
action being taken by any competent governmental
authority which restrains, prevents or imposes
material adverse conditions upon the consummation of
the respective Related Transactions.
(d) The execution and delivery of the
Thane/▇▇▇▇▇ Merger Documents did not, and the
consummation of the Thane/▇▇▇▇▇ Merger will not,
violate any statute or regulation of the United
States (including
5
any securities law) or of any state or other
applicable jurisdiction, or any order, judgment or
decree of any court or governmental body binding on
any Borrower or, to the Borrowers' knowledge, any
other party to the Thane/▇▇▇▇▇ Merger Documents, or
result in a breach of, or constitute a default under,
any material agreement, indenture, instrument or
other document, or any judgment, order or decree, to
which any Borrower is a party or by which the any
Borrower is bound or, to the Borrowers' knowledge, to
which any other party to the Thane/▇▇▇▇▇ Merger
Documents is a party or by which any such party is
bound.
(e) No statement or representation made
in the Thane/▇▇▇▇▇ Merger Documents by any Borrower
nor, to the Borrowers' knowledge, any other Person,
contains any untrue statement of a material fact or
omits to state any material fact required to be
stated therein or necessary in order to make the
statements made therein, in light of the
circumstances under which they are made, not
misleading.
10.28 Capitalization. Schedule 10.28 sets forth
the authorized equity securities of the Intermediate Entity
and each Borrower as of the Second Amendment Closing Date. All
issued and outstanding equity securities of each Borrower and
the Intermediate Entity are duly authorized and validly
issued, fully paid, non-assessable, and free and clear of all
Liens other than, in the case of each Borrower, those in favor
of the Agent, for the benefit of the Lender Parties. All such
securities were issued in compliance with all applicable state
and federal laws concerning the issuance of securities. All of
the issued and outstanding equity securities of the
Intermediate Entity are owned by Thane. The Intermediate
Entity owns all of the issued and outstanding equity
securities of Holdings and Holdings owns all of the issued and
outstanding equity securities of ▇▇▇▇▇. Except as set forth on
Schedule 10.28, there are no pre-emptive or other outstanding
rights, options, warrants, conversion rights or other similar
agreements or understandings for the purchase or acquisition
of any equity securities in any such entity.
10.29 Incorporation of Certain Representations and
Warranties. The representations and warranties made by the
Borrowers in the Thane/▇▇▇▇▇ Merger Documents are true and
correct in all material respects and by this reference such
representations and warranties hereby are incorporated herein,
mutatis mutandis, for the benefit of the Agent and the
Lenders."
2.5 Section 11.1. Section 11.1 of the Existing Credit
Agreement is amended by (i) deleting in its entirety the current
version of Section 11.1.11 contained in such Section 11.1 and
substituting the following Section 11.1.11 in lieu thereof and (ii)
adding the following Section 11.1.12 to such Section 11.1 in the
appropriate numerical order:
"11.1.11 Amendments to Thane Credit Facilities.
Promptly from time to time, (a) copies of any and all
amendments and supplements to, and
6
modifications of, and any waivers and other notices delivered
under, the credit agreement and credit documents evidencing
the senior secured credit accommodations made from time to
time to Thane by certain financial institutions, and (b)
notice (in reasonable detail) of any substitute, replacement
or additional lender to Thane thereunder.
11.1.12 Other Information. Promptly from time to
time, such other information concerning the Borrowers and any
other Loan Party as any Lender or the Agent may reasonably
request."
2.6 Section 11.11. Section 11.11 of the Existing Credit
Agreement is deleted and the following Section 11.11 is substituted in
lieu thereof:
"11.11 Mergers, Acquisitions, Consolidations,
Sales11.11 Mergers, Acquisitions, Consolidations, Sales. Not
be a party to any merger or consolidation, or purchase or
otherwise acquire all or substantially all of the assets or
any stock of any class of, or any partnership or joint venture
interest in, any other Person, or, except in the ordinary
course of its business, sell, transfer, convey or lease any of
its assets, or sell or assign with or without recourse any
receivables, except for the following (but only to the extent
permitted under all agreements, documents and instruments
applicable to any Subordinated Debt): (a) any such merger,
consolidation, acquisition, sale, transfer, conveyance, lease
or assignment of or by any Borrower (other than Holdings) with
any other Borrower (other than Holdings); (b) any such
purchase or other acquisition by any Borrower (other than
Holdings) of the assets of any other Borrower or any such
purchase or other acquisition by any Borrower of the stock of
any other Borrower; (c) sales and other dispositions of the
type described in clauses (a), (b) and (c) of the definition
of "Asset Sales;" (d) sales and dispositions of assets (other
than Subsidiary Equity Interests) for at least fair market
value (as determined by the Board of Directors of Holdings),
provided, (i) the net book value of all assets sold or
otherwise disposed of in any Fiscal Year does not exceed five
percent (5%) of the net book value of the consolidated assets
of the Borrowers and their respective Subsidiaries as of the
last day of the preceding Fiscal Year and (ii) no Default or
Event of Default exists or would exist after giving effect to
such sale or disposition; and (e) the Thane/▇▇▇▇▇ Merger."
2.7 Section 11.14. Section 11.14 of the Existing Credit
Agreement is deleted and the following Section 11.14 is substituted in
lieu thereof:
"11.14 Further Assurances.14 Further Assurances.
Take such actions as are necessary or as the Agent or the
Required Lenders may reasonably request from time to time
(including the execution and delivery of guaranties, security
agreements, pledge agreements, mortgages, deeds of trust,
financing statements and other documents, the filing or
recording of any of the foregoing, and the delivery of stock
certificates and other collateral with respect to which
perfection is obtained by possession) to ensure that (a) the
obligations of the Borrowers hereunder and under the other
Loan Documents (i) are secured by substantially all of the
assets
7
of the Borrowers and the Intermediate Entity, (ii) are secured
by all of the Equity Interests in all Subsidiaries of the
Intermediate Entity, (iii) guaranteed by the Intermediate
Entity and (iv) if not Borrowers hereunder, guaranteed by all
Subsidiaries of the Borrowers and (b) the obligations of each
non-Borrower Subsidiary under such guaranty are secured by
substantially all of the assets of such non-Borrower
Subsidiary."
2.8 Section 11.15. Section 11.15 of the Existing Credit
Agreement is deleted and the following Section 11.15 is substituted in
lieu thereof:
"11.15 Transactions with Affiliates. Not enter
into, or cause, suffer or permit to exist any transaction,
arrangement or contract with any of its other Affiliates
(other than among or between Borrowers) (a) which is on terms
which are less favorable than are obtainable from any Person
which is not one of its Affiliates and (b) if such
transaction, arrangement or contract is with Thane and any of
its Subsidiaries (other than the Borrowers and their
Subsidiaries), unless the Borrowers shall have disclosed in
writing such transaction, arrangement or contract to the Agent
prior to the entering into thereof and the Agent shall have
consented to such transaction, arrangement or contract."
2.9 Section 11.19. Section 11.19 of the Existing Credit
Agreement is deleted and the following Section 11.19 is substituted in
lieu thereof:
"11.19 Inconsistent Agreements. Not, and not permit
any of its Subsidiaries to, enter into any agreement, other
than this Agreement and the other Loan Documents, containing
any provision which would (a) be violated or breached by any
borrowing by any Borrower hereunder or by the performance by
any Borrower or any Subsidiary of any Borrower of any of its
obligations hereunder or under any other Loan Document, (b)
prohibit any Borrower from granting to the Agent, for the
benefit of the Lender Parties, a Lien on any of its assets,
(c) create or permit to exist or become effective any
encumbrance or restriction on the ability of any Borrower to
(i) pay dividends or make other distributions to any Borrower,
or pay any Debt owed to any Borrower, (ii) make loans or
advances to any Borrower or (iii) transfer any of its assets
or properties to any Borrower, or (d) violate the terms of the
Thane/▇▇▇▇▇ Intercreditor Agreement."
2.10 Section 11.20. Section 11.20 of the Existing Credit
Agreement is deleted and the following Section 11.20 is substituted in
lieu thereof:
"11.20 Business Activities. Not, and not permit any
of its Subsidiaries to, engage in any line of business other
than the Related Businesses. In addition, and notwithstanding
the other provisions herein contained, neither the
Intermediate Entity nor Holdings shall engage in any business
or other activities, or own any material assets or property,
other than the ownership and management of its Subsidiaries."
8
2.11 Section 13.1.4. Section 13.1.4 of the Existing Credit
Agreement is deleted and the following Section 13.1.4 is substituted in
lieu thereof:
"13.1.4 Bankruptcy, Insolvency, etc. Any Borrower,
any Subsidiary of any Borrower or any other Loan Party becomes
insolvent or generally fails to pay, or admits in writing its
inability or refusal to pay, debts as they become due; or any
Borrower or any other Loan Party applies for, consents to, or
acquiesces in the appointment of a trustee, receiver or other
custodian for such Borrower, Subsidiary or Loan Party or any
property thereof, or makes a general assignment for the
benefit of creditors; or, in the absence of such application,
consent or acquiescence, a trustee, receiver or other
custodian is appointed for any Borrower or any Subsidiary of
any Borrower or any other Loan Party or for a substantial part
of the property of any thereof and is not discharged within
sixty (60) days; or any bankruptcy, reorganization, debt
arrangement, or other case or proceeding under any bankruptcy
or insolvency law, or any dissolution or liquidation
proceeding, is commenced in respect of any Borrower or any
Subsidiary of any Borrower or any other Loan Party, and if
such case or proceeding is not commenced by such Borrower,
Subsidiary or Loan Party, it is consented to or acquiesced in
by such Borrower, Subsidiary or Loan Party, or remains for
thirty (30) days undismissed; or any Borrower or any
Subsidiary of any Borrower or any other Loan Party takes any
action to authorize, or in furtherance of, any of the
foregoing."
2.12 Section 13.1.10. Section 13.1.10 of the Existing
Credit Agreement is deleted and the following Section 13.1.10 is
substituted in lieu thereof:
"13.1.10 Invalidity of Subordination Provisions, etc.
(a) Any subordination provision in any document or instrument
governing Subordinated Debt (including, without limitation,
the Prairie Subordination Agreement or the HIG Subordinated
Notes), shall cease to be in full force and effect, or any
Borrower or any other Person (including the holder of any
applicable Subordinated Debt) shall contest in any manner
the validity, binding nature or enforceability of any
such provision, or (b) any provision in the Thane/▇▇▇▇▇
Intercreditor Agreement shall cease to be in full force and
effect, or any Borrower or any other Person (including Thane
or any of its Subsidiaries) shall contest in any manner the
validity, binding nature or enforceability of any such
provision."
2.13 Section 13.1.11. Section 13.1.11 of the Existing
Credit Agreement is deleted and the following Section 13.1.11 is
substituted in lieu thereof:
"13.1.11 Change of Control. (a) After the Second
Amendment Closing Date, any Person or group of Persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act
of 1934, but excluding any "Specified Person" (as defined
below)) shall acquire beneficial ownership (within the meaning
of Rule 13d-3 promulgated under such Act) of more than
twenty-five
9
percent (25%) of the outstanding securities (on a fully
diluted basis and taking into account any securities or
contract rights exercisable, exchangeable or convertible into
equity securities) of Thane having voting rights in the
election of directors under normal circumstances; or (c) any
"Change of Control" (as from time to time defined in the
Prairie Subordinated Debt Documents) shall occur; or (d) the
Intermediate Entity at any time for any reason shall cease to
be a Wholly-Owned Subsidiary of Thane; or (e) Holdings at any
time for any reason shall cease to be a Wholly-Owned
Subsidiary of the Intermediate Entity; or (f) ▇▇▇▇▇ at any
time for any reason shall cease to be a Wholly-Owned
Subsidiary of Holdings; or (g) ▇▇▇▇▇ at any time for any
reason shall cease to own 100% of the Equity Interests of its
Subsidiaries; (h) a majority of the members of the Board of
Directors of Thane shall cease to be Continuing Members; or
(i) the Agent, for the benefit of the Lender Parties, shall
cease at any time for any reason to have a first priority Lien
on 100% of the Equity Interests of Holdings and/or the
Subsidiary Equity Interests of each Subsidiary of Holdings; or
(j) a period of thirty (30) consecutive days shall have
elapsed during which any two of the individuals named in
Schedule 13.1.11 shall have ceased to hold executive offices
with Holdings at least equal in seniority and responsibility
to such individuals' present offices described as set out in
such Schedule 13.1.11, excluding any such individual who has
been replaced by another individual or individuals reasonably
satisfactory to the Required Lenders (it being understood that
any such replacement individual shall be deemed added to
Schedule 13.1.11 on the date of approval thereof by the
Required Lenders); for purposes of the foregoing, "Continuing
Member" means a member of the Board of Directors of Holdings
who either (i) was a member of the Holdings' Board of
Directors on the day before the Closing Date and has been such
continuously thereafter or (ii) became a member of such Board
of Directors after the day before the Closing Date and whose
election or nomination for election was approved by a vote of
the majority of the Continuing Members then members of the
Holdings' Board of Directors; and "Specified Person" means
HIG; or (k) HIG shall cease to collectively directly own and
control at least fifty-one percent (51%) of the capital stock
of Thane or no longer possesses the voting power to elect a
majority of Thane's board of directors."
2.14 Section 13.1. Section 13.1 of the Existing Credit
Agreement amended by adding the following Section 13.1.14 to such
Section 13.1 in the appropriate numerical order:
"13.1.14 Thane. Any event described in Section 13.1.4
shall occur in respect of Thane."
2.15 Schedules. Schedule 10.28 attached hereto hereby is
attached to the Existing Credit Agreement in the appropriate numerical
order and by this reference is made a part thereof. Further, Schedules
3.1(a) and 3.1(b) currently attached to the Existing Credit Agreement
are deleted in their entirety and Schedules 3.1(a) and 3.1(b) attached
hereto are substituted in lieu thereof.
10
3. Conditions to Effectiveness. The effectiveness of this
Amendment shall be subject to the satisfaction of all of the following
conditions in a manner, form and substance satisfactory to the Agent:
(a) Representations and Warranties. All of the
representations and warranties of the Borrowers and each of their
respective Subsidiaries set forth in the Existing Credit Agreement, as
amended, and the other Loan Documents to the extent such Persons are
parties thereto shall be true and correct in all respects, except for
the representations and warranties qualified by the terms "material,"
materially," "Material Adverse Effect" or other terms with similar
import, which shall be true and correct in all respects.
(b) Delivery of Documents. The following shall have been
delivered to the Agent, each duly authorized and executed and in form
and substance satisfactory to the Agent:
(1) this Amendment;
(2) the Thane/▇▇▇▇▇ Intercreditor Agreement, the
Thane/▇▇▇▇▇ Merger Documents Assignment and the amended and
restated Make-Well Agreement;
(3) the Intermediate Entity Security Agreement,
the Intermediate Entity Pledge Agreement and the Intermediate
Entity Guaranty Agreement;
(4) such evidence of the authority of HIG, the
Intermediate Entity, the Borrowers and each of their
respective Subsidiaries to execute and deliver this Amendment
and all other Loan Documents delivered in connection herewith
as the Agent may require, including but not limited to (i) a
copy of resolutions duly adopted by the board of directors (or
other governing authority) of each such Person, authorizing
the execution by each such Person of this Amendment and the
other agreements, documents and instruments to be executed by
each such Person pursuant to this Amendment (collectively, the
"Other Amendment Documents"), certified as complete and
correct by the corporate secretary or similar officer of each
such Person, (ii) a certificate of the secretary of the
Intermediate Entity, each Borrower and each of its
Subsidiaries to the effect that neither the articles of
incorporation nor the bylaws of such Person has been amended
or modified since the Closing Date or, if not the Closing
Date, the date on which certified copies of such documents
previously were delivered to the Agent, and (iii) certified
copies of the organizational and authority documents of the
Intermediate Entity;
(5) to the extent not previously delivered to
the Agent, (i) a Collateral Access Agreement in respect of
each parcel of leased real Property of any Borrower or any
Subsidiary of any Borrower, and (ii) for each Depositary
Account maintained by any Borrower or any Subsidiary of any
Borrower, a Depositary Account Agreement covering such
Depositary Account;
11
(6) termination or release agreements relating
to the Equity Documents to be terminated as of the
effectiveness of the Thane/▇▇▇▇▇ Merger, including, without
limitation, the Stockholders' Agreement and the related
warrants in favor of any Lender or Prairie;
(7) a reaffirmation of subordination agreement
by and among Prairie, the Borrowers and the Agent and a
reaffirmation agreement in respect of the Make-Well Agreement;
(8) a certificate executed by a Vice President
of the Borrowers, pursuant to which such Person represents and
warrants to the Agent and the Lenders that the Thane/▇▇▇▇▇
Merger has been consummated in accordance with the Thane/▇▇▇▇▇
Merger Documents and applicable law and to other circumstances
requested by the Agent;
(9) a certificate signed by the Secretary or a
Vice President of the Borrowers dated as of the Second
Amendment Closing Date affirming the matters set forth in this
Section as of the Second Amendment Closing Date;
(10) a certificate executed by a Vice President
of the Borrowers certifying the occurrence of the closing of
the Thane/▇▇▇▇▇ Merger and that such transaction has been
consummated in accordance with the terms of the Thane/▇▇▇▇▇
Merger Documents without waiver of any material condition
thereof; together with evidence satisfactory to the Required
Lenders that (i) all necessary governmental, regulatory,
creditor, shareholder, partner and other material consents,
approvals and exemptions required to be obtained by Thane, the
Intermediate Entity and the Borrowers in connection with such
transactions have been duly obtained and are in full force and
effect and (ii) all material and necessary permits have been
obtained; and
(11) such other instruments, documents,
certificates, consents, waivers and opinions (including,
without limitation, opinions from White & Case, counsel to the
Borrowers and their Subsidiaries, and an opinion from counsel
to Thane and its Subsidiaries (other than the Borrowers and
their Subsidiaries) (further including, without limitation, an
opinion from appropriate counsel that the Thane/▇▇▇▇▇ Merger
has been consummated in accordance with applicable law)) as
the Agent may request.
(c) Amendment to and Waivers under the Prairie
Subordinated Debt Documents. The Agent shall have received evidence
satisfactory to the Agent of Prairie's consent to this Amendment and
the transactions contemplated hereby (including, without limitation,
the Merger); Prairie and the Borrowers shall have amended the Prairie
Subordinated Debt Documents in a manner, form and substance
satisfactory to Agent. The Agent shall have received a copy of all such
amendments certified by a Vice President or Secretary of the Borrowers
as true, correct and complete in all respects.
12
(d) Payment of Fees and Expenses. The Borrowers shall
have paid (i) to the Agent a non-refundable Second Amendment closing
fee in the amount of $25,000, which fee shall be deemed fully earned
and due and payable on the date hereof, and (ii) all fees and expenses
of the Agent and the Lenders in connection with this Amendment,
including, without limitation, reasonable attorneys' fees and expenses.
(e) Performance; No Default. The Intermediate Entity and
the Borrowers and each of their respective Subsidiaries shall have
performed and complied with all agreements and conditions contained in
the Existing Credit Agreement and the other Loan Documents to be
performed by or complied with by such Persons prior to the date hereof,
and no Unmatured Event of Default or Event of Default shall exist or be
created hereby.
(f) No Material Adverse Effect. No Material Adverse
Effect shall have occurred since the date of the most recent financial
statements for the Borrowers and their respective Subsidiaries received
by the Agent.
(g) Approvals. The approval and/or consent shall have
been obtained from all Persons whose approval or consent is necessary
or required to enable the Intermediate Entity, the Borrowers and their
respective Subsidiaries and HIG to enter into this Amendment and the
Other Amendment Documents and to perform their respective obligations
hereunder and thereunder.
(h) Merger. The Agent shall have received evidence
(including, without limitation, a file-stamped certificate of merger
issued by the Secretary of State of the State of Delaware), reasonably
satisfactory to the Required Lenders, that the Merger shall have been
completed in accordance with the terms of the Thane/▇▇▇▇▇ Merger
Documents and applicable law. LaSalle, in its individual capacity,
shall have received a cash payment of $234,610 in accordance with the
Thane/▇▇▇▇▇ Redemption Agreement in respect of the conversion into cash
of all equity securities in Holdings owned by LaSalle immediately prior
to the effectiveness of the Merger. Further, the Agent shall have
received a copy of all of the Thane/▇▇▇▇▇ Merger Documents certified by
a Vice President or Secretary of the Borrowers as true, correct and
complete in all respects.
(i) Satisfaction of the Agent's Counsel. All legal
matters incident to the transactions contemplated hereby shall be
satisfactory to counsel for the Agent.
The date on which the foregoing conditions shall have been satisfied shall be
referred to herein as the "Effective Date."
4. References. From and after the Effective Date, all references
in the Existing Credit Agreement and the other Loan Documents to the "Credit
Agreement" shall be deemed to refer to the Existing Credit Agreement, as amended
hereby. This Amendment shall constitute a Loan Document.
13
5. Intentionally Reserved.
6. Representations and Warranties. The Intermediate Entity, each
Borrower and each Subsidiary of each Borrower (individually, an "Obligor" and
collectively, the "Obligors") each hereby confirms to the Lender Parties that
the representations and warranties set forth in the Existing Credit Agreement,
as amended, and the other Loan Documents are true and correct in all respects as
of the date hereof, except (i) to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties shall have been true and correct in all respects as of such earlier
date, and (ii) for the representations and warranties qualified by the terms
"material," "materially," "Material Adverse Effect" or other terms of similar
import, which shall be true and correct in all respects as of the date hereof.
Each Obligor further represents and warrants to the Lender Parties that (a) it
has full power and authority to execute and deliver this Amendment and the Other
Amendment Documents and to perform its obligations hereunder and thereunder, (b)
upon the execution and delivery hereof and thereof, this Amendment and the Other
Amendment Documents will be valid, binding and enforceable upon it in accordance
with their respective terms, (c) the execution, delivery and performance of this
Amendment and/or the Other Amendment Documents do not and will not contravene,
conflict with, violate or constitute a default under (i) the articles of
incorporation or bylaws of such Obligor, or (ii) any applicable law, rule or
regulation, or any judgment, decree or order, of which such Obligor has
knowledge or any material agreement, indenture or instrument to which such
Obligor is a party or is bound or which is binding upon or applicable to all or
any portion of its property, and (d) no Unmatured Event of Default or Event of
Default presently exists.
7. Costs and Expenses. The Borrowers, jointly and severally,
agree to reimburse the Agent for all out of pocket expenses incurred in the
preparation, negotiation and execution of this Amendment and the Other Amendment
Documents and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, reasonable expenses and fees of counsel
for the Agent.
8. No Further Amendments; Ratification of Liability; Waiver;
Release. Except as amended hereby, the Existing Credit Agreement and each of the
other Loan Documents shall remain in full force and effect in accordance with
their respective terms. Each Obligor, as a debtor, grantor, pledgor, guarantor
or assignor, or in any similar capacity in which it has granted Liens or acted
as an accommodation party or guarantor, as the case may be, hereby ratifies,
confirms and reaffirms its liabilities, its payment and performance obligations
(contingent or otherwise) and its agreements under the Existing Credit Agreement
and the other Loan Documents to the extent such Person is a party thereto, all
as amended by this Amendment, and the liens and security interests granted,
created and perfected thereby, and agrees and acknowledges that (a) it has no
defenses, claims or set-offs to the enforcement of such liabilities, obligations
and agreements, (b) the Lender Parties have fully performed all obligations to
such Person which the Lender Parties may have had prior to, or have on and as
of, the date hereof and (c) other than as specifically set forth herein, no
Lender Party waives, diminishes or limits any term or condition contained in the
Existing Credit Agreement or any other Loan Document. The Lender Parties'
agreement to the terms of this Amendment or any other amendment of the Existing
Credit Agreement or any other Loan Document shall not be deemed to establish or
14
create a custom or course of dealing among the Obligors or the Lender Parties,
or any of them. This Amendment and the Other Amendment Documents contain the
entire agreement among the Obligors and the Lender Parties contemplated by this
Amendment. In consideration of the Lenders' agreements herein contained, each
Obligor, jointly and severally, hereby irrevocably releases and forever
discharges the Agent, the Lenders and their affiliates, subsidiaries,
successors, assigns, participants, directors, officers, employees, agents,
consultants and attorneys (each, a "Released Person") of and from all damages,
losses, claims, demands, liabilities, obligations, actions and causes of action
whatsoever which such Obligor or any of its Affiliates may now have or claim to
have against the Agent, the Lenders or any other Released Person on account of
or in any way touching, concerning, arising out of or founded upon the Existing
Credit Agreement, as amended, the Loan Documents and the transactions
contemplated or otherwise evidenced thereby, whether presently known or unknown
and of every nature and extent whatsoever.
9. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which, when
taken together, shall constitute one and the same instrument.
10. Further Assurances. Each Obligor covenants and agrees that it
will at any time and from time to time do, execute, acknowledge and deliver, or
will cause to be done, executed, acknowledged and delivered, all such further
acts, documents and instruments as reasonably may be required by the Agent in
order to effectuate fully the intent of this Amendment.
11. Severability. If any term or provision of this Amendment or
the application thereof to any party or circumstance shall be held to be
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, the validity, legality and enforceability of the remaining terms
and provisions of this Amendment shall not in any way be affected or impaired
thereby, and the affected term or provision shall be modified to the minimum
extent permitted by law so as most fully to achieve the intention of this
Amendment.
12. Captions. The captions in this Amendment are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Amendment or any of the provisions hereof.
13. Governing Law. This Amendment shall be a contract made under
and governed by the laws of the State of Illinois, without regard to conflict of
laws principles.
14. Additional Agreements. The Borrowers hereby covenant and agree
to deliver, or shall cause to be delivered, to the Agent, on or before the
thirtieth (30th) day after the date hereof, opinion letters from Cayman Islands
local counsel to HIG and its affiliates that are parties to the Make-Well
Agreement, in form and substance reasonably satisfactory to the Agent (and
consistent in scope with prior similar opinions delivered to the Agent in
connection with the Existing Credit Agreement). The Borrowers agree that the
failure of the Borrowers to timely comply with the provisions of this paragraph
shall constitute an immediate Event of Default without further notice or action
by the Agent, any Lender or any other Person.
15
Delivered at Chicago, Illinois as of the day and year first above
written.
BORROWERS:
▇▇▇▇▇ HOLDINGS, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Its: President
-------------------------------
▇▇▇▇▇ PRODUCTS, INC.
By:/s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------
Its: Vice President
-------------------------------
INTERMEDIATE ENTITY:
▇▇▇▇▇ ACQUISITION CORPORATION
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Its: Vice President
-------------------------------
LENDER PARTIES:
LASALLE BANK NATIONAL
ASSOCIATION, as Agent, Issuing
Lender and as a Lender
By: /s/illegible
--------------------------------
Its: Vice President
-------------------------------
SCHEDULE 10.28
Capitalization as of the Second Amendment Closing Date
SCHEDULE 3.1(a)
TERM LOANS A INSTALLMENTS (Aggregate)
Date Amount
---- ------
September 30, 2000 $ 325,000
December 31, 2000 $ 325,000
March 31, 2001 $ 325,000
June 30, 2001 $ 325,000
September 30, 2001 $ 375,000
December 31, 2001 $ 375,000
March 31, 2002 $ 375,000
June 30, 2002 $ 375,000
September 30, 2002 $ 425,000
December 31, 2002 $ 425,000
February 28, 2003 Remaining Principal Amount
*The following assumes that all of the Subsequent Term Loans A shall have been
disbursed. In the event any of the Subsequent Term Loans A shall not have been
disbursed in accordance with the terms hereof, the scheduled installments set
forth above occurring after the date on which such of the Subsequent Term Loans
A were scheduled to be disbursed (other than the installment due on February 28,
2003) shall be reduced by the amount of such Subsequent Term Loans A on a pro
rata basis.
SCHEDULE 3.1(b)
INTENTIONALLY RESERVED.
