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Exhibit 99.03
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$110,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF JUNE 27, 1997
AS AMENDED AND RESTATED AS OF MAY 19, 1998
among
WATERLINK, INC.,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
as Agent, Letter of Credit Issuing Bank,
and
Swing Line Bank,
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
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TABLE OF CONTENTS
SECTION Page
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ARTICLE I
DEFINITIONS.....................................................................................1
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1.01 Certain Defined Terms..............................................................................1
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1.02 Other Interpretive Provisions.....................................................................24
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1.03 Accounting Principles.............................................................................25
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ARTICLE II
THE CREDITS....................................................................................25
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2.01 Amounts and Terms Of Commitments..................................................................25
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(a) The Term Credit.......................................................................25
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(b) The Revolving Credit..................................................................25
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2.02 Loan Accounts.....................................................................................26
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2.03 Procedure for Borrowing...........................................................................26
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2.04 The Swing Line Loans..............................................................................27
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2.05 Procedure For Swing Line Loans....................................................................28
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2.06 Conversion And Continuation Elections.............................................................29
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2.07 Voluntary Termination Or Reduction Of Commitments.................................................30
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2.08 Optional Prepayments..............................................................................31
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2.09 Mandatory Prepayments Of Loans; Mandatory Commitment Reductions
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..............................................................................................31
(b) Asset Dispositions....................................................................32
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(c) Equity Issuance.......................................................................32
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(d) Debt Issuance.........................................................................32
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(e) Excess Cash Flow......................................................................32
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(f) Closing Date..........................................................................33
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(g) General...............................................................................33
2.10 Repayment.........................................................................................33
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(a) Term Loans............................................................................33
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(b) The Revolving Credit..................................................................33
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2.11 Interest..........................................................................................34
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2.12 Fees..............................................................................................34
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(a) Agency Fees...............................................................................34
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(b) Commitment Fees...........................................................................34
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2.13 Computation Of Fees And Interest..................................................................35
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2.14 Payments by the Company...........................................................................35
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2.15 Payments by the Banks To The Agent................................................................36
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2.16 Sharing of Payments, Etc..........................................................................36
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ARTICLE III
THE LETTERS OF CREDIT..........................................................................37
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3.01 The Letter of Credit Subfacility..................................................................37
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3.02 Issuance, Amendment and Renewal of Letters of Credit..............................................38
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3.03 Risk Participations, Drawings and Reimbursements..................................................40
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3.04 Repayment of Participations.......................................................................42
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3.05 Role of the Issuing Bank..........................................................................42
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3.06 Obligations Absolute..............................................................................43
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3.07 Cash Collateral Pledge............................................................................44
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3.08 Letter of Credit Fees.............................................................................44
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3.09 Uniform Customs and Practice......................................................................45
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ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY.........................................................45
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4.01 Taxes.............................................................................................45
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4.02 Illegality........................................................................................46
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4.03 Increased Costs and Reduction of Return...........................................................47
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4.04 Funding Losses....................................................................................48
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4.05 Inability to Determine Rates......................................................................48
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4.06 Reserves on Offshore Rate Loans...................................................................49
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4.07 Certificates of Banks.............................................................................49
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4.08 Survival..........................................................................................49
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ARTICLE V
CONDITIONS PRECEDENT...........................................................................49
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5.01 Conditions of Initial Credit Extensions...........................................................49
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(a) Credit Agreement and Notes............................................................49
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(b) Resolutions; Incumbency...............................................................49
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(c) Organization Documents; Good Standing.................................................50
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(d) Legal Opinions........................................................................50
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(e) Payment of Fees.......................................................................50
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(f) Certificate...........................................................................50
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(g) Bring Down Certificate................................................................51
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(h) Collateral Documents..................................................................51
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(j) Pro Forma Balance Sheet...............................................................52
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5.02 Conditions to All Credit Extensions...............................................................53
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(b) Continuation of Representations and Warranties........................................53
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(c) No Existing Default...................................................................53
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES.................................................................54
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6.01 Corporate Existence and Power.....................................................................54
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6.02 Corporate Authorization; No Contravention.........................................................54
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6.03 Governmental Authorization........................................................................54
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6.04 Binding Effect....................................................................................55
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6.05 Litigation........................................................................................55
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6.06 No Default........................................................................................55
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6.07 ERISA Compliance..................................................................................55
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6.08 Use of Proceeds; Margin Regulations...............................................................56
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6.09 Title to Properties...............................................................................56
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6.10 Taxes.............................................................................................56
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6.11 Financial Condition...............................................................................56
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6.12 Environmental Matters.............................................................................57
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6.13 Collateral Documents..............................................................................57
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6.14 Regulated Entities................................................................................58
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6.15 No Burdensome Restrictions........................................................................58
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6.16 Solvency..........................................................................................58
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6.17 Labor Relations...................................................................................58
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6.18 Copyrights, Patents, Trademarks And Licenses, Etc.................................................58
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6.19 Subsidiaries......................................................................................58
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6.20 Broker's; Transaction Fees........................................................................59
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6.21 Insurance.........................................................................................59
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6.22 Swap Obligations..................................................................................59
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6.23 Full Disclosure...................................................................................59
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6.24 Subordination Provisions..........................................................................59
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6.25 Year 2000 Compliance..............................................................................59
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ARTICLE VII
AFFIRMATIVE COVENANTS..........................................................................60
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7.01 Financial Statements..............................................................................60
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7.02 Certificates; Other Information...................................................................60
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7.03 Notices...........................................................................................61
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7.04 Preservation of Corporate Existence, Etc..........................................................62
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7.05 Maintenance of Property...........................................................................62
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7.06 Insurance.........................................................................................63
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7.07 Payment of Obligations............................................................................63
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7.08 Compliance with Laws..............................................................................63
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7.09 Compliance with Erisa.............................................................................63
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7.10 Inspection of Property and Books and Records......................................................63
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7.11 Environmental Laws................................................................................64
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7.12 Use of Proceeds...................................................................................64
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7.13 Solvency..........................................................................................64
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7.14 Further Assurances................................................................................64
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7.15 Foreign Subsidiaries Security.....................................................................64
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ARTICLE VIII
NEGATIVE COVENANTS.............................................................................65
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8.01 Limitation on Liens...............................................................................65
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8.02 Disposition of Assets.............................................................................67
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8.03 Consolidations and Mergers........................................................................67
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8.04 Loans and Investments.............................................................................68
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8.05 Limitation on Indebtedness........................................................................69
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8.06 Transactions with Affiliates......................................................................70
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8.07 Use of Proceeds...................................................................................70
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8.08 Contingent Obligations............................................................................70
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8.09 Joint Ventures....................................................................................70
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8.10 Lease Obligations.................................................................................71
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8.11 Restricted Payments...............................................................................71
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8.12 ERISA.............................................................................................71
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8.13 Change in Business................................................................................72
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8.14 Accounting Changes................................................................................72
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8.15 Minimum Net Worth.................................................................................72
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8.16 Leverage Ratio....................................................................................72
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8.17 Senior Leverage Ratio.............................................................................73
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8.18 Interest Coverage Ratio...........................................................................74
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8.19 Operating Income..................................................................................74
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8.20 Capital Expenditures..............................................................................74
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ARTICLE IX
EVENTS OF DEFAULT..............................................................................74
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9.01 Event of Default..................................................................................74
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(a) Non-payment...........................................................................74
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(b) Representation or Warranty............................................................75
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(c) Specific Defaults.....................................................................75
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(d) Other Defaults........................................................................75
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(e) Cross-default.........................................................................75
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(f) Insolvency; Voluntary Proceedings.....................................................75
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(g) Involuntary Proceedings...............................................................76
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(h) ERISA.................................................................................76
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(i) Monetary Judgments....................................................................76
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(j) Non-monetary Judgments................................................................76
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(k) Collateral............................................................................76
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(l) Change of Control.....................................................................77
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(m) Guarantor Defaults....................................................................77
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(n) Invalidity of Subordination Provisions................................................77
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9.02 Remedies..........................................................................................77
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9.03 Rights Not Exclusive..............................................................................78
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ARTICLE X
THE AGENT......................................................................................78
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10.01 Appointment And Authorization; "Agent"...........................................................78
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10.02 Delegation Of Duties.............................................................................79
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10.03 Liability Of Agent...............................................................................79
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10.04 Reliance By Agent................................................................................79
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10.05 Notice Of Default................................................................................80
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10.06 Credit Decision..................................................................................80
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10.07 Indemnification Of Agent.........................................................................80
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10.08 Agent In Individual Capacity.....................................................................81
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10.09 Successor Agent..................................................................................81
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10.10 Withholding Tax..................................................................................81
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ARTICLE XI
MISCELLANEOUS..................................................................................83
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11.01 Amendments and Waivers...........................................................................83
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11.02 Notices..........................................................................................84
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11.03 No Waiver; Cumulative Remedies...................................................................85
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11.04 Costs and Expenses...............................................................................85
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11.05 Company Indemnification..........................................................................85
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11.06 Payments Set Aside...............................................................................86
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11.07 Successors and Assigns...........................................................................86
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11.08 Assignments, Participations, Etc.................................................................86
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11.09 Confidentiality..................................................................................87
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11.10 Set-off..........................................................................................88
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11.11 Automatic Debits of Fees.........................................................................88
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11.12 Notification of Addresses, Lending Offices, Etc..................................................89
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11.13 Counterparts.....................................................................................89
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11.14 Severability.....................................................................................89
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11.15 No Third Parties Benefited.......................................................................89
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11.16 Governing Law and Jurisdiction...................................................................89
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11.17 Waiver of Jury Trial.............................................................................90
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11.18 Effectiveness....................................................................................90
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11.19 Amendment and Restatement........................................................................90
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11.20 Entire Agreement.................................................................................91
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SCHEDULES
Schedule 1.01 Existing Letters of Credit
Schedule 2.01 Commitments
Schedule 6.11 Permitted Liabilities
Schedule 6.19 Subsidiaries and Minority Interests
Schedule 8.01 Existing Liens
Schedule 8.04 Existing Investments
Schedule 8.05 Existing Indebtedness
Schedule 8.08 Contingent Obligations
Schedule 11.02 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D-1 Form of Legal Opinion of Company's Counsel
Exhibit D-2 Form of Legal Opinion of Special Illinois Counsel to
the Company
Exhibit E Form of Assignment and Acceptance
Exhibit F-1 Form of Promissory Note - Revolving Loan
Exhibit F-2 Form of Promissory Note - Term Loan
Exhibit F-3 Form of Promissory Note - Swing Line Loan
Exhibit G Special Funding Procedure Letter
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AMENDED AND RESTATED
CREDIT AGREEMENT
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This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of June
27, 1997 and amended and restated as of May 19, 1998, among Waterlink, Inc., a
Delaware corporation (the "COMPANY"), the several financial institutions from
time to time party to this Agreement (collectively, the "BANKS"; individually, a
"BANK"), and Bank of America National Trust and Savings Association, as letter
of credit issuing bank, swing line bank and as agent for the Banks.
WHEREAS, the Banks have agreed to make available to the Company a term
loan, a swing line loan and a revolving credit facility with a letter of credit
subfacility upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
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1.01 CERTAIN DEFINED TERMS. The following terms have the following
meanings:
"ACQUISITION" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly,
in (a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the acquisition
of in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise causing any
Person to become a Subsidiary, or (c) a merger or consolidation or any
other combination with another Person (other than a Person that is a
Subsidiary) provided that the Company or the Subsidiary is the
surviving entity.
"AFFILIATE" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. A Person shall be deemed to control
another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, membership interests, by contract, or
otherwise.
"AGENT" means BofA in its capacity as agent for the Banks
hereunder, and any successor agent arising under Section 10.09.
"AGENT-RELATED PERSONS" means BofA and any successor agent
arising under Section 10.09 and any successor letter of credit issuing
bank hereunder, together with their respective
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Affiliates, and the officers, directors, employees, agents
and attorneys-in-fact of such Persons and Affiliates.
"AGENT'S PAYMENT OFFICE" means the address for payments set
forth on SCHEDULE 11.02 or such other address as the Agent may from
time to time specify.
"AGREEMENT" means this Credit Agreement.
"APPLICABLE MARGIN" shall mean on any date the applicable
percentage set forth below based upon the Level as shown in the
Compliance Certificate then most recently delivered to the Banks:
Loans
-------- Letters of Credit
Offshore Base ---------------------------------- Commitment
Level Rate Rate Non-Financial Financial Fee
----- ---------- ---- ------------- --------- -----------
I 1.00% -0-% 0.50% 1.00% 0.30%
II 1.25% -0-% 0.625% 1.25% 0.30%
III 1.50% -0-% 0.75% 1.50% 0.375%
IV 1.75% -0-% 0.875% 1.75% 0.50%
V 2.00% -0-% 1.00% 2.00% 0.50%
VI 2.25% 0.25% 1.125% 2.25% 0.50%
PROVIDED, HOWEVER that for the period from the date hereof until the
date that is 3 Business Days after the date the first Compliance
Certificate is delivered to the Banks pursuant to Section 7.02(b), the
Applicable Margin shall be deemed to be the Level determined pursuant
to the certificate referred to in Section 5.01(1); PROVIDED FURTHER
that, if the Company shall have failed to deliver to the Banks by the
date required hereunder any Compliance Certificate pursuant to Section
7.02(b), then from the date such Compliance Certificate was required to
be delivered until the date of such delivery the Applicable Margin
shall be deemed to be Level VI. Each change in the Applicable Margin
shall take effect with respect to all outstanding Loans on the third
Business Day immediately succeeding the day on which such Compliance
Certificate is received by the Agent. Notwithstanding the foregoing, no
reduction in the Applicable Margin shall be effected if a Default or an
Event of Default shall have occurred and be continuing on the date when
such change would otherwise occur, it being understood that on the
third Business Day immediately succeeding the day on which such Default
or Event of Default is either waived or cured (assuming no other
Default or Event of Default shall be then pending), the Applicable
Margin shall be reduced (on a
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prospective basis) in accordance with the then most recently
delivered Compliance Certificate.
"APPROVED ALTERNATIVE CURRENCY" means Sterling, Deutschmarks,
Krona or ECU's or any other currency (other than Dollars) approved by
the Agent and the Issuing Bank.
"ASSIGNEE" has the meaning specified in SECTION 11.08(A).
"ATTORNEY COSTS" means and includes all reasonable and
customary fees and disbursements of any law firm or other external
counsel, the allocated cost of internal legal services and all
disbursements of internal counsel.
"BOFA" means Bank of America National Trust and Savings
Association, a national banking association.
"BANK" has the meaning specified in the introductory clause
hereto. References to the "Banks" shall include BofA, including in its
capacity as Issuing Bank and Swing Line Bank; for purposes of
clarification only, to the extent that BofA may have any rights or
obligations in addition to those of the Banks due to its status as
Issuing Bank, its status as such will be specifically referenced.
"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C. ss.101, ET SEQ.).
"BASE RATE" means, for any day, the higher of: (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of interest
in effect for such day as publicly announced from time to time by BofA
in San Francisco, California as its "reference rate." The "reference
rate" is a rate set by BofA based upon various factors including BofA's
costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate. Any change in
the reference rate announced by BofA shall take effect at the opening
of business on the day specified in the public announcement of such
change.
"BASE RATE LOAN" means a Loan or an L/C Advance, that bears
interest based on the Base Rate.
"BORROWING" means a borrowing hereunder consisting of Loans of
the same Type made to the Company on the same day by the Banks under
ARTICLE II, and, in the case of Offshore Rate Loans, having the same
Interest Period.
"BORROWING DATE" means any date on which a Borrowing occurs
under SECTION 2.03.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial banks in Chicago, Illinois, New York, New
York or San Francisco, California
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are authorized or required by law to close and, if the applicable
Business Day relates to any Offshore Rate Loan, means such a day on
which dealings are carried on in the applicable offshore interbank
market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"CAPITAL EXPENDITURES" means, for any period and with respect
to any Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs
and improvements during such period) which should be capitalized under
GAAP on a consolidated balance sheet of such Person and its
Subsidiaries.
"CAPITAL LEASE" has the meaning specified in the definition of
"Capital Lease Obligations."
"CAPITAL LEASE OBLIGATIONS" means all monetary obligations of
the Company or any of its Subsidiaries under any leasing or similar
arrangement which, in accordance with GAAP, is classified as a capital
lease ("CAPITAL LEASE").
"CASH EQUIVALENTS" means:
(a) securities issued or fully guaranteed or insured
by the United States Government or any agency thereof and
backed by the full faith and credit of the United States
having maturities of not more than six months from the date of
acquisition;
(b) certificates of deposit, time deposits,
Eurodollar time deposits, repurchase agreements, reverse
repurchase agreements, or bankers' acceptances, having in each
case a term of not more than six months, issued by any Bank,
or by any U.S. commercial bank having combined capital and
surplus of not less than $100,000,000 whose short term
securities are rated at least A-1 by Standard & Poor's
Corporation and P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.;
(c) commercial paper of an issuer rated at least A-1
by Standard & Poor's Corporation or P-1 by ▇▇▇▇▇'▇ Investors
Service Inc. and in either case having a tenor of not more
than three months.
"CASH COLLATERALIZE" means to pledge and deposit with or
deliver to the Agent, for the benefit of the Agent, the Issuing Bank
and the Banks, as additional collateral for the L/C Obligations, cash
or deposit account balances pursuant to documentation in form and
substance satisfactory to the Agent and the Issuing Bank (which
documents are hereby
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consented to by the Banks). Derivatives of such term shall have
corresponding meaning. The Company hereby grants the Agent, for the
benefit of the Agent, the Issuing Bank and the Banks, a security
interest in all such cash and deposit account balances. Cash collateral
shall be maintained in blocked deposit accounts at BofA. The Agent
shall invest any and all available funds deposited in such deposit
accounts, within 10 business days after the date the relevant funds
become available, in securities issued or fully guaranteed or insured
by the United States Government or any agency thereof backed by the
full faith and credit of the United States having maturities of three
months from the date of acquisition thereof (collectively, "Government
Obligations"). The Company hereby acknowledges and agrees that the
Agent shall not have any liability with respect to, and the Company
hereby indemnifies the Agent against, any loss resulting from the
acquisition of the Government Obligations and the Agent shall not have
any obligation to monitor the trading activity of any such Governmental
Obligations on and after the acquisition thereof for the purpose of
obtaining the highest possible return with respect thereto, the Agent's
responsibility being limited to acquiring such Governmental
Obligations.
"CHANGE OF CONTROL" means (a) any Person or any two or more
Persons acting in concert (in any such case, excluding the Closing Date
Stockholders and their Affiliates) acquiring beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Exchange Act), directly or indirectly, of capital
stock of the Company (or other securities convertible into such capital
stock) representing 20% or more of the combined voting power of all
capital stock of the Company entitled to vote in the election of
directors, other than capital stock having such power only by reason of
the happening of a contingency, or (b) during any period of twelve
consecutive calendar months, individuals who at the beginning of such
period constituted the Company's board of directors (together with any
new directors whose election by the Company's board of directors or
whose nomination for election by the Company's stockholders was
approved by a vote of at least a majority of the directors then still
in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reasons other than death or disability to constitute a
majority of the directors then in office.
"CLOSING DATE" means the date on which all conditions
precedent set forth in SECTION 5.01 are satisfied or waived by all
Banks.
"CLOSING DATE STOCKHOLDERS" means, collectively, ▇▇▇▇▇▇▇▇
Venture Partners, III, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Environmental
Opportunities Fund, River Cities Capital Fund IPP95, L.P. and ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇ & Sons, L.L.C.
"CODE" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.
"COLLATERAL" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by the Company or any
Guarantor in or upon which a Lien
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now or hereafter exists in favor of the Banks, or the Collateral Agent
on behalf of the Banks, whether under this Agreement or under any other
documents executed by any such Persons and delivered to the Collateral
Agent.
"COLLATERAL AGENT" means the Agent acting in its capacity as
Collateral Agent pursuant to the Collateral Documents (other than the
Guaranty).
"COLLATERAL DOCUMENTS" means, collectively, (a) the Security
Agreements, the Guaranty, the Pledge Agreements, the Intellectual
Property Assignments and all other security agreements, patent and
trademark assignments, guarantees and other similar agreements between
the Company or its Subsidiaries and the Banks or the Collateral Agent
for the benefit of the Banks now or hereafter delivered to the Banks or
the Collateral Agent pursuant to or in connection with the transactions
contemplated hereby, and all financing statements (or comparable
documents now or hereafter filed in accordance with the UCC or
comparable law) against the Company or any Subsidiaries or any
Guarantor as debtor in favor of the Banks or the Collateral Agent for
the benefit of the Banks as secured party and (b) any amendments,
supplements, modifications, renewals, replacements, consolidations,
substitutions and extensions of any of the foregoing.
"COMMITMENT" means, collectively, the Revolving Loan
Commitment, the Term Loan Commitment and the Swing Line Loan
Commitment.
"COMMITMENT FEE" has the meaning specified in SECTION 2.12(B).
"COMPANY" means Waterlink, Inc., a Delaware corporation.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT C.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, gross
consolidated interest expense for the period (including all
commissions, discounts, fees and other charges in connection with
standby letters of credit and similar instruments) for the Company and
its Subsidiaries, PLUS the portion of the upfront costs and expenses
for Swap Contracts (to the extent not included in gross interest
expense) fairly allocated to such Swap Contracts as expenses for such
period, as determined in accordance with GAAP and after giving effect
to any Swap Contract then in effect.
"CONTINGENT OBLIGATION" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including any
obligation of that Person (i) to purchase, repurchase or otherwise
acquire such primary obligations or any security therefor, (ii) to
advance or provide funds for the payment or discharge of any such
primary obligation, or to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency
or any balance sheet item, level of income or financial
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condition of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation, or (iv) otherwise to assure or
hold harmless the holder of any such primary obligation against loss in
respect thereof (each, a "GUARANTY OBLIGATION"); (b) with respect to
any Surety Instrument (other than any Letter of Credit) issued for the
account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings or payments; (c) to purchase any
materials, supplies or other property from, or to obtain the services
of, another Person if the relevant contract or other related document
or obligation requires that payment for such materials, supplies or
other property, or for such services, shall be made regardless of
whether delivery of such materials, supplies or other property is ever
made or tendered, or such services are ever performed or tendered, or
(d) in respect of any Swap Contract. The amount of any Contingent
Obligation shall, in the case of Guaranty Obligations, be deemed equal
to the stated or determinable amount of the primary obligation in
respect of which such Guaranty Obligation is made or, if not stated or
if indeterminable, the maximum reasonably anticipated liability in
respect thereof, and in the case of other Contingent Obligations other
than in respect of Swap Contracts, shall be equal to the maximum
reasonably anticipated liability in respect thereof and, in the case of
Contingent Obligations in respect of Swap Contracts, shall be equal to
the Swap Termination Value.
"CONTINUING LOANS" has the meaning specified in SECTION 11.19.
"CONTRACTUAL OBLIGATION" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party or by
which it or any of its property is bound.
"CONVERSION/CONTINUATION DATE" means any date on which, under
SECTION 2.06, the Company (a) converts Loans of one Type to another
Type, or (b) continues as Loans of the same Type, but with a new
Interest Period, having Interest Periods expiring on such date.
"CREDIT EXTENSION" means and includes (a) the making of any
Loans hereunder, and (b) the Issuance of any Letters of Credit
hereunder.
"DEFAULT" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied during such time) constitute an Event of Default.
"DEUTSCHMARKS" means the lawful currency of Germany.
"DISPOSITION" means (a) the sale, lease, conveyance or other
disposition of Property in excess of $100,000, other than sales or
other dispositions expressly permitted under SECTION 8.02, and (b) the
sale or transfer by the Company or any Subsidiary of the Company
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15
of any equity securities issued by any Subsidiary of the Company and
held by such transferor Person.
"DOLLARS", "DOLLARS" and "$" each mean lawful money of the
United States.
"DOMESTIC SUBSIDIARY" means each Subsidiary of the Company
that is organized under the laws of the United States or any state
thereof.
"EBIT" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, determined in accordance with
GAAP, the sum of (a) net income (or net loss) for such period PLUS (b)
all amounts treated as expenses for interest to the extent included in
the determination of such net income (or loss), PLUS (c) all accrued
taxes on or measured by income to the extent included in the
determination of such net income (or loss); PROVIDED, HOWEVER, that net
income (or loss) shall be computed for these purposes without giving
effect to extraordinary losses or extraordinary gains, plus (d) with
respect to any business acquired during the period of determination, an
amount equal to the sum of (x) the total compensation paid to each
management equity holder of such acquired business during the twelve
month period immediately preceding the date such business was acquired
LESS the base compensation paid to each such Person during such twelve
month period PLUS (y) the aggregate amount of management fees paid to
management equity holders or Affiliates thereof during such twelve
month period to the extent that such management fee is no longer
required to be paid after the date of such acquisition PLUS (z) the net
income of such acquired business during such period (plus, to the
extent deducted in determining such net income, interest expense and
income tax expense of such acquired business) in accordance with
Article 11 of Regulation S-X of the SEC; and PROVIDED FURTHER, that for
the purpose of computations under SECTIONS 8.16, 8.17 and 8.18 for any
business acquired during the period of determination (including the
Sutcliffe Acquisition), EBIT for such period shall be determined on a
pro forma basis as if such acquisition had occurred as of the beginning
of such period.
"EBITDA" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, determined in accordance with
GAAP, the sum of (a) the net income (or net loss) for such period PLUS
(b) all amounts treated as expenses for depreciation and interest and
the amortization of intangibles of any kind to the extent included in
the determination of such net income (or loss), PLUS (c) all accrued
taxes on or measured by income to the extent included in the
determination of such net income (or loss); PROVIDED, HOWEVER, that net
income (or loss) shall be computed for these purposes without giving
effect to extraordinary losses or extraordinary gains plus (d) with
respect to any business acquired during the period of determination, an
amount equal to the sum of (x) the total compensation paid to each
management equity holder of such acquired business during the twelve
month period immediately preceding the date such business was acquired
LESS the base compensation paid to each such Person during such twelve
month period PLUS (y) the aggregate amount of management fees paid to
management equity holders or Affiliates thereof during such twelve
month period to the extent that such management fee is no
8
16
longer required to be paid after the date of such acquisition PLUS (z)
the net income of such acquired business during such period (plus, to
the extent deducted in determining such net income, interest expense,
income tax expense, depreciation and amortization of such acquired
business) in accordance with Article 11 of Regulation S-X of the SEC;
and PROVIDED FURTHER, that for the purpose of computations under
SECTIONS 8.16, 8.17 and 8.18 for any business acquired during the
period of determination (including the Sutcliffe Acquisition), EBITDA
for such period shall be determined on a pro forma basis as if such
acquisition had occurred as of the beginning of such period.
"ECU" means the "European Currency Unit" and/or "Euro" used in
the European Monetary System.
"EFFECTIVE AMOUNT" means (a) with respect to any Revolving
Loans on any date, the aggregate outstanding principal amount thereof
after giving effect to any Borrowings and prepayments or repayments of
Revolving Loans occurring on such date; (b) with respect to any Swing
Line Loans on any date, the aggregate outstanding principal amount
thereof after giving effect to any Borrowings and prepayments or
repayments of Swing Line Loans occurring on such date; (c) with respect
to any outstanding L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any Issuances of
Letters of Credit occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a
result of any reimbursements of outstanding unpaid drawings under any
Letters of Credit or any reductions in the maximum amount available for
drawing under Letters of Credit taking effect on such date; and (d)
with respect to any Term Loans on any date, the aggregate outstanding
principal amount thereof after giving effect to any Borrowing of Term
Loans occurring on such date. For purposes of SECTION 2.09, the
Effective Amount shall be determined without giving effect to any
mandatory prepayments to be made under said Section.
"EFFECTIVE DATE" has the meaning specified in SECTION 11.18.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least $100,000,000; (b) a commercial
bank organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development (the "OECD"),
or a political subdivision of any such country, and having a combined
capital and surplus of at least $100,000,000, PROVIDED that such bank
is acting through a branch or agency located in the United States; or
(c) a Person that is primarily engaged in the business of commercial
banking and that is (i) a Subsidiary of a Bank, (ii) a Subsidiary of a
Person of which a Bank is a Subsidiary, or (iii) a Person of which a
Bank is a Subsidiary.
"ENVIRONMENTAL CLAIMS" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential liability
or responsibility for violation of any Environmental Law, or for
release or injury to the environment.
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17
"ENVIRONMENTAL LAWS" means all 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 Authorities, in each case relating to environmental,
health, safety and land use matters.
"ENVIRONMENTAL PERMITS" has the meaning specified in SECTION
6.12(B).
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning
of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of
the Code for purposes of provisions relating to Section 412 of the
Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year
in which it was a substantial employer (as defined in Section
4001(a)(2) of ERISA) or a cessation of operations which is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Company or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multiemployer Plan; or
(f) the imposition of any liability to the PBGC under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section
4007 of ERISA, upon the Company or any ERISA Affiliate.
"EURODOLLAR RESERVE PERCENTAGE" has the meaning specified in
the definition of "Offshore Rate".
"EVENT OF DEFAULT" means any of the events or circumstances
specified in SECTION 9.01.
"EXCESS CASH FLOW" means, for any period, (x) EBITDA for such
period less (y) the sum, without duplication, of the amount for such
period of (i) Consolidated Interest Expense, (ii) provisions for taxes
based on income, (iii) Capital Expenditures, (iv) payments made with
respect to Permitted Earn-Out Debt and (v) all scheduled principal
payments on Indebtedness (including all Scheduled Repayments).
10
18
"EXCHANGE ACT" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"EXISTING LETTER OF CREDIT" means each letter of credit listed
on SCHEDULE 1.01.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal
functions.
"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, "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" has the meaning specified in SECTION 2.12(A).
"FINANCIAL LETTERS OF CREDIT" means any Letter of Credit which
either the Agent or the Issuing Bank determines is required under
applicable law (including regulations and guidelines established by
banking regulators) relating to reserve requirements to be classified
as a financial letter of credit.
"FOREIGN SUBSIDIARY" means each Subsidiary of the Company that
is not a Domestic Subsidiary.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
"FURTHER TAXES" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees, withholdings or
similar charges (including, without limitation, net income taxes and
franchise taxes), and all liabilities with respect thereto, imposed by
any jurisdiction on account of amounts payable or paid pursuant to
SECTION 4.01.
"FX TRADING OFFICE" means the Foreign Exchange Trading Center
#5193, San Francisco, California, of the Bank of America National Trust
and Savings Association, or such other foreign exchange trading center
of the Bank of America National Trust and Savings Association as it may
designate from time to time.
"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
11
19
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; PROVIDED, HOWEVER, that for purposes of all
computations required to be made with respect to compliance by the
Company with SECTIONS 8.15, 8.16, 8.17, 8.18 and 8.19, such term shall
mean generally accepted accounting principles as in effect on the date
of this Agreement, applied in a manner consistent with those used in
preparing the financial statements referred to in SECTION 6.11.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"GUARANTOR" means each Domestic Subsidiary of the Company and,
to the extent requested pursuant to SECTION 7.15, each Foreign
Subsidiary of the Company.
.
"GUARANTY" means the Guaranty, dated as of June 27, 1997, duly
executed and delivered by the Guarantors in favor of the Agent, on
behalf of the Banks, as the same may be amended, supplemented or
otherwise modified from time to time.
"GUARANTY OBLIGATION" has the meaning specified in the
definition of "Contingent Obligation."
"HAZARDOUS MATERIALS" means any toxic or hazardous waste,
substance or chemical or any pollutant, contaminant, chemical or other
substance defined or regulated pursuant to any Environmental Law,
including, without limitation, asbestos, petroleum, crude oil or any
fraction thereof.
"HONOR DATE" has the meaning specified in SECTION 3.03(B).
"INDEBTEDNESS" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued,
undertaken or assumed as the deferred purchase price of property or
services (other than trade payables entered into in the ordinary course
of business on ordinary terms); (c) all non-contingent reimbursement or
payment obligations with respect to Surety Instruments and all L/C
Obligations; (d) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses; (e)
all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case
with respect to property acquired by the Person (even though the rights
and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property); (f) all
obligations with respect to capital leases; (g) all indebtedness
referred to in clauses (a) through (f) above secured by (or for which
the holder of such Indebtedness has an existing right, contingent or
otherwise, to be
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20
secured by) any Lien upon or in property (including accounts and
contracts rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness; and (h)
all Guaranty Obligations in respect of indebtedness or obligations of
others of the kinds referred to in clauses (a) through (g) above; it
being understood and agreed that the Company's obligation to fund
$1,200,000 of Waterlink (Sweden) AB's employee benefit plans in
connection with the initial capitalization thereof shall not be
included within the definition of "Indebtedness".
"INDEMNIFIED LIABILITIES" has the meaning specified in SECTION
11.05.
"INDEMNIFIED PERSON" has the meaning specified in SECTION
11.05.
"INDEPENDENT AUDITOR" has the meaning specified in SECTION
7.01(A).
"INSOLVENCY PROCEEDING" means, with respect to any Person, (a)
any case, action or proceeding with respect to such Person before any
court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshaling of assets for creditors,
or other, similar arrangement in respect of its creditors generally or
any substantial portion of its creditors; undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.
"INTELLECTUAL PROPERTY ASSIGNMENTS" means, collectively, those
certain Patent Assignment, Trademark Assignment and Copyright
Assignments duly executed and delivered by each of the Company and each
Guarantor in favor of the Collateral Agent, for the benefit of itself
and the Banks, as the same may be amended, supplemented or otherwise
modified from time to time.
"INTEREST PAYMENT DATE" means, as to any Offshore Rate Loan,
the last day of each Interest Period applicable to such Offshore Rate
Loan and, as to any Base Rate Loan, the last Business Day of each
March, June, September and December; PROVIDED, HOWEVER, that if any
Interest Period exceeds three months, the date that falls three months
after the beginning of such Interest Period and after each Interest
Payment Date thereafter is also an Interest Payment Date.
"INTEREST COVERAGE RATIO" means, with respect to any period,
the ratio of EBIT for that period to Consolidated Interest Expense for
that period.
"INTEREST PERIOD" means, as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two,
three or six months thereafter as selected by the Company in its Notice
of Borrowing or Notice of Conversion/Continuation;
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PROVIDED that:
(a) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless the result of
such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period
shall end on the preceding Business Day;
(b) any Interest Period that begins on the last
Business Day of a calendar month (or 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;
(c) no Interest Period for any Term Loan shall extend
beyond the Term Maturity Date and no Interest Period for any
Revolving Loan shall extend beyond the Revolving Termination
Date; and
(d) no Interest Period applicable to a Term Loan or
portion thereof shall extend beyond any date upon which is due
any scheduled principal payment in respect of the Term Loans
unless the aggregate principal amount of Term Loans
represented by Base Rate Loans or Offshore Rate Loans having
Interest Periods that will expire on or before such date,
equals or exceeds the amount of such principal payment.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"ISSUANCE DATE" has the meaning specified in SECTION 3.01(A).
"ISSUE" means, with respect to any Letter of Credit, to issue
or to extend the expiry of, or to renew or increase the amount of, such
Letter of Credit; and the terms "ISSUED," "ISSUING" and "ISSUANCE" have
corresponding meanings.
"ISSUING BANK" means BofA in its capacity as issuer of one or
more Letters of Credit hereunder, together with any replacement letter
of credit issuer arising under SECTION 10.01(B) or SECTION 10.09.
"JOINT VENTURE" means a single-purpose corporation,
partnership, limited liability company, joint venture or other similar
legal arrangement (whether created by contract or conducted through a
separate legal entity) now or hereafter formed by the Company or any of
its Subsidiaries with another Person in order to conduct a common
venture or enterprise with such Person.
"KRONA" means the lawful currency of Sweden.
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"L/C ADVANCE" means each Bank's participation in any L/C
Borrowing in accordance with its Pro Rata Share.
"L/C AMENDMENT APPLICATION" means an application form for
amendment of outstanding standby or commercial documentary letters of
credit as shall at any time be in use at the Issuing Bank, as the
Issuing Bank shall request.
"L/C APPLICATION" means an application form for issuances of
standby or commercial documentary letters of credit as shall at any
time be in use at the Issuing Bank, as the Issuing Bank shall request.
"L/C BORROWING" means an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been reimbursed
on the date when made nor converted into a Borrowing of Revolving Loans
under SECTION 3.03(C).
"L/C COMMITMENT" means the commitment of the Issuing Bank to
Issue, and the commitment of the Banks severally to participate in,
Letters of Credit from time to time Issued or outstanding under ARTICLE
III, in an aggregate amount not to exceed on any date the amount of
$20,000,000, as the same shall be reduced as a result of a reduction in
the L/C Commitment pursuant to SECTION 2.08; PROVIDED that the L/C
Commitment is a part of the combined Commitments, rather than a
separate, independent commitment.
"L/C OBLIGATIONS" means at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding,
plus (b) the amount of all unreimbursed drawings under all Letters of
Credit, including all outstanding L/C Borrowings.
"L/C-RELATED DOCUMENTS" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit, including any of the Issuing Bank's
standard form documents for letter of credit issuances.
"LENDING OFFICE" means, as to any Bank, the office or offices
of such Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office", as the case may be, on SCHEDULE
11.02, or such other office or offices as such Bank may from time to
time notify the Company and the Agent.
"LETTERS OF CREDIT" means any letter of credit (whether
Financial Letters of Credit or Non-Financial Letters of Credit) that is
either (a) an Existing Letter of Credit or (b) Issued by the Issuing
Bank pursuant to ARTICLE III.
"LEVEL" means, and includes, Level I, Level II or Level III,
Level IV, Level V or Level VI, whichever is in effect at the relevant
time.
"LEVEL I" shall exist at any time the Leverage Ratio is less
than 2.00:1.0.
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"LEVEL II" shall exist at any time the Leverage Ratio is less
than 2.50.1.0 but equal to or greater than 2.00:1.0.
"LEVEL III" shall exist at any time the Leverage Ratio is less
than 3.00:1.0 but equal to or greater than 2.50:1.0.
"LEVEL IV" shall exist at any time the Leverage Ratio is less
than 3.50:1.0 but greater than or equal to 3.00:1.0.
"LEVEL V" shall exist at any time the Leverage Ratio is less
than 4.0:1.0 but greater than or equal to 3.50:1.0.
"LEVEL VI" shall exist at any time the Leverage Ratio is
greater than or equal to 4.00:1.0.
"LEVERAGE RATIO" means, with respect to any period, the ratio
of total consolidated Indebtedness (other than L/C Obligations) as of
the end of that period to EBITDA for that period.
"LIEN" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as
debtor, under the Uniform Commercial Code or any comparable law) and
any contingent or other agreement to provide any of the foregoing, but
not including the interest of a lessor under an operating lease.
"LOAN" means an extension of credit by a Bank to the Company
under Article II or Article III in the form of a Revolving Loan, a
Swing Line Loan, the Term Loan, a Special Funding Loan or L/C
Borrowing.
"LOAN DOCUMENTS" means this Agreement, any Notes, the Fee
Letter, the L/C-Related Documents, the Collateral Documents and all
other documents delivered to the Agent or any Bank in connection
herewith.
"MAJORITY BANKS" means (a) at any time two Banks are party to
this Agreement, both Banks and (b) at any other time, prior to the
termination of the Commitment, Banks holding at least 66-2/3% of the
then aggregate unpaid principal amount of Term Loans, PLUS the
aggregate Revolving Loan Commitments or, if the Revolving Commitments
have been terminated, Banks holding at least 66-2/3% of the then unpaid
principal amount of Loans and L/C Obligations.
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"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) or prospects of the
Company or the Company and its Subsidiaries taken as a whole or as to
any Subsidiary; (b) a material impairment of the ability of the Company
or any Subsidiary to perform under any Loan Document and to avoid any
Event of Default; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against the Company or any
Subsidiary of any Loan Document.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which the Company or any
ERISA Affiliate makes, is making, or is obligated to make contributions
or, during the preceding three calendar years, has made, or been
obligated to make, contributions.
"NET INCOME" shall mean for any period, the net income (or
loss) of the Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in
conformity with GAAP, PROVIDED that there shall be excluded (i) the
income (or loss) of any entity accrued prior to the date it becomes a
Subsidiary of the Company or is merged into or consolidated with the
Company or any Subsidiary or on which its assets are acquired by the
Company or any Subsidiary of the Company and (ii) the income of any
Subsidiary of the Company to the extent that the declaration or payment
of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary.
"NET ISSUANCE PROCEEDS" means, in respect of any issuance of
debt or equity, cash proceeds and non-cash proceeds received or
receivable in connection therewith, net of reasonable out-of-pocket
costs and expenses paid or incurred in connection therewith in favor of
any Person not an Affiliate of the Company.
"NET PROCEEDS" means proceeds in cash, checks or other cash
equivalent financial instruments (including Cash Equivalents) as and
when received by the Person making a Disposition, net of: (a) the
direct costs relating to such Disposition (excluding amounts payable to
the Company or any Affiliate of the Company), (b) sale, use or other
transaction taxes paid or payable as a result thereof, (c) amounts
required to be applied to repay principal, interest and prepayment
premiums and penalties on Indebtedness secured by a Lien on the asset
which is the subject of such Disposition, and (d) amounts related to
the sale of any demonstration plant the proceeds of which are utilized
by the Company for new demonstration plants and/or marketing expenses.
"NET WORTH" means shareholders' equity as determined in
accordance with GAAP.
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"NON-FINANCIAL LETTERS OF CREDIT" means Letters of Credit
which are not Financial Letters of Credit.
"NOTE" means a promissory note executed by the Company in
favor of a Bank pursuant to Section 2.02(b), in substantially the form
of EXHIBIT F-1, with respect to Revolving Loans, EXHIBIT F-2, with
respect to Term Loans, and EXHIBIT F-3, with respect to the Swing Line
Loan.
"NOTICE OF BORROWING" means a notice in substantially the form
of EXHIBIT A.
"NOTICE OF CONVERSION/CONTINUATION" means a notice in
substantially the form of EXHIBIT B.
"OBLIGATIONS" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan Document owing
by the Company to any Bank, the Agent, the Collateral Agent, or any
Indemnified Person, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due,
now existing or hereafter arising.
"OFFSHORE RATE" means, for any Interest Period, with respect
to Offshore Rate Loans comprising part of the same Borrowing, the rate
of interest per annum (rounded upward to the next 1/16th of 1%)
determined by the Agent as follows:
Offshore Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"EURODOLLAR RESERVE PERCENTAGE" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect
on such day (whether or not applicable to any Bank) under
regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
"LIBOR" means the rate of interest per annum determined by the
Agent to be the rate of interest per annum at which dollar
deposits in the approximate amount of the amount of the Loan
to be made or continued as, or converted into, an Offshore
Rate Loan by the Agent and having a maturity comparable to
such Interest Period would be offered to major banks in the
London interbank market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
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The Offshore Rate shall be adjusted automatically as to all Offshore
Rate Loans then outstanding as of the effective date of any change in
the Eurodollar Reserve Percentage.
"OFFSHORE RATE LOAN" means a Loan that bears interest based on
the Offshore Rate.
"ORGANIZATION DOCUMENTS" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate
of determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement, and
all applicable resolutions of the board of directors (or any committee
thereof) of such corporation.
"OTHER TAXES" means any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, this Agreement or any other Loan Documents.
"PARTICIPANT" has the meaning specified in SECTION 11.08(D).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"PENSION PLAN" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which the Company sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as described
in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years.
"PERMITTED FOREIGN SUBSIDIARY INDEBTEDNESS" has the meaning
specified in SECTION 8.05(F).
"PERMITTED LIENS" has the meaning specified in SECTION 8.01.
"PERMITTED EARN-OUT DEBT" means (a) payment obligations of the
Company incurred to sellers in connection with the purchase of stock or
assets pursuant to an Acquisition, which obligations are payable by the
Company only in the event certain future performance goals are achieved
with respect to the operations of such target and (b) any non-compete,
consulting or similar obligation incurred to sellers in connection with
an Acquisition; PROVIDED, that any such payment obligation (other than
as described in item 1 on SCHEDULE 8.08 which is hereby deemed to
constitute Permitted Earn-Out Debt) shall only constitute Permitted
Earn-Out Debt to the extent such obligations are unsecured and are
payable only up to a fixed maximum dollar amount.
"PERMITTED SELLER DEBT" has the meaning specified in SECTION
8.05(I).
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"PERMITTED SWAP OBLIGATIONS" means all obligations (contingent
or otherwise) of the Company or any Subsidiary existing or arising
under Swap Contracts, provided that each of the following criteria is
satisfied: (a) such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments or assets
held or reasonably anticipated by such Person, or changes in the value
of securities issued by such Person in conjunction with a securities
repurchase program not otherwise prohibited hereunder, and not for
purposes of speculation or taking a "market view;" (b) such Swap
Contracts do not contain (i) any provision ("walk-away" provision)
exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party, or (ii)
any provision creating or permitting the declaration of an event of
default, termination event or similar event upon the occurrence of an
Event of Default hereunder (other than an Event of Default under
SECTION 9.01(A)).
"PERSON" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"PLAN" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Company sponsors or maintains or to which the
Company makes, is making, or is obligated to make contributions and
includes any Pension Plan.
"PLEDGE AGREEMENTS" means, collectively, those certain Pledge
Agreements, duly executed and delivered by each of the Company and the
Guarantors pledging the stock of its Subsidiaries to the Collateral
Agent, for the benefit of itself and the Banks, as the same may be
amended, supplemented or otherwise modified from time to time.
"PLEDGED COLLATERAL" has the meaning specified in the relevant
Pledge Agreement.
"PRIOR LOAN DOCUMENT" has the meaning specified in SECTION
11.19.
"PROPERTY" means any interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or
intangible.
"PRO RATA SHARE" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of such Bank's Commitment divided by the
combined Commitments of all Banks.
"REPORTABLE EVENT" means, any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC.
"REQUIREMENT OF LAW" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of
an arbitrator or of a Governmental Authority,
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in each case applicable to or binding upon the Person or any of its
property or to which the Person or any of its property is subject.
"RESPONSIBLE OFFICER" means the chief executive officer or the
president of the Company, or any other officer having substantially the
same authority and responsibility; or, with respect to compliance with
financial covenants, the chief financial officer or the treasurer of
the Company, or any other officer having substantially the same
authority and responsibility.
"REVOLVING LOAN COMMITMENT" as to each Bank, has the meaning
specified in SECTION 2.01(B).
"REVOLVING LOAN" has the meaning specified in SECTION 2.01(B).
"REVOLVING TERMINATION DATE" means the earlier to occur of:
(a) May 19, 2003; and
(b) the date on which the Revolving Loan Commitments
terminate in accordance with the provisions of this Agreement.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"SECURITY AGREEMENTS" means, collectively, those certain
Security Agreements, duly executed and delivered by each of the Company
and the Guarantors in favor of the Collateral Agent, for the benefit of
itself and the Banks, as the same may be amended, supplemented or
otherwise modified from time to time.
"SENIOR LEVERAGE RATIO" means, with respect to any period, the
ratio of total consolidated Indebtedness (other than Subordinated Debt
and L/C Obligations) as of the end of that period to EBITDA for that
period.
"SCHEDULED REPAYMENT" has the meaning specified in SECTION
2.10(A).
"SOLVENT" means, when used with respect to a Person, that (a)
the fair saleable value of the assets of such Person is in excess of
the total amount of the present value of its liabilities (including for
purposes of this definition all liabilities (including loss reserves as
determined by such Person), whether or not reflected on a balance sheet
prepared in accordance with GAAP and whether direct or indirect, fixed
or contingent, secured or unsecured, disputed or undisputed), (b) such
Person is able to pay its debts or obligations in the ordinary course
as they mature and (c) such Person does not have unreasonably small
capital to carry out its business as conducted and as proposed to be
conducted. "Solvency" shall have a correlative meaning.
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"SPECIAL FUNDING ACCOUNT" means a new account established by
the Company with the Collateral Agent into which funds to be utilized
by the Company to consummate the Sutcliffe Acquisition will be
deposited.
"SPECIAL FUNDING DATE" means the date, which shall be a
Business Day, on which Special Funding Loans are made pursuant to
SECTION 5.03 and the Special Funding Procedure Letter.
"SPECIAL FUNDING LOANS" mean Loans made on the Special Funding
Date 100% of the proceeds of which are deposited into the Special
Funding Account.
"SPECIAL FUNDING PROCEDURE LETTER" means the letter attached
hereto as EXHIBIT G.
"SPOT RATE" for a currency means the rate generally quoted by
the Bank of America National Trust and Savings Association as the spot
rate for the purchase by the Bank of America National Trust and Savings
Association of such currency with another currency through its FX
Trading Office on the date two Business Days prior to the date as of
which the foreign exchange computation is made.
"STERLING" means the lawful currency of the United Kingdom.
"SUBORDINATED DEBT" means the Indebtedness permitted to be
incurred by the Company pursuant to SECTION 8.05(G) and (I).
"SUBSIDIARY" of a Person means any corporation , association,
partnership, limited liability company, joint venture or other business
entity of which more than 50% of the voting stock, membership interests
or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of the
Company.
"SURETY INSTRUMENTS" means all letters of credit (including
standby and documentary), banker's acceptances, bank guaranties,
shipside bonds, surety bonds and similar instruments.
"SUTCLIFFE" means Sutcliffe ▇▇▇▇▇▇▇▇, p.l.c.
"SUTCLIFFE ACQUISITION" means the acquisition by the Company
of 100% of the capital stock of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ Corporation and
the acquisition by Waterlink Holding (U.K.) Ltd. of 100% of the capital
stock of Sutcliffe ▇▇▇▇▇▇▇▇ Carbons Limited and Sutcliffe Croftshaw
Limited, in each case pursuant to the Sutcliffe Acquisition Documents.
"SUTCLIFFE ACQUISITION DOCUMENTS" means the executed purchase
agreement among the Company, Waterlink Holding (U.K.) Ltd. and
Sutcliffe, and all other documents entered into or delivered in the
connection therewith.
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"SWAP CONTRACT" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond, note or ▇▇▇▇ option, interest rate
option, forward foreign exchange transaction, cap, collar or floor
transaction, currency swap, cross-currency rate swap, swaption,
currency option or any other, similar transaction (including any option
to enter into any of the foregoing) or any combination of the
foregoing, and, unless the context otherwise clearly requires, any
master agreement relating to or governing any or all of the foregoing.
"SWAP TERMINATION VALUE" means, in respect of any one or more
Swap Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Swap Contracts, (a) for
any date on or after the date such Swap Contracts have been closed out
and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date referenced
in clause (a) the amount(s) determined as the ▇▇▇▇-to-market value(s)
for such Swap Contracts, as determined by the Company based upon one or
more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include any Bank).
"SWING LINE LOAN COMMITMENT" has the meaning specified in
SECTION 2.04.
"SWING LINE BANK" means BofA, in its capacity as provider of
the Swing Line Loans.
"SWING LINE LOAN" has the meaning specified in SECTION 2.04.
"SWING LINE TERMINATION DATE" means the earlier to occur of:
(a) May 14, 2003; and
(b) the date on which the Revolving Loan Commitment
terminates in accordance with the provisions of this
Agreement.
"SWING LINE NOTE" means a promissory note in substantially the
form of EXHIBIT F-3.
"SWING LINE RATE" means the Base Rate.
"TAXES" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the
case of each Bank and the Agent, respectively, taxes imposed on or
measured by its net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Bank or the Agent, as
the case may be, is organized or maintains a lending office.
"TERM LOAN COMMITMENT" means Thirty-Five Million Dollars
($35,000,000).
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"TERM LOAN" has the meaning specified in SECTION 2.01(A).
"TERM MATURITY DATE" means May 19, 2003.
"TYPE" means, with respect to any Borrowing, its nature as a
Base Rate Loan or an Offshore Rate Loan.
"UNFUNDED PENSION LIABILITY" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.
"UNITED STATES" and "U.S." each means the United States of
America.
"WHOLLY-OWNED SUBSIDIARY" means any corporation, association,
partnership, limited liability company, joint venture or other business
entity in which (other than directors' qualifying shares required by
law) 100% of the equity interests of each class having ordinary voting
power, and 100% of the equity interests of every other class, in each
case, at the time as of which any determination is being made, is
owned, beneficially and of record, by the Company, or by one or more of
the other Wholly-Owned Subsidiaries, or both.
1.02 OTHER INTERPRETIVE PROVISIONS. (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) 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."
(d) 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 are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
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(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and 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 shall
each be performed in accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Agent or the Banks by way of
consent, approval or waiver shall be deemed modified by the phrase "in its/their
sole discretion."
(g) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent, the
Company and the other parties, and are the products of all parties. Accordingly,
they shall not be construed against the Banks or the Agent merely because of the
Agent's or Banks' involvement in their preparation.
1.03 ACCOUNTING PRINCIPLES. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Company.
ARTICLE II
THE CREDITS
-----------
2.01 AMOUNTS AND TERMS OF COMMITMENTS.
(a) THE TERM CREDIT. Each Bank severally agrees, on the terms
and conditions set forth herein, to make, in an amount not to exceed such Bank's
Pro Rata Share of the Term Loan Commitment, on the Special Funding Date, a term
loan to the Company in an aggregate principal amount equal to the Term Loan
Commitment ("TERM LOAN"). Amounts borrowed as Term Loans which are repaid or
prepaid by the Company may not be reborrowed.
(b) THE REVOLVING CREDIT. Each Bank severally agrees, on the
terms and conditions set forth herein, to make loans to the Company (each such
loan, a "REVOLVING LOAN") from time to time on any Business Day during the
period from the Special Funding Date to the Revolving Termination Date, in an
aggregate amount not to exceed at any time outstanding the amount set forth on
SCHEDULE 2.01 (such amount, as the same may be reduced under SECTION 2.07 or as
a result of one or more assignments under SECTION 10.08, the Bank's "REVOLVING
LOAN COMMITMENT"); PROVIDED, HOWEVER, that, after giving effect to any Borrowing
of Revolving Loans (exclusive of Revolving Loans which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans), the Effective Amount of all outstanding
Revolving Loans, the Effective Amount of all Swing Line Loans and the Effective
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Amount of all L/C Obligations, shall not at any time exceed the combined
Revolving Loan Commitments; AND PROVIDED FURTHER, that the Effective
Amount of the Revolving Loans of any Bank plus the participation of such Bank in
the Effective Amount of all Swing Line Loans and the Effective Amount of all L/C
Obligations shall not at any time exceed such Bank's Revolving Loan Commitment.
Within the limits of each Bank's Revolving Loan Commitment, and subject to the
other terms and conditions hereof, the Company may borrow under this SECTION
2.01(B), prepay under SECTION 2.08 and reborrow under this SECTION 2.01(B).
2.02 LOAN ACCOUNTS.
(a) The Loans made by each Bank and the Letters of Credit
Issued by the Issuing Bank shall be evidenced by one or more accounts or records
maintained by such Bank or Issuing Bank, as the case may be, in the ordinary
course of business. The accounts or records maintained by the Agent, the Issuing
Bank and each Bank shall be prima facie evidence of the amount of the Loans made
by the Banks to the Company and the Letters of Credit Issued for the account of
the Company, and the interest and payments thereon. Any failure so to record or
any error in doing so shall not, however, limit or otherwise affect the
obligation of the Company hereunder to pay any amount owing with respect to the
Loans or any Letter of Credit.
(b) Upon the request of any Bank made through the Agent, the
Loans made by such Bank may be evidenced by one or more Notes, instead of or in
addition to loan accounts. Each such Bank shall record on the schedules annexed
to its Note(s) the date, amount and maturity of each Loan made by it and the
amount of each payment of principal made by the Company with respect thereto.
Each such Bank is irrevocably authorized by the Company to make such
recordations on its Note(s) and each Bank's record shall be deemed prima facie
correct; PROVIDED, HOWEVER, that the failure of a Bank to make, or an error in
making, a notation thereon with respect to any Loan shall not limit or otherwise
affect the obligations of the Company hereunder or under any such Note to such
Bank.
2.03 PROCEDURE FOR BORROWING.
(a) Each Borrowing (other than an L/C Borrowing or a Borrowing
of Swing Line Loans) shall be made upon the Company's irrevocable written notice
delivered to the Agent in the form of a Notice of Borrowing (which notice must
be received by the Agent prior to 12:00 noon (Chicago time) (i) three Business
Days prior to the requested Borrowing Date, in the case of Offshore Rate Loans
and (ii) on the date of the requested Borrowing Date, in the case of Base Rate
Loans, specifying:
(i) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $500,000, or any multiple of
$100,000 in excess thereof, in the case of Base Rate Loans,
and $1,000,000, or any multiple of $500,000 in excess thereof,
in the case of Offshore Rate Loans;
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(ii) whether such Borrowing shall consist of
Revolving Loans and/or Term Loans;
(iii) the requested Borrowing Date, which shall be a
Business Day;
(iv) the Type of Loans comprising the Borrowing;
and
(v) the duration of the Interest Period applicable to
such Loans included in such notice. If the Notice of Borrowing
fails to specify the duration of the Interest Period for any
Borrowing comprised of Offshore Rate Loans, such Interest
Period shall be three months;
PROVIDED, HOWEVER, that with respect to the Borrowing to be made on the Special
Funding Date, the Notice of Borrowing shall be delivered to the Agent not later
than 10:00 a.m. (Chicago time) on the Special Funding Date and such Borrowing
will consist of Base Rate Loans only; and PROVIDED FURTHER, all Borrowings
during the first 90 days following the Special Funding Date (or such shorter
period as determined by the Agent) shall have the same Interest Period and shall
be Base Rate Loans or Offshore Rate Loans for Interest Periods no longer than
one month.
(b) The Agent will promptly notify each Bank of its receipt of
any Notice of Borrowing and of the amount of such Bank's Pro Rata Share of that
Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of
each Borrowing available to the Agent for the account of the Company at the
Agent's Payment Office by 2:00 p.m. (Chicago time) on the Borrowing Date
requested by the Company in funds immediately available to the Agent. The
proceeds of all such Loans will then be made available to the Company by the
Agent at such office by crediting the account of the Company on the books of
BofA with the aggregate of the amounts made available to the Agent by the Banks
and in like funds as received by the Agent.
(d) After giving effect to any Borrowing, unless the Agent
shall otherwise consent, there may not be more than five different Interest
Periods in effect.
2.04 THE SWING LINE LOANS. Subject to the terms and conditions hereof,
the Swing Line Bank agrees to make loans to the Company (each such loan, a
"SWING LINE LOAN") from time to time on any Business Day during the period from
the Closing Date to the Swing Line Termination Date in an aggregate principal
amount at any one time outstanding not to exceed $5,000,000 (the "SWING LINE
LOAN COMMITMENT"); PROVIDED, after giving effect to any Borrowing of Swing Line
Loans, the Effective Amount of all outstanding Swing Line Loans shall not at any
time exceed the Swing Line Loan Commitment; AND PROVIDED FURTHER, that the
Effective Amount of all outstanding Revolving Loans, the Effective Amount of all
Swing Line Loans and the Effective Amount of all L/C Obligations shall not at
any time exceed the combined Revolving Loan Commitments. Prior to the Swing Line
Termination Date, the Company may use the Swing Line Loan Commitment by
borrowing, prepaying the Swing Line Loans in whole or in part, and reborrowing,
all in accordance
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with the terms and conditions hereof. All Swing Line Loans shall bear interest
at the Swing Line Rate and shall not be entitled to be converted into Loans that
bear interest at any other rate.
2.05 PROCEDURE FOR SWING LINE LOANS. (a) The Company may borrow under
the Swing Line Loan Commitment on any Business Day until the Swing Line
Termination Date; PROVIDED that the Company shall give the Agent irrevocable
notice (which notice must be received by the Agent prior to 12:00 noon (Chicago
time)) and the Agent shall promptly deliver to the Company and the Swing Line
Bank a confirmation of such notice specifying the amount of the requested Swing
Line Loan, which shall be in a minimum amount of $100,000 or a whole multiple of
$50,000 in excess thereof. The proceeds of the Swing Line Loan will be made
available by the Swing Line Bank to the Company in immediately available funds
at the office of the Swing Line Bank by 2:00 p.m. (Chicago time) on the date of
such notice. The Company may at any time and from time to time, prepay the Swing
Line Loans, in whole or in part, without premium or penalty, by notifying the
Agent prior to 12:00 noon (Chicago time) on any Business Day of the date and
amount of prepayment. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein. Partial
prepayments shall be in an aggregate principal amount of $100,000 or a whole
multiple of $50,000 in excess thereof.
(b) The Agent, acting upon the request of the Swing Line Bank,
at any time in its sole and absolute discretion, may on behalf of the Company
(which hereby irrevocably directs the Agent to so act on its behalf) notify each
Bank (including the Swing Line Bank) to make a Revolving Loan to the Company in
a principal amount equal to such Bank's Pro Rata Share of the amount of such
Swing Line Loan, unless any Bank or Banks shall be obligated, pursuant to
SECTION 2.01(B), to make funds available to the Agent on the date such notice is
given in an aggregate amount equal to or in excess of such Swing Line Loan, in
which case such funds shall be applied by the Agent first to repay such Swing
Line Loan and any remaining funds shall be made available to the Borrower in
accordance with SECTION 2.01(B); PROVIDED, HOWEVER, that such notice shall be
deemed to have automatically been given upon the occurrence of an Event of
Default under SECTION 9.01(F) or (G). Upon notice from the Agent, each Bank
(other than the Swing Line Bank) will immediately transfer to the Agent, for
transfer to the Swing Line Bank, in immediately available funds, an amount equal
to such Bank's Pro Rata Share of the amount of such Swing Line Loan so repaid.
Each Bank's obligation to transfer the amount of such Revolving Loan to the
Agent shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank or any other Person may have
against the Swing Line Bank, (ii) the occurrence or continuance of a Default or
an Event of Default or the termination of the Revolving Loan Commitments, (iii)
any adverse change in the condition (financial or otherwise) of the Company or
any other Person, (iv) any breach of this Agreement by the Company or any other
Company or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.
(c) Notwithstanding anything herein to the contrary, the Swing
Line Bank (i) shall not be obligated to make any Swing Line Loan if the
conditions set forth in ARTICLE V have not been satisfied and (ii) shall not
make any requested Swing Line Loan if, prior to 1:00 p.m. (Chicago time) on the
date of such requested Swing Line Loan, it has received a written notice from
the Agent
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or any Bank directing it not to make further Swing Line Loans because one or
more of the conditions specified in ARTICLE V are not then satisfied.
(d) If prior to the making of a Loan required to be made by
SECTION 2.05(B) an Event of Default described in SECTION 9.01(F) OR 9.01(G)
shall have occurred and be continuing with respect to the Company, each Bank
will, on the date such Loan was to have been made pursuant to the notice
described in SECTION 2.05(B), purchase an undivided participating interest in
the outstanding Swing Line Loans in an amount equal to its Pro Rata Share of the
aggregate principal amount of Swing Line Loans then outstanding. Each Bank will
immediately transfer to the Agent for the benefit of the Swing Line Bank, in
immediately available funds, the amount of its participation.
(e) Whenever, at any time after a Bank has purchased a
participating interest in a Swing Line Loan, the Swing Line Bank receives any
payment on account thereof, the Swing Line Bank will distribute to the Agent for
delivery to each Bank its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Bank's participating interest was outstanding and funded); PROVIDED,
HOWEVER, that in the event that such payment received by the Swing Line Bank is
required to be returned, such Bank will return to the Agent for delivery to the
Swing Line Bank any portion thereof previously distributed by the Swing Line
Bank to it.
(f) Each Bank's obligation to make the Loans referred to in
SECTION 2.05(B) and to purchase participating interests pursuant to SECTION
2.05(D) shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank or the Company may have
against the Swing Line Bank, the Company or any other Person for any reason
whatsoever, (ii) the occurrence or continuance of a Default or an Event of
Default, (iii) any adverse change in the condition (financial or otherwise) of
the Company, (iv) any breach of this Agreement or any other Loan Document by the
Company, any Subsidiary or any other Bank, or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
2.06 CONVERSION AND CONTINUATION ELECTIONS.
(a) The Company may, upon irrevocable written notice to the
Agent in accordance with SECTION 2.06(B):
(i) elect, as of any Business Day, in the case of
Base Rate Loans, or as of the last day of the applicable Interest
Period, in the case of Offshore Rate Loans, to convert any such Loans
(or any part thereof in an aggregate minimum amount of $500,000, or any
multiple of $100,000 in excess thereof, in the case of Base Rate Loans,
and $1,000,000, or any multiple of $500,000 in excess thereof, in the
case of Offshore Rate Loans) into Loans of any other Type; or
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(ii) elect as of the last day of the applicable
Interest Period, to continue any Loans having Interest Periods expiring
on such day (or any part thereof in an amount not less than $1,000,000,
or that is in an integral multiple of $500,000 in excess thereof);
PROVIDED, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Company to continue such Loans as, and convert such Loans into, Offshore
Rate Loans shall terminate.
(b) The Company shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 12:00 noon
(Chicago time) at least (i) three Business Days in advance of the Conversion/
Continuation Date, if the Loans are to be converted into or continued as
Offshore Rate Loans and (ii) on the date of the Conversion/Continuation Date, if
the Loans are to be converted into Base Rate Loans, specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or
continued;
(iii) the Type of Loans resulting from the proposed
conversion or continuation; and
(iv) other than in the case of conversions into Base
Rate Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable
to Offshore Rate Loans, the Company has failed to select a new Interest Period
to be applicable to such Offshore Rate Loans by the time specified in SECTION
2.06(B), or if any Default or Event of Default then exists, the Company shall be
deemed to have elected to convert such Offshore Rate Loans into Base Rate Loans
effective as of the expiration date of such Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of
a Notice of Conversion/Continuation, or, if no timely notice is provided by the
Company, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of the Loans, with
respect to which the notice was given, held by each Bank.
(e) Unless the Majority Banks otherwise consent, during the
existence of a Default or Event of Default, the Company may not elect to have a
Loan converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of
Loans, unless the Agent shall otherwise consent, there may not be more than five
different Interest Periods in effect.
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2.07 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. The Company may,
upon not less than three Business Days' prior notice to the Agent, terminate the
Commitments or permanently reduce the Commitments by an aggregate minimum amount
of $1,000,000 or any multiple of $500,000 in excess thereof; UNLESS, after
giving effect thereto and to any prepayments of Revolving Loans made on the
effective date thereof, (a) the Effective Amount of all Revolving Loans, Swing
Line Loans and L/C Obligations together would exceed the amount of the combined
Revolving Commitments then in effect, (b) the Effective Amount of all L/C
Obligations then outstanding would exceed the L/C Commitment or (c) the
Effective Amount of all Swing Line Loans then outstanding would exceed the Swing
Line Loan Commitment. Once reduced in accordance with this Section, the
Commitment so reduced may not be increased. Any reduction of the Commitments
shall be applied to each Bank according to its Pro Rata Share of such
Commitment. If and to the extent specified by the Company in the notice to the
Agent, some or all of the reduction in the combined Revolving Loan Commitments
shall be applied to reduce the L/C Commitment and the Swing Line Loan
Commitment. All accrued commitment and letter of credit fees to, but not
including, the effective date of any reduction or termination of the Commitments
shall be paid on the effective date of such reduction or termination.
2.08 OPTIONAL PREPAYMENTS. Subject to SECTION 4.04, the Company may, at
any time or from time to time, upon irrevocable notice to the Agent, prepay
Loans ratably among the Banks in whole or in part, in minimum amounts of
$100,000, or any multiple of $100,000 in excess thereof, in the case of Base
Rate Loans, and $500,000, or any multiple of $500,000 in excess thereof, in the
case of Offshore Rate Loans. Such notice of prepayment shall specify the date
and amount of such prepayment and the Type(s) of Loans to be prepaid. The Agent
will promptly notify each Bank of its receipt of any such notice, and of such
Bank's Pro Rata Share of such prepayment. If such notice is given by the
Company, the Company shall make such prepayment and the payment amount specified
in such notice shall be due and payable on the date specified therein, together
with accrued interest to each such date on the amount prepaid and any amounts
required pursuant to SECTION 4.04. Optional prepayments of Term Loans shall be
applied, FIRST, in an aggregate amount of up to $1,000,000, to the next
Scheduled Repayment, and SECOND, with respect to all other voluntary
prepayments, ratably among all Scheduled Repayments.
2.09 MANDATORY PREPAYMENTS OF LOANS; MANDATORY COMMITMENT REDUCTIONS.
(a) If on any date the Effective Amount of L/C Obligations
exceeds the L/C Commitment, the Company shall Cash Collateralize on such date
the outstanding Letters of Credit in an amount equal to the excess of the
maximum amount then available to be drawn under the Letters of Credit over the
Aggregate L/C Commitment. Subject to SECTION 4.04, if on any date after giving
effect to any Cash Collateralization made on such date pursuant to the preceding
sentence, the Effective Amount of all Revolving Loans and Swing Line Loans then
outstanding plus the Effective Amount of all L/C Obligations exceeds the
combined Revolving Loan Commitments, the Company shall immediately, and without
notice or demand, prepay the outstanding principal amount of the Revolving
Loans, Swing Line Loans and L/C Advances by an amount equal to the applicable
excess.
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(b) ASSET DISPOSITIONS. If the Company or any of its
Subsidiaries shall at any time or from time to time make or agree to make a
Disposition then (i) the Company shall promptly provide written notice to the
Agent of such proposed Disposition (including the amount of the estimated Net
Proceeds to be received by the Company in respect thereof) and (ii) promptly
upon receipt by the Company or its Subsidiary of the Net Proceeds of such
Disposition the Company shall FIRST, prepay Term Loans in an aggregate amount
equal to the amount of such Net Proceeds, FIRST, to the repayment of the next
Scheduled Repayment, and SECOND, ratably among all remaining Scheduled
Repayments, SECOND, prepay Swing Line Loans (without any reduction in the Swing
Line Loan Commitment) and THIRD, prepay Revolving Loans (without any reduction
in the Revolving Loan Commitment).
(c) EQUITY ISSUANCE. If the Company shall issue new common or
preferred equity after the Closing Date (other than issuances in connection with
an Acquisition (to the extent such equity is issued to the seller as
consideration in connection with such Acquisition) or in connection with the
exercise by employees of the Company or any of its Subsidiaries pursuant to an
employee stock option plan), the Company shall (i) promptly provide written
notice to the Agent of the estimated Net Issuance Proceeds of such issuance to
be received by the Company and (ii) promptly upon receipt by the Company of such
Net Issuance Proceeds, the Company shall, (x) in the event that the Term Loan
remains outstanding on such date, prepay Term Loans in an aggregate amount equal
to 100% of the amount of such Net Issuance Proceeds, FIRST, to the repayment of
the next Scheduled Repayment, and SECOND, ratably among all remaining Scheduled
Repayments, and (y) in the event that the Term Loan has been repaid in full
prior to such date and the Leverage Ratio is greater than or equal to 3.00:1.0
on such date, prepay in an aggregate amount necessary to achieve a Leverage
Ratio calculated pursuant to SECTION 8.16 equal to or less than 3.00:1.0 FIRST,
Swing Line Loans (without any reduction in the Swing Line Loan Commitments) and
SECOND, Revolving Loans (without any reduction in the Revolving Loan
Commitment).
(d) DEBT ISSUANCE. If the Company or any of its Subsidiaries
shall issue or incur any Indebtedness for borrowed money (other than as
permitted pursuant to SECTION 8.05), the Company shall (i) promptly provide
written notice to the Agent of the estimated Net Issuance Proceeds of such
issuance to be received by such Person and (ii) promptly upon receipt by such
Person of such Net Issuance Proceeds, the Company shall, (x) in the event that
the Term Loan remains outstanding on such date, prepay Term Loans in an
aggregate amount equal to 100% of the amount of such Net Issuance Proceeds,
FIRST, to the repayment of the next Scheduled Repayment, and SECOND, ratably
among all remaining Scheduled Repayments, and (y) in the event that the Term
Loan has been repaid in full prior to such date and the Leverage Ratio is
greater than or equal to 3.00:1.0 on such date, prepay in an aggregate amount
necessary to achieve a Leverage Ratio calculated pursuant to SECTION 8.16 equal
to or less than 3.00:1.0 FIRST, Swing Line Loans (without any reduction in the
Swing Line Loan Commitments) and SECOND, Revolving Loans (without any reduction
in the Revolving Loan Commitment).
(e) EXCESS CASH FLOW. On each date which is 90 days after the
last day of each fiscal year of the Company, an amount equal to 75% of Excess
Cash Flow for such fiscal year shall be applied by the Company (x) in the event
that the Term Loan remains outstanding on such
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date, to prepay Term Loans, FIRST, to the repayment of the next Scheduled
Repayment, and SECOND, ratably among all remaining Scheduled Repayments, and (y)
in the event that the Term Loan has been repaid in full prior to such date and
the Leverage Ratio is greater than or equal to 3.50:1.0 on such date, to prepay
in an aggregate amount necessary to achieve a Leverage Ratio calculated pursuant
to SECTION 8.16 equal to or less than 3.50:1.0 FIRST, Swing Line Loans (without
any reduction in the Swing Line Loan Commitments) and SECOND, Revolving Loans
(without any reduction in the Revolving Loan Commitment).
(f) CLOSING DATE. The Commitments shall be reduced to zero in
the event that the Closing Date has not occurred on or prior to June 30, 1998
and the Prior Loan Documents shall remain uneffected by the terms and conditions
of this Agreement.
(g) GENERAL. Any prepayments pursuant to this SECTION 2.09 shall
be applied first to any Base Rate Loans then outstanding and then to Offshore
Rate Loans with the shortest Interest Periods remaining. The Company shall pay,
together with each prepayment under this SECTION 2.09, accrued interest on the
amount prepaid and any amounts required pursuant to SECTION 4.04.
Notwithstanding the terms of SECTIONS 2.09(B), (C), (D) and (E), at no time
shall a mandatory prepayment pursuant to said Sections result in more than a six
month period between Scheduled Repayments.
2.10 REPAYMENT.
(a) TERM LOANS. On each date set forth below, the Borrower shall
be required to repay the principal amount (or such other amount after giving
effect to any prepayments permitted or required pursuant to this Agreement) of
the Term Loans as is set forth opposite such date (each, a "Scheduled
Repayment"):
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DATE AMOUNT
March 31, 1999 $1,000,000
June 30, 1999 1,000,000
September 30, 1999 1,000,000
December 31, 1999 1,000,000
March 31, 2000 1,000,000
June 30, 2000 1,000,000
September 29, 2000 1,000,000
December 29, 2000 2,000,000
March 30, 2001 2,000,000
June 29, 2001 2,000,000
September 28, 2001 2,000,000
December 31, 2001 2,500,000
March 29, 2002 2,500,000
June 28, 2002 2,500,000
September 30, 2002 2,500,000
December 31, 2002 2,500,000
March 31, 2003 2,500,000
Term Maturity Date 5,000,000
(b) THE REVOLVING CREDIT. The Company shall repay to the Banks
on the Revolving Termination Date the aggregate principal amount of Revolving
Loans outstanding on such date.
(c) SWING LINE LOANS. The Company shall repay to the Swing
Line Bank on the Swing Line Termination Date the aggregate principal amount of
Swing Line Loans outstanding on such date.
(d) SPECIAL FUNDING LOANS. The Company shall repay to the
Banks on the Business Day following the Special Funding Date the aggregate
principal amount of Special Funding Loans outstanding on such date in the event
that the Closing Date has not occurred on such date.
2.11 INTEREST.
(a) Each Loan shall bear interest on the outstanding principal
amount thereof from the applicable Borrowing Date at a rate per annum equal to
the Offshore Rate or the Base Rate, as the case may be (and subject to the
Company's right to convert to other Types of Loans under SECTION 2.06), PLUS the
Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any prepayment
of Loans under SECTION 2.08 or 2.09 for the portion of the Loans so prepaid and
upon payment (including prepayment) in full thereof and, during
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the existence of any Event of Default, interest shall be paid on demand of the
Agent at the request or with the consent of the Majority Banks.
(c) Notwithstanding SECTION 2.11(A), while any Event of
Default exists or after acceleration, the Company shall pay interest (after as
well as before entry of judgment thereon to the extent permitted by law) on the
principal amount of all outstanding Obligations, at a rate per annum which is
determined by adding 2% per annum to the Applicable Margin then in effect for
such Loans; PROVIDED, HOWEVER, that, on and after the expiration of any Interest
Period applicable to any Offshore Rate Loan outstanding on the date of
occurrence of such Event of Default or acceleration, the principal amount of
such Loan shall, during the continuation of such Event of Default or after
acceleration, bear interest at a rate per annum equal to the Base Rate plus the
Applicable Margin plus 2%.
(d) Anything herein to the contrary notwithstanding, the
obligations of the Company to any Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Bank would be contrary to
the provisions of any law applicable to such Bank limiting the highest rate of
interest that may be lawfully contracted for, charged or received by such Bank,
and in such event the Company shall pay such Bank interest at the highest rate
permitted by applicable law.
2.12 FEES. In addition to certain fees described in SECTION 3.08:
(a) AGENCY FEES. The Company shall pay the fees to the Agent
for the Agent's own account, as required by the letter agreement ("FEE LETTER")
between the Company and the Agent, dated May 19, 1998.
(b) COMMITMENT FEES. The Company shall pay to the Agent for
the account of each Bank a commitment fee ("Commitment Fee") on the average
daily unused portion of such Bank's Revolving Loan Commitment computed on a
quarterly basis in arrears on the last Business Day of each calendar quarter
based upon the daily utilization for that quarter as calculated by the Agent,
equal to the Applicable Margin per annum. For purposes of calculating
utilization under this Section, the Revolving Loan Commitments shall be deemed
used to the extent of the Effective Amount of Revolving Loans then outstanding
PLUS the Effective Amount of L/C Obligations then outstanding. Such commitment
fee shall accrue from the Closing Date to the Revolving Termination Date and
shall be due and payable quarterly in arrears on the last Business Day of each
March, June, September and December through the Revolving Termination Date, with
the final payment to be made on the Revolving Termination Date; PROVIDED that,
in connection with any reduction or termination of Revolving Loan Commitments as
the case may be, under SECTION 2.07, the accrued commitment fee calculated for
the period ending on such date shall also be paid on the date of such reduction
or termination, with the following quarterly payment being calculated on the
basis of the period from such reduction or termination date to such quarterly
payment date. The commitment fees provided in this Section shall accrue at all
times after the above-mentioned commencement date, including at any time during
which one or more conditions in ARTICLE V are not met.
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2.13 COMPUTATION OF FEES AND INTEREST.
(a) All computations of interest for Base Rate Loans when the
Base Rate is determined by BofA's "reference rate" shall be made on the basis of
a year of 365 or 366 days, as the case may be, and actual days elapsed. All
other computations of fees and interest shall be made on the basis of a 360-day
year and actual days elapsed (which results in more interest being paid than if
computed on the basis of a 365-day year). Interest and fees shall accrue during
each period during which interest or such fees are computed from the first day
thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent shall
be conclusive and binding on the Company and the Banks in the absence of
manifest error. The Agent will, at the request of the Company or any Bank,
deliver to the Company or the Bank, as the case may be, a statement showing the
quotations used by the Agent in determining any interest rate and the resulting
interest rate.
2.14 PAYMENTS BY THE COMPANY.
(a) All payments to be made by the Company shall be made
without set-off, recoupment or counterclaim. Except as otherwise expressly
provided herein, all payments by the Company shall be made to the Agent for the
account of the Banks at the Agent's Payment Office, and shall be made in dollars
and in immediately available funds, no later than 12:00 Noon (Chicago time) on
the date specified herein. The Agent will promptly distribute to each Bank its
Pro Rata Share (or other applicable share as expressly provided herein) of such
payment in like funds as received. Any payment received by the Agent later than
12:00 Noon (Chicago time) shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue to accrue for the
day actually received.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(c) Unless the Agent receives notice from the Company prior to
the date on which any payment is due to the Banks that the Company will not make
such payment in full as and when required, the Agent may assume that the Company
has made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Company has not made such
payment in full to the Agent, each Bank shall repay to the Agent on demand such
amount distributed to such Bank, together with interest thereon at the Federal
Funds Rate for each day from the date such amount is distributed to such Bank
until the date repaid.
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2.15 PAYMENTS BY THE BANKS TO THE AGENT.
(a) Unless the Agent receives notice from a Bank on or prior
to the Special Funding Date or, with respect to any Borrowing after the Special
Funding Date, at least one Business Day prior to the date of such Borrowing,
that such Bank will not make available as and when required hereunder to the
Agent for the account of the Company the amount of that Bank's Pro Rata Share of
the Borrowing, the Agent may assume that each Bank has made such amount
available to the Agent in immediately available funds on the Borrowing Date and
the Agent may (but shall not be so required), in reliance upon such assumption,
make available to the Company on such date a corresponding amount. If and to the
extent any Bank shall not have made its full amount available to the Agent in
immediately available funds and the Agent in such circumstances has made
available to the Company such amount, that Bank shall on the Business Day
following such Borrowing Date make such amount available to the Agent, together
with interest at the Federal Funds Rate for each day during such period. A
notice of the Agent submitted to any Bank with respect to amounts owing under
this clause (a) shall be conclusive, absent manifest error. If such amount is so
made available, such payment to the Agent shall constitute such Bank's Loan on
the date of Borrowing for all purposes of this Agreement. If such amount is not
made available to the Agent on the Business Day following the Borrowing Date,
the Agent will notify the Company of such failure to fund and, upon demand by
the Agent, the Company shall pay such amount to the Agent for the Agent's
account, together with interest thereon for each day elapsed since the date of
such Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing
Date shall not relieve any other Bank of any obligation hereunder to make a Loan
on such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
2.16 SHARING OF PAYMENTS, ETC. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately (a) notify the Agent of
such fact, and (b) purchase from the other Banks such participations in the
Loans made by them as shall be necessary to cause such purchasing Bank to share
the excess payment pro rata with each of them; PROVIDED, HOWEVER, that if all or
any portion of such excess payment is thereafter recovered from the purchasing
Bank, such purchase shall to that extent be rescinded and each other Bank shall
repay to the purchasing Bank the purchase price paid therefor, together with an
amount equal to such paying Bank's ratable share (according to the proportion of
(i) the amount of such paying Bank's required repayment to (ii) the total amount
so recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Company agrees that any Bank so purchasing a participation from another Bank
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to SECTION 11.10) with respect to
such participation as fully as if such Bank were the direct creditor of the
Company in the amount of such participation. The Agent will keep records (which
shall be
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conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Banks following
any such purchases or repayments.
ARTICLE III
THE LETTERS OF CREDIT
---------------------
3.01 THE LETTER OF CREDIT SUBFACILITY.
(a) On the terms and conditions set forth herein (i) the
Issuing Bank agrees, (A) from time to time on any Business Day during the period
from the Closing Date to the Revolving Termination Date to issue Letters of
Credit for the account of the Company, and to amend or renew Letters of Credit
previously issued by it, in accordance with SECTIONS 3.02(C) and (D), and (B) to
honor drafts under the Letters of Credit; and (ii) the Banks severally agree to
participate in Letters of Credit Issued for the account of the Company;
PROVIDED, that the Issuing Bank shall not be obligated to Issue, and no Bank
shall be obligated to participate in, any Letter of Credit if as of the date of
Issuance of such Letter of Credit (the "ISSUANCE DATE") (1) the Effective Amount
of all L/C Obligations plus the Effective Amount of all Revolving Loans and
Swing Line Loans exceeds the combined Revolving Loan Commitments, (2) the
participation of any Bank in the Effective Amount of all L/C Obligations and
Swing Line Loans plus the Effective Amount of the Revolving Loans of such Bank
exceeds such Bank's Revolving Loan Commitment or, (3) the Effective Amount of
L/C Obligations exceeds the L/C Commitment. Within the foregoing limits, and
subject to the other terms and conditions hereof, the Company's ability to
obtain Letters of Credit shall be fully revolving, and, accordingly, the Company
may, during the foregoing period, obtain Letters of Credit to replace Letters of
Credit which have expired or which have been drawn upon and reimbursed.
(b) The Issuing Bank is under no obligation to Issue any
Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or
restrain the Issuing Bank from Issuing such Letter of Credit, or any
Requirement of Law applicable to the Issuing Bank or any request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Bank shall
prohibit, or request that the Issuing Bank refrain from, the Issuance
of letters of credit generally or such Letter of Credit in particular
or shall impose upon the Issuing Bank with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the
Issuing Bank is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which the Issuing Bank in good ▇▇▇▇▇ ▇▇▇▇▇ material to
it;
(ii) the Issuing Bank has received written notice
from any Bank, the Agent or the Company, on or prior to the Business
Day prior to the requested date of Issuance of
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such Letter of Credit, that one or more of the applicable conditions
contained in ARTICLE V is not then satisfied;
(iii) the expiry date of any requested Letter of
Credit is after the Revolving Termination Date, unless the Company has
Cash Collateralized, in form and substance satisfactory to the Issuing
Bank, its L/C Obligations under such Letter of Credit on or prior to
the date of the Issuance of such Letter of Credit;
(iv) any requested Letter of Credit does not provide
for drafts, or is not otherwise in form and substance acceptable to the
Issuing Bank, or the Issuance of a Letter of Credit shall violate any
applicable policies of the Issuing Bank; or
(v) such Letter of Credit is in a face amount less
than $25,000, unless such lesser amount is approved by the Agent and
the Issuing Bank, or is to be denominated in a currency other than
Dollars or an Approved Alternate Currency.
(c) All determinations of the stated amount of Letters of
Credit and of the principal amount of L/C Obligations, in each case to the
extent denominated in an Approved Alternate Currency, shall be made by the Agent
by converting same into Dollars at the Spot Rate. Each such determination by the
Agent shall be conclusive and binding on the Company and each Bank in the
absence of manifest error. The Agent will, at the request of the Company or any
Bank, deliver to such Person a statement showing the quotations used by the
Agent in making such determination.
3.02 ISSUANCE, AMENDMENT AND RENEWAL OF LETTERS OF CREDIT.
(a) Each Letter of Credit shall be issued upon the irrevocable
written request of the Company received by the Issuing Bank (with a copy sent by
the Company to the Agent) at least three days (or such shorter time as the
Issuing Bank may agree in a particular instance in its sole discretion) prior to
the proposed date of issuance. Each such request for issuance of a Letter of
Credit shall be by facsimile, confirmed immediately in an original writing, in
the form of an L/C Application, and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the proposed date of issuance of the
Letter of Credit (which shall be a Business Day); (ii) the face amount of the
Letter of Credit; (iii) the expiry date of the Letter of Credit; (iv) the name
and address of the beneficiary thereof; (v) the documents to be presented by the
beneficiary of the Letter of Credit in case of any drawing thereunder; (vi) the
full text of any certificate to be presented by the beneficiary in case of any
drawing thereunder; and (vii) such other matters as the Issuing Bank may
require.
(b) Prior to the Issuance of any Letter of Credit, the Issuing
Bank will confirm with the Agent (by telephone or in writing) that the Agent has
received a copy of the L/C Application or L/C Amendment Application from the
Company and, if not, the Issuing Bank will provide the Agent with a copy
thereof. Unless the Issuing Bank has received notice on or before the Business
Day the Issuing Bank is to issue a requested Letter of Credit from the Agent (A)
directing the Issuing Bank not to issue such Letter of Credit because such
issuance is not then permitted under
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SECTION 3.01(A) as a result of the limitations set forth in CLAUSES (1) through
(3) thereof or SECTION 3.01(B)(II); or (B) that one or more conditions specified
in ARTICLE V are not then satisfied; then, subject to the terms and conditions
hereof, the Issuing Bank shall, with the written approval of the Agent, on the
requested date, issue a Letter of Credit for the account of the Company in
accordance with the Issuing Bank's usual and customary business practices.
(c) From time to time while a Letter of Credit is outstanding
and prior to the Revolving Termination Date, the Issuing Bank will, upon the
written request of the Company received by the Issuing Bank (with a copy sent by
the Company to the Agent) at least three days (or such shorter time as the
Issuing Bank may agree in a particular instance in its sole discretion) prior to
the proposed date of amendment, amend any Letter of Credit issued by it. Each
such request for amendment of a Letter of Credit shall be made by facsimile,
confirmed immediately in an original writing, made in the form of an L/C
Amendment Application and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the Letter of Credit to be amended; (ii) the proposed date of
amendment of the Letter of Credit (which shall be a Business Day); (iii) the
nature of the proposed amendment; and (iv) such other matters as the Issuing
Bank may require. The Issuing Bank shall be under no obligation to amend any
Letter of Credit if: (A) the Issuing Bank would have no obligation at such time
to issue such Letter of Credit in its amended form under the terms of this
Agreement; or (B) the beneficiary of any such letter of Credit does not accept
the proposed amendment to the Letter of Credit. The Agent will promptly notify
the Banks of the receipt by it of any L/C Application or L/C Amendment
Application.
(d) The Issuing Bank and the Banks agree that, while a Letter
of Credit is outstanding and prior to the Revolving Termination Date, at the
option of the Company and upon the written request of the Company received by
the Issuing Bank (with a copy sent by the Company to the Agent) at least five
days (or such shorter time as the Issuing Bank may agree in a particular
instance in its sole discretion) prior to the proposed date of notification of
renewal, the Issuing Bank shall be entitled to authorize the automatic renewal
of any Letter of Credit issued by it. Each such request for renewal of a Letter
of Credit shall be made by facsimile, confirmed immediately in an original
writing, in the form of an L/C Amendment Application, and shall specify in form
and detail satisfactory to the Issuing Bank: (i) the Letter of Credit to be
renewed; (ii) the proposed date of notification of renewal of the Letter of
Credit (which shall be a Business Day); (iii) the revised expiry date of the
Letter of Credit; and (iv) such other matters as the Issuing Bank may require.
The Issuing Bank shall be under no obligation to renew any Letter of Credit if:
(A) the Issuing Bank would have no obligation at such time to issue or amend
such Letter of Credit in its renewed form under the terms of this Agreement; or
(B) the beneficiary of any such Letter of Credit does not accept the proposed
renewal of the Letter of Credit. If any outstanding Letter of Credit shall
provide that it shall be automatically renewed unless the beneficiary thereof
receives notice from the Issuing Bank that such Letter of Credit shall not be
renewed, and if at the time of renewal the Issuing Bank would be entitled to
authorize the automatic renewal of such Letter of Credit in accordance with this
clause (d) upon the request of the Company but the Issuing Bank shall not have
received any L/C Amendment Application from the Company with respect to such
renewal or other written direction by the Company with respect thereto, the
Issuing Bank shall nonetheless be permitted to allow such Letter of Credit to
renew, and the Company and the Banks hereby authorize such renewal, and,
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accordingly, the Issuing Bank shall be deemed to have received an L/C Amendment
Application from the Company requesting such renewal.
(e) The Issuing Bank may, at its election (or as required by
the Agent at the direction of the Majority Banks), deliver any notices of
termination or other communications to any Letter of Credit beneficiary or
transferee, and take any other action as necessary or appropriate, at any time
and from time to time, in order to cause the expiry date of such Letter of
Credit to be a date not later than the Revolving Termination Date.
(f) This Agreement shall control in the event of any conflict
with any L/C-Related Document (other than any Letter of Credit).
(g) The Issuing Bank will also deliver to the Agent,
concurrently or promptly following its delivery of a Letter of Credit, or
amendment to or renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit or amendment
to or renewal of a Letter of Credit.
3.03 RISK PARTICIPATIONS, DRAWINGS AND REIMBURSEMENTS.
(a) Immediately upon the Issuance of each Letter of Credit,
each Bank shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase from the Issuing Bank a participation in such Letter of Credit and
each drawing thereunder in an amount equal to the product of (i) the Pro Rata
Share of such Bank, times (ii) the maximum amount available to be drawn under
such Letter of Credit and the amount of such drawing, respectively. For purposes
of Section 2.01(b), each Issuance of a Letter of Credit shall be deemed to
utilize the Commitment of each Bank by an amount equal to the amount of such
participation.
(b) In the event of any request for a drawing under a Letter
of Credit by the beneficiary or transferee thereof, the Issuing Bank will
promptly notify the Company. The Company shall reimburse the Issuing Bank (by an
L/C Borrowing or otherwise) prior to 12:00 Noon (Chicago time), on each date
that any amount is paid by the Issuing Bank under any Letter of Credit (each
such date, an "HONOR DATE"), in an amount equal to the amount so paid by the
Issuing Bank (such amount, in the case of a Letter of Credit denominated in an
Approved Alternate Currency, being deemed to be the Dollar equivalent of the
amount drawn, determined on the basis of the Spot Rate for such Approved
Alternate Currency as of the approximate time of such drawing). In the event the
Company fails to reimburse the Issuing Bank for the full amount of any drawing
under any Letter of Credit by 12:00 Noon (Chicago time) on the Honor Date, the
Issuing Bank will promptly notify the Agent and the Agent will promptly notify
each Bank thereof, and the Company shall be deemed to have requested that Base
Rate Loans in an aggregate amount equal to the unreimbursed drawing be made by
the Banks to be disbursed on the Honor Date under such Letter of Credit, subject
to the amount of the unutilized portion of the Revolving Loan Commitment and
subject to the conditions set forth in SECTION 5.02. Any notice given by the
Issuing Bank or the Agent pursuant to this clause (b) may be oral if immediately
confirmed in writing (including by facsimile); PROVIDED, that the lack
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of such an immediate confirmation shall not affect the conclusiveness or binding
effect of such notice.
(c) Each Bank shall upon any notice pursuant to SECTION
3.03(B) make available to the Agent for the account of the relevant Issuing Bank
an amount in Dollars and in immediately available funds equal to its Pro Rata
Share of the amount of the drawing, whereupon the participating Banks shall
(subject to SECTION 3.03(D)) each be deemed to have made a Revolving Loan
consisting of a Base Rate Loan to the Company in that amount. If any Bank so
notified fails to make available to the Agent for the account of the Issuing
Bank the amount of such Bank's Pro Rata Share of the amount of the drawing by no
later than 2:00 p.m. (Chicago time) on the Honor Date, then interest shall
accrue on such Bank's obligation to make such payment, from the Honor Date to
the date such Bank makes such payment, at a rate per annum equal to the Federal
Funds Rate in effect from time to time during such period. The Agent will
promptly give notice of the occurrence of the Honor Date, but failure of the
Agent to give any such notice on the Honor Date or in sufficient time to enable
any Bank to effect such payment on such date shall not relieve such Bank from
its obligations under this Section 3.03.
(d) With respect to any unreimbursed drawing that is not
converted into Revolving Loans consisting of Base Rate Loans to the Company in
whole or in part, because of the Company's failure to satisfy the conditions set
forth in SECTION 5.02 or for any other reason, the Company shall be deemed to
have incurred from the Issuing Bank an L/C Borrowing in the amount of such
drawing (such amount, in the case of a Letter of Credit denominated in an
Approved Alternate Currency, being deemed to be the Dollar equivalent of the
amount drawn, determined on the basis of the Spot Rate for such Approved
Alternate Currency as of the approximate time of such drawing), which L/C
Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at a rate per annum equal to the Base Rate plus the Applicable
Margin plus 2% per annum, and each Bank's payment to the Issuing Bank pursuant
to SECTION 3.03(C) shall be deemed payment in respect of its participation in
such L/C Borrowing and shall constitute an L/C Advance from such Bank in
satisfaction of its participation obligation under this SECTION 3.03.
(e) Each Bank's obligation in accordance with this Agreement
to make the Revolving Loans or L/C Advances, as contemplated by this SECTION
3.03, as a result of a drawing under a Letter of Credit, shall be absolute and
unconditional and without recourse to the Issuing Bank and shall not be affected
by any circumstance, including (i) any set-off, counterclaim, recoupment,
defense or other right which such Bank may have against the Issuing Bank, the
Company or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default, an Event of Default or a Material Adverse Effect; or
(iii) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; PROVIDED, however, that each Bank's obligation
to make Revolving Loans under this SECTION 3.03 is subject to the conditions set
forth in SECTION 5.02.
3.04 REPAYMENT OF PARTICIPATIONS.
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(a) Upon (and only upon) receipt by the Agent for the account
of the Issuing Bank of immediately available funds from the Company (i) in
reimbursement of any payment made by the Issuing Bank under the Letter of Credit
with respect to which any Bank has paid the Agent for the account of the Issuing
Bank for such Bank's participation in the Letter of Credit pursuant to SECTION
3.03 or (ii) in payment of interest thereon, the Agent will pay to each Bank, in
the same funds as those received by the Agent for the account of the Issuing
Bank, the amount of such Bank's Pro Rata Share of such funds, and the Issuing
Bank shall receive the amount of the Pro Rata Share of such funds of any Bank
that did not so pay the Agent for the account of the Issuing Bank.
(b) If the Agent or the Issuing Bank is required at any time
to return to the Company, or to a trustee, receiver, liquidator, custodian, or
any official in any Insolvency Proceeding, any portion of the payments made by
the Company to the Agent for the account of the Issuing Bank pursuant to SECTION
3.04(A) in reimbursement of a payment made under the Letter of Credit or
interest or fee thereon, each Bank shall, on demand of the Agent, forthwith
return to the Agent or the Issuing Bank the amount of its Pro Rata Share of any
amounts so returned by the Agent or the Issuing Bank plus interest thereon from
the date such demand is made to the date such amounts are returned by such Bank
to the Agent or the Issuing Bank, at a rate per annum equal to the Federal Funds
Rate in effect from time to time.
3.05 ROLE OF THE ISSUING BANK.
(a) Each Bank and the Company agree that, in paying any
drawing under a Letter of Credit, the Issuing Bank shall not have any
responsibility to obtain any document (other than any sight draft and
certificates expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.
(b) No Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Bank shall be liable to
any Bank for: (i) any action taken or omitted in connection herewith at the
request or with the approval of the Banks (including the Majority Banks, as
applicable); (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any L/C-Related Document.
(c) The Company hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; PROVIDED, however, that this assumption is not intended to,
and shall not, preclude the Company's pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. No Agent-Related Person, nor any of the respective correspondents,
participants or assignees of the Issuing Bank, shall be liable or responsible
for any of the matters described in clauses (i) through (vii) of SECTION 3.06;
PROVIDED, however, anything in such clauses to the contrary notwithstanding,
that the Company may have a claim against the Issuing Bank, and the Issuing Bank
may be liable to the Company, to the extent, but only to the extent, of any
direct, as opposed to consequential or exemplary, damages suffered by the
Company which the Company proves were caused by the
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Issuing Bank's willful misconduct or gross negligence or the Issuing Bank's
willful failure to pay under any Letter of Credit after the presentation to it
by the beneficiary of a sight draft and certificate(s) strictly complying with
the terms and conditions of a Letter of Credit. In furtherance and not in
limitation of the foregoing: (i) the Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary; and (ii)
the Issuing Bank shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
3.06 OBLIGATIONS ABSOLUTE. The obligations of the Company under this
Agreement and any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing
under a Letter of Credit converted into Revolving Loans, shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and each such other L/C-Related Document under all circumstances,
including the following:
(i) any lack of validity or enforceability of this
Agreement or any L/C-Related Document;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the obligations of
the Company in respect of any Letter of Credit or any other amendment
or waiver of or any consent to departure from all or any of the
L/C-Related Documents;
(iii) the existence of any claim, set-off, defense or
other right that the Company may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any Person
for whom any such beneficiary or any such transferee may be acting),
the Issuing Bank or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by the L/C-Related
Documents or any unrelated transaction;
(iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit;
(v) any payment by the Issuing Bank under any Letter
of Credit against presentation of a draft or certificate that does not
strictly comply with the terms of any Letter of Credit; or any payment
made by the Issuing Bank under any Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any
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transferee ofany Letter of Credit, including any arising in connection
with any Insolvency Proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guarantee, for all or any of the obligations
of the Company in respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or
a discharge of, the Company or a guarantor.
3.07 CASH COLLATERAL PLEDGE. Upon (i) the request of the Agent or the
Majority Banks, (A) if the Issuing Bank has honored any full or partial drawing
request on any Letter of Credit and such drawing has resulted in an L/C
Borrowing hereunder, or (B) if, as of the Revolving Termination Date, any
Letters of Credit may for any reason remain outstanding and partially or wholly
undrawn, or (ii) the occurrence of the circumstances described in SECTION
2.09(A) requiring the Company to Cash Collateralize Letters of Credit, then, the
Company shall immediately Cash Collateralize the L/C Obligations in an amount
equal to such L/C Obligations.
3.08 LETTER OF CREDIT FEES.
(a) The Company shall pay to the Agent for the account of each
of the Banks a letter of credit fee with respect to the Letters of Credit equal
to the Applicable Margin per annum of the average daily maximum amount available
to be drawn of the outstanding Letters of Credit, computed on a quarterly basis
in arrears on the last Business Day of each March, June, September and December
based upon Letters of Credit outstanding for that quarter as calculated by the
Agent. Such letter of credit fees shall be due and payable quarterly in arrears
on the last Business Day of each calendar quarter during which Letters of Credit
are outstanding, commencing on the first such quarterly date to occur after the
Closing Date, through the Revolving Termination Date (or such later date upon
which the outstanding Letters of Credit shall expire), with the final payment to
be made on the Revolving Termination Date (or such later expiration date).
(b) The Company shall pay to the Issuing Bank a letter of
credit fronting fee for each Letter of Credit Issued by the Issuing Bank equal
to .125% per annum of the face amount (or increased face amount, as the case may
be) of such Letter of Credit. Such Letter of Credit fronting fee shall be due
and payable quarterly in arrears on the last Business Day of each calendar
quarter during which such Letter of Credit is outstanding, commencing on the
first such quarterly date to occur after such Letter of Credit is issued,
through the Revolving Termination Date (or such later date upon which such
Letter of Credit shall expire), with the final payment to be made on the
Revolving Termination Date (or such later expiration date).
(c) The Company shall pay to the Issuing Bank from time to
time on demand the normal issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the Issuing Bank relating to
letters of credit as from time to time in effect.
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3.09 UNIFORM CUSTOMS AND PRACTICE. The Uniform Customs and Practice for
Documentary Credits as published by the International Chamber of Commerce most
recently at the time of issuance of any Letter of Credit shall (unless otherwise
expressly provided in the Letters of Credit) apply to the Letters of Credit.
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
4.01 TAXES.
(a) Any and all payments by the Company to each Bank or the
Agent under this Agreement and any other Loan Document shall be made free and
clear of, and without deduction or withholding for, any Taxes. In addition, the
Company shall pay all Other Taxes.
(b) If the Company shall be required by law to deduct or
withhold any Taxes, Other Taxes or Further Taxes from or in respect of any sum
payable hereunder to any Bank or the Agent, then:
(i) the sum payable shall be increased as necessary
so that, after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums
payable under this Section), such Bank or the Agent, as the case may
be, receives and retains an amount equal to the sum it would have
received and retained had no such deductions or withholdings been made;
(ii) the Company shall make such deductions and
withholdings;
(iii) the Company shall pay the full amount deducted
or withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) the Company shall also pay to each Bank or the
Agent for the account of such Bank, at the time interest is paid,
Further Taxes in the amount that the respective Bank specifies as
necessary to preserve the after-tax yield the Bank would have received
if such Taxes, Other Taxes or Further Taxes had not been imposed.
(c) The Company agrees to indemnify and hold harmless each
Bank and the Agent for the full amount of i) Taxes, ii) Other Taxes, and iii)
Further Taxes in the amount that the respective Bank specifies as necessary to
preserve the after-tax yield the Bank would have received if such Taxes, Other
Taxes or Further Taxes had not been imposed, and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within 30 days after the date the Bank or the Agent makes written demand
therefor.
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(d) Within 30 days after the date of any payment pursuant to
this Section by the Company of Taxes, Other Taxes or Further Taxes, the Company
shall furnish to each Bank or the Agent the original or a certified copy of a
receipt evidencing payment thereof, or other evidence of payment satisfactory to
such Bank or the Agent.
(e) If the Company is required to pay any amount to any Bank
or the Agent pursuant to clauses (b) or (c) of this Section, then such Bank
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Company which may thereafter accrue, if such change in
the sole judgment of such Bank is not otherwise disadvantageous to such Bank.
4.02 ILLEGALITY.
(a) If any Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Loans, then, on notice thereof by the Bank to the Company through
the Agent, any obligation of that Bank to make Offshore Rate Loans shall be
suspended until the Bank notifies the Agent and the Company that the
circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any
Offshore Rate Loan, the Company shall, upon its receipt of notice of such fact
and demand from such Bank (with a copy to the Agent), prepay in full such
Offshore Rate Loans of that Bank then outstanding, together with interest
accrued thereon and amounts required under SECTION 4.04, either on the last day
of the Interest Period thereof, if the Bank may lawfully continue to maintain
such Offshore Rate Loans to such day, or immediately, if the Bank may not
lawfully continue to maintain such Offshore Rate Loan. If the Company is
required to so prepay any Offshore Rate Loan, then concurrently with such
prepayment, the Company may borrow from the affected Bank, in the amount of such
repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore
Rate Loans has been so terminated or suspended, the Company may elect, by giving
notice to the Bank through the Agent that all Loans which would otherwise be
made by the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent under this Section,
the affected Bank shall designate a different Lending Office with respect to its
Offshore Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise disadvantageous to the Bank.
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4.03 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Bank determines that, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance by that Bank with any guideline or request
from any central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to such Bank of agreeing
to make or making, funding or maintaining any Offshore Rate Loans or
participating in Letters of Credit, or, in the case of the Issuing Bank, any
increase in the cost to the Issuing Bank of agreeing to issue, issuing or
maintaining any Letter of Credit or of agreeing to make or making, funding or
maintaining any unpaid drawing under any Letter of Credit, then the Company
shall be liable for, and shall from time to time, upon demand (with a copy of
such demand to be sent to the Agent), pay to the Agent for the account of such
Bank, additional amounts as are sufficient to compensate such Bank for such
increased costs.
(b) If any Bank shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by the Bank (or its Lending Office) or any corporation controlling
the Bank with any Capital Adequacy Regulation, affects or would affect the
amount of capital required or expected to be maintained by the Bank or any
corporation controlling the Bank and (taking into consideration such Bank's or
such corporation's policies with respect to capital adequacy and such Bank's
desired return on capital) determines that the amount of such capital is
increased as a consequence of its Commitment, loans, credits or obligations
under this Agreement, then, upon demand of such Bank to the Company through the
Agent, the Company shall pay to the Bank, from time to time as specified by the
Bank, additional amounts sufficient to compensate the Bank for such increase.
4.04 FUNDING LOSSES. The Company shall reimburse each Bank and hold
each Bank harmless from any loss or expense which the Bank may sustain or incur
as a consequence of:
(i) the failure of the Company to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(ii) the failure of the Company to borrow, continue or convert
a Loan after the Company has given (or is deemed to have given) a
Notice of Borrowing or a Notice of Conversion/Continuation;
(iii) the failure of the Company to make any prepayment in
accordance with any notice delivered under SECTION 2.08;
(iv) the prepayment (including pursuant to SECTION 2.09) or
other payment (including after acceleration thereof) of an Offshore
Rate Loan on a day that is not the last day of the relevant Interest
Period; or
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(v) the automatic conversion under SECTION 2.06 of any
Offshore Rate Loan to a Base Rate Loan on a day that is not the last
day of the relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Company to the Banks under this Section and
under SECTION 4.03(A), each Offshore Rate Loan made by a Bank (and each related
reserve, special deposit or similar requirement) shall be conclusively deemed to
have been funded at the LIBOR used in determining the Offshore Rate for such
Offshore Rate Loan by a matching deposit or other borrowing in the interbank
eurodollar market for a comparable amount and for a comparable period, whether
or not such Offshore Rate Loan is in fact so funded.
4.05 INABILITY TO DETERMINE RATES. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the Offshore
Rate for any requested Interest Period with respect to a proposed Offshore Rate
Loan, or that the Offshore Rate applicable pursuant to SECTION 2.11(A) for any
requested Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to the Banks of funding such Loan, the
Agent will promptly so notify the Company and each Bank. Thereafter, the
obligation of the Banks to make or maintain Offshore Rate Loans hereunder shall
be suspended until the Agent revokes such notice in writing. Upon receipt of
such notice, the Company may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the Company does not revoke
such Notice, the Banks shall make, convert or continue the Loans, as proposed by
the Company, in the amount specified in the applicable notice submitted by the
Company, but such Loans shall be made, converted or continued as Base Rate Loans
instead of Offshore Rate Loans.
4.06 RESERVES ON OFFSHORE RATE LOANS. The Company shall pay to each
Bank, as long as such Bank shall be required under regulations of the FRB to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), additional costs on the unpaid principal amount of each Offshore
Rate Loan equal to the actual costs of such reserves allocated to such Loan by
the Bank (as determined by the Bank in good faith, which determination shall be
conclusive), payable on each date on which interest is payable on such Loan,
provided the Company shall have received at least 15 days' prior written notice
(with a copy to the Agent) of such additional interest from the Bank. If a Bank
fails to give notice 15 days prior to the relevant Interest Payment Date, such
additional interest shall be payable 15 days from receipt of such notice.
4.07 CERTIFICATES OF BANKS. Any Bank claiming reimbursement or
compensation under this ARTICLE IV shall deliver to the Company (with a copy to
the Agent) a certificate setting forth in reasonable detail the amount payable
to the Bank hereunder and such certificate shall be conclusive and binding on
the Company in the absence of manifest error.
4.08 SURVIVAL. The agreements and obligations of the Company in this
ARTICLE IV shall survive the payment of all other Obligations.
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ARTICLE V
CONDITIONS PRECEDENT
--------------------
5.01 CONDITIONS OF INITIAL CREDIT EXTENSIONS. The obligation of each
Bank to make its initial Credit Extension hereunder is subject to the condition
that the Agent shall have received on or before the Closing Date all of the
following, in form and substance satisfactory to the Agent and each Bank, and in
sufficient copies for each Bank:
(a) CREDIT AGREEMENT AND NOTES. The Effective Date shall have
occurred and there shall have been delivered to the Agent for the account of
each Bank the appropriate Note or Notes executed by the Company in the amount,
maturity and as otherwise provided herein.
(b) RESOLUTIONS; INCUMBENCY. On or prior to the Effective
Date, with respect to the Company, and the Closing Date, with respect to each
Subsidiary that is a party to a Loan Document:
(i) copies of the resolutions of the board of
directors of the Company and each Subsidiary that may become party to a
Loan Document authorizing the transactions contemplated hereby,
certified by the Secretary or an Assistant Secretary of such Person;
and
(ii) a certificate of the Secretary or Assistant
Secretary of the Company, and each Subsidiary that may become party to
a Loan Document certifying the names and true signatures of the
officers of the Company or such Subsidiary authorized to execute,
deliver and perform, as applicable, this Agreement, and all other Loan
Documents to be delivered by it hereunder;
(c) ORGANIZATION DOCUMENTS; GOOD STANDING. Each of the
following documents on or prior to the Effective Date, with respect to the
Company, and the Closing Date, with respect to each Subsidiary that is a party
to a Loan Document:
(i) copies of the articles or certificate of
incorporation, the bylaws and board of directors resolutions of the
Company and each Subsidiary as then in effect, certified by the
Secretary or Assistant Secretary of the Company or such Subsidiary;
(ii) a good standing certificate for the Company and
each Subsidiary party to any Loan Document from the Secretary of State
(or similar, applicable Governmental Authority) of its state of
incorporation and each state where the Company or such Subsidiary is
qualified to do business as a foreign corporation as of a recent date,
together with a bring-down certificate by facsimile; and
(iii) unless and to the extent otherwise agreed by
the Agent, the Agent shall have received evidence of the amendment to
the certificate of incorporation (or equivalent organizational
document) and by-laws of each Foreign Subsidiary whose capital stock is
to
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be pledged pursuant to the Pledge Agreement permitting the granting
of a security interest in such Foreign Subsidiary's capital stock
pursuant to the Pledge Agreement, in form and substance satisfactory to
the Agent and local counsel to the Agent.
(d) LEGAL OPINIONS. On or prior to the Effective Date, an
opinion addressed to the Agent, the Collateral Agent and the Banks (i) of
Benesch, Friedlander, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., counsel to the Company,
substantially in the form of EXHIBIT D-1, (ii) from ▇▇▇▇▇▇▇▇ & ▇▇▇▇, special
Illinois counsel to the Company, substantially in the form of EXHIBIT D-2, and
(iii) from local counsel in such jurisdictions as the Agent may request, such
opinion to be in form and substance acceptable to the Agent.
(e) PAYMENT OF FEES. Evidence of payment by the Company of all
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Closing Date, together with Attorney Costs of BofA to the extent invoiced
prior to or on the Closing Date, plus such additional amounts of Attorney Costs
as shall constitute BofA's reasonable estimate of Attorney Costs incurred or to
be incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude final settling of accounts between the Company and
BofA); including any such costs, fees and expenses arising under or referenced
in SECTIONS 2.12 and 10.04;
(f) CERTIFICATE. On or prior to the Effective Date, a
certificate signed by a Responsible Officer, dated as of the Effective Date:
(i) stating that the representations and warranties
contained in ARTICLE VI are true and correct on and as of such date, as
though made on and as of such date;
(ii) stating that no Default or Event of Default
exists or would result from a Credit Extension;
(iii) stating that there has occurred since September
30, 1997, no event or circumstance that has resulted or could
reasonably be expected to result in a Material Adverse Effect; and
(iv) certifying the names and true signatures of the
officers of the Company and each Subsidiary authorized to execute,
deliver and perform, as applicable, this Agreement and the other Loan
Documents to which it is a party, and all other Loan Documents to be
delivered hereunder.
(g) BRING DOWN CERTIFICATE. A certificate signed by a
Responsible Officer, in form and substance satisfactory to the Agent, dated as
of the Closing Date, certifying any changes to the Schedules occurring after the
Effective Date.
(h) COLLATERAL DOCUMENTS. As of the Closing Date, the
Collateral Documents, executed by the Company and each Subsidiary party to such
Collateral Document, in appropriate form for recording, where necessary,
together with:
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(i) acknowledgment copies of all UCC-l financing
statements filed, registered or recorded to perfect the security
interests of the Collateral Agent for the benefit of the Banks, or
other evidence satisfactory to the Agent that there has been or will be
filed, registered or recorded all financing statements and other
filings, registrations and recordings necessary and advisable to
perfect the Liens of the Collateral Agent for the benefit of the Banks
in accordance with applicable law;
(ii) written advice relating to such Lien and
judgment searches as the Collateral Agent shall have requested of the
Company, and such termination statements or other documents as may be
necessary to confirm that the Collateral is subject to no other Liens
in favor of any Persons (other than Permitted Liens);
(iii) all certificates and instruments representing
the Pledged Collateral, stock transfer powers executed in blank as the
Collateral Agent or the Banks may specify;
(iv) evidence that all other actions necessary or, in
the opinion of the Collateral Agent or the Banks, desirable to perfect
and protect the first priority security interest created by the
Collateral Documents have been taken;
(v) funds sufficient to pay any filing or recording
tax or fee in connection with any and all UCC-1 financing statements;
(vi) evidence that the Collateral Agent has been
named as loss payee under all policies of casualty insurance, and as
additional insured under all policies of liability insurance;
(vii) such consents, estoppels, subordination
agreements and other documents and instruments executed by landlords,
tenants and other Persons party to material contracts relating to any
Collateral as to which the Agent shall be granted a Lien for the
benefit of the Banks, as requested by the Agent or any Bank; and
(viii) evidence that all other actions necessary or,
in the opinion of the Collateral Agent or the Banks, desirable to
perfect and protect the first priority Lien created by the Collateral
Documents, and to enhance the Collateral Agent's ability to preserve
and protect its interests in and access to the Collateral, have been
taken;
(i) SUTCLIFFE ACQUISITION. (a) On or prior to the Effective
Date, the Company shall have delivered to the Agent a fully executed copy of the
purchase agreement between the Company and Sutcliffe with respect to the
Sutcliffe Acquisition, certified as true and correct by a Responsible Officer,
which purchase agreement shall be in form and substance reasonably satisfactory
to the Banks.
(b) On or prior to the Closing Date, the Company shall have
delivered to the Agent (x) all Sutcliffe Acquisition Documents, certified as
true and correct by a Responsible Officer,
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all of which Sutcliffe Acquisition Documents shall be in form and substance
reasonably satisfactory to the Banks and each of the conditions precedent to the
Company's obligations to consummate the Sutcliffe Acquisition shall have been
satisfied (without any waiver thereto not agreed to by the Banks) to the
reasonable satisfaction of the Agent and (y) a certificate executed by a
Responsible Officer stating that there has occurred since March 31, 1998, no
event or circumstance that has resulted or could reasonably be expected to
result in a Material Adverse Effect of the type described in CLAUSE (A) of the
definition thereof with respect to Sutcliffe. The Sutcliffe Acquisition shall
have been consummated in substantial compliance with the terms of the Sutcliffe
Acquisition Documents and all applicable laws.
(j) PRO FORMA BALANCE SHEET. On or prior to the Closing Date,
a pro forma consolidated balance sheet of the Company and its Subsidiaries,
after giving effect to the Sutcliffe Acquisition and the related financing
thereof, together with a Compliance Certificate executed by a Responsible
Officer, demonstrating compliance by the Company with SECTIONS 8.15, 8.16, 8.17,
8.18 and 8.19 as of the Closing Date (after giving effect to the Sutcliffe
Acquisition and the related financing thereof), which pro forma balance sheet
and Compliance Certificate shall be in form and substance reasonably acceptable
to the Agent.
(k) SOLVENCY CERTIFICATE. A written solvency certificate from
the chief financial officer of the Company in form and content satisfactory to
the Banks, dated the Closing Date, with respect to the value, Solvency and other
factual information of, or relating to, as the case may be, Company, after
giving effect to the Borrowing.
(l) APPLICABLE MARGIN CERTIFICATE. On or prior to the Closing
Date, the Company shall have delivered to the Agent a certificate, executed by a
Responsible Officer, delineating the Applicable Margin after giving pro forma
effect to the Loans to be incurred on the Closing Date and the consummation of
the Sutcliffe Acquisition, the form and substance of such certificate to be
reasonably satisfactory to the Agent.
(m) OTHER DOCUMENTS. Such other approvals, opinions, documents
or materials as the Agent or any Bank may request.
5.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each Bank
to make any Loan to be made by it (including its initial Loan) or to continue or
convert any Loan under SECTION 2.06 and the obligation of the Issuing Bank to
Issue any Letter of Credit (including the initial Letter of Credit) is subject
to the satisfaction of the following conditions precedent on the relevant
Borrowing Date or Issuance Date:
(a) NOTICE, APPLICATION. The Agent shall have received (with,
in the case of the initial Loans only, a copy for each Bank) a Notice of
Borrowing (or equivalent notice pursuant to SECTION 2.05 with respect to Swing
Line Loans) or, in the case of any Issuance of any Letter of Credit, the Issuing
Bank and the Agent shall have received an L/C Application or L/C Amendment
Application, as required under SECTION 3.02;
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(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties in ARTICLE VI shall be true and correct on and as
of such Borrowing Date, Special Funding Date or Issuance Date with the same
effect as if made on and as of such Borrowing Date, Special Funding Date or
Issuance Date (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be true and correct
as of such earlier date); and
(c) NO EXISTING DEFAULT. No Default or Event of Default shall
exist or shall result from such Borrowing or continuation or conversion or
Issuance.
Each Notice of Borrowing, L/C Application or L/C Amendment Application submitted
by the Company hereunder shall constitute a representation and warranty by the
Company hereunder, as of the date of each such notice and as of each Borrowing
Date, Special Funding Date or Issuance Date, as applicable, that the conditions
in this SECTION 5.02 are satisfied.
5.03 CONDITIONS TO SPECIAL FUNDING LOANS. The obligation of each Bank
to make any Special Funding Loan to be made by it is subject to the following
conditions precedent on the Special Funding Date:
(a) EFFECTIVE DATE. The Effective Date shall have occurred.
(b) SPECIAL FUNDING PROCEDURE LETTER. On or prior to the
Special Funding Date, each Bank shall have executed and delivered the Special
Funding Procedure Letter to the Agent.
(c) SPECIAL FUNDING ACCOUNT. On or prior to the Special
Funding Date, the Company shall have established the Special Funding Account,
and shall have granted to the Collateral Agent, for the benefit of itself and
the Banks, a first priority security interest in the Special Funding Account and
any and all funds from time to time on deposit therein. On or prior to the
Special Funding Date, the Collateral Agent shall have received evidence that all
actions necessary or, in the opinion of the Collateral Agent, desirable to
perfect and protect a first priority Lien in the Special Funding Account and on
all funds on deposit therein have been taken.
(d) NO LITIGATION. There shall exist on the Special Funding
Date no judgment, order, injunction or other restraint issued or filed with
respect to (i) any Sutcliffe Acquisition Document or the consummation of the
Sutcliffe Acquisition, (ii) the Special Funding Account or any funds on deposit
therein, (iii) the making of Special Funding Loans or (iv) this Agreement or any
other Loan Document.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
------------------------------
The Company represents and warrants to the Agent and each Bank that:
6.01 CORPORATE EXISTENCE AND POWER. The Company and each of its
Subsidiaries:
(a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and to execute, deliver, and perform its obligations under the Loan Documents;
(c) is duly qualified as a foreign corporation and is licensed
and in good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification or license; and
(d) is in compliance with all Requirements of Law; except, in
each case referred to in clause (c) or clause (d), to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
6.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery
and performance by the Company and its Subsidiaries of this Agreement and each
other Loan Document to which such Person is party, have been duly authorized by
all necessary corporate action, and do not and will not:
(a) contravene the terms of any of such Person's Organization
Documents;
(b) conflict with or result in any breach or contravention of,
or the creation of any Lien under, any document evidencing any Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its property is
subject; or
(c) violate any Requirement of Law.
6.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company or
any of its Subsidiaries of the Agreement or any other Loan Document.
6.04 BINDING EFFECT. This Agreement and each other Loan Document to
which the Company or any of its Subsidiaries is a party constitute the legal,
valid and binding obligations of the
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Company and any of its Subsidiaries to the extent it is a party thereto,
enforceable against such Person in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
6.05 LITIGATION. There are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of the Company, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against the Company, or its Subsidiaries or any of their respective
properties which: (a) purport to affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby or thereby;
or (b) if determined adversely to the Company or its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect. No injunction, writ,
temporary restraining order or any order of any nature has been issued by any
court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other Loan Document,
or directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
6.06 NO DEFAULT. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Company. As of the Closing Date,
neither the Company nor any Subsidiary is in default under or with respect to
any Contractual Obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a Material Adverse
Effect, or that would, if such default had occurred after the Closing Date,
create an Event of Default under SECTION 9.01(E).
6.07 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and to the best knowledge
of the Company, nothing has occurred which would cause the loss of such
qualification. The Company and each ERISA Affiliate has made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected
to occur; (ii) neither the Company nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability to the PBGC under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iii) neither the Company nor any ERISA Affiliate
has incurred, or reasonably expects to incur, any liability (and no event has
occurred
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which, with the giving of notice under Section 4219 of ERISA, would result in
such liability) under Section 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (iv) neither the Company nor any ERISA Affiliate has
engaged in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA.
6.08 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans are
to be used solely for the purposes set forth in and permitted by Section 7.12
and Section 8.07. Neither the Company nor any Subsidiary is generally engaged in
the business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.
6.09 TITLE TO PROPERTIES. The Company and each Subsidiary have good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. As of the Closing Date, the
property of the Company and its Subsidiaries is subject to no Liens, other than
Permitted Liens.
6.10 TAXES. The Company and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Company or
any Subsidiary that would, if made, have a Material Adverse Effect.
6.11 FINANCIAL CONDITION. (a) The (x) audited consolidated financial
statements of the Company and its Subsidiaries dated September 30, 1997 and (y)
the unaudited consolidated financial statements of the Company and its
Subsidiaries dated, March 31, 1998, in each case including the related
consolidated statements of income or operations, shareholders' equity and cash
flows for the period ended on that date:
(i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein (subject to ordinary, good faith year
end audit adjustments);
(ii) fairly present the financial condition of the
Company and its Subsidiaries as of the date thereof and results of
operations for the period covered thereby; and
(iii) except as specifically disclosed in SCHEDULE
6.11, show all material indebtedness and other liabilities, direct or
contingent, of the Company and its consolidated Subsidiaries as of the
date thereof, including liabilities for taxes, material commitments and
Contingent Obligations.
(b) Since September 30, 1997, there has been no Material
Adverse Effect.
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6.12 ENVIRONMENTAL MATTERS.
(a) The on-going operations of the Company and each of its
Subsidiaries comply in all respects with all Environmental Laws, except such
non-compliance which would not (if enforced in accordance with applicable law)
result in liability in excess of $1,000,000 in the aggregate.
(b) The Company and each of its Subsidiaries have obtained all
licenses, permits, authorizations and registrations required under any
Environmental Law ("Environmental Permits") and necessary for their respective
ordinary course operations, all such Environmental Permits are in good standing,
and the Company and each of its Subsidiaries are in compliance with all material
terms and conditions of such Environmental Permits.
(c) None of the Company, any of its Subsidiaries or any of
their respective present Property or operations, is subject to any outstanding
written order from or agreement with any Governmental Authority, nor subject to
any judicial or docketed administrative proceeding, respecting any Environmental
Law, Environmental Claim or Hazardous Material.
(d) There are no Hazardous Materials or other conditions or
circumstances existing with respect to any Property, or arising from operations
prior to the Closing Date, of the Company or any of its Subsidiaries that would
reasonably be expected to give rise to Environmental Claims with a potential
liability of the Company and its Subsidiaries in excess of $1,000,000 in the
aggregate for any such condition, circumstance or Property. In addition, (i)
neither the Company nor any of its Subsidiaries has any underground storage
tanks (x) that are not properly registered or permitted under applicable
Environmental Laws, or (y) that are leaking or disposing of Hazardous Materials
off-site, and (ii) the Company and its Subsidiaries have notified all of their
employees of the existence, if any, of any health hazard arising from the
conditions of their employment and have met all notification requirements under
Title III of CERCLA and all other Environmental Laws.
6.13 COLLATERAL DOCUMENTS.
(a) The provisions of each of the Collateral Documents are
effective to create in favor of the Collateral Agent for the benefit of the
Banks, a legal, valid and enforceable first priority security interest in all
right, title and interest of the Company and its Subsidiaries in the collateral
described therein; and financing statements have been delivered to the
Collateral Agent on the Closing Date to be filed in the offices in all of the
jurisdictions listed in the schedule to the Security Agreement, and each
Intellectual Property Assignment has been delivered to the Collateral Agent on
the Closing Date to be filed in the U.S. Patent and Trademark Office and the
U.S. Copyright Office.
(b) The provisions of each Pledge Agreement are effective to
create, in favor of the Collateral Agent for the benefit of the Banks, a legal,
valid and enforceable security interest in all of the collateral described
therein; and the Pledged Collateral was delivered to the Collateral Agent or its
nominee in accordance with the terms thereof. The Lien of each
Pledge Agreement
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constitutes a perfected, first priority security interest in all right, title
and interest of the Company or such Subsidiary, as the case may be, in the
Collateral described therein, prior and superior to all other Liens and
interests.
(c) All representations and warranties of the Company and any
of its Subsidiaries party thereto contained in the Collateral Documents are true
and correct.
6.14 REGULATED ENTITIES. None of the Company nor any Subsidiary, is an
"Investment Company" within the meaning of the Investment Company Act of 1940.
The Company is not subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, any
state public utilities code, or any other Federal or state statute or regulation
limiting its ability to incur Indebtedness.
6.15 NO BURDENSOME RESTRICTIONS. Neither the Company nor any Subsidiary
is a party to or bound by any Contractual Obligation, or subject to any
restriction in any Organization Document, or any Requirement of Law, which could
reasonably be expected to have a Material Adverse Effect.
6.16 SOLVENCY. The Company and each of its Subsidiaries are Solvent.
6.17 LABOR RELATIONS. There are no strikes, lockouts or other labor
disputes against the Company or any of its Subsidiaries, or, to the best of the
Company's knowledge, threatened against or affecting the Company or any of its
Subsidiaries, and no significant unfair labor practice complaint is pending
against the Company or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against any of them before any Governmental Authority.
6.18 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC. The Company or
its Subsidiaries own or are licensed or otherwise have the right to use all of
the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of the Company, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Company or any
Subsidiary infringes upon any rights held by any other Person. No claim or
litigation regarding any of the foregoing is pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Company,
proposed, which, in either case, could reasonably be expected to have a Material
Adverse Effect.
6.19 SUBSIDIARIES. As of the Closing Date and after giving effect to
the Sutcliffe Acquisition, the Company has no Subsidiaries other than those
specifically disclosed in part (a) of SCHEDULE 6.19 hereto and has no equity
investments in any other corporation or entity other than those specifically
disclosed in part (b) of SCHEDULE 6.19.
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6.20 BROKER'S; TRANSACTION FEES. Neither the Company nor any of its
Subsidiaries has any obligation to any Person in respect of any finder's,
broker's or investment banker's fee in connection with the transactions
contemplated hereby.
6.21 INSURANCE. The properties of the Company and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Company, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Company or such Subsidiary operates.
6.22 SWAP OBLIGATIONS. Neither the Company nor any of its Subsidiaries
has incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations. The Company has undertaken its own independent
assessment of its consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks associated with
such matters and has not relied on any swap counterparty or any Affiliate of any
swap counterparty in determining whether to enter into any Swap Contract.
6.23 FULL DISCLOSURE. None of the representations or warranties made by
the Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Company or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Company to the Banks prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light
of the circumstances under which they are made, not misleading as of the time
when made or delivered.
6.24 SUBORDINATION PROVISIONS. The subordination provisions contained
in all notes, debentures and other instruments entered into or issued in respect
of Subordinated Debt and Permitted Seller Debt are enforceable against the
issuer of the respective security and the holders thereof, and the Loans and all
other Obligations and all Permitted Foreign Subsidiary Indebtedness entitled to
the benefits of any Loan Document and any related guaranty are within the
definitions of "Senior Indebtedness", or other comparable definition, included
in such provisions.
6.25 YEAR 2000 COMPLIANCE. The Company acknowledges that it has
received a copy of the brochure prepared by the Agent entitled "On Turning 00"
and that it has reviewed this material and is aware of the possible impact of
the year 2000 problem (that is, the risk that computer applications may not be
able to properly perform date sensitive functions after December 31, 1999) upon
its computer applications and ongoing business. The Company represents that any
corrective action necessary will be taken and that the Company believes the year
2000 problem will not result in a Material Adverse Effect.
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ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
On and after the Effective Date, so long as any Bank shall have any
Commitment hereunder, or any Loan or other Obligation shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, unless the
Majority Banks waive compliance in writing:
7.01 FINANCIAL STATEMENTS. The Company shall deliver to the Agent, in
form and detail satisfactory to the Agent and the Majority Banks, with
sufficient copies for the Agent and each Bank:
(a) as soon as available, but not later than 90 days after the
end of each fiscal year, a copy of the audited consolidated and consolidating
balance sheet of the Company and its Subsidiaries as at the end of such year and
the related consolidated and consolidating statements of income or operations,
shareholders' equity and cash flows for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, and accompanied by
the opinion of Ernst & Young LLP or another nationally-recognized independent
public accounting firm ("INDEPENDENT AUDITOR") which report shall state that
such consolidated financial statements present fairly the financial position for
the periods indicated in conformity with GAAP applied on a basis consistent with
prior years. Such opinion shall not be qualified or limited because of a
restricted or limited examination by the Independent Auditor of any material
portion of the Company's or any Subsidiary's records; and
(b) as soon as available, but not later than 45 days after the
end of each of the first three fiscal quarters of each fiscal year, a copy of
the unaudited consolidated and consolidating balance sheet of the Company and
its Subsidiaries as of the end of such quarter and the related consolidated and
consolidating statements of income, shareholders' equity and cash flows for the
period commencing on the first day and ending on the last day of such quarter,
and certified by a Responsible Officer as fairly presenting, in accordance with
GAAP (subject to ordinary, good faith year-end audit adjustments), the financial
position and the results of operations of the Company and the Subsidiaries.
7.02 CERTIFICATES; OTHER INFORMATION. The Company shall furnish to the
Agent, with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements
referred to in SECTION 7.01(A), a certificate of the Independent Auditor stating
that in making the examination necessary therefor no knowledge was obtained of
any Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in SECTIONS 7.01(A) and (B), a Compliance Certificate executed by a
Responsible Officer;
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(c) promptly, copies of all financial statements and reports
that the Company sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports (including Forms 10K, 10Q
and 8K) that the Company or any Subsidiary may make to, or file with, the SEC;
(d) as soon as available, but in any event not later than the
30th day prior to the end of each fiscal year, a copy of the plan and forecast
(including a projected consolidated and consolidating balance sheet, income
statement and cash flow statement) of the Company and its Subsidiaries for the
next fiscal year;
(e) within 30 days after each anniversary of the Closing Date,
new insurance certificates satisfying the requirements of SECTION 5.01(H)(VI);
and
(f) promptly, such additional information regarding the
business, financial or corporate affairs of the Company or any Subsidiary as the
Agent, at the request of any Bank, may from time to time request.
7.03 NOTICES. The Company shall promptly notify the Agent and each
Bank:
(a) of the occurrence of any Default or Event of Default;
(b) of any matter that has resulted or may reasonably be
expected to result in a Material Adverse Effect, including (i) breach or
non-performance of, or any default under, a Contractual Obligation of the
Company or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Company or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Company or any
Subsidiary; including pursuant to any applicable Environmental Laws;
(c) of the occurrence of any of the following events affecting
the Company or any ERISA Affiliate (but in no event more than 10 days after such
event), and deliver to the Agent and each Bank a copy of any notice with respect
to such event that is filed with a Governmental Authority and any notice
delivered by a Governmental Authority to the Company or any ERISA Affiliate with
respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the Code by the
Company or any ERISA Affiliate; or
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(iv) the adoption of any amendment to a Plan subject
to Section 412 of the Code, if such amendment results in a material
increase in contributions or Unfunded Pension Liability.
(d) of any material change in accounting policies or financial
reporting practices by the Company or any of its consolidated Subsidiaries; and
(e) upon the request from time to time of the Agent, the Swap
Termination Values, together with a description of the method by which such
values were determined, relating to any then-outstanding Swap Contracts to which
the Company or any of its Subsidiaries is party.
Each notice under this Section shall be accompanied by a
written statement by a Responsible Officer setting forth details of the
occurrence referred to therein, and stating what action the Company or any
affected Subsidiary proposes to take with respect thereto and at what time. Each
notice under SECTION 7.03(A) shall describe with particularity any and all
clauses or provisions of this Agreement or other Loan Document that have been
(or foreseeably will be) breached or violated.
7.04 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Company shall, and
shall cause each Subsidiary to:
(a) preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state or
jurisdiction of incorporation;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
in connection with transactions permitted by SECTION 8.03 and sales of assets
permitted by SECTION 8.02;
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.
7.05 MAINTENANCE OF PROPERTY. The Company shall maintain, and shall
cause each Subsidiary to maintain, and preserve all its property which is used
or useful in its business in good working order and condition, ordinary wear and
tear excepted and make all necessary repairs thereto and renewals and
replacements thereof.
7.06 INSURANCE. The Company shall maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged
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in the same or similar business, of such types and in such amounts as are
customarily carried under similar circumstances by such other Persons.
7.07 PAYMENT OF OBLIGATIONS. The Company shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable, all
their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges
or levies upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a
Lien (other than a Permitted Lien) upon its property; and
(c) all indebtedness, as and when due and payable, but subject
to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.
7.08 COMPLIANCE WITH LAWS. The Company shall comply, and shall cause
each Subsidiary to comply, in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
7.09 COMPLIANCE WITH ERISA. The Company shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification unless such Plan is terminated; and (c) make
all required contributions to any Plan subject to Section 412 of the Code.
7.10 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Company and such Subsidiary. The
Company shall permit, and shall cause each Subsidiary to permit, representatives
and independent contractors of the Agent or any Bank to visit and inspect any of
their respective properties, to examine their respective corporate, financial
and operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, all at the expense of
the Company and at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Company; PROVIDED, HOWEVER, when an Event of Default exists the Agent or any
Bank may do any of the foregoing at the expense of the Company at any time
during normal business hours and without advance notice.
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7.11 ENVIRONMENTAL LAWS. The Company shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws.
7.12 USE OF PROCEEDS. The Company shall use the proceeds of the
Revolving Loans and Swing Line Loans for working capital and other general
corporate purposes, other than for the purpose of financing a hostile
Acquisition, the proceeds of Revolving Loans and Term Loans to consummate the
Sutcliffe Acquisition, for the refinancing of certain Indebtedness in connection
with the Sutcliffe Acquisition and the payment of fees and expenses relating
thereto, and the proceeds of Special Funding Loans for the purpose of funding
the Special Funding Account, in each case not in contravention of any
Requirement of Law or of any Loan Document.
7.13 SOLVENCY. The Company shall at all times be, and shall cause each
of its Subsidiaries to be, Solvent.
7.14 FURTHER ASSURANCES.
(a) The Company shall ensure that all written information,
exhibits and reports furnished to the Agent or the Banks do not and will not
contain any untrue statement of a material fact and do not and will not omit to
state any material fact or any fact necessary to make the statements contained
therein not misleading in light of the circumstances in which made, and will
promptly disclose to the Agent and the Banks and correct any defect or error
that may be discovered therein or in any Loan Document or in the execution,
acknowledgment or recordation thereof.
(b) Promptly upon request the Agent or the Majority Banks, the
Company shall (and shall cause any of its Subsidiaries to) do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, assignments, estoppel certificates, financing statements
and continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments the Agent or such
Banks, as the case may be, may reasonably require from time to time in order (i)
to carry out more effectively the purposes of this Agreement or any other Loan
Document, (ii) to subject any of the properties, rights or interests covered by
any of the Collateral Documents to the Liens created by any of the Collateral
Documents, (iii) to perfect and maintain the validity, effectiveness and
priority of any of the Collateral Documents and the Liens intended to be created
thereby, and (iv) to better assure, convey, grant, assign, transfer, preserve,
protect and confirm to the Collateral Agent and Banks the rights granted or now
or hereafter intended to be granted to the Collateral Agent and the Banks under
any Loan Document or under any other document executed in connection therewith.
7.15 FOREIGN SUBSIDIARIES SECURITY. If following a change in the
relevant sections of the Code, the regulations and rules promulgated thereunder
and any rulings issued thereunder and at the request of the Agent or the
Majority Banks, counsel for the Company acceptable to the Agent and the Majority
Banks does not within 30 days after such request deliver evidence satisfactory
to the Agent, with respect to any Foreign Subsidiary which is a Wholly-Owned
Subsidiary of the Company, that (i) a pledge of 66-2/3% or more of the total
combined voting power of all classes of
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capital stock of such Foreign Subsidiary entitled to vote, (ii) the entering
into by such Foreign Subsidiary of a guaranty in substantially the form of the
Guaranty or (iii) the entering into by such Foreign Subsidiary of a security
agreement in substantially the form of the Security Agreement, in either case
would cause the earnings of such Foreign Subsidiary to be treated as a deemed
dividend to such Foreign Subsidiary's United States parent or would otherwise
violate a material applicable law, then in the case of a failure to deliver the
evidence described in clause (i) above, that portion of such Foreign
Subsidiary's outstanding capital stock not theretofore pledged pursuant to the
Pledge Agreement shall be pledged to the Collateral Agent for the benefit of the
Banks pursuant to the Pledge Agreement (or another pledge agreement in
substantially similar form, if needed), (ii) in the case of a failure to deliver
the evidence described in clause (ii) above, such Foreign Subsidiary shall
execute and deliver a guaranty of the Obligations of the Company under the Loan
Documents and (iii) in the case of a failure to deliver the evidence described
in clause (iii) above, such Foreign Subsidiary shall execute and deliver a
security agreement granting the Collateral Agent for the benefit of the Banks a
security interest in all of such Foreign Subsidiary's assets, in each case with
all documents delivered pursuant to this SECTION 7.15 to be in form and
substance satisfactory to the Agent and the Majority Banks.
ARTICLE VIII
NEGATIVE COVENANTS
------------------
On and after the Closing Date, so long as any Bank shall have any
Commitment hereunder, or any Loan or other Obligation shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, unless the
Majority Banks waive compliance in writing:
8.01 LIMITATION ON LIENS. The Company shall not, and shall not suffer
or permit any Subsidiary to, directly or indirectly, make, create, incur, assume
or suffer to exist any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the following ("PERMITTED
LIENS"):
(a) any Lien existing on property of the Company or any
Subsidiary on the Effective Date and set forth in SCHEDULE 8.01 (as such
Schedule is updated pursuant to the bring down certificate of a Responsible
Officer pursuant to SECTION 5.01(G) in form and substance acceptable to the
Banks) securing Indebtedness outstanding on such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental
charges which are not delinquent or remain payable without penalty, or to the
extent that non-payment thereof is permitted by Section 7.07, provided that no
notice of lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary course
of business which are not delinquent or remain
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payable without penalty or which are being contested in good faith and by
appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation;
(f) Liens on the property of the Company or its Subsidiary
securing (i) the non-delinquent performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, (ii) contingent obligations
on surety and appeal bonds, and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business, provided all
such Liens in the aggregate would not (even if enforced) cause a Material
Adverse Effect;
(g) Liens consisting of judgment or judicial attachment liens,
provided that the enforcement of such Liens is effectively stayed and all such
liens in the aggregate at any time outstanding for the Company and its
Subsidiaries do not exceed $1,000,000;
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
(i) Liens on assets of corporations which become Subsidiaries
after the date of this Agreement, PROVIDED, HOWEVER, that such Liens existed at
the time the respective corporations became Subsidiaries and were not created in
anticipation thereof and do not in the aggregate at any time outstanding exceed
$1,000,000;
(j) purchase money security interests on any property acquired
or held by the Company or its Subsidiaries in the ordinary course of business,
securing Indebtedness incurred or assumed for the purpose of financing all or
any part of the cost of acquiring such property; PROVIDED THAT (i) any such Lien
attaches to such property concurrently with or within 20 days after the
acquisition thereof, (ii) such Lien attaches solely to the property so acquired
in such transaction and (iii) the principal amount of the Indebtedness secured
by any and all such purchase money security interests shall not at any time
exceed, together with Indebtedness permitted under Section 8.05(D), $1,000,000;
(k) Liens securing Capital Lease Obligations on assets subject
to such Capital Leases, provided that such Capital Leases are otherwise
permitted under SECTION 8.10(C); and
(l) Liens arising solely by virtue of any statutory or common
law provision relating to banker's liens, rights of set-off or similar rights
and remedies as to deposit accounts or other funds maintained with a creditor
depository institution; PROVIDED THAT (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the FRB, and (ii) such deposit
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account is not intended by the Company or any Subsidiary to provide collateral
to the depository institution.
8.02 DISPOSITION OF ASSETS. The Company shall not, and shall not suffer
or permit any Subsidiary to, directly or indirectly, sell, assign, lease,
convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except:
(a) dispositions of inventory, or used, worn-out or surplus
equipment (including, without limitation, demonstration or pilot plants), all in
the ordinary course of business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment; and
(c) dispositions of inventory and/or equipment by (i) the
Company or any Guarantor to the Company or any Guarantor pursuant to reasonable
business requirements and (ii) other assets of the Company or any Subsidiary to
any Foreign Subsidiary in an aggregate amount for all such dispositions after
the date of this Agreement not to exceed $1,000,000.
8.03 CONSOLIDATIONS AND MERGERS. The Company shall not, and shall not
suffer or permit any Subsidiary to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions all or substantially all of its assets whether now owned
or hereafter acquired) to or in favor of any Person, except:
(a) any Domestic Subsidiary may merge with the Company,
provided that the
Company shall be the continuing or surviving corporation, or with any one or
more Subsidiaries, provided that if any transaction shall be between a Domestic
Subsidiary and a Wholly-Owned Domestic Subsidiary, the Wholly-Owned Domestic
Subsidiary shall be the continuing or surviving corporation;
(b) any Domestic Subsidiary may sell all or substantially all
of its assets (upon voluntary liquidation or otherwise), to the Company or
another Wholly-Owned Domestic Subsidiary;
(c) any Foreign Subsidiary may be merged with and into, or be
dissolved or liquidated into, or transfer any of its assets to , any Foreign
Subsidiary so long as in each case at least 65% of the total combined voting
power of all classes of capital stock of all first-tier Foreign Subsidiaries are
pledged pursuant to the Pledge Agreement.
(d) the assets of any Foreign Subsidiary may be transferred to
the Company or any of its Domestic Subsidiaries, and any Foreign Subsidiary may
be merged with and into, or be dissolved or liquidated into, the Company or any
of its Domestic Subsidiaries so long as the Company or such Domestic Subsidiary
is the surviving corporation of any such merger, dissolution or liquidation.
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8.04 LOANS AND INVESTMENTS. The Company shall not purchase or acquire,
or suffer or permit any Subsidiary to purchase or acquire, or make any
commitment therefor, any capital stock, equity interest, or any obligations or
other securities of, or any interest in, any Person, or make or commit to make
any Acquisitions, or make or commit to make any advance, loan, extension of
credit or capital contribution to or any other investment in, any Person
including any Affiliate of the Company (together, "INVESTMENTS"), except for:
(a) Investments held by the Company or Subsidiary in the form
of Cash Equivalents;
(b) extensions of credit in the nature of accounts receivable
or notes receivable arising from the sale or lease of goods or services in the
ordinary course of business;
(c) extensions of credit by (i) the Company to any Guarantor
or by any Guarantor to another Guarantor or the Company and (ii) any
Wholly-Owned Foreign Subsidiary to another Wholly-Owned Foreign Subsidiary,
PROVIDED, that any extension of credit pursuant to this clause (c) (other than
as described in subclause (ii)) shall be evidenced by a promissory note, in form
and substance acceptable to the Agent, and such promissory note shall be
delivered to the Collateral Agent pursuant to the relevant Pledge Agreement;
(d) Investments, subject to SECTION 8.09, incurred in order to
consummate Acquisitions (other than the Sutcliffe Acquisition) otherwise
permitted herein, PROVIDED that (i) any such Acquisition the aggregate
consideration of which exceeds $7,500,000 shall not be permitted without the
prior written approval of the Majority Banks, (ii) no Default or Event of
Default is in existence both before and after giving effect to such Acquisition,
(iii) such Acquisition is undertaken in accordance with all applicable
Requirements of Law, and (iv) the prior, effective written consent or approval
to such Acquisition of the board of directors or equivalent governing body of
the acquiree is obtained;
(e) Investments constituting Permitted Swap Obligations or
payments or advances under Swap Contracts relating to Permitted Swap
Obligations;
(f) Investments existing as of the Effective Date and listed
on SCHEDULE 8.04 (as such Schedule is updated pursuant to the bring down
certificate of a Responsible Officer pursuant to SECTION 5.01(G) in form and
substance acceptable to the Banks);
(g) Investments (other than pursuant to SECTION 8.04(C)) made
by the Company after the date of this Agreement in any Guarantor;
(h) the Sutcliffe Acquisition, subject to compliance with all
conditions set forth in SECTIONS 5.01 and 5.02;
(i) Permitted Seller Debt; and
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(j) Permitted Earn-Out Debt.
8.05 LIMITATION ON INDEBTEDNESS. The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations
permitted pursuant to SECTION 8.08;
(c) Indebtedness existing on the Effective Date and set forth
in SCHEDULE 8.05, (as such Schedule is updated pursuant to the bring down
certificate of a Responsible Officer pursuant to SECTION 5.01(G) in form and
substance acceptable to the Banks);
(d) other Indebtedness in an aggregate amount outstanding not
to exceed $2,000,000 (including Indebtedness secured by Liens permitted by
SECTION 8.01(I), and (J));
(e) Indebtedness incurred in connection with leases permitted
pursuant to SECTION 8.10;
(f) unsecured Indebtedness (or commitments relating thereto)
of any Foreign Subsidiary, PROVIDED that the aggregate amount of all such
Indebtedness outstanding shall not exceed the Dollar equivalent of $15,000,000
at any time (any such Indebtedness, "PERMITTED FOREIGN SUBSIDIARY
INDEBTEDNESS");
(g) subordinated Indebtedness of the Company in an aggregate
amount outstanding not to exceed $10,000,000, such Indebtedness to be on terms
and conditions satisfactory to the Agent;
(h) Indebtedness permitted to be incurred pursuant to SECTION
8.04(C);
(i) unsecured Indebtedness under seller notes containing terms
satisfactory to the Agent and fully subordinated to the Loans and the other
Obligations on terms satisfactory to the Agent (any such Indebtedness,
"PERMITTED SELLER DEBT"); and
(j) Permitted Earn-Out Debt.
8.06 TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall not
suffer or permit any Subsidiary to, enter into any transaction with any
Affiliate of the Company, except upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of the Company or such
Subsidiary.
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8.07 USE OF PROCEEDS. The Company shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds or any Letter of
Credit, directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to
repay or otherwise refinance indebtedness of the Company or others incurred to
purchase or carry Margin Stock, (iii) to extend credit for the purpose of
purchasing or carrying any Margin Stock, or (iv) to acquire any security in any
transaction that is subject to Section 13 or 14 of the Exchange Act.
8.08 CONTINGENT OBLIGATIONS. The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary
course of business;
(b) Permitted Swap Obligations;
(c) Contingent Obligations of the Company and its Subsidiaries
existing as of the Effective Date and listed in SCHEDULE 8.08 (as such Schedule
is updated pursuant to the bring down certificate of a Responsible Officer
pursuant to SECTION 5.01(G) in form and substance acceptable to the Banks);
(d) Contingent Obligations of the Company with respect to
Permitted Foreign Subsidiary Indebtedness;
(e) Contingent Obligations of the Company arising under this
Agreement;
(f) Contingent Obligations of the Company with respect to
operating leases entered into by a Subsidiary of the Company; and
(g) Contingent Obligations of the Company with respect to the
performance of contractual obligations of a Subsidiary incurred in the ordinary
course of business.
8.09 JOINT VENTURES. The Company shall not, and shall not suffer or
permit any Subsidiary to enter into any Joint Venture.
8.10 LEASE OBLIGATIONS. The Company shall not, and shall not suffer or
permit any Subsidiary to, create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, except for:
(a) leases of the Company and of Subsidiaries in existence on
the Closing Date and any renewal, extension or refinancing thereof;
(b) operating leases entered into by the Company or any
Subsidiary after the Closing Date in the ordinary course of business; PROVIDED
that the aggregate annual rental payments for all such operating leases shall
not exceed in any fiscal year $500,000; and
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(c) Capital Leases other than those permitted under clause (a)
of this Section, entered into by the Company or any Subsidiary after the Closing
Date to finance the acquisition of equipment; PROVIDED that the aggregate
Capital Lease Obligations for all such Capital Leases shall not at any time
exceed $1,000,000.
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8.11 RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not suffer or permit any
Subsidiary to, declare or make any dividend payment or other distribution of
assets, properties, cash, rights, obligations or securities on account of any
shares of any class of its capital stock, or purchase, redeem or otherwise
acquire for value any shares of its capital stock or any warrants, rights or
options to acquire such shares, now or hereafter outstanding, except that (i)
any Wholly-Owned Subsidiary may declare and make dividend payments or other
distributions to the Company or a Wholly-Owned Subsidiary of the Company and
(ii) so long as (x) no Default or Event of Default is in existence both before
and after giving effect to the declaration and payment of such dividend and (y)
either (i) no Term Loans remain outstanding or (ii) the Leverage Ratio as of the
end of the two fiscal quarters immediately preceding the date of the declaration
and payment of such dividend was less than 2.00:1.0, the Company may declare and
pay cash dividends, PROVIDED that, at the time it is declared, the aggregate
amount of such dividend, when added to all dividends theretofore declared and
paid pursuant to this clause (ii), shall not exceed an amount equal to 25% of
cumulative Net Income for the period from June 30, 1997 and ending on the last
day of the last fiscal quarter of the Company then ended.
(b) The Company shall not, and shall not permit any Subsidiary
to, make (or give any notice in respect or) any voluntary or optional payment or
prepayment on or redemption or acquisition for value of any Subordinated Debt
or, with respect to any Subordinated Debt incurred pursuant to SECTION 8.05(G),
any scheduled principal payment without the consent of the Banks; PROVIDED,
HOWEVER, that the Company may make a one time prepayment on any Subordinated
Debt in an aggregate amount up to $250,000.
8.12 ERISA. The Company shall not, and shall not suffer or permit any
of its Subsidiaries to, (i) terminate any Plan subject to Title IV of ERISA so
as to result in any material (in the opinion of the Majority Banks) liability to
the Company or any ERISA Affiliate, (ii) permit to exist any ERISA Event or any
other event or condition, which presents the risk of a material (in the opinion
of the Majority Banks) liability to any member of the Controlled Group, (iii)
make a complete or partial withdrawal (within the meaning of ERISA Section 4201)
from any Multiemployer Plan so as to result in any material (in the opinion of
the Majority Banks) liability to the Company or any ERISA Affiliate or, (iv)
enter into any new Plan or modify any existing Plan so as to increase its
obligations thereunder which could result in any material (in the opinion of the
Majority Banks) liability to any member of the Controlled Group.
8.13 CHANGE IN BUSINESS. The Company shall not, and shall not suffer or
permit any Subsidiary to, engage in any material line of business substantially
different from those lines of business carried on by the Company and its
Subsidiaries on the date hereof.
8.14 ACCOUNTING CHANGES. The Company shall not, and shall not suffer or
permit any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of
the Company or of any Subsidiary.
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8.15 MINIMUM NET WORTH. The Company shall not permit its consolidated
Net Worth at any time to be less than an amount equal to the sum of (a)
$61,600,000 PLUS (b) 75% of the Company's positive Net Income, if any, for each
fiscal quarter ending after the date hereof and prior to the date of
determination, PLUS (c) an amount equal to 100% of the cash and non-cash
proceeds of any equity securities issued by the Company after the Effective Date
and prior to the date of determination.
8.16 LEVERAGE RATIO. The Company shall not permit, at any time during a
period listed below, its Leverage Ratio at such time for the twelve month period
(taken as one accounting period) last ended prior to the date of determination,
to be greater than the ratio set forth below opposite the respective period in
which the determination is being made:
PERIOD RATIO
------ -----
From and including the Closing Date 4.75:1.00
to but excluding the last day of the
fiscal quarter ended in September, 1998
Thereafter, from and including the last day of the 4.50:1.0
fiscal quarter ended in September, 1998 to but excluding
the last day of the fiscal quarter ended in March, 1999
Thereafter, from and including the last day of the 4.25:1.0
fiscal quarter ended in March, 1999 to but excluding the
last day of the fiscal quarter ended in September, 1999
Thereafter, from and including the last day of the 4.00:1.0
fiscal quarter ended in September, 1999 to but excluding
the last day of the fiscal quarter ended in March, 2000
Thereafter, from and including the last day of the 3.75:1.0
fiscal quarter ended in March, 2000 to but excluding the
last day of the fiscal quarter ended in December, 2000
Thereafter, from and including the last day of the 3.50:1.0
fiscal quarter ended in December, 2000 to but excluding
the last day of the fiscal quarter ended in December, 2001
Thereafter 3.25:1.0
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8.17 SENIOR LEVERAGE RATIO. The Company shall not permit, at any time
during a period listed below, its Senior Leverage Ratio at such time for the
twelve month period (taken as one accounting period) last ended prior to the
date of determination, to be greater than the ratio set forth below opposite the
respective period in which the determination is being made:
PERIOD RATIO
------ -----
From and including the Closing Date 4.25:1.00
to but excluding the last day of the
fiscal quarter ended in September, 1998
Thereafter, from and including the last day of the 4.00:1.0
fiscal quarter ended in September, 1998 to but excluding
the last day of the fiscal quarter ended in March, 1999
Thereafter, from and including the last day of the 3.75:1.0
fiscal quarter ended in March, 1999 to but excluding the
last day of the fiscal quarter ended in September, 1999
Thereafter, from and including the last day of the 3.50:1.0
fiscal quarter ended in September, 1999 to but excluding
the last day of the fiscal quarter ended in March, 2000
Thereafter 3.25:1.0
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8.18 INTEREST COVERAGE RATIO. The Company shall not permit, at any time
during a period listed below, its Interest Coverage Ratio at such time for the
twelve month period (taken as one accounting period) last ended prior to the
date of determination, to be less than the ratio set forth below opposite the
respective period in which the determination is being made:
PERIOD RATIO
------ -----
From and including the Closing Date 2.00:1.0
to but excluding the last day of the fiscal
quarter ended in September, 1999
From and including the last day of the fiscal 2.25:1.0
quarter ended in September, 1999 but
excluding the last day of the fiscal quarter
ended September, 2001
Thereafter 2.50:1.0
8.19 OPERATING INCOME. The Company shall not permit (as of the end of
any fiscal quarter) its operating income to be less than $.01.
8.20 CAPITAL EXPENDITURES. The Company shall not, and shall not permit
any of its Subsidiaries to, incur Capital Expenditures; PROVIDED, that the
Company and its Subsidiaries may make Capital Expenditures during each fiscal
year of the Company in an aggregate amount not in excess of $6,000,000.
ARTICLE IX
EVENTS OF DEFAULT
-----------------
9.01 EVENT OF DEFAULT. Any of the following shall constitute an "EVENT
OF DEFAULT":
(a) NON-PAYMENT. The Company fails to pay, (i) when and as
required to be paid herein, any amount of principal of any Loan or of any L/C
Obligation, or (ii) within five days after the same becomes due, any interest,
fee or any other amount payable hereunder or under any other Loan Document; or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty
by the Company or any Subsidiary made or deemed made herein, in any other Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Company, any Subsidiary, or any Responsible Officer,
furnished at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the date made or
deemed made; or
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(c) SPECIFIC DEFAULTS. The Company fails to perform or observe
any term, covenant or agreement contained in any of SECTION 7.01, 7.02, 7.03 or
7.09 or in ARTICLE VIII; or
(d) OTHER DEFAULTS. The Company or any Subsidiary party
thereto fails to perform or observe any other term or covenant contained in this
Agreement or any other Loan Document, and such default shall continue unremedied
for a period of 20 days after the earlier of (i) the date upon which a
Responsible Officer knew or reasonably should have known of such failure or (ii)
the date upon which written notice thereof is given to the Company by the Agent
or any Bank; or
(e) CROSS-DEFAULT. (i) The Company or any Subsidiary (A) fails
to make any payment in respect of any Indebtedness or Contingent Obligation
(other than in respect of Swap Contracts), having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement) of more than
$2,500,000 when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure; or (B) fails to perform or observe any other condition
or covenant, or any other event shall occur or condition exist, under any
agreement or instrument relating to any such Indebtedness or Contingent
Obligation, and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such failure
if the effect of such failure, event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be declared to be
due and payable prior to its stated maturity, or such Contingent Obligation to
become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (1) any event of default under such Swap
Contract as to which the Company or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (2) any Termination Event (as so defined) as
to which the Company or any Subsidiary is an Affected Party (as so defined),
and, in either event, the Swap Termination Value owed by the Company or such
Subsidiary as a result thereof is greater than $1,000,000; or
(f) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Company or any
Subsidiary (i) ceases or fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing; or
(g) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Company or any Subsidiary, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of the Company's or any Subsidiary's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) the
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Company or any Subsidiary admits the material allegations of a petition against
it in any Insolvency Proceeding, or an order for relief (or similar order under
non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) the Company or
any Subsidiary acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its property or business;
or
(h) ERISA. (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Company under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$1,000,000 the aggregate amount of Unfunded Pension Liability among all Pension
Plans at any time exceeds $1,000,000; or (iii) the Company or any ERISA
Affiliate shall fail to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of $1,000,000; or
(i) MONETARY JUDGMENTS. One or more non-interlocutory
judgments, noninterlocutory orders, decrees or arbitration awards is entered
against the Company or any Subsidiary involving in the aggregate a liability (to
the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related series of
transactions, incidents or conditions, of $1,000,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period of 30
days after the entry thereof; or
(j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order
or decree is entered against the Company or any Subsidiary which does or would
reasonably be expected to have a Material Adverse Effect, and there shall be any
period of 10 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(k) COLLATERAL.
(i) any provision of any Collateral Document shall for any
reason cease to be valid and binding on or enforceable against the
Company or any Subsidiary of the Company party thereto or the Company
or any Subsidiary of the Company shall so state in writing or bring an
action to limit its obligations or liabilities thereunder; or
(ii) any Collateral Document shall for any reason (other
than pursuant to the terms thereof or as a result of the failure of the
Collateral Agent to file appropriate continuation statements) cease to
create a valid security interest in the Collateral purported to be
covered thereby or such security interest shall for any reason cease to
be a perfected and first priority security interest subject only to
Permitted Liens; or
(l) CHANGE OF CONTROL. There occurs any Change of Control; or
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(m) GUARANTOR DEFAULTS. Any Guarantor fails in any material
respect to perform or observe any term, covenant or agreement in the Guaranty or
the Guaranty is for any reason partially (including with respect to future
advances) or wholly revoked or invalidated, or otherwise ceases to be in full
force and effect, or any Guarantor or any other Person contests in any manner
the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder; or any event described at CLAUSES (F) or (G)
of this Section occurs with respect to such Guarantor; or
(n) INVALIDITY OF SUBORDINATION PROVISIONS. The subordination
provisions of any agreement or instrument governing any Subordinated Debt or any
Permitted Seller Debt is for any reason revoked or invalidated, or otherwise
cease to be in full force and effect, or enforceability thereof or denies that
it has any further liability or obligation thereunder, or the Loans and the
other Obligations hereunder or Permitted Foreign Subsidiary Indebtedness
entitled to receive the benefits of any Loan Document is for any reason
subordinated or does not have the priority contemplated by this Agreement or
such subordination provisions.
9.02 REMEDIES. If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Majority Banks:
(a) declare the commitment of each Bank to make Loans and any
obligation of the Issuing Bank to Issue Letters of Credit to be terminated,
whereupon such commitments and obligation shall be terminated;
(b) declare an amount equal to the maximum aggregate amount
that is or at any time thereafter may become available for drawing under any
outstanding Letters of Credit (whether or not any beneficiary shall have
presented, or shall be entitled at such time to present, the drafts or other
documents required to draw under such Letters of Credit) to be immediately due
and payable, and declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or applicable
law;
PROVIDED, HOWEVER, that upon the occurrence of any event specified in SECTIONS
9.01(F) or (G) (in the case of clause (i) of SECTION 9.01 (G) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans and any obligation of the Issuing Bank to Issue Letters of Credit
shall automatically terminate and the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable without further act of the Agent, the Issuing Bank or any Bank.
9.03 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies
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provided by law or in equity, or under any other instrument, document or
agreement now existing or hereafter arising.
ARTICLE X
THE AGENT
---------
10.01 APPOINTMENT AND AUTHORIZATION; "AGENT".
(a) Each Bank hereby irrevocably (subject to SECTION 10.09)
appoints, designates and authorizes the Agent (including, without limitations,
in its capacity as Collateral 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 duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Bank, 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. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
(b) The Issuing Bank shall act on behalf of the Banks with
respect to any Letters of Credit Issued by it and the documents associated
therewith until such time and except for so long as the Agent may agree at the
request of the Majority Lenders to act for such Issuing Bank with respect
thereto; PROVIDED, HOWEVER, that the Issuing Bank shall have all of the benefits
and immunities (i) provided to the Agent in this ARTICLE X with respect to any
acts taken or omissions suffered by the Issuing Bank in connection with Letters
of Credit Issued by it or proposed to be Issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as fully as
if the term "Agent", as used in this ARTICLE X, included the Issuing Bank with
respect to such acts or omissions, and (ii) as additionally provided in this
Agreement with respect to the Issuing Bank.
10.02 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.
10.03 LIABILITY OF AGENT. None of the Agent-Related Persons 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
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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 of the Banks for any recital, statement, representation or
warranty made by the Company or any Subsidiary or Affiliate of the Company, 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 validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Company or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Bank 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 the Company or any of the Company's Subsidiaries
or Affiliates.
10.04 RELIANCE BY AGENT.
(a) 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 the
Company), independent accountants and other experts selected by the Agent. 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 Majority Banks as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Banks
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 Majority
Banks and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in SECTION 5.01, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Bank.
10.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or 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 Banks, unless the Agent shall
have received written notice from a Bank or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". The Agent will notify the Banks of its receipt
of any such notice. The Agent shall take such action with respect to such
Default or Event of Default as may be requested by the Majority Banks in
accordance with Article IX; PROVIDED, HOWEVER, 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,
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with respect to such Default or Event of Default as it shall deem advisable or
in the best interest of the Banks.
10.06 CREDIT DECISION. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person 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 the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company and its Subsidiaries
hereunder. Each Bank also represents that it will, independently and without
reliance upon any Agent-Related Person 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 Company.
Except for notices, reports and other documents expressly herein required to be
furnished to the Banks by the Agent, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Company which may come into the possession
of any of the Agent-Related Persons.
10.07 INDEMNIFICATION OF AGENT. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro rata,
from and against any and all Indemnified Liabilities; PROVIDED, HOWEVER, that no
Bank shall be liable for the payment to the Agent-Related Persons of any portion
of such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each Bank
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 Company. The undertaking in
this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.
10.08 AGENT IN INDIVIDUAL CAPACITY. BofA 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 the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent or the Issuing
Bank hereunder and without notice to or consent of the Banks. The Banks
acknowledge that, pursuant to such
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activities, BofA or its Affiliates may receive information regarding the Company
or its Affiliates (including information that may be subject to confidentiality
obligations in favor of the Company or such Subsidiary) and acknowledge that the
Agent shall be under no obligation to provide such information to them. With
respect to its Loans, BofA shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not the
Agent or the Issuing Bank.
10.09 SUCCESSOR AGENT. The Agent may, and at the request of the
Majority Banks shall, resign as Agent upon 30 days' notice to the Banks. If the
Agent resigns under this Agreement, the Majority Banks shall appoint from among
the Banks a successor agent for the Banks which successor agent shall be
approved by the Company. 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 Banks and the Company, a successor agent from among the
Banks. 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 ARTICLE X and SECTIONS 11.04 and 11.05 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 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Majority Banks appoint a successor agent as provided for
above. Notwithstanding the foregoing, however, BofA may not be removed as the
Agent at the request of the Majority Banks unless BofA shall also simultaneously
be replaced as "Issuing Bank" hereunder pursuant to documentation in form and
substance reasonably satisfactory to BofA.
10.10 WITHHOLDING TAX
(a) If any Bank is a "foreign corporation, partnership or
trust" within the meaning of the Code and such Bank claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Bank agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Bank claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, two properly
completed and executed copies of IRS Form 1001 before the payment of
any interest in the first calendar year and before the payment of any
interest in each third succeeding calendar year during which interest
may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Bank, two properly completed and executed copies of IRS Form 4224
before the payment of any interest is due in the first taxable year of
such Bank and in each
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succeeding taxable year of such Bank during which interest may be paid
under this Agreement; and
(iii) such other form or forms as may be required under
the Code or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the Obligations of the Company to such Bank, such Bank agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Company to such Bank. To the extent of
such percentage amount, the Agent will treat such Bank's IRS Form 1001 as no
longer valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Company to such Bank, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into account
such reduction. However, if the forms or other documentation required by clause
(a) of this Section are not delivered to the Agent, then the Agent may withhold
from any interest payment to such Bank not providing such forms or other
documentation an amount equivalent to the applicable withholding tax imposed by
Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered or was not properly executed, or
because such Bank failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Bank shall indemnify the Agent fully for all amounts
paid, directly or indirectly, by the Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on
the amounts payable to the Agent under this Section, together with all costs and
expenses (including Attorney Costs). The obligation of the Banks under this
Section shall survive the payment of all Obligations and the resignation or
replacement of the Agent.
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ARTICLE XI
MISCELLANEOUS
-------------
11.01 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company or any applicable Subsidiary therefrom, shall be
effective unless the same shall be in writing and signed by the Majority Banks
(or by the Agent at the written request of the Majority Banks) and the Company
and acknowledged by the Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; PROVIDED, HOWEVER, that no such waiver, amendment, or consent shall,
unless in writing and signed by all the Banks and the Company and acknowledged
by the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank (or
reinstate any Commitment terminated pursuant to SECTION 8.02);
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Banks (or any of them) hereunder or under any other Loan
Document ;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or (subject to clause (iii) below) any fees or other amounts
payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Banks
or any of them to take any action hereunder; or
(e) amend this Section, or SECTION 2.16, or any provision
herein providing for consent or other action by all Banks;
and, PROVIDED FURTHER, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank in addition to the Majority Banks or all
the Banks, as the case may be, affect the rights or duties of the Issuing Bank
under this Agreement or any L/C-Related Document relating to any Letter of
Credit Issued or to be Issued by it, (ii) no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Majority Banks or
all the Banks, as the case may be, affect the rights or duties of the Agent or
the Swing Line Bank under this Agreement or any other Loan Document, and (iii)
the Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed by the parties thereto.
11.02 NOTICES.
(a) All notices, requests, consents, approvals, waivers and
other communications shall be in writing (including, unless the context
expressly otherwise provides, by facsimile
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transmission, provided that any matter transmitted by facsimile (i) shall be
immediately confirmed by a telephone call to the recipient at the number
specified on SCHEDULE 11.02, and (ii) shall be followed promptly by delivery of
a hard copy original thereof) and mailed, faxed or delivered, to the address or
facsimile number specified for notices on SCHEDULE 11.02; or, as directed to the
Company or the Agent, to such other address as shall be designated by such party
in a written notice to the other parties, and as directed to any other party, at
such other address as shall be designated by such party in a written notice to
the Company and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to ARTICLE II, III or X to the Agent shall not be effective
until actually received by the Agent, and notices pursuant to ARTICLE III to the
Issuing Bank shall not be effective until actually received by the Issuing Bank
at the address specified for the "Issuing Bank" on the applicable signature page
hereof.
(c) Any agreement of the Agent and the Banks herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Company. The Agent and the Banks shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the Company
to give such notice and the Agent and the Banks shall not have any liability to
the Company or other Person on account of any action taken or not taken by the
Agent or the Banks in reliance upon such telephonic or facsimile notice. The
obligation of the Company to repay the Loans and L/C Obligations shall not be
affected in any way or to any extent by any failure by the Agent and the Banks
to receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Banks of a confirmation which is at variance with
the terms understood by the Agent and the Banks to be contained in the
telephonic or facsimile notice.
11.03 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
11.04 COSTS AND EXPENSES. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (including in its capacity as Agent and
Issuing Bank) within five Business Days after demand (subject to SECTION
5.01(E)) for all costs and expenses incurred by BofA (including in its capacity
as Agent and Issuing Bank) in connection with the development, preparation,
delivery, administration and execution of, and any amendment, supplement, waiver
or modification to (in each case, whether or not consummated), this Agreement,
any Loan Document and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions
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contemplated hereby and thereby, including reasonable Attorney Costs incurred by
BofA (including in its capacity as Agent and Issuing Bank) with respect thereto;
and
(b) pay or reimburse the Agent and each Bank within five
Business Days after demand (subject to SECTION 5.01(E)) for all costs and
expenses (including Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during the existence of an Event
of Default or after acceleration of the Loans (including in connection with any
"workout" or restructuring regarding the Loans, and including in any Insolvency
Proceeding or appellate proceeding).
11.05 COMPANY INDEMNIFICATION. Whether or not the transactions
contemplated hereby are consummated, the Company shall indemnify, defend and
hold the Agent-Related Persons, and each Bank and each of its respective
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"INDEMNIFIED PERSON") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans, the termination of the Letters of Credit and the
termination, resignation or replacement of the Agent or replacement of any Bank)
be imposed on, incurred by or asserted against any such Person in any way
relating to or arising out of the Company entering into this Agreement or any
document contemplated by or referred to herein, or the transactions contemplated
hereby, or any action taken or omitted by any such Person under or in connection
with any of the foregoing, including with respect to any investigation,
litigation or proceeding (including any Insolvency Proceeding or appellate
proceeding) related to or arising out of this Agreement or the Loans or Letters
of Credit or the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the "INDEMNIFIED
LIABILITIES"); PROVIDED, that the Company shall have no obligation hereunder to
any Indemnified Person with respect to Indemnified Liabilities resulting solely
from the gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section shall survive payment of all other Obligations.
11.06 PAYMENTS SET ASIDE. To the extent that the Company makes a
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any Insolvency Proceeding or otherwise, then (a)
to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Bank severally agrees to pay to the Agent upon demand its pro rata share of
any amount so recovered from or repaid by the Agent.
11.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the
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Company may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the Agent and each Bank.
11.08 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Any Bank may, with the written consent of the Agent and
the Issuing Bank, which consents shall not be unreasonably withheld, at any time
assign and delegate to one or more Eligible Assignees (provided that no written
consent of the Agent or the Issuing Bank shall be required in connection with
any assignment and delegation by a Bank to an Eligible Assignee that is an
Affiliate of such Bank) (each an "ASSIGNEE") all, or any ratable part of all, of
the Loans, the Commitments, the L/C Obligations and the other rights and
obligations of such Bank hereunder, in a minimum amount of $5,000,000 (or, if
less, the entire amount of such Bank's Loans, Commitment and L/C Obligations);
PROVIDED, HOWEVER, that the Company and the Agent may continue to deal solely
and directly with such Bank in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee,
shall have been given to the Company and the Agent by such Bank and the
Assignee; (ii) such Bank and its Assignee shall have delivered to the Company
and the Agent an Assignment and Acceptance in the form of EXHIBIT E ("ASSIGNMENT
AND ACCEPTANCE") together with any Note or Notes subject to such assignment and
(iii) the assignor Bank or Assignee has paid to the Agent a processing fee in
the amount of $3,500.
(b) From and after the date that the Agent notifies the
assignor Bank that it has received (and provided its consent with respect to) an
executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Bank under the Loan Documents, and (ii) the assignor Bank shall, to the extent
that rights and obligations hereunder and under the other Loan Documents have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by
the Agent that it has received an executed Assignment and Acceptance and payment
of the processing fee, (and provided that it consents to such assignment in
accordance with SECTION 11.08(A)), the Company shall execute and deliver to the
Agent, new Notes evidencing such Assignee's assigned Loans and Commitment and,
if the assignor Bank has retained a portion of its Loans and its Commitment,
replacement Notes in the principal amount of the Loans retained by the assignor
Bank (such Notes to be in exchange for, but not in payment of, the Notes held by
such Bank). Immediately upon each Assignee's making its processing fee payment
under the Assignment and Acceptance, this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Bank PRO TANTO.
(d) Any Bank may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Company (a "PARTICIPANT")
participating interests in any Loans, the Commitment
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of that Bank and the other interests of that Bank (the "originating Bank")
hereunder and under the other Loan Documents; PROVIDED, HOWEVER, that (i) the
originating Bank's obligations under this Agreement shall remain unchanged, (ii)
the originating Bank shall remain solely responsible for the performance of such
obligations, (iii) the Company, the Issuing Bank and the Agent shall continue to
deal solely and directly with the originating Bank in connection with the
originating Bank's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Bank shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment, consent or waiver would require
unanimous consent of the Banks as described in the FIRST PROVISO to SECTION
11.01. In the case of any such participation, the Participant shall not have any
rights under this Agreement, or any of the other Loan Documents, and all amounts
payable by the Company hereunder shall be determined as if such Bank had not
sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Bank under
this Agreement.
(e) Notwithstanding any other provision in this Agreement, any
Bank may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and the Note held by
it in favor of any Federal Reserve Bank in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank
may enforce such pledge or security interest in any manner permitted under
applicable law.
11.09 CONFIDENTIALITY. Each Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by the Company and provided to it by the Company or any Subsidiary, or
by the Agent on the Company's or such Subsidiary's behalf, under this Agreement
or any other Loan Document, and neither it nor any of its Affiliates shall use
any such information other than in connection with or in enforcement of this
Agreement and the other Loan Documents or in connection with other business now
or hereafter existing or contemplated with the Company or any Subsidiary; except
to the extent such information (i) was or becomes generally available to the
public other than as a result of disclosure by the Bank, or (ii) was or becomes
available on a non-confidential basis from a source other than the Company,
provided that such source is not bound by a confidentiality agreement with the
Company known to the Bank; PROVIDED, HOWEVER, that any Bank may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Agent, any
Bank or their respective Affiliates may be party; (E) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other Loan Document; (F) to such Bank's independent auditors and other
professional advisors; (G) to any Participant or Assignee, actual or potential,
provided that such Person agrees in writing to keep such information
confidential to the
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same extent required of the Banks hereunder; (H) as to any Bank or its
Affiliate, as expressly permitted under the terms of any other document or
agreement regarding confidentiality to which the Company or any Subsidiary is
party or is deemed party with such Bank or such Affiliate; and (I) to its
Affiliates.
11.10 SET-OFF. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from time to time, without
prior notice to the Company, any such notice being waived by the Company to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Bank to or for the credit or
the account of the Company against any and all Obligations owing to such Bank,
now or hereafter existing, irrespective of whether or not the Agent or such Bank
shall have made demand under this Agreement or any Loan Document and although
such Obligations may be contingent or unmatured. Each Bank agrees promptly to
notify the Company and the Agent after any such set-off and application made by
such Bank; PROVIDED, HOWEVER, that the failure to give such notice shall not
affect the validity of such set-off and application.
11.11 AUTOMATIC DEBITS OF FEES. With respect to any principal or
interest due on the Loans, unreimbursed L/C Obligation, Commitment Fees,
arrangement fee, letter of credit fee or other fee, or any other cost or expense
(including Attorney Costs) due and payable to the Agent, the Issuing Bank or
BofA under the Loan Documents, the Company hereby irrevocably authorizes BofA to
debit any deposit account of the Company with BofA in an amount such that the
aggregate amount debited from all such deposit accounts does not exceed such fee
or other cost or expense. If there are insufficient funds in such deposit
accounts to cover the amount of the fee or other cost or expense then due, such
debits will be reversed (in whole or in part, in BofA's sole discretion) and
such amount not debited shall be deemed to be unpaid. No such debit under this
Section shall be deemed a set-off.
11.12 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
11.13 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
11.14 SEVERABILITY. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
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11.15 NO THIRD PARTIES BENEFITED. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Banks, the
Agent and the Agent-Related Persons, and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents.
11.16 GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS; PROVIDED THAT
THE PARTIES SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT AND
THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT AND
THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
COMPANY, THE AGENT AND THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
ILLINOIS LAW.
11.17 WAIVER OF JURY TRIAL. THE COMPANY, THE BANKS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY AGENTRELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE
BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER
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SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
11.18 EFFECTIVENESS. This Agreement shall become effective on the date
(the "Effective Date") on which (i) each of the Company and each of the Banks
shall have signed a copy hereof (whether the same or different copies) and shall
have delivered the same to the Agent at the Agent's office or, in the case of
the Banks, shall have given to the Agent telephonic (confirmed in writing),
written, telex or facsimile transmission notice (actually received) at such
office that the same has been signed and mailed to it and (ii) the Company shall
have satisfied the conditions precedent of SECTIONS 5.01(A), (B), (C)(I),
(C)(II), (D), (F) and (I)(A). The Agent will give the Company and each Bank
prompt written notice of the occurrence of the Effective Date.
11.19 AMENDMENT AND RESTATEMENT.
(a) On and after the Closing Date, this Agreement amends and
restates in its entirety the Credit Agreement, dated as of June 27,
1997, among the Company, the financial institutions party thereto and
BofA, as Agent (as amended through the date of this Agreement, the
"Prior Loan Document") and, upon the Closing Date the terms and
provisions of the Prior Loan Document shall, subject to this SECTION
11.19, be superseded hereby and thereby.
(b) Notwithstanding the amendment and restatement of the Prior
Loan Document by this Agreement, the Loans under, and as defined in,
the Prior Loan Document ("Continuing Loans") owing to the Banks by the
Company remain outstanding as of the date hereof, constitute continuing
Obligations hereunder and shall continue to be secured by the
Collateral.
The Continuing Loans and the Liens securing payment thereof
shall in all respects be continuing, and this Agreement shall not be
deemed to evidence or result in a novation or repayment and
re-borrowing of the Continuing Loans. In furtherance of and without
limiting the foregoing (i) all amounts owing with respect to the
Continuing Loans, other than the principal amount thereof, but
including, accrued interest, fees and expenses with respect to the
Continuing Loans shall have been paid currently as the date hereof and
(ii) from and after the Closing Date, the terms, conditions, and
covenants governing the Continuing Loans shall be solely as set forth
in this Agreement, which shall supersede the Prior Loan Document in its
entirety.
11.20 ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Banks and the Agent, and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Chicago, Illinois by their proper and duly
authorized officers as of the day and year first above written.
WATERLINK, INC.
By:
---------------------------------
Title:
------------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By:
---------------------------------
Title:
------------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
Individually as a Bank, as the
Issuing Bank and Swing Line Bank
By:
---------------------------------
Title:
------------------------------
101
ACKNOWLEDGEMENT AND AGREEMENT
-----------------------------
The undersigned, being a Guarantor, hereby acknowledges and agrees to the
provisions of this Amended and Restated Credit Agreement, dated as of June 27,
1997 and amended and restated as of May 19, 1998, among Waterlink, Inc., the
financial institutions party thereto as lenders and Bank of America National
Trust and Savings Association, as Agent (the "CREDIT AGREEMENT"), which Credit
Agreement precedes this Acknowledgement and Agreement.
WATERLINK TECHNOLOGIES, INC.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
SAN TECH EQUIPMENT, INC.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
GREAT LAKES ENVIRONMENTAL EQUIPMENT,
INC.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
MASS TRANSFER SYSTEMS, INC.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
102
AERO-MOD INCORPORATED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
WATERLINK OPERATIONAL SERVICES, INC.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
WATERLINK MANAGEMENT, INC.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
LANCO ENVIRONMENTAL PRODUCTS, INC.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
HYCOR CORPORATION
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
103
HYCOR THICKENER, INC.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
CHEMITREAT SERVICES, INC.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
PURAC ENGINEERING, INC.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
104
SCHEDULE 2.01
-------------
COMMITMENTS
-----------
AND PRO RATA SHARES
-------------------
Revolving Loan Pro Rata Term Loan Pro Rata
Bank Commitment Share Commitment Share
---- ---------- --------- ---------- -----
Bank of America National $75,000,000 100% $35,000,000 100%
Trust and Savings
Association
----------- --- ----------- ---
TOTAL $75,000,000 100% $35,000,000 100%
=========== === =========== ===
105
SCHEDULE 11.02
--------------
AGENT AND BANK NOTICE INFORMATION
---------------------------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
-------------------------------------------------------
as Agent
Bank of America National Trust and Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
AGENT'S PAYMENT OFFICE:
-----------------------
Bank of America National Trust and Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
-------------------------------------------------------
as a Bank and as Swing Line Bank
Bank of America National Trust and Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Notices (other than Borrowing notices and Notices of
Conversion/Continuation):
Bank of America National Trust and Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ NATIONAL TRUST AND SAVINGS ASSOCIATION,
-------------------------------------------------------
as Issuing Bank
Bank of America National Trust and Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
COMPANY NOTICE INFORMATION
--------------------------
Waterlink, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇