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EXHIBIT 4.6
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CREDIT AGREEMENT
among
FLORSHEIM GROUP INC.,
VARIOUS BANKS
and
BANKERS TRUST COMPANY,
as AGENT
________________________________________
Dated as of May 9, 1997
________________________________________
$110,000,000
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit 1
1.01 The Commitments 1
1.02 Minimum Amount of Each Borrowing 3
1.03 Notice of Borrowing 3
1.04 Disbursement of Funds 4
1.05 Notes 5
1.06 Conversions 5
1.07 Pro Rata Borrowings 6
1.08 Interest 6
1.09 Interest Periods 7
1.10 Increased Costs, Illegality, etc. 8
1.11 Compensation 10
1.12 Change of Lending Office 11
1.13 Replacement of Banks 11
SECTION 2. Letters of Credit 12
2.01 Letters of Credit 12
2.02 Minimum Stated Amount 14
2.03 Letter of Credit Requests 14
2.04 Letter of Credit Participations 15
2.05 Agreement to Repay Letter of Credit Drawings and Acceptance
Payments 17
2.06 Increased Costs 18
SECTION 3. Commitment Commission; Fees; Reductions of Commitment 19
3.01 Fees 19
3.02 Voluntary Termination of Unutilized Commitments 20
3.03 Mandatory Reduction of Revolving Loan Commitment 21
3.04 Voluntary and Mandatory Reductions to Blocked Commitments 24
SECTION 4. Prepayments; Payments; Taxes 26
4.01 Voluntary Prepayments 26
4.02 Mandatory Repayments, Cash Collateralizations and Commitment
Reductions 27
4.03 Method and Place of Payment 28
4.04 Net Payments 28
SECTION 5. Conditions Precedent to Initial Credit Events 30
5.01 Execution of Agreement; Notes 30
5.02 Fees, etc. 30
5.03 Opinions of Counsel 30
5.04 Corporate Documents; Proceedings; etc. 30
5.05 Plans; Existing Indebtedness Agreements; Shareholders'
Agreements; Management Agreements; Employment Agreements;
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Collective Bargaining Agreements; Tax Sharing Agreements 31
5.06 Solvency; Environmental Analyses; Insurance Matters 32
5.07 Subsidiary Guaranty 32
5.08 Pledge Agreement 32
5.09 Security Agreement 33
5.10 Mortgages 33
5.11 Consent Letter 34
5.12 Adverse Change; Governmental Approvals; etc. 34
5.13 Litigation 35
5.14 Pro Forma Balance Sheet; Financial Statements; Projections 35
5.15 Existing Indebtedness 36
5.16 Tender Offer/Consent Solicitations 37
SECTION 6. Conditions Precedent to All Credit Events 37
6.01 No Default; Representations and Warranties 37
6.02 Notice of Borrowing; Letter of Credit Request 38
SECTION 7. Representations, Warranties and Agreements 38
7.01 Corporate Status 38
7.02 Corporate Power and Authority 39
7.03 No Violation 39
7.04 Governmental Approvals 39
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections; etc. 39
7.06 Litigation 41
7.07 True and Complete Disclosure 41
7.08 Use of Proceeds; Margin Regulations 41
7.09 Tax Returns and Payments 42
7.10 Compliance with ERISA 43
7.11 The Security Documents 44
7.12 Representations and Warranties in Other Documents 45
7.13 Properties 45
7.14 Capitalization 45
7.15 Subsidiaries 46
7.16 Compliance with Statutes, etc. 46
7.17 Investment Company Act 46
7.18 Public Utility Holding Company Act 46
7.19 Environmental Matters 46
7.20 Labor Relations 47
7.21 Patents, Licenses, Franchises and Formulas 47
7.22 Indebtedness 47
7.23 Transaction 47
7.24 Inactive Subsidiaries 48
SECTION 8. Affirmative Covenants 48
8.01 Information Covenants 48
8.02 Books, Records and Inspections 52
(ii)
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8.03 Maintenance of Property; Insurance 52
8.04 Corporate Franchises 53
8.05 Compliance with Statutes, etc. 53
8.06 Compliance with Environmental Laws 54
8.07 ERISA 55
8.08 End of Fiscal Years; Fiscal Quarters 56
8.09 Performance of Obligations 56
8.10 Payment of Taxes 56
8.11 Additional Security; Further Assurances; Required Appraisals 56
8.12 Interest Rate Protection 59
8.13 Ownership of Subsidiaries 60
8.14 Maintenance of Corporate Separateness 60
SECTION 9. Negative Covenants 60
9.01 Liens 60
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. 63
9.03 Dividends 66
9.04 Indebtedness 67
9.05 Investments; etc. 68
9.06 Transactions with Affiliates and Unrestricted Subsidiaries 70
9.07 Capital Expenditures 72
9.08 Minimum Consolidated EBITDA 73
9.09 Maximum Leverage Ratio 73
9.10 Minimum Consolidated Net Interest Coverage Ratio. 74
9.11 Limitation on Modifications of and Payments on Indebtedness;
Modifications of Certificate of Incorporation, By-Laws and
Certain Other Agreements, etc. 75
9.12 Limitation on Creation or Acquisition of Subsidiaries and
Restricted Subsidiaries 75
9.13 Limitation on Issuance of Capital Stock 76
9.14 Business 77
9.15 Limitation on Certain Restrictions on Subsidiaries 77
SECTION 10. Events of Default 77
10.01 Payments 78
10.02 Representations, etc. 78
10.03 Covenants 78
10.04 Default Under Other Agreements 78
10.05 Bankruptcy, etc. 78
10.06 ERISA 79
10.07 Security Documents 80
10.08 Subsidiary Guaranty 80
10.09 Judgments 80
10.10 Change of Control 80
10.11 Tax Sharing Agreement 80
SECTION 11. Definitions and Accounting Terms 81
(iii)
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11.01 Defined Terms 81
SECTION 12. The Agent 111
12.01 Appointment 111
12.02 Nature of Duties 111
12.03 Lack of Reliance on the Agent 111
12.04 Certain Rights of the Agent 112
12.05 Reliance 112
12.06 Indemnification 112
12.07 The Agent in its Individual Capacity 112
12.08 Holders 113
12.09 Resignation by the Agent 113
SECTION 13. Miscellaneous 114
13.01 Payment of Expenses, etc. 114
13.02 Right of Setoff 115
13.03 Notices 115
13.04 Benefit of Agreement 116
13.05 No Waiver; Remedies Cumulative 117
13.06 Payments Pro Rata 118
13.07 Calculations; Computations 118
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL 119
13.09 Counterparts 120
13.10 Effectiveness 120
13.11 Headings Descriptive 120
13.12 Amendment or Waiver; etc. 120
13.13 Survival 122
13.14 Domicile of Loans 122
13.15 Limitation on Additional Amounts, etc. 122
13.16 Confidentiality 122
13.17 Register 123
13.18 Post Closing Actions 124
(iv)
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SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Real Properties
SCHEDULE IV Subsidiaries
SCHEDULE V Existing Indebtedness
SCHEDULE VI Insurance
SCHEDULE VII Existing Liens
SCHEDULE VIII Existing Investments
SCHEDULE IX Existing Transactions
SCHEDULE X Existing Letters of Credit
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Revolving Note
EXHIBIT B-2 Swingline Note
EXHIBIT C-1 Letter of Credit Service Agreement
EXHIBIT C-2 Trade Letter of Credit Request
EXHIBIT C-3 Standby Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E Opinion of ▇▇▇▇▇ ▇▇▇▇ LLP, Special
Counsel to Credit Parties
EXHIBIT F Officer's Certificate
EXHIBIT G Solvency Certificate
EXHIBIT H Subsidiary Guaranty
EXHIBIT I Pledge Agreement
EXHIBIT J Security Agreement
EXHIBIT K Consent Letter
EXHIBIT L Assignment and Assumption Agreement
(v)
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CREDIT AGREEMENT, dated as of May 9, 1997 among FLORSHEIM GROUP INC., a
Delaware corporation (the "Borrower"), the Banks party hereto from time to
time, and BANKERS TRUST COMPANY, as Agent (all capitalized terms used herein
and defined in Section 11 are used herein as therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set forth,
the Banks are willing to make available to the Borrower the credit facilities
provided for herein; and
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and conditions
set forth herein, each Bank severally agrees, at any time and from time to time
on and after the Effective Date and prior to the Maturity Date, to make a
revolving loan or revolving loans (each, a "Revolving Loan" and, collectively,
the "Revolving Loans") to the Borrower, which Revolving Loans (i) shall, at the
option of the Borrower, be Base Rate Loans or Eurodollar Loans, provided that
except as otherwise specifically provided in Section 1.10(b), all Revolving
Loans comprising the same Borrowing shall at all times be of the same Type,
(ii) may be repaid and reborrowed in accordance with the provisions hereof,
(iii) shall not exceed for any Bank at any time outstanding that aggregate
principal amount which, when added to the product of (x) such Bank's Adjusted
Percentage and (y) the sum of (I) the aggregate amount of all Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) at such time and (II) the aggregate principal amount of all
Swingline Loans (exclusive of Swingline Loans which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Adjusted Available
Revolving Loan Commitment of such Bank at such time and (iv) shall not exceed
for all Banks at any time outstanding that aggregate principal amount which,
when added to (x) the aggregate amount of all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) at such time and (y) the aggregate principal amount of all Swingline
Loans (exclusive of Swingline Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) then outstanding, equals the Total Available Revolving Loan Commitment
at such time.
(b) Subject to and upon the terms and conditions herein set forth, BTCo
in its individual capacity agrees to make at any time and from time to time on
and after the Initial Borrowing Date and prior to the Swingline Expiry Date, a
revolving loan or revolving loans (each, a "Swingline Loan" and, collectively,
the "Swingline Loans") to the Borrower, which Swingline Loans (i) shall be made
and maintained as Base Rate Loans, (ii) may be repaid and reborrowed in
accordance with the provisions hereof, (iii) shall not exceed in aggregate
principal amount at any time outstanding, when combined with the aggregate
principal amount of all Revolving Loans made by Non-Defaulting Banks then
outstanding and the Letter of Credit Outstandings at such time, an amount equal
to the Adjusted Total Available Revolving Loan Commitment at such time (after
giving effect to any reductions to
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the Adjusted Total Revolving Loan Commitment on such date) and (iv) shall not
exceed at any time outstanding the Maximum Swingline Amount.
(c) On any Business Day, BTCo may, in its sole discretion, give notice to
the Banks that its outstanding Swingline Loans shall be funded with a Borrowing
of Revolving Loans (provided that such notice shall be deemed to have been
automatically given upon the occurrence of a Default or an Event of Default
under Section 10.05 or upon the exercise of any of the remedies provided in the
last paragraph of Section 10), in which case a Borrowing of Revolving Loans
constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing")
shall be made on the immediately succeeding Business Day by all Banks with a
Revolving Loan Commitment (without giving effect to any reductions thereto
pursuant to the last paragraph of Section 10) pro rata based on each Bank's
Adjusted Percentage (determined before giving effect to any termination of the
Revolving Loan Commitments pursuant to the last paragraph of Section 10) and
the proceeds thereof shall be applied directly to BTCo to repay BTCo for such
outstanding Swingline Loans. Each such Bank hereby irrevocably agrees to make
Revolving Loans upon one Business Day's notice pursuant to each Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the date specified in writing by BTCo notwithstanding (i) that the
amount of the Mandatory Borrowing may not comply with the minimum amount for
Borrowings otherwise required hereunder, (ii) whether any conditions specified
in Section 6 are then satisfied, (iii) whether a Default or an Event of Default
then exists, (iv) the date of such Mandatory Borrowing and (v) the amount of
the Total Available Revolving Loan Commitment or the Adjusted Total Available
Revolving Loan Commitment at such time; provided that, in no event shall such
Bank be required to make Revolving Loans in excess of such Bank's Revolving
Loan Commitment. In the event that any Mandatory Borrowing cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower), then each such Bank hereby
agrees that it shall forthwith purchase (as of the date the Mandatory Borrowing
would otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from BTCo such
participations in the outstanding Swingline Loans as shall be necessary to
cause such Banks to share in such Swingline Loans ratably based upon its
respective Adjusted Percentages (determined before giving effect to any
termination of the Revolving Loan Commitments pursuant to the last paragraph of
Section 10), provided that (x) all interest payable on the Swingline Loans
shall be for the account of BTCo until the date as of which the respective
participation is required to be purchased and, to the extent attributable to
the purchased participation, shall be payable to the participant from and after
such date and (y) at the time any purchase of participations pursuant to this
sentence is actually made, the purchasing Bank shall be required to pay BTCo
interest on the principal amount of participation purchased for each day from
and including the day upon which the Mandatory Borrowing would otherwise have
occurred to but excluding the date of payment for such participation, at the
overnight Federal Funds Rate for the first three days and at the rate otherwise
applicable to Revolving Loans maintained as Base Rate Loans hereunder for each
day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount of
each Borrowing of Revolving Loans shall be not less than $1,000,000 and, if
greater, shall be in an integral multiple of $500,000, provided that Mandatory
Borrowings shall be made in the amounts required by Section 1.01(c). The
aggregate principal amount of each Borrowing of Swingline Loans shall not be
less than $500,000 and, if greater, shall be in an integral multiple of
$100,000. More than one Borrowing may occur on the same date, but at no time
shall there be outstanding more than twelve Borrowings of Eurodollar
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Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to make a
Borrowing hereunder (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), an Authorized Representative of the Borrower shall give the Agent
at its Notice Office at least one Business Day's prior written (or telephonic
notice promptly confirmed in writing) notice of each Base Rate Loan and at
least three Business Days' prior written (or telephonic notice promptly
confirmed in writing) notice of each Eurodollar Loan to be made hereunder,
provided that any such notice shall be deemed to have been given on a certain
day only if given before 12:00 Noon (New York time) (or until 1:00 P.M. (New
York time) in the case of a Borrowing of Base Rate Loans) on such day. Each
such written notice or written confirmation of telephonic notice (each a
"Notice of Borrowing"), except as otherwise expressly provided in Section 1.10,
shall be irrevocable and shall be given by the Borrower in the form of Exhibit
A, appropriately completed to specify the aggregate principal amount of the
Loans to be made pursuant to such Borrowing, the date of such Borrowing (which
shall be a Business Day) and whether the Revolving Loans being made pursuant to
such Borrowing are to be initially maintained as Base Rate Loans or Eurodollar
Loans and, if Eurodollar Loans, the initial Interest Period to be applicable
thereto. The Agent shall promptly give each Bank notice of such proposed
Borrowing, of such Bank's proportionate share thereof and of the other matters
required by the immediately preceding sentence to be specified in the Notice of
Borrowing.
(b) (i) Whenever the Borrower desires to make a Borrowing of Swingline
Loans hereunder, an Authorized Representative of the Borrower shall give BTCo
not later than 1:00 P.M. (New York time) on the date that a Swingline Loan is
to be made, written notice or telephonic notice promptly confirmed in writing
of each Swingline Loan to be made hereunder. Each such notice shall be
irrevocable and specify in each case (A) the date of Borrowing (which shall be
a Business Day) and (B) the aggregate principal amount of the Swingline Loans
to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(c), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(c).
(c) Without in any way limiting the obligation of the Borrower to confirm
in writing any telephonic notice of any Borrowing, the Agent may act without
liability upon the basis of telephonic notice of such Borrowing, believed by
the Agent in good faith to be from an Authorized Representative of the Borrower
prior to receipt of written confirmation. In each such case, the Borrower
hereby waives the right to dispute the Agent's record of the terms of such
telephonic notice of such Borrowing.
1.04 Disbursement of Funds. Except as otherwise specifically provided in
the immediately succeeding sentence, no later than 1:00 P.M. (New York time) on
the date specified in each Notice of Borrowing (or (x) in the case of Swingline
Loans, not later than 3:00 P.M. (New York time) on the date specified pursuant
to Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not later
than 1:00 P.M. (New York time) on the date specified in Section 1.01(c)), each
Bank will make available its pro rata portion of each such Borrowing requested
to be made on such date (or in the case of Swingline Loans, BTCo shall make
available the full amount thereof). All such amounts shall be made available
in Dollars and in immediately available funds at the Payment Office of the
Agent, and the Agent will make available to the Borrower at the Payment Office
the aggregate of the amounts so made available by the Banks (prior to 2:00 P.M.
(New York time)) on such day,
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to the extent of funds actually received by the Agent prior to 1:00 P.M. (New
York time) on such day). Unless the Agent shall have been notified by any Bank
prior to the date of Borrowing that such Bank does not intend to make
available to the Agent such Bank's portion of any Borrowing to be made on such
date, the Agent may assume that such Bank has made such amount available to the
Agent on such date of Borrowing and the Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent by such Bank,
the Agent shall be entitled to recover such corresponding amount on demand from
such Bank. If such Bank does not pay such corresponding amount forthwith upon
the Agent's demand therefor, the Agent shall promptly notify the Borrower to
immediately pay such corresponding amount to the Agent. The Agent shall also
be entitled to recover on demand from such Bank or the Borrower, as the case
may be, interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Agent to the Borrower
until the date such corresponding amount is recovered by the Agent, at a rate
per annum equal to (i) if recovered from such Bank, the overnight Federal Funds
Rate and (ii) if recovered from the Borrower, the rate of interest applicable
to the respective Borrowing, as determined pursuant to Section 1.08. Nothing
in this Section 1.04 shall be deemed to relieve any Bank from its obligation to
make Loans hereunder or to prejudice any rights which the Borrower may have
against any Bank as a result of any failure by such Bank to make Loans
hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made by each Bank shall be evidenced (i) if Revolving
Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-1, with blanks appropriately completed
in conformity herewith (each, a "Revolving Note" and, collectively, the
"Revolving Notes") and (ii) if Swingline Loans, by a promissory note duly
executed and delivered by the Borrower substantially in the form of Exhibit
B-2, with blanks appropriately completed in conformity herewith (the "Swingline
Note").
(b) The Revolving Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to such Bank or its registered assigns and be dated
the Initial Borrowing Date, (iii) be in a stated principal amount equal to the
Revolving Loan Commitment of such Bank and be payable in the principal amount
of the Revolving Loans evidenced thereby, (iv) mature on the Maturity Date, (v)
bear interest as provided in the appropriate clause of Section 1.08 in respect
of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (vi) be subject to voluntary prepayment and mandatory repayment as
provided in Sections 4.01 and 4.02 and (vii) be entitled to the benefits of
this Agreement and the other Credit Documents.
(c) The Swingline Note issued to BTCo shall (i) be executed by the
Borrower, (ii) be payable to BTCo or its registered assigns and be dated the
Initial Borrowing Date, (iii) be in a stated principal amount equal to the
Maximum Swingline Amount and be payable in the principal amount of the
outstanding Swingline Loans evidenced thereby from time to time, (iv) mature on
the Swingline Expiry Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans evidenced thereby,
(vi) be subject to voluntary prepayment and mandatory repayment as provided in
Sections 4.01 and 4.02 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.
(d) Each Bank will note on its internal records the amount of each Loan
made by it and each payment in respect thereof and will prior to any transfer
of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans
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evidenced thereby. Failure to make any such notation or any error in any
such notation or endorsement shall not affect the Borrower's obligations in
respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert, on any
Business Day occurring after the Initial Borrowing Date, all or a portion equal
to at least $1,000,000 (and, if greater, in an integral multiple of $500,000),
of the outstanding principal amount of Revolving Loans made pursuant to one or
more Borrowings of one or more Types of Loans into a Borrowing of another Type
of Loan, provided that (i) except as otherwise provided in Section 1.10(b),
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable to the Revolving Loans being converted and no
such partial conversion of Eurodollar Loans shall reduce the outstanding
principal amount of such Eurodollar Loans made pursuant to a single Borrowing
to less than $1,000,000, (ii) Base Rate Loans may only be converted into
Eurodollar Loans if no Default or Event of Default is in existence on the date
of the conversion, (iii) no conversion pursuant to this Section 1.06 shall
result in a greater number of Borrowings of Eurodollar Loans than is permitted
under Section 1.02 and (iv) Swingline Loans may not be converted pursuant to
this Section 1.06. Each such conversion shall be effected by the Borrower by
giving the Agent at its Notice Office prior to 1:00 P.M. (New York time) at
least three Business Days' prior notice (each a "Notice of Conversion")
specifying the Revolving Loans to be so converted, the Borrowing or Borrowings
pursuant to which such Revolving Loans were made and, if to be converted into
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Agent shall give each Bank prompt notice of any such proposed conversion
affecting any of its Revolving Loans.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans under this
Agreement shall be incurred from the Banks pro rata on the basis of their
Revolving Loan Commitments, provided that all Borrowings of Revolving Loans
made pursuant to a Mandatory Borrowing shall be incurred from the Banks pro
rata on the basis of their Adjusted Percentages. It is understood that no Bank
shall be responsible for any default by any other Bank of its obligation to
make Loans hereunder and that each Bank shall be obligated to make the Loans
provided to be made by it hereunder, regardless of the failure of any other
Bank to make its Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Borrower until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Base Rate Loan and (ii)
the conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section
1.06, at a rate per annum which shall be equal to the sum of the Applicable
Margin plus the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date the proceeds thereof are
made available to the Borrower until the earlier of (i) the maturity (whether
by acceleration or otherwise) of such Eurodollar Loan and (ii) the conversion
of such Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06 or 1.10,
as applicable, at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the Applicable Margin plus the
Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(x) 2% per annum in excess of the rate otherwise applicable to Base Rate Loans
from time to time and (y) the rate which is 2%
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in excess of the rate then borne by such Loans, in each case with such
interest to be payable by the Borrower on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period, (iii) in respect of each Eurodollar Loan, on any
repayment or prepayment (on the amount repaid or prepaid) and (iv) in respect
of each Loan, at maturity (whether by acceleration or otherwise) and, after
such maturity, on demand.
(e) Upon each Interest Determination Date, the Agent shall determine the
Eurodollar Rate for the respective Interest Period or Interest Periods and
shall promptly notify the Borrower and the Banks thereof. Each such
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
1.09 Interest Periods. At the time the Borrower gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Loan (in the case of the initial Interest Period
applicable thereto) or on the third Business Day prior to the expiration of an
Interest Period applicable to such Eurodollar Loan (in the case of any
subsequent Interest Period), the Borrower shall have the right to elect, by
having an Authorized Representative of the Borrower give the Agent notice
thereof, the interest period (each an "Interest Period") applicable to such
Eurodollar Loan, which Interest Period shall, at the option of the Borrower, be
a one, two, three or six-month period, provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Revolving Loan of a different Type)
and each Interest Period occurring thereafter in respect of such
Eurodollar Loan shall commence on the day on which the next preceding
Interest Period applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins on
a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end
on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period
for a Eurodollar Loan would otherwise expire on a day which is not a
Business Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(v) no Interest Period may be selected at any time when a Default or
an Event of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing shall be
selected which
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extends beyond the Maturity Date; and
(vii) no Interest Period in respect of any Borrowing of Revolving
Loans shall be selected which extends beyond any date upon which a
Scheduled Commitment Reduction will be required to be made under Section
3.03(c) if, after giving effect to the selection of such Interest Period,
the aggregate principal amount of Revolving Loans maintained as
Eurodollar Loans which have Interest Periods expiring after such date
would be in excess of the aggregate principal amount of Loans permitted
to be outstanding after such Scheduled Commitment Reduction.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrower has failed to elect, or are not permitted to
elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above, the Borrower shall be deemed to have elected to convert such
Eurodollar Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any Bank
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition
of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect
to any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction
of any new law or governmental rule, regulation, order, guideline or
request, such as, for example, but not limited to: (A) a change in the
basis of taxation of payment to any Bank of the principal of or interest
on such Eurodollar Loan or any other amounts payable hereunder (except
for changes in the rate of tax on, or determined by reference to, the net
income or net profits of such Bank, or any franchise tax based on the net
income or net profits of such Bank, in either case pursuant to the laws
of the United States of America, the jurisdiction in which it is
organized or in which its principal office or applicable lending office
is located or any subdivision thereof or therein), but without
duplication of any amounts payable in respect of Taxes pursuant to
Section 4.04(a), or (B) a change in official reserve requirements, but,
in all events, excluding reserves required under Regulation D to the
extent included in the computation of the Eurodollar Rate and/or (y)
other circumstances since the date of this Agreement affecting such Bank
or the interbank Eurodollar market or the position of such Bank in such
market (except as a result of a deterioration in the creditworthiness of
such Bank subsequent to the date hereof); or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by any Bank in good
faith with any governmental request (whether or not having force of law)
or (z) impracticable as a result of a contingency occurring after the
date of this Agreement which materially and adversely affects the
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interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent, in the case of clause (i)
above) shall promptly give notice (by telephone confirmed in writing) to the
Borrower and, except in the case of clause (i) above, to the Agent of such
determination (which notice the Agent shall promptly transmit to each of the
other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar Loans
shall no longer be available until such time as the Agent notifies the Borrower
and the Banks that the circumstances giving rise to such notice by the Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by the
Borrower with respect to Eurodollar Loans which have not yet been incurred
(including by way of conversion) shall be deemed rescinded by the Borrower, (y)
in the case of clause (ii) above, the Borrower agrees to, subject to the
provisions of Section 13.15 (to the extent applicable), pay to such Bank, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank in its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to
such Bank, showing the basis for the calculation thereof, submitted to the
Borrower by such Bank in good faith shall, absent manifest error, be final and
conclusive and binding on all the parties hereto) and (z) in the case of clause
(iii) above, the Borrower shall take one of the actions specified in Section
1.10(b) as promptly as possible and, in any event, within the time period
required by law. Each of the Agent and each Bank agrees that if it gives
notice to the Borrower of any of the events described in clause (i) or (iii)
above, it shall promptly notify the Borrower and, in the case of any such Bank,
the Agent, if such event ceases to exist. If any such event described in
clause (iii) above ceases to exist as to a Bank, the obligations of such Bank
to make Eurodollar Loans and to convert Base Rate Loans into Eurodollar Loans
on the terms and conditions contained herein shall be reinstated.
(b) At any time that any Eurodollar Loan is affected by the circumstances
described in Section 1.10(a)(ii) or (iii), the Borrower may (and in the case of
a Eurodollar Loan affected by the circumstances described in Section
1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then being
made initially or pursuant to a conversion, cancel the respective Borrowing by
giving the Agent telephonic notice (confirmed in writing) on the same date that
the Borrower was notified by the affected Bank or the Agent pursuant to Section
1.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan is then
outstanding, upon at least three Business Days' written notice to the Agent,
require the affected Bank to convert such Eurodollar Loan into a Base Rate
Loan, provided that, if more than one Bank is affected at any time, then all
affected Banks must be treated the same pursuant to this Section 1.10(b).
(c) If at any time after the date of this Agreement any Bank determines
that the introduction of or any change in any applicable law or governmental
rule, regulation, order, guideline, directive or request (whether or not having
the force of law) concerning capital adequacy, or any change in interpretation
or administration thereof by any governmental authority, central bank or
comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by such Bank or any corporation
controlling such Bank based on the existence of such Bank's Commitments
hereunder or its obligations hereunder, then the Borrower agrees, subject to
the provisions of Section 13.15 (to the extent applicable), to pay to such
Bank, upon its written demand therefor, such additional amounts as shall be
required to compensate such Bank or such other corporation for the increased
cost to such Bank or such other corporation or the reduction in the rate of
return to such Bank or such other corporation as a result of such increase of
capital. In determining such additional amounts, each Bank will act reasonably
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and in good faith and will use averaging and attribution methods which are
reasonable, provided that such Bank's reasonable good faith determination of
compensation owing under this Section 1.10(c) shall, absent manifest error, be
final and conclusive and binding on all the parties hereto. Each Bank, upon
determining that any additional amounts will be payable pursuant to this
Section 1.10(c), will give written notice thereof to the Borrower, which notice
shall show the basis for calculation of such additional amounts.
1.11 Compensation. The Borrower agrees, subject to the provisions of
Section 13.15 (to the extent applicable), to compensate each Bank, upon its
written request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Loans but excluding any loss of anticipated profit) which
such Bank may sustain: (i) if for any reason (other than a default by such
Bank or the Agent) a Borrowing of, or conversion from or into, Eurodollar Loans
does not occur on a date specified therefor in a Notice of Borrowing or Notice
of Conversion (whether or not withdrawn by the Borrower or deemed withdrawn
pursuant to Section 1.10(a)); (ii) if any repayment (including any repayment
made pursuant to Section 4.02 or as a result of an acceleration of the Loans
pursuant to Section 10) or conversion of any of its Eurodollar Loans occurs on
a date which is not the last day of an Interest Period with respect thereto;
(iii) if any prepayment of any of its Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other default by the Borrower to repay its Loans when
required by the terms of this Agreement or any Note held by such Bank or (y)
any election made pursuant to Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that upon the occurrence
of any event giving rise to the operation of Section 1.10(a)(ii) or (iii),
Section 1.10(c), Section 2.06 or Section 4.04 with respect to such Bank, it
will, if requested by the Borrower, use reasonable efforts (subject to overall
policy considerations of such Bank) to designate another lending office for any
Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Bank and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 1.12 shall affect or postpone any of the obligations of the
Borrower or the rights of any Bank provided in Sections 1.10, 2.06 and 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank or
otherwise defaults in its obligations to make Loans or fund Unpaid Drawings,
(y) upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with
respect to any Bank which results in such Bank charging to the Borrower
increased costs in excess of those being generally charged by the other Banks
or (z) as provided in Section 13.12(b) in the case of certain refusals by a
Bank to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks, the Borrower shall have the right, if no Default or Event of
Default will exist immediately after giving effect to the respective
replacement, to either replace such Bank (the "Replaced Bank") with one or more
other Eligible Transferee or Transferees, none of whom shall constitute a
Defaulting Bank at the time of such replacement (collectively, the "Replacement
Bank") reasonably acceptable to the Agent, provided that (i) at the time of any
replacement pursuant to this Section 1.13, the Replacement Bank shall enter
into one or more Assignment and Assumption Agreements pursuant to Section
13.04(b) (and with all fees payable pursuant to said Section 13.04(b) to be
paid by the Replacement Bank) pursuant to which the Replacement Bank shall
acquire all
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16
of the Revolving Loan Commitments and outstanding Revolving Loans
of, and participations in Letters of Credit by, the Replaced Bank and, in
connection therewith, shall pay to (x) the Replaced Bank in respect thereof an
amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Revolving Loans of the Replaced Bank, (B)
an amount equal to all Unpaid Drawings that have been funded by (and not
reimbursed to) such Replaced Bank, together with all then unpaid interest with
respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid, Fees owing to the Replaced Bank pursuant to Section 3.01
and (y) BTCo an amount equal to such Replaced Bank's Adjusted Percentage (for
this purpose, determined as if the adjustment described in clause (y) of the
immediately succeeding sentence had been made with respect to such Replaced
Bank) of (1) any Unpaid Drawing (which at such time remains an Unpaid Drawing)
and (2) any portion of any Swingline Loan for which BTCo has given a notice of
a Mandatory Borrowing pursuant to Section 1.01(c) and such Replaced Bank has
not provided a Revolving Loan which it was obligated to provide to the extent
such amount was not theretofore funded by such Replaced Bank, and (ii) all
obligations of the Borrower owing to the Replaced Bank (other than those (a)
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid or (b) relating to any
Revolving Loans and/or Revolving Loan Commitments of the respective Replaced
Bank which will remain outstanding after giving effect to the respective
replacement) shall be paid in full to such Replaced Bank concurrently with such
replacement. Upon the execution of the respective Assignment and Assumption
Agreements, the payment of amounts referred to in clauses (i) and (ii) above
and, if so requested by the Replacement Bank, delivery to the Replacement Bank
of the appropriate Revolving Note executed by the Borrower, (x) the Replacement
Bank shall become a Bank hereunder and the Replaced Bank shall cease to
constitute a Bank hereunder, except with respect to indemnification provisions
under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.06,
4.04, 13.01 and 13.06), which shall survive as to such Replaced Bank and (y) in
the case of a replacement of a Defaulting Bank with a Non-Defaulting Bank, the
Adjusted Percentages of the Banks shall be automatically adjusted at such time
to give effect to such replacement (and to give effect to the replacement of a
Defaulting Bank with one or more Non-Defaulting Banks).
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request that any Issuing Bank
issue, at any time and from time to time on and after the Initial Borrowing
Date and prior to the Maturity Date, for the account of the Borrower, one or
more irrevocable letters of credit denominated in Dollars or, in the case of
Trade Letters of Credit, through the creation thereunder by the respective
Issuing Bank of acceptances or any other customary agreement or method for
providing for deferred payment under letters of credit ("Acceptances"), and
otherwise in a form customarily used by such Issuing Bank or in such other form
as has been approved by such Issuing Bank (each such letter of credit, a
"Letter of Credit") in support of obligations described in the definitions of
Standby Letter of Credit or Trade Letter of Credit and any other obligations of
the Borrower that are reasonably acceptable to the Agent and otherwise
permitted to exist pursuant to this Agreement. On the Initial Borrowing Date,
concurrent with the consummation of the Refinancing contemplated by Section
5.15 all Existing Letters of Credit shall be deemed to have been issued under
this Agreement and shall for all purposes constitute "Letters of Credit"
hereunder.
(b) Each Issuing Bank may agree, in its sole discretion, and BTCo hereby
agrees that in the event a requested Letter of Credit is not issued by one of
the other Issuing
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Banks, it will (subject to the terms and conditions contained
herein), at any time and from time to time on or after the Initial Borrowing
Date and prior to the Maturity Date, following its receipt of the respective
Letter of Credit Request, issue for the account of the Borrower one or more
Letters of Credit in support of such obligations described in the definitions
of Standby Letter of Credit and Trade Letter of Credit of the Borrower or any
of their Restricted Subsidiaries as is permitted to exist pursuant to this
Agreement without giving rise to a Default or Event of Default hereunder,
provided that the respective Issuing Bank shall be under no obligation to issue
any Letter of Credit of the types described above if at the time of such
issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Bank or any request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over such Issuing Bank shall prohibit, or request that such
Issuing Bank refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such Issuing
Bank with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuing Bank is not otherwise
compensated) not in effect on the date hereof, or any unreimbursed loss,
cost or expense which was not applicable, in effect or known to such
Issuing Bank as of the date hereof and which such Issuing Bank in good
▇▇▇▇▇ ▇▇▇▇▇ material to it; or
(ii) such Issuing Bank shall have received notice from any Bank
prior to the issuance of such Letter of Credit of the type described in
the penultimate sentence of Section 2.03(b).
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time would
exceed either (x) $20,000,000 (or, $10,000,000 in the case of time Letters of
Credit issued in contemplation of Acceptances) or (y) when added to the
aggregate principal amount of all Revolving Loans made by Non-Defaulting Banks
and then outstanding and Swingline Loans then outstanding, an amount equal to
the Adjusted Total Available Revolving Loan Commitment at such time, (ii) no
Acceptance shall be created the Stated Amount of which, when added to the
amount of all Acceptances outstanding at such time, would exceed $10,000,000;
(iii) each Letter of Credit shall by its terms terminate or be terminable by
the Issuing Bank on such date that would result in all drawings thereunder, or
any Acceptances created thereunder, being funded pursuant to the terms thereof
prior to (x) (A) in the case of Standby Letters of Credit, the date which
occurs 12 months after the date of the issuance thereof (although any such
Letter of Credit may be extendable for successive periods of up to 12 months,
but not beyond the Maturity Date, on terms acceptable to the Issuing Bank
thereof) and (B) in the case of Trade Letters of Credit, the date which occurs
six months (or up to one year with the consent of the respective Issuing Bank)
after the date of the issuance thereof or (y) (A) in the case of Standby
Letters of Credit, the date which is five Business Days prior to the Maturity
Date and (B) in the case of Trade Letters of Credit, the date which is thirty
Business Days prior to the Maturity Date and (iv) each Acceptance shall by its
terms mature not later than the date which is thirty Business Days prior to the
Maturity Date.
2.02 Minimum Stated Amount. The Stated Amount of each Letter of Credit
shall be not less than $10,000 or such lesser amount as is acceptable to the
respective Issuing
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Bank.
2.03 Letter of Credit Requests. (a) Whenever the Borrower desires that
a Letter of Credit be issued by the Agent as Issuing Bank for its account, it
shall have (i) executed and delivered the Letter of Credit Service Agreement in
the form of Exhibit C-1 attached hereto (as amended, modified or supplemented
from time to time, the "Letter of Credit Service Agreement"), which Letter of
Credit Service Agreement shall be in full force and effect and (ii) made a
request for the issuance of such Letter of Credit in accordance with the terms
of the Letter of Credit Service Agreement. Whenever the Borrower desires that
a Trade Letter of Credit be issued by an Issuing Bank other than the Agent for
its account, it shall have (x) executed and delivered to the respective Issuing
Bank (with copies having been sent to the Agent) at least five Business Days
(or such shorter period as may be acceptable to such Issuing Bank) prior to the
issuance thereof, a Trade Letter of Credit Request in the form of Exhibit C-2
attached hereto (each a "Trade Letter of Credit Request") and (y) completed and
executed a letter of credit application in the form customarily used by such
Issuing Bank for Trade Letters of Credit or in such other form as the Issuing
Bank shall request. Whenever the Borrower desires that a Standby Letter of
Credit be issued by an Issuing Bank other than the Agent for its account it
shall have executed and delivered to the respective Issuing Bank (with copies
having been sent to the Agent) at least five Business Days (or such shorter
period as may be acceptable to such Issuing Bank) prior to the issuance
thereof, a Standby Letter of Credit Request in the form of Exhibit C-3 attached
hereto (each a "Standby Letter of Credit Request"). Letter of Credit Requests
shall be given in writing, or in the case of requests of Trade Letters of
Credit, by telephone, if promptly confirmed in writing, or, if the Agent is the
Issuing Bank, as otherwise provided in the Letter of Credit Service Agreement,
provided that (I) if the express provisions of any letter of credit application
conflict with the express provisions of this Agreement, the provisions of this
Agreement shall control to the extent of such conflict and (II) no event (other
than the failure to reimburse Letter of Credit Drawings as provided for in
Section 2.05) which constitutes a default under any application shall
constitute an Event of Default hereunder solely by reason of any default
provisions contained in such application.
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.01(c). Unless the respective Issuing Bank has received notice from any Bank
before it issues a Letter of Credit that one or more of the conditions
specified in Section 6 are not then satisfied, or that the issuance of such
Letter of Credit would violate Section 2.01(c), then such Issuing Bank may
issue the requested Letter of Credit for the account of the Borrower in
accordance with such Issuing Bank's usual and customary practices. In the case
of Standby Letters of Credit, upon issuance, such Issuing Bank shall promptly
notify each Bank of such issuance.
2.04 Letter of Credit Participations. (a) Immediately upon the issuance
by any Issuing Bank of any Letter of Credit, such Issuing Bank shall be deemed
to have sold and transferred to each Bank, other than such Issuing Bank (each
such Bank, in its capacity under this Section 2.04, a "Participant"), and each
such Participant shall be deemed irrevocably and unconditionally to have
purchased and received from such Issuing Bank, without recourse or warranty, an
undivided interest and participation, to the extent of such Participant's
Adjusted Percentage in such Letter of Credit, each drawing made thereunder and
Acceptances created thereunder and the obligations of the Borrower under this
Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Loan Commitments or
Adjusted Percentages of the Banks pursuant to Section 1.13 or 13.04 or as a
result of a Bank Default, it is hereby agreed
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that, with respect to all outstanding Letters of Credit, Acceptances and
Unpaid Drawings, there shall be an automatic adjustment to the participations
pursuant to this Section 2.04 to reflect the new Adjusted Percentages of the
assignor and assignee Bank or of all Banks with Revolving Loan Commitments, as
the case may be.
(b) In determining whether to pay or create an Acceptance under any
Letter of Credit, such Issuing Bank shall have no obligation relative to the
other Banks other than to confirm that any documents required to be delivered
under such Letter of Credit appear to have been delivered and that they appear
to substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or
in connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for such Issuing Bank
any resulting liability to the Borrower or any Bank.
(c) In the event that any Issuing Bank makes any payment under any Letter
of Credit issued by it or any Acceptance created thereunder and the Borrower
shall not have reimbursed such amount in full to such Issuing Bank pursuant to
Section 2.05(a), such Issuing Bank shall promptly notify the Agent, which shall
promptly notify each Participant of such failure, and each Participant shall
promptly and unconditionally pay to such Issuing Bank the amount of such
Participant's Adjusted Percentage of such unreimbursed payment in Dollars and
in same day funds. If the Agent so notifies, prior to 12:00 Noon (New York
time) on any Business Day, any Participant required to fund a payment under a
Letter of Credit, such Participant shall make available to such Issuing Bank in
Dollars such Participant's Adjusted Percentage of the amount of such payment on
such Business Day in same day funds. If and to the extent such Participant
shall not have so made its Adjusted Percentage of the amount of such payment
available to such Issuing Bank, such Participant agrees to pay to such Issuing
Bank, forthwith on demand, such amount, together with interest thereon, for
each day from such date until the date such amount is paid to such Issuing Bank
at the overnight Federal Funds Rate. The failure of any Participant to make
available to such Issuing Bank its Adjusted Percentage of any payment under any
Letter of Credit shall not relieve any other Participant of its obligation
hereunder to make available to such Issuing Bank its Adjusted Percentage of any
Letter of Credit or Acceptance created thereunder on the date required, as
specified above, but no Participant shall be responsible for the failure of any
other Participant to make available to such Issuing Bank such other
Participant's Adjusted Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Bank shall pay to each Participant
which has paid its Adjusted Percentage thereof, in Dollars and in same day
funds, an amount equal to such Participant's share (based upon the
proportionate aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of
the respective participations.
(e) (i) In the case of Standby Letters of Credit, the Agent shall deliver
to each Participant copies of each Standby Letter of Credit upon issuance and
any amendments thereto as they occur, as furnished to the Agent by the Issuing
Bank.
(ii) In the case of Trade Letters of Credit, when the Agent is not the
Issuing Bank, then the Issuing Bank is to send to the Agent, promptly on the
first business day of each week, by telefax, their daily outstanding Trade
Letters of Credit balances for the previous week. The Agent shall deliver to
each Bank upon each calendar month end and
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upon each Letter of Credit fee payment a report setting forth for such period
the aggregate daily amount available to be drawn under Trade Letters of Credit
issued by all Issuing Banks that were outstanding during such period.
(f) The obligations of the Participants to make payments to each Issuing
Bank with respect to Letters of Credit and Acceptances issued thereunder shall
be irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower or any of its Subsidiaries may have at any time
against a beneficiary named in a Letter of Credit, any transferee of any
Letter of Credit (or any Person for whom any such transferee may be
acting), any holder of an Acceptance, the Agent, any Participant, or any
other Person, whether in connection with this Agreement, any Letter of
Credit, any Acceptance, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between the
Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any 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;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings and Acceptance
Payments. (a) The Borrower hereby agrees to reimburse the respective Issuing
Bank, by making payment to the Agent in immediately available funds at the
Payment Office, for any payment or disbursement made by such Issuing Bank under
any Letter of Credit or Acceptance created thereunder (each such amount, so
paid until reimbursed, an "Unpaid Drawing"), immediately after, and in any
event on the date of such payment or disbursement, with interest on the amount
so paid or disbursed by such Issuing Bank, to the extent not reimbursed prior
to 1:00 P.M. (New York time) on the date of such payment or disbursement, from
and including the date paid or disbursed to but excluding the date such Issuing
Bank was reimbursed by the Borrower therefor at a rate per annum which shall be
the Base Rate in effect from time to time plus the Applicable Margin for Base
Rate Loans, provided, however, to the extent such amounts are not reimbursed
prior to 1:00 P.M. (New York time) on the second Business Day following such
payment or disbursement, interest shall thereafter accrue on the amounts so
paid or disbursed by such Issuing Bank (and until reimbursed by the Borrower)
at a rate per annum which shall be the Base Rate in effect from time to time
plus the Applicable Margin for Base Rate Loans plus 2%, in each such case, with
interest to be payable by the Borrower on demand. The respective Issuing Bank
shall give the Borrower prompt notice of each Drawing under any Letter of
Credit or payment under any Acceptance created thereunder, provided that the
failure to give any such notice shall in no way affect, impair or diminish the
Borrower's obligations hereunder.
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(b) The obligations of the Borrower under this Section 2.05 to reimburse
the respective Issuing Bank with respect to drawings on Letters of Credit and
payments under any Acceptance created thereunder (each, a "Drawing") (including
interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against any Bank (including in
its capacity as issuer of the Letter of Credit or as Participant), or any
nonapplication or misapplication by the beneficiary of the proceeds of such
Drawing, the respective Issuing Bank's only obligation to the Borrower being to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to substantially comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by any Issuing Bank under or in connection with any Letter
of Credit or any Acceptance created thereunder if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create for such
Issuing Bank any resulting liability to the Borrower.
2.06 Increased Costs. If at any time after the date of this Agreement,
the introduction of or any change in any applicable law, rule, regulation,
order, guideline or request or in the interpretation or administration thereof
by any governmental authority charged with the interpretation or administration
thereof, or compliance by any Issuing Bank or any Participant with any request
or directive by any such authority (whether or not having the force of law), or
any change in generally acceptable accounting principles, shall either (i)
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued, or Acceptances created,
by any Issuing Bank or participated in by any Participant, or (ii) impose on
any Issuing Bank or any Participant any other conditions relating, directly or
indirectly, to this Agreement, any Letter of Credit or any Acceptance created
thereunder; and the result of any of the foregoing is to increase the cost to
any Issuing Bank or any Participant of issuing, maintaining or participating in
any Letter of Credit or any Acceptance created thereunder, or reduce the amount
of any sum received or receivable by any Issuing Bank or any Participant
hereunder or reduce the rate of return on its capital with respect to Letters
of Credit and Acceptances created thereunder (except for changes in the rate of
tax on, or determined by reference to, the net income or net profits of such
Issuing Bank or such Participant, or any franchise tax based on the net income
or net profits of such Bank or Participant, in either case pursuant to the laws
of the United States of America, the jurisdiction in which it is organized or
in which its principal office or applicable lending office is located or any
subdivision thereof or therein), but without duplication of any amounts payable
in respect of Taxes pursuant to Section 4.04(a), then, upon demand to the
Borrower by such Issuing Bank or any Participant (a copy of which demand shall
be sent by such Issuing Bank or such Participant to the Agent) and subject to
the provisions of Section 13.15 (to the extent applicable), the Borrower agrees
to pay to such Issuing Bank or such Participant such additional amount or
amounts as will compensate such Bank for such increased cost or reduction in
the amount receivable or reduction on the rate of return on its capital. Any
Issuing Bank or any Participant, upon determining that any additional amounts
will be payable pursuant to this Section 2.06, will give prompt written notice
thereof to the Borrower, which notice shall include a certificate submitted to
the Borrower by such Issuing Bank or such Participant (a copy of which
certificate shall be sent by such Issuing Bank or such Participant to the
Agent), setting forth in reasonable detail the basis for the calculation of
such additional amount or amounts necessary to compensate such Issuing Bank or
such Participant. The certificate required to be delivered pursuant to this
Section 2.06 shall, if delivered in good faith and absent manifest error, be
final and conclusive and binding on the Borrower.
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SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
3.01 Fees. (a) The Borrower agrees to pay to the Agent for distribution
to each Non-Defaulting Bank with a Revolving Loan Commitment a commitment
commission (the "Commitment Commission") for the period from the Effective Date
to but excluding the Maturity Date (or such earlier date as the Total Revolving
Loan Commitment shall have been terminated), equal to the sum of (x) the
product of the Applicable Commitment Commission Percentage, as in effect from
time to time, for each day, on the daily average Unutilized Available Revolving
Loan Commitment of such Non-Defaulting Bank plus (y) the product of 50% of the
Applicable Commitment Commission Percentage, as then in effect from time to
time, for each day, on such Non-Defaulting Bank's Adjusted Percentage of the
daily average Senior Notes Blocked Commitment. Accrued Commitment Commission
shall be due and payable quarterly in arrears on each Quarterly Payment Date
and on the Maturity Date or such earlier date upon which the Total Revolving
Loan Commitment is terminated.
(b) The Borrower agrees to pay to the Agent for pro rata distribution to
each Non-Defaulting Bank a fee in respect of (x) each Letter of Credit issued
hereunder (the "Letter of Credit Fee"), for the period from and including the
date of issuance of such Letter of Credit to the termination of such Letter of
Credit, computed at a rate per annum equal to the Applicable Margin for
Revolving Loans maintained as Eurodollar Loans as in effect from time to time
on the daily Stated Amount of such Letter of Credit and (y) each Acceptance
(the "Acceptance Fee") for the period from and including the date of creation
of such Acceptance to and including the maturity of such Acceptance, computed
at a rate per annum equal to the Applicable Margin for Revolving Loans
maintained as Eurodollar Loans as in effect from time to time on the daily
Stated Amount of such Acceptance. Accrued Letter of Credit Fees and Acceptance
Fees shall be due and payable quarterly in arrears on each Quarterly Payment
Date and upon the first day on or after the termination of the Total Revolving
Loan Commitment upon which no Letters of Credit or Acceptances remain
outstanding.
(c) The Borrower agrees to pay to the respective Issuing Bank, for its
own account, a facing fee in respect of (x) each Standby Letter of Credit
issued for its account hereunder (the "Letter of Credit Facing Fee") for the
period from and including the date of issuance of such Standby Letter of Credit
to and including the termination of such Standby Letter of Credit, computed at
a rate equal to 1/8 of 1% per annum of the daily Stated Amount of such Standby
Letter of Credit, provided that in any event the minimum amount of the Letter
of Credit Facing Fee payable in any 12 month period for any Standby Letter of
Credit shall be $500 (it being agreed that, on each anniversary of the issuance
of any Standby Letter of Credit or upon any earlier termination or expiration
of a Standby Letter of Credit, if $500 exceeds the amount of Letter of Credit
Facing Fees theretofore paid or then accrued with respect to such Standby
Letter of Credit, in either case after the date of the issuance thereof or, if
later, after the date of the last anniversary of the issuance thereof (but
excluding any amounts paid after such anniversary with respect to periods
ending on or prior to such anniversary, including, without limitation, as a
result of the operation of this parenthetical), the amount of such excess shall
be payable on the next date upon which accrued Letter of Credit Facing Fees are
otherwise payable with respect to Standby Letters of Credit as provided in the
following sentence) and (y) each Acceptance created by it (the "Acceptance
Facing Fee," and together with the Letter of Credit Facing Fees, the "Facing
Fees") for the period from and including the date of creation of such
Acceptance to and including the maturity of such Acceptance, computed at a rate
equal to 1/8 of 1% per annum of the daily Stated Amount of such Acceptance.
Accrued Facing Fees shall be due and pay-
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able quarterly in arrears on each Quarterly Payment Date and on the date
upon which the Total Revolving Loan Commitment has been terminated and all
Letters of Credit and Acceptances have been terminated in accordance with their
terms.
(d) The Borrower agrees to pay, upon each drawing under, issuance of, or
amendment to any Letter of Credit, such amount as shall at the time of such
event be the administrative charge and out-of-pocket expenses which the
respective Issuing Bank is generally imposing in connection with such
occurrence with respect to letters of credit.
(e) The Borrower agrees to pay to the Agent, for its own account, such
other fees as have been agreed to in writing by the Borrower and the Agent.
3.02 Voluntary Termination of Unutilized Commitments. (a) Upon at least
two Business Days' prior notice from an Authorized Representative of the
Borrower to the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks), the Borrower shall have the right, at
any time or from time to time, without premium or penalty, to terminate the
Total Unutilized Revolving Loan Commitment, in whole or in part, in integral
multiples of $1,000,000, provided that (i) at the time of any reduction to the
Total Unutilized Revolving Loan Commitment pursuant to this Section 3.02(a),
the amount of such reduction (or such lesser amount as may be elected by the
Borrower) may be applied by the Borrower to reduce the General Blocked
Commitment and/or the Senior Notes Blocked Commitment, in each case as
theretofore in effect, in accordance with the provisions of Section 3.04(c)
hereof, (ii) each reduction to the Total Unutilized Revolving Loan Commitment
pursuant to this Section 3.02(a) shall apply proportionately to permanently
reduce the Revolving Loan Commitment of each Bank, (iii) the reduction to the
Total Unutilized Revolving Loan Commitment shall in no case be in an amount
which would cause the outstanding Revolving Loans of any Bank, when added to
its Adjusted Percentage of outstanding Swingline Loans and Letter of Credit
Outstandings, to exceed the Adjusted Available Revolving Loan Commitment of
such Bank as same will be in effect immediately after giving effect to such
reduction and (iv) such reduction shall be applied to reduce the then remaining
Scheduled Commitment Reductions in the direct order of maturity after giving
effect to all prior reductions thereto.
(b) In the event of certain refusals by a Bank as provided in Section
13.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks, the Borrower may, subject to its compliance with the
requirements of said Section 13.12(b), upon five Business Days' written notice
to the Agent at its Notice Office (which notice the Agent shall promptly
transmit to each of the Banks) terminate all of the Revolving Loan Commitment
of such Bank so long as all Revolving Loans, together with accrued and unpaid
interest, Fees and all other amounts, owing to such Bank are repaid
concurrently with the effectiveness of such termination (at which time Schedule
I shall be deemed modified to reflect such changed amounts), and at such time,
such Bank shall no longer constitute a "Bank" for purposes of this Agreement,
except with respect to indemnifications under this Agreement (including,
without limitation, Sections 1.10, 1.11, 2.06, 4.04, 13.01 and 13.06), which
shall survive as to such repaid Bank.
3.03 Mandatory Reduction of Revolving Loan Commitment. (a) The Total
Revolving Loan Commitment (and the Revolving Loan Commitment of each Bank)
shall terminate in its entirety on June 30, 1997 unless the Initial Borrowing
Date shall have occurred on or prior to such date.
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(b) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, the Total Revolving Loan Commitment (and the Revolving Loan
Commitment of each Bank) shall terminate in its entirety on the Maturity Date.
(c) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, on each date set forth below, the Total Revolving Loan
Commitment shall be permanently reduced by the amount set forth opposite such
date (each such reduction, as same may be further reduced in accordance with
Sections 3.02 and 3.03(h), a "Scheduled Commitment Reduction"):
Scheduled Commitment Reduction Date Amount
----------------------------------- ------
April 28, 2000 $10,000,000
April 30, 2001 $25,000,000
Maturity Date $75,000,000
(d) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, on each date after the Initial Borrowing Date upon which the
Borrower or any of its Restricted Subsidiaries receives any cash proceeds from
any incurrence by the Borrower or any of its Restricted Subsidiaries of
Indebtedness for borrowed money (excluding proceeds of Indebtedness under this
Agreement, and excluding Indebtedness permitted to be incurred pursuant to
Section 9.04, as originally in effect), an amount equal to 100% (or 50% of the
proceeds of Permitted Subordinated Indebtedness, if the Leverage Ratio, after
giving effect to the respective debt incurrence, is less than 3.0:1.0, so long
as no Default or Event of Default exists on the date of the respective
incurrence of debt) of the Net Cash Proceeds of the respective incurrence of
Indebtedness shall be applied as a mandatory reduction to the Total Revolving
Loan Commitment in accordance with the requirements of Sections 3.03(h) and
(i).
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.03, on each date after the Initial
Borrowing Date upon which the Borrower or any of its Restricted Subsidiaries
receives any cash proceeds from any sale or issuance of its equity, an amount
equal to 50% (or 0% if the Leverage Ratio, after giving effect to the
respective equity issuance, is less than 3.50:1.00) of the Net Cash Proceeds of
the respective sale or issuance shall be applied as a mandatory reduction to
the Total Revolving Loan Commitment in accordance with the requirements of
Sections 3.03(h) and (i).
(f) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, on each date after the Initial Borrowing Date upon which the
Borrower or any of its Restricted Subsidiaries receives proceeds from any sale
or other disposition of assets (including capital stock and securities held
thereby, but excluding (i) sales or transfers of inventory in the ordinary
course of business, (ii) sales or transfers of assets with a fair market value
less than (A) $250,000 per such sale or disposition (or in a series of related
sales or dispositions) and (B) with respect to any sale or transfer in an
amount in excess of the amount referred to in clause (A) above, $1,000,000 in
the aggregate for all such transfers in any Fiscal Year and (iii) sales or
transfers of assets permitted pursuant to Sections 9.02(ii)(w), (iii) and (v)),
an amount equal to 80% of the Net Sale Proceeds therefrom shall be applied as a
mandatory reduction to the Total Revolving Loan Commitment in accordance with
the requirements of Sections 3.03(h) and (i).
(g) In addition to any other mandatory commitment reductions pursuant to
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this Section 3.03, within 10 days following each date after the Initial
Borrowing Date on which the Borrower or any of its Restricted Subsidiaries
receives any proceeds from any Recovery Event (other than proceeds from
Recovery Events in an amount less than (A) $100,000 per each Recovery Event and
(B) with respect to any Recovery Event with proceeds in excess of the amount
referred to in clause (A) above, $1,000,000 in the aggregate for all such
Recovery Events in any Fiscal Year), an amount equal to 100% of the proceeds of
such Recovery Event (net of reasonable costs including, without limitation,
legal costs and expenses, and taxes incurred in connection with such Recovery
Event) shall be applied as a mandatory reduction to the Total Revolving Loan
Commitment in accordance with the requirements of Sections 3.03(h) and (i)),
provided that (x) so long as no Default or Event of Default then exists and
such proceeds do not exceed $5,000,000, such proceeds shall not be required to
be so applied on such date to the extent that an Authorized Representative of
the Borrower has delivered a certificate to the Agent on or prior to such date
stating that such proceeds shall be used or shall be committed to be used to
replace or restore any properties or assets in respect of which such proceeds
were paid within one year following the date of such Recovery Event (which
certificate shall set forth the estimates of the proceeds to be so expended)
and (y) so long as no Default or Event of Default then exists and to the extent
that (a) the amount of such proceeds exceeds $5,000,000, (b) the amount of such
proceeds, together with other cash available to the Borrower and permitted to
be spent by it or its Restricted Subsidiaries on Capital Expenditures during
the relevant period pursuant to Section 9.07, equals at least 100% of the cost
of replacement or restoration of the properties or assets in respect of which
such proceeds were paid as determined by the Borrower and as supported by such
estimates or bids from contractors or subcontractors or such other supporting
information as the Agent may reasonably request, (c) an Authorized
Representative of the Borrower has delivered to the Agent a certificate on or
prior to the date the application would otherwise be required pursuant to this
Section 3.03(g) in the form described in clause (x) above and also certifying
its determination as required by preceding clause (b) and certifying the
sufficiency of business interruption insurance as required by succeeding clause
(d), and (d) an Authorized Representative of the Borrower has delivered to the
Agent such evidence as the Agent may reasonably request in form and substance
reasonably satisfactory to the Agent establishing that the Borrower has
sufficient business interruption insurance and that the Borrower will receive
payment thereunder in such amounts and at such times as are necessary to
satisfy all obligations and expenses of the Borrower (including, without
limitation, all debt service requirements, including pursuant to this
Agreement) without any delay or extension thereof, for the period from the date
of the respective casualty, condemnation or other event giving rise to the
Recovery Event and continuing through the completion of the replacement or
restoration of respective properties or assets, then the entire amount of the
proceeds of such Recovery Event and not just the portion in excess of
$5,000,000 shall be deposited with the Agent pursuant to a cash collateral
arrangement reasonably satisfactory to the Agent whereby such proceeds shall be
disbursed to the Borrower from time to time as needed to pay actual costs
incurred by them in connection with the replacement or restoration of the
respective properties or assets (pursuant to such certification requirements as
may be established by the Agent), provided further, that at any time while an
Event of Default has occurred and is continuing, the Required Banks may direct
the Agent (in which case the Agent shall, and is hereby authorized by the
Borrower to, follow said directions) to apply any or all proceeds then on
deposit in such collateral account to the repayment of Obligations hereunder in
the same manner as proceeds would be applied pursuant to the Security
Agreement, and provided further, that if all or any portion of such proceeds
not required to be applied to the reduction of commitment pursuant to the
second preceding proviso (whether pursuant to clause (x) or (y) thereof) are
either (A) not so used or committed to be so used within one year after the
date of the respective Recovery Event or (B) if committed to be used within one
year after
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the date of receipt of such Net Sale Proceeds and not so used within
18 months after the date of respective Recovery Event then, in either such
case, such remaining portion not used or committed to be used in the case of
preceding clause (A) and not used in the case of preceding clause (B) shall be
applied on the date which is the first anniversary of the date of the
respective Recovery Event in the case of clause (A) above or the date occurring
18 months after the date of the respective Recovery Event in the case of clause
(B) above as a mandatory reduction to the Total Revolving Loan Commitment in
accordance with the requirements of Sections 3.03(h) and (i).
(h) Any amount required to be applied to reduce the Total Revolving Loan
Commitment pursuant to this Section 3.03 (other than Scheduled Commitment
Reductions pursuant to Section 3.03(c)) shall be applied to reduce the then
remaining Scheduled Commitment Reductions on a pro rata basis (based upon the
then remaining principal amounts of Scheduled Commitment Reductions after
giving effect to all prior reductions thereto).
(i) Each reduction to the Total Revolving Loan Commitment pursuant to
this Section 3.03 shall be applied proportionately to reduce the Revolving Loan
Commitment of each Bank.
3.04 Voluntary and Mandatory Reductions to Blocked Commitments. (a) At
any time and from time to time prior to December 31, 1998, the Borrower may, by
the delivery to the Agent of a certificate signed by any Authorized
Representative, reduce, in whole or in part, the amount of the General Blocked
Commitment, provided that any partial reduction to the General Blocked
Commitment shall be in the amount of at least $5,000,000 and, if greater, shall
be in integral multiples of $1,000,000; provided further that (x) no reduction
may be made to the General Blocked Commitment pursuant to this Section 3.04(a)
at any time that the Senior Notes Blocked Commitment exceeds the aggregate
principal amount of Senior Notes then outstanding (in which event, the Senior
Notes Blocked Commitment will be required to be reduced pursuant to following
Section 3.04(b) to the extent of such excess prior to any further reduction to
the General Blocked Commitment pursuant to this Section 3.04(a)) and (y) if at
the time of any reduction to the General Blocked Commitment pursuant to this
clause (a) the amount of the Senior Notes Blocked Commitment at such time is in
excess $0, the certificate delivered pursuant to this clause (a) shall be
required to contain a certification (which shall be deemed to be a
representation and warranty by the Borrower for the purposes of this Agreement)
to the effect that no proceeds of Loans made available as a result of the
reduction to the General Blocked Commitment shall be used to pay principal
amounts of Senior Notes in connection with any purchase or redemption of any
Senior Notes. The reductions to the General Blocked Commitment pursuant to
this clause (a) shall not result in any reduction to the Total Revolving Loan
Commitment (reductions in the latter being governed by Section 3.02).
(b) At any time and from time to time prior to December 31, 1998, the
Borrower may, by the delivery to the Agent of a certificate signed by any
Authorized Representative, reduce, in whole or in part, the amount of the
Senior Notes Blocked Commitment, provided that any partial reduction to the
Senior Notes Blocked Commitment shall be in the amount of at least $1,000,000
and, if greater, shall be in integral multiples of $1,000,000. The reductions
to the Senior Notes Blocked Commitment pursuant to this clause (b) shall not
result in any reduction to the Total Revolving Loan Commitment (reductions in
the latter being governed by Section 3.02).
(c) In addition to reductions effected pursuant to preceding clauses (a)
and (b), in
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connection with any voluntary reduction of the Total Unutilized Revolving Loan
Commitment pursuant to Section 3.02(a), the Borrower may, by delivering to the
Agent a certificate signed by any Authorized Representative, reduce the Total
Blocked Commitment by an amount (which shall be specified in the respective
Authorized Representative's certificate) which does not exceed the amount of
the reduction to the Total Unutilized Revolving Loan Commitment then being
effected pursuant to Section 3.02(a), in which case the Total Blocked
Commitment shall be reduced by the amount specified in the respective
Authorized Representative's certificate, which reduction shall be applied to
reduce the General Blocked Commitment and/or the Senior Notes Blocked
Commitment (so long as the total reductions thereto do not exceed the reduction
to the Total Blocked Commitment then being effected) on the basis specified in
the respective certificate of the Authorized Representative.
(d) In addition to the foregoing reductions, on December 31, 1998, each
of the General Blocked Commitment and the Senior Notes Blocked Commitment, in
each case to the extent then in effect, shall be reduced to $0.
(e) At the time of each reduction to the General Blocked Commitment or
Senior Notes Blocked Commitment (excluding reductions pursuant to preceding
clause (c)), the Borrower shall pay to the Agent such fees as have been
separately agreed between the Borrower and the Agent prior to the execution of
this Agreement.
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. (a) The Borrower shall have the right to
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions: (i) an Authorized
Representative of the Borrower shall give the Agent prior to 1:00 P.M. (New
York time) at its Notice Office (x) at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of the Borrower's
intent to prepay Base Rate Loans (or same day notice in the case of Swingline
Loans provided such notice is given prior to 12:00 Noon (New York time)) and
(y) at least three Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) of their intent to prepay Eurodollar Loans,
whether Revolving Loans or Swingline Loans shall be prepaid, the amount of such
prepayment and the Types of Loans to be prepaid and, in the case of Eurodollar
Loans, the specific Borrowing or Borrowings pursuant to which made, which
notice the Agent shall promptly transmit to each of the Banks; (ii) each
prepayment shall be in an aggregate principal amount of at least $1,000,000 (or
$500,000 in the case of Swingline Loans), provided that if any partial
prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less
than $1,000,000, then such Borrowing may not be continued as a Borrowing of
Eurodollar Loans and any election of an Interest Period with respect thereto
given by the Borrower shall have no force or effect; (iii) at the time of any
prepayment of Eurodollar Loans pursuant to this Section 4.01 on any date other
than the last day of the Interest Period applicable thereto, the Borrower shall
pay the amounts required pursuant to Section 1.11; and (iv) each prepayment in
respect of any Loans made pursuant to a Borrowing shall be applied pro rata
among such Loans, provided that at the Borrower's election in connection with
any prepayment of Revolving Loans, such prepayment shall not be applied to the
prepayment of Revolving Loans of a Defaulting Bank.
(b) In the event of certain refusals by a Bank as provided in Section
13.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to
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this Agreement which have been approved by the Required Banks, the Borrower
may, upon five Business Days' written notice by an Authorized
Representative of the Borrower to the Agent at its Notice Office (which notice
the Agent shall promptly transmit to each of the Banks) repay all Loans,
together with accrued and unpaid interest, Fees, and other amounts owing to
such Bank in accordance with, and subject to the requirements of, said Section
13.12(b) so long as (A) the Revolving Loan Commitment of such Bank is
terminated concurrently with such repayment (at which time Schedule I shall be
deemed modified to reflect the changed Revolving Loan Commitments) and (B) the
consents required by Section 13.12(b) in connection with the repayment pursuant
to this clause (b) have been obtained.
4.02 Mandatory Repayments, Cash Collateralizations and Commitment
Reductions. (a)(i) On any day on which the sum of the aggregate outstanding
principal amount of the Revolving Loans made by Non-Defaulting Banks, Swingline
Loans and the Letter of Credit Outstandings exceeds the Adjusted Total
Available Revolving Loan Commitment as then in effect, the Borrower agrees to
prepay principal of Swingline Loans and, after the Swingline Loans have been
repaid in full, Revolving Loans of Non-Defaulting Banks in an amount equal to
such excess. If, after giving effect to the prepayment of all outstanding
Swingline Loans and Revolving Loans of Non-Defaulting Banks, the aggregate
amount of the Letter of Credit Outstandings exceeds the Adjusted Total
Available Revolving Loan Commitment as then in effect, the Borrower agrees to
pay to the Agent at the Payment Office on such date an amount of cash or Cash
Equivalents equal to the amount of such excess (up to a maximum amount equal to
the Letter of Credit Outstandings at such time), such cash or Cash Equivalents
to be held as security for all obligations of the Borrower to Non-Defaulting
Banks hereunder in a cash collateral account to be established by the Agent.
(ii) On any day on which the aggregate outstanding principal amount of
the Revolving Loans made by any Defaulting Bank exceeds the Available Revolving
Loan Commitment of such Defaulting Bank, the Borrower shall prepay principal of
Revolving Loans of such Defaulting Bank in an amount equal to such excess.
(b) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans which are to be repaid and,
in the case of Eurodollar Loans, the specific Borrowing or Borrowings pursuant
to which made, provided that: (i) repayments of Eurodollar Loans pursuant to
this Section 4.02 may only be made on the last day of an Interest Period
applicable thereto unless all Eurodollar Loans with Interest Periods ending on
such date of required repayment and all Base Rate Loans have been paid in full;
(ii) if any repayment of Eurodollar Loans made pursuant to a single Borrowing
shall reduce the outstanding Eurodollar Loans made pursuant to such Borrowing
to an amount less than $1,000,000, such Borrowing shall be converted at the
end of the then current Interest Period into a Borrowing of Base Rate Loans;
and (iii) each repayment of Loans required by this Section 4.02 shall, except
as otherwise expressly set forth in Section 4.02(a), be applied pro rata among
such Loans. In the absence of a designation by the Borrower as described in
the preceding sentence, the Agent shall, subject to the above, make such
designation in its sole discretion with a view, but no obligation, to minimize
breakage costs owing under Section 1.11.
(c) Notwithstanding anything to the contrary contained elsewhere in this
Agreement, (i) all then outstanding Revolving Loans shall be repaid in full on
the Maturity Date and (ii) all then outstanding Swingline Loans shall be repaid
on the Swingline Expiry Date.
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4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Agent for the account of the Bank or Banks entitled thereto not later than
1:00 P.M. (New York time) on the date when due and shall be made in Dollars in
immediately available funds at the Payment Office of the Agent. Any payments
received by the Agent after such time shall be deemed to have been received on
the next Business Day. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder or
under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future
taxes, levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such
payments (but excluding, except as provided in the second succeeding sentence,
any tax imposed on or measured by the net income or net profits of a Bank
pursuant to the laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending office of such
Bank is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imports, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied or imposed,
the Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any Note, after withholding or deduction for or on account
of any Taxes, will not be less than the amount provided for herein or in such
Note. If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, the Borrower agrees to reimburse each Bank, upon the written request
of such Bank, for taxes imposed on or measured by the net income or net profits
of such Bank pursuant to the laws of the jurisdiction in which the principal
office or applicable lending office of such Bank is located or under the laws
of any political subdivision or taxing authority of any such jurisdiction in
which the principal office or applicable lending office of such Bank is located
and for any withholding of income or similar taxes imposed by the United States
of America as such Bank shall determine are payable by, or withheld from, such
Bank in respect of such amounts so paid to or on behalf of such Bank pursuant
to the preceding sentence and in respect of any amounts paid to or on behalf of
such Bank pursuant to this sentence. The Borrower will furnish to the Agent
within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by the
Borrower. The Borrower agrees to indemnify and hold harmless each Bank, and
reimburse such Bank upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower and the
Agent on or prior to the Initial Borrowing Date, or in the case of a Bank that
is an assignee or transferee of an interest under this Agreement pursuant to
Section 1.13 or 13.04 (unless the respective Bank was already a Bank hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor
forms) certifying to such Bank's entitlement to a complete exemption from
United States withholding tax with respect to payments to be made under this
Agreement and under any Note, or (ii) if the Bank
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is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and
cannot deliver either Internal Revenue Service Form 1001 or 4224 pursuant to
clause (i) above, (x) a certificate substantially in the form of Exhibit D (any
such certificate, a "Section 4.04(b)(ii) Certificate") and (y) two accurate and
complete original signed copies of Internal Revenue Service Form W-8 (or
successor form) certifying to such Bank's entitlement to a complete exemption
from United States withholding tax with respect to payments of interest to be
made under this Agreement and under any Note. In addition, each Bank agrees
that from time to time after the Initial Borrowing Date, when a lapse in time
or change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Borrower and the
Agent two new accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001, or Form W-8 and a Section 4.04(b)(ii) Certificate,
as the case may be, and such other forms as may be required in order to confirm
or establish the entitlement of such Bank to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify the Borrower and the
Agent that such Form or Certificate is no longer required to be filed or that
the Bank is no longer entitled to an exemption pursuant to (including a change
in) any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of income or similar Taxes. Notwithstanding anything to the
contrary contained in Section 4.04(a), but subject to Section 13.04(b) and the
immediately succeeding sentence, (x) the Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or similar
taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, fees or other amounts payable
hereunder for the account of any Bank which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal
income tax purposes to the extent that such Bank has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall not be
obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to
a Bank in respect of income or similar taxes imposed by the United States if
(I) such Bank has not provided to the Borrower the Internal Revenue Service
Forms required to be provided to the Borrower pursuant to this Section 4.04(b)
or (II) in the case of a payment, other than interest, to a Bank described in
clause (ii) above, to the extent that such forms do not establish a complete
exemption from withholding of such taxes. Notwithstanding anything to the
contrary contained in the preceding sentence or elsewhere in this Section 4.04
and except as set forth in Section 13.04(b), the Borrower agrees to pay
additional amounts and to indemnify each Bank in the manner set forth in
Section 4.04(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any amounts deducted or withheld by
it as described in the immediately preceding sentence as a result of any
changes after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof,
relating to the deducting or withholding of income or similar Taxes.
(c) The provisions of this Section 4.04 are subject to the provisions of
Section 13.15 (to the extent applicable).
SECTION 5. Conditions Precedent to Initial Credit Events. The obligation
of each Bank to make Loans, and the obligation of each Issuing Bank to issue
Letters of Credit, on the Initial Borrowing Date, is subject at the time of the
making of such Loans or the issuance of such Letters of Credit to the
satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Initial Borrowing
Date (i) this Agreement shall have been executed and delivered as provided in
Section 13.10
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and (ii) there shall have been delivered to the Agent for the account of each
of the Banks the appropriate Revolving Note executed by the Borrower, and to
BTCo the Swingline Note executed by the Borrower, in each case in the amount,
maturity and as otherwise provided herein.
5.02 Fees, etc. On the Initial Borrowing Date, all costs, fees and
expenses (including, without limitation, legal fees and expenses) payable to
the Agent and the Banks shall have been paid to the extent then due.
5.03 Opinions of Counsel. On the Initial Borrowing Date, the Agent shall
have received from ▇▇▇▇▇ ▇▇▇▇ LLP, special counsel to the Borrower and the
Subsidiary Guarantors, an opinion addressed to the Agent and each of the Banks
and dated the Initial Borrowing Date covering the matters set forth in Exhibit
E.
5.04 Corporate Documents; Proceedings; etc. (a) On the Initial
Borrowing Date, the Agent shall have received a certificate from each Credit
Party, dated the Initial Borrowing Date, signed by an Authorized Representative
of the relevant Credit Party, and attested by the Secretary or any Assistant
Secretary of such Credit Party, in the form of Exhibit F with appropriate
insertions, together with true and complete copies of the Certificate of
Incorporation and By-Laws of such Credit Party and the resolutions of such
Credit Party referred to in such certificate.
(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Documents shall be reasonably satisfactory in form and substance
to the Agent and the Agent shall have received all information and copies of
all documents and papers, including records of corporate proceedings,
governmental approvals, good standing certificates and bring-down telegrams, if
any, which the Agent reasonably may have requested in connection therewith,
such documents and papers where appropriate to be certified by proper corporate
or governmental authorities.
5.05 Plans; Existing Indebtedness Agreements; Shareholders' Agreements;
Management Agreements; Employment Agreements; Collective Bargaining Agreements;
Tax Sharing Agreements. On or prior to the Initial Borrowing Date, the Agent
shall have received copies of (certified as true and correct by an appropriate
officer of the Borrower), or the Agent shall have been provided access to:
(i) all Plans (and for each Plan that is required to file an annual
report on Internal Revenue Service Form 5500-series, a copy of the most
recent such report (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information), and for each Plan
that is a "single-employer plan," as defined in Section 4001(a)(15) of
ERISA, the most recently prepared actuarial valuation therefor) and any
other "employee benefit plans," as defined in Section 3(3) of ERISA, and
any other material agreements, plans or arrangements, with or for the
benefit of current or former employees of the Borrower or any Subsidiary
of the Borrower or any ERISA Affiliate (provided that the foregoing shall
apply in the case of any multiemployer plan, as defined in Section
4001(a)(3) of ERISA, only to the extent that any document described
therein is in the possession of the Borrower or any Subsidiary of the
Borrower or any ERISA Affiliate or reasonably available thereto from the
sponsor or trustee of any such plan);
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(ii) any agreements evidencing or relating to Existing Indebtedness
(the "Existing Debt Agreements");
(iii) any agreements entered into by the Borrower or any of its
Subsidiaries (after giving effect to the Transaction) governing the terms
and relative rights of its capital stock, and any agreements entered into
by members or shareholders relating to any such entity with respect to
their capital stock (collectively, the "Shareholders' Agreements");
(iv) any material agreement with members of, or with respect to, the
management of the Borrower or any of its Subsidiaries (after giving
effect to the Transaction) (collectively, the "Management Agreements");
(v) any material employment agreements entered into by the Borrower
or any of its Subsidiaries (collectively, the "Employment Agreements");
(vi) all collective bargaining agreements applying or relating to
any employee of the Borrower or any of its Subsidiaries (collectively,
the "Collective Bargaining Agreements"); and
(vii) all tax sharing, tax allocation and other similar agreements
entered into by the Borrower or any of its Subsidiaries (including,
without limitation, the Furniture Brands Tax Sharing Agreement)
(collectively, the "Tax Sharing Agreements");
all of which Plans, Existing Debt Agreements, Shareholders' Agreements,
Management Agreements, Employment Agreements, Collective Bargaining Agreements
and Tax Sharing Agreements shall be in form and substance reasonably
satisfactory to the Agent.
5.06 Solvency; Environmental Analyses; Insurance Matters. On or prior to
the Initial Borrowing Date, the Borrower shall cause to be delivered to the
Agent (i) a solvency certificate from the Treasurer and Chief Accounting
Officer of the Borrower, in the form of Exhibit G hereto, setting forth her
conclusions that, after giving effect to the Transaction and the incurrence of
all the financings contemplated herein, the Borrower and its Subsidiaries (on a
consolidated basis), is not insolvent, and has not been rendered insolvent by
the Indebtedness in connection therewith, will not be left with unreasonably
small capital with which to engage in its and/or their businesses and will not
have incurred debts beyond its and/or their ability to pay such debts as they
mature, (ii) such environmental updates as may have been requested by the
Agent, the results of which will be in scope, form and substance acceptable to
the Agent, and (iii) evidence of insurance complying with the requirements of
Section 8.03 for the business and properties of the Borrower and its Restricted
Subsidiaries, in scope, form and substance reasonably satisfactory to the Agent
and naming the Collateral Agent as an additional insured and/or loss payee, and
stating that such insurance shall not be cancelled or revised without 30 days'
prior written notice by the insurer to the Agent.
5.07 Subsidiary Guaranty. On or prior to the Initial Borrowing Date,
each Subsidiary Guarantor shall have duly authorized, executed and delivered
the Subsidiary Guaranty in the form of Exhibit H hereto (as modified,
supplemented or amended from time to time, the "Subsidiary Guaranty").
5.08 Pledge Agreement. On or prior to the Initial Borrowing Date, each
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Credit Party shall have duly authorized, executed and delivered the Agreement
in the form of Exhibit I (as modified, supplemented or amended from time to
time, the "Pledge Agreement") and shall have delivered to the Collateral Agent,
as Pledgee, all the Pledged Securities referred to therein then owned by such
Credit Party, (x) endorsed in blank in the case of promissory notes
constituting Pledged Securities and (y) together with executed and undated
stock powers, in the case of capital stock constituting Pledged Securities.
5.09 Security Agreement. On or prior to the Initial Borrowing Date, each
Credit Party shall have duly authorized, executed and delivered the Security
Agreement in the form of Exhibit J (as modified, supplemented or amended from
time to time, the "Security Agreement") covering all of such Credit Party's
present and future Security Agreement Collateral, together with:
(a) proper Financing Statements (Form UCC-1) fully executed for
filing under the UCC or other appropriate filing offices of each
jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests purported
to be created by the Security Agreement;
(b) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all effective financing
statements that name any Credit Party as debtor and that are filed in the
jurisdictions referred to in clause (a) above, together with copies of
such other financing statements (none of which shall cover the Collateral
except to the extent evidencing Permitted Liens or in respect of which
the Collateral Agent shall have received termination statements (Form
UCC-3) or such other termination statements as shall be required by local
law) fully executed for filing;
(c) evidence of the completion of all other recordings and filings
of, or with respect to, the Security Agreement as may be necessary or, in
the reasonable opinion of the Collateral Agent, desirable to perfect (or
maintain the perfection of) the security interests intended to be created
(or maintained) by the Security Agreement;
(d) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect (or
maintain the perfection of) the security interests purported to be
created (or maintained) by the Security Agreement have been taken.
5.10 Mortgages. On or prior to the Initial Borrowing Date, the
Collateral Agent shall have received:
(a) fully executed counterparts of deeds of trust, mortgages and
similar documents, in each case in form and substance reasonably
satisfactory to the Collateral Agent (as amended, modified or
supplemented from time to time in accordance with the terms thereof and
hereof, each a "Mortgage" and, collectively, the "Mortgages") with
respect to each of the Mortgaged Properties, and arrangements reasonably
satisfactory to the Collateral Agent shall be in place to provide that
counterparts of such Mortgages shall be recorded on or about the Initial
Borrowing Date in all places to the extent necessary or desirable, in the
reasonable judgment of the Collateral Agent, effectively to create a
valid and enforceable first priority mortgage Lien, subject only to
Permitted Encumbrances, on each such Mortgaged Property in favor of the
Collateral Agent (or such other trustee as may be required or desired
under local law) for the benefit of the Agent and the Banks;
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(b) mortgagee title insurance policies (or binding commitments to
issue such title insurance policies) issued by title insurers reasonably
satisfactory to the Collateral Agent (the "Mortgage Policies") in amounts
reasonably satisfactory to the Collateral Agent and assuring the
Collateral Agent that the Mortgages are valid and enforceable first
priority mortgage Liens on the respective Mortgaged Properties, free and
clear of all defects and encumbrances except Permitted Encumbrances, and
such Mortgage Policies shall be in form and substance reasonably
satisfactory to the Collateral Agent and (A) shall include (to the extent
available in the respective jurisdiction of each Mortgaged Property) an
endorsement for future advances under this Agreement, the Notes and the
Mortgages, and for such other matters that the Collateral Agent in its
discretion may reasonably request, (B) shall not include an exception for
mechanics' liens, and (C) shall provide for affirmative insurance and
such reinsurance (including direct access agreements) as the Collateral
Agent in its discretion may reasonably request; and
(c) such estoppel letters, landlord waiver letters, non-disturbance
letters and similar assurances as may have been reasonably requested by
the Collateral Agent, which letters shall be in form and substance
reasonably satisfactory to the Collateral Agent.
5.11 Consent Letter. On or prior to the Initial Borrowing Date, the
Agent shall have received a letter from CT Corporation System, presently
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, substantially in the form
of Exhibit K, indicating its consent to its appointment by each Credit Party as
its agent to receive service of process as specified in Section 13.08 or in the
respective Credit Document.
5.12 Adverse Change; Governmental Approvals; etc. (a) On the Initial
Borrowing Date, nothing shall have occurred (and the Agent shall have become
aware of no facts, conditions or other information not previously known) which
the Agent believes is reasonably likely to have a material adverse effect on
the rights or remedies of the Agent or the Banks, or on the ability of the
Credit Parties to perform their respective obligations to the Agent and the
Banks or which the Agent believes is reasonably likely to have a Material
Adverse Effect.
(b) On the Initial Borrowing Date, there shall not have occurred and be
continuing material adverse change to the syndication market for credit
facilities similar in nature to this Agreement and there shall not have
occurred and be continuing a material disruption of or a material adverse
change in financial, banking or capital markets that would have a material
adverse effect on the syndication, in each case as determined by the Agent in
its sole discretion.
(c) On or prior to the Initial Borrowing Date, all necessary and material
governmental (domestic and foreign) and third party approvals in connection
with the Transaction shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being taken by
any competent authority which restrains, prevents or imposes materially adverse
conditions upon the consummation of the Transaction. Additionally, there shall
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunctive relief or other restraint pending or notified
prohibiting or imposing materially adverse conditions upon the making of any
Loan, issuance of any Letter of Credit or the consummation of the Transaction.
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5.13 Litigation. On the Initial Borrowing Date, no material litigation
by any entity (private or governmental) shall be pending or threatened with
respect to the Transaction or any documentation executed in connection
therewith (including any Credit Document), or which the Agent believes could
reasonably be anticipated to (x) have a materially adverse effect on the
Transaction or (y) have a Material Adverse Effect.
5.14 Pro Forma Balance Sheet; Financial Statements; Projections. (a) On
or prior to the Initial Borrowing Date, there shall have been delivered to the
Agent (I) an unaudited pro forma consolidated balance sheet of the Borrower and
its Subsidiaries as of December 28, 1996 and (II) an unaudited pro forma
consolidated balance sheet of the Borrower and its Subsidiaries as of March 29,
1997, after giving effect to the Transaction, in each case prepared in
accordance with generally accepted accounting principles, together with (x)
historical consolidated statements of income and consolidated statements of
cash flow of the Borrower and its Subsidiaries, for the quarterly period ended
March 29, 1997 and (y) historical consolidated statements of income and
consolidated statements of cash flow of the Borrower and its Subsidiaries for
the three most recent Fiscal Years ended December 28, 1996, which historical
statements shall (i) be audited, in the case of the income and cash flow
statements for the three most recent Fiscal Years and in the case of the
balance sheets for the two most recent Fiscal Years and (ii) be certified by an
officer of the Borrower, in all other cases.
(b) On or prior to the Initial Borrowing Date there shall have been
delivered to the Agent "management case" projected financial statements of the
Borrower and its Restricted Subsidiaries after giving effect to the
Transaction, as set forth in the Confidential Memorandum dated April 1997, for
the period from December 29, 1996 to December 29, 2001 (the "Projections"),
which Projections shall reflect the forecasted financial conditions and income
and expenses of the Borrower and its Restricted Subsidiaries after giving
effect to the Transaction, including the related Refinancing, and shall be
satisfactory in form and substance to the Agent.
5.15 Existing Indebtedness. (a) At the time of the making of the Loans
on the Initial Borrowing Date, the Agent shall be satisfied that arrangements
are in place to effect the Refinancing on the Initial Borrowing Date with the
proceeds of Loans hereunder and concurrently with the making of such Loans on
the Initial Borrowing Date, the Refinancing shall be consummated. After giving
effect to the Refinancing, the Borrower and its Subsidiaries shall have no
outstanding Indebtedness except (i) those Senior Notes which remain outstanding
after giving effect to the Refinancing, (ii) Indebtedness pursuant to this
Agreement and the other Credit Documents (including, without limitation, the
Existing Letters of Credit) and (iii) the Existing Indebtedness. The
consummation of the Refinancing shall not result in, and upon the Refinancing
there shall not be, any defaults or events of default existing under or with
respect to the Existing Indebtedness and, as of the Initial Borrowing Date,
there shall not be any amendments or modifications to the agreements and
instruments governing or evidencing the Existing Indebtedness other than as
requested or approved by the Agent.
(b) On the Initial Borrowing Date or concurrently with the Credit Events
then occurring, the total commitments under the Existing Credit Agreement shall
have been terminated, and all loans and notes issued thereunder shall have been
repaid in full by means of the Refinancing, together with interest thereon, and
all other amounts owing pursuant to the Existing Credit Agreement shall have
been repaid in full by means of the Refinancing and the Existing Credit
Agreement shall have been terminated and be of no further force or effect
except for continuing indemnification obligations described therein. The Agent
shall
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have received evidence in form, scope and substance reasonably
satisfactory to it that the matters set forth in this Section 5.15(b) have been
satisfied on such date (and except that the Existing Letters of Credit shall
remain outstanding and shall become part of the Obligations under this
Agreement).
(c) On or prior to the Initial Borrowing Date or concurrently with the
Credit Events then occurring, the creditors under the Existing Credit Agreement
shall have terminated and released all security interests and Liens on the
assets owned or to be owned by the Borrower or any of its Subsidiaries granted
in connection with the Existing Credit Agreement. The Agent shall have
received such releases of security interests in and Liens on the assets owned
or to be owned by the Borrower as may have been reasonably requested by the
Agent, which releases shall be in form and substance reasonably satisfactory to
the Agent. Without limiting the foregoing, there shall have been delivered (i)
proper termination statements (Form UCC-3 or the appropriate equivalent) for
filing under the UCC of each jurisdiction where a financing statement (Form
UCC-1 or the appropriate equivalent) was filed with respect to the Borrower or
any of its Subsidiaries, or their respective predecessors in interest, in
connection with the security interests created with respect to the Existing
Credit Agreement and the documentation related thereto, (ii) terminations or
assignments of any security interest in, or Lien on, any patents, trademarks,
copyrights, or similar interests of the Borrower or any of its Subsidiaries, on
which filings have been made and (iii) terminations of all mortgages, leasehold
mortgages and deeds of trust created with respect to property of the Borrower
or any of its Subsidiaries, or their respective predecessors in interest, in
each case to secure the obligations under the Existing Credit Agreement, all of
which shall be in form and substance reasonably satisfactory to the Agent.
5.16 Tender Offer/Consent Solicitations. On or prior to the Initial
Borrowing Date, the Borrower shall have commenced a tender offer/consent
solicitation with respect to the Senior Notes (the "Tender Offer/Consent
Solicitation"), pursuant to which (i) the Borrower shall, subject to the terms
and conditions contained therein, offer to purchase pursuant to a tender offer
(the "Tender Offer") all of the outstanding Senior Notes at a price equal to
the principal of, and accrued interest on, the Senior Notes plus a premium, not
to exceed an amount reasonably satisfactory to the Agent and (ii) consents
shall be solicited (with the solicitation of such consents being herein called
the "Consent Solicitation") to amendments to the indenture pursuant to the
Senior Notes (the "Senior Notes Indenture"), on the terms and conditions
described in the Tender Offer/Consent Solicitation, which amendment (the
"Senior Notes Indenture Amendment") shall substantially eliminate the financial
and certain other operating covenants contained in the Senior Notes Indenture.
All terms and conditions of the Tender Offer/Consent Solicitation shall be
reasonably satisfactory to the Agent. On or prior to the Initial Borrowing
Date, (x) pursuant to the Consent Solicitation, the holders of at least a
majority of the Senior Notes shall have consented to the adoption of the Senior
Notes Indenture Amendment, and, in accordance with the terms of the Tender
Offer/Consent Solicitation, the Senior Notes Indenture Amendment shall have
been adopted and (y) the Tender Offer/Consent Solicitation shall have expired
in accordance with the terms thereof (with at least a majority of the
theretofore outstanding principal amount of Senior Notes being accepted for
purchase pursuant to the terms of the Tender Offer/Consent Solicitation).
SECTION 6. Conditions Precedent to All Credit Events. The obligation of
each Bank to make Loans (including Loans made on the Initial Borrowing Date but
excluding Mandatory Borrowings made thereafter, which shall be made as provided
in Section 1.01(c)), and the obligation of an Issuing Bank to issue any Letter
of Credit, is subject, at the time of each such Credit Event (except as
hereinafter indicated), to the sat-
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isfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in any other Credit Document shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct
in all material respects only as of such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Revolving Loan, the Agent shall have received the notice
required by Section 1.03(a). Prior to the making of each Swingline Loan, BTCo
shall have received the notice required by Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Agent and the
respective Issuing Bank shall have received a Letter of Credit Request meeting
the requirements of Section 2.03.
The acceptance of the benefit of each Credit Event shall constitute a
representation and warranty by the Borrower to the Agent and each of the Banks
that all the conditions specified in Section 5 and in this Section 6 and
applicable to such Credit Event exist as of that time (except to the extent
that any of the conditions specified in Section 5 are expressly required to be
satisfactory to or determined by any Bank, the Required Banks and/or the
Agent). All of the Notes, certificates, legal opinions and other documents and
papers referred to in Section 5 and in this Section 6, unless otherwise
specified, shall be delivered to the Agent at the Notice Office for the account
of each of the Banks and, except for the Notes, in sufficient counterparts or
copies for each of the Banks.
SECTION 7. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and to make the Loans, and issue
(or participate in) the Letters of Credit as provided herein, the Borrower
makes the following representations, warranties and agreements, in each case
after giving effect to the Transaction consummated on the Initial Borrowing
Date, all of which shall survive the execution and delivery of this Agreement
and the Notes and the making of the Loans and issuance of the Letters of
Credit, with the occurrence of each Credit Event on or after the Initial
Borrowing Date being deemed to constitute a representation and warranty that
the matters specified in this Section 7 are true and correct in all material
respects on and as of the Initial Borrowing Date and on the date of each such
Credit Event (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date).
7.01 Corporate Status. The Borrower and each of its Restricted
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
corporate power and authority to own its property and assets and to transact
the business in which it is engaged and presently proposes to engage and (iii)
is duly qualified and is authorized to do business and is in good standing in
each jurisdiction where the conduct of its business requires such
qualifications, except for failures to be so qualified which, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
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7.02 Corporate Power and Authority. Each Credit Party has the corporate
power and authority to execute, deliver and perform the terms and provisions of
each of the Documents to which it is party and has taken all necessary
corporate action to authorize the execution, delivery and performance by it of
each of such Documents. Each Credit Party has duly executed and delivered each
of the Documents to which it is party, and each of such Documents constitutes
the legal, valid and binding obligation of such Credit Party enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by any
Credit Party of the Documents to which it is a party, nor compliance by it with
the terms and provisions thereof, nor the consummation of the transactions
contemplated therein (i) will contravene any provision of any applicable law,
statute, rule or regulation or any applicable order, writ, injunction or decree
of any court or governmental instrumentality, (ii) will conflict with or result
in any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the material properties or assets of the Borrower or any
of its Restricted Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement or loan agreement, or any other
material agreement, contract or instrument, to which the Borrower or any of its
Restricted Subsidiaries is a party or by which it or any of its property or
assets is bound or to which it may be subject or (iii) will violate any
provision of the Certificate of Incorporation or By-Laws of the Borrower or any
of its Restricted Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except (i) as have been obtained or made prior to the Initial Borrowing Date
and (ii) other than UCC-1 or UCC-3 filings and recordings of Assignments of
Security Interests in U.S. Patents and Trademarks, in each case, performed
pursuant to Section 5.09, which filings and/or recordings, as the case may be,
if this representation is being made on a date which is more than ten days
after the Initial Borrowing Date, have been made), or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance of any Document or (ii) the legality, validity,
binding effect or enforceability of any such Document.
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7.05 Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections; etc. (a) (i) The consolidated and consolidating statements of
financial condition of the Borrower and its Subsidiaries at December 28, 1996
and the related consolidated statements of income and consolidated statements
of cash flow and changes in shareholders' equity of the Borrower and its
Subsidiaries for the Fiscal Year ended on such date, and furnished to the Banks
prior to the Initial Borrowing Date and (ii) the consolidated and consolidating
statements of financial condition of the Borrower and its Subsidiaries as of
the end of each fiscal quarter of the Borrower ended after December 28, 1996,
and the related consolidated statements of income and consolidated statements
of cash flow of the Borrower and its Subsidiaries for such quarterly periods,
and furnished to the Banks prior to the Initial Borrowing Date, in each case,
present fairly the financial condition of the Borrower and its Subsidiaries (or
the Borrower and its Restricted Subsidiaries, as the case may be) at the date
of such statements of financial condition and the results of the operations of
the Borrower and its Subsidiaries (or the Borrower and its Restricted
Subsidiaries as the case may be) for the respective Fiscal Year or fiscal
quarter, as the case may be (subject, in the case of unaudited financial
statements, to normal year-end adjustments). All such financial statements
have been prepared in accordance with generally accepted accounting principles
and practices consistently applied, except, in the case of the quarterly
financial statements, for the omission of footnotes, and certain
reclassifications and ordinary end of period adjustments and accruals (all of
which are of a recurring nature and none of which individually, or in the
aggregate, would be material).
(b) Since December 28, 1996 there has been no material adverse change in
the business, operations, property, assets, liabilities, condition (financial
or otherwise) or prospects of the Borrower and its Restricted Subsidiaries
taken as a whole.
(c) (i) On and as of the Initial Borrowing Date, after giving effect to
the Transaction and to all Indebtedness (including the Loans) being incurred or
assumed and Liens created (or maintained) by the Credit Parties in connection
therewith (assuming the full utilization of all Revolving Loan Commitments on
the Initial Borrowing Date), (a) the sum of the assets, at a fair valuation, of
the Borrower, individually, the Borrower and its Subsidiaries, (each of the
foregoing, as to itself or as to itself and its Subsidiaries, a "Solvent
Entity") will exceed its or their debts; (b) each Solvent Entity has not
incurred and does not intend to incur, and does not believe that it will incur,
debts beyond its ability to pay such debts as such debts mature; and (c) each
Solvent Entity will have sufficient capital with which to conduct its
businesses. For purposes of this Section 7.05(c), "debt" means any liability
on a claim, and "claim" means (i) right to payment, whether or not such a right
is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or
(ii) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(d) Except as fully disclosed in the financial statements delivered
pursuant to Section 7.05(a) or as disclosed in writing prior to or concurrent
with such delivery, there were as of the Initial Borrowing Date no liabilities
or obligations with respect to the Borrower or any of its Subsidiaries of any
nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) which, either individually or in aggregate, is reasonably
likely to have a Material Adverse Effect. As of the Initial Borrowing Date,
the Borrower does not know of any basis for the assertion against it of any
liability or obligation of any nature whatsoever that is not fully disclosed in
the financial statements delivered pur-
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suant to Section 7.05(a) which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(e) On and as of the Initial Borrowing Date, the Projections previously
delivered to the Agent and the Banks have been prepared on a basis consistent
with the financial statements referred to in Section 7.05(a) (other than as set
forth or presented in such Projections), and there are no statements or
conclusions in any of the Projections which are based upon or include
information known to the Borrower to be misleading in any material respect or
which fail to take into account material information regarding the matters
reported therein. On the Initial Borrowing Date, the Borrower believes that
the Projections are reasonable and attainable, based on current (as of the
Initial Borrowing Date) good faith estimates and assessments of, and
assumptions with respect to, markets, trends and general economic forecasts, it
being understood that uncertainty is inherent in any forecasts or projections
and that no assurances can be given by the Borrower as to the future
achievement of such performance.
7.06 Litigation. There are no actions, suits or proceedings pending or,
to the best knowledge of the Borrower, threatened (i) with respect to any
Document or (ii) that could reasonably be expected to have a Material Adverse
Effect.
7.07 True and Complete Disclosure. All factual information (taken as a
whole) furnished by the Borrower or any of its Subsidiaries in writing to the
Agent or any Bank (including, without limitation, all factual information
contained in the Documents) for purposes of or in connection with this
Agreement, the other Credit Documents or any transaction contemplated herein or
therein is, and all other such factual information (taken as a whole) hereafter
furnished by the Borrower or any of its Subsidiaries in writing to the Agent or
any Bank will be, true and accurate in all material respects on the date as of
which such information is dated or certified and not incomplete by omitting to
state any fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was provided.
7.08 Use of Proceeds; Margin Regulations. (a)(i) Proceeds of Revolving
Loans incurred on the Initial Borrowing Date shall be used by the Borrower
solely (x) to consummate the Refinancing and (y) to pay fees and expenses
relating to the Refinancing and (ii) proceeds of Revolving Loans and Swingline
Loans incurred on and after the Initial Borrowing Date shall be used for the
Borrower's and its Subsidiaries' ongoing general corporate purposes, provided
that proceeds of Revolving Loans incurred after the Initial Borrowing Date may
be used to repurchase, redeem or repay Senior Notes (including payment of
unpaid principal, accrued interest, and any premium) only to the extent that
(x) the Senior Notes Blocked Commitment has theretofore been reduced to $0 (or
concurrently therewith is reduced to $0) or (y) the incurrence of such
Revolving Loans is accompanied by a concurrent reduction in the Senior Notes
Blocked Commitment in an amount equal to the aggregate principal amount of
Senior Notes being so repurchased, redeemed or repaid (or, if such principal
amount shall not be a multiple of $1,000,000, then the reduction in the Senior
Notes Blocked Commitment shall be in amount equal to the $1,000,000 increment
above the aggregate principal amount of Senior Notes being so repurchased,
redeemed or repaid).
(b) No part of the proceeds of any Loan will be used to purchase or carry
any Margin Stock or to extend credit for the purpose of purchasing or carrying
any Margin Stock. Neither the making of any Loan nor the use of the proceeds
thereof nor the occurrence of any other Credit Event will violate or be
inconsistent with the provisions of
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Regulation G, T, U or X of the Board of Governors of the Federal Reserve System.
7.09 Tax Returns and Payments. (a) Each of the Borrower and its
Restricted Subsidiaries have timely filed or caused to be timely filed, on the
due dates thereof or within applicable grace periods (inclusive of any
permitted extensions), with the appropriate taxing authority, all Federal,
state, foreign and other material returns, statements, forms and reports for
taxes (the "Returns") required to be filed by or with respect to the income,
properties or operations of the Borrower and its Restricted Subsidiaries. The
Returns accurately reflect in all material respects all liability for taxes of
the Borrower and its Restricted Subsidiaries for the periods covered thereby
other than Taxes for which adequate reserves have been established in
accordance with generally accepted accounting principles. Each of the Borrower
and its Restricted Subsidiaries have paid all material taxes payable by them
other than taxes which are not delinquent, and other than those contested in
good faith and for which adequate reserves have been established in accordance
with generally accepted accounting principles. Except as disclosed in the
financial statements referred to in Section 7.05(a), there is, as of the
Initial Borrowing Date, no material action, suit, proceeding, investigation,
audit, or claim now pending or, to the best knowledge of the Borrower,
threatened by any authority regarding any taxes relating to the Borrower or its
Restricted Subsidiaries. As of the Initial Borrowing Date, none of the
Borrower or its Restricted Subsidiaries has entered into an agreement or waiver
or been requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of the Borrower or
its Restricted Subsidiaries, or is aware of any circumstances that would cause
the taxable years or other taxable periods of the Borrower or its Restricted
Subsidiaries not to be subject to the normally applicable statute of
limitations. As of the Initial Borrowing Date, none of the Borrower or its
Restricted Subsidiaries has provided, with respect to themselves or property
held by them, any consent under Section 341 of the Code. None of the Borrower
or its Restricted Subsidiaries has incurred, or will incur, any material tax
liability in connection with the Transaction and the other transactions
contemplated hereby. Additionally, all of the foregoing representations are
true and correct as to all Unrestricted Subsidiaries of the Borrower (to the
same extent they were Restricted Subsidiaries) except to the extent any and all
failures to be true and correct could not reasonably be expected to have a
Material Adverse Effect.
7.10 Compliance with ERISA. (a) Each Plan (and each related trust,
insurance contract or fund) is in substantial compliance with its terms and
with all applicable laws, including, without limitation, ERISA and the Code; no
Reportable Event has occurred with respect to a Plan; to the best knowledge of
the Borrower, no Multiemployer Plan is insolvent or in reorganization; and no
Plan has an Unfunded Current Liability; all contributions required to be made
by the Borrower, any of its respective Restricted Subsidiaries or any ERISA
Affiliate with respect to a Plan, a Multiemployer Plan, and/or a Foreign
Pension Plan have been timely made; neither the Borrower nor any of its
respective Restricted Subsidiaries nor any ERISA Affiliate has incurred any
liability to or on account of a Plan, and/or a Multiemployer Plan pursuant to
Section 409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code or reasonably
expects to incur any liability (including any indirect, contingent or secondary
liability) under any of the foregoing Sections with respect to any Plan, and/or
a Multiemployer Plan; no proceedings have been instituted to terminate or
appoint a trustee to administer any Plan and, to the best knowledge of the
Borrower; no condition exists which presents a risk to the Borrower or any of
its respective Restricted Subsidiaries or any ERISA Affiliate of incurring a
liability to or on account of a Plan, and/or a Multiemployer Plan pursuant to
the foregoing provisions of ERISA and the Code; using actuarial assumptions and
computation methods consistent with Part 1 of subtitle E of Title
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IV of ERISA, the aggregate liabilities of the Borrower, its respective
Restricted Subsidiaries and their ERISA Affiliates to all Multiemployer
Plans in the event of a complete withdrawal therefrom, as of the close of the
most recent fiscal year of each such Multiemployer Plan ended prior to the date
of the most recent Credit Event, would not exceed $50,000; no lien imposed
under the Code or ERISA on the assets of the Borrower or any of its respective
Restricted Subsidiaries or any ERISA Affiliate exists on account of any Plan,
and/or a Multiemployer Plan or is likely to arise on account of any Plan, or to
the best knowledge of the Borrower, is likely to arise on account of any
Multiemployer Plan; and the Borrower and its respective Restricted Subsidiaries
do not maintain or contribute to any employee welfare benefit plan (as defined
in Section 3(1) of ERISA) which provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any
employee pension benefit plan (as defined in Section 3(2) of ERISA) the
obligations with respect to which could reasonably be expected to have a
Material Adverse Effect.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. Neither the
Borrower nor any of its respective Restricted Subsidiaries has incurred any
obligation in connection with the termination of or withdrawal from any Foreign
Pension Plan. The present value of the accrued benefit liabilities (whether or
not vested) under each Foreign Pension Plan, determined as of the end of the
Borrower's most recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities.
(c) Notwithstanding anything to the contrary in this Section 7.10, the
representations made in this Section 7.10 shall only be untrue if the aggregate
effect of all failures and noncompliances of the types described above could
reasonably be expected to have a Material Adverse Effect.
7.11 The Security Documents. (a) The provisions of the Security
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties in the Security
Agreement Collateral described therein, and the Security Agreement, upon the
filing of Form UCC-1 financing statements or the appropriate equivalent (which
filings, if this representation is being made more than 10 days after the
Initial Borrowing Date, have been made), create a fully perfected first lien
on, and security interest in, all right, title and interest in all of the
Security Agreement Collateral described therein, to the extent that a security
interest may be perfected therein by filing a financing statement under the
UCC, subject to no other Liens other than Permitted Liens. The recordation of
the Assignment of Security Interest in U.S. Patents and Trademarks in the form
attached to the Security Agreement in the United States Patent and Trademark
Office together with filings on Form UCC-1 made pursuant to the Security
Agreement will be effective, under applicable law, to perfect the security
interest granted to the Collateral Agent in the trademarks and patents covered
by the Security Agreement. Each of the Credit Parties party to the Security
Agreement has good and valid title to all Security Agreement Collateral owned
by such Credit Party described therein, free and clear of all Liens except
those described above in this clause (a).
(b) The security interests created in favor of the Collateral Agent, as
Pledgee, for the benefit of the Secured Creditors under the Pledge Agreement
constitute first priority perfected security interests in the Pledged
Securities described in the Pledge Agreement, subject to no security interests
of any other Person. No filings or recordings are
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required in order to perfect (or maintain the perfection or priority of) the
security interests created in the Pledged Securities and the proceeds thereof
under the Pledge Agreement.
(c) The Mortgages create, as security for the obligations purported to be
secured thereby, a valid and enforceable perfected security interest in and
mortgage lien on all of the Mortgaged Properties in favor of the Collateral
Agent (or such other trustee as may be required or desired under local law) for
the benefit of the Secured Creditors, superior to and prior to the rights of
all third persons (except that the security interest and mortgage lien created
in the Mortgaged Properties may be subject to the Permitted Encumbrances
related thereto) and subject to no other Liens (other than Permitted Liens).
Schedule III contains a true and complete list of each parcel of Real Property
owned or leased by the Borrower and its Restricted Subsidiaries on the Initial
Borrowing Date, and the type of interest therein held by the Borrower or such
Restricted Subsidiary. The Borrower and each of its Restricted Subsidiaries
have good and indefeasible title to all fee-owned Mortgaged Properties and
valid leasehold title to all Leaseholds material to its business, in each case
free and clear of all Liens except those described in the first sentence of
this subsection (c).
7.12 Representations and Warranties in Other Documents. All
representations and warranties set forth in the Documents other than this
Agreement were true and correct in all material respects at the time as of
which such representations and warranties were made (or deemed made) and shall
be true and correct in all material respects as of the Initial Borrowing Date
as if such representations and warranties were made on and as of such date,
unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date. Notwithstanding anything to the contrary
contained above, to the extent that the representations and warranties set
forth in the Documents other than this Agreement were made by parties other
than the Borrower and its Subsidiaries, such representations and warranties
shall be deemed untrue only if the aggregate effect of all inaccuracies in such
representations and warranties would reasonably be expected to have a Material
Adverse Effect.
7.13 Properties. The Borrower and each of its Restricted Subsidiaries
have good and valid title to all material properties owned by them, including
all property reflected in the balance sheets referred to in Sections 7.05(a)
and in the pro forma balance sheet referred to in Section 5.14 (except as sold
or otherwise disposed of since the date of such balance sheet in the ordinary
course of business or otherwise as permitted hereunder), free and clear of all
Liens, other than (i) as referred to in the balance sheet or in the notes
thereto or in the pro forma balance sheet or (ii) Permitted Liens otherwise
permitted by Section 9.01.
7.14 Capitalization. (a) On the Effective Date, the authorized capital
stock of the Borrower consists of (i) 20,000,000 shares of common stock, $1.00
stated value per share, 8,346,051 shares of which are issued and outstanding,
and at least 67% of such outstanding shares are owned by the Apollo Group or a
Controlled Account and (ii) 2,000,000 shares of preferred stock, $0 par value
per share, none of which shares are issued and outstanding. As of the
Effective Date, the Borrower does not have outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any
rights to subscribe for or to purchase, or any options (other than stock
options under the Stock Option Plan) for the purchase of, or any agreement
providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock.
7.15 Subsidiaries. The Borrower has no Subsidiaries other than (i) those
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Subsidiaries listed on Schedule IV and (ii) new Subsidiaries created in
compliance with this Agreement.
7.16 Compliance with Statutes, etc. The Borrower and each of its
Subsidiaries are in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of their business and the
ownership of their property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls), except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
7.17 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.18 Public Utility Holding Company Act. Neither the Borrower nor any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
7.19 Environmental Matters. (a) The Borrower and each of its
Subsidiaries have complied with all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws. There are no
pending or, to the best knowledge of the Borrower after due inquiry, threatened
Environmental Claims against the Borrower, or any of its Subsidiaries or any
Real Property owned or operated by the Borrower or any of its Subsidiaries.
There are no facts, circumstances, conditions or occurrences on any Real
Property owned or operated by the Borrower or any of its Subsidiaries or, to
the best knowledge of the Borrower after due inquiry, on any property adjoining
or in the vicinity of any such Real Property that, to the best knowledge of the
Borrower after due inquiry, could reasonably be expected (i) to form the basis
of an Environmental Claim against the Borrower or any of its Subsidiaries or
any such Real Property or (ii) to cause any such Real Property to be subject to
any restrictions on the ownership, occupancy, use or transferability of such
Real Property by the Borrower or any of its Subsidiaries under any applicable
Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by the Borrower or any of its Subsidiaries except in compliance with
all applicable Environmental Laws and so as not to give rise to an
Environmental Claim. Hazardous Materials have not at any time been Released on
or from any Real Property owned or operated by the Borrower or any of its
Subsidiaries except in compliance with all applicable Environmental Laws and so
as not to give rise to an Environmental Claim.
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(c) Notwithstanding anything to the contrary in this Section 7.19, the
representations made in this Section 7.19 shall only be untrue if the aggregate
effect of all failures and noncompliances of the types described above could
reasonably be expected to have a Material Adverse Effect.
7.20 Labor Relations. Neither the Borrower nor any of its Subsidiaries
is engaged in any unfair labor practice that could reasonably be expected to
have a Material Adverse Effect. There is (i) no unfair labor practice
complaint pending against the Borrower or any of its Subsidiaries or, to the
best knowledge of the Borrower, threatened against any of them, before the
National Labor Relations Board, and no material grievance or material
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Borrower or any of its Subsidiaries or, to
the best knowledge of the Borrower, threatened against any of them, (ii) no
strike, labor dispute, slowdown or stoppage pending against the Borrower or any
of its Subsidiaries or, to the best knowledge of the Borrower, threatened
against the Borrower or any of its Subsidiaries and (iii) to the best knowledge
of the Borrower, no union representation proceeding pending with respect to the
employees of the Borrower or any of its Subsidiaries, except (with respect to
any matter specified in clause (i), (ii) or (iii) above, either individually or
in the aggregate) such as could not reasonably be expected to have a Material
Adverse Effect.
7.21 Patents, Licenses, Franchises and Formulas. The Borrower and its
Restricted Subsidiaries own all material patents, trademarks, permits, service
marks, trade names, copyrights, licenses, franchises and formulas, or rights
with respect to the foregoing, and have obtained assignments of all leases and
other rights of whatever nature, reasonably necessary for the present conduct
of their business, without any known conflict with the rights of others which,
or the failure to obtain which, as the case may be, could reasonably be
expected to result in a Material Adverse Effect.
7.22 Indebtedness. Schedule V sets forth a true and complete list of all
Indebtedness for borrowed money of the Borrower and its Restricted Subsidiaries
as of the Initial Borrowing Date and which is to remain outstanding after
giving effect to the Transaction (excluding the Loans, the Letters of Credit
and the Senior Notes, the "Existing Indebtedness"), in each case showing the
aggregate principal amount thereof and the name of the respective borrower and
any other entity which directly or indirectly guaranteed such debt.
7.23 Transaction. At the time of consummation thereof, the Transaction
shall have been consummated in all respects in accordance with the terms of the
respective Documents and all applicable laws. At the time of consummation of
the Transaction, all consents and approvals of, and filings and registrations
with, and all other actions in respect of, all governmental agencies,
authorities or instrumentalities required in order to make or consummate the
Transaction will have been obtained, given, filed or taken and are or will be
in full force and effect (or effective judicial relief with respect thereto has
been obtained), except where the failure to so obtain, give, file or take would
not have a Material Adverse Effect. All applicable waiting periods with
respect thereto have or, prior to the time when required, will have, expired
without, in all such cases, any action being taken by any competent authority
which restrains, prevents, or imposes material adverse conditions upon the
Transaction. Additionally, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon the
Transaction or the occurrence of any Credit Event or the performance by the
Credit Parties of their obligations under the respective Documents. All
actions taken by the Credit Parties pursuant to or in furtherance
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of the Transaction have been taken in material compliance with the respective
Documents and all applicable laws.
7.24 Inactive Subsidiaries. On the Effective Date, Florsheim
Occupational is an Inactive Subsidiary and, on such date, is the only
Subsidiary of the Borrower which is an Inactive Subsidiary.
SECTION 8. Affirmative Covenants. The Borrower hereby covenants and
agrees that on and after the Initial Borrowing Date and until the Total
Commitment and all Letters of Credit and Acceptances have terminated and the
Loans, Notes and Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:
8.01 Information Covenants. The Borrower will furnish to the Agent, and
the Agent will promptly forward to each Bank:
(a) Monthly Reports. Within 30 days after the end of each calendar
month of the Borrower (within 45 days after the end of the last month of
each Fiscal Year), the consolidated balance sheets of the Borrower and
its Subsidiaries, in each case, as at the end of such month, and the
related consolidated statements of income and the consolidated statement
of cash flow for such month and for the elapsed portion of the calendar
year ended with the last day of such month, in each case setting forth
comparative figures for the corresponding month in the prior calendar
year and the budgeted figures for such month as set forth in the
respective budget delivered pursuant to Section 8.01(e).
(b) Quarterly Financial Statements. As soon as available and in
any event within 45 days after the close of each of the first three
quarterly accounting periods in each Fiscal Year, (i) the consolidated
balance sheets of the Borrower and its Subsidiaries, in each case, as at
the end of such quarterly period and the related consolidated statements
of income and the consolidated statement of cash flow for such quarterly
period and for the elapsed portion of the Fiscal Year ended with the last
day of such quarterly period and (ii) management's discussion and
analysis of the important operational and financial developments during
such quarterly period; provided that so long as the Borrower is filing
quarterly reports on Form 10-Q with the SEC, the provision of such a
quarterly report for the respective fiscal quarter within the time frame
required above shall satisfy the requirements of this clause (b).
(c) Annual Financial Statements. Within 95 days after the close of
each Fiscal Year, (i) the consolidated and consolidating balance sheets
of the Borrower and its Subsidiaries, in each case, as at the end of such
Fiscal Year and the related consolidated and consolidating statements of
income and consolidated statements of shareholders' equity and cash flow
for such Fiscal Year setting forth comparative figures for the preceding
Fiscal Year and by KPMG Peat Marwick or such other independent certified
public accountants of recognized national standing reasonably acceptable
to the Agent, together with a report of such accounting firm stating that
in the course of its regular audit of the financial statements of the
Borrower and its Subsidiaries, which audit was conducted in accordance
with generally accepted auditing standards, such accounting firm obtained
no knowledge of any Default or Event of Default which has occurred and is
continuing or, if in the opinion of such accounting firm such a Default
or Event of Default with respect to the covenants set forth in Sections
9.02 through 9.15, inclusive, has occurred and is continuing, a
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material Indebtedness of the Borrower and its Restricted Subsidiaries
taken as a whole or (z) with respect to any Document.
(h) Other Reports and Filings. Promptly, copies of all financial
information, proxy materials and other information and reports, if any,
which the Borrower or any of its Restricted Subsidiaries shall file with
the Securities and Exchange Commission or any successor thereto (the
"SEC") or deliver to holders of its Indebtedness pursuant to the terms of
the documentation governing such Indebtedness (or any trustee, agent or
other representative therefor).
(i) Environmental Matters. Promptly upon, and in any event within
ten Business Days after, an Authorized Representative of the Borrower or
any of its Restricted Subsidiaries obtains knowledge thereof, notice of
one or more of the following environmental matters, unless such
environmental matters could not, individually or when aggregated with all
other such environmental matters, be reasonably expected to materially
and adversely affect the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the
Borrower and its Restricted Subsidiaries taken as a whole:
(i) any pending or threatened Environmental Claim against the
Borrower or any of its Subsidiaries or any Real Property owned or
operated by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real
Property owned or operated by the Borrower or any of its
Subsidiaries that (a) results in noncompliance by the Borrower or
any of its Subsidiaries with any applicable Environmental Law or
(b) could reasonably be expected to form the basis of an
Environmental Claim against the Borrower or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned
or operated by the Borrower or any of its Subsidiaries that could
reasonably be expected to cause such Real Property to be subject
to any restrictions on the ownership, occupancy, use or
transferability by the Borrower or any of its Subsidiaries of such
Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response
to the actual or alleged presence of any Hazardous Material on any
Real Property owned or operated by the Borrower or any of its
Subsidiaries as required by any Environmental Law or any
governmental or other administrative agency; provided that in any
event the Borrower shall deliver to each Bank all notices received
by it or any of its respective Subsidiaries from any government or
governmental agency under, or pursuant to, CERCLA.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial
action, and the Borrower's or such Subsidiary's response thereto. In
addition, the Borrower will provide the Banks with copies of all material
communications with any government or governmental agency relating to
Environmental Laws, all communications with any Person (other than its
attorneys) relating to any Environmental Claim of which notice is
required to be given pursuant to this Section 8.01(i), and such detailed
reports of any such Environmental Claim as may reasonably be requested by
the Banks.
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(j) Annual Meetings with Banks. At the request of the Agent, the
Borrower shall within 120 days after the close of each Fiscal Year hold a
meeting at a time and place selected by the Borrower and reasonably
acceptable to the Agent at which meeting shall be reviewed the financial
results of the previous Fiscal Year and the financial condition of the
Borrower and the budgets presented for the current Fiscal Year.
(k) Other Information. From time to time, such other information
or documents (financial or otherwise) with respect to the Borrower or any
of its Subsidiaries as the Agent or the Required Banks may reasonably
request in writing.
8.02 Books, Records and Inspections. The Borrower will, and will cause
each of its respective Restricted Subsidiaries to, keep proper books of record
and account in which full, true and correct entries in conformity with
generally accepted accounting principles and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its respective
Restricted Subsidiaries to, permit officers and designated representatives of
the Agent and any representatives designated by the Required Banks to visit and
inspect, after reasonable notice during regular business hours and under
guidance of officers of the Borrower or such Restricted Subsidiary, any of the
properties of the Borrower or such Restricted Subsidiary, and to examine the
books of account of the Borrower or such Restricted Subsidiary and discuss the
affairs, finances and accounts of the Borrower or such Restricted Subsidiary
with, and be advised as to the same by, its and their officers and independent
accountants, all at such reasonable times and intervals and to such reasonable
extent as such Agent or such Bank may request.
8.03 Maintenance of Property; Insurance. (a) Schedule VI sets forth a
true and complete listing of all insurance (including self-insurance programs)
maintained by the Borrower and its Restricted Subsidiaries as of the Initial
Borrowing Date, the levels (and scope of coverage) of which insurance the
Borrower deems prudent. The Borrower will, and will cause each of its
respective Restricted Subsidiaries to, (i) keep all property necessary in its
business in good working order and condition (ordinary wear and tear excepted),
(ii) maintain insurance on all its property in at least such amounts and
against at least such risks as is consistent and in accordance with industry
practice and (iii) furnish to the Agent, upon written request, full information
as to the insurance carried.
(b) The Borrower will, and will cause its respective Restricted
Subsidiaries to, at all times keep their respective property insured in favor
of the Collateral Agent, and all policies (including Mortgage Policies) or
certificates (or certified copies thereof) with respect to such insurance (and
any other insurance maintained by the Borrower or any of its respective
Restricted Subsidiaries) (i) shall be endorsed to the Collateral Agent's
reasonable satisfaction for the benefit of the Collateral Agent (including,
without limitation, by naming the Collateral Agent as loss payee or as an
additional insured (provided that the Borrower and its Restricted Subsidiaries
shall be permitted to settle claims in an amount less than $10,000,000 per
claim, so long as the proceeds from such claims are applied in accordance with
Section 3.03(g))), (ii) shall state that such insurance policies shall not be
cancelled or revised without 30 days' prior written notice thereof by the
respective insurer to the Collateral Agent, (iii) shall provide that the
respective insurers irrevocably waive any and all rights of subrogation with
respect to the Collateral Agent and the Secured Creditors, (iv) shall contain
the standard non-contributory mortgagee clause endorsement in favor of the
Collateral Agent with respect to hazard insurance coverage, (v) shall, except
in the case of
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public liability insurance and workers' compensation insurance,
provide that any losses shall be payable notwithstanding (A) any act or neglect
of the Borrower or any of its respective Restricted Subsidiaries, (B) the
occupation or use of the properties for purposes more hazardous than those
permitted by the terms of the respective policy if such coverage is obtainable
at commercially reasonable rates and is of the kind from time to time
customarily insured against by Persons owning or using similar property and in
such amounts as are customary, (C) any foreclosure or other proceeding relating
to the insured properties if such coverage is available at commercially
reasonable rates or (D) any change in the title to or ownership or possession
of the insured properties and (vi) shall be deposited with the Collateral Agent
if such coverage is available at commercially reasonable rates.
(c) If the Borrower or any of its respective Restricted Subsidiaries
shall fail to maintain all insurance in accordance with this Section 8.03, or
if the Borrower or any of its respective Restricted Subsidiaries shall fail to
so endorse and deposit all policies or certificates with respect thereto, the
Agent and/or the Collateral Agent shall have the right (but shall be under no
obligation) after giving notice to the Borrower (but not requiring any consent
from the Borrower) to procure such insurance and the Borrower agrees to
reimburse the Agent or the Collateral Agent, as the case may be, for all costs
and expenses of procuring such insurance.
8.04 Corporate Franchises. The Borrower will, and will cause each of its
respective Restricted Subsidiaries to, do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and its
material rights, franchises, licenses and patents; provided, however, that
nothing in this Section 8.04 shall prevent (i) sales of assets, mergers or
other transactions by or among the Borrower or any of its Restricted
Subsidiaries in accordance with Section 9.02 or (ii) (x) the withdrawal by the
Borrower or any of the Restricted Subsidiaries of its qualification as a
foreign corporation or the failure to qualify as a foreign corporation in any
jurisdiction or (y) the amendment of the Certificate of Incorporation or
By-Laws of the Borrower or any of its Restricted Subsidiaries, in each case
which would not in any way materially and adversely affect the Banks, and where
such withdrawal or failure or amendment, as the case may be, could not
reasonably be expected to have a Material Adverse Effect.
8.05 Compliance with Statutes, etc. The Borrower will, and will cause
each of its respective Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such noncompliances as could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
8.06 Compliance with Environmental Laws. (a) The Borrower will comply,
and will cause each of its respective Subsidiaries to comply, in all material
respects with all Environmental Laws applicable to the ownership or use of its
Real Property now or hereafter owned or operated by the Borrower or any of its
Subsidiaries, will within a reasonable time period pay or cause to be paid all
costs and expenses incurred in connection with such compliance, and will keep
or cause to be kept all such Real Property free and clear of any Liens on such
Real Property imposed pursuant to such Environmental Laws; provided that,
neither the Borrower nor any of its Subsidiaries shall be required to remove
any such Liens, so long as the aggregate amount of obligations purported to be
secured by such Liens does not exceed $1,000,000, and such Liens are being
contested in good faith and by proper proceedings if it has maintained adequate
reserves with respect thereto in accordance with generally accepted accounting
principles. Neither the Borrower nor any of
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its Subsidiaries will generate, use, treat, store, release or dispose of, or
permit the generation, use, treatment, storage, release or disposal of
Hazardous Materials on any Real Property now or hereafter owned or operated by
the Borrower or any of its Subsidiaries, or transport or permit the
transportation of Hazardous Materials to or from any such Real Property except
for Hazardous Materials used or stored at any such Real Properties in material
compliance with all applicable Environmental Laws and reasonably required in
connection with the operation, use and maintenance of any such Real Property.
(b) At the written request of the Agent or the Required Banks, which
request shall specify in reasonable detail the basis therefor, at any time and
from time to time, the Borrower will provide, at the Borrower's cost and
expense, an environmental site assessment report concerning any Real Property
now or hereafter owned or operated by the Borrower or any of its Subsidiaries,
prepared by an environmental consulting firm approved by the Agent, indicating
the presence or absence of Hazardous Materials and the potential cost of any
removal or remedial action in connection with any Hazardous Materials on such
Real Property; provided that such request may be made only if (i) there has
occurred and is continuing an Event of Default, (ii) the Agent reasonably
believes that the Borrower, any of its Subsidiaries or any such Real Property
is not in material compliance with Environmental Law, or (iii) circumstances
exist that reasonably could be expected to form the basis of a material
Environmental Claim against the Borrower, any of its Subsidiaries or any such
Real Property. If the Borrower fails to provide the same within 90 days after
such request was made, the Agent may order the same, and the Borrower shall
grant and hereby grant to the Agent and the Banks and their agents access to
such Real Property and specifically grant the Agent and the Banks an
irrevocable non-exclusive license to the extent consistent with the rights of
tenants, to undertake such an assessment, subject to the Borrower's right to
receive notice (through an Authorized Representative) at least 5 days prior to
the exercise of any such access and subject to the Borrower's right to have a
representative of the Borrower accompany the Agent and the Banks and their
agents at all times in connection with such access, all at the Borrower's
expense.
8.07 ERISA. As soon as possible and, in any event, within 20 days after
the Borrower or any of its respective Restricted Subsidiaries or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the
following, the Borrower will deliver to the Agent, and the Agent shall promptly
forward to each Bank a certificate of an Authorized Representative of the
Borrower setting forth details as to such occurrence and the action, if any,
that the Borrower, such Restricted Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given to or filed with or by the Borrower, such Restricted Subsidiary, the
ERISA Affiliate, the PBGC, or a Plan participant or the Plan administrator with
respect thereto: that a Reportable Event has occurred; that an accumulated
funding deficiency has been incurred or an application is likely to be or has
been made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code or Section
302 of ERISA with respect to a Plan and/or a Multiemployer Plan; that a
contribution required to be made to a Plan, Multiemployer Plan and/or Foreign
Pension Plan has not been timely made; that a Plan and/or a Multiemployer Plan
has been or is reasonably expected to be terminated, reorganized, partitioned
or declared insolvent under Title IV of ERISA; that a Plan and/or a
Multiemployer Plan has an Unfunded Current Liability giving rise to a lien
under ERISA or the Code; that proceedings are likely to be or have been
instituted or notice has been given to terminate or appoint a trustee to
administer a Plan and/or a Multiemployer Plan; that a proceeding has been
instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Multiemployer Plan if material in amount; that the Borrower,
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any of its respective Restricted Subsidiaries or any ERISA Affiliate will or is
reasonably expected to incur any material liability (including any indirect,
contingent or secondary liability) to or on account of the termination of or
withdrawal from a Plan and/or a Multiemployer Plan under Section 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan and/or a
Multiemployer Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(l) of ERISA; or that the Borrower or any
Restricted Subsidiary is reasonably expected to incur any liability pursuant to
any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any employee pension benefit plan (as
defined in Section 3(2) of ERISA) which liability, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Upon request, the Borrower will deliver to each of the Banks (i) a complete
copy of the annual report (Form 5500) of each Plan (including, to the extent
required to be filed with the Internal Revenue Service in connection with such
annual report, the related financial and actuarial statements and opinions and
other supporting statements, certifications, schedules and information)
required to be filed with the Internal Revenue Service and (ii) copies of any
records, documents or other information (but only Schedule B of any annual
report unless the Agent shall, with respect to a particular year, request in
writing a copy of the entire annual report) that must be furnished to the PBGC
with respect to any Plan pursuant to Section 4010 of ERISA. In addition to any
certificates or notices delivered to the Banks pursuant to the first sentence
hereof, copies of such annual reports and any material notices received by the
Borrower or any of its respective Restricted Subsidiaries or any ERISA
Affiliate with respect to any Plan, Multiemployer Plan, and/or Foreign Pension
Plan shall be delivered to the Banks no later than 20 days after the date such
report has been requested or such notice has been received by the Borrower, the
Restricted Subsidiary or the ERISA Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. The Borrower shall cause each
of its Fiscal Years, and each of its Restricted Subsidiaries' Fiscal Years, to
end on the Saturday closest to December 31, and shall cause each of its fiscal
quarters, and each of its Restricted Subsidiaries' fiscal quarters, to end on
the Saturday closest to each March 31, June 30, September 30 and December 31.
8.09 Performance of Obligations. The Borrower will, and will cause each
of its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement and other debt instrument by which it
is bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
8.10 Payment of Taxes. The Borrower will pay and discharge or cause to
be paid and discharged, and will cause each of its respective Subsidiaries to
pay and discharge, all material taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits, or upon any material
properties belonging to it, in each case on a timely basis, and all lawful
claims which, if unpaid, might become a lien or charge upon any properties of
the Borrower or any of its Restricted Subsidiaries; provided that neither the
Borrower nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves with respect thereto
in accordance with generally accepted accounting principles.
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8.11 Additional Security; Further Assurances; Required Appraisals. (a)
The Borrower will, and will cause each of its respective Restricted
Subsidiaries (excluding Foreign Subsidiaries) to, grant to the Collateral Agent
security interests and mortgages (an "Additional Mortgage") in such Real
Property (other than Real Property encumbered by (i) liens incurred by a
Restricted Subsidiary at a time when it was an Unrestricted Subsidiary, to the
extent such Liens are otherwise permitted by this Agreement and (ii) Liens
permitted pursuant to Sections 9.01(vii), (viii), (xvii) and (xviii)) of the
Borrower or any of its respective Restricted Subsidiaries as are not covered by
the original Mortgages, to the extent such Real Property is acquired after the
Initial Borrowing Date and either (x) the cost (including assumed Indebtedness)
of such Real Property is in excess of $2,500,000 or (y) the respective
Additional Mortgage has been requested by the Required Banks (each such Real
Property, an "Additional Mortgaged Property"). All such Additional Mortgages
shall be granted pursuant to documentation substantially in the form of the
Mortgages delivered to the Agent on the Initial Borrowing Date or in such other
form as is reasonably satisfactory to the Agent and shall constitute valid and
enforceable perfected Liens superior to and prior to the rights of all third
Persons and subject to no other Liens except as are permitted by Section 9.01
at the time of perfection thereof. The Additional Mortgages or instruments
related thereto shall have been duly recorded or filed in such manner and in
such places as are required by law to establish, perfect, preserve and protect
the Liens in favor of the Collateral Agent required to be granted pursuant to
the Additional Mortgages and all taxes, fees and other charges payable in
connection therewith shall have been paid in full.
(b) The Borrower will, and will cause each of its respective Restricted
Subsidiaries to, at the expense of the Borrower or the respective Subsidiary,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral
Agent from time to time such vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers
of attorney, certificates, real property surveys, reports and other assurances
or instruments and take such further steps relating to the Collateral covered
by any of the Security Documents as the Collateral Agent may reasonably require
pursuant to this Section 8.11. Furthermore, the Borrower shall cause to be
delivered to the Collateral Agent such opinions of counsel, title insurance and
other related documents as may be requested by the Collateral Agent to assure
itself that this Section 8.11 has been complied with.
(c) The Borrower agrees to cause each Restricted Subsidiary (excluding
Foreign Subsidiaries) established or created in accordance with Section 9.12 to
execute and deliver a guaranty of all Obligations in substantially the form of
the Subsidiary Guaranty, or by becoming a party to the Subsidiary Guaranty.
(d) The Borrower agrees to pledge all of the capital stock (excluding
that portion of the voting stock of any Foreign Subsidiary which would be in
excess of 65% of the total outstanding voting stock of such Foreign Subsidiary)
of each new Subsidiary (other than (x) any Subsidiary of an Unrestricted
Subsidiary and (y) any Foreign Subsidiary which is a Subsidiary of another
Foreign Subsidiary) created in accordance with Section 9.12 to the Collateral
Agent for the benefit of the Secured Creditors pursuant to the Pledge
Agreement.
(e) The Borrower will cause each Restricted Subsidiary (excluding Foreign
Subsidiaries) established or created in accordance with Section 9.12 to grant
to the Collateral Agent a first priority Lien on all property (tangible and
intangible) of such Subsidiary upon terms similar to those set forth in the
Security Documents, as appropriate, and reasonably satisfactory in form and
substance to the Agent. The Borrower shall cause each of its
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respective Restricted Subsidiaries, at its own expense, to execute, acknowledge
and deliver, or cause the execution, acknowledgment and delivery of, and
thereafter register, file or record in any appropriate governmental
office, any document or instrument reasonably deemed by the Collateral Agent to
be necessary or desirable for the creation and perfection of the foregoing
Liens. The Borrower will cause each of its respective Restricted Subsidiaries
to take all actions requested by the Agent (including, without limitation, the
filing of UCC-1s) in connection with the granting of such security interests.
(f)(i) Notwithstanding anything to the contrary contained in this
Agreement or the Security Agreement but subject to Section 8.11(f)(ii) hereof,
the parties hereto agree that, to the extent that the representations,
warranties, covenants and agreements contained herein or in the Security
Agreement with respect to foreign Patents, Marks or Copyrights are at any time
incorrect (in the case of representations or warranties) or not complied with
(in the case of covenants), then in each case (a) the existence of such
circumstances shall be deemed not to give rise to a material misrepresentation
(with the effect being that Credit Events may still occur, so long as all other
applicable conditions are satisfied, pursuant to Section 6.01(ii) and no Event
of Default shall exist as a result thereof pursuant to Section 10.02), and (b)
no Default or Event of Default shall arise as a result of such covenant
violations pursuant to Section 10.07. Notwithstanding anything to the contrary
contained above, the Borrower shall, and shall cause its Subsidiaries to, use
its good faith efforts to provide correct information with respect to all
foreign Patents, Marks or Copyrights, and to comply with the covenants relating
thereto (in each case without regard to the matters described in the preceding
sentence).
(ii) Upon the request of the Collateral Agent or the Required Banks, the
Borrower shall take, or cause to be taken, action as may be requested in order
to perfect (or maintain the perfection of) the security interests (or take any
analogous actions under the applicable provisions of local law in order to
protect such security interests) in any foreign Patents, Marks or Copyrights,
in each case to the extent such actions are permitted to be taken under the
laws of the applicable jurisdictions and, so long as no Default or Event of
Default exists, the requested actions will not result in any material costs
(including additional taxes) or material burdens in the conduct of the
Borrower's business, in each case in relation to the benefit to be received.
Such foreign Patents, Marks and Copyrights shall not be subject to the
provisions of the first sentence of Section 8.11(f)(i).
(g) The security interests required to be granted pursuant to this
Section 8.11 shall be granted pursuant to security documentation (which shall
be substantially similar to the Security Documents already executed and
delivered by the Borrower and its Restricted Subsidiaries, as applicable) or
otherwise satisfactory in form and substance to the Agent and shall constitute
valid and enforceable perfected security interests prior to the rights of all
third Persons and subject to no other Liens except such Liens as are permitted
by Section 9.01. The Additional Security Documents and other instruments
related thereto shall be duly recorded or filed in such manner and in such
places and at such times as are required by law to establish, perfect, preserve
and protect the Liens, in favor of the Collateral Agent for the benefit of the
respective Secured Creditors, required to be granted pursuant to the Additional
Security Documents and all taxes, fees and other charges payable in connection
therewith shall be paid, jointly and severally, in full by the Borrower. At
the time of the execution and delivery of the Additional Security Documents,
the Borrower shall cause to be delivered to the Collateral Agent such opinions
of counsel, Mortgage Policies, title surveys, real estate appraisals and other
related documents as may be reasonably requested by the Agent or the Required
Banks to assure themselves that this Section 8.11 has been complied with.
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(h) In the event that the Agent or the Required Banks at any time after
the Initial Borrowing Date determine in its or their good faith discretion that
real estate appraisals satisfying the requirements of FIRREA (any such
appraisal a "Required Appraisal") are or were required to be obtained, or
should be obtained, in connection with any Mortgaged Property or Mortgaged
Properties, then, within 120 days after receiving written notice thereof from
the Agent or the Required Banks, as the case may be, such Required Appraisal
shall be delivered, at the expense of the Borrower or the relevant Restricted
Subsidiary, to the Agent, which Required Appraisal, and the respective
appraiser, shall be reasonably satisfactory to the Agent.
(i) In the event that at any time after the Initial Borrowing Date,
Florsheim Occupational shall cease to constitute an Inactive Subsidiary, the
Borrower shall cause Florsheim Occupational to become a party to each of the
Subsidiary Guaranty, the Pledge Agreement and the Security Agreement.
(j) The Borrower agrees that each action required above by Section 8.11
(a), (b) or (i) shall be completed as soon as possible, but in no event later
than 60 days after such action is requested to be taken by the Agent or the
Required Banks. The Borrower further agrees that each action required by
Section 8.11(c), (d), (e) and (g) with respect to the Additional Collateral
shall be completed contemporaneously with the creation of such new Subsidiary.
8.12 Interest Rate Protection. The Borrower shall maintain, at all times
commencing no later than the 90th day after the Initial Borrowing Date and
continuing until the third anniversary of the Initial Borrowing Date (the
"Required Interest Rate Protection Period"), interest rate protection pursuant
to one or more Interest Rate Protection Agreements which establish a fixed or
maximum interest rate (whether through swaps, caps, collars, or otherwise)
reasonably acceptable to the Agent in respect of, at all times during the
Required Interest Rate Protection Period, a notional amount at all such times
at least equal to (x) $20,000,000 less (y) the aggregate principal amount of
Senior Notes, if any, outstanding at such time.
8.13 Ownership of Subsidiaries. Except as set forth in Schedule IV, the
Borrower shall directly or indirectly own 100% of the capital stock of each of
its Subsidiaries.
8.14 Maintenance of Corporate Separateness. The Borrower will, and will
cause each of its Subsidiaries to, satisfy customary corporate formalities,
including the holding of regular board of directors' and shareholders' meetings
or action by directors or shareholders without a meeting and the maintenance of
corporate offices and records. Neither the Borrower nor any of its respective
Restricted Subsidiaries shall make any payment to a creditor of any
Unrestricted Subsidiaries in respect of any liability of any Unrestricted
Subsidiaries, and no bank account of any Unrestricted Subsidiary shall be
commingled with any bank account of the Borrower or any of its respective
Restricted Subsidiaries. Any financial statements distributed to any creditors
of any Unrestricted Subsidiaries shall clearly establish or indicate the
corporate separateness of such Unrestricted Subsidiary from the Borrower and
its respective Restricted Subsidiaries. Finally, neither the Borrower nor any
of its Subsidiaries shall take any action, or conduct its affairs in a manner,
which is likely to result in the corporate existence of the Borrower or any of
its Subsidiaries being ignored, or in the assets and liabilities of the
Borrower or any of its respective Restricted Subsidiaries being substantively
consolidated with those of any Unrestricted Subsidiaries in a bankruptcy,
reorganization or other insolvency proceeding.
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SECTION 9. Negative Covenants. The Borrower covenants and agrees that on
and after the Initial Borrowing Date and until the Total Revolving Loan
Commitment and all Letters of Credit and Acceptances have terminated and the
Loans, Notes and Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:
9.01 Liens. The Borrower will not, and will not permit any of its
respective Restricted Subsidiaries to, create, incur, assume or suffer to exist
any Lien upon or with respect to any property or assets (real or personal,
tangible or intangible) of the Borrower or any of its Restricted Subsidiaries,
whether now owned or hereafter acquired, or sell any such property or assets
subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets (including sales of accounts receivable with
recourse to the Borrower or any of its Restricted Subsidiaries), or assign any
right to receive income or permit the filing of any financing statement under
the UCC or any other similar notice of Lien under any similar recording or
notice statute; provided that the provisions of this Section 9.01 shall not
prevent the creation, incurrence, filing, assumption or existence of the
following (Liens described below are herein referred to as "Permitted Liens"):
(i) incipient or inchoate Liens for taxes, assessments or
governmental charges or levies not yet due and payable or Liens for
taxes, assessments or governmental charges or levies being contested in
good faith and by appropriate proceedings for which adequate reserves
have been established in accordance with generally accepted accounting
principles in the United States (or the equivalent thereof in any country
in which a Foreign Sales Corporation or a Foreign Subsidiary is doing
business, as applicable);
(ii) Liens in respect of property or assets of the Borrower or any
of its Restricted Subsidiaries imposed by law, which were incurred in the
ordinary course of business and do not secure Indebtedness for borrowed
money, such as carriers', warehousemen's, materialmen's and mechanics'
liens and other similar Liens arising in the ordinary course of business,
and (x) which do not in the aggregate materially detract from the value
of the Borrower's or such Restricted Subsidiary's property or assets or
materially impair the use thereof in the operation of the business of the
Borrower or such Restricted Subsidiary or (y) which are being contested
in good faith by appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the property or assets
subject to any such Lien;
(iii) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Schedule VII, but
only to the respective date, if any, set forth in such Schedule VII for
the removal and termination of any such Liens, plus renewals and
extensions of such Liens to the extent set forth on Schedule VII,
provided that (x) the aggregate principal amount of the Indebtedness, if
any, secured by such Liens does not increase from that amount outstanding
at the time of any such renewal or extension and (y) any such renewal or
extension does not encumber any additional assets or properties of the
Borrower or any of its Restricted Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
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(vi) licenses, leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the conduct
of the business of the Borrower and its Restricted Subsidiaries taken as
a whole;
(vii) Liens upon assets subject to Capitalized Lease Obligations of
the Borrower and its Restricted Subsidiaries to the extent permitted by
Section 9.04(x), plus renewals and extensions of such Liens, provided
that (x) such Liens only serve to secure the payment of Indebtedness
arising under such Capitalized Lease Obligation and (y) the Lien
encumbering the asset giving rise to the Capitalized Lease Obligation
does not encumber any other asset of the Borrower or any Restricted
Subsidiary of the Borrower;
(viii) Liens placed upon assets used in the ordinary course of
business of the Borrower or any of its Restricted Subsidiaries at the
time of acquisition or new construction thereof by the Borrower or any
such Restricted Subsidiary or within 180 days thereafter to secure
Indebtedness permitted pursuant to Section 9.04(x) and incurred to pay
all or a portion of the purchase price and/or construction costs thereof,
plus renewals and extensions of such Liens, provided that, in all events,
the Lien encumbering the assets so acquired or newly constructed does not
encumber any other asset of the Borrower or such Restricted Subsidiary,
or liens securing Indebtedness permitted pursuant to Section 9.04(x) and
assumed or incurred in connection with any acquisition or merger
permitted under Section 9.02(vi), plus renewals and extensions of such
Liens, provided that, in all events, such Liens do not encumber any other
asset of the Borrower or such Restricted Subsidiary;
(ix) easements, rights-of-way, restrictions (including zoning
restrictions), encroachments, protrusions and other similar charges or
encumbrances, and minor title deficiencies, in each case whether now or
hereafter in existence, not securing Indebtedness and not materially
interfering with the conduct of the business of the Borrower or any of
its Restricted Subsidiaries;
(x) Liens arising from precautionary UCC financing statement filings
regarding operating leases entered into by the Borrower or any of its
Restricted Subsidiaries in the ordinary course of business;
(xi) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under Section 10.09, provided that no
cash or property is deposited or delivered to secure the respective
judgment or award (or any appeal bond in respect thereof, except as
permitted by following clause (xiii));
(xii) statutory and contractual landlords' liens under leases to
which the Borrower or any of its Restricted Subsidiaries are a party;
(xiii) Liens (other than any Lien imposed by ERISA) (x) incurred or
deposits made in the ordinary course of business of the Borrower and its
Restricted Subsidiaries in connection with workers' compensation,
unemployment insurance and other types of social security, (y) to secure
the performance by the Borrower and its Restricted Subsidiaries of
tenders, statutory obligations (other than excise taxes), surety, stay,
customs and appeal bonds, statutory bonds, bids, leases, government
contracts, trade contracts, performance and return of money bonds and
other similar obligations (exclusive of obligations for the payment of
borrowed money) or (z) to secure the performance by the Borrower and its
Restricted Subsidiaries of leases of
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Real Property, to the extent incurred or made in the ordinary course of
business consistent with past practices, provided that the aggregate
amount of deposits at any time pursuant to sub-clause (y) and sub-clause
(z) shall not exceed $1,000,000 in the aggregate;
(xiv) any interest or title of a lessor, sublessor, licensee or
licensor under any lease or license agreement permitted by this
Agreement;
(xv) Liens in favor of customs and revenue authorities arising as a
matter of law to secure the payment of customs duties in connection with
the importation of goods and deposits made to secure statutory
obligations in the form of excise taxes;
(xvi) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
the Borrower or any of its Restricted Subsidiaries in the ordinary course
of business of the Borrower and its Restricted Subsidiaries;
(xvii) Liens on assets of Foreign Subsidiaries, provided that such
Liens secure only Indebtedness incurred by Foreign Subsidiaries pursuant
to Section 9.04(ix);
(xviii) Liens on assets of any Person becoming a Restricted
Subsidiary and acquired in connection with any Investments permitted
pursuant to Section 9.05(vi), provided that (x) such Liens existed at the
time the respective acquisition was made pursuant to Section 9.05(vi) and
were not granted in connection with, or in anticipation of, such
acquisition; (y) such Liens do not extend to or cover any property or
assets of the Borrower or any of its Restricted Subsidiaries other than
the property and assets of such Person so acquired pursuant to Section
9.05(vi) and that were subject to such Liens at the time of such
acquisition; and (z) such Liens do not secure any obligations other than
the obligations secured by the respective such Liens at the time of the
acquisition pursuant to Section 9.05(vi), and the obligations secured are
permitted under Section 9.04 of this Agreement; and
(xix) Liens not otherwise permitted by the foregoing clauses (i)
through (xviii) to the extent attaching to properties and assets with an
aggregate fair value not in excess of, and securing liabilities not in
excess of, $2,000,000 in the aggregate at any time outstanding.
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. The
Borrower will not, and will not permit any of its Restricted Subsidiaries to,
wind up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation, or convey, sell, lease or otherwise dispose of (or
agree to do any of the foregoing at any future time) all or any part of its
property or assets (other than the liquidation of Cash Equivalents in the
ordinary course of business), or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than (x) purchases or other acquisitions
of inventory, materials, equipment, furniture, fixtures, and intangible assets
in the ordinary course of business and (y) transfers of cash, Cash Equivalents,
equipment and inventory in the ordinary course of business among the Credit
Parties) of any Person, except that:
(i) Capital Expenditures by the Borrower and its Restricted
Subsidiaries shall be permitted to the extent not in violation of Section
9.07;
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(ii) the Borrower and its Restricted Subsidiaries may (w) in the
ordinary course of business sublease any leased real property which, in
the judgment of such Person, is no longer necessary in the conduct of
such Person's business, provided that each such sublease shall be for
fair market value, (x) in the ordinary course of business, sell, lease or
otherwise dispose of any fixed assets which, in the reasonable judgment
of such Person, are obsolete, worn out or otherwise no longer useful in
the conduct of such Person's business and (y) sell, lease or otherwise
dispose of any other assets, provided that with respect to dispositions
pursuant to clauses (x) and (y) each such sale, lease or disposition
shall be for fair market value (other than with respect to sales, leases
or dispositions in an aggregate amount not to exceed $100,000 per
calendar year) and at least 75% of the consideration therefor shall be in
the form of cash, and, provided further, that the aggregate Net Sale
Proceeds of all assets subject to sales or other dispositions pursuant to
clauses (x) and (y) shall not exceed $5,000,000 in the aggregate after
the Initial Borrowing Date and prior to the Maturity Date;
(iii) Investments may be made to the extent permitted by Section
9.05;
(iv) the Borrower and its Restricted Subsidiaries may lease (as
lessee) real or personal property (so long as any such lease does not
create a Capitalized Lease Obligation except to the extent permitted by
Section 9.04);
(v) the Borrower and its Restricted Subsidiaries may make sales or
transfers of inventory (x) in the ordinary course of business or (y) to
any Domestic Wholly-Owned Subsidiary of the Borrower which is a
Subsidiary Guarantor;
(vi) so long as (x) no Default or Event of Default exists or would
result therefrom and (y) the Borrower's Leverage Ratio at the time of any
such acquisition (and calculated on a Pro Forma Basis after giving effect
to such acquisition and to any Indebtedness incurred, issued or assumed
in connection therewith) is less than 4.25:1.00 (except to the extent set
forth in the proviso to the definition of Available $25 Million Basket
Amount), the Borrower and its Restricted Subsidiaries may acquire the
capital stock of, or all or substantially all of the assets of, any
Person (or any product line or division of such Person) or merge,
consolidate or otherwise combine with another Person (so long as the
Borrower, in the case of combinations involving the Borrower, or the
Subsidiary, in other cases, is the surviving corporation), provided that
the aggregate consideration (including the amount of any liabilities
assumed but excluding any stock of the Borrower issued directly as
consideration for such acquisition or merger) paid in connection with any
acquisition or merger pursuant to this Section 9.02(vi) does not exceed
(A) the then Available $25 Million Basket Amount on such date (after
giving effect to all prior and contemporaneous reductions thereto, except
as a result of such acquisition or merger), plus (B) the then Available
Net Income Amount on such date (after giving effect to all prior and
contemporaneous adjustments thereto, except as a result of such
acquisition or merger), plus (C) the then Available Unrestricted Proceeds
Amount (after giving effect to all prior and contemporaneous adjustments
thereto, except as a result of such acquisition or merger), it being
understood and agreed that at the time of any acquisition or merger
pursuant to this clause (vi), the Borrower shall allocate the amount of
the aggregate consideration therefor (as described above) as constituting
a utilization of one or more of the basket amounts described in preceding
clauses (A), (B) and (C), with the aggregate amount of such utilizations
to
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equal the aggregate consideration as described above;
(vii) the Borrower may sell or otherwise dispose of any shares of
capital stock of any Unrestricted Subsidiaries owned by it;
(viii) so long as no Default or Event of Default exists or would
result therefrom, the Borrower or any Domestic Wholly-Owned Subsidiary
which is a Credit Party may be merged into or consolidated with the
Borrower (so long as the Borrower is the surviving corporation of such
combination) or any other Domestic Wholly-Owned Subsidiary which is a
Credit Party; and
(ix) so long as no Default or Event of Default exists or would
result therefrom, the assets of any Restricted Subsidiary may be disposed
of by the merger or consolidation of such Restricted Subsidiary with and
into another Person or by the sale of 100% of the capital stock of such
Restricted Subsidiary (in which event the assets of such Restricted
Subsidiary shall no longer serve as Collateral for the Obligations and
shall be released from the Liens of the Security Documents, and such
Restricted Subsidiary shall be released from liability for the
Obligations), provided that such merger, consolidation or stock sale, if
completed as a sale of other assets, would be permissible under Section
9.02(ii)(y).
To the extent the provisions of this Section 9.02 restrict the sale or other
disposition of any Collateral but the Required Banks (or all Banks to the
extent required by Section 13.12) waive such provisions in writing with respect
to such sale or other Disposition, or to the extent with respect to any
Collateral is sold or otherwise disposed of as permitted by this Section 9.02,
such Collateral (unless sold to the Borrower or a Subsidiary of the Borrower)
shall be sold or otherwise disposed of free and clear of the Liens created by
the Security Documents, and the Agent and Collateral Agent shall be authorized
to take any actions deemed appropriate in order to effect the foregoing.
9.03 Dividends. The Borrower shall not, and shall not permit any
of its Restricted Subsidiaries to, authorize, declare or pay any Dividends with
respect to the Borrower or any of its Restricted Subsidiaries, except that:
(i) any Restricted Subsidiary of the Borrower may pay Dividends to
the Borrower or any Wholly-Owned Subsidiary which is a Restricted
Subsidiary of the Borrower;
(ii) so long as (x) no Default or Event of Default exists or would
result therefrom and (y) the Borrower's Leverage Ratio at the time of
paying any such Dividend is less than 4.25:1.00 (except to the extent set
forth in the proviso to the definition of Available $25 Million Basket
Amount), the Borrower shall be permitted to pay cash Dividends
(including, without limitation, cash Dividends on Qualified Preferred
Stock) in an amount not to exceed (A) the then Available $25 Million
Basket Amount on such date (after giving effect to all prior and
contemporaneous reductions thereto, except as a result of such Dividend),
plus (B) the then Available Net Income Amount on such date (after giving
effect to all prior and contemporaneous adjustments thereto, except as a
result of such Dividend), plus (C) the then Available Unrestricted
Proceeds Amount (after giving effect to all prior and contemporaneous
adjustments thereto, except as a result of such Dividend); provided that
from the Effective Date through and including March 28, 1998, the
Borrower shall in no event be permitted to pay Dividends pursuant to this
clause (ii) in an
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aggregate amount greater than $10 million; provided further that, at the
time of any Dividend payment pursuant to this clause (ii), the
Borrower shall allocate the amount of the aggregate amount of such
payment (as described above) as constituting a utilization of one or more
of the basket amounts described in preceding clauses (A), (B) and (C),
with the aggregate amount of such utilizations to equal the aggregate
consideration as described above);
(iii) so long as no Default or Event of Default exists or would
result therefrom, the Borrower may pay regularly accruing cash Dividends
on Disqualified Preferred Stock issued after the Initial Borrowing Date
pursuant to Section 9.13(b), with such Dividends to be paid in accordance
with the terms of the respective certificate of designation therefor; and
(iv) so long as no Default or Event of Default exists or would
result therefrom, the Borrower may repurchase options outstanding under
the Stock Option Plan and may pay up to $1,000,000 in the aggregate in
any Fiscal Year (in addition to any payments for the release of such
options out of (i) the Available $25 Million Basket Amount, (ii) the
Available Unrestricted Proceeds Amount or (iii) the Available Net Income
Amount).
9.04 Indebtedness. The Borrower will not, and will not permit any
of its Restricted Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) Existing Indebtedness shall be permitted to the extent the same
is listed on Schedule V (in the aggregate principal amount outstanding
(or in the case of revolving lines of credit, available) on the Initial
Borrowing Date and listed on Schedule V), and refinancings or renewals
thereof, provided that the aggregate principal amount of outstanding
Indebtedness does not increase as a result of any such refinancing or
renewal from the amount outstanding at the time of such refinancing or
renewal;
(iii) accrued expenses and current trade accounts payable incurred
in the ordinary course of business;
(iv) Indebtedness under Interest Rate Protection Agreements entered
into in compliance with Section 8.12 or otherwise entered into to protect
the Borrower and its Restricted Subsidiaries (as determined in good faith
by the Borrower) from fluctuations in interest rates, to the extent the
respective Interest Rate Protection Agreement relates to outstanding
floating rate Indebtedness permitted to be outstanding in accordance with
the other provisions of this Section 9.04;
(v) Indebtedness under Currency Hedging Agreements entered into in
compliance with Section 9.05(viii);
(vi) Indebtedness among the Borrower and its Restricted Subsidiaries
to the extent permitted pursuant to Sections 9.05(v), (x), (xi) and
(xii);
(vii) Senior Notes not purchased pursuant to the Tender
Offer/Consent
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Solicitations which remain outstanding, so long as the aggregate
principal amount of Senior Notes outstanding at no time exceeds the
remainder of (x) $18,562,000 less (y) the aggregate amount of principal
repayments thereof made after the Initial Borrowing Date;
(viii) Contingent Obligations of the Borrower or any Subsidiary
Guarantor as a guarantor of the lessee under any lease pursuant to which
the Borrower or a Subsidiary Guarantor is the lessee;
(ix) Foreign Subsidiaries of the (A) Borrower or (B) the Borrower's
Restricted Subsidiaries may from time to time incur Indebtedness for
their own working capital and general corporate purposes, provided that
in no event (x) shall such Indebtedness guaranteed, directly or
indirectly, by the Borrower or any of its Restricted Subsidiaries which
are not Foreign Subsidiaries, (y) shall such Indebtedness be secured by
any assets other than assets of one or more Foreign Subsidiaries of the
Borrower or of such Restricted Subsidiary and (z) the aggregate principal
amount of Indebtedness at any time outstanding pursuant to this clause
(ix) exceed $7,500,000; and
(x) other Indebtedness of the Borrower and its Restricted
Subsidiaries, consisting of (x) Capitalized Lease Obligations, (y)
Indebtedness secured by Liens permitted under Section 9.01(viii), and (z)
other Indebtedness of the Borrower and its Restricted Subsidiaries not
expressly permitted by the foregoing clauses (i) through (ix), plus
refinancings and renewals thereof, provided that in no event shall the
aggregate principal amount of Indebtedness permitted by this clause (x)
exceed $10,000,000 at any time outstanding.
In furtherance of the foregoing and in no way in limitation thereof,
the Borrower shall not permit any Unrestricted Subsidiary to incur any
Indebtedness having any element of recourse to the Borrower or its Restricted
Subsidiaries or to any of their assets or property.
9.05 Investments; etc. The Borrower will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, lend money or
credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (any of the foregoing, an "Investment"), except that
the following shall be permitted:
(i) the Borrower and its Restricted Subsidiaries may acquire and
hold accounts receivables owing to any of them, if created or acquired in
the ordinary course of business and payable or dischargeable in
accordance with customary terms;
(ii) the Borrower and its Restricted Subsidiaries may acquire and
hold cash and Cash Equivalents;
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(iii) the Borrower and its Restricted Subsidiaries may make loans
and advances in the ordinary course of business to its respective
employees so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs
of such loans and advances) shall not exceed $1,000,000;
(iv) the Borrower may enter into Interest Rate Protection Agreements
to the extent permitted in Section 9.04(iv);
(v) the Borrower may (x) establish Subsidiaries in compliance with
Section 9.12 and (y) make Investments therein as otherwise provided in
this Section 9.05;
(vi) so long as (x) no Default or Event of Default exists or would
result therefrom and (y) the Borrower's Leverage Ratio at the time of
making any such Investment is less than 4.25:1.00 (except to the extent
set forth in the proviso to the definition of Available $25 Million
Basket Amount), the Borrower shall be permitted to make Investments (in
addition to those otherwise provided in clauses (i) through (v) and (vii)
through (ix) of this Section 9.05) on any date in an amount not to exceed
(A) the Available $25 Million Basket Amount on such date (after giving
effect to all prior and contemporaneous reductions thereto, except as a
result of such Investment), plus (B) the then Available Net Income Amount
on such date (after giving effect to all prior and contemporaneous
adjustments thereto, except as a result of such Investment), plus (C) the
then Available Unrestricted Proceeds Amount (after giving effect to all
prior and contemporaneous adjustments thereto, except as a result of such
Investment), it being understood and agreed that (1) at the time of any
Investment pursuant to this clause (vi), the Borrower shall allocate the
aggregate amount thereof as constituting a utilization of one or more of
the basket amounts described in preceding clauses (A), (B) and (C), with
the aggregate amount of such utilizations to equal the aggregate amount
of the respective Investment and (2) in the case of Investments in
entities which do not become Credit Parties, then to the extent the
Borrower or one or more other Credit Parties (after the respective
Investment has been made) receive a return of capital previously invested
pursuant to this clause (vi), then the amount of such return of capital
shall, upon the Agent's receipt of a certification of the amount of the
return of capital and the allocation thereof (as described below) from an
Authorized Representative, apply to increase of one or more of the
Available $25 Million Basket Amount, the Available Net Income Amount
and/or the Available Unrestricted Proceeds Amount, provided that the
aggregate amount of increases to the various basket amounts described
above shall not exceed the amount of returned capital and, in no event,
shall the amount of the increases made to the various basket amounts in
respect of any Investment exceed the amount previously invested pursuant
to this clause (vi);
(vii) the Borrower and its Restricted Subsidiaries may retain cash
consideration plus purchase money notes derived from asset sales
permitted pursuant to Section 9.02(ii);
(viii) the Borrower may enter into and perform its obligations under
Currency Hedging Agreements entered into in the ordinary course of
business so long as any such Currency Hedging Agreement is not
speculative in nature and (i) each such Currency Hedging Agreement is
related to income derived from foreign operations of the Borrower or any
Restricted Subsidiary (or any Foreign Sales
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Corporation which is a Restricted Subsidiary) or otherwise related to
purchases permitted hereunder from foreign suppliers and (ii) such
Currency Hedging Agreements do not exceed $15,000,000 in the aggregate
notional amount at any one time outstanding;
(ix) the Borrower and its Restricted Subsidiaries may acquire and
own investments (including notes or other debt obligations or securities)
received in connection with the bankruptcy or reorganization of their
suppliers and customers and in settlement of delinquent obligations of,
or disputes with, their customers or suppliers in the ordinary course of
business;
(x) any Credit Party may transfer cash and Cash Equivalents to, may
make intercompany loans or advances to, and in the ordinary course of
business may transfer equipment and inventory to, any other Credit Party;
(xi) existing Investments by the Borrower and its Restricted
Subsidiaries (including, without limitation, Investments in Foreign
Subsidiaries and the Indian Joint Venture) shall be permitted to remain
outstanding after the Initial Borrowing Date to the extent listed on
Schedule VIII; and
(xii) in addition to the Investments permitted under clause (xi) of
this Section 9.05, the Borrower and its Restricted Subsidiaries may make
loans, advances and capital contributions, open account sales and
transfers of goods, extend other trade support, or make other Investments
in Foreign Subsidiaries and the Indian Joint Venture, so long as the
aggregate amount invested pursuant to this clause (xii) after the
Effective Date (net of any return of capital previously invested after
the Effective Date pursuant to this clause (xii)) in no event exceeds the
Maximum Foreign Investment Amount as then in effect.
9.06 Transactions with Affiliates and Unrestricted Subsidiaries.
The Borrower will not, and will not permit any of its Restricted Subsidiaries
to, enter into any transaction or series of related transactions with any
Affiliate of the Borrower or any of its Subsidiaries or any of its Unrestricted
Subsidiaries, other than in the ordinary course of business and on terms and
conditions substantially as favorable to the Borrower or such Restricted
Subsidiary as would reasonably be obtained by the Borrower or such Restricted
Subsidiary at that time in a comparable arm's-length transaction with a Person
other than an Affiliate, except that:
(i) Dividends may be paid to the extent permitted by Section 9.03;
(ii) Investments may be made (excluding Investments in Persons who
would constitute Affiliates of the Borrower even if the Borrower and its
Restricted Subsidiaries did not have any ownership interests therein) to
the extent permitted by Section 9.05;
(iii) transactions between the Borrower and its Restricted
Subsidiaries shall be permitted to the extent expressly permitted by
Section 9.02;
(iv) customary fees may be paid to non-officer directors of the
Borrower and its Restricted Subsidiaries;
(v) the Borrower and its Restricted Subsidiaries may enter into
employment arrangements with respect to the procurement of services with
its
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respective officers and employees, and may extend cash bonus and stock
options to such officers and employees, in the ordinary course of
business;
(vi) so long as no Default or Event of Default exists, or would
result therefrom, the Borrower shall be permitted to pay management fees
to Apollo Advisors, L.P. pursuant to the Apollo Management Agreement,
provided, that, such fees shall not exceed $500,000 in any Fiscal Year
and no amendment adverse to the interests of the Banks shall be made to
the Apollo Management Agreement without the consent of the Agent;
(vii) existing transactions between the Borrower and its
Subsidiaries and their Affiliates shall be permitted to the extent listed
on Schedule IX; and
(viii) the Borrower may sell or issue common stock and, Qualified
Preferred Stock to its Affiliates (other than its Subsidiaries).
Except as specifically provided above, no management or similar fees
shall be paid or payable by the Borrower or any of its Restricted Subsidiaries
to any Affiliate (other than the Borrower).
Notwithstanding anything contained in the foregoing to the contrary,
any transactions between and among the Borrower and/or Restricted Subsidiaries
on the one hand and any of its respective Affiliates (excluding the Borrower and
its Restricted Subsidiaries) on the other hand, shall be arm's-length
transactions and on terms and conditions at least as favorable to the Borrower
and/or such Restricted Subsidiaries as the terms and conditions which would
apply to a similar transaction on an arm's-length basis with a Person that is
not an Affiliate; provided that, any transaction (other than as described in
clauses (i), (ii), (iii) and (vii) above) between and among the aforementioned
parties with a value in excess of $1,000,000 shall only be permitted if a
majority of the disinterested directors of the Borrower approve the
transaction.
9.07 Capital Expenditures. (a) The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, make any Capital Expenditures,
except that (x) during the Fiscal Year ending January 3, 1998, (taken as one
accounting period), the Borrower and its Subsidiaries may make Capital
Expenditures in an aggregate amount not to exceed $10,000,000 and (y) during
the Fiscal Year ended January 2, 1999 (taken as one accounting period) and each
Fiscal Year thereafter until the Maturity Date, the Borrower and its
Subsidiaries may make Capital Expenditures in an aggregate amount not to exceed
$12,000,000.
(b) Notwithstanding anything to the contrary contained in clause (a)
above, to the extent that the aggregate amount of Capital Expenditures made by
the Borrower and its Subsidiaries pursuant to Section 9.07(a) in any Fiscal
Year of the Borrower (beginning with the Fiscal Year ended January 3, 1998) are
less than $10,000,000 (or $12,000,000 in the case of a fiscal year beginning
after January 3, 1998), 75% of the amount of such difference, but in no event
greater than $5,000,000, may be carried forward and used to make Capital
Expenditures in the immediately succeeding fiscal year, provided that amounts
once carried forward to such succeeding fiscal year shall lapse and terminate
at the end of such fiscal year.
(c) In addition to the Capital Expenditures permitted pursuant to
preceding clauses (a) and (b), the Borrower and its Restricted Subsidiaries
shall be permitted to make
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additional Capital Expenditures (1) to the extent consisting of the
reinvestment of proceeds of Recovery Events not required to be applied to
reduce commitments pursuant to the provisions of Section 3.03(g) and (2) so
long as (x) no Default or Event of Default exists or would result therefrom and
(y) the Borrower's Leverage Ratio at the time of making any such Capital
Expenditure is less than 4.25:1.00 (except to the extent set forth in the
proviso to the definition of Available $25 Million Basket Amount), the Borrower
shall be permitted to make Capital Expenditures (in addition to those otherwise
provided in preceding clause (1)) on any date in an amount not to exceed (A)
the Available $25 Million Basket Amount on such date (after giving effect to
all prior and contemporaneous reductions thereto, except as a result of such
Capital Expenditure), plus (B) the then Available Net Income Amount on such
date (after giving effect to all prior and contemporaneous adjustments thereto,
except as a result of such Capital Expenditure), plus (C) the then Available
Unrestricted Proceeds Amount (after giving effect to all prior and
contemporaneous adjustments thereto, except as a result of such Capital
Expenditure) it being understood and agreed that, at the time of any Capital
Expenditure pursuant to this Section 9.07(c)(2), the Borrower shall allocate
the aggregate amount thereof as constituting a utilization of one or more of
the basket amounts described in preceding clauses (A), (B) and (C), with the
aggregate amount of such utilizations to equal the aggregate amount of the
respective Capital Expenditure.
9.08 Minimum Consolidated EBITDA. The Borrower will not permit
Consolidated EBITDA for any Test Period ending at the end of any fiscal quarter
of the Borrower set forth below to be less than the amount set forth opposite
such fiscal quarter:
Fiscal Quarter
Ended Closest to
----------------
Amount
------
June 30, 1997 $16.0 million
September 30, 1997 $16.5 million
December 31, 1997 $17.0 million
March 31, 1998 $17.5 million
June 30, 1998 $18.0 million
September 30, 1998 $18.5 million
December 31, 1998 $19.0 million
March 31, 1999 $19.5 million
June 30, 1999 $20.0 million
September 30, 1999 $20.5 million
December 31, 1999 $21.0 million
March 31, 2000 $21.5 million
June 30, 2000 $22.0 million
September 30, 2000 $22.5 million
December 31, 2000 $23.0 million
and each fiscal
quarter thereafter
9.09 Maximum Leverage Ratio. The Borrower will not permit the Leverage
Ratio at any time on or after June 29, 1997 to be greater than the ratio set
forth opposite the fiscal quarter most recently ended as set forth below:
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Fiscal Quarter
Ended Closest to Ratio
------------------- -----
June 30, 1997 4.85:1.00
September 30, 1997 4.75:1.00
December 31, 1997 4.65:1.00
March 31, 1998 4.55:1.00
June 30, 1998 4.45:1.00
September 30, 1998 4.35:1.00
December 31, 1998 4.25:1.00
March 31, 1999 4.10:1.00
June 30, 1999 3.95:1.00
September 30, 1999 3.75:1.00
December 31, 1999 3.60:1.00
March 31, 2000 3.50:1.00
and each fiscal
quarter thereafter
9.10 Minimum Consolidated Net Interest Coverage Ratio. The Borrower will
not permit the Consolidated Net Interest Coverage Ratio for any Test Period
ending at the end of any fiscal quarter of the Borrower set forth below to be
less than the ratio set forth opposite the fiscal quarter most recently ended
as set forth below:
Fiscal Quarter
Ended Closest to Ratio
------------------- -----
June 30, 1997 2.25:1.00
September 30, 1997 2.30:1.00
December 31, 1997 2.35:1.00
March 31, 1998 2.40:1.00
June 30, 1998 2.45:1.00
September 30, 1998 2.55:1.00
December 31, 1998 2.65:1.00
March 31, 1999 3.10:1.00
June 30, 1999 3.20:1.00
September 30, 1999 3.30:1.00
December 31, 1999 3.40:1.00
March 31, 2000 3.50:1.00
and each fiscal
quarter thereafter
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9.11 Limitation on Modifications of and Payments on Indebtedness;
Modifications of Certificate of Incorporation, By-Laws and Certain Other
Agreements, etc. (a) The Borrower will not, and will not permit any of its
Restricted Subsidiaries to, (i) make (or give any notice in respect of) any
voluntary or optional payment or prepayment on or redemption, repurchase or
acquisition for value of any of the Existing Indebtedness, (ii) amend or
modify, or permit the amendment or modification of, any provision of the Senior
Notes Document, the Existing Indebtedness or of any agreement (including,
without limitation, any purchase agreement, indenture, loan agreement, security
agreement or certificate of designation) relating thereto, other than (x) any
amendments or modifications to the Senior Notes Indenture made pursuant to the
Senior Notes Indenture Amendment and (y) such other amendments or modifications
to the Senior Notes Documents or documentation relating to Existing
Indebtedness which (A) do not make any term or condition thereof more
restrictive than the previously existing terms and conditions with respect
thereto and (B) do not in any way materially adversely affect the interests of
the Banks or (iii) amend or modify its Certificate of Incorporation (including,
without limitation, by the filing or modification of any certificate of
designation other than any certificates of designation relating to Qualified
Preferred Stock or Disqualified Preferred Stock issued as permitted herein) or
By-Laws, or any agreement entered into by it, with respect to its capital stock
(including any Shareholders' Agreement), or enter into any new agreement with
respect to its capital stock if the foregoing would in any way materially and
adversely affect the Banks.
(b) The Borrower will not, and will not permit any of its respective
Restricted Subsidiaries to, amend, modify or change any provision of any Tax
Sharing Agreement other than any amendment, modification or change deemed
immaterial by the Agent or as otherwise consented to by the Required Banks.
9.12 Limitation on Creation or Acquisition of Subsidiaries and Restricted
Subsidiaries. The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, establish, create or acquire after the Effective Date any
Subsidiary, unless (x) if such Subsidiary is an Unrestricted Subsidiary, (i)
100% of the capital stock, if any, of such new Unrestricted Subsidiary owned by
the Borrower or any other Credit Party shall be pledged pursuant to the Pledge
Agreement and the certificates representing such stock, together with stock
powers duly executed in blank, shall be delivered to the Collateral Agent and
(ii) such Unrestricted Subsidiary shall, at the request of the Agent, become a
party to a Tax Sharing Agreement in form and substance reasonably satisfactory
to the Agent, (y) if such Subsidiary is a Restricted Subsidiary (i) at least 10
Business Days' prior written notice thereof is given to the Agent and the
Banks, (ii) 100% of the capital stock of such new Subsidiary is pledged
pursuant to the Pledge Agreement and the certificates representing such stock,
together with stock powers duly executed in blank, are delivered to the
Collateral Agent and (iii) such new Restricted Subsidiary executes a
counterpart of the Subsidiary Guaranty, the Security Agreement and the Pledge
Agreement or (z) any Investment in such Subsidiary therein is made in
accordance with Section 9.05. In addition, each new Restricted Subsidiary
shall execute and deliver, or cause to be executed and delivered, all other
relevant documentation of the type described in Section 5 as such new
Restricted Subsidiary would have had to deliver if such new Restricted
Subsidiary were a Restricted Subsidiary and/or a Subsidiary Guarantor on the
Initial Borrowing Date.
9.13 Limitation on Issuance of Capital Stock. (a) The Borrower shall
not issue (i) any Preferred Stock (other than Qualified Preferred Stock and
Disqualified Preferred Stock issued pursuant to clause (b) below) or (ii) any
redeemable common stock unless, in either case, the terms thereof are
satisfactory to the Required Banks in their sole discretion.
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(b) So long as no Default or Event of Default then exists or would exist
immediately after giving effect to the respective issuance, the Borrower may
issue Disqualified Preferred Stock with an aggregate liquidation preference
(for all Disqualified Preferred Stock issued after the Effective Date) not to
exceed $15,000,000 (which shall be in addition to any Indebtedness permitted
under Section 9.04), on terms and conditions set forth in the definition of
Disqualified Preferred Stock and on other terms and conditions reasonably
satisfactory to the Agent. All Disqualified Preferred Stock issued pursuant to
Section 9.13(b) shall be issued only (x) where 100% of the consideration
received for the issuance of such Disqualified Preferred Stock is cash or (y)
as direct consideration in connection with Permitted Acquisitions.
Disqualified Preferred Stock may be issued by the Borrower pursuant to this
Section 9.13(b) only if (i) based on calculations made by the Borrower on a Pro
Forma Basis after giving effect to the issuance of such Disqualified Preferred
Stock, no Default or Event of Default will exist, or would have existed during
the Test Period most recently ended, under the financial covenants contained in
Sections 9.08 through 9.10 of this Agreement, (ii) based on good faith
projections (subject to the same understandings as apply to any projections as
referenced in Section 8.01(e)) prepared by the Borrower for the period from the
date of the issuance of such Disqualified Preferred Stock to the date which is
one year thereafter, the level of financial performance measured by the
covenants set forth in Sections 9.08 through 9.10 shall be better than or equal
to such level as would be required to provide that no Default or Event of
Default would exist under the financial covenants contained in Sections 9.08
through 9.10 of this Agreement through the date which is one year from the date
of the issuance of such Disqualified Preferred Stock, and (iii) the Borrower
shall furnish to the Agent a certificate by an Authorized Representative of the
Borrower certifying to the best of his or her knowledge as to compliance with
the requirements of the preceding clauses (i) and (ii) and containing the pro
forma calculations and projections required by the preceding clauses (i), (ii),
and (iv) such Disqualified Preferred Stock shall not contain any provision in
the documents governing or evidencing the same which, in the reasonable
judgment of the Agent, are more restrictive than the provisions in the Credit
Documents.
(c) No Restricted Subsidiary of the Borrower shall issue, or permit any
of its Restricted Subsidiaries to issue, any capital stock (including by way of
sales of treasury stock) or any options or warrants to purchase, or securities
convertible into, capital stock, except (i) for transfers and replacements of
then outstanding shares of capital stock, (ii) for stock splits, stock
dividends and additional issuances which do not decrease the percentage
ownership of the Borrower or any of its Restricted Subsidiaries in any class of
the capital stock of such Restricted Subsidiaries, (iii) to qualify directors
to the extent required by applicable law, and (iv) Restricted Subsidiaries
formed after the Initial Borrowing Date pursuant to Section 9.12 may issue
capital stock to the Borrower or the respective Restricted Subsidiary of the
Borrower which is to own such stock in accordance with the requirements of
Section 9.12. All capital stock issued in accordance with this Section 9.13(b)
shall, to the extent required by the Pledge Agreement and subject to the
qualification set forth in Section 8.11(d) in the case of capital stock of
Foreign Subsidiaries, be delivered to the Collateral Agent for pledge pursuant
to the Pledge Agreement.
9.14 Business. The Borrower will not, and will not permit any of its
Restricted Subsidiaries to, engage (directly or indirectly) in any business
other than substantially the same lines of business in which they are engaged
on the Effective Date and reasonable extensions thereof. The Foreign Sales
Corporation will not engage in any business other than the sale of goods and/or
services outside of the United States and any business reasonably incidental to
the foregoing.
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9.15 Limitation on Certain Restrictions on Subsidiaries. (a) The
Borrower will not, and will not permit any of its respective Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective, any encumbrance or restriction on the ability of any
such Restricted Subsidiary to (x) pay dividends or make any other distributions
on its capital stock or any other interest or participation in its profits
owned by the Borrower or any Restricted Subsidiary of the Borrower, or pay any
Indebtedness owed to the Borrower or a Restricted Subsidiary of the Borrower,
(y) make loans or advances to the Borrower or any of the Borrower's Restricted
Subsidiaries or (z) transfer any of its properties or assets to the Borrower,
except for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) this Agreement and the other Credit Documents, (iii)
customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of the Borrower or a Restricted Subsidiary of
the Borrower and (iv) customary provisions restricting assignment of any
licensing agreement entered into by the Borrower or any Restricted Subsidiary
of the Borrower in the ordinary course of business.
(b) The Borrower will not permit any of its Unrestricted Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any restriction whatsoever on the operations of the Borrower and/or
its Restricted Subsidiaries.
SECTION 10. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment when due
of any principal of any Loan or any Note or (ii) default, and such default
shall continue unremedied for three or more Business Days, in the payment when
due of any Unpaid Drawings or interest on any Loan or Note, or any Fees or any
other amounts owing hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or statement
made by any Credit Party herein or in any other Credit Document or in any
certificate delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
10.03 Covenants. The Borrower shall (i) default in the due performance
or observance by it of any term, covenant or agreement contained in Section
8.01(g)(i), 8.08, 8.11, 8.13 or Section 9 or (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement and such default, in the case of this clause (ii),
shall continue unremedied for a period of 30 days after written notice to the
Borrower by the Agent or any Bank; or
10.04 Default Under Other Agreements. The Borrower or any of its
Restricted Subsidiaries shall (i) default in any payment of any Indebtedness
(other than the Obligations) beyond the period of grace, if any, provided in
the instrument or agreement under which such Indebtedness was created or (ii)
default in the observance or performance of any agreement or condition relating
to any Indebtedness (other than the Obligations) or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause
(determined without regard to whether any notice is required), any such
Indebtedness to become due prior to its stated maturity, or
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(iii) any Indebtedness (other than the Obligations) of the Borrower or any of
its Restricted Subsidiaries shall be declared to be due and payable, or
required to be prepaid other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof, provided that (x) it shall not be a
Default or Event of Default under this Section 10.04 unless the aggregate
principal amount of all Indebtedness as described in preceding clauses (i)
through (iii), inclusive, is at least $2,500,000; or
10.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against
the Borrower or any of its Subsidiaries and the petition is not controverted
within 30 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of the Borrower or
any of its Subsidiaries, or the Borrower or any of its Subsidiaries commences
any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
of its Subsidiaries, or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days, or the Borrower or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Borrower or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by the Borrower or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan and/or Multiemployer Plan, shall fail to
satisfy the minimum funding standard required for any plan year or part thereof
under Section 412 of the Code or Section 302 of ERISA or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code or Section 303 or 304 of ERISA, a Reportable Event
shall have occurred, a contributing sponsor (as defined in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA shall be subject to the
advance reporting requirement of PBGC Regulation 4043.61 (without regard to
subparagraph (b)(1) thereof) and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 shall be reasonably
expected to occur with respect to such Plan within the following 30 days, any
Plan and/or Multiemployer Plan shall have had or is likely to have a trustee
appointed to administer such Plan and/or Multiemployer Plan, any Plan and/or
Multiemployer Plan shall have been or is reasonably expected to be terminated
or to be the subject of termination proceedings under ERISA, any Plan and/or
Multiemployer Plan shall have an Unfunded Current Liability, a contribution
required to be made to a Plan, Multiemployer Plan, and/or Foreign Pension Plan
has not been timely made, the Borrower or any its Restricted Subsidiaries or
any ERISA Affiliate has incurred or is reasonably expected to incur a liability
to or on account of a Plan and/or Multiemployer Plan under Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971, 4975 or 4980 of the Code or on account of a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
under Section 4980B of the Code, or, the Borrower or any of its Restricted
Subsidiaries has incurred or is reasonably expected to incur liabilities
pursuant to one or more employee welfare benefit plans (as defined in Section
3(1) of ERISA) which provide benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or employee pension
benefit plans (as defined in Section 3(2) of
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ERISA) or Foreign Pension Plans, (b) there shall result from any such event or
events the imposition of a lien, the granting of a security interest,
or a liability or a material risk of incurring a liability; and (c) in each
case in clauses (a) and (b) above, such lien, security interest or liability,
individually, and/or in the aggregate would reasonably be expected to have a
Material Adverse Effect; or
10.07 Security Documents. At any time after the execution and delivery
thereof, any of the Security Documents shall cease to be in full force and
effect, or shall cease in any material respect to give the Collateral Agent for
the benefit of the Secured Creditors the Liens, rights, powers and privileges
purported to be created thereby (including, without limitation, a perfected
security interest in, and Lien on, all of the Collateral), in favor of the
Collateral Agent, superior to and prior to the rights of all third Persons
(except as permitted by Section 9.01), and subject to no other Liens (except as
permitted by Section 9.01), or the Borrower shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any of the Security Documents and such
default shall continue beyond any grace period specifically applicable thereto
pursuant to the terms of such Security Document; or
10.08 Subsidiary Guaranty. The Subsidiary Guaranty or any provision
thereof shall cease to be in full force or effect as to any Subsidiary
Guarantor, or any Subsidiary Guarantor or Person acting by or on behalf of such
Subsidiary Guarantor shall deny or disaffirm such Subsidiary Guarantor's
obligations under the Subsidiary Guaranty, or any Subsidiary Guarantor shall
default in the due performance or observance of any term, covenant or agreement
on its part to be performed or observed pursuant to the Subsidiary Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be entered
against the Borrower or any of its Restricted Subsidiaries involving in the
aggregate for the Borrower and its Restricted Subsidiaries a liability (not
paid or fully covered by a reputable and solvent insurance company) and such
judgments and decrees either shall be final and non-appealable or shall not be
vacated, discharged or stayed or bonded pending appeal for any period of 60
consecutive days, and the aggregate amount of all such judgments exceeds
$2,500,000; or
10.10 Change of Control. A Change of Control shall occur; or
10.11 Tax Sharing Agreement. One or more parties to a Tax Sharing
Agreement (other than Borrower or any of its respective Restricted
Subsidiaries) shall have defaulted in its or their payment obligations in an
aggregate amount equal to or greater than $2,500,000 thereunder and such
default or defaults shall remain unremedied for a period in excess of ten
consecutive Business Days;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Agent, upon the written request of the
Required Banks, shall by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent, any Bank or
the holder of any Note to enforce its claims against any Credit Party (provided
that, if an Event of Default specified in Section 10.05 shall occur with
respect to the Borrower, the result of which would occur upon the giving of
written notice by the Agent to the Borrower as specified in clauses (i) and
(ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Revolving Loan Commitment terminated, whereupon the
Revolving Loan Commitment of each Bank shall forthwith terminate immediately
and any Commitment Commission and other Fees shall
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forthwith become due and payable without any other notice of any kind; (ii)
declare the principal of and any accrued interest in respect of all Loans and
the Notes and all Obligations owing hereunder and thereunder to be, whereupon
the same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Credit Party; (iii) terminate any Letter of Credit which may be terminated in
accordance with its terms; (iv) direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an Event of
Default specified in Section 10.05 with respect to the Borrower, it will pay)
to the Collateral Agent at the Payment Office such additional amount of cash,
to be held as security by the Collateral Agent, as is equal to the aggregate
Stated Amount of all Letters of Credit and all Acceptances then outstanding;
(v) enforce, as Collateral Agent, all of the Liens and security interests
created pursuant to the Security Documents; and (vi) apply any cash collateral
held for the benefit of the Banks pursuant to Section 4.02 to repay outstanding
Obligations.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Acceptance" shall have the meaning provided in Section 2.01(a).
"Acceptance Facing Fee" shall having the meaning provided in Section
3.01(c).
"Acceptance Fee" shall have the meaning provided in Section 3.01(b).
"Additional Collateral" shall mean all property (whether real or personal)
in which security interests are granted (or have been purported to be granted)
(and continue to be in effect at the time of determination) pursuant to Section
8.11.
"Additional Mortgage" shall have the meaning provided in Section 8.11(a).
"Additional Mortgaged Property" shall have the meaning provided in Section
8.11(a).
"Additional Security Documents" shall mean all mortgages, pledge
agreements, security agreements and other security documents entered into
pursuant to Section 8.11 with respect to Additional Collateral.
"Adjusted Available Revolving Loan Commitment" for each Bank shall mean at
any time such Bank's Revolving Loan Commitment less such Bank's Adjusted
Percentage of the Total Blocked Commitment, if any, at such time.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable certificates
of deposit with a three-month maturity in the secondary market as published in
the most recent Federal Reserve System publication entitled "Select Interest
Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Agent on the basis of quotations for such
certificates received by it
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from three certificate of deposit dealers in New York of recognized standing
or, if such quotations are unavailable, then on the basis of other sources
reasonably selected by the Agent, by (y) a percentage equal to 100% minus the
stated maximum rate of all reserve requirements as specified in Regulation D
applicable on such day to a three-month certificate of deposit of a member bank
of the Federal Reserve System in excess of $100,000 (including, without
limitation, any marginal, emergency, supplemental, special or other reserves),
plus (2) the then daily net annual assessment rate as estimated by the Agent
for determining the current annual assessment payable by the Agent to the
Federal Deposit Insurance Corporation for insuring three-month certificates of
deposit.
"Adjusted Percentage" shall mean (x) at a time when no Bank Default
exists, for each Bank, such Bank's Percentage and (y) at a time when a Bank
Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii) for
each Bank that is a Non-Defaulting Bank, the percentage determined by dividing
such Bank's Revolving Loan Commitment at such time by the Adjusted Total
Revolving Loan Commitment at such time, it being understood that all references
herein to Revolving Loan Commitments and the Adjusted Total Revolving Loan
Commitment at a time when the Total Revolving Loan Commitment or Adjusted Total
Revolving Loan Commitment, as the case may be, has been terminated shall be
references to the Revolving Loan Commitments or Adjusted Total Revolving Loan
Commitment, as the case may be, in effect immediately prior to such
termination, provided that (A) no Bank's Adjusted Percentage shall change upon
the occurrence of a Bank Default from that in effect immediately prior to such
Bank Default, to the extent such change after giving effect to such Bank
Default, and any repayment of Revolving Loans and Swingline Loans at such time
pursuant to Section 4.02(a) or otherwise, would cause the sum of (i) the
aggregate outstanding principal amount of Revolving Loans of all Non-Defaulting
Banks plus (ii) the aggregate outstanding principal amount of Swingline Loans
plus (iii) the Letter of Credit Outstandings, to exceed the Adjusted Total
Revolving Loan Commitment; (B) any changes to the Adjusted Percentage that
would have become effective upon the occurrence of a Bank Default but that did
not become effective as a result of the preceding clause (A) shall become
effective on the first date after the occurrence of the relevant Bank Default
on which the sum of (i) the aggregate outstanding principal amount of the
Revolving Loans of all Non-Defaulting Banks plus (ii) the aggregate outstanding
principal amount of Swingline Loans plus (iii) the Letter of Credit
Outstandings is equal to or less than the Adjusted Total Revolving Loan
Commitment; and (C) if (i) a Non-Defaulting Bank's Adjusted Percentage is
changed pursuant to the preceding clause (B) and (ii) any repayment of such
Bank's Revolving Loans, or of Unpaid Drawings with respect to Letters of Credit
or of Swingline Loans, that were made during the period commencing after the
date of the relevant Bank Default and ending on the date of such change to its
Adjusted Percentage must be returned to the Borrower as a preferential or
similar payment in any bankruptcy or similar proceeding of the Borrower, then
the change to such Non-Defaulting Bank's Adjusted Percentage effected pursuant
to said clause (B) shall be reduced to that positive change, if any, as would
have been made to its Adjusted Percentage if (x) such repayments had not been
made and (y) the maximum change to its Adjusted Percentage would have resulted
in the sum of the outstanding principal of Revolving Loans made by such Bank
plus such Bank's new Adjusted Percentage of the outstanding principal amount of
Swingline Loans and of Letter of Credit Outstandings equalling such Bank's
Revolving Loan Commitment at such time.
"Adjusted Total Available Revolving Loan Commitment" shall mean at any
time the Total Available Revolving Loan Commitment at such time less the
aggregate Revolving Loan Commitments of all Defaulting Banks at such time.
"Adjusted Total Revolving Loan Commitment" shall mean at any time the
Total Revolving Loan Commitment less the aggregate Revolving Loan Commitments
of all
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Defaulting Banks.
"Affiliate" shall mean, with respect to any Person, any other Person
(including, for purposes of Section 9.06 only, all directors, officers and
partners of such Person) directly or indirectly controlling, controlled by, or
under direct or indirect common control with, such Person; provided, however,
that for purposes of Section 9.06, an Affiliate of the Borrower shall include
any Person that directly or indirectly owns more than 5% of any class of the
capital stock of the Borrower and any officer or director of the Borrower or
any such Person. A Person shall be deemed to control another Person if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agent" shall mean Bankers Trust Company, in its capacity as Agent for the
Banks hereunder, and shall include any successor to the Agent appointed
pursuant to Section 12.09.
"Agreement" shall mean this Credit Agreement, as modified, supplemented,
amended, restated, extended, renewed or replaced from time to time.
"Apollo Group" shall mean Apollo Advisors, L.P., Lion Advisors, L.P.,
Apollo Investment Fund, L.P., Apollo Investment Fund III, L.P., Apollo Overseas
Partners III, L.P., Apollo U.K. Partners III, L.P., AIF II, L.P., and Apollo
Advisors II, L.P., all Delaware limited partnerships.
"Apollo Management Agreement" shall mean the consulting agreement, dated
November 17, 1994, between Apollo Advisors, L.P. and Florsheim.
"Applicable Commitment Commission Percentage" and "Applicable Margin"
shall mean (i) for the period from the Effective Date to but not including the
first Start Date after the Borrower's Fiscal Quarter ending June 28, 1997, the
percentage per annum set forth below:
APPLICABLE APPLICABLE APPLICABLE
COMMITMENT MARGIN FOR MARGIN FOR
COMMISSION BASE RATE EURODOLLAR
PERCENTAGE LOANS LOANS
--------------- --------------- ----------
0.50% 1.25% 2.25%
and (ii) during each Margin Adjustment Period beginning after the Initial
Borrowing Date, the percentage per annum set forth below opposite the Leverage
Ratio indicated to have been achieved on the applicable Test Date for such
Margin Adjustment Period (as shown on the respective officer's certificate
delivered pursuant to Section 8.01(f)):
APPLICABLE APPLICABLE APPLICABLE
COMMITMENT MARGIN FOR MARGIN FOR
COMMISSION BASE RATE EURODOLLAR
LEVEL LEVERAGE RATIO PERCENTAGE LOANS LOANS
----- -------------------- ---------- ---------- ----------
1 Less than or equal 0.250% 0% 1.00%
to 3.00:1.00
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APPLICABLE APPLICABLE APPLICABLE
COMMITMENT MARGIN FOR MARGIN FOR
COMMISSION BASE RATE EURODOLLAR
LEVEL LEVERAGE RATIO PERCENTAGE LOANS LOANS
----- -------------------- ---------- ---------- ----------
2 Greater than 0.375% .25% 1.25%
3.00:1.00 but less
than or equal to
3.25:1.00
3 Greater than 0.375% .50% 1.50%
3.25:1.00 but less
than or equal to
3.50:1.00
4 Greater than 0.50% .75% 1.75%
3.50:1.00 but less
than or equal to
3.75:1.00
5 Greater than 0.50% 1.00% 2.00%
3.75:1.00 but less
than or equal to
4.0:1.0
6 Greater than .50% 1.25% 2.25%
4.00:1.00 but less
than or equal to
4.25:1.00
7 Greater than .50% 1.50% 2.50%
4.25:1.00
provided, however, that (x) if the Borrower fails to deliver the officer's
certificate as described in Section 8.01(f) by the date required by such
Section, then upon actual delivery by the Borrower of the officer's certificate
required by Section 8.01(f) (or the related financial statements upon which
such officer's certificate is to be based) for such Test Date, the Borrower
shall pay, within five days if payment has already been made (otherwise, on the
next Quarterly Payment Date), to the Agent for the account of each Bank with
affected Loans, any additional amounts the Borrower would have paid hereunder
had the officer's certificates required by Section 8.01(f) been timely
delivered and (y) Level 7 pricing shall apply at any time when an Event of
Default exists.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit L (appropriately
completed).
"Authorized Representative" shall mean, with respect to (i) delivering
Notices of Borrowing, Notices of Conversion, Letter of Credit Requests and
similar notices and the certificate described in Section 5.04(a), any of the
President, Chief Financial Officer, Chief Executive Officer, Chief Operating
Officer, Chief Accounting Officer or Treasurer of the Borrower and any other
person or persons that has or have been authorized by the board of directors of
the Borrower to deliver such notices pursuant to this Agreement and that has or
have appropriate signature cards on file with the Agent, BTCo and each
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Issuing Bank; (ii) delivering financial information and officer's certificates
pursuant to this Agreement, any of the Chief Financial Officer, Chief
Accounting Officer or Treasurer of the Borrower; and (iii) any other matter in
connection with this Agreement or any other Credit Document, any
officer of the Borrower listed in clauses (i) or (ii).
"Available Net Income Amount" shall mean on any date of determination an
amount equal to zero, plus or minus (i) an amount equal to the Consolidated
Cumulative 25% Net Income Amount on such date, minus (ii) the aggregate amount
of consideration (including the amount of any Indebtedness assumed) in
connection with acquisitions effected pursuant to Section 9.02(vi) after the
Effective Date and on or prior to such date, in each case to the extent the
amount of such consideration was justified pursuant to clause (B) of said
Section 9.02(vi), minus (iii) the aggregate amount of Investments made pursuant
to Section 9.05(vi) after the Effective Date and on or prior to such date, in
each case to the extent the amount of such Investment was justified pursuant to
clause (B) of said Section 9.05(vi), minus (iv) any Dividend payments made by
the Borrower pursuant to clause (B) of Section 9.03(ii) after the Effective
Date and on or prior to such date, minus (v) the aggregate amount of Capital
Expenditures made after the Effective Date pursuant to Section 9.07(c) (2) in
each case to the extent the amount thereof was justified pursuant to clause (B)
of said Section 9.07(c)(2), minus (vi) the amount of any reduction (expressed
as a positive number) required to be made after the Effective Date to the
Available Net Income Amount pursuant to the proviso to Section 9.03(iv) plus
(viii) the amount of any increase to the Available Net Income Amount made in
accordance with the provisions of clause (2) of Section 9.05(vi).
"Available Revolving Loan Commitment" for any Bank shall mean, at any
time, the Revolving Loan Commitment of such Bank as then in effect less such
Bank's Percentage of the amount of the Total Blocked Commitment, if any, at
such time.
"Available $25 Million Basket Amount" shall mean on any date of
determination an amount equal to (i) $25,000,000, minus (ii) the aggregate
amount of consideration (including the amount of any Indebtedness assumed) in
connection with acquisitions effected pursuant to Section 9.02(vi) after the
Effective Date and on or prior to such date, in each case to the extent the
amount of such consideration was justified pursuant to clause (A) of said
Section 9.02(vi), minus (iii) the aggregate amount of Investments made pursuant
to Section 9.05(vi) after the Effective Date and on or prior to such date, in
each case to the extent the amount of such Investment was justified pursuant to
clause (A) of said Section 9.05(vi), minus (iv) any amounts used to pay
Dividends pursuant to clause (A) of Section 9.03(ii) after the Effective Date
and on or prior to such date, minus (v) the aggregate amount of Capital
Expenditures made after the Effective Date pursuant to Section 9.07(c)(2), in
each case to the extent the amount thereof was justified pursuant to clause (A)
of said Section 9.07(c)(2), minus (vi) the amount of any reduction (expressed
as a positive number) required to be made after the Effective Date to the
Available $25 Million Basket Amount pursuant to the proviso to Section
9.03(iv), plus (vii) the amount of any increase to the Available $25 Million
Basket Amount made after the Effective Date in accordance with the provisions
of clause (2) of Section 9.05(vi); provided that, notwithstanding anything to
the contrary contained in Sections 9.02(vi), 9.03(ii), 9.05(vi) or 9.07(c)(2),
up to $1,000,000, in the aggregate, of the Available $25 Million Basket Amount
shall be available (unless and then to the extent utilized after the Effective
Date) for the purposes set forth in such Sections regardless of the Leverage
Ratio at such time.
"Available Unrestricted Proceeds Amount" shall mean, on any date of
determination, an amount equal to zero, plus (i) all Net Cash Proceeds received
by the Borrower from issuances of equity by the Borrower (including any
exercise of stock options pursuant to the Stock Option Plan and the issuance of
any Qualified Preferred Stock or
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Disqualified Preferred Stock) after the Initial Borrowing Date, minus (ii) the
aggregate amount of consideration (including the amount of any Indebtedness
assumed) in connection with acquisitions effected pursuant to Section 9.02(vi)
after the Effective Date and on or prior to such date, in each case to the
extent the amount of such consideration was justified pursuant to clause (C) of
said Section 9.02(vi), minus (iii) the aggregate amount of Investments made
pursuant to Section 9.05(vi) after the Effective Date and on or prior to such
date, in each case to the extent the amount of such Investment was justified
pursuant to clause (C) of said Section 9.05(vi), minus (iv) any Dividend
payments made by the Borrower pursuant to clause (C) of Section 9.03(ii) after
the Initial Borrowing Date and on or prior to such date, minus (v) the
aggregate amount of Capital Expenditures made after the Effective Date pursuant
to Section 9.07(c)(2), in each case to the extent the amount thereof was
justified pursuant to clause (C) of said Section 9.07(c)(2), minus (vi) the
amount of any reduction (expressed as a positive number) required to be made
after the Effective Date to the Available Unrestricted Proceeds Amount pursuant
to the proviso to Section 9.03(iv), plus (vii) the amount of any increase to
the Available Unrestricted Proceeds Amount made after the Effective Date in
accordance with the provisions of clause (2) of Section 9.05(vi).
"Bank" shall mean each financial institution listed on Schedule I, as well
as any Person which becomes a "Bank" hereunder pursuant to 13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been retracted)
of a Bank, in violation of this Agreement, to make available its portion of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) or (ii) a Bank having notified in
writing the Borrower and/or the Agent that it does not intend to comply with
its obligations under Section 1.01(c) or Section 2 in the case of either clause
(i) or (ii), as a result of any takeover of such bank by any regulatory
authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the higher of (i) 1/2 of 1% in excess
of the Adjusted Certificate of Deposit Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii) each
Revolving Loan designated or deemed designated as such by the Borrower at the
time of the incurrence thereof or conversion thereto.
"Blocked Commitment" shall mean each of the General Blocked Commitment and
the Senior Notes Blocked Commitment.
"Borrower" shall have the meaning provided in the first paragraph of this
Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan from all the
Banks (or from BTCo in the case of Swingline Loans) on a given date (or
resulting from a conversion or conversions on such date) having in the case of
Eurodollar Loans the same Interest Period, provided that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of the related
Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company in its individual capacity.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day which shall be
in either
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Chicago or New York City a legal holiday or a day on which banking institutions
are authorized or required by law or other government action to close and (ii)
with respect to all notices and determinations in connection with, and payments
of principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and
between banks in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles, including all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with
generally accepted accounting principles).
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken
at the amount thereof accounted for as indebtedness in accordance with such
principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than one
year from the date of acquisition, (ii) time deposits and certificates of
deposit of any commercial bank having, or which is the principal banking
subsidiary of a bank holding company organized under the laws of the United
States, any State thereof, the District of Columbia or any foreign jurisdiction
having capital, surplus and undivided profits aggregating in excess of
$200,000,000, with maturities of not more than one year from the date of
acquisition by such Person, (iii) repurchase obligations with a term of not
more than 90 days for underlying securities of the types described in clause
(i) above entered into with any bank meeting the qualifications specified in
clause (ii) above, (iv) commercial paper issued by any Person incorporated in
the United States rated at least A-1 or the equivalent thereof by Standard &
Poor's Rating Services or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇
Investors Service, Inc. and in each case maturing not more than one year after
the date of acquisition by such Person, (v) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (iv) above and (vi) cash and demand deposit
accounts maintained in the ordinary course of business.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time
to time, 42 U.S.C. Section 9601 et seq.
"Change of Control" shall mean (i) the Borrower shall at any time cease to
own 100% of the capital stock of any of its Restricted Subsidiaries (except, in
the case of a Restricted Subsidiary, if 100% of the capital stock thereof is
sold or disposed in a transaction permitted pursuant to Section 9.02(ii)(y) or
9.02(ix)), (ii) the board of directors of the Borrower shall cease to consist
of a majority of Continuing Directors or (iii) any Person, entity or "group"
(as such term is defined in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended) (other than the Apollo Group or a Controlled Account) is or
becomes the beneficial owner of an amount of outstanding Voting Stock, or of
outstanding common stock, of the Borrower in excess of 25%, and the Apollo
Group and/or one or more Controlled Accounts own less than such Person, entity
or group (as defined above), of the total amount of fully diluted shares of
outstanding Voting Stock or common stock, as the
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case may be, of the Borrower.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of
this Agreement, and to any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral, all Mortgaged
Properties, all cash and Cash Equivalents delivered as collateral pursuant to
Section 4.02 or 10 hereof and all Additional Collateral, if any.
"Collateral Agent" shall mean the Agent acting as collateral agent for the
Secured Creditors pursuant to the Security Documents.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5.05.
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Consent Solicitation" shall have the meaning provided in Section 5.16.
"Consolidated Cumulative Net Income Period" shall mean each period
consisting of a fiscal quarter of the Borrower ending after the Initial
Borrowing Date and for which the related financial statements required to be
delivered pursuant to Section 8.01(b) or (c), as the case may be, have
theretofore been delivered.
"Consolidated Cumulative 25% Net Income Amount" shall mean, at any date an
amount determined on a cumulative basis equal to (i) the sum of 25% of
Consolidated Net Income for all Consolidated Cumulative Net Income Periods
ending after the Initial Borrowing Date and prior to such date of determination
for which Consolidated Net Income was a positive number, minus (ii) 100% of
Consolidated Net Income (expressed as a positive number) for all Consolidated
Cumulative Net Income Periods ending after the last day of the Initial
Borrowing Date and prior to such date of determination for which Consolidated
Net Income was a negative number.
"Consolidated Debt" shall mean the sum of (i) all Indebtedness of the
Borrower and its Restricted Subsidiaries determined on a consolidated basis
with respect to borrowed money or other obligations of such Persons which would
appear on the balance sheet of such Persons as indebtedness (excluding, in any
event, consolidated current liabilities (other than short-term debt and the
current portion of long-term debt), deferred tax and pension liabilities, the
amount available to be drawn under letters of credit issued for the account of
such Persons (other than unreimbursed drawings) and other Contingent
Obligations) and (ii) an amount equal to the greater of the aggregate
liquidation preference and the maximum fixed repurchase price of any
outstanding Disqualified Preferred Stock.
"Consolidated EBITDA" shall mean, with respect to any period, Consolidated
Net Income for such period before payment of or provision for taxes measured by
income plus interest charges (to the extent deducted in computing Consolidated
Net
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Income for such period), fees payable in connection with this Agreement (to
the extent deducted in computing Consolidated Net Income for such period),
amortization and depreciation expense (to the extent deducted in computing
Consolidated Net Income for such period), and other non-cash items reducing
Consolidated Net Income for such period, in each case determined on a
consolidated basis for the Borrower and its Restricted Subsidiaries.
"Consolidated Net Income" shall mean, for any period, the consolidated net
income of the Borrower and its Restricted Subsidiaries for such period, in each
case determined on a consolidated basis, excluding (i) gains or losses from
dispositions of assets other than from dispositions of inventory in the
ordinary course of business, (ii) any extraordinary items, and (iii) other
non-recurring items not related to operations.
"Consolidated Net Interest Coverage Ratio" for any period shall mean the
ratio of Consolidated EBITDA for such period to Consolidated Net Interest
Expense for such period, provided that, in case of Test Periods ended before
the first anniversary of the Initial Borrowing Date, for purposes of
calculating Consolidated Net Interest Coverage Ratio only, Consolidated Net
Interest Expense shall mean for each such Test Period (x) an amount equal to
the actual Consolidated Net Interest Expense for the period from the Initial
Borrowing Date through the end of the fiscal quarter most recently ended,
multiplied by (y) a fraction the numerator of which is 360 and the denominator
of which is the number of days actually elapsed during such period.
"Consolidated Net Interest Expense" shall mean, for any period, the sum of
(i) the aggregate amount of interest expense (excluding non-cash interest,
non-cash financing fee amortization, amortization of discount and non-cash cap
or hedging fee amortization), whether payable, accrued or paid (without
duplication) for the Borrower and its Restricted Subsidiaries, in each case
determined on a consolidated basis, which is treated as interest expense during
such period in accordance with generally accepted accounting principles and
(ii) the product of (x) the amount of all Dividend requirements (whether or not
declared or paid) on Disqualified Preferred Stock paid, accrued or scheduled to
paid or accrued during such period times (y) a fraction, the numerator of which
is one and the denominator of which is one minus the then current effective
consolidated Federal, state, local and foreign tax rate (expressed as a decimal
number between one and zero) of the Borrower as reflected in the audited
consolidated financial statements of the Borrower for its most recently
completed Fiscal Year, which amounts described in preceding clause (ii) shall
be treated as interest expense of the Borrower and its Restricted Subsidiaries
for purposes of this definition regardless of the treatment of such amounts
under generally acceptable accounting principles, less (iii) the aggregate
amount of cash interest income of the Borrower and its Restricted Subsidiaries
during such period.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency 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
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hold harmless the holder of such primary obligation against loss in respect
thereof; provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made (or, if less,
the maximum amount of such primary obligation for which such Person may be
liable pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.
"Continuing Directors" shall mean the Directors of the Borrower on the
Initial Borrowing Date and each other Director if such Director's nomination
for election to the Board of Directors of the Borrower is recommended by a
majority of the then Continuing Directors.
"Controlled Account" shall mean any account managed by the Apollo Group
for so long as the Apollo Group exercises sole power of disposition and voting
with respect thereto.
"Credit Documents" shall mean this Agreement and, after the execution and
delivery thereof pursuant to the terms of this Agreement, each Note, each
Security Document and the Subsidiary Guaranty and, after the execution and
delivery thereof, each additional guaranty or Additional Security Document
executed pursuant to Section 8.11.
"Credit Event" shall mean the making of any Loan or the issuance of any
Letter of Credit.
"Credit Party" shall mean the Borrower and each Subsidiary Guarantor.
"Currency Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed
to protect against the fluctuations in currency values.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank Default
is in effect.
"Disqualified Preferred Stock" means any Preferred Stock of the Borrower
which would be Qualified Preferred Stock except that regular accruing dividends
thereon are required to be paid in cash; provided that in no event shall any
Disqualified Preferred Stock be mandatorily redeemable, pursuant to a sinking
fund obligation or otherwise, or be redeemable, or be required to be
repurchased, including at the option of the holder thereof (including, without
limitation, upon the occurrence of an event which would constitute a Change of
Control), in whole or in part, at any time on or prior to the third anniversary
of the Maturity Date.
"Dividend" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
or authorized or made any other distribution, payment or delivery of property
(other than common stock or options to purchase same of such Person or
Qualified Preferred Stock of the Borrower paid
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as a pay-in-kind Dividend on any outstanding Qualified Preferred Stock of the
Borrower) or cash to its stockholders as such, or redeemed, retired, purchased
or otherwise acquired, directly or indirectly, for a consideration any shares
of any class of its capital stock outstanding on or after the Effective Date
(or any options or warrants issued by such Person with respect to its capital
stock other than options issued by the Borrower pursuant to the Stock Option
Plan), or set aside any funds for any of the foregoing purposes, or shall have
permitted any of its Subsidiaries to purchase or otherwise acquire for a
consideration any shares of any class of the capital stock of such Person
outstanding on or after the Effective Date (or any options or warrants issued
by such Person with respect to its capital stock). Without limiting the
foregoing, "Dividends" with respect to any Person shall also include all
payments made or required to be made during any period by such Person with
respect to any stock appreciation rights, plans, equity incentive or
achievement plans or any similar plans or setting aside of any funds for the
foregoing purposes, except to the extent such payments have reduced
Consolidated EBITDA during the respective period.
"Documents" shall mean and include all Credit Documents and all
Refinancing Documents.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Domestic Subsidiary" with respect to any Person shall mean a Subsidiary
thereof other than a Foreign Subsidiary thereof.
"Domestic Wholly-Owned Subsidiary" of any Person shall mean each
Wholly-Owned Subsidiary of such Person which is also a Domestic Subsidiary.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Transferee" shall mean and include a commercial bank, mutual
fund, financial institution or other "accredited investor" (as defined in
Regulation D of the Securities Act).
"Employment Agreements" shall have the meaning provided in Section 5.05.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating
in any way to any Environmental Law or any permit issued, or any approval
given, under any such Environmental Law (hereafter, "Claims"), including,
without limitation, (a) any and all Claims by governmental or regulatory
authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law, and (b) any
and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment
due to the presence of Hazardous Materials.
"Environmental Law" means any applicable Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy and rule of common law now or
hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, to the extent binding on the
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Borrower or any of its respective Subsidiaries, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C.
Section 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe
Drinking Water Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act of
1990, 33 U.S.C. Section 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Hazardous
Material Transportation Act, 49 U.S.C. Section 1801 et seq.; the Occupational
Safety and Health Act, 29 U.S.C. Section 651 et seq. (to the extent it
regulates occupational exposure to Hazardous Materials); and any state and
local or foreign counterparts or equivalents, in each case as amended from time
to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrower or any Subsidiary of the Borrower would
be deemed to be a "single employer" (i) within the meaning of Section 414(b),
(c), (m) or (o) of the Code or (ii) as a result of the Borrower or any
Subsidiary of the Borrower being or having been a general partner of such
person.
"Eurodollar Loan" shall mean each Revolving Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to first-class
banks in the New York interbank Eurodollar market by BTCo for Dollar deposits
of amounts in immediately available funds comparable to the outstanding
principal amount of the Eurodollar Loan of BTCo with maturities comparable to
the Interest Period applicable to such Eurodollar Loan commencing two Business
Days thereafter as of 10:00 A.M. (New York time) on the date which is two
Business Days prior to the commencement of such Interest Period, divided (and
rounded off to the nearest 1/16 of 1%) by (b) a percentage equal to 100% minus
the then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves
required by applicable law) applicable to any member bank of the Federal
Reserve System in respect of Eurocurrency funding or liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 10.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Existing Credit Agreement" shall mean the $75 million Credit Facility
dated as of November 17, 1994 among the Borrower, BT Commercial Corporation and
the lenders party thereto.
"Existing Debt Agreement" shall have the meaning provided in Section 5.05.
"Existing Indebtedness" shall have the meaning provided in Section 7.22.
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"Existing Letters of Credit" shall mean the letters of credit listed on
Schedule X and previously issued under the Existing Credit Agreement.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"FIRREA" shall mean Financial Institution Reform, Recovery and Enforcement
Act of 1989.
"Fiscal Year" shall mean each fiscal year of the Borrower.
"Florsheim Occupational" shall mean Florsheim Occupational Footwear, Inc.
(f/k/a Hy-Test, Inc.).
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by any Borrower or any one or
more of its respective Subsidiaries primarily for the benefit of employees of
such Borrower or such Subsidiary residing outside the United States of America,
which plan, fund or other similar program provides, or results in, retirement
income, a deferral of income in contemplation of retirement or payments to be
made upon termination of employment, and which plan is not subject to ERISA or
the Code.
"Foreign Sales Corporation" shall mean a Wholly-Owned Foreign Subsidiary
of the Borrower and/or its Restricted Subsidiaries created for the purpose of
effecting sales of goods and/or services in foreign countries.
"Foreign Subsidiary" with respect to any Person shall mean each Subsidiary
thereof that is incorporated under the laws of any jurisdiction other than the
United States of America, any State thereof, the United States Virgin Islands
or Puerto Rico.
"Furniture Brands Tax Sharing Agreement" shall mean the Tax Sharing
Agreement, dated as of November 17, 1994, among the Borrower and Furniture
Brands International, Inc., as amended.
"General Blocked Commitment" shall initially mean $20,000,000, which
amount shall be reduced from time to time as provided in Section 3.04.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing any level of polychlorinated biphenyls, and radon
gas; (b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances,"
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"hazardous waste," "hazardous materials," "extremely hazardous substances,"
"restricted hazardous waste," "toxic substances," "toxic pollutants,"
"contaminants," or "pollutants," or words of similar import, under any
applicable Environmental Law; and (c) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
governmental authority under Environmental Laws.
"Inactive Subsidiary" shall mean any Subsidiary of the Borrower that owns
(and continues to own) no assets (other than nominal assets, including, without
limitation, any treasury stock of the Borrower) and is (and continues to be)
inactive.
"Indebtedness" shall mean, as to any Person, without duplication, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (ii) the maximum amount available to be drawn
under all letters of credit issued for the account of such Person and all
unpaid drawings in respect of such letters of credit, (iii) all Indebtedness of
the types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this
definition secured by any Lien on any property owned by such Person, whether or
not such Indebtedness has been assumed by such Person (to the extent of the
value of the respective property), (iv) the aggregate amount required to be
capitalized under leases under which such Person is the lessee, (v) all
obligations of such person to pay a specified purchase price for goods or
services, whether or not delivered or accepted, in connection with, take-or-pay
and similar obligations, (vi) all Contingent Obligations of such Person and
(vii) all obligations under any Interest Rate Protection Agreement or Currency
Hedging Agreement.
"Indian Joint Venture" shall mean, for so long as the Borrower
beneficially owns at least 20% of all outstanding capital stock thereof,
▇▇▇▇▇▇▇ Shoes Limited or any successor thereto.
"Initial Borrowing Date" shall mean the date occurring on or after the
Effective Date on which the initial Borrowing of Revolving Loans occurs.
"Interest Determination Date" shall mean, with respect to any Eurodollar
Loan, the second Business Day prior to the commencement of any Interest Period
relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest
rate hedging agreement, interest rate floor agreement or other similar
agreement or arrangement.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Bank" shall mean BTCo and any Bank which, at the request of the
Borrower (notice of which request shall be given to the Agent), agrees, in such
Bank's sole discretion, to become an Issuing Bank for the purpose of issuing
Letters of Credit pursuant to Section 2.
"L/C Supportable Obligations" shall mean obligations of the Borrower or
its Restricted Subsidiaries incurred in the ordinary course of business with
respect to insurance obligations and workers' compensation, surety bonds and
other similar statutory obligations, and all obligations customarily supported
by Standby Letters of Credit and satisfactory to the Agent.
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"Leaseholds" of any Person means all the right, title and interest of such
Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a) and
shall include Trade Letters of Credit and Standby Letters of Credit.
"Letter of Credit Facing Fee" shall have the meaning provided in Section
3.01(c).
"Letter of Credit Fee" shall have the meaning provided in Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i)
the aggregate Stated Amount of all outstanding Letters of Credit which have not
terminated and Acceptances which have not matured or been prepaid and (ii) the
amount of all Unpaid Drawings.
"Letter of Credit Request" shall mean any request for the issuance of a
Letter of Credit made by the Borrower pursuant to Section 2.03(a), including
Trade Letter of Credit Requests and Standby Letter of Credit Requests.
"Letter of Credit Service Agreement" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean on any date the ratio of (i) Consolidated Debt
on such date to (ii) Consolidated EBITDA for the period of four consecutive
fiscal quarters most recently ended on or prior to such date.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any lease having substantially the
same effect as any of the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Management Agreements" shall have the meaning provided in Section 5.05.
"Mandatory Borrowing" shall have the meaning provided in Section 1.01(c).
"Margin Adjustment Period" shall mean each period which shall commence on
a date occurring after the Effective Date on which the respective officer's
certificate is delivered pursuant to Section 8.01(f) and which shall end on the
earlier of (i) the date of actual delivery of the next officer's certificate
pursuant to Section 8.01(f) and (ii) the latest date on which the next
officer's certificate is required to be delivered pursuant to Section 8.01(f).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
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business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Restricted Subsidiaries taken
as a whole.
"Maturity Date" shall mean May 9, 2002.
"Maximum Foreign Investment Amount" shall mean $5,000,000 as of the
Initial Borrowing Date, and shall increase by an additional $5,000,000 on each
anniversary of the Initial Borrowing Date, on a cumulative basis.
"Maximum Swingline Amount" shall mean $10,000,000.
"Mortgage" shall have the meaning provided in Section 5.10(a).
"Mortgage Policies" shall have the meaning provided in Section 5.10(b).
"Mortgaged Property" shall mean all Real Property of the Borrower and its
Subsidiaries listed on Schedule III and designated as "Mortgaged Property"
therein.
"Multiemployer Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of) the Borrower or a Subsidiary of the
Borrower or an ERISA Affiliate and each such plan for the five year period
immediately following the latest date on which the Borrower, any Subsidiaries
of the Borrower or any ERISA Affiliates maintained, contributed to or had an
obligation to contribute to such plan.
"Net Cash Proceeds" shall mean for any event requiring a commitment
reduction pursuant to Section 3.03, the gross cash proceeds (including any cash
received by way of deferred payment pursuant to a promissory note, receivable
or otherwise, but only as and when received) received from such event, net of
reasonable transaction costs (including, as applicable, any underwriting,
brokerage or other customary commissions and reasonable legal, advisory and
other fees and expenses associated therewith) received from any such event.
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from any sale of assets, net of reasonable transaction costs
(including, without limitation, any underwriting, brokerage or other customary
selling commissions and reasonable legal, advisory and other fees and expenses,
including title and recording expenses, associated therewith) and payments of
unassumed liabilities relating to the assets sold at the time of, or within 30
days after, the date of such sale, the amount of such gross cash proceeds
required to be used to repay any Indebtedness (other than Indebtedness of the
Banks pursuant to this Agreement) which is secured by the respective assets
which were sold, and the estimated marginal increase in income taxes which will
be payable by the Borrower's consolidated group with respect to the fiscal year
in which the sale occurs as a result of such sale; but excluding any portion of
any such gross cash proceeds which the Borrower determines in good faith should
be reserved for post-closing adjustments (to the extent the Borrower delivers
to the Agent a certificate signed by an Authorized Representative as to such
determination), it being understood and agreed that on the day that all such
post-closing adjustments have been determined, (which shall not be later than
six months following the date of the respective asset sale), the amount (if
any) by which the reserved amount in respect of such sale or disposition
exceeds the actual post-closing adjustments payable by the Borrower or any of
its Restricted Subsidiaries shall constitute Net Sale Proceeds on such date
received by the
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Borrower and/or any of its Restricted Subsidiaries from such sale, lease,
transfer or other disposition.
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Note" shall mean each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in Section 1.06.
"Notice Office" shall mean the office of the Agent located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or such other
office as the Agent may hereafter designate in writing as such to the other
parties hereto.
"Obligations" shall mean all amounts owing to the Agent, the Collateral
Agent, any Issuing Bank or any Bank pursuant to the terms of this Agreement or
any other Credit Document.
"Participant" shall have the meaning provided in Section 2.04(a).
"Pay-In-Kind Preferred Stock" means any Preferred Stock where all
dividends with respect thereto may, at the option of the issuer thereof, be
paid through the issuance of additional shares of preferred stock of the same
series.
"Payment Office" shall mean the office of the Agent located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other office as the Agent may
hereafter designate in writing as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Bank at any time shall mean a fraction (expressed
as a percentage) the numerator of which is the Revolving Loan Commitment of
such Bank at such time and the denominator of which is the Total Revolving Loan
Commitment at such time, provided that if the Percentage of any Bank is to be
determined after the Total Revolving Loan Commitment has been terminated, then
the Percentages of the Banks shall be determined immediately prior (and without
giving effect) to such termination.
"Permitted Acquisition" shall mean the acquisition by the Borrower or any
of its Restricted Subsidiaries of assets constituting part of or an entire
business or division of any person not already a Subsidiary of the Borrower or
of 100% of the capital stock of any such Person to the extent permitted and
effected under Section 9.02(vi).
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be acceptable to the Agent in its reasonable discretion.
"Permitted Liens" shall have the meaning provided in Section 9.01.
"Person" shall mean any individual, partnership, joint venture, firm,
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corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plans" shall mean any pension plan as defined in Section 3(2) of ERISA,
which is maintained or contributed to by (or to which there is an obligation to
contribute of) the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate, and each such plan for the five year period immediately following
the latest date on which the Borrower, or a Subsidiary of the Borrower or an
ERISA Affiliate maintained, contributed to or had an obligation to contribute
to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.08.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined in
the Pledge Agreement.
"Pledged Securities" shall mean "Pledged Securities" as defined in the
Pledge Agreement.
"Preferred Stock," as applied to the capital stock of any Person, means
capital stock of such Person (other than common stock of such Person) of any
class or classes (however designed) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of capital
stock of any other class of such Person, and shall include any Qualified
Preferred Stock and Disqualified Preferred Stock.
"Prime Lending Rate" shall mean the rate which BTCo announces from time to
time as its prime lending rate, the Prime Lending Rate to change when and as
such prime lending rate changes. The Prime Lending Rate is a reference rate
and does not necessarily represent the lowest or best rate actually charged to
any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, as to any Person, for any of the following
events which occur subsequent to the commencement of a period for which the
financial effect of such event is being calculated, and giving effect to the
event for which such calculation is being made, such calculation as will give
pro forma effect to such event as if same had occurred at the beginning of such
period of calculation, and
(i) for purposes of the foregoing calculation, the transaction
giving rise to the need to calculate the pro forma effect to any of the
following events shall be assumed to have occurred on the first day of
the four fiscal quarter period last ended before the occurrence of the
respective event for which such pro forma effect is being determined (the
"Reference Period"), and
(ii) in making any determination with respect to the incurrence or
assumption of any Indebtedness or issuance of any Disqualified Preferred
Stock during the Reference Period or subsequent to the Reference Period
and on or prior to the date of the transaction referenced in clause (i)
above (the "Transaction Date"), (x) all Indebtedness (including the
Indebtedness incurred or assumed and for which the financial effect is
being calculated, whether incurred under this Agreement or otherwise, but
excluding normal fluctuations in revolving indebtedness incurred for
working capital purposes and not to finance any Permitted Acquisition)
and Disqualified Preferred Stock incurred or permanently repaid during
the Reference
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Period shall be deemed to have been incurred or repaid at the beginning
of such period, (y) Consolidated Net Interest Expense of such Person
attributable to interest or dividends on any Indebtedness or Disqualified
Preferred Stock, as the case may be, bearing floating interest rates
should be computed on a pro forma basis as if the rate in effect on the
Transaction Date had been the applicable rate for the entire period and
(z) Consolidated Net Interest Expense will be increased or reduced by the
net cost (including amortization of discount) or benefit (after giving
effect to amortization of discount) associated with the Interest Rate
Protection Agreements, which will remain in effect for the twelve-month
period after the Transaction Date and which shall have the effect of
fixing the interest rate on the date of computation, and
(iii) in making any determination of Consolidated EBITDA, pro forma
effect shall be given to any Permitted Acquisition or Significant
Divestiture which occurred during the Reference Period or subsequent to
the Reference Period and prior to the Transaction Date, as if such
Permitted Acquisition or Significant Divestiture occurred on the first
day of the Reference Period, taking into account cost savings, other
synergies and expenses which would otherwise be accounted for as an
adjustment pursuant to Article 11 of Regulation S-X under the Securities
Act, as if such cost savings, other synergies or expenses were realized
on the first day of the Reference Period.
"Projections" shall have the meaning provided in Section 5.14(b).
"Qualified Preferred Stock" means any Pay-In-Kind Preferred Stock of the
Borrower, or any other Preferred Stock of the Borrower, the express terms of
which shall provide that Dividends thereon shall not be required to be paid in
cash at any time that such cash payment would be prohibited by the terms of
this Agreement (and any refinancings, replacements or extensions hereof) and in
either case which, by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable), or upon the happening of any
event (including an event which would constitute a Change of Control), cannot
mature (excluding any maturity as the result of an optional redemption by the
issuer thereof) and is not mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, and is not redeemable, or required to be repurchased,
at the sole option of the holder thereof (including, without limitation, upon
the occurrence of an event which would constitute a Change of Control), in
whole or in part, on or prior to the third anniversary of the Maturity Date.
"Quarterly Payment Date" shall mean the last Business Day of each June,
September, December and March, occurring after the Initial Borrowing Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the same
may be amended from time to time, 42 U.S.C. Section 6901 et seq.
"Real Property" of any Person shall mean all the right, title and interest
of such Person in and to land, improvements and fixtures, including Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of its
Restricted Subsidiaries of any cash insurance proceeds or condemnation award
payable (i) by reason of theft, loss, physical destruction or damage or any
other similar event with respect to any property or assets of the Borrower or
any of its Subsidiaries and (ii) under any policy of insurance required to be
maintained under Section 8.03.
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"Refinancing" shall mean (i) the termination of the commitments under the
Existing Credit Agreement and the refinancing of all loans outstanding
thereunder and (ii) the purchase, pursuant to the Tender Offer/Consent
Solicitation, of at least a majority, and of up to 100%, of the theretofore
outstanding principal amount of Senior Notes.
"Refinancing Documents" shall mean all documentation in connection with
the Tender Offer/Consent Solicitation and the Refinancing, including, without
limitation, the Consent Solicitation and the Senior Notes Indenture Amendment.
"Register" shall have the meaning provided in Section 13.17.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .24, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Appraisal" shall have the meaning provided in Section 8.11(h).
"Required Banks" shall mean Non-Defaulting Banks, the sum of whose
outstanding Revolving Loan Commitments (or after the termination thereof,
outstanding Revolving Loans and Adjusted Percentage of Swingline Loans and
Letter of Credit Outstandings) represent greater than 50% of the sum of the
Adjusted Total Revolving Loan Commitment (or after the termination thereof, the
sum of the then total outstanding Revolving Loans of Non-Defaulting Banks and
the aggregate Adjusted Percentages of all
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Non-Defaulting Banks of the total outstanding Swingline Loans and Letter of
Credit Outstandings at such time).
"Required Interest Rate Protection Period" shall have the meaning provided
in Section 8.12.
"Restricted Subsidiaries" shall mean, (x) all of the Subsidiaries of the
Borrower and its respective Subsidiaries in existence on the Initial Borrowing
Date (other than any Inactive Subsidiaries), (y) any Subsidiary (other than an
Unrestricted Subsidiary) that is created, established or acquired after the
Initial Borrowing Date and (z) any Subsidiary that ceases to be an Inactive
Subsidiary.
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section 1.01(a).
"Revolving Loan Commitment" shall mean, for each Bank, the amount set
forth opposite such Bank's name in Schedule I hereto directly below the column
entitled "Revolving Loan Commitment," as same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03 and/or 10 or (y) adjusted from time to
time as a result of assignments to or from such Bank pursuant to Section 1.13
or 13.04(b).
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"Scheduled Commitment Reduction" shall have the meaning provided in
Section 3.03(c).
"Scheduled Commitment Reduction Date" shall mean each date upon which any
Scheduled Commitment Reduction is to occur.
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term in the
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security Agreement" shall have the meaning provided in Section 5.09.
"Security Agreement Collateral" shall mean all "Collateral" as defined in
the Security Agreement.
"Security Document" shall mean the Pledge Agreement, the Security
Agreement, each Mortgage and, after the execution and delivery thereof, each
Additional Mortgage and each Additional Security Document.
"Senior Notes" shall mean the $85,000,000 original aggregate principal
amount of the Borrower's 12 3/4% Senior Notes due 2002.
"Senior Notes Blocked Commitment" shall initially mean that amount which
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is equal to the aggregate principal amount of Senior Notes which will remain
outstanding after giving effect to the Refinancing, which amount shall be
reduced from time to time as provided in Section 3.04.
"Senior Notes Documents" shall mean the Senior Notes, the Senior Notes
Indenture and any other documentation relating to the Senior Notes.
"Senior Notes Indenture" shall have the meaning provided in Section 5.16.
"Senior Notes Indenture Amendment" shall have the meaning provided in
Section 5.16.
"Shareholders' Agreement" shall have the meaning provided in Section 5.05.
"Significant Divestiture" shall mean any sale or other disposition of
assets by the Borrower and/or its Restricted Subsidiaries, the fair market
value of which exceeds $1,000,000 for any transaction (or series of related
transactions).
"Solvent Entity" shall have the meaning provided in Section 7.05(c).
"Standby Letter of Credit" shall mean any Standby Letter of Credit or
similar instrument issued or deemed issued for the account of any Borrower
pursuant to Section 2.01 for the purpose of supporting L/C Supportable
Obligations.
"Standby Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Start Date" shall mean, with respect to any Margin Adjustment Period, the
first day of such Margin Adjustment Period.
"Stated Amount" of (x) each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined
without regard to whether any conditions to drawing could then be met) and (y)
each Acceptance shall mean the amount of each such Acceptance.
"Stock Option Plan" shall mean the Florsheim Shoe Company 1994 Stock
Option Plan, the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 1996 Stock Option Plan and, after the
execution and delivery thereof to the Agent pursuant to Section 13.18, the
Florsheim Group Inc. 1997 Non-Employee Stock Option Plan, as the same may, from
time to time, be modified.
"Subsidiary" shall mean, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time. As used in this
Agreement, the term "Subsidiary" shall include or apply to any Restricted
Subsidiary and any Unrestricted Subsidiary.
"Subsidiary Guarantor" shall mean each Subsidiary of the Borrower
incorporated in the United States or any State thereof other than Florsheim
Occupational (so
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long as Florsheim Occupational remains an Inactive Subsidiary).
"Subsidiary Guaranty" shall have the meaning provided in Section 5.07.
"Supermajority Banks" shall mean those Non-Defaulting Banks which would
constitute the Required Banks under, and as defined in, this Agreement if the
term "50%" contained therein were changed to "66-2/3%."
"Swingline Expiry Date" shall mean the date which is two Business Days
prior to the Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(b).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Tax Sharing Agreement" shall have the meaning provided in Section 5.05.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Tender Offer" shall have the meaning provided in Section 5.16.
"Tender Offer/Consent Solicitation" shall have the meaning provided in
Section 5.16.
"Test Date" shall mean the last day of each fiscal quarter ended after the
Initial Borrowing Date.
"Test Period" at any time shall mean the period of four consecutive fiscal
quarters of the Borrower ended on the last Test Date which therefore occurred.
"Total Available Revolving Loan Commitment" shall mean, at any time, the
Total Revolving Loan Commitment less the Total Blocked Commitment, if any, at
such time.
"Total Blocked Commitment" shall mean, at any time, the sum of the General
Blocked Commitment and the Senior Notes Blocked Commitment at such time.
"Total Funded Debt" shall mean, as applied to any Person, the aggregate
amount of all Indebtedness of such Person that by its terms or by the terms of
any instrument or agreement relating thereto matures more than one year from,
or is directly renewable or extendable at the option of the debtor to a date
more than one year from (including an option of the debtor under a revolving
credit or similar agreement obligating the lender or lenders to extend credit
over a period of one year or more from), the date of the creation thereof.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of the
Revolving Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time, an
amount equal to the remainder of (x) the then Total Revolving Loan Commitment,
less (y) the sum of the aggregate principal amount of Revolving Loans and
Swingline Loans outstanding plus the then aggregate amount of Letter of Credit
Outstandings.
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"Trade Letter of Credit" shall mean any Letter of Credit or similar
instrument issued for the account of the Borrower pursuant to Section 2.01 for
the purpose of providing the primary payment mechanism in connection with the
purchase of any materials, goods or services by the Borrower or its Restricted
Subsidiaries in the ordinary course of business of the Borrower or its
Restricted Subsidiaries.
"Trade Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Transaction" shall mean (i) the consummation of the Refinancing and (ii)
the incurrence of the Loans hereunder on the Initial Borrowing Date.
"Type" shall mean the type of Loan determined with regard to the interest
option applicable thereto, i.e., whether a Base Rate Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated benefits under the Plan as
of the close of its most recent plan year each exceeds the fair market value of
the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions
used by the Plan's actuary in the most recent annual valuation of the Plan.
"United States" and "U.S." shall each mean the United States of America.
"Unpaid Drawing" shall have the meaning provided for in Section 2.05(a).
"Unrestricted Subsidiary" shall mean any Wholly-Owned Subsidiary of the
Borrower that is acquired or created after the Initial Borrowing Date and
designated by the Borrower as an Unrestricted Subsidiary hereunder by written
notice to the Agent; provided that the Borrower shall only be permitted to so
designate a new Unrestricted Subsidiary after the Initial Borrowing Date and so
long as (i) no Default or Event of Default exists or would result therefrom and
(ii) 100% of the capital stock of such newly-designated Unrestricted Subsidiary
is owned by the Borrower or another Unrestricted Subsidiary and all of the
provisions of Section 9.12 shall have been complied with in respect of such
newly-designated Unrestricted Subsidiary and such Unrestricted Subsidiary is
capitalized (to the extent capitalized by the Borrower or any of its Restricted
Subsidiaries) through Investments as permitted by, and in compliance with,
Section 9.05(vi), with any assets owned by such Unrestricted Subsidiary at the
time of the initial designation thereof to be treated as Investments made
pursuant to Section 9.05(vi), provided that at the time of the initial
Investments by the Borrower in such Subsidiary (x) the Borrower shall designate
such entity as an Unrestricted Subsidiary in a written notice to the Agent and
(y) such entity and the Borrower shall have entered into tax sharing and
management services agreements on a basis reasonably satisfactory to the Agent.
Additionally, the Borrower may not designate any Subsidiary created or
acquired pursuant to a Permitted Acquisition as an Unrestricted Subsidiary.
"Unutilized Available Revolving Loan Commitment" with respect to any Bank,
at any time, shall mean such Bank's Revolving Loan Commitment at such time less
the sum of (i) the aggregate outstanding principal amount of Revolving Loans
made by such
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Bank, (ii) such Bank's Adjusted Percentage of the Letter of Credit
Outstandings at such time and (iii) such Bank's Adjusted Percentage of the
Senior Notes Blocked Commitment, if any, at such time.
"Unutilized Revolving Loan Commitment" with respect to any Bank, at any
time, shall mean such Bank's Revolving Loan Commitment at such time less the
sum of (i) the aggregate outstanding principal amount of Revolving Loans made
by such Bank and (ii) such Bank's Adjusted Percentage of the Letter of Credit
Outstandings at such time.
"Voting Stock" shall mean, as to any Person, any class or classes of
capital stock of such Person pursuant to which the holders thereof have the
general voting power under ordinary circumstances to elect at least a majority
of the Board of Directors of such Person.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
SECTION 12. The Agent.
12.01 Appointment. The Banks hereby designate BTCo as Agent (for
purposes of this Section 12, the term "Agent" shall include BTCo in its
capacity as Collateral Agent pursuant to the Security Documents) to act as
specified herein and in the other Credit Documents. Each Bank hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, the Agent to take such action on
its behalf under the provisions of this Agreement, the other Credit Documents
and any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The Agent
may perform any of its duties hereunder by or through its respective officers,
directors, agents, employees or affiliates. Other than the Borrower's rights
under Section 12.09, the provisions of this Section 12 are solely for the
benefit of the Agent and the Banks, and none of the Credit Parties shall have
any rights as a third party beneficiary of any of the provisions hereof.
12.02 Nature of Duties. The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement and the
Security Documents. Neither the Agent nor any of its respective officers,
directors, agents, employees or affiliates shall be liable for any action taken
or omitted by it or them hereunder or under any other Credit Document or in
connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Agent shall be mechanical
and administrative in nature; the Agent shall not have by reason of this
Agreement or any other Credit Document a fiduciary relationship in respect of
any Bank or the holder of any Note; and nothing in this Agreement or any other
Credit Document, expressed or implied, is intended to or shall be so construed
as to impose upon the Agent any obligations in respect of this Agreement or any
other Credit Document except as expressly set forth herein or therein.
12.03 Lack of Reliance on the Agent. Independently and without reliance
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upon the Agent, each Bank and the holder of each Note, to the extent it deems
appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Borrower and its
Subsidiaries in connection with the making and the continuance of the Loans and
the taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of the Borrower and its Subsidiaries and,
except as expressly provided in this Agreement, the Agent shall not have any
duty or responsibility, either initially or on a continuing basis, to provide
any Bank or the holder of any Note with any credit or other information with
respect thereto, whether coming into its possession before the making of the
Loans or at any time or times thereafter. Except as otherwise expressly agreed
to in writing, neither the Agent nor any of its respective affiliates nor any
of its respective officers, directors, agents, or employees shall be
responsible to any Bank or the holder of any Note for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of the Borrower and its Subsidiaries or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any other
Credit Document, or the financial condition of the Borrower and its
Subsidiaries or the existence or possible existence of any Default or Event of
Default.
12.04 Certain Rights of the Agent. If the Agent shall request
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other
Credit Document, the Agent shall be entitled to refrain from such act or taking
such action unless and until the Agent shall have received instructions from
the Required Banks; and the Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Bank or holder of
any Note shall have any right of action whatsoever against the Agent as a
result of the Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Banks.
12.05 Reliance. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other document or telephone message signed, sent or made by any Person that
the Agent believed to be the proper Person, and, with respect to all legal
matters pertaining to this Agreement and any other Credit Document and its
duties hereunder and thereunder, upon advice of counsel selected by the Agent
(which may be counsel for the Credit Parties).
12.06 Indemnification. To the extent the Agent is not reimbursed and
indemnified by the Borrower, the Banks will reimburse and indemnify the Agent,
in proportion to their respective Percentages (and if the Total Revolving Loan
Commitment has terminated, as same would be determined immediately prior to
giving effect to such termination, but adjusted for any assignments of
outstandings pursuant to said commitments effected after the termination of the
Total Revolving Loan Commitment), for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed on,
asserted against or incurred by the Agent in performing its respective duties
hereunder or under any other Credit Document, in any way relating to or arising
out of this Agreement or any other Credit Document; provided that no Bank shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct.
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12.07 The Agent in its Individual Capacity. With respect to its
obligation to make Loans and participate in Letters of Credit under this
Agreement, the Agent shall have the rights and powers specified herein for a
"Bank" and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the term "Banks," "Required Banks,"
"holders of Notes" or any similar terms shall, unless the context clearly
otherwise indicates, include the Agent in its individual capacity. The Agent
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with the Borrower as if it were not performing
the duties specified herein, and may accept fees and other consideration from
the Borrower or any other Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the Banks.
12.08 Holders. The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until a written notice of the
assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Agent. Any request, authority or consent of any Person
who, at the time of making such request or giving such authority or consent, is
the holder of any Note shall be conclusive and binding on any subsequent
holder, transferee, assignee or indorsee, as the case may be, of such Note or
of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Agent. (a) The Agent may resign from the
performance of all its functions and duties hereunder and/or under the other
Credit Documents at any time by giving 15 Business Days' prior written notice
to the Borrower and the Banks. Such resignation shall take effect upon the
appointment of a successor Agent pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall appoint
a successor Agent hereunder or thereunder who shall be a commercial bank or
trust company reasonably acceptable to the Borrower (which approval shall not
be unreasonably withheld or delayed); provided that if the Borrower shall
recommend a successor Agent to the Banks, the Required Banks will not
unreasonably withhold their consent.
(c) If a successor Agent shall not have been so appointed within such 15
Business Day period, the Agent, with the consent of the Borrower, shall then
appoint a commercial bank or trust company with capital and surplus of not less
than $500 million as successor Agent who shall serve as Agent hereunder or
thereunder until such time, if any, as the Required Banks appoint a successor
Agent as provided above. Notwithstanding anything to the contrary in Section
12.09(b) and (c), the Borrower shall have no rights with respect to the
appointment of a successor Agent upon the occurrence and continuance of an
Event of Default.
(d) If no successor Agent has been appointed pursuant to clause (b) or
(c) above by the 20th Business Day after the date such notice of resignation
was given by the Agent, the Agent's resignation shall become effective and the
Banks shall thereafter perform all the duties of the Agent hereunder and/or
under any other Credit Document until such time, if any, as the Required Banks
appoint a successor Agent as provided above.
(e) Upon its acceptance of the agency hereunder, such successor Agent
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent.
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SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrower shall: (i) whether or not
the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Agent (including, without limitation,
the reasonable fees and disbursements of White & Case and local counsel) in
connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto or thereto, of
the Agent in connection with its respective syndication efforts with respect to
this Agreement and of the Agent and, following and during the continuation of
an Event of Default, each of the Banks in connection with the enforcement of
this Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation, the reasonable
fees and disbursements of counsel for the Agent and, following and during the
continuation of an Event of Default, for each of the Banks); (ii) pay and hold
each of the Banks harmless from and against any and all present and future
stamp, excise and other similar taxes with respect to the foregoing matters and
hold each of the Banks harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to such Bank) to pay such taxes; and (iii) indemnify the Agent and
each Bank (including in its capacity as an Issuing Bank), and each of its
respective officers, directors, employees, representatives, affiliates and
agents from and hold each of them harmless against any and all liabilities,
obligations (including removal or remedial actions), losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses and disbursements
(including reasonable attorneys' and consultants' fees and disbursements)
incurred by, imposed on or assessed against any of them as a result of, or
arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not the Agent or any
Bank is a party thereto) related to the entering into and/or performance of
this Agreement or any other Credit Document or the use of any Letter of Credit
or the proceeds of any Loans hereunder or the consummation of any transactions
contemplated herein (including, without limitation, the Transaction) or in any
other Credit Document or the exercise of any of their rights or remedies
provided herein or in the other Credit Documents, or (b) the actual or alleged
presence of Hazardous Materials in the air, surface water or groundwater or on
the surface or subsurface of any Real Property owned or at any time operated by
the Borrower or any of its Subsidiaries, the generation, storage,
transportation, handling or disposal of Hazardous Materials at any location,
whether or not owned or operated by the Borrower or any of its Subsidiaries,
the non-compliance of any Real Property with foreign, federal, state and local
laws, regulations, and ordinances (including applicable permits thereunder)
applicable to any Real Property, or any Environmental Claim asserted against
the Borrower, any of its Subsidiaries, or any Real Property owned or at any
time operated by the Borrower or any of its Subsidiaries, including, in each
case, without limitation, the reasonable fees and disbursements of counsel and
other consultants incurred in connection with any such investigation,
litigation or other proceeding (but excluding any losses, liabilities, claims,
damages or expenses to the extent incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified). To the extent that the
undertaking to indemnify, pay or hold harmless the Agent or any Bank set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
13.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the
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occurrence of an Event of Default, each Bank is hereby authorized at any time
or from time to time, without presentment, demand, protest or other notice of
any kind to the Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other Indebtedness at any time held or
owing by such Bank (including, without limitation, by branches and agencies of
such Bank wherever located) to or for the credit or the account of any Credit
Party against and on account of the Obligations and liabilities of all Credit
Parties to such Bank under this Agreement or under any of the other Credit
Documents, including, without limitation, all interests in Obligations
purchased by such Bank pursuant to Section 13.06(b), and all other claims of
any nature or description arising out of or connected with this Agreement or
any other Credit Document, irrespective of whether or not such Bank shall have
made any demand hereunder and although said Obligations, liabilities or claims,
or any of them, shall be contingent or unmatured.
13.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to the Borrower, at
the Borrower's address specified opposite its signature below; if to any other
Credit Party, at such Credit Party's address set forth in any Credit Document;
if to any Bank, at its address specified opposite its name on Schedule II
below; and if to the Agent, at its Notice Office; or, as to any Credit Party or
the Agent, at such other address as shall be designated by such party in a
written notice to the other parties hereto and, as to each Bank, at such other
address as shall be designated by such Bank in a written notice to the Borrower
and the Agent. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be
effective when deposited in the mails, delivered to the telegraph company,
cable company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to the Agent and the
Borrower shall not be effective until received by the Agent or the Borrower, as
the case may be.
13.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, the Borrower may not assign
or transfer any of its rights, obligations or interest hereunder or under any
other Credit Document without the prior written consent of all of the Banks
and, provided further, that although any Bank may transfer, assign or grant
participations in its rights hereunder, such Bank shall remain a "Bank" for all
purposes hereunder (and may not transfer or assign all or any portion of its
Revolving Loan Commitment hereunder except as provided in Section 13.04(b)) and
the transferee, assignee or participant, as the case may be, shall not
constitute a "Bank" hereunder and, provided further, that no Bank shall
transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan or Note or extend the expiry date of
any Letter of Credit in which such participant is participating beyond the
Maturity Date, or reduce the rate or extend the time of payment of interest or
Fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount
thereof, or increase the amount of the participant's participation over the
amount thereof then in effect (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Revolving Loan Commitment shall not
constitute a change in the terms of such participation, and that an increase in
any Commitment or Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
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thereof), (ii) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement or (iii) release all or
substantially all of the Collateral under all of the Security Documents (except
as expressly provided in the Credit Documents) supporting the Loans and/or
Letters of Credit hereunder in which such participant is participating. In the
case of any such participation, the participant shall not have any rights under
this Agreement or any of the other Credit Documents (the participant's rights
against such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined as if
such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together with
one or more other Banks) may (x) assign all or a portion of its Revolving Loan
Commitment (and related outstanding Obligations hereunder) to its parent
company and/or any affiliate of such Bank which is at least 50% owned by such
Bank or its parent company or to one or more Banks or (y) after providing at
least two Business Days prior notice to the Borrower, assign all, or if less
than all, a portion equal to at least $5,000,000 in the aggregate for the
assigning Bank or assigning Banks, of such Revolving Loan Commitments (or, if
the Revolving Loan Commitments have terminated, its outstanding obligations)
hereunder to one or more Eligible Transferees, each of which assignees shall
become a party to this Agreement as a Bank by execution of an Assignment and
Assumption Agreement, provided that, (i) at such time Schedule I shall be
deemed modified to reflect the Revolving Loan Commitments of such new Bank and
of the existing Banks, (ii) upon surrender of the old Notes, new Notes will be
issued, at the Borrower's expense, to such new Bank and to the assigning Bank,
such new Notes to be in conformity with the requirements of Section 1.05 (with
appropriate modifications) to the extent needed to reflect the revised
Revolving Loan Commitments, (iii) the consent of the Agent, the Borrower and
any Issuing Bank shall be required in connection with any such assignment of a
Bank's Revolving Loan Commitment (which consents shall not be unreasonably
withheld or delayed) and (iv) the Agent shall receive at the time of each such
assignment (other than in connection with an assignment by a Bank to an
affiliate of such Bank), from the assigning or assignee Bank, the payment of a
non-refundable fee of $3,500 and, provided further, that such transfer or
assignment will not be effective until recorded by the Agent on the Register
pursuant to Section 13.17 hereof. To the extent of any assignment pursuant to
this Section 13.04(b), the assigning Bank shall be relieved of its obligations
hereunder with respect to its assigned Revolving Loan Commitments. At the time
of each assignment pursuant to this Section 13.04(b) to a Person which is not
already a Bank hereunder and which is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes,
the respective assignee Bank shall provide to the Borrower and the Agent the
appropriate Internal Revenue Service Forms (and, if applicable a Section
4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent that an
assignment of all or any portion of a Bank's Revolving Loan Commitments and
related outstanding Obligations pursuant to Section 1.13 or this Section
13.04(b) would, at the time of such assignment, result in increased costs under
Section 1.10 or 1.11 greater than those being charged by the respective
assigning Bank prior to such assignment, then the Borrower shall not be
obligated to pay such greater increased costs (although the Borrower shall be
obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank.
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13.05 No Waiver; Remedies Cumulative. No failure or delay on the part of
the Agent or any Bank or any holder of any Note in exercising any right, power
or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower or any other Credit Party and the Agent or any
Bank or the holder of any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which the Agent or any Bank or the holder of any Note would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent or any Bank or
the holder of any Note to any other or further action in any circumstances
without notice or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Agent agrees that promptly after its receipt of each payment
from or on behalf of the Borrower in respect of any Obligations hereunder, it
shall distribute such payment to the Banks (other than any Bank that has
consented in writing to waive its pro rata share of any such payment) pro rata
based upon its respective shares, if any, of the Obligations with respect to
which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or other Fees, of a sum
which with respect to the related sum or sums received by other Banks is in a
greater proportion than the total of such Obligation then owed and due to such
Bank bears to the total of such Obligation then owed and due to all of the
Banks immediately prior to such receipt, then such Bank receiving such excess
payment shall purchase for cash without recourse or warranty from the other
Banks an interest in the Obligations of the respective Credit Party to such
Banks in such amount as shall result in a proportional participation by all the
Banks in such amount; provided that if all or any portion of such excess amount
is thereafter recovered from such Bank, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
13.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with generally accepted accounting principles in the United States (or the
equivalent thereof in any country in which a Foreign Sales Corporation is doing
business, as applicable) consistently applied throughout the periods involved,
provided that, (i) except as otherwise specifically provided herein, all
computations of Available $25 Million Basket Amount, Available Unrestricted
Proceeds Amount, Available Net Income Amount, Consolidated Cumulative 25% Net
Income Amount and all computations determining compliance with Sections 9.02
through 9.10, inclusive, shall utilize accounting principles and policies in
conformity with those used to prepare the historical financial statements
delivered to the Banks pursuant to
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Section 7.05(a) and (ii) for purposes of calculating financial terms, all
covenants and related definitions, all such calculations based on the
operations of the Borrower and its Restricted Subsidiaries on a consolidated
basis shall be made without giving effect to the operations of any Unrestricted
Subsidiaries.
(b) All computations of interest, Commitment Commission and other Fees
hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day) occurring
in the period for which such interest, Commitment Commission or other Fees are
payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN CERTAIN OF THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE
BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION
SYSTEM, WITH OFFICES ON THE DATE HEREOF AT ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE AND ACCEPT FOR AND ON ITS
BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS,
SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR
PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE
TO BE AVAILABLE TO ACT AS SUCH, EACH CREDIT PARTY AGREES TO DESIGNATE A NEW
DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE
PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT UNDER THIS AGREEMENT. THE
BORROWER FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY CREDIT
PARTY AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE AGENT UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND
HEREBY FURTHER IRREVOCABLY WAIVES AND
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AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Agent.
13.10 Effectiveness. This Agreement shall become effective on the date
(the "Effective Date") on which the Borrower, the Agent and each Bank shall
have signed a counterpart hereof (whether the same or different counterparts)
and shall have delivered (including by way of facsimile device) the same to the
Agent at its Notice Office.
13.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
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13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected thereby in the case of following clause
(i)), (i) extend the final scheduled maturity of any Loan or Note, or extend
the stated maturity of any Letter of Credit beyond the Maturity Date, or reduce
the rate or extend the time of payment of interest or Fees thereon, or reduce
the principal amount thereof (except to the extent repaid in cash), (ii)
release all or substantially all of the Collateral under all the Security
Documents (except as expressly provided in the Credit Documents), (iii) amend,
modify or waive any provision of this Section 13.12, (iv) reduce the percentage
specified in the definition of Required Banks (it being understood that, with
the consent of the Required Banks, additional extensions of credit pursuant to
this Agreement may be included in the determination of the Required Banks on
substantially the same basis as the extensions of Revolving Loan Commitments
are included on the Initial Borrowing Date) or (v) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement; provided further, that no such change, waiver, discharge or
termination shall (t) increase the Revolving Loan Commitment of any Bank over
the amount thereof then in effect without the written consent of such Bank (it
being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in any
Revolving Loan Commitments shall not constitute an increase of the Revolving
Loan Commitment of any Bank, and that an increase in the available portion of
any Revolving Loan Commitment of any Bank shall not constitute an increase in
the Revolving Loan Commitment of such Bank), (u) without the written consent of
the respective Issuing Bank or Issuing Banks, amend, modify or waive any
provision of Section 2 with respect to Letters of Credit issued by it or alter
its rights or obligations with respect to Letters of Credit or Acceptances, (v)
without the consent of BTCo, amend, modify or waive any provision of Sections
1.01(b) and (c) or alter its rights and obligations with respect to Swingline
Loans, (w) without the consent of the Agent, amend, modify or waive any
provision of Section 12 as same applies to the Agent or any other provision as
same relates to the rights or obligations of the Agent, (x) without the consent
of the Collateral Agent, amend, modify or waive any provision relating to the
rights or obligations of the Collateral Agent, or (y) without the consent of
the Supermajority Banks (1) amend, modify or waive any Scheduled Commitment
Reduction or (2) reduce the percentage specified in the definition of
Supermajority Banks.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Banks whose individual
consent is required are treated as described in either clauses (A) or (B)
below, to either (A) replace each such non-consenting Bank or Banks with one or
more Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change,
waiver, discharge or termination or (B) terminate such non-consenting Bank's
Revolving Loan Commitment in accordance with Sections 3.02(b) and/or 4.01(b),
provided that, unless the Revolving Loan Commitments are terminated, and Loans
repaid, pursuant to the preceding clause (B) are immediately replaced in full
at such time through the addition of new Banks or the increase of the Revolving
Loan Commitments and/or outstanding Loans of existing
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Banks (who in each case must specifically consent thereto), then in the case of
any action pursuant to preceding clause (B) the Required Banks (determined both
before and after giving effect to the proposed action) shall specifically
consent thereto, provided further, that in any event the Borrower shall not
have the right to replace a Bank, terminate its Revolving Loan Commitment
or repay its Loans solely as a result of the exercise of such Bank's rights
(and the withholding of any required consent by such Bank) pursuant to the
second proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 13.01 and 13.06 shall, subject
to Section 13.15 (to the extent applicable), survive the execution, delivery
and termination of this Agreement and the Notes and the making and repayment of
the Loans.
13.14 Domicile of Loans. Each Bank may transfer and carry its Loans at,
to or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from
those being charged by the respective Bank prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Limitation on Additional Amounts, etc. Notwithstanding anything to
the contrary contained in Sections 1.10, 1.11, 2.06 or 4.04 of this Agreement,
unless a Bank gives notice to the Borrower that it is obligated to pay an
amount under any such Section within one year after the later of (x) the date
the Bank incurs the respective increased costs, Taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return
on capital or (y) the date such Bank has actual knowledge of its incurrence of
the respective increased costs, Taxes, loss, expense or liability, reductions
in amounts received or receivable or reduction in return on capital, then such
Bank shall only be entitled to be compensated for such amount jointly and
severally by the Borrower pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as
the case may be, to the extent the costs, Taxes, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital
are incurred or suffered on or after the date which occurs one year prior to
such Bank giving notice to the Borrower that it is obligated to pay the
respective amounts pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as the
case may be. This Section 13.15 shall have no applicability to any Section of
this Agreement other than said Sections 1.10, 1.11, 2.06 and 4.04.
13.16 Confidentiality. (a) Subject to the provisions of clause (b) of
this Section 13.16, each Bank agrees that it will use its best efforts not to
disclose without the prior consent of the Borrower (other than to its
employees, auditors, advisors or counsel or to another Bank if the Bank or such
Bank's holding or parent company in its sole discretion determines that any
such party should have access to such information, provided such Persons shall
be subject to the provisions of this Section 13.16 to the same extent as such
Bank) any information with respect to the Borrower or any of its Subsidiaries
which is now or in the future furnished pursuant to this Agreement or any other
Credit Document and which is designated by the Borrower to the Banks in writing
as confidential, provided that any Bank may disclose any such information (a)
as has become generally available to the public (except as a result of the
unauthorized disclosure of such information by such Bank), (b) as may be
required or appropriate in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such
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Bank or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (c) as may be required or appropriate in
respect to any summons or subpoena or in connection with any litigation, (d)
in order to comply with any law, order, regulation or ruling applicable to such
Bank, (e) to any Agent or the Collateral Agent and (f) to any prospective or
actual transferee or participant in connection with any contemplated transfer
or participation of any of the Notes or Commitments or any interest therein by
such Bank, provided that such prospective transferee agrees to maintain the
confidentiality contained in this Section.
(b) The Borrower hereby acknowledges and agrees that each Bank may share
with any of its affiliates any information related to the Borrower or any of
its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Borrower and its
Subsidiaries), provided such Persons shall be subject to the provisions of this
Section 13.16 to the same extent as such Bank.
13.17 Register. The Borrower hereby designates the Agent to serve as the
Borrower's agent, solely for purposes of this Section 13.17, to maintain a
register (the "Register") on which it will record the Revolving Loan
Commitments from time to time of each of the Banks, the Loans made by each of
the Banks and each repayment in respect of the principal amount of the Loans of
each Bank. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of the Revolving Loan
Commitments of such Bank and the rights to the principal of, and interest on,
any Loan made pursuant to such Revolving Loan Commitments shall not be
effective until such transfer is recorded on the Register maintained by the
Agent with respect to ownership of such Revolving Loan Commitments and Loans
and prior to such recordation all amounts owing to the transferor with respect
to such Revolving Loan Commitments and Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Revolving Loan Commitments and Loans shall be recorded by the Agent on the
Register only upon the acceptance by the Agent of a properly executed and
delivered Assignment and Assumption Agreement pursuant to Section 13.04(b).
Coincident with the delivery of such an Assignment and Assumption Agreement to
the Agent for acceptance and registration of assignment or transfer of all or
part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Bank shall surrender the Note evidencing such Loan, and thereupon
one or more new Notes in the same aggregate principal amount shall be issued to
the assigning or transferor Bank and/or the new Bank. The Borrower agrees to
indemnify the Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Agent in performing its duties under this Section 13.17,
provided that the Borrower shall have no obligation to indemnify the Agent for
any loss, claim, damage, liability or expense which resulted primarily from the
gross negligence or willful misconduct of the Agent.
13.18 Post Closing Actions. Notwithstanding anything to the contrary
contained in this Agreement or the other Credit Documents, the parties hereto
acknowledge and agree that:
(a) Mortgage Policies. The Borrower will deliver, or cause to be
delivered, within ten (10) Business Days after the Effective Date,
Mortgage Policies complying with the requirements set forth in Section
5.10(b);
(b) Foreign Corporation Stock. The Borrower will use its best
efforts to deliver, as soon as practicable, to the Collateral Agent, as
pledgee, the capital stock
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108
constituting Pledged Securities of Florsheim Europe, S.r.l. and Florsheim
B.V., together with executed and undated stock powers related thereto; and
(c) Florsheim Group Inc. 1997 Non-Employee Stock Option Plan. The
Borrower will deliver or cause to be delivered, within ten (10) Business
Days after the execution thereof by the parties thereto, a true and
correct copy of the Florsheim Group Inc. 1997 Non-Employee Stock Option
Plan.
All conditions precedent and representations contained in this
Agreement and the other Credit Documents shall be deemed modified to the
extent necessary to effect the foregoing (and to permit the taking of the
actions described above within the time periods required above, rather than as
elsewhere provided in the Credit Documents); provided, that (x) to the extent
any representation and warranty would not be true because the foregoing actions
were not taken on the Effective Date, the respective representation and
warranty shall be required to be true and correct in all material respects at
the time the respective action is taken (or was required to be taken) in
accordance with the foregoing provisions of Section 13.18 and (y) all
representations and warranties relating to the Security Documents shall be
required to be true immediately after the actions required to be taken by
Section 13.18 have been taken (or were required to be taken). The acceptance
of the benefits of each Credit Event shall constitute a representation,
warranty and covenant by the Borrower to each of the Banks that the actions
required pursuant to this Section 13.18 will be taken within the relevant time
periods referred to in this Section 13.18 and that, at such time, all
representations and warranties contained in this Agreement and the other
Credit Documents shall then be true and correct without any modification
pursuant to this Section 13.18.
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ FLORSHEIM GROUP INC.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Title: Secretary, Treasurer and
Chief Accounting Officer
110
One Bankers Trust Plaza BANKERS TRUST COMPANY,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as a Bank and as Agent
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President
▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
112
CAISSE NATIONALE DE CREDIT AGRICOLE
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title: Head of Corporate Banking
113
CREDIT LYONNAIS CHICAGO BRANCH
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title: Vice President
114
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Title: Vice President
115
▇▇▇▇▇▇ FINANCIAL, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Title: Senior Vice President
116
LASALLE NATIONAL BANK
By /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title: Vice President
117
SOCIETE GENERALE, CHICAGO BRANCH
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Title: Vice President
118
THE SUMITOMO BANK, LIMITED
By /s/ ▇. ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President & Manager
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title: Vice President
119
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
120
SCHEDULE I
COMMITMENTS
Revolving
Loan
Bank Commitment
---- --------------
Bankers Trust Company $13,333,334
Bank of America Illinois 9,000,000
Caisse Nationale de Credit Agricole 10,750,000
Credit Lyonnais Chicago Branch 9,000,000
▇▇▇▇▇▇ Trust and Savings Bank 13,333,333
▇▇▇▇▇▇ Financial, Inc. 10,750,000
LaSalle National Bank 13,333,333
Societe Generale, Chicago Branch 10,750,000
The Sumitomo Bank, Limited 9,000,000
Transamerica Business Credit Corporation 10,750,000
------------
Total $110,000,000
121
SCHEDULE II
BANK ADDRESSES
Bankers Trust Company ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: 212-250-7200
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Bank of America Illinois ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Caisse Nationale de Credit
Agricole ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Credit Lyonnais Chicago Branch ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Trust and Savings Bank ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ Financial, Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
LaSalle National Bank ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
122
SCHEDULE II
Page 2
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇
Societe Generale, Chicago ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
The Sumitomo Bank, Limited ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Transamerica Business Credit
Corporation ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
123
SCHEDULE III
REAL PROPERTY
124
SCHEDULE IV
SUBSIDIARIES
125
SCHEDULE V
EXISTING INDEBTEDNESS
126
SCHEDULE VI
INSURANCE
127
SCHEDULE VII
EXISTING LIENS
128
SCHEDULE VIII
EXISTING INVESTMENTS
129
SCHEDULE IX
EXISTING TRANSACTIONS
130
SCHEDULE X
EXISTING LETTERS OF CREDIT