EXHIBIT 4.5
[CONFORMED AS EXECUTED]
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AMENDED AND RESTATED CREDIT AGREEMENT
in the amount of
$220,000,000
among
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ HOLDING COMPANY, INC.,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ COMPANY,
VARIOUS FINANCIAL INSTITUTIONS
and
BT COMMERCIAL CORPORATION,
as Agent
_____________________________________
Dated as of March 3, 1993
Amended and Restated as of March 24, 1998
_____________________________________
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TABLE OF CONTENTS
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ARTICLE 1.
Definitions....................................................................... 1
1.1 General Definitions..................................................... 1
1.2 Accounting Terms and Determinations..................................... 26
1.3 Other Defined Terms..................................................... 26
ARTICLE 2.
Revolving Loans................................................................... 27
2.1 Commitments............................................................. 27
2.2 Determination of Borrowing Base......................................... 27
2.3 Borrowing Mechanics..................................................... 28
2.4 Settlements Among the Payments Administrator and the Lenders............ 29
2.5 Mandatory Payment; Mandatory Reduction of Commitments................... 32
2.6 Payments and Computations............................................... 32
2.7 Maintenance of Account.................................................. 34
2.8 Statement of Account.................................................... 34
2.9 Taxes................................................................... 34
2.10 Sharing of Payments.................................................... 36
ARTICLE 3.
Letters of Credit................................................................. 36
3.1 Issuance of Letters of Credit........................................... 36
3.2 Terms of Letters of Credit.............................................. 37
3.3 Lenders' Participation.................................................. 37
3.4 Notice of Issuance...................................................... 38
3.5 Payment of Amount Drawn Under Letters of Credit......................... 38
3.6 Payment by Lenders...................................................... 38
3.7 Nature of Issuing Bank's Duties......................................... 39
3.8 Obligations Absolute.................................................... 39
ARTICLE 4.
Interest, Fees and Expenses....................................................... 40
4.1 Interest on Eurodollar Rate Loans....................................... 40
4.2 Interest on Prime Rate Loans............................................ 41
4.3 Notice of Continuation and Notice of Conversion......................... 41
4.4 Interest After Default.................................................. 42
4.5 Reimbursement of Expenses............................................... 43
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4.6 Unused Line Fee.......................................................................................... 43
4.7 Letter of Credit Fee; Facing Fee......................................................................... 43
4.8 Authorization to Charge Account.......................................................................... 44
4.9 Indemnification in Certain Events........................................................................ 44
4.10 Calculations............................................................................................. 45
4.11 Change of Applicable Lending Office...................................................................... 45
ARTICLE 5.
Conditions Precedent........................................................................................... 46
5.1 Conditions to Initial Loans and Letters of Credit on the Restatement Effective
Date............................................................................................... 46
(a) Execution of Agreement; Notes................................................................. 46
(b) Material Adverse Change....................................................................... 46
(c) Officer's Certificate......................................................................... 46
(d) Opinions of Counsel........................................................................... 46
(e) Corporate Proceedings......................................................................... 46
(f) Issuance of New Senior Notes.................................................................. 47
(g) Amendment to Holding Restructuring Agreement and Holding Notes................................ 47
(h) Special Term Loan Agreement................................................................... 48
(i) Use of Proceeds............................................................................... 48
(j) Existing Credit Agreement..................................................................... 48
(k) Approvals..................................................................................... 49
(l) Litigation.................................................................................... 49
(m) Acknowledgment, Consent and Amendment......................................................... 49
(n) Insurance Policies............................................................................ 49
(o) Existing Indebtedness Agreements; Shareholders' Agreements; Management Agreements; Employment
Agreements; Tax Sharing Agreements............................................................ 49
(p) Balance Sheet................................................................................. 50
(q) Solvency Opinion.............................................................................. 50
(r) Payment of Fees............................................................................... 51
(s) Borrowing Base Certificate.................................................................... 51
(t) Consent Letter................................................................................ 51
(u) Intercreditor Agreement....................................................................... 51
5.2 Conditions to Each Revolving Loan and Letter of Credit............................................... 51
ARTICLE 6.
Representations and Warranties................................................................................. 52
6.1 Corporate Status..................................................................................... 52
6.2 Corporate Power and Authority........................................................................ 53
6.3 No Violation......................................................................................... 53
6.4 Litigation........................................................................................... 53
6.5 Use of Proceeds...................................................................................... 53
6.6 Governmental Approvals............................................................................... 53
(ii)
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6.7 Investment Company Act.................................................... 54
6.8 Public Utility Holding Company Act........................................ 54
6.9 True and Complete Disclosure.............................................. 54
6.10 Financial Condition; Financial Statements................................. 55
6.11 Locations of Offices, Records and Inventory............................... 55
6.12 Fictitious Business Names................................................. 55
6.13 Security Interests........................................................ 56
6.14 Tax Returns and Payments.................................................. 56
6.15 Compliance with ERISA..................................................... 56
6.16 Subsidiaries.............................................................. 57
6.17 Patents, etc.............................................................. 57
6.18 Compliance with Statutes, etc............................................. 57
6.19 Properties................................................................ 58
6.20 Labor Relations; Collective Bargaining Agreements......................... 58
6.21 Restrictions on Subsidiaries.............................................. 59
6.22 Conduct of Business....................................................... 59
6.23 Status of Accounts........................................................ 59
6.24 Material Contracts........................................................ 59
ARTICLE 7.
Affirmative Covenants................................................................ 59
7.1 Financial Information..................................................... 60
7.2 Inventory................................................................. 63
7.3 Corporate Franchises...................................................... 63
7.4 Compliance with Statutes, etc............................................. 63
7.5 ERISA..................................................................... 64
7.6 Good Repair............................................................... 65
7.7 Books and Records......................................................... 65
7.8 Collateral Records........................................................ 65
7.9 Security Interests........................................................ 66
7.10 Insurance; Casualty Loss.................................................. 66
7.11 Taxes..................................................................... 67
7.12 End of Fiscal Years; Fiscal Quarters...................................... 67
7.13 Further Assurances........................................................ 67
7.14 Maintenance of Corporate Separateness..................................... 67
7.15 Post-Closing Obligations.................................................. 68
ARTICLE 8.
Negative Covenants................................................................... 68
8.1 Consolidation, Merger, Sale or Purchase of Assets, etc.................... 68
8.2 Liens..................................................................... 69
8.3 Indebtedness.............................................................. 71
8.4 Capital Expenditures...................................................... 73
8.5 Investments............................................................... 73
(iii)
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8.6 Dividends, etc................................................................................................... 75
8.7 Transactions with Affiliates..................................................................................... 75
8.8 Changes in Business.............................................................................................. 76
8.9 Working Capital.................................................................................................. 76
8.10 Fixed Charge Coverage Ratio...................................................................................... 76
8.11 Limitation on Voluntary Payments and Modifications of Indebtedness;
Modifications of Governing Documents and Preferred Stock; etc.................................................... 77
8.12 Issuance of Subsidiary Stock..................................................................................... 77
8.13 Limitation on Restrictions Affecting Subsidiaries............................................................... 77
8.14 No Additional Bank Accounts...................................................................................... 78
8.15 No Excess Cash................................................................................................... 78
8.16 Additional Negative Pledges...................................................................................... 78
ARTICLE 9.
Events of Default and Remedies............................................................................................... 79
9.1 Events of Default................................................................................................ 79
(a) Payments...................................................................................................... 79
(b) Representations, etc.......................................................................................... 79
(c) Covenants..................................................................................................... 79
(d) Default Under Other Agreements................................................................................ 79
(e) Bankruptcy, etc............................................................................................... 80
(f) ERISA......................................................................................................... 80
(g) Collateral Documents.......................................................................................... 80
(h) Guaranty...................................................................................................... 81
(i) Judgments..................................................................................................... 81
ARTICLE 10.
The Agent.................................................................................................................... 81
10.1 Appointment...................................................................................................... 81
10.2 Nature of Duties of the Agent.................................................................................... 82
10.3 Lack of Reliance on the Agent.................................................................................... 82
10.4 Certain Rights of the Agent...................................................................................... 83
10.5 Reliance by the Agent............................................................................................ 83
10.6 Indemnification of the Agent..................................................................................... 83
10.7 The Agent in its Individual Capacity............................................................................. 83
10.8 Holders of Notes................................................................................................. 84
10.9 Successor Agent.................................................................................................. 84
10.10 Collateral Matters............................................................................................... 84
10.11 Actions with Respect to Defaults................................................................................. 85
10.12 Delivery of Information.......................................................................................... 86
(iv)
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ARTICLE 11.
Miscellaneous................................................................................................................ 86
11.1 Submission to Jurisdiction; Waivers.............................................................................. 86
11.2 Jury Trial....................................................................................................... 87
11.3 Governing Law.................................................................................................... 87
11.4 Delays: Partial Exercise of Remedies............................................................................ 87
11.5 Notices.......................................................................................................... 87
11.6 Benefit of Agreement............................................................................................. 87
11.7 Confidentiality.................................................................................................. 90
11.8 Indemnification.................................................................................................. 91
11.9 Entire Agreement; Successors and Assigns......................................................................... 92
11.10 Amendment or Waiver.............................................................................................. 92
11.11 Nonliability of Agent and Lenders................................................................................ 92
11.12 Independent Nature of Lenders' Rights............................................................................ 92
11.13 Counterparts..................................................................................................... 92
11.14 Effectiveness.................................................................................................... 93
11.15 Severability..................................................................................................... 93
11.16 Headings Descriptive............................................................................................. 93
11.17 Maximum Rate..................................................................................................... 93
11.18 Right of Setoff.................................................................................................. 94
11.19 Amendment and Restatement; Termination of Existing Credit Agreement.............................................. 94
11.20 Additions of New Lenders; Conversion of Original Loans of Continuing Lenders; Termination of Commitments of
Non-Continuing Lenders........................................................................................... 94
ARTICLE 12.
Guaranty..................................................................................................................... 95
12.1 The Guaranty..................................................................................................... 95
12.2 Bankruptcy....................................................................................................... 96
12.3 Nature of Liability.............................................................................................. 96
12.4 Independent Obligation........................................................................................... 96
12.5 Authorization.................................................................................................... 96
12.6 Reliance......................................................................................................... 97
12.7 Subordination.................................................................................................... 97
12.8 Waiver........................................................................................................... 97
12.9 Limitation on Enforcement........................................................................................ 98
(v)
SCHEDULE I List of Lenders
SCHEDULE II Existing Indebtedness
SCHEDULE III Existing Letters of Credit
SCHEDULE IV Litigation
SCHEDULE V Governmental Approvals
SCHEDULE VI Chief Executive Offices, Records Locations and Inventory and
Equipment Locations
SCHEDULE VII Fictitious Business Names
SCHEDULE IX Subsidiaries
SCHEDULE X Real Properties
SCHEDULE XI Collective Bargaining Agreements
SCHEDULE XII Insurance
SCHEDULE XIII Permitted Property Sales
SCHEDULE XIV Permitted Liens
SCHEDULE XV Investments
SCHEDULE XVI Transactions with Affiliates
SCHEDULE XVII Bank Accounts
EXHIBIT A Form of Assignment and Assumption Agreement
EXHIBIT B Form of Collateral Access Agreement
EXHIBIT C Form of Revolving Note
EXHIBIT D Form of Notice of Borrowing
EXHIBIT E-1 Form of Collection Bank Agreement
EXHIBIT E-2 Form of Concentration Account Agreement
EXHIBIT F Form of Letter of Credit Request
EXHIBIT G-1 Form of Notice of Continuation
EXHIBIT G-2 Form of Notice of Conversion
EXHIBIT H-1 Form of Opinion of Katten, Muchin & Zavis
EXHIBIT H-2 Form of Opinion of White & Case
EXHIBIT I Form of Officer's Certificate
EXHIBIT J Form of Acknowledgment, Consent and Amendment
EXHIBIT K Form of Consent Letter
EXHIBIT L Form of Intercreditor Agreement
EXHIBIT M Form of Compliance Certificate
EXHIBIT N Form of Borrowing Base Certificate
EXHIBIT O Form of Notice of Assignment
EXHIBIT P Form of Confidentiality Agreement
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 3, 1993,
and amended and restated as of March 24, 1998, among ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Holding
Company, Inc., a Delaware corporation ("Holding"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Company, a
Delaware corporation (the "Borrower"), each of those financial institutions
listed from time to time on Schedule I hereto (each a "Lender" and collectively,
the "Lenders"), and BT COMMERCIAL CORPORATION, acting as Agent in the manner and
to the extent described in Article 10 hereof. Capitalized terms used and not
otherwise defined herein have the respective meanings set forth in Section 1.1
hereof.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Holding, the Borrower, each of the Lenders, and BT Commercial
Corporation and Chemical Bank, as Agents, are party to a Credit Agreement, dated
as of March 3, 1993 (as the same has been amended, modified or supplemented
prior to, but not including, the Restatement Effective Date, the "Existing
Credit Agreement");
WHEREAS, the parties hereto wish to amend and restate the Existing
Credit Agreement as herein provided;
WHEREAS, the Borrower wishes to obtain a credit facility to (i)
refinance the Existing Credit Agreement, (ii) prepay certain purchase money
indebtedness, including premium and accrued interest thereon, as set forth in
the ▇▇▇▇▇▇ Documents, (iii) pay certain fees and expenses incurred in connection
with the Transaction and (iv) provide for the Borrower's general corporate
purposes;
WHEREAS, upon the terms and subject to the conditions set forth
herein, the Lenders are willing to make available to the Borrower the credit
facilities provided for herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE 1.
Definitions
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1.1 General Definitions. As used herein, the following terms shall
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have the meanings herein specified (to be equally applicable to both the
singular and plural forms of the terms defined):
Accounts shall mean, with respect to any Person, all present and
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future accounts, contract rights and other rights to payment for goods sold or
leased (whether or not delivered) or for services rendered which are not
evidenced by an instrument or chattel paper, whether or not they have been
earned by performance, and any letter of credit, guarantee, security interest or
other security issued or granted to secure payment by an account debtor.
Acknowledgment, Consent and Amendment shall have the meaning given to
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such term in Section 5.1(m) hereof.
Adjusted Certificate of Deposit Rate shall mean on any day, the sum
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(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 Bankers Trust Company on the basis of quotations for
such certificates received by it from three certificate of deposit dealers in
New York of recognized standing, 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 in excess of
$100,000 issued by a member bank of the Federal Reserve System with deposits in
excess of five billion dollars (including, without limitation, any marginal,
emergency, supplemental, special or other reserves), plus the then daily net
annual assessment rate as estimated by Bankers Trust Company for determining the
current annual assessment payable by Bankers Trust Company to the Federal
Deposit Insurance Corporation for insuring three month certificates of deposit.
Adjusted Eurodollar Rate shall mean, with respect to each Interest
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Period for any Eurodollar Rate Loan, the rate obtained by dividing (i) the
Eurodollar Rate for such Interest Period by (ii) a percentage equal to 100%
minus the stated maximum rate (stated as a decimal) of all reserves, if any,
required by the Board of Governors of the Federal Reserve System to be
maintained by a member bank of the Federal Reserve System in New York City with
deposits in excess of five billion dollars against "Eurocurrency liabilities" as
specified in Regulation D (or against any other category of liabilities which
includes deposits by reference to which the interest rate on Eurodollar Rate
Loans is determined or any category of extensions of credit or other assets
which includes loans by a non-United States office of any Lender to United
States residents).
Affiliate shall mean, with respect to any Person, any entity which
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directly or indirectly controls, is controlled by, or is under common control
with, such Person or any Subsidiary of such Person or any Person who is a
director or officer of such Person or any Subsidiary of such Person. For
purposes of this definition, "control" shall mean the possession, directly or
indirectly, of the power to (i) vote ten percent (10%) or more of the securities
having ordinary voting power for the election of directors of such Person or
(ii) direct or cause the direction of management and policies of a business,
whether through the ownership of voting securities, by contract or otherwise and
either alone or in conjunction with others or any group. Neither any Lender nor
any person controlling any Lender nor any of their respective Subsidiaries shall
be treated as an Affiliate of the Credit Parties or their respective
Subsidiaries.
Agent shall mean BTCC in its capacity as Agent for the Lenders
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hereunder, and shall include any successor thereto as Agent, appointed as such
pursuant to Section 10.9.
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Amendment to Holding Restructuring Agreement shall mean the Amendment
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to Holding Restructuring Agreement entered into by and between Holding and KIA
IV on the Restatement Effective Date.
Applicable Lending Office shall mean, with respect to each Lender,
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such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Loan,
and such Lender's Domestic Lending Office in the case of a Base Rate Loan.
Applicable Margin shall mean a percentage per annum equal to (i) in
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the case of Eurodollar Rate Loans, the Eurodollar Rate plus 1.75% and (ii) in
the case of Base Rate Loans, the Base Rate plus 0.50%
Assignment and Assumption Agreement shall mean an assignment and
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assumption agreement entered into by an assigning Lender and an assignee Lender,
and accepted by the Syndication Agent, in accordance with Section 11.6,
substantially in the form of Exhibit A.
Auditors shall mean a nationally-recognized firm of independent public
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accountants selected by the Borrower and reasonably satisfactory to the Agent.
For purposes of this Credit Agreement, the Borrower's current firm of
independent public accountants, Ernst & Young LLP, shall be deemed to be
satisfactory to the Agent.
Available Amount shall mean, as of any date of calculation thereof, an
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amount equal to zero, plus or minus the sum of all Excess Cash Flow Amounts for
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all Excess Cash Flow Periods then ended, minus the amount of all Dividends
previously made pursuant to Sections 8.6(b)(iv) (A), (B) and (C).
Base Rate shall mean, at any time, the highest of (i) the Prime
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Lending Rate, (ii) 1/2 of 1% in excess of the overnight Federal Funds Rate then
in effect and (iii) 1/2 of 1% in excess of the Adjusted Certificate of Deposit
Rate then in effect. If for any reason Bankers Trust Company shall have
determined (which determination shall be final absent manifest error) that it is
unable to ascertain the Adjusted Certificate of Deposit Rate, the Base Rate
shall be determined without regard to clause (iii), until the circumstance
giving rise to such inability shall no longer exist.
Base Rate Loan shall mean each Revolving Loan bearing interest as
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provided in Section 4.2.
Borrower shall have the meaning provided in the preamble to this
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Credit Agreement.
Borrowing shall mean an incurrence of Revolving Loans of the same Type
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from all the Lenders on the same day (or resulting from Conversion or
Continuance on the same date), having, in the case of Eurodollar Rate Loans, the
same Interest Period.
Borrowing Base shall have the meaning given to such term in Section
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2.2.
3
Borrowing Base Certificate shall have the meaning given to such term
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in Section 7.1(e).
BT Account shall have the meaning given to such term in Section
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2.6(c).
BT Delaware shall have the meaning provided in Section 2.3(b).
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BTCC shall mean BT Commercial Corporation, in its individual capacity.
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Business Day shall mean any day other than a Saturday, Sunday or legal
------------
holiday on which commercial banks in New York, New York are authorized to close.
When used in connection with Eurodollar Rate Loans, this definition will also
exclude any day on which commercial banks are not open for dealing in U.S.
Dollar deposits in the New York interbank Eurodollar market.
Capital Expenditures shall mean, for any period, the aggregate of all
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expenditures (whether paid in cash or accrued as liabilities (including
Capitalized Lease Obligations)) by the Borrower and its Subsidiaries during that
period that, in conformity with GAAP, are, or are required to be, included in
the property, plant or equipment reflected in the balance sheet of Borrower and
its Subsidiaries; provided that Capital Expenditures shall in any event include
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the purchase price paid in connection with the acquisition of any Person
(including through the purchase of all of the capital stock or other ownership
interests of such Person or through merger or consolidation) to the extent
allocable to property, plant and equipment.
Capital Lease, as applied to any Person, shall mean any lease of any
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property (whether real, personal or mixed) by that Person or any of its
Subsidiaries as lessee which, in conformity with GAAP, is accounted for as a
capital lease on the consolidated balance sheet of that Person.
Capitalized Lease Obligations shall mean the obligations under Capital
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Leases of Borrower and its Subsidiaries in each case taken at the amount thereof
accounted for as liabilities in accordance with GAAP.
Cash Equivalents shall mean (i) securities issued or directly and
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fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
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States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers acceptances of (x) any Lender that
is a domestic commercial bank of recognized standing having capital and surplus
in excess of $500,000,000 or (y) any bank whose short-term commercial paper
rating from Standard & Poor's Corporation ("S&P") is at least A-1 or the
equivalent thereof or from ▇▇▇▇▇'▇ Investors Service, Inc. ("▇▇▇▇▇'▇") is at
least P-1 or the equivalent thereof (any such bank, an "Approved Bank"), in each
case with maturities of not more than one year from the date of acquisition,
(iii) commercial paper issued by any Lender or Approved Bank or by the parent
company of any Lender or Approved Bank and commercial paper issued by, or
guaranteed by, any industrial or financial company with a short-term commercial
paper rating of at least A-1 or the equivalent thereof by
4
S&P or at least P-1 or the equivalent thereof by Moody's (any such company, an
"Approved Company"), or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each thereof,
from S&P or Moody's, as the case may be, and in each case maturing within one
year after the date of acquisition, (iv) any fund or funds investing solely in
investments of the type described in clauses (i) through (iii) above, and (v)
repurchase obligations with a term of not more than seven days for investments
of the type described in clause (i) above and entered into with any Lender or
Approved Bank.
Casualty Loss shall have the meaning given to such term in Section
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7.10.
CERCLA shall mean the Comprehensive Environmental Response,
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Compensation, and Liability Act of 1980, as amended, 42 U.S.C. (S) 9601 et seq.
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Change of Control shall mean (x) a "Change of Control" (or any similar
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term) under and as defined in the New Senior Note Documents or Special Term Loan
Documents, (y) the direct or indirect acquisition by any Person, entity or
"group" (as such term is defined in Section 13(d)(3) of the Securities Exchange
Act of 1934 as amended (the "Exchange Act")) of beneficial ownership (as such
term is defined in Rule 13d-3 promulgated under the Exchange Act) of 30% or more
of the outstanding shares of Voting Stock of the Borrower or Holding, other than
any such Person, entity or group which is the direct transferee of any of the
voting stock of Holding from ▇▇▇▇▇ & Company and/or its Affiliates, officers and
employees and/or the ESOP so long as ▇▇▇▇▇ & Company and its Affiliates,
officers and employees and/or the ESOP which owned the voting stock of Holding
on the Restatement Effective Date continue to beneficially own a majority of the
voting stock of Holding or (z) Holding shall cease to own a majority of the
voting stock of the Borrower.
Code shall mean the Internal Revenue Code of 1986, as amended from
----
time to time, and the regulations promulgated and rulings issued thereunder.
Collateral shall mean all of the Collateral as defined in each of the
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Collateral Documents.
Collateral Access Agreements shall mean any landlord waivers,
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mortgagee waivers, bailee letters or any similar acknowledgment agreements of
any warehouseman or processor in possession of Inventory, in each case as
executed in connection with the Existing Credit Agreement, or executed pursuant
to the requirements in clause (b) of the definition of Eligible Inventory and
Section 7.7, and otherwise substantially in the form of Exhibit B with such
changes thereto as are reasonably acceptable to the Agent.
Collateral Agent shall mean BTCC acting as collateral agent pursuant
----------------
to the Collateral Documents.
Collateral Documents shall mean all contracts, instruments and other
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documents now or hereafter executed and delivered in connection with the
Existing Credit Agreement or this Credit Agreement, pursuant to which liens and
security interests are granted to the Collateral
5
Agent in the Collateral for the benefit of the Lenders, including, without
limitation, the Security Agreement.
Collection Account shall mean the account established at a Collection
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Bank pursuant to the Collection Bank Agreement, into which funds on deposit in
the relevant Sub-Collection Account shall be transferred pursuant to Section
2.6.
Collection Agreements shall have the meaning given to such term in
---------------------
Section 2.6(b)(ii).
Collection Bank shall have the meaning given to such term in Section
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2.6(b)(ii).
Collective Bargaining Agreements shall mean any collective bargaining
--------------------------------
agreements or any other similar agreement or arrangements covering the employees
of the Borrower.
Commitment of any Lender shall mean the amount set forth opposite such
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Lender's name on Schedule I, as such Schedule may be amended from time to time,
under the heading "Commitment," as such amount may be reduced from time to time
pursuant to the terms of this Credit Agreement.
Computation Date shall mean the last Business Day of each month and
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any other date specified in writing by an Issuing Bank with respect to a Letter
of Credit, or any replacement or renewal thereof.
Concentration Account shall have the meaning given to such term in
---------------------
Section 2.6(c).
Concentration Account Agreement shall have the meaning given to such
-------------------------------
term in Section 2.6(c).
Consolidated Net Income shall mean for any period the consolidated net
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income of the Borrower and its Subsidiaries for such period as determined in
accordance with GAAP applied on a basis consistent with prior practices.
Contingent Obligations 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,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) 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 (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof; provided, however, that
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the term Contingent Obligations shall not include (x) endorsements of
instruments for deposit or collection in the ordinary course of business or (y)
6
guarantees made by a Person of the obligations of a Subsidiary or Affiliate of
such Person which do not constitute Indebtedness of such Subsidiary or Affiliate
and are incurred in the ordinary course of business of such Subsidiary or
Affiliate. 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 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.
Continuation and Continuance each shall refer to a continuation of
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Revolving Loans pursuant to Section 4.3, provided that each such term shall not
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constitute the making of a Revolving Loan for purposes of this Credit Agreement.
Continuing Lender shall mean each Existing Lender with a Commitment
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under this Credit Agreement (immediately upon giving effect to this Credit
Agreement on the Restatement Effective Date).
Convert, Conversion and Converted each shall refer to a conversion of
---------------------------------
Revolving Loans of one Type into Revolving Loans of another Type pursuant to
Section 4.3, provided that each such term shall not constitute the making of a
--------
Revolving Loan for purposes of this Credit Agreement.
Credit Agreement shall mean this Amended and Restated Credit
----------------
Agreement, as the same may be amended, modified, restated, amended and restated,
supplemented, extended or renewed from time to time.
Credit Documents shall mean, collectively, this Credit Agreement and
----------------
once executed and delivered pursuant to the terms of this Credit Agreement (or
previously executed in connection with the Existing Credit Agreement), each
Revolving Note, each Letter of Credit, each Notice of Borrowing, each Notice of
Conversion, each of the Collateral Documents, the Intercreditor Agreement and
all other documents, agreements, instruments and certificates now or hereafter
executed and delivered in connection herewith or therewith, as the same may be
modified, amended, extended, restated or supplemented from time to time, except
as released prior to or in accordance with the execution of this Credit
Agreement.
Credit Event shall mean the making of a Revolving Loan or the issuance
------------
of a Letter of Credit.
Credit Parties shall mean, collectively, Holding and the Borrower.
--------------
Current Assets shall mean all assets (including cash and Cash
--------------
Equivalents) designated as "current" on a consolidated balance sheet of the
Borrower prepared in accordance with GAAP.
Current Liabilities shall (i) mean all liabilities designated as
-------------------
"current" on a consolidated balance sheet of the Borrower prepared in accordance
with GAAP and (ii) include, without limitation, and solely for the purpose of
calculating financial covenants contained in this Credit Agreement, the balance
of Revolving Loans outstanding.
7
Default shall mean an event, condition or default which with the
-------
giving of notice, the passage of time or both would be an Event of Default.
Defaulting Lender shall have the meaning given to such term in Section
-----------------
2.4(c).
Disbursement Account shall have the meaning given to such term in
--------------------
Section 2.3(b).
Dividend shall have the meaning given to such term in Section 8.6.
--------
Dollars and the sign $ shall each mean freely transferable lawful
------- -
money of the United States.
Domestic Lending Office shall mean, with respect to any Lender, the
-----------------------
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule I, as such annex may be amended from time to time.
EBITDA shall mean, in any fiscal period, the Consolidated Net Income
------
(other than extraordinary items of the Borrower and its Subsidiaries for such
period but including any Inventory adjustments), (i) plus the amount of all
Interest Expense, income tax expense, depreciation and amortization, including
amortization of any goodwill or other intangibles for such period, (ii) less
gains and plus losses attributable to any fixed asset sales, (iii) plus or minus
(as the case may be) any other non-cash charges (other than any reserve
established by the Borrower against Accounts and/or Inventory) which have been
subtracted or added, as the case may be, in calculating Consolidated Net Income
for such period, all determined in accordance with GAAP, (iv) plus or minus (as
the case may be) any decrease or increase in the amount of deferred taxes (to
the extent the amount of such increase or decrease is not duplicative of any
other taxes already included in this calculation) as shown on the balance sheet
as of the end of such period since the first day of the same period, (v) plus
ESOP contributions during such period which are paid in cash and subsequently
invested in the capital stock of, or otherwise contributed to, the Borrower,
(vi) plus any LIFO expense and (vii) minus any LIFO income.
Eligible Accounts Receivable shall mean Accounts of the Borrower
----------------------------
payable in Dollars and deemed by the Agent in its Permitted Discretion to be
eligible for inclusion in the calculation of the Borrowing Base. In determining
the amount to be so included, the face amount of such Accounts shall be reduced
by the amount of all returns, discounts, claims, credits, charges, or other
allowances and by the aggregate amount of all reserves, limits and deductions
provided for in this definition and elsewhere in this Credit Agreement. Unless
otherwise approved in writing by the Agent, no Account shall be deemed to be an
Eligible Account Receivable if:
(a) it arises out of a sale made by the Borrower to an Affiliate; or
(b) the Account is unpaid more than 90 days after the original
payment invoice date, with respect to Accounts the invoice for which
provides that payment is due in 30 days and 120 days from invoice date with
respect to Accounts the invoice for which is due in 60 days after the
original payment invoice date or less from the date of such invoice; or
8
(c) it is from the same account debtor (or any Subsidiary thereof)
and fifty percent (50%) or more, in face amount, of all Accounts from such
account debtor (or any Subsidiary thereof) are ineligible pursuant to (b)
above; or
(d) the Account, when aggregated with all other Accounts of such
account debtor, exceeds five percent (5%) in face value of all Accounts of
the Borrower then outstanding, to the extent of such excess; provided,
--------
however, that Accounts supported or secured by an irrevocable letter of
-------
credit in form and substance satisfactory to the Agent, issued by a
financial institution satisfactory to the Agent, and duly pledged to the
Collateral Agent (together with sufficient documentation to permit direct
draws by the Collateral Agent) shall be excluded for purposes of such
calculation; or
(e) (i) the account debtor is also a creditor of the Borrower, (ii)
the account debtor has disputed its liability on, or the account debtor has
made any claim with respect to, such Account or any other Account due from
such account debtor to the Borrower, which has not been resolved or (iii)
the Account otherwise is or may become subject to any right of setoff by
the account debtor; provided that any Account deemed ineligible pursuant to
--------
this clause (e) shall only be ineligible to the extent of the amount owed
by the Borrower to the account debtor, the amount of such dispute or claim,
or the amount of such setoff, as applicable; or
(f) the account debtor has commenced a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or made
an assignment for the benefit of creditors, or if a decree or order for
relief has been entered by a court having jurisdiction over the account
debtor in an involuntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or if any other petition or other
application for relief under the federal bankruptcy laws has been filed by
or against the account debtor, or if the account debtor has filed a
certificate of dissolution under applicable state law or shall be
liquidated, dissolved or wound up, or shall authorize or commence any
action or proceeding for dissolution, winding-up or liquidation, or if the
account debtor has failed, suspended business, declared itself to be
insolvent, is generally not paying its debts as they become due or has
consented to or suffered a receiver, trustee, liquidator or custodian to be
appointed for it or for all or a significant portion of its assets or
affairs, unless the payment of Accounts from such account debtor is secured
in a manner satisfactory to the Agent or, if the Account from such account
debtor arises subsequent to a decree or order for relief with respect to
such account debtor under the federal bankruptcy laws, as now or hereafter
in effect, the Agent shall have determined that the timely payment and
collection of such Account will not be impaired; or
(g) the sale is to an account debtor outside of the United States,
unless the account debtor thereon has supplied the Borrower with an
irrevocable letter of credit in form and substance satisfactory to the
Agent, issued by a financial institution satisfactory to the Agent and
which has been duly pledged to the Collateral Agent (together with
sufficient documentation to permit direct draws by the Collateral Agent);
or
9
(h) the sale to the account debtor is on a ▇▇▇▇-and-hold, guaranteed
sale, sale-and-return, sale on approval or consignment basis or made
pursuant to any other written agreement providing for repurchase or return
(other than pursuant to ordinary course of business warranties); or
(i) the Agent determines in its Permitted Discretion that such
Account may not be paid by reason of the account debtor's financial
inability to pay; or
(j) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the Borrower duly
assigns its rights to payment of such Account to the Collateral Agent
pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C. (S)
3727 et seq.); or
-- ----
(k) title to the goods giving rise to such Account has not been
transferred to the account debtor or the services giving rise to such
Account have not been performed by the Borrower and accepted by the account
debtor or the Account otherwise does not represent a final sale; or
(l) the Account does not comply with all applicable legal
requirements, including, where applicable, the Federal Consumer Credit
Protection Act, the Federal Truth in Lending Act and Regulation Z of the
Board of Governors of the Federal Reserve System, in each case as amended;
or
(m) the Collateral Agent does not have a valid and perfected first
priority security interest in or Lien (subject to Permitted Liens) on such
Account or the Account does not otherwise conform to the representations
and warranties contained in this Credit Agreement or the other Credit
Documents, except that the value of any Account shall be reduced by the
amount of any obligations secured by Permitted Liens which are prior to the
Lien in favor of the Collateral Agent.
Eligible Inventory shall mean Inventory of the Borrower deemed by the
------------------
Agent in its Permitted Discretion to be eligible for inclusion in the
calculation of the Borrowing Base. In determining the amount to be so included,
the amount of such Inventory shall be valued on a FIFO basis at the lower of
cost or market as adjusted from the Borrower's month end balance sheet, less any
----
goods returned or rejected by the Borrower's customers and goods in transit
(other than goods to which the Borrower has title), less any reserves otherwise
----
required by the Agent pursuant to Section 2.2(b), and less any Inventory that
----
the Agent determines to be ineligible pursuant to Section 2.2(b). Unless
otherwise approved in writing by the Agent, no Inventory shall be deemed
Eligible Inventory if:
(a) the Inventory is not owned solely by the Borrower and with
respect to which the Borrower does not have good, valid and marketable
title; or
(b) the Inventory is not stored on property that is either (i) owned
or leased by the Borrower or (ii) owned or leased by a warehouseman that
has contracted with the Borrower to store Inventory on such warehouseman's
property, provided that (x) with
--------
10
respect to Inventory stored on property leased by the Borrower, such
Inventory shall be deemed Eligible Inventory so long as, by the date which
-- ---- --
is 60 days after the Restatement Effective Date, the Borrower shall have
delivered in favor of the Collateral Agent a Collateral Access Agreement
executed by the lessor of such property, and, with respect to Inventory
stored on property owned or leased by a warehouseman, the Borrower shall
have delivered to the Collateral Agent a Collateral Access Agreement
executed by such warehouseman and (y) with respect to Inventory of the
Borrower stored on property owned or leased by a customer of the Borrower,
such Inventory shall be deemed Eligible Inventory so long as (1) such
-- ---- --
Inventory is segregated and identifiable from such customer's other
inventory, (2) such Inventory and other Inventory stored on property owned
or leased by other customers of the Borrower do not exceed $5,000,000 in
the aggregate and (3) the Borrower shall have delivered in favor of the
Collateral Agent a collateral access agreement, in form and substance
satisfactory to the Agent, executed by such customer; or
(c) the Inventory is not subject to a perfected first priority Lien
(subject to Permitted Liens) in favor of the Collateral Agent except, (i)
with respect to Eligible Inventory stored at sites described in clause (b)
above, for Liens for normal and customary warehouseman charges and (ii) the
value of any Inventory shall be reduced by the amount of any obligations
secured by Permitted Liens which are prior to the Lien in favor of the
Collateral Agent; or
(d) the Inventory is not located in the United States; or
(e) the Inventory is obsolete or the Inventory does not otherwise
conform to the representations and warranties contained in this Credit
Agreement or the other Credit Documents; or
(f) the Inventory to the extent to which the FIFO value for each
Inventory product item is in excess of the previous rolling 12 month cost
of goods sold for such item (to the extent of such excess); or
(g) such Inventory is part of one product line as disclosed on the
schedules attached to the Borrowing Base Certificate and the amount of such
Inventory exceeds 20% of the FIFO stock Inventory at such time (in the
amount of such excess).
Eligible Transferee shall mean and include a commercial bank,
-------------------
financial institution or other "accredited investor" (as defined in SEC
Regulation D).
Employment Agreements shall have the meaning provided in Section
---------------------
5.1(o).
Environmental Claims shall mean any and all administrative, regulatory
--------------------
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by the Borrower or any of its Subsidiaries solely in the ordinary course of such
Person's business or as required in connection with a financing transaction and
not in response to any third party action or request of any kind) or
11
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 resulting from
Hazardous Materials arising from alleged injury or threat of injury to health,
safety or the environment.
Environmental Law shall mean any applicable Federal, state, foreign or
-----------------
local statute, law, rule, regulation, ordinance, code, guide, 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, relating to the environment,
health, safety or Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Federal Water Pollution Control Act, as amended, 33 U.S.C. (S) 1251 et
--
seq.; the Toxic Substances Control Act, 15 U.S.C. (S) 2601 et seq.; the Clean
---- -- ----
Air Act, 42 U.S.C. (S) 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. (S)
-- ----
300f et seq.; the Emergency Planning and Community Right-to-Know Act, 49 U.S.C.
-- ----
(S) 1801 et seq.; the Occupational Safety and Health Act, 29 U.S.C. (S) 651 et
-- ---- --
seq.; the Oil Pollution Act of 1990, 33 U.S.C (S) 2701 et seq. and any
---- -- ----
applicable state and local or foreign counterparts or equivalents.
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 Credit 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 Holding, the Borrower or any Subsidiary of Holding or
the Borrower would be deemed to be a "single employer" within the meaning of
Section 414(b) or (c) of the Code, and for the purpose of any specific provision
of this Credit Agreement which expressly refers to Section 302 of ERISA or
Section 412 of the Code, within the meaning of Section 414(b), (c), (m) or (o)
of the Code.
ESOP shall mean the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Employee Stock Ownership Plan,
----
as in effect on the Restatement Effective Date.
Eurodollar Lending Office shall mean, with respect to any Lender, the
-------------------------
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule I, as such annex may be amended from time to time (or, if no
such office is specified, its Domestic Lending Office), or such other office or
Affiliate of such Lender as such Lender may from time to time specify to the
Borrower and the Agent.
Eurodollar Rate shall mean, with respect to an Interest Period for
---------------
each Eurodollar Rate Loan comprising part of the same Borrowing, an interest
rate per annum equal to the average (rounded upward to the nearest whole
multiple of one-sixteenth (1/16) of one percent (1%) per annum, if such rate is
not such a multiple) of the offered quotation, if any, to first class
12
banks in the New York interbank Eurodollar market by Bankers Trust Company for
U.S. dollar deposits of amounts in immediately available funds comparable to the
principal amount of the Eurodollar Rate Loan of BTCC for which the Eurodollar
Rate is being determined with maturities comparable to the Interest Period for
which such Eurodollar Rate will apply as of approximately 11:00 A.M. New York
City time two (2) Business Days prior to the commencement of such Interest
Period.
Eurodollar Rate Loan shall mean a Revolving Loan bearing interest as
--------------------
provided in Section 4.1.
Event of Default shall have the meaning provided for in Section 9.1 of
----------------
this Credit Agreement.
Excess Cash Flow shall mean, for any period (calculated based on
----------------
annual audited numbers for the first Excess Cash Flow Period), the remainder of
(i) the sum of (a) EBITDA for such period and (b) the decrease, if any, in
Working Capital from the first day to the last day of such period, minus (ii)
-----
the sum of (a) the amount of Capital Expenditures (to the extent not financed
with Indebtedness (other than the amount financed by Revolving Loans) or made
with the proceeds from asset sales, insurance proceeds or condemnation awards)
made by the Borrower during such period, (b) the aggregate principal amount of
permanent principal payments of Indebtedness for borrowed money of the Borrower
(provided that repayments of Revolving Loans shall be deducted in determining
--------
Excess Cash Flow only if such repayments were accompanied by a reduction in the
Total Commitments) during such period and (c) the increase, if any, in Working
Capital from the first day to the last day of such period.
Excess Cash Flow Amount shall mean, for any Excess Cash Flow Period,
-----------------------
the amount, which may be a positive or negative number, of Excess Cash Flow
calculated for such period.
Excess Cash Flow Period shall mean (i) the period commencing on April
-----------------------
1, 1998 and ending on March 31, 1999 and (ii) each subsequent fiscal year of the
Borrower.
Exchange Notes shall mean exchange notes of the Borrower issued,
--------------
pursuant to a registration statement to be filed by the Borrower with the
Securities and Exchange Commission, to the holders of the New Senior Notes (in
exchange for such New Senior Notes), which such exchange notes shall have terms
substantially identical in all material respects to the New Senior Notes.
Existing Credit Agreement shall have the meaning given to such term in
-------------------------
the first WHEREAS clause hereof.
Existing Indebtedness shall mean all Indebtedness of the Borrower and
---------------------
its Subsidiaries outstanding prior to, and to remain outstanding on and after,
the Restatement Effective Date, and set forth on Schedule II, without giving
effect to extensions or renewals thereto, except as expressly provided therein.
13
Existing Indebtedness Agreements shall have the meaning given to such
--------------------------------
term in Section 5.1(o) hereof.
Existing Lender shall mean a Lender with a Commitment pursuant to the
---------------
Existing Credit Agreement.
Existing Letter of Credit shall have the meaning given to such term in
-------------------------
Section 3.1.
Existing Loans shall have the meaning given to such term in Section
--------------
5.1(j) hereof.
Expenses shall mean all present and future expenses incurred by or on
--------
behalf of the Agent in connection with this Credit Agreement, any other Credit
Document or otherwise in its capacity as the Agent under this Credit Agreement,
whether incurred heretofore or hereafter, which expenses shall include, without
being limited to, the cost of record searches, the reasonable fees and expenses
of attorneys and paralegals, all costs and expenses incurred by the Agent in
opening bank accounts, depositing checks, receiving and transferring funds, and
any charges imposed on the Agent due to insufficient funds of deposited checks
and the standard fee of the Agent relating thereto, collateral examination fees
and expenses, reasonable fees and expenses of accountants, appraisers or other
consultants, experts or advisors employed or retained by the Agent, out of
pocket syndication fees and expenses, fees and taxes relative to the filing of
financing statements, costs of preparing and recording any other Collateral
Documents, all expenses, costs and fees set forth in Article 4 of this Credit
Agreement, all other fees and expenses required to be paid pursuant to the Fee
Letter and all fees and expenses incurred in connection with releasing
Collateral and the amendment or termination of any of the Credit Documents.
Expiration Date shall mean March 24, 2003.
---------------
Facing Fee shall have the meaning given to such term in Section
----------
4.7(c).
Federal Funds Rate shall mean, for any period, a fluctuating interest
------------------
rate per annum equal, for each day during such period, to the weighted average
of the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Payments Administrator from three Federal Funds
brokers of recognized standing selected by it.
Fees shall mean, collectively, the Unused Line Fee, the Letter of
----
Credit Fees and the other fees provided for in Section 4.8 hereof.
Financial Statements shall mean the consolidated and consolidating
--------------------
balance sheets and statements of operations and consolidated statements of cash
flows and statements of changes in shareholder's equity of the Borrower for the
period specified prepared in accordance with GAAP and consistent with prior
practices.
14
Fixed Charge Coverage Ratio for any period shall mean the ratio of (x)
---------------------------
EBITDA less the sum of (i) Capital Expenditures for such period and (ii) the
aggregate principal amount of all scheduled payments of Indebtedness subject to
a Lien permitted by Section 8.2(o) for such period to (y) Fixed Charges for such
period.
Fixed Charges for any period shall mean the sum of (i) Interest
-------------
Expense and (ii) for purposes of calculating the Fixed Charge Coverage Ratio as
used in Section 8.6(b)(iv)(C), Dividends paid from Available Amounts calculated
for such period (other than Dividends the proceeds of which are promptly
contributed to the Borrower) plus the amount of the Dividend proposed to be paid
pursuant to Section 8.6(b)(iv)(C) at such time of the calculation for such
purpose.
GAAP shall mean generally accepted accounting principles in the United
----
States as in effect from time to time subject to Section 1.2.
Governing Documents shall mean, as to any Person, the certificate or
-------------------
articles of incorporation and by-laws or other organizational or governing
documents of such Person.
Governmental Authority shall mean any nation or government, any state
----------------------
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
Guarantor shall mean Holding in its capacity as the guarantor under
---------
Article 12.
Guaranty shall mean the guaranty provided by Holding pursuant to
--------
Article 12 of this Credit Agreement.
Hazardous Materials shall mean (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
contained dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous waste," "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.
▇▇▇▇▇▇ Documents means (a) the Loan and Security Agreement dated as of
----------------
March 27, 1995, by and between the Borrower and ▇▇▇▇▇▇ Financial, Inc., (b) the
Promissory Note dated March 30, 1995, made by the Borrower and payable to the
order of ▇▇▇▇▇▇ Financial, Inc., in the original principal amount of $2,875,974,
(c) the Deed of Trust and Security Agreement dated as of March 28, 1995, by and
between the Borrower as grantor, ▇▇▇▇▇ ▇. ▇▇▇▇▇, as trustee, and ▇▇▇▇▇▇
Financial, Inc., as the lender and (d) the Guaranty dated March 28, 1995, made
by the Parent.
Highest Lawful Rate shall mean, at any given time during which any
-------------------
Obligations shall be outstanding hereunder, the maximum nonusurious interest
rate, if any, that at any time or
15
from time to time may be contracted for, taken, reserved, charged or received on
the Obligations owing under this Credit Agreement, under the laws of the State
of New York (or the law of any other jurisdiction whose laws may be mandatorily
applicable notwithstanding other provisions of this Credit Agreement and the
other Credit Documents), or under applicable federal laws which may presently or
hereafter be in effect and which allow a higher maximum nonusurious interest
rate than under New York (or such other jurisdiction's) law, in any case after
taking into account, to the extent permitted by applicable law, any and all
relevant payments or charges under this Credit Agreement and any other Credit
Documents executed in connection herewith, and any available exemptions,
exceptions and exclusions.
Holding shall have the meaning provided in the preamble to this Credit
-------
Agreement.
Holding Management Agreement shall mean the Management Agreement
----------------------------
between Holding and the Borrower as in effect on the Restatement Effective Date.
Holding Note Documents shall mean and include each of the documents
----------------------
and other agreements entered into by Holding (including, without limitation, the
Holding Restructuring Agreement and the Holding Note Pledge Agreement) relating
to the issuance by Holding of the Holding Notes, as in effect on the Restatement
Effective Date and as the same may be modified, supplemented or amended from
time to time to the extent permitted pursuant to the terms hereof and thereof.
Holding Note Pledge Agreement shall mean the Pledge Agreement entered
-----------------------------
into by Holding and KIA IV in the form attached as Exhibit D to the Holding
Restructuring Agreement, as in effect on the Original Effective Date and as same
may be modified, supplemented or amended from time to time to the extent
permitted pursuant to the terms hereof and thereof.
Holding Notes shall mean the Series A Variable Rate Senior Notes due
-------------
2006, including any Series A Variable Rate Senior Notes issued in lieu of
interest thereon, issued by Holding under the Holding Restructuring Agreement,
and amended by the Amendment to Holding Restructuring Agreement as in effect on
the Restatement Effective Date and as the same may be modified, supplemented or
amended from time to time to the extent permitted pursuant to the terms hereof
and thereof.
Holding PIK Notes shall mean senior notes of Holding, issued, pursuant
-----------------
to the Holding Restructuring Agreement, to the holders of Holding Notes in lieu
of payments of interest on such Holding Notes to the extent that Holding has
insufficient excess cash flow to pay such interest, which such senior notes
shall have terms substantially identical in all material respects to the Holding
Notes.
Holding Restructuring Agreement shall mean the Restructuring Agreement
-------------------------------
entered into by and between Holding and KIA IV, as in effect on the Restatement
Effective Date (after giving effect to the Amendment to Holding Restructuring
Agreement) and as the same may be modified, supplemented or amended from time to
time to the extent permitted pursuant to the terms hereof and thereof.
16
Indebtedness of any Person shall mean without duplication (i) all
------------
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all indebtedness of a second
Person secured by any Lien on any property owned by such first Person, whether
or not such indebtedness has been assumed, (v) all Capitalized Lease Obligations
of such Person, (vi) all obligations of such Person to pay a specified purchase
price for goods or services whether or not delivered or accepted, i.e., take-or-
----
pay and similar obligations, (vii) all obligations of such Person under Interest
Rate Agreements, (viii) all reimbursement or other monetary obligations with
respect to surety, performance and bid bonds, and (ix) all Contingent
Obligations of such Person; provided that (x) Indebtedness shall not include
--------
trade payables and accrued expenses, in each case arising in the ordinary course
of business and (y) Indebtedness for purposes of determining compliance with
Sections 8.9 and 8.10 shall not include Contingent Obligations and Interest Rate
Agreements to the extent not reflected on the Borrower's balance sheet in
accordance with GAAP.
Initial Credit Event shall mean the making of the initial Revolving
--------------------
Loans hereunder.
Insurance Sub shall mean a Wholly-Owned Subsidiary of the Borrower
-------------
organized under the laws of Bermuda.
Intercreditor Agreement shall have the meaning given to such term in
-----------------------
Section 5.1(u) hereof.
Interest Expense shall mean the aggregate consolidated interest
----------------
expense of the Borrower and its Subsidiaries in respect of Indebtedness
determined on a consolidated basis in accordance with GAAP, including, without
limitation, the interest portion of any deferred payment obligation and the
interest component of any Capital Lease Obligations, provided that for the
--------
purpose of the definition "Fixed Charges", amortization of original issue
discount and debt issuance costs on any Indebtedness and all fees payable in
connection with the incurrence of such Indebtedness (to the extent included in
interest expense) and debt issuance costs incurred by the Borrower in connection
with the Transaction shall each be excluded in calculating Interest Expense;
provided, further, that, interest expense in respect of Life Insurance Policy
--------
Loans shall be included in the calculation of "Interest Expense" only to the
extent that such interest expense exceeds any dividends received by the Borrower
in respect of the Life Insurance Policies relating to such Life Insurance Policy
Loans.
Interest Period shall mean for any Eurodollar Rate Loan the period
---------------
commencing on the date of the Borrowing, Conversion or Continuance thereof and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be one, two,
three or six months, in each case as the Borrower may, in an appropriate Notice
of Borrowing, Notice of Continuation or Notice of Conversion, select; provided,
--------
however, that the Borrower may not select any Interest Period that ends after
-------
the Expiration Date. Whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the
17
next succeeding Business Day; provided, however, that if such extension would
-------- -------
cause the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the next
preceding Business Day. Whenever any Interest Period begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period),
such Interest Period shall end on the last Business Day of the applicable
calendar month.
Interest Rate Agreement shall mean any interest rate protection
-----------------------
agreement, interest rate future, interest rate option, interest rate swap,
interest rate cap or other interest rate hedge or arrangement under which the
Borrower or any of its Subsidiaries is a party or beneficiary.
Interim Advance shall mean a Revolving Loan made by the Payments
---------------
Administrator to the Borrower pursuant to Section 2.3(c).
Interim Advance Period shall have the meaning given to such term in
----------------------
Section 2.3(c).
Inventory shall mean all of the inventory owned by the Borrower,
---------
including without limitation: (i) all raw materials, work in process, parts,
components, assemblies, supplies and materials used or consumed in the
Borrower's business; (ii) all goods, wares and merchandise, finished or
unfinished, held for sale or lease or leased or furnished or to be furnished
under contracts of service; and (iii) all goods returned or repossessed by the
Borrower.
Inventory Sublimit shall have the meaning given to such term in
------------------
Section 2.2(a).
Investment shall have the meaning given to such term in Section 8.5.
----------
Issuing Bank shall mean Bankers Trust Company or any Lender that is
------------
acceptable to the Agent which has agreed to issue a Letter of Credit for the
account of the Borrower under this Credit Agreement.
Issuing Bank Fees shall have the meaning given to such term in Section
-----------------
4.7.
KIA IV shall mean ▇▇▇▇▇ Investment Associates IV, L.P.
------
Lender shall have the meaning given to such term in the preamble to
------
this Credit Agreement.
Letter of Credit Fees shall have the meaning given to such term in
---------------------
Section 4.7.
Letter of Credit Obligations shall mean, at any time, the sum of (i)
----------------------------
the aggregate Stated Amount of all Letters of Credit outstanding at such time,
plus (ii) the aggregate amount of all drawings under Letters of Credit which
----
have not been reimbursed by the Borrower (including through the incurrence of
Revolving Loans).
Letter of Credit Request shall have the meaning given to such term in
------------------------
Section 3.4.
18
Letters of Credit shall mean all letters of credit (whether
-----------------
documentary or stand-by and whether for the purchase of inventory, equipment or
otherwise) issued for the account of the Borrower pursuant to Article 3 of this
Credit Agreement and all amendments, renewals, extensions or replacements
thereof.
Lien(s) shall mean any lien, charge, pledge, security interest, deed
-------
of trust, mortgage, other encumbrance or other arrangement having the practical
effect of the foregoing or other preferential arrangement of any other kind and
shall include the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
Life Insurance Policies shall mean those certain life insurance
-----------------------
policies obtained in 1984, 1985 and 1986 by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Holding Co. ("KR")
from Phoenix Mutual Life Insurance Company covering participants in the KR
employee stock ownership plan and certain other KR executives, as in effect on
the Restatement Effective Date.
Life Insurance Policy Loans shall mean the loans made to the Borrower
---------------------------
and secured by its interests in the Life Insurance Policies.
Management Agreements shall have the meaning given to such term in
---------------------
Section 5.1(o).
Margin Stock shall have the meaning provided in Regulation U.
------------
Material Adverse Effect shall mean a material adverse effect on (i)
-----------------------
the business, prospects, operations, results of operations, assets, liabilities
or financial condition of the Borrower or of Holding and its Subsidiaries taken
as a whole, (ii) the value of Collateral or the amount which the Agent and the
Lenders would be likely to receive (after giving consideration to delays in
payment and costs of enforcement) in the liquidation of such Collateral, (iii)
any Credit Party's ability to perform its material obligations under the Credit
Documents to which it is a party, or (iv) the material rights and remedies of
the Agent, the Issuing Banks or the Lenders under any Credit Document.
Material Contract shall mean any contract or other arrangement (other
-----------------
than the Credit Documents), whether written or oral, to which the Borrower or
any of its Subsidiaries is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto may be reasonably expected
to have a Material Adverse Effect.
Multiemployer Plan shall mean a "multiemployer plan" as defined in
------------------
Section 4001(a)(3) of ERISA.
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 (i) 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), (ii) payments of
unassumed liabilities relating to the assets sold at the time of, or within 90
days after, the date of such sale and (iii) the
19
amount of such gross cash proceeds required to be used to repay any Indebtedness
(other than Indebtedness of the Lenders pursuant to this Credit Agreement) which
is secured by the respective assets which were sold.
New Lenders shall mean each of the Persons listed on Schedule I hereto
-----------
which is not a Continuing Lender.
New Senior Note Documents shall mean and include each of the documents
-------------------------
and other agreements entered into (including, without limitation, the New Senior
Note Indenture) relating to the issuance by the Borrower of the New Senior
Notes, as in effect on the Restatement Effective Date and as the same may be
entered into, modified, supplemented or amended from time to time to the extent
permitted pursuant to the terms hereof and thereof.
New Senior Note Indenture shall mean the Indenture, dated as of March
-------------------------
24, 1998, entered into by and between the Borrower and United States Trust
Company of New York, as trustee thereunder, as in effect on the Restatement
Effective Date and as the same may be modified, amended or supplemented from
time to time to the extent permitted in accordance with the terms hereof and
thereof.
New Senior Notes shall mean the Borrower's 9 1/2% Senior Notes due in
----------------
the year 2005, as in effect on the Restatement Effective Date and the Exchange
Notes issued in exchange therefor in accordance with the terms of the New Senior
Note Indenture as the same may be modified, supplemented or amended from time to
time to the extent permitted pursuant to the terms hereof and thereof.
Non-Continuing Lender shall mean each Existing Lender that is not a
---------------------
Continuing Lender.
Notice of Borrowing shall have the meaning given to such term in
-------------------
Section 2.3(a) and shall include any deemed Notice of Borrowing pursuant to
Section 3.5.
Notice of Continuation shall have the meaning given to such term in
----------------------
Section 4.3(a).
Notice of Conversion shall have the meaning given to such term in
--------------------
Section 4.3(b).
Obligations shall mean, without duplication, the unpaid principal of
-----------
and interest on (including interest accruing on or after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to Holding, the Borrower or any Subsidiary of the
Borrower, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) the Revolving Notes, any reimbursement obligation or
indemnity of Holding, the Borrower or any Subsidiary of the Borrower on account
of Letters of Credit or any accommodation extended with respect to applications
for Letters of Credit, the Fees, the Expenses and all other obligations and
liabilities of Holding, the Borrower or any Subsidiary of the Borrower to the
Agent, the Issuing Banks or to the Lenders, whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, this Credit Agreement, the
Revolving Notes, any other
20
Credit Document and any other document made, delivered or given in connection
herewith or therewith.
Offering Memorandum shall mean the final Offering Memorandum pursuant
-------------------
to which the New Senior Notes are issued and sold.
Original Effective Date shall mean March 3, 1993.
-----------------------
Outstandings shall mean, at any time, the sum of (i) the principal
------------
amount of Revolving Loans outstanding at such time plus (ii) the Letter of
----
Credit Obligations at such time.
Payment Office shall mean ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or
--------------
any other office within the continental United States designated by the Payments
Administrator to the Borrower from time to time as the office for payment of all
amounts required to be paid by the Borrower or Holding under this Credit
Agreement.
Payments Administrator shall mean BTCC; provided, however, that if
---------------------- -------- -------
BTCC shall cease to be the Agent hereunder, the Lenders shall have the option to
appoint one of the remaining Lenders as the Payments Administrator by written
notice to the Borrower.
PBGC shall mean the Pension Benefit Guaranty Corporation established
----
pursuant to Section 4002 of ERISA and any Person succeeding to the functions
thereof.
Permitted Discretion shall mean, with respect to the Agent, the
--------------------
Agent's judgment exercised in good faith based upon its consideration of any
factor which it believes in good faith: (i) will or could adversely affect the
value of any Collateral, the enforceability or priority of the Collateral
Agent's Liens thereon or the amount which the Agent and the Lenders would be
likely to receive (after giving consideration to delays in payment and costs of
enforcement) in the liquidation of such Collateral; (ii) suggests that any
collateral report or financial information delivered to the Agent by any Person
on behalf of Holding, the Borrower or any Subsidiary of the Borrower is
incomplete, inaccurate or misleading in any material respect; (iii) materially
increases the likelihood of a bankruptcy, reorganization or other insolvency
proceeding involving Holding, the Borrower or any of the Borrower's Subsidiaries
or any of the Collateral; or (iv) creates or reasonably could be expected to
create a Default or Event of Default. In exercising such judgment, the Agent
may consider such factors already included in or tested by the definition of
Eligible Accounts Receivable or Eligible Inventory, as well as any of the
following: (i) the financial and business climate of the Borrower's industry and
general macroeconomic conditions, (ii) changes in collection history and
dilution with respect to the Accounts, (iii) changes in demand for, and pricing
of, Inventory, (iv) changes in any concentration of risk with respect to
Accounts and Inventory, and (v) any other factors that change the credit risk of
lending to the Borrower on the security of the Accounts and Inventory. The
Agent shall disclose to the Borrower the basis on which its Permitted Discretion
is exercised, however, the burden of establishing lack of good faith hereunder
shall be on the Borrower.
21
Permitted Liens shall mean any Liens permitted under Section 8.2(d)
---------------
and, to the extent such Liens may by operation of law take priority over a
previously perfected Lien, Sections 8.2(a) and (n).
Permitted Materials shall have the meaning given to such term in
-------------------
Section 6.18(c).
Permitted Transactions shall mean (i) reasonable and customary fees,
----------------------
compensation and benefits paid to officers, directors, employees or consultants
of the Borrower or any of its Subsidiaries or their respective Affiliates for
services rendered to the Borrower or any such Subsidiary in the ordinary course
of business consistent with past practices; (ii) transfers of goods and services
by or among the Borrower and its Subsidiaries and their respective Affiliates in
the ordinary course of business on fair and reasonable terms, provided that if
--------
any such transaction or series of related transactions involves in excess of
$3,000,000, the Board of Directors of the Borrower shall determine in good faith
by resolution that such transaction is on terms fair and reasonable to the
Borrower; (iii) Dividends permitted under Section 8.6; (iv) transactions
pursuant to the Holding Management Agreement (provided that the 5% service fee
--------
referred to in Section 5(b) of the Management Agreement shall not exceed
$200,000 per annum) and the Tax Sharing Agreement; (v) transactions between the
Borrower or any Subsidiary and the ESOP and permitted under Sections 8.3 and
8.5; and (vi) transactions between Holding, the Borrower or its Subsidiaries
(other than Insurance Sub) and Insurance Sub in connection with compliance by
the Borrower with Section 7.10.
Person shall mean any individual, sole proprietorship, partnership,
------
joint venture, trust, unincorporated organization, association, corporation,
institution, entity, party or government (including any division, agency or
department thereof), and, as applicable, the successors, heirs and assigns of
each.
Plan shall mean any multiemployer or single-employer plan as defined
----
in Section 4001 of ERISA, which (i) is maintained or contributed to by (or to
which there is an obligation to contribute of), or (ii) at any time during the
five year period preceding (A) in the case of any Credit Event, the date of such
Credit Event or (B) in the case of any event or condition described in Section
7.5 or 9.1(f), the date thereof, was maintained or contributed to by (or to
which there is or was an obligation to contribute of), Holding, the Borrower, a
Subsidiary of Holding or the Borrower or an ERISA Affiliate.
Prime Lending Rate shall mean the rate which Bankers Trust Company
------------------
publicly announces in New York City from time to time as its prime lending rate,
as in effect from time to time. The Prime Lending Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. Bankers Trust Company may make commercial loans or other loans at
rates of interest at, above or below the Prime Lending Rate.
Proportionate Share shall mean, with respect to any Lender, a fraction
-------------------
(expressed as a percentage), the numerator of which shall be the amount of such
Lender's Commitment and the denominator of which shall be the Total Commitments
or, if the Commitments are terminated, a fraction the numerator of which shall
be the amount of such Lender's Revolving Loans and the
22
denominator of which shall be the aggregate amount of then outstanding Revolving
Loans of all the Lenders.
RCRA shall mean the Resources Conservation and Recovery Act, as
----
amended, 42 U.S.C. (S) 6901 et seq.
-- ----
Real Property of any Person shall mean all of the right, title and
-------------
interest of such Person in and to land, improvements and fixtures, including
leaseholds.
Recovery Event shall mean the receipt by Holding or any of its
--------------
Subsidiaries of any (i) cash insurance proceeds payable (x) by reason of theft,
loss, physical destruction or damage or any other similar event with respect to
any property or assets of Holding or any of its Subsidiaries and (y) under any
policy of insurance required to be maintained under Section 7.10 or (ii)
condemnation award payable by reason of eminent domain or deed in lieu thereof.
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 thereto.
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 thereto.
Reportable Event shall mean any of the events described in Section
----------------
4043 of ERISA with respect to a Plan as to which the 30-day notice requirement
has not been waived by the PBGC.
Required Lenders shall mean, at any time, those Lenders then owed or
----------------
holding in the aggregate more than 50% of the sum of the then existing aggregate
unpaid principal amount of the Revolving Loans and the then existing aggregate
undrawn amount of the Total Commitments.
Requirement of Law shall mean, as to any Person, the Governing
------------------
Documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
Restatement Effective Date shall have the meaning set forth in Section
--------------------------
11.14.
Revolving Loan Conversion shall have the meaning set forth in Section
-------------------------
2.1.
Revolving Loans shall have the meaning given to such term in Section
---------------
2.1.
Revolving Note shall mean a promissory note of the Borrower payable to
--------------
the order of a Lender, substantially in the form of Exhibit C, evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from the
Revolving Loans made by such Lender or acquired by such Lender pursuant to
Section 11.6.
23
Security Agreement shall mean the Security Agreement entered into
------------------
pursuant to the Existing Credit Agreement, as same may be amended, modified or
supplemented from time to time.
Senior Note Indenture shall mean the Indenture, dated as of March 11,
---------------------
1993, entered into by and between the Borrower and United States Trust Company
of New York, as trustee thereunder, as in effect on the Restatement Effective
Date and as the same may be modified, amended or supplemented from time to time
to the extent permitted in accordance with the terms hereof and thereof.
Senior Notes shall mean the Borrower's 10-3/4% Senior Notes due in the
------------
year 2000, issued pursuant to the Senior Note Indenture, as in effect prior to
the Restatement Effective Date and as the same may be modified, supplemented or
amended from time to time to the extent permitted pursuant to the terms hereof
and thereof.
Settlement Date shall have the meaning given to such term in Section
---------------
2.4(b)(i).
Shareholders' Agreement shall have the meaning given to such term in
-----------------------
Section 5.1(o).
Special Term Loan Agreement shall mean the Term Loan Agreement, dated
---------------------------
as of March 24, 1998, among the Borrower, DLJ Capital Funding, Inc., as
Syndication Agent, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation and BT
Alex. ▇▇▇▇▇ Incorporated, as Arrangers, Bankers Trust Company, as Documentation
Agent, Fleet National Bank, as Administrative Agent, and various financial
institutions party thereto from time to time (as amended, modified or
supplemented from time to time to the extent permitted by the terms hereof and
thereof).
Special Term Loan Documents shall mean and include each of the
---------------------------
documents and other agreements entered into (including, without limitation, the
Special Term Loan Agreement) by the Borrower in connection with the Special Term
Loan Agreement, as in effect on the Restatement Effective Date and as the same
----
may be entered into, modified, supplemented or amended from time to time to the
extent permitted pursuant to the terms hereof and thereof.
Special Term Loan Security Agreement shall mean the Security
------------------------------------
Agreement, dated as of March 24, 1998, between the Borrower, Fleet National
Bank, as Administrative Agent, and certain Subsidiaries of the Borrower from
time to time party thereto.
Stated Amount of 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).
Sub-Collection Account shall have the meaning given to such term in
----------------------
Section 2.6(b)(i).
Subsidiary shall mean as to any Person, a corporation, partnership or
----------
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than
24
stock or such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person. Unless
otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in
this Credit Agreement shall refer to a Subsidiary or Subsidiaries of the
Borrower.
Syndication Agent shall mean BTCC; provided that if BTCC shall cease
----------------- --------
to be the Agent hereunder, the Lenders shall have the option to appoint one of
the remaining Lenders as the Syndication Agent.
Syndication Date shall mean the earlier of (x) the date which is 60
----------------
days after the Restatement Effective Date and (y) the date upon which the Agent
determines in its sole discretion (and notifies the Borrower) that the primary
syndication (and the resulting addition of institutions as Lenders pursuant to
Section 11.6) has been completed, notice of which shall be promptly given to the
Borrower.
Tax Sharing Agreements shall have the meaning given to such term in
----------------------
Section 5.1(o).
Taxes shall have the meaning given to such term in Section 2.9.
-----
Total Availability shall mean the difference between (i) the lesser of
------------------
(x) the Total Commitments and (y) the Borrowing Base and (ii) the Outstandings.
Total Commitments shall mean the aggregate of the Commitments of all
-----------------
the Lenders.
Transaction shall mean, collectively, (i) the issuance by the Borrower
-----------
of the New Senior Notes, (ii) the entering into by the Borrower of the Special
Term Loan Agreement and the incurrence by the Borrower of loans thereunder and
(iii) the execution and effectiveness of this Credit Agreement and the
incurrence by the Borrower of the Revolving Loans hereunder.
Transaction Documents shall mean, collectively, (i) the New Senior
---------------------
Note Documents, (ii) the Special Term Loan Documents and all other documentation
executed in connection therewith and (iii) the Credit Documents.
Type shall mean, with respect to any Revolving Loan, whether such
----
Revolving Loan is a Eurodollar Rate Loan or a Base Rate Loan.
UCC shall mean the Uniform Commercial Code.
---
Unfunded Current Liability of any Plan shall mean the amount, if any,
--------------------------
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year, determined in accordance with
Statement of Financial Accounting Standards No. 35, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual
25
valuation of the Plan, exceeds the fair market value of the assets allocable
thereto, determined in accordance with Section 412 of the Code.
Unused Line Fee shall have the meaning given to such term in Section
---------------
4.6.
Wholly-Owned Subsidiary of any Person shall mean any Subsidiary of
-----------------------
such Person to the extent all of the capital stock or other ownership interests
in such Subsidiary, other than directors' qualifying shares, is owned directly
or indirectly by such Person or a Wholly-Owned Subsidiary thereof.
Working Capital shall mean, at any time, the excess of Current Assets
---------------
over Current Liabilities.
1.2 Accounting Terms and Determinations. Unless otherwise defined or
-----------------------------------
specified herein, all accounting terms used herein shall have the meanings
customarily given in accordance with GAAP, and all financial computations to be
made under this Credit Agreement shall, unless otherwise specifically provided
herein, be made in accordance with GAAP applied on a basis consistent in all
material respects with the Financial Statements referred to in Section 6.10(b).
All accounting determinations for purposes of determining compliance with
Sections 8.6(b), 8.9 and 8.10 hereof shall be made in accordance with GAAP and
applied on a basis consistent in all material respects with the Financial
Statements referred to in Section 6.10(b) and shall exclude, in any event, any
(i) interest accrued on the Senior Notes after the Restatement Effective Date
and (ii) any interest income earned on the funds deposited by the Borrower with
the trustee under the Senior Note Indenture on March 24, 1998 for the purpose of
defeasing or redeeming all Senior Notes on or prior to April 23, 1998. The
Financial Statements required to be delivered hereunder from and after the
Restatement Effective Date and all financial records shall be maintained in
accordance with GAAP as in effect as of the date of the Financial Statements
referred to in Section 6.10(b) or, if GAAP shall change from the basis used in
preparing the Financial Statements referred to in Section 6.10(b), the
certificates required to be delivered pursuant to Section 7.1 demonstrating
compliance with the covenants contained herein shall include calculations
setting forth the adjustments necessary to demonstrate how the Borrower is in
compliance with the financial covenants based upon GAAP as utilized in the
Section 6.10(b) Financial Statements. If the Borrower shall change its method
of inventory accounting from the last-in-first-out method to the first-in-first-
out method, all calculations necessary to determine compliance with the
covenants contained herein shall be made as if such method of inventory
accounting had not been so changed. Any reference herein to a fiscal quarter
shall mean a fiscal quarter consisting of 63 Business Days, except in the case
of 366-day year, in which case one fiscal quarter may contain an additional
Business Day. Any reference herein to a fiscal month shall mean a fiscal month
consisting of 21 Business Days.
1.3 Other Defined Terms. Terms not otherwise defined herein which
-------------------
are defined in the UCC as in effect in the State of New York shall have the
meanings given them in such UCC. The words "hereof," "herein" and "hereunder"
and words of similar import when used in this Credit Agreement shall refer to
this Credit Agreement as a whole and not to any particular provision of this
Credit Agreement, and references to Article, Section, Schedule, Exhibit and like
references are references to this Credit Agreement unless otherwise specified.
An Event of
26
Default shall "continue" or be "continuing" until such Event of Default has been
cured or waived in accordance with Section 11.10 hereof.
ARTICLE 2.
Revolving Loans
---------------
2.1 Commitments. Subject to and upon the terms and conditions set
-----------
forth herein, each Lender with a Commitment severally agrees, (A) in the case of
each Continuing Lender, to convert into Revolving Loans (each a "Revolving Loan
Conversion", and together, the "Revolving Loan Conversions"), on the Restatement
Effective Date, Existing Loans made by such Continuing Lender to the Borrower
pursuant to the Existing Credit Agreement and outstanding on the Restatement
Effective Date, and/or (B) at any time and from time to time on and after the
Restatement Effective Date and prior to the Expiration Date, to make a revolving
loan or revolving loans (together with each Revolving Loan Conversion, each a
"Revolving Loan" and, collectively, the "Revolving Loans") to the Borrower,
which Revolving Loans (i) shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans, (ii)
shall not exceed for any Lender at any time outstanding such Lender's Commitment
and (iii) shall not exceed for all Lenders at anytime outstanding that aggregate
principal amount which, when added to the amount of all Letter of Credit
Obligations at such time, equals the Total Commitments at such time. The
Borrower hereby agrees to execute and deliver to each Lender a Revolving Note to
evidence the Revolving Loans made by such Lender.
2.2 Determination of Borrowing Base. (a) Subject to Section 2.2(b)
-------------------------------
and Section 2.3(c), Revolving Loans shall not in aggregate principal amount
exceed the lesser of:
(i) the Total Commitments then in effect minus the sum of (A) the
-----
Letter of Credit Obligations and (B) the Borrower's exposure (as determined
by the Agent) under any Interest Rate Agreements entered into in connection
with Section 8.3(m); and
(ii) the amount then equal to:
(A) Eighty-five percent (85%) of the Eligible Accounts
Receivable, plus
----
(B) Fifty-five percent (55%) of the Eligible Inventory, and
minus
-----
(C) the Borrower's exposure (as determined by the Agent) under
any Interest Rate Agreements entered into in connection
with Section 8.3(m), and minus
-----
(D) the Letter of Credit Obligations.
The sum of the amounts calculated in accordance with clauses (ii)(A), (B) and
(C) above is hereinafter referred to as the "Borrowing Base." In addition,
fifty-five percent (55%) of the Eligible Inventory shall not exceed sixty
percent (60%) of Outstandings (the "Inventory Sublimit").
27
(b) The Agent at any time shall be entitled to (i) establish and
increase or decrease reserves against Eligible Accounts Receivable and Eligible
Inventory, (ii) reduce the advance rates under Section 2.2(a)(ii)(A) or (B) or
restore such advance rates to any level equal to or below the advance rates
stated in Section 2.2(a)(ii)(A) or (B), and (iii) impose additional restrictions
(or eliminate the same) to the standards of "Eligible Accounts Receivable" and
"Eligible Inventory," in the exercise of its Permitted Discretion. The Agent
may but shall not be required to rely on each Borrowing Base Certificate and any
other schedules or reports delivered to it in connection herewith in determining
the then eligibility of Accounts and Inventory. Reliance thereon by the Agent
from time to time shall not be deemed to limit the right of the Agent to revise
advance rates or standards of eligibility as provided in this Section 2.2(b).
2.3 Borrowing Mechanics. (a) Except as provided in Section 2.3(b),
-------------------
Borrowings shall be made on notice from the Borrower to the Payments
Administrator, given not later than 1:00 P.M. New York City time on the date on
which the proposed Borrowing consisting of Base Rate Loans is requested to be
made and on the third Business Day prior to the date on which any proposed
Borrowing consisting of Eurodollar Rate Loans is requested to be made.
(i) Each Notice of Borrowing shall be given by either telephone,
telecopy, telex, or cable, and, if by telephone, confirmed in writing,
substantially in the form of Exhibit D (the "Notice of Borrowing"). Each
Notice of Borrowing shall be irrevocable by and binding on the Borrower.
(ii) The Borrower shall notify the Payments Administrator in writing
of the names of the officers authorized to request Revolving Loans on
behalf of the Borrower, and shall provide the Payments Administrator with a
specimen signature of each such officer. The Payments Administrator shall
be entitled to rely conclusively on such officers' authority to request
Revolving Loans on behalf of the Borrower until the Payments Administrator
receives written notice to the contrary. The Payments Administrator shall
have no duty to verify the authenticity of the signature appearing on any
Notice of Borrowing or other writing delivered pursuant to this Section
2.3(a) and, with respect to an oral request for Revolving Loans, the
Payments Administrator shall have no duty to verify the identity of any
individual representing himself as one of the officers authorized to make
such request on behalf of the Borrower. Neither the Payments Administrator
nor any of the Lenders shall incur any liability to the Borrower as a
result of acting upon any telephonic notice referred to in this Section
2.3(a) which notice the Payments Administrator believes in good faith to
have been given by a duly authorized officer or other individual authorized
to request Revolving Loans on behalf of the Borrower or for otherwise
acting reasonably and in good faith under this Section 2.3(a) and, upon the
funding of Revolving Loans by the Lenders in accordance with this Credit
Agreement, pursuant to any such telephonic notice, the Borrower shall be
deemed to have made a Borrowing of Revolving Loans hereunder.
(iii) In a Notice of Borrowing, the Borrower may request one or more
Borrowings on a single day. Each such Borrowing shall, unless otherwise
specifically provided herein, consist entirely of Revolving Loans of the
same Type and shall be in an aggregate amount for all Lenders of not less
than $1,000,000 in the case of Eurodollar Rate Loans or $500,000 in the
case of Base Rate Loans. Unless otherwise requested in the applicable
Notice of Borrowing, all
28
Revolving Loans shall be Base Rate Loans. The right of the Borrower to
choose Eurodollar Rate Loans is subject to the provisions of Section
4.3(c).
(iv) The Borrower may not incur Eurodollar Rate Loans prior to the
Syndication Date.
(b) The Borrower has informed the Agent that it has decided to open a
checking account (the "Disbursement Account") with Bankers Trust (Delaware) ("BT
Delaware") for general corporate purposes, including the purpose of paying trade
payables and other operating expenses. The Lenders hereby authorize the
Payments Administrator, and so long as the conditions for Borrowing in Article 5
remain satisfied, the Payments Administrator on behalf of the Lenders may but
shall not be obligated to make Revolving Loans to cover the amount of checks
presented for payment and other disbursements from the Disbursement Account.
Advice from BT Delaware of amounts required to cover such amounts will be deemed
a sufficient Notice of Borrowing. Such Borrowings shall be of Base Rate Loans
only and will not be subject to the minimum amount requirement of Section
2.3(a)(iii).
(c) In the event the Borrower is unable to comply with (i) the
Borrowing Base limitations set forth in Section 2.2(a) or (ii) the conditions
precedent to the making of a Revolving Loan or the issuance of a Letter of
Credit set forth in Section 5.2, the Lenders authorize the Payments
Administrator to make Interim Advances to the Borrower for a period commencing
on the date the Payments Administrator first receives a Notice of Borrowing
requesting an Interim Advance until the earlier of (i) the fifteenth Business
Day after such date (unless the Required Lenders authorize a later date), (ii)
the date the Borrower is again able to comply with the Borrowing Base
limitations and the conditions precedent to the making of Revolving Loans and
issuance of Letters of Credit, or obtains an amendment or waiver with respect
thereto, or (iii) the date the Required Lenders instruct the Payments
Administrator to cease making Interim Advances (in each case, the "Interim
Advance Period"). The Payments Administrator shall not make any Interim Advance
to the extent that at such time the amount of such Interim Advance when added to
the aggregate outstanding amount of other Interim Advances would exceed the
greater of (1) the lesser of (A) the difference between the Total Commitments
and the Outstandings and (B) the greater of (x) $10,000,000 or (y) 10% of the
Outstandings and (2) such amount as the Required Lenders shall authorize.
2.4 Settlements Among the Payments Administrator and the Lenders.
------------------------------------------------------------
(a) Except as provided in Section 2.4(b), the Payments Administrator shall give
to each Lender prompt notice of each Notice of Borrowing by telecopy, telex or
cable. No later than 12:00 Noon New York City time on the date of each Borrowing
representing the incurrence of Revolving Loans (unless the Restatement Effective
Date is the date of such incurrence, in which case no later than 11:00 A.M. New
York City time on the Restatement Effective Date), each Lender will make
available for the account of its Applicable Lending Office, to the Payments
Administrator at its Payment Office, in immediately available funds, its
Proportionate Share of such Borrowing. Unless the Payments Administrator shall
have been notified by any Lender on the Restatement Effective Date or, with
respect to each Borrowing after the Restatement Effective Date, prior to the
date of such Borrowing that such Lender does not intend to make available to the
Payments Administrator its portion of such Borrowing to be made on such date,
the Payments Administrator may assume that such Lender will make such amount
available to the Payments
29
Administrator at its Payment Office on such date of Borrowing, or, if
applicable, the Settlement Date (as defined below) and the Payments
Administrator, in reliance upon such assumption, may but shall not be obligated
to make available the amount of the Borrowing to be provided by such Lender.
Except as provided in Section 2.4(b) and subject to Section 2.4(e), promptly
after its receipt of payments from or on behalf of the Borrower (other than
amounts payable to the Agent to reimburse the Agent and any Issuing Bank for
fees and expenses payable solely to them), the Payments Administrator will cause
such payments to be distributed ratably to the Lenders. The Lenders will apply
such payments in accordance with Section 2.6(d).
(b) Unless the Required Lenders have instructed the Payments
Administrator to the contrary, the Payments Administrator on behalf of the
Lenders may but shall not be obligated to make Base Rate Loans under Section 2.3
without prior notice of the proposed Borrowing to the Lenders, as follows:
(i) The amount of each Lender's Proportionate Share of Revolving
Loans shall be computed weekly (or more frequently in the Payment
Administrator's discretion) and shall be adjusted upward or downward on the
basis of the amount of outstanding Revolving Loans as of 5:00 P.M. New York
City time on the last Business Day of the period specified by the Payments
Administrator (such date, the "Settlement Date"). The Payments
Administrator shall deliver to each of the Lenders promptly after the
Settlement Date a summary statement of the amount of outstanding Revolving
Loans for such period. The Lenders shall transfer to the Payments
Administrator, or, subject to Section 2.4(e), the Payments Administrator
shall transfer to the Lenders, such amounts as are necessary so that (after
giving effect to all such transfers) the amount of Revolving Loans made by
each Lender shall be equal to such Lender's Proportionate Share of the
aggregate amount of Revolving Loans outstanding as of such Settlement Date.
If the summary statement is received by the Lenders prior to 12:00 Noon New
York City time on any Business Day, each Lender shall make the transfers
described above in immediately available funds no later than 3:00 P.M. New
York City time on the day such summary statement was received; and if such
summary statement is received by the Lenders after 12:00 Noon New York City
time on such day, each Lender shall make such transfers no later than 3:00
P.M. New York City time on the next succeeding Business Day. The
obligation of each of the Lenders to transfer such funds shall be
irrevocable and unconditional and without recourse to or warranty by the
Payments Administrator. Each of the Payments Administrator and the Lenders
agree to ▇▇▇▇ their respective books and records on the Settlement Date to
show at all times the dollar amount of their respective Proportionate
Shares of the outstanding Revolving Loans.
(ii) To the extent that the settlement described above shall not yet
have occurred, upon repayment of Revolving Loans by the Borrower, the
Payments Administrator may apply such amounts repaid directly to the
amounts made available by the Payments Administrator pursuant to this
Section 2.4(b).
(iii) Because the Payments Administrator on behalf of the Lenders
may be advancing and/or may be repaid Revolving Loans prior to the time
when the Lenders will actually advance and/or be repaid Revolving Loans,
interest with respect to Revolving Loans shall
30
be allocated by the Payments Administrator to each Lender and the Payments
Administrator in accordance with the amount of Revolving Loans actually
advanced by and repaid to each Lender and the Payments Administrator and
shall accrue from and including the date such Loans are so advanced to but
excluding the date such Loans are either repaid by the Borrower in
accordance with Section 2.5 or actually settled by the applicable Lender as
described in this Section 2.4(b).
(c) If any amount described in this Section 2.4 is not made available
to the Payments Administrator by a Lender (such Lender being hereinafter
referred to as a "Defaulting Lender") and the Payments Administrator has made
such amount available to the Borrower, the Payments Administrator shall be
entitled to recover such amount on demand from such Defaulting Lender. If such
Defaulting Lender does not pay such amount forthwith upon the Payments
Administrator's demand therefor, the Payments Administrator shall promptly
notify the Borrower and the Borrower shall immediately (but in any event no
later than five Business Days after such demand) pay such amount to the Payments
Administrator. The Payments Administrator shall also be entitled to recover
from such Defaulting Lender and the Borrower, (x) interest on such amount in
respect of each day from the date such corresponding amount was made available
by the Payments Administrator to the Borrower to the date such amount is
recovered by the Payments Administrator, at a rate per annum equal to either (i)
--- -----
if paid by such Defaulting Lender, the overnight Federal Funds Rate or (ii) if
paid by the Borrower, the then applicable rate of interest, calculated in
accordance with Section 4.1 or Section 4.2 hereof, plus (y) in each case, an
----
amount equal to any costs (including legal expenses) and losses incurred as a
result of the failure of such Defaulting Lender to provide such amount as
provided in this Credit Agreement; provided, however, that the Payments
-------- -------
Administrator shall not be entitled to demand payment by the Borrower of any
amount under clause (y) above unless demand therefor has been made of the
Defaulting Lender and not paid within five Business Days of such demand.
Nothing herein shall be deemed to relieve any Lender from its duty to fulfill
its obligations hereunder or to prejudice any rights which the Borrower may have
against any Lender as a result of any default by such Lender hereunder,
including, without limitation, the right of the Borrower to seek reimbursement
from any Defaulting Lender for any amounts paid by the Borrower under clause (y)
above on account of such Defaulting Lender's default.
(d) The failure of any Lender to make the Revolving Loan to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Revolving Loan on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Revolving Loan to be made by such other Lender on the date of
any Borrowing.
(e) Notwithstanding anything contained herein to the contrary, so
long as any Lender is a Defaulting Lender or has rejected its Commitment, the
Payments Administrator shall not be obligated to transfer to such Lender any
payments made by the Borrower to the Payments Administrator for the benefit of
such Lender; and such Lender shall not be entitled to the sharing of any
payments pursuant to Section 2.10. Amounts payable to such Lender under Section
2.10 shall instead be paid to the Payments Administrator. The Payments
Administrator may hold and, in its discretion, re-lend to the Borrower the
amount of all such payments received by it for such Lender. For purposes of
voting or consenting to matters with respect to the Credit Documents
31
and determining Proportionate Share, such Defaulting Lender shall be deemed not
to be a "Lender" and such Lender's Commitment shall be deemed to be zero (0).
This Section 2.4(e) shall remain effective with respect to such Defaulting
Lender until (x) the Obligations under this Agreement shall have been paid in
full to the Payments Administrator and/or the Lenders other than the Defaulting
Lender or (y) the Required Lenders, the Payments Administrator and the Borrower
shall have waived such Defaulting Lender's default in writing. No Commitment of
any Lender shall be increased or otherwise affected, and performance by the
Borrower shall not be excused, by the operation of this Section 2.4(e).
2.5 Mandatory Payment; Mandatory Reduction of Commitments. (a)
-----------------------------------------------------
Revolving Loans shall be due and payable without any demand at any time (A) the
Outstandings at such time exceeds the Borrowing Base or the Total Commitments,
in the amount of such excess and (B) the Inventory Sublimit is exceeded, in the
amount of such excess, provided that (i) no such payment shall be required
--------
pursuant to the foregoing (A) as a result of a Borrowing Base deficiency during
an Interim Advance Period and (ii) if the then aggregate outstanding principal
amount of Revolving Loans is less than either such excess (after giving effect
to the foregoing clause (i)), Letters of Credit will be required to be cash
collateralized (to the satisfaction of the Collateral Agent) in the amount of
such difference.
(b) On the Expiration Date, the Total Commitments (and the Commitment
of each Lender) shall automatically reduce to zero and all outstanding Revolving
Loans shall be paid in full.
(c) The Borrower may reduce or terminate the unutilized Total
Commitments at any time and from time to time in whole or in part; provided,
--------
however, that each such reduction must be in an amount not less than $1,000,000
-------
(and in increments of $100,000 thereafter); and provided further, that (i) if
-------- -------
the Borrower seeks to reduce the Total Commitments to an amount less than
$25,000,000, then the Total Commitments shall be reduced to zero and this Credit
Agreement shall be terminated and (ii) once reduced the amount of any such
reductions in the Total Commitments may not be reinstated.
(d) Upon the occurrence of a Change in Control, unless the Required
Lenders otherwise consent, the Total Commitments shall automatically be reduced
to zero.
(e) Any reduction to the Total Commitments pursuant to this Section
2.5 shall reduce the Commitment of each of the Lenders pro rata.
--- ----
2.6 Payments and Computations. (a) The Borrower shall make each
-------------------------
payment hereunder and under the Revolving Notes not later than 3:00 P.M. New
York City time on the day when due in Dollars to the Payments Administrator at
its Payment Office in immediately available funds. The Borrower's obligations
to the Lenders with respect to such payments shall be discharged by making such
payments to the Payments Administrator pursuant to this Section 2.6 or, if such
payments are not received prior to the foregoing deadline, by the Payments
Administrator's adding such payments to the principal amount of the Revolving
Loans outstanding by charging such payments to the Borrower's Revolving Loan
account (which charge shall consti-
32
tute an incurrence of Revolving Loans (that are Base Rate Loans) in an aggregate
principal amount equal to the amount so charged).
(b) (i) The Borrower shall have established and shall maintain one
or more accounts for the collection of payments made in respect of Accounts
(each, a "Sub-Collection Account") and shall instruct all account debtors on the
Accounts of the Borrower to remit all payments to its Sub-Collection Account.
All amounts received by the Borrower from any account debtor, in addition to all
other cash received from any other source (other than proceeds kept in the
"Collateral Account" (as defined in and pursuant to the Special Term Loan
Agreement)), shall, subject to the requirements of Section 8.15, upon receipt be
deposited into a Sub-Collection Account.
(ii) The Borrower, the Collateral Agent and financial institutions
selected by the Borrower and acceptable to the Agent (the "Collection Banks")
shall enter into agreements substantially in the form of Exhibit E-1 (the
"Collection Agreements"), providing, among other things, for all receipts
received in respect of Accounts to be transferred at the end of each day from
each Sub-Collection Account to the appropriate Collection Account.
(iii) The Borrower may close Sub-Collection Accounts and/or open new
Sub-Collection Accounts with the prior written consent of the Collateral Agent
and subject to prior execution and delivery to the Collateral Agent of
Collection Agreements consistent with the provisions of this Section 2.6 and in
form and substance satisfactory to the Agent and its counsel.
(c) Upon the terms and subject to the conditions set forth in the
Collection Agreements, all available amounts held in the Collection Accounts
shall be wired each Business Day into an account (the "Concentration Account")
established pursuant to a concentration account agreement entered into among the
Borrower, the Collateral Agent and Bankers Trust Company substantially in the
form of Exhibit E-2 (the "Concentration Account Agreement"). Subject to the
terms and conditions of the Concentration Account Agreement, all available funds
in the Concentration Account shall be transferred on every Business Day to an
account (the "BT Account") maintained by the Collateral Agent at Bankers Trust
Company.
(d) All available amounts held in the BT Account shall be distributed
and applied on a daily basis in the following order: first, to the payment of
-----
any Fees, Expenses or other Obligations due and payable to the Agent under any
of the Credit Documents, including amounts advanced by the Payments
Administrator on behalf of the Lenders pursuant to Section 2.3(b), 2.3(c) or
2.4(b); second, to the payment of any Fees, Expenses or other Obligations due
------
and payable to any Issuing Bank under any of the Credit Documents; third, to the
-----
ratable payment of any Fees, Expenses or other Obligations due and payable to
the Lenders under any of the Credit Documents other than those Obligations
specifically referred to in this Section 2.6(d); fourth, to the ratable payment
------
of interest due on the Loans; and fifth, to the ratable payment of principal on
-----
the Loans. Any payment received hereunder as a distribution in any proceeding
referred to in Section 9.1(e) shall, unless paid with respect to amounts
specifically owing to the Agent or any Issuing Bank, be distributed and applied
by the Collateral Agent to the payment of the amounts due hereunder and under
the Revolving Notes ratably in accordance with such amounts (or, if a court of
competent jurisdiction shall otherwise specify, as specified by such court).
33
2.7 Maintenance of Account. The Payments Administrator shall
----------------------
maintain an account on its books in the name of the Borrower in which the
Borrower will be charged with all loans and advances made by the Lenders to the
Borrower or for the Borrower's account, including the Revolving Loans, the
Letter of Credit Obligations, the Fees, the Expenses and any other Obligations.
The Borrower will be credited, in accordance with Section 2.6 above, with all
amounts received by the Lenders from the Borrower or from others for the
Borrower's account, including, as set forth above, all amounts received by the
Payments Administrator in payment of Accounts and applied to the Obligations.
In no event shall prior recourse to any Accounts or other Collateral be a
prerequisite to the Payments Administrator's right to demand payment of any
Obligation upon its maturity. Further, the Payments Administrator shall have no
obligation whatsoever to perform in any respect any of the Borrower's contracts
or obligations relating to the Accounts.
2.8 Statement of Account. After the end of each month the Payments
--------------------
Administrator shall send the Borrower a statement accounting for the charges,
loans, advances and other transactions occurring among and between the Agent,
the Lenders, the Issuing Banks and the Borrower during that month. The monthly
statements shall, absent manifest error, be an account stated, which is final,
conclusive and binding on the Borrower.
2.9 Taxes. (a) All payments made by the Borrower or Holding, as the
-----
case may be, hereunder, under any Revolving Note, under the Guaranty or under
any other Credit Document will be made without setoff, counterclaim or other
defense to the extent permitted by law. Except as provided for in Section
2.9(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
Governmental Authority or by any political subdivision or taxing authority
thereof or therein (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income of a Lender pursuant
to the laws of the Governmental Authority in which such Lender is organized or
incorporated or in which the principal office or Applicable Lending Office of
such Lender is located or under the laws of any political subdivision or taxing
authority thereof or therein) and all interest, penalties or similar liabilities
with respect thereto (collectively, "Taxes"). If any Taxes are so levied or
imposed, the Borrower or Holding, as the case may be, 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 hereunder, under any Revolving Note, under the
Guaranty or under any other Credit Document, after withholding or deduction for
or on account of any Taxes, will not be less than the amount provided for
herein, in such Revolving Note or in the Guaranty. The Borrower shall also
reimburse each Lender, upon the written request of such Lender, for taxes
imposed on or measured by the net income of such Lender pursuant to the laws of
the Governmental Authority in which such Lender is organized or incorporated or
in which the principal office or Applicable Lending Office of such Lender is
located or of any political subdivision or taxing authority thereof or therein
as such Lender shall determine are payable by such Lender in respect of Taxes
paid to or on behalf of such Lender pursuant to this or the preceding sentence.
The Borrower will furnish to the Payments Administrator within 45 days after the
date the payment of any Taxes, or any withholding or deduction on account
thereof, is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrower or Holding, as the case may be. The
Borrower or Holding, as the case may be, will
34
indemnify and hold harmless the Agent and each Lender, and reimburse the Agent
or such Lender upon its written request, for the amount of any Taxes so levied
or imposed and paid or withheld by such Lender.
(b) Each Lender 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
agrees (i) to provide to each of the Borrower and the Agent on or prior to the
Restatement Effective Date two original signed copies of Internal Revenue
Service Form 4224 or Form 1001 certifying to such Lender's entitlement as of
such date to an exemption from United States withholding tax with respect to
payments to be made under this Credit Agreement, under any Revolving Note, under
the Guaranty or under any other Credit Document and (ii) that, to the extent
legally entitled to do so, (x) with respect to a Lender that is an assignee or
transferee of an interest under this Credit Agreement pursuant to Section 11.6
(unless the respective Lender was already a Lender hereunder immediately prior
to such assignment or transfer), upon the date of such assignment or transfer to
such Lender, and (y) with respect to any such Lender, from time to time upon the
reasonable written request of the Borrower or the Agent after the Restatement
Effective Date, such Lender will provide to each of the Borrower and the Agent
two original signed copies of Internal Revenue Service Form 4224 or Form 1001
(or any successor forms) certifying to such Lender's entitlement to an exemption
from, or reduction in, United States withholding tax with respect to payments to
be made under this Credit Agreement, under any Revolving Note, under the
Guaranty, or under any other Credit Document. Notwithstanding anything to the
contrary contained in Section 2.9(a), but subject to the immediately succeeding
sentence, the Borrower or Holding, as the case may be, 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 (without any obligation to pay the respective Lender additional
amounts with respect thereto) for the account of any Lender 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 and which has not provided to the
Borrower or the Agent such forms required to be provided to the Borrower or the
Agent pursuant to the first sentence of this Section 2.9(b). Notwithstanding
anything to the contrary contained in the preceding sentence and except as set
forth in Section 2.9(b), the Borrower or Holding, as the case may be, agrees to
indemnify each Lender in the manner set forth in Section 2.9(a) in respect of
any amounts deducted or withheld by it as described in the immediately preceding
sentence as a result of any changes that are effective after the Restatement
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) If the Borrower pays any additional amount pursuant to this
Section 2.9 and any Lender actually receives a refund of tax or a credit against
its tax liabilities as a result of such payment by the Borrower, such Lender
shall pay to the Borrower an amount that such Lender determines, in its sole
judgment, is equal to the net tax benefit obtained by such Lender as a result of
such payment by the Borrower. Whether or not any Lender claims any credit or
refund shall be in the sole discretion of each Lender. Nothing in this Section
2.9(c) shall require any Lender to disclose or detail the basis of its
calculation of the amount of any tax benefit or any other information to the
Borrower or any other party.
35
2.10 Sharing of Payments. If any Lender shall obtain any payment
-------------------
(whether voluntary, involuntary, through the exercise of any right of set-off or
otherwise) on account of the Revolving Loans made by it or its participation in
Letters of Credit in excess of its Proportionate Share of payments on account of
the Revolving Loans or Letters of Credit obtained by all the Lenders (other than
any Lender that has waived its Proportionate Share in writing), such Lender
shall forthwith purchase from the other Lenders such participation in the
Revolving Loans made by them or in their participation in Letters of Credit as
shall be necessary to cause such purchasing Lender to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
-------- -------
excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and each such Lender shall repay to
the purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect to the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.10 may, to the fullest extent permitted by
law, exercise all of its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
ARTICLE 3.
Letters of Credit
-----------------
3.1 Issuance of Letters of Credit. Subject to the terms and
-----------------------------
conditions of this Credit Agreement and in reliance upon the representations and
warranties of the Borrower set forth herein, upon the request of the Borrower
pursuant to Section 3.4, one or more Issuing Banks selected by the Borrower
shall issue Letters of Credit hereunder and for the Borrower's account, as more
specifically described below. No Issuing Bank shall be obligated to issue any
Letter of Credit for the account of the Borrower if at the time of such
requested issuance:
(a) the face amount of such requested Letter of Credit when added to
the Letter of Credit Obligations then outstanding, would (i) cause the
Letter of Credit Obligations to exceed $15,000,000 or (ii) when added to
the aggregate amount of Revolving Loans then outstanding would exceed (x)
the lesser of (A) the Total Commitments and (B) the Borrowing Base then in
effect or (y) the Inventory Sublimit;
(b) 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 such Issuing Bank to
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 as
of the Restatement Effective Date, or any unreimbursed loss, cost or
expense which was not applicable, in effect or known to such Issuing Bank
as of the
36
Restatement Effective Date and which such Issuing Bank deems in good faith
to be material to it; or
(c) a default of any Lender's obligations to fund under Section 3.6
exists, or such Lender is a Defaulting Lender under Section 2.4(c), unless
the Agent and the Issuing Banks have entered into satisfactory arrangements
with the Borrower to eliminate such Issuing Bank's risk with respect to
such Lender, including cash collateralization of such Lender's
Proportionate Share of the Letter of Credit Obligations.
Schedule III attached hereto contains a description of all letters of credit
issued by an Issuing Bank pursuant to the Existing Credit Agreement and which
are to remain outstanding on the Restatement Effective Date. Each such letter
of credit, including any extension thereof (each an "Existing Letter of Credit")
shall constitute a "Letter of Credit" for all purposes of this Agreement. Each
Existing Letter of Credit shall be deemed issued for purposes of Sections 3.3
and 4.7 on the Restatement Effective Date.
3.2 Terms of Letters of Credit. The Letters of Credit shall be in a
--------------------------
form customarily issued by the respective Issuing Bank or in such other form as
has been approved by such Issuing Bank. Each Letter of Credit shall be
denominated in Dollars. At the time of issuance, the amount and the terms and
conditions of each Letter of Credit, and the form of any drafts or acceptances
thereunder, shall be subject to approval by the Agent and the Borrower. In no
event may the term of any standby Letter of Credit issued hereunder exceed 12
months (except that such Letters of Credit may provide for annual renewal) nor
the term of any documentary Letter of Credit exceed 180 days, and all Letters of
Credit issued hereunder shall expire no later than the date that is five
Business Days prior to the Expiration Date. Any Letter of Credit containing an
automatic renewal provision shall also contain a provision pursuant to which,
notwithstanding any other provisions thereof, it shall expire no later than the
date that is five Business Days prior to the Expiration Date. Notwithstanding
the foregoing, to the extent that an Issuing Bank of a Letter of Credit
denominated in a currency other than Dollars has agreed in writing to such
arrangement at the time of the issuance of such Letter of Credit, the Borrower
shall reimburse any drawing thereunder in the currency in which such Letter of
Credit is denominated; provided that (x) if any such drawing is made at a time
--------
when there exists an Event of Default or (y) if such reimbursement is not made
by the close of business two Business Days after the Borrower has received
notice of such drawing, then, in either such case, such reimbursement shall
instead be made in Dollars and in immediately available funds.
3.3 Lenders' Participation. Immediately upon the issuance or
----------------------
amendment by any Issuing Bank of any Letter of Credit in accordance with the
procedures set forth in Section 3.1, each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from such Issuing Bank,
without recourse or warranty, an undivided interest and participation to the
extent of such Lender's Proportionate Share (based upon its Commitment) of the
liability with respect to such Letter of Credit (including, without limitation,
all obligations of the Borrower with respect thereto, other than amounts owing
to such Issuing Bank consisting of Issuing Bank Fees and Facing Fees) and any
security therefor or guaranty pertaining thereto.
37
3.4 Notice of Issuance. Whenever the Borrower desires the issuance
------------------
of a Letter of Credit, the Borrower shall deliver to the Payments Administrator
and the Issuing Bank a written notice no later than 1:00 P.M. New York City time
at least three Business Days (or such shorter period as may be agreed to by such
Issuing Bank) in advance of the proposed date of issuance of a letter of credit
request in substantially the form attached as Exhibit F (a "Letter of Credit
Request"). The Payments Administrator shall promptly transmit copies of each
Letter of Credit Request to each Lender. The transmittal by the Borrower of
each Letter of Credit Request shall be deemed to be a representation and
warranty by the Borrower that the Letter of Credit may be issued in accordance
with and will not violate any of the requirements of Section 3.1 or 5.2. A
Letter of Credit Request may be given in writing or electronically with prompt
confirmation in writing.
3.5 Payment of Amount Drawn Under Letters of Credit. In the event of
-----------------------------------------------
any request for drawing under any Letter of Credit by the beneficiary thereof,
the respective Issuing Bank shall notify the Payments Administrator, which shall
notify the Borrower of such request, not later than 11:00 A.M. on the Business
Day immediately prior to the date on which such Issuing Bank intends to honor
such drawing. The Borrower shall give notice to be received by the Payments
Administrator and the Issuing Bank not later than 1:00 P.M. on such Business Day
if it intends to reimburse such Issuing Bank for the amount of such drawing with
funds other than the proceeds of Revolving Loans. Such notice from the Borrower
shall be irrevocable and, if given, the Borrower shall reimburse such Issuing
Bank not later than the close of business New York City time on the day on which
such drawing is honored in an amount in same day funds equal to the amount of
such drawing. If the Payments Administrator shall not have timely received such
notice (i) the Borrower shall be deemed to have timely given a Notice of
Borrowing to the Payments Administrator to incur Revolving Loans on the date on
which such drawing is honored in an amount equal to the amount of such drawing
and (ii) subject to satisfaction or waiver of the conditions specified in
Section 5.2 hereof and the other terms and conditions of Borrowings contained
herein, the Lenders shall, on the date of such drawing, make Revolving Loans in
the amount of such drawing, the proceeds of which shall be applied directly by
the Payments Administrator to reimburse such Issuing Bank for the amount of such
drawing or payment. Borrowings pursuant to this Section 3.5 shall not be
subject to the minimum amount requirement of Section 2.3(a)(iii). If for any
reason, proceeds of Revolving Loans are not received by such Issuing Bank on
such date in an amount equal to the amount of such drawing, the Borrower shall
be obligated to and shall reimburse such Issuing Bank, on the Business Day
immediately following the date of such drawing, in an amount in same day funds
equal to the excess of the amount of such drawing over the amount of such
Revolving Loans, if any, which are so received, plus accrued interest on such
amount at the rate set forth in Section 4.2; provided, however, that any such
-------- -------
payments shall not prejudice any rights that the Borrower may have against any
Lender as a result of any default by such Lender in funding such Revolving
Loans, as provided in the final sentence of Section 2.4(c).
3.6 Payment by Lenders. (a) In the event that the Borrower does not
------------------
reimburse an Issuing Bank for the amount of any drawing pursuant to Section 3.5
and the proceeds of Revolving Loans incurred for such purpose are insufficient
for such purpose, the Payments Administrator shall promptly notify each Lender
of the unreimbursed amount and of such Lender's respective participation
therein. Each Lender shall make available to such Issuing Bank an
38
amount equal to its respective participation in same day funds, at the office of
such Issuing Bank specified in such notice, not later than 1:00 P.M. New York
City time on the Business Day after the date notified by the Payments
Administrator. In the event that any Lender fails to make available to the
Issuing Bank the amount of such Lender's participation in such Letter of Credit
as provided in this Section 3.6, such Issuing Bank shall be entitled to recover
such amount on demand from such Lender, together with interest at the Federal
Funds Rate.
(b) The Payments Administrator or the Issuing Bank, as the case may
be, shall distribute to each Lender which has paid all amounts payable by it
under this Section 3.6 with respect to any Letter of Credit such Lender's
Proportionate Share of all payments subsequently received by the Payments
Administrator or the Issuing Bank, as the case may be, from the Borrower in
reimbursement of drawings honored under such Letter of Credit when such payments
are received.
3.7 Nature of Issuing Bank's Duties. In determining whether to pay
-------------------------------
under any Letter of Credit, each Issuing Bank shall be responsible only to
determine that the documents and certificates required to be delivered under
that Letter of Credit have been delivered and that they comply on their face
with the requirements of that Letter of Credit. As between the Borrower, an
Issuing Bank and each other Lender, the Borrower assumes all risks of the acts
and omissions of, or misuse of the Letter of Credit issued by each Issuing Bank
by, the respective beneficiaries of such Letter of Credit. In furtherance and
not in limitation of the foregoing, no Issuing Bank nor any of the other Lenders
shall be responsible (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effects of any document submitted by any party in
connection with the application for and issuance of or any drawing honored under
such Letter of Credit even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged, (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign such Letter of Credit, or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason, (iii) for failure of the beneficiary
of such Letter of Credit to comply fully with conditions required in order to
draw upon such Letter of Credit, (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex, telecopy or otherwise, whether or not they be in cipher, (v) for errors
in interpretation of technical terms, (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit, or of the proceeds thereof, (vii) for the
misapplication by the beneficiary of such Letter of Credit of the proceeds of
any drawing honored under such Letter of Credit, and (viii) for any consequences
arising from actions or omissions taken or omitted in good faith or from causes
beyond the control of such Issuing Bank or the other Lenders; provided, however,
-------- -------
that nothing in this sentence shall relieve an Issuing Bank of liability for its
own gross negligence or willful misconduct.
3.8 Obligations Absolute. The obligations of the Borrower to
--------------------
reimburse an Issuing Bank for drawings honored under a Letter of Credit issued
by it and the obligations of the Lenders under Section 3.6 shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Credit Agreement under all circumstances including, without
limitation, the following circumstances:
39
(a) any lack of validity or enforceability of any Letter of Credit;
(b) the existence of any claim, set-off, defense or other right which
the Borrower or any Affiliate of the Borrower may have at any time against
a beneficiary or any transferee of any Letter of Credit (or any Persons or
entities for whom any such beneficiary or transferee may be acting), such
Issuing Bank, any Lender or any other Person, whether in connection with
this Credit Agreement, the transactions contemplated herein or any
unrelated transaction, provided, however, that nothing contained herein
-------- -------
shall preclude the Borrower from asserting any such claim, defense or
counterclaim in a separate judicial proceeding or by compulsory
counterclaim;
(c) any draft, demand, certificate or any other documents 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;
(d) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents;
(e) payment by such Issuing Bank under any Letter of Credit against
presentation of a demand, draft or certificate or other document which does
not comply with the terms of such Letter of Credit;
(f) failure of any drawing under a Letter of Credit or any non-
application or misapplication by the beneficiary of the proceeds of any
drawing; or
(g) the fact that a Default or Event of Default shall have occurred
and be continuing;
provided, however, that the Borrower shall have no obligation to reimburse an
-------- -------
Issuing Bank and the Lenders shall have no obligation under Section 3.6 in the
event of such Issuing Bank's willful misconduct or gross negligence in
determining whether documents presented under the Letter of Credit comply with
the terms of such Letter of Credit or with respect to any other express
obligation an Issuing Bank may have under this Credit Agreement in making any
payment pursuant to any Letter of Credit.
ARTICLE 4.
Interest, Fees and Expenses
---------------------------
4.1 Interest on Eurodollar Rate Loans. Subject to the provisions of
---------------------------------
Section 4.4 hereof, interest on Eurodollar Rate Loans shall be payable on the
last day of each Interest Period with respect to such Eurodollar Rate Loans
(and, if earlier, the date three months after the date of the incurrence,
Conversion or Continuance thereof), at the date of any Conversion thereof (or
portion thereof) to a Base Rate Loan, upon any prepayment (on the amount
prepaid) and at maturity at an interest rate per annum equal during each
Interest Period for such Eurodollar Rate Loan to the Adjusted Eurodollar Rate in
effect for such Interest Period in effect for such Eurodollar Rate Loan plus the
Applicable Margin. The Payments Administrator upon
40
determining the Adjusted Eurodollar Rate for any Interest Period shall promptly
notify the Borrower and the Lenders thereof. Each determination by the Payments
Administrator of an interest rate hereunder shall be conclusive and binding for
all purposes, absent manifest error.
4.2 Interest on Prime Rate Loans. Subject to the provisions of
----------------------------
Section 4.4 hereof, interest on Base Rate Loans shall be payable monthly as of
the end of each month, upon any Conversion thereof (or portion thereof) to a
Eurodollar Rate Loan, upon any prepayment (on the amount prepaid) and at
maturity at an interest rate per annum equal to the Base Rate plus the
Applicable Margin; provided that the payment of any interest that would
--------
otherwise be required to be paid on the Restatement Effective Date in respect of
any Existing Loan which is repaid on such date as described in Section 5.1(j)
shall be deferred until the date on which the Interest Period applicable to such
Existing Loan would have otherwise ended. Each determination by the Payments
Administrator of an interest rate hereunder shall be conclusive and binding for
all purposes, absent manifest error.
4.3 Notice of Continuation and Notice of Conversion. (a) With
-----------------------------------------------
respect to any Borrowing consisting of Eurodollar Rate Loans, the Borrower may,
subject to the provisions of Section 4.3(c) and the condition that no Default or
Event of Default then exists, elect to maintain such Borrowing or any portion
thereof equal to at least $1,000,000 as Eurodollar Rate Loans by selecting a new
Interest Period for such Borrowing (or portion thereof), which new Interest
Period shall commence on the last day of the immediately preceding Interest
Period. Each selection of a new Interest Period (a "Continuation") shall be
made by notice given not later than 12:00 P.M. New York City time on the third
Business Day prior to the date of any such Continuation, by the Borrower to the
Payments Administrator. Such notice (a "Notice of Continuation") shall be by
telephone, telecopy, telex or cable, confirmed immediately in writing if by
telephone, substantially in the form of Exhibit G-1, which shall be completed in
such manner as is necessary to comply with all limitations on Revolving Loans
outstanding hereunder. If the Borrower shall fail to, or does not have the
right to, select a new Interest Period for any Borrowing consisting of
Eurodollar Rate Loans in accordance with this Section 4.3(a), such Loans will
automatically, on the last day of the then existing Interest Period therefor,
Convert into Base Rate Loans.
(b) The Borrower may on any Business Day occurring on or after the
Syndication Date (provided that no Default or Event of Default has occurred and
--------
is continuing), upon notice (each such notice, a "Notice of Conversion") given
to the Payments Administrator, and subject to the provisions of Section 4.3(c),
Convert the entire amount of or a portion of Revolving Loans of one Type into a
Borrowing of Revolving Loans of the other Type; provided, however, that any
-------- -------
Conversion of any Eurodollar Rate Loans into Base Rate Loans shall be made on,
and only on, the last day of an Interest Period for such Eurodollar Rate Loans.
Each such Notice of Conversion shall be given not later than 12:00 P.M. New York
City time on the Business Day prior to the date of any proposed Conversion into
Base Rate Loans and on the third Business Day prior to the date of any proposed
Conversion into Eurodollar Rate Loans. Subject to the restrictions specified
above, each Notice of Conversion shall be by telephone, telecopy, telex or
cable, confirmed immediately in writing if by telephone, substantially in the
form of Exhibit G-2. Each Conversion shall be in an aggregate amount for the
Revolving Loans of all Lenders of not less than $1,000,000.
41
(c) Notwithstanding anything contained in Section 2.3 or subsections
(a) and (b) above to the contrary,
(i) if the Payments Administrator is unable to determine the
Adjusted Eurodollar Rate for Eurodollar Rate Loans comprising any requested
Borrowing, Continuation or Conversion, the right of the Borrower to select
or maintain Eurodollar Rate Loans for such Borrowing or any subsequent
Borrowing shall be suspended until the Payments Administrator shall notify
the Borrower and the Lenders that the circumstances causing such suspension
no longer exist, and each Revolving Loan comprising such Borrowing shall be
made as, or Converted into, a Base Rate Loan,
(ii) if the Required Lenders shall, at least one Business Day before
the date of any requested Borrowing, Continuation or Conversion, notify the
Payments Administrator that the Adjusted Eurodollar Rate for Revolving
Loans comprising such Borrowing will not adequately reflect the cost to
such Lenders of making or funding their respective Revolving Loans for such
Borrowing, the right of the Borrower to select Eurodollar Rate Loans for
such Borrowing shall be suspended until the Payments Administrator shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist, and each Revolving Loan comprising such
Borrowing shall be made as, or Converted into, a Base Rate Loan, and
(iii) there shall not be at any one time more than five (5) Interest
Periods in effect with respect to Eurodollar Rate Loans.
(d) Each Notice of Continuation and Notice of Conversion shall be
irrevocable by and binding on the Borrower. In the case of any Borrowing,
Continuation or Conversion that the related Notice of Borrowing, Notice of
Continuation or Notice of Conversion specifies is to be comprised of Eurodollar
Rate Loans, the Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill, on or
before the date for such Borrowing, Continuation or Conversion specified in such
Notice of Borrowing, Notice of Continuation or Notice of Conversion, the
applicable conditions set forth in Article 5, including, without limitation, any
loss (excluding loss of anticipated profits), cost or expense incurred by reason
of the liquidation or re-employment of deposits or other funds acquired by such
Lender to fund the Eurodollar Rate Loan to be made by such Lender as part of
such Borrowing, Continuation or Conversion.
4.4 Interest After Default. Interest on any amount of matured
----------------------
principal of the Revolving Loans, and interest on the amount of principal of the
Revolving Loans outstanding as of the date an Event of Default under Section
9.1(a) or (c) (to the extent arising from the failure to comply with Sections
8.3, 8.9, 8.10 or 8.15 and after the Agent has given notice of such failure to
the Borrower) occurs, and at all times thereafter until the earlier of the date
upon which (i) all Obligations have been paid and satisfied in full, (ii) such
Event of Default shall have been cured or waived, or (iii) with respect to such
Events of Default arising under Section 9.1(c) the date which is thirty days
after the first day the rate is increased pursuant to Section 4.4 with respect
to any individual occurrence of Event of Default shall be payable on demand at a
rate equal to the rate at which the Revolving Loans are bearing interest
pursuant to Sections 4.1 or 4.2 above plus 2%, or,
42
if higher, the Base Rate in effect from time to time plus the sum of (x) the
Applicable Margin for Base Rate Loans and (y) 2%.
4.5 Reimbursement of Expenses. (a) From and after the Restatement
-------------------------
Effective Date, the Borrower shall promptly reimburse the Agent for all Expenses
of the Agent as the same are incurred by the Agent and upon receipt of invoices
therefor and, if requested by the Borrower, such reasonable backup materials and
information as the Borrower shall reasonably request.
(b) If any payment of principal of, or any Conversion of, any
Eurodollar Rate Loan is made other than on the last day of an Interest Period
applicable thereto for any reason, the Borrower shall, upon demand by any Lender
(with a copy of such demand to the Payments Administrator), pay to the Payments
Administrator for the account of such Lender any amounts required to compensate
such Lender for any additional losses, costs or expenses which it may reasonably
incur as a result of such payment, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Eurodollar Rate Loan.
4.6 Unused Line Fee. The Borrower shall pay to the Payments
---------------
Administrator for the benefit of each of the Lenders (other than a Defaulting
Lender for so long as such Lender is a Defaulting Lender) a non-refundable fee
(the "Unused Line Fee") equal to 0.375% per annum on the unused portion of such
Lender's Commitment, which fee shall (i) accrue from the date this Credit
Agreement becomes effective pursuant to Section 11.14 until the Expiration Date
and (ii) be due and payable quarterly in arrears on the last Business Day of
March, June, September and December, and on the Expiration Date or such earlier
date upon which the Total Commitments are terminated.
4.7 Letter of Credit Fee; Facing Fee. (a) The Payments
--------------------------------
Administrator, for the ratable benefit of the Lenders, shall be entitled to
charge to the account of the Borrower (i) a fee (the "Letter of Credit Fee"), in
an amount equal to 1.75% per annum of the daily weighted average amount of
outstanding Letter of Credit Obligations during the immediately preceding
quarter, due and payable quarterly in arrears on the last Business Day of March,
June, September and December, and on the Expiration Date or such earlier date
upon which the Total Commitments are terminated, and (ii) as and when incurred
by the Payment Administrator or any Lender, any charges, fees, costs and
expenses charged to the Payment Administrator or any Lender for the Borrower's
account by any Issuing Bank (other than any fees charged to such Payment
Administrator or any Lender which would be duplicative of the Letter of Credit
Fee paid to such Payment Administrator for the benefit of the Lenders) (the
"Issuing Bank Fees") in connection with the issuance of any Letters of Credit by
any Issuing Bank. Each determination by the Payments Administrator of Letter of
Credit Fees hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(b) Letter of Credit Fees payable in respect of Letter of Credit
Obligations outstanding as of the date an Event of Default under Section 9.1(a)
or (c) (to the extent arising from the failure to comply with Sections 8.3, 8.9,
8.10 or 8.15 and after the Agent has given notice of such failure to the
Borrower) occurs, and at all times thereafter until the earlier of the date upon
which (i) all Obligations have been paid and satisfied in full, (ii) such Event
of Default
43
shall have been cured or waived, or (iii) with respect to such Events of Default
arising under Section 9.1(c) the date which is thirty days after the first day
the rate is increased pursuant to this clause (b) with respect to any individual
occurrence of Event of Default shall be payable on demand at a rate equal to the
rate at which the Letter of Credit Fees are charged pursuant to Section 4.7(a)
above, plus 2%.
(c) The Borrower agrees to pay to the respective Issuing Bank, for
its own account, a facing fee in respect of each Letter of Credit issued for its
account hereunder (the "Facing Fee') for the period from and including the date
of issuance of such Letter of Credit to and including termination of such Letter
of Credit, computed at a rate equal to 1/4 of 1% per annum of the daily Stated
Amount of such Letter of Credit; provided that in no event shall the annual
--------
Facing Fee with respect to each Letter of Credit be less than $500. Accrued
Facing Fees shall be due and payable quarterly in arrears on the last Business
Day of March, June, September and December, and on the Expiration Date or such
earlier date upon which the Total Commitments are terminated and no Letters of
Credit remain outstanding.
4.8 Authorization to Charge Account. The Borrower hereby authorizes
-------------------------------
the Payments Administrator, subject to prior notice to the Borrower, to charge
the Borrower's Revolving Loan account with the amount of all Fees, Expenses and
other payments to be paid hereunder and under the other Credit Documents as and
when such payments become due. The Borrower confirms that any charges which the
Payments Administrator may so make to the Borrower's Revolving Loan account as
herein provided will be made as an accommodation to the Borrower and solely at
the Payments Administrator's discretion.
4.9 Indemnification in Certain Events. (a) If after the Restatement
---------------------------------
Effective Date, either (i) any change in or in the interpretation of any law or
regulation is introduced, including, without limitation, with respect to reserve
requirements, applicable to the Agent, BT Delaware or any of the Lenders (or, in
the case of a Lender which is not a banking institution, any Affiliate of such
Lender funding such Lender ("Funding Affiliate")), or (ii) any of the Lenders
(or, in the case of a Lender which is not a banking institution, any Funding
Affiliate) complies with any future guideline or request from any central bank
or other Governmental Authority or (iii) any of the Lenders (or, in the case of
a Lender which is not a banking institution, any Funding Affiliate) reasonably
determines that the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof has or would
have the effect described below, or any of the Lenders (or, in the case of a
Lender which is not a banking institution, any Funding Affiliate) complies with
any future request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, and in the case of any event set forth in this clause (iii), such
adoption, change or compliance has or would have the direct or indirect effect
of reducing the rate of return on any of the Lenders' (or, in the case of a
Lender which is not a banking institution, any Funding Affiliate) capital as a
consequence of its obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, change or compliance (taking into
consideration the Lenders' (or, in the case of a Lender which is not a banking
institution, any Funding Affiliate) policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, and any of the foregoing
events described in
44
clauses (i), (ii) or (iii) increases the cost to the Agent, any Issuing Bank or
any of the Lenders of (A) funding or maintaining its Commitment or (B) issuing,
making or maintaining any Letter of Credit or of purchasing or maintaining any
participation therein, or reduces the amount receivable in respect thereof by
the Agent or any Lender, then the Borrower shall within 10 days after demand by
the Agent, pay to the Payments Administrator, for the account of each applicable
Lender, additional amounts sufficient to indemnify the Lenders against such
increase in cost or reduction in amount receivable allocable to such Lenders'
funding or maintaining its Commitment or issuing, making or maintaining any
Letter of Credit or purchasing or maintaining any participation therein. A
certificate as to the amount of such increased cost and setting forth in
reasonable detail the calculation thereof shall be submitted to the Borrower by
the Payments Administrator, or the applicable Lender, and shall be conclusive
absent manifest error.
(b) Each Lender or Issuing Bank or the Agent will notify the
Borrower and the Payments Administrator of any event occurring after the
Restatement Effective Date which will entitle such Lender, Issuing Bank or the
Agent to payment pursuant to Section 4.9(a) as promptly as practicable after it
obtains knowledge thereof, specifying the event giving rise to such claim and
setting out in reasonable detail an estimate of the basis and computation of
such claim. Upon receipt of such notice, the Borrower shall compensate such
Lender or Issuing Bank or the Agent in accordance with Section 4.9(a) from the
date such costs are incurred (including, without limitation, where such costs
are retroactively applied); provided, however, that the Borrower shall not be
-------- -------
required to compensate a Lender or Issuing Bank or the Agent for cost incurred
earlier than 150 days prior to the date of the notice required to be delivered
to the Borrower pursuant to this Section 4.9(b).
4.10 Calculations. All calculations of (i) interest hereunder and
------------
(ii) fees, including, without limitation, Unused Line Fees and Letter of Credit
Fees, shall be made by the Payments Administrator, on the basis of a year of 360
days, or, if such computation would cause the interest and fees chargeable
hereunder to exceed the Highest Lawful Rate, 365/366 days, in each case for the
actual number of days elapsed (including the first day but excluding the last
day) occurring in the period for which such interest or fees are payable. Each
determination by the Payments Administrator of an interest rate or payment
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
4.11 Change of Applicable Lending Office. Each Lender agrees that on
-----------------------------------
the occurrence of any event giving rise to the operation of Sections 2.9 or 4.9
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Revolving Loans or Letters of Credit
affected by such event, provided that such designation is made on such terms
--------
that such Lender 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 Sections. Nothing in this Section 4.11 shall
affect or postpone any of the obligations of the Borrower or the right of any
Lender provided in Sections 2.9 or 4.9.
45
ARTICLE 5.
Conditions Precedent
--------------------
5.1 Conditions to Initial Loans and Letters of Credit on the
--------------------------------------------------------
Restatement Effective Date. The occurrence of the Restatement Effective Date
--------------------------
and the obligation of each Lender to make the initial Revolving Loans hereunder
are subject to the satisfaction of, or waiver of, immediately prior to or
concurrently with the making of such Revolving Loans on the Restatement
Effective Date, the following conditions precedent:
(a) Execution of Agreement; Notes. On or prior to the Restatement
-----------------------------
Effective Date, this Credit Agreement shall have become effective as
provided in Section 11.14 and there shall have been delivered to the
Payments Administrator for the account of each Lender the appropriate
Revolving Note in the amount, maturity and as otherwise provided herein.
(b) Material Adverse Change. (i) Since the Restatement Effective
-----------------------
Date, no Lender shall have become aware of any, or no change, occurrence,
event or development or event involving a prospective change shall have
occurred and be continuing, in either case, that is reasonably likely to
have a Material Adverse Effect or (ii) there shall not have occurred a
substantial impairment of the financial markets generally that is
reasonably likely to materially and adversely affect the transactions
contemplated hereby, in each case as determined by the Agent.
(c) Officer's Certificate. On the Restatement Effective Date, the
---------------------
Agent shall have received a certificate dated such date signed by an
appropriate officer of the Borrower stating that all of the applicable
conditions set forth in Sections 5.1(b), (f), (g), (h), (i), (j)(ii) and
(iv), (k) and (l) and 5.2(a), (b), (c) and (d) exist as of such date.
(d) Opinions of Counsel. On the Restatement Effective Date, the
-------------------
Agent shall have received opinions, addressed to each of the Lenders and
dated the Restatement Effective Date, (i) from Katten, Muchin & Zavis,
special counsel to Holding and the Borrower, which opinion shall be
substantially in the form of Exhibit H-1 and shall cover the matters
contained in Exhibit H-1 and such other matters incident to the
transactions contemplated herein as the Agent may reasonably request and
(ii) from White & Case, special counsel to the Lenders, which opinion shall
be substantially in the form of Exhibit H-2 and shall cover the matters
contained in Exhibit H-2.
(e) Corporate Proceedings. (i) On the Restatement Effective Date,
---------------------
the Agent shall have received from each Credit Party a certificate, dated
the Restatement Effective, signed by the president, chief executive
officer, vice president or chief financial officer, and attested by the
secretary or any assistant secretary of such Person, substantially in the
form of Exhibit I with appropriate insertions, together with copies of the
Certificate of Incorporation and By-Laws, or other organizational documents
of such Credit Party and the resolutions of such Credit Party referred to
in such certificate and all of the foregoing
46
(including each such Certificate of Incorporation and By-Laws) shall be
satisfactory to the Agent.
(ii) On the Restatement Effective Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Credit Agreement and the other
Transaction Documents shall be reasonably satisfactory in form and
substance to the Agent, and the Agent shall have received all information
and copies of all certificates, documents and papers, including good
standing certificates and any other records of corporate proceedings and
governmental approvals, 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.
(f) Issuance of New Senior Notes. (i) On or prior to the
----------------------------
Restatement Effective Date, the Borrower shall have received cash proceeds
(after the payment of discount and the payment of underwriting or placement
fees in respect thereof) of approximately $105,000,000 from the issuance by
the Borrower of its New Senior Notes, provided that such cash proceeds
--------
received and the proceeds received pursuant to the Special Term Loan
Agreement described in Section 5.1(h) shall not exceed $225,000,000 in the
aggregate.
(ii) On or prior to the Restatement Effective Date, the Borrower
shall have complied with all requirements of the Senior Note Indenture to
redeem or defease the outstanding Senior Notes and the Agent shall have
received evidence in form, scope and substance satisfactory to it that the
matters set forth in this Section 5.1(f)(ii) have been satisfied at such
time.
(iii) On or prior to the Restatement Effective Date, the Agent shall
have received copies of the New Senior Note Documents, which shall be in
full force and effect and certified as true and correct by an authorized
officer of the Borrower and all of the terms and conditions of the New
Senior Notes and the New Senior Note Documents shall be in form and
substance satisfactory to the Agent.
(g) Amendment to Holding Restructuring Agreement and Holding Notes.
--------------------------------------------------------------
(i) On or prior to the Restatement Effective Date, Holding and KIA IV shall
have entered into the Amendment to Holding Restructuring Agreement, and the
Holding Notes shall have been amended in accordance with the Holding
Restructuring Agreement.
(ii) On or prior to the Restatement Effective Date, the Agent shall
have received copies of the Holding Restructuring Agreement, the Amendment
to Holding Restructuring Agreement and documents evidencing the amendment
to the Holding Notes, which shall be in full force and effect and certified
as true and correct by an authorized officer of the Borrower and all of the
terms and conditions of the Amendment to Holding Restructuring Agreement
and the documents evidencing the amendment to the Holding Notes shall be in
form and substance satisfactory to the Agent.
47
(h) Special Term Loan Agreement. (i) On or prior to the
--------------------------
Restatement Effective Date, the Borrower shall have entered into the
Special Term Loan Agreement, incurred loans thereunder and received
proceeds in the amount of approximately $100,000,000 as a result thereof,
provided that such proceeds received and the cash proceeds received
--------
pursuant to the issuance of New Senior Notes described in Section 5.1(f)
shall not exceed $225,000,000 in the aggregate.
(ii) On or prior to the Restatement Effective Date, the Agent shall
have received copies of the Special Term Loan Documents, which shall be in
full force and effect and certified as true and correct by an authorized
officer of the Borrower and all of the terms and conditions of the Special
Term Loan Agreement and the Special Term Loan Documents shall be in form
and substance satisfactory to the Agent.
(i) Use of Proceeds. On the Restatement Effective Date, the
---------------
Borrower shall have utilized proceeds received by it from the consummation
of the Transaction to (i) deposit funds not exceeding approximately
$162,500,000 with the trustee under the Senior Note Indenture for the
purpose of defeasing or redeeming all Senior Notes on or prior to April 23,
1998, pursuant to documents (including the documents described in Section
8.01 of the Senior Note Indenture) in form and substance satisfactory to
the Agent and repaying accrued and unpaid interest, in the amount of
approximately $7,200,000, on the Senior Notes, (ii) (x) deposit funds not
exceeding $5,100,000 with an escrow agent under an escrow agreement in form
and substance satisfactory to the Agent, and (y) ▇▇▇▇▇▇ Financial, Inc.
shall have delivered to the escrow agent all mortgage releases, UCC
termination statements and other instruments as may be suitable or
appropriate to release all Liens securing payment of the obligations under
the ▇▇▇▇▇▇ Documents (and the Borrower shall have delivered copies of such
documents described in this clause (y) to the Agent and such documents
shall be in form and substance satisfactory to the Agent), (iii) pay a
dividend in the amount of $45,400,000 (provided that if more than
--------
$205,000,000, in the aggregate, in proceeds are raised from the
transactions described in Sections 5.1(f) and (g), the net excess amount of
the proceeds raised may be used to increase the amount of the dividend
payment by such net excess amount) to Holding to enable Holding to prepay
approximately $40,000,000 of principal of, and approximately $5,400,000 of
interest accrued on, the Holding Notes as of March 31, 1998 and (iv) pay
related fees and expenses in the aggregate amount of approximately
$9,000,000.
(j) Existing Credit Agreement. On the Restatement Effective Date,
-------------------------
(i) each Continuing Lender shall have converted its Existing Loans as
contemplated by Section 1.1, (ii) the Borrower shall have paid all interest
and fees (including commitment fees) owing under the Existing Credit
Agreement through the Restatement Effective Date, (iii) the Agent shall
have received evidence in form, scope and substance satisfactory to it that
the matters set forth in this Section 5.1(j) have been satisfied on the
Restatement Effective Date and (iv) the Borrower shall have paid to any
Non-Continuing Lender the expenses, if any, set forth in Section 4.5(b).
48
(k) Approvals. On or prior to the Restatement Effective Date, all
---------
necessary governmental and third party approvals in connection with the
Transaction shall have been obtained and remain in effect and evidence
thereof shall have been provided to the Agent, and all applicable waiting
periods shall have expired without any action being taken by any competent
authority which restrains, prevents or imposes, in the judgment of the
Required Lenders or the Agent, materially adverse conditions upon the
consummation of the Transaction.
(l) Litigation. On the Restatement Effective Date, there shall be
----------
no actions, suits or proceedings pending or threatened (i) with respect to
this Credit Agreement or any other Transaction Document or (ii) except as
set forth on Schedule IV, which the Agent or the Required Lenders shall
determine is reasonably likely to have a Material Adverse Effect.
(m) Acknowledgment, Consent and Amendment. (i) On the Restatement
-------------------------------------
Effective Date, the Borrower and the Agent shall have duly authorized,
executed and delivered an Acknowledgment, Consent and Amendment,
substantially in the form of Exhibit J hereto (as amended, modified,
extended, renewed, replaced, restated or supplemented from time to time,
the "Acknowledgment, Consent and Amendment").
(ii) On the Restatement Effective Date, (1) the Security Agreement
shall remain in full force and effect, (2) no filings, recordings,
registrations or other actions shall be necessary or desirable to maintain
the perfection and priority of the security interests granted pursuant to
the Security Agreement in the Security Agreement Collateral covered thereby
and (3) the Agent shall have received:
(x) executed copies of Form UCC-1 financing statements in
appropriate form for filing under the UCC of each jurisdiction as may
be necessary to perfect the security interests purported to be created
by the Security Agreement;
(y) evidence of the completion of all recordings and filings of,
or with respect to, the Security Agreement as may be necessary or, in
the opinion of the Collateral Agent, desirable to perfect the security
interests intended to be created thereby; and
(z) evidence that all other actions necessary or, in the opinion
of the Collateral Agent, desirable to perfect the security interests
purported to be created by the Security Agreement have been taken.
(n) Insurance Policies. On the Restatement Effective Date, the
------------------
Agent shall have received evidence (including, without limitation,
certificates of insurance complying with the requirements of Section 7.10
for the business and properties of the Borrower, in form and substance
satisfactory to the Agent.
(o) Existing Indebtedness Agreements; Shareholders' Agreements;
-----------------------------------------------------------
Management Agreements; Employment Agreements; Tax Sharing Agreements. On
--------------------------------------------------------------------
or prior to the
49
Restatement Effective Date, there shall have been delivered to the Agent
copies, certified as true and correct by an appropriate officer of Holding
and the Borrower, respectively, making such delivery, of:
(i) all agreements evidencing or relating to the Existing
Indebtedness (collectively, the "Existing Indebtedness Agreements"),
if any, of Holding and the Borrower, respectively;
(ii) all agreements entered into by Holding or any of its
Subsidiaries (x) governing the terms and relative rights of its
capital stock or (y) with any shareholders relating to such entity
with respect to their capital stock (collectively, the "Shareholders'
Agreements"), if any, of Holding and the Borrower, respectively;
(iii) any material agreements (or the forms thereof) with
members of, or with respect to the, management of Holding or any of
its Subsidiaries (collectively the "Management Agreements"), if any,
of Holding and the Borrower, respectively;
(iv) any employment agreements (or the forms thereof together
with a list of employees who are parties to such agreements) entered
into by Holding or any of its Subsidiaries (collectively, the
"Employment Agreements"), if any, of Holding and the Borrower,
respectively; and
(v) any tax sharing, tax allocation and other similar
agreement entered into by Holding, or any Subsidiary of Holding
(collectively, the "Tax Sharing Agreements"), if any, of Holding and
the Borrower, respectively;
all of which Existing Indebtedness Agreements, Shareholders' Agreements,
Management Agreements, Employment Agreements and Tax Sharing Agreements
shall be in the form delivered to counsel to the Agent on or prior to the
date hereof or otherwise in form and substance satisfactory to the Agent
and shall be in full force and effect on the Restatement Effective Date.
(p) Balance Sheet. On the Restatement Effective Date, Holding shall
-------------
have delivered, or shall have caused to be delivered, to the Agent, the
unaudited December 31, 1997 pro forma consolidated balance sheet of the
--- -----
Borrower and its Subsidiaries, after giving effect to the Transaction and
the related financing thereof, which pro forma balance sheet as well as the
--- -----
assumptions heretofore supplied to the Agent relating to taxes and
intangibles and the amortization of intangibles, shall be satisfactory in
form and substance to the Agent.
(q) Solvency Opinion. On the Restatement Effective Date, the
----------------
Lenders shall have received opinions of value and other appropriate factual
information and expert advice from ▇▇▇▇▇▇, ▇▇▇▇▇▇ & Co., Inc. supporting
the conclusions that, after giving effect to the Transaction, the Borrower
and its Subsidiaries taken as a whole will not be
50
insolvent and will not be rendered insolvent by the indebtedness incurred
or guaranteed in connection therewith, will not be left with unreasonably
small capital with which to engage in its or their businesses and will not
have incurred debts beyond its or their ability to pay such debts as they
mature.
(r) Payment of Fees. On the Restatement Effective Date, all costs,
---------------
fees and expenses, and all other compensation contemplated by this Credit
Agreement, due to the Agent or the Lenders (including, without limitation,
legal fees and expenses) shall have been paid to the extent due.
(s) Borrowing Base Certificate. On the Restatement Effective Date,
--------------------------
the Borrower shall have delivered to the Agent a Borrowing Base Certificate
meeting the requirements of Section 7.1(e) and which Borrowing Base shall
be deemed appropriate by the Agent in its Permitted Discretion with respect
to the Borrower's overall business and working capital requirements.
(t) Consent Letter. On the Restatement Effective Date, the Agent
--------------
shall have received a letter from CT Corporation System, indicating its
consent to its continued appointment by Holding and the Borrower as their
agent to receive service of process, pursuant to the consent letter
executed in connection with the Existing Credit Agreement and substantially
in the form of Exhibit K hereto, as specified in Section 11.1 of this
Credit Agreement.
(u) Intercreditor Agreement. On the Restatement Effective Date, (i)
-----------------------
the Agent on behalf the Lenders, and Fleet National Bank, as administrative
agent for the lenders under the Special Term Loan Agreement, shall have
entered into an Intercreditor Agreement substantially in the form of
Exhibit L (as modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, the "Intercreditor
Agreement"), which shall be in full force and effect and (ii) the Borrower
shall have delivered to such parties set forth in clause (i) an
acknowledgment of the Intercreditor Agreement.
5.2 Conditions to Each Revolving Loan and Letter of Credit. On the
------------------------------------------------------
date of the making of any Revolving Loan or the issuance of any Letter of
Credit, both immediately before and after giving effect thereto and to the
application of the proceeds therefrom, the following statements shall be true to
the satisfaction of the Agent (and each delivery or deemed delivery of each
Notice of Borrowing and a Letter of Credit Request, and the acceptance by the
Borrower of the proceeds of such Revolving Loans or issuance of such Letter of
Credit, shall constitute a representation and warranty by the Borrower that on
the date of such Revolving Loans or issuance of such Letter of Credit
immediately before and after giving effect thereto and to the application of the
proceeds therefrom, such statements are true):
(a) the representations and warranties contained in this Credit
Agreement and in each other Credit Document are true and correct in all
material respects on and as of the date of such Revolving Loans or issuance
of such Letter of Credit as though made on and as of such date, except to
the extent that such representations and warranties expressly
51
relate solely to an earlier date (in which case such representations and
warranties shall have been true and accurate on and as of such earlier
date);
(b) no event has occurred and is continuing, or would result from
such Revolving Loans or the issuance of any Letter of Credit or the
application of the proceeds thereof, which would constitute a Default or an
Event of Default;
(c) no change or development which in any such case, has had or is
reasonably expected to have a Material Adverse Effect, shall have occurred
and be continuing; and
(d) with respect to the issuance of any Letter of Credit, none of the
events set forth in Section 3.1 hereof has occurred and is continuing or
would result from the issuance of such Letter of Credit.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each Credit Party to each of the Lenders that all
of the applicable conditions specified above exist as of the date of such Credit
Event. All of the certificates, legal opinions and other documents and papers
referred to in this Section 5, unless otherwise specified, shall be delivered to
the Payments Administrator at its address specified in Section 11.5 hereof for
the account of each of the Lenders and, except for the Notes, in sufficient
counterparts or copies for each of the Lenders and shall be in form and
substance as specified herein or otherwise satisfactory to the Agent.
ARTICLE 6.
Representations and Warranties
------------------------------
To induce the Lenders to enter into this Credit Agreement and to make
Revolving Loans and issue and/or participate in the Letters of Credit provided
for herein, each of Holding and the Borrower makes the following
representations, warranties and agreements, as to itself and as to each of its
Subsidiaries, with the Lenders, all of which shall survive the execution and
delivery of this Credit Agreement, the making of the Revolving Loans and the
issuance of the Letters of Credit (with the occurrence of each Credit Event
being deemed to constitute a representation and warranty that the matters
specified in this Article 6 are true and correct in all material respects on and
as of the date of each such Credit Event, unless stated to relate to a specific
earlier date):
6.1 Corporate Status. Holding, the Borrower and each of the
----------------
Borrower's Subsidiaries (i) is a duly organized and validly existing corporation
in good standing under the laws of the jurisdiction of its organization and 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 (ii)
has duly qualified and is authorized to do business and is in good standing in
all jurisdictions where it is required to be so qualified and where the failure
to be so qualified would be reasonably likely to have a Material Adverse Effect.
52
6.2 Corporate Power and Authority. Each Credit Party has the
-----------------------------
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Credit Documents to which it is a party. Each Credit Party has duly
executed and delivered each Credit Document to which it is a party and each such
Credit Document constitutes the legal, valid and binding obligation of such
Credit Party enforceable in accordance with its terms, except that such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting the rights and remedies of creditors and (ii) federal securities or
other laws or regulations or public policy insofar as they may restrict the
enforceability of rights to indemnification.
6.3 No Violation. Neither the execution, delivery and performance by
------------
any Credit Party of the Credit Documents to which it is a party nor compliance
with the terms and provisions thereof, nor the consummation of the transactions
contemplated therein (i) will contravene any applicable provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or (other than pursuant to the Collateral
Documents) result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of such Credit Party or
any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed
of trust, agreement or other instrument to which such Credit Party or any of its
Subsidiaries is a party or by which it or any of its property or assets are
bound or to which it may be subject or (iii) will violate any provision of the
charter or By-Laws of Holding, the Borrower or any of the Borrower's
Subsidiaries, except, in the case of clauses (i) and (ii) any immaterial
contravention, conflict, inconsistency, breach or default which are not
reasonably likely to adversely affect any Lender.
6.4 Litigation. Except as set forth on Schedule IV, there are no
----------
actions, suits or proceedings pending or threatened with respect to Holding, the
Borrower or any of the Borrower's Subsidiaries that, after giving effect to
expected insurance proceeds and indemnity payments, are reasonably likely to
have a Material Adverse Effect.
6.5 Use of Proceeds. (a) The proceeds of all Revolving Loans shall
---------------
be utilized (i) to refinance the Existing Loans, (ii) pay no more than
$20,000,000 (w) to repay the $155,000,000 of the Senior Notes, plus premium and
accrued and unpaid interest, in the amount of approximately $7,200,000, on the
Senior Notes, (x) repay the aggregate principal amount of purchase money
indebtedness, including premium and accrued interest thereon, as set forth in
the ▇▇▇▇▇▇ Documents, (y) to pay in part a dividend to Holding and (z) to pay
related fees and expenses and (iii) for general corporate purposes of the
Borrower and/or its Subsidiaries.
(b) No part of the proceeds of any Revolving 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.
6.6 Governmental Approvals. Except as set forth on Schedule V hereto
----------------------
and except for the filing of financing statements and continuation statements as
required under the
53
Collateral Documents, no order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any
foreign or domestic 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 by each Credit Party of any Credit Document
or (ii) the legality, validity, binding effect or enforceability of any Credit
Document as against each Credit Party thereto.
6.7 Investment Company Act. Neither Holding, the Borrower nor any of
----------------------
the Borrower's 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.
6.8 Public Utility Holding Company Act. Neither Holding, the
----------------------------------
Borrower nor any of the Borrower's 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.
6.9 True and Complete Disclosure. (a) All factual information
----------------------------
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
Holding or the Borrower in writing to the Agent or any Lender (including,
without limitation, such information contained in the Confidential Information
Memorandum delivered to the Agent for purposes of or in connection with this
Credit Agreement or the Transaction does not, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of Holding or
the Borrower in writing to the Agent or any Lender will not, as of the date as
of which such information is dated or certified, contain any untrue statement of
a material fact or omit to state any material fact necessary to make such
information (taken as a whole) not misleading as of such time, in each case in
light of the circumstances under which such information was provided, it being
understood and agreed that for the purposes of this Section 6.9, such factual
information shall not include projections and pro forma financial information.
--- -----
(b) The projections and pro forma financial information contained in
--- -----
the factual information referred to in clause (a) above are based on good faith
estimates and assumptions believed by the Borrower to be reasonable at the time
made, it being recognized by the Lenders that such projections as to future
events are not to be viewed as facts and necessarily were based upon numerous
assumptions with respect to industry performance, general business and economic
and competitive conditions and uncertainties, taxes and other matters which are
beyond the control of Holding, the Borrower and the Borrower's Subsidiaries,
such that there can be no assurance that such projections will be realized and
actual results may differ from the projected results.
(c) As of the Restatement Effective Date, there is no fact known to
any Credit Party (other than matters of general economic, political or social
nature) which materially and adversely affects the business, property, assets,
liabilities, financial condition or prospects of the Borrower and its
Subsidiaries taken as a whole which has not been disclosed herein or in such
other documents, certificates and statements furnished to the Lenders for use in
connection with the transactions contemplated hereby.
54
6.10 Financial Condition; Financial Statements. (a) On and as of
-----------------------------------------
the Restatement Effective Date on a pro forma basis after giving effect to the
--- -----
Transaction and all Indebtedness incurred, and to be incurred, and Liens created
and to be created, by each Credit Party in connection with this Credit
Agreement, (x) the sum of the assets, at a fair valuation, of the Borrower and
its Subsidiaries taken as a whole will exceed their debts, (y) the Borrower and
its Subsidiaries taken as a whole will not have incurred nor intended to, or
believe that they will, incur debts beyond their ability to pay such debts as
such debts mature and (z) the Borrower and its Subsidiaries taken as a whole do
not have unreasonably small capital with which to conduct their respective
businesses. For purposes of this Section 6.10(a), "debt" means any reasonably
expected 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 payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(b) Holding and/or the Borrower have furnished to the Lenders the
following financial statements, which have been prepared in accordance with GAAP
(except, in the case of the unaudited financial statements referred to below,
for the omission of footnotes and ordinary year end adjustments) consistently
applied throughout the periods involved: (i) the Borrower's consolidated
balance sheet as of, and statements of operations, shareholder's equity and cash
flows for the fiscal year ended March 31, 1997, audited by independent certified
public accountants, and accompanied by an unqualified opinion thereof and (ii)
an unaudited consolidated balance sheet of the Borrower as of, and unaudited
statements of operations, shareholder's equity and cash flows for the nine-month
period ending December 31, 1997. Since the date of the financial statements
referred to in clause (ii) above, nothing has occurred which would be reasonably
likely to result in a Material Adverse Effect.
6.11 Locations of Offices, Records and Inventory. The address of the
-------------------------------------------
principal place of business and chief executive office of Holding and the
Borrower as of the date hereof and as of the Restatement Effective Date is set
forth on Schedule VI. The books and records of Holding and the Borrower, and
all its chattel paper and records of Accounts, are maintained exclusively at the
locations listed on Schedule VI. As of the date hereof and as of the
Restatement Effective Date, there is no jurisdiction in which the Borrower has
any chattel paper, records of Account and Inventory (except for Inventory in
transit) other than those jurisdictions identified on Schedule VI. Schedule VI
also contains a complete list of the legal names and addresses of each facility
or warehouse at which Inventory is stored as of the date hereof and as of the
Restatement Effective Date. None of the receipts received by the Borrower from
any warehouseman states that the goods covered thereby are to be delivered to
bearer or to the order of a named person other than the Borrower or its
Subsidiaries or to a named person and such named person's assigns.
6.12 Fictitious Business Names. Except as set forth in Schedule VII,
-------------------------
the Borrower has not used any corporate or fictitious name since May 4, 1990,
other than the corporate name shown on its Governing Documents.
55
6.13 Security Interests. On and after the Restatement Effective
------------------
Date, each of the Collateral Documents create, as security for the Obligations,
a valid and enforceable perfected security interest in and Lien on all of the
Collateral, superior to and prior to the rights of all third persons and subject
to no other Liens, other than (i) Permitted Liens to the extent permitted to
encumber the Collateral and (ii) as otherwise permitted under the Collateral
Documents. At all times on or after the Restatement Effective Date, the
respective grantor under each Collateral Document shall have good and marketable
title to all the Collateral subject thereto free and clear of all Liens other
than Liens permitted under Section 8.2. No filings or recordings are required in
order to perfect the security interests created under any Collateral Document
except for filings or recordings required in connection with any such Collateral
Document.
6.14 Tax Returns and Payments. Holding, the Borrower and each of the
------------------------
Borrower's Subsidiaries has timely filed or caused to be timely filed with the
appropriate taxing authority, all federal returns and all other material
returns, domestic and foreign statements, forms and reports for taxes required
to be filed by or with respect to the income, properties or operations of
Holding, the Borrower and/or any of the Borrower's Subsidiaries. Such returns
accurately reflect all liability for taxes of Holding, the Borrower and the
Borrower's Subsidiaries for the periods covered thereby. Holding, the Borrower
and each of the Borrower's Subsidiaries has paid all material taxes payable by
it other than taxes which are not established, 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 provided in Schedule
VIII, there is no material action, suit, proceeding, investigation, audit, or
claim now pending or, to the knowledge of Holding or the Borrower, threatened by
any authority regarding any taxes relating to Holding, the Borrower or any of
the Borrower's Subsidiaries. Except as provided in Schedule VIII, as of the
Restatement Effective Date, neither Holding, the Borrower nor any of the
Borrower's 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 Holding, the
Borrower or any of the Borrower's Subsidiaries, or is aware of any circumstances
that would cause the taxable years or other taxable periods of Holding, the
Borrower or any of the Borrower's Subsidiaries not to be subject to the normally
applicable statute of limitations. None of Holding, the Borrower or any of the
Borrower's Subsidiaries have provided, with respect to themselves or property
held by them, any consent under Section 341 of the Code. Neither Holding, the
Borrower nor any of the Borrower's Subsidiaries has incurred, or will incur, any
material tax liability with respect to the Transaction and the other
transactions contemplated hereby.
6.15 Compliance with ERISA. Except to the extent that all events and
---------------------
obligations described in the following clauses of this Section 6.15 and then in
existence would not, in the aggregate, be reasonably likely to have a Material
Adverse Effect; each Plan is in substantial compliance with ERISA and the Code;
no Reportable Event has occurred with respect to a Plan (other than a
Multiemployer Plan); no Multiemployer Plan is insolvent (as defined in Section
4245 of ERISA) or in reorganization (as defined in Section 4241 of ERISA); no
Plan (other than a Multiemployer Plan) has an Unfunded Current Liability; no
Plan (other than a Multiemployer Plan) has an accumulated or waived funding
deficiency or has applied for an extension of any amortization period within the
meaning of Section 412 of the Code or Section 302 of ERISA; neither Holding nor
any Subsidiary nor any ERISA Affiliate has incurred any liability which as of
56
the date hereof has not been fully satisfied, to or on account of a Plan
pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section 4971 or 4975 of the Code or expects to incur any
liability under any of the foregoing Sections with respect to any Plan; no
proceedings have been instituted to terminate any Plan; no condition exists
which presents a material risk to Holding or any Subsidiary or any ERISA
Affiliate of incurring a liability to or on account of a Plan pursuant to the
foregoing provisions of ERISA and the Code; no lien imposed under the Code or
ERISA on the assets of Holding or any Subsidiary or any ERISA Affiliate exists
or, to the knowledge of Holding or any Subsidiary is likely to arise on account
of any Plan; and Holding and its Subsidiaries do not maintain or contribute to
any employee welfare benefit plan (as defined in Section 3(1) of ERISA) (other
than such an employee welfare benefit plan which is a "multiemployer plan"
within the meaning of Section 414(f) of the Code) 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. With respect to Plans that are Multiemployer
Plans the representations and warranties in this Section 6.15, other than any
made with respect to liability under Section 4201 or 4204 of ERISA, are made to
the knowledge of the Borrower.
6.16 Subsidiaries. Schedule IX hereto lists each Subsidiary of the
------------
Borrower, and the direct and indirect ownership interest of the Borrower
therein, in each case existing on the Restatement Effective Date. All
Subsidiaries of the Borrower are Wholly-Owned Subsidiaries. Holding is the
record and beneficial owner of all of the capital stock of the Borrower.
6.17 Patents, etc. Holding and each of its Subsidiaries have
-------------
obtained all material patents, trademarks, servicemarks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions, that
are necessary for the operation of their respective businesses as presently
conducted and as proposed to be conducted.
6.18 Compliance with Statutes, etc. (a) Holding, the Borrower and
------------------------------
each of the Borrower's Subsidiaries is 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 its
business and the ownership of its property, except such noncompliances as are
not likely to, in the aggregate, have a Material Adverse Effect.
(b) Except as set forth in the Offering Memorandum or Schedule IV,
Holding, the Borrower and each of the Borrower's Subsidiaries is in compliance
with all applicable Environmental Laws governing its business for which failure
to comply is likely to have a Material Adverse Effect, and neither Holding, the
Borrower nor any of the Borrower's Subsidiaries is liable for any material
penalties, fines or forfeitures for failure to comply with any of the foregoing
in the manner set forth above. All licenses, permits, registrations or
approvals required for the business of Holding, the Borrower and each of the
Borrower's Subsidiaries, as conducted as of the Restatement Effective Date,
under any Environmental Law have been secured and Holding, the Borrower and each
of the Borrower's Subsidiaries is in material compliance therewith, except such
licenses, permits, registrations or approvals the failure to secure or to comply
therewith is not likely to have a Material Adverse Effect. Neither Holding, the
Borrower nor any of the Borrower's Subsidiaries is in any respect in
noncompliance with, breach of or default under any
57
applicable writ, order, judgment, injunction, or decree to which Holding, the
Borrower or such Subsidiary is a party or which would affect the ability of
Holding, the Borrower or such Subsidiary to operate its business or other Real
Property and no event has occurred and is continuing which, with the passage of
time or the giving of notice or both, would constitute noncompliance, breach of
or default thereunder, except in each such case, such noncompliances, breaches
or defaults as are not likely to, in the aggregate, have a Material Adverse
Effect. Except as set forth in the Offering Memorandum delivered to the Agent,
there are as of the Restatement Effective Date no Environmental Claims pending
or, to the best knowledge of the Borrower, threatened, which (a) question the
validity, term or entitlement of Holding, the Borrower or any of the Borrower's
Subsidiaries for any permit, license, order or registration required for the
operation of any facility which Holding, the Borrower or any of the Borrower's
Subsidiaries currently operates and (b) wherein an unfavorable decision, ruling
or finding would be reasonably likely to have a Material Adverse Effect. There
are no facts, circumstances, conditions or occurrences on any Real Property of
Holding, the Borrower or any of the Borrower's Subsidiaries or on any property
adjoining or adjacent to any such Real Property, that are reasonably expected
(i) to form the basis of an Environmental Claim against Holding, the Borrower
any of the Borrower's Subsidiaries or any Real Property of Holding, the Borrower
or any of the Borrower's Subsidiaries, or (ii) to cause such Real Property to be
subject to any restrictions on the ownership, occupancy, use or transferability
of such Real Property under any Environmental Law, except in each such case,
such Environmental Claims or restrictions that individually or in the aggregate
are not likely to have a Material Adverse Effect.
(c) Except as set forth in the Offering Memorandum delivered to the
Agent prior to the date hereof, Hazardous Materials have not at any time been
(i) generated, used, treated or stored on, or transported to or from, by
Holding, the Borrower or any of the Borrower's Subsidiaries, any Real Property
of Holding, the Borrower or any of the Borrower's Subsidiaries, except Hazardous
Materials generated, used, treated or stored on, or transported to or from, any
Real Property of Holding, the Borrower or any of the Borrower's Subsidiaries in
the ordinary course of business and in compliance with Environmental Laws
("Permitted Materials") or (ii) released or disposed of (not including the sale
of inventory) on any such Real Property, in each case where such occurrence or
event is likely to have a Material Adverse Effect.
6.19 Properties. Holding and each of its Subsidiaries has good title
----------
to all material properties owned by it free and clear of all Liens, other than
as permitted by Section 8.2. Schedule X contains a true and complete list of
each Real Property owned, if any, and each Real Property leased by the Borrower
on the Restatement Effective Date and the type of interest therein held by the
Borrower.
6.20 Labor Relations; Collective Bargaining Agreements. (a) Set
-------------------------------------------------
forth on Schedule XI hereto is a list (including dates of termination) of all
collective bargaining or similar agreements between or applicable to the
Borrower or any of its Subsidiaries and any union, labor organization or other
bargaining agent in respect of the employees of the Borrower and/or any of its
Subsidiaries on the Restatement Effective Date.
(b) Neither the Borrower nor any of its Subsidiaries is engaged in
any unfair labor practice that is likely to have a Material Adverse Effect.
There is (i) no significant unfair labor
58
practice complaint pending against Holding, the Borrower or any of the
Borrower's Subsidiaries or, to the best knowledge of the Borrower, threatened
against any of them, before the National Labor Relations Board, and no
significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is pending on the Restatement
Effective Date against Holding, the Borrower or any of the Borrower's
Subsidiaries or, to the best knowledge of the Borrower, threatened against any
of them, (ii) no significant strike, labor dispute, slowdown or stoppage is
pending against Holding, the Borrower or any of the Borrower's Subsidiaries or,
to the best knowledge of the Borrower, threatened against Holding, the Borrower
or any of the Borrower's Subsidiaries, except (with respect to any matter
specified in clause (i) and (ii) above, either individually or in the aggregate)
such as is not reasonably likely to have a Material Adverse Effect.
6.21 Restrictions on Subsidiaries. Except for restrictions contained
----------------------------
in the Credit Documents, the New Senior Note Documents, the Special Term Loan
Agreement and in agreements with respect to the Existing Indebtedness, as of the
Restatement Effective Date there are no contractual or consensual restrictions
on the Borrower or any of its Subsidiaries which prohibit or otherwise restrict
(i) the transfer of cash or other assets (x) between the Borrower and any of its
Subsidiaries or (y) between any Subsidiaries of the Borrower or (ii) the ability
of the Borrower or any of its Subsidiaries to grant security interests to the
Lenders in the Collateral.
6.22 Conduct of Business. Prior to the Restatement Effective Date,
-------------------
Holding has not conducted any other business other than those associated with
its status as a holding company of all the outstanding capital stock of the
Borrower and its obligations under the Holding Management Agreement.
6.23 Status of Accounts. Each Account is based on an actual and bona
------------------
fide sale and delivery of goods or rendition of services to customers, made by
the Borrower in the ordinary course of its business; the goods and inventory
being sold and the Accounts created are its exclusive property and are not and
shall not be subject to any Lien, consignment arrangement, encumbrance, security
interest or financing statement whatsoever other than the Liens created pursuant
to the Collateral Documents and Permitted Liens, and, except as otherwise
reported or reserved against on the Borrower's or its Subsidiaries books and
records, the Borrower's customers have accepted the goods or services, owe and
are obligated to pay the full amounts stated in the invoices according to their
terms, without any dispute, offset, defense, or counterclaim.
6.24 Material Contracts. Neither the Borrower nor any of its
------------------
Subsidiaries is in breach of or in default under any Material Contract.
ARTICLE 7.
Affirmative Covenants
---------------------
Holding and the Borrower hereby covenant and agree that on the
Restatement Effective Date and thereafter, for so long as this Credit Agreement
is in effect and until the Total Commitments have terminated, no Letters of
Credit or Revolving Notes are outstanding and the
59
Revolving Loans and Letter of Credit Obligations, together with interest, Fees,
Expenses and all other Obligations (other than any indemnities described in
Section 11.8 hereof which are not then due and payable) incurred hereunder, are
paid in full:
7.1 Financial Information. The Borrower shall (and Holding shall,
---------------------
with respect to the financial statements referred to in clause (a)(i) below)
furnish to the Lenders the following information within the following time
periods:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, (i) audited consolidated balance
sheets, statements of operations, statements of cash flows and statements
of changes in shareholder's equity of Holding as of the close of such
fiscal year, (ii) audited Financial Statements as of the close of the
fiscal year and for the fiscal year, together with a comparison to the
Financial Statements for the prior year, in each case accompanied by (A)
report thereon of the Auditors unqualified as to scope, which report shall
state that such consolidated financial statements fairly present the
consolidated financial position of the Borrower and its consolidated
Subsidiaries as at the date indicated and the results of their operations
and cash flow for the periods indicated in conformity with GAAP (except as
otherwise stated therein) and that the examination by the Auditors has been
made in accordance with generally accepted auditing standards, (B) such
Auditors' "Management Letter" to Holding and/or the Borrower, (C) a written
statement signed by the Auditors stating that in the course of the regular
audit of the business of Holding and of the Borrower, which audit was
conducted by the Auditors in accordance with generally accepted auditing
standards, the Auditors have not obtained any knowledge of the existence of
any Default or Event of Default under any provision of Sections 8.4, 8.9
and 8.10 of this Credit Agreement, or, if such Auditors shall have obtained
from such examination any such knowledge, they shall disclose in such
written statement the existence of the Default or Event of Default and the
nature thereof, it being understood that such Auditors shall not be
required hereunder to perform any special audit procedures and shall have
no liability, directly or indirectly, to anyone for failure to obtain
knowledge of any such Default or Event of Default and (iii) a compliance
certificate substantially in the form of Exhibit M along with a schedule in
form satisfactory to the Agent of the calculations used in determining, as
of the end of such fiscal year, whether the Borrower was in compliance with
the covenants set forth in Articles 7 and 8 of this Credit Agreement for
such year. To the extent that the Borrower's annual report on Form 10-K
contains any of the foregoing items, the Lenders will accept the Borrower's
Form 10-K in lieu of such items;
(b) as soon as available and in any event within 45 days after the
end of each fiscal quarter of the Borrower (except the last fiscal quarter
of any fiscal year) (i) Financial Statements as at the end of such period
and for the fiscal year to date, together with a comparison to the
Financial Statements for the same periods in the prior year, all in
reasonable detail and duly certified (subject to the addition of footnotes
and audit and normal year-end adjustments) by the chief executive officer
or chief financial officer of the Borrower as having been prepared
substantially in accordance with GAAP and (ii) a compliance certificate
substantially in the form of Exhibit M along with a schedule in form
satisfactory to the Agent of the calculations used in determining, as of
the end of such
60
fiscal quarter, whether the Borrower was in compliance with the covenants
set forth in Articles 7 and 8 of this Credit Agreement for such quarter. To
the extent that the Borrower's quarterly report on Form 10-Q contains any
of the foregoing items, the Lenders will accept the Borrower's Form 10-Q in
lieu of such items;
(c) as soon as available and in any event within 30 days after the
end of each month (except the last month of any fiscal quarter, with
respect to which such reports shall be delivered within 45 days after the
end of the month (other than the last quarter of the fiscal year with
respect to which such reports shall be delivered within 90 days after the
end of the month)), a consolidated and consolidating balance sheet for the
Borrower as at the end of such month and for the fiscal year to date and
consolidated statements of operations and cash flows for such month and for
the fiscal year to date, together with a comparison to the balance sheet,
statement of operations and statement of cash flows for the same periods in
the prior year, all in reasonable detail and duly certified (subject to the
addition of footnotes and audit and normal year-end adjustments) by the
chief executive officer or chief financial officer of the Borrower as
having been prepared substantially in accordance with GAAP;
(d) not later than 45 days after the end of each fiscal year
commencing with the fiscal year ending March 31, 1999, monthly projections
of the financial condition and results of operations of the Borrower and
its Subsidiaries for the following fiscal year and annual projections for
each subsequent fiscal year through and including the fiscal year in which
the Expiration Date occurs, including, but not limited to, a projected
consolidated balance sheet and statement of operations, for such fiscal
years;
(e) upon request by the Agent or at any time a Default or Event of
Default shall exist and in any event either (i) if the Total Availability
is equal to or less than $30,000,000, not later than 12:00 Noon Los Angeles
time on the third Business Day of each week, and within 12 Business Days
after the last Business Day of each month, a Borrowing Base certificate,
substantially in the form of Exhibit N (the "Borrowing Base Certificate"),
duly completed, as of the Friday of the immediately preceding week and as
of the last day of such month, as applicable (or such other date as the
Agent may specify in such request) or (ii) if the Total Availability is
more than $30,000,000, within five Business Days after the end of each
month, a draft of, and within 12 Business Days after the end of each month,
a final version of, the Borrowing Base Certificate, duly completed, as of
the last day of such immediately preceding month (or such other date as the
Agent may specify in such request). In any event, such Borrowing Base
Certificate shall be certified by the Borrower's chief executive officer,
chief financial officer, treasurer or controller and be subject only to
adjustment upon completion of the normal year-end audit and confirmation
based upon cycle counting verification. In addition, each Borrowing Base
Certificate shall have attached to it such additional schedules and/or
other information, including monthly aging reports, as the Agent may
reasonably request;
(f) promptly and in any event within five Business Days after
becoming aware of the occurrence of a Default or Event of Default, a
certificate of the chief executive officer
61
or chief financial officer of the Borrower specifying the nature thereof
and the Borrower's proposed response thereto, each in reasonable detail;
(g) within 30 days after the end of each month (except the last month
of any fiscal quarter, with respect to which such reports shall be
delivered within 45 days after the end of the month (other than the last
quarter of the fiscal year with respect to which such reports shall be
delivered within 90 days after the end of the month)), a comparison of
actual results of operations, cash flow and capital expenditures for the
Borrower and the Borrower's Subsidiaries for such month and for the period
from the beginning of the current fiscal year through the end of such month
(i) with amounts projected for such month and for the period from the
beginning of the current fiscal year through the end of such month pursuant
to Section 7.1(d) above and (ii) with actual results of operations, cash
flow and capital expenditures for the Borrower and the Borrower's
Subsidiaries for the same periods of the prior fiscal year;
(h) promptly upon the earlier of the mailing or filing thereof,
copies of all ▇▇-▇▇, ▇▇-▇▇, ▇-▇▇, proxy statements, annual reports,
quarterly reports, registration statements and any other filings or other
communications made by the Borrower or Holding to holders of its publicly
traded securities or the Securities Exchange Commission from time to time
pursuant to the Securities Exchange Act of 1934, as amended, or the
Securities Act of 1933, as amended;
(i) promptly and in any event after becoming aware of the occurrence
of any of the following events:
(i) any Material Contract of the Borrower or any of its
Subsidiaries is terminated or amended or any new Material Contract is
entered into which is reasonably likely to have an adverse effect on
the Lenders (in which event the Borrower shall provide the Agent with
a copy of such Material Contract); or
(ii) any of the material terms (other than price) upon which
material suppliers of the Borrower or any of its Subsidiaries do
business with the Borrower or such Subsidiary are changed or amended
the results of which are reasonably likely to have an adverse effect
on the Lenders; or
(iii) any order, judgment or decree in excess of $2,000,000
(after reasonably expected insurance and indemnity recovery) shall
have been entered against Holding, the Borrower or any of its
Subsidiaries or any of their respective properties or assets; or
(iv) any notification of violation of any Requirement of Law
shall have been received by Holding, the Borrower or any of its
Subsidiaries from any Governmental Authority the results of which are
likely to have a Material Adverse Effect; and
62
(j) from time to time, such further information, including customer
address list, regarding the Collateral, business affairs and financial
condition of Holding, the Borrower and/or each of the Borrower's
Subsidiaries as the Agent may reasonably request.
7.2 Inventory. Upon the request of the Agent from time to time, the
---------
Borrower shall provide to the Agent written statements listing items of
Inventory in reasonable detail as requested by the Agent. The Borrower shall
make available when complete the results of any physical inventory count or
reconciliation of perpetual inventory to the general ledger.
7.3 Corporate Franchises. The Borrower will, and will cause each of
--------------------
its Subsidiaries to, do or cause to be done, all things necessary to preserve
and keep in full force and effect its existence, material rights and authority
to do business, provided that any transaction permitted by Section 8.1 will not
constitute a breach of this Section 7.3, and provided further that the Borrower
shall not be required to preserve, with respect to itself, any material right or
authority to do business and with respect to any of its Subsidiaries, any such
existence, material right or authority to do business if the Borrower shall
reasonably determine that such preservation is no longer desirable in the
ordinary course of business, and the loss thereof shall not be reasonably likely
to have a Material Adverse Effect.
7.4 Compliance with Statutes, etc. (a) Holding and the Borrower
------------------------------
will, and will cause each of the Borrower's 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 (including applicable
Environmental Laws) other than those the non-compliance with which (individually
or in the aggregate) would not have a Material Adverse Effect. Neither Holding
nor any of 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 of its Real Property, or transport or permit the
transportation of Hazardous Materials to or from any such Real Property, except
for quantities used or stored at such Real Properties in material compliance
with all applicable Environmental Laws and required in connection with the
normal operation, use and maintenance of such Real Property or the operation of
the business of the Borrower and its Subsidiaries. If required to do so under
any applicable Environmental Law, the Borrower agrees to undertake, and agrees
to cause each of its Subsidiaries to undertake, any cleanup, removal, remedial
or other action necessary to remove and clean up any Hazardous Materials from
any Real Property in accordance with the requirements of all such applicable
Environmental Laws and in accordance with orders and directives of all
governmental authorities; provided that neither Holding nor any of its
--------
Subsidiaries shall be required to take any such action where same is being
contested by appropriate legal proceedings in good faith by Holding or such
Subsidiary.
(b) At the request of the Agent or the Required Lenders at any time
and from time to time, but in any event no more frequently than once a year, the
Borrower will provide, at the Borrower's sole cost and expense, an environmental
site assessment report concerning any Real Property of the Borrower or any
Subsidiary, prepared by an environmental consulting firm reasonably acceptable
to the Agent, indicating the presence or release of Hazardous Materials and the
potential cost of any removal or remedial action in connection with any
Hazardous Materials on such Real Property; provided, however, no such request
-------- -------
may be made unless the Agent or the
63
Required Lenders reasonably believe that (i) the Borrower or any of its
Subsidiaries is in material noncompliance with any Environmental Law with
respect to such Real Property and such noncompliance is reasonably likely to
result in a liability of the Borrower in excess of $5,000,000 (after expected
insurance and indemnity recovery) or (ii) an Event of Default is in existence.
If the Borrower fails to provide the same after sixty (60) days' written notice,
the Agent may order the same, and the Borrower shall grant and hereby grants to
the Agent and the Lenders and their agents access to such Real Property at all
reasonable times and without unreasonably interfering with the Borrower's
operations and specifically grants the Agent and the Lenders an irrevocable
nonexclusive license, subject to the rights of tenants, to undertake such an
assessment all at the Borrower's sole expense.
7.5 ERISA. As soon as possible and, in any event, within twenty (20)
-----
days after Holding, the Borrower or any of the Borrower's Subsidiaries or any
ERISA Affiliate knows or has reason to know of the occurrence of any of the
following events relating to a Plan, the Borrower will deliver to each of the
Lenders a certificate of the chief financial officer of the Borrower setting
forth details as to such occurrence and the action, if any, that Holding, the
Borrower, such Subsidiary or such ERISA Affiliate is required or proposes to
take, together with any notices required to be given to or filed with or by
Holding, the Borrower, such Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto: that a Reportable
Event has occurred which could reasonably be expected to result in material
liability of Holding, the Borrower, any of the Borrower's Subsidiaries or any
ERISA Affiliate (except to the extent that Holding or the Borrower has
previously delivered to the Lenders a certificate and notices (if any)
concerning such event pursuant to the next clause hereof); that a contributing
sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title
IV of ERISA is subject to the advance reporting requirement of PBGC Regulation
Section 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 is reasonably expected to occur with respect to such Plan within
the following 30 days; that, with respect to a Plan which is not a Multiemployer
Plan, an accumulated funding deficiency has been incurred or an application will
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; that a Plan has been or may
be terminated (other than pursuant to Section 4041(b) of ERISA), reorganized,
partitioned or declared insolvent under Title IV of ERISA; that a Plan has an
Unfunded Current Liability giving rise to a lien under ERISA or the Code; that
proceedings have been instituted to terminate a Plan (other than pursuant to
Section 4041(b) of ERISA); that a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Plan; or that
Holding, any Subsidiary or any ERISA Affiliate will or may incur any material
liability (including any contingent or secondary liability) to or on account of
the termination of or withdrawal from a Plan under Section 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 4971
or 4975 of the Code or Section 409 or 502(i) or 502(l) of ERISA. Upon the
request of the Agent, Holding will deliver to each of the Lenders a complete
copy of the annual report (Form 5500) of each Plan required to be filed with the
Internal Revenue Service. In addition to any certificates or notices delivered
to the Lenders pursuant to the first sentence hereof, copies of any material
notices received by Holding, the Borrower, any Subsidiary of
64
Holding or the Borrower or any ERISA Affiliate with respect to any Plan shall be
delivered to the Lenders no later than 10 Business Days after the date such
records, documents and/or information have been furnished to the PBGC or such
notice has been received by Holding, the Borrower or such Subsidiary or the
ERISA Affiliate, as applicable.
7.6 Good Repair. The Borrower will, and will cause each of its
-----------
Subsidiaries to, use its best efforts to provide that its material properties
and equipment used or useful in its business in whomsoever's possession they may
be, are kept in good repair, working order and condition, normal wear and tear
excepted and, subject to Section 8.4, that from time to time there are made in
such properties and equipment all needful and proper repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto, to
the extent and in the manner customary for companies in similar businesses.
7.7 Books and Records. The Borrower agrees to maintain, and to cause
-----------------
each of its Subsidiaries to maintain, books and records pertaining to the
Collateral in such detail, form and scope as is consistent with good business
practice, and agrees that such books and records will reflect the Lenders'
interest in its Accounts. The Borrower agrees that the Collateral Agent or its
agents may enter upon the premises of Holding or any of its Subsidiaries at any
time and from time to time, during normal business hours and upon reasonable
notice under the circumstances, and at any time at all during the continuance of
an Event of Default, for the purposes of (i) inspecting the Collateral, (ii)
inspecting and/or copying (at the Borrower's expense) any and all records
pertaining thereto, (iii) discussing the affairs, finances and business of the
Borrower with any officers, employees and directors of the Borrower or with the
Auditors (it being understood that the Borrower shall be entitled to have a
representative present at any such discussions) and (iv) verifying Eligible
Account Receivable and/or Eligible Inventory. The Borrower shall give the
Collateral Agent fifteen days prior written notice of any change in the location
of any facility owned or leased by the Borrower or any of its Subsidiaries where
Collateral is located or in the location of its chief executive office or place
of business from the locations specified in Schedule VI, and to execute in
advance of such change, cause to be filed and/or delivered to the Collateral
Agent any financing statements, Collateral Access Agreements or other documents
required by the Agent, all in form and substance satisfactory to the Agent. The
Borrower agrees to advise the Agent promptly, in sufficient detail, of any
substantial change relating to the type, quantity or quality of the Collateral,
or any event (other than a change in price) which could have an adverse effect
on the value of the Collateral or on the security interests granted to the
Lenders therein. The Borrower shall, and shall cause of each of its
Subsidiaries to, adopt internal procedures and systems measures in advance of
January 1, 2000 to address the "Year 2000 Problem" as it may apply to the
Borrower and its Subsidiaries.
7.8 Collateral Records. The Borrower agrees to execute and deliver,
------------------
and to cause each of its Subsidiaries to execute and deliver, to the Collateral
Agent, from time to time, solely for the Agent's convenience in maintaining a
record of the Collateral, such written statements and schedules as the
Collateral Agent may reasonably require, including, without limitation, those
described in Section 7.1 of this Credit Agreement, designating, identifying or
describing the Collateral pledged or granted to the Lenders under the Collateral
Documents. The failure by the Borrower or any of its Subsidiaries, however, to
promptly give the Agent such statements or
65
schedules shall not affect, diminish, modify or otherwise limit the Lenders'
security interests in the Collateral.
7.9 Security Interests. The Borrower shall, and shall cause each of
------------------
its Subsidiaries to, defend the Collateral against all claims and demands of all
Persons at any time claiming the same or any interest therein. The Borrower
shall, comply with the requirements of all state and federal laws in order to
grant to the Lenders valid and perfected first priority security interests in
the Collateral, subject only to Permitted Liens. The Collateral Agent is hereby
authorized by the Borrower to file any UCC financing statements covering the
Collateral whether or not the signatures of the Borrower appear thereon. The
Borrower shall do whatever the Collateral Agent may reasonably request, from
time to time, to effect the purposes of this Credit Agreement and the other
Credit Documents, including without limitation, filing notices of liens, UCC
financing statements and amendments, renewals and continuations thereof;
cooperating with the Collateral Agent's representatives; keeping stock records;
obtaining waivers from landlords and mortgagees and from warehousemen and their
landlords and mortgagees; and, paying claims which might, if unpaid, become a
Lien on the Collateral other than a Permitted Lien.
7.10 Insurance; Casualty Loss. Schedule XII hereto sets forth a true
------------------------
and complete listing of all insurance maintained by the Borrower and each of its
Subsidiaries as of the Restatement Effective Date. The Borrower agrees to
maintain, and to cause each of its Subsidiaries to maintain, public liability
insurance, third party property damage insurance and replacement value (or such
higher coverage as the Borrower may obtain) insurance on the Collateral under
such policies of insurance, with such insurance companies and/or Insurance Sub,
in such amounts and covering such risks in at least such amounts and against at
least such risks as are described on Schedule XII, or as are at all times
satisfactory to the Agent in its commercially reasonable judgment. All policies
covering the Collateral are to name the Collateral Agent as an additional
insured and the Collateral Agent as loss payee in case of loss, as its interests
may appear, and are to contain such other provisions as the Agent may reasonably
require to fully protect the Lenders' interest in the Collateral and to any
payments to be made under such policies. The Borrower shall provide written
notice to the Agent of the occurrence of any of the following events within ten
Business Days after the occurrence of such event: any Collateral is (i) damaged
or destroyed, or suffers any other loss, or (ii) condemned, confiscated or
otherwise taken, in whole or in part, or the use thereof is otherwise diminished
so as to render impracticable or unreasonable the use of such Collateral or to
materially diminish its marketability, and in either case the amount of the
damage, destruction, loss or diminution in value is in excess of $5,000,000
(collectively, a "Casualty Loss"). The Borrower and/or the respective
Subsidiary shall diligently file and prosecute their claim or claims for any
award or payment in connection with a Casualty Loss. In the event of a Casualty
Loss, the Borrower shall pay to the Collateral Agent, promptly upon receipt
thereof, any and all net insurance proceeds and payments received by the
Borrower or any Subsidiary on account of damage, destruction, loss, condemnation
or eminent domain proceedings, whereupon the Collateral Agent shall, at the
election of the Agent, in its sole discretion, either (a) apply the proceeds
realized from Casualty Losses to payment of accrued and unpaid interest or
outstanding principal under the Revolving Loans or (b) pay such proceeds to the
Borrower to be used to repair or replace the Collateral that was the subject of
the Casualty Loss. After the occurrence and during the continuance of an Event
of Default, (i) no settlement on account of any such Casualty Loss shall be made
without the consent of the Collateral Agent and
66
(ii) the Collateral Agent may participate in any such proceedings and the
Borrower shall deliver to the Collateral Agent such documents as may be
requested by the Collateral Agent to permit such participation and shall consult
with the Collateral Agent, its attorneys and agents in the making and
prosecution of such claim or claims. The Borrower hereby irrevocably authorizes
and appoints the Collateral Agent its attorney-in-fact, after the occurrence and
continuance of an Event of Default, to collect and receive for any such award or
payment and to file and prosecute such claim or claims, which power of attorney
shall be irrevocable and shall be deemed to be coupled with an interest, and the
Borrower shall, upon demand of the Collateral Agent, make, execute and deliver
any and all assignments and other instruments sufficient for the purpose of
assigning any such award or payment to the Collateral Agent for the benefit of
the Lenders, free and clear of any encumbrances of any kind or nature
whatsoever, other than the right of the Borrower to any insurance proceeds
remaining after application thereof by the Collateral Agent as provided in this
Section 7.10.
7.11 Taxes. Holding will, and will cause each of its Subsidiaries
-----
to, pay and discharge all federal income and other material taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
profits, or upon any properties belonging to it, or payable by it pursuant to
the Tax Sharing Agreements, in each case on a timely basis, and all lawful
claims which, if unpaid, might become a Lien or charge upon any properties of
Holding or of any of its Subsidiaries; provided that neither Holding 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 (in the good faith judgment of the management
of such Person) with respect thereto in accordance with GAAP.
7.12 End of Fiscal Years; Fiscal Quarters. The Borrower will, for
------------------------------------
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on March 31 of each year and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to consist of 63 Business
Days each, except in the case of a 366 day year, in which case one fiscal
quarter may contain an additional Business Day.
7.13 Further Assurances. Holding and the Borrower shall take, and
------------------
shall cause each of the Borrower's Subsidiaries to take, all such further
actions and execute all such further documents and instruments as the Collateral
Agent may at any time reasonably determine to be necessary or desirable to
further carry out and consummate the transactions contemplated by the Credit
Documents, to cause the execution, delivery and performance of the Credit
Documents to be duly authorized and to perfect or protect the Liens (and the
priority status thereof) of the Collateral Agent on the Collateral.
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
reasonably requested by the Collateral Agent to assure itself that this Section
7.13 has been complied with.
7.14 Maintenance of Corporate Separateness. Holding and the Borrower
-------------------------------------
will, and will cause each of the Borrower's Subsidiaries to, satisfy customary
corporate formalities, including the holding of regular board of directors' and
shareholders' meetings and the maintenance of corporate offices and records.
Neither the Borrower nor any of its Subsidiaries shall make any payment to a
creditor of Holding in respect of any liability of Holding, and no bank
67
account of Holding shall be commingled with any bank account of the Borrower or
any of its Subsidiaries. Any financial statements distributed to any creditors
of Holding shall, to the extent permitted by GAAP, clearly state the corporate
separateness of Holding from the Borrower and its Subsidiaries. Finally, neither
Holding 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
Holding being ignored, or in the assets and liabilities of the Borrower or any
of its Subsidiaries being substantively consolidated with those of Holding in a
bankruptcy, reorganization or other insolvency proceeding.
7.15 Post-Closing Obligations. Notwithstanding anything to the
------------------------
contrary contained in this Agreement or the other Documents, the parties hereto
acknowledge and agree that no later than thirty (30) days after the Restatement
Effective Date, (i) the Agent shall have received full executed copies of the
Collection Agreements, (ii) the requirements set forth in Section 2.6(c) shall
have been satisfied as if the Agent had already received fully executed copies
of the Collection Agreements and (iii) the Agent shall have received an executed
copy of the payoff letter or equivalent termination document and all other
documents evidencing the termination and cancellation of the ▇▇▇▇▇▇ Documents.
ARTICLE 8.
Negative Covenants
------------------
Holding and the Borrower hereby covenant and agree that as of the
Restatement Effective Date, and thereafter, for so long as this Credit Agreement
is in effect and until the Total Commitments have terminated, no Letter of
Credit or Revolving Notes are outstanding and the Revolving Loans and Letter of
Credit Obligations, together with interest, Fees, Expenses and all other
Obligations (other than any indemnities described in Section 11.8 hereof which
are not then due and payable) incurred hereunder, are paid in full:
8.1 Consolidation, Merger, Sale or Purchase of Assets, etc. Holding
-------------------------------------------------------
and the Borrower will not, and will not permit any of the Borrower's
Subsidiaries to, wind up, liquidate or dissolve its affairs, or enter into any
transaction of merger or consolidation, sell or otherwise dispose of all or any
part of its property or assets (other than (x) inventory, obsolete equipment,
excess equipment no longer needed in the conduct of business or equipment being
replaced with other equipment, in each case in the ordinary course of business
and (y) in the case of Holding, the disposition of the capital stock of the
Borrower in accordance with the Holding Note Pledge Agreement as in effect on
the Restatement Effective Date) or purchase, lease or otherwise acquire (in one
transaction or a series of related transactions) all or any part of the property
or assets of any Person (other than (i) to replace obsolete property or assets
disposed of in compliance with this Section and (ii) purchases, leases or other
acquisitions of goods, inventory and equipment, operating leases of property, in
each case, in the ordinary course of business) or agree to do any of the
foregoing at any future time, except that the following shall also be permitted:
(a) Capital Expenditures to the extent within the limitations set
forth in Section 8.4;
68
(b) the investments, acquisitions and transfers or dispositions of
properties permitted pursuant to Section 8.5;
(c) any Subsidiary (other than Insurance Sub) of the Borrower may be
merged or consolidated with or into, or be liquidated into, the Borrower or
any other Subsidiary (other than Insurance Sub) of the Borrower (so long as
the Borrower or any other Subsidiary (other than Insurance Sub) of the
Borrower is the surviving corporation), or all or any part of the business,
properties and assets of any Subsidiary (other than Insurance Sub) may be
conveyed, leased, sold or transferred to the Borrower or any other
Subsidiary (other than Insurance Sub) of the Borrower;
(d) the Borrower and its Subsidiaries may sell or otherwise dispose
of (i) assets the net cash proceeds of which in the aggregate do not exceed
$10,000,000 (excluding the assets described in clause (ii) hereof) and (ii)
the properties listed on Schedule XIII; and
(e) the Borrower may (i) purchase the real property and plant located
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ for no more than $6,000,000 and (ii)
enter into a sale leaseback agreement with a third party for such real
property and plant on terms no less favorable than the terms of the
existing lease agreement for such real property and plant.
To the extent the Required Lenders waive the provisions of this Section 8.1 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by
this Section 8.1, such Collateral in each case shall be sold free and clear of
the Liens in favor of the Lenders created by the Collateral Documents and the
Collateral Agent shall take such actions as it deems appropriate in connection
therewith or may be reasonably requested by the Borrower to evidence such Lien
release, in each case at the Borrower's expense.
8.2 Liens. Holding will not, and will not permit any of its
-----
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to (i) the capital stock of the Borrower (other than pursuant to, and
only to the extent provided in, the Holding Note Pledge Agreement) or (ii) any
property or assets of any kind (real or personal, tangible or intangible) of the
Borrower or any of its 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 or notes with recourse to the Borrower or any of its
Subsidiaries) or assign any right to receive income, or file 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, except:
(a) Liens for taxes not yet due and payable or Liens for taxes being
contested in good faith and by appropriate proceedings for which adequate
reserves (in the good faith judgment of the management of the Borrower)
have been established;
(b) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law or which were incurred in the ordinary
course of business, such as carriers', warehousemen's and mechanics' Liens,
statutory landlord's Liens, Liens in favor of customs and revenue
authorities to secure payment of customs duties in
69
connection with the importation of goods, and other similar Liens arising
in the ordinary course of business and not overdue for a period of more
than 60 days, and (x) which, if any such property or asset is material, do
not in the aggregate materially detract from the value of such property or
assets or materially impair the use thereof in the operation of the
business of the Borrower or such 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 asset
subject to such Lien;
(c) Liens created by or pursuant to this Credit Agreement or the
other Credit Documents;
(d) Liens existing on the Restatement Effective Date and listed on
Schedule XIV hereto without giving effect to any subsequent extensions,
renewals or replacements thereof;
(e) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business (x) in connection with liability
insurance, workers' compensation, unemployment insurance and other types of
social security, or (y) to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
incurred in the ordinary course of business, in an aggregate amount (in the
case of this clause (y) not to exceed $7,500,000) (exclusive of obligations
(i) in respect of borrowed money or (ii) in respect of which a Letter of
Credit has been issued);
(f) leases or subleases granted to third Persons not interfering with
the ordinary course of business of Borrower or any of its Subsidiaries;
(g) Capital Leases to the extent permitted under Section 8.3(b);
(h) Liens (x) arising pursuant to purchase money mortgages securing
Indebtedness representing the purchase price (or financing of the purchase
price within 180 days after the respective purchase) of property or other
assets acquired by the Borrower, provided that (i) any such Liens attach
--------
only to the assets so purchased, (ii) the Indebtedness secured by any such
Lien does not exceed 100% of the purchase price of the assets being
purchased and (iii) the Indebtedness secured thereby or any refinancing
thereof is permitted by Section 8.3(b); or (y) existing on specific
tangible assets at the time acquired by the Borrower or on assets of a
Person at the time such Person first becomes a Subsidiary; provided that
--------
(i) any such Liens were not created at the time of or in contemplation of
the acquisition of such assets or Person by the Borrower, (ii) in the case
of any such acquisition of a Person, any such Lien attaches only to
specific tangible assets of such Person and not assets of such Person
generally and (iii) the Indebtedness secured thereby or any refinancing
thereof is permitted by Section 8.3(b);
(i) any attachment or judgment Lien arising from a judgment not
giving rise to a Default or an Event of Default so long as such Lien, if
encumbering Collateral, has not attached to such Collateral for more than
45 days;
70
(j) easements, rights-of-way, restrictions and other similar charges
or encumbrances not interfering in any material respect with the business
of the Borrower and its Subsidiaries;
(k) title defects or irregularities that do not in the aggregate
materially impair the use of such properties by the Borrower or its
Subsidiaries;
(l) Liens on Life Insurance Policies incurred in connection with the
Life Insurance Policy Loans permitted under Section 8.3(h);
(m) Liens on the property or assets of Subsidiaries of the Borrower
incorporated outside of the United States to secure Indebtedness of such
Subsidiaries permitted under Section 8.3(l);
(n) Liens created under ERISA and under Environmental Laws that are
being contested in good faith and as to which adequate reserves have been
established to the extent required by GAAP and secure obligations not in
excess of $5,000,000 in the aggregate;
(o) Liens created by or pursuant to the Special Term Loan Agreement
or other documents executed in connection therewith; and
(p) Liens on the funds deposited on the Restatement Effective Date
with the trustee under the Senior Note Indenture (such funds not to exceed
approximately $162,500,000 plus earnings thereon) for the purpose of
defeasing or redeeming all Senior Notes on or prior to April 23, 1998;
(q) until April 1, 1998, Liens granted to secure Indebtedness under
the ▇▇▇▇▇▇ Documents;
(r) Liens not encumbering Collateral other than those described in
the preceding clauses (a) through (o) with respect to obligations not in
excess of $5,000,000 in the aggregate.
8.3 Indebtedness. Holding will not, and will not permit any of its
------------
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Credit Agreement and the
other Credit Documents;
(b) Capitalized Lease Obligations and Indebtedness of the Borrower
secured by Liens permitted by Section 8.2(h) in an aggregate amount not to
exceed $12,500,000 at any time outstanding;
(c) Existing Indebtedness;
71
(d) Indebtedness of the Borrower evidenced by the New Senior Notes in
aggregate principal amount of approximately $105,000,000, provided that
--------
such amount of Indebtedness and the amount of Indebtedness incurred
pursuant to the Special Term Loan Agreement do not exceed $225,000,000 in
the aggregate;
(e) Indebtedness of Holding evidenced by the Holding Note (and any
Holding PIK Notes);
(f) Indebtedness of the Borrower incurred pursuant to the Special
Term Loan Agreement, provided that such amount of Indebtedness and the
--------
amount of Indebtedness incurred pursuant to the New Senior Notes do not
exceed $225,000,000 in the aggregate.
(g) Indebtedness of the Borrower or any of its Wholly-Owned
Subsidiaries owing to the Borrower or any of its Wholly-Owned Subsidiaries,
in each case to the extent making such loan was permitted in Section 8.5;
(h) Indebtedness of the Borrower in connection with any Life
Insurance Policy Loans so long as such Indebtedness is limited to the cash
-- ---- --
surrender value of such Life Insurance Policies and is without recourse to
Holding, the Borrower or any Subsidiary of the Borrower or any of their
assets other than such insurance policies;
(i) Indebtedness of the Borrower or any of its Subsidiaries evidenced
by guarantees, performance bonds and surety bonds incurred in the ordinary
course of business for purposes of insuring the performance of the Borrower
or such Subsidiary in an aggregate principal amount not to exceed
$7,500,000 at any time;
(j) Indebtedness of Subsidiaries of the Borrower arising out of loans
made by the Borrower to such Subsidiary and permitted by Section 8.5;
(k) drafts payable for payroll and ordinary expense items;
(l) Indebtedness of those of the Borrower's Subsidiaries organized
under the laws of a nation other than the United States, in an aggregate
principal amount not to exceed $8,500,000 at any time outstanding so long
as such Indebtedness is without recourse to the Borrower or any of its
assets
(m) Indebtedness under Interest Rate Agreements relating to the
Obligations and the "Obligations" defined in the Special Term Loan
Agreement, provided that (i) such Interest Rate Agreements entered into by
--------
the Borrower are on terms and conditions satisfactory to the Agent and (ii)
the outstanding exposure in connection therewith shall not exceed
$8,000,000.
(n) Indebtedness of the Borrower or any of its Subsidiaries, in
addition to other Indebtedness permitted under clauses (a) through (m)
above, in an aggregate principal amount not to exceed $10,000,000 at any
time outstanding.
72
8.4 Capital Expenditures. Holding will not, and will not permit any
--------------------
of its Subsidiaries to, incur Capital Expenditures except Capital Expenditures
made in compliance with this Section 8.4. Capital Expenditures shall be
permitted to be made by the Borrower (a) with the proceeds of insurance or any
condemnation award to restore or replace capital assets in accordance with
Section 7.10 plus (b) with respect to each period listed below, in an aggregate
amount not in excess of the corresponding amount set forth below opposite such
period (it being understood and agreed that the purchase price of the real
property and plant referred to in Section 8.1(e) will be excluded from the
calculation of Capital Expenditures to the extent that the sale leaseback
transaction with respect to such property and plant as described in Section
8.1(e) has been consummated prior to March 31, 1999):
Period Amount
------ ------
Fiscal year beginning April 1, 1997 and ending $12,000,000
March 31, 1998
Fiscal year beginning April 1, 1998 and ending $12,000,000
March 31, 1999
Fiscal year beginning April 1, 1999 and ending $12,000,000
March 31, 2000
Fiscal year beginning April 1, 2000 and ending $14,000,000
March 31, 2001
Fiscal year beginning April 1, 2001 and ending $14,000,000
March 31, 2002
Fiscal year beginning April 1, 2002 and ending $14,000,000
March 31, 2003
Fiscal year beginning April 1, 2003 and thereafter $14,000,000
provided, however, that to the extent the maximum amount of Capital Expenditures
-------- -------
permitted to be made in any period listed above pursuant to this clause (b),
without giving effect to this proviso, exceeds the aggregate amount actually
made during such period (the excess), Capital Expenditures may be made only in
the immediately subsequent period in an amount equal to such Capital
Expenditures plus such excess.
8.5 Investments. Holding will not, and will not permit any of its
-----------
Subsidiaries to, 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 (collectively, "Investments")
any other Person, except:
(a) the Borrower or any of its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or
73
dischargeable in accordance with the customary trade terms of the Borrower
or its applicable Subsidiary, as the case may be;
(b) loans and advances to employees, officers and directors in the
ordinary course of business in an aggregate principal amount not to exceed
$3,000,000 at any time outstanding shall be permitted;
(c) Investments existing on the Restatement Effective Date and listed
on Schedule XV hereto, without giving effect to any additions thereto or
replacements thereof shall be permitted;
(d) the Borrower may make Investments in its Subsidiaries so long as
the aggregate amount of all Investments outstanding at any time permitted under
this clause (d) shall not exceed $4,000,000;
(e) any Investment by any Subsidiary (other than Insurance Sub) of
the Borrower in the Borrower (so long as any loan made by a Subsidiary of the
Borrower to the Borrower is subordinated to the Obligations on terms
satisfactory to the Agent) or in another Subsidiary of the Borrower in an
aggregate principal amount for all Investments permitted by this clause (e) not
to exceed $4,000,000 at any time outstanding shall be permitted;
(f) Subject to Section 8.15, Investments in Cash Equivalents shall be
permitted;
(g) Investments by the Borrower and/its Subsidiaries permitted under
Section 8.1 and Capital Expenditures permitted under Section 8.4 shall be
permitted;
(h) Investments received in connection with the bona fide settlement
of debts created in the ordinary course of business shall be permitted;
(i) Contributions by Holding to the ESOP;
(j) Contributions to the ESOP by the Borrower and/or its Subsidiaries
to the extent permitted by Section 8.7;
(k) the Borrower may make capital contributions to Insurance Sub in
an aggregate amount not to exceed $1,000,000;
(l) any Investments in accordance with any Rabbi Trust of the
Borrower in effect on January 1, 1997 that is for the benefit of the
Borrower's 401(a)(17) Supplemental Compensation Plan and deferred
compensation plans; and
(m) any Investments in addition to those contemplated by the
foregoing clauses (a) through (l), provided that all Investments made
--------
pursuant to this clause (m) shall be permitted by the New Senior Notes and
the Special Term Loan Agreement and shall not exceed $10,000,000 at any
time outstanding.
74
8.6 Dividends, etc. The Borrower will not, and will not permit any
---------------
of its Subsidiaries to, declare or pay any dividends (other than dividends
payable solely in capital stock of the Borrower) or return any capital to,
its stockholders or authorize or make any other distribution, payment or
delivery of property or cash to its stockholders as such, or redeem,
retire, purchase or otherwise acquire, directly or indirectly, for a
consideration (other than consideration in the form of capital stock of the
Borrower), any shares of any class of its capital stock now or hereafter
outstanding (or any warrants for or options or stock appreciation rights in
respect of any of such shares), or set aside any funds for any of the
foregoing purposes and the Borrower will not permit any of its Subsidiaries
to purchase or otherwise acquire for consideration any shares of any class
of the capital stock of Holding or the Borrower now or hereafter
outstanding (or any warrants for or options or stock appreciation rights
issued by such Person in respect of any such shares) (all of the foregoing
"Dividends"), except that:
(a) any Subsidiary of the Borrower may pay dividends to the Borrower;
and
(b) the Borrower may pay cash Dividends to Holding in an amount
necessary and to the extent immediately used by Holding to (i) pay accrued
fees and expenses arising from the Transaction and/or ongoing reporting and
related requirements, (ii) pay taxes payable by Holding (whether for itself
alone or for itself and its Subsidiaries), in each case to the extent then
due and payable and to the extent not otherwise paid by the Borrower
pursuant to the Tax Sharing Agreement, (iii) repurchase shares of capital
stock of Holding as required pursuant to the ESOP or pursuant to the
Shareholders' Agreement, provided that the repurchase price therefor is
--------
available to the Borrower from the net proceeds of any benefits paid
pursuant to the terms of any life insurance policies covering certain
participants in the ESOP and certain other executives of Holding and the
Borrower, (iv) so long as no Default or Event of Default then exists, (A)
pay the repurchase price payable to any officer or employee (or their
estates) of Holding, the Borrower or any of its Subsidiaries upon death,
disability or termination of employment of such officers and employees to
the extent provided by the terms of any Shareholders' Agreement (including
any extension thereof) as in effect on the date of this Credit Agreement,
provided, however, that the aggregate amount of all such repurchases in any
-------- -------
fiscal year of the Borrower shall not exceed $5,000,000, (B) pay amounts to
repurchase shares of its capital stock from participants who were
distributed such shares from, and as required under, the ESOP and (C) make
current payments of interest on the Holding Notes or pay principal in
respect of Holding Notes issued in lieu of interest, so long as (x) the
----------
Fixed Charge Coverage Ratio calculated for any period of four consecutive
fiscal quarters (or, if shorter, the period beginning on April 1, 1998 and
ending on the last day of the last fiscal quarter then ended) in each case
taken as one accounting period shall exceed 2:1 and (y) the Borrower would
be permitted to make a Restricted Payment under, and as defined in, the New
Senior Note Indenture in the amount of such Dividend, provided that the
--------
amount of any Dividend paid pursuant to this clause (b)(iv)(C) shall not
exceed the Available Amount in effect immediately prior to the payment of
such Dividend.
8.7 Transactions with Affiliates. The Borrower will not, and will
----------------------------
not permit any of its Subsidiaries to, enter into any transaction or series of
transactions involving payments or
75
property with a value in excess of $100,000, whether or not in the ordinary
course of business, with any Affiliate other than (i) Permitted Transactions,
(ii) Investments permitted under Section 8.5, (iii) Dividends permitted under
Section 8.6, (iv) fees and expenses set forth in Schedule XVI, (v) amounts
payable under the contractual agreements listed in Schedule XVI, as in effect as
of the date of this Credit Agreement, copies of which have been delivered to the
Agent, (vi) cash contributions by the Borrower and its Subsidiaries to the ESOP
in an amount not to exceed 10% of their aggregate cash compensation to employees
during any fiscal year plus any amounts reinvested by the ESOP in capital stock
of Holding and contributed to the Borrower, and (vii) any other transaction or
series of transactions the terms and conditions of which are substantially as
favorable (or more favorable) to the Borrower or such Subsidiary as would be
obtainable by the Borrower or such Subsidiary at the time in a comparable arm's-
length transaction with a Person other than an Affiliate, and for transactions
involving aggregate payments in excess of $3,000,000, the Borrower delivers to
the Agent a resolution of the Board of Directors of the Borrower (including all,
if any, of the disinterested directors) to the effect that the terms of such
transactions are fair and reasonable to the Borrower.
8.8 Changes in Business. (a) Except as otherwise permitted by
-------------------
Sections 7.3 and 8.1 and clause (c) of this Section 8.8, the Borrower will not
alter the character of the business of the Borrower and its Subsidiaries from
that conducted by the Borrower and its Subsidiaries on the Restatement Effective
Date.
(b) Holding shall not engage in any business other than its
ownership of the capital stock of the Borrower (and no other Person) and the
performance of certain management services for the Borrower and its Subsidiaries
pursuant to the Holding Management Agreement.
(c) Insurance Sub shall not engage in any business other than the
performance of insurance services for Holding, the Borrower and its Subsidiaries
and the investment of its assets in cash and/or Cash Equivalents.
8.9 Working Capital. The Borrower shall maintain as of the end of
---------------
each fiscal quarter, a level of Working Capital (without giving effect to any
balance sheet LIFO reserves) of not less than $30,000,000.
8.10 Fixed Charge Coverage Ratio. The Borrower will not permit the
---------------------------
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
(or, if shorter, the period beginning on April 1, 1998 and ending on the last
day of each fiscal quarter of the Borrower specified below), in each case taken
as one accounting period, ended on a date set forth below to be less than the
ratio set forth opposite such date:
Fiscal Quarter
Ended Ratio
-------------- -----
June 27, 1998 1.10 to 1
September 26, 1998 1.15 to 1
December 30, 1998 1.20 to 1
March 31, 1999 and each quarter thereafter 1.25 to 1
76
8.11 Limitation on Voluntary Payments and Modifications of
-----------------------------------------------------
Indebtedness; Modifications of Governing Documents and Preferred Stock; etc.
----------------------------------------------------------------------------
(a) The Borrower will not, and will not permit any of its Subsidiaries to: (i)
make (or give any notice in respect of) any voluntary or optional payment or
prepayment of principal on or voluntary or optional redemption of or acquisition
for value of (including, without limitation, by way of depositing with the
trustee with respect thereto or any other Person money or securities before due
for the purpose of paying when due), exchange (except through the issuance of
Exchange Notes, as contemplated by the New Senior Note Indenture), purchase,
redeem or acquire for value (whether as a result of a Change of Control, the
consummation of asset sales or otherwise) any Existing Indebtedness (except as
otherwise provided in Section 8.11(b)) or the Indebtedness described in Section
8.3(c), (d) and (f) (provided that the proceeds from "Asset Dispositions" (as
--------
defined in the Special Term Loan Agreement) may be used to prepay the "Term
Loans" (as defined in the Special Term Loan Agreement) as required by the
Special Term Loan Documents), (ii) amend or modify, or permit the amendment or
modification of, any provision of (x) any such Indebtedness (other than
Indebtedness incurred pursuant to the Special Term Loan Agreement), (y) the
Special Term Loan Agreement, the effect of which would be to change any of the
covenants or defaults thereunder, shorten the weighted average life of the Term
Loans thereunder, or allow the lenders thereunder to create liens in collateral
of the Borrower other than real property, plant and equipment or (z) any
provision of its Certificate of Incorporation or By Laws relating to any
preferred or preference stock or the Shareholders' Agreement (without the
consent of the Agent) or (iii) issue any preferred or preference stock.
(b) Holding will not amend, modify or waive, or permit the
amendment, modification or waiver of, any provision of the Holding Note
Documents (including, without limitation, the Holding Note Pledge Agreement)
without the Agent's consent, or make (or give any notice in respect of) any
voluntary or optional redemption of or acquisition for value (including, without
limitation, by way of depositing with the trustee with respect thereto money or
securities for the purpose of paying when due) the Holding Notes (other than (i)
Holding PIK Notes issued in lieu of interest and repaid with Dividends as
permitted by Section 8.6 and (ii) any such redemption or repayment made with the
proceeds of the issuance of equity by Holding).
8.12 Issuance of Subsidiary Stock. The Borrower will not permit any
----------------------------
of its Subsidiaries directly or indirectly to issue, sell, assign, pledge or
otherwise encumber or dispose of any shares of its capital stock or other equity
securities (or warrants, rights or options to acquire shares or other equity
securities) of such Subsidiary to any Person other than the Borrower or another
wholly-owned Subsidiary, except (i) to the extent permitted by Sections 8.1(c)
and 8.5 and (ii) for the issuance of directors' qualifying shares to the extent
required by applicable law.
8.13 Limitation on Restrictions Affecting Subsidiaries. The Borrower
-------------------------------------------------
will not, and will not permit any Subsidiary of the Borrower to, directly, or
indirectly, create or otherwise cause or suffer to exist any encumbrance or
restriction which prohibits or limits the ability of any Subsidiary of the
Borrower to (a) pay dividends or make other distributions or pay any
Indebtedness owed to the Borrower or any Subsidiary of the Borrower, (b) make
loans or advances to the Borrower or any Subsidiary of the Borrower, (c)
transfer any of its properties or assets to the Borrower or any Subsidiary of
the Borrower or (d) create, incur, assume or suffer to exist any lien upon any
of its property, assets or revenues, whether now owned or hereafter
77
acquired, other than encumbrances and restrictions arising under (i) applicable
law, (ii) this Credit Agreement and the other Transaction Documents, (iii)
Indebtedness permitted pursuant to Sections 8.3(c), (d), (f) and (l), (iv)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of the Borrower or any of its Subsidiaries, (v) customary
restrictions on dispositions of real property interests found in reciprocal
easement agreements of the Borrower or any of its Subsidiaries, (vi) any
agreement relating to permitted Indebtedness incurred by a Subsidiary of the
Borrower prior to the date on which such Subsidiary was acquired by the Borrower
or any other Subsidiary of the Borrower and outstanding on such acquisition
date, (vii) the extension or continuation of contractual obligations in
existence on the date hereof, provided that any such encumbrances or
--------
restrictions contained in such continuation are no less favorable to the Lenders
than those encumbrances and restrictions under or pursuant to the contractual
obligations continued hereby, and (viii) restrictions imposed under the
agreements relating to Indebtedness permitted under Section 8.3(b), provided
--------
that such restrictions apply only to the property giving rise to such
Indebtedness.
8.14 No Additional Bank Accounts. The Borrower will not, and will
---------------------------
not permit any of its Subsidiaries (other than Insurance Sub) within the United
States to, directly or indirectly, open, maintain or otherwise have any
checking, savings or other deposit accounts at any bank or other financial
institution where money is or may be deposited or maintained with any Person,
other than (i) the Disbursement Account and the accounts set forth on Schedule
XVII, (ii) local accounts for ▇▇▇▇▇ cash deposit in the ordinary course of
business and (iii) the "Collateral Account" (as defined in the Special Term Loan
Agreement and as required under the Special Term Loan Documents).
8.15 No Excess Cash. The Borrower will not, and will not permit any
--------------
of its Subsidiaries (other than Insurance Sub) to, directly or indirectly,
maintain in the aggregate in all of the checking, savings or other accounts
(other than the Disbursement Accounts, the Sub-Collection Accounts, the
Collection Accounts, the Concentration Account and the payroll accounts) of the
Borrower and its Subsidiaries (other than Insurance Sub) total cash balances and
investments (other than Investments permitted under Section 8.5(l)) in excess of
$8,000,000 at any time during which any Revolving Loans are outstanding
hereunder.
8.16 Additional Negative Pledges. The Borrower will not, and will
---------------------------
not permit any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective, or permit any of its
Subsidiaries to create or otherwise cause or suffer to exist or become
effective, directly or indirectly, any prohibition or restriction (including any
agreement to provide equal and ratable security to any other Person in the event
a Lien is granted to or for the benefit of the Agent and the Lenders) on the
creation or existence of any Lien upon the assets of the Borrower or its
Subsidiaries, other than the restrictions contained in (i) the Transaction
Documents, (ii) any agreement relating to a Lien permitted pursuant to Section
8.2 as relating to the property encumbered thereby or (iii) restrictions
described in Section 8.13.
78
ARTICLE 9.
Events of Default and Remedies
------------------------------
9.1 Events of Default. Upon the occurrence of any of the following
-----------------
specified events (each an "Event of Default"):
(a) Payments. The Borrower shall (i) default in the payment when due
--------
of any principal of the Revolving Loans or (ii) default, and such default
shall continue for five or more days, in the payment when due of, any
interest on the Revolving Loans or any drawings under Letters of Credit
which have not been reimbursed by the Borrower (including through the
incurrence of Revolving Loans), or (iii) default, and such default shall
continue for five or more days after written demand therefor by the Agent,
in the payment when due of any Fees, Expense or any other amounts owing
hereunder or under any other Credit Document; or
(b) Representations, etc. Any representation, warranty or statement
---------------------
made by any Credit Party herein or in any other Credit Document or in any
statement or certificate delivered or required to be 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
(c) Covenants. Holding or the Borrower shall (i) default in the due
---------
performance or observance by it of any term, covenant or agreement
contained in Article 8, or (ii) default in the due performance or
observance by it of any term, covenant or agreement (other than those
referred to in Section 9.1(a), 9.1(b) or clause (i) of this Section 9.1(c))
contained in this Credit Agreement and such default shall continue
unremedied for a period of at least 30 days after notice to the defaulting
party by the Agent or the Required Lenders; or
(d) Default Under Other Agreements. Holding, the Borrower or any of
------------------------------
its Subsidiaries shall (i) default in any payment in respect to any
Indebtedness (other than the Obligations) in excess of $2,500,000
individually or $5,000,000 in the aggregate of the Borrower and its
Subsidiaries beyond the period of grace, if any, provided in the agreement
or instrument under which such Indebtedness was issued, including, but not
limited to, the New Senior Note Documents and the Special Term Loan
Documents, or (ii) default in the observance or performance of any
agreement or condition relating to any such Indebtedness 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 to so cause), any such Indebtedness to become due prior to its
stated maturity; or any such Indebtedness of Holding, the Borrower or any
such Subsidiary shall be declared to be due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment or as a
mandatory prepayment, prior to the stated maturity thereof; or
79
(e) Bankruptcy, etc. Holding, 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 Holding, 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 Holding, the Borrower or any of its
Subsidiaries; or Holding, 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
Holding, the Borrower or such Subsidiary; or there is commenced against
Holding, the Borrower or any of its Subsidiaries any such proceeding which
remains undismissed for a period of 60 days; or Holding, 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 Holding, 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 Holding,
the Borrower or any of its Subsidiaries makes a general assignment for the
benefit of creditors; or any corporate action is taken by Holding, the
Borrower or any of its Subsidiaries for the purpose of effecting any of the
foregoing; or
(f) ERISA. (i) Any Plan shall fail to satisfy the minimum funding
-----
standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code or Section 302 of ERISA, any Plan is, shall have
been, or is reasonably likely to be terminated or the subject of
termination proceedings under ERISA, an event shall have occurred or a
condition shall exist in either case entitling the PBGC to terminate a
Plan, any Plan shall have an Unfunded Current Liability, Holding, the
Borrower or any Subsidiary or any ERISA Affiliate has incurred or is
reasonably likely to incur a liability to or on account of a Plan under
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 4971 or 4975 of the Code, or Holding, the Borrower
or any Subsidiary has incurred or is reasonably likely to incur liabilities
pursuant to one or more employee welfare benefit plans (as defined in
Section 3(1) of ERISA) that 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 ERISA); (ii)
there shall result from any event or events set forth in clause (i) of this
Section 9.1(f) the imposition of a lien, the granting of a security
interest, or a liability or a material risk of incurring a liability; and
(iii) such lien, security interest or liability, will have a Material
Adverse Effect; or
(g) Collateral Documents. Any Collateral Document shall cease to be
--------------------
in full force and effect, or shall cease to give the Collateral Agent on
behalf of the Lenders the Liens, rights, powers and privileges purported to
be created thereby in favor of the Collateral Agent, or any Credit Party
shall default in any material respect in the due performance or observance
of any term, covenant or agreement on its part to be performed or observed
80
pursuant to any such Collateral Document and such default shall continue
unremedied for a period of at least 15 days after notice to the Borrower by
the Agent or the Required Lenders; or
(h) Guaranty. The Guaranty or any provision thereof shall cease to
--------
be in full force and effect, or Holding or any Person acting by or on
behalf of Holding shall deny or disaffirm obligations under the Guaranty;
or
(i) Judgments. One or more judgments or decrees shall be entered
---------
against Holding, the Borrower or any of its Subsidiaries involving a
liability of $2,500,000 or more in the case of any one such judgment or
decree and $5,000,000 or more in the aggregate for all such judgments and
decrees for Holding and all its Subsidiaries (to the extent not paid or
covered by insurance provided by a carrier that has acknowledged coverage)
and all such judgments or decrees shall not have been vacated, discharged
or stayed pending appeal within 60 days from the entry thereof;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent shall, upon the written request of the
Required Lenders, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent or any Lender to
enforce its claims against the Borrower, except as otherwise specifically
provided for in this Credit Agreement (provided that, if an Event of Default
--------
specified in Section 9.1(e) shall occur with respect to the Borrower, the result
which would occur upon the giving of written notice by the Agent as specified in
clauses (i) and (ii) below shall occur automatically without the giving of any
such notice): (i) declare the Total Commitments terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately and any Unused
Line Fee accrued and unpaid shall 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 Revolving Loans and all Obligations owing hereunder 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
the Borrower; (iii) direct the Collateral Agent to enforce any or all of the
Liens and security interests created pursuant to the Collateral Documents; (iv)
terminate any Letter of Credit which may be terminated in accordance with its
terms; and/or (v) direct the Borrower to pay (and the Borrower hereby agrees
upon receipt of such notice, or upon the occurrence of any Event of Default
specified in Section 9.05 in respect of the Borrower, it will pay) to the
Payments Administrator at its Payment Office such additional amounts of cash, to
be held as security for the Borrower's reimbursement obligations in respect of
Letters of Credit then outstanding equal to the aggregate of all Letters of
Credit Obligations.
ARTICLE 10.
The Agent
---------
10.1 Appointment. (a) Each Lender hereby designates BTCC as Agent
-----------
(for purposes of this Section 10, the term "Agent" shall include BTCC as
Payments Administrator and as Collateral Agent under the Collateral Documents
and Syndication Agent) to act as herein specified. Each Lender hereby
irrevocably authorizes, and each holder of any Revolving Note or
81
participation in any Letter of Credit by the acceptance of a Revolving Note or
participation shall be deemed irrevocably to authorize, the Agent to take such
action on its behalf under the provisions of this Credit Agreement and the
Revolving Notes and any other instruments and agreements referred to herein 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
Collateral Agent shall hold all Collateral and the Payments Administrator shall
hold all payments of principal, interest, Fees, charges and Expenses received
pursuant to this Credit Agreement or any other Credit Document for the benefit
of the Lenders to be distributed as provided herein. The Agent may perform any
of its duties hereunder by or through its agents or employees.
(b) The provisions of this Article 10 are solely for the benefit of
the Agent and the Lenders, and neither Holding nor any of its Subsidiaries shall
have any rights as a third party beneficiary of any of the provisions hereof
(other than Sections 10.9 and 10.10(c)). In performing its functions and duties
under this Credit Agreement, the Agent shall act solely as agent of the Lenders
and does not assume and shall not be deemed to have assumed any obligation
toward or relationship of agency or trust with or for Holding or any of its
Subsidiaries.
10.2 Nature of Duties of the Agent. The Agent shall not have any
-----------------------------
duties or responsibilities except those expressly set forth in this Credit
Agreement and the other Credit Documents. Neither the Agent nor any of its
officers, directors, employees or agents shall be liable for any action taken or
omitted by it as such hereunder or in connection herewith, 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 have by reason of
this Credit Agreement or the other Credit Documents a fiduciary relationship in
respect of any Lender; and nothing in this Credit Agreement or the other Credit
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Credit Agreement or the
other Credit Documents except as expressly set forth herein or therein.
10.3 Lack of Reliance on the Agent. (a) Independently and without
-----------------------------
reliance upon the Agent, each Lender, to the extent it deems appropriate, has
made and shall continue to make (i) its own independent investigation of the
financial or other condition and affairs of the Borrower and its Subsidiaries in
connection with 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 Credit Agreement, the
Agent shall not have any duty or responsibility, either initially or on a
continuing basis, to provide any Lender 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.
(b) The Agent shall not be responsible to any Lender 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,
collectibility, priority or sufficiency of this Credit Agreement or the
Revolving Notes or the financial or other condition of the Borrower or any of
its Subsidiaries. The Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Credit Agreement or the Revolving Notes, or the
82
financial condition of the Borrower or any of its Subsidiaries, or the existence
or possible existence of any Default or Event of Default, unless specifically
requested to do so in writing by any Lender.
10.4 Certain Rights of the Agent. The Agent shall have the right to
---------------------------
request instructions from the Required Lenders at any time. If the Agent shall
request instructions from the Required Lenders with respect to any act or action
(including the failure to act) in connection with this Credit Agreement, 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 Lenders,
and the Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Lenders.
10.5 Reliance by the Agent. 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 documentary, teletransmission or telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person. The Agent may consult with legal counsel (including
counsel for the Borrower with respect to matters concerning the Borrower and its
Subsidiaries), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
10.6 Indemnification of the Agent. To the extent the Agent is not
----------------------------
reimbursed and indemnified by the Borrower, each Lender will reimburse and
indemnify the Agent, in proportion to its respective Commitment, for and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including counsel fees and disbursements) or
disbursements of any kind or nature whatsoever (including all Expenses) which
may be imposed on, incurred by or asserted against the Agent in performing its
duties hereunder, in any way relating to or arising out of this Credit
Agreement; provided that no Lender 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.
10.7 The Agent in its Individual Capacity. With respect to its
------------------------------------
obligation to lend under this Credit Agreement, the Loans made by it and the
Revolving Notes issued to it, and its participation in Letters of Credit issued
hereunder, the Agent shall have the same rights and powers hereunder as any
other Lender or holder of a Revolving Note or participation interests and may
exercise the same as though it was not performing the duties specified herein;
and the terms "Lenders," "Required Lenders," "holders of Revolving 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, acquire equity interests in, and generally engage in any kind of
banking, trust, financial advisory or other business with Holding or any
Affiliate of Holding as if it were not performing the duties specified herein,
and may accept fees and other consideration from Holding for services in
connection with this Credit Agreement and otherwise without having to account
for the same to the Lenders.
83
10.8 Holders of Notes. The Agent may deem and treat the payee of
----------------
any Revolving Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment or transfer thereof 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
Revolving Note, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Revolving Note or of any Revolving Note or
Revolving Notes issued in exchange therefor.
10.9 Successor Agent. (a) The Agent may, upon five (5) Business
---------------
Days' notice to the Lenders and the Borrower, resign at any time (effective upon
the appointment of a successor Agent pursuant to the provisions of this Section
10.9) by giving written notice thereof to the Lenders and the Borrower. Such
resignation of the Agent shall also operate as a resignation as an Issuing Bank,
as Payments Administrator and as Syndication Agent. Upon any such resignation,
the Required Lenders shall have the right, upon five (5) days' notice and
approval by the Borrower (which approval shall not be unreasonably withheld), to
appoint a successor Agent which shall also serve as a successor Issuing Bank.
If no successor Agent (i) shall have been so appointed by the Required Lenders,
and (ii) shall have accepted such appointment, within thirty (30) days after the
retiring Agent's giving of notice of resignation, then, upon five (5) days'
notice, the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall also serve as a successor Issuing Bank.
(b) Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Credit Agreement. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article 10 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this Credit
Agreement.
(c) In the event of a material breach by the Agent of its duties
hereunder, the Agent may be removed by the Required Lenders (other than the
Agent and without giving effect to any Revolving Loans or Commitments made by
the Agent) for cause and the provisions of this Section 10.9 shall apply to the
appointment of a successor Agent. Such removal of the Agent shall also operate
as a removal as an Issuing Bank, as Payments Administrator as Syndication Agent.
10.10 Collateral Matters. (a) Each Lender authorizes and directs
------------------
the Collateral Agent to enter into the Collateral Documents for the benefit of
the Lenders. Each Lender hereby agrees, and each holder of any Revolving Note by
the acceptance thereof will be deemed to agree, that, except as otherwise set
forth herein, any action taken by the Required Lenders in accordance with the
provisions of this Credit Agreement or the Collateral Documents, and the
exercise by the Required Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders. The Collateral Agent is hereby
authorized on behalf of all of the Lenders, without the necessity of any notice
to or further consent from any Lender, from time to time prior to an Event of
Default, to take any action with respect to any Collateral or Collateral
Documents which may be necessary to perfect and maintain perfected the security
interest in and liens upon the Collateral granted pursuant to the Collateral
Documents.
84
(b) The Lenders hereby authorize the Collateral Agent, at its
option and in its discretion, upon the direction of the Agent to release any
Lien granted to or held by the Collateral Agent upon any Collateral (i) upon
termination of the Commitments and payment and satisfaction of all of the
Obligations at any time arising under or in respect of this Credit Agreement or
the Credit Documents or the transactions contemplated hereby or thereby, (ii)
constituting property being sold or disposed of upon receipt of the proceeds of
such sale by the Collateral Agent if the Borrower certifies to the Collateral
Agent that the sale or disposition is made in compliance with Section 8.1 hereof
(and the Agent may rely conclusively on any such certificate, without further
inquiry) or (iii) if approved, authorized or ratified in writing by the Required
Lenders, unless such release is required to be approved by all of the Lenders
hereunder. Upon request by the Agent at any time, the Lenders will confirm in
writing the Collateral Agent's authority to release particular types or items of
Collateral pursuant to this Section 10.10.
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Credit Agreement, or consented to in
writing by the Required Lenders or all of the Lenders, as applicable, and upon
at least five (5) Business Days' prior written request by the Borrower, the
Collateral Agent shall (and is hereby irrevocably authorized by the Lenders to)
execute such documents as may be necessary to evidence the release of the Liens
granted to the Collateral Agent for the benefit of the Lenders herein or
pursuant hereto upon the Collateral that was sold or transferred; provided that
--------
(i) the Collateral Agent shall not be required to execute any such document on
terms which, in the Collateral Agent's opinion, would expose the Collateral
Agent to liability or create any obligation or entail any consequence other than
the release of such Liens without recourse, representation or warranty and (ii)
such release shall not in any manner discharge, affect or impair the Obligations
or any Liens upon (or obligations of the Borrower or any of its Subsidiaries in
respect of) all interests retained by the Borrower or any of its Subsidiaries,
including, without limitation, the proceeds of the sale, all of which shall
continue to constitute part of the Collateral. In the event of any sale or
transfer of Collateral, or any foreclosure with respect to any of the
Collateral, the Collateral Agent shall be authorized to deduct all of the
Expenses reasonably incurred by the Collateral Agent from the proceeds of any
such sale, transfer or foreclosure.
(d) The Collateral Agent shall have no obligation whatsoever to the
Lenders or to any other Person to assure that the Collateral exists or is owned
by the Borrower or any of its Subsidiaries or is cared for, protected or insured
or that the Liens granted to the Collateral Agent herein or pursuant hereto have
been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise or to
continue exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers granted or
available to the Collateral Agent in this Section 10.10 or in any of the
Collateral Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Collateral Agent
may act in any manner it may deem appropriate, in its sole discretion, given the
Collateral Agent's own interest in the Collateral as one of the Lenders and that
the Collateral Agent shall have no duty or liability whatsoever to the Lenders,
except for its gross negligence or willful misconduct.
10.11 Actions with Respect to Defaults. In addition to the Agent's
--------------------------------
right to take actions on its own accord as permitted under this Credit
Agreement, the Agent shall take such
85
action with respect to an Event of Default as shall be directed by the Required
Lenders; provided that until the Agent shall have received such directions, the
--------
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default as it shall deem
advisable and in the best interests of the Lenders.
10.12 Delivery of Information. The Agent shall not be required to
-----------------------
deliver to any Lender originals or copies of any documents, instruments,
notices, communications or other information received by the Agent from Holding,
the Borrower, any Subsidiary, the Required Lenders, any Lender or any other
Person under or in connection with this Credit Agreement or any other Credit
Document except (i) as specifically provided in this Credit Agreement or any
other Credit Document and (ii) as specifically requested from time to time in
writing by any Lender with respect to a specific document, instrument, notice or
other written communication received by and in the possession of the Agent at
the time of receipt of such request and then only in accordance with such
specific request.
ARTICLE 11.
Miscellaneous
-------------
11.1 Submission to Jurisdiction; Waivers. Each of Holding and the
-----------------------------------
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Credit Agreement and the other credit documents
to which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the courts
of the State of New York located in New York City, the Courts of the United
States of America for the Southern District of New York and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) designates, appoints and empowers CT Corporation System with
offices on the date hereof at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as
its designee, appointee and agent to receive, accept and acknowledge 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 Credit Agreement;
(d) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially
86
similar form of mail), postage prepaid, to the Borrower at its address set
forth in Section 11.5 or at such other address of which the Agent shall
have been notified pursuant thereto;
(e) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction;
(f) to the extent permitted by law, waives the right to assert any
setoff, counterclaim or cross-claim in respect of, and all statutes of
limitations which may be relevant to, such action or proceeding (other than
compulsory counterclaims), provided that nothing in this clause (f) shall
--------
preclude a separate action asserting any such claims; and
(g) waives due diligence, demand, presentment and protest and any
notices thereof as well as notice of nonpayment.
11.2 Jury Trial. Holding, the Borrower, the Agent, the Issuing Banks
----------
and the Lenders each hereby waive any right to a trial by jury in any action or
proceeding arising out of this Credit Agreement, the Credit Documents or any
other agreements or transactions related hereto or thereto.
11.3 Governing Law. The validity, interpretation and enforcement of
-------------
this Credit Agreement shall be governed by the laws of the State of New York.
11.4 Delays: Partial Exercise of Remedies. No delay or omission of
-------------------------------------
the Agent, any Issuing Bank or the Lenders to exercise any right or remedy
hereunder, whether before or after the happening of any Event of Default, shall
impair any such right or shall operate as a waiver thereof or as a waiver of any
such Event of Default. No single or partial exercise by the Agent, any Issuing
Bank or the Lenders of any right or remedy shall preclude any other or further
exercise thereof, or preclude any other right or remedy.
11.5 Notices. Except as otherwise provided herein, all notices and
-------
correspondences hereunder shall be in writing and sent by certified or
registered mail, return receipt requested, or by overnight delivery service,
with all charges prepaid, if to the Agent, or any of the Lenders, then to BTCC,
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, and if to
the Borrower, 10th Floor then to the Borrower at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or by facsimile transmission,
promptly confirmed in writing sent by first class mail, if to the Agent, or any
of the Lenders, in the case of BTCC at (▇▇▇) ▇▇▇-▇▇▇▇, and if to the Borrower at
(▇▇▇) ▇▇▇-▇▇▇▇. All such notices and correspondence shall be deemed given when
received by the party to whom sent.
11.6 Benefit of Agreement. (a) This Credit 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 that no Credit Party may
--------
assign or transfer any of its interests hereunder, without the prior written
consent of the Lenders and provided further, that the rights of each Lender to
----------------
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth below in this Section 11.6, provided
--------
that nothing in this Section 11.6 shall prevent or
87
prohibit any Lender from pledging its rights under this Credit Agreement and/or
its Revolving Loans and/or Revolving Notes hereunder to a Federal Reserve Bank
in support of borrowings made by such Lender from such Federal Reserve Bank.
(b) Each Lender shall have the right to transfer, assign or grant
participations in all or any part of its remaining rights and obligations
hereunder on the basis set forth below in this clause (b).
(A) Assignments. Each Lender may assign pursuant to an Assignment
-----------
and Assumption Agreement all or a portion of its rights and obligations
hereunder pursuant to this clause (b)(A) to (x) one or more Lenders or (y) one
or more other Eligible Transferees, provided that (i) any such assignment
--------
pursuant to clause (y) above shall be in the aggregate amount of at least
$5,000,000, and (ii) any assignment pursuant to clause (y) shall require the
consent of the Agent which consent shall not be unreasonably withheld. Any
assignment to another Lender pursuant to this clause (b)(A) will become
effective upon the payment to the Payments Administrator by either the assigning
or the assignee Lender of a nonrefundable assignment fee of $3,500 and the
recording by the Payments Administrator of such assignment, and the resultant
effects thereof on the Revolving Loans and Commitments of the assigning Lender
and the assignee Lender, in a register maintained by the Payments Administrator
(the "Register"), the Payments Administrator hereby agreeing to effect such
recordation no later than five Business Days after its receipt of a written
notification by the assigning Lender and the assignee Lender of the proposed
assignment, provided that the Payments Administrator shall not be required to,
--------
and shall not, so record any assignment in the Register on or after the date on
which any proposed amendment, modification or supplement in respect of this
Credit Agreement has been circulated to the Lenders for approval until the
earlier of (x) the effectiveness of such amendment, modification or supplement
in accordance with Section 11.10 or (y) 30 days following the date on which such
proposed amendment, modification or supplement was circulated to the Lenders.
Assignments pursuant to clause (b)(A) (y) will only be effective if the Payments
Administrator shall have received a written notice, substantially in the form of
Exhibit O hereto, from the assigning Lender and the assignee and payment of a
nonrefundable assignment fee of $2,500 to the Payments Administrator by either
the assigning Lender or the assignee. No later than five Business Days after
its receipt of such written notice, the Payments Administrator will record such
assignment, and the resultant effects thereof on the Revolving Loans and
Commitment of the assigning Lender, in the Register, at which time such
assignment shall become effective, provided that the Payments Administrator
--------
shall not be required to, and shall not, so record any assignment in the
Register on or after the date on which any proposed amendment, modification or
supplement in respect of this Credit Agreement has been circulated to the
Lenders for approval until the earlier of (x) the effectiveness of such
amendment, modification or supplement in accordance with Section 11.10 or (y) 30
days following the date on which such proposed amendment, modification or
supplement was circulated to the Lenders. Upon the effectiveness of any
assignment pursuant to clause (b)(A)(y), (x) the assignee will become a "Lender"
for all purposes of this Credit Agreement and the other Credit Documents with
Revolving Loans and a Commitment as so recorded by the Payments Administrator in
the Register, and to the extent of such assignment, the assigning Lender shall
be relieved of its obligations hereunder with respect to the portion of its
Commitment being assigned and (y) if such assignment occurs after the
Restatement Effective Date, the Borrower shall issue new Revolving Notes (in
exchange for the Revolving Note or Revolving Notes of the assigning
88
Lender) to the assigning Lender (to the extent such Lender's Commitment is not
reduced to zero as a result of such assignment) and to the assignee Lender, in
each case to the extent requested by the assigning Lender or assignee Lender, as
the case may be, to the extent needed to reflect the revised Commitments of such
Lenders. The Payments Administrator will (x) notify each Letter of Credit Issuer
with respect to outstanding Letters of Credit within 5 Business Days of the
effectiveness of any assignment hereunder and (y) prepare on the last Business
Day of each calendar quarter during which an assignment has become effective
pursuant to this clause (b)(A) a new Schedule I giving effect to all such
assignments effected during such quarter and will promptly provide same to the
Borrower and each of the Lenders. In addition, each agreement creating any
assignment must include an agreement by the assignee to be bound by the
provisions of Section 11.7 of this Credit Agreement and such assignee shall have
executed a confidentiality agreement substantially in the form of Exhibit P
hereto.
(B) Participations. Each Lender may transfer, grant or assign
--------------
participations in all or any part of such Lender's interests and obligations
hereunder pursuant to this clause (b)(B) to any Eligible Transferee, provided
--------
that (i) such Lender shall remain a "Lender" for all purposes of this Credit
Agreement and the transferee of such participation shall not constitute a Lender
hereunder and (ii) no participant under any such participation shall have rights
to approve any amendment to or waiver of this Credit Agreement or any other
Credit Document except to the extent such amendment or waiver would (x) extend
the final scheduled maturity of any of the Revolving Loans or the Commitment in
which such participant is participating (it being understood that a waiver of a
mandatory reduction in the Total Commitments or the waiver of the application of
any prepayment to the Revolving Loans shall not constitute the extension of the
final scheduled maturity of any Revolving Loan or Commitment), (y) reduce the
interest rate (other than as a result of waiving the applicability of any post-
default increases in interest rates) or Fees applicable to any of the Revolving
Loans, Commitments or Letters of Credit or postpone the payment or reduce the
amount thereof or (z) release all or substantially all of the Collateral or
guaranties (except as expressly provided in the Credit Documents). In the case
of any such participation, the participant shall not have any rights under this
Credit Agreement or any of the other Credit Documents (the participant's rights
against the granting Lender in respect of such participation to be those set
forth in the agreement with such Lender creating such participation) and all
amounts payable by the Borrower hereunder shall be determined as if such Lender
had not sold such participation, provided that such participant shall be
--------
entitled to receive additional amounts under Sections 2.9, 2.10, 4.5 and 4.9 on
the same basis as if it were a Lender. In addition, each agreement creating any
participation must include an agreement by the participant to be bound by the
provisions of Section 11.7 of this Credit Agreement and such participant shall
have executed a confidentiality agreement substantially in the form of Exhibit P
hereto.
(c) Notwithstanding any other provisions of this Section 11.6, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participations therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration statement
with the SEC or to qualify the Loans under the "Blue Sky" laws of any State.
(d) If any Lender becomes a Defaulting Lender, or upon the occurrence
of any event giving rise to the operation of Section 2.9, 4.3(c)(ii) or 4.9 with
respect to such Lender, the
89
Borrower shall have the right, if no Default or Event of Default then exists, to
either replace such Lender (the "Replaced Lender") with one or more Eligible
Transferee (collectively, the "Replacement Lender"), provided that (i) at the
--------
time of any replacement pursuant to this Section 11.6(d), the Replacement Lender
shall enter into one or more Assignment and Assumption Agreements pursuant to
Section 11.6(b)(A) (and with all fees payable pursuant to said Section
11.6(b)(A) to be paid by the Replacement Lender) pursuant to which the
Replacement Lender shall acquire all of the Commitments and outstanding
Revolving Loans of, and participations in Letters of Credit by, the Replaced
Lender and, in connection therewith, shall pay to (x) the Replaced Lender 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 Lender, (B) an amount equal to all drawings under Letters of Credit
that have been funded by (and not reimbursed to) such Replaced Lender, together
with all then unpaid interest with respect thereto at such time, (C) at the
option of the Borrower, an amount equal to the increased costs incurred by the
Borrower and owing to the Replaced Lender pursuant to Sections 2.9 and 4.9 and
(D) an amount equal to all accrued, but theretofore unpaid, Fees owing to the
Replaced Lender pursuant to Article 4 and (y) any Issuing Bank the amount of all
unreimbursed drawings under Letters of Credit attributable to such Replaced
Lender and (ii) all obligations of the Borrower owing to the Replaced Lender
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be
paid in full by the Borrower to such Replaced Lender 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 the
Replacement Lender shall become a Lender hereunder and the Replaced Lender shall
cease to constitute a Lender hereunder, except with respect to indemnification
provisions under this Credit Agreement, which shall survive as to such Replaced
Lender.
(e) Each Lender initially party to this Credit Agreement hereby
represents, and each Person that becomes a Lender pursuant to an assignment
permitted by the preceding clause (b)(A) will upon its becoming party to this
Credit Agreement represent, that it is an Eligible Transferee which makes loans
in the ordinary course of its business and that it will make or acquire
Revolving Loans for its own account in the ordinary course of such business,
provided that subject to the preceding clauses (a) through (d), the disposition
--------
of any promissory notes or other evidences of or interests in Indebtedness held
by such Lender shall at all times be within its exclusive control.
11.7 Confidentiality. Each Lender agrees that it will use its
---------------
reasonable best efforts not to disclose without the prior consent of the
Borrower (other than to its employees, auditors, or counsel, or to another
Lender if the disclosing Lender or such disclosing Lender's holding or parent
company in its sole discretion determines that any such party should have access
to such information) any information with respect to the Borrower or any of the
Borrower's Subsidiaries, which is furnished pursuant to the Credit Documents and
which is designated by the Borrower to the Lenders in writing as confidential;
provided that any Lender may disclose any such information (a) as has become
--------
generally available to the public, (b) as may be required or appropriate in any
report, statement or testimony submitted to any Governmental Authority having or
claiming to have jurisdiction over such Lender, (c) as may be required or
appropriate in response to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any Requirement of Law, and (e) to any
prospective or actual transferee or participant in connection
90
with any contemplated transfer or participation of any of the Revolving Notes or
Commitments or any interest therein by such Lender which prospective transferee
or participant shall have agreed in writing to be subject to the confidentiality
provisions of this Section 11.7; provided, however, that in the case of any
-------- -------
disclosure pursuant to the foregoing clauses (c) or (d), such Lender will use
its reasonable efforts to notify the Borrower, to the extent permitted as
advised by counsel, in advance (or, in the case of clause (d), promptly
thereafter) of such disclosure so as to afford the Borrower the opportunity to
protect the confidentiality of the information proposed to be so disclosed.
11.8 Indemnification. (a) Each of Holding and the Borrower shall
---------------
and hereby agrees to jointly and severally indemnify, defend and hold harmless
the Agent, each Issuing Bank and each of the Lenders and their respective
directors, officers, agents and employees (the "Indemnitee") from and against
(x) any and all losses, claims, damages, liabilities, deficiencies, judgments or
expenses incurred by any of them (except to the extent that it is finally
judicially determined to have resulted from their own gross negligence or
willful misconduct) arising out of or by reason of any litigations,
investigations, claims or proceedings which arise out of or are in any way
related to (i) this Credit Agreement or the transactions contemplated thereby,
(ii) the issuance of the Letters of Credit, (iii) the failure of an Issuing Bank
to honor a drawing under any Letter of Credit, as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or Governmental Authority, (iv) any actual or proposed use by
the Borrower of the proceeds of the Revolving Loans or (v) the Agent's or the
Lenders' entering into this Credit Agreement, the other Credit Documents or any
other agreements and documents relating hereto, including, without limitation,
amounts paid in any settlement agreed to by the Borrower, court costs and the
reasonable fees and disbursements of counsel incurred in connection with any
such litigation, investigation, claim or proceeding or any advice rendered in
connection with any of the foregoing and (y) any such losses, claims, damages,
liabilities, deficiencies, judgments or expenses incurred in connection with any
remedial or other action taken by Holdings or any of the Lenders in connection
with compliance by Holdings or any of its Subsidiaries, or any of their
respective properties, with any federal, state or local environmental laws,
acts, rules, regulations, orders, directions, ordinances, criteria or
guidelines.
(b) If and to the extent that the Obligations of either of Holding
or the Borrower hereunder are unenforceable for any reason, each of Holding and
the Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of such Obligations which is permissible under applicable law.
Each of Holding's and the Borrower's Obligations hereunder shall survive any
termination of this Credit Agreement and the other Credit Documents and the
payment in full of the Obligations, and are in addition to, and not in
substitution of, any other of their Obligations set forth in this Credit
Agreement.
(c) In addition, each of Holding and the Borrower shall, upon
demand, pay to the Agent and any Lender all costs and expenses (including the
reasonable fees and disbursements of counsel and other professionals) paid or
incurred by the Agent or such Lender in (i) enforcing or defending its rights
under or in respect of this Credit Agreement, the other Credit Documents or any
other document or instrument now or hereafter executed and delivered in
connection herewith, (ii) in collecting the Revolving Loans, (iii) in
foreclosing or otherwise collecting upon the
91
Collateral or any part thereof and (iv) obtaining any legal, accounting or other
advice in connection with any of the foregoing.
11.9 Entire Agreement; Successors and Assigns. This Credit
----------------------------------------
Agreement and the other Credit Documents constitute the entire agreement among
Holding, the Borrower, the Agent and the Lenders, supersedes any prior
agreements among them, and shall bind and benefit Holding, the Borrower, the
Agent and the Lenders and their respective successors and permitted assigns.
11.10 Amendment or Waiver. Neither this Credit 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 Borrower and the Required Lenders, provided that no
--------
such change, waiver, discharge or termination shall, without the consent of each
Lender affected thereby, (i) extend the final scheduled maturity of any
Revolving Loan or Revolving Note (it being understood that any waiver of the
application of any prepayment or the method of application of any prepayment to
the Revolving Loans or any mandatory reduction to the Total Commitments shall
not constitute an extension of the final maturity date of such Revolving Loans),
or reduce the rate or extend the time of payment of interest or Fees thereon, or
reduce the amount thereof, or increase the Commitment of any Lender over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of a mandatory reduction in the Total Commitments, or
mandatory prepayment, shall not constitute a change in the terms of any
Commitment of any Lender), (ii) release all or substantially all of the
Collateral or guaranties (except as expressly provided in the Credit Documents),
(iii) amend, modify or waive any provision of this Section, (iv) reduce the
percentage specified in the definition of Required Lenders or (v) consent to the
assignment or transfer by any Credit Party of any of its rights and obligations
under any Credit Document. No provision of Article 3, 10 or 11 may be amended
without the consent of each Issuing Bank or the Agent, respectively.
11.11 Nonliability of Agent and Lenders. The relationship between
---------------------------------
Holding, the Borrower and the Borrower's Subsidiaries, and the Lenders and the
Agent shall be solely that of borrower and lender. Neither the Agent nor any
Lender shall have any fiduciary responsibilities to Holding, the Borrower, or
any of the Borrower's Subsidiaries. Neither the Agent nor any Lender undertakes
any responsibility to Holding, the Borrower, or any of the Borrower's
Subsidiaries to review or inform Holding, the Borrower, or any of the Borrower's
Subsidiaries of any matter in connection with any phase of the business or
operations of Holding, the Borrower, or any of the Borrower's Subsidiaries.
11.12 Independent Nature of Lenders' Rights. The amounts payable at
-------------------------------------
any time hereunder to each Lender under such Lender's Revolving Note or Notes
shall be a separate and independent debt.
11.13 Counterparts. This Credit Agreement may be executed in any
------------
number of counterparts and by the different parties hereto in 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.
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11.14 Effectiveness. (a) This Credit Agreement shall become
-------------
effective on the date (the "Restatement Effective Date") on which (i) all of the
parties hereto shall have signed a copy hereof (whether the same or different
copies) and shall have delivered (including by way of facsimile device) the same
to the Agent pursuant to Section 11.5 or, in the case of the Lenders, shall have
given to the Agent written, telecopied or telex notice (actually received) at
such office that the same has been signed and mailed to it and (ii) the
conditions precedent set forth in Section 5.1 have been met to the satisfaction
of the Agent or have been waived by the Agent.
(b) On the Restatement Effective Date, each New Lender and each
Continuing Lender shall have delivered to the Agent for the account of the
Borrower an amount equal to (i) in the case of each New Lender, the Revolving
Loans to be made by such New Lender on the Restatement Effective Date and (ii)
in the case of each Continuing Lender, the amount by which the principal amount
of Loans to be made and/or converted by such Continuing Lender on the
Restatement Effective Date exceeds the amount of the Existing Loans of such
Continuing Lender outstanding on the Restatement Effective Date. Notwithstanding
anything to the contrary contained in this Section 11.14(b), in satisfying the
foregoing condition, unless the Agent shall have been notified by any Lender
prior to the occurrence of the Restatement Effective Date that such Lender does
not intend to make available to the Agent such Lender's Revolving Loans required
to be made by it on such date, then the Agent may, in reliance on such
assumption, make available to the Borrower the corresponding amounts in
accordance with the provisions of Section 2.4 of this Credit Agreement, and the
making available by the Agent of such amounts shall satisfy the condition
contained in this Section 11.14(b).
11.15 Severability. In case any provision in or obligation under
------------
this Credit Agreement or the Revolving Notes or the other Credit Documents shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
11.16 Headings Descriptive. The headings of the several sections and
--------------------
subsections of this Credit Agreement, and the Table of Contents, are inserted
for convenience only and shall not in any way affect the meaning or construction
of any provision of this Credit Agreement.
11.17 Maximum Rate. Notwithstanding anything to the contrary
------------
contained elsewhere in this Credit Agreement or in any other Credit Document,
the Borrower, the Agent and the Lenders hereby agree that all agreements among
them under this Credit Agreement and the other Credit Documents, whether now
existing or hereafter arising and whether written or oral, are expressly limited
so that in no contingency or event whatsoever shall the amount paid, or agreed
to be paid, to the Agent or any Lender for the use, forbearance, or detention of
the money loaned to the Borrower and evidenced hereby or thereby or for the
performance or payment of any covenant or obligation contained herein or
therein, exceed the Highest Lawful Rate. If due to any circumstance whatsoever,
fulfillment of any provisions of this Credit Agreement or any of the other
Credit Documents at the time performance of such provision shall be due shall
exceed the Highest Lawful Rate, then, automatically, the obligation to be
fulfilled shall be modified or reduced to the extent necessary to limit such
interest to the Highest Lawful Rate, and if from any such circumstance and
Lender should ever receive anything of value deemed interest by applicable
93
law which would exceed the Highest Lawful Rate, such excessive interest shall be
applied to the reduction of the principal amount then outstanding hereunder or
on account of any other then outstanding Obligations and not to the payment of
interest, or if such excessive interest exceeds the principal unpaid balance
then outstanding hereunder and such other then outstanding Obligations, such
excess shall be refunded to the Borrower. All sums paid or agreed to be paid to
the Agent or any Lender for the use, forbearance, or detention of the
Obligations and other Indebtedness of the Borrower to the Agent or any Lender
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such Indebtedness until payment
in full so that the actual rate of interest on account of all such Indebtedness
does not exceed the Highest Lawful Rate throughout the entire term of such
Indebtedness. The terms and provisions of this Section shall control every
other provision of this Credit Agreement and all agreements among the Borrower,
the Agent and the Lenders.
11.18 Right of Setoff. In addition to and not in limitation of all
---------------
rights of offset that any Lender or any Issuing Bank may have under applicable
law, each Lender and each Issuing Bank shall, upon the occurrence of any Event
of Default and whether or not such Lender or such Issuing Bank has made any
demand or the Obligations of any Credit Party are matured, have the right, upon
prior notice to the Borrower, to appropriate and apply to the payment of the
Obligations of Holding or any of its Subsidiaries all deposits (general or
special, time or demand, provisional or final) then or thereafter held by and
other Indebtedness or property then or thereafter owing by such Lender or such
Issuing Bank, including, without limitation, any and all amounts in any
Depositary Account, the Concentration Account or the Disbursement Account. Each
Lender or each Issuing Bank exercising such rights shall notify the Agent
thereof and any amount received as a result of the exercise of such rights shall
be reallocated among the Lenders and the Issuing Bank as set forth in Section
2.11 provided, however, that failure of the Borrower to receive such notice
shall not impair any Lender's or Issuing Bank's rights hereunder.
11.19 Amendment and Restatement; Termination of Existing Credit
---------------------------------------------------------
Agreement. On the Restatement Effective Date, without further action by any
---------
party, the Existing Credit Agreement shall be amended and restated to read in
full as set forth herein. The Borrower and each of the Lenders agrees that the
"Commitments" as defined in the Existing Credit Agreement shall be terminated in
their entirety on and as of the Restatement Effective Date.
11.20 Additions of New Lenders; Conversion of Original Loans of
---------------------------------------------------------
Continuing Lenders; Termination of Commitments of Non-Continuing Lenders. (a)
------------------------------------------------------------------------
On and as of the occurrence of the Restatement Effective Date in accordance with
Section 11.14, each New Lender shall become a "Lender" under, and for all
purposes of, this Agreement and the other Credit Documents.
(b) The parties hereto acknowledge that each Existing Lender has
been offered the opportunity to participate in this Credit Agreement, after the
occurrence of the Restatement Effective Date, as a Continuing Lender hereunder,
but that no Existing Lender is obligated to be a Continuing Lender.
(c) Notwithstanding anything to the contrary contained in the
Existing Credit Agreement, this Credit Agreement or any other Credit Document,
the Borrower and each of the
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Lenders hereby agree that on the Restatement Effective Date, (i) each Lender
with a Commitment as set forth on Schedule I (after giving effect to the
Restatement Effective Date) shall make or maintain (including by way of
conversion) that principal amount of Revolving Loans to the Borrower as is
required by Section 2.1, provided that if the Existing Loans of any Continuing
--------
Lender outstanding on the Restatement Effective Date (immediately before giving
effect thereto) exceed the aggregate principal amount of Loans required to be
made available by such Lender on such date (after giving effect to the
Restatement Effective Date), then Existing Loans of such Continuing Lender in an
amount equal to such excess shall be repaid on the Restatement Effective Date to
such Lender and (ii) in the case of each Non-Continuing Lender, all of such Non-
Continuing Lender's Existing Loans outstanding on the Restatement Effective Date
shall be repaid in full on such date, together with interest thereon and all
accrued Fees (and any other amounts) owing to such Non-Continuing Lender, and
the Commitment (under, and as defined in, the Original Credit Agreement) of such
Non-Continuing Lender, if any, shall be terminated, effective upon the
occurrence of the Restatement Effective Date. Notwithstanding anything to the
contrary contained in the Existing Credit Agreement, this Credit Agreement or
any other Credit Document, the parties hereto hereby consent to the repayments
and reductions required above, and agree that in the event that any Existing
Lender shall fail to execute a counterpart of this Credit Agreement prior to the
occurrence of the Restatement Effective Date, such Existing Lender shall be
deemed to be a Non-Continuing Lender and, concurrently with the occurrence of
the Restatement Effective Date, the Commitment (under, and as defined, in the
Existing Credit Agreement) of such Existing Lender, if any, shall be terminated,
all Existing Loans of such Existing Lender outstanding on the Restatement
Effective Date shall be repaid in full, together with interest thereon and all
accrued Fees (and any other amounts) owing to such Existing Lender, and
concurrently with the occurrence of the Restatement Effective Date, such
Existing Lender shall no longer constitute a "Lender" under this Credit
Agreement and the other Credit Documents, provided that all indemnities of the
--------
Credit Parties under the Existing Credit Agreement and the other Credit
Documents (as in effect prior to the Restatement Effective Date) for the benefit
of such Existing Lender shall survive in accordance with the terms thereof.
ARTICLE 12.
Guaranty
--------
12.1 The Guaranty. In order to induce the Lenders to enter into this
------------
Credit Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by the Guarantor from the proceeds of the Revolving
Loans and the issuance of the Letters of Credit, the Guarantor hereby agrees
with the Lenders as follows: the Guarantor hereby unconditionally and
irrevocably guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, by acceleration or otherwise, of
any and all indebtedness of the Borrower to the Lenders hereunder. If any or
all of the indebtedness of the Borrower to the Lenders becomes due and payable
hereunder, the Guarantor unconditionally promises to pay such indebtedness to
the Lenders, or order, on demand, together with any and all reasonable expenses
which may be incurred by the Agent or the Lenders in collecting any of the
indebtedness. The word "indebtedness" is used in this Section 12 in its most
comprehensive sense and means any and all advances, debts, obligations and
liabilities of the Borrower arising in connection with this Credit Agreement, in
each case, heretofore, now, or hereafter made, incurred or
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created, whether voluntarily or involuntarily, absolute or contingent,
liquidated or unliquidated, determined or undetermined, whether or not such
indebtedness is from time to time reduced, or extinguished and thereafter
increased or incurred, whether the Borrower may be liable individually or
jointly with others, whether or not recovery upon such indebtedness may be or
hereafter become barred by any statute of limitations, and whether or not such
indebtedness may be or hereafter become otherwise unenforceable.
12.2 Bankruptcy. Additionally, the Guarantor unconditionally and
----------
irrevocably guarantees the payment of any and all indebtedness of the Borrower
to the Lenders whether or not due or payable by the Borrower upon the occurrence
in respect of the Borrower of any of the events specified in Section 9.1(e), and
unconditionally and irrevocably promises to pay such indebtedness to the
Lenders, or order, on demand, in lawful money of the United States.
12.3 Nature of Liability. The liability of the Guarantor hereunder
-------------------
is exclusive and independent of any security for or other guaranty of the
indebtedness of the Borrower whether executed by the Guarantor, any other
guarantor or by any other party, and the liability of the Guarantor hereunder
shall not be affected or impaired by (a) any direction as to application of
payment by the Borrower or by any other party, or (b) any other continuing or
other guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the indebtedness of the Borrower, or (c) any payment on or in
reduction of any such other guaranty or undertaking, or (d) any dissolution,
termination or increase, decrease or change in personnel by the Borrower, or (e)
any payment made to the Agent or the Lenders on the indebtedness which the Agent
or such Lender repay the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
the Guarantor waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
12.4 Independent Obligation. The obligations of the Guarantor
----------------------
hereunder are independent of the obligations of any other guarantor or the
Borrower, and a separate action or actions may be brought and prosecuted against
the Guarantor whether or not action is brought against any other guarantor or
the Borrower and whether or not any other guarantor or the Borrower be joined in
any such action or actions. The Guarantor waives, to the fullest extent
permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Borrower or
other circumstance which operates to toll any statute of limitations as to the
Borrower shall, to the fullest extent permitted by law, operate to toll the
statute of limitations as to the Guarantor.
12.5 Authorization. The Guarantor authorizes the Agent and the
-------------
Lenders without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to:
(a) subject to the agreement of the Borrower, change the manner,
place or terms of payment of, and/or change or extend the time of payment
of, renew, increase, accelerate or alter, any of the indebtedness
(including any increase or decrease in the rate of interest thereon), any
security therefor, or any liability incurred directly or indirectly in
respect thereof, and the Guaranty herein made shall apply to the
indebtedness as so changed, extended, renewed or altered;
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(b) take and hold security for the payment of the indebtedness and
sell, exchange, release, surrender, realize upon or otherwise deal with in
any manner and in any order any property by whomsoever at any time pledged
or mortgaged to secure, or howsoever securing, the indebtedness or any
liabilities (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any offset there against;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
(e) settle or compromise any of the indebtedness, any security
therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate
the payment of all or any part thereof to the payment of any liability
(whether due or not) of the Borrower to its creditors other than the
Lenders;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Lenders regardless of what
liability or liabilities of the Guarantor or the Borrower remain unpaid;
and/or
(g) consent to or waive any breach of, or any act, omission or
default under, this Credit Agreement or any of the instruments or
agreements referred to herein, or otherwise, with the agreement of the
Borrower, amend, modify or supplement this Credit Agreement or any of such
other instruments or agreements
12.6 Reliance. It is not necessary for the Agent or the Lenders to
--------
inquire into the capacity or powers of the Borrower or its Subsidiaries or the
officers, directors, partners or agents acting or purporting to act on its
behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
12.7 Subordination. Any indebtedness of the Borrower now or
-------------
hereafter owing to the Guarantor is hereby subordinated to the indebtedness of
the Borrower owing to the Agent and the Lenders; provided that payment may be
--------
made by the Borrower on any such indebtedness owing to the Guarantor so long as
the same is not prohibited by this Credit Agreement; and provided further, that
----------------
if the Agent so requests at a time when an Event of Default exists, all such
indebtedness of the Borrower to the Guarantor shall be collected, enforced and
received by the Guarantor as trustee for the Lenders and be paid over to the
Lenders on account of the indebtedness of the Borrower to the Lenders, but
without affecting or impairing in any manner the liability of the Guarantor
under the other provisions of this Guaranty. Prior to the transfer by the
Guarantor of any note or negotiable instrument evidencing any indebtedness of
the Borrower to the Guarantor, the Guarantor shall ▇▇▇▇ such note or negotiable
instrument with a legend that the same is subject to this subordination.
12.8 Waiver. (a) The Guarantor waives any right (except as shall be
------
required by applicable statute and cannot be waived) to require the Agent or the
Lenders to (i) proceed against the Borrower, any other guarantor or any other
party, (ii) proceed against or exhaust any
97
security held from the Borrower, any other guarantor or any other party or (iii)
pursue any other remedy in the Agent's or the Lenders' power whatsoever. The
Guarantor waives any defense based on or arising out of any defense of the
Borrower, any other guarantor or any other party other than payment in full of
the indebtedness, including, without limitation, any defense based on or arising
out of the disability of the Borrower, any other guarantor or any other party,
or the unenforceability of the indebtedness or any part thereof from any cause,
or the cessation from any cause of the liability of the Borrower other than
payment in full of the indebtedness. The Agent and the Lenders may, at their
election, foreclose on any security held by the Agent, the Collateral Agent or
the Lenders by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the Agent
and the Lenders may have against the Borrower or any other party, or any
security, without affecting or impairing in any way the liability of the
Guarantor hereunder except to the extent the indebtedness has been paid. The
Guarantor waives, to the fullest extent permitted by law, any defense arising
out of any such election by the Agent and the Lenders, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of the Guarantor against any Borrower or any other party
or any security.
(b) The Guarantor waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. The Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the indebtedness and
the nature, scope and extent of the risks which the Guarantor assumes and incurs
hereunder, and agrees that the Agent and the Lenders shall have no duty to
advise the Guarantor of information known to them regarding such circumstances
or risks.
(c) The Guarantor, until the Obligations have been indefeasibly paid
in full, hereby waives all rights of subrogation which it may at any time
otherwise have as a result of this Guaranty (whether contractual, under Section
509 of the Bankruptcy Code, or otherwise) to the claims of the Lenders against
the Borrower or any other guarantor of the indebtedness of the Borrower to the
Lenders (collectively, the "Other Parties") and all contractual, statutory or
common law rights of reimbursement, contribution or indemnity from any Other
Party which it may at any time otherwise have as a result of this Guaranty. The
Guarantor hereby further waives any right to enforce any other remedy which the
Lenders now have or may hereafter have against any Other Party, any endorser or
any other guarantor of all or any part of such indebtedness of the Borrower to
the Lenders and any benefit of, and any right to participate in, any security or
collateral given to or for the benefit of the Lenders to secure payment of such
indebtedness of the Borrower to the Lenders.
12.9 Limitation on Enforcement. The Lenders agree that this Guaranty
-------------------------
may be enforced only by the action of the Agent, in each case acting upon the
instructions of the Required Lenders and that no Lender shall have any right
individually to seek to enforce or to enforce this Guaranty it being understood
and agreed that such rights and remedies may be exercised by the Agent for the
benefit of the Lenders upon the terms of this Credit Agreement. The Lenders
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further agree that this Guaranty may not be enforced against any Affiliate,
director, officer, employee or stockholder of the Guarantor.
* * *
99
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ HOLDING
COMPANY, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief Financial
Officer
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ COMPANY
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief Financial
Officer
AGENT:
-----
BT COMMERCIAL CORPORATION,
as Agent
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
ISSUING BANK:
------------
BANKERS TRUST COMPANY,
as Issuing Bank
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
LENDER:
------
BT COMMERCIAL CORPORATION,
as Lender
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President