EXECUTION COPY
$140,000,000
CREDIT AGREEMENT
dated as of
October 17, 1997
among
BLYTH INDUSTRIES, INC.
THE BANKS LISTED HEREIN
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
as Documentation Agent
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Administrative Agent
______________________
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
Arranger
TABLE OF CONTENTS
_______________
PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS . . . . . . . . . 20
SECTION 1.03. TYPES OF BORROWINGS . . . . . . . . . . . . . . . . . 21
ARTICLE 2
THE CREDITS
SECTION 2.01. COMMITMENTS TO LEND . . . . . . . . . . . . . . . . . 21
SECTION 2.02. METHOD OF COMMITTED BORROWING . . . . . . . . . . . . 23
SECTION 2.03. COMPETITIVE BID BORROWINGS. . . . . . . . . . . . . . 23
SECTION 2.04. NOTICE TO BANKS; FUNDING OF LOANS . . . . . . . . . . 28
SECTION 2.05. NOTES . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.06. MATURITY OF LOANS . . . . . . . . . . . . . . . . . . 29
SECTION 2.07. INTEREST RATES. . . . . . . . . . . . . . . . . . . . 29
SECTION 2.08. FEES. . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.09. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS. . . 32
SECTION 2.10. METHOD OF ELECTING INTEREST RATES . . . . . . . . . . 32
SECTION 2.11. SCHEDULED TERMINATION OF COMMITMENTS. . . . . . . . . 34
SECTION 2.12. OPTIONAL PREPAYMENTS. . . . . . . . . . . . . . . . . 34
SECTION 2.13. GENERAL PROVISIONS AS TO PAYMENTS . . . . . . . . . . 35
SECTION 2.14. FUNDING LOSSES. . . . . . . . . . . . . . . . . . . . 36
SECTION 2.15. COMPUTATION OF INTEREST AND FEES. . . . . . . . . . . 37
SECTION 2.16. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . 37
SECTION 2.17. REGULATION D COMPENSATION . . . . . . . . . . . . . . 40
SECTION 2.18. TAKEOUT OF SWINGLINE LOANS. . . . . . . . . . . . . . 41
SECTION 2.19. INCREASED COMMITMENTS, ADDITIONAL BANKS . . . . . . . 42
SECTION 2.20. CURRENCY EQUIVALENTS. . . . . . . . . . . . . . . . . 43
SECTION 2.21. JUDGMENT CURRENCY . . . . . . . . . . . . . . . . . . 44
ARTICLE 3
CONDITIONS
SECTION 3.01. CLOSING . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 3.02. BORROWINGS AND ISSUANCES OF LETTERS OF CREDIT . . . . 45
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
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SECTION 4.01. EXISTENCE AND POWER. . . . . . . . . . . . . . . . . .47
SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION . . . . . . . . . . . . . . . . . . . . 47
SECTION 4.03. BINDING EFFECT. . . . . . . . . . . . . . . . . . . . 47
SECTION 4.04. FINANCIAL INFORMATION . . . . . . . . . . . . . . . . 47
SECTION 4.05. LITIGATION. . . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.06. COMPLIANCE WITH ERISA . . . . . . . . . . . . . . . . 48
SECTION 4.07. ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . 48
SECTION 4.08. TAXES . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 4.09. NOT AN INVESTMENT COMPANY . . . . . . . . . . . . . . 49
SECTION 4.10. FULL DISCLOSURE . . . . . . . . . . . . . . . . . . . 49
ARTICLE 5
COVENANTS
SECTION 5.01. INFORMATION . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.02. COMPLIANCE WITH LAW . . . . . . . . . . . . . . . . . 52
SECTION 5.03. INSURANCE . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 5.04. MAINTENANCE OF PROPERTIES . . . . . . . . . . . . . . 52
SECTION 5.05. MAINTENANCE OF RECORDS; INSPECTION. . . . . . . . . . 52
SECTION 5.06. PAYMENT OF TAXES AND CLAIMS . . . . . . . . . . . . . 53
SECTION 5.07. CORPORATE EXISTENCE, ETC. . . . . . . . . . . . . . . 53
SECTION 5.08. TRANSACTIONS WITH AFFILIATES. . . . . . . . . . . . . 53
SECTION 5.09. PROHIBITED LIENS. . . . . . . . . . . . . . . . . . . 54
SECTION 5.10. SUBSIDIARY INDEBTEDNESS . . . . . . . . . . . . . . . 55
SECTION 5.11. INVESTMENTS . . . . . . . . . . . . . . . . . . . . . 56
SECTION 5.12. LEVERAGE RATIO. . . . . . . . . . . . . . . . . . . . 57
SECTION 5.13. MINIMUM CONSOLIDATED NET WORTH. . . . . . . . . . . . 57
SECTION 5.14. MERGERS AND SALES OF ASSETS . . . . . . . . . . . . . 57
SECTION 5.15. EXISTING TERM LOANS . . . . . . . . . . . . . . . . . 57
SECTION 5.16. SUBSIDIARY GUARANTORS . . . . . . . . . . . . . . . . 57
SECTION 5.17. USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . 58
ARTICLE 6
DEFAULTS
SECTION 6.01. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . 58
SECTION 6.02. NOTICE OF DEFAULT . . . . . . . . . . . . . . . . . . 61
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SECTION 6.03. CASH COVER. . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE 7
THE AGENTS
SECTION 7.01. APPOINTMENT AND AUTHORIZATION . . . . . . . . . . . . 62
SECTION 7.02. AGENTS AND AFFILIATES . . . . . . . . . . . . . . . . 62
SECTION 7.03. ACTION BY AGENTS. . . . . . . . . . . . . . . . . . . 62
SECTION 7.04. CONSULTATION WITH EXPERTS . . . . . . . . . . . . . . 62
SECTION 7.05. LIABILITY OF AGENT. . . . . . . . . . . . . . . . . . 62
SECTION 7.06. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . 63
SECTION 7.07. CREDIT DECISION . . . . . . . . . . . . . . . . . . . 63
SECTION 7.08. SUCCESSOR AGENT . . . . . . . . . . . . . . . . . . . 63
SECTION 7.09. AGENT'S FEE; ARRANGER FEE . . . . . . . . . . . . . . 64
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR
UNFAIR. . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 8.02. ILLEGALITY. . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.03. INCREASED COST AND REDUCED RETURN . . . . . . . . . . 66
SECTION 8.04. TAXES . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 8.05. BASE RATE LOANS SUBSTITUTED FOR AFFECTED FIXED RATE
LOANS . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 8.06. SUBSTITUTION OF BANK. . . . . . . . . . . . . . . . . 70
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. NOTICES . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 9.02. NO WAIVERS. . . . . . . . . . . . . . . . . . . . . . 70
SECTION 9.03. EXPENSES; INDEMNIFICATION . . . . . . . . . . . . . . 71
SECTION 9.04. SHARING OF SET-OFFS . . . . . . . . . . . . . . . . . 71
SECTION 9.05. AMENDMENTS AND WAIVERS. . . . . . . . . . . . . . . . 72
SECTION 9.06. SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . 72
SECTION 9.07. COLLATERAL. . . . . . . . . . . . . . . . . . . . . . 74
SECTION 9.08. GOVERNING LAW; SUBMISSION TO JURISDICTION . . . . . . 74
SECTION 9.09. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. . . . . . . 74
SECTION 9.10. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . 74
SECTION 9.11. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . 75
iii
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Pricing Schedule
Schedule 2.16 -- Existing Letters of Credit
Schedule 5.09 -- Existing Liens
Schedule 5.10 -- Existing Indebtedness
Schedule 5.11 -- Existing Investments
Exhibit A -- Note
Exhibit B -- Notice of Committed Borrowing
Exhibit C -- Competitive Bid Quote Request
Exhibit D -- Invitation for Competitive Bid Quotes
Exhibit E -- Competitive Bid Quote
Exhibits F-1 and F-2 -- Opinions of Counsel for the Borrower
Exhibit G -- Opinion of Special Counsel for the Agents
Exhibit H -- Assignment and Assumption Agreement
Exhibit I -- Guaranty Agreement
Exhibit J -- Extension Agreement
Exhibit K -- Compliance Certificate
iv
CREDIT AGREEMENT
AGREEMENT dated as of October 17, 1997 among BLYTH INDUSTRIES, INC., the
BANKS listed on the signature pages hereof, ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, as Documentation Agent and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. DEFINITIONS. The following terms, as used herein, have
the following meanings:
"AFFILIATE" means, at any time, (a) with respect to any Person, any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control
with, such first Person, and (b) with respect to the Borrower, any Person
beneficially owning or holding, directly or indirectly, 10% or more of any
class of voting or equity interests of the Borrower or any of its
Subsidiaries or any corporation of which the Borrower and its Subsidiaries
beneficially own or hold, in the aggregate, directly or indirectly, 10% or
more of any class of voting or equity interests. As used in this definition,
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an
"Affiliate" is a reference to an Affiliate of the Borrower.
"ABSOLUTE RATE AUCTION" means a solicitation of Competitive Bid Quotes
setting forth Competitive Bid Absolute Rates pursuant to Section 2.03 for
Competitive Bid Loans in Dollars.
"ACQUISITION" means an acquisition by the Borrower or any of its
Consolidated Subsidiaries of a company, a division, a location or a line of
business or of all or substantially all of the assets of any of the foregoing.
"ADDITIONAL BANK" has the meaning set forth in Section 2.19.
"ADMINISTRATIVE AGENT" means BofA in its capacity as administrative
agent for the Banks under the Loan Documents, and its successors in such
capacity.
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
"AGENT" means the Administrative Agent or the Documentation Agent, as
the context may require, and "AGENTS" means both of them.
"ALTERNATIVE CURRENCIES" means the respective lawful currencies of the
United Kingdom, France, Germany, Japan, Switzerland, The Netherlands, Austria
and Italy; PROVIDED that any other currency (except Dollars) shall also be
an Alternative Currency if (i) the Borrower requests, by notice to the Banks
through the Administrative Agent, that such currency be included as an
additional Alternative Currency for purposes of this Agreement, (ii) such
currency is freely transferable and is freely convertible into Dollars in the
London foreign exchange market, (iii) deposits in such currency are
customarily offered to banks in the London interbank market and (iv) no Bank
shall have objected to the inclusion of such currency as an Alternative
Currency by notice to the Borrower and the Administrative Agent given within
five Euro-Currency Business Days of such Bank's receipt of the notice
referred to in clause (i).
"ALTERNATIVE CURRENCY LOAN" means a Loan that is made in an Alternative
Currency in accordance with the applicable Notice of Borrowing.
"APPLICABLE LENDING OFFICE" means, with respect to any Bank, (i) in the
case of its Base Rate Loans, its Domestic Lending Office, (ii) in the case of
its Euro-Currency Loans, its Euro-Currency Lending Office, (iii) in the case
of its Competitive Bid Loans, its Competitive Bid Lending Office and (iv) in
the case of its Swingline Loans, its Swingline Lending Office.
"ASSIGNEE" has the meaning set forth in Section 9.06(c).
"BANK" means each bank listed on the signature pages hereof, each
Additional Bank or Assignee which becomes a Bank pursuant to Section 2.19 or
9.06(c), and their respective successors.
"BASE RATE" means, for any day, a rate per annum equal to the higher of
(i) the Reference Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
2
"BASE RATE LOAN" means a Syndicated Loan which bears interest at the
Base Rate pursuant to the applicable Notice of Committed Borrowing or Notice
of Interest Rate Election or the provisions of Article 8.
"BOFA" means Bank of America National Trust and Savings Association, and
its successors.
"BORROWER" means Blyth Industries, Inc., a Delaware corporation, and its
successors.
"BORROWER'S 1996 FORM 10-K" means the Borrower's annual report on Form
10-K for the fiscal year ended January 31, 1997, as filed with the Securities
and Exchange Commission pursuant to the Exchange Act.
"BORROWER'S LATEST FORM 10-Q" means the Borrower's quarterly report on
Form 10-Q for the quarter ended July 31, 1997, as filed with the Securities
and Exchange Commission pursuant to the Exchange Act.
"BORROWING" has the meaning set forth in Section 1.03.
"CANDLE AMERICA" means Candle Corporation of America, a New York
corporation.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and
the incurrence of a liability in accordance with GAAP.
"CASH EQUIVALENTS" means (a) marketable securities issued or directly
and unconditionally guaranteed by the United States Government or issued by
any agency or instrumentality thereof and backed by the full faith and credit
of the United States, in each case maturing within one year from the date of
issuance thereof; (b) obligations of a municipality, a state, a territory or
a possession of the United States, or any political subdivision of any of the
foregoing or of the District of Columbia as described in Section 103(a) of
the Code if these investments are rated at least AA- by Standard & Poor's
Ratings Services or its equivalent by another nationally recognized credit
rating agency or are secured, as to payments of principal and interest, by a
letter of credit provided by a financial institution or by insurance provided
by a bond insurance company whose debt is rated at least AA- by Standard &
Poor's Ratings Services or its equivalent by another nationally recognized
credit rating agency; (c) commercial paper maturing no more than 270 days
from the date of acquisition thereof and, at the time of acquisition, having
the highest rating by a nationally recognized credit rating agency; (d)
investments in short term asset management accounts offered by any
3
bank described in clause (e) of this definition for the purpose of investing
in loans to a corporation (other than an Affiliate of the Parent or any of
its Subsidiaries) organized under the laws of the United States of America or
any state thereof or the District of Columbia and rated at least A-1 by
Standard and Poor's Ratings Services are at least P-1 by ▇▇▇▇▇'▇ Investors
Service, Inc.; (e) certificates of deposit or bankers' acceptances maturing
within one year from the date of acquisition thereof issued by any bank or
trust company organized under the laws of the United States of America or any
state thereof or the District of Columbia having unimpaired capital, surplus
and undivided profits of not less than $250,000,000 and (f) tax exempt and
tax advantaged auction rate products issued by financial institutions and
rated at least AA- by Standard & Poor's Ratings Services or its equivalent by
another nationally recognized credit rating agency.
"CCW" means Candle Corporation Worldwide, Inc., a Delaware
corporation.
"CHICAGO OFFICE" means, at any time, the office of the Administrative
Agent in Chicago, Illinois specified in or pursuant to Section 9.01 at such
time.
"CLOSING DATE" means the date on or after the Effective Date on which
the Documentation Agent shall have received the documents specified in or
pursuant to Section 3.01.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"COMMITMENT" means (i) with respect to each Bank listed on the
Commitment Schedule, the amount set forth opposite its name on the Commitment
Schedule, (ii) with respect to any Additional Bank, the amount of the
Commitment assumed by it pursuant to Section 2.19 and (iii) with respect to
any Assignee, the amount of the transferor Bank's Commitment assigned to it
pursuant to Section 9.06(c), in each case as such amount may be changed from
time to time pursuant to Section 2.09, 2.19 or 9.06(c); PROVIDED that, if the
context so requires, the term "Commitment" means the obligation of a Bank to
extend credit up to such amount to the Borrower hereunder.
"COMMITMENT SCHEDULE" means the Commitment Schedule attached
hereto.
"COMMITTED LOAN" means a Syndicated Loan or a Swingline Loan.
"COMPETITIVE BID ABSOLUTE RATE" has the meaning set forth in Section
2.03(d)(ii)(D).
4
"COMPETITIVE BID ABSOLUTE RATE LOAN" means a Loan to be made by a
Bank pursuant to an Absolute Rate Auction.
"COMPETITIVE BID LENDING OFFICE" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it
may hereafter designate as its Competitive Bid Lending Office by notice to
the Borrower and the Administrative Agent; PROVIDED that any Bank may from
time to time by notice to the Borrower and the Administrative Agent designate
separate Competitive Bid Lending Offices for (i) its Competitive Bid LIBOR
Loans, (ii) its Competitive Bid Absolute Rate Loans and (iii) its Competitive
Bid Loans in different currencies, in which case all references herein to the
Competitive Bid Lending Office of such Bank shall be deemed to refer to any
or all of such offices, as the context may require.
"COMPETITIVE BID LIBOR LOAN" means a Loan to be made by a Bank pursuant
to a LIBOR Auction (including such a Loan bearing interest at the Base Rate
pursuant to Section 8.01(a)).
"COMPETITIVE BID LOAN" means a Competitive Bid LIBOR Loan or a
Competitive Bid Absolute Rate Loan.
"COMPETITIVE BID MARGIN" has the meaning set forth in Section
2.03(d)(ii)(C).
"COMPETITIVE BID QUOTE" has the meaning set forth in Section 2.03(d).
"CONSOLIDATED DEBT" means at any date the Indebtedness of the Borrower
and its Consolidated Subsidiaries, determined on a consolidated basis as of
such date.
"CONSOLIDATED EBITDA" means, for any period, the sum of (i) Consolidated
Net Income for such period plus (ii) to the extent deducted in the
determination thereof, interest expense, depreciation and amortization
expense and provision for income taxes. Consolidated EBITDA for any
four-quarter period will be adjusted on a historical pro forma basis to
reflect any Acquisition closed during such period as if such Acquisition had
been closed on the first day of such period.
"CONSOLIDATED NET INCOME" for any period means the consolidated net
income of the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis for such period.
5
"CONSOLIDATED NET WORTH" means at any date the consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries,
determined as of such date.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower
in its consolidated financial statements if such statements were prepared as
of such date.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DOCUMENTATION AGENT" means MGT in its capacity as documentation agent
for the Banks under the Loan Documents, and its successors in such capacity.
"DOLLAR AMOUNT" means, at any time:
(i) with respect to any Dollar-Denominated Loan, the
principal amount thereof then outstanding;
(ii) with respect to any Alternative Currency Loan, the principal
amount thereof then outstanding in the relevant Alternative Currency,
converted to Dollars in accordance with Section 2.20; and
(iii) with respect to any Letter of Credit Liabilities, the face
amount thereof at such time.
"DOLLAR-DENOMINATED LOAN" means a Loan that is made in Dollars in
accordance with the applicable Notice of Borrowing.
"DOLLARS" and the sign "$" mean lawful money of the United States.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City or Chicago are
authorized by law to close.
"DOMESTIC LENDING OFFICE" means, as to each Bank, its office located at
its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such
other office as such Bank may hereafter designate as its Domestic Lending
Office by notice to the Borrower and the Administrative Agent.
6
"EFFECTIVE DATE" means the date this Agreement becomes effective in
accordance with Section 9.09.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
but not limited to those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with an Obligor
under section 414 of the Code.
"EURO-CURRENCY BUSINESS DAY" means a Euro-Dollar Business Day, unless
such term is used in connection with an Alternative Currency Borrowing or
Alternative Currency Loan for which funds are to be paid or made available in
such Alternative Currency on such day, in which case such day shall not be a
Euro-Currency Business Day unless commercial banks are open for international
business (including dealings in deposits in such Alternative Currency) in
both London and the place where such funds are to be paid or made available.
"EURO-CURRENCY LENDING OFFICE" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Currency Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Currency Lending Office
by notice to the Administrative Agent; PROVIDED that any Bank may from time
to time by notice to the Borrower and the Administrative Agent designate
separate Euro-Currency Lending Offices for its Loans in different currencies,
in which case all references herein to the Euro-Currency Lending Office of
such Bank shall be deemed to refer to any or all of such offices, as the
context may require.
"EURO-CURRENCY LOAN" means a Syndicated Loan which is either a Euro-
Dollar Loan or an Alternative Currency Loan.
"EURO-CURRENCY MARGIN" means a rate per annum determined in
accordance with the Pricing Schedule.
7
"EURO-CURRENCY RATE" means a rate of interest determined pursuant to
Section 2.07(b) on the basis of a London Interbank Offered Rate.
"EURO-CURRENCY RESERVE PERCENTAGE" means, for any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars
in respect of "Eurocurrency liabilities" (or in respect of any other category
of liabilities which includes deposits by reference to which the interest
rate on Euro-Currency Loans is determined or any category of extensions of
credit or other assets which includes loans by a non-United States office of
any Bank to United States residents).
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
Dollar deposits) in London.
"EURO-DOLLAR LOAN" means a Syndicated Loan denominated in Dollars which
bears interest at a Euro-Currency Rate pursuant to the applicable Notice of
Committed Borrowing or Notice of Interest Rate Election.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"EXISTING REVOLVER" means the revolving credit facility identified as Item
1 in Schedule 5.10.
"EXISTING TERM LOANS" means the term loan facilities identified as Items
2 and 3 in Schedule 5.10.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business
Day next succeeding such day, PROVIDED that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal Funds
Rate for such
8
day shall be the average rate quoted to BofA on such day on such transactions
as determined by the Administrative Agent.
"FISCAL QUARTER" means a consolidated fiscal quarter of the Borrower and
its Subsidiaries ending on a Quarter Date.
"FISCAL YEAR" means the consolidated fiscal year of the Borrower and its
Subsidiaries ending on January 31 of each calendar year.
"FIXED RATE LOANS" means Euro-Currency Loans, Swingline Loans or
Competitive Bid Loans (excluding Swingline Loans or Competitive Bid LIBOR
Loans bearing interest at the Base Rate) or any combination of the foregoing.
"FOREIGN SUBSIDIARY" means any Subsidiary organized outside the United
States and conducting substantially all its business outside the United
States.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any State or other political
subdivision thereof, or
(ii) any jurisdiction in which the Borrower or any of its
Subsidiaries conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Borrower or any of its Subsidiaries,
or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"GROUP OF LOANS" means at any time a group of Loans consisting of (i)
all Loans which are Base Rate Loans at such time or (ii) all Euro-Currency
Loans denominated in the same currency and having the same Interest Period at
such time, PROVIDED that, if a Committed Loan of any particular Bank is
converted to or made as a Base Rate Loan pursuant to Article 8, such Loan
shall be included in the same Group or Groups of Loans from time to time as
it would have been if it had not been so converted or made.
9
"GUARANTY" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing
any indebtedness, dividend or other obligation of any other Person in any
manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefore;
(b) to advance or supply funds (i) for the purchase or payment of
such indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor
under any Guaranty, the indebtedness or other obligations that are the
subject of such Guaranty shall be assumed to be direct obligations of such
obligor.
"GUARANTY AGREEMENT" means the Guaranty Agreement, dated as of the date
hereof between the Subsidiary Guarantors and the Documentation Agent, such
Guaranty Agreement to be substantially in the form of Exhibit I hereto, and
as the same may from time to time be amended, supplemented or otherwise
modified.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety,
the removal of which may be required or the generation, manufacture,
refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage,
seepage, or filtration of which is or shall be restricted, prohibited or
penalized by any applicable law (including, without limitation, asbestos,
urea formaldehyde foam insulation and polychlorinated biphenyls).
10
"IMMATERIAL SUBSIDIARY" means, at any time, any Subsidiary of the
Borrower having consolidated assets at such time in an amount less than 5% of
Consolidated Net Worth at such time.
"INDEBTEDNESS" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under any
conditional sale or other title retention agreement with respect to any such
property);
(c) all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account by
banks and other financial institutions (whether or not representing
obligations for borrowed money); PROVIDED that for purposes of the definition
of "Consolidated Debt", contingent liabilities in respect of undrawn amounts
under letters of credit shall be excluded;
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a type
described in any clauses (a) through (f) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect thereof not withstanding that any such obligation is
deemed to be extinguished under GAAP.
"INDEMNITEE" has the meaning set forth in Section 9.03(b).
"INTEREST PERIOD" means: (1) with respect to each Euro-Currency Loan,
the period commencing on the date of borrowing specified in the applicable
Notice of Borrowing or on the date specified in the applicable Notice of
Interest
11
Rate Election and ending one, two, three or six months thereafter,
as the Borrower may elect in the applicable notice, PROVIDED that:
(a) any Interest Period (except an Interest Period determined
pursuant to clause (c) below) which would otherwise end on a day which
is not a Euro-Currency Business Day for the relevant currency shall be
extended to the next succeeding Euro-Currency Business Day for such
currency unless such Euro-Currency Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Euro-Currency Business Day for such currency;
(b) any Interest Period which begins on the last
Euro-Currency Business Day for the relevant currency in a calendar month
(or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall, subject to
clause (c) below, end on the last Euro-Currency Business Day for the
relevant currency in a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date for the relevant currency shall end on such Termination
Date;
(2) with respect to each Swingline Loan, the period commencing on the
date of borrowing specified in the applicable Notice of Borrowing and ending
such number of days thereafter (but not more than 7 days) as the Borrower may
elect in such notice; PROVIDED that:
(a) any Interest Period (except an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(3) with respect to each Competitive Bid LIBOR Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing and ending such whole number of months thereafter as the Borrower
may elect in accordance with Section 2.03; PROVIDED that:
(a) any Interest Period (except an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which
is not a Euro-Currency Business Day for the relevant currency shall be
12
extended to the next succeeding Euro-Currency Business Day for such
currency unless such Euro-Currency Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Euro-Currency Business Day for such currency;
(b) any Interest Period which begins on the last
Euro-Currency Business Day for the relevant currency in a calendar month
(or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall, subject to
clause (c) below, end on the last Euro-Currency Business Day for such
currency in a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date for the relevant currency shall end on such Termination
Date; and
(4) with respect to each Competitive Bid Absolute Rate Loan,
the period commencing on the date of borrowing specified in the applicable
Notice of Borrowing and ending such number of days thereafter (but not less
than 7 days) as the Borrower may elect in accordance with Section 2.03;
PROVIDED that:
(a) any Interest Period (except an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which
is not a Euro-Currency Business Day for the relevant currency shall be
extended to the next succeeding Euro-Currency Business Day for such
currency; and
(b) any Interest Period which would otherwise end after the
Termination Date for the relevant currency shall end on such Termination
Date.
"INVESTMENT" means (a) any direct or indirect purchase or other
acquisition by the Borrower or any of its Subsidiaries of, or of a beneficial
interest in, any securities of any other Person (other than a Person that,
prior to such purchase or acquisition, was a Subsidiary of the Borrower), (b)
any direct or indirect redemption, retirement, purchase or other acquisition
for value, by any Subsidiary of the Borrower from any Person other than the
Borrower or any of its Subsidiaries, of any equity securities of such
Subsidiary, or (c) any direct or indirect loan, advance (other than advances
to employees for moving, entertainment and travel expenses, drawing accounts
and similar expenditures in the ordinary course of business) or capital
contribution by the Borrower or any of its Subsidiaries to any other Person
other than a Subsidiary of the Borrower, including all indebtedness and
accounts receivable from that other Person that are
13
not current assets or did not arise from sales to that other Person in the
ordinary course of business. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investments. A guaranty by
any Subsidiary of an Obligor of Indebtedness of such Obligor shall not be
deemed an Investment hereunder.
"ISSUING BANK" means ▇▇▇▇▇▇ Bank and Trust Company and any other Bank
that may agree to issue letters of credit hereunder, in each case as issuer
of a Letter of Credit hereunder.
"LETTER OF CREDIT" means a letter of credit to be issued hereunder by the
Issuing Bank in accordance with Section 2.16.
"LETTER OF CREDIT LIABILITIES" means, for any Bank and at any time, such
Bank's ratable participation in the sum of (x) the amounts then owing by the
Borrower in respect of amounts drawn under Letters of Credit and (y) the
aggregate amount then available for drawing under all Letters of Credit.
"LEVERAGE RATIO" means, at any date, the ratio of (i) Consolidated Debt
at such date to (ii) Consolidated EBITDA for the period of four consecutive
fiscal quarters most recently ended on or prior to such date.
"LIBOR AUCTION" means a solicitation of Competitive Bid Quotes setting
forth Competitive Bid Margins based on the London Interbank Offered Rate
pursuant to Section 2.03.
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of
any vendor, lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention agreement or Capital Lease,
upon or with respect to any property or asset of such Person.
"LOAN" means a Committed Loan or a Competitive Bid Loan and "LOANS"
means Committed Loans or Competitive Bid Loans or both.
"LOAN DOCUMENTS" means this Agreement, the Notes and the Guaranty
Agreement.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.07(b).
14
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Borrower and its
Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of
the Borrower and its Subsidiaries taken as a whole, or (b) the ability of the
Obligors collectively to perform their obligations under the Loan Documents
or (c) the validity or enforceability of any Loan Document.
"MATERIAL SUBSIDIARY" means, at any time, any Subsidiary of the Borrower
having consolidated assets at such time in an amount equal to or greater than
10% of Consolidated Net Worth at such time.
"MGT" means ▇▇▇▇▇▇ Guaranty Trust Company of New York, and its
successors.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"NOTES" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to repay
the Loans, and "NOTE" means any one of such promissory notes issued hereunder.
"NOTICE OF BORROWING" means a Notice of Committed Borrowing or a
Notice of Competitive Bid Borrowing.
"NOTICE OF COMMITTED BORROWING" has the meaning set forth in Section
2.02.
"NOTICE OF COMPETITIVE BID BORROWING" has the meaning set forth in
Section 2.03(f).
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in
Section 2.10(a).
"NOTICE OF ISSUANCE" has the meaning set forth in Section 2.16(b).
"OBLIGOR" means any of the Borrower and the Subsidiary Guarantors.
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Person delivering such certificate
whose responsibilities extend to the subject matter of such certificate.
15
"PARENT" means, with respect to any Bank, any Person controlling such
Bank.
"PARTICIPANT" has the meaning set forth in Section 9.06(b).
"PARTYlITE" means PartyLite Gifts, Inc., a Delaware corporation.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERMITTED LIENS" means:
(a) Liens for current taxes, assessments or governmental changes which
are not delinquent or remain payable without penalty, or the validity of
which is being contested in good faith by appropriate proceedings and for
which adequate reserves or other appropriate provisions are maintained on the
books of the Borrower or any of its Subsidiaries in accordance with GAAP,
PROVIDED that any right to seizure, levy, attachment, sequestration,
foreclosure or garnishment with respect to such property by reason of such
Lien has not matured, or has been and continues to be effectively enjoyed or
stayed;
(b) nonconsensual Liens, such as landlord liens and Liens of carriers,
workmen, repairmen, warehousemen, mechanics and materialmen, imposed by
operation of law, in each case incurred in the ordinary course of business
and securing obligations that are not overdue or securing obligations that
are overdue that are being contested in good faith by appropriate proceedings
and (with respect to any such obligations that are overdue) for which
adequate reserves or other appropriate provisions are maintained on the books
of the Borrower or any of its Subsidiaries in accordance with GAAP, PROVIDED
that any right to seizure, levy, attachment, sequestration, foreclosure or
garnishment with respect to such property by reason of such Lien has not
matured, or has been and continues to be effectively enjoyed or stayed;
(c) Liens incurred or deposits made in connection with workers'
compensation, unemployment insurance and other types of social security, or
securing liability to insurance carriers under insurance and other types of
social security, or securing liability to insurance carriers under insurance
or self-insurance arrangements, or obtaining utility service or to secure the
performance of tenders, statutory obligations, surety and appeal bonds
(PROVIDED that no Lien securing any appeal or similar bond in connection with
any litigation or other legal proceeding shall constitute a Permitted Lien to
the extent the amount secured thereby exceeds $5,000,000), bids, leases,
government contracts, trade contracts, performance and return-of-money bonds
and other similar obligations
16
(exclusive of obligations for the payment of borrowed money) in each case
incurred in the ordinary course of business and securing obligations that are
not overdue or securing obligations that are overdue that are being contested
in good faith by appropriate proceedings and (with respect to any such
obligations that are overdue) for which adequate reserves or other
appropriate provisions are maintained on the books of the Borrower or any of
its Subsidiaries in accordance with GAAP, PROVIDED that any right to seizure,
levy, attachment, sequestration, foreclosure or garnishment with respect to
such property by reason of such Lien has not matured, or has been and
continues to be effectively enjoyed or stayed;
(d) easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities in title and other similar charges or
encumbrances not interfering in any Material respect with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries; and
(e) Liens arising out of or in connection with any litigation or other
legal proceeding, the time for the appeal or petition for rehearing of which
shall not have expired or which is being contested in good faith by
appropriate proceedings and for which adequate reserves or other appropriate
provisions are maintained on the books of the Borrower or any of its
subsidiaries in accordance with GAAP, PROVIDED that any right to seizure,
levy, attachment, sequestration, foreclosure or garnishment with respect to
such property by reason of such Lien has not matured, or has been and
continues to be effectively enjoyed or stayed; and PROVIDED FURTHER that no
such Lien shall be a Permitted Lien to the extent that the amount secured
thereby exceeds $5,000,000.
"PERSON" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the proceeding five years, has been established or
maintained, or to which contributions are or, within the preceding five
years, have been made or required to be made, by an Obligor or any of its
ERISA Affiliates or with respect to which an Obligor or any of its ERISA
Affiliates may have any liability.
"PREFERRED STOCK" means any class of capital stock of a corporation that
is preferred over any other class of capital stock of such corporation as to
the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"PRICING SCHEDULE" means the Pricing Schedule attached hereto.
17
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, ▇▇▇▇▇▇ or
inchoate.
"QUARTERLY DATE" means each January 31, April 30, July 31 and October
31, commencing with January 31, 1998.
"REFERENCE BANKS" means the principal London offices of Dresdner Bank
AG, BofA and MGT.
"REFERENCE RATE" means the rate of interest publicly announced by BofA
in San Francisco, California from time to time as its "reference rate". Any
change in the reference rate announced by BofA shall take effect at the
opening of business on the day specified in the public announcement of such
change. (The "reference rate" is a rate set by BofA based upon various
factors including BofA's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing
some loans, which may be priced at, above, or below such announced rate.)
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REQUIRED BANKS" means at any time Banks having at least 66 2/3% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding at least 66 2/3% of the aggregate Dollar Amount of the
Loans and the Letter of Credit Liabilities.
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
executive officer of the Borrower with responsibility for the administration
of the relevant portion of this Agreement.
"REVOLVING CREDIT PERIOD" means the period from and including the
Effective Date to but excluding the Termination Date.
"SENIOR FINANCIAL OFFICER" means as to any Person, the chief financial
officer, principal accounting officer, treasurer or comptroller of such Person.
"SPOT RATE" means, at any date, the Administrative Agent's spot buying
rate for the relevant Alternative Currency against Dollars as of approximately
11:00 A.M. (London time) on such date.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
18
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture of
more than 50% interest in the profits or capital thereof is owned by such
Person or one or more o fits Subsidiaries or such Person and one or more of
its Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of
its Subsidiaries).
"SUBSIDIARY GUARANTORS" means the Subsidiaries of the Borrower listed in
the signature pages of the Guaranty Agreement and their respective successors.
"SWAPS" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount
of the obligation under any Swap shall be the amount determined in respect
thereof as of the end of the then most recently ended fiscal quarter of such
Person, based on the assumptions that such Swap had terminated at the end of
such fiscal quarter, and in making such determination, if any agreement
relating to such Swap provides for the netting of amounts payable by and to
such Person thereunder or if any such agreement provides for the simultaneous
payment of amounts by and to such Person, then in each such case, the amount
of such obligation shall be the net amount so determined.
"SWINGLINE BANK" means Bank of America National Trust and Savings
Association, and its successors.
"SWINGLINE LENDING OFFICE" means, as to the Swingline Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Swingline Lending
Office) or such other office as such Bank may hereafter designate as its
Swingline Lending Office by notice to the Borrower and the Administrative
Agent.
"SWINGLINE LOAN" means a loan made by the Swingline Bank pursuant to
Section 2.01(b).
"SWINGLINE TAKEOUT LOAN" means a Base Rate Loan made pursuant to
Section 2.18.
"SYNDICATED LOAN" means a Loan made by a Bank pursuant to Section
2.01(a); PROVIDED that, if any such loan or loans (or portions thereof) are
combined or subdivided pursuant to a Notice of Interest Rate Election, the
term "Syndicated Loan" shall refer to the combined principal amount resulting
from such
19
combination or to each of the separate principal amounts resulting
from such subdivision, as the case may be.
"TERMINATION DATE" means October 17, 2002, or such later date to which
the Termination Date may be extended pursuant to Section 2.01(c), or if any
such day is not a Euro-Currency Business Day for the relevant currency, the
next preceding Euro-Currency Business Day for such currency. Unless the
context otherwise requires, references to the Termination Date are to the
Termination Date determined with reference to Loans denominated in Dollars.
"UCP" means the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500, as
amended from time to time.
"UNITED STATES" means the United States of America, including the States
and the District of Columbia, but excluding its territories and possessions.
"UNREFUNDED SWINGLINE LOANS" has the meaning set forth in
Section 2.18(b).
"WHOLLY-OWNED SUBSIDIARY" means, at any time, with respect to any
Person, any Subsidiary of such Person one hundred percent (100%) of all of
the equity interests (except directors' qualifying shares) and voting
interests of which are owned by any one or more of such Person and such
Person's other Wholly-Owned Subsidiaries at such time.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance
with generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks; PROVIDED that, if the Borrower notifies
the Documentation Administrative Agent that the Borrower wishes to amend any
covenant in Article 5 to eliminate the effect of any change in generally
accepted accounting principles on the operation of such covenant (or if the
Documentation Agent notifies the Borrower that the Required Banks wish to
amend Article 5 for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice
20
is withdrawn or such covenant is amended in a manner satisfactory to the
Borrower and the Required Banks.
SECTION 1.03. TYPES OF BORROWINGS. The term "BORROWING" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant
to Article 2 on the same date, all of which Loans are of the same type
(subject to Article 8), are denominated in the same currency and, except in
the case of Base Rate Loans, have the same initial Interest Period.
Borrowings are classified for purposes of this Agreement either by reference
to the pricing of Loans comprising such Borrowing (E.G., a "FIXED RATE
BORROWING" is a Euro-Dollar Borrowing, a Swingline Borrowing or a Competitive
Bid Borrowing (excluding any such Borrowing consisting of Swingline Loans or
Competitive Bid LIBOR Loans bearing interest at the Base Rate), and a
"EURO-DOLLAR BORROWING" is a Borrowing comprised of Euro-Dollar Loans) or by
reference to the provisions of Article 2 under which participation therein is
determined (I.E., a "SYNDICATED BORROWING" is a Borrowing under Section
2.01(a) in which all Banks participate in proportion to their Commitments,
while a "COMPETITIVE BID BORROWING" is a Borrowing under Section 2.03 in
which the Bank participants are determined on the basis of their bids in
accordance therewith).
ARTICLE 2
THE CREDITS
SECTION 2.01. COMMITMENTS TO LEND. (a) SYNDICATED LOANS. During
the Revolving Credit Period each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make Loans to the Borrower from
time to time in amounts such that the aggregate Dollar Amount of Committed
Loans by such Bank, together with its Letter of Credit Liabilities and its
participating interests in any Unrefunded Swingline Loans, shall at no time
exceed the amount of its Commitment. The aggregate Dollar Amount of each
Borrowing under this subsection (other than a Swingline Takeout Borrowing)
shall be (i) in the case of a Base Rate Borrowing,$1,000,000 or any larger
multiple of $500,000 (except that any such Borrowing may be in the aggregate
amount available to the Borrower in accordance with Section 3.02) or (ii) in
the case of a Euro-Currency Borrowing, $2,000,000 or any larger multiple in
of $500,000. Each Borrowing under this subsection shall be made from the
several Banks ratably in proportion to their respective Commitments. Within
the foregoing limits, the Borrower may borrow under this Section, repay, or
to the extent permitted by Section 2.12, prepay Loans and reborrow at any
time during the Revolving Credit Period under this Section.
21
(b) SWINGLINE LOANS. From time to time prior to the
Termination Date, the Swingline Bank agrees, on the terms and conditions set
forth in this Agreement, to make loans denominated in Dollars to the Borrower
pursuant to this subsection from time to time in amounts such that (i) the
aggregate Dollar Amount of its Committed Loans at any one time outstanding
together with its Letter of Credit Liabilities shall not exceed the amount of
its Commitment, (ii) the aggregate Dollar Amount of Swingline Loans at any
time outstanding shall not exceed $10,000,000 and (iii) the number of
Swingline Loans outstanding at any time shall not be greater than five.
Within the foregoing limits, the Borrower may borrow under this subsection,
repay or, to the extent permitted by Section 2.12, prepay Loans and reborrow
at any time during the Revolving Credit Period under this subsection;
PROVIDED that the proceeds of a Swingline Borrowing may not be used, in whole
or in part, to refund any prior Swingline Borrowing. Each Borrowing under
this subsection 2.01(b) shall be in an aggregate principal amount of $100,000
or any larger multiple thereof (except that any such Borrowing may be in the
aggregate amount available in accordance with Section 3.02).
(c) The Termination Date may be extended, in the manner set
forth in this subsection 2.01(c), on October 17, 1998 and on each anniversary
of such date which falls not less than one year prior to the Termination Date
as theretofore extended (an "EXTENSION DATE"), for a period of one year after
the date on which the Termination Date would otherwise have occurred. If the
Borrower wishes to request an extension of the Termination Date on any
Extension Date, it shall give written notice to that effect to the
Documentation Agent not less than 45 nor more than 90 days prior to such
Extension Date, whereupon the Documentation Agent shall notify each of the
Banks of such notice. Each Bank will respond to such request, whether
affirmatively or negatively, within 30 days. If all Banks shall have
responded affirmatively to such a request, then, subject to receipt by the
Documentation Agent of counterparts of an Extension Agreement in
substantially the form of Exhibit J duly completed and signed by all of the
parties hereto, the Termination Date shall be extended, effective on such
Extension Date, for a period of one year to the date stated in such Extension
Agreement. If Banks holding less than all but more than 75% of the aggregate
Commitments shall have responded affirmatively to such a request, then the
Borrower shall have the right prior to the Extension Date to replace all, but
not less than all, of the Banks that did not respond affirmatively with an
Assignee or Assignees (which may be one or more of the other Banks) that will
purchase the Loans and assume the Commitment and Letter of Credit Liabilities
of the Banks that did not respond affirmatively and extend the Termination
Date as requested, and, upon consummation of the assignments pursuant to
Section 9.06 promptly followed by the receipt by the Documentation Agent of
counterparts of an Extension Agreement substantially in the form of Exhibit J
duly completed and signed by all of the parties hereto, the Termination Date
shall be extended, effective on such
22
Extension Date, for a period of one year to the date stated in such Extension
Agreement.
SECTION 2.02. METHOD OF COMMITTED BORROWING. The Borrower shall give
the Administrative Agent telephonic notice with the information required
described in clauses (a) - (e) below, followed promptly by a written notice
substantially in the form of Exhibit B (a "NOTICE OF COMMITTED BORROWING") not
later than 12:00 Noon (New York City time) on (x) the date of each Base Rate
Borrowing or Swingline Borrowing, (y) the third Euro-Dollar Business Day
before each Euro-Dollar Borrowing and (z) the fourth Euro-Currency Business
Day before each Euro-Currency Borrowing in an Alternative Currency,
specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Swingline
Borrowing or a Euro-Currency Business Day for the relevant currency in
the case of a Euro-Currency Borrowing;
(b) the currency and aggregate amount (in such currency) of such
Borrowing;
(c) whether the Loans comprising such Borrowing are to be
Swingline Loans or Syndicated Loans;
(d) in the case of a Syndicated Borrowing, whether the Loans
comprising such Borrowing are to bear interest initially at the Base Rate
or a Euro-Currency Rate; and
(e) in the case of a Fixed Rate Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
SECTION 2.03. COMPETITIVE BID BORROWINGS. (a) THE COMPETITIVE BID
OPTION. In addition to Committed Borrowings pursuant to Section 2.01, the
Borrower may, as set forth in this Section, request the Banks to make offers to
make Competitive Bid Loans to the Borrower from time to time during the
Revolving Credit Period. The Banks may, but shall have no obligation to, make
such offers and the Borrower may, but shall have no obligation to, accept any
such offers in the manner set forth in this Section.
(b) COMPETITIVE BID QUOTE REQUEST. When the Borrower wishes
to request offers to make Competitive Bid Loans under this Section, it shall
transmit to the Administrative Agent by telephone call followed promptly by
facsimile
23
transmission a Competitive Bid Quote Request substantially in the form of
Exhibit C hereto so as to be received by the Administrative Agent at its
Chicago Office not later than 12:00 Noon (New York City time) on (x) the
fifth Euro-Currency Business Day before the date of Borrowing proposed
therein, in the case of a LIBOR Auction in an Alternative Currency, (y) the
fourth Euro-Currency Business Day before the date of Borrowing proposed
therein, in the case of a LIBOR Auction in Dollars or (z) the Domestic
Business Day next preceding the date of Borrowing proposed therein, in the
case of an Absolute Rate Auction, or, in any such case, such other time or
date as the Borrower and the Administrative Agent shall have mutually agreed
and shall have notified to the Banks not later than the date of the
Competitive Bid Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective. Each such Competitive Bid
Quote Request shall specify:
(i) the proposed date of Borrowing, which shall be (x) a
Euro-Currency Business Day in the case of a LIBOR Auction or (y) a
Domestic Business Day in the case of an Absolute Rate Auction,
(ii) the proposed currency and the aggregate amount (in such
currency) of such Borrowing, which shall be $2,000,000 in aggregate
Dollar Amount (or any larger multiple of $1,000,000),
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Competitive Bid Quotes requested are to set
forth a Competitive Bid Margin or a Competitive Bid Absolute Rate.
The Borrower may request offers to make Competitive Bid Loans for more
than one Interest Period in a single Competitive Bid Quote Request. No more
than two (2) Competitive Bid Quote Requests shall be given within five
Euro-Currency Business Days (or such other number of days as the Borrower and
the Administrative Agent may agree) of any other Competitive Bid Quote
Request for a Borrowing in the same currency.
(c) INVITATION FOR COMPETITIVE BID QUOTES. Promptly after receiving
a Competitive Bid Quote Request, the Administrative Agent shall send to the
Banks by telex or facsimile an Invitation for Competitive Bid Quotes
substantially in the form of Exhibit D hereto, which shall constitute an
invitation by the Borrower to each Bank to submit Competitive Bid Quotes
offering to make the Competitive Bid Loans to which such Competitive Bid
Quote Request relates in accordance with this Section.
24
(d) SUBMISSION AND CONTENTS OF COMPETITIVE BID QUOTES. (i) Each Bank
may submit a competitive bid quote (a "COMPETITIVE BID QUOTE") containing an
offer or offers to make Competitive Bid Loans in response to any Invitation
for Competitive Bid Quotes. Each Competitive Bid Quote must comply with the
requirements of this subsection 2.03(d) and must be submitted to the
Administrative Agent by telex or facsimile at its Chicago Office not later
than (x) 10:30 A.M. (New York City time) on the fourth Euro-Currency Business
Day before the proposed date of Borrowing, in the case of a LIBOR Auction in
an Alternative Currency, (y) 10:30 A.M. (New York City time) on the third
Euro-Currency Business Day before the proposed date of Borrowing, in the case
of a LIBOR Auction in Dollars, or (z) 10:30 A.M. (New York City time) on the
proposed date of Borrowing, in the case of an Absolute Rate Auction, or, in
any such case, such other time or date as the Borrower and the Administrative
Agent shall have mutually agreed and shall have notified to the Banks not
later than the date of the Competitive Bid Quote Request for the first LIBOR
Auction or Absolute Rate Auction for which such change is to be effective;
PROVIDED that Competitive Bid Quotes submitted by the Administrative Agent
(or any affiliate of the Administrative Agent) in the capacity of a Bank may
be submitted, and may only be submitted, if the Administrative Agent or such
affiliate notifies the Borrower of the terms of the offer or offers contained
therein not later than (x) one hour before the deadline for the other Banks,
in the case of a LIBOR Auction or (y) 15 minutes before the deadline for the
other Banks, in the case of an Absolute Rate Auction. Subject to Articles 3
and 8, any Competitive Bid Quote so made shall not be revocable except with
the written consent of the Administrative Agent given on the instructions of
the Borrower.
(ii) Each Competitive Bid Quote shall be substantially in the
form of Exhibit E hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount (in the relevant currency) of
the Competitive Bid Loan for which each such offer is being
made, which principal amount (w) may be greater than or less
than the Commitment of the quoting Bank, (x) must be in the
Dollar Amount of $2,000,000 (or any larger mulitple of
$1,000,000), (y) may not exceed the principal amount of
Competitive Bid Loans for which offers were requested and (z)
may be subject to an aggregate limitation as to the principal
amount of Competitive Bid Loans for which offers being made
by such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or
below the applicable London Interbank Offered Rate (the
25
"COMPETITIVE BID MARGIN") offered for each such Competitive
Bid Loan, expressed as a percentage (specified to the nearest
1/1,000th of 1%) to be added to or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/1,000th of 1%) (the
"COMPETITIVE BID ABSOLUTE RATE") offered for each such
Competitive Bid Loan, and
(E) the identity of the quoting Bank.
A Competitive Bid Quote may set forth up to five separate offers by the
quoting Bank with respect to each Interest Period specified in the related
Invitation for Competitive Bid Quotes.
(iii) Any Competitive Bid Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit E
hereto or does not specify all of the information required by
subsection 2.03(d)(ii) above;
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Competitive Bid Quotes; or
(D) arrives after the time set forth in subsection 2.03(d)(i).
(e) NOTICE TO BORROWER. The Administrative Agent shall promptly
notify the Borrower of the terms of (i) any Competitive Bid Quote submitted
by a Bank that is in accordance with subsection 2.03(d) and (ii) any
Competitive Bid Quote that amends, modifies or is otherwise inconsistent with
a previous Competitive Bid Quote submitted by such Bank with respect to the
same Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote
shall be disregarded by the Administrative Agent unless such subsequent
Competitive Bid Quote is submitted solely to correct a manifest error in such
former Competitive Bid Quote. The Administrative Agent's notice to the
Borrower shall specify (A) the aggregate principal amount of Competitive Bid
Loans for which offers have been received for each Interest Period specified
in the related Competitive Bid Quote Request, (B) the respective principal
amounts and Competitive Bid Margins or Competitive Bid Absolute Rates, as the
case may be, so offered and (C) if applicable, limitations on the aggregate
principal amount of Competitive Bid Loans for which offers in any single
Competitive Bid Quote may be accepted.
26
(f) ACCEPTANCE AND NOTICE BY BORROWER. The Borrower shall notify
the Administrative Agent of its acceptance or non-acceptance of the offers
notified to it pursuant to subsection 2.03(e) at its Chicago Office not later
than 12:00 Noon (New York City time) on (x) the fourth Euro-Currency Business
Day before the proposed date of Borrowing, in the case of a LIBOR Auction in
an Alternative Currency, (y) the third Euro-Dollar Business Day before the
proposed date of Borrowing, in the case of a LIBOR Auction in Dollars or (z)
the proposed date of Borrowing, in the case of an Absolute Rate Auction, or,
in any such case, such other time or date as the Borrower and the
Administrative Agent shall have mutually agreed and shall have notified to
the Banks not later than the date of the Competitive Bid Quote Request for
the first LIBOR Auction or Absolute Rate Auction for which such change is to
be effective. In the case of acceptance, such notice (a "NOTICE OF
COMPETITIVE BID BORROWING") shall specify the aggregate principal amount of
offers for each Interest Period that are accepted. The Borrower may accept
any Competitive Bid Quote in whole or in part; PROVIDED that:
(i) the aggregate principal amount of each Competitive Bid
Borrowing may not exceed the applicable amount set forth in the related
Competitive Bid Quote Request;
(ii) the aggregate Dollar Amount of each Competitive Bid
Borrowing must be in the amount of $2,000,000 (or any larger mulitple of
$1,000,000);
(iii) acceptance of offers may only be made on the basis of
ascending Competitive Bid Margins or Competitive Bid Absolute Rates,
as the case may be; and
(iv) the Borrower may not accept any offer that is described in
subsection 2.03(d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) ALLOCATION BY ADMINISTRATIVE AGENT. If offers are made by two
or more Banks with the same Competitive Bid Margins or Competitive Bid
Absolute Rates, as the case may be, for a greater aggregate principal amount
than the amount in respect of which such offers are accepted for the related
Interest Period, the principal amount of Competitive Bid Loans in respect of
which such offers are accepted shall be allocated by the Administrative Agent
among such Banks as nearly as possible (in multiples of $1,000,000 or the
equivalent thereof in the relevant Alternative Currency, as the
Administrative Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers.
27
Determinations by the Administrative Agent of the amounts of Competitive Bid
Loans shall be conclusive in the absence of manifest error.
SECTION 2.04. NOTICE TO BANKS; FUNDING OF LOANS.
(a) Upon receipt of a Notice of Borrowing, the Administrative
Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share (if any) of such Borrowing and such Notice of Borrowing
shall not thereafter be revocable by the Borrower.
(b) On the date of each Borrowing, each Bank participating
therein shall:
(i) if such Borrowing is to be made in Dollars, make
available its share of such Borrowing in Dollars not later than
2:00 P.M. (New York City time), in Federal or other funds
immediately available in Chicago, to the Administrative Agent at
its Chicago Office; or
(ii) if such Borrowing is to be made in an Alternative
Currency, make available its share of such Borrowing in such
Alternative Currency (in such funds as may then be customary for
the settlement of international transactions in such Alternative
Currency) to the account of the Administrative Agent at such time
and place as shall have been notified by the Administrative Agent
to the Banks by at least two Euro-Currency Business Days' notice.
Unless the Administrative Agent determines that any applicable
condition specified in Article 3 has not been satisfied, the
Administrative Agent will make the funds so received from the Banks
available to the Borrower at the Administrative Agent's aforesaid
address.
(c) Unless the Administrative Agent shall have received
notice from a Bank prior to the date of any Borrowing that such Bank will not
make available to the Administrative Agent such Bank's share of such
Borrowing, the Administrative Agent may assume that such Bank has made such
share available to the Administrative Agent on the date of such Borrowing in
accordance with subsection 2.04(b) and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such share available to the Administrative Agent, such Bank and the
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date
such amount is repaid to the Administrative Agent, at the Federal Funds Rate
(if such Borrowing is in Dollars) or the applicable London Interbank Offered
Rate (if such Borrowing is in an Alternative Currency). If such Bank shall
repay to the Administrative
28
Agent such corresponding amount, such amount so repaid shall constitute such
Bank's Loan included in such Borrowing for purposes of this Agreement.
SECTION 2.05. NOTES. (a) The Loans of each Bank shall be evidenced by
a single Note payable to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the
Documentation Agent, request that its Loans of a particular type or currency
be evidenced by a separate Note in an amount equal to the aggregate unpaid
principal amount of such Loans. Each such Note shall be in substantially the
form of Exhibit A hereto with appropriate modifications to reflect the fact
that it evidences solely Loans of the relevant type or currency. Each
reference in this Agreement to the "Note" of such Bank shall be deemed to
refer to and include any or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section
3.01(a), the Documentation Agent shall forward such Note to such Bank. Each
Bank shall record the date, amount, type and currency of each Loan made by it
and the date and amount of each payment of principal made by the Borrower
with respect thereto, and may, if such Bank so elects in connection with any
transfer or enforcement of its Note, endorse on the schedule forming a part
thereof appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding; PROVIDED that the failure of any
Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Notes. Each Bank is hereby
irrevocably authorized by the Borrower so to endorse its Note and to attach
to and make a part of its Note a continuation of any such schedule as and
when required.
SECTION 2.06. MATURITY OF LOANS. (a) Each Syndicated Loan shall
mature, and the principal amount thereof shall be due and payable, together
with accrued interest thereon, on the Termination Date.
(b) Each Swingline Loan included in any Swingline Borrowing
and each Competitive Bid Loan included in any Competitive Bid Borrowing shall
mature, and the principal amount thereof shall be due and payable on the last
day of the Interest Period applicable to such Borrowing.
SECTION 2.07. INTEREST RATES. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to the
Base Rate for such day. Such interest shall be payable in arrears at maturity
and on each Quarterly
29
Date prior to maturity. Any overdue principal of or overdue interest on any
Base Rate Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 2% plus the rate otherwise
applicable to Base Rate Loans for such day.
(b) Each Euro-Currency Loan shall bear interest on the
outstanding principal amount thereof, for each day during each Interest
Period applicable thereto, at a rate per annum equal to the sum of the
Euro-Currency Margin for such day plus the London Interbank Offered Rate
applicable to such Interest Period. Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per annum at which deposits in the relevant
currency are offered to each of the Reference Banks in the London interbank
market at approximately 11:00 A.M. (London time) two Euro-Currency Business
Days before the first day of such Interest Period in an amount approximately
equal to the principal amount of the Euro-Currency Loan of such Reference
Bank to which such Interest Period is to apply and for a period of time
comparable to such Interest Period.
(c) Any overdue principal of or interest on any Euro-Currency
Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the higher of (i) the sum of 2% plus the
Euro-Currency Margin for such day plus the London Interbank Offered Rate
applicable to such Loan at the date such payment was due and (ii) the sum of
2% plus the Euro-Currency Margin for such day plus the quotient obtained
(rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing
(x) the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which one day (or, if such amount due
remains unpaid more than three Euro-Currency Business Days, then for such
other period of time not longer than three months as the Administrative Agent
may select) deposits in the relevant currency in an amount approximately
equal to such overdue payment due to each of the Reference Banks are offered
to such Reference Bank in the London interbank market for the applicable
period determined as provided above by (y) 1.00 minus the Euro-Currency
Reserve Percentage (or, if the circumstances described in clause 8.01(a)
8.01(a) or 8.01(b) of Section 8.01 shall exist, at a rate per annum equal to
the sum of 2% plus the rate applicable to Base Rate Loans for such day).
(d) Each Swingline Loan shall bear interest on the
outstanding principal amount thereof, for each day during the Interest Period
applicable thereto, at a rate
30
per annum equal to the Base Rate for such day or such other rate as may be
from time to time determined by mutual agreement between the Swingline Bank
and the Borrower. Any interest on any Swingline Loans shall be payable on
each Quarterly Date and on the Termination Date. Any overdue principal of or
interest on any Swingline Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 2% plus the Base
Rate for such day.
(e) Subject to Section 8.01, the unpaid principal amount of
each Competitive Bid LIBOR Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the sum of the London Interbank Offered Rate for such
Interest Period (determined in accordance with Section 2.07(b) as if the
related Competitive Bid LIBOR Borrowing were a Euro-Currency Borrowing) plus
(or minus) the Competitive Bid Margin quoted by the Bank making such Loan.
The unpaid principal amount of each Competitive Bid Absolute Rate Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the Competitive Bid
Absolute Rate quoted by the Bank making such Loan. Such interest shall be
payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of three months
after the first day thereof. Any overdue principal of or interest on any
Competitive Bid Loan shall bear interest, payable on demand, for each day
until paid (i) in the case of Loans denominated in Dollars, at a rate per
annum equal to the sum of 2% plus the Base Rate for such day and (ii) in the
case of Loans denominated in an Alternative Currency, at a rate per annum
determined in accordance with Section 2.07(c) as if such Loans were
Euro-Currency Loans.
(f) The Administrative Agent shall determine each interest
rate applicable to the Loans hereunder. The Administrative Agent shall give
prompt notice to the Borrower and the participating Banks of each rate of
interest so determined, and its determination thereof shall be conclusive in
the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to
furnish quotations to the Administrative Agent as contemplated hereby. If any
Reference Bank does not furnish a timely quotation, the Administrative Agent
shall determine the relevant interest rate on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Banks or, if none of
such quotations is available on a timely basis, the provisions of Section
8.01 shall apply.
SECTION 2.08. FEES. (a) The Borrower shall pay to the Administrative
Agent for the account of the Banks a facility fee at the Facility Fee Rate
31
(determined daily in accordance with the Pricing Schedule). Such facility fee
shall accrue (i) from and including the Effective Date to but excluding the
date of termination of the Commitments in their entirety, on the daily
aggregate amount of the Commitments (whether used or unused) and (ii) from
and including such date of termination to but excluding the date the Loans
and Letter of Credit Liabilities shall be repaid in their entirety, on the
daily aggregate Dollar Amount of Loans and Letter of Credit Liabilities.
Such facility fee shall be allocated among the Banks ratably in proportion to
their Commitments; PROVIDED that any facility fee accruing after the
Commitments terminate in their entirety shall be allocated among the Banks
ratably in proportion to the outstanding Dollar Amounts of their respective
Loans and Letter of Credit Liabilities.
(b) The Borrower shall pay to the Administrative Agent for
the account of the Banks ratably a letter of credit fee accruing daily on the
aggregate amount then available for drawing under all outstanding Letters of
Credit at the LC Fee Rate (determined daily in accordance with the Pricing
Schedule) and shall pay to the Issuing Bank fees in the amounts and at the
times as may be mutually agreed from time to time by the Borrower and such
Issuing Bank.
(c) Accrued fees under subsections 2.08(a) and 2.08(b) shall
be payable quarterly in arrears on each Quarterly Date and on the date of
termination of the Commitments in their entirety (and, if later, the date the
Loans and Letter of Credit Liabilities shall be repaid in their entirety).
SECTION 2.09. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS. During
the Revolving Credit Period, the Borrower may, upon at least three Domestic
Business Days' notice to the Administrative Agent, (i) terminate the
Commitments at any time, if no Loans or Letter of Credit Liabilities are
outstanding at such time or (ii) ratably reduce from time to time by an
aggregate amount of $2,000,000 or a larger multiple of $1,000,000, the
aggregate amount of the Commitments in excess of the aggregate Dollar Amount
of Loans and Letter of Credit Liabilities.
SECTION 2.10. METHOD OF ELECTING INTEREST RATES. (a) The
Dollar-Denominated Loans included in each Syndicated Borrowing shall bear
interest initially at the type of rate specified by the Borrower in the
applicable Notice of Committed Borrowing. Thereafter, the Borrower may from
time to time elect to change or continue the type of interest rate borne by
each Group of Dollar-Denominated Loans (subject in each case to the
provisions of Article 8 and subsection 2.10(d)), as follows:
32
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to Euro-Dollar Loans as of any Euro-Dollar Business
Day; and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans or elect to continue such
Loans as Euro-Dollar Loans for an additional Interest Period, subject to
Section 2.14 in the case of any such conversion or continuation
effective on any day other than the last day of the then current
Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "NOTICE OF
INTEREST RATE ELECTION") to the Administrative Agent not later than 12:00
Noon (New York City time) on the third Euro-Dollar Business Day before the
conversion or continuation selected in such notice is to be effective. A
Notice of Interest Rate Election may, if it so specifies, apply to only a
portion of the aggregate principal amount of the relevant Group of Loans,
PROVIDED that (i) such portion is allocated ratably among the Loans
comprising such Group and (ii) the portion to which such Notice applies, and
the remaining portion to which it does not apply, are each $2,000,000 or any
larger multiple of $500,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected in
such notice is to be effective, which shall comply with the applicable
clause of subsection 2.10(a) above;
(iii) if the Loans comprising such Group are to be converted, the
new type of Loans and, if the Loans being converted are to be Euro-Dollar
Loans, the duration of the next succeeding Interest Period applicable
thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for an
additional Interest Period, the duration of such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of the term "INTEREST PERIOD".
(c) Upon receipt of a Notice of Interest Rate Election from
the Borrower pursuant to subsection 2.10(a) above, the Administrative Agent
shall promptly
33
notify each Bank of the contents thereof and such notice shall not thereafter
be revocable by the Borrower. If no Notice of Interest Rate Election is
timely received prior to the end of an Interest Period for any Group of
Euro-Dollar Loans, the Borrower shall be deemed to have elected that such
Group be converted to Base Rate Loans as of the last day of such Interest
Period.
(d) The Borrower shall not be entitled to elect to convert
any Syndicated Loans to, or continue any Syndicated Loans for an additional
Interest Period as, Euro-Dollar Loans if (i) the aggregate principal amount
of any Group of Euro-Dollar Loans created or continued as a result of such
election would be less than $2,000,000 or (ii) a Default shall have occurred
and be continuing when the Borrower delivers notice of such election to the
Administrative Agent.
(e) The initial Interest Period for each Group of Alternative
Currency Loans shall be specified by the Borrower in the applicable Notice of
Borrowing. The Borrower may specify the duration of each subsequent Interest
Period applicable to such Group of Loans by delivering to the Administrative
Agent, not later than 12:00 Noon (New York City time) on the fourth
Euro-Currency Business Day before the end of the immediately preceding
Interest Period, a notice specifying the Group of Loans to which such notice
applies and the duration of such subsequent Interest Period (which shall
comply with the provisions of the definition of Interest Period). Such
notice may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans; PROVIDED that (i) such
portion is allocated ratably among the Loans comprising such Group and (ii)
the Dollar Amounts of the portion to which such notice applies, and the
remaining portion to which it does not apply, are each at least $2,000,000.
If no such Notice of Interest Rate Election is timely received by the
Administrative Agent before the end of any applicable Interest Period, the
Borrower shall be deemed to have elected that the subsequent Interest Period
for such Group of Loans shall have a duration of one month (subject to the
provisions of the definition of Interest Period).
SECTION 2.11. SCHEDULED TERMINATION OF COMMITMENTS. The Commitments
shall terminate on the Termination Date, and any Loans then outstanding
(together with accrued interest thereon) shall be due and payable on the
Termination Date.
SECTION 2.12. OPTIONAL PREPAYMENTS. (a) Subject in the case of any
Fixed Rate Loan to Section 2.14, the Borrower may (i) with notice by 12:00
Noon (New York City time) on the date of such prepayment, prepay any Group of
Base Rate Loans, any Swingline Borrowing or any Competitive Bid Borrowing
bearing interest at the Base Rate pursuant to Section 8.01, in each case in
whole at any time, or from time to time in part in an aggregate Dollar Amount
of $1,000,000
34
($100,000 in the case of a Swingline Borrowing) or any larger multiple of
$500,000 ($100,000 in the case of a Swingline Borrowing), or (ii) upon at
least three Euro-Currency Business Days' notice to the Agent, prepay any
Group of Euro-Currency Loans in whole at any time, or from time to time in
part in an aggregate Dollar Amount of $2,000,000 or any larger multiple of
$500,000, by paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment. Each such optional prepayment
shall be applied to prepay ratably the Loans of the several Banks included in
such Group or Borrowing.
(b) Except as provided in subsection 2.12(a) above the
Borrower may not prepay all or any portion of the principal amount of any
Competitive Bid Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this
Section, the Administrative Agent shall promptly notify each Bank of the
contents thereof and of such Bank's ratable share (if any) of such prepayment
and such notice shall not thereafter be revocable by the Borrower.
SECTION 2.13. GENERAL PROVISIONS AS TO PAYMENTS. (a) The Borrower
shall make each payment of principal of, and interest on, the
Dollar-Denominated Loans and of fees hereunder, not later than 2:00 P.M. (New
York City time) on the date when due, in Federal or other funds immediately
available in Chicago, to the Administrative Agent at its at its Chicago
Office. Each payment of principal of, and interest on, the Alternative
Currency Loans shall be made in the relevant Alternative Currency in such
funds as may then be customary for the settlement of international
transactions in such Alternative Currency, for the account of the
Administrative Agent at such time and at such place as shall have been
notified by the Administrative Agent to the Borrower and the Banks by at
least two Domestic Business Days' notice. Each such payment shall be made
irrespective of any set-off, counterclaim or defense to payment which might
in the absence of this provision be asserted by the Borrower against the
Administrative Agent or any Bank. The Administrative Agent will promptly
distribute to each Bank its ratable share of each such payment received by
the Administrative Agent for the account of the Banks. Whenever any payment
of principal of, or interest on, the Base Rate Loans, Swingline Loans or
Letter of Credit Liabilities or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of,
or interest on, the Euro-Currency Loans shall be due on a day which is not a
Euro-Currency Business Day, the date for payment thereof shall be extended to
the next succeeding Euro-Currency Business Day unless such Euro-Currency
Business Day falls in another calendar month, in which case the date for
payment thereof shall be the next preceding Euro-Currency Business Day.
35
Whenever any payment of principal of, or interest on, the Competitive Bid
Loans shall be due on a day which is not a Euro-Currency Business Day, the
date for payment thereof shall be extended to the next succeeding
Euro-Currency Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable
for such extended time. The Borrower hereby authorizes and directs the
Administrative Agent (upon receipt of oral or written direction by the
Borrower) to debit any account maintained by the Borrower with the
Administrative Agent to pay when due any amounts required to be paid from
time to time under this Agreement.
(b) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Banks hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each Bank
on such due date an amount equal to the amount then due such Bank. If and to
the extent that the Borrower shall not have so made such payment, each Bank
shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day from
the date such amount is distributed to such Bank until the date such Bank
repays such amount to the Administrative Agent, at (i) the Federal Funds Rate
(if such amount was distributed in Dollars) or (ii) the rate per annum at
which one day deposits in the relevant currency are offered to the
Administrative Agent in the London interbank market for such day (if such
amount was distributed in an Alternative Currency).
SECTION 2.14. FUNDING LOSSES. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan or any Euro-Dollar Loan is
converted or continued (pursuant to Article 2, 6 or 8 or otherwise) on any
day other than the last day of an Interest Period applicable thereto, or the
last day of an applicable period fixed pursuant to Section 2.07(c), or if the
Borrower fails to borrow, prepay, convert or continue any Fixed Rate Loans
after notice has been given to any Bank in accordance with Section 2.04(a),
2.12(c) or 2.10(c), the Borrower shall reimburse each Bank within 15 days
after demand for any resulting loss or expense incurred by it (or by an
existing or prospective Participant in the related Loan), including (without
limitation) any loss incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the period after any
such payment or conversion or failure to borrow, prepay, convert or continue,
PROVIDED that such Bank shall have delivered to the Borrower and the
Administrative Agent a certificate as to the amount of such loss or expense,
which certificate shall be conclusive in the absence of manifest error if
prepared reasonably and in good faith.
36
SECTION 2.15. COMPUTATION OF INTEREST AND FEES. Interest based on the
Reference Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.16. LETTERS OF CREDIT. (a) Subject to the terms and conditions
hereof, the Issuing Bank agrees to issue Letters of Credit hereunder
denominated in Dollars from time to time before the tenth day before the
Termination Date upon the request of the Borrower; PROVIDED that, immediately
after each Letter of Credit is issued (i) the aggregate Dollar Amount of
Loans and Letter of Credit Liabilities shall not exceed the aggregate amount
of the Commitments and (ii) the aggregate Letter of Credit Liabilities shall
not exceed $10,000,000. Upon the date of issuance by the Issuing Bank of a
Letter of Credit, the Issuing Bank shall be deemed, without further action by
any party hereto, to have sold to each Bank, and each Bank shall be deemed,
without further action by any party hereto, to have purchased from the
Issuing Bank, a participation in such Letter of Credit and the related Letter
of Credit Liabilities in the proportion their respective Commitments bear to
the aggregate Commitments.
On the Closing Date, if all of the conditions set forth in Article 3 (other
than the receipt by the Issuing Bank of a Notice of Issuance) shall be
satisfied, each of the letters of credit issued by ▇▇▇▇▇▇ Bank and Trust
Company and identified on Schedule 2.16 (the "EXISTING LETTERS OF CREDIT")
shall be deemed to be Letters of Credit for all purposes hereof, and the
Issuing Bank shall be deemed, without further action by any party hereto, to
have sold to each Bank, and each Bank shall be deemed, without further action
by any party hereto, to have purchased from the Issuing Bank, a participation
in each of the Existing Letters of Credit and the related Letter of Credit
Liabilities in the proportion their respective Commitments bear to the
aggregate Commitments.
(b) The Borrower shall give the Issuing Bank notice at least
three Domestic Business Days prior to the requested issuance of a Letter of
Credit specifying the date such Letter of Credit is to be issued, and
describing the terms of such Letter of Credit and the nature of the
transactions to be supported thereby (such notice, including any such notice
given in connection with the extension of a Letter of Credit, a "NOTICE OF
ISSUANCE"). Upon receipt of a Notice of Issuance, the Issuing Bank shall
promptly notify the Administrative Agent, and the Administrative Agent shall
promptly notify each Bank of the contents thereof and of the amount of such
Bank's participation in such Letter of Credit. The issuance by the Issuing
Bank of each Letter of Credit shall, in addition to the conditions precedent
set forth in Article 3, be subject to the conditions precedent that such
37
Letter of Credit shall be in such form and contain such terms as shall be
satisfactory to the Issuing Bank and that the Borrower shall have executed
and delivered such other instruments and agreements relating to such Letter
of Credit as the Issuing Bank shall have reasonably requested. The Borrower
shall also pay to the Issuing Bank for its own account issuance, drawing,
amendment and extension charges in the amounts and at the times as agreed
between the Borrower and the Issuing Bank. The extension or renewal of any
Letter of Credit shall be deemed to be an issuance of such Letter of Credit,
and if any Letter of Credit contains a provision pursuant to which it is
deemed to be extended unless notice of termination is given by the Issuing
Bank, the Issuing Bank shall timely give such notice of termination unless it
has theretofore timely received a Notice of Issuance and the other conditions
to issuance of a Letter of Credit have also theretofore been met with respect
to such extension.
(c) No Letter of Credit shall have a term extending or be so
extendible beyond the fifth Domestic Business Day preceding the Termination
Date.
(d) Upon receipt from the beneficiary of any Letter of Credit
of any notice of a drawing under such Letter of Credit, the Issuing Bank
shall notify the Administrative Agent and the Administrative Agent shall
promptly notify the Borrower and each other Bank as to the amount to be paid
as a result of such demand or drawing and the payment date. The Borrower
shall be irrevocably and unconditionally obligated forthwith to reimburse the
Issuing Bank for any amounts paid by the Issuing Bank upon any drawing under
any Letter of Credit, without presentment, demand, protest or other
formalities of any kind. All such amounts paid by the Issuing Bank and
remaining unpaid by the Borrower shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 2% plus the Base
Rate for such day. In addition, each Bank will pay to the Administrative
Agent, for the account of the Issuing Bank, immediately upon the Issuing
Bank's demand at any time during the period commencing after such drawing
until reimbursement therefor in full by the Borrower, an amount equal to such
Bank's ratable share of such drawing (in proportion to its participation
therein), together with interest on such amount for each day from the date of
the Issuing Bank's demand for such payment (or, if such demand is made after
12:00 Noon (New York City time) on such date, from the next succeeding
Domestic Business Day) to the date of payment by such Bank of such amount at
a rate of interest per annum equal to the Federal Funds Rate. The Issuing
Bank will pay to each Bank ratably all amounts received from the Borrower for
application in payment of its reimbursement obligations in respect of any
Letter of Credit, but only to the extent such Bank has made payment to the
Issuing Bank in respect of such Letter of Credit pursuant hereto. Unless the
Borrower gives notice to the contrary not less than one Business Day prior to
the date of such drawing, each notice by the Issuing Bank to the
Administrative Agent of the Issuing Bank's
38
receipt of a notice of a drawing under a Letter of Credit shall be deemed to
be a Notice of Committed Borrowing from the Borrower for a Base Rate Loan on
the date of such drawing in the exact amount due to the Issuing Bank
hereunder (the requirement with respect to the aggregate Dollar Amount of
Base Rate Borrowings shall not apply to such deemed Notice of Borrowing) on
such date with respect thereto, and the Administrative Agent shall apply the
proceeds of any Base Rate Loan made pursuant to such deemed Notice of
Borrowing to the payment of such amount.
(e) The obligations of the Borrower and each Bank under
subsection 2.16(d) above shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including without limitation
the following circumstances:
(i) the use which may be made of the Letter of Credit by,
or any acts or omission of, a beneficiary of a Letter of Credit (or
any Person for whom the beneficiary may be acting);
(ii) the existence of any claim, set-off, defense or other
rights that the Borrower may have at any time against a beneficiary
of a Letter of Credit (or any Person for whom the beneficiary may be
acting), the Banks (including the Issuing Bank) or any other Person,
whether in connection with this Agreement or the Letter of Credit or
any document related hereto or thereto or any unrelated transaction;
(iii) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any
respect whatsoever;
(iv) payment under a Letter of Credit to the beneficiary
of such Letter of Credit against presentation to the Issuing Bank of
a draft or certificate that does not comply with the terms of the
Letter of Credit; or
(v) any other act or omission to act or delay of any kind
by any Bank (including the Issuing Bank), the Administrative Agent
or any other Person or any other event or circumstance whatsoever
that might, but for the provisions of this subsection 2.16(e)(v),
constitute a legal or equitable discharge of the Borrower's or the
Bank's obligations hereunder.
(f) The Borrower hereby indemnifies and holds harmless each
Bank (including the Issuing Bank) and the Administrative Agent from and
against any and all claims, damages, losses, liabilities, costs or expenses
which such Bank or
39
the Administrative Agent may incur (including, without limitation, any
claims, damages, losses, liabilities, costs or expenses which the Issuing
Bank may incur by reason of or in connection with the failure of any other
Bank to fulfill or comply with its obligations to such Issuing Bank hereunder
(but nothing herein contained shall affect any rights the Borrower may have
against such defaulting Bank)), and none of the Banks (including the Issuing
Bank) nor the Administrative Agent nor any of their officers or directors or
employees or agents shall be liable or responsible, by reason of or in
connection with the execution and delivery or transfer of or payment or
failure to pay under any Letter of Credit, including without limitation any
of the circumstances enumerated in subsection 2.16(d) above, as well as (i)
any error, omission, interruption or delay in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, (ii) any loss or
delay in the transmission of any document required in order to make a drawing
under a Letter of Credit, and (iii) any consequences arising from causes
beyond the control of the Issuing Bank, including without limitation any
government acts, or any other circumstances whatsoever in making or failing
to make payment under such Letter of Credit; PROVIDED that the Borrower shall
not be required to indemnify the Issuing Bank for any claims, damages,
losses, liabilities, costs or expenses, and the Borrower shall have a claim
for direct (but not consequential) damage suffered by it, to the extent found
by a court of competent jurisdiction to have been caused by (x) the failure
of the Issuing Bank to comply in any material respect with the UCP (or, with
respect to any Letter of Credit not governed by the UCP or any successor
publication, applicable law) in determining whether a request presented under
any Letter of Credit complied with the terms of such Letter of Credit or (y)
the Issuing Bank's failure to pay under any Letter of Credit after the
presentation to it of a request strictly complying with the terms and
conditions of the Letter of Credit. Nothing in this subsection 2.16(f) is
intended to limit the obligations of the Borrower under any other provision
of this Agreement. To the extent the Borrower does not indemnify the Issuing
Bank as required by this subsection, the Banks agree to do so ratably in
accordance with their Commitments.
SECTION 2.17. REGULATION D COMPENSATION. Each Bank may require the
Borrower to pay, contemporaneously with each payment of interest on the
Euro-Currency Loans, additional interest on the related Euro-Currency Loan of
such Bank at a rate per annum determined by such Bank up to but not exceeding
the excess of (i) (A) the applicable London Interbank Offered Rate divided by
(B) one MINUS the Euro-Currency Reserve Percentage over (ii) the applicable
London Interbank Offered Rate. Any Bank wishing to require payment of such
additional interest (x) shall so notify the Borrower and the Agent, in which
case such additional interest on the Euro-Currency Loans of such Bank shall
be payable to such Bank at the place indicated in such notice with respect to
each Interest Period commencing at least three Euro-Currency Business Days
after such Bank gives
40
such notice and (y) shall notify the Borrower at least five Euro-Currency
Business Days before each date on which interest is payable on the
Euro-Currency Loans of the amount then due it under this Section.
SECTION 2.18. TAKEOUT OF SWINGLINE LOANS. (a) In the event that any
Swingline Borrowing shall not be repaid in full at or prior to the maturity
thereof, the Administrative Agent shall, on behalf of the Borrower (the
Borrower hereby irrevocably directing and authorizing the Administrative
Agent so to act on its behalf), give a Notice of Borrowing requesting the
Banks, including the Swingline Bank, to make a Base Rate Borrowing on the
maturity date of such Swingline Borrowing in an amount equal to the unpaid
principal amount of such Swingline Borrowing. Each Bank will make the
proceeds of its Base Rate Loan included in such Borrowing available to the
Administrative Agent for the account of the Swingline Bank on such date in
accordance with Section 2.04. The proceeds of such Base Rate Borrowing shall
be immediately applied to repay such Swingline Borrowing.
(b) If, for any reason, a Base Rate Borrowing may not be (as
determined by the Administrative Agent in its sole discretion), or is not,
made pursuant to subsection 2.18(a) above to refund Swingline Loans as
required by said clause, then, effective on the date such Borrowing would
otherwise have been made, each Bank severally, unconditionally and
irrevocably agrees that it shall purchase an undivided participating interest
in such Swingline Loans ("UNREFUNDED SWINGLINE LOANS") in an amount equal to
the amount of the Loan which otherwise would have been made by such Bank
pursuant to subsection 2.18(a), which purchase shall be funded by the time
such Loan would have been required to be funded pursuant to Section 2.04 by
transfer to the Administrative Agent, for the account of the Swingline Bank,
in immediately available funds, of the amount of its participation.
(c) Whenever, at any time after the Swingline Bank has
received from any Bank payment in full for such Bank's participating interest
in a Swingline Loan, the Swingline Bank (or the Administrative Agent on its
behalf) receives any payment on account thereof, the Swingline Bank (or the
Administrative Agent, as the case may be) will promptly distribute to such
Bank its participating interest in such payment (appropriately adjusted, in
the case of interest payments, to reflect the period of time during which
such Bank's participating interest was outstanding and funded); PROVIDED,
HOWEVER, that in the event that such payment is subsequently required to be
returned, such Bank will return to the Swingline Bank (or the Administrative
Agent, as the case may be) any portion thereof previously distributed by the
Swingline Bank (or the Administrative Agent, as the case may be) to it.
41
(d) Each Bank's obligation to purchase and fund participating
interests pursuant to this Section shall be absolute and unconditional and
shall not be affected by any circumstance, including, without limitation:
(i) any setoff, counterclaim, recoupment, defense or other right which such
Bank or the Borrower may have against the Swingline Bank, or any other Person
for any reason whatsoever; (ii) the occurrence or continuance of a Default or
the failure to satisfy any of the conditions specified in Article 3; (iii)
any adverse change in the condition (financial or otherwise) of the Borrower;
(iv) any breach of this Agreement by the Borrower or any Bank; or (v) any
other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing.
SECTION 2.19. INCREASED COMMITMENTS, ADDITIONAL BANKS. (a) From time to
time, the Borrower may, upon at least 15 days' notice (which may be written
notice or telephonic notice promptly followed by written notice) to the
Documentation Agent (which shall promptly provide a copy of such notice to
the Banks), propose to increase the aggregate amount of the Commitments by an
amount not less than $10,000,000 (the amount of any such increase, the
"INCREASED COMMITMENTS"). Each Bank party to this Agreement at such time
shall have the right (but no obligation), for a period of 10 days following
receipt of such notice, to elect by notice to the Borrower and the
Documentation Agent to increase its Commitment by a principal amount which
bears the same ratio to the Increased Commitments as its then Commitment
bears to the aggregate Commitments then existing. Any Bank not responding
within 10 days of receipt of such notice shall be deemed to have declined to
increase its Commitment.
(b) If any Bank party to this Agreement shall not elect to
increase its Commitment pursuant to subsection 2.19(a) of this Section, the
Borrower may, within 5 days of the Banks' response, designate one or more of
the existing Banks or other financial institutions acceptable to the Agents,
the Issuing Banks, the Swingline Bank and the Borrower which at the time
agree to (i) in the case of any such lender that is an existing Bank,
increase its Commitment and (ii) in the case of any other such lender (an
"ADDITIONAL BANK"), become a party to this Agreement with a Commitment of not
less than $10,000,000. The sum of the increases in the Commitments of the
existing Banks pursuant to this subsection 2.19(b) plus the Commitments of
the Additional Banks shall not in the aggregate exceed the unsubscribed
amount of the Increased Commitments.
(c) Any increase in the Commitments pursuant to this Section
2.19 shall be subject to satisfaction of the following conditions:
(i) before and after giving effect to such increase, all
representations and warranties contained in Article 4 shall be true;
42
(ii) at the time of such increase, no Default shall have occurred
and be continuing or would result from such increase; and
(iii) after giving effect to such increase, the aggregate amount of
all increases in Commitments made pursuant to this Section 2.19 shall not
exceed $35,000,000.
(d) An increase in the aggregate amount of the Commitments pursuant
to this Section 2.19 shall become effective upon the receipt by the
Documentation Agent of (i) an agreement in form and substance reasonably
satisfactory to the Documentation Agent signed by the Borrower, by each
Additional Bank and by each other Bank whose Commitment is to be increased,
setting forth the new Commitments of such Banks and setting forth the
agreement of each Additional Bank to become a party to this Agreement and to
be bound by all the terms and provisions hereof, (ii) such evidence of
appropriate corporate authorization on the part of the Borrower with respect
to the Increased Commitments and such opinions of counsel for the Borrower
with respect to the Increased Commitments as the Documentation Agent may
reasonably request and (iii) such evidence of the satisfaction of the
conditions set forth in subsection 2.19(c) above as the Documentation Agent
may reasonably request.
(e) Upon any increase in the aggregate amount of the
Commitments pursuant to this Section 2.19, within five Domestic Business
Days, in the case of Base Rate Loans then outstanding, and at the end of the
then current Interest Period with respect thereto, in the case of Syndicated
Fixed Rate Loans then outstanding, the Borrower shall prepay or repay such
Loans in their entirety and, to the extent the Borrower elects to do so and
subject to the conditions specified in Article 3, the Borrower shall reborrow
Syndicated Loans from the Banks in proportion to their respective Commitments
after giving effect to such increase, until such time as all outstanding
Syndicated Loans are held by the Banks in such proportion.
SECTION 2.20. CURRENCY EQUIVALENTS. The Administrative Agent shall
determine the Dollar Amount of each Alternative Currency Loan as of the first
day of each Interest Period applicable thereto and, in the case of any such
Interest Period of more than three months, at three-month intervals after the
first day thereof, and shall promptly notify the Borrower and the Banks of
each Dollar Amount so determined by it. Each such determination shall be
based on the Spot Rate (i) on the date of the related Notice of Committed
Borrowing (in the case of Syndicated Loans) or Competitive Bid Quote Request
(in the case of Competitive Bid Loans) for purposes of the initial such
determination for any Alternative Currency Loan and (ii) the fourth
Euro-Currency Business Day prior to the date as of which such Dollar Amount
is to be determined, for purposes of any subsequent
43
determination. If after giving effect to any such determination of a Dollar
Amount, the aggregate Dollar Amount of all Loans and Letter of Credit
Liabilities exceeds the aggregate amount of the Commitments, the Borrower
shall within five Euro-Currency Business Days prepay outstanding Loans (as
selected by the Borrower and notified to the Banks through the Administrative
Agent not less than three Euro-Currency Business Days prior to the date of
prepayment) to the extent necessary to eliminate any such excess.
SECTION 2.21. JUDGMENT CURRENCY. If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due from the Borrower
hereunder or under any of the Notes in the currency expressed to be payable
herein (the "SPECIFIED CURRENCY") into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate
of exchange used shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase the specified currency
with such other currency at the Administrative Agent's Chicago Office on the
Euro-Currency Business Day preceding that on which final judgment is given.
The obligations of the Borrower in respect of any sum due to any Bank or the
Administrative Agent hereunder or under any Note shall, notwithstanding any
judgment in a currency other than the specified currency, be discharged only
to the extent that on the Euro-Currency Business Day following receipt by
such Bank or the Administrative Agent (as the case may be) of any sum
adjudged to be so due in such other currency such Bank or the Administrative
Agent (as the case may be) may in accordance with normal banking procedures
purchase the specified currency with such other currency. If the amount of
the specified currency so purchased is less than the sum originally due to
such Bank or the Administrative Agent, as the case may be, in the specified
currency, the Borrower agrees, to the fullest extent that it may effectively
do so, as a separate obligation and notwithstanding any such judgment, to
indemnify such Bank or the Administrative Agent, as the case may be, against
such loss, and if the amount of the specified currency so purchased exceeds
(a) the sum originally due to any Bank or the Administrative Agent, as the
case may be, in the specified currency and (b) any amounts shared with other
Banks as a result of allocations of such excess as a disproportionate payment
to such Bank under Section 9.04, such Bank or the Administrative Agent, as
the case may be, agrees to remit such excess to the Borrower.
44
ARTICLE 3
CONDITIONS
SECTION 3.01. CLOSING. The closing hereunder shall occur upon receipt
by the Documentation Agent of the following documents, each dated the Closing
Date unless otherwise indicated:
(a) a duly executed Note for the account of each Bank dated on
or before the Closing Date complying with the provisions of Section 2.05;
(b) counterparts of the Guaranty Agreement, duly executed by
each of the Subsidiaries listed on the signature pages thereof;
(c) opinions of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel to the
Borrower, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the General Counsel of the Borrower,
substantially in the forms of Exhibits F-1 and F-2 hereto and covering
such additional matters relating to the transactions contemplated hereby as
the Required Banks may reasonably request;
(d) an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the
Agents, substantially in the form of Exhibit G hereto and covering such
additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request;
(e) all documents the Documentation Agent may reasonably
request relating to the existence of the Obligors, the corporate authority
for and the validity of the Loan Documents, and any other matters relevant
hereto, all in form and substance satisfactory to the Documentation Agent;
and
(f) evidence satisfactory to the Documentation Agent of the
payment of all principal of and interest on any loans outstanding under,
and all accrued commitment fees under, the Existing Revolver, and the
termination of the commitments thereunder.
The Agent shall promptly notify the Borrower, the Administrative Agent and the
Banks of the Effective Date, and such notice shall be conclusive and binding on
all parties hereto.
SECTION 3.02. BORROWINGS AND ISSUANCES OF LETTERS OF CREDIT. The
obligation of any Bank to make a Loan on the occasion of any Borrowing and
the obligation of the Issuing Bank to issue (or renew or extend the term of)
any Letter of Credit is subject to the satisfaction of the following
conditions; PROVIDED that if
45
such Borrowing is a Swingline Takeout Borrowing, only the conditions set
forth in clauses 3.02(b) and 3.02(c) must be satisfied:
(a) the fact that the Closing Date shall have occurred on or
prior to October 31, 1997;
(b) receipt (or deemed receipt) by the Administrative Agent of
a Notice of Borrowing as required by Section 2.02 or Section 2.03 or
receipt by the Issuing Bank of a Notice of Issuance as required by
Section 2.16(b), as the case may be;
(c) the fact that, immediately after such Borrowing or
issuance of such Letter of Credit (i) the sum of the aggregate Dollar
Amount of Loans and Letter of Credit Liabilities will not exceed the
aggregate amount of the Commitments, (ii) the aggregate outstanding
principal amount of Swingline Loans will not exceed $10,000,000 and (iii)
the aggregate amount of Letter of Credit Liabilities will not exceed
$10,000,000;
(d) the fact that, immediately before and after such Borrowing
or issuance of such Letter of Credit, no Default shall have occurred and be
continuing;
(e) the fact that the representations and warranties of the
Borrower contained in this Agreement shall be true on and as of the date
of such Borrowing or issuance of such Letter of Credit; and
(f) the fact that, in the case of any Euro-Currency Borrowing in
a currency other than Dollars or the lawful currency of the United Kingdom,
France, Japan, Germany, Switzerland or Italy, the fact that no Bank shall
have notified the Administrative Agent (which shall promptly notify the
Borrower and the other Banks) within two Euro-Currency Business Days
of such Bank's receipt of the Notice of Committed Borrowing for such
Euro-Currency Borrowing that deposits in the relevant currency are not
available to such Bank in the London interbank market for the relevant
Interest Period.
Each Borrowing and issuance of a Letter of Credit hereunder shall be deemed to
be a representation and warranty by the Borrower on the date of such Borrowing
as to the facts specified in clauses 3.02(c), 3.02(d) and 3.02(e) (unless such
Borrowing is a Swingline Takeout Borrowing, in which case the Borrower shall
be deemed to represent and warrant as to the facts specified in clause 3.02(c)).
46
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. EXISTENCE AND POWER. The Borrower and each of its
Subsidiaries is a corporation, partnership, limited liability company or
other entity duly organized, validly existing and, where applicable, in good
standing under the laws of their respective jurisdictions of organization and
have all powers and all material governmental licenses, authorizations,
consents and approvals required to carry on their business as now conducted.
SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION. The execution, delivery and performance by the Borrower of this
Agreement and the Notes and by the Subsidiaries party thereto of the Guaranty
Agreement are within the Borrower's and such Subsidiaries' respective powers,
have been duly authorized by all necessary action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable
law or regulation or of the certificate of incorporation or by-laws of the
Borrower or of such Subsidiaries or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Borrower or any of its
Subsidiaries or result in the creation or imposition of any Lien on any asset
of the Borrower or any of its Subsidiaries.
SECTION 4.03. BINDING EFFECT. This Agreement constitutes a valid and
binding agreement of the Borrower and each Note, when executed and delivered
in accordance with this Agreement, will constitute a valid and binding
obligation of the Borrower, in each case enforceable in accordance with its
terms. The Guaranty Agreement constitutes a valid and binding agreement of
each Subsidiary Guarantor enforceable against it in accordance with its terms.
SECTION 4.04. FINANCIAL INFORMATION.
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of January 31, 1997 and the related consolidated
statements of income, common stockholders' equity and cash flows for the
fiscal year then ended, reported on by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and set forth in
the Borrower's 1996 Form 10-K, a copy of which has been delivered to each of
the Banks, fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.
47
(b) The unaudited consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of July 31, 1997 and the related
unaudited consolidated statements of income, common stockholders' equity and
cash flows for the three months then ended, set forth in the Borrower's
Latest Form 10-Q, a copy of which has been delivered to each of the Banks,
fairly present, in conformity with generally accepted accounting principles
applied on a basis consistent with the financial statements referred to in
subsection 4.04(a), the consolidated financial position of the Borrower and
its Consolidated Subsidiaries as of such date and their consolidated results
of operations and cash flows for such three-month period (subject to normal
year-end adjustments).
(c) Since July 31, 1997, there has been no material adverse
change in the business, financial position or results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. LITIGATION. There is no action, suit or proceeding
pending against, or to the knowledge of the Borrower threatened against or
affecting, the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official which could
reasonably be expected to have a Material Adverse Effect or which in any
manner draws into question the validity of the Loan Documents.
SECTION 4.06. COMPLIANCE WITH ERISA. Each of the Obligors and the
ERISA Affiliates has fulfilled its obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and is in
compliance in all material respects with the presently applicable provisions
of ERISA and the Code with respect to each Plan. No Obligor or ERISA
Affiliate has (i) sought a waiver of the minimum funding standard under
Section 412 of the Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan, or made any
amendment to any Plan, which has resulted or could result in the imposition
of a Lien or the posting of a bond or other security under ERISA or the Code
or (iii) incurred any liability under Title IV of ERISA other than a
liability to the PBGC for premiums under Section 4007 of ERISA.
SECTION 4.07. ENVIRONMENTAL MATTERS. In the ordinary course of its
business, the Borrower reviews when and as it determines to be appropriate
the effect of Environmental Laws on the business, operations and properties
of the Borrower and its Subsidiaries, in the course of which it identifies
and evaluates associated liabilities and costs (which may include capital or
operating expenditures required for clean-up or closure of properties
presently or previously owned, any capital or operating expenditures required
to achieve or maintain compliance with environmental protection standards
imposed by law or as a
48
condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site
disposal of wastes or Hazardous Materials, and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses). On the basis of this review, the Borrower has reasonably concluded
that such associated liabilities and costs, including the costs of compliance
with Environmental Laws, are unlikely to have a Material Adverse Effect.
SECTION 4.08. TAXES. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant
to such returns or pursuant to any assessment received by the Borrower or any
Subsidiary, to the extent required to be paid pursuant to Section 5.06. The
charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of taxes or other governmental charges are, in the
opinion of the Borrower, adequate.
SECTION 4.09. NOT AN INVESTMENT COMPANY. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
SECTION 4.10. FULL DISCLOSURE. All information heretofore furnished by
the Borrower to either Agent or any Bank for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Borrower to either Agent or any Bank
will be, true and accurate (taken as a whole) in all material respects on the
date as of which such information is stated or certified. On the date
hereof, the Borrower has disclosed to the Banks in writing any and all facts
which materially and adversely affect or could reasonably be expected to
materially and adversely affect (to the extent the Borrower can now
reasonably foresee), the business, operations or financial condition of the
Borrower and its Consolidated Subsidiaries, taken as a whole, or the ability
of the Borrower to perform its obligations under this Agreement.
49
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid or any Letter
of Credit Liabilities remain outstanding:
SECTION 5.01. INFORMATION. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 90 days after the
end of each Fiscal Year of the Borrower, a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such Fiscal Year
and the related consolidated statements of income and cash flows for such
Fiscal Year, setting forth in each case in comparative form the figures for
the previous Fiscal Year, all reported on in a manner acceptable to the
Securities and Exchange Commission by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent
public accountants of nationally recognized standing;
(b) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of the Borrower,
a consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such quarter and the related consolidated
statements of income and cash flows for such quarter and for the portion of
the Borrower's fiscal year ended at the end of such quarter, setting forth in
each case in comparative form the figures for the corresponding quarter and
the corresponding portion of the Borrower's previous fiscal year, all
certified (subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by a
Senior Financial Officer;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses 5.01(a) and 5.01(b) above, a certificate of
a Senior Financial Officer substantially in the form of Exhibit K setting
forth (i) in reasonable detail the calculations required to establish whether
the Borrower was in compliance with the requirements of Sections 5.09 to
5.13, inclusive, on the date of such financial statements, (ii) the Leverage
Ratio and Consolidated Net Worth as at the date of such financial statements
and (iii) stating whether any Default exists on the date of such certificate
and, if any Default then exists, setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause 5.01(a) above, a statement of the firm of
50
independent public accountants which reported on such statements whether
anything has come to their attention to cause them to believe that any
Default existed on the date of such statements;
(e) within five days after any Senior Financial Officer of the
Borrower obtains knowledge of any Default, if such Default is then
continuing, an Officer's Certificate setting forth the details thereof and
the action which the Borrower is taking or proposes to take with respect
thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Borrower shall have filed with the Securities
and Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows that
the plan administrator of any Plan has given or is required to give notice of
any such reportable event, a copy of the notice of such reportable event
given or required to be given to the PBGC; (ii) receives notice of complete
or partial withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been terminated,
a copy of such notice; (iii) receives notice from the PBGC under Title IV of
ERISA of an intent to terminate, impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the Code, a copy of such
application; (v) gives notice of intent to terminate any Plan under Section
4041(c) of ERISA, a copy of such notice and other information filed with the
PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or makes any amendment to any
Plan which has resulted or could result in the imposition of a Lien or the
posting of a bond or other security, a certificate of the chief financial
officer or the chief accounting officer of the Borrower setting forth details
as to such occurrence and action, if any, which the Borrower or applicable
member of the ERISA Group is required or proposes to take; and
51
(i) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Documentation Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. COMPLIANCE WITH LAW. The Borrower will and will cause
each of its Subsidiaries to comply with all laws, ordinances or governmental
rules or regulations to which each of them is subject, including, without
limitation, Environmental Laws, and will and will cause each of its
Subsidiaries to obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to the
ownership of its property or to the conduct of its business, in each case to
the extent necessary to ensure that non-compliance with such laws, ordinances
or governmental rules or regulations or failures to obtain or maintain in
effect such licenses, certificates, permits, franchises and other
governmental authorizations would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
operations, financial condition, properties or assets of the Borrower and its
Subsidiaries, taken as a whole.
SECTION 5.03. INSURANCE. The Borrower will and will cause each of its
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to its property and business against such casualties
and contingencies, of such types, on such terms and in such amounts
(including deductibles, co-insurance and self-insurance, if adequate reserves
are maintained with respect thereto) as is customary in the case of entities
of established reputations engaged in the same or a similar business and
similarly situated.
SECTION 5.04. MAINTENANCE OF PROPERTIES. The Borrower will and will
cause each of its Subsidiaries to maintain and keep, or cause to be
maintained and kept, its property in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times, PROVIDED that
this Section shall not prevent the Borrower or any of its Subsidiaries from
discontinuing the operation and the maintenance of any of its property if
such discontinuance is desirable in the conduct of its business and the
Borrower has concluded that such discontinuance would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on
the business, operations, financial condition, properties or assets of the
Borrower and its Subsidiaries, taken as a whole.
SECTION 5.05. MAINTENANCE OF RECORDS; INSPECTION. The Borrower will
and will cause each of its Subsidiaries to maintain proper books of records
and accounts in accordance with normal business practice in which full and
appropriate entries shall be made of all dealings or transactions in relation
to their respective businesses and activities; and will permit, and will
52
cause each Subsidiary to permit, representatives of any Bank at such Bank's
expense to visit and inspect any of their respective properties, to examine
and make abstracts from any of their respective books and records and to
discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants, all at such
reasonable times and as often as may reasonably be desired.
SECTION 5.06. PAYMENT OF TAXES AND CLAIMS. The Borrower will and will
cause each of its Subsidiaries to file all income and franchise tax returns
required to be filed in any jurisdiction and to pay and discharge all taxes
shown to be due and payable on such returns and all other taxes, assessments,
governmental charges, or levies imposed on them or any of their properties,
assets, income or franchises, to the extent such taxes and assessments have
become due and payable and before they have become delinquent and all claims
for which sums have become due and payable that have or might become a Lien
on properties or assets of the Borrower or any of its Subsidiaries, PROVIDED
that neither the Borrower nor any of its Subsidiaries need pay any such tax
or assessment or claims if (i) the amount, applicability or validity thereof
is contested by the Borrower or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Borrower or a Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books
of the Borrower or such Subsidiary or (ii) the nonpayment of all such taxes
and assessments in the aggregate would not reasonably be expected to have a
material adverse effect on the business, operations, financial condition,
properties or assets of the Borrower and its Subsidiaries, taken as a whole.
SECTION 5.07. CORPORATE EXISTENCE, ETC. The Borrower will and will
cause each Subsidiary Guarantor (unless merged into the Borrower or another
Subsidiary Guarantor) to at all times preserve and keep in full force and
effect its corporate existence. The Borrower will at all times preserve and
keep in full force and effect the corporate existence of each of its other
Subsidiaries (unless merged into the Borrower or any Subsidiary) and all
rights and franchises of the Borrower and its Subsidiaries unless, in the
good faith judgment of the Borrower, the termination of or failure to
preserve and keep in full force and effect such corporate existence, right or
franchise could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
SECTION 5.08. TRANSACTIONS WITH AFFILIATES. The Borrower will not and
will not permit any of its Subsidiaries to enter into directly or indirectly
any Material transaction or Material group of related transactions (including
without limitation the purchase, lease, sale or exchange of properties of any
kind or the rendering of any service) with any Affiliate (other than the
Borrower or another Subsidiary), except in the ordinary course and pursuant
53
to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower
or such Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate.
SECTION 5.09. PROHIBITED LIENS. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or
asset of any kind (including any document or instrument in respect of goods
or accounts receivable) of the Borrower or any of its Subsidiaries, whether
now owned or hereafter acquired, or any income profits therefrom, or file or
permit the filing of, or permit to remain in effect, any charge, mortgage,
finance statement or other similar notice of any Lien with respect to any
such property, asset, income or profits under the recording or notice
statutes of any jurisdiction, except:
(a) Permitted Liens;
(b) Liens existing as of the date hereof and described in
Schedule 5.09 annexed hereto; PROVIDED that to the extent any such Lien
secures any greater amount of Indebtedness than the respective amount
thereof set forth on Schedule 5.09, such Lien shall not be permitted by
this Section 5.09(d) but only by Section 5.09(g);
(c) Liens created or incurred after the date hereof by the
Borrower or any of its Subsidiaries on assets useful and intended to be
used in carrying on the business of the Borrower and its Subsidiaries
(subject to Section 5.10), securing the purchase price, or cost of
construction or improvement, thereof; PROVIDED, HOWEVER, that (i) the
Liens shall attach solely to assets purchased or constructed, (ii) the
Liens shall be created within twelve months of the date of the
acquisition, purchase, construction or improvement of the assets to
which the Liens attached, and (iii) at the time of acquisition,
purchase, construction or improvement of such assets, the unpaid
principal amount of all Indebtedness secured by such Liens on such
assets (whether or not assumed by the Borrower or a Subsidiary) shall
not exceed an amount equal to the lesser of (A) the purchase price, or
the cost of construction or improvement, of such assets incurred by the
Borrower or any of its Subsidiaries and (B) the fair market value of
such assets at the time of acquisition, purchase, construction or
improvement of such assets (as determined in good faith by the Board of
Directors of the Borrower);
(d) Liens existing on property of a Person immediately prior
to its being consolidated with or merged into the Borrower or any of
54
its Subsidiaries or immediately prior to its becoming a Subsidiary of
the Borrower; PROVIDED that to the extent any Lien described in Items
10 through 13 of Schedule 5.09 secures any greater amount of
Indebtedness than the respective amount thereof set forth in Schedule
5.09, such Lien shall not be permitted by this Section 5.09(d) but only
by Section 5.09(g);
(e) Liens on assets leased by the Borrower or one of its
Subsidiaries pursuant to a Capital Lease securing the obligations of
the Borrower or such Subsidiary under such Capital Lease;
(f) Liens on assets of a Foreign Subsidiary securing
Indebtedness of such Foreign Subsidiary; and
(g) Liens securing Indebtedness of the Borrower or any of its
Subsidiaries not described in Section 5.09(a) through 5.09(f) above
(the "OTHER LIENS"), PROVIDED that after giving effect to the creation,
incurrence or assumption, or after accounting for the existence, of all
Other Liens, the aggregate principal amount of all Indebtedness secured
by all Other Liens does not exceed 10% of Consolidated Net Worth.
SECTION 5.10. SUBSIDIARY INDEBTEDNESS. The Borrower will not permit
any of its Subsidiaries (including Candle America, CCW and PartyLite) to
directly or indirectly create, assume, incur or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness for
borrowed money except:
(a) a Subsidiary may become and remain liable with respect to
Indebtedness to the Borrower or a Wholly-Owned Subsidiary of the
Borrower;
(b) the Subsidiaries may remain liable with respect to
Indebtedness existing as of the date of the Closing and described in
Schedule 5.10;
(c) a Subsidiary may remain liable with respect to
Indebtedness outstanding at the time such Subsidiary becomes a
Subsidiary; PROVIDED that (i) such Indebtedness shall not have been
incurred in contemplation of such Subsidiary becoming a Subsidiary and
(ii) immediately after such Subsidiary becomes a Subsidiary, no Default
shall exist; PROVIDED that any increase in the amount of the
Indebtedness described in Items 10 through 13 of Schedule 5.10 at such
time over the respective amount thereof set forth in Schedule 5.10
shall not be permitted by this Section 5.10(c) but only by Section
5.10(g);
55
(d) a Subsidiary may become and remain liable with respect to
Indebtedness incurred to refinance, in whole or in part, any
outstanding Indebtedness permitted under Section 5.10(b) or 5.10(c);
PROVIDED, however, that the principal amount of such refinancing
Indebtedness does not exceed the principal amount of the Indebtedness
so refinanced;
(e) a Subsidiary may become and remain liable with respect to
Indebtedness secured by Liens permitted by Section 5.09; PROVIDED that
the recourse of the holders of such Indebtedness in respect thereof
shall be limited to the assets subject to such Lien, and such holder
shall have no recourse to any other assets of such Subsidiary or to the
Borrower or any other Subsidiary with respect thereto;
(f) a Subsidiary Guarantor may become and remain liable with
respect to Indebtedness which is in all respects pari passu with the
obligations of such Subsidiary Guarantor under the Loan Documents; and
(g) a Subsidiary may become and remain liable after the date
hereof with respect to Indebtedness not described in Sections 5.10(a)
through 5.10(f) above, PROVIDED that after giving effect to such
Subsidiary's creation, assumption, incurrence or guaranty of (or such
Subsidiary's becoming liable with respect to), or after accounting for
the existence of, such other Indebtedness, the aggregate principal
amount of all such Indebtedness of Subsidiaries does not exceed 15% of
Consolidated Net Worth.
SECTION 5.11. INVESTMENTS. The Borrower will not, and will not permit
any of its Subsidiaries to, make directly or indirectly any Investment
in any Person, including any joint venture, except:
(a) the Borrower and its Subsidiaries may continue to own
the Investments owned by them as of the date hereof and described in
Schedule 5.11;
(b) the Borrower and its Subsidiaries may make and own
Investments in any Person which is, or immediately after giving effect
to such Investment will become, a Subsidiary of the Borrower;
(c) the Borrower and its Subsidiaries may make and own
Investments in Cash Equivalents or in money market funds that invest
solely in Cash Equivalents; and
56
(d) the Borrower and its Subsidiaries may make and own
Investments not described in Sections 5.11(a) through (c) above,
PROVIDED that the aggregate amount of all such Investments does not
exceed 15% of Consolidated Net Worth.
SECTION 5.12. LEVERAGE RATIO. The Leverage Ratio will not, at any
time exceed 2.00 to 1.00.
SECTION 5.13. MINIMUM CONSOLIDATED NET WORTH. Consolidated Net Worth
will at no time be less than the sum of $160,000,000 plus 50% of Cumulative
Positive Net Income plus 50% of Cumulative Equity Proceeds. For purposes of
this Section, "CUMULATIVE POSITIVE NET INCOME" means, as of any date, the sum
of Consolidated Net Income for each Fiscal Quarter ending after the Effective
Date (or, in the case of the first such Fiscal Quarter, the period from May
1, 1997 through the end of such Fiscal Quarter, treated as a single period)
and on or prior to such date for which such Consolidated Net Income is a
positive amount, disregarding any Fiscal Quarter for which Consolidated Net
Income is a negative amount and "CUMULATIVE EQUITY PROCEEDS" means, as of any
date, the aggregate amount by which Consolidated Net Worth shall have been
increased by reason of the issuance of capital stock of the Borrower
subsequent to April 30, 1997 and on or prior to such date.
SECTION 5.14. MERGERS AND SALES OF ASSETS. The Borrower will not
consolidate or merge with or into any other Person; PROVIDED that the
Borrower may merge with another Person if (x) the Borrower is the corporation
surviving such merger and (y) after giving effect to such merger, no Default
shall have occurred and be continuing. The Borrower shall not permit the
sale, lease or other transfer, directly or indirectly, of all or any
substantial part of the assets of the Borrower and its Subsidiaries, taken as
a whole, to any other Person or Persons; PROVIDED that the foregoing shall
not prohibit the Borrower and its Subsidiaries from (i) transferring assets
with an aggregate book value of less than $70,000,000 in one or more related
or unrelated transactions to one or more Persons in connection with the
leasing of such assets from such Person or Persons, (ii) selling inventory in
the ordinary course of business, (iii) disposing of obsolete assets no longer
used in their respective businesses or (iv) disposing of any assets within
twelve months after the acquisition thereof.
SECTION 5.15. EXISTING TERM LOANS. Not later than December 31, 1997,
the Borrower will prepay in full the Existing Term Loans and terminate the
related lending facilities.
57
SECTION 5.16. SUBSIDIARY GUARANTORS. The Borrower will maintain
ownership free and clear of any Lien of all capital stock of the Subsidiary
Guarantors from time to time outstanding.
SECTION 5.17. USE OF PROCEEDS. The proceeds of the Loans made under
this Agreement will be used by the Borrower for its general corporate
purposes (including, without limitation, acquisitions, but only with the
approval of the boards of directors of the Persons to be acquired). None of
such proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any "margin
stock" within the meaning of Regulation U.
ARTICLE 6
DEFAULTS
SECTION 6.01. EVENTS OF DEFAULT. If one or more of the following
events ("EVENTS OF DEFAULT") shall have occurred and be continuing:
(a) The Obligors default in the payment of any principal on
any Note or on any Letter of Credit Liabilities when the same becomes
due and payable, whether at maturity or at a date fixed for prepayment
or by declaration or otherwise; or
(b) The Obligors default in the payment of any interest, any
fees or any other amount payable hereunder for more than five Domestic
Business Days after the same becomes due and payable; or
(c) the Borrower defaults in the performance of or compliance
with any term contained in Sections 5.01(e) or 5.08 through 5.17,
inclusive;
(d) the Borrower defaults in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs 6.01(a), 6.01(b) and 6.01(c)) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Borrower
receiving notice of such default from the Documentation Agent at the
request of any Bank (any such notice to be identified as a "notice of
default" and to refer specifically to this paragraph 6.01(d)); or
58
(e) any representation or warranty made in writing by or on
behalf of any Obligor or by any officer of any Obligor in the Loan
Documents or in any writing furnished in connection with the
transactions contemplated thereby proves to have been false or
incorrect in any material respect on the date as of which made; or
(f) (i) the Borrower or any of its Material Subsidiaries is
in default (as principal or as guarantor or other surety) in the
payment of any principal of or premium or make-whole amount or interest
on any Indebtedness that is outstanding in an aggregate principal
amount of at least $5,000,000 beyond any period of grace provided with
respect thereto, or (ii) the Borrower or any of its Material
Subsidiaries is in default in the performance of or compliance with any
term of any evidence of any Indebtedness in an aggregate outstanding
principal amount of at least $5,000,000 or of any mortgage, indenture
or other agreement relating thereto or any other condition exists, and
as a consequence of such default or condition such Indebtedness has
become, or has been declared (or one or more Persons are entitled to
declare such Indebtedness to be), due and payable before its stated
maturity or before its regularly scheduled dates of payment or (iii) as
a consequence of the occurrence or continuation of any event or
condition (other than the passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity interests), (x)
the Borrower or any of its Material Subsidiaries has become obligated
to purchase or repay Indebtedness before its regular maturity or before
its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $5,000,000, or (y) one or more Persons
have the right to require the Borrower or any of its Material
Subsidiaries so to purchase or repay such Indebtedness, except to the
extent that such obligation to purchase or repay or right to require
repayment arises solely through the passage of time (or, in the case of
any such right, may be exercised at any time) and not by the occurrence
of any other event or the existence of any other condition; or
(g) the Borrower or any of its Subsidiaries (other than
Immaterial Subsidiaries) (i) is generally not paying, or admits in
writing its inability to pay, its debts as the become due, (ii) files,
or consents by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law
of any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
59
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the
Borrower or any of its Subsidiaries (other than Immaterial
Subsidiaries), a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving
a petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Borrower or any of its Subsidiaries
(other than Immaterial Subsidiaries), or any such petition shall be
filed against the Borrower or any of its Subsidiaries (other than
Immaterial Subsidiaries) and such petition shall not be dismissed
within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 are rendered against one or more of
the Borrower and its Subsidiaries (other than Immaterial Subsidiaries)
and which judgments are not, within 60 days after entry thereof,
bonded, discharged or stayed pending appeal, or are not discharged
within 30 days after the expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected
to be filed with the PBGC or the PBGC shall have instituted proceedings
under ERISA section 4042 to terminate or appoint a trustee to
administer any Plan or the PBGC shall have notified any Obligor or any
ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall
exceed $5,000,000, (iv) any Obligor or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to
Title I or IV or ERISA or the penalty or exercise tax provisions of the
Code relating to employee benefit plans (as defined in Section 3 of
ERISA), (v) any Obligor or any ERISA Affiliate withdraws from any
Multiemployer Plan, or (vi) any Obligor or any Subsidiary establishes
or amends any employee welfare benefit plan (as defined in Section 3 of
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ERISA) that provides post-employment welfare benefits in a manner that
would increase the liability of any Obligor or any Subsidiary
thereunder; and any such event or events described in clauses
6.01(j)(i) through 6.01(j)(vi) above, either individually or together
with any other such event or events, could reasonably be expected to
have a Material Adverse Effect; or
(k) any Subsidiary Guarantor seeks to revoke its obligations
under the Guaranty Agreement, or any provision of the Guaranty
Agreement shall, for any reason, cease to be valid and binding on any
Subsidiary Guarantor, or the Borrower or any Subsidiary Guarantor shall
so state in writing; or
(l) any person or group of persons (within the meaning of
Section 13 or 14 of the Exchange Act) (other than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or
a group including ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Exchange Act) of 30% or
more of the outstanding shares of voting common stock of the Borrower;
or, during any period of 12 consecutive calendar months, individuals
who were either (i) directors of the Borrower on the first day of such
period or (ii) elected to fill vacancies caused by the ordinary course
resignation or retirement of any other director and whose nomination or
election was approved by a vote of at least a majority of directors
then still in office who were directors of the Borrower on the first
day of such period, shall cease to constitute a majority of the board
of directors of the Borrower;
then, and in every such event, the Documentation Agent shall (i) if requested
by the Required Banks, by notice to the Borrower terminate the Commitments
and they shall thereupon terminate, (ii) if requested by Banks holding at
least 66 2/3% of the aggregate Dollar Amount of the Loans, by notice to the
Borrower declare the Notes (together with accrued interest thereon) to be,
and the Notes shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; PROVIDED that in the case of any of the Events
of Default specified in clause 6.01(g) or 6.01(h) above with respect to the
Borrower, without any notice to the Borrower or any other act by the
Documentation Agent or the Banks, the Commitments shall thereupon terminate
and the Notes (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.
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SECTION 6.02. NOTICE OF DEFAULT. The Documentation Agent shall give
notice to the Borrower under Section 6.01(d) promptly upon being requested to
do so by any Bank and shall thereupon notify all the Banks thereof.
SECTION 6.03. CASH COVER. The Borrower agrees, in addition to the
provisions of Section 6.01(d) hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by the
Documentation Agent upon the instruction of the Banks having at least 66 2/3%
in aggregate amount of the Commitments (or, if the Commitments shall have
been terminated, holding at least 66 2/3% of the Letter of Credit
Liabilities), pay to the Documentation Agent an amount in immediately
available funds (which funds shall be held as collateral pursuant to
arrangements satisfactory to the Documentation Agent) equal to the aggregate
amount available for drawing under all Letters of Credit then outstanding at
such time, PROVIDED that, upon the occurrence of any Event of Default
specified in Section 6.01(g) or 6.01(h) with respect to the Borrower, the
Borrower shall pay such amount forthwith without any notice or demand or any
other act by any Agent or Bank.
ARTICLE 7
THE AGENTS
SECTION 7.01. APPOINTMENT AND AUTHORIZATION. Each Bank irrevocably
appoints and authorizes each Agent to take such action as agent on its behalf
and to exercise such powers under the Loan Documents as are delegated to such
Agent by the terms thereof, together with all such powers as are reasonably
incidental thereto.
SECTION 7.02. AGENTS AND AFFILIATES. MGT and BofA shall each have the
same rights and powers under the Loan Documents as any other Bank and may
exercise or refrain from exercising the same as though it were not an Agent,
and MGT and BofA and their respective affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with the Borrower
or any Subsidiary or affiliate of the Borrower as if it were not an Agent
hereunder.
SECTION 7.03. ACTION BY AGENTS. The obligations of the Agents under
the Loan Documents are only those expressly set forth therein. Without
limiting the generality of the foregoing, neither Agent shall be required to
take any action with respect to any Default, except in the case of the
Documentation Agent as expressly provided in Article 6.
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SECTION 7.04. CONSULTATION WITH EXPERTS. Either Agent may consult with
legal counsel (who may be counsel for the Borrower), 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.
SECTION 7.05. LIABILITY OF AGENT. Neither Agent nor any of their
respective affiliates nor any of the respective directors, officers, agents
or employees of the foregoing shall be liable for any action taken or not
taken by it in connection with the Loan Documents (i) with the consent or at
the request of the Required Banks (or such other number or percentage of the
Banks as may be specified herein for the particular purpose) or (ii) in the
absence of its own gross negligence or willful misconduct. Neither Agent nor
any of their respective affiliates nor any of the respective directors,
officers, agents or employees of the foregoing shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with the Loan Documents or any
borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower or any of its Subsidiaries; (iii) the
satisfaction of any condition specified in Article 3, except receipt of items
required to be delivered to such Agent; or (iv) the validity, effectiveness
or genuineness of the Loan Documents or any other instrument or writing
furnished in connection therewith. Neither Agent shall incur any liability
by acting in reliance upon any notice, consent, certificate, statement, or
other writing (which may be a bank wire, telex, facsimile transmission or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties. Without limiting the generality of the foregoing, the use
of the term "agent" in this Agreement with reference to an Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law. Instead, such term is
used merely as a matter of market custom and is intended to create or reflect
only a contractual relationship between independent contracting parties.
SECTION 7.06. INDEMNIFICATION. Each Bank shall, ratably in accordance
with its Commitment, indemnify each Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that
such indemnitees may suffer or incur in connection with the Loan Documents or
any action taken or omitted by such indemnitees thereunder.
SECTION 7.07. CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon either Agent or any other Bank, and
on the basis of such documents and information as it has deemed appropriate,
63
made its own credit analysis and decision to enter into this Agreement. Each
Bank also acknowledges that it will, independently and without reliance upon
either Agent or any other Bank, and on the basis of such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action under the Loan
Documents.
SECTION 7.08. SUCCESSOR AGENT. Either Agent may resign at any time by
giving notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent with (so long as no Default shall have occurred and be continuing) the
consent of the Borrower, which consent shall not be unreasonably withheld or
delayed. If no successor Agent shall have been so appointed by the Required
Banks with the Borrower's consent, and shall have accepted such appointment,
within 60 days after the retiring Agent gives notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a commercial bank organized or licensed under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of at least $250,000,000. Upon the acceptance of its appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
SECTION 7.09. AGENT'S FEE; ARRANGER FEE. The Borrower shall pay to
each Agent for its own account and to ▇.▇. ▇▇▇▇▇▇ Securities Inc. ("JPMSI"),
in its capacity as arranger, for its own account, fees in the amounts and at
the times previously agreed upon between the Borrower and each Agent and
JPMSI, respectively.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR.
If on or prior to the first day of any Interest Period for any Euro-Currency
Loan or Competitive Bid LIBOR Loan:
(a) the Administrative Agent is advised by the Reference
Banks that deposits in the relevant currency (in the applicable
amounts) are not being offered to the Reference Banks in the relevant
market for such Interest Period, or
(b) in the case of Euro-Currency Loans, Banks having 50% or
more of the aggregate amount of the Commitments advise the
Administrative Agent that the London Interbank Offered Rate as
determined by the Administrative Agent will not adequately and fairly
64
reflect the cost to such Banks of funding their Euro-Currency Loans for
such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the Borrower
and the Banks, whereupon until the Administrative Agent notifies the Borrower
that the circumstances giving rise to such suspension no longer exist, (i)
the obligations of the Banks to make Euro-Currency Loans, or to continue or
convert outstanding Loans as or into Euro-Currency Loans, in the affected
currency shall be suspended and (ii) each outstanding Euro-Currency Loan in
the affected currency shall be converted (in the case of an Alternative
Currency Loan, at the Spot Conversion Rate) into a Base Rate Loan on the last
day of the then current Interest Period applicable thereto. Unless the
Borrower notifies the Administrative Agent at least two Domestic Business
Days before the date of any Fixed Rate Borrowing for which a Notice of
Borrowing has previously been given that it elects not to borrow on such
date, (i) if such Fixed Rate Borrowing is a Syndicated Borrowing, such
Borrowing shall instead be made in Dollars as a Base Rate Borrowing in the
same aggregate Dollar Amount as the requested Borrowing and (ii) if such
affected Borrowing is a Competitive Bid LIBOR Borrowing, the Competitive Bid
LIBOR Loans comprising such Borrowing shall be made in Dollars in the same
aggregate Dollar Amount as the requested Borrowing and shall bear interest
for each day from and including the first day to but excluding the last day
of the Interest Period applicable thereto at the Base Rate for such day.
SECTION 8.02. ILLEGALITY. If, on or after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any Bank (or its Euro-Currency Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Euro-Currency Lending Office) to make,
maintain or fund any of its Euro-Dollar Loans in any currency and such Bank
shall so notify the Administrative Agent, the Administrative Agent shall
forthwith give notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Administrative Agent that the
circumstances giving rise to such suspension no longer exist, the obligation
65
of such Bank to make Euro-Currency Loans, or to convert outstanding Loans
into Euro-Currency Loans, in such currency shall be suspended. Before giving
any notice to the Administrative Agent pursuant to this Section, such Bank
shall designate a different Euro-Currency Lending Office if such designation
will avoid the need for giving such notice and will not, in the judgment of
such Bank, be otherwise disadvantageous to such Bank. If such notice is
given, each Euro-Currency Loan of such Bank in such currency then outstanding
shall be converted (at the Spot Rate on the date of conversion in the case of
each Alternative Currency Loan) to a Base Rate Loan either (a) on the last
day of the then current Interest Period applicable to such Euro-Currency Loan
if such Bank may lawfully continue to maintain and fund such Loan to such day
or (b) immediately if such Bank shall determine that it may not lawfully
continue to maintain and fund such Loan to such day.
SECTION 8.03. INCREASED COST AND REDUCED RETURN. (a) If on or after
(x) the date hereof, in the case of any Committed Loan or Letter of Credit or
any obligation to make Committed Loans or issue or participate in any Letter
of Credit or (y) the date of any related Competitive Bid Quote, in the case
of any Competitive Bid Loan, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by any Bank (or its Applicable
Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Euro-Currency Loan any such
requirement with respect to which such Bank is entitled to compensation
during the relevant Interest Period under Section 2.17), special deposit,
insurance assessment or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Bank (or its Applicable
Lending Office) or shall impose on any Bank (or its Applicable Lending
Office) or on the London interbank market any other condition affecting its
Fixed Rate Loans, its Note or its obligation to make Fixed Rate Loans or its
obligations hereunder in respect of Letters of Credit and the result of any
of the foregoing is to increase the cost to such Bank (or its Applicable
Lending Office) of making or maintaining any Fixed Rate Loan or of issuing or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Bank (or its Applicable Lending Office) under
this Agreement or under its Note with respect thereto, by an amount deemed by
such Bank to be material, then, within 15 days after demand by such Bank
(with a copy to the Administrative Agent), the Borrower shall pay to such
Bank such additional
66
amount or amounts as will compensate such Bank for such increased cost or
reduction.
(b) If any Bank shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing
the rate of return on capital of such Bank (or its Parent) as a consequence
of such Bank's obligations hereunder to a level below that which such Bank
(or its Parent) could have achieved but for such adoption, change, request or
directive (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Bank to be material, then from time to
time, within 15 days after demand by such Bank (with a copy to the
Administrative Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank (or its Parent) for such
reduction.
(c) Each Bank will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Bank to compensation pursuant to
this Section and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error if made reasonably and in good faith. In determining such
amount, such Bank may use any reasonable averaging and attribution methods.
Notwithstanding subsections (a) and (b) of this Section 8.03, the Borrower
shall only be obligated to compensate any Bank for any amount arising or
accruing during (i) any time or period commencing not more than three months
prior to the date on which such Bank notifies the Administrative Agent and
the Borrower that it proposes to demand such compensation and identifies to
the Administrative Agent and the Borrower the statute, regulation or other
basis upon which the claimed compensation is or will be based and (ii) any
time or period during which, because of the retroactive application of such
statute, regulation or other basis, such Bank did not know that such amount
would arise or accrue.
SECTION 8.04. TAXES. (a) For purposes of this Section 8.04, the
following terms have the following meanings:
67
"TAXES" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by
any Obligor pursuant to any Loan Document, and all liabilities with respect
thereto, EXCLUDING (i) in the case of each Bank and the Administrative Agent,
taxes imposed on its income, net worth or gross receipts and franchise or
similar taxes imposed on it, by a jurisdiction under the laws of which such
Bank or the Administrative Agent (as the case may be) is organized or in
which its principal executive office is located or, in the case of each Bank,
in which its Applicable Lending Office is located and (ii) in the case of
each Bank, any United States withholding tax imposed on such payments but
only to the extent that such payments to such Bank are subject to United
States withholding tax at the time such Bank first becomes a party to this
Agreement.
"OTHER TAXES" means any present or future stamp or documentary taxes and
any other excise or property taxes, or similar charges or levies, which arise
from any payment made pursuant to any Loan Document or from the execution or
delivery of, or otherwise with respect to, any Loan Document.
(b) Any and all payments by any Obligor to or for the account
of any Bank or the Administrative Agent under any Loan Document shall be made
without deduction for any Taxes or Other Taxes; PROVIDED that, if such
Obligor shall be required by law to deduct any Taxes or Other Taxes from any
such payments, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 8.04) such Bank or the
Administrative Agent (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) such Obligor
shall make such deductions, (iii) such Obligor shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law and (iv) such Obligor shall furnish to the Administrative
Agent, at its Chicago Office, the original or a certified copy of a receipt
evidencing payment thereof.
(c) The Borrower agrees to indemnify each Bank and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 8.04) paid by such Bank or
the Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be paid within 15 days after such Bank or the
Administrative Agent (as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
68
delivery of this Agreement in the case of each Bank listed on the signature
pages hereof and on or prior to the date on which it becomes a Bank in the
case of each other Bank, and from time to time thereafter if requested in
writing by the Borrower (but only so long as such Bank remains lawfully able
to do so), shall provide the Borrower and the Administrative Agent with
Internal Revenue Service form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Bank is
entitled to benefits under an income tax treaty to which the United States is
a party which exempts the Bank from United States withholding tax or reduces
the rate of withholding tax on payments of interest for the account of such
Bank or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States.
(e) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form pursuant to subsection 8.04(d)
(unless such failure is due to a change in treaty, law or regulation
occurring subsequent to the date on which such form originally was required
to be provided), such Bank shall not be entitled to indemnification under
subsection 8.04(b) or 8.04(c) with respect to Taxes imposed by the United
States; PROVIDED that if a Bank, which is otherwise exempt from or subject to
a reduced rate of withholding tax, becomes subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall take such
steps as such Bank shall reasonably request to assist such Bank to recover
such Taxes.
(f) If any Obligor is required to pay additional amounts to
or for the account of any Bank pursuant to this Section 8.04, then such Bank
will change the jurisdiction of its Applicable Lending Office if, in the
judgment of such Bank, such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Bank.
SECTION 8.05. BASE RATE LOANS SUBSTITUTED FOR AFFECTED FIXED RATE
LOANS. If (i) the obligation of any Bank to make, or to continue or convert
outstanding Loans as or to, Euro-Currency Loans has been suspended pursuant
to Section 8.02 or (ii) any Bank has demanded compensation under Section 8.03
or 8.04 with respect to its Euro-Currency Loans, and in any such case the
Borrower shall, by at least five Euro-Dollar Business Days' prior notice to
such Bank through the Administrative Agent, have elected that the provisions
of this Section shall apply to such Bank, then, unless and until such Bank
notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer exist, all Loans which would otherwise
be made by such Bank as (or continued as or converted to) Euro-Currency Loans
(in the affected currency), shall instead be Base Rate Loans (in the case of
69
Alternative Currency Loans, in the same Dollar Amount as the Euro-Currency
Loan that such Bank would otherwise have made in the Alternative Currency)
(on which interest and principal shall be payable contemporaneously with the
related Euro-Currency Loans of the other Banks). If such Bank notifies the
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer exist, the principal amount of each such Base Rate
Loan shall be converted into a Euro-Currency Loan on the first day of the
next succeeding Interest Period applicable to the related Euro-Currency Loans
of the other Banks. If such Loan is converted into an Alternative Currency
Loan, such Bank, the Administrative Agent and the Borrower shall make such
arrangements as shall be required (including increasing or decreasing the
amount of such Alternative Currency Loan) so that such Alternative Currency
Loan shall be in the same amount as it would have been if the provisions of
this Section had never been applied thereto.
SECTION 8.06. SUBSTITUTION OF BANK. If (i) the obligation of any Bank
to make Euro-Currency Loans has been suspended pursuant to Section 8.02 or
(ii) any Bank has demanded compensation under Section 8.03 or 8.04, and, in
the case of either clause (i) or clause (ii), such suspension is not
generally applicable to or such compensation has not generally been demanded
by the other Banks, then the Borrower shall have the right, with the
assistance of the Agents, to replace such Bank with an Assignee or Assignees
(which may be one or more of the Banks) that will purchase the Loans and
assume the Commitment and Letter of Credit Liabilities of such Bank.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex,
facsimile transmission or similar writing) and shall be given to such party
(a) in the case of the Borrower, at its address, facsimile number or telex
number set forth on the signature pages hereof, (b) in the case of either
Agent, at its address, facsimile number or telex number set forth on the
signature pages hereof, (c) in the case of any Bank, at its address,
facsimile number or telex number set forth in its Administrative
Questionnaire or (d) in the case of any party, such other address, facsimile
number or telex number as such party may hereafter specify for the purpose by
notice to the Agents and the Borrower. Each such notice, request or other
communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the appropriate
answerback is received, (ii) if given by facsimile transmission, when
transmitted to the facsimile number specified in this Section and
70
confirmation of receipt is received, (iii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iv) if given by any other means, when
delivered at the address specified in this Section; PROVIDED that notices to
either Agent or any Issuing Bank under Article 2 or Article 8 shall not be
effective until received.
SECTION 9.02. NO WAIVERS. No failure or delay by either Agent or any
Bank in exercising any right, power or privilege under the Loan Documents
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies provided in the Loan
Documents shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. EXPENSES; INDEMNIFICATION. (a) The Borrower shall pay
(i) all out-of-pocket expenses of the Documentation Agent, including
reasonable fees and disbursements of special counsel for the Documentation
Agent, in connection with the preparation of the Loan Documents, any waiver
or consent thereunder or any amendment thereof or any Default or alleged
Default hereunder and (ii) if an Event of Default occurs, all out-of-pocket
expenses incurred by each Agent and Bank, including, without limitation and
without duplication, the reasonable fees and disbursements of outside counsel
and allocated cost of inside counsel, in connection with such Event of
Default and collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom.
(b) The Borrower agrees to indemnify each Agent and Bank,
their respective affiliates and the respective directors, officers, agents
and employees of the foregoing (each an "INDEMNITEE") and hold each
Indemnitee harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without limitation and
without duplication, the reasonable fees and disbursements of outside counsel
and allocated cost of inside counsel, which may be incurred by such
Indemnitee in connection with any investigative, administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a party
thereto) brought or threatened relating to or arising out of this Agreement
or any actual or proposed use of proceeds of Loans or Letter of Credit
hereunder; PROVIDED that no Indemnitee shall have the right to be indemnified
hereunder for such Indemnitee's own gross negligence or willful misconduct as
determined by a court of competent jurisdiction.
SECTION 9.04. SHARING OF SET-OFFS. Subject to Section 2.18, each Bank
agrees that if it shall, by exercising any right of set-off or counterclaim
or otherwise, receive payment of a proportion of the aggregate amount then
due with respect to the Loans and Letter of Credit Liabilities held by it
which is greater than the proportion received by any other Bank in respect of
the aggregate amount then due and interest due with respect to the Loans and
71
Letter of Credit Liabilities held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the
Loans and Letter of Credit Liabilities held by the other Banks, and such
other adjustments shall be made, as may be required so that all such payments
then due with respect to the Loans and Letter of Credit Liabilities held by
the Banks shall be shared by the Banks pro rata; PROVIDED that nothing in
this Section shall impair the right of any Bank to exercise any right of
set-off or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness other than indebtedness under the
Loan Documents. Each Obligor agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in
the Loans and Letter of Credit Liabilities, whether or not acquired pursuant
to the foregoing arrangements, may exercise rights of set-off or counterclaim
and other rights with respect to such participation as fully as if such
holder of a participation were a direct creditor of such Obligor in the
amount of such participation.
SECTION 9.05. AMENDMENTS AND WAIVERS. Any provision of this Agreement
or the Notes may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of either Agent, the Swingline Bank or any
Issuing Bank are affected thereby, by such Person); PROVIDED that no such
amendment or waiver shall, unless signed by all the Banks, (i) increase or
decrease the Commitment of any Bank (except (x) as contemplated by Section
2.19 or (y) for a ratable decrease in the Commitments of all Banks) or
subject any Bank to any additional obligation, (ii) reduce the principal of
or rate of interest on any Loan or the amount to be reimbursed in respect of
any Letter of Credit or any interest thereon or any fees hereunder, (iii)
postpone the date fixed for any payment of principal of or interest on any
Loan or for reimbursement in respect of any Letter of Credit or interest
thereon or any fees hereunder or for termination of any Commitment, (iv)
release any Subsidiary Guarantor from its obligations under the Guaranty
Agreement or (v) change the percentage of the Commitments or of the aggregate
Dollar Amount of the Notes and Letter of Credit Liabilities, or the number of
Banks, which shall be required for the Banks or any of them to take any
action under this Section or any other provision of this Agreement.
SECTION 9.06. SUCCESSORS AND ASSIGNS. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower
may not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or
other institutions (each a "PARTICIPANT") participating interests in its
Commitment or any or all of its Loans and Letter of Credit Liabilities. In
the event of any such grant by a Bank of a
72
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agents, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Borrower, the Issuing
Banks, the Swingline Bank and the Agents shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under the Loan Documents. Any agreement pursuant to which any Bank may grant
such a participating interest shall provide that such Bank shall retain the
sole right and responsibility to enforce the obligations of the Borrower
under the Loan Documents including, without limitation, the right to approve
any amendment, modification or waiver of any provision thereof; PROVIDED that
such participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clause (i),
(ii) or (iii) of Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article 8 with
respect to its participating interest. An assignment or other transfer which
is not permitted by subsection 9.06(c) or 9.06(d) below shall be given effect
for purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection 9.06(b).
(c) Any Bank may at any time assign to one or more banks or
other institutions (each an "ASSIGNEE") all, or a proportionate part
(equivalent to an initial Commitment of not less than $10,000,000) of all, of
its rights and obligations under the Loan Documents, and such Assignee shall
assume such rights and obligations, pursuant to an Assignment and Assumption
Agreement in substantially the form of Exhibit H hereto executed by such
Assignee and such transferor Bank, with (and subject to) the written consent
of the Borrower, the Agents, the Swingline Bank and the Issuing Banks, which
consents shall not be unreasonably withheld or delayed; PROVIDED that if an
Assignee is an affiliate of such transferor Bank or was a Bank immediately
prior to such assignment, no such consent shall be required. Upon execution
and delivery of such instrument and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank party to
this Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding
extent, and no further consent or action by any party shall be required. Upon
the consummation of any assignment pursuant to this subsection 9.06(c), the
transferor Bank, the Agents and the Borrower shall make appropriate
arrangements so that, if required, a new Note is issued to the Assignee. In
connection with any such assignment, the transferor Bank shall pay to the
Administrative Agent an administrative fee for processing such assignment in
the amount of $2,500. If the Assignee is not incorporated under the laws of
the United States of America or a state thereof, it
73
shall, prior to the first date on which interest or fees are payable
hereunder for its account, deliver to the Borrower and the Administrative
Agent certification as to exemption from deduction or withholding of any
United States federal income taxes in accordance with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its
rights under the Loan Documents to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any
Bank's rights shall be entitled to receive any greater payment under Section
8.03 or 8.04 than such Bank would have been entitled to receive with respect
to the rights transferred, unless such transfer is made with the Borrower's
prior written consent or by reason of the provisions of Section 8.02, 8.03 or
8.04 requiring such Bank to designate a different Applicable Lending Office
under certain circumstances or at a time when the circumstances giving rise
to such greater payment did not exist.
SECTION 9.07. COLLATERAL. Each of the Banks represents to the Agents
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT
AND EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK. THE BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE BORROWER IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 9.09. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement
may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject
74
matter hereof. This Agreement shall become effective upon receipt by the
Documentation Agent of counterparts hereof signed by each of the parties
hereto (or, in the case of any party as to which an executed counterpart
shall not have been received, receipt by the Agent in form satisfactory to it
of telegraphic, telex, facsimile or other written confirmation from such
party of execution of a counterpart hereof by such party).
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENTS,
THE BANKS, THE SWINGLINE BANK AND THE ISSUING BANKS HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.11. CONFIDENTIALITY. Each Agent and each Bank agrees to keep
any information delivered or made available by the Borrower pursuant to this
Agreement confidential from anyone other than persons employed or retained by
such Agent or such Bank who are engaged in evaluating, approving, structuring
or administering the credit facility contemplated hereby; PROVIDED that
nothing herein shall prevent any Agent or Bank from disclosing such
information (a) to any other Bank or Agent, (b) to any other Person if
reasonably incidental to the administration of the credit facility
contemplated hereby, (c) upon the order of any court or administrative
agency, (d) upon the request or demand of any regulatory agency or authority,
(e) which had been publicly disclosed other than as a result of a disclosure
by an Agent or any Bank prohibited by this Agreement, (f) in connection with
any litigation to which an Agent, any Bank or its subsidiaries or Parent may
be a party, (g) to the extent necessary in connection with the exercise of
any remedy hereunder, (h) to such Bank's or Agent's legal counsel and
independent auditors and (i) subject to provisions substantially similar to
those contained in this Section, to any actual or proposed Participant
or Assignee.
75
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BLYTH INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
Commitments
-----------
$23,000,000 ▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
$22,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:
--------------------------------
Name:
Title:
$20,000,000 ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By:
--------------------------------
Name:
Title:
$15,000,000 DRESDNER BANK AG
By:
--------------------------------
Name:
Title:
Commitments
-----------
$23,000,000 ▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By:
--------------------------------
Name:
Title:
$22,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
$20,000,000 ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By:
--------------------------------
Name:
Title:
$15,000,000 DRESDNER BANK AG
By:
--------------------------------
Name:
Title:
Commitments
-----------
$23,000,000 ▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By:
--------------------------------
Name:
Title:
$22,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:
--------------------------------
Name:
Title:
$20,000,000 ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
(▇▇▇) ▇▇▇-▇▇▇▇
$15,000,000 DRESDNER BANK AG
By:
--------------------------------
Name:
Title:
Commitments
-----------
$23,000,000 ▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By:
--------------------------------
Name:
Title:
$22,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:
--------------------------------
Name:
Title:
$20,000,000 ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By:
--------------------------------
Name:
Title:
$15,000,000 DRESDNER BANK AG
By: /s/ B. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: B. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Treasurer
Commitments
-----------
$15,000,000 THE FIRST NATIONAL BANK OF
CHICAGO
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: First Vice President
$15,000,000 FIRST UNION NATIONAL BANK
By:
--------------------------------
Name:
Title:
$15,000,000 THE NORTHERN TRUST COMPANY
By:
--------------------------------
Name:
Title:
$15,000,000 MARINE MIDLAND BANK
By:
--------------------------------
Name:
Title:
-----------------
Total Commitments
$140,000,000
=================
Commitments
-----------
$15,000,000 THE FIRST NATIONAL BANK OF
CHICAGO
By:
--------------------------------
Name:
Title:
$15,000,000 FIRST UNION NATIONAL BANK
By: /s/ C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
$15,000,000 THE NORTHERN TRUST COMPANY
By:
--------------------------------
Name:
Title:
$15,000,000 MARINE MIDLAND BANK
By:
--------------------------------
Name:
Title:
-----------------
Total Commitments
$140,000,000
=================
Commitments
-----------
$15,000,000 THE FIRST NATIONAL BANK OF
CHICAGO
By:
--------------------------------
Name:
Title:
$15,000,000 FIRST UNION NATIONAL BANK
By:
--------------------------------
Name:
Title:
$15,000,000 THE NORTHERN TRUST COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
$15,000,000 MARINE MIDLAND BANK
By:
--------------------------------
Name:
Title:
-----------------
Total Commitments
$140,000,000
=================
Commitments
-----------
$15,000,000 THE FIRST NATIONAL BANK OF
CHICAGO
By:
--------------------------------
Name:
Title:
$15,000,000 FIRST UNION NATIONAL BANK
By:
--------------------------------
Name:
Title:
$15,000,000 THE NORTHERN TRUST COMPANY
By:
--------------------------------
Name:
Title:
$15,000,000 MARINE MIDLAND BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
-----------------
Total Commitments
$140,000,000
=================
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Documentation Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Loan Department
Telex number: 177615 MGT
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Administrative Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Senior Agency Officer
Telex number:
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
PRICING SCHEDULE
The "EURO-CURRENCY MARGIN", "FACILITY FEE RATE" and "LC FEE RATE" for
any day are the respective percentages set forth below in the applicable row
under the column corresponding to the Status that exists on such day:
----------------------------------------------------------------------
STATUS LEVEL I LEVEL II LEVEL III LEVEL IV
----------------------------------------------------------------------
Euro-Currency Margin 0.170% 0.210% 0.250% 0.350%
----------------------------------------------------------------------
Facility Fee Rate 0.080% 0.090% 0.1250% 0.150%
----------------------------------------------------------------------
LC Fee Rate 0.170% 0.210% 0.250% 0.350%
For purposes of this Schedule, the following terms have the following
meanings:
"APPLICABLE LEVERAGE RATIO" means, at any date, the Leverage Ratio
reflected in the certificate most recently delivered by the Borrower pursuant
to Section 5.01(c) prior to such date; provided that until the delivery of
the first such certificate, the Applicable Leverage Ratio shall be deemed to
be at a level resulting in Level II Status; and provided further that at any
date on which a Default exists under Section 5.01(c), the Applicable Leverage
Ratio shall be deemed to be greater than 1.50 to 1.00.
"LEVEL I STATUS" exists at any date if, at such date, the Applicable
Leverage Ratio is less than or equal to 0.50 to 1.00.
"LEVEL II STATUS" exists at any date if, at such date, (i) the
Applicable Leverage Ratio is less than or equal to 1.00 to 1.00 and (ii)
Level I Status does not exist.
"LEVEL III STATUS" exists at any date if, at such date, (i) the
Applicable Leverage Ratio is less than or equal to 1.50 to 1.00 and (ii)
neither Level I Status nor Level II Status exists.
"LEVEL IV STATUS" exists at any date if, at such date, no other Status
exists.
"STATUS" refers to the determination of which of Level I Status, Level
II Status, Level III Status or Level IV Status exists at any date.
NOTE
New York, New York
October 17, 1997
For value received, Blyth Industries, Inc., a Delaware corporation (the
"BORROWER"), promises to pay to the order of ____________________________
(the "BANK"), for the account of its Applicable Lending Office, the unpaid
principal amount of each Loan made by the Bank to the Borrower pursuant to
the Credit Agreement referred to below on the on the maturity date provided
for in the Credit Agreement. The Borrower promises to pay interest on the
unpaid principal amount of each such Loan on the dates and at the rate or
rates provided for in the Credit Agreement. All such payments of principal
and interest shall be made (i) if in Dollars, in lawful money of the United
States in Federal or other immediately available funds at the office of Bank
of America National Trust and Savings Association, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or (ii) if in an Alternative Currency, in such
funds as may then be customary for the settlement of international
transactions in such Alternative Currency at the place specified for payment
thereof pursuant to the Credit Agreement.
All Loans made by the Bank, the respective types thereof and, in the
case of Alternative Currency Loans, the currency thereof, and all repayments
of the principal thereof shall be recorded by the Bank and, if the Bank so
elects in connection with any transfer or enforcement hereof, appropriate
notations to evidence the foregoing information with respect to each such
Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; PROVIDED that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement dated
as of October 17, 1997 among the Borrower, the banks listed on the signature
pages thereof and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Documentation
Agent and Bank of America National Trust and Savings Association, as
Administrative Agent (as the same may be amended from time to time, the
"CREDIT AGREEMENT"). Terms defined in the Credit Agreement are used herein
with the same meanings. Reference is made to the Credit Agreement for
provisions for the prepayment hereof and the acceleration of the maturity
hereof.
BLYTH INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------
Title: Vice President
A-1
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
------------------------------------------------------------------------------
CURRENCY OF AMOUNT OF TYPE OF PRINCIPAL NOTATION
DATE LOAN LOAN LOAN REPAID MADE BY
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
A-2
EXHIBIT B
FORM OF NOTICE OF COMMITTED BORROWING
[Date]
To: Bank of America National Trust and Savings Association, as
Administrative Agent
From: Blyth Industries, Inc. (the "BORROWER")
Re: Credit Agreement (as the same may be amended from time to time, the
"CREDIT AGREEMENT") dated as of October 17, 1997 among the Borrower,
the Banks party thereto, ▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Documentation Agent and Bank of America National Trust and Savings
Association, as Administrative Agent
We hereby give irrevocably give notice pursuant to Section 2.02 of the
Credit Agreement of the Committed Borrowing specified below:
1. The [Domestic Business Day][Euro-Currency Busienss Day] of
the proposed Borrowing is [Date].
2. The aggregate amount of the proposed Borrowing is [specify
currency and amount in such currency].
3. The Loans comprising such Borrowing are to be [Swingline
Loans][Syndicated Loans].
[4. The Loans comprising such Borrowing are to bear interest
initially at [the Base Rate][a Euro-Currency Rate].]
[5. The duration of the initial Interest Period applicable thereto is
[specify duration].]
B-1
Terms used herein have the meanings assigned to them in the Credit
Agreement.
BLYTH INDUSTRIES, INC.
By:
-----------------------
Name:
Title:
B-2
EXHIBIT C
FORM OF COMPETITIVE BID QUOTE REQUEST
[Date]
To: Bank of America National Trust and Savings Association, as
Administrative Agent
From: Blyth Industries, Inc. (the "BORROWER")
Re: Credit Agreement (as the same may be amended from time to time, the
"CREDIT AGREEMENT") dated as of October 17, 1997 among the
Borrower, the Banks party thereto, ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Documentation Agent and Bank of America National
Trust and Savings Association, as Administrative Agent
We hereby give notice pursuant to Section 2.03 of the Credit Agreement
that we request Competitive Bid Quotes for the following proposed Competitive
Bid Borrowing(s):
Date of Borrowing: __________________
CURRENCY PRINCIPAL AMOUNT* INTEREST PERIOD**
Such Competitive Bid Quotes should offer a Competitive Bid [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
____________________
* Dollar Amount must be not less than $2,000,000.
** Not less than one month (LIBOR Auction) or not less than 7 days
(Absolute Rate Auction), subject to the provisions of the definition of
Interest Period.
C-1
Terms used herein have the meanings assigned to them in the Credit
Agreement.
BLYTH INDUSTRIES, INC.
By:_____________________________________
Name:
Title:
C-2
EXHIBIT D
FORM OF INVITATION FOR COMPETITIVE BID QUOTES
To: [Name of Bank]
Re: Invitation for Competitive Bid Quotes to Blyth Industries, Inc. (the
"BORROWER")
Pursuant to Section 2.03 of the Credit Agreement dated as of October 17,
1997 among the Borrower, the Banks party thereto, ▇▇▇▇▇▇ Guaranty Trust
Company of New York, as Documentation Agent and Bank of America National
Trust and Savings Association, as Administrative Agent, we are pleased on
behalf of the Borrower to invite you to submit Quotes to the Borrower for
the following proposed Competitive Bid Borrowing(s):
Date of Borrowing: __________________
CURRENCY PRINCIPAL AMOUNT* INTEREST PERIOD**
Such Competitive Quotes should offer a Competitive Bid [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than [2:00 P.M.] [9:30 A.M.]
(New York City time) on [date].
____________________
* Dollar Amount must be not less than $2,000,000.
** Not less than one month (LIBOR Auction) or not less than 7 days
(Absolute Rate Auction), subject to the provisions of the definition of
Interest Period.
D-1
Terms used herein have the meanings assigned to them in the Credit
Agreement.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Administrative Agent
By:____________________________________
Authorized Officer
D-2
EXHIBIT E
FORM OF COMPETITIVE BID QUOTE
To: Bank of America National Trust and Savings Association, as
Administrative Agent
Re: Competitive Bid Quote to Blyth Industries, Inc. (the "BORROWER")
In response to your invitation on behalf of the Borrower dated
_____________, ____, we hereby make the following Competitive Bid Quote on
the following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________
4. We hereby offer to make Competitive Bid Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
PRINCIPAL INTEREST COMPETITIVE BID
CURRENCY AMOUNT** PERIOD*** [MARGIN****] [ABSOLUTE RATE*****]
____________________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed
principal amount requested. Specify aggregate limitation if the sum of the
individual offers exceeds the amount the Bank is willing to lend. Each bid
must be made for a Dollar Amount not less than $2,000,000.
*** Not less than one month or not less than 7 days, as specfied in the
related Invitation. No more than five bids are permitted for each Interest
Period.
**** Margin over or under the London Interbank Offered Rate determined
for the applicable Interest Period. Specify percentage (to the nearest
1/1,000th of 1%) and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/1,000th of 1%).
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[PROVIDED, that the aggregate principal amount of Competitive Bid Loans for
which the above offers may be accepted shall not exceed ____________.]**
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the Credit Agreement
dated as of October 17, 1997 among Blyth Industries, Inc., the Banks party
thereto, ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Documentation Agent
and yourselves, as Administrative Agent, irrevocably obligate(s) us to make
the Competitive Bid Loan(s) for which any offer(s) are accepted, in whole or
in part.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:____________________________________
Authorized Officer
E-2
EXHIBIT F-1
OPINION OF COUNSEL FOR THE BORROWER
October 17, 1997
To the Banks and the Agents
Referred to Below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Documentation Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Credit Agreement dated as of October 17, 1997, among Blyth Industries,
Inc., the banks named therein (the "Banks"), ▇▇▇▇▇▇ Guaranty Trust
Company of New York, as Documentation Agent and Bank of America National
Trust and Savings Association, as Administrative Agent
Ladies and Gentlemen:
We have acted as special counsel to Blyth Industries, Inc., a Delaware
corporation (the "Borrower"), in connection with the Credit Agreement
referred to above (the "Credit Agreement"). All terms defined in the Credit
Agreement and used herein shall have the meaning given to such terms in the
Credit Agreement unless otherwise defined herein.
In connection with rendering this opinion, we have examined copies of the
following executed documents:
(A) the Credit Agreement;
(B) the Notes; and
(C) the Guaranty Agreement.
The aforementioned documents described in clauses (A) through (C) above are
hereinafter collectively referred to as the "Loan Documents."
We have also examined, and relied upon without any independent
investigation or verification, such certificates of officers of the Borrower
and the Subsidiary Guarantors and public officials and such other documents
and records as we deemed necessary as the basis for the opinions set forth
below.
F-1
For purposes of our opinions herein we have assumed: (a) the genuineness
and authenticity of all documents submitted to us as originals, (b) the
conformity with the original documents of all documents submitted to us as
certified, photostatic, conformed or telecopied copies, (c) the legal
capacity of all natural persons, (d) the genuineness of all signatures, (e)
the requisite power and authority of each party (other than the Company and
the Subsidiary Guarantors) to enter into and perform its obligations under
the Loan Documents to which it is a party, (f) that the execution, delivery
and performance of the Loan Documents do not violate the constitutive
documents of any Bank, the Documentation Agent or the Administrative Agent,
or any law, rule, regulation, order, judgment, decree or ruling applicable to
any Bank, the Documentation Agent or the Administrative Agent or any
agreement to which any Bank, the Documentation Agent or Administrative Agent
is a party or is otherwise bound, (g) that the Loan Documents constitute the
legal, valid and binding obligation of each party thereto (other than the
Company and the Subsidiary Guarantors) enforceable against such party in
accordance with its terms, and (g) that the Company and each Subsidiary
Guarantor is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation.
Based upon the foregoing and subject to the qualifications set forth
below, we are of the opinion that:
1. The Borrower has the corporate power and authority to execute,
deliver and perform the Credit Agreement and the Notes and to borrow under
the Credit Agreement. The Borrower has taken all necessary corporate action
to authorize borrowing under the Credit Agreement and to authorize its
execution, delivery and performance of the Credit Agreement and the Notes.
Each of the Credit Agreement and the Notes has been duly executed and
delivered by the Borrower.
2. Each of the Credit Agreement and the Notes (assuming, in the case
of the Notes, execution and delivery thereof for value) constitutes a legal,
valid and binding obligation of the Borrower enforceable against the Borrower
in accordance with its terms.
3. No license, approval or authorization of, exemption by, or
registration or declaration with, any governmental body is required in
connection with the execution, delivery or performance by the Borrower, or
the validity or enforceability against the Borrower, of the Credit Agreement
and the Notes.
4. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes and by the Subsidiary Guarantors of the
Guaranty Agreement (a) will not violate (i) any provision of any existing law
or regulation, (ii) the charter or by-laws of the Borrower or of any
Subsidiary Guarantor, or (iii) to our knowledge, any judgment, order, decree
or award of any court, arbitrator or governmental body binding on the
Borrower or any Subsidiary Guarantor or to our knowledge any mortgage,
indenture, security agreement, contract or other agreement to which the
Borrower or any Subsidiary Guarantor is a party or that is binding upon any
of them or
F-2
any of their respective properties or assets, and (b) to our knowledge will
not result in the imposition or creation of any Lien on any properties or
assets of the Borrower or any Subsidiary Guarantor pursuant to the provisions
of any such mortgage, indenture, security agreement, contract or other
agreement to which the Borrower or any Subsidiary Guarantor is a party or
that is binding upon any of them or any of their respective properties or
assets.
5. Each Subsidiary Guarantor has the corporate power and authority to
execute, deliver and perform the Guaranty Agreement. Each Subsidiary
Guarantor has taken all necessary corporate action to authorize the execution
and delivery of the Guaranty Agreement and the Guaranty Agreement has been
duly executed and delivered by each Subsidiary Guarantor.
6. The Guaranty Agreement is a legal, valid and binding agreement of
each Subsidiary Guarantor enforceable against such Subsidiary Guarantor in
accordance with its terms.
7. No license, approval or authorization of, exemption by, or
registration or declaration with, any governmental body is required in
connection with the execution, delivery, performance, validity or
enforceability of the Guaranty Agreement.
8. Neither the Borrower nor any Subsidiary Guarantor is an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, and the rules and regulations thereunder.
The opinions herein are subject to the following limitations and
exceptions:
(a) Our opinions in paragraphs 2 and 6 are subject to the effect of: (1)
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent or other conveyance laws and other similar laws now
or hereafter in effect affecting the rights of creditors and secured
parties generally (including, without limitation, court decisions),
and (2) general equity principles (including, without limitation,
concepts of materiality, reasonableness, good faith and fair
dealing) regardless of whether such principles are considered in a
proceeding in equity or at law, including principles which may
limit the availability of specific performance, injunctive relief,
the appointment of a receiver or any other equitable remedy.
(b) We express no opinion with respect to: (1) provisions of any of
the Loan Documents which (a) require use of "best efforts" by
any Person; (b) purport to confer subject matter jurisdiction on
any court; (c) provide for the payment of interest on interest; (d)
provide for a higher rate of interest after the occurrence of a
default or for a prepayment premium to the extent such premium
or higher rate of interest is held to be a penalty or otherwise
unreasonable; (e) waive objections to venue, service of process,
F-3
counterclaim or cross-claim; (f) provide that the delay in
exercising or the failure to exercise rights or remedies will not
operate as a waiver of any such right or remedy; (g) indemnify a
Person against liability for its own wrongful or negligent acts
or omissions where such indemnification is against public policy
or otherwise; or (h) require that amendments, wavers or other
modifications only be in writing; (2) the enforceability of
remedies to the extent such remedies would have the effect of
compensating the party entitled to the benefits thereof in
amounts in excess of actual loss suffered by such party; (3) the
validity, binding nature or enforceability of any waivers or
consents relating to rights or defenses of any party or duties
owing to it which exist as a matter of law to the extent such
waivers or consents may be held to be contrary to public policy
or otherwise ineffective pursuant to applicable statutes or
judicial decisions thereunder.
(c) All opinions expressed herein are limited to the federal law of
the United States of America, the laws of the State of Illinois
and, for purposes of our opinions in paragraphs 1 and 5 above,
the Delaware General Corporation Law and the New York Business
Corporation Law (as applicable); our opinions involving the New
York Business Corporation Law are based solely on our review of
such statute as set forth in CORPORATION STATUTES published by
Aspen Law & Business (as updated through September 1, 1997). To
the extent any other law is applicable we express no opinion. In
this regard, we call to your attention that the Loan Documents
state that they shall be governed by the laws of the State of New
York. With your permission, for purposes of our opinions in
paragraphs 2 and 6 above, we have assumed that the laws of the
State of New York are identical to the laws of the State of
Illinois
(d) Wherever we indicate that our opinion is based on our knowledge,
our opinion is based solely on the current conscious awareness of
the attorneys currently with the firm with direct and active
involvement in the negotiations of the Loan Documents. We have
made no special or independent investigation or review of any
such matters.
(e) We express no opinion as to any matters other than as expressly
set forth above, and no opinion may be implied or inferred
herefrom.
This opinion is solely for the benefit of the Banks, the Documentation
Agent and the Administrative Agent (and their respective successors and
assigns) in connection with the Loan Documents and may not be used for any
other purpose and may not be relied upon in any manner by any other Person,
in each case, without the express prior written consent of the undersigned
firm.
F-4
This opinion is given as of the date hereof, and we undertake no, and
hereby disclaim any, obligation to advise any Person of any change after the
date hereof in any matters set forth herein or any facts or laws relating
hereto.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
F-5
EXHIBIT F-2
OPINION OF COUNSEL FOR THE BORROWER
October 17, 1997
To the Banks and the Agents
Referred to Below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, Documentation Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Credit Agreement dated as of October 17, 1997, among Blyth Industries,
Inc., the banks named therein (the "Banks"), ▇▇▇▇▇▇ Guaranty Trust
Company of New York, as Documentation Agent and Bank of America
National Trust and Savings Association, as Administrative Agent
Ladies and Gentlemen:
I am the Vice President and General Counsel of Blyth Industries, Inc.
(the "Company") and am rendering the opinions contained herein in connection
with the Credit Agreement (the "Credit Agreement"), dated as of the date
hereof among the Company, the Banks, the Documentation Agent and the
Administrative Agent. Terms defined in the Credit Agreement are used herein
as defined therein.
In rendering the opinions expressed below, I have examined the originals
or copies of such corporate and stockholder records, agreements and
instruments of the Company and Subsidiary Guarantors, certificates of public
officials and of officers of the Company and Subsidiary Guarantors and such
other documents and papers I have deemed necessary as a basis for the
opinions hereinafter expressed. In such examination, as I have assumed the
genuineness of all signatures, the authenticity of documents submitted to me
as originals and the conformity to the original documents of all documents
submitted to me as copies.
Based upon the foregoing and subject to the qualifications set forth
below, and having due regard for such legal consideration as I have deemed
relevant, I am of the opinion that:
1. The Company and each Subsidiary Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
F-6
2. Each of the Company and each Subsidiary Guarantor has all corporate
power required to own its properties and conduct its business as now
conducted.
3. To the best of my knowledge after due inquiry, except as set forth in
the Borrower's Form 10-K for the fisca1 year ended January 31, 1997, there
are no actions, suits or proceedings pending or threatened against or
affecting the Borrower or any Subsidiary or any of their respective
properties in any court or before any arbitrator of any kind or before or by
any governmental body, except actions, suits or proceedings of the character
normally incident to the kind of business conducted by the Borrower and its
Subsidiaries that (a) would not materially impair the right or ability of the
Borrower or any Subsidiary to carry on its business substantially as now
conducted and (b) would not have a material adverse effect on the
consolidated financial condition of the Borrower and its Subsidiaries, and
there are no actions, suits or proceedings pending or threatened that relate
to or which in any manner draw into question the validity of any of the
transactions contemplated by the Credit Agreement or the Guaranty Agreement.
This opinion is limited in all respects to the facts and law existing on
the date hereof and, by rendering my opinion, I do not undertake to advise
you of any changes in such facts or law which may occur after the date
hereof. This opinion has been rendered solely to you for your use in
connection with the Credit Agreement. No other person or entity shall be
entitled to rely hereon without my prior written consent.
Very truly yours,
▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, SPECIAL COUNSEL
FOR THE AGENTS
To the Banks and the Agents
Referred to Below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Documentation Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We have participated in the preparation of the Credit Agreement (the
"CREDIT AGREEMENT") dated as of October 17, 1997 among Blyth Industries,
Inc., a Delaware corporation (the "BORROWER"), the banks listed on the
signature pages thereof (the "BANKS"), ▇▇▇▇▇▇ Guaranty Trust Company of New
York, as Documentation Agent and Bank of America National Trust and Savings
Association, as Administrative Agent and have acted as special counsel for
the Agents for the purpose of rendering this opinion pursuant to Section
3.01(e) of the Credit Agreement. Terms defined in the Credit Agreement are
used herein as therein defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers and
have been duly authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and binding agreement of
the Borrower and each Note constitutes a valid and binding obligation of the
Borrower, in each case enforceable with its terms, except as the same may be
limited
G-1
by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the federal laws of
the United States of America and the General Corporation Law of the State of
Delaware. In giving the foregoing opinion, we express no opinion as to the
effect (if any) of any law of any jurisdiction (except the State of New York)
in which any Bank is located which limits the rate of interest that such Bank
may charge or collect.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other person without our prior written consent.
Very truly yours,
G-2
EXHIBIT H
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the
"ASSIGNOR"), [ASSIGNEE] (the "ASSIGNEE"), BLYTH INDUSTRIES, INC. (the
"BORROWER"), ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as Documentation
Agent and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
Administrative Agent (the "AGENTS"), BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Swingline Bank and [ISSUING BANK(S)], as Issuing
Bank(s).
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "AGREEMENT")
relates to the Credit Agreement dated as of October 17, 1997 among the
Borrower, the Assignor and the other Banks party thereto, as Banks, and the
Agents (the "CREDIT AGREEMENT");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower and participate in Letters of
Credit in an aggregate Dollar Amount at any time outstanding not to exceed
$___,000,000;
WHEREAS, Syndicated Loans made to the Borrower by the Assignor
under the Credit Agreement in the aggregate Dollar Amount of $__________ are
outstanding at the date hereof;
WHEREAS, Letters of Credit with a total amount available for
drawing thereunder of $__________ are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement and the other Loan
Documents in respect of a portion of its Commitment thereunder in an amount
equal to $__________ (the "ASSIGNED AMOUNT"), together with a corresponding
portion of its outstanding Syndicated Loans and Letter of Credit Liabilities,
and the Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
H-1
SECTION 1. DEFINITIONS. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
SECTION 2. ASSIGNMENT. The Assignor hereby assigns and sells to
the Assignee all of the rights of the Assignor under the Credit Agreement and
the other Loan Documents to the extent of the Assigned Amount, and the
Assignee hereby accepts such assignment from the Assignor and assumes all of
the obligations of the Assignor under the Credit Agreement to the extent of
the Assigned Amount, including the purchase from the Assignor of the
corresponding portion of the principal amount of the Syndicated Loans made
by, and Letter of Credit Liabilities of, the Assignor outstanding at the
date hereof. Upon the execution and delivery hereof by the Assignor, the
Assignee, [the Borrower, the Swingline Bank, the Issuing Banks and the Agents]
and the payment of the amounts specified in Section 3 required to be paid on
the date hereof (i) the Assignee shall, as of the date hereof, succeed to the
rights and be obligated to perform the obligations of a Bank under the Credit
Agreement with a Commitment in an amount equal to the Assigned Amount, and
(ii) the Commitment of the Assignor shall, as of the date hereof, be reduced
by a like amount and the Assignor released from its obligations under the
Credit Agreement to the extent such obligations have been assumed by the
Assignee. The assignment provided for herein shall be without recourse to the
Assignor.
SECTION 3. PAYMENTS. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal the amount heretofore agreed between them.* It is
understood that facility and Letter of Credit fees accrued to the date hereof
in respect of the Assigned Amount are for the account of the Assignor and
such fees accruing from and including the date hereof are for the account of
the Assignee. Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the account of
the other party hereto, it shall receive the same for the account of such
other party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
_____________________
* Amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the Assignee, net of any
portion of any upfront fee to be paid by the Assignor to the Assignee. It
may be preferable in an appropriate case to specify these amounts
generically or by formula rather than as a fixed sum
H-2
[SECTION 4. CONSENTS. This Agreement is conditioned upon the consent
of the Borrower, the Issuing Banks, the Swingline Bank and the Agents pursuant
to Section 9.06(c)) of the Credit Agreement. The execution of this Agreement by
the Borrower, the Issuing Banks, the Swingline Bank and the Agents is evidence
of this consent. Pursuant to Section 9.06(c) the Borrower agrees to execute and
deliver a Note payable to the order of the Assignee to evidence the assignment
and assumption provided for herein.]
SECTION 5. NON-RELIANCE ON ASSIGNOR. The Assignor makes no
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition or
statements of the Borrower or any of its Subsidiaries, or the validity and
enforceability of the obligations of the Borrower or any of its Subsidiaries
in respect of any Loan Document. The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower and its Subsidiaries.
SECTION 6. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. COUNTERPARTS. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By:____________________________________
Title:
[ASSIGNEE]
H-3
By:____________________________________
Title:
BLYTH INDUSTRIES, INC.
By:____________________________________
Title:
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, as Documentation Agent
By:____________________________________
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative
Agent and as Swingline Bank
By:____________________________________
Title:
[ISSUING BANK
By:____________________________________
Title:]
H-4
EXHIBIT I
GUARANTY AGREEMENT
AGREEMENT dated as of October 17, 1997 among each of the Guarantors
listed on the signature pages hereof under the caption "GUARANTORS"
(individually a "GUARANTOR" and collectively the "GUARANTORS") and ▇▇▇▇▇▇
Guaranty Trust Company of New York, as Documentation Agent.
W I T N E S S E T H :
WHEREAS, Blyth Industries, Inc., a Delaware corporation (the "BORROWER"),
of which each of the Guarantors is a Subsidiary, has entered into a Credit
Agreement (as the same may be amended from time to time, the "CREDIT
AGREEMENT") dated as of October 17, 1997 with the banks listed on the
signature pages thereof (the "BANKS"), ▇▇▇▇▇▇ Guaranty Trust Company of New
York, as Documentation Agent and Bank of America National Trust and Savings
Association, as Administrative Agent, pursuant to which the Borrower is
entitled, subject to certain conditions, to borrow up to $140,000,000 which
amount may be increased under certain conditions to $175,000,000;
WHEREAS, the Credit Agreement provides, among other things, that one
condition to its effectiveness is the execution and delivery by the
Guarantors of this Agreement; and
WHEREAS, in conjunction with the transactions contemplated by the Credit
Agreement and in consideration of the financial and other support that the
Borrower has provided, and such financial and other support as the Borrower
may in the future provide, to the Guarantors, and in order to induce the
Banks and the Agents to enter into the Credit Agreement and to make Loans
thereunder, the Guarantors are willing to guarantee the obligations of the
Borrower under the Credit Agreement and the Notes.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
I-1
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Terms defined in the Credit Agreement and
not otherwise defined herein are used herein as therein defined. In addition
the following term, as used herein, has the following meaning:
"OBLIGATIONS" means (i) all obligations of the Borrower in respect of
principal of and interest on the Loans and the Letter of Credit Liabilities,
(ii) all other amounts payable by the Borrower under the Credit Agreement or
the Notes and (iii) all renewals or extensions of the foregoing, in each case
whether now outstanding or hereafter arising. The Obligations shall include,
without limitation, any interest, costs, fees and expenses which accrue on or
with respect to any of the foregoing, whether before or after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization by the Borrower, and whether or not
allowed or allowable as a claim in any such proceeding, any such interest,
costs, fees and expenses that would have accrued thereon or with respect
thereto but for the commencement of such case, proceeding or other action.
ARTICLE II
THE GUARANTEE
SECTION 2.01. THE GUARANTEE. Subject to Section 2.03, the Guarantors
hereby unconditionally, irrevocably and jointly and severally guarantee to
the Banks and the Agents, and to each of them, the due and punctual payment
of all Obligations as and when the same shall become due and payable, whether
at maturity, by declaration or otherwise, according to the terms thereof. In
case of failure by the Borrower punctually to pay any Obligation, the
Guarantors, subject to Section 2.03, hereby unconditionally agree to cause
such payment to be made punctually as and when the same shall become due and
payable, whether at maturity or by declaration or otherwise, and as if such
payment were made by the Borrower.
SECTION 2.02. GUARANTEES UNCONDITIONAL. The obligations of the
Guarantors under this Article II shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of the Borrower under the Credit
Agreement or the Notes by operation of law or otherwise;
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(b) any modification or amendment of or supplement to the Credit
Agreement;
(c) any modification, amendment, waiver, release, non-perfection or
invalidity of any direct or indirect security, or of any guarantee or other
liability of any third party, for any obligation of the Borrower under the
Credit Agreement or the Notes;
(d) any change in the corporate existence, structure or ownership of
the Borrower or its Subsidiaries, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower or its
Subsidiaries or their assets or any resulting release or discharge of any
obligation of the Borrower contained in the Credit Agreement or the Notes;
(e) the existence of any claim, set-off or other rights which the
Guarantors may have at any time against the Borrower, the Agent or any Bank
or any other Person, whether or not arising in connection with any of the
Credit Agreement or the Notes; PROVIDED that nothing herein shall prevent
the assertion of any such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against the
Borrower for any reason of any of the Credit Agreement, or any provision of
applicable law or regulation purporting to prohibit the payment by the
Borrower of the principal of or interest on any Note or any other amount
payable by the Borrower under the Credit Related Agreement or the Notes; or
(g) any other act or omission to act or delay of any kind by the
Borrower, the Agent, any Bank or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph, constitute
a legal or equitable discharge of or defense to the obligations of the
Guarantors under this Article II.
SECTION 2.03. LIMIT OF LIABILITY. Each Guarantor shall be liable under
this Agreement only for amounts aggregating up to the largest amount that
would not render its obligations hereunder subject to avoidance under Section
548 of the United States Bankruptcy Code or any comparable provisions of any
applicable state law.
SECTION 2.04. DISCHARGE; REINSTATEMENT IN CERTAIN CIRCUMSTANCES. The
Guarantors' obligations under this Article II shall remain in full force and
effect until the Commitments are terminated, no Letters of Credit remain
outstanding and all
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principal of and interest on the Notes and all other amounts payable by the
Borrower under the Credit Agreement shall have been paid in full. If at any
time any payment of the principal of or interest on any Note or any other
amount payable by the Borrower under the Credit Agreement is rescinded or
must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, the Guarantors' obligations
under this Article II with respect to such payment shall be reinstated at
such time as though such payment had become due but had not been made at such
time.
SECTION 2.05. WAIVER OF NOTICE. The Guarantors irrevocably waive
acceptance hereof, presentment, demand, protest and any notice not provided
for herein, as well as any requirement that at any time any action be taken
by any Person against the Borrower or any other Person.
SECTION 2.06. SUBROGATION. Upon making any payment hereunder, the
Guarantor making such payment shall be subrogated to the rights of the payee
against the Borrower with respect to such payment; PROVIDED that such
Guarantor shall not enforce any payment by way of subrogation until all
Obligations shall have been paid in full.
SECTION 2.07. STAY OF ACCELERATION. If acceleration of the time for
payment of any amount payable by the Borrower under the Credit Agreement is
stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all
such amounts otherwise subject to acceleration under the terms of the Credit
Agreement shall nonetheless be payable by the Guarantors hereunder forthwith
on demand by the Agent made at the request of the Required Banks.
ARTICLE II
THE GUARANTEE
SECTION 3.01. NOTICES. Unless otherwise specified herein, all notices,
requests and other communications to any party hereunder shall be in writing
(including bank wire, telex, facsimile transmission or similar writing) and
shall be given to such party at its address or telex or facsimile number set
forth on the signature pages hereof or such other address or telex or
facsimile number as such party may hereafter specify for the purpose by
notice to the to the other party hereto. Each such notice, request or other
communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in or pursuant to this Section 3.01
and the appropriate answerback is received, (ii) if given by facsimile
transmission, when such
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facsimile is transmitted to the facsimile transmission number specified in or
pursuant to this Section 3.01 and telephonic confirmation of receipt thereof
is received, (iii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as
aforesaid or (iv) if given by any other means, when delivered at the address
specified in this Section 3.01.
SECTION 3.02. NO WAIVER. No failure or delay by either Agent or any Bank
in exercising any right, power or privilege under this Agreement or any other
Loan Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein and therein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 3.03. AMENDMENTS AND WAIVERS. Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in
writing and is signed by the Guarantors and the Agent with the prior written
consent of the Required Banks under the Credit Agreement.
SECTION 3.04. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF A
JURY TRIAL. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
EACH GUARANTOR HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY
NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. EACH GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. EACH GUARANTOR AND THE AGENT HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 3.05. SUCCESSORS AND ASSIGNS. This Agreement is for the benefit
of the Agents and the Banks and their respective successors and assigns and
in the event of an assignment of the Loans, the Notes or other amounts
payable under the Credit
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Agreement, the rights hereunder, to the extent applicable to the indebtedness
so assigned, shall be transferred with such indebtedness. All the provisions
of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
SECTION 3.06. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed
in any number of counterparts, each of which shall be an original, and all of
which taken together shall constitute a single instrument, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when the Agent shall have received a
counterpart hereof signed by the each Guarantor listed on the signature page
hereof and when the Credit Agreement shall become effective in accordance
with its terms.
SECTION 3.07. SEVERABILITY. If any provision of this Guaranty Agreement
is prohibited, unenforceable or not authorized, or to the extent that any
portion of the Obligations hereunder may be voidable or subject to avoidance,
in any jurisdiction, such provision or the Obligation shall, as to such
jurisdiction, be ineffective to the extent of such prohibition,
unenforceability, non-authorization or portion so subject without
invalidating or limiting the remaining provisions hereof or remaining portion
of the Obligations or affecting the validity, enforceability or legality of
such provision or such portion of the Obligations in any other jurisdiction.
SECTION 3.08. JUDGMENT CURRENCY; TAXES. The provisions of Sections 2.21
and 8.04 of the Credit Agreement shall be binding upon each Guarantor.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date first
above written.
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, as Documentation Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title: Vice President
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Loan Department
Telex number: 177615 MGT
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
CANDLE CORPORATION OF AMERICA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Title: Vice President
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PARTYLITE GIFTS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Title: Vice President
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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CANDLE CORPORATION WORLDWIDE,
INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Title: Vice President
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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EXHIBIT J
EXTENSION AGREEMENT
▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Documentation
Agent under the Credit Agreement
referred to below
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
The undersigned hereby agree to extend, effective [Extension Date], the
Termination Date under the Credit Agreement dated as of October 17, 1997
among Blyth Industries, Inc., the Banks parties thereto and ▇▇▇▇▇▇ Guaranty
Trust Company of New York, as Documentation Agent and Bank of America
National Trust and Savings Association, as Administrative Agent (the "CREDIT
AGREEMENT") for one year to [date to which the Termination Date is extended].
Terms defined in the Credit Agreement are used herein as therein defined.
This Extension Agreement shall be construed in accordance with and
governed by the law of the State of New York.
[NAME OF BANK]
By:
----------------------------------
Name:
Title:
Agreed and accepted:
BLYTH INDUSTRIES, INC.
By:
-----------------------------
Name:
Title:
J-1
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Documentation Agent
By:
-----------------------------
Name:
Title:
J-2
EXHIBIT K
FORM OF COMPLIANCE CERTIFICATE
[Date]
To: The Banks
From: Blyth Industries, Inc. (the "BORROWER")
Re: Credit Agreement (as the same may be amended from time to time, the
"CREDIT AGREEMENT") dated as of October 17, 1997 among the Borrower, the
Banks party thereto, ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Documentation Agent and Bank of America National Trust and Savings
Association, as Administrative Agent
I, [Name], am a Senior Financial Officer of the Borrower and hereby
certify pursuant to Section 5.01(c) of the Credit Agreement in connection
with the delivery of the [describe financial statements, including date of
financial statements]as follows:
1. Set forth on Schedule I hereto is information and calculations
establishing that the Borrower was in compliance with the requirements of
Sections 5.09 to 5.13, inclusive, on [Date of financial statements], together
with the Leverage Ratio and the Consolidated Net Worth as of [Date of
financial statements].
2. [No Default exists on the date hereof.][The following are the only
Default(s) existing on the date hereof: [set forth details of Default(s)].
The Borrower proposes to [describe actions proposed to be taken with respect
to Default(s)].]
Terms used herein have the meanings assigned to them in the Credit
Agreement.
-----------------------------------------
Name:
Title:
K-1