EXHIBIT 10. 1
$150,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
among
HOME PRODUCTS INTERNATIONAL, INC.,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of September 8, 1998
____________________________
CHASE SECURITIES INC.,
as Arranger
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS....................................... 1
1.1 Defined Terms....................................... 1
1.2 Other Definitional Provisions....................... 22
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS................... 23
2.1 Term Commitments.................................... 23
2.2 Procedure for Term Loan Borrowing................... 23
2.3 Repayment of Term Loans............................. 23
2.4 Revolving Commitments............................... 24
2.5 Procedure for Revolving Loan Borrowing.............. 25
2.6 Swingline Commitment................................ 25
2.7 Procedure for Swingline Borrowing; Refunding of
Swingline Loans.............................................. 26
2.8 Commitment Fees, etc. .............................. 27
2.9 Termination or Reduction of Revolving Commitments... 27
2.10 Optional Prepayments............................... 28
2.11 Mandatory Prepayments and Commitment Reductions.... 28
2.12 Conversion and Continuation Options................ 29
2.13 Limitations on Eurodollar Tranches................. 30
2.14 Interest Rates and Payment Dates................... 30
2.15 Computation of Interest and Fees................... 30
2.16 Inability to Determine Interest Rate............... 31
2.17 Pro Rata Treatment and Payments.................... 31
2.18 Requirements of Law................................ 33
2.19 Taxes.............................................. 34
2.20 Indemnity.......................................... 35
2.21 Change of Lending Office........................... 36
2.22 Replacement of Lenders............................. 36
2.23 Reporting Requirements of Issuing Lenders.......... 37
SECTION 3. LETTERS OF CREDIT................................. 37
3.1 L/C Commitment...................................... 37
3.2 Procedure for Issuance of Letter of Credit.......... 37
3.3 Fees and Other Charges.............................. 38
3.4 L/C Participations.................................. 38
3.5 Reimbursement Obligation of the Borrower............ 39
3.6 Obligations Absolute................................ 39
3.7 Letter of Credit Payments........................... 40
3.8 Applications........................................ 40
SECTION 4. REPRESENTATIONS AND WARRANTIES.................... 40
4.1 Financial Condition................................. 40
4.2 No Change........................................... 41
4.3 Corporate Existence; Compliance with Law............ 41
4.4 Corporate Power; Authorization; Enforceable
Obligations......................................... 41
4.5 No Legal Bar........................................ 42
4.6 Litigation.......................................... 42
4.7 No Default.......................................... 42
4.8 Ownership of Property; Liens........................ 42
4.9 Intellectual Property............................... 42
4.10 Taxes.............................................. 42
4.11 Federal Regulations................................ 43
4.12 Labor Matters...................................... 43
4.13 ERISA.............................................. 43
4.14 Investment Company Act; Other Regulations.......... 44
4.15 Subsidiaries....................................... 44
4.16 Use of Proceeds.................................... 44
4.17 Environmental Matters.............................. 44
4.18 Accuracy of Information, etc....................... 45
4.19 Security Documents................................. 45
4.20 Solvency........................................... 46
4.21 Senior Indebtedness................................ 46
4.22 Year 2000 Matters.................................. 46
4.23 Regulation H....................................... 46
SECTION 5. CONDITIONS PRECEDENT.............................. 47
5.1 Conditions to Initial Extension of Credit........... 47
5.2 Conditions to Each Extension of Credit.............. 50
SECTION 6. AFFIRMATIVE COVENANTS............................. 51
6.1 Financial Statements................................ 51
6.2 Certificates; Other Information..................... 52
6.3 Payment of Obligations.............................. 53
6.4 Maintenance of Existence; Compliance. .............. 53
6.5 Maintenance of Property; Insurance.................. 53
6.6 Inspection of Property; Books and Records;
Discussions......................................... 53
6.7 Notices............................................. 54
6.8 Environmental Laws.................................. 55
6.9 Additional Collateral, etc.......................... 55
SECTION 7. NEGATIVE COVENANTS................................ 57
7.1 Financial Condition Covenants....................... 57
7.2 Indebtedness........................................ 58
7.3 Liens............................................... 59
7.4 Fundamental Changes................................. 60
7.5 Disposition of Property............................. 61
7.6 Restricted Payments................................. 61
7.7 Capital Expenditures................................ 62
7.8 Investments......................................... 62
7.9 Optional Payments and Modifications of Debt
Instruments, etc. .................................. 63
7.10 Transactions with Affiliates....................... 64
7.11 Changes in Fiscal Periods.......................... 64
7.12 Negative Pledge Clauses............................ 64
7.13 Clauses Restricting Subsidiary Distributions....... 64
7.14 Lines of Business.................................. 65
7.15 Amendments to Purchase Agreements.................. 65
SECTION 8. EVENTS OF DEFAULT................................. 65
SECTION 9. THE ADMINISTRATIVE AGENT.......................... 69
9.1 Appointment......................................... 69
9.2 Delegation of Duties................................ 69
9.3 Exculpatory Provisions.............................. 69
9.4 Reliance by Administrative Agent.................... 69
9.5 Notice of Default................................... 70
9.6 Non-Reliance on Administrative Agent and Other
Lenders............................................. 70
9.7 Indemnification..................................... 71
9.8 Administrative Agent in Its Individual Capacity..... 71
9.9 Successor Administrative Agent...................... 71
9.10 Authorization to Release Liens..................... 72
SECTION 10. MISCELLANEOUS.................................... 72
10.1 Amendments and Waivers............................. 72
10.2 Notices............................................ 73
10.3 No Waiver; Cumulative Remedies..................... 74
10.4 Survival of Representations and Warranties......... 74
10.5 Payment of Expenses and Taxes...................... 74
10.6 Successors and Assigns; Participations and
Assignments........................................ 75
10.7 Adjustments; Set-off............................... 77
10.8 Counterparts....................................... 78
10.9 Severability....................................... 78
10.10 Integration....................................... 78
10.11 GOVERNING LAW..................................... 78
10.12 Submission To Jurisdiction; Waivers............... 78
10.13 Acknowledgements.................................. 79
10.14 WAIVERS OF JURY TRIAL............................. 79
10.15 Confidentiality................................... 80
ANNEX:
A Pricing Grid
SCHEDULES:
1.1A Commitments
1.1B Mortgaged Properties
4.1(b) Contingent Liabilities
4.4 Consents, Authorizations, Filings and Notices
4.6 Litigation
4.13 ERISA Matters
4.15 Subsidiaries
4.17 Environmental Matters
4.19(a) UCC Filing Jurisdictions
4.19(b) Mortgage Filing Jurisdictions
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.5 Planned Dispositions
EXHIBITS:
A-1 Form of Guarantee and Collateral Agreement
A-2 Form of Guarantee
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Mortgage
E Form of Assignment and Acceptance
F Form of Legal Opinion of ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of September 8,
1998, among HOME PRODUCTS INTERNATIONAL, INC., a Delaware corporation
(the "Borrower"), the several banks and other financial institutions or
entities from time to time parties to this Agreement (the "Lenders"), and
THE CHASE MANHATTAN BANK, as administrative agent.
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders and The Chase Manhattan
Bank, as administrative agent, are parties to a Credit Agreement, dated
as of May 14, 1998 (the "Existing Credit Agreement");
WHEREAS, the Borrower has requested that the Lenders and the
Administrative Agent amend and restate the Existing Credit Agreement to,
among other things, provide for $50,000,000 of term loans, the proceeds
of which would be used to finance a portion of the ▇▇▇▇▇▇ Acquisition (as
hereinafter defined) and to pay related fees and expenses; and
WHEREAS, the Lenders and the Administrative Agent are willing
to so amend and restate the Existing Credit Agreement upon the terms and
subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties hereto hereby agree to amend and
restate the Existing Credit Agreement as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth
in this Section 1.1.
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime
Rate in effect on such day, (b) the Base CD Rate in effect on such day
plus 1% and (c) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the rate
of interest per annum publicly announced from time to time by the
Reference Lender as its prime rate in effect at its principal office in
New York City (the Prime Rate not being intended to be the lowest rate of
interest charged by the Reference Lender in connection with extensions of
credit to debtors); "Base CD Rate" shall mean the sum of (a) the product
of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the
C/D Reserve Percentage and (b) the C/D Assessment Rate; and "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board through the public information telephone line
of the Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or, if
such rate shall not be so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New
York City received at approximately 10:00 A.M., New York City time, on
such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Reference Lender from three New York City
negotiable certificate of deposit dealers of recognized standing selected
by it. Any change in the ABR due to a change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate shall
be effective as of the opening of business on the effective day of such
change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.
"Acquisition": any acquisition, whether in a single
transaction or series of related transactions, by the Borrower or any one
or more of its Subsidiaries of (a) all or a substantial majority of the
assets, or of a business, unit or division, of any Person, whether
through purchase of assets or securities, by merger or otherwise; (b) any
Person that becomes a Subsidiary after giving effect to such acquisition;
or (c) control (as defined in clause (b) of the definition of
"Affiliate") of a partnership, joint venture or other Person.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": The Chase Manhattan Bank, together
with its affiliates, as the arranger of the Commitments and as the
administrative agent for the Lenders under this Agreement and the other
Loan Documents, together with any of its successors.
"Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" of
a Person means the power, directly or indirectly, either to (a) vote 10%
or more of the securities having ordinary voting power for the election
of directors (or persons performing similar functions) of such Person or
(b) direct or cause the direction of the management and policies of such
Person, whether by contract or otherwise.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to the sum of (i) the aggregate then unpaid principal
amount of such Lender's Term Loans and (ii) the amount of such Lender's
Revolving Commitment then in effect or, if the Revolving Commitments have
been terminated, the amount of such Lender's Revolving Extensions of
Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's
Aggregate Exposure at such time to the Aggregate Exposure of all Lenders
at such time.
"Agreement": this Amended and Restated Credit Agreement, as
amended, supplemented or otherwise modified from time to time.
"Applicable Margin": for each Type of Loan, the rate per annum
set forth under the relevant column heading below:
ABR Loans Eurodollar Loans
Term Loans 0.75% 1.75%
Revolving Loans 0.75% 1.75%
Swingline Loans 0.75% Not applicable
; provided, that on and after the first Adjustment Date occurring after
the Closing Date, the Applicable Margin with respect to Term Loans,
Revolving Loans and Swingline Loans will be determined pursuant to the
Pricing Grid.
"Application": an application, in such form as the applicable
Issuing Lender may specify from time to time, requesting the Issuing
Lender to open a Letter of Credit.
"Asset Sale": any Disposition of property or series of related
Dispositions of property (excluding any such Disposition permitted by
clause (a), (b), (c) or (d) of Section 7.5) that yields gross proceeds to
the Borrower or any of its Subsidiaries (valued at the initial principal
amount thereof in the case of non-cash proceeds consisting of notes or
other debt securities and valued at fair market value in the case of
other non-cash proceeds) in excess of $250,000.
"Assignee": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Available Revolving Commitment": as to any Revolving Lender
at any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Commitment over (b) such Lender's Revolving Extensions of
Credit; provided, that in calculating any Lender's Revolving Extensions
of Credit for the purpose of determining such Lender's Available
Revolving Commitment pursuant to Section 2.8(a), the aggregate principal
amount of Swingline Loans then outstanding shall be deemed to be zero.
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make
Loans hereunder.
"Business": as defined in Section 4.17.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City or Chicago, Illinois are
authorized or required by law to close, provided, that with respect to
notices and determinations in connection with, and payments of principal
and interest on, Eurodollar Loans, such day is also a day for trading by
and between banks in Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital lease)
of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period)
that are required to be capitalized under GAAP on a consolidated balance
sheet of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under
GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, rights or options to
purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of
the United States, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, time deposits, eurodollar time
deposits or overnight bank deposits having maturities of one year or less
from the date of acquisition issued by any Lender or by any commercial
bank organized under the laws of the United States of America or any
state thereof having combined capital and surplus of not less than
$500,000,000; (c) commercial paper of an issuer rated at least A-1 by
Standard & Poor's Ratings Group ("S&P") or P-1 by ▇▇▇▇▇'▇ Investors
Service, Inc. ("Moody's"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally,
and maturing within one year from the date of acquisition; and (d)
securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States or by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory,
political subdivision, taxing authority or foreign government (as the
case may be) carry the highest possible rating from S&P or Moody's.
"C/D Assessment Rate": for any day as applied to any ABR Loan,
the annual assessment rate in effect on such day that is payable by a
member of the Bank Insurance Fund maintained by the Federal Deposit
Insurance Corporation (the "FDIC") classified as well-capitalized and
within supervisory subgroup "B" (or a comparable successor assessment
risk classification) within the meaning of 12 C.F.R. ' 327.4 (or any
successor provision) to the FDIC (or any successor) for the FDIC's (or
such successor's) insuring time deposits at offices of such institution
in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR
Loan, that percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board, for determining the maximum reserve
requirement for a Depositary Institution (as defined in Regulation D of
the Board as in effect from time to time) in respect of new non-personal
time deposits in Dollars having a maturity of 30 days or more.
"Closing Date": the date on which the conditions precedent set
forth in Section 5.1 shall have been satisfied, which date is September
8, 1998.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commitment": as to any Lender, the sum of the Term Commitment
and the Revolving Commitment of such Lender.
"Commitment Fee Rate": 1/2 of 1% per annum; provided, that on
and after the first Adjustment Date occurring after the Closing Date, the
Commitment Fee Rate will be determined pursuant to the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group that includes the
Borrower and that is treated as a single employer under Section 414(b) or
(c) of the Code or, for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 (m), (n),
(o) or (p) of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated July 1998 and furnished to the Lenders.
"Consolidated Current Assets": at any date, all amounts (other
than cash and Cash Equivalents) that would, in conformity with GAAP, be
set forth opposite the caption "total current assets" (or any like
caption) on a consolidated balance sheet of the Borrower and its
Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption
"total current liabilities" (or any like caption) on a consolidated
balance sheet of the Borrower and its Subsidiaries at such date, but
excluding (a) the current portion of any Funded Debt of the Borrower and
its Subsidiaries and (b) without duplication of clause (a) above, all
Indebtedness consisting of Revolving Loans or Swingline Loans to the
extent otherwise included therein.
"Consolidated EBITDA": for any period, Consolidated Net Income
for such period plus, without duplication and to the extent reflected as
a charge in the statement of such Consolidated Net Income for such
period, the sum of (a) income tax expense, (b) interest expense,
amortization or writeoff of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with
Indebtedness (including the Loans), (c) depreciation and amortization
expense, (d) amortization of intangibles (including, but not limited to,
goodwill) and organization costs, (e) any extraordinary, unusual or non-
recurring expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net
Income for such period, non-cash losses on sales of assets outside of the
ordinary course of business), (f) any other non-cash charges (including,
without limitation, the amount of any non-cash deduction to Consolidated
Net Income as a result of any grant to members of management of any
Capital Stock of the Borrower) and (g) the prepayment costs associated
with the termination of the GE Credit Agreement, not to exceed an
aggregate amount of $3,100,000, and minus, to the extent included in the
statement of such Consolidated Net Income for such period, the sum of (a)
any extraordinary, unusual or non-recurring income or gains (including,
whether or not otherwise includable as a separate item in the statement
of such Consolidated Net Income for such period, gains on the sales of
assets outside of the ordinary course of business) and (b) any other non-
cash income, all as determined on a consolidated basis; provided, that
for purposes of calculating Consolidated EBITDA pursuant to any
determination of the Consolidated Senior Leverage Ratio and the
Consolidated Total Leverage Ratio for the four quarter period ending on
or about (i) September 30, 1998, there shall be added to Consolidated
EBITDA for such period the amount of $18,500,000, (ii) December 31, 1998,
there shall be added to Consolidated EBITDA for such period the amount of
$13,875,000, (iii) March 31, 1999, there shall be added to Consolidated
EBITDA for such period the amount of $9,250,000 and (iv) June 30, 1999,
there shall be added to Consolidated EBITDA for such period the amount of
$4,625,000.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.
"Consolidated Interest Expense": for any period, total cash
interest expense (including that attributable to Capital Lease
Obligations) of the Borrower and its Subsidiaries for such period with
respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Borrower and its Subsidiaries, determined on
a consolidated basis in accordance with GAAP; provided that there shall
be excluded (a) the income (or deficit) of any Person accrued prior to
the date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries, (b) the income
(or deficit) of any Person (other than a Subsidiary of the Borrower) in
which the Borrower or any of its Subsidiaries has an ownership interest,
except to the extent that any such income is actually received by the
Borrower or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary of the
Borrower to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by
the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Net Worth": as of the date of determination, all
items which in conformity with GAAP would be included under shareholders'
equity on a consolidated balance sheet of the Borrower at such date.
"Consolidated Senior Debt": at any date, the aggregate
principal amount of all Indebtedness of the Borrower and its Subsidiaries
(including the Loans) which is not by its terms subordinated to any other
Indebtedness of the Borrower or any such Subsidiary at such date,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Senior Leverage Ratio": as at the last day of
any period, the ratio of (a) Consolidated Senior Debt on such day to (b)
Consolidated EBITDA for such period.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Indebtedness of the Borrower and its Subsidiaries
at such date, determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Leverage Ratio": as at the last day of any
period, the ratio of (a) Consolidated Total Debt on such day to (b)
Consolidated EBITDA for such period.
"Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current
Liabilities on such date.
"Continuing Directors": the directors of the Borrower on the
Closing Date, after giving effect to the ▇▇▇▇▇▇ Acquisition and the other
transactions contemplated hereby, and each other director, if, in each
case, such other director's nomination for election to the board of
directors of the Borrower is recommended by at least a majority of the
then Continuing Directors.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Disposition": with respect to any property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof; and the terms "Dispose" and "Disposed of" shall have correlative
meanings.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States of
America.
"ECF Percentage": 50%; provided, that, the ECF Percentage with
respect to any fiscal year shall be reduced to 0% if the Consolidated
Leverage Ratio as of the last day of such fiscal year is not greater than
3.75 to 1.0.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or
other Requirements of Law (including common law) regulating, relating to
or imposing liability or standards of conduct concerning protection of
human health or the environment, as now or may at any time hereafter be
in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the maximum
rates (expressed as a decimal fraction) of reserve requirements in effect
on such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto) dealing
with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board)
maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined on the basis of the rate for deposits in Dollars for a period
equal to such Interest Period appearing on Page 3750 of the Dow ▇▇▇▇▇
Markets screen as of 11:00 A.M., London time, two Business Days prior to
the beginning of such Interest Period. In the event that such rate does
not appear on Page 3750 of the Dow ▇▇▇▇▇ Markets screen (or otherwise on
such screen), the "Eurodollar Base Rate" shall be determined by reference
to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent or, in
the absence of such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00 A.M.,
New York City time, two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where its eurodollar
and foreign currency and exchange operations are then being conducted for
delivery on the first day of such Interest Period for the number of days
comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula (rounded
upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i) Consolidated
Net Income for such fiscal year, (ii) an amount equal to the amount of
all non-cash charges (including depreciation and amortization) deducted
in arriving at such Consolidated Net Income, (iii) decreases in
Consolidated Working Capital for such fiscal year, (iv) an amount equal
to the aggregate net non-cash loss on the Disposition of property by the
Borrower and its Subsidiaries during such fiscal year (other than sales
of inventory in the ordinary course of business), to the extent deducted
in arriving at such Consolidated Net Income and (v) the amount of any
Newell Facility Reimbursements during such fiscal year, over (b) the sum,
without duplication, of (i) an amount equal to the amount of all non-cash
credits included in arriving at such Consolidated Net Income, (ii) the
aggregate amount actually paid by the Borrower and its Subsidiaries in
cash during such fiscal year on account of Capital Expenditures
(excluding the principal amount of Indebtedness Incurred in connection
with such expenditures and any such expenditures financed with the
proceeds of any Reinvestment Deferred Amount), (iii) the aggregate amount
of all prepayments of Revolving Loans and Swingline Loans during such
fiscal year to the extent accompanying permanent optional reductions of
the Revolving Commitments and all optional prepayments of the Term Loans
during such fiscal year, (iv) the aggregate amount of all regularly
scheduled principal payments of Funded Debt (including, without
limitation, the Term Loans) of the Borrower and its Subsidiaries made
during such fiscal year (other than in respect of any revolving credit
facility to the extent there is not an equivalent permanent reduction in
commitments thereunder), (v) increases in Consolidated Working Capital
for such fiscal year, (vi) the amount of any cash taxes paid during such
fiscal year to the extent not included as a charge or expense in arriving
at such Consolidated Net Income (provided, that to the extent such cash
taxes are included as a charge or expense in arriving at Consolidated Net
Income for a later fiscal year, such amount shall be added to
Consolidated Net Income for such later fiscal year) and (vii) an amount
equal to the aggregate net non-cash gain on the Disposition of property
by the Borrower and its Subsidiaries during such fiscal year (other than
sales of inventory in the ordinary course of business), to the extent
included in arriving at such Consolidated Net Income.
"Excess Cash Flow Application Date": as defined in Section
2.11(c).
"Excluded Foreign Subsidiary": any Foreign Subsidiary in
respect of which either (a) the pledge of all of the Capital Stock of
such Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary
of the Obligations, would, in the good faith judgment of the Borrower,
result in adverse tax consequences to the Borrower.
"Excluded Taxes": as defined in Section 2.19(a).
"Existing Credit Agreement": as defined in the recitals
hereto.
"Facility": each of (a) the Term Commitments and the Term
Loans made thereunder (the "Term Facility") and (b) the Revolving
Commitments and the extensions of credit made thereunder (the "Revolving
Facility").
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with members
of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for the day of such
transactions received by the Reference Lender from three federal funds
brokers of recognized standing selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such
Person that matures more than one year from the date of its creation or
matures within one year from such date but is renewable or extendible, at
the option of such Person, to a date more than one year from such date or
arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year
from such date, including, without limitation, all current maturities and
current sinking fund payments in respect of such Indebtedness whether or
not required to be paid within one year from the date of its creation
and, in the case of the Borrower, Indebtedness in respect of the Loans.
"Funding Office": the office of the Administrative Agent
specified in Section 10.2.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board and the rules
and regulations of the Securities and Exchange Commission, or in such
other statements by such other entity as may be in general use by
significant segments of the accounting profession, that are applicable to
the circumstances of the Borrower as of the date of determination, except
that for purposes of Section 7.1, GAAP shall be determined on the basis
of such principles in effect on the date hereof and consistent with those
used in the preparation of the most recent audited financial statements
delivered pursuant to Section 4.1(b). In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, standards or
terms in this Agreement, then the Borrower and the Administrative Agent
agree to enter into negotiations in order to amend such provisions of
this Agreement so as to equitably reflect such Accounting Changes with
the desired result that the criteria for evaluating the Borrower's
financial condition shall be the same after such Accounting Changes as if
such Accounting Changes had not been made. Until such time as such an
amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred. "Accounting
Changes" refers to changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the
Financial Accounting Standards Board of the American Institute of
Certified Public Accountants or, if applicable, the Securities and
Exchange Commission (or successors thereto or agencies with similar
functions).
"GE Credit Agreement": the Amended and Restated Credit
Agreement, dated as of December 30, 1997, among Selfix, Inc., Tamor
Corporation, Shutters, Inc. and Seymour Housewares Corporation, as
borrowers, the other credit parties signatory thereto, the lenders from
time to time signatory thereto and General Electric Capital Corporation,
as agent.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government (including, without limitation, the
National Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Amended and Restated
Guarantee and Collateral Agreement to be executed and delivered by the
Borrower and each Subsidiary Guarantor, substantially in the form of
Exhibit A-1, as the same may be amended, supplemented or otherwise
modified from time to time.
"Guarantee": the Guarantee to be executed and delivered by
Prestige Plastics, Inc., substantially in the form of Exhibit A-2, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit), as to which, to induce the creation of such obligation, the
guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing
any Indebtedness, leases, dividends or other obligations (the "primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (1) for
the purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The amount
of any Guarantee Obligation of any guaranteeing person shall be deemed to
be the lesser of (a) an amount equal to the stated or determinable amount
of the primary obligation in respect of which such Guarantee Obligation
is made and (b) the maximum amount for which such guaranteeing person may
be liable pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the maximum
amount for which such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee Obligation shall
be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Incur": as defined in Section 7.2; and the terms "Incurred"
and "Incurrence" shall have correlative meanings.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b)
all obligations of such Person for the deferred purchase price of
property or services (other than current trade payables incurred in the
ordinary course of such Person's business), (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all Capital Lease
Obligations of such Person, (f) all obligations of such Person,
contingent or otherwise, as an account party under acceptance, letter of
credit or similar facilities, (g) all obligations of such Person,
contingent or otherwise, to purchase, redeem, retire or otherwise acquire
for value any Capital Stock of such Person, (h) all Guarantee Obligations
of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above; (i) all obligations of the kind referred
to in clauses (a) through (h) above secured by (or for which the holder
of such obligation has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without limitation, accounts
and contract rights) owned by such Person, whether or not such Person has
assumed or become liable for the payment of such obligation; and (j) for
the purposes of Section 8(e) only, all obligations of such Person in
respect of Interest Rate Protection Agreements.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245(b) of ERISA and any section incorporated by reference therein.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, copyrights, copyright licenses,
patents, patent licenses, trademarks, trademark licenses, technology,
know-how and processes, and all rights to ▇▇▇ at law or in equity for any
infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the
last day of such Interest Period, (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day that is three months,
or a whole multiple thereof, after the first day of such Interest Period
and the last day of such Interest Period and (d) as to any Eurodollar
Loan, the date of any repayment or prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case
may be, with respect to such Eurodollar Loan and ending one, two, three
or six months thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with respect
thereto; and (b) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not less than
three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing
provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend
beyond the Revolving Termination Date (in the case of Revolving
Loans) or beyond the date final payment is due on the Term Loans (in
the case of Term Loans) shall end on the Revolving Termination Date
or such due date, as applicable;
(iii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a
calendar month; and
(iv) the Borrower shall select Interest Periods so as not
to require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"Interest Rate Protection Agreement": any interest rate
protection agreement, interest rate futures contract, interest rate
option, interest rate cap or other interest rate hedge arrangement, to or
under which the Borrower or any of its Subsidiaries is a party or a
beneficiary on the date hereof or becomes a party or a beneficiary after
the date hereof.
"Investments": as defined in Section 7.8.
"Issuing Lender": The Chase Manhattan Bank (or any of its
Affiliates, including, without limitation, Chase Manhattan Bank
Delaware), LaSalle National Bank or any other Lender (or any of their
respective Affiliates), in its capacity as issuer of any Letter of
Credit, as determined by the Borrower for the applicable Letter of
Credit.
"L/C Commitment": $15,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Commitment
Period.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit that have not then been reimbursed pursuant to
Section 3.5.
"L/C Participants": the collective reference to all the
Revolving Lenders other than the Issuing Lender.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the same
economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Security Documents and
the Notes.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower that is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the
Term Loans or the Total Revolving Extensions of Credit, as the case may
be, outstanding under such Facility (or, in the case of the Revolving
Facility, prior to any termination of the Revolving Commitments, the
holders of more than 50% of the Total Revolving Commitments).
"Majority Revolving Facility Lenders": the Majority Facility
Lenders in respect of the Revolving Facility.
"Material Adverse Effect": a material adverse effect on (a)
the Newell Acquisition or the Tenex Acquisition, (b) the business,
property, assets, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole or (c) the validity or
enforceability of this Agreement or any of the other Loan Documents or
the rights or remedies of the Administrative Agent or the Lenders
hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Mortgaged Properties": the real properties listed on Schedule
1.1B, as to which the Administrative Agent for the benefit of the Lenders
shall be granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by
any Loan Party in favor of, or for the benefit of, the Administrative
Agent for the benefit of the Lenders, substantially in the form of
Exhibit D (with such changes thereto as shall be advisable under the law
of the jurisdiction in which such mortgage or deed of trust is to be
recorded), as the same may be amended, supplemented or otherwise modified
from time to time.
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale or Recovery Event, net of attorneys' fees,
accountants' fees, investment banking fees, amounts required to be
applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset that is the subject of such Asset Sale
or Recovery Event (other than any Lien pursuant to a Security Document)
and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as
a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with
any issuance or sale of equity securities or debt securities or
instruments or the incurrence of loans, the cash proceeds received from
such issuance or incurrence, net of attorneys' fees, investment banking
fees, accountants' fees, underwriting discounts and commissions and other
customary fees and expenses actually incurred in connection therewith.
"Newell Acquisition": the Acquisition by the Borrower of
substantially all of the assets of Plastics, Inc pursuant to the Newell
Purchase Agreement.
"Newell Facility CapEx": Capital Expenditures by the Borrower
or any of its Subsidiaries associated with the relocation of the
facilities and operations acquired in the Newell Acquisition from St.
▇▇▇▇, Minnesota to Eagan, Minnesota, to the extent constituting
"Relocation Costs" (as defined in the Newell Purchase Agreement).
"Newell Facility Reimbursements": the amount of any cash
payments made by Plastics Inc. or ▇▇▇▇▇▇ Co. with respect to the
reimbursement of any Newell Facility CapEx, as provided in Section
10.13(a) of the Newell Purchase Agreement.
"Non-Excluded Taxes": as defined in Section 2.19(a).
"Non-U.S. Lender": as defined in Section 2.19(b).
"Notes": the collective reference to any promissory note
evidencing Loans.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of
the Loans and Reimbursement Obligations and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender
(or, in the case of Interest Rate Protection Agreements, any affiliate of
any Lender), whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, any other Loan
Document, the Letters of Credit, any Interest Rate Protection Agreement
entered into with any Lender or any affiliate of any Lender or any other
document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including, without limitation, all
fees, charges and disbursements of counsel to the Administrative Agent or
to any Lender that are required to be paid by the Borrower pursuant
hereto) or otherwise.
"Participant": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": as defined in Section 7.8(g).
"Permitted Investors": the collective reference to officers
and directors of the Borrower on the date hereof and any holder of more
than 15% of the outstanding common stock of the Borrower on the date
hereof.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Preferred Stock": any Capital Stock entitled by its terms to
a preference (a) as to dividends or (b) upon a distribution of assets.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Properties": as defined in Section 4.17.
"Purchase Agreements": the collective reference to (a) the
Asset Purchase Agreement, dated as of July 24, 1998 (the "Tenex Purchase
Agreement"), between Tenex Corporation and the Borrower and (b) the Asset
Purchase and Sale Agreement, dated as of July 31, 1998 (the "Newell
Purchase Agreement"), among Plastics, Inc., ▇▇▇▇▇▇ Co. and the Borrower,
as each are amended, supplemented or otherwise modified from time to time
in accordance with the terms hereof and thereof.
"Purchase Price": with respect to any Acquisition, the sum
(without duplication) of (a) the amount of cash paid by the Borrower and
its Subsidiaries in connection with such Acquisition, (b) the value (as
determined for purposes of such Acquisition in accordance with the
applicable acquisition agreement) of all Capital Stock of the Borrower
issued or given as consideration in connection with such Acquisition, (c)
the principal amount (or, if less, the accreted value) at the time of
such Acquisition of all Indebtedness incurred, assumed or acquired by
Borrower and its Subsidiaries in connection with such Acquisition, (d)
all additional purchase price amounts in connection with such Acquisition
in the form of earnouts, deferred purchase price and other contingent
obligations that should be recorded as a liability on the balance sheet
of the Borrower and its Subsidiaries in accordance with GAAP, Regulation
S-X under the Securities Act of 1933, as amended, or any other rule or
regulation of the United States Securities and Exchange Commission, (e)
all amounts paid by the Borrower and its Subsidiaries in respect of
covenants not to compete, consulting agreements and other affiliated
contracts in connection with such Acquisition, and (f) the aggregate fair
market value of all other consideration given by the Borrower and its
Subsidiaries in connection with such Acquisition.
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any asset of the Borrower or any of its Subsidiaries.
"Reference Lender": The Chase Manhattan Bank.
"Reference Period": with respect to any date, means the period
of four consecutive fiscal quarters of the Borrower immediately preceding
such date or, if such date is the last day of a fiscal quarter, ending on
such date.
"Refunded Swingline Loans": as defined in Section 2.7.
"Refunding Date": as defined in Section 2.7.
"Register": as defined in Section 10.6(d).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn
under Letters of Credit.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the
Borrower or any of its Subsidiaries in connection therewith that are not
applied to prepay the Term Loans or reduce the Revolving Commitments
pursuant to Section 2.11(b) as a result of the delivery of a Reinvestment
Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a
Subsidiary) intends and expects to use all or a specified portion of the
Net Cash Proceeds of an Asset Sale or Recovery Event to acquire assets
useful in its business.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto
less any amount expended prior to the relevant Reinvestment Prepayment
Date to acquire assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring six months
after such Reinvestment Event and (b) the date on which the Borrower
shall have determined not to, or shall have otherwise ceased to, acquire
assets useful in the Borrower's business with all or any portion of the
relevant Reinvestment Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .22, .23, .27, .28, .29, .30,
.31, .32, .34 or .35 of PBGC Reg. ' 4043.
"Required Lenders": the holders of more than 50% of the sum of
(i) the aggregate unpaid principal amount of the Term Loans and (ii) the
Total Revolving Commitments or, if the Revolving Commitments have been
terminated, the Total Revolving Extensions of Credit.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer": the chief executive officer, president
or chief financial officer of the Borrower, but in any event, with
respect to financial matters, the chief financial officer of the
Borrower.
"Restricted Payments": as defined in Section 7.6.
"Revolving Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving Loans and participate in Swingline
Loans and Letters of Credit, in an aggregate principal and/or face amount
not to exceed the amount set forth under the heading "Revolving
Commitment" opposite such Lender's name on Schedule 1.1A, as the same may
be changed from time to time pursuant to the terms hereof. The original
amount of the Total Revolving Commitments is $100,000,000.
"Revolving Commitment Period": the period from and including
the Closing Date to the Revolving Termination Date.
"Revolving Extensions of Credit": as to any Revolving Lender
at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving Loans made by such Lender then outstanding, (b)
such Lender's Revolving Percentage of the L/C Obligations then
outstanding and (c) such Lender's Revolving Percentage of the aggregate
principal amount of Swingline Loans then outstanding.
"Revolving Lender": each Lender that has a Revolving
Commitment or that holds Revolving Loans.
"Revolving Loans": as defined in Section 2.4.
"Revolving Percentage": as to any Revolving Lender at any
time, the percentage which such Lender's Revolving Commitment then
constitutes of the Total Revolving Commitments (or, at any time after the
Revolving Commitments shall have expired or terminated, the percentage
which the aggregate principal amount of such Lender's Revolving Loans
then outstanding constitutes of the aggregate principal amount of the
Revolving Loans then outstanding).
"Revolving Termination Date": May 13, 2003.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Guarantee, the Mortgages and all
other security documents hereafter delivered to the Administrative Agent
granting a Lien on any property of any Person to secure the obligations
and liabilities of any Loan Party under any Loan Document.
"Senior Subordinated Note Indenture": the Indenture, dated as
of May 14, 1998, between the Borrower, certain of its Subsidiaries and
LaSalle National Bank, as Trustee, in connection with the issuance of the
Senior Subordinated Notes, together with all instruments and other
agreements entered into by the Borrower or such Subsidiaries in
connection therewith, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with Section 7.9.
"Senior Subordinated Notes": the subordinated notes of the
Borrower issued on May 14, 1998 pursuant to the Senior Subordinated Note
Indenture.
"Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date,
exceed the amount of all "liabilities of such Person, contingent or
otherwise", as of such date, as such quoted terms are determined in
accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be
greater than the amount that will be required to pay the probable
liability of such Person on its debts as such debts become absolute and
matured, (c) such Person will not have, as of such date, an unreasonably
small amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature. For purposes of
this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured or (y) right to an equitable remedy for breach of performance
if such breach gives rise to a right to payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed, contingent,
matured or unmatured, disputed, undisputed, secured or unsecured.
"Specified Change of Control": a "Change of Control" as
defined in the Senior Subordinated Note Indenture.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than stock
or such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors
or other managers of such corporation, partnership or other entity are at
the time owned, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall
refer to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other
than any Excluded Foreign Subsidiary.
"Swingline Commitment": the obligation of the Swingline Lender
to make Swingline Loans pursuant to Section 2.6 in an aggregate principal
amount at any one time outstanding not to exceed $5,000,000.
"Swingline Lender": The Chase Manhattan Bank, in its capacity
as the lender of Swingline Loans.
"Swingline Loans": as defined in Section 2.6.
"Swingline Participation Amount": as defined in Section 2.7.
"Target": either of Plastics, Inc. or the Consumer Plastic
Storage Product Lines of Tenex Corporation, collectively, the "Targets".
"Tenex Acquisition": the Acquisition by the Borrower of the
Consumer Plastic Storage Product Lines of Tenex Corporation pursuant to
the Tenex Purchase Agreement.
"Term Commitment": as to any Lender, the obligation of such
Lender, if any, to make a Term Loan to the Borrower hereunder on the
Closing Date in a principal amount not to exceed the amount set forth
under the heading "Term Commitment" opposite such Lender's name on
Schedule 1.1A. The original aggregate amount of the Term Commitments is
$50,000,000.
"Term Lender": each Lender that has a Term Commitment or is
the holder of a Term Loan.
"Term Loan": as defined in Section 2.1.
"Term Percentage": as to any Term Lender at any time, the
percentage which such Lender's Term Commitment then constitutes of the
aggregate Term Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's Term
Loans then outstanding constitutes of the aggregate principal amount of
the Term Loans then outstanding).
"Total Revolving Commitments": at any time, the aggregate
amount of the Revolving Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving
Lenders outstanding at such time.
"Transferee": any Assignee or Participant.
"Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"U.S. Taxes": as defined in Section 10.6(d).
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying
shares required by law) is owned by such Person directly and/or through
other Wholly Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the other Loan Documents or any certificate
or other document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or
thereto, (i) accounting terms relating to the Borrower and its
Subsidiaries not defined in Section 1.1 and accounting terms partly
defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP and (ii) the words "asset"
and "property" shall be construed to have the same meaning and effect and
to refer to any and all tangible and intangible assets and properties,
including cash, Capital Stock, securities, accounts and contract rights.
(c) For the purposes of calculating Consolidated EBITDA for
any Reference Period pursuant to any determination of the Consolidated
Senior Leverage Ratio and the Consolidated Total Leverage Ratio, (i) if
at any time during such Reference Period the Borrower or any Subsidiary
shall have made any Material Disposition, the Consolidated EBITDA for
such Reference Period shall be reduced by an amount equal to the
Consolidated EBITDA (if positive) attributable to the property that is
the subject of such Material Disposition for such Reference Period or
increased by an amount equal to the Consolidated EBITDA (if negative)
attributable thereto for such Reference Period and (ii) if during such
Reference Period the Borrower or any Subsidiary shall have made a
Material Acquisition, Consolidated EBITDA for such Reference Period shall
be calculated after giving pro forma effect thereto as if such Material
Acquisition occurred on the first day of such Reference Period. As used
in this paragraph, "Material Acquisition" means any acquisition (other
than the ▇▇▇▇▇▇ Acquisition and the Tenex Acquisition) of property or
series of related acquisitions of property that (a) constitutes assets
comprising all or substantially all of an operating unit of a business or
constitutes all or substantially all of the common stock of a Person and
(b) involves the payment of consideration by the Borrower and its
Subsidiaries in excess of $10,000,000 (including any Indebtedness assumed
or incurred in connection therewith); and "Material Disposition" means
any Disposition of property or series of related Dispositions of property
that yields gross proceeds to the Borrower or any of its Subsidiaries in
excess of $10,000,000.
(d) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement, and
Section, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(e) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Commitments. Subject to the terms and conditions
hereof, each Term Lender severally agrees to make a term loan (a "Term
Loan") to the Borrower on the Closing Date in an amount not to exceed the
amount of the Term Commitment of such Lender. The Term Loans may from
time to time be Eurodollar Loans or ABR Loans, as determined by the
Borrower and notified to the Administrative Agent in accordance with
Sections 2.2 and 2.12.
2.2 Procedure for Term Loan Borrowing. The Borrower shall
give the Administrative Agent irrevocable notice (which notice must be
received by the Administrative Agent prior to 12:00 Noon, New York City
time, on the Closing Date) requesting that the Term Lenders make the Term
Loans on the Closing Date and specifying the amount to be borrowed. The
Term Loans made on the Closing Date shall initially be ABR Loans. Upon
receipt of such notice the Administrative Agent shall promptly notify
each Term Lender thereof. Not later than 12:00 Noon, New York City time,
on the Closing Date each Term Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately
available funds equal to the Term Loan to be made by such Lender. The
Administrative Agent shall credit the account of the Borrower on the
books of such office of the Administrative Agent with the aggregate of
the amounts made available to the Administrative Agent by the Term
Lenders in immediately available funds or deposit such amounts in such
other account as shall be directed by the Borrower.
2.3 Repayment of Term Loans. The Term Loan of each Term
Lender shall mature in 24 consecutive quarterly installments, commencing
on December 31, 1998, each of which shall be in an amount equal to such
Lender's Term Percentage multiplied by the amount set forth below
opposite such installment:
Installment Principal Amount
December 31, 1998 $750,000
March 31, 1999 $750,000
June 30, 1999 $750,000
September 30, 1999 $750,000
December 31, 1999 $1,250,000
March 31, 2000 $1,250,000
June 30, 2000 $1,250,000
September 30, 2000 $1,250,000
December 31, 2000 $1,500,000
March 31, 2001 $1,500,000
June 30, 2001 $1,500,000
September 30, 2001 $1,500,000
December 31, 2001 $1,750,000
March 31, 2002 $1,750,000
June 30, 2002 $1,750,000
September 30, 2002 $1,750,000
December 31, 2002 $2,250,000
March 31, 2003 $2,250,000
June 30, 2003 $2,250,000
September 30, 2003 $2,250,000
December 31, 2003 $2,250,000
March 31, 2004 $2,250,000
June 30, 2004 $2,250,000
September 30, 2004 $13,250,000
2.4 Revolving Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Lender severally agrees to make
revolving credit loans ("Revolving Loans") to the Borrower from time to
time during the Revolving Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender's
Revolving Percentage of the sum of (i) the L/C Obligations then
outstanding and (ii) the aggregate principal amount of the Swingline
Loans then outstanding, does not exceed the amount of such Lender's
Revolving Commitment. During the Revolving Commitment Period the
Borrower may use the Revolving Commitments by borrowing, prepaying the
Revolving Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof. The Revolving Loans may from time
to time be Eurodollar Loans or ABR Loans, as determined by the Borrower
and notified to the Administrative Agent in accordance with Sections 2.5
and 2.12, provided that no Revolving Loan shall be made as a Eurodollar
Loan after the day that is one month prior to the Revolving Termination
Date. Notwithstanding the foregoing, each of the revolving credit loans
made under the Existing Credit Agreement shall, from and after the
Closing Date, be deemed to have been made pursuant to this Section 2.4.
(b) The Borrower shall repay all outstanding Revolving Loans
on the Revolving Termination Date.
2.5 Procedure for Revolving Loan Borrowing. The Borrower may
borrow under the Revolving Commitments during the Revolving Commitment
Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 12:00 Noon, New York City time, (a)
three Business Days prior to the requested Borrowing Date, in the case of
Eurodollar Loans, or (b) on the requested Borrowing Date, in the case of
ABR Loans), specifying (i) the amount and Type of Revolving Loans to be
borrowed, (ii) the requested Borrowing Date and (iii) in the case of
Eurodollar Loans, the respective amounts of each such Type of Loan and
the respective lengths of the initial Interest Period therefor. Any
Revolving Loans made on the Closing Date shall initially be ABR Loans.
Each borrowing under the Revolving Commitments shall be in an amount
equal to (x) in the case of ABR Loans, $500,000 or a whole multiple of
$250,000 in excess thereof (or, if the then aggregate Available Revolving
Commitments are less than $500,000, such lesser amount) and (y) in the
case of Eurodollar Loans, $1,000,000 or a whole multiple of $500,000 in
excess thereof; provided, that the Swingline Lender may request, on
behalf of the Borrower, borrowings under the Revolving Commitments that
are ABR Loans in other amounts pursuant to Section 2.7. Upon receipt of
any such notice from the Borrower, the Administrative Agent shall
promptly notify each Revolving Lender thereof. Each Revolving Lender
will make the amount of its pro rata share of each borrowing available to
the Administrative Agent for the account of the Borrower at the Funding
Office prior to 2:00 P.M., New York City time, on the Borrowing Date
requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the
Borrower by the Administrative Agent crediting the account of the
Borrower on the books of such office with the aggregate of the amounts
made available to the Administrative Agent by the Revolving Lenders and
in like funds as received by the Administrative Agent or by depositing
such amounts in such other account as shall be directed by the Borrower.
2.6 Swingline Commitment. (a) Subject to the terms and
conditions hereof, the Swingline Lender agrees to make a portion of the
credit otherwise available to the Borrower under the Revolving
Commitments from time to time during the Revolving Commitment Period by
making swing line loans ("Swingline Loans") to the Borrower; provided
that (i) the aggregate principal amount of Swingline Loans outstanding at
any time shall not exceed the Swingline Commitment then in effect
(notwithstanding that the Swingline Loans outstanding at any time, when
aggregated with the Swingline Lender's other outstanding Revolving Loans
hereunder, may exceed the Swingline Commitment or such Lender's Revolving
Commitment then in effect) and (ii) the Borrower shall not request, and
the Swingline Lender shall not make, any Swingline Loan if, after giving
effect to the making of such Swingline Loan, the aggregate amount of the
Available Revolving Commitments would be less than zero. During the
Revolving Commitment Period, the Borrower may use the Swingline
Commitment by borrowing, repaying and reborrowing, all in accordance with
the terms and conditions hereof. Swingline Loans shall be ABR Loans
only.
(b) The Borrower shall repay all outstanding Swingline Loans
on the Revolving Termination Date.
2.7 Procedure for Swingline Borrowing; Refunding of Swingline
Loans. (a) Whenever the Borrower desires that the Swingline Lender make
Swingline Loans it shall give the Swingline Lender irrevocable telephonic
notice confirmed promptly in writing (which telephonic notice must be
received by the Swingline Lender not later than 1:00 P.M., New York City
time, on the proposed Borrowing Date), specifying (i) the amount to be
borrowed and (ii) the requested Borrowing Date (which shall be a Business
Day during the Revolving Commitment Period). Each borrowing under the
Swingline Commitment shall be in an amount equal to $250,000 or a whole
multiple of $100,000 in excess thereof. Not later than 3:00 P.M., New
York City time, on the Borrowing Date specified in a notice in respect of
Swingline Loans, the Swingline Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately
available funds equal to the amount of the Swingline Loan to be made by
the Swingline Lender. The Administrative Agent shall make the proceeds
of such Swingline Loan available to the Borrower on such Borrowing Date
by depositing such proceeds in the account of the Borrower with the
Administrative Agent or such other account as shall be directed by the
Borrower on such Borrowing Date in immediately available funds.
(b) The Swingline Lender, at any time and from time to time in
its sole and absolute discretion may, on behalf of the Borrower (which
hereby irrevocably directs the Swingline Lender to act on its behalf), on
one Business Day's notice given by the Swingline Lender no later than
12:00 Noon, New York City time, request each Revolving Lender to make,
and each Revolving Lender hereby agrees to make, a Revolving Loan, in an
amount equal to such Revolving Lender's Revolving Percentage of the
aggregate amount of the Swingline Loans (the "Refunded Swingline Loans")
outstanding on the date of such notice, to repay the Swingline Lender.
Each Revolving Lender shall make the amount of such Revolving Loan
available to the Administrative Agent at the Funding Office in
immediately available funds, not later than 10:00 A.M., New York City
time, one Business Day after the date of such notice. The proceeds of
such Revolving Loans shall be immediately made available by the
Administrative Agent to the Swingline Lender for application by the
Swingline Lender to the repayment of the Refunded Swingline Loans. The
Borrower irrevocably authorizes the Swingline Lender to charge the
Borrower's accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount of
such Refunded Swingline Loans to the extent amounts received from the
Revolving Lenders are not sufficient to repay in full such Refunded
Swingline Loans.
(c) If prior to the time a Revolving Loan would have otherwise
been made pursuant to Section 2.7(b), one of the events described in
Section 8(f) shall have occurred and be continuing with respect to the
Borrower or if for any other reason, as determined by the Swingline
Lender in its sole discretion, Revolving Loans may not be made as
contemplated by Section 2.7(b), each Revolving Lender shall, on the date
such Revolving Loan was to have been made pursuant to the notice referred
to in Section 2.7(b) (the "Refunding Date"), purchase for cash an
undivided participating interest in the then outstanding Swingline Loans
by paying to the Swingline Lender an amount (the "Swingline Participation
Amount") equal to (i) such Revolving Lender's Revolving Percentage times
(ii) the sum of the aggregate principal amount of Swingline Loans then
outstanding that were to have been repaid with such Revolving Loans.
(d) Whenever, at any time after the Swingline Lender has
received from any Revolving Lender such Lender's Swingline Participation
Amount, the Swingline Lender receives any payment on account of the
Swingline Loans, the Swingline Lender will distribute to such Lender its
Swingline Participation Amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such
Lender's participating interest was outstanding and funded and, in the
case of principal and interest payments, to reflect such Lender's pro
rata portion of such payment if such payment is not sufficient to pay the
principal of and interest on all Swingline Loans then due); provided,
however, that in the event that such payment received by the Swingline
Lender is required to be returned, such Revolving Lender will return to
the Swingline Lender any portion thereof previously distributed to it by
the Swingline Lender.
(e) Each Revolving Lender's obligation to make the Revolving
Loans referred to in Section 2.7(b) and to purchase participating
interests pursuant to Section 2.7(c) 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 that such Revolving Lender or the Borrower may have against the
Swingline Lender, the Borrower or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or an Event
of Default or the failure to satisfy any of the other conditions
specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this
Agreement or any other Loan Document by the Borrower, any other Loan
Party or any other Revolving Lender; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing.
2.8 Commitment Fees, etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Revolving Lender a
commitment fee for the period from and including the Closing Date to the
last day of the Revolving Commitment Period, computed at the Commitment
Fee Rate on the average daily amount of the Available Revolving
Commitment of such Lender during the period for which payment is made,
payable quarterly in arrears on the last day of each March, June,
September and December and on the Revolving Termination Date, commencing
on the first of such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates previously agreed to in writing by
the Borrower and the Administrative Agent.
2.9 Termination or Reduction of Revolving Commitments. The
Borrower shall have the right, upon not less than three Business Days'
notice to the Administrative Agent, to terminate the Revolving
Commitments or, from time to time, to reduce the amount of the Revolving
Commitments; provided that no such termination or reduction of Revolving
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Loans and Swingline Loans made on the
effective date thereof, the Total Revolving Extensions of Credit would
exceed the Total Revolving Commitments. Any such reduction shall be in
an amount equal to $1,000,000, or a whole multiple thereof, and shall
reduce permanently the Revolving Commitments then in effect.
2.10 Optional Prepayments. The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, without premium
or penalty, upon irrevocable notice delivered to the Administrative Agent
at least three Business Days prior thereto in the case of Eurodollar
Loans and by 12:00 Noon, New York City time on the Business Day of such
prepayment in the case of ABR Loans, which notice shall specify the date
and amount of prepayment and whether the prepayment is of Term Loans or
Revolving Loans and of Eurodollar Loans or ABR Loans; provided, that if a
Eurodollar Loan is prepaid on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall also pay any
amounts owing pursuant to Section 2.20. Upon receipt of any such notice
the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, together
with (in the case of Eurodollar Loans) accrued interest to such date on
the amount prepaid. Partial prepayments of Term Loans and Revolving
Loans shall be in an aggregate principal amount of $1,000,000 or a whole
multiple thereof. Partial prepayments of Term Loans shall be applied to
the installments thereof in accordance with Section 2.17(b). Partial
prepayments of Swingline Loans shall be in an aggregate principal amount
of $100,000 or a whole multiple thereof.
2.11 Mandatory Prepayments and Commitment Reductions. (a)
Unless the Required Lenders shall otherwise agree, if any Indebtedness
shall be issued or Incurred by the Borrower or any of its Subsidiaries
(excluding any Indebtedness Incurred in accordance with Section 7.2), an
amount equal to 100% of the Net Cash Proceeds thereof shall be applied on
the date of such issuance or Incurrence toward the prepayment of the Term
Loans and the reduction of the Revolving Commitments as set forth in
Section 2.11(d).
(b) Unless the Required Lenders shall otherwise agree, if on
any date the Borrower or any of its Subsidiaries shall receive Net Cash
Proceeds from any Asset Sale or Recovery Event then, unless a
Reinvestment Notice shall be delivered in respect thereof, such Net Cash
Proceeds shall be applied on such date toward the prepayment of the Term
Loans and the reduction of the Revolving Commitments as set forth in
Section 2.11(d); provided, that, notwithstanding the foregoing, on each
Reinvestment Prepayment Date, an amount equal to the Reinvestment
Prepayment Amount with respect to the relevant Reinvestment Event shall
be applied toward the prepayment of the Term Loans and the reduction of
the Revolving Commitments as set forth in Section 2.11(d).
(c) Unless the Required Lenders shall otherwise agree, if, for
any fiscal year of the Borrower commencing with the fiscal year ending on
or about December 31, 1999, there shall be Excess Cash Flow, the Borrower
shall, on the relevant Excess Cash Flow Application Date, apply the ECF
Percentage of such Excess Cash Flow toward the prepayment of the Term
Loans as set forth in Section 2.11(d). Each such prepayment shall be
made on a date (an "Excess Cash Flow Application Date") no later than
five days after the earlier of (i) the date on which the financial
statements of the Borrower referred to in Section 6.1(a), for the fiscal
year with respect to which such prepayment is to be made, are required to
be delivered to the Lenders and (ii) the date such financial statements
are actually delivered.
(d) Amounts to be applied in connection with prepayments and
Revolving Commitment reductions made pursuant to Section 2.11 shall be
applied, first, to the prepayment of the Term Loans (in accordance with
Section 2.17(b)) and, second, to reduce permanently the Revolving
Commitments; provided, that, amounts to be applied in connection with
prepayments under Section 2.11(c) shall not be applied to reduce the
Revolving Commitments. Any such reduction of the Revolving Commitments
shall be accompanied by prepayment of the Revolving Loans and/or
Swingline Loans to the extent, if any, that the Total Revolving
Extensions of Credit exceed the amount of the Total Revolving Commitments
as so reduced, provided that if the aggregate principal amount of
Revolving Loans and Swingline Loans then outstanding is less than the
amount of such excess (because L/C Obligations constitute a portion
thereof), the Borrower shall, to the extent of the balance of such
excess, replace outstanding Letters of Credit and/or deposit an amount in
cash in a cash collateral account established with the Administrative
Agent for the benefit of the Lenders on terms and conditions satisfactory
to the Administrative Agent. The application of any prepayment pursuant
to this Section 2.11 shall be made first to ABR Loans and second to
Eurodollar Loans. Each prepayment of Loans under this Section 2.11 (in
the case of Eurodollar Loans) shall be accompanied by accrued interest to
the date of such prepayment on the amount prepaid.
2.12 Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans by
giving the Administrative Agent at least two Business Days' prior
irrevocable notice of such election, provided that any such conversion of
Eurodollar Loans may only be made on the last day of an Interest Period
with respect thereto. The Borrower may elect from time to time to
convert ABR Loans to Eurodollar Loans by giving the Administrative Agent
at least three Business Days' prior irrevocable notice of such election
(which notice shall specify the length of the initial Interest Period
therefor), provided that no ABR Loan under a particular Facility may be
converted into a Eurodollar Loan (i) when any Event of Default has
occurred and is continuing and the Administrative Agent has or the
Majority Facility Lenders in respect of such Facility have determined in
its or their sole discretion not to permit such conversions or (ii) after
the date that is one month prior to the scheduled termination or final
maturity date of such Facility. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by
the Borrower giving irrevocable notice to the Administrative Agent, in
accordance with the applicable provisions of the term "Interest Period"
set forth in Section 1.1, of the length of the next Interest Period to be
applicable to such Revolving Loans, provided that no Eurodollar Loan
under a particular Facility may be continued as such (i) when any Event
of Default has occurred and is continuing and the Administrative Agent
has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such
continuations or (ii) after the date that is one month prior to the
scheduled termination or final maturity date of such Facility, and
provided, further, that if the Borrower shall fail to give any required
notice as described above in this paragraph or if such continuation is
not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to ABR Loans on the last day of such then
expiring Interest Period. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.
2.13 Limitations on Eurodollar Tranches. Notwithstanding
anything to the contrary in this Agreement, all borrowings, conversions,
continuations and optional prepayments of Eurodollar Loans hereunder and
all selections of Interest Periods hereunder shall be in such amounts and
be made pursuant to such elections so that, (a) after giving effect
thereto, the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $1,000,000 or a
whole multiple of $500,000 in excess thereof and (b) no more than ten
Eurodollar Tranches shall be outstanding at any one time.
2.14 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with
respect thereto at a rate per annum equal to the Eurodollar Rate
determined for such day plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal
to the ABR plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), all outstanding Loans
and Reimbursement Obligations (whether or not overdue) shall bear
interest at a rate per annum equal to (x) in the case of the Loans, the
rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section 2.14 plus 2% or (y) in the case of
Reimbursement Obligations, the rate applicable to ABR Loans plus 2%, and
(ii) if all or a portion of any interest payable on any Loan or
Reimbursement Obligation or any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a
rate per annum equal to the rate then applicable to ABR Loans plus 2%, in
each case, with respect to clauses (i) and (ii) above, from the date of
such non-payment until such amount is paid in full (as well after as
before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c)
of this Section 2.14 shall be payable from time to time on demand.
2.15 Computation of Interest and Fees. (a) Interest and fees
payable pursuant hereto shall be calculated on the basis of a 360-day
year for the actual days elapsed, except that, with respect to ABR Loans
the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or
366-, as the case may be) day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and
the relevant Lenders of each determination of a Eurodollar Rate. Any
change in the interest rate on a Loan resulting from a change in the ABR
or the Eurocurrency Reserve Requirements shall become effective as of the
opening of business on the day on which such change becomes effective.
The Administrative Agent shall as soon as practicable notify the Borrower
and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the
Borrower, deliver to the Borrower a statement showing the quotations used
by the Administrative Agent in determining any interest rate pursuant to
Section 2.14(a).
2.16 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower)
that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility
that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making
or maintaining their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof
to the Borrower and the relevant Lenders as soon as practicable
thereafter. If such notice is given (x) any Eurodollar Loans under the
relevant Facility requested to be made on the first day of such Interest
Period shall be made as ABR Loans or not borrowed, at the Borrower's
option, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans
shall be prepaid or continued as ABR Loans at the Borrower's option and
(z) any outstanding Eurodollar Loans under the relevant Facility shall be
prepaid or converted at the Borrower's option, on the first day of such
Interest Period, to ABR Loans. Until such notice has been withdrawn by
the Administrative Agent, no further Eurodollar Loans under the relevant
Facility shall be made or continued as such, nor shall the Borrower have
the right to convert Loans under the Relevant Facility to Eurodollar
Loans.
2.17 Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee and any reduction of the Commitments of the
Lenders shall be made pro rata according to the respective Term
Percentages or Revolving Percentages, as the case may be, of the relevant
Lenders.
(b) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Term Loans shall be made
pro rata according to the respective outstanding principal amounts of the
Term Loans then held by the Term Lenders. The amount of each principal
prepayment of the Term Loans shall be applied to reduce the then
remaining installments of the Term Loans pro rata based upon the then
remaining principal amount thereof. Amounts prepaid on account of the
Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Loans shall be
made pro rata according to the respective outstanding principal amounts
of the Revolving Loans then held by the Revolving Lenders.
(d) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made
prior to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Funding
Office, in Dollars and in immediately available funds. The
Administrative Agent shall distribute such payments to the Lenders
promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day. If any payment on a
Eurodollar Loan becomes due and payable on a day other than a Business
Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such
payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day. In the case of any
extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate
during such extension.
(e) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its share of such borrowing
available to the Administrative Agent, the Administrative Agent may
assume that such Lender is making such amount available to the
Administrative Agent, and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrower a corresponding amount.
If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to
the Administrative Agent, on demand, such amount with interest thereon at
a rate equal to the daily average Federal Funds Effective Rate for the
period until such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this
Section 2.17(e) shall be conclusive in the absence of manifest error. If
such Lender's share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum
applicable to ABR Loans, on demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment being made
hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the
Borrower is making such payment, and the Administrative Agent may, but
shall not be required to, in reliance upon such assumption, make
available to the Lenders their respective pro rata shares of a
corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date,
the Administrative Agent shall be entitled to recover, on demand, from
each Lender to which any amount which was made available pursuant to the
preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing
herein shall be deemed to limit the rights of the Administrative Agent or
any Lender against the Borrower.
2.18 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof or compliance by any Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall change the basis of Excluded Taxes of any Lender
with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it;
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender that is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender, by an amount that such Lender deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or issuing or
participating in Letters of Credit, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced
amount receivable; provided that the Borrower shall not be required to
compensate a Lender pursuant to this paragraph for any amounts incurred
more than six months prior to the date that such Lender notifies the
Borrower of such Lender's intention to claim compensation therefor; and
provided further that, if the circumstances giving rise to such claim
have a retroactive effect, then such six-month period shall be extended
to include the period of such retroactive effect. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section 2.18,
it shall promptly notify the Borrower (with a copy to the Administrative
Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in
the interpretation or application thereof or compliance by such Lender or
any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from
any Governmental Authority made subsequent to the date hereof shall have
the effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder or
under or in respect of any Letter of Credit to a level below that which
such Lender or such corporation could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to time,
after submission by such Lender to the Borrower (with a copy to the
Administrative Agent) of a written request therefor, the Borrower shall
pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction; provided that the Borrower shall not be
required to compensate a Lender pursuant to this paragraph for any
amounts incurred more than six months prior to the date that such Lender
notifies the Borrower of such Lender's intention to claim compensation
therefor; and provided further that, if the circumstances giving rise to
such claim have a retroactive effect, then such six-month period shall be
extended to include the period of such retroactive effect.
(c) A certificate as to any additional amounts payable
pursuant to this Section 2.18 submitted by any Lender to the Borrower
(with a copy to the Administrative Agent) shall be conclusive in the
absence of manifest error. The obligations of the Borrower pursuant to
this Section 2.18 shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
2.19 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender as a result of a present or former
connection between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any other Loan
Document) (such excluded taxes, "Excluded Taxes"). If any such non-
excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder, the
amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or
such Lender (after payment of all Non-Excluded Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement, provided, however, that the Borrower shall
not be required to increase any such amounts payable to any Lender that
is not organized under the laws of the United States of America or a
state thereof to the extent such Lender's compliance with the
requirements of Section 2.19(b) at the time such Lender becomes a party
to this Agreement fails to establish a complete exemption from such
withholding; provided, further, that the Borrower shall not be required
to increase any such amounts pursuant to this paragraph for any amounts
incurred more than six months prior to the date such Lender notified the
Borrower of such Lender's intention to claim compensation therefor unless
(x) such Lender did not have actual knowledge of the circumstances giving
rise to the obligation of the Borrower to so increase such amount or (y)
the Borrower did have actual knowledge of the circumstances giving rise
to its obligation to so increase such amount; and provided further that,
if the circumstances giving rise to such claim have a retroactive effect,
then such six-month period shall be extended to include the period of
such retroactive effect. Whenever any Non-Excluded Taxes are payable by
the Borrower, as promptly as possible thereafter the Borrower shall send
to the Administrative Agent for its own account or for the account of
such Lender, as the case may be, a certified copy of an original official
receipt, if available, received by the Borrower showing payment thereof.
If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence, the
Borrower shall indemnify the Administrative Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. The
agreements in this Section 2.19 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder.
(b) Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a corporation, partnership or
other entity created or organized in or under the laws of the United
States of America (or any jurisdiction thereof), or any estate or trust
that is subject to federal income taxation regardless of the source of
its income (a "Non-U.S. Lender") shall deliver to the Borrower and the
Administrative Agent (or, in the case of a Participant, to the Lender
from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form 1001 or Form 4224,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Non-U.S. Lender
delivers a Form W-8, an annual certificate representing that such
Non-U.S. Lender is not a "bank" for purposes of Section 881(c) of the
Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign
corporation related to the Borrower (within the meaning of Section
864(d)(4) of the Code)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or a reduced rate of,
U.S. federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents. Such forms shall be delivered by
each Non-U.S. Lender on or before the date it becomes a party to this
Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each
Non-U.S. Lender shall deliver such forms promptly upon the obsolescence
or invalidity of any form previously delivered by such Non-U.S. Lender.
Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this Section 2.19(b), a Non-U.S.
Lender shall not be required to deliver any form pursuant to this Section
2.19(b) that such Non-U.S. Lender is not legally able to deliver.
2.20 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense that such
Lender may sustain or incur as a consequence of (a) default by the
Borrower in making a borrowing of, conversion into or continuation of
Eurodollar Loans after the Borrower has given a notice requesting the
same in accordance with the provisions of this Agreement, (b) default by
the Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c)
the making of a prepayment of Eurodollar Loans on a day that is not the
last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i)
the amount of interest that would have accrued on the amount so prepaid,
or not so borrowed, converted or continued, for the period from the date
of such prepayment or of such failure to borrow, convert or continue to
the last day of such Interest Period (or, in the case of a failure to
borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable
rate of interest for such Revolving Loans provided for herein (excluding,
however, the Applicable Margin included therein, if any) over (ii) the
amount of interest (as reasonably determined by such Lender) that would
have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank
eurodollar market. A certificate as to any amounts payable pursuant to
this Section 2.20 submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive
the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.21 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.18
or 2.19(a) with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for
any Loans affected by such event with the object of avoiding the
consequences of such event; provided, that such designation is made on
terms that, in the sole judgment of such Lender, cause such Lender and
its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section 2.21
shall affect or postpone any of the obligations of any Borrower or the
rights of any Lender pursuant to Section 2.18 or 2.19(a).
2.22 Replacement of Lenders. The Borrower shall be permitted
to replace any Lender that (a) requests reimbursement for amounts owing
pursuant to Section 2.18 or 2.19 or (b) defaults in its obligation to
make Loans hereunder, with a replacement financial institution; provided
that (i) such replacement does not conflict with any Requirement of Law,
(ii) no Event of Default shall have occurred and be continuing at the
time of such replacement, (iii) if applicable, prior to any such
replacement, such Lender shall have taken no action under Section 2.21 so
as to eliminate the continued need for payment of amounts owing pursuant
to Section 2.18 or 2.19, (iv) the replacement financial institution shall
purchase, at par, all Loans and other amounts owing to such replaced
Lender on or prior to the date of replacement, (v) the Borrower shall be
liable to such replaced Lender under Section 2.20 if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last
day of the Interest Period relating thereto, (vi) the replacement
financial institution, if not already a Lender, shall be reasonably
satisfactory to the Administrative Agent, (vii) the replaced Lender shall
be obligated to make such replacement in accordance with the provisions
of Section 10.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such
time as such replacement shall be consummated, the Borrower shall pay all
additional amounts (if any) required pursuant to Section 2.18 or 2.19, as
the case may be, and (ix) any such replacement shall not be deemed to be
a waiver of any rights that the Borrower, the Administrative Agent or any
other Lender shall have against the replaced Lender.
2.23 Reporting Requirements of Issuing Lenders. Within two
Business Days following the last day of each calendar month, each Issuing
Lender shall deliver to the Administrative Agent a report detailing all
activity during the preceding month with respect to any Letters of Credit
issued by any such Issuing Lender, including the face amount, the account
party, the beneficiary and the expiration date of such Letters of Credit
and any other information with respect thereto as may be requested by the
Administrative Agent.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other
Revolving Lenders set forth in Section 3.4(a), agrees to issue letters of
credit ("Letters of Credit") for the account of the Borrower on any
Business Day during the Revolving Commitment Period in such form as may
be approved from time to time by the Issuing Lender; provided that the
Issuing Lender shall have no obligation to issue any Letter of Credit if,
after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the aggregate amount of the Available
Revolving Commitments would be less than zero. Letters of Credit may be
either standby letters of credit or commercial letters of credit.
Notwithstanding the foregoing, each of the letters of credit issued or
deemed issued under the Existing Credit Agreement shall, from and after
the Closing Date, be deemed to have been issued pursuant to this Section
3.1(a). Each Letter of Credit shall (i) be denominated in Dollars and
(ii) expire no later than the earlier of (x) the first anniversary of its
date of issuance and (y) the date that is five Business Days prior to the
Revolving Termination Date, provided that any Letter of Credit with a
one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in
clause (y) above), provided, however, that any Letter of Credit which is
a commercial letter of credit shall expire no later than 180 days after
its date of issuance.
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the
State of New York.
(c) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict
with, or cause the Issuing Lender or any L/C Participant to exceed any
limits imposed by, any applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of
Credit by delivering to the Issuing Lender and the Administrative Agent
at their respective addresses for notices specified herein (or to such
other address provided by such Issuing Lender) an Application therefor,
completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing
Lender may request. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other
papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the
Letter of Credit requested thereby (but in no event shall the Issuing
Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such
other certificates, documents and other papers and information relating
thereto) by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed to by the Issuing
Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof.
The Issuing Lender shall promptly furnish to the Administrative Agent,
which shall in turn promptly furnish to the Lenders, notice of the
issuance of each Letter of Credit (including the amount thereof).
3.3 Fees and Other Charges. (a) The Borrower will pay a fee
on all outstanding Letters of Credit at a per annum rate equal to (i) the
Applicable Margin then in effect with respect to Eurodollar Loans minus
1/8% times (ii) the average daily undrawn face amount of all such Letters
of Credit, shared ratably among the Revolving Lenders and payable
quarterly in arrears on each L/C Fee Payment Date after the issuance
date. In addition, the Borrower shall pay to the relevant Issuing Lender
for its own account a fronting fee at a rate to be agreed with such
Issuing Lender, payable quarterly in arrears on each L/C Fee Payment Date
after the Issuance Date.
(b) In addition to the foregoing fees, the Borrower shall pay
or reimburse the Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by the Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering
any Letter of Credit.
3.4 L/C Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce
the Issuing Lender to issue Letters of Credit hereunder, each L/C
Participant irrevocably agrees to accept and purchase and hereby accepts
and purchases from the Issuing Lender, on the terms and conditions
hereinafter stated, for such L/C Participant's own account and risk an
undivided interest equal to such L/C Participant's Revolving Percentage
in the Issuing Lender's obligations and rights under each Letter of
Credit issued hereunder and the amount of each draft paid by the Issuing
Lender thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Lender that, if a draft is paid under any Letter
of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C
Participant shall pay to the Issuing Lender upon demand at the Issuing
Lender's address for notices specified herein an amount equal to such L/C
Participant's Revolving Percentage of the amount of such draft, or any
part thereof, that is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any
Letter of Credit is paid to the Issuing Lender within three Business Days
after the date such payment is due, such L/C Participant shall pay to the
Issuing Lender on demand an amount equal to the product of (i) such
amount, times (ii) the daily average Federal Funds Effective Rate during
the period from and including the date such payment is required to the
date on which such payment is immediately available to the Issuing
Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360.
If any such amount required to be paid by any L/C Participant pursuant
to Section 3.4(a) is not made available to the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is
due, the Issuing Lender shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon calculated from
such due date at the rate per annum applicable to ABR Loans. A
certificate of the Issuing Lender submitted to any L/C Participant with
respect to any amounts owing under this Section shall be conclusive in
the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C
Participant its pro rata share of such payment in accordance with Section
3.4(a), the Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, including
proceeds of collateral applied thereto by the Issuing Lender), or any
payment of interest on account thereof, the Issuing Lender will
distribute to such L/C Participant its pro rata share thereof; provided,
however, that in the event that any such payment received by the Issuing
Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse the Issuing Lender on each date on which the Issuing
Lender notifies the Borrower of the date and amount of a draft presented
under any Letter of Credit and paid by the Issuing Lender for the amount
of (a) such draft so paid and (b) any taxes, fees, charges or other costs
or expenses incurred by the Issuing Lender in connection with such
payment. Each such payment shall be made to the Issuing Lender at its
address for notices specified herein in lawful money of the United States
of America and in immediately available funds. Interest shall be payable
on any and all amounts remaining unpaid by the Borrower under this
Section from the date such amounts become payable (whether at stated
maturity, by acceleration or otherwise) until payment in full at the rate
set forth in (i) until the second Business Day following the date of the
applicable drawing, Section 2.14(b) and (ii) thereafter, Section 2.14(c).
3.6 Obligations Absolute. The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment that the Borrower may have or have had against the Issuing
Lender, any beneficiary of a Letter of Credit or any other Person. The
Borrower also agrees with the Issuing Lender that the Issuing Lender
shall not be responsible for, and the Borrower's Reimbursement
Obligations under Section 3.5 shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged (subject to the immediately succeeding sentence), or
any dispute between or among the Borrower and any beneficiary of any
Letter of Credit or any other party to which such Letter of Credit may be
transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing
Lender shall not be liable for any error, omission, interruption or delay
in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors
or omissions resulting from the gross negligence or willful misconduct of
the Issuing Lender. The Borrower agrees that any action taken or omitted
by the Issuing Lender under or in connection with any Letter of Credit or
the related drafts or documents, if done in the absence of gross
negligence or willful misconduct and in accordance with the standards or
care specified in the Uniform Commercial Code of the State of New York,
shall be binding on the Borrower and shall not result in any liability of
the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender
shall promptly notify the Borrower of the date and amount thereof. The
responsibility of the Issuing Lender to the Borrower in connection with
any draft presented for payment under any Letter of Credit shall, in
addition to any payment obligation expressly provided for in such Letter
of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such
presentment are substantially in conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the
provisions of this Section 3, the provisions of this Section 3 shall
apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower hereby represents and warrants to the
Administrative Agent and each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at June 30, 1998 (including the notes thereto) (the "Pro
Forma Balance Sheet"), copies of which have heretofore been furnished to
each Lender, has been prepared giving effect (as if such events had
occurred on such date) to (i) the consummation of the ▇▇▇▇▇▇ Acquisition
and the Tenex Acquisition, (ii) the Loans to be made on the Closing Date
and the use of proceeds thereof and (iii) the payment of fees and
expenses in connection with the foregoing. The Pro Forma Balance Sheet
has been prepared based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable as of the date of
delivery thereof, and presents fairly on a pro forma basis the estimated
financial position of Borrower and its consolidated Subsidiaries as at
June 30, 1998, assuming that the events specified in the preceding
sentence had actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower as
at December 28, 1996 and December 27, 1997, and the related audited
consolidated statements of income and of cash flows for the fiscal years
ended on such dates and the unaudited consolidating balance sheet of the
Borrower as at December 27, 1997, and the related unaudited consolidating
statement of income and of cash flows for the fiscal year ended on such
date, in each case, reported on, in the case of the consolidated
statements, by and accompanied by an unqualified report from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, present fairly the consolidated and consolidating financial
condition of the Borrower as at such date, and the consolidated and
consolidating results of its operations and its consolidated and
consolidating cash flows for the respective fiscal years then ended. The
unaudited consolidated and consolidating balance sheets of the Borrower
as at June 30, 1998, and the related unaudited consolidated and
consolidating statements of income and cash flows for the twenty-six-week
period ended on such date, present fairly the consolidated and
consolidating financial condition of the Borrower as at such date and the
consolidated and consolidating results of its operations and its
consolidated and consolidating cash flows for the twenty-six-week period
then ended (subject to normal year-end audit adjustments). All such
financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned
firm of accountants and disclosed therein). Except as set forth in
Schedule 4.1(b), the Borrower and its Subsidiaries do not have any
material Guarantee Obligations, contingent liabilities or liabilities for
taxes, or any long-term leases or unusual forward or long-term
commitments, including, without limitation, any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the most recent financial
statements referred to in this paragraph. During the period from
December 27, 1997 to and including the date hereof there has been no
Disposition by the Borrower of any material part of its business or
property.
4.2 No Change. Since December 27, 1997 there has been no
development or event that has had or could reasonably be expected to have
a Material Adverse Effect.
4.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization,
(b) has the corporate power and authority, and the legal right, to own
and operate its property, to lease the property it operates as lessee and
to conduct the business in which it is currently engaged, (c) is duly
qualified as a foreign corporation and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, except where the
failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect, and (d) is in compliance with all Requirements
of Law except to the extent that the failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal
right, to make, deliver and perform the Loan Documents to which it is a
party and, in the case of the Borrower, to borrow hereunder. Each Loan
Party has taken all necessary corporate action to authorize the
execution, delivery and performance of the Loan Documents to which it is
a party and, in the case of the Borrower, to authorize the borrowings on
the terms and conditions of this Agreement. No consent or authorization
of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with
the ▇▇▇▇▇▇ Acquisition and the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this
Agreement or any of the Loan Documents, except (i) consents,
authorizations, filings and notices described in Schedule 4.4, which
consents, authorizations, filings and notices have been obtained or made
and are in full force and effect and (ii) the filings referred to in
Section 4.19. Each Loan Document has been duly executed and delivered on
behalf of each Loan Party party thereto. This Agreement constitutes, and
each other Loan Document upon execution will constitute, a legal, valid
and binding obligation of each Loan Party party thereto, enforceable
against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of
Credit, the borrowings hereunder and the use of the proceeds thereof will
not violate any Requirement of Law or any Contractual Obligation of the
Borrower or any of its Subsidiaries and will not result in, or require,
the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security
Documents).
4.6 Litigation. Except as set forth on Schedule 4.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or
against any of their respective properties or revenues (a) with respect
to any of the Loan Documents or any of the transactions contemplated
hereby or thereby, or (b) that could reasonably be expected to have a
Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect that could reasonably be expected
to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
4.8 Ownership of Property; Liens. Each of the Borrower and
its Subsidiaries has title in fee simple to, or a valid leasehold
interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other material property, and none of such
property is subject to any Lien except as permitted by Section 7.3.
4.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted. No
material claim has been asserted and is pending by any Person challenging
or questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property, nor does the Borrower know of
any valid basis for any such claim. To the knowledge of the Borrower,
the use of Intellectual Property by the Borrower and its Subsidiaries
does not infringe on the rights of any Person in any material respect.
4.10 Taxes. Each of the Borrower and each of its Subsidiaries
has filed or caused to be filed all Federal, state and other material tax
returns that are required to be filed and has paid all taxes shown to be
due and payable on said returns or on any assessments made against it or
any of its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority (in each case,
other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of
the Borrower or its Subsidiaries, as the case may be); no tax Lien has
been filed, and, to the knowledge of the Borrower, no claim is being
asserted, with respect to any such tax, fee or other charge.
4.11 Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock"
within the respective meanings of each of the quoted terms under
Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the Board. If
requested by any Lender or the Administrative Agent, the Borrower will
furnish to the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form U-1
referred to in Regulation U.
4.12 Labor Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are
no strikes or other labor disputes against the Borrower or any of its
Subsidiaries pending or, to the knowledge of the Borrower, threatened;
(b) hours worked by and payment made to employees of the Borrower and its
Subsidiaries have not been in violation of the Fair Labor Standards Act
or any other applicable Requirement of Law dealing with such matters; (c)
all payments due from the Borrower or any of its Subsidiaries on account
of employee health and welfare insurance have been paid or accrued as a
liability on the books of the Borrower or the relevant Subsidiary.
4.13 ERISA. Except as set forth on Schedule 4.13, neither a
Reportable Event nor an "accumulated funding deficiency" (within the
meaning of Section 412 of the Code or Section 302 of ERISA) has occurred
during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each
Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. Except as set forth on Schedule 4.13, no
termination of a Single Employer Plan has occurred, and no Lien in favor
of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan
(based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan
allocable to such accrued benefits by a material amount. Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan that has resulted or could
reasonably be expected to result in a material liability under ERISA, and
neither the Borrower nor any Commonly Controlled Entity would become
subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such
Multiemployer Plan is in Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended. No Loan Party is subject to regulation under any Requirement of
Law that limits its ability to incur Indebtedness.
4.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15
constitute all the Subsidiaries of the Borrower at the date hereof.
4.16 Use of Proceeds. The proceeds of the Term Loans shall be
used to finance a portion of the ▇▇▇▇▇▇ Acquisition and to pay related
fees and expenses. The proceeds of the Revolving Loans and the Swingline
Loans, and the Letters of Credit, shall be used to finance a portion of
the ▇▇▇▇▇▇ Acquisition and the Tenex Acquisition, to finance working
capital needs and for general corporate purposes (including Permitted
Acquisitions).
4.17 Environmental Matters. Except as, in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect
and except as set forth on Schedule 4.17:
(a) the facilities and properties owned, leased or operated by
the Borrower or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation of, or
could give rise to liability under, any Environmental Law;
(b) neither the Borrower nor any of its Subsidiaries has
received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the business operated by the
Borrower or any of its Subsidiaries (the "Business"), nor does the
Borrower have knowledge or reason to believe that any such notice
will be received or is being threatened;
(c) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or
in a manner or to a location that could give rise to liability
under, any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of
at, on or under any of the Properties in violation of, or in a
manner that could give rise to liability under, any applicable
Environmental Law;
(d) no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened,
under any Environmental Law to which the Borrower or any Subsidiary
is or will be named as a party with respect to the Properties or the
Business, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business;
(e) there has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Borrower or any
Subsidiary in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with
all applicable Environmental Laws; and
(g) neither the Borrower nor any of its Subsidiaries has
assumed any liability of any other Person under Environmental Laws.
4.18 Accuracy of Information, etc. No statement or
information contained in this Agreement, any other Loan Document, the
Confidential Information Memorandum or any other document, certificate or
statement furnished to the Administrative Agent or the Lenders or any of
them, by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or
certificate was so furnished (or, in the case of the Confidential
Information Memorandum, as of the Closing Date), any untrue statement of
a material fact or omitted to state a material fact necessary to make the
statements contained herein or therein not misleading. The projections
and pro forma financial information contained in the materials referenced
above are based upon good faith estimates and assumptions believed by
management of the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates
to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may
differ from the projected results set forth therein by a material amount.
4.19 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent,
for the benefit of the Lenders, a legal, valid and enforceable security
interest in the Collateral described therein and proceeds thereof. In
the case of the Pledged Stock described in the Guarantee and Collateral
Agreement, when stock certificates representing such Pledged Stock are
delivered to the Administrative Agent, and in the case of the other
Collateral described in the Guarantee and Collateral Agreement, when
financing statements in appropriate form are filed in the offices
specified on Schedule 4.19(a), the Guarantee and Collateral Agreement
shall constitute a fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties in such Collateral and the
proceeds thereof, as security for the Obligations (as defined in the
Guarantee and Collateral Agreement), in each case prior and superior in
right to any other Person other than the holders of the Liens permitted
pursuant to Section 7.3.
(b) Each of the Mortgages is effective to create in favor of
the Administrative Agent, for the benefit of the Lenders, a legal, valid
and enforceable Lien on the Mortgaged Properties described therein and
proceeds thereof, and when the Mortgages are filed in the offices
specified on Schedule 4.19(b), each such Mortgage shall constitute a
legal, valid and enforceable Lien on, and security interest in, all
right, title and interest of the Loan Parties in the Mortgaged Properties
and the proceeds thereof, as security for the Obligations (as defined in
the relevant Mortgage), in each case prior and superior in right to any
other Person other than the holders of the Liens permitted with respect
to such Mortgaged Properties pursuant to Section 7.3.
4.20 Solvency. Each Loan Party is, and after giving effect to
the Newell Acquisition and the Tenex Acquisition and the incurrence of
all Indebtedness and obligations being incurred in connection herewith
and therewith will be and will continue to be, Solvent.
4.21 Senior Indebtedness. The Obligations constitute "Senior
Indebtedness" of the Borrower under and as defined in the Senior
Subordinated Note Indenture. The obligations of each Subsidiary
Guarantor under the Guarantee and Collateral Agreement and of Prestige
Plastics, Inc. under the Guarantee constitute "Guarantor Senior
Indebtedness" of such Subsidiary Guarantor and Prestige Plastics, Inc.,
as the case may be, under and as defined in the Senior Subordinated Note
Indenture.
4.22 Year 2000 Matters. Any reprogramming reasonably foreseen
to be necessary in accordance with customary business practices to permit
the proper functioning (but only to the extent that such proper
functioning would otherwise be impaired by the occurrence of the year
2000) in and following the year 2000 of computer systems and other
equipment containing embedded microchips, in either case owned or
operated by the Borrower or any of its Subsidiaries and the testing of
all such systems and other equipment as so reprogrammed, will be
completed by June 30, 1999 (or September 30, 1999 in the case of Tamor
Corporation). The Borrower will make reasonable inquiry of all Persons
the computer systems of which interface with the Borrower's computer
systems (other than those of any Lender or any immaterial customer or
vendor) with regard to such Person's year 2000 compliance. The Borrower
does not have actual knowledge that any of such Persons will not be year
2000 compliant. The Borrower does not have any actual knowledge that the
reasonably anticipated remaining costs to the Borrower and its
Subsidiaries for such reprogramming and testing and for the other
reasonably foreseeable consequences to them of any improper functioning
of other computer systems and equipment containing embedded microchips
due to the occurrence of the year 2000 could result in a Default or Event
of Default or to have a Material Adverse Effect. Except for any
reprogramming referred to above, the computer systems of the Borrower and
its Subsidiaries are and, with ordinary course upgrading and maintenance,
will continue for the term of this Agreement to be, sufficient for the
conduct of their business as currently conducted. The Borrower does not
make any representations other than as set forth above about any other
Person's year 2000 compliance.
4.23 Regulation H. No Mortgage encumbers improved real
property that is located in an area that has been identified by the
Secretary of Housing and Urban Development as an area having special
flood hazards and in which flood insurance has been made available under
the National Flood Insurance Act of 1968.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial extension of credit requested to be
made by it is subject to the satisfaction, prior to or concurrently with
the making of such extension of credit on the Closing Date, of the
following conditions precedent:
(a) Credit Agreement; Guarantee and Collateral Agreement;
Guarantee. The Administrative Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of
the Borrower, (ii) the Guarantee and Collateral Agreement, executed
and delivered by a duly authorized officer of the Borrower and each
Subsidiary Guarantor and (iii) the Guarantee, executed and delivered
by a duly authorized officer of Prestige Plastics, Inc.
(b) Acquisitions. The Newell Acquisition and the Tenex
Acquisition shall have been consummated for an aggregate purchase
price not exceeding $100,000,000 (including related fees and
expenses) pursuant to the Purchase Agreements and on other terms and
conditions reasonably satisfactory to the Lenders, and no provision
of such purchase agreements shall have been waived, amended,
supplemented or otherwise modified without the consent of the
Lenders (other than any modifications which are not adverse to the
interests of the Lenders).
(c) Pro Forma Balance Sheet; Financial Statements. The
Lenders shall have received (i) the Pro Forma Balance Sheet, (ii)
audited consolidated and unaudited consolidating financial
statements of the Borrower for the 1996 and 1997 fiscal years and
(iii) unaudited interim consolidated financial statements of the
Borrower for each fiscal quarterly period ended subsequent to the
date of the latest applicable financial statements delivered
pursuant to clause (ii) of this paragraph as to which such financial
statements are available, and such financial statements shall not,
in the reasonable judgment of the Lenders, reflect any material
adverse change in the consolidated financial condition of the
Borrower, as reflected in the financial statements or projections
contained in the Confidential Information Memorandum.
(d) Financial Information of Targets. The Lenders shall have
received and be reasonably satisfied with (i) the historical sales
data and cost projections of the Consumer Plastic Storage Product
Lines of Tenex Corporation and (ii) audited financial statements of
Plastics, Inc. for each of its three most recently ended fiscal
years.
(e) Approvals. All governmental and third party approvals
(including landlords' and other consents) necessary or, in the
discretion of the Administrative Agent, advisable in connection with
the ▇▇▇▇▇▇ Acquisition, the continuing operations of the Borrower
and its Subsidiaries and the transactions contemplated hereby shall
have been obtained and be in full force and effect, and all
applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority that would
restrain, prevent or otherwise impose adverse conditions on the
▇▇▇▇▇▇ Acquisition or the financing contemplated hereby.
(f) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of the
jurisdictions where assets to be acquired in the Newell Acquisition
and the Tenex Acquisition are located, and such search shall reveal
no liens on any of such assets except for liens permitted by Section
7.3.
(g) Environmental Audit. To the extent any such audit is
received by the Borrower in connection with the ▇▇▇▇▇▇ Acquisition,
the Administrative Agent shall have received a reasonably
satisfactory environmental audit with respect to the real properties
owned or leased by Plastics, Inc., or if such environmental audits
are not so received by the Borrower, the Borrower shall benefit from
environmental indemnities from Plastics, Inc. and ▇▇▇▇▇▇ Co. which
are satisfactory to the Administrative Agent.
(h) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each
Loan Party, dated the Closing Date, substantially in the form of
Exhibit C, with appropriate insertions and attachments.
(i) Solvency Certificate. The Lenders shall have received a
certificate of the chief financial officer of the Borrower
certifying the solvency of the Borrower and its Subsidiaries after
giving effect to the ▇▇▇▇▇▇ Acquisition, the Loans to be made on the
Closing Date and the other transactions contemplated hereby or
thereby.
(j) Compliance Certificate. The Lenders shall have received a
certificate of the chief financial officer of the Borrower (with
supporting calculations) detailing compliance by the Borrower with
the financial covenants contained in Section 7.1 (in the manner set
forth in Section 7.8(g)) after giving effect to the ▇▇▇▇▇▇
Acquisition, the Loans to be made on the Closing Date and the other
transactions contemplated hereby or thereby, as well as detailing
compliance by the Borrower with the other items described in Section
7.8(g) with respect to the ▇▇▇▇▇▇ Acquisition.
(k) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
counsel to the Borrower and its Subsidiaries, substantially in
the form of Exhibit F; and
(ii) the legal opinion of local counsel in each
jurisdiction where a Mortgaged Property is located and of such
other special and local counsel, in each case, as may be
required by the Administrative Agent.
Each such legal opinion shall cover such other matters incident to
the transactions contemplated by this Agreement as the
Administrative Agent may reasonably require.
(l) Pledged Stock; Stock Powers. The Administrative Agent
shall have received the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral
Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the
pledgor thereof.
(m) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code
financing statement) required by the Security Documents or under law
or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected
Lien on the Collateral described therein, prior and superior in
right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall be in proper form for
filing, registration or recordation.
(n) Mortgages, etc. (i) The Administrative Agent shall have
received a Mortgage with respect to each Mortgaged Property,
executed and delivered by a duly authorized officer of each party
thereto.
(ii) If requested by the Administrative Agent, the
Administrative Agent shall have received, and the title
insurance company issuing the policy referred to in clause
(iii) below (the "Title Insurance Company") shall have
received, maps or plats of an as-built survey of the sites of
the Mortgaged Properties certified to the Administrative Agent
(if the Administrative Agent determines such certification to
it is reasonably practicable) and the Title Insurance Company
in a manner satisfactory to them, dated a date satisfactory to
the Administrative Agent and the Title Insurance Company by an
independent professional licensed land surveyor satisfactory to
the Administrative Agent and the Title Insurance Company, which
maps or plats and the surveys on which they are based shall be
made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and the American
Congress on Surveying and Mapping in 1992, and, without
limiting the generality of the foregoing, there shall be
surveyed and shown on such maps, plats or surveys the
following: (A) the locations on such sites of all the
buildings, structures and other improvements and the
established building setback lines; (B) the lines of streets
abutting the sites and width thereof; (C) all access and other
easements appurtenant to the sites; (D) all roadways, paths,
driveways, easements, encroachments and overhanging projections
and similar encumbrances affecting the site, whether recorded,
apparent from a physical inspection of the sites or otherwise
known to the surveyor; (E) any encroachments on any adjoining
property by the building structures and improvements on the
sites; (F) if the site is described as being on a filed map, a
legend relating the survey to said map; and (G) the flood zone
designations, if any, in which the Mortgaged Properties are
located.
(iii) The Administrative Agent shall have received in
respect of each Mortgaged Property a mortgagee's title
insurance policy (or policies) or marked up unconditional
binder for such insurance. Each such policy shall (A) be in an
amount satisfactory to the Administrative Agent; (B) be issued
at ordinary rates; (C) insure that the Mortgage insured thereby
creates a valid first Lien on such Mortgaged Property free and
clear of all defects and encumbrances, except as disclosed
therein; (D) name the Administrative Agent for the benefit of
the Lenders as the insured thereunder; (E) be in the form of
ALTA Loan Policy - 1970 (Amended 10/17/70 and 10/17/84) (or
equivalent policies); (F) contain such endorsements and
affirmative coverage as the Administrative Agent may reasonably
request and (G) be issued by title companies satisfactory to
the Administrative Agent (including any such title companies
acting as co-insurers or reinsurers, at the option of the
Administrative Agent). The Administrative Agent shall have
received evidence satisfactory to it that all premiums in
respect of each such policy, all charges for mortgage recording
tax, and all related expenses, if any, have been paid.
(iv) If requested by the Administrative Agent, the
Administrative Agent shall have received (A) a policy of flood
insurance that (1) covers any parcel of improved real property
that is encumbered by any Mortgage, (2) is written in an amount
not less than the outstanding principal amount of the
indebtedness secured by such Mortgage that is reasonably
allocable to such real property or the maximum limit of
coverage made available with respect to the particular type of
property under the National Flood Insurance Act of 1968,
whichever is less, and (3) has a term ending not later than the
maturity of the Indebtedness secured by such Mortgage and (B)
confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board.
(v) The Administrative Agent shall have received a copy
of all recorded documents referred to, or listed as exceptions
to title in, the title policy or policies referred to in clause
(iii) above and a copy of all other material documents
affecting the Mortgaged Properties.
(o) Fees. The Lenders and the Administrative Agent shall have
received all fees required to be paid, and all expenses for which
invoices have been presented, on or before the Closing Date.
5.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on
any date (including, without limitation, its initial extension of credit)
is subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant
to the Loan Documents shall be true and correct in all material
respects on and as of such date as if made on and as of such date
except to the extent any such representation or warranty relates
specifically to an earlier date, in which case such representation
or warranty shall be true and correct in all material respects on
and as of such earlier date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to
the extensions of credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the
Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date of such extension of credit that the conditions
contained in this Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or
other amount is owing to any Lender or the Administrative Agent
hereunder, the Borrower shall and shall cause each of its Subsidiaries
to:
6.1 Financial Statements. Furnish to the Administrative Agent
and each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
audited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements of income and of cash flows for such
year, setting forth in each case in comparative form the figures for
the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the
scope of the audit, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent
certified public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of
each fiscal year of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the
end of such quarter and the related unaudited consolidated
statements of income and of cash flows for such quarter and the
portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer as being fairly stated in
all material respects (subject to normal year-end audit
adjustments).
All such financial statements shall be complete and correct in all
material respects and shall be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods
reflected therein and with prior periods (except as approved by such
accountants or officer, as the case may be, and disclosed therein).
6.2 Certificates; Other Information. Furnish to the
Administrative Agent and each Lender (or, in the case of clause (f), to
the relevant Lender):
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no
knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that such Responsible Officer has obtained no knowledge of
any Default or Event of Default during the period covered by such
financial statements except as specified in such certificate
(including, in the case of any such Default or Event of Default, an
explanation of the proposed actions the Borrower intends to take
with respect thereto), (ii) a Compliance Certificate containing all
information necessary for determining compliance by the Borrower and
its Subsidiaries with the provisions of this Agreement referred to
therein as of the last day of the fiscal quarter or fiscal year of
the Borrower, as the case may be, (iii) to the extent not previously
disclosed to the Administrative Agent, a listing of the locations
within the United States as to which UCC financing statements in
favor of the Administrative Agent have not been filed and in which
any Loan Party keeps inventory or equipment with an aggregate value
for all such locations and all such Loan Parties in excess of
$500,000, (iv) in the case of annual financial statements, a report
of all Intellectual Property owned by any Loan Party and (v) in the
case of quarterly financial statements, a report of any material
Intellectual Property acquired by any Loan Party since the date of
the most recent list delivered pursuant to this clause (v) (or, in
the case of the first such list so delivered, since the Closing
Date);
(c) as soon as available, and in any event no later than 45
days after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of the following fiscal year, and the
related consolidated statements of projected cash flow, projected
changes in financial position and projected income and a statement
and explanation of the principal assumptions underlying such
projections), and, as soon as available, significant revisions, if
any, of such budget and projections with respect to such fiscal year
(collectively, the "Projections"), which Projections shall in each
case be accompanied by a certificate of a Responsible Officer
stating that such Projections are based on reasonable estimates,
information and assumptions and that such Responsible Officer has no
reason to believe that such Projections are incorrect or misleading
in any material respect;
(d) no later than 10 Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed
amendment, supplement, waiver or other modification with respect to
the Senior Subordinated Note Indenture (other than any such
amendments or supplements which are administrative or corrective in
nature, in which case final copies of which shall be delivered
within five days after the effectiveness thereof);
(e) within five days after the same are sent, copies of all
financial statements and reports that the Borrower sends to the
holders of any class of its debt securities or public equity
securities and, promptly after the same are filed, copies of all
financial statements and reports that the Borrower may make to, or
file with, the Securities and Exchange Commission or any successor
or analogous Governmental Authority; and
(f) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the
case may be, all its material obligations of whatever nature, except
where the amount or validity thereof is currently being contested in good
faith by appropriate proceedings and reserves in conformity with GAAP
with respect thereto have been provided on the books of the Borrower or
its Subsidiaries, as the case may be.
6.4 Maintenance of Existence; Compliance. (_) (a) (i)
Continue to engage in business of the same general type as now conducted
by it, (ii) preserve, renew and keep in full force and effect its
corporate existence and (iii) take all reasonable action to maintain all
rights, privileges and franchises necessary or desirable in the normal
conduct of its business, except, in each case, as otherwise permitted by
Section 7.4 or in connection with the dissolution of any Subsidiary with
de minimis assets and except, in the case of clause (iii) above, to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and(_) (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to
comply therewith could not, in the aggregate, reasonably be expected to
have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but
including in any event public liability, product liability and business
interruption) as are usually insured against in the same general area by
companies engaged in the same or a similar business.
6.6 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which proper entries in
conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and
(b) permit, upon two Business Days' prior notice to the chief financial
officer or other Responsible Officer of the Borrower (except when a
Default or Event of Default has occurred and is continuing, in which
case, no notice shall be required), representatives of the Administrative
Agent or any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss
the business, operations, properties and financial and other condition of
the Borrower and its Subsidiaries with officers and employees of the
Borrower and its Subsidiaries and with its independent certified public
accountants; provided that all such visits and inspections shall be
coordinated through the Administrative Agent; provided, further, that
such visits and inspections (i) shall be at the expense of the Borrower
(A) upon the occurrence and during the continuance of an Event of Default
and (B) in respect of up to two visits a year by the Administrative Agent
and (ii) shall otherwise be at the expense of the Administrative Agent or
the relevant Lender, as the case may be.
6.7 Notices. Promptly give notice to the Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding that may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, that in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have
a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any
of its Subsidiaries in which the amount involved is $1,000,000 or
more and not believed by the Borrower to be covered by insurance or
in which injunctive or similar relief is sought;
(d) (i) any release or discharge by the Borrower or any
Subsidiary of any Materials of Environmental Concern required to be
reported under Environmental Laws to any Governmental Authority;
(ii) any condition, circumstance, occurrence or event that could
result in a material liability under Environmental Laws or could
result in the imposition of any lien or other restriction on the
title, ownership or transferability of any Property; and (iii) any
proposed action to be taken by the Borrower or any Subsidiary that
could subject the Borrower or any Subsidiary to any additional or
different requirements or liabilities under Environmental Law that
could reasonably be expected to result in a Material Adverse Effect;
(e) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency
of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or the Borrower or any
Commonly Controlled Entity or any Multiemployer Plan with respect to
the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan; and
(f) any development or event that has had or could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a
statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the Borrower or
the relevant Subsidiary proposes to take with respect thereto.
6.8 Environmental Laws. Except as could not in the aggregate
reasonably be expected to result in a Material Adverse Effect:
(a) comply with, and use reasonable efforts to ensure
compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws, and obtain and comply with and
maintain, and use reasonable efforts to ensure that all tenants and
subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws; and
(b) conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required
under Environmental Laws and promptly comply with all lawful orders
and directives of all Governmental Authorities regarding
Environmental Laws.
6.9 Additional Collateral, etc. (a) With respect to any
property acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than (x) any property described in paragraph (b), (c)
or (d) below and (y) any property subject to a Lien expressly permitted
by Section 7.3(g) or 7.3(i)) as to which the Administrative Agent, for
the benefit of the Lenders, does not have a perfected Lien, promptly (i)
execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement or such other documents as the
Administrative Agent deems necessary or reasonably advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a security
interest in such property and (ii) take all actions necessary or
reasonably advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in
such property, subject to the Liens permitted pursuant to Section 7.3,
including without limitation, the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may otherwise be
reasonably requested by the Administrative Agent.
(b) With respect to any fee interest in any real property
having a value (together with improvements thereof) of at least
$1,000,000 acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than any such real property subject to a Lien
expressly permitted by Section 7.3(g) or 7.3(i)), promptly (i) execute
and deliver a first priority Mortgage, subject to the Liens permitted
pursuant to Section 7.3, in favor of the Administrative Agent, for the
benefit of the Lenders, covering such real property, (ii) if requested by
the Administrative Agent, provide the Lenders with (x) title and extended
coverage insurance covering such real property in an amount at least
equal to the purchase price of such real property (or such other amount
as shall be reasonably specified by the Administrative Agent) as well as,
to the extent reasonably practicable in the judgment of the
Administrative Agent, a current ALTA survey thereof, together with a
surveyor's certificate and (y) any consents or estoppels reasonably
deemed necessary or advisable by the Administrative Agent in connection
with such mortgage or deed of trust, each of the foregoing in form and
substance reasonably satisfactory to the Administrative Agent and (iii)
if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date by the
Borrower (which, for the purposes of this paragraph (c), shall include
any existing Subsidiary that ceases to be an Excluded Foreign
Subsidiary), the Borrower or any of its Subsidiaries, promptly (i)
execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in
the Capital Stock of such new Subsidiary that is owned by the Borrower or
any of its Subsidiaries, (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of
the Borrower or such Subsidiary, as the case may be, (iii) cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral
Agreement and (B) to take such actions necessary or reasonably advisable
to grant to the Administrative Agent for the benefit of the Lenders a
perfected first priority security interest, subject to the Liens
permitted pursuant to Section 7.3, in the Collateral described in the
Guarantee and Collateral Agreement with respect to such new Subsidiary,
including, without limitation, the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by
the Administrative Agent, and (iv) if reasonably requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form
and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement as the
Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary
that is owned by the Borrower or any of its Subsidiaries (provided that
in no event shall more than 65% of the total outstanding Capital Stock of
any such new Subsidiary be required to be so pledged or, following any
change in applicable law, such greater or lesser percentage which would
not result in adverse tax consequences), (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the Borrower or such Subsidiary, as the case
may be, and take such other action as may be necessary or, in the opinion
of the Administrative Agent, desirable to perfect the Administrative
Agent's security interest therein, and (iii) if reasonably requested by
the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or
other amount is owing to any Lender or the Administrative Agent
hereunder, the Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Total Leverage Ratio. Permit the
Consolidated Total Leverage Ratio as at the last day of any period of
four consecutive fiscal quarters of the Borrower ending on or about any
date occurring during the periods set forth below to exceed the ratio set
forth below opposite such period:
Consolidated Total
Period Leverage Ratio
June 30, 1998 - June 30, 1999 5.75 to 1.00
September 30, 1999 - June 30, 2000 5.50 to 1.00
September 30, 2000 - June 30, 2001 5.25 to 1.00
September 30, 2001 - June 30, 2002 5.00 to 1.00
September 30, 2002 - June 30, 2003 4.75 to 1.00
September 30, 2003 - September 30, 2004 4.50 to 1.00
(b) Consolidated Senior Leverage Ratio. Permit the
Consolidated Senior Leverage Ratio as at the last day of any period of
four consecutive fiscal quarters of the Borrower ending on or about any
date occurring during the periods set forth below to exceed the ratio set
forth below opposite such period:
Consolidated Senior
Period Leverage Ratio
June 30, 1998 - June 30, 2000 3.00 to 1.00
September 30, 2000 - June 30, 2002 2.75 to 1.00
September 30, 2002 - September 30, 2004 2.50 to 1.00
(c) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower ending on or about any date occurring
during the periods set forth below to be less than the ratio set forth
below opposite such period:
Consolidated Interest
Period Coverage Ratio
June 30, 1998 - June 30, 1999 1.75 to 1.00
September 30, 1999 - June 30, 2001 2.00 to 1.00
September 30, 2001 - June 30, 2002 2.25 to 1.00
September 30, 2002 - September 30, 2004 2.50 to 1.00
7.2 Indebtedness and Preferred Stock. Create, incur, assume
or suffer to exist (in each case, to "Incur") any Indebtedness or issue
any Preferred Stock, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary;
(c) Indebtedness incurred to finance, contemporaneously
therewith, the acquisition of fixed or capital assets and Capital
Lease Obligations in an aggregate principal amount not to exceed
$7,500,000 at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d) and any refinancings, refundings, renewals or
extensions thereof (without increasing, or shortening the maturity
of, the principal amount thereof);
(e) Guarantee Obligations Incurred in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations
of any Wholly Owned Subsidiary Guarantor;
(f) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$125,000,000 and (ii) Guarantee Obligations of any Subsidiary
Guarantor in respect of such Indebtedness, provided that such
Guarantee Obligations are subordinated to the same extent as the
obligations of the Borrower in respect of the Senior Subordinated
Notes;
(g) Indebtedness of the Borrower or any of its Subsidiaries
Incurred to finance the Purchase Price of any Permitted Acquisition
permitted by Section 7.8(g) (including, without limitation any
assumed Indebtedness or any Indebtedness of a Subsidiary acquired in
any such Permitted Acquisition so long as the Borrower complies with
the provisions of Section 6.9(c)), in an aggregate principal amount
(for the Borrower and all Subsidiaries) not to exceed $7,500,000 at
any one time outstanding, provided that such Indebtedness is
Incurred substantially simultaneously with such Permitted
Acquisition;
(h) the Borrower may issue Preferred Stock so long as such
Preferred Stock is not mandatorily redeemable by the Borrower and is
not convertible into debt obligations of the Borrower or any of its
Subsidiaries, in each case, during the term of this Agreement, the
dividends payable with respect thereto would not be in violation of
Section 7.9, and is otherwise on terms and conditions satisfactory
to the Administrative Agent; and
(i) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and
all Subsidiaries) not to exceed $5,000,000 at any one time
outstanding.
7.3 Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property or revenues, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes, assessments and other governmental
charges not yet due or that are being contested in good faith by
appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business that, in the aggregate, are not substantial in amount and
that do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance, social security and other
similar legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in
the aggregate, are not substantial in amount and that do not in any
case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(d), provided
that no such Lien is spread to cover any additional property after
the Closing Date and that the principal amount of Indebtedness
secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(c) (and Liens associated
with any immaterial intangibles related to the assets financed with
such Indebtedness), provided that (i) such Liens shall be created
substantially simultaneously with the acquisition or lease of the
assets financed thereby, (ii) such Liens do not at any time encumber
any property other than the property financed by such Indebtedness
and (iii) the principal amount of Indebtedness secured thereby is
not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any other Subsidiary in the ordinary course
of its business and covering only the assets so leased;
(j) deposits of money securing statutory obligations of the
Borrower or any Subsidiary;
(k) Liens arising by reason of any judgment, decree or order
of any court or other Governmental Authority, if appropriate legal
proceedings which may have been duly initiated for the review of
such judgment, decree or order, are being diligently prosecuted and
shall not have been finally terminated or the period within which
such proceedings may be initiated shall not have expired and the
amount of all such judgments, decrees and orders are in an aggregate
amount not to exceed $1,000,000 at any one time outstanding;
(l) deposits securing, or in lieu of, surety, appeal or
customs bonds in proceedings to which the Borrower or any Subsidiary
is a party;
(m) cash deposits to secure the performance of the Borrower
under any hedging agreements with respect to resin in the ordinary
course of business for legitimate hedging purposes; and
(n) Liens not otherwise permitted by this Section 7.3 so long
as the aggregate outstanding principal amount of the obligations
secured thereby does not exceed (as to the Borrower and all
Subsidiaries) $2,500,000 at any one time.
7.4 Fundamental Changes. Enter into any merger, consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of
its property or business, except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into
any Wholly Owned Subsidiary Guarantor or into any Person which
contemporaneously with such merger or consolidation is to become a
Wholly Owned Subsidiary Guarantor (provided that the Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving
corporation); and
(b) any Subsidiary of the Borrower may Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the
Borrower or any Wholly Owned Subsidiary Guarantor or to the extent
permitted by Section 7.5.
7.5 Disposition of Property. Dispose of any of its property
(including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock
to any Person, except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Wholly Owned Subsidiary Guarantor;
(e) the Dispositions set forth on Schedule 7.5; and
(f) the Disposition of other property having a fair market
value not to exceed $10,000,000 in the aggregate during the term of
this Agreement.
7.6 Restricted Payments. Declare or pay any dividend (other
than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for
a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any Capital Stock of the
Borrower or any Subsidiary, whether now or hereafter outstanding, or make
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Borrower or any
Subsidiary (collectively, "Restricted Payments"); provided, that (i) any
Subsidiary may make Restricted Payments to the Borrower or any Wholly
Owned Subsidiary Guarantor, (ii) the Borrower may repurchase shares of
its common stock or rights, options or units in respect thereof, from its
officers and directors for an aggregate purchase price not to exceed
$1,000,000 in any fiscal year, (iii) so long as no Default or Event of
Default has occurred and is continuing, the Borrower may, at any time
after January 1, 1999, otherwise repurchase shares of its common stock so
long as (A) there are no Revolving Extensions of Credit outstanding at
the time of such repurchase (other than outstanding L/C Obligations which
have not become Reimbursement Obligations) and (B) after giving effect to
such repurchase, Consolidated Net Worth at such time shall be an amount
at least equal to the sum of (x) $52,000,000, (y) the aggregate amount of
any Preferred Stock permitted to be issued pursuant to Section 7.2(h)
which has been issued prior to the date of such repurchase and (z) 25% of
the cumulative amount of any Consolidated Net Income since May 14, 1998
reflected on the financial statements of the Borrower which have been
delivered pursuant to Section 6.1(a) on or prior to the date of such
repurchase and (iv) so long as no Default or Event of Default has
occurred and is continuing, the Borrower may make Restricted Payments up
to $2,000,000 in any fiscal year with respect to Preferred Stock which
has been issued in accordance with Section 7.2(h).
7.7 Capital Expenditures. Make or commit to make (by way of
the acquisition of securities of a Person or otherwise) any Capital
Expenditure, except:
(a) Capital Expenditures of the Borrower and its Subsidiaries
in the ordinary course of business not exceeding in any fiscal year
the amount set forth below opposite such fiscal year:
Fiscal Year Amount
1998 $15,000,000
1999 $28,000,000
2000 $20,000,000
2001 $20,000,000
2002 $20,000,000
2003 $20,000,000
2004 $20,000,000
; provided, that (i) up to $5,000,000 of any such amount referred to
above, if not so expended in the fiscal year for which it is
permitted, may be carried over for expenditure in the next
succeeding fiscal year and (ii) Capital Expenditures made pursuant
to this clause (a) during any fiscal year shall be deemed made,
first, in respect of amounts carried over from the prior fiscal year
pursuant to subclause (i) above and, second, in respect of amounts
permitted for such fiscal year as provided above; and
(b) ▇▇▇▇▇▇ Facility CapEx during fiscal years 1998 and 1999 in
an aggregate amount not to exceed $5,250,000.
7.8 Investments. Make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase
any Capital Stock, bonds, notes, debentures or other securities of, or
any assets constituting all or a material part of a business unit of, or
make any other investment in, any Person (all of the foregoing,
"Investments"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) Investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of the Borrower or any of
its Subsidiaries in the ordinary course of business (including,
without limitation, for travel, entertainment and relocation
expenses) in an aggregate amount for the Borrower and its
Subsidiaries not to exceed $100,000 with respect to any one employee
and $500,000 in the aggregate at any one time outstanding;
(e) Investments by the Borrower or any of its Subsidiaries in
the Borrower or any Person that, prior to such investment, is a
Wholly Owned Subsidiary Guarantor;
(f) (i) Investments by Seymour Housewares Corporation
("Seymour") in or to ▇▇▇▇▇▇▇ ▇.▇. de C.V. (the "Mexican Subsidiary")
in such amounts as are necessary to fund the working capital
requirements of the Mexican Subsidiary in the ordinary course of
business and to maintain level capital expenditure requirements of
the Mexican Subsidiary and (ii) Investments by Seymour in the
Mexican Subsidiary in an aggregate amount not to exceed $3,000,000
to finance the expansion of the manufacturing facility of the
Mexican Subsidiary (including for the purchase of machinery and
equipment in connection with such expansion) (it being understood
that the expenditures in connection with such expansion shall, to
the extent they constitute "Capital Expenditures" pursuant to the
definition thereof, be deemed to be a utilization of the amounts of
Capital Expenditures permitted under Section 7.7(a)); provided, that
Seymour shall not permit cash or Cash Equivalents in excess of such
immediate needs to be accumulated or held by the Mexican Subsidiary;
(g) any Acquisition of any Person or business, either through
the purchase of the assets (including the goodwill) of such Person
or business or the purchase of 100% of the Capital Stock of such
Person, if each of the following conditions is satisfied: (i) the
Borrower would have been in compliance as of the last day (such day
relating to any Acquisition, the "Related Test Date") of the most
recently completed fiscal quarter for which financial statements are
available, on a pro forma basis, with each of the financial
covenants contained in Section 7.1 as if such Acquisition had been
made on the first day of the Reference Period ending on the Related
Test Date for such Acquisition, and if the Purchase Price for such
Acquisition is greater than $10,000,000, the Borrower shall deliver
to the Lenders 10 days prior to the consummation of such Acquisition
a certificate of its chief financial officer, supported by detailed
calculations, demonstrating such pro forma compliance; (ii) no
Default or Event of Default has occurred and is continuing, or would
occur after giving effect to such Acquisition (including, without
limitation, under Section 7.1); (iii) such Acquisition shall be in
compliance with Section 7.14; and (iv) any such Acquisition shall
have been approved by the Board of Directors or such comparable
governing body of the Person or business being acquired (all such
Acquisitions, the "Permitted Acquisitions");
(h) the ▇▇▇▇▇▇ Acquisition and the Tenex Acquisition on the
terms set forth in Section 5.1(b); and
(i) other Investments by the Borrower or any of its
Subsidiaries in an aggregate amount (for the Borrower and all
Subsidiaries) not to exceed $7,500,000 during the term of this
Agreement.
7.9 Optional Payments and Modifications of Debt Instruments,
etc. (a) Make or offer to make any payment, prepayment, repurchase or
redemption of or otherwise defease or segregate funds (any such event or
combination thereof referred to herein as a "Take-Out") with respect to
the Senior Subordinated Notes (other than scheduled interest payments
required to be made in cash); provided, that the Borrower may Take Out
the Senior Subordinated Notes with the proceeds of any issuance of
Capital Stock by the Borrower (to the extent the issuance of such Capital
Stock is permitted under Section 7.2), (b) amend, modify, waive or
otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, any of the terms of the Senior Subordinated
Notes (other than any such amendment, modification, waiver or other
change that (x) (i) would extend the maturity or reduce the amount of any
payment of principal thereof or reduce the rate or extend the date for
payment of interest thereon and (ii) does not involve the payment of a
consent fee or (y) is administrative or corrective in nature and is not
adverse to the interests of the Lenders) or (c) designate any
Indebtedness (other than obligations of the Loan Parties pursuant to the
Loan Documents) as "Designated Senior Indebtedness" for the purposes of
the Senior Subordinated Note Indenture.
7.10 Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Wholly Owned Subsidiary Guarantor) unless such
transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of business of the Borrower or such Subsidiary, as the
case may be, and (c) upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary, as the case may be, than it would obtain
in a comparable arm's length transaction with a Person that is not an
Affiliate; provided, that the Borrower and its Subsidiaries may (i) enter
into transactions with Selfix Europe L.L.C. in the ordinary course of
business and consistent in character with past practice, (ii) make loans
and advances to employees permitted under Section 7.8(d), (iii) pay
directors' fees to members of the Borrower's board of directors who are
not employees of the Borrower, (iv) issue securities in connection with
the Borrower's stock option plan to the extent such plan has been
approved by the board of directors of the Borrower and (v) in the case of
any Subsidiary, make payments to the Borrower pursuant to a tax sharing
agreement.
7.11 Changes in Fiscal Periods. Permit the fiscal year of the
Borrower to end on a day other than the last Saturday in December or
change the Borrower's method of determining fiscal quarters.
7.12 Negative Pledge Clauses. Enter into or suffer to exist
or become effective any agreement that prohibits or limits the ability of
the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its property or revenues, whether
now owned or hereafter acquired, other than (a) this Agreement and the
other Loan Documents and (b) any agreements governing any purchase money
Liens or Capital Lease Obligations otherwise permitted hereby (in which
case, any prohibition or limitation shall only be effective against the
assets financed thereby).
7.13 Clauses Restricting Subsidiary Distributions. Enter into
or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of the Borrower to (a) pay
dividends or make any other distributions in respect of any Capital Stock
of such Subsidiary held by, or pay any Indebtedness owed to, the Borrower
or any other Subsidiary of the Borrower, (b) make loans or advances to
the Borrower or any other Subsidiary of the Borrower or (c) transfer any
of its assets to the Borrower or any other Subsidiary of the Borrower,
except for such encumbrances or restrictions existing under or by reason
of (i) any restrictions existing under the Loan Documents and (ii) any
restrictions with respect to a Subsidiary imposed pursuant to an
agreement that has been entered into in connection with the Disposition
of all or substantially all of the Capital Stock or assets of such
Subsidiary.
7.14 Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the date of this
Agreement or that are reasonably related thereto.
7.15 Amendments to Purchase Agreements. (a) Amend,
supplement or otherwise modify (pursuant to a waiver or otherwise) the
terms and conditions of the indemnities and licenses furnished to the
Borrower or any of its Subsidiaries pursuant to the Purchase Agreements
or any other document delivered by the sellers of the Targets or any of
their affiliates in connection therewith such that after giving effect
thereto such indemnities or licenses shall be materially less favorable
to the interests of the Loan Parties or the Lenders with respect thereto
or (b) otherwise amend, supplement or otherwise modify the terms and
conditions of the Purchase Agreements or any such other documents except
for any such amendment, supplement or modification that (i) becomes
effective after the Closing Date and (ii) does not adversely affect the
interests of the Lenders.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan
or Reimbursement Obligation, or any other amount payable hereunder
or under any other Loan Document, within five days after any such
interest or other amount becomes due in accordance with the terms
hereof; or
(b) any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or that is contained
in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this
Agreement or any such other Loan Document shall prove to have been
inaccurate in any material respect on or as of the date made or
deemed made; or
(c) (i) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of
Section 6.4(a) (with respect to the Borrower only), Section 6.7(a)
or Section 7 of this Agreement or (ii) an "Event of Default" under
and as defined in any Mortgage shall have occurred and be
continuing; or
(d) any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or
any other Loan Document (other than as provided in paragraphs (a)
through (c) of this Section), and such default shall continue
unremedied for a period of 30 days after notice from the
Administrative Agent or the Required Lenders; or
(e) the Borrower or any of its Subsidiaries shall (i) default
in making any payment of any principal of any Indebtedness
(including, without limitation, any Guarantee Obligation, but
excluding the Loans) on the scheduled or original due date with
respect thereto; or (ii) default in making any payment of any
interest on any such Indebtedness beyond the period of grace, if
any, provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating to such Indebtedness, or any other event shall
occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or beneficiary of
such Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the
case of any such Indebtedness constituting a Guarantee Obligation)
to become payable; provided, that a default, event or condition
described in clause (i), (ii) or (iii) of this paragraph (e) shall
not at any time constitute an Event of Default unless, at such time,
one or more defaults, events or conditions of the type described in
clauses (i), (ii) and (iii) of this paragraph (e) shall have
occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate
$1,000,000; or
(f) (i) the Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part
of its assets, or the Borrower or any of its Subsidiaries shall make
a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against the Borrower or any of its Subsidiaries
any case, proceeding or other action of a nature referred to in
clause (i) above that (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets that results in
the entry of an order for any such relief that shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) the Borrower or any of its
Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Borrower or
any of its Subsidiaries shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of
the PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or
in the reasonable opinion of the Required Lenders is likely to,
incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan or (vi) any
other event or condition shall occur or exist with respect to a
Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if
any, could, in the sole judgment of the Required Lenders, reasonably
be expected to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance as to which the
relevant insurance company has acknowledged coverage) of $1,000,000
or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 30 days
from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason,
to be in full force and effect, or any Loan Party or any Affiliate
of any Loan Party shall so assert, or any Lien created by any of the
Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement or Section 2 of the Guarantee shall cease, for
any reason, to be in full force and effect or any Loan Party or any
Affiliate of any Loan Party shall so assert; or
(k) (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) other than the Permitted Investors
shall become, or obtain rights (whether by means or warrants,
options or otherwise) to become, the "beneficial owner" (as defined
in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of more than 25% of the outstanding common stock of the
Borrower; (ii) the board of directors of the Borrower shall cease to
consist of a majority of Continuing Directors; or (iii) a Specified
Change of Control shall occur; or
(l) the Senior Subordinated Notes or the guarantees thereof
shall cease, for any reason, to be validly subordinated to the
Obligations, the obligations of the Subsidiary Guarantors under the
Guarantee and Collateral Agreement or the obligations of Prestige
Plastics, Inc. under the Guarantee, as the case may be, as provided
in the Senior Subordinated Note Indenture, or any Loan Party, any
Affiliate of any Loan Party, the trustee in respect of the Senior
Subordinated Notes or the holders of at least 25% in aggregate
principal amount of the Senior Subordinated Notes shall so assert;
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) above with respect to
the Borrower, automatically the Commitments shall immediately terminate
and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether
or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of
Default, either or both of the following actions may be taken: (i)
unless and to the extent previously cured or waived, with the consent of
the Majority Revolving Facility Lenders, the Administrative Agent may, or
upon the request of the Majority Revolving Facility Lenders, the
Administrative Agent shall, by notice to the Borrower declare the
Revolving Commitments to be terminated forthwith, whereupon the Revolving
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of
the Required Lenders, the Administrative Agent shall, by notice to the
Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether
or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment
for honor shall not have occurred at the time of an acceleration pursuant
to this paragraph, the Borrower shall at such time deposit in a cash
collateral account opened by the Administrative Agent an amount equal to
the aggregate then undrawn and unexpired amount of such Letters of
Credit. Amounts held in such cash collateral account shall be applied by
the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters
of Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay other obligations of the Borrower hereunder and under
the other Loan Documents. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall
have been satisfied and all other obligations of the Borrower hereunder
and under the other Loan Documents shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower (or such other Person as may be lawfully entitled thereto).
Except as expressly provided above in this Section, presentment, demand,
protest and all other notices of any kind are hereby expressly waived by
the Borrower.
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates
and appoints the Administrative Agent as the agent of such Lender under
this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the Administrative Agent, in such capacity, to
take such action on its behalf under the provisions of this Agreement and
the other Loan Documents and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the
terms of this Agreement and the other Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Administrative
Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other
Loan Document or otherwise exist against the Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan
Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable to any Lender for any
action lawfully taken or omitted to be taken by it or such Person under
or in connection with this Agreement or any other Loan Document (except
to the extent that any of the foregoing are found by a final and
nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any Loan
Party or any officer thereof contained in this Agreement or any other
Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or any other Loan Document or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or for any
failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions of,
this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party.
9.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying,
upon any instrument, writing, resolution, notice, consent, certificate,
affidavit, letter, telecopy, telex or teletype message, statement, order
or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and
other experts selected by the Administrative Agent. The Administrative
Agent may deem and treat the payee of any Note as the owner thereof for
all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent.
The Administrative Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan Document unless
it shall first receive such advice or concurrence of the Required Lenders
(or, if so specified by this Agreement, all Lenders) as it deems
appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by
it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders), and such request and any
action taken or failure to act pursuant thereto shall be binding upon all
the Lenders and all future holders of the Loans.
9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Administrative Agent has received
notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice
is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice
thereof to the Lenders. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement,
all Lenders); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
9.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent
nor any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates have made any representations or
warranties to it and that no act by the Administrative Agent hereinafter
taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender.
Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates and made its
own decision to make its Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party that
may come into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not
reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their respective Aggregate
Exposure Percentages in effect on the date on which indemnification is
sought under this Section 9.7 (or, if indemnification is sought after the
date upon which the Commitments shall have terminated and the Loans shall
have been paid in full, ratably in accordance with such Aggregate
Exposure Percentages immediately prior to such date), from and against
any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or
arising out of, the Commitments, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action
taken or omitted by the Administrative Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the Administrative Agent's
gross negligence or willful misconduct. The Administrative Agent shall
have the right to deduct any amount owed to it by any Lender under this
Section from any payment made by it to such Lender hereunder. The
agreements in this Section 9.7 shall survive the payment of the Loans and
all other amounts payable hereunder.
9.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with any Loan
Party as though the Administrative Agent was not the Administrative
Agent. With respect to its Loans made or renewed by it and with respect
to any Letter of Credit issued or participated in by it, the
Administrative Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its
individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders
and the Borrower. If the Administrative Agent shall resign as
Administrative Agent under this Agreement and the other Loan Documents,
then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall (unless an
Event of Default under Section 8(a) or Section 8(f) with respect to the
Borrower shall have occurred and be continuing) be subject to approval by
the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights,
powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon
such appointment and approval, and the former Administrative Agent's
rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall assume and perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint
a successor agent as provided for above. After any retiring
Administrative Agent's resignation as Administrative Agent, the
provisions of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent
under this Agreement and the other Loan Documents.
9.10 Authorization to Release Liens. The Administrative Agent
is hereby irrevocably authorized by each of the Lenders to release any
Lien covering any property of the Borrower or any of its Subsidiaries
that is the subject of a Disposition or to release the guarantee of any
Subsidiary Guarantor which is the subject of a fundamental change
permitted by Section 7.4, in either case, that is permitted by this
Agreement or that has been consented to in accordance with Section 10.1.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders and each Loan Party party to the
relevant Loan Document may, or, with the written consent of the Required
Lenders, the Administrative Agent and each Loan Party party to the
relevant Loan Document may, from time to time, (a) enter into written
amendments, supplements or modifications hereto and to the other Loan
Documents for the purpose of adding any provisions to this Agreement or
the other Loan Documents or changing in any manner the rights of the
Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders or the Administrative
Agent, as the case may be, may specify in such instrument, any of the
requirements of this Agreement or the other Loan Documents or any Default
or Event of Default and its consequences; provided, however, that no such
waiver and no such amendment, supplement or modification shall (i)
forgive or reduce the principal amount or extend the final scheduled date
of maturity of any Loan, extend the scheduled date of any amortization
payment in respect of any Term Loan, reduce the stated rate of any
interest or fee payable hereunder, or increase the amount or extend the
expiration date of any Lender's Revolving Commitment, in each case
without the consent of each Lender directly affected thereby; (ii) amend,
modify or waive any provision of this Section 10.1 or reduce any
percentage specified in the definition of Required Lenders, consent to
the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents, release
all or substantially all of the Collateral or release all or
substantially all of the Subsidiary Guarantors from their obligations
under the Guarantee and Collateral Agreement, in each case without the
written consent of all Lenders; (iii) reduce the percentage specified in
the definition of Majority Facility Lenders with respect to any Facility
without the written consent of all Lenders under such Facility; (iv)
amend, modify or waive any provision of Section 9 without the written
consent of the Administrative Agent; (v) amend, modify or waive any
provision of Section 2.6 or 2.7 without the written consent of the
Swingline Lender; or (v) amend, modify or waive any provision of Section
3 without the written consent of each of the Issuing Lenders. Any such
waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan
Parties, the Lenders, the Administrative Agent and all future holders of
the Loans. In the case of any waiver, the Loan Parties, the Lenders and
the Administrative Agent shall be restored to their former position and
rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing;
but no such waiver shall extend to any subsequent or other Default or
Event of Default, or impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered, or three
Business Days after being deposited in the mail, postage prepaid, or, in
the case of telecopy notice, when received, addressed as follows in the
case of the Borrower and the Administrative Agent, and as set forth in an
administrative questionnaire delivered to the Administrative Agent in the
case of the Lenders, or to such other address as may be hereafter
notified by the respective parties hereto:
The Borrower: Home Products International, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive
Vice President and Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: The Chase Manhattan Bank
The Loan and Agency Services Group
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: The Chase Manhattan Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
in the case of
Letters of Credit,
with a copy to: Chase Manhattan Bank Delaware
Corporate Banking Department
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative
Agent or the Lenders shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or
any Lender, any right, remedy, power or privilege hereunder or under the
other Loan Documents shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the execution and
delivery of this Agreement and the making of the Loans and other
extensions of credit hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a)
to pay or reimburse the Administrative Agent for all its reasonable
out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement
or modification to, this Agreement and the other Loan Documents and any
other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent and filing and
recording fees and expenses, with statements with respect to the
foregoing to be submitted to the Borrower prior to the Closing Date (in
the case of amounts to be paid on the Closing Date) and from time to time
thereafter on a quarterly basis or such other periodic basis as the
Administrative Agent shall deem appropriate, (b) to pay or reimburse each
Lender and the Administrative Agent for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights
under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of
counsel (including the allocated fees and expenses of in-house counsel)
to each Lender and of counsel to the Administrative Agent, (c) to pay,
indemnify, and hold each Lender and the Administrative Agent harmless
from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and
other taxes, if any, that may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under
or in respect of, this Agreement, the other Loan Documents and any such
other documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "Indemnitee")
harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents,
including, without limitation, any of the foregoing relating to the use
of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of
the Borrower or any of its Subsidiaries or any of the Properties (all the
foregoing in this clause (d), collectively, the "Indemnified
Liabilities"), provided, that the Borrower shall have no obligation
hereunder to any Indemnitee (x) with respect to Indemnified Liabilities
to the extent such Indemnified Liabilities resulted from the gross
negligence or willful misconduct of such Indemnitee, (y) with respect to
any proceeding initiated by the Administrative Agent against any Lender
or by any Lender against the Administrative Agent or any other Lender or
(z) to the extent arising in connection with any action by or on behalf
of the Borrower against such Indemnitee where the Borrower is found to be
the prevailing party pursuant to a final and nonappealable decision of a
court of competent jurisdiction. Without limiting the foregoing, and to
the extent permitted by applicable law, the Borrower agrees not to assert
and to cause its Subsidiaries not to assert, and hereby waives and agrees
to cause its Subsidiaries to so waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever
kind or nature, under or related to Environmental Laws, that any of them
might have by statute or otherwise against any Indemnitee. The
agreements in this Section 10.5 shall survive repayment of the Loans and
all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent, all future holders of
the Loans and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "Participant")
participating interests in any Loan owing to such Lender, any Commitment
of such Lender or any other interest of such Lender hereunder and under
the other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under
this Agreement to the other parties to this Agreement shall remain
unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan
for all purposes under this Agreement and the other Loan Documents, and
the Borrower and the Administrative Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no
event shall any Participant under any such participation have any right
to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except to
the extent that such amendment, waiver or consent would reduce the
principal of, or interest on, the Loans or any fees payable hereunder, or
postpone the date of the final maturity of the Loans, in each case to the
extent subject to such participation. The Borrower agrees that if
amounts outstanding under this Agreement and the Loans are due or unpaid,
or shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff
in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement,
provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 10.7(a) as fully as if it were a
Lender hereunder. The Borrower also agrees that each Participant shall
be entitled to the benefits of Sections 2.18, 2.19 and 2.20 with respect
to its participation in the Commitments and the Loans outstanding from
time to time as if it was a Lender; provided that, in the case of Section
2.19, such Participant shall have complied with the requirements of said
Section and provided, further, that no Participant shall be entitled to
receive any greater amount pursuant to any such Section than the
transferor Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law, at any time and from time to time assign to any Lender or
any affiliate thereof or, with the consent of the Borrower and the
Administrative Agent (which, in each case, shall not be unreasonably
withheld or delayed), to an additional bank, financial institution or
other entity (an "Assignee") all or any part of its rights and
obligations under this Agreement pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit E, executed by such
Assignee, such Assignor and any other Person whose consent is required
pursuant to this Section 10.6(c), and delivered to the Administrative
Agent for its acceptance and recording in the Register; provided that no
such assignment to an Assignee (other than any Lender or any affiliate
thereof) shall be in an aggregate principal amount of less than
$5,000,000 (other than in the case of an assignment of all of a Lender's
interests under this Agreement), unless otherwise agreed by the Borrower
and the Administrative Agent. Any such assignment need not be ratable as
among the Facilities. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with a Commitment
and/or Loans as set forth therein, and (y) the Assignor thereunder shall,
to the extent provided in such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor's rights and
obligations under this Agreement, such Assignor shall cease to be a party
hereto). Notwithstanding any provision of this Section 10.6, the consent
of the Borrower shall not be required for any assignment that occurs when
an Event of Default pursuant to Section 8(f) shall have occurred and be
continuing with respect to the Borrower.
(d) The Administrative Agent shall maintain at its address
referred to in Section 10.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the recordation of
the names and addresses of the Lenders and the Commitment of, and the
principal amount of the Loans owing to, each Lender from time to time.
The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, each other Loan Party, the
Administrative Agent and the Lenders shall treat each Person whose name
is recorded in the Register as the owner of the Loans and any Notes
evidencing the Loans recorded therein for all purposes of this Agreement.
Any assignment of any Loan, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made
in the Register (and each Note shall expressly so provide). Any
assignment or transfer of all or part of a Loan evidenced by a Note shall
be registered on the Register only upon surrender for registration of
assignment or transfer of the Note evidencing such Loan, accompanied by a
duly executed Assignment and Acceptance, and thereupon one or more new
Notes shall be issued to the designated Assignee.
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor, an Assignee and any other Person whose consent is
required by Section 10.6(c), together with payment to the Administrative
Agent of a registration and processing fee of $4,000, the Administrative
Agent shall (i) promptly accept such Assignment and Acceptance and (ii)
record the information contained therein in the Register on the effective
date determined pursuant thereto.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 10.6 concerning
assignments of Loans and Notes relate only to absolute assignments and
that such provisions do not prohibit assignments creating security
interests, including, without limitation, any pledge or assignment by a
Lender of any Loan or Note to any Federal Reserve Bank in accordance with
applicable law.
(g) The Borrower agrees to issue Notes to any Lender requiring
Notes to facilitate transactions of the type described in paragraph (f)
above.
10.7 Adjustments; Set-off. (a) Except to the extent that
this Agreement provides for payments to be allocated to the Lenders under
a particular Facility, if any Lender (a "Benefitted Lender") shall at any
time receive any payment of all or part of the Obligations owing to it,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the
nature referred to in Section 8(f), or otherwise), in a greater
proportion than any such payment to or collateral received by any other
Lender, if any, in respect of the Obligations owing to such other Lender,
such Benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of the Obligations owing to each
such other Lender, or shall provide such other Lenders with the benefits
of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral ratably
with each of the Lenders; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall upon the occurrence and during the
continuance of an Event of Default have the right, without prior notice
to the Borrower, any such notice being expressly waived by the Borrower
to the extent permitted by applicable law, upon any amount becoming due
and payable by the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise), to set off and appropriate and apply against
such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held
or owing by such Lender or any Affiliate, branch or agency thereof to or
for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any
such setoff and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such setoff
and application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate
counterparts, and all of said counterparts taken together shall be deemed
to constitute one and the same instrument. Delivery of an executed
signature page of this Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof. A set
of the copies of this Agreement signed by all the parties shall be lodged
with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
10.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, the Administrative
Agent and the Lenders with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents
to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York, the courts of
the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered
or certified mail (or any substantially similar form of mail),
postage prepaid, to the Borrower at its address set forth in Section
10.2 or at such other address of which the Administrative Agent
shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section 10.12 any special, exemplary,
punitive or consequential damages.
10.13 Acknowledgements. The Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan
Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of
or in connection with this Agreement or any of the other Loan
Documents, and the relationship between Administrative Agent and
Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL
BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. Each of the Administrative Agent and
each Lender agrees to keep confidential all non-public information
provided to it by any Loan Party pursuant to this Agreement that is
designated by such Loan Party as confidential; provided that nothing
herein shall prevent the Administrative Agent or any Lender from
disclosing any such information (a) to the Administrative Agent, any
other Lender or any affiliate of any Lender, (b) to any Transferee or
prospective Transferee that agrees to comply with the provisions of this
Section 10.15, (c) to its employees, directors, agents, attorneys,
accountants and other professional advisors or those of any of its
affiliates that agree to comply with this Section 10.15, (d) upon the
request or demand of any Governmental Authority, (e) in response to any
order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, in which case the
Administrative Agent or such Lender shall give notice of such order to
the Borrower, (f) if requested or required to do so in connection with
any litigation or similar proceeding, (g) that has been publicly
disclosed, (h) to the National Association of Insurance Commissioners or
any similar organization or any nationally recognized rating agency that
requires access to information about a Lender's investment portfolio in
connection with ratings issued with respect to such Lender, or (i) in
connection with the exercise of any remedy hereunder or under any other
Loan Document.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
HOME PRODUCTS INTERNATIONAL, INC.
By:
Name:
Title:
THE CHASE MANHATTAN BANK, as Administrative
Agent and as a Lender
By:
Name:
Title:
Annex A
PRICING GRID FOR TERM LOANS REVOLVING LOANS, SWINGLINE LOANS,
AND COMMITMENT FEES
ConsolidatedTotal Applicable Applicable Commitment
Leverage Ratio Margin for Margin for Fee Rate
Eurodollar ABR Loans
Loans
Greater than or equal 2.00% 1.00% .50%
to 4.75 to 1.00
Less than 4.75 to 1.00 1.75% .75% .50%
and greater than or
equal to 3.75 to 1.00
Less than 3.75 to 1.00 1.50% .50% .375%
Changes in the Applicable Margin with respect to Revolving Loans or
Swingline Loans or in the Commitment Fee Rate resulting from changes in
the Consolidated Total Leverage Ratio shall become effective on the date
(the "Adjustment Date") on which financial statements are delivered to
the Lenders pursuant to Section 6.1 (but in any event not later than the
45th day after the end of each of the first three quarterly periods of
each fiscal year or the 90th day after the end of each fiscal year, as
the case may be) and shall remain in effect until the next change to be
effected pursuant to this paragraph. If any financial statements
referred to above are not delivered within the time periods specified
above, then, until such financial statements are delivered, if the
Administrative Agent or the Required Lenders so determine, the
Consolidated Total Leverage Ratio as at the end of the fiscal period that
would have been covered thereby shall for the purposes of this definition
be deemed to be greater than 4.75 to 1.00. In addition, at all times
while an Event of Default shall have occurred and be continuing and the
Administrative Agent or the Required Lenders so determine, the
Consolidated Total Leverage Ratio shall for the purposes of this
definition be deemed to be greater than 4.75 to 1.00. Each determination
of the Consolidated Total Leverage Ratio pursuant to this definition
shall be made with respect to the period of four consecutive fiscal
quarters of the Borrower ending at the end of the period covered by the
relevant financial statements.