1
Exhibit 10.1
CREDIT AGREEMENT
among
STEEL HEDDLE MFG. CO.,
as Borrower
and
THE OTHER CREDIT PARTIES FROM TIME TO TIME PARTIES HERETO,
THE LENDERS IDENTIFIED HEREIN,
and
NATIONSBANK, N.A.,
as Administrative Agent and Documentation Agent
and
DLJ CAPITAL FUNDING, INC.,
as Syndication Agent
DATED AS OF MAY 26, 1998
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TABLE OF CONTENTS
PAGE
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SCHEDULES
Schedule 1.1(a)
EXHIBITS
Exhibit 1.1A
4
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Credit Agreement"), is entered into as of
May 26, 1998 among STEEL HEDDLE MFG. CO., a Pennsylvania corporation (the
"Borrower"), the Guarantors (as defined herein), the Lenders (as defined
herein), NATIONSBANK, N.A., as Agent for the Lenders (in such capacity, the
"Agent"), and DLJ CAPITAL FUNDING, INC., as Syndication Agent for the Lenders
(in such capacity, the "Syndication Agent").
RECITALS
WHEREAS, the Borrower has requested that the Lenders provide a
$50,000,000 credit facility to the Borrower; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"Acquired Companies" means Steel Heddle Mfg. Co., a
Pennsylvania corporation, and its Subsidiaries as of the Closing Date.
"Acquired Indebtedness" of any Person means, without
duplication, (i) Indebtedness of any other Person existing at the time
such other Person is merged with or into or becomes a Subsidiary of
such Person and (ii) Indebtedness assumed in connection with the
acquisition by such Person of any Property or any other Person.
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"Acquisition," by any Person, means the acquisition by such
Person of the Capital Stock or all or substantially all of the
Property of another Person, whether or not involving a merger or
consolidation with such Person.
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date, as provided in Section 7.13.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited
to all directors and officers of such Person), controlled by or under
direct or indirect common control with such Person. A Person shall be
deemed to control a corporation if such Person possesses, directly or
indirectly, the power (i) to vote 10% or more of the securities having
ordinary voting power for the election of directors of such
corporation or (ii) to direct or cause direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Agency Services Address" means NationsBank, N.A.,
NC-001-15-04, Independence Center, 15th Floor, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Agency Services, or such other address as may
be identified by written notice from the Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors or assigns.
"Applicable Percentage" means for the Revolving Loans, Term
Loans, Standby Letter of Credit Fee, Trade Letter of Credit Fee and
Commitment Fees, the appropriate applicable percentages corresponding
to the Total Leverage Ratio in effect as of the most recent
Calculation Date as shown below:
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Applicable Applicable Applicable Applicable Applicable
Percentage Percentage Percentage For Percentage for Percentage For
Total For For Standby Letter Trade Letter Commitment Fees
Pricing Leverage Eurodollar Base Rate of Credit Fee of Credit Fee
Level Ratio Loans Loans
I greater than or 5.00 to 2.25% 1.00% 2.25% 1.125% 0.50%
equal to 1.00
II less than 5.00 to 2.00% .75% 2.00% 1.00% 0.50%
1.00 but
greater than or 4.50 to
equal to 1.00
III less than 4.50 to 1.75% 0.50% 1.75% 0.875% 0.50%
1.00 but
greater than or 4.00 to
equal to 1.00
IV less than 4.00 to 1.50% 0.25% 1.50% 0.75% 0.50%
1.00 but
greater than or 3.50 to
equal to 1.00
V less than 3.50 to 1.25% 0.00% 1.25% 0.625% 0.50%
1.00
The Applicable Percentages shall be determined and adjusted quarterly
on the date (each a "Calculation Date") five Business Days after the
date by which the Borrower is required to provide an officer's
certificate in accordance with the provisions of Section 7.1(c) after
each fiscal quarter of the Consolidated Parties; provided, however
that (i) the initial Applicable Percentages shall be based on Pricing
Level I (as shown above) and shall remain at Pricing Level I until the
Calculation Date for the fiscal quarter of the Consolidated Parties
ending on December 31, 1998, on and after which time the Pricing
Level shall be determined by the Total Leverage Ratio as of the most
recent fiscal quarter end with respect to which the Agent shall have
received the financial statements of the
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Consolidated Parties required to be delivered pursuant to Section
7.1(a) or (b) and the officer's certificate as required to be
delivered pursuant Section 7.1(c), and (ii) if the Borrower fails to
provide such financial statements and officer's certificate as
required by Section 7.1(a) or (b) and Section 7.1(c) on or before the
most recent Calculation Date, the Applicable Percentages from such
Calculation Date shall be based on Pricing Level I until such time as
an appropriate officer's certificate is provided, whereupon the
Pricing Level shall be determined by the then current Total Leverage
Ratio. Except as set forth above, each Applicable Percentage shall be
effective from one Calculation Date until the next Calculation Date.
Any adjustment in the Applicable Percentages shall be applicable to
all existing Loans and Letters of Credit as well as any new Loans made
or Letters of Credit issued.
"Application Period" shall have the meaning assigned to such
term in Section 8.5.
"Asset Disposition" means the disposition of any or all of the
assets (including without limitation the Capital Stock of a
Subsidiary) of any Consolidated Party whether by sale, lease, transfer
or otherwise (including pursuant to any casualty or condemnation
event); provided that the term "Asset Disposition" (a) shall include
any "Asset Sale" as defined in Section 1.01 of the Indenture for the
Senior Subordinated Debt and (b) shall not include (i) the sale,
leasing or licensing of inventory or equipment in the ordinary course
of business, (ii) the sale or disposition of machinery and equipment
no longer used or useful in the conduct of such Person's business,
(iii) the replacement of machinery and equipment or (iv) any Equity
Issuance.
"Asset Disposition Prepayment Event" means, with respect to
any Asset Disposition other than an Excluded Asset Disposition, the
failure of the Borrower to apply (or cause to be applied) the Net Cash
Proceeds of such Asset Disposition to the purchase, acquisition or
construction of Eligible Assets during the Application Period for such
Asset Disposition.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property
or ordering the winding up or liquidation of its affairs; or (ii)
there shall be commenced against such Person an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or
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hereafter in effect, or any case, proceeding or other action for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any
substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or
other action shall remain undismissed, undischarged or unbonded for a
period of sixty (60) consecutive days; or (iii) such Person shall
commence a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or consent to the
entry of an order for relief in an involuntary case under any such
law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property
or make any general assignment for the benefit of creditors; or (iv)
such Person shall be unable to, or shall admit in writing its
inability to, pay its debts generally as they become due.
"Base Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (a) the Federal Funds Rate in effect on such
day plus 1/2 of 1% or (b) the Prime Rate in effect on such day. If
for any reason the Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable after due
inquiry to ascertain the Federal Funds Rate for any reason, including
the inability or failure of the Agent to obtain sufficient quotations
in accordance with the terms hereof, the Base Rate shall be determined
without regard to clause (a) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist.
Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading
hereof, together with any successor and permitted assigns.
"Borrower Intercompany Notes" means (i) the promissory note
dated as of February 21, 1997 of Steel Heddle Mfg. Co., a Pennsylvania
corporation, in favor of Heddle Capital Corp. in the original
principal amount of $55,000,000 and (ii) the promissory note of Steel
Heddle Mfg. Co., a Pennsylvania corporation (as successor in interest
pursuant to the merger of SH Intermediate Corp. with and into Steel
Heddle Mfg. Co.) dated as of February 21, 1997 in favor of Heddle
Capital Corp. in the original principal amount of $40,000,000, as both
may be amended or modified from time to time.
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"Business Day" means any day other than a Saturday, a Sunday,
a legal holiday or a day on which banking institutions are authorized
or required by law or other governmental action to close in Charlotte,
North Carolina or New York, New York; provided that in the case of
Eurodollar Loans, such day is also a day on which dealings between
banks are carried on in U.S. dollar deposits in the London interbank
market.
"Calculation Date" has the meaning set forth in the definition
of Applicable Percentage.
"Capital Lease" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as
lessee which, in accordance with GAAP, is or should be accounted for
as a capital lease on the balance sheet of that Person.
"Capital Lease Obligations" means, with respect to any Person
as of any date, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a
balance sheet of such Person as of such date in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation,
capital stock, (ii) in the case of an association or business entity,
any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (iii) in the case
of a partnership, partnership interests (whether general or limited)
and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time deposits and
certificates of deposit of (i) any Lender, (ii) any domestic
commercial bank of recognized standing having capital and surplus in
excess of $500,000,000 or (iii) any bank whose short-term commercial
paper rating from S&P is at least A-1 or the equivalent thereof or
from ▇▇▇▇▇'▇ is at least P-1 or the equivalent thereof (any such bank
being an "Approved Bank"), in each case with maturities of not more
than 270 days from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the
parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better
by Moody's and maturing within six months of the date of acquisition,
(d) repurchase agreements with a bank or trust company (including any
of the Lenders) or recognized securities dealer having capital and
surplus in excess of $500,000,000 for direct obligations issued by or
fully guaranteed by the United States of America in which any Credit
Party shall have a perfected first priority security interest (subject
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to no other Liens) and having, on the date of purchase thereof, a fair
market value of at least 100% of the amount of the repurchase
obligations and (e) Investments, classified in accordance with GAAP as
current assets, in money market investment programs registered under
the Investment Company Act of 1940, as amended, which are administered
by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of
the character described in the foregoing subdivisions (a) through (d).
"Change of Control" means any of the following events: (a)
the sale, lease, transfer or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions,
of all or substantially all of the assets of the Borrower and its
subsidiaries taken as a whole to any Person other than the Sponsor,
(b) the failure of the Parent to own directly all of the Capital Stock
of the Borrower, (c) prior to the occurrence of a Qualifying IPO, (i)
the failure of the Sponsor to own at least 51% of the Voting Stock of
the Parent or (ii) any Schedule 13D, Form 13F or Schedule 13G under
the Exchange Act, or any amendment to such Schedule or Form, is
received by the Parent which indicates that, or the Parent otherwise
becomes aware that, a "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Exchange Act) other than the Parent
shall have acquired beneficial ownership, directly or indirectly, of,
or shall have acquired by contract or otherwise, or shall have entered
into a contract or arrangement that, upon consummation, will result in
its or their acquisition of, control over, 30% or more of the Voting
Stock of the Parent, (d) after the occurrence of a Qualifying IPO, (i)
any Schedule 13D, Form 13F or Schedule 13G under the Exchange Act, or
any amendment to such Schedule or Form, is received by the Parent
which indicates that, or the Parent otherwise becomes aware that, a
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2)
of the Exchange Act) other than the Parent has become, directly or
indirectly, the "beneficial owner", by way of merger, consolidation or
otherwise, of 35% or more of the Voting Stock of the Company and (ii)
any such "person" or "group" has become, directly or indirectly, the
beneficial owner of a greater percentage of the Voting Stock of the
Parent than is beneficially owned by the Sponsor, (e) during any
period of up to 24 consecutive months, commencing after the Closing
Date, individuals who at the beginning of such 24 month period were
directors of the Parent (together with any new director whose election
by the Parent's Board of Directors or whose nomination for election by
the Parent's shareholders was approved by a vote of at least
two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors of the Parent then in
office or (f) the occurrence of a "Change of Control" under and as
defined in the documents evidencing or governing the Senior
Subordinated Debt. As used herein, "beneficial ownership" shall have
the meaning provided in Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act.
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"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"Collateral" means all collateral referred to in and covered
by the Collateral Documents.
"Collateral Documents" means the Security Agreements, the
Pledge Agreements, the Mortgages and such other documents executed and
delivered in connection with the attachment and perfection of the
Lenders' security interests in the assets of the Credit Parties,
including without limitation, UCC financing statements and patent and
trademark filings.
"Commitment Fees" means the fees payable to the Lenders
pursuant to Section 3.4(a).
"Commitments" means the Revolving Committed Amount and the
Term Loan Committed Amount.
"Consolidated Capital Expenditures" means all expenditures of
the Consolidated Parties which, in accordance with GAAP, would be
classified as capital expenditures.
"Consolidated Cash Taxes" means, with respect to any Person
for any period of determination, the aggregate of all taxes of such
Person, as determined in accordance with GAAP, to the extent the same
are paid in cash during such period.
"Consolidated EBIT" means, for any period of determination
with respect to the Consolidated Parties on a consolidated basis, the
sum of (a) Consolidated Net Income for such period plus (b) an amount
which, in the determination of Consolidated Net Income for such
period, has been deducted for (i) Consolidated Interest Expense, (ii)
total Federal, state, foreign or other income taxes and (iii) expenses
incurred in connection with the Transaction, all as determined in
accordance with GAAP plus (c) as of the end of any fiscal quarter of
the Consolidated Parties occurring on or before April 1, 2000, the
Consolidated EBIT Special Adjustment for such fiscal quarter.
"Consolidated EBIT Special Adjustment" means (i) for the
fiscal quarter ending September 30, 1997, $356,000, (ii) for the
fiscal quarter ending January 3, 1998, $331,000, (iii) for the fiscal
quarter ending March 31, 1998, $137,000 and (iv) for the fiscal
quarter ending June 30, 1998, $68,000, in each case as set forth in
more complete detail on Schedule 1.1(a).
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"Consolidated EBITDA" means, for any period of determination
with respect to the Consolidated Parties on a consolidated basis, the
sum of (a) Consolidated EBIT for such period plus (b) an amount which,
in the determination of Consolidated Net Income for such period, has
been deducted for depreciation and amortization expense plus (c) the
amounts of the annual management and Chairman of the Board fees
expensed during such period in accordance with the terms of Section
8.8 plus (d) retroactive expenses, if any, required to be recognized
by the Securities and Exchange Commission during such period, all as
determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period of
determination with respect to the Consolidated Parties on a
consolidated basis, all net interest expense, including the interest
component under Capital Leases and, to the extent payable pursuant to
Section 8.7, cash interest expense on the Discount Notes, as
determined in accordance with GAAP.
"Consolidated Net Income" means, for any period of
determination the net income (excluding extraordinary income and
expense items) after taxes for such period of the Consolidated Parties
on a consolidated basis, as determined in accordance with GAAP.
"Consolidated Parties" means a collective reference to the
Borrower and its Subsidiaries, and "Consolidated Party" means any one
of them.
"Consolidated Total Assets" means, at any time, all items
which, in accordance with GAAP, would be classified as assets on a
consolidated balance sheet of the Borrower as of such time.
"Credit Documents" means this Credit Agreement, the Notes, any
Joinder Agreement, the Collateral Documents, the LOC Documents, the
Fee Letter and all other related agreements and documents issued or
delivered hereunder or thereunder or pursuant hereto or thereto, and
"Credit Document" means any one of them.
"Credit Parties" means a collective reference to the Borrower,
the Parent and the Guarantors, and "Credit Party" means any one of
them.
"Credit Party Obligations" means, without duplication, (a) all
of the obligations of the Credit Parties to the Lenders (including the
Issuing Lender) and the Agent, whenever arising, under this Credit
Agreement, the Notes, the Collateral Documents or any of the other
Credit Documents to which the Borrower or any other Credit Party is a
party and (b) all Hedging Obligations owing from the Borrower to any
Lender, or any Affiliate of a Lender.
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"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a)
has failed to make a Loan or purchase a Participation Interest
required pursuant to the term of this Credit Agreement within one
Business Day of when due, (b) other than as set forth in (a) above,
has failed to pay to the Agent or any Lender an amount owed by such
Lender pursuant to the terms of this Credit Agreement within one
Business Day of when due, unless such amount is subject to a good
faith dispute or (c) has been deemed insolvent or has become subject
to a bankruptcy or insolvency proceeding or with respect to which (or
with respect to any of assets of which) a receiver, trustee or similar
official has been appointed.
"Discount Notes" shall have the meaning assigned to such term
in Section 5.1(j).
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Domestic Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the
laws of any State of the United States or the District of Columbia.
"Eligible Assets" means another business or any substantial
part of another business or other long-term assets, in each case, in,
or used or useful in, the same or a similar line of business as the
Borrower or any of its Subsidiaries was engaged in on the Closing Date
or any reasonable extensions or expansions thereof. The term
"Eligible Assets" shall not include any item which is not a permitted
application of proceeds of an "Asset Sale" under the documents
evidencing or governing the Senior Subordinated Debt.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; and (iii) any other Person approved by the Agent (such
approval not to be unreasonably withheld or delayed) and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 11.3, the Borrower
(such approval not to be unreasonably withheld or delayed by the
Borrower and such approval to be deemed given by the Borrower if no
objection is received by the assigning Lender and the Agent from the
Borrower within two Business Days after notice of such proposed
assignment has been provided by the assigning Lender to the Borrower);
provided, however, that neither the Borrower nor an Affiliate of the
Borrower shall qualify as an Eligible Assignee.
"Environmental Claim" means any written notice, notice of
violation, written demand, written allegation, action, suit,
injunction, judgment, order, consent decree, penalty, fine, lien,
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proceeding, or written claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, an
actual or alleged violation of, any Environmental Law, (b) in
connection with any Hazardous Material, (c) from any assessment,
abatement, removal, remedial, corrective, or other response action in
connection with an Environmental Law or (d) from any actual or alleged
damage, injury, threat, or harm to occupational health or safety,
natural resources, or the environment.
"Environmental Laws" means any current or future legal
requirement of any Governmental Authority pertaining to (a) the
protection of occupational health or safety, and the environment, (b)
the protection of natural resources and wildlife, (c) the protection
or use of surface water and groundwater, (d) the management,
manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, release, threatened release, abatement,
removal, remediation or handling of, or exposure to, any hazardous or
toxic substance or material or (e) pollution (including any release to
the air, land, surface water, and groundwater) and includes, without
limitation, the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 USC 9601 et seq., Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act of 1976
and Hazardous and Solid Waste Amendment of 1984, 42 USC 6901 et seq.,
Federal Water Pollution Control Act, as amended by the Clean Water Act
of 1977, 33 USC 1251 et seq., Clean Air Act of 1966, as amended, 42
USC 7401 et seq., Toxic Substances Control Act of 1976, 15 USC 2601 et
seq., Hazardous Materials Transportation Act, 49 USC App. 1801 et
seq., Occupational Safety and Health Act of 1970, as amended, 29 USC
651 et seq., Oil Pollution Act of 1990, 33 USC 2701 et seq., Emergency
Planning and Community Right-to-Know Act of 1986, 42 USC 11001 et
seq., National Environmental Policy Act of 1969, 42 USC 4321 et seq.,
Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq.,
any analogous implementing or successor law, and any amendment, rule,
regulation, order, or directive issued thereunder.
"Equity Interest" means Capital Stock and all warrants,
options or rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital
Stock), whether outstanding prior to, on or after the Closing Date.
"Equity Issuance" means any issuance of (a) shares of Capital
Stock, (b) any shares of Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of Capital Stock pursuant to the
conversion of any debt securities to equity by (i) any Consolidated
Party to any Person other than the Sponsor, any Affiliate of the
Sponsor or the Parent or (ii) to the extent that the proceeds thereof
are ultimately contributed to or otherwise applied for the benefit of
any Consolidated Party, the Parent to any Person other than the
Sponsor, any
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Affiliate of the Sponsor or any managerial employee of a Consolidated
Party. The term "Equity Issuance" shall not include any Asset
Disposition.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common
control with any Consolidated Party within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes any
Consolidated Party and which is treated as a single employer under
Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by any Consolidated Party from a Multiple Employer Plan
during a plan year in which it was a substantial employer (as such
term is defined in Section 4001(a)(2) of ERISA), or the termination of
a Multiple Employer Plan; (iii) the distribution of a notice of intent
to terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under
Section 4042 of ERISA; (v) any event or condition which could
reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (vi) the complete or partial withdrawal of any
Consolidated Party from a Multiemployer Plan; (vii) the conditions for
imposition of a lien under Section 302(f) of ERISA exist with respect
to any Plan; or (vii) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section
307 of ERISA.
"Eurodollar Loan" means a Loan bearing interest based at a
rate determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = London Interbank Offered Rate
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1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as such regulation may be amended
from
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time to time or any successor regulation, as the maximum reserve
requirement (including, without limitation, any basic, supplemental,
emergency, special, or marginal reserves) applicable with respect to
Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is
determined), whether or not Lender has any Eurocurrency liabilities
subject to such reserve requirement at that time. Eurodollar Loans
shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available
from time to time to a Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" has the meaning specified in Section 9.1.
"Excess Cash Flow" means, with respect to any twelve-month
period of the Consolidated Parties on a consolidated basis, an amount
equal to (a) Consolidated EBITDA for such period minus (b)
Consolidated Capital Expenditures for such period minus (c)
Consolidated Interest Expense for such period minus (d) Federal, state
and other income taxes actually paid by the Consolidated Parties on a
consolidated basis during such period minus (e) Scheduled Funded
Indebtedness Payments made during such period minus (f) prepayments
applied during such period to the permanent reduction of Funded
Indebtedness of any Consolidated Party; provided that in the case of
any revolving Funded Indebtedness, such prepayment shall
correspondingly permanently reduce commitments with respect thereto
minus (g) without duplication of any reduction pursuant to clause (f)
above, the amount of any proceeds received by any of the Consolidated
Parties from any Asset Disposition or any casualty or condemnation
event to the extent any such proceeds are included in Consolidated
EBITDA minus (h) Consolidated EBIT Special Adjustments to the extent
actually paid during such period minus (i) the amounts of the annual
management and Chairman of the Board fees expensed by the Consolidated
Parties during such period in accordance with the terms of Section 8.8
minus (j) to the extent not otherwise deducted in the calculation of
Consolidated EBITDA for such period, Restricted Payments made by any
Consolidated Party to the Parent pursuant to clause (v) or (vi) of
Section 8.7.
"Exchange Act of 1934" means the Securities Exchange Act of
1934.
"Excluded Asset Disposition" means (a) any Asset Disposition
by a Consolidated Party to any Credit Party other than the Parent, (b)
any casualty or condemnation event with respect to which the net
proceeds received by the Parent or the Consolidated Parties are less
than $250,000 and (c) any Asset Disposition by a Consolidated Party
which is not a Credit Party
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to any other Consolidated Party which is not a Credit Party, in each
case so long as, after giving effect to such Asset Disposition, no
Default or Event of Default exists.
"Executive Officer" of any Person means any of the chief
executive officer, chief operating officer, president, executive vice
president, chief financial officer or treasurer of such Person.
"Exempt Affiliate Transactions" means (a) transactions between
or among the Consolidated Parties, (b) advances to officers of any
Consolidated Party in the ordinary course of business to provide for
the payment of reasonable expenses incurred by such persons in the
performance of their responsibilities to the relevant Consolidated
Party or in connection with any relocation, (c) fees and compensation
paid to and indemnity provided on behalf of directors, officers or
employees of any Consolidated Party in the ordinary course of
business, (d) any employment agreement that is in effect on the
Closing Date and any such agreement entered into by any Consolidated
Party after the Closing Date in the ordinary course of business of
such Consolidated Party and (e) any Restricted Payment that is not
prohibited by Section 8.7.
"Existing Letters of Credit" means the letters of credit
described by date of issuance, letter of credit number, undrawn
amount, name of beneficiary and date of expiry on Schedule 1.1(d).
"Extension of Credit" means, as to any Lender, the making of a
Loan or the purchase of a Participation Interest by such Lender.
"Federal Funds Rate" means, for any day, the rate of interest
per annum (rounded upwards, if necessary, to the nearest whole
multiple of 1/100 of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (A) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Business Day and (B) if no
such rate is so published on such next preceding Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to
the Agent on such day on such transactions as determined by the Agent.
"Fee Letter" means that certain letter agreement, dated as of
the Closing Date, between the Agent and the Borrower, as amended,
modified, supplemented or replaced from time to time.
"Foreign Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is not a Domestic Subsidiary of such
Person.
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"Funded Indebtedness" means, without duplication, the sum of
(a) all outstanding Indebtedness of the Consolidated Parties other
than Indebtedness of the types referred to in clause (e), (f), (i),
(k), (l) and (m) of the definition of "Indebtedness" set forth in
Section 1.1, (b) all Guaranty Obligations of the Consolidated Parties
with respect to Funded Indebtedness of another Person, (c) all Funded
Indebtedness of any Person secured by a Lien on any property of a
Consolidated Party whether or not such Funded Indebtedness has been
assumed by a Consolidated Party and (d) all Funded Indebtedness of any
partnership or unincorporated joint venture to the extent a
Consolidated Party is legally obligated or has a reasonable
expectation of being liable with respect thereto, net of any assets of
such partnership or joint venture.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to Section
1.3.
"Governmental Authority" means any Federal, state, local,
provincial or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Guarantor" means each of those Persons identified as a
"Guarantor" on the signature pages hereto, and each Additional Credit
Party which may hereafter execute a Joinder Agreement, together with
their successors and permitted assigns.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness,
leases, dividends or other obligations of any other Person in any
manner, whether direct or indirect, and including without limitation
any obligation, whether or not contingent, (a) to purchase any such
Indebtedness or other obligation or any property constituting security
therefor, (b) to advance or provide funds or other support for the
payment or purchase of such indebtedness or obligation or to maintain
working capital, solvency or other balance sheet condition of such
other Person (including, without limitation, maintenance agreements,
comfort letters, take or pay arrangements, put agreements or similar
agreements or arrangements) for the benefit of the holder of
Indebtedness of such other Person, (c) to lease or purchase property,
securities or services primarily for the purpose of assuring the owner
of such Indebtedness or obligation, or (d) to otherwise assure or hold
harmless the owner of such Indebtedness or obligation against loss in
respect thereof. The amount of any Guaranty Obligation hereunder
shall (subject to any limitations set forth therein) be deemed to be
an amount equal to the outstanding principal amount (or maximum
principal amount, if larger) of the Indebtedness in respect of which
such Guaranty Obligation is made.
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"Hazardous Materials" means any substance, material or waste
defined as toxic or hazardous (or words of similar meaning) or
regulated because of its harmful or deleterious properties in or under
any Environmental Laws.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements and
other similar financial agreements or arrangements entered into such
Person with any Lender, or any Affiliate of a Lender, in the ordinary
course of such Person's business to protect such Person against, or
manage the exposure of such Person to, fluctuations in interest rates,
and not for speculative purposes.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c)
all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person to
the extent of the value of such property (other than customary
reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations,
other than intercompany items, of such Person issued or assumed as the
deferred purchase price of property or services purchased by such
Person (other than trade debt incurred in the ordinary course of
business and due within six months of the incurrence thereof) which
would appear as liabilities on a balance sheet of such Person, (e) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production
from, property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (f) all Guaranty
Obligations of such Person, (g) the amount of all Capital Lease
Obligations of such Person, (h) the principal portion of all
obligations of such Person under Synthetic Leases, (i) all Hedging
Obligations of such Person, (j) the maximum amount of all performance
and standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed),
(k) all preferred Capital Stock issued by such Person which by the
terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments, redemption or
other acceleration, (l) the aggregate amount of uncollected accounts
receivable of such Person subject at such time to a sale of
receivables (or similar transaction) regardless of whether such
transaction is effected without recourse to such Person or in a manner
that would not be reflected on the balance sheet of such Person in
accordance with GAAP and (m) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is legally obligated
or has a reasonable expectation of being liable with respect thereto.
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"Interest Coverage Ratio" means, with respect to the
Consolidated Parties on a consolidated basis, the ratio of (a)
Consolidated EBITDA to (b) Consolidated Interest Expense.
"Interest Payment Date" means (a) as to Base Rate Loans, the
last Business Day of each fiscal quarter of the Borrower and on the
Maturity Date and (b) as to Eurodollar Loans, on the last day of each
applicable Interest Period and on the Maturity Date and in addition
where the applicable Interest Period for a Eurodollar Loan is greater
than three months, then also on the date three months from the
beginning of the Interest Period and each three months thereafter.
"Interest Period" means, as to Eurodollar Loans, a period of
one, two, three or six months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(b) no Interest Period shall extend beyond the Maturity Date, (c) with
regard to the Term Loans, no Interest Period shall extend beyond any
Principal Amortization Payment Date unless the portion of Term Loans
comprised of Base Rate Loans together with the portion of Term Loans
comprised of Eurodollar Loans with Interest Periods expiring prior to
the date such Principal Amortization Payment is due, is at least equal
to the amount of such Principal Amortization Payment due on such date
and (d) where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month.
"Investment" in any Person means (a) the acquisition (whether
for cash, property, services, assumption of Indebtedness, securities
or otherwise) of assets, shares of Capital Stock, bonds, notes,
debentures, partnership, joint ventures or other ownership interests
or other securities of such other Person or (b) any deposit with, or
advance, loan or other extension of credit to, such Person (other than
deposits made in connection with the purchase of equipment or other
assets in the ordinary course of business) or (c) any other capital
contribution to or investment in such Person, including, without
limitation, any Guaranty Obligation (including any support for a
Letter of Credit issued on behalf of such Person) incurred for the
benefit of such Person.
"Issuing Lender" means NationsBank, N.A.
"Issuing Lender Fees" has the meaning set forth in Section
3.4(b)(iii).
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"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit 7.13.
"Lender" means any of the Persons identified as a "Lender" on
the signature pages hereto, and any Person which may become a Lender
by way of assignment in accordance with the terms hereof, together
with their successors and permitted assigns.
"Letter of Credit" means (i) a Letter of Credit issued for the
account of the Borrower or one of its Subsidiaries by the Issuing
Lender pursuant to Section 2.2 and (ii) any Existing Letter of Credit,
as such Letter of Credit or Existing Letter of Credit may be amended,
modified, extended, renewed or replaced.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory
or otherwise), preference, priority or charge of any kind, including,
without limitation, any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any financing or
similar statement or notice filed under the Uniform Commercial Code as
adopted and in effect in the relevant jurisdiction or other similar
recording or notice statute, and any lease in the nature thereof.
"Loan" or "Loans" means the Revolving Loans and/or the Term
Loans (or a portion of any Revolving Loan or Term Loan bearing
interest at the Adjusted Base Rate or the Adjusted Eurodollar Rate),
individually or collectively, as appropriate.
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (a) the rights and obligations of the parties concerned
or at risk or (b) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (a) the
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding,
assuming compliance with all requirements for drawings referred to in
such Letters of Credit plus (b) the aggregate amount of all drawings
under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.
"LOC Participants" means all Lenders whose Revolving Loan
Commitment Percentage is greater than zero.
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"London Interbank Offered Rate" means, for the Interest Period
for each Eurodollar Loan comprising part of the same borrowing
(including conversions, extensions and renewals), a per annum interest
rate (rounded upwards, if necessary, to the nearest whole multiple of
1/100 of 1%) equal to the rate of interest, determined by the Agent on
the basis of the offered rates for deposits in dollars for a period of
time corresponding to such Interest Period (and commencing on the
first day of such Interest Period), appearing on Telerate Page 3750
(or, if, for any reason, Telerate Page 3750 is not available, the
Reuters Screen LIBO Page) as of approximately 11:00 A.M. (London time)
two (2) Business Days before the first day of such Interest Period.
As used herein, "Telerate Page 3750" means the display designated as
page 3750 by Dow ▇▇▇▇▇ Telerate, Inc. (or such other page as may
replace such page on that service for the purpose of displaying the
British Bankers Association London interbank offered rates) and
"Reuters Screen LIBO Page" means the display designated as page "LIBO"
on the Reuters Monitor Money Rates Service (or such other page as may
replace the LIBO page on that service for the purpose of displaying
London interbank offered rates of major banks).
"Mandatory Borrowing" has the meaning set forth in Section
2.2(e).
"Material Adverse Effect" means a material adverse effect on
(a) the operations, financial condition, business or prospects of any
Consolidated Party, (b) the ability of a Credit Party to perform its
respective obligations under this Credit Agreement or any of the other
Credit Documents, or (c) the validity or enforceability of this Credit
Agreement, any of the other Credit Documents, or the rights and
remedies of the Lenders hereunder or thereunder taken as a whole.
"Maturity Date" means April 3, 2004.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Mortgage Policies" has the meaning set forth in Section
5.1(d).
"Mortgage" and "Mortgages" have the meanings set forth in
Section 5.1(d).
"Mortgaged Properties" has the meaning set forth in Section
5.1(d).
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
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"Multiple Employer Plan" means a Plan which any Consolidated
Party and at least one employer other than the Consolidated Parties
are contributing sponsors.
"Net Cash Proceeds" means the aggregate cash proceeds received
by any Consolidated Party in respect of any Asset Disposition or
Equity Issuance, net of (a) direct costs (including, without
limitation, legal, accounting and investment banking fees, and sales
commissions), (b) taxes paid or payable as a result thereof and (c)
any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP; it being understood
that "Net Cash Proceeds" shall include, without limitation, any cash
received upon the sale or other disposition of any non-cash
consideration received by a Consolidated Party in any Asset
Disposition or Equity Issuance. In addition, the "Net Cash Proceeds"
of any Asset Disposition shall include any other amounts defined as
"Net Cash Proceeds" of such transaction under Section 1.01 of the
Indenture for the Senior Subordinated Debt.
"Non-Excluded Taxes" has the meaning set forth in Section
3.14.
"Note" or "Notes" means the Revolving Loan Notes and/or the
Term Loan Notes, individually or collectively, as appropriate.
"Notice of Borrowing" means a request by the Borrower for a
Revolving Loan, in the form of Exhibit 2.1.
"Notice of Continuation/Conversion" means a request by the
Borrower to continue an existing Eurodollar Loan to a new Interest
Period or to convert a Eurodollar Loan to a Base Rate Loan or a Base
Rate Loan to a Eurodollar Loan, in the form of Exhibit 2.4.
"Offering Memorandum" means that certain Preliminary Offering
Memorandum dated May __, 1998 describing the Senior Subordinated Debt.
"Parent" means Steel Heddle Group, Inc., a Delaware
corporation, together with any successor and permitted assigns.
"Participation Interest" means a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in
Section 2.2 or in any Loans as provided in Section 3.9.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereto.
"Permitted Acquisition" means an Acquisition by the Borrower
or any Subsidiary of the Borrower for not more than the fair market
value of the Capital Stock or Property
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acquired, provided that (i) the Capital Stock or Property acquired in
such Acquisition relates to a line of business similar to the business
of any Consolidated Party engaged in on the Closing Date, (ii) the
Agent shall have received all items in respect of the Capital Stock or
Property acquired in such Acquisition (and/or the seller thereof)
required to be delivered by the terms of Section 7.9 and/or Section
7.13, (iii) in the case of an Acquisition of the Capital Stock of
another Person, the board of directors (or other comparable governing
body) of such other Person shall have duly approved such Acquisition,
(iv) the Borrower shall have delivered to the Agent a certificate
demonstrating that, upon giving pro forma effect to such Acquisition
(assuming, for purposes hereof, that such Acquisition was consummated
as of the first day of the four fiscal-quarter period ending as of
such fiscal quarter end), no violation of Section 7.12 would have
occurred as of the most recent fiscal quarter end preceding the date
of such Acquisition with respect to which the Agent has received the
financial statements and officer's certificate as required by Section
7.1(a) or (b) and Section 7.1(c), (v) the representations and
warranties made by the Credit Parties in any Credit Document shall be
true and correct in all material respects at and as if made as of the
date of such Acquisition (after giving effect thereto) except to the
extent such representations and warranties expressly relate to an
earlier date, (vi) after giving effect to such Acquisition, the
Revolving Committed Amount shall be at least $5,000,000 greater than
the sum of the Revolving Loans outstanding plus LOC Obligations
outstanding and (vii) the aggregate consideration (including cash
consideration and non-cash consideration (including Capital Stock of
the Parent) and any assumption of liabilities (other than current
working capital liabilities not constituting Indebtedness)) for all
such Acquisitions occurring after the Closing Date shall not exceed
$10,000,000.
"Permitted Investments" means Investments which are (a) cash
or Cash Equivalents, (b) accounts receivable created, acquired or made
in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms or otherwise in the prudent
judgment of a Consolidated Party, (c) inventory, raw materials and
general intangibles (to the extent such general intangible is not a
capital expenditure under GAAP) acquired in the ordinary course of
business, (d) Investments existing as of the Closing Date and set
forth in Schedule 1.1(b), (e) additional Investments in any Credit
Party, (f) subject to the terms of Section 7.9, additional Investments
in Subsidiaries of the Borrower which are not Credit Parties, not to
exceed $750,000 in the aggregate at any one time outstanding, (g)
Guaranty Obligations permitted by Section 8.1, (h) loans and advances
to directors, officers, employees, agents, customers or suppliers in
the ordinary course of business for reasonable business expenses, not
to exceed $500,000 in the aggregate at any one time outstanding, (i)
loans by the Borrower to any of its employees to finance the
acquisition of Capital Stock in the Parent, not to exceed $750,000 in
the aggregate at any one time outstanding, (j) Investments in dealers
and customers received in connection with any bankruptcy or
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reorganization of such dealer or customer, (k) Permitted Acquisitions
and (l) Investments not otherwise permitted by the other clauses of
this definition not to exceed $250,000 in the aggregate at any one
time outstanding.
"Permitted Liens" means (a) Liens in favor of the Agent on
behalf of the Lenders, (b) Liens for taxes not yet due or Liens for
taxes being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with GAAP have been
established (and as to which the property subject to any such Lien is
not yet subject to foreclosure, sale or loss on account thereof), (c)
Liens in respect of property imposed by law arising in the ordinary
course of business such as materialmen's, mechanics', warehousemen's,
carrier's, landlords' and other nonconsensual statutory Liens which
are not yet due and payable, which have been in existence less than 90
days or which are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the property subject to
any such Lien is not yet subject to foreclosure, sale or loss on
account thereof), (d) pledges or deposits made in the ordinary course
of business to secure payment of worker's compensation insurance,
unemployment insurance, pensions or social security programs, (e)
Liens arising from good faith deposits in connection with or to secure
performance of tenders, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
incurred in the ordinary course of business (other than obligations in
respect of the payment of borrowed money), (f) Liens arising from good
faith deposits in connection with or to secure performance of
statutory obligations and surety and appeal bonds, (g) easements,
rights-of-way, restrictions (including zoning restrictions), minor
defects or irregularities in title and other similar charges or
encumbrances not, in any material respect, impairing the use of the
encumbered property for its intended purposes, (h) judgment Liens that
would not constitute an Event of Default, (i) Liens in connection with
Indebtedness allowed under Section 8.1(d) (including without
limitation Sale and Leaseback Transactions permitted thereunder and
under Section 8.13), (j) Liens arising by virtue of any statutory or
common law provision relating to banker's liens, rights of setoff or
similar rights as to deposit accounts or other funds maintained with a
creditor depository institution, (k) Permitted Encumbrances (as
defined in any Mortgage or Mortgage Policy), (l) any interest of a
lessor under, and Liens arising from UCC financing statements relating
to, leases not prohibited by this Credit Agreement, (m) Liens in favor
of customs and revenue authorities arising as a matter of law to
secure payment of customs duties in connection with the importation of
goods, (n) Liens of a collection bank arising under Section 4-210 of
the Uniform Commercial Code on items in the course of collection and
(o) Liens on assets of Subsidiaries of the Borrower in connection with
Indebtedness allowed under Section 8.1(j), provided that such Liens
are only on assets acquired with such Indebtedness and that such Liens
were not created in contemplation of or in connection with the
acquisition of such assets.
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"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated), or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Consolidated Party is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer"
within the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the Pledge Agreement in the form of
Exhibit 1.1A executed and delivered by the Credit Parties in favor of
the Agent, for the benefit of the Lenders, to secure the Credit Party
Obligations, as the same may be amended, modified, extended, renewed
or replaced from time to time.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by the Agent as its prime rate in effect
at its principal office in Charlotte, North Carolina, with each change
in the Prime Rate being effective on the date such change is publicly
announced as effective (it being understood and agreed that the Prime
Rate is a reference rate used by the Agent in determining interest
rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit by the Agent to any
debtor).
"Principal Amortization Payment" means a principal payment on
the Term Loans as set forth in Section 2.3(d).
"Principal Amortization Payment Date" means the date a
Principal Amortization Payment is due.
"Purchase Agreement" means the Stock Purchase Agreement by and
among SH Holdings Corp. and the other Persons identified on Schedule 1
thereto, as sellers, and the Parent, as buyer, dated as of May 1,
1998, as it may be amended on or prior to the Closing Date.
"Qualifying IPO" means an underwritten primary public offering
(other than a public offering pursuant to a registration statement on
Form S-8) of the common Capital Stock of the Parent (or, subject to
the definition of the term "Change of Control" set forth in Section
1.1, of the common Capital Stock the Borrower) (i) pursuant to an
effective registration statement filed with the Securities and
Exchange Commission in accordance with the Securities Act of 1933
(whether alone or in connection with a secondary public offering) and
(ii) resulting in gross proceeds to the Parent (or the Borrower, as
applicable) of at least $15,000,000.
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"Real Properties" means each of facilities and properties
owned, leased or operated by any Credit Party.
"Regulation T, U, or X" means Regulation T, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Reportable Event" means a "reportable event" as defined in
Section 4043(c) of ERISA, other than those events as to which the
notice requirements or penalties for failure to provide notice have
been waived by regulation or administrative action of the PBGC.
"Required Lenders" means Lenders whose aggregate Credit
Exposure (as hereinafter defined) constitutes at least 51% of the
Credit Exposure of all Lenders at such time; provided, however, that
if any Lender shall be a Defaulting Lender at such time then there
shall be excluded from the determination of Required Lenders the
aggregate principal amount of Credit Exposure of such Lender at such
time. For purposes of the preceding sentence, the term "Credit
Exposure" as applied to each Lender shall mean (a) at any time prior
to the termination of the Commitments, the sum of (i) the Revolving
Commitment Percentage of such Lender multiplied by the Revolving
Committed Amount, plus (ii) the Term Loan Commitment Percentage of
such Lender multiplied by the aggregate principal amount of Term Loans
outstanding at such time and (b) at any time after the termination of
any of the Commitments pursuant to Section 9.2, the sum of (i) the
principal balance of the outstanding Loans of such Lender plus (ii)
such Lender's Participation Interests in the face amount of the
outstanding Letters of Credit.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation or final, non-appealable determination of an arbitrator or
a court or other Governmental Authority, in each case applicable to or
binding upon such Person or to which any of its material property is
subject.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any
class of Capital Stock of any Consolidated Party, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of Capital Stock of any Consolidated Party,
now or hereafter outstanding, (iii) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding, (iv) any payment or
prepayment of principal of, premium, if any, or interest on,
redemption,
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purchase, retirement, defeasance, sinking fund or similar payment with
respect to, the Senior Subordinated Debt and (v) any loan or advance
to the Parent.
"Revolving Committed Amount" means TWENTY MILLION DOLLARS
($20,000,000) or such lesser amount as the Revolving Committed Amount
may be reduced pursuant to Section 2.1(d) or Section 3.3(b)(v).
"Revolving Loan Commitment Percentage" means, for each Lender,
the percentage identified as its Revolving Loan Commitment Percentage
on Schedule 1.1(c), as such percentage may be modified in connection
with any assignment made in accordance with the provisions of Section
11.3.
"Revolving Loans" means the Revolving Loans made to the
Borrower pursuant to Section 2.1.
"Revolving Note" or "Revolving Notes" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1, individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to
time and as evidenced in the form of Exhibit 2.6(a).
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of
such division in the business of rating securities.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to any Consolidated Party of any property,
whether owned by such Consolidated Party as of the Closing Date or
later acquired, which has been or is to be sold or transferred by such
Consolidated Party to such Person or to any other Person from whom
funds have been or are to be advanced by such Person on the security
of such property.
"Scheduled Funded Indebtedness Payments" means, as of the end
of each fiscal quarter of the Consolidated Parties, for the
Consolidated Parties on a consolidated basis, the sum of all scheduled
payments of principal on Funded Indebtedness for the applicable period
ending on such date (including the principal component of payments due
on Capital Leases during the applicable period ending on such date);
it being understood that Scheduled Funded Indebtedness Payments shall
not include voluntary prepayments or the mandatory prepayments
required pursuant to Section 3.3.
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"Security Agreement" means the Security Agreement in the form
of Exhibit 1.1A executed and delivered by the Borrower and the
Guarantors in favor of the Agent, for the benefit of the Lenders, to
secure the Credit Party Obligations, as the same may be amended,
modified, extended, renewed, restated or replaced from time to time.
"Senior Funded Indebtedness" means Funded Indebtedness of the
Consolidated Parties which is not Subordinated Indebtedness determined
on a consolidated basis in accordance with GAAP applied on consistent
basis.
"Senior Leverage Ratio" means, with respect to the
Consolidated Parties on a consolidated basis for the four fiscal
quarter period ending on the last day of any fiscal quarter, the ratio
of (a) Senior Funded Indebtedness of the Consolidated Parties on a
consolidated basis on the last day of such period to (b) Consolidated
EBITDA for such period.
"Senior Subordinated Debt" shall have the meaning assigned to
such term in Section 5.1(l).
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"Solvent" means, with respect to any Person as of a particular
date, that on such date (a) such Person is able to pay its debts and
other liabilities, contingent obligations and other commitments as
they mature in the normal course of business, (b) such Person does not
intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and
liabilities mature in their ordinary course, (c) such Person is not
engaged in a business or a transaction, and is not about to engage in
a business or a transaction, for which such Person's assets would
constitute unreasonably small capital after giving due consideration
to the prevailing practice in the industry in which such Person is
engaged or is to engage, (d) the fair value of the assets of such
Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person and (e) the
present fair salable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured. In
computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which,
in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"Sponsor" means American Industrial Partners Capital Fund II,
L.P., a Delaware limited partnership.
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"Standby Letter of Credit Fee" shall have the meaning assigned
to such term in Section 3.4(b)(i).
"Subordinated Indebtedness" means Indebtedness of the Borrower
in respect of the Senior Subordinated Debt, together with Guaranty
Obligations, if any, of the Guarantors in respect thereof.
"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose Capital Stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at the
time, any class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at
the time owned by such Person directly or indirectly through
Subsidiaries, and (b) any partnership, association, joint venture or
other entity in which such Person directly or indirectly through
Subsidiaries has more than a 50% equity interest at any time.
"Synthetic Lease" means any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease
in accordance with GAAP.
"Term Loans" means the Term Loans made to the Borrower
pursuant to Section 2.3(a).
"Term Loan Commitment Percentage" means, for each Lender, the
percentage identified as its Term Loan Commitment Percentage on
Schedule 1.1(c), as such percentage may be modified in connection with
any assignment made in accordance with the provisions of Section 11.3.
"Term Loan Committed Amount" means THIRTY MILLION DOLLARS
($30,000,000).
"Term Loan Note" or "Term Loan Notes" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Term Loans provided pursuant to Section 2.3(a), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to
time and as evidenced in the form of Exhibit 2.6(b).
"Total Leverage Ratio" means, with respect to the Consolidated
Parties on a consolidated basis for the four fiscal quarter period
ending on the last day of any fiscal
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quarter, the ratio of (a) all Funded Indebtedness (including
Subordinated Indebtedness) of the Consolidated Parties on a
consolidated basis on the last day of such period to (b) Consolidated
EBITDA for such period.
"Trade Letter of Credit Fee" shall have the meaning assigned
to such term in Section 3.4(b)(ii).
"Transaction" means the acquisition of the Acquired Companies
pursuant to the terms of the Purchase Agreement.
"Unused Revolving Commitment" means, for any period, the
amount by which (a) the then applicable aggregate Revolving Committed
Amount exceeds (b) the daily average sum for such period of the
outstanding aggregate principal amount of all Revolving Loans plus the
aggregate amount of LOC Obligations outstanding.
"Voting Stock" means, with respect to any Person, Capital
Stock issued by such Person the holders of which are ordinarily, in
the absence of contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening
of such a contingency.
1.2 COMPUTATION OF TIME PERIODS AND OTHER DEFINITIONAL PROVISIONS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding." References in this Credit Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits
of or to this Credit Agreement unless otherwise specifically provided.
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All financial statements delivered to the Lenders hereunder shall be
accompanied by a statement from the Borrower that GAAP has not changed since
the most recent financial statements delivered by the Credit Parties to the
Lenders or if GAAP has changed describing such changes in detail and explaining
how such changes affect the financial statements. All calculations made for
the purposes of determining compliance with this Credit Agreement shall (except
as otherwise expressly provided herein) be made by application of GAAP applied
on a basis consistent with the most recent annual or monthly financial
statements delivered pursuant to Section 7.1 (or, prior to the delivery of the
first financial statements pursuant to Section 7.1, consistent with the January
3, 1998 financial statements of the Consolidated Parties); provided, however,
if (a) the Credit Parties shall object to
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determining such compliance on such basis at the time of delivery of such
financial statements due to any change in GAAP or the rules promulgated with
respect thereto or (b) the Agent or the Required Lenders shall so object in
writing within 60 days after delivery of such financial statements (or after
the Lenders have been informed of the change in GAAP affecting such financial
statements, if later), then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Credit
Parties to the Lenders as to which no such objection shall have been made.
Notwithstanding the above or the terms of any definition set forth in Section
1.1, the parties hereto acknowledge and agree that, for purposes of all
calculations made under the financial covenants set forth in Section 7.12
(including without limitation for purposes of the definition of "Applicable
Percentage" set forth in Section 1.1), (i)(A) income statement items (whether
positive or negative) attributable to the Property disposed of in any Asset
Disposition as contemplated by Section 8.5, as applicable, shall be excluded to
the extent relating to any period occurring prior to the date of such
transaction and (B) Indebtedness which is retired in connection with any such
Asset Disposition shall be excluded and deemed to have been retired as of the
first day of the applicable period and (ii) income statement items (whether
positive or negative) attributable to any Property acquired in any Investment
transaction contemplated by Section 8.6 and clause (k) of the definition of
"Permitted Investment" set forth in Section 1.1 shall, to the extent not
otherwise included in such income statement items for the Consolidated Parties
in accordance with GAAP or in accordance with any defined terms set forth in
Section 1.1, be included on a pro forma basis as if the Capital Stock or
Property acquired in the related Permitted Acquisition had been owned by the
Consolidated Parties on the first day of the relevant period to the extent
relating to any period applicable in such calculations.
SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) Revolving Loan Commitment. Subject to the terms and
conditions set forth herein, each Lender severally agrees to make
revolving loans (each a "Revolving Loan" and collectively the
"Revolving Loans") to the Borrower, in Dollars, at any time and from
time to time, during the period from and including the Closing Date to
but not including the Maturity Date (or such earlier date if the
Revolving Committed Amount has been terminated as provided herein);
provided, however, that (i) the sum of the aggregate amount of
Revolving Loans outstanding plus the aggregate amount of LOC
Obligations outstanding shall not exceed the Revolving Committed
Amount and (ii) with respect to each individual Lender, the
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Lender's pro rata share of outstanding Revolving Loans plus such
Lender's pro rata share of outstanding LOC Obligations shall not
exceed such Lender's Revolving Loan Commitment Percentage of the
Revolving Committed Amount. Subject to the terms of this Credit
Agreement (including Section 3.3), the Borrower may borrow, repay and
reborrow Revolving Loans.
(b) Method of Borrowing for Revolving Loans. Except for
the initial Revolving Loans to be made on the Closing Date, by no
later than 11:00 a.m. (i) on the date of the requested borrowing of
Revolving Loans that will be Base Rate Loans or (ii) three Business
Days prior to the date of the requested borrowing of Revolving Loans
that will be Eurodollar Loans, the Borrower shall submit a written
Notice of Borrowing in the form of Exhibit 2.1 to the Agent setting
forth (A) the amount requested, (B) whether such Revolving Loans shall
accrue interest at the Adjusted Base Rate or the Adjusted Eurodollar
Rate, (C) with respect to Revolving Loans that will be Eurodollar
Loans, the Interest Period applicable thereto and (D) certification
that the Borrower has complied in all respects with Section 5.2;
(c) Funding of Revolving Loans. Except for the initial
Revolving Loans to be made on the Closing Date which will be funded
initially by the Agent, upon receipt of a Notice of Borrowing, the
Agent shall promptly inform the applicable Lenders as to the terms
thereof. Each such Lender shall make its Revolving Loan Commitment
Percentage of the requested Revolving Loans available to the Agent by
1:00 p.m. on the date specified in the Notice of Borrowing by deposit,
in Dollars, of immediately available funds at the offices of the Agent
at its principal office in Charlotte, North Carolina or at such other
address as the Agent may designate in writing. The amount of the
requested Revolving Loans will then be made available to the Borrower
by the Agent by crediting the account of the Borrower on the books of
such office of the Agent, to the extent the amount of such Revolving
Loans are made available to the Agent.
No Lender shall be responsible for the failure or delay by any
other Lender in its obligation to make Revolving Loans hereunder;
provided, however, that the failure of any Lender to fulfill its
obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Agent shall have been notified by
any Lender prior to the time of any such Revolving Loan that such
Lender does not intend to make available to the Agent its portion of
the Revolving Loans to be made on such date, the Agent may assume that
such Lender has made such amount available to the Agent on the date of
such Revolving Loans, and the Agent in reliance upon such assumption,
may (in its sole discretion but without any obligation to do so) make
available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent, the
Agent shall be able to recover such corresponding amount from such
Lender. If such Lender does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent will promptly
notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to
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the Agent. The Agent shall also be entitled to recover from the
Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower
to the date such corresponding amount is recovered by the Agent at a
per annum rate equal to (i) from the Borrower at the applicable rate
for such Revolving Loan pursuant to the Notice of Borrowing and (ii)
from a Lender at the Federal Funds Rate.
(d) Reductions of Revolving Committed Amount. Upon at
least three Business Days' notice, the Borrower shall have the right
to permanently terminate or reduce the aggregate unused amount of the
Revolving Committed Amount at any time or from time to time; provided
that (i) each partial reduction shall be in an aggregate amount at
least equal to $1,000,000 and in integral multiples of $100,000 above
such amount and (ii) no reduction shall be made which would reduce the
Revolving Committed Amount to an amount less than the aggregate amount
of outstanding Revolving Loans plus the aggregate amount of
outstanding LOC Obligations. Any reduction in (or termination of) the
Revolving Committed Amount shall be permanent and may not be
reinstated.
2.2 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof
and of the LOC Documents, if any, and any other terms and conditions
which the Issuing Lender may reasonably require, the Issuing Lender
shall from time to time upon request issue, in Dollars, and the LOC
Participants shall participate in, letters of credit (the "Letters of
Credit") for the account of the Borrower or any of its Subsidiaries,
from the Closing Date until the date five (5) days prior to the
Maturity Date, in a form reasonably acceptable to the Issuing Lender;
provided, however, that (i) the aggregate amount of LOC Obligations
shall not at any time exceed TWO MILLION DOLLARS ($2,000,000), (ii)
the sum of the aggregate amount of LOC Obligations outstanding plus
Revolving Loans outstanding shall not exceed the Revolving Committed
Amount and (iii) with respect to each individual LOC Participant, the
LOC Participant's pro rata share of outstanding Revolving Loans plus
its pro rata share of outstanding LOC Obligations shall not exceed
such LOC Participant's Revolving Loan Commitment Percentage of the
Revolving Committed Amount. The issuance and expiry date of each
Letter of Credit shall be a Business Day. Except as otherwise
expressly agreed upon by all the LOC Participants, no Letter of Credit
shall have an original expiry date more than one year from the date of
issuance, or as extended, shall have an expiry date extending beyond
the date five (5) days prior to the Maturity Date. Each Letter of
Credit shall be either (x) a standby letter of credit issued to
support the obligations (including pension or insurance obligations),
contingent or otherwise, of the Borrower or any of its Subsidiaries,
or (y) a commercial letter of credit in respect of the purchase of
goods or services by the Borrower or
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any of its Subsidiaries in the ordinary course of business. Each
Letter of Credit shall comply with the related LOC Documents.
(b) Notice and Reports. The request for the issuance of
a Letter of Credit shall be submitted to the Issuing Lender at least
three Business Days prior to the requested date of issuance. The
Issuing Lender will, at least quarterly and more frequently upon
request, provide to the Agent for dissemination to the Lenders a
detailed report specifying the Letters of Credit which are then issued
and outstanding and any activity with respect thereto which may have
occurred since the date of the prior report, and including therein,
among other things, the account party, the beneficiary, the face
amount, and the expiry date as well as any payments or expirations
which may have occurred. The Issuing Lender will further provide to
the Agent, promptly upon request, copies of the Letters of Credit.
(c) Participations. Each LOC Participant, upon issuance
of a Letter of Credit (or, in the case of each Existing Letter of
Credit, on the Closing Date), shall be deemed to have purchased
without recourse a risk participation from the Issuing Lender in such
Letter of Credit and the obligations arising thereunder and any
collateral relating thereto, in each case in an amount equal to its
Revolving Loan Commitment Percentage of the obligations under such
Letter of Credit, and shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and be
obligated to pay to the Issuing Lender therefor and discharge when
due, its Revolving Loan Commitment Percentage of the obligations
arising under such Letter of Credit. Without limiting the scope and
nature of each LOC Participant's participation in any Letter of
Credit, to the extent that the Issuing Lender has not been reimbursed
as required hereunder or under any such Letter of Credit, each such
LOC Participant shall pay to the Issuing Lender its Revolving Loan
Commitment Percentage of such unreimbursed drawing in same day funds
on the day of notification by the Issuing Lender of an unreimbursed
drawing pursuant to the provisions of subsection (d) hereof. The
obligation of each LOC Participant to so reimburse the Issuing Lender
shall be absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default or any other occurrence
or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of the Borrower or any other Credit Party to
reimburse the Issuing Lender under any Letter of Credit, together with
interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the
Borrower. Unless the Borrower shall immediately notify the Issuing
Lender of its intent to otherwise reimburse the Issuing Lender, the
Borrower shall be deemed to have requested a Revolving Loan at the
Adjusted Base Rate in the amount of the drawing as provided in
subsection (e) hereof, the proceeds of which will be used to satisfy
the reimbursement obligations. The Borrower shall reimburse the
Issuing Lender on the day of drawing under any Letter of Credit either
with the proceeds of a Revolving Loan obtained hereunder or otherwise
in same day funds as provided herein or in the LOC
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Documents. If the Borrower shall fail to reimburse the Issuing Lender
as provided hereinabove, the unreimbursed amount of such drawing shall
bear interest at a per annum rate equal to the Base Rate plus the
Applicable Percentage for the Base Rate Loans that are Revolving Loans
plus two percent (2%). The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of (but without waiver of) any rights of set-off,
counterclaim or defense to payment the applicable account party or the
Borrower may claim or have against the Issuing Lender, the Agent, the
Lenders, the beneficiary of the Letter of Credit drawn upon or any
other Person, including without limitation, any defense based on any
failure of the applicable account party, the Borrower or any other
Credit Party to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the LOC Participants of the amount of any
unreimbursed drawing and each LOC Participant shall promptly pay to
the Agent for the account of the Issuing Lender, in Dollars and in
immediately available funds, the amount of such LOC Participant's
Revolving Loan Commitment Percentage of such unreimbursed drawing.
Such payment shall be made on the day such notice is received by such
Lender from the Issuing Lender if such notice is received at or before
2:00 p.m., otherwise such payment shall be made at or before 12:00
Noon on the Business Day next succeeding the day such notice is
received. If such LOC Participant does not pay such amount to the
Issuing Lender in full upon such request, such LOC Participant shall,
on demand, pay to the Agent for the account of the Issuing Lender
interest on the unpaid amount during the period from the date the LOC
Participant received the notice regarding the unreimbursed drawing
until such LOC Participant pays such amount to the Issuing Lender in
full at a rate per annum equal to, if paid within two Business Days of
the date of drawing, the Federal Funds Rate and thereafter at a rate
equal to the Base Rate. Each LOC Participant's obligation to make
such payment to the Issuing Lender, and the right of the Issuing
Lender to receive the same, shall be absolute and unconditional, shall
not be affected by any circumstance whatsoever and without regard to
the termination of this Credit Agreement or the Commitments hereunder,
the existence of a Default or Event of Default or the acceleration of
the obligations hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever. Simultaneously with
the making of each such payment by a LOC Participant to the Issuing
Lender, such LOC Participant shall, automatically and without any
further action on the part of the Issuing Lender or such LOC
Participant, acquire a participation in an amount equal to such
payment (excluding the portion of such payment constituting interest
owing to the Issuing Lender) in the related unreimbursed drawing
portion of the LOC Obligation and in the interest thereon and in the
related LOC Documents, and shall have a claim against the Borrower and
the other Credit Parties with respect thereto.
(e) Repayment with Revolving Loans. On any day on which
the Borrower shall have requested, or been deemed to have requested, a
Revolving Loan borrowing to reimburse
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a drawing under a Letter of Credit, the Agent shall give notice to the
applicable Lenders that a Revolving Loan has been requested or deemed
requested in connection with a drawing under a Letter of Credit, in
which case a Revolving Loan borrowing comprised solely of Base Rate
Loans (each such borrowing, a "Mandatory Borrowing") shall be
immediately made from all applicable Lenders (without giving effect to
any termination of the Commitments pursuant to Section 9.2) pro rata
based on each Lender's respective Revolving Loan Commitment Percentage
and the proceeds thereof shall be paid directly to the Issuing Lender
for application to the respective LOC Obligations. Each such Lender
hereby irrevocably agrees to make such Revolving Loans immediately
upon any such request or deemed request on account of each such
Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date notwithstanding (i) the
amount of Mandatory Borrowing may not comply with the minimum amount
for borrowings of Revolving Loans otherwise required hereunder, (ii)
whether any conditions specified in Section 5 are then satisfied,
(iii) whether a Default or Event of Default then exists, (iv) failure
of any such request or deemed request for Revolving Loans to be made
by the time otherwise required hereunder, (v) the date of such
Mandatory Borrowing, or (vi) any reduction in the Revolving Committed
Amount or any termination of the Commitments. In the event that any
Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result
of the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower or any other Credit Party), then each such
Lender hereby agrees that it shall forthwith fund (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for
any payments received from the Borrower on or after such date and
prior to such purchase) its Participation Interest in the outstanding
LOC Obligations; provided further, that in the event any Lender shall
fail to fund its Participation Interest on the day the Mandatory
Borrowing would otherwise have occurred, then the amount of such
Lender's unfunded Participation Interest therein shall bear interest
payable to the Issuing Lender upon demand, at the rate equal to, if
paid within two Business Days of such date, the Federal Funds Rate,
and thereafter at a rate equal to the Base Rate.
(f) Designation of Subsidiaries as Account Parties;
Existing Letters of Credit. Notwithstanding anything to the contrary
set forth in this Credit Agreement, a Letter of Credit issued
hereunder may contain a statement to the effect that such Letter of
Credit is issued for the account of a Subsidiary of the Borrower;
provided that notwithstanding such statement, the Borrower shall be
the actual account party for all purposes of this Credit Agreement for
such Letter of Credit and such statement shall not affect the
Borrower's reimbursement obligations hereunder with respect to such
Letter of Credit.
(g) Modification and Extension. The issuance of any
supplement, modification, amendment, renewal, or extensions to any
Letter of Credit shall, for purposes hereof, be treated in all
respects the same as the issuance of a new Letter of Credit hereunder.
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(h) Uniform Customs and Practices. The Issuing Lender
may have the Letters of Credit be subject to The Uniform Customs and
Practice for Documentary Credits, as published as of the date of issue
by the International Chamber of Commerce (Publication No. 500 or the
most recent publication, the "UCP"), in which case the UCP may be
incorporated therein and deemed in all respects to be a part thereof.
(i) Responsibility of Issuing Lender. It is expressly
understood and agreed that the obligations of the Issuing Lender
hereunder to the LOC Participants are only those expressly set forth
in this Credit Agreement and that the Issuing Lender shall be entitled
to assume that the conditions precedent set forth in Section 5 have
been satisfied unless it shall have acquired actual knowledge that any
such condition precedent has not been satisfied; provided, however,
that nothing set forth in this Section 2.2 shall be deemed to
prejudice the right of any LOC Participant to recover from the Issuing
Lender any amounts made available by such LOC Participant to the
Issuing Lender pursuant to this Section 2.2 in the event that it is
determined by a court of competent jurisdiction that the payment with
respect to a Letter of Credit constituted gross negligence or willful
misconduct on the part of the Issuing Lender.
(j) Conflict with LOC Documents. In the event of any
conflict between this Credit Agreement and any LOC Document, this
Credit Agreement shall govern.
(k) Indemnification of Issuing Lender.
(i) In addition to its other obligations under
this Credit Agreement, the Borrower hereby agrees to protect,
indemnify, pay and save the Issuing Lender harmless from and
against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be
subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit or (B) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as
a result of any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto government or
governmental authority (all such acts or omissions, herein
called "Government Acts").
(ii) As between the Borrower and the Issuing
Lender, the Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary
thereof. The Issuing Lender shall not be responsible for:
(A) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter
of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or
forged; (B) the validity or sufficiency of any instrument
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transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (C) failure of the
beneficiary of a Letter of Credit to comply fully with
conditions required in order to draw upon a Letter of Credit;
(D) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex
or otherwise, whether or not they be in cipher; (E) errors in
interpretation of technical terms; (F) any loss or delay in
the transmission or otherwise of any document required in
order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (G) any consequences arising from causes
beyond the control of the Issuing Lender, including, without
limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing Lender's
rights or powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by the Issuing Lender, under or in
connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put
the Issuing Lender under any resulting liability to the
Borrower or any other Credit Party. It is the intention of
the parties that this Credit Agreement shall be construed and
applied to protect and indemnify the Issuing Lender against
any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any and all risks of the acts
or omissions, whether rightful or wrongful, of any present or
future Government Acts. The Issuing Lender shall not, in any
way, be liable for any failure by the Issuing Lender or anyone
else to pay any drawing under any Letter of Credit as a result
of any Government Acts or any other cause beyond the control
of the Issuing Lender.
(iv) Nothing in this subsection (k) is intended to
limit the reimbursement obligation of the Borrower contained
in this Section 2.2. The obligations of the Borrower under
this subsection (k) shall survive the termination of this
Credit Agreement. No act or omission of any current or prior
beneficiary of a Letter of Credit shall in any way affect or
impair the rights of the Issuing Lender to enforce any right,
power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (k), the Borrower shall have no
obligation to indemnify the Issuing Lender in respect of any
liability incurred by the Issuing Lender arising solely out of
the gross negligence or willful misconduct of the Issuing
Lender, as determined by a court of competent jurisdiction.
2.3 TERM LOANS.
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(a) Term Loans. Subject to the terms and conditions set
forth herein, each Lender severally agrees, on the Closing Date, to
make a term loan (collectively, the "Term Loans") to the Borrower, in
Dollars, in an amount equal to such Lender's Term Loan Commitment
Percentage, if any, of the Term Loan Committed Amount; provided that
the aggregate amount of such Term Loans made on the Closing Date shall
not exceed the Term Loan Committed Amount. Once repaid, Term Loans
cannot be reborrowed.
(b) Funding of Term Loans. On the Closing Date, each
applicable Lender will make its Term Loan Commitment Percentage of the
Term Loan Committed Amount available to the Agent by deposit, in
Dollars and in immediately available funds, at the offices of the
Agent at its principal office in Charlotte, North Carolina or at such
other address as the Agent may designate in writing. The amount of
the Term Loans will then be made available to the Borrower by the
Agent by crediting the account of the Borrower on the books of such
office of the Agent, to the extent the amount of such Term Loans are
made available to the Agent. All Term Loans on the Closing Date shall
be Base Rate Loans. Thereafter, all or any portion of the Term Loans
may be converted into Eurodollar Loans in accordance with the terms of
Section 2.4.
No Lender shall be responsible for the failure or delay by any
other Lender in its obligation to make a Term Loan hereunder;
provided, however, that the failure of any Lender to fulfill its
obligations hereunder shall not relieve any other Lender of its
obligations hereunder. If the Agent shall have received (and shall
have been authorized to release from escrow) an executed signature
page to this Credit Agreement (whether an original or via telecopy)
from a Lender, the Agent may assume that such Lender has or will make
the amount of its Term Loans available to the Agent on the Closing
Date, and the Agent in reliance upon such assumption, shall make
available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent, the
Agent shall be able to recover such corresponding amount from such
Lender. If such Lender does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent will promptly
notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Agent. The Agent shall also be entitled
to recover from the Lender or the Borrower, as the case may be,
interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Agent to the
Borrower to the date such corresponding amount is recovered by the
Agent at a per annum rate equal to (i) from the Borrower at the
applicable rate for such Term Loan and (ii) from a Lender at the
Federal Funds Rate.
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(c) Amortization. The principal amount of the Term Loans
shall be repaid in quarterly payments on the dates set forth below:
=====================================================================
PRINCIPAL AMORTIZATION PAYMENT FOR
PRINCIPAL AMORTIZATION EACH APPLICABLE PRINCIPAL
PAYMENT DATE AMORTIZATION PAYMENT DATE
---------------------------------------------------------------------
July 3, 1999, October $1,000,000
2, 1999, January 1,
2000
and
April 1, 2000
---------------------------------------------------------------------
July 1, 2000, September $1,250,000
30, 2000, December 30,
2000 and
March 31, 2001
---------------------------------------------------------------------
June 30, 2001, $1,500,000
September 29, 2001,
December 29, 2001 and
March 30, 2002
---------------------------------------------------------------------
June 29, 2002, $1,750,000
September 28, 2002,
December 28, 2002
and
March 29, 2003
---------------------------------------------------------------------
June 28, 2003, $2,000,000
September 27, 2003,
January 3, 2004
and
April 3, 2004
=====================================================================
2.4 CONTINUATIONS AND CONVERSIONS.
Subject to the terms of Section 5.2, the Borrower shall have the
option, on any Business Day, to continue existing Eurodollar Loans for a
subsequent Interest Period, to convert Base Rate Loans
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into Eurodollar Loans or to convert Eurodollar Loans into Base Rate Loans;
provided, however, that (a) each such continuation or conversion must be
requested by the Borrower pursuant to a written Notice of
Continuation/Conversion, in the form of Exhibit 2.4, in compliance with the
terms set forth below, (b) except as provided in Section 3.12, Eurodollar Loans
may only be continued or converted into Base Rate Loans on the last day of the
Interest Period applicable hereto, (c) Eurodollar Loans may not be continued
nor may Base Rate Loans be converted into Eurodollar Loans during the existence
and continuation of a Default or Event of Default and (d) any request to extend
a Eurodollar Loan that fails to comply with the terms hereof or any failure to
request an extension of a Eurodollar Loan at the end of an Interest Period
shall constitute a conversion to a Base Rate Loan on the last day of the
applicable Interest Period. Each continuation or conversion must be requested
by the Borrower no later than 11:00 a.m. (i) on the date for a requested
conversion of a Eurodollar Loan to a Base Rate Loan or (ii) three Business Days
prior to the date for a requested continuation of a Eurodollar Loan or
conversion of a Base Rate Loan to a Eurodollar Loan, in each case pursuant to a
written Notice of Continuation/Conversion submitted to the Agent which shall
set forth (A) whether the Loans to be continued or converted are Revolving
Loans or Term Loans, (B) whether the Borrower wishes to continue or convert
such Loans and (C) if the request is to continue a Eurodollar Loan or convert a
Base Rate Loan to a Eurodollar Loan, the Interest Period applicable thereto.
2.5 MINIMUM AMOUNTS, ETC.
Each request for a borrowing, conversion or continuation shall be
subject to the requirements that (a) each Eurodollar Loan shall be in a minimum
amount of $1,000,000 and in integral multiples of $100,000 in excess thereof,
(b) each Base Rate Loan shall, subject to the terms of Section 2.2(e), be in a
minimum amount of the lesser of $1,000,000 (and integral multiples of $100,000
in excess thereof) or the remaining amount available under the Revolving
Committed Amount or the Term Committed Amount, as applicable and (c) no more
than 5 Eurodollar Loans (in the aggregate for Revolving Loans and Term Loans)
shall be outstanding hereunder at any one time. For the purposes of this
Section, all Eurodollar Loans with the same Interest Periods shall be
considered as one Eurodollar Loan, but Eurodollar Loans with different Interest
Periods, even if they begin on the same date, shall be considered as separate
Eurodollar Loans.
2.6 NOTES.
(a) Revolving Loan Notes. The Revolving Loans made by
each Lender shall be evidenced by a duly executed promissory note of
the Borrower to each applicable Lender in the face amount of its
Revolving Loan Commitment Percentage of the Revolving Committed Amount
in substantially the form of Exhibit 2.6(a).
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(b) Term Loan Notes. The Term Loan made by each Lender
shall be evidenced by a duly executed promissory note of the Borrower
to each applicable Lender in the face amount of its Term Loan
Commitment Percentage of the Term Loan Committed Amount in
substantially the form of Exhibit 2.6(b).
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT
3.1 INTEREST.
(a) Interest Rate. All Base Rate Loans shall accrue
interest at the Adjusted Base Rate and all Eurodollar Loans shall
accrue interest at the Adjusted Eurodollar Rate.
(b) Default Rate of Interest. Upon the occurrence, and
during the continuance, of an Event of Default under Section 7.1(a),
(b) (to the extent involving a misrepresentation which, in the
reasonable determination of the Agent, could be reasonably expected to
constitute a Material Adverse Effect), (c)(ii), (e), (f), (g), (h),
(i) or (j), the principal of and, to the extent permitted by law,
interest on the Loans and any other amounts owing (but not timely
paid) hereunder or under the other Credit Documents (including without
limitation fees and expenses) shall bear interest, payable on demand,
at a per annum rate equal to 2% plus the rate which would otherwise be
applicable (or if no rate is applicable, then the Adjusted Base Rate
plus two percent (2%) per annum).
(c) Interest Payments. Interest on Loans shall be due
and payable in arrears on each Interest Payment Date. If an Interest
Payment Date falls on a date which is not a Business Day, such
Interest Payment Date shall be deemed to be the next succeeding
Business Day, except that in the case of Eurodollar Loans where the
next succeeding Business Day falls in the next succeeding calendar
month, then on the next preceding Business Day.
3.2 PLACE AND MANNER OF PAYMENTS.
All payments of principal, interest, fees, expenses and other amounts
to be made by a Credit Party under this Credit Agreement shall be received not
later than 2:00 p.m. on the date when due, in Dollars and in immediately
available funds, by the Agent at its offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Payments received after such time shall be
deemed to have been received on the next Business Day. The Borrower shall, at
the time it makes any payment under this Credit Agreement, specify to the
Agent, the Loans, Letters of Credit, fees or other amounts payable by the
Borrower hereunder to which such payment is to be applied (and in the event
that it fails to specify, or if such application would be inconsistent with the
terms hereof, the Agent shall, subject
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to Section 3.7, distribute such payment to the Lenders in such manner as the
Agent may deem appropriate). The Agent will distribute on the same day of
receipt, such payments to the applicable Lenders if any such payment is
received prior to 2:00 p.m.; otherwise the Agent will distribute such payment
to the applicable Lenders on the next succeeding Business Day. Whenever any
payment hereunder shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
(subject to accrual of interest and fees for the period of such extension),
except that in the case of Eurodollar Loans, if the extension would cause the
payment to be made in the next following calendar month, then such payment
shall instead be made on the next preceding Business Day.
3.3 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower shall have the
right to prepay Loans in whole or in part from time to time without
premium or penalty; provided, however, that (i) Eurodollar Loans may
only be prepaid if the Agent has received written notice of such
prepayment by no later than 11:00 a.m. on the date three Business
Days' prior to such prepayment and any prepayment of Eurodollar Loans
will be subject to Section 3.15; (ii) each such partial prepayment of
Loans shall be in the minimum principal amount of $500,000 and
integral multiples of $100,000 in excess thereof and (iii) any
voluntary prepayment of the Term Loans shall be applied first to the
next Principal Amortization Payment with any remainder applied pro
rata among the remaining Principal Amortization Payments. Subject to
the foregoing terms, amounts prepaid under this Section 3.3(a) shall
be applied as the Borrower elects; provided that if Borrower shall
fail to specify, such prepayment shall be applied first to Term Loans
and then to Revolving Loans and, in each case first to Base Rate Loans
and then to Eurodollar Loans in direct order of Interest Period
maturities.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time
the sum of the aggregate amount of Revolving Loans outstanding
plus LOC Obligations outstanding exceeds the Revolving
Committed Amount, the Borrower shall immediately make a
principal payment to the Agent in the manner and in an amount
necessary to be in compliance with Section 2.1.
(ii) Excess Cash Flow. If the Total Leverage
Ratio as of June 30, 1999 is greater than 3.50 to 1.00, then
within 90 days after such date the Borrower shall prepay the
Loans in an amount equal to (x) 50% of the Excess Cash Flow
for the twelve-month period ended on such June 30 less (y) the
amount of any voluntary prepayments of the Term Loans or (to
the extent accompanied by a reduction in the
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Revolving Committed Amount) of the Revolving Loans during the
twelve-month period ended on such June 30. Thereafter, if the
Total Leverage Ratio as of the end of any fiscal year of the
Borrower is greater than 3.50 to 1.00, then within ninety (90)
days after such fiscal year end the Borrower shall prepay the
Loans in an amount equal to fifty (50%) percent of the Excess
Cash Flow for such fiscal year (provided that for the fiscal
year ending January 1, 2000, the calculation of the amount of
the prepayment required by this Section 3.3(b)(ii) shall be
based on the 2 fiscal quarter period then ended). Any
prepayments pursuant to this clause (ii) shall be applied as
set forth in clause (v) below.
(iii) Asset Dispositions. Immediately upon the
occurrence of any Asset Disposition Prepayment Event, the
Borrower shall prepay the Loans in an aggregate amount equal
to the Net Cash Proceeds of the related Asset Disposition not
applied (or caused to be applied) by the Borrower during the
related Application Period to the purchase, acquisition or
construction of Eligible Assets as contemplated by the terms
of Section 8.5(v) (such prepayment to be applied as set forth
in clause (v) below). For purposes or this clause (iii),
acquisitions of Eligible Assets during the 180-day period
preceding such Asset Disposition shall be deemed to satisfy
the application of Net Cash Proceeds required in the preceding
sentence.
(iv) Issuances of Equity. Immediately upon
receipt by a Consolidated Party of proceeds from any Equity
Issuance, the Borrower shall prepay the Loans in an aggregate
amount equal to 50% of the Net Cash Proceeds of such Equity
Issuance (such prepayment to be applied as set forth in clause
(v) below).
(v) Application of Mandatory Prepayments. All
amounts required to be paid pursuant to this Section 3.3(b)
shall be applied as follows: (A) with respect to all amounts
prepaid pursuant to Section 3.3(b)(i), to Revolving Loans and
(after all Revolving Loans have been repaid) to a cash
collateral account in respect of LOC Obligations and (B) with
respect to all amounts prepaid pursuant to Section 3.3(b)(ii),
(iii) and (iv), (1) first to the outstanding Term Loans (first
to the next Principal Amortization Payment with any remainder
applied pro rata among the remaining Principal Amortization
Payments) and (2) second to the Revolving Loans and (after all
Revolving Loans have been repaid) to a cash collateral account
in respect of LOC Obligations (with a corresponding reduction
in the Revolving Committed Amount in an amount equal to all
amounts applied pursuant to this clause (2)). Within the
parameters of the applications set forth above, prepayments
shall be applied first to Base Rate Loans and then to
Eurodollar Loans in direct order of Interest Period
maturities. All prepayments hereunder shall be subject to
Section 3.15.
3.4 FEES.
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(a) Commitment Fees. In consideration of the Revolving
Committed Amount being made available by the Lenders hereunder, the
Borrower agrees to pay to the Agent, for the pro rata benefit of each
applicable Lender (based on each Lender's Revolving Loan Commitment
Percentage of the Revolving Committed Amount), a per annum fee equal
to the Applicable Percentage of the Unused Revolving Commitment (the
"Commitment Fees"). The accrued Commitment Fees shall commence to
accrue on the Closing Date and shall be due and payable in arrears on
the last Business Day of each fiscal quarter of the Borrower (as well
as on the Maturity Date and on any date that the Revolving Committed
Amount is reduced) for the immediately preceding fiscal quarter (or
portion thereof), beginning with the first of such dates to occur
after the Closing Date.
(b) Letter of Credit Fees.
(i) Standby Letter of Credit Issuance Fee. In
consideration of the issuance of standby Letters of Credit
hereunder, the Borrower promises to pay to the Agent for the
account of each Lender a fee (the "Standby Letter of Credit
Fee") on such Lender's Commitment Percentage of the average
daily maximum amount available to be drawn under each such
standby Letter of Credit computed at a per annum rate for each
day from the date of issuance to the date of expiration equal
to the Applicable Percentage. The Standby Letter of Credit
Fee be payable quarterly in arrears 15 days after the end of
each fiscal quarter of the Borrower and on the Maturity Date.
(ii) Trade Letter of Credit Drawing Fee. In
consideration of the issuance of trade Letters of Credit
hereunder, the Borrower promises to pay to the Agent for the
account of each Lender a fee (the "Trade Letter of Credit
Fee") equal to the Applicable Percentage on such Lender's
Commitment Percentage of the amount of each drawing under any
such trade Letter of Credit. The Trade Letter of Credit Fee
will be payable on each date of drawing under a trade Letter
of Credit.
(iii) Issuing Lender Fees. In addition to the
Standby Letter of Credit Fee and the Trade Letter of Credit
Fee payable pursuant to subsections (i) and (ii) above, the
Borrower shall pay to the Issuing Lender for its own account,
without sharing by the other Lenders, (i) a the letter of
credit fronting fee of 25 basis points on the face amount of
each Letter of Credit and (ii) the customary charges from time
to time to the Issuing Lender for its services in connection
with the issuance, amendment, payment, transfer,
administration, cancellation and conversion of, and drawings
under, such Letters of Credit (collectively, the "Issuing
Lender Fees").
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(c) Administrative Fees. The Borrower agrees to pay to
the Agent, for its own account, an annual fee as agreed to between the
Borrower and the Agent in the Fee Letter.
3.5 PAYMENT IN FULL AT MATURITY.
On the Maturity Date, the entire outstanding principal balance
of all Loans, together with accrued but unpaid interest and all other
sums owing with respect thereto, shall be due and payable in full,
unless accelerated sooner pursuant to Section 9.
3.6 COMPUTATIONS OF INTEREST AND FEES.
(a) Except for Base Rate Loans, in which case interest
shall be computed on the basis of a 365 or 366 day year as the case
may be (unless the Base Rate is determined by reference to the Federal
Funds Rate), all computations of interest and fees hereunder shall be
made on the basis of the actual number of days elapsed over a year of
360 days. Interest shall accrue from and include the date of
borrowing (or continuation or conversion) but exclude the date of
payment.
(b) It is the intent of the Lenders and the Credit
Parties to conform to and contract in strict compliance with
applicable usury law from time to time in effect. All agreements
between the Lenders and the Borrower are hereby limited by the
provisions of this paragraph which shall override and control all such
agreements, whether now existing or hereafter arising and whether
written or oral. In no way, nor in any event or contingency
(including but not limited to prepayment or acceleration of the
maturity of any obligation), shall the interest taken, reserved,
contracted for, charged, or received under this Credit Agreement,
under the Notes or otherwise, exceed the maximum non-usurious amount
permissible under applicable law. If, from any possible construction
of any of the Credit Documents or any other document, interest would
otherwise be payable in excess of the maximum non-usurious amount, any
such construction shall be subject to the provisions of this paragraph
and such documents shall be automatically reduced to the maximum
non-usurious amount permitted under applicable law, without the
necessity of execution of any amendment or new document. If any
Lender shall ever receive anything of value which is characterized as
interest on the Loans under applicable law and which would, apart from
this provision, be in excess of the maximum lawful amount, an amount
equal to the amount which would have been excessive interest shall,
without penalty, be applied to the reduction of the principal amount
owing on the Loans and not to the payment of interest, or refunded to
the Borrower or the other payor thereof if and to the extent such
amount which would have been excessive exceeds such unpaid principal
amount of the Loans. The right to demand payment of the Loans or any
other indebtedness evidenced by any of the Credit Documents does not
include the right to receive any interest which has not otherwise
accrued on the date of such demand, and the Lenders do not intend to
charge or receive any unearned interest in the event of such demand.
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All interest paid or agreed to be paid to the Lenders with respect to
the Loans shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated
term (including any renewal or extension) of the Loans so that the
amount of interest on account of such indebtedness does not exceed the
maximum non-usurious amount permitted by applicable law.
3.7 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Loans. Each Revolving Loan borrowing (including,
without limitation, each Mandatory Borrowing), each payment or
prepayment of principal of any Loan, each payment of fees (other than
the Issuing Lender Fees retained by the Issuing Lender for its own
account and the Administrative Fees retained by the Agent for its own
account), each reduction of the Revolving Committed Amount, and each
conversion or continuation of any Loan, shall (except as otherwise
provided in Section 3.3(c)) be allocated pro rata among the relevant
Lenders in accordance with the respective Revolving Loan Commitment
Percentages and Term Loan Commitment Percentages, as applicable, of
such Lenders (or, if the Commitments of such Lenders have expired or
been terminated, in accordance with the respective principal amounts
of the outstanding Revolving Loans and Participation Interests and
outstanding Term Loans, as applicable, of such Lenders); provided
that, if any Lender shall have failed to pay its applicable pro rata
share of any Loan, then any amount to which such Lender would
otherwise be entitled pursuant to this subsection (a) shall instead be
payable to the Agent; provided further, that in the event any amount
paid to any Lender pursuant to this subsection (a) is rescinded or
must otherwise be returned by the Agent, each Lender shall, upon the
request of the Agent, repay to the Agent the amount so paid to such
Lender, with interest for the period commencing on the date such
payment is returned by the Agent until the date the Agent receives
such repayment at a rate per annum equal to, during the period to but
excluding the date two Business Days after such request, the Federal
Funds Rate, and thereafter, the Base Rate plus two percent (2%) per
annum; and
(b) Letters of Credit. Each payment of unreimbursed
drawings in respect of LOC Obligations shall be allocated to each LOC
Participant pro rata in accordance with its Revolving Loan Commitment
Percentage; provided that, if any LOC Participant shall have failed to
pay its applicable pro rata share of any drawing under any Letter of
Credit, then any amount to which such LOC Participant would otherwise
be entitled pursuant to this subsection (b) shall instead be payable
to the Issuing Lender; provided further, that in the event any amount
paid to any LOC Participant pursuant to this subsection (b) is
rescinded or must otherwise be returned by the Issuing Lender, each
LOC Participant shall, upon the request of
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the Issuing Lender, repay to the Agent for the account of the Issuing
Lender the amount so paid to such LOC Participant, with interest for
the period commencing on the date such payment is returned by the
Issuing Lender until the date the Issuing Lender receives such
repayment at a rate per annum equal to, during the period to but
excluding the date two Business Days after such request, the Federal
Funds Rate, and thereafter, the Base Rate plus two percent (2%) per
annum.
3.8 ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.
Notwithstanding any other provisions of this Credit Agreement, after
the occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of amounts
outstanding under any of the Credit Documents or in respect of the Collateral
shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Agent in connection with enforcing the rights of the Lenders
under the Credit Documents and any protective advances made by the
Agent with respect to the Collateral under or pursuant to the terms of
the Collateral Documents;
SECOND, to payment of any fees owed to the Agent or the
Issuing Lender;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses, (including, without limitation, reasonable attorneys'
fees) of each of the Lenders in connection with enforcing its rights
under the Credit Documents;
FOURTH, to the payment of all accrued fees and interest
payable to the Lenders hereunder;
FIFTH, to the payment of the outstanding principal amount of
the Loans, to the payment or cash collateralization of the outstanding
LOC Obligations, and, in the case of any proceeds of Collateral, to
the outstanding principal portion of any Hedging Obligations, pro
rata, as set forth below;
SIXTH, to all other obligations which shall have become due
and payable under the Credit Documents and not repaid pursuant to
clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
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In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans,
LOC Obligations and Hedging Obligations held by such Lender bears to the
aggregate then outstanding Loans, LOC Obligations and Hedging Obligations held
by all of the Lenders) of amounts available to be applied pursuant to clauses
"THIRD", "FOURTH," "FIFTH," and "SIXTH" above; and (c) to the extent that any
amounts available for distribution pursuant to clause "FIFTH" above are
attributable to the issued but undrawn amount of an outstanding Letter of
Credit, such amounts shall be held by the Agent in a cash collateral account
and applied (x) first, to reimburse the Issuing Lender from time to time for
any drawings under such Letter of Credit and (y) then, following the expiration
of such Letter of Credit, to all other obligations of the types described in
clauses "FIFTH" and "SIXTH" above in the manner provided in this Section 3.8.
3.9 SHARING OF PAYMENTS.
The Lenders agree among themselves that, except to the extent
otherwise provided herein, in the event that any Lender shall obtain payment in
respect of any Loan, unreimbursed drawing with respect to any LOC Obligations
or any other obligation owing to such Lender under this Credit Agreement
through the exercise of a right of setoff, banker's lien or counterclaim, or
pursuant to a secured claim under Section 506 of the Bankruptcy Code or other
security or interest arising from, or in lieu of, such secured claim, received
by such Lender under any applicable bankruptcy, insolvency or other similar law
or otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
pay in cash or purchase from the other Lenders a participation in such Loans,
LOC Obligations, and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all
Lenders share such payment in accordance with their respective ratable shares
as provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by payment in cash or a
repurchase of a participation theretofore sold, return its share of that
benefit (together with its share of any accrued interest payable with respect
thereto) to each Lender whose payment shall have been rescinded or otherwise
restored. The Borrower agrees that any Lender so purchasing such a
participation may, to the fullest extent permitted by law, exercise all rights
of payment, including setoff, banker's lien or counterclaim, with respect to
such participation as fully as if such Lender were a holder of such Loan, LOC
Obligation or other obligation in the amount of such participation. Except as
otherwise expressly provided in this Credit Agreement, if any Lender or the
Agent shall fail to remit to the Agent or any other Lender an amount payable by
such Lender or the Agent to the Agent or such other Lender pursuant to this
Credit Agreement on the date when such amount is due, such payments shall be
made together with interest
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thereon for each date from the date such amount is due until the date such
amount is paid to the Agent or such other Lender at a rate per annum equal to
the Federal Funds Rate. If under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a setoff to
which this Section 3.9 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent
with the rights of the Lenders under this Section 3.9 to share in the benefits
of any recovery on such secured claim.
3.10 CAPITAL ADEQUACY.
If, after the date hereof, any Lender has determined that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender, or its parent corporation, with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such Lender's (or
parent corporation's) capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender, or its parent
corporation, could have achieved but for such adoption, effectiveness, change
or compliance (taking into consideration such Lender's (or parent
corporation's) policies with respect to capital adequacy), then, upon prompt
notice from such Lender to the Borrower, the Borrower shall be obligated to pay
to such Lender such additional amount or amounts as will compensate such Lender
for such reduction. This covenant shall survive the termination of this Credit
Agreement and the payment of the Loans and all other amounts payable hereunder.
3.11 INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any Interest Period, the 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, the Agent shall give telecopy or telephonic notice
thereof to the Borrower and the Lenders as soon as practicable thereafter. If
such notice is given (a) any Eurodollar Loans requested to be made on the first
day of such Interest Period shall be made as Base Rate Loans, (b) any Loans
that were to have been converted on the first day of such Interest Period to or
continued as Eurodollar Loans shall be converted to or continued as Base Rate
Loans and (c) any outstanding Eurodollar Loans shall be converted, on the first
day of such Interest Period, to Base Rate Loans. Until such notice has been
withdrawn by the Agent, no further Eurodollar Loans shall be made or continued
as such, nor shall the Borrower have the right to convert Base Rate Loans to
Eurodollar Loans.
3.12 ILLEGALITY.
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Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof occurring after the Closing Date shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Credit Agreement,
(a) such Lender shall promptly give written notice of such circumstances to the
Borrower and the Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (b) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base
Rate Loan to Eurodollar Loans shall forthwith be canceled and, until such time
as it shall no longer be unlawful for such Lender to make or maintain
Eurodollar Loans, such Lender shall then have a commitment only to make a Base
Rate Loan when a Eurodollar Loan is requested and (c) such Lender's Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to
Base Rate Loans on the respective last days or the then current Interest
Periods with respect to such Loans or within such earlier period as required by
law. If any such conversion of a Eurodollar Loan occurs on a day which is not
the last day of the then current Interest Period with respect thereto, the
Borrower shall pay to such Lender such amounts, if any, as may be required
pursuant to Section 3.15.
3.13 REQUIREMENTS OF LAW.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, 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, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(a) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit, any Eurodollar Loans
made by it or its obligation to make Eurodollar Loans, or change the
basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by Section 3.14 (including
Non-Excluded Taxes imposed solely by reason of any failure of such
Lender to comply with its obligations under Section 3.14(b)) and
changes in taxes measured by or imposed upon the overall net income,
or franchise tax (imposed in lieu of such net income tax), of such
Lender or its applicable lending office, branch, or any affiliate
thereof);
(b) 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 which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
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(c) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which 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, upon prompt notice to the Borrower from such
Lender, through the Agent, in accordance herewith, the Borrower shall be
obligated to 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, in any such case, the Borrower may elect to convert
the Eurodollar Loans made by such Lender hereunder to Base Rate Loans by giving
the Agent at least one Business Day's notice of such election, in which case
the Borrower shall promptly pay to such Lender, upon demand, without
duplication, such amounts, if any, as may be required pursuant to Section 3.15.
If any Lender becomes entitled to claim any additional amounts pursuant to this
Section 3.13, it shall provide prompt notice thereof to the Borrower, through
the Agent, certifying (x) that one of the events described in this Section 3.13
has occurred and describing in reasonable detail the nature of such event, (y)
as to the increased cost or reduced amount resulting from such event and (z) as
to the additional amount demanded by such Lender and a reasonably detailed
explanation of the calculation thereof. Such a certificate as to any
additional amounts payable pursuant to this Section 3.13 submitted by such
Lender, through the Agent, to the Borrower shall be conclusive and binding on
the parties hereto in the absence of manifest error. This covenant shall
survive the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.
3.14 TAXES.
(a) Except as provided below in this Section 3.14, all
payments made by the Borrower under this Credit Agreement and any
Notes 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 court, or governmental body, agency or other official,
excluding taxes measured by or imposed upon the overall net income of
any Lender or its applicable lending office, or any branch or
affiliate thereof, and all franchise taxes, branch taxes, taxes on
doing business or taxes on the overall capital or net worth of any
Lender or its applicable lending office, or any branch or affiliate
thereof, in each case imposed in lieu of net income taxes, imposed:
(i) by the jurisdiction under the laws of which such Lender,
applicable lending office, branch or affiliate is organized or is
located, or in which its principal executive office is located, or any
nation within which such jurisdiction is located or any political
subdivision thereof; or (ii) by reason of any connection between the
jurisdiction imposing such tax and such Lender, applicable lending
office, branch or affiliate other than a connection arising solely
from such Lender having executed, delivered or performed its
obligations, or received payment under or enforced, this Credit
Agreement or
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any Notes. 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 Agent or any
Lender hereunder or under any Notes, (A) the amounts so payable to the
Agent or such Lender shall be increased to the extent necessary to
yield to the 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 Credit Agreement and any
Notes, provided, however, that the Borrower shall be entitled to
deduct and withhold any Non-Excluded Taxes and 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 if such Lender fails to comply with the requirements of
paragraph (b) of this Section 3.14 whenever any Non-Excluded Taxes are
payable by the Borrower, and (B) as promptly as possible thereafter
the Borrower shall send to the 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 received by the Borrower, if any, 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
Agent the required receipts or other required documentary evidence,
the Borrower shall indemnify the Agent and any Lender for any
incremental taxes, interest or penalties that may become payable by
the Agent or any Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts
payable hereunder.
(b) Each Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:
(i) (A) on or before the date of any payment
by the Borrower under this Credit Agreement or Notes to such
Lender, deliver to the Borrower and the Agent (x) two duly
completed copies of United States Internal Revenue Service
Form 1001 or 4224, or successor applicable form, as the case
may be, certifying that it is entitled to receive payments
under this Credit Agreement and any Notes without deduction or
withholding of any United States federal income taxes and (y)
an Internal Revenue Service Form W-8 or W-9, or successor
applicable form, as the case may be, certifying that it is
entitled to an exemption from United States backup withholding
tax;
(B) deliver to the Borrower and the Agent two
further copies of any such form or certification on or before
the date that any such form or certification expires or
becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously
delivered by it to the Borrower; and
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(C) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be
requested by the Borrower or the Agent; or
(ii) in the case of any such Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the
Internal Revenue Code, (A) represent to the Borrower (for the
benefit of the Borrower and the Agent) that it is not a bank
within the meaning of Section 881(c)(3)(A) of the Internal
Revenue Code, (B) agree to furnish to the Borrower, on or
before the date of any payment by the Borrower, with a copy to
the Agent, two accurate and complete original signed copies of
Internal Revenue Service Form W-8, or successor applicable
form certifying to such Lender's legal entitlement at the date
of such certificate to an exemption from U.S. withholding tax
under the provisions of Section 881(c) of the Internal Revenue
Code with respect to payments to be made under this Credit
Agreement and any Notes (and to deliver to the Borrower and
the Agent two further copies of such form on or before the
date it expires or becomes obsolete and after the occurrence
of any event requiring a change in the most recently provided
form and, if necessary, obtain any extensions of time
reasonably requested by the Borrower or the Agent for filing
and completing such forms), and (C) agree, to the extent
legally entitled to do so, upon reasonable request by the
Borrower, to provide to the Borrower (for the benefit of the
Borrower and the Agent) such other forms as may be reasonably
required in order to establish the legal entitlement of such
Lender to an exemption from withholding with respect to
payments under this Credit Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or regulation
has occurred after the date such Person becomes a Lender hereunder
which renders all such forms (including successor forms) inapplicable
or which would prevent such Lender from duly completing and delivering
any such form with respect to it and such Lender so advises the
Borrower and the Agent then such Lender shall be exempt from such
requirements. Each Person that shall become a Lender or a participant
of a Lender pursuant to Section 11.3 shall, upon the effectiveness of
the related transfer, be required to provide all of the forms,
certifications and statements required pursuant to this subsection
(b); provided that in the case of a participant of a Lender, the
obligations of such participant of a Lender pursuant to this
subsection (b) shall be determined as if the participant of a Lender
were a Lender except that such participant of a Lender shall furnish
all such required forms, certifications and statements to the Lender
from which the related participation shall have been purchased.
3.15 INDEMNITY.
The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than to the extent a consequence of such Lender's gross negligence or willful
misconduct) as a consequence of (a) default by the Borrower
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in making a borrowing of, conversion into or continuation of Eurodollar Loans
after the Borrower has given a written notice requesting the same in accordance
with the provisions of this Credit Agreement, (b) default by the Borrower in
making any prepayment of a Eurodollar Loan after the Borrower has given a
written notice thereof in accordance with the provisions of this Credit
Agreement and (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto, provided,
however, that the Lenders hereby agree to exercise reasonable efforts, so long
as no Default or Event of Default shall exist, to mitigate the payment
obligations of the Borrower under this Section 3.15 in respect of the timing of
application of proceeds of any prepayment pursuant to Section 3.3(b). Such
indemnification may include an amount equal to (i) the amount of interest which
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 the applicable 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 Eurodollar Loans provided for
herein (excluding, however, the Applicable Percentage included therein, if any)
minus (ii) the amount of interest (as reasonably determined by such Lender)
which 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. The agreements in this Section shall survive the
termination of this Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.
3.16 MANDATORY ASSIGNMENT.
In the event that any Lender delivers to the Borrower a demand for
payment in accordance with Section 3.10, 3.13 or 3.14 or a notification in
accordance with Section 3.12 that such Lender is suspending its obligation or
obligations to make or continue Eurodollar Loans and to convert Base Rate Loans
into Eurodollar Loans, then, provided that no Default or Event of Default has
occurred and is continuing at such time, the Borrower may, at its own expense
(such expense to include the administrative fee payable to the Agent under
Section 11.3(b)), require such Lender to transfer and assign in whole, without
recourse (in accordance with and subject to the terms and conditions of Section
11.3), all of its interests, rights and obligations under this Credit Agreement
to an Eligible Assignee which shall assume such assigned obligations; provided
that (i) such assignment shall not conflict with any law, rule or regulation or
order of any court or any Governmental Authority and (ii) the Borrower or such
assignee shall have paid to the assigning Lender in immediately available funds
the principal of and interest accrued to the date of such payment on the Loans
made by it hereunder and all other amounts owed to it hereunder (including
Section 3.12).
SECTION 4
GUARANTY
4.1 GUARANTY OF PAYMENT.
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Subject to Section 4.7 below, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Lender, each Affiliate of
Lender that enters into any agreement with a Credit Party giving rise to
Hedging Obligations of such Credit Party and the Agent the prompt payment of
the Credit Party Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration or otherwise). The Guarantors
additionally, jointly and severally, unconditionally guarantee to each Lender
the timely performance of all other obligations under the Credit Documents and
any agreements giving rise to Hedging Obligations of any Credit Party. This
guaranty is a guaranty of payment and not of collection and is a continuing
guaranty and shall apply to all Credit Party Obligations whenever arising.
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents or any agreements giving rise to
Hedging Obligations on the part of any Credit Party, or any other agreement or
instrument referred to therein, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor agrees that this guaranty may be enforced by the Lenders without
the necessity at any time of resorting to or exhausting any other security or
collateral and without the necessity at any time of having recourse to the
Notes or any other of the Credit Documents or any collateral, if any, hereafter
securing the Credit Party Obligations or otherwise and each Guarantor hereby
waives the right to require the Lenders to proceed against the Borrower or any
other Person (including a co-guarantor) or to require the Lenders to pursue any
other remedy or enforce any other right. Each Guarantor further agrees that it
shall have no right of subrogation, indemnity, reimbursement or contribution
against the Borrower or any other Guarantor of the Credit Party Obligations for
amounts paid under this guaranty until such time as the Lenders (and any
Affiliates of Lenders entering into any agreement with any Credit Party giving
rise to Hedging Obligations of such Credit Party) have been paid in full, all
Commitments under the Credit Agreement have been terminated and no Person or
Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received
under the Credit Documents. Each Guarantor further agrees that nothing
contained herein shall prevent the Lenders from suing on the Notes or any of
the other Credit Documents or any agreements giving rise to Hedging Obligations
on the part of any Credit Party or foreclosing its security interest in or Lien
on any collateral, if any, securing the Credit Party Obligations or from
exercising any other rights available to it under this Credit Agreement, the
Notes, any other of the Credit Documents, or any other instrument of security,
if any, and the exercise of any of the aforesaid rights and the completion of
any foreclosure proceedings shall not constitute a discharge of any of any
Guarantor's obligations hereunder; it being the purpose and intent of each
Guarantor that its obligations hereunder shall be absolute, independent and
unconditional under any and all circumstances. Neither any Guarantor's
obligations under this guaranty nor any remedy for the enforcement thereof
shall be impaired,
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modified, changed or released in any manner whatsoever by an impairment,
modification, change, release or limitation of the liability of the Borrower or
by reason of the bankruptcy or insolvency of the Borrower. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Credit Party Obligations and notice of or proof of reliance of by the
Agent or any Lender upon this Guarantee or acceptance of this Guarantee. The
Credit Party Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended or waived,
in reliance upon this Guarantee. All dealings between the Borrower and any of
the Guarantors, on the one hand, and the Agent and the Lenders, on the other
hand, likewise shall be conclusively presumed to have been had or consummated
in reliance upon this Guarantee.
4.3 MODIFICATIONS.
Each Guarantor agrees that (a) all or any part of the security now or
hereafter held for the Credit Party Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) the Lenders shall not have
any obligation to protect, perfect, secure or insure any such security
interests, liens or encumbrances now or hereafter held, if any, for the Credit
Party Obligations or the properties subject thereto; (c) the time or place of
payment of the Credit Party Obligations may be changed or extended, in whole or
in part, to a time certain or otherwise, and may be renewed or accelerated, in
whole or in part; (d) the Borrower and any other party liable for payment under
the Credit Documents may be granted indulgences generally; (e) any of the
provisions of the Notes or any of the other Credit Documents may be modified,
amended or waived; (f) any party (including any co-guarantor) liable for the
payment thereof may be granted indulgences or be released; and (g) any deposit
balance for the credit of the Borrower or any other party liable for the
payment of the Credit Party Obligations or liable upon any security therefor
may be released, in whole or in part, at, before or after the stated, extended
or accelerated maturity of the Credit Party Obligations, all without notice to
or further assent by such Guarantor, which shall remain bound thereon,
notwithstanding any such exchange, compromise, surrender, extension, renewal,
acceleration, modification, indulgence or release.
4.4 WAIVER OF RIGHTS.
Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this guaranty by the Lenders and
of all extensions of credit to the Borrower by the Lenders; (b) presentment and
demand for payment or performance of any of the Credit Party Obligations; (c)
protest and notice of dishonor or of default (except as specifically required
in the Credit Agreement) with respect to the Credit Party Obligations or with
respect to any security therefor; (d) notice of the Lenders obtaining,
amending, substituting for, releasing, waiving or modifying any security
interest, lien or encumbrance, if any, hereafter securing the Credit Party
Obligations, or the
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Lenders' subordinating, compromising, discharging or releasing such security
interests, liens or encumbrances, if any; (e) all other notices to which such
Guarantor might otherwise be entitled; and (f) demand for payment under this
guaranty. Without limiting the generality of any other provision of this
Section 4, each Guarantor hereby specifically waives the benefits of N.C. Gen.
Stat. Sections 26-7 through 26-9, inclusive. Each Guarantor further agrees
that such Guarantor shall have no right of recourse to security for the Credit
Parties' Obligations, except through the exercise of the rights of subrogation
pursuant to Section 4.2.
4.5 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment
by or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit
Party Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.6 REMEDIES.
The Guarantors agree that, as between the Guarantors, on the one hand,
and the Agent and the Lenders, on the other hand, the Credit Party Obligations
may be declared to be forthwith due and payable as provided in Section 9 (and
shall be deemed to have become automatically due and payable in the
circumstances provided in Section 9) notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing such Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Credit Party
Obligations being deemed to have become automatically due and payable), such
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors. The Guarantors
acknowledge and agree that their obligations hereunder are secured in
accordance with the terms of the Security Agreements and the other Collateral
Documents and that the Lenders may exercise their remedies thereunder in
accordance with the terms thereof.
4.7 LIMITATION OF GUARANTY.
Notwithstanding any provision to the contrary contained herein or in
any of the other Credit Documents, to the extent the obligations of any
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of such
Guarantor hereunder
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shall be limited to the maximum amount that is permissible under applicable law
(whether federal or state and including, without limitation, the Bankruptcy
Code).
4.8 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree, as among themselves, that if any
Guarantor shall become an Excess Funding Guarantor (as defined below), each
other Guarantor shall, on demand of such Excess Funding Guarantor (but subject
to the next sentence hereof), pay to such Excess Funding Guarantor an amount
equal to such Guarantor's Pro Rata Share (as defined below and determined, for
this purpose, without reference to the properties, assets, liabilities and
debts of such Excess Funding Guarantor) of such Excess Payment (as defined
below). The payment obligation of any Guarantor to any Excess Funding
Guarantor under this Section 4.8 shall be subordinate and subject in right of
payment to the prior payment in full of the obligations of such Guarantor under
the other provisions of this Section 4, and such Excess Funding Guarantor shall
not exercise any right or remedy with respect to such excess until payment and
satisfaction in full of all of such obligations. For purposes hereof, (i)
"Excess Funding Guarantor" shall mean, in respect of any obligations arising
under the other provisions of this Section 4 (hereafter, the "Guaranteed
Obligations"), a Guarantor that has paid an amount in excess of its Pro Rata
Share of the Guaranteed Obligations; (ii) "Excess Payment" shall mean, in
respect of any Guaranteed Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations; and
(iii) "Pro Rata Share", for the purposes of this Section 4.8, shall mean, for
any Guarantor, the ratio (expressed as a percentage) of (a) the amount by which
the aggregate present fair salable value of all of its assets and properties
exceeds the amount of all debts and liabilities of such Guarantor (including
contingent, subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of such Guarantor hereunder) to (b) the amount by
which the aggregate present fair salable value of all assets and other
properties of the Borrower and all of the Guarantors exceeds the amount of all
of the debts and liabilities (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of the Borrower and
the Guarantors hereunder) of the Borrower and all of the Guarantors, all as of
the Closing Date (if any Guarantor becomes a party hereto subsequent to the
Closing Date, then for the purposes of this Section 4.8 such subsequent
Guarantor shall be deemed to have been a Guarantor as of the Closing Date and
the information pertaining to, and only pertaining to, such Guarantor as of the
date such Guarantor became a Guarantor shall be deemed true as of the Closing
Date). Notwithstanding the foregoing, all rights of contribution against any
Guarantor shall terminate from and after the date such Guarantor shall be
relieved of its obligations pursuant to Section 8.4.
SECTION 5
CONDITIONS PRECEDENT
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5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement and
make the initial Extension of Credit is subject to satisfaction of the
following conditions:
(a) Executed Credit Documents. Receipt by the Agent of
duly executed copies of (i) this Credit Agreement, (ii) the Notes,
(iii) the Collateral Documents and (iv) all other Credit Documents,
each in form and substance acceptable to the Lenders in their sole
discretion.
(b) Corporate Documents. Receipt by the Agent of the
following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of
each Credit Party certified to be true and complete as of a
recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation and certified
by a secretary or assistant secretary of such Credit Party to
be true and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit
Party certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the
Board of Directors of each Credit Party approving and adopting
the Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of
such Credit Party to be true and correct and in force and
effect as of the Closing Date.
(iv) Good Standing. Copies of (A) certificates of
good standing, existence or its equivalent with respect to
each Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing could
reasonably be expected to have a Material Adverse Effect on
the business or operations of a Credit Party in such
jurisdiction and (B) to the extent available, a certificate
indicating payment of all corporate franchise taxes certified
as of a recent date by the appropriate governmental taxing
authorities.
(v) Incumbency. An incumbency certificate of
each Credit Party certified by a secretary or assistant
secretary to be true and correct as of the Closing Date.
(c) Personal Property Collateral. The Agent shall have
received:
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(i) searches of Uniform Commercial Code ("UCC")
filings in the jurisdiction of the chief executive office of
each Credit Party and such other jurisdictions where
Collateral is located (as reasonably determined by the Agent),
copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) duly executed UCC financing statements for
each appropriate jurisdiction as is necessary, in the Agent's
sole discretion, to perfect the Lenders' security interest in
the Collateral;
(iii) searches of ownership of intellectual
property in the appropriate governmental offices and such
patent/trademark/copyright filings as requested by the Agent
in order to perfect the Agent's security interest in the
Collateral;
(iv) all stock certificates evidencing the Capital
Stock pledged to the Agent pursuant to the Pledge Agreements,
together with duly executed in blank undated stock powers
attached thereto;
(v) all instruments and chattel paper in the
possession of a Credit Party, as required by the Security
Agreements, together with allonges or assignments as may be
necessary or appropriate to perfect the Lenders' security
interest in the Collateral; and
(vi) all duly executed consents as are necessary,
in the Agent's sole discretion, to perfect the Lenders'
security interest in the Collateral.
(d) Real Property Collateral. The Agent shall have
received:
(i) fully executed and notarized mortgages, deeds
of trust or deeds to secure debt (each a "Mortgage" and
collectively the "Mortgages") encumbering the fee interest of
the Credit Parties in each real property asset owned by a
Credit Party set forth on Schedule 5.1(d) (each a "Mortgaged
Property" and collectively the "Mortgaged Properties"),
together with such UCC-1 financing statements as the Agent
shall deem appropriate with respect to each such Mortgaged
Property;
(ii) an opinion of counsel (which counsel shall be
reasonably satisfactory to the Agent) in the state in which
each Mortgaged Property is located (other than North Carolina)
with respect to the enforceability of the form of Mortgage and
sufficiency of the form of UCC-1 financing statements to be
recorded or filed in such
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state and such other matters as the Agent may request, in form
and substance satisfactory to the Agent; and
(iii) ALTA or other appropriate form mortgagee
title insurance policies (the "Mortgage Policies") issued by
Chicago Title Insurance Company or other title insurers
satisfactory to the Agent (the "Title Insurance Company"), in
an amount satisfactory to the Agent with respect to each
Mortgaged Property assuring the Agent that the applicable
Mortgages, as applicable, create valid and enforceable first
priority mortgage liens on the respective Mortgaged
Properties, free and clear of all defects and encumbrances
except Permitted Liens, which Mortgage Policies shall be in
form and substance satisfactory to the Agent and containing
such endorsements as shall be satisfactory to the Agent and
for any other matters that the Agent may request, and
providing affirmative insurance and such reinsurance as the
Agent may request, all of the foregoing in form and substance
satisfactory to the Agent.
(e) Legal Opinions. The Agent shall have received:
(i) a legal opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, dated as
of the Closing Date and substantially in the form of Schedule
5.1(e)(i);
(ii) a legal opinion of special local counsel for
each Credit Party not incorporated in the State of Delaware,
dated as of the Closing Date and substantially in the form of
Schedule 5.1(e)(ii); and
(iii) a legal opinion of special local counsel for
the Credit Parties for each State other than North Carolina in
which any Collateral is located, dated as of the Closing Date
and substantially in the form of Schedule 5.1(e)(iii).
(f) Evidence of Insurance. Receipt by the Agent of
copies of insurance policies or certificates of insurance of the
Consolidated Parties evidencing liability and casualty insurance
meeting the requirements set forth in the Credit Documents, including,
but not limited to, naming the Agent as additional insured (in the
case of liability insurance) or sole loss payee (in the case of hazard
insurance) on behalf of the Lenders.
(g) Officer's Certificate. The Agent shall have received
a certificate or certificates executed by an Executive Officer of the
Borrower as of the Closing Date stating that (i) each Consolidated
Party is in compliance with all existing financial obligations, (ii)
all governmental, shareholder and third party consents and approvals,
if any, with respect to the Credit Documents and the transactions
contemplated thereby have been obtained, (iii) no action, suit,
investigation or proceeding is pending or threatened in any court or
before any arbitrator or governmental instrumentality that purports to
affect any Credit Party or
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Consolidated Party or any transaction contemplated by the Credit
Documents, if such action, suit, investigation or proceeding could
have or could be reasonably expected to have a Material Adverse Effect
and (iv) immediately after giving effect to this Credit Agreement, the
other Credit Documents, the Transaction and all the transactions
contemplated herein and therein to occur on such date, (A) each of the
Credit Parties is Solvent, (B) no Default or Event of Default exists,
(C) all representations and warranties contained herein and in the
other Credit Documents are true and correct in all material respects,
(D) the Credit Parties are in compliance with each of the financial
covenants set forth in Section 7.12 and all existing financial
obligations of any such Persons, (E) upon giving pro forma effect to
the Acquisition on the Closing Date, the ratio of Funded Indebtedness
of the Consolidated Parties as of such date to Consolidated EBITDA of
the Consolidated Parties for the twelve-month period ended as of April
30, 1998 does not exceed 6.00 to 1.00.
(h) Government Consent. Receipt by the Agent of evidence
that all governmental, shareholder and material third party consents
(including ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ clearance) and approvals necessary or, in
the reasonable opinion of the Agent desirable in connection with the
acquisition, financings and other transactions contemplated hereby and
the absence of any action being taken by any authority that could
reasonably be likely to restrain, prevent or impose any material
adverse conditions on such financings and other transactions or that
could reasonably be likely to seek or threaten any of the foregoing,
and no law or regulation shall be applicable which in the judgment of
the Agent could reasonably be likely to have such effect.
(i) Financial Information. Receipt by the Agent and the
Lenders of (i) a satisfactory pro forma consolidated balance sheet of
the Consolidated Parties as of April 4, 1998 giving effect to this
Credit Agreement, the other Credit Documents, the Transaction and all
the transactions contemplated herein and therein to occur on such
date, and reflecting estimated purchase price accounting adjustments,
reviewed by independent public accountants of recognized national
standing and (ii) such other information relating to the Acquisition
as the Agent may reasonably require in connection with the structuring
and syndication of credit facilities of the type described herein.
(j) Equity Investment. Receipt by the Agent of evidence
that an equity investment of at least $40,000,000 (to include the
proceeds of $25,000,000 of common equity issued by the Parent
(consisting of a cash equity investment by the Sponsor of
approximately $23,200,000 and the rollover of $1,800,000 of equity of
management of Acquired Companies) and the proceeds of $15,000,000 of
discount notes issued by the Parent (the "Discount Notes") shall have
been received by the Parent on the terms described in the Offering
Memorandum.
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(k) Purchase Agreement. There shall not have been any
material modification, amendment, supplement or waiver to the Purchase
Agreement without the prior written consent of the Agent, and the
Acquisition shall have been consummated in accordance with the terms
of the Purchase Agreement (without waiver of any conditions precedent
to the obligations of the buyer thereunder) and the expenses related
to such acquisition shall not exceed $9 million. The Agent shall have
received a final Purchase Agreement, together with all exhibits and
schedules thereto certified by an officer of the Borrower.
(l) Consummation of other Senior Subordinated Debt
Financing. The Borrower shall have received gross proceeds of at
least $100,000,000 from the issuance by the Borrower of senior
subordinated notes (the "Senior Subordinated Debt") on terms that are
satisfactory to the Agent.
(m) Solvency Opinion. Receipt by the Agent of an opinion
from an independent auditor or appraiser acceptable to the Agent as to
the solvency of each of the Borrower and the Guarantors, in each case
after giving effect to this Credit Agreement, the other Credit
Documents, the Transaction to the and all the transactions
contemplated herein and therein to occur on such date.
(n) Litigation. There shall not exist any pending or
threatened action, suit, investigation or proceeding against a Credit
Party or a Consolidated Party that could reasonably be expected to
have a Material Adverse Effect.
(o) Fees and Expenses. Payment by the Borrower of all
fees and reasonable expenses owed by it to the Lenders and the Agent,
including, without limitation, payment to the Agent of the fees set
forth in the Fee Letter.
(p) Syndication Side Letter. Receipt by the Agent of a
letter agreement executed by the Borrower and reasonably satisfactory
to the Agent regarding amendment of this Credit Agreement in
connection with the primary syndication of the credit facilities
hereunder.
(q) Borrower Intercompany Notes. Receipt by the Agent of
satisfactory evidence that (i) the obligor under the Borrower
Intercompany Notes is the Borrower and (ii) that the payee under the
Borrower Intercompany Notes is Heddle Capital Corp.
(r) Other. Receipt by the Lenders of such other
documents, instruments, agreements or information as reasonably
requested by any Lender.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
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In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make, continue or convert Loans nor shall an
Issuing Lender be required to issue or extend a Letter of Credit unless:
(a) Notice. The Borrower shall have delivered (i) in the
case of any new Revolving Loan, a Notice of Borrowing, duly executed
and completed, by the time specified in Section 2.1, (ii) in the case
of any Letter of Credit, the Issuing Lender shall have received an
appropriate request for issuance in accordance with the provisions of
Section 2.2 and (iii) in the case of any continuation or conversion of
a Loan, a duly executed and completed Notice of
Continuation/Conversion by the time specified in Section 2.4;
(b) Representations and Warranties. The representations
and warranties made by any Credit Party or any Consolidated Party in
any Credit Document are true and correct in all material respects at
and as if made as of such date except to the extent they expressly
relate to an earlier date;
(c) No Default. No Default or Event of Default shall
exist or be continuing either prior to or after giving effect thereto;
(d) No Bankruptcy Event. There shall not have been
commenced against the Parent or any Consolidated Party an involuntary
case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or any case, proceeding or other action
for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or
other action shall remain undismissed, undischarged or unbonded;
(e) No Material Adverse Effect. No Material Adverse
Effect shall have occurred since January 3, 1998; and
(f) Availability. Immediately after giving effect to the
making of a Revolving Loan (and the application of the proceeds
thereof) or to the issuance of a Letter of Credit, as the case may be,
the sum of the Revolving Loans outstanding plus LOC Obligations
outstanding shall not exceed the Revolving Commitment Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit shall constitute a representation and
warranty by the Borrower of the correctness of the matters specified in
subsections (b), (c), (d), (e) and (f) above.
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SECTION 6
REPRESENTATIONS AND WARRANTIES
The Consolidated Parties hereby represent to the Agent and each Lender
that:
6.1 FINANCIAL CONDITION.
(a) The audited consolidated balance sheets and income
statements of the Consolidated Parties for the fiscal years ended
January 3, 1998 and December 28, 1996 have heretofore been furnished
to the Agent. Such financial statements (including the notes thereto)
(i) have been audited by Ernst & Young, LLP (ii) have been prepared in
accordance with GAAP consistently, applied throughout the periods
covered thereby and (iii) present fairly (on the basis disclosed in
the footnotes to such financial statements) the consolidated financial
condition, results of operations and cash flows of the Consolidated
Parties as of such date and for such periods. The unaudited
consolidated interim balance sheet of the Consolidated Parties as at
the end of, and the related unaudited consolidated interim statements
of earnings and of cash flows for, each fiscal month ended after
January 3, 1998 and prior to the Closing Date, have heretofore been
furnished to the Agent. Such interim financial statements for each
such monthly period, (i) have been prepared in accordance with GAAP
(except for the absence of footnotes) consistently applied throughout
the periods covered thereby and (ii) present fairly the consolidated
financial condition, results of operations and cash flows of the
Consolidated Parties as of such date and for such periods. During the
period from January 3, 1998 to and including the Closing Date there
has been no sale, transfer or other disposition by any Consolidated
Party of any material part of the business or property of the
Consolidated Parties, taken as a whole, and no purchase or other
acquisition by any of them of any business or property (including any
capital stock of any other person) material in relation to the
consolidated financial condition of the Consolidated Parties, taken as
a whole, in each case, which, is not reflected in the foregoing
financial statements or in the notes thereto and has not otherwise
been disclosed in writing to the Lenders on or prior to the Closing
Date.
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(b) The financial statements delivered to the Lenders
pursuant to Section 7.1(a) and (b), (a) have been prepared in
accordance with GAAP (except as may otherwise be permitted under
Section 7.1(a) and (b)) and (b) present fairly (on the basis disclosed
in the footnotes to such financial statements) the consolidated
financial condition, results of operations and cash flows of the
Consolidated Parties as of such date and for such periods. Since
January 3, 1998, there has been no sale, transfer or other disposition
by any Consolidated Party of any material part of the business or
property of the Consolidated Parties, taken as a whole, and no
purchase or other acquisition by any of them of any business or
property (including any Capital Stock of any other Person) material in
relation to the consolidated financial condition of the Consolidated
Parties, taken as a whole, in each case, which, is not (x) reflected
in the most recent financial statements delivered to the Lenders
pursuant to Section 7.1 or in the notes thereto or (y) otherwise
permitted by the terms of this Credit Agreement and communicated to
the Agent.
6.2 NO MATERIAL CHANGE.
Except with respect to the Transaction, since January 3, 1998 (a)
there has been no development or event relating to or affecting a Consolidated
Party which has had or would be reasonably expected to have a Material Adverse
Effect or (b) there has been no development or event relating to or affecting
the Parent which has had or would be reasonably expected to have a material
adverse effect on (i) the ability of the Parent to perform its obligations
under the Pledge Agreement or (ii) the validity or enforceability of the Pledge
Agreement or the rights and remedies of the Agent or the Lenders thereunder and
(b) except as otherwise permitted under this Credit Agreement, no dividends or
other distributions have been declared, paid or made upon the Capital Stock in
a Consolidated Party nor has any of the Capital Stock in a Consolidated Party
been redeemed, retired, purchased or otherwise acquired for value.
6.3 ORGANIZATION AND GOOD STANDING.
(a) Each of the Consolidated Parties and the Parent is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State (or other jurisdiction) of its incorporation, (b) each Consolidated Party
is duly qualified and in good standing as a foreign corporation and authorized
to do business in every jurisdiction unless the failure to be so qualified, in
good standing or authorized would not have a Material Adverse Effect and (c) of
the Consolidated Parties and the Parent has the requisite corporate power and
authority to own its properties and to carry on its business as now conducted
and as proposed to be conducted.
6.4 DUE AUTHORIZATION.
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Each Credit Party (a) has the requisite corporate power and authority
to execute, deliver and perform this Credit Agreement and the other Credit
Documents to which it is a party and to incur the obligations herein and
therein provided for and (b) is duly authorized to, and has been authorized by
all necessary corporate action, to execute, deliver and perform this Credit
Agreement and the other Credit Documents to which it is a party.
6.5 NO CONFLICTS.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or materially conflict with any Requirement of
Law or any other law, regulation (including, without limitation, Regulation U
or Regulation X), order, writ, judgment, injunction, decree or permit
applicable to it, (c) violate, contravene or conflict with contractual
provisions of, or cause an event of default under, any indenture, loan
agreement, mortgage, deed of trust, contract or other agreement or instrument
to which it is a party or by which it may be bound, the violation of which
could reasonably be expected to have a Material Adverse Effect, or (d) result
in or require the creation of any Lien (other than those contemplated in or
created in connection with the Credit Documents) upon or with respect to its
properties.
6.6 CONSENTS.
Except for consents, approvals and authorizations (a) which have been
obtained or (b) which are listed on Schedule 6.6, no consent, approval,
authorization or order of, or filing, registration or qualification with, any
court or Governmental Authority or third party in respect of any Credit Party
is required in connection with the execution, delivery or performance of this
Credit Agreement or any of the other Credit Documents by such Credit Party.
6.7 ENFORCEABLE OBLIGATIONS.
This Credit Agreement and the other Credit Documents have been duly
executed and delivered and constitute legal, valid and binding obligations of
each Credit Party enforceable against such Credit Party in accordance with
their respective terms, except as may be limited by bankruptcy or insolvency
laws or similar laws affecting creditors' rights generally or by general
equitable principles.
6.8 NO DEFAULT.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by
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which any of its properties is bound which default could reasonably be expected
to have a Material Adverse Effect. No Default or Event of Default has occurred
or exists except as previously disclosed in writing to the Lenders.
6.9 OWNERSHIP.
Each Consolidated Party (i) is the owner of, and has good and
marketable title to, all of its respective assets which such Person purports to
own and none of such assets is subject to any Lien other than Permitted Liens
and (ii) has a valid license, leasehold interest or other right to use all of
the respective assets which such Person purports to hold under license, lease
or other usage right and none of such assets is subject to any Lien other than
Permitted Liens(i).
6.10 INDEBTEDNESS.
The Consolidated Parties have no Indebtedness except (a) as disclosed
in the financial statements referenced in Section 6.1, (b) as set forth on
Schedule 6.10 and (c) as otherwise permitted by this Credit Agreement.
6.11 LITIGATION.
Except as disclosed in Schedule 6.11, there are no actions, suits or
legal, equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Consolidated Party, threatened (i) against any Consolidated
Party which would reasonably be expected to have a Material Adverse Effect or
(ii) against the Parent which would reasonably be expected to have a material
adverse effect on (A) the ability of the Parent to perform its obligations
under the Pledge Agreement or (B) the validity or enforceability of the Pledge
Agreement or the rights and remedies of the Agent or the Lenders thereunder.
6.12 TAXES.
Each Consolidated Party has filed, or caused to be filed, all tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent or
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP.
No Consolidated Party is aware as of the Closing Date of any proposed tax
assessments against it or any other Consolidated Party.
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6.13 COMPLIANCE WITH LAW.
Each Credit Party and each Consolidated Party is in compliance with
all Requirements of Law and all other laws, rules, regulations, orders and
decrees (including without limitation Environmental Laws) applicable to it, or
to its properties, unless such failure to comply would not be reasonably
expected to have a Material Adverse Effect. No Requirement of Law would be
reasonably expected to cause a Material Adverse Effect.
6.14 ERISA.
Except as disclosed in the Financial Statements or in Schedule 6.14
or except as would not result or be reasonably expected to result in a Material
Adverse Effect:
(a) During the five-year period prior to the date on
which this representation is made or deemed made: (i) no ERISA Event
has occurred, and, to the best knowledge of the Consolidated Parties,
no event or condition has occurred or exists as a result of which any
ERISA Event could reasonably be expected to occur, with respect to any
Plan; (ii) no "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether
or not waived, has occurred with respect to any Plan; (iii) each Plan
has been maintained, operated, and funded in compliance with its own
terms and in material compliance with the provisions of ERISA, the
Code, and any other applicable federal or state laws; and (iv) no lien
in favor of the PBGC or a Plan has arisen or is reasonably likely to
arise on account of any Plan.
(b) The actuarial present value of all "benefit
liabilities" (as defined in Section 4001(a)(16) of ERISA), whether or
not vested, under each Single Employer Plan, as of the last annual
valuation date prior to the date on which this representation is made
or deemed made (determined, in each case, utilizing the actuarial
assumptions used in such Plan's most recent actuarial valuation
report), did not exceed as of such valuation date the fair market
value of the assets of such Plan, or by more than $250,000 in the
aggregate as to all such Plans.
(c) Neither any Consolidated Party nor any ERISA
Affiliate has incurred, or, to the best knowledge of the Consolidated
Parties, could be reasonably expected to incur, any withdrawal
liability under ERISA to any Multiemployer Plan or Multiple Employer
Plan. No Consolidated Party would become subject to any withdrawal
liability under ERISA if any Consolidated Party or any ERISA Affiliate
were to withdraw completely from all Multiemployer Plans and Multiple
Employer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. Neither any
Consolidated Party nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization (within
the
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meaning of Section 4241 of ERISA), is insolvent (within the meaning of
Section 4245 of ERISA), or has been terminated (within the meaning of
Title IV of ERISA), and no Multiemployer Plan is, to the best
knowledge of the Consolidated Parties, reasonably expected to be in
reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility has occurred with respect to a Plan which has
subjected or may subject any Consolidated Party nor any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l)
of ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which any Consolidated Party or any ERISA
Affiliate has agreed or is required to indemnify any Person against
any such liability.
(e) Neither any Consolidated Party nor any ERISA
Affiliate has any material liability with respect to "expected
post-retirement benefit obligations" within the meaning of the
Financial Accounting Standards Board Statement 106.
6.15 SUBSIDIARIES.
Set forth on Schedule 6.15 is a complete and accurate list of all
Subsidiaries of each Consolidated Party as of the Closing Date. Information on
Schedule 6.15 includes jurisdiction of incorporation, the number of shares of
each class of Capital Stock outstanding, the number and percentage of
outstanding shares of each class owned (directly or indirectly) by such
Consolidated Party; and the number and effect, if exercised, of all outstanding
options, warrants, rights of conversion or purchase and all other similar
rights with respect thereto. The outstanding Capital Stock of all such
Subsidiaries is validly issued, fully paid and non-assessable and is owned by
each such Consolidated Party, directly or indirectly, free and clear of all
Liens (other than those arising under or contemplated in connection with the
Credit Documents). Other than as set forth in Schedule 6.15, as of the Closing
Date no Consolidated Party has outstanding any securities convertible into or
exchangeable for its Capital Stock nor does any such Person have outstanding
any rights to subscribe for or to purchase or any options for the purchase of,
or any agreements providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any character relating to its Capital
Stock.
6.16 USE OF PROCEEDS; MARGIN STOCK.
The proceeds of the Loans hereunder will be used solely for the
purposes specified in Section 7.10. None of the proceeds of the Loans will be
used for the purpose of purchasing or carrying any "margin stock" as defined in
Regulation U or Regulation X, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry "margin stock"
or any "margin
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security" or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of Regulation T, U, or X. No Consolidated
Party owns any "margin stock".
6.17 GOVERNMENT REGULATION.
No Credit Party or Consolidated Party is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940 or the Interstate Commerce Act, each as amended.
In addition, no Credit Party or Consolidated Party is an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, or controlled by such a company, or a "holding company," or
a "Subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "Subsidiary" or a "holding company," within the meaning of the
Public Utility Holding Company Act of 1935, as amended. As of the Closing
Date, no director, executive officer or principal shareholder of any Credit
Party or Consolidated Party is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference to
any Lender) have the respective meanings assigned thereto in Regulation O
issued by the Board of Governors of the Federal Reserve System.
6.18 ENVIRONMENTAL MATTERS.
Except as set forth on Schedule 6.18 or in the Purchase Agreement or
except as would not reasonably expected to have a Material Adverse Effect:
(i) Each of the Real Properties and all
operations of any Consolidated Party at the Real Properties
are in compliance with all applicable Environmental Laws, and
there is no violation of any applicable Environmental Law with
respect to the Real Properties or the businesses operated by
any Consolidated Party (the "Businesses"), and there are no
conditions relating to the Businesses or the Real Properties
that would be reasonably expected to give rise to liability
under any applicable Environmental Laws.
(ii) No Hazardous Materials have been released in
amounts or concentrations that constitute or constituted a
violation by any Consolidated Party of, or could reasonably be
expected to give rise to liability on the part of any
Consolidated Party under, Environmental Laws.
(iii) No Consolidated Party has received any
written notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance,
liability or potential liability regarding Hazardous Materials
or compliance with Environmental Laws with regard to any of
the Real Properties or the Businesses, nor does any
Consolidated Party have knowledge or reason to believe that
any such notice is being threatened
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(iv) Hazardous Materials have not been transported
or disposed of from the Real Properties, or generated,
treated, stored or disposed of at, on or under any of the Real
Properties or any other location, in each case by, or on
behalf or with the permission of, any Consolidated Party in a
manner that would reasonably be expected to give rise to
liability on the part of any Consolidated Party under any
applicable Environmental Law.
(v) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of any
Consolidated Party, threatened, under any applicable
Environmental Law to which any Consolidated Party is or will
be named as a party, 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 any
Consolidated Party, the Real Properties or the Businesses.
(vi) There has been no release or threatened
release of Hazardous Materials at or from the Real Properties,
or arising from or related to the operations (including,
without limitation, disposal) of any Consolidated Party in
connection with the Real Properties or otherwise in connection
with the Businesses where such release or threatened release
could reasonably be expected to give rise to liability on the
part of any Consolidated Party under Environmental Laws.
(vii) No Consolidated Party has assumed any
liability of any Person under any applicable Environmental
Law.
6.19 INTELLECTUAL PROPERTY.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual Property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal
right to use would not have or be reasonably expected to have a Material
Adverse Effect. Set forth on Schedule 6.19 is a list of all Intellectual
Property owned by each Consolidated Party as of the Closing Date or that any
Consolidated Party has the right to use as of the Closing Date. Except as
provided on Schedule 6.19, no claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does any
Consolidated Party know of any such claim, and to the Consolidated Parties'
knowledge the use of such Intellectual Property by any Consolidated Party does
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not infringe on the rights of any Person, except for such claims and
infringements that in the aggregate, would not have or be reasonably expected
to have a Material Adverse Effect.
6.20 SOLVENCY.
As of the Closing Date, after giving effect to this Credit Agreement,
the other Credit Documents, the Transaction and all the transactions
contemplated herein and therein to occur on such date, each Consolidated Party
is Solvent.
6.21 INVESTMENTS.
All Investments of each Consolidated Party are Permitted Investments.
6.22 LOCATION OF COLLATERAL.
Set forth on Schedule 6.22(a) is a list as of the Closing Date of all
Real Properties with street address, county and state where located. Set forth
on Schedule 6.22(b) is a list as of the Closing Date of all locations where any
tangible personal property of a Consolidated Party is located as of the Closing
Date, including county and state where located. Set forth on Schedule 6.22(c)
is the chief executive office and principal place of business of each
Consolidated Party.
6.23 DISCLOSURE.
(a) Neither this Credit Agreement nor any financial
statements delivered to the Lenders nor any other document,
certificate or statement furnished to the Lenders by or on behalf of
any Consolidated Party in connection with the transactions
contemplated hereby contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the
statements contained therein or herein not misleading.
(b) The financial projections and other pro forma
financial information contained in the information referred to in
subsection (a) above were based on good faith estimates and
assumptions believed by the applicable Consolidated Parties to be
reasonable at the time made and at the time furnished to the Agent
and/or any Lender, it being recognized by the Lenders that such
projections and other pro forma financial information as to future
events such projections and other pro forma financial information may
differ from the projected results for such period or periods.
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6.24 LICENSES, ETC.
The Consolidated Parties have obtained and hold in full force and
effect, all franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals which are necessary for the operation of their
respective businesses as presently conducted.
6.25 BROKERS' FEES.
Other than fees and expenses payable in connection with the
Transaction and described in the Offering Memorandum, no Consolidated Party has
any obligation to any Person in respect of any finder's, broker's, investment
banking or other similar fee in connection with any of the transactions
contemplated under the Credit Documents.
6.26 LABOR MATTERS.
Except as set forth on Schedule 6.26, there are no collective
bargaining agreements or Multiemployer Plans covering the employees of a
Consolidated Party as of the Closing Date and none of the Consolidated Parties
has suffered any strikes, walkouts, work stoppages or other material labor
difficulty within the last five years.
6.27 NATURE OF BUSINESS.
As of the Closing Date, the Borrower and its Subsidiaries are engaged
in the business of manufacturing and selling precision textile loom accessories
and, with respect to its wire rolling facility, metal products.
6.28 REAL PROPERTY MATTERS.
Each of the Mortgaged Properties, and the uses of the Mortgaged Properties, are
in compliance with all applicable laws, regulations and ordinances including
without limitation health and environmental protection laws, erosion control
ordinances, storm drainage control laws, doing business and/or licensing laws
and laws regarding access and facilities for disabled persons including, but
not limited to, the federal Architectural Barriers Act, the Fair Housing
Amendments Act of 1988 and the Rehabilitation Act of 1973, except where the
failure to be in compliance could not reasonably be expected to have a Material
Adverse Effect.
6.29 YEAR 2000 COMPLIANCE.
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Each of the Consolidated Parties has conducted a review and assessment
of its computer applications with respect to the "year 2000 problem" (that is,
the risk that computer applications may not be able to properly perform
date-sensitive functions after December 31, 1999) and, based on that review and
inquiry, the Consolidated Parties believe that the year 2000 problem will not
result in a material adverse change in the operations, financial condition,
business or prospects of the Consolidated Parties taken as a whole, or on the
ability of any Credit Parties taken as a whole to perform any material
obligations under the Credit Documents.
SECTION 7
AFFIRMATIVE COVENANTS
Each Consolidated Party hereby covenants and agrees that so long as
this Credit Agreement is in effect and until the Loans and LOC Obligations,
together with interest, fees and other obligations hereunder, have been paid in
full and the Commitments and Letters of Credit hereunder shall have terminated:
7.1 INFORMATION COVENANTS.
The Consolidated Parties will furnish, or cause to be furnished, to
the Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available,
and in any event within 90 days after the close of each fiscal year of
the Borrower, a consolidated balance sheet and income statement of the
Consolidated Parties, as of the end of such fiscal year, together with
related consolidated statements of operations and retained earnings
and of cash flows for such fiscal year, setting forth in comparative
form consolidated figures for the preceding fiscal year, all such
financial information described above to be in reasonable form and
detail and audited (with respect to consolidated financial statements
only) by independent certified public accountants of recognized
national standing reasonably acceptable to the Agent and whose opinion
shall be to the effect that such financial statements have been
prepared in accordance with GAAP (except for changes with which such
accountants concur) and shall not be limited as to the scope of the
audit or qualified in any manner.
(b) Monthly Financial Statements. As soon as available,
and in any event within 30 days after the close of each fiscal month
of the Borrower (other than the twelfth fiscal month) a consolidated
balance sheet and income statement of the Consolidated Parties as of
the end of such fiscal month, together with related consolidated
statements of operations and retained earnings and of cash flows for
such fiscal month and for the then current fiscal year to date in each
case setting forth in comparative form consolidated figures for the
corresponding period of the preceding fiscal year, all such financial
information described
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above to be in reasonable form and detail and reasonably acceptable to
the Agent, and accompanied by a certificate of an Executive Officer of
the Borrower to the effect that such financial statements fairly
present in all material respects the financial condition of the
Consolidated Parties and have been prepared in accordance with GAAP
(except for the absence of footnotes), subject to changes resulting
from audit and normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of
the financial statements as of the end of each fiscal year of the
Consolidated Parties provided for in Sections 7.1(a) and the financial
statements as of the end of each fiscal quarter of the Consolidated
Parties provided for in 7.1(b) above, a certificate of an Executive
Officer of the Borrower substantially in the form of Exhibit 7.1(c),
(i) demonstrating compliance with the financial covenants contained in
Section 7.12 by calculation thereof as of the end of each such fiscal
period and (ii) stating that no Default or Event of Default exists, or
if any Default or Event of Default does exist, specifying the nature
and extent thereof and what action the Borrower proposes to take with
respect thereto.
(d) Annual Business Plan and Budgets. Within 45 days
after the end of each fiscal year of the Borrower, an annual business
plan and budget of the Consolidated Parties on a consolidated basis
containing, among other things, pro forma financial statements for the
next fiscal year.
(e) Compliance With Certain Provisions of the Credit
Agreement. Within 90 days after the end of each fiscal year of the
Borrower, the Borrower shall deliver a certificate of an Executive
Officer of the Borrower containing information regarding the amount of
all Asset Dispositions and Equity Issuances that were made during the
prior fiscal year.
(f) Accountant's Certificate. Within the period for
delivery of the annual financial statements provided in Section
7.1(a), a certificate of the accountants conducting the annual audit
stating that they have reviewed this Credit Agreement and stating
further whether, in the course of their audit, they have become aware
of any Default or Event of Default and, if any such Default or Event
of Default exists, specifying the nature and extent thereof.
(g) Reports. Promptly upon transmission or receipt
thereof, (i) copies of any filings and registrations with, and reports
to or from, the Securities and Exchange Commission, or any successor
agency, and copies of all financial statements, proxy statements,
notices and reports as any Consolidated Party shall send to its
shareholders generally or to a holder of any Indebtedness owed by any
Consolidated Party in its capacity as such a holder and (ii) upon the
written request of the Agent, all reports and written information to
and from the United
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States Environmental Protection Agency, or any state or local agency
responsible for environmental matters, the United States Occupational
Health and Safety Administration, or any state or local agency
responsible for health and safety matters, or any successor agencies
or authorities concerning environmental, health or safety matters.
(h) Notices. Upon any Executive Officer of a Credit
Party obtaining knowledge thereof, such Credit Party will give
reasonably prompt written notice to the Agent of (i) the occurrence of
an event or condition consisting of a Default or Event of Default,
specifying the nature and existence thereof and what action the
Borrower proposes to take with respect thereto, and (ii) the
occurrence of any of the following: (A) the pendency or commencement
of any litigation, arbitral or governmental proceeding against any
Credit Party or Consolidated Party which if adversely determined could
reasonably be expected to have a Material Adverse Effect, (B) the
institution of any proceedings against any Consolidated Party with
respect to, or the receipt of written notice by such Person of
potential liability or responsibility for violation, or alleged
violation of any federal, state or local law, rule or regulation,
including but not limited to, Environmental Laws, which violation
could reasonably be expected to have a Material Adverse Effect or (C)
any notice or determination concerning the imposition of any
withdrawal liability by a Multiemployer Plan against such Person or
any ERISA Affiliate, the determination that a Multiemployer Plan is,
or is expected to be, in reorganization within the meaning of Title IV
of ERISA or the termination of any Plan. Upon its receipt of any
notice pursuant to this Section 7.1(i), the Agent will promptly notify
each of the Lenders.
(i) ERISA. Upon any Executive Officer of a Credit Party
obtaining knowledge thereof, the Borrower will give prompt written
notice to the Agent (and in any event within five Business Days) of:
(i) of any event or condition, including, but not limited to, any
Reportable Event, that constitutes, or might reasonably lead to, an
ERISA Event, (ii) with respect to any Multiemployer Plan, the receipt
of notice as prescribed in ERISA or otherwise of any withdrawal
liability assessed against any Consolidated Party or any ERISA
Affiliate, or of a determination that any Multiemployer Plan is in
reorganization or insolvent (both within the meaning of Title IV of
ERISA); (iii) the failure to make full payment on or before the due
date (including extensions) thereof of all amounts which any
Consolidated Party or any ERISA Affiliate is required to contribute to
each Plan pursuant to its terms and as required to meet the minimum
funding standard set forth in ERISA and the Code with respect thereto;
(iv) any event has occurred or failed to occur with respect to a
Single Employer Plan, Multiemployer Plan or Multiple Employer Plan
sponsored, maintained or contributed to by an ERISA Affiliate of any
Consolidated Party which could reasonably be expected to have a
Material Adverse Effect or (v) any change in the funding status of any
Plan that could have a Material Adverse Effect, together with a
description of any such event or condition or a copy of any such
notice and a statement by an Executive Officer of the Borrower briefly
setting forth the details regarding such event, condition, or notice,
and the action, if any, which has been or is being taken or is
proposed to be taken by the Credit Parties with respect thereto.
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Promptly upon request, the Borrower shall furnish the Agent and the
Lenders with such additional information concerning any Plan as may be
reasonably requested, including, but not limited to, copies of each
annual report/return (Form 5500 series), as well as all schedules and
attachments thereto required to be filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section
3(39) of ERISA).
(j) Environmental.
(i) Within 45 days after written request of the
Agent at any time (but not more than one time) after the first
anniversary date of the Closing Date, the Borrower will
furnish or cause to be furnished to the Agent, at the
Borrower's expense, an assessment prepared by ENVIRON
Corporation (or such other environmental consultant reasonably
acceptable to the Agent) with respect to compliance by the
Consolidated Parties with the recommendations set forth in the
environmental report referred to in Schedule 6.18.
(ii) In addition to the assessment required to be
delivered pursuant to clause (i) above, in the event that the
Agent reasonably believes that the Consolidated Parties have
breached any of the representations and warranties contained
in Section 6.18 or any of the affirmative covenants contained
in Section 7.4 (to the extent relating to compliance with
Environmental Laws), upon the written request of the Agent,
which shall not occur more than once annually, the Borrower
will furnish or cause to be furnished to the Agent, at the
Borrower's expense, an environmental report addressing the
subject matter of such breach of reasonable scope, form and
depth, (including, where appropriate, as recommended by an
environmental consultant reasonably acceptable to the Agent,
where reasonable and appropriate, invasive soil or groundwater
sampling) by a consultant reasonably acceptable to the Agent.
If the Borrower fails to deliver such an environmental report
within seventy-five (75) days after receipt of such written
request then the Agent may arrange for same, and the
Consolidated Parties hereby grant to the Agent and its
representatives reasonable access to the Real Properties to
reasonably undertake such an assessment (including, where
appropriate, invasive soil or groundwater sampling). The
reasonable cost of any assessment arranged for by the Agent
pursuant to this provision will be payable by the Borrower on
demand and added to the obligations secured by the Collateral
Documents.
(iii) Each Consolidated Party will conduct and
complete all investigations, studies, sampling, and testing
and all remedial, removal, and other actions necessary
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to address all Hazardous Materials on , from or affecting any
of the Real Properties to the extent necessary to be in
compliance with all Environmental Laws and with the validly
issued orders and directives of all Governmental Authorities
with jurisdiction over such Real Properties to the extent any
failure could reasonably be expected to have a Material
Adverse Effect.
(k) Other Information. With reasonable promptness upon
any such request, such other information regarding the business,
properties or financial condition of the Consolidated Parties as the
Agent or the Required Lenders may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Each of the Consolidated Parties will, and will cause each of its
Subsidiaries to, do all things necessary to preserve and keep in full force and
effect its existence, rights, franchises and authority, except where the
failure to do so would not have a Material Adverse Effect or except as
otherwise permitted by Section 8.4 or Section 8.5.
7.3 BOOKS AND RECORDS.
Each of the Consolidated Parties will, and will cause each of its
Subsidiaries to, keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of GAAP
(including the establishment and maintenance of appropriate reserves).
7.4 COMPLIANCE WITH LAW.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, comply with all material laws, rules, regulations and orders,
and all applicable material restrictions imposed by all Governmental
Authorities, applicable to it and its Property (including, without limitation,
Environmental Laws), where such failure to so comply could reasonably be
expected to have a Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Each of the Consolidated Parties will, and will cause each of its
Subsidiaries to, pay, settle or discharge all taxes, assessments and
governmental charges or levies imposed upon it, or upon its income or profits,
or upon any of its properties, before they shall become delinquent, all lawful
claims (including claims for labor, materials and supplies) which, if unpaid,
might give rise to a Lien upon any of its properties, and except as prohibited
hereunder, all of its other Indebtedness as it shall become due; provided,
however, that no Consolidated Party shall be required to pay any such tax,
assessment, charge, levy, claim or Indebtedness which is being contested in
good faith by appropriate proceedings and as to which adequate reserves
therefor have been established in accordance with
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GAAP, unless the failure to make any such payment (i) would give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) could
reasonably be expected to have a Material Adverse Effect.
7.6 INSURANCE.
Each of the Consolidated Parties will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance
(including worker's compensation insurance, liability insurance, casualty
insurance and business interruption insurance) in such amounts, covering such
risks and liabilities and with such deductibles or self-insurance retentions as
are in accordance with normal industry practice. All liability policies shall
have the Agent, on behalf of the Lenders, as an additional insured and all
casualty policies shall have the Agent, on behalf of the Lenders, as loss
payee.
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In the event there occurs any material loss, damage to or destruction
of the Collateral of any Consolidated Party or any part thereof, such
Consolidated Party shall promptly give written notice thereof to the Agent
generally describing the nature and extent of such damage or destruction.
Subsequent to any loss, damage to or destruction of the Collateral of any
Consolidated Party or any part thereof, such Consolidated Party, whether or not
the insurance proceeds, if any, received on account of such damage or
destruction shall be sufficient for that purpose, at such Consolidated Party's
cost and expense, will promptly repair or replace the Collateral of such
Consolidated Party so lost, damaged or destroyed; provided, however, that such
Consolidated Party need not repair or replace the Collateral of such
Consolidated Party so lost, damaged or destroyed to the extent the failure to
make such repair or replacement is desirable to the proper conduct of the
business of such Consolidated Party in the ordinary course and otherwise is in
the best interest of such Consolidated Party and would not materially impair
the rights and benefits of the Agent or the Lenders under the Collateral
Documents, any other Credit Document or any Hedging Agreement. Notwithstanding
any provision to the contrary contained in this Credit Agreement (including
without limitation Section 3.3(b)(v) and Section 8.5), none of the Consolidated
Parties shall undertake replacement or restoration of any lost, damaged or
destroyed Collateral of such Consolidated Party with insurance proceeds in
respect thereof unless (A) the Agent has received evidence reasonably
satisfactory to it that the Collateral lost, damaged or destroyed has been or
will be replaced or restored to its condition immediately prior to the loss,
destruction or other event giving rise to the payment of such insurance
proceeds and (B) no violation of Section 7.12 would have occurred as of the
most recent fiscal quarter end preceding the date of determination with respect
to which the Agent has received the financial statements and officer's
certificate required to be delivered pursuant to Section 7.1(a) or (b), as
applicable, and Section 7.1(c) upon giving pro forma effect to any Indebtedness
to be incurred in connection with such replacement or restoration (assuming,
for purposes hereof, that such Indebtedness was incurred as of the first day of
the four fiscal-quarter period ending as of such fiscal quarter end). All
insurance proceeds shall be subject to the security interest of the Lenders
under the Collateral Documents.
The present insurance coverage of the Consolidated Parties is outlined
as to carrier, policy number, expiration date, type and amount on Schedule 7.6.
7.7 MAINTENANCE OF PROPERTY.
Each of the Consolidated Parties will maintain and preserve its
properties and equipment in good repair, working order and condition, normal
wear and tear excepted, and will make, or cause to be made, in such properties
and equipment from time to time all repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto as may be needed or
proper, to the extent and in the manner customary for companies in similar
businesses.
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7.8 PERFORMANCE OF OBLIGATIONS.
Each Credit Party and each Consolidated Party will, and will cause
each of its Subsidiaries to, perform in all respects all of its obligations
under the terms of all agreements, indentures, mortgages, security agreements
or other debt instruments to which it is a party or by which it is bound unless
the failure to do so will not have or be reasonably expected to have a Material
Adverse Effect.
7.9 COLLATERAL.
Each Consolidated Party will, and will cause each of its Subsidiaries
to, cause (i) all of its owned Real Properties and personal property located in
the United States, (ii) to the extent deemed to be material by the Agent or the
Required Lenders in its or their sole reasonable discretion, all of its other
owned Real Properties and personal property and (iii) all of its leased Real
Properties located in the United States to be subject at all times to first
priority, perfected and, in the case of Real Property (whether leased or
owned), title insured Liens in favor of the Agent pursuant to the terms and
conditions of the Collateral Documents or, with respect to any such property
acquired subsequent to the Closing Date, such other additional security
documents as the Agent shall reasonably request. With respect to any real
property (whether leased or owned) located in the United States of America
acquired by any direct or indirect Subsidiary of the Borrower subsequent to the
Closing Date, such Person will cause to be delivered to the Agent with respect
to such Real Property documents, instruments and other items of the types
required to be delivered pursuant to Section 5.1(d) in form acceptable to the
Agent. In furtherance of the foregoing terms of this Section 7.9 and without
limiting the terms of Section 8.4, the Borrower agrees to promptly provide the
Agent with written notice of the acquisition by, or the entering into a leasing
by, the Borrower or any of its direct or indirect Subsidiaries of any asset(s)
having a market value greater than $1,000,000, setting forth in reasonable
detail the location and a description of the asset(s) so acquired. Without
limiting the generality of the above, the Consolidated Parties will cause 100%
of the Capital Stock or other equity interest in each of their direct or
indirect Domestic Subsidiaries and 65% of the Capital Stock or other equity
interest in each of their direct Foreign Subsidiaries to be subject at all
times to a first priority, perfected Lien in favor of the Agent pursuant to the
terms and conditions of the Collateral Documents or such other security
documents as the Agent shall reasonably request.
If, subsequent to the Closing Date, a Consolidated Party shall (a) acquire
any intellectual property, securities, instruments, chattel paper or other
personal property required to be delivered to the Agent as Collateral hereunder
or under any of the Collateral Documents or (b) acquire or lease any real
property, the Borrower shall promptly (and in any event within three (3)
Business Days) after any Executive Officer of a Consolidated Party acquires
knowledge of same notify the Agent of same. Each Consolidated Party shall, and
shall cause
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each of its Subsidiaries to, take such action (including but not limited to the
actions set forth in Sections 5.1(c)) at its own expense as requested by the
Agent to ensure that the Lenders have a first priority perfected Lien in (i)
all owned Real Properties and personal property of the Consolidated Parties
located in the United States, (ii) to the extent deemed to be material by the
Agent or the Required Lenders in its or their sole reasonable discretion, all
other owned Real Properties and personal property of the Consolidated Parties
and (iii) all leased Real Properties located in the United States, subject in
each case only to Permitted Liens. Each Consolidated Party shall, and shall
cause each of its Subsidiaries to, adhere to the covenants regarding the
location of personal property as set forth in the Security Agreements.
7.10 USE OF PROCEEDS.
The proceeds of the Loans will be used solely to pay a portion of the
following: (i) to refinance on the Closing Date approximately $53,000,000 of
existing Indebtedness of the Acquired Companies, (ii) to pay on the Closing
Date a portion of the purchase price, including fees and expenses, for the
Acquisition and (iii) to provide from time to time for the working capital, and
general corporate needs of the Borrower and its Subsidiaries. Letters of
Credit shall be used solely for the purposes set forth in Section 2.2(a).
7.11 AUDITS/INSPECTIONS.
Upon reasonable notice and during normal business hours, but not more
than once annually so long as an Event of Default shall not have occurred and
is continuing, each Consolidated Party will, and will cause each of its
Subsidiaries to, permit representatives appointed by the Agent (or, so long as
an Event of Default shall have occurred and be continuing, any Lender),
including, without limitation, independent accountants, agents, attorneys and
appraisers to visit and inspect such Person's property, including its books and
records, its accounts receivable and inventory, its facilities and its other
business assets, and to make photocopies or photographs thereof and to write
down and record any information such representative obtains and shall permit
the Agent (or, so long as an Event of Default shall have occurred and be
continuing, any Lender) or its representatives to investigate and verify the
accuracy of information provided to the Lenders and to discuss all such matters
with the officers, employees and representatives of the Consolidated Parties.
The Consolidated Parties agree that the Agent, and its representatives, may
conduct an annual audit of the Collateral, at the expense of the Borrower.
7.12 FINANCIAL COVENANTS.
(a) Interest Coverage Ratio. The Interest Coverage
Ratio, as of the last day of each fiscal quarter, to be greater than
or equal to:
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(i) for the fiscal quarter ending October 3, 1998,
1.55 to 1.00, based on (A) Consolidated EBITDA for the four
fiscal quarter period then ended to (b) Consolidated Interest
Expense for the one fiscal quarter period then ended
multiplied by 4;
(ii) for the fiscal quarter ending January 2, 1999,
1.55 to 1.00, based on (A) Consolidated EBITDA for the four
fiscal quarter period then ended to (b) Consolidated Interest
Expense for the two fiscal quarter period then ended
multiplied by 2;
(iii) for the fiscal quarter ending April 3, 1999,
1.55 to 1.00, based on (A) Consolidated EBITDA for the four
fiscal quarter period then ended to (b) Consolidated Interest
Expense for the three fiscal quarter period then ended
multiplied by 1.33;
(iv) for the period from April 4, 1999 to and
including July 3, 1999, 1.55 to 1.00, based on (A)
Consolidated EBITDA for the four fiscal quarter period then
ended to (b) Consolidated Interest Expense for the four fiscal
quarter period then ended;
(v) for the period from July 4, 1999 to and including
January 1, 2000, 1.60 to 1.00, based on (A) Consolidated
EBITDA for the four fiscal quarter period then ended to (b)
Consolidated Interest Expense for the four fiscal quarter
period then ended;
(vi) for the period from January 2, 2000 to and
including July 1, 2000, 1.65 to 1.00, based on (A)
Consolidated EBITDA for the four fiscal quarter period then
ended to (b) Consolidated Interest Expense for the four fiscal
quarter period then ended;
(vii) for the period from July 2, 2000 to and
including December 30, 2000, 1.70 to 1.00, based on (A)
Consolidated EBITDA for the four fiscal quarter period then
ended to (b) Consolidated Interest Expense for the four fiscal
quarter period;
(viii) for the period from December 31, 2000 to and
including December 29, 2001, 1.75 to 1.00, based on (A)
Consolidated EBITDA for the four fiscal quarter period then
ended to (b) Consolidated Interest Expense for the four fiscal
quarter period then ended;
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(ix) for the period from December 30, 2001 to and
including December 28, 2002, 1.85 to 1.00, based on (A)
Consolidated EBITDA for the four fiscal quarter period then
ended to (b) Consolidated Interest Expense for the four fiscal
quarter period then ended; and
(x) for the period from December 29, 2002 and at all
times thereafter, 1.60 to 1.00, based on (A) Consolidated
EBITDA for the four fiscal quarter period then ended to (b)
Consolidated Interest Expense for the four fiscal quarter
period then ended.
(b) Senior Leverage Ratio. The Senior Leverage Ratio, as
of the last day of each fiscal quarter, to be less than or equal to:
(i) for the period from the Closing Date to and
including January 2, 1999, 2.15 to 1.00;
(ii) for the period from January 3, 1999 to and
including January 1, 2000, 1.90 to 1.00;
(iii) for the period from January 2, 2000 to and
including December 30, 2000, 1.60 to 1.00;
(iv) for the period from December 31, 2000 to and
including December 29, 2001, 1.40 to 1.00; and
(v) for the period from December 30, 2001 and at all
times thereafter, 1.10 to 1.00.
(c) Total Leverage Ratio. The Total Leverage Ratio, as
of the last day of each fiscal quarter, to be less than or equal to:
(i) for the period from the Closing Date to and
including January 2, 1999, 6.30 to 1.00;
(ii) for the period from January 3, 1999 to and
including January 1, 2000, 6.20 to 1.00;
(iii) for the period from January 2, 2000 to and
including December 30, 2000, 5.85 to 1.00;
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(iv) for the period from December 31, 2000 to and
including December 29, 2001, 5.40 to 1.00; and
(v) for the period from December 30, 2001 and at all
times thereafter, 4.90 to 1.00.
(d) Minimum EBITDA. EBITDA, as of the last day of each
fiscal quarter for the four fiscal quarter period then ended, to be
greater than or equal to:
(i) for the period from the Closing Date to and
including January 2, 1999, $19,380,000;
(ii) for the period from January 3, 1999 to and
including January 1, 2000, $19,890,000;
(iii) for the period from January 2, 2000 to and
including December 30, 2000, $20,660,000;
(iv) for the period from December 31, 2000 to and
including December 29, 2001, $21,680,000;
(v) for the period from December 30, 2001 to and
including December 28, 2002, $22,610,000; and
(vi) for the period from December 29, 2002 and at all
times thereafter, $23,000,000.
7.13 ADDITIONAL CREDIT PARTIES.
As soon as practicable and in any event within 30 days after any
Person becomes a direct or indirect Subsidiary of the Borrower, the Borrower
shall provide the Agent with written notice thereof setting forth information
in reasonable detail describing all of the assets of such Person and shall (a)
if such Person is a direct or indirect Domestic Subsidiary of the Borrower,
cause such Person to execute a Joinder Agreement in substantially the same form
as Exhibit 7.13, (b) cause 100% (if such Person is a Domestic Subsidiary of the
Borrower) or 65% (if such Person is a direct Foreign Subsidiary of the
Borrower) of the Capital Stock of such Person to be delivered to the Agent
(together with undated stock powers signed in blank (unless, with respect to a
Foreign Subsidiary, such stock powers are deemed unnecessary by the Agent in
its reasonable discretion under the law of the jurisdiction of incorporation of
such Person)) and
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pledged to the Agent pursuant to an appropriate pledge agreement(s) in
substantially the form of the Pledge Agreement and otherwise in form acceptable
to the Agent and (c) cause such Person to (i) if such Person owns or leases any
Real Property located in the United States of America or deemed to be material
by the Agent or the Required Lenders in its or their sole reasonable
discretion, such Person will cause to be delivered to the Agent with respect to
such Real Property documents, instruments and other items of the types required
to be delivered pursuant to Section 5.1(d) all in form, content and scope
reasonably satisfactory to the Agent and (ii) deliver such other documentation
as the Agent may reasonably request in connection with the foregoing,
including, without limitation, appropriate UCC-1 financing statements, real
estate title insurance policies, environmental reports, landlord's waivers,
certified resolutions and other organizational and authorizing documents of
such Person, favorable opinions of counsel to such Person (which shall cover,
among other things, the legality, validity, binding effect and enforceability
of the documentation referred to above and the perfection of the Agent's liens
thereunder) and other items of the types required to be delivered pursuant to
Section 5.1(c), all in form, content and scope reasonably satisfactory to the
Agent.
7.14 FURTHER ASSURANCES.
(a) Within 30 days after the Closing Date, the Borrower
shall deliver to the Agent (i) maps or plats of an as-built survey of
each of the Mortgaged Properties certified to the Agent and the Title
Insurance Company in a manner reasonably satisfactory to each of the
Agent and the Title Insurance Company, dated a date reasonably
satisfactory to the Agent and the Title Insurance Company by an
independent professional land surveyor licensed by the state in which
the applicable Mortgaged Property is located, which maps or plats and
the surveys on which they are based shall be made in accordance with
standards that enable the Title Insurance Company to issue an
endorsement to the applicable Mortgage Policies removing any exception
for "survey matters", except for matters as are reasonably acceptable
to the Agent, (ii) certification from a registered engineer or land
surveyor in a form reasonably satisfactory to the Agent or other
evidence acceptable to the Agent that none of the improvements on the
Mortgaged Properties are located within any area designated by the
Director of the Federal Emergency Management Agency as a "special
flood hazard" area or if any improvements on the Mortgaged Properties
are located within a "special flood hazard" area, evidence of a flood
insurance policy from a company and in an amount satisfactory to the
Agent for the applicable portion of the premises, naming the Agent,
for the benefit of the Lenders, as mortgagee and (iii) such amendments
or modifications to the Mortgage Instruments delivered pursuant to
Section 5.1(d) as shall be required by the Title Insurance Company in
order for the applicable Mortgage Policy to be endorsed by the Title
Insurance Company in order to insure the legal description of the
related Mortgaged Property determined from the survey of such
Mortgaged Property
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described in clause (i) above (together with corresponding amendments
to any related Uniform Commercial Code fixture filings).
(b) The Borrower shall use reasonable best efforts to
cause to be delivered to the Agent within 30 days after the Closing
Date (or as soon thereafter as is practicable, if at all) (i) evidence
satisfactory to the Agent that each of the Mortgaged Properties, and
the uses of the Mortgaged Properties, are in compliance with all
applicable zoning laws (the evidence submitted as to zoning should
include the zoning designation made for each of the Mortgaged
Properties, the permitted uses of each such Mortgaged Properties under
such zoning designation and zoning requirements as to parking, lot
size, ingress, egress and building setbacks) and the Americans with
Disabilities Act of 1990 and (ii) such endorsements (including but not
limited to zoning endorsements evidencing the permitted uses of each
of the Mortgaged Properties and that the uses of such Mortgaged
Properties are in compliance with applicable zoning laws) to the
Mortgage Policies as the Agent may reasonably request, all in form and
substance reasonably satisfactory to the Agent.
(c) Within 90 days after the Closing Date, the Borrower
shall deliver to the Agent a satisfactory pro forma consolidated
balance sheet of the Consolidated Parties as of the Closing Date
(updated from the pro forma balance sheet delivered pursuant to
Section 5.1(i)) giving effect to this Credit Agreement, the other
Credit Documents, the Transaction and all the transactions
contemplated herein and therein to occur on such date, and reflecting
estimated purchase price accounting adjustments, reviewed by
independent public accountants of recognized national standing.
SECTION 8
NEGATIVE COVENANTS
Each Consolidated Party hereby covenants and agrees that so long as
this Credit Agreement is in effect and until the Loans and LOC Obligations,
together with interest and fees hereunder, have been paid in full and the
Commitments and Letters of Credit hereunder shall have terminated:
8.1 INDEBTEDNESS.
No Consolidated Party will, nor will it permit any of its Subsidiaries
to, contract, create, incur, assume or permit to exist any Indebtedness,
except:
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(a) Indebtedness arising under this Credit Agreement and
the other Credit Documents;
(b) Subject to the terms of Section 8.6:
(i) Indebtedness owing by a Consolidated Party to
any Credit Party other than the Parent; and
(ii) Indebtedness owing by a Consolidated Party
which is not a Credit Party to (A) any Credit Party other than
the Parent or (B) any other Consolidated Party which is not a
Credit Party;
(c) Hedging Obligations of the Borrower;
(d) purchase money Indebtedness (including obligations in
respect of Capital Leases or Synthetic Leases) of any Consolidated
Party to finance the purchase or lease of capital assets, whether
tangible or intangible, provided that (i) the total of all such
Indebtedness for all such Persons taken together shall not exceed an
aggregate principal amount of $5,000,000 at any one time outstanding
and (ii) such Indebtedness when incurred shall not exceed the purchase
price of the asset(s) financed;
(e) obligations of the Borrower in respect of deferred
compensation arrangements with employees of the Borrower, to the
extent such obligations constitute Indebtedness;
(f) the Senior Subordinated Debt (and any notes with
identical terms registered pursuant to the registration rights
agreement set forth in the Indenture for the Senior Subordinated Debt
issued in exchange therefor) including Guaranty Obligations of any
Guarantor in respect of the Senior Subordinated Debt;
(g) obligations of the Borrower evidenced by the Borrower
Intercompany Notes;
(h) subject to the terms of Section 8.6, Guaranty
Obligations of any Consolidated Party in respect of any Indebtedness
otherwise permitted under this Section 8.1;
(i) to the extent not otherwise permitted under this
Section 8.1, obligations constituting Indebtedness of a Consolidated
Party secured by Permitted Liens;
(j) Acquired Indebtedness of any Consolidated Party,
provided the total of all such Indebtedness for all such Persons taken
together shall not exceed an aggregate principal amount of $2,500,000
at any one time outstanding; and
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(k) other unsecured Indebtedness of any Consolidated
Party (in addition to Indebtedness otherwise permitted by any other
clause of this Section 8.1), provided the total of all such
Indebtedness for all such Persons taken together shall not exceed an
aggregate principal amount of $2,500,000 at any one time outstanding.
8.2 LIENS.
No Consolidated Party will, nor will it permit any of its Subsidiaries
to, contract, create, incur, assume or permit to exist any Lien with respect to
any of its property or assets of any kind (whether real or personal, tangible
or intangible), whether now owned or after acquired, except for Permitted
Liens.
8.3 NATURE OF BUSINESS.
No Consolidated Party will, nor will it permit any of its Subsidiaries
to, substantively alter its business from the same general type of business
conducted as of the Closing Date or engage in any business other than the same
general type of business conducted as of the Closing Date.
8.4 CONSOLIDATION AND MERGER.
No Consolidated Party will, nor will it permit any of its Subsidiaries
to, enter into any transaction of merger or consolidation or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution); provided that,
notwithstanding the foregoing provisions of this Section 8.4, (a) the Borrower
may merge or consolidate with any of its Subsidiaries provided that (i) the
Agent shall be given prior written notice of such transaction, (ii) the
Borrower shall be the continuing or surviving corporation, (iii) the
Consolidated Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Agent may reasonably request so as to cause
the Consolidated Parties to be in compliance with the terms of Section 7.9
after giving effect to such transaction and (iv) after giving effect thereto,
no Default or Event of Default shall exist, (b) any Credit Party other than the
Parent or the Borrower may merge or consolidate with or into any other Credit
Party other than the Parent or the Borrower, provided that (i) the Agent shall
be given prior written notice of such transaction, (ii) the Consolidated
Parties shall execute and deliver such documents, instruments and certificates
as the Agent may reasonably request so as to cause the Consolidated Parties to
be in compliance with the terms of Section 7.9 after giving effect to such
transaction and (iii) after giving effect thereto, no Default or Event of
Default shall exist, (c) any Consolidated Party which is not a Credit Party may
be merged or consolidated with or into any other Consolidated Party which is
not a Credit Party, (d) any Consolidated Party which is not a Credit Party may
be merged or consolidated with or into any Credit Party other than the Parent
or the Borrower, provided that (i) the Agent shall be given prior written
notice of such transaction, (ii) such Credit Party shall be the continuing or
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surviving corporation, (iii) the Consolidated Parties shall execute and deliver
such documents, instruments and certificates as the Agent may reasonably
request so as to cause the Consolidated Parties to be in compliance with the
terms of Section 7.9 after giving effect to such transaction and (iii) after
giving effect thereto, no Default or Event of Default shall exist and (e) any
Credit Party may merge with or consolidate with any other Person which is not a
Credit Party or a Consolidated Party, provided that (i) the Agent shall be
given prior written notice of such transaction, (ii) such Credit Party shall be
the continuing or surviving corporation, (iii) the Consolidated Parties shall
cause to be executed and delivered such documents, instruments and certificates
as the Agent may reasonably request so as to cause the Consolidated Parties to
be in compliance with the terms of Section 7.9 after giving effect to such
transaction and (iv) after giving effect thereto, no Default or Event of
Default shall exist.
8.5 ASSET DISPOSITIONS.
No Consolidated Party will, nor will it permit any of its Subsidiaries
to, make any Asset Disposition (including, without limitation, any Sale and
Leaseback Transaction) other than Excluded Asset Dispositions, unless (i) the
consideration paid in connection therewith is cash or Cash Equivalents, (ii) if
such Asset Disposition is a Sale and Leaseback Transaction, such transaction is
permitted by the terms of Section 8.13, (iii) such Asset Disposition does not
involve the sale or other disposition of a minority equity interest in any
Consolidated Party, (iv) the aggregate net book value of all of the assets sold
or otherwise disposed of by the Consolidated Parties in all such Asset
Dispositions after the Closing Date (other than pursuant to any casualty or
condemnation event) shall not exceed $5,000,000 and (v) no later than 14 days
prior to such Asset Disposition, the Agent and the Lenders shall have received
a certificate of an Executive Officer of the Borrower specifying the
anticipated or actual date of such Asset Disposition, briefly describing the
assets to be sold or otherwise disposed of and setting forth the net book value
of such assets, the aggregate consideration and the Net Cash Proceeds to be
received for such assets in connection with such Asset Disposition, and
thereafter the Borrower shall, within the period of 180 days (or such earlier
date as is provided for reinvestment of such proceeds under the documents
evidencing or governing the Senior Subordinated Debt) following the
consummation of such Asset Disposition (with respect to any such Asset
Disposition, the "Application Period"), apply (or cause to be applied) an
amount equal to the Net Cash Proceeds of such Asset Disposition to (A) the
purchase, acquisition or, in the case of improvements to real property,
construction of Eligible Assets or (B) to the prepayment of the Loans in
accordance with the terms of Section 3.3(b)(iii).
Upon a sale of assets or the sale of Capital Stock of a Subsidiary of
the Borrower permitted by this Section 8.5, the Agent shall (to the extent
applicable) deliver to the Borrower, upon the Borrower's request and at the
Borrower's expense, such documentation as is reasonably necessary to evidence
the release of the Lenders' security interest in such assets or Capital Stock,
including, without limitation, amendments or terminations of UCC financing
statements, the return of stock certificates and the release of such Subsidiary
from its obligations as a Guarantor under the Credit Documents.
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8.6 INVESTMENTS.
No Consolidated Party will, nor will it permit any of its Subsidiaries
to, make any Investments except for Permitted Investments.
8.7 RESTRICTED PAYMENTS.
No Consolidated Party will, nor will it permit any of its Subsidiaries
to, directly or indirectly, declare, order, make or set apart any sum for or
pay any Restricted Payment, except (i) in connection with the Transaction as
contemplated by Section 7.10 and the Offering Memorandum, (ii) subject to the
terms of Section 8.9(b), to make dividends payable solely in the same class of
Capital Stock of such Person, (iii) to make dividends or other distributions
payable to any Consolidated Party, (iv) as permitted by Section 8.8 or Section
8.11, (v) payments by any Consolidated Parties to the Parent pursuant to a tax
sharing agreement under which each such Consolidated Party is allocated its
proportionate share of the tax liability of the affiliated group of
corporations that file consolidated Federal income tax returns (or that file
state or local income tax returns on a consolidated basis) and (vi) provided
that no Default or Event of Default exists either before or after giving effect
thereto, (A) loans, advances, dividends or distributions by any Consolidated
Party to the Parent not to exceed an amount necessary to permit the Parent to
pay (1) its costs (including all professional fees and expenses) incurred to
comply with its reporting or other obligations under federal or state laws or
in connection with reporting or other obligations under this Credit Agreement
and the Credit Documents, (2) its expenses incurred in connection with
registration of the Discount Notes, (3) its expenses (including liquidated
damages payable under any registration rights agreement) incurred in connection
with any public offering of equity securities which has been terminated by the
board of directors of the Parent, the net proceeds of which were specifically
intended to be received by or contributed or loaned to the Borrower and (4)
loans or advances by any Consolidated Party to the Parent not to exceed an
amount necessary to permit the Parent to pay its interim expenses incurred in
connection with any public offering of equity securities the net proceeds of
which are specifically intended to be received by or contributed or loaned to
the Borrower, which, unless such offering shall have been terminated by the
board of directors of the Parent, shall be repaid to the Borrower promptly out
of the proceeds of such offering, (B) to make interest payments in respect of
the Senior Subordinated Debt, including payment of accrued interest and
premium, if any, payable in connection with a redemption of the Subordinated
Notes permitted under Section 8.11, (C) at any time after May 26, 2003, to make
interest payments (or payments by any Consolidated Party to the Parent to
enable the Parent to make interest payments) in respect of the Discount Notes
and (D) the repurchase, redemption or retirement of any shares of Capital Stock
of the Parent following the death, disability or termination of employment of
an executive officer of the Parent, not to exceed $750,000 in an aggregate
amount for any fiscal year. Notwithstanding anything to the contrary set forth
in this Section 8.7 or in any other provision of this Credit Agreement, an
amount equal to the amount of any Restricted Payment referred
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to in clause (v) or (vi) above shall be promptly returned to the Consolidated
Party which made such Restricted Payment to the extent that such Restricted
Payment can not be or is not applied by the Parent to payment of the taxes,
costs or expenses in respect of which such Restricted Payment was permitted to
be made pursuant to this Section 8.7.
8.8 TRANSACTIONS WITH AFFILIATES.
No Consolidated Party will, nor will it permit any of its Subsidiaries
to, enter into or permit to exist any transaction or series of transactions
with any officer, director, shareholder, Subsidiary or Affiliate of such Person
other than (a) advances of working capital to any Credit Party other than the
Parent, (b) transfers of cash and assets to any Credit Party other than the
Parent, including without limitation Excluded Asset Dispositions, (c)
transactions permitted by Section 8.1(b), Section 8.4, Section 8.5, Section 8.6
or Section 8.7, (d) normal compensation and reimbursement of expenses of
officers and directors, including an annual Chairman of the Board fee of up to
$150,000, (e) provided that no Default or Event of Default has occurred and is
continuing or would be directly or indirectly caused as a result thereof,
payments to the Sponsor of annual management fees of up to $895,000 plus the
unused amount available for payments of such management fees under this Section
8.8 for the immediately preceding fiscal year (excluding any carryover amount
from any prior fiscal year), and (f) except as otherwise specifically limited
in this Credit Agreement, other transactions which are entered into in the
ordinary course of such Person's business on terms and conditions substantially
as favorable to such Person as would be obtainable by it in a comparable
arms-length transaction with a Person other than an officer, director,
shareholder, Subsidiary or Affiliate.
8.9 RESTRICTIONS ON ACTIVITIES; OWNERSHIP OF SUBSIDIARIES.
Notwithstanding any other provisions of this Credit Agreement or any
of the other Credit Documents to the contrary, the Borrower shall (i) not
permit any Person (other than the Borrower or any wholly-owned Subsidiary of
the Borrower) to own any Capital Stock of any Subsidiary of the Borrower, (ii)
not permit any Subsidiary of the Borrower to issue Capital Stock (except to the
Borrower or to a wholly-owned Subsidiary of the Borrower), (iii) not permit,
create, incur, assume or suffer to exist any Lien thereon, in each case except
(a) to qualify directors where required by applicable law or to satisfy other
requirements of applicable law with respect to the ownership of Capital Stock
of Foreign Subsidiaries, (b) if such Subsidiary merges with another Subsidiary
of the Borrower, (c) if such Subsidiary ceases to be a Subsidiary of the
Borrower (as a result of the sale of 100% of the Equity Interests in such
Subsidiary) or (d) Permitted Liens and (iv) notwithstanding anything to the
contrary contained in clause (ii) above, not permit any Subsidiary of the
Borrower to issue any shares of preferred Capital Stock.
8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
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No Consolidated Party will, nor will it permit any of its Subsidiaries
to, change its fiscal year without providing prior written notice to the Agent.
Without the prior written consent of the Required Lenders, no Credit Party
will, nor will it permit any of its Subsidiaries to, materially change its
articles or certificate of incorporation in a manner which would have an
adverse effect on the Lenders.
8.11 PREPAYMENT OR MODIFICATION OF INDEBTEDNESS.
No Consolidated Party will, nor will it permit any of its Subsidiaries
to, (i) if any Default or Event of Default has occurred and is continuing or
would be directly or indirectly caused as a result thereof, (a) after the
issuance thereof, amend or modify (or permit the amendment or modification of)
any of the terms of any Indebtedness if such amendment or modification would
add or change any terms in a manner adverse to the Lenders, including, but not
limited to, shortening the final maturity or average life to maturity or
requiring any payment to be made sooner than originally scheduled or increasing
the interest rate applicable thereto or changing any subordination provision
thereof or (b) except for the exchange of the notes evidencing the Senior
Subordinated Debt for notes with identical terms registered pursuant to the
registration rights agreement set forth in the Indenture for the Senior
Subordinated Debt, make (or give any notice with respect thereto) any voluntary
or optional payment or any prepayment or any redemption or any acquisition for
value of (including without limitation, by way of depositing money or
securities with the trustee with respect thereto before due for the purpose of
paying when due), refund, refinance or exchange of any other Indebtedness
(including without limitation the Senior Subordinated Debt) or (ii) except for
the exchange of the notes evidencing the Senior Subordinated Debt for notes
with identical terms registered pursuant to the registration rights agreement
set forth in the Indenture for the Senior Subordinated Debt, at any time make
(or give any notice with respect thereto) any voluntary or optional payment or
prepayment, redemption, acquisition for value or defeasance of (including
without limitation, by way of depositing money or securities with the trustee
with respect thereto before due for the purpose of paying when due), refund,
refinance or exchange of the Senior Subordinated Debt.
8.12 LIMITATIONS ON RESTRICTED ACTIONS.
No Consolidated Party will, nor will it permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any such
Person to (i) pay dividends or make any other distributions to any Credit Party
on its Capital Stock or with respect to any other interest or participation in,
or measured by, its profits, (ii) pay any Indebtedness or other obligation owed
to any Credit Party, (iii) make loans or advances to any Credit Party, (iv)
sell, lease or transfer any of its properties or assets to any Credit Party, or
(v) guarantee the obligations of the Borrower arising under the Credit
Agreement and the other Credit Documents or any renewals, refinancings,
exchanges, refundings or extension thereof, except for such encumbrances or
restrictions existing under or by reason of
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(A) this Credit Agreement, (B) the documents evidencing or governing the Senior
Subordinated Debt, as in effect as of the Closing Date, (C) applicable law, (D)
any document or instrument governing Indebtedness incurred pursuant to Section
8.1(d), provided that any such restriction contained therein relates only to
the asset or assets constructed or acquired in connection therewith and (E)
custormary provisions of any foreign law or lease, license or similar
agreement, provided that any such restriction contained therein relates only to
the asset or assets subject to such agreement.
8.13 SALE LEASEBACKS.
No Credit Party will other than the Parent, nor will it permit any of
its Subsidiaries to, directly or indirectly, become or remain liable as lessee
or as guarantor or other surety with respect to any Sale and Leaseback
Transaction in respect of any property (whether real or personal or mixed), now
owned or hereafter acquired, (a) which such Person has sold or transferred or
is to sell or transfer to the Parent or any other Person other than a Credit
Party or (b) which such Person intends to use for substantially the same
purpose as any other property which has been sold or is to be sold or
transferred by such Person to any Person in connection with such lease.
8.14 CAPITAL EXPENDITURES.
Except in respect of any Consolidated Capital Expenditures made in
connection with proceeds of an Asset Disposition or as part of a Permitted
Acquisition, the Consolidated Parties will not permit Consolidated Capital
Expenditures for any fiscal year to exceed $4,000,000, plus the unused amount
available for Consolidated Capital Expenditures under this Section 8.14 for the
immediately preceding fiscal year (excluding any carry forward available from
any prior fiscal year).
8.15 NEGATIVE PLEDGES.
Except (i) pursuant to this Credit Agreement and the other Credit
Documents, (ii) pursuant to the documents evidencing or governing the Senior
Subordinated Debt, as in effect as of the Closing Date, and (iii) pursuant to
any document or instrument governing Indebtedness incurred pursuant to Section
8.1(d), provided that any such restriction contained therein relates only to
the asset or assets constructed or acquired in connection therewith, no
Consolidated Party will, nor will it permit any of its Subsidiaries to, enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of any
security for such obligation if security is given for some other obligation.
8.16 FOREIGN OPERATIONS.
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(i) The Consolidated Parties will not permit (i) the Borrower and its Domestic
Subsidiaries to own at any time less than 75% of Consolidated Total Assets or
(ii) as of as of the last day of each fiscal quarter, the portion attributable
to the Borrower and its Domestic Subsidiaries of Consolidated Net Income for
the four quarter then ended to be less than 75% of Consolidated Net Income for
such period.
SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default") which is not waived by
the Agent or Lenders as provided herein:
(a) Payment. Any Consolidated Party shall:
(i) default in the payment when due of any
principal of any of the Loans or of any principal of any
reimbursement obligation arising from drawings under Letters
of Credit; or
(ii) default, and such default shall continue for
three or more Business Days, in the payment when due of any
interest on the Loans, or of any interest on any reimbursement
obligations arising from drawings under Letters of Credit or
of any fees or other amounts owing hereunder, under any of the
other Credit Documents or in connection herewith.
(b) Representations. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein, in any
of the other Credit Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall
prove untrue in any material respect on the date as of which it was
made or deemed to have been made.
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(c) Covenants. Any Consolidated Party shall:
(i) default in the due performance or observance
of any term, covenant or agreement contained in Sections 7.6,
7.9, 7.10, 7.12, 7.13 or 8.1 through 8.16, inclusive; or
(ii) default in the due performance or observance
by it of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) of this Section
9.1) contained in this Credit Agreement and such default shall
continue unremedied for a period of at least 30 days after the
earlier of an Executive Officer of a Credit Party becoming
aware of such default or notice thereof given by the Agent.
(d) Other Credit Documents. (i) Any Credit Party shall
default in the due performance or observance of any term, covenant or
agreement in any of the other Credit Documents and such default shall
continue unremedied for a period of at least 30 days after the earlier
of an Executive Officer of a Credit Party becoming aware of such
default or notice thereof given by the Agent, (ii) except pursuant to
the terms thereof, any Credit Document shall fail to be in full force
and effect or any Credit Party shall so assert or (iii) except
pursuant to the terms thereof, any Credit Document shall fail to give
the Agent and/or the Lenders the security interests, liens, rights,
powers and privileges purported to be created thereby.
(e) Guaranties. The guaranty hereunder given by any
Guarantor or any provision thereof shall, except pursuant to the terms
thereof, cease to be in full force and effect, or any guarantor
thereunder or any Person acting by or on behalf of such Guarantor
shall deny or disaffirm such Guarantor's obligations under such
guaranty.
(f) Bankruptcy Events. Any Bankruptcy Event shall occur
with respect to any Credit Party or Consolidated Party.
(g) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) of one or more of the Consolidated Parties in an aggregate
principal amount in excess of $500,000 (i) a Consolidated Party shall
(A) default in any payment (beyond the applicable grace period with
respect thereto, if any) with respect to any such Indebtedness, or (B)
default (after giving effect to any applicable grace period) in the
observance or performance relating to such Indebtedness or contained
in any instrument or agreement evidencing, securing or relating
thereto, or any other event or condition shall occur or condition
exist, the effect of which default or other event or condition is to
cause, or permit, the holder or holders of such Indebtedness (or
trustee or agent on behalf of such holders) to cause (determined
without regard to whether any notice or lapse of time is required) any
such Indebtedness to become due prior to its stated maturity; or (ii)
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any such Indebtedness shall be declared due and payable prior to the
stated maturity thereof; provided, however, that a default waived with
respect to such Indebtedness shall not constitute a default hereunder.
(h) Judgments. One or more judgments, orders, or decrees
shall be entered against any one or more of the Consolidated Parties
involving a liability of $500,000 or more, in the aggregate, (to the
extent not paid or covered by insurance provided by a carrier who has
acknowledged coverage) and such judgments, orders or decrees (i) are
the subject of any enforcement proceeding commenced by any creditor or
(ii) shall continue unsatisfied, undischarged and unstayed for a
period ending on the first to occur of (A) the last day on which such
judgment, order or decree becomes final and unappealable or (B) 30
days.
(i) ERISA. Any of the following events or conditions, if
such event or condition would cause or be reasonably expected to cause
a Material Adverse Effect: (1) any "accumulated funding deficiency,"
as such term is defined in Section 302 of ERISA and Section 412 of the
Code, whether or not waived, shall exist with respect to any Plan, or
any lien shall arise on the assets of any Consolidated Party or any
ERISA Affiliate in favor of the PBGC or a Plan; (2) an ERISA Event
shall occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in the termination
of such Plan for purposes of Title IV of ERISA; (3) an ERISA Event
shall occur with respect to a Multiemployer Plan or Multiple Employer
Plan, which is, in the reasonable opinion of the Agent, likely to
result in (i) the termination of such Plan for purposes of Title IV of
ERISA, or (ii) any Consolidated Party or any ERISA Affiliate incurring
any liability in connection with a withdrawal from, reorganization of
(within the meaning of Section 4241 of ERISA), or insolvency or
(within the meaning of Section 4245 of ERISA) such Plan; (4) any event
occurring or failing to occur with respect to a Single Employer Plan,
Multiemployer or Multiple Employer Plan sponsored, maintained or
contributed to by an ERISA Affiliate of any Consolidated Party; or (5)
any prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) or breach of fiduciary responsibility
shall occur which may any Consolidated Party or any ERISA Affiliate to
any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Consolidated Party or any ERISA Affiliate has
agreed or is required to indemnify any Person against any such
liability.
(j) Senior Subordinated Debt. (i) There shall occur and
be continuing any Event of Default under and as defined in the
documents evidencing or governing the Senior Subordinated Debt or (ii)
any of the Credit Party Obligations for any reason shall cease to be
"Designated Senior Indebtedness" under and as defined in such
documents.
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(j) Ownership. There shall occur a Change of Control.
(k) Capital Stock of Parent. Any Capital Stock of the
Parent owned by the Sponsor or any of its Affiliates shall become
subject to any consensual Lien other than the pledge to the Borrower
of any such Capital Stock held by management to secure loans to buy
such Capital Stock.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived in writing by the
Required Lenders (or the Lenders as may be required hereunder), the Agent
shall, upon the request and direction of the Required Lenders, by written
notice to the Borrower, take any of the following actions without prejudice to
the rights of the Agent or any Lender to enforce its claims against the Credit
Parties, except as otherwise specifically provided for herein:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal
of and any accrued interest in respect of all Loans, any reimbursement
obligations arising from drawings under Letters of Credit and any and
all other indebtedness or obligations of any and every kind owing by a
Credit Party to any of the Lenders hereunder to be due whereupon the
same shall be immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by
the Credit Parties.
(c) Cash Collateral. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), it will
immediately pay) to the Agent additional cash, to be held by the
Agent, for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount
equal to the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights
and interests created and existing under the Credit Documents,
including, without limitation, all rights and remedies existing under
the Collateral Documents, all rights and remedies against a Guarantor
and all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters
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of Credit, all accrued interest in respect thereof, all accrued and unpaid fees
and other indebtedness or obligations owing to the Lenders hereunder shall
immediately become due and payable without the giving of any notice or other
action by the Agent or the Lenders, which notice or other action is expressly
waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Agent, each Lender has, to the extent permitted by law, a separate right of
payment and shall be considered a separate "creditor" holding a separate
"claim" within the meaning of Section 101(5) of the Bankruptcy Code or any
other insolvency statute.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT.
Each Lender hereby designates and appoints NationsBank, N.A. as Agent
of such Lender to act as specified herein and the other Credit Documents, and
each such Lender hereby authorizes the Agent, as the agent for such Lender, to
take such action on its behalf under the provisions of this Credit Agreement
and the other Credit Documents and to exercise such powers and perform such
duties as are expressly delegated by the terms hereof and of the other Credit
Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere herein and in
the other Credit Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Credit Documents, or shall otherwise
exist against the Agent. The provisions of this Section are solely for the
benefit of the Agent and the Lenders and no Credit Party shall have any rights
as a third party beneficiary of the provisions hereof. In performing its
functions and duties under this Credit Agreement and the other Credit
Documents, the Agent shall act solely as an agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligation or relationship
of agency or trust with or for any Credit Party.
10.2 DELEGATION OF DUTIES.
The Agent may execute any of its duties hereunder or under the other
Credit 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 Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
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10.3 EXCULPATORY PROVISIONS.
Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents (except for
its or such Person's own gross negligence or willful misconduct) or
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any of the Credit Parties contained
herein or in any of the other Credit Documents or in any certificate, report,
document, financial statement or other written or oral statement referred to or
provided for in, or received by the Agent under or in connection herewith or in
connection with the other Credit Documents, or enforceability or sufficiency
therefor of any of the other Credit Documents, or for any failure of the
Borrower to perform its obligations hereunder or thereunder. The Agent shall
not be responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Credit Agreement, or any
of the other Credit Documents or for any representations, warranties, recitals
or statements made herein or therein or made by any Credit Party in any written
or oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents in connection herewith or
therewith furnished or made by the Agent to the Lenders or by or on behalf of
the Credit Parties to the Agent or any Lender or be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the
use of the proceeds of the Loans or the use of the Letters of Credit or of the
existence or possible existence of any Default or Event of Default or to
inspect the properties, books or records of the Credit Parties and Consolidated
Parties. The Agent is not trustee for the Lenders and owes no fiduciary duty
to the Lenders.
10.4 RELIANCE ON COMMUNICATIONS.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, 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 any of the Credit Parties, independent accountants and
other experts selected by the Agent with reasonable care). The Agent may deem
and treat the Lenders as the owner of its interests hereunder for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Agent in accordance with Section 11.3(b). The Agent
shall be fully justified in failing or refusing to take any action under this
Credit Agreement or under any of the other Credit Documents unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder or under
any of the other Credit Documents in accordance with a request of the Required
Lenders (or to the extent specifically
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provided in Section 11.6(a), all the Lenders) and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders
(including their successors and assigns).
10.5 NOTICE OF DEFAULT.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
received notice from a Lender or a Credit Party referring to the Credit
Document, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders.
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates has
made any representations or warranties to it and that no act by the Agent or
any affiliate thereof hereinafter taken, including any review of the affairs of
any Credit Party or Consolidated Party, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents
to the Agent that it has, independently and without reliance upon the 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,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Credit Parties and made its own decision to make its
Loans hereunder and enter into this Credit Agreement. Each Lender also
represents that it will, independently and without reliance upon the 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 Credit Agreement, and
to make such investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Credit Parties. Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by the Agent hereunder and any other documents reasonably requested by a
Lender, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
operations, assets, property, financial or other conditions, prospects or
creditworthiness of the Credit Parties which may come into the possession of
the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
10.7 INDEMNIFICATION.
The Lenders agree to indemnify the 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
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their respective Commitments (or if the Commitments have expired or been
terminated, in accordance with the respective principal amounts of outstanding
Loans and Participation Interest of the Lenders), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including without limitation at any time following payment in full of the
Credit Party Obligations) be imposed on, incurred by or asserted against the
Agent in its capacity as such in any way relating to or arising out of this
Credit Agreement or the other Credit 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 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 resulting from the
gross negligence or willful misconduct of the Agent. If any indemnity
furnished to the Agent for any purpose shall, in the opinion of the Agent, be
insufficient or become impaired, the Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished; provided that the Agent shall not be
indemnified for any event caused by its gross negligence or willful misconduct.
The agreements in this Section shall survive the payment of the Credit Party
Obligations and all other amounts payable hereunder and under the other Credit
Documents.
10.8 AGENT IN ITS INDIVIDUAL CAPACITY.
The Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower or any other
Credit Party as though the Agent were not the Agent hereunder. With respect to
the Loans made and Letters of Credit issued and all obligations owing to it,
the Agent shall have the same rights and powers under this Credit Agreement as
any Lender and may exercise the same as though it were not the Agent, and the
terms "Lender" and "Lenders" shall include the Agent in its individual
capacity.
10.9 SUCCESSOR AGENT.
The Agent may, at any time, resign upon 20 days written notice to the
Lenders. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Agent reasonably satisfactory to Borrower. If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 45 days after the notice of resignation
or the Borrower shall unreasonably fail to consent to such appointment, then
the retiring Agent shall select a successor Agent provided such successor is a
Lender hereunder or a commercial bank organized under the laws of the United
States of America or of any State thereof and has a combined capital and
surplus of at least $400,000,000. Upon the acceptance of any appointment as
the Agent hereunder by a successor, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations as the Agent, as appropriate, under this Credit
Agreement
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and the other Credit Documents and the provisions of this Section 10.9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Agent under this Credit Agreement.
10.10 SYNDICATION AGENT.
The Syndication Agent, in its capacity as such, shall have no rights,
powers, duties or obligations under this Credit Agreement or any of the other
Credit Documents.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address or telecopy numbers set forth on Schedule
11.1, or at such other address as such party may specify by written notice to
the other parties hereto.
11.2 RIGHT OF SET-OFF.
In addition to any rights now or hereafter granted under applicable
law or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and the commencement of remedies described in
Section 9.2, each Lender is authorized at any time and from time to time,
without presentment, demand, protest or other notice of any kind (all of which
rights being hereby expressly waived), to set-off and to appropriate and apply
any and all deposits (general or special) and any other indebtedness at any
time held or owing by such Lender (including, without limitation, branches,
agencies or Affiliates of such Lender wherever located) to or for the credit or
the account of any Credit Party against obligations and liabilities of such
Credit Party to the Lenders hereunder, under the Notes, the other Credit
Documents or otherwise, irrespective of whether the Agent or the Lenders shall
have made any demand hereunder and although such obligations, liabilities or
claims, or any of them, may be contingent or unmatured, and any such set-off
shall be deemed to have been made immediately upon the occurrence of an Event
of Default even though such charge is made or entered on the books of such
Lender subsequent thereto. The Credit Parties hereby agree
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that to the extent permitted by law any Person purchasing a participation in
the Loans and Commitments hereunder pursuant to Section 11.3(c) or 3.9 may
exercise all rights of set-off with respect to its participation interest as
fully as if such Person were a Lender hereunder.
11.3 BENEFIT OF AGREEMENT.
(a) Generally. This Credit Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided that no Credit
Party may assign and transfer any of its interests without the prior
written consent of the Lenders; and provided further that the rights
of each Lender to transfer, assign or grant participations in its
rights and/or obligations hereunder shall be limited as set forth
below in subsections (b) and (c) of this Section 11.3.
Notwithstanding the above (including anything set forth in subsections
(b) and (c) of this Section 11.3), nothing herein shall restrict,
prevent or prohibit any Lender from (A) pledging its Loans hereunder
to a Federal Reserve Bank in support of borrowings made by such Lender
from such Federal Reserve Bank, or (B) granting assignments or
participations in such Lender's Loans and/or Commitments hereunder to
its parent company and/or to any Affiliate of such Lender or to any
existing Lender or Affiliate thereof.
(b) Assignments. Each Lender may assign all or a portion
of its rights and obligations hereunder pursuant to an assignment
agreement substantially in the form of Exhibit 11.3 to one or more
Eligible Assignees; provided that any such assignment shall (i) unless
to a Lender or an Affiliate of a Lender, be in a minimum aggregate
amount of $5,000,000 of the Commitments and in integral multiples of
$1,000,000 above such amount (or the remaining amount of Commitments
held by such Lender) and (ii) be of a constant, not varying,
percentage of all of the assigning Lender's rights and obligations
under the Commitment being assigned. Any assignment hereunder shall
be effective upon satisfaction of the conditions set forth above and
delivery to the Agent of a duly executed assignment agreement together
with a transfer fee of $3,500 payable to the Agent for its own
account. Upon the effectiveness of any such assignment, the assignee
shall become a "Lender" for all purposes of this Credit Agreement and
the other Credit Documents and, to the extent of such assignment, the
assigning Lender shall be relieved of its obligations hereunder to the
extent of the Loans and Commitment components being assigned. Along
such lines the Borrower agrees that upon notice of any such assignment
and surrender of the appropriate Note or Notes, it will promptly
provide to the assigning Lender and to the assignee separate
promissory notes in the amount of their respective interests
substantially in the form of the original Note or Notes (but with
notation thereon that it is given in substitution for and replacement
of the original Note or Notes or any replacement notes thereof).
Notwithstanding the above, a Lender may assign all or a portion of its
Commitments to another Lender without the consent of the Borrower and
without regard to any minimum amount of such assignment.
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By executing and delivering an assignment agreement in accordance with
this Section 11.3(b), the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and
the other parties hereto as follows: (i) such assigning Lender
warrants that it is the legal and beneficial owner of the interest
being assigned thereby free and clear of any adverse claim and the
assignee warrants that it is an Eligible Assignee; (ii) except as set
forth in clause (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant
hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit
Agreement, any of the other Credit Documents or any other instrument
or document furnished pursuant hereto or thereto or the financial
condition of any Credit Party or the performance or observance by any
Credit Party of any of its obligations under this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such
assignment agreement; (iv) such assignee confirms that it has received
a copy of this Credit Agreement, the other Credit Documents and such
other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such assignment
agreement; (v) such assignee will independently and without reliance
upon the Agent, such assigning Lender 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 decisions in taking or not
taking action under this Credit Agreement and the other Credit
Documents; (vi) such assignee appoints and authorizes the Agent to
take such action on its behalf and to exercise such powers under this
Credit Agreement or any other Credit Document as are delegated to the
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the obligations which
by the terms of this Credit Agreement and the other Credit Documents
are required to be performed by it as a Lender.
(c) Participations. Each Lender may sell, transfer,
grant or assign participations in all or any part of such Lender's
rights, obligations or rights and obligations hereunder; provided that
(i) such selling Lender shall remain a "Lender" for all purposes under
this Credit Agreement (such selling Lender's obligations under the
Credit Documents remaining unchanged) and the participant shall not
constitute a Lender hereunder, (ii) no such participant shall have, or
be granted, rights to approve any amendment or waiver relating to this
Credit Agreement or the other Credit Documents except to the extent
any such amendment or waiver would (A) reduce the principal of or rate
of interest on or fees in respect of any Loans in which the
participant is participating or increase any Commitments with respect
thereto, (B) postpone the date fixed for any payment of principal
(including the extension of the final
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maturity of any Loan or the date of any mandatory prepayment pursuant
to Section 2.3(d)), interest or fees in which the participant is
participating, or (C) release all or substantially all of the
collateral or guaranties (except as expressly provided in the Credit
Documents) supporting any of the Loans or Commitments in which the
participant is participating and (iii) sub-participations by the
participant (except to an Affiliate, parent company or Affiliate of a
parent company of the participant) shall be prohibited. In the case
of any such participation, the participant shall not have any rights
under this Credit Agreement or the other Credit Documents (the
participant's rights against the selling Lender in respect of such
participation to be those set forth in the participation agreement
with such Lender creating such participation) and all amounts payable
by the Borrower hereunder shall be determined as if such Lender had
not sold such participation; provided, however, that such participant
shall be entitled to receive additional amounts under Section 3.15 to
the same extent that the Lender from which such participant acquired
its participation would be entitled to the benefit of such cost
protection provisions.
(d) Registration. The Agent, acting for this purpose
solely on behalf of the Borrower, shall maintain a register (the
"Register") for the recordation of the names and addresses of the
Lenders 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, the Agent and the
Lenders shall treat each Person whose name is recorded in the Register
as the owner of a Loan or other obligation hereunder for all purposes
of this Credit Agreement and the other Credit Documents,
notwithstanding notice to the contrary. Any assignment of any Loan or
other obligation hereunder shall be effective only upon appropriate
entries with respect thereto being made in the Register. The Register
shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between any Credit Party or Consolidated
Party and the Agent or any Lender shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
under any other Credit Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege hereunder or thereunder.
The rights and remedies provided herein are cumulative and not exclusive of any
rights or remedies which the Agent or any Lender would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent or the Lenders
to any other or further action in any circumstances without notice or demand.
11.5 PAYMENT OF EXPENSES; INDEMNIFICATION.
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The Credit Parties agree to: (a) pay all reasonable out-of-pocket
costs and reasonable expenses of (i) the Agent in connection with (A) the
negotiation, preparation, execution and delivery and administration of this
Credit Agreement and the other Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and expenses of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC, special counsel to the Agent and
the fees and expenses of counsel for the Agent in connection with collateral
issues), and (B) any amendment, waiver or consent relating hereto and thereto
including, but not limited to, any such amendments, waivers or consents
resulting from or related to any work-out, renegotiation or restructure
relating to the performance by the Credit Parties under this Credit Agreement
and (ii) the Agent and the Lenders in connection with (A) enforcement of the
Credit Documents and the documents and instruments referred to therein,
including, without limitation, in connection with any such enforcement, the
reasonable fees and disbursements of counsel for the Agent and each of the
Lenders, and (B) any bankruptcy or insolvency proceeding of a Credit Party and
(b) indemnify the Agent and each Lender, their respective officers, directors,
employees, representatives and agents from and hold each of them harmless
against any and all losses, liabilities, claims, damages or expenses incurred
by any of them as a result of, or arising out of, or in any way related to, or
by reason of, any investigation, litigation or other proceeding (whether or not
the Agent or any Lender is a party thereto) related to (i) the entering into
and/or performance of any Credit Document or the use of proceeds of any Loans
(including other extensions of credit) hereunder or the consummation of any
other transactions contemplated in any Credit Document, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of gross negligence or willful misconduct on the part
of the Person to be indemnified), (ii) any Environmental Claim and (iii) any
claims for Non-Excluded Taxes.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
(a) Neither this Credit Agreement nor any other Credit
Document nor any of the terms hereof or thereof may be amended,
changed, waived, discharged or terminated unless such amendment,
change, waiver, discharge or termination is in writing and signed by
the Required Lenders and the then Credit Parties; provided that no
such amendment, change, waiver, discharge or termination shall
(i) without the consent of each Lender affected
thereby,
(A) extend the final maturity of any
Loan or extend or waive any Principal Amortization
Payment of any Loan, or any portion thereof,
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111
(B) reduce the rate or extend the time
of payment of interest (other than as a result of
waiving the applicability of any post-default
increase in interest rates) thereon or fees
hereunder,
(C) reduce or waive the principal amount
of any Loan,
(D) increase the Commitment of a Lender
over the amount thereof in effect (it being
understood and agreed that a waiver of any Default or
Event of Default or a mandatory reduction in the
Commitments shall not constitute a change in the
terms of any Commitment of any Lender),
(E) release all or any material portion
of the Collateral securing the Credit Party
Obligations hereunder (provided that the Agent may,
without consent from any other Lender, release any
Collateral that is sold or transferred by a Credit
Party in conformance with Section 8.5),
(F) release the Borrower or any other
material Credit Party from its obligations under the
Credit Documents (provided that the Agent may,
without consent from any other Lender, release any
Guarantor that is sold or transferred in conformance
with Section 8.5),
(G) amend, modify or waive any provision
of this Section or Section 3.4(b)(i), 3.7, 3.8, 3.9,
3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 9.1(a), 11.2,
11.3 or 11.5,
(H) reduce any percentage specified in,
or otherwise modify, the definition of Required
Lenders or
(I) consent to the assignment or
transfer by the Borrower (or substantially all of the
other Credit Parties) of any of its rights and
obligations under (or in respect of) the Credit
Documents except as permitted thereby; and
(ii) without the consent of Lenders holding in the
aggregate more than 50% of the outstanding Term Loans, extend
the time for or the amount or the manner of application of
proceeds of any mandatory prepayment required by Section
3.3(b)(ii), (iii) or (iv). No provision of Section 10 may be
amended without the consent of the Agent.
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Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender
is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans or the Letters of Credit,
and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set
forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or
insolvency proceeding.
(b) A Default or Event of Default shall not be deemed to
have occurred or to be in existence for any purpose of this Credit
Agreement if the Required Lenders (or all of the Lenders, if required
hereunder) shall have expressly waived such Default or Event of
Default in writing pursuant to Section 11.6(a) hereof or stated in
writing that the same has been cured to the reasonable satisfaction of
the Required Lenders (or the Lenders as may be required hereunder).
No waiver pursuant to Section 11.6(a) shall extend to or affect any
subsequent Default or Event of Default or impair the rights of the
Lenders upon the occurrence thereof.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts,
each of which where so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary
in making proof of this Credit Agreement to produce or account for more than
one such counterpart.
11.8 PLEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 DEFAULTING LENDER.
Each Lender understands and agrees that if such Lender is a Defaulting
Lender then notwithstanding the provisions of Section 11.6(a) it shall not be
entitled to vote on any matter requiring the consent of the Required Lenders or
to object to any matter requiring the consent of all the Lenders adversely
affected thereby; provided, however, that all other benefits and obligations
under the Credit Documents shall apply to such Defaulting Lender.
11.10 SURVIVAL OF INDEMNIFICATION AND REPRESENTATIONS AND
WARRANTIES.
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All indemnities set forth herein and all representations and
warranties made herein shall survive the execution and delivery of this Credit
Agreement, the making of the Loans, the issuance of the Letters of Credit and
the repayment of the Loans, LOC Obligations and other obligations and the
termination of the Commitments hereunder.
11.11 GOVERNING LAW; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Credit Agreement or any other Credit Document may
be brought in the courts of the State of New York, or of the United
States for the Southern District of New York, and, by execution and
delivery of this Credit Agreement, each Credit Party hereby
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of such courts. Each
Credit Party further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address for notices pursuant to
Section 11.1, such service to become effective 3 days after such
mailing. Nothing herein shall affect the right of a Lender to serve
process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against a Credit Party in any
other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) hereof and hereby
further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
11.12 WAIVER OF JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES TO THIS
CREDIT AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT
AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
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11.13 TIME.
All references to time herein shall be references to Eastern Standard
Time or Eastern Daylight time, as the case may be, unless specified otherwise.
11.14 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.15 ENTIRETY.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.16 BINDING EFFECT.
This Credit Agreement shall become effective at such time when all of
the conditions set forth in Section 5.1 have been satisfied or waived by the
Lenders and it shall have been executed by the Borrower, the Guarantors and the
Agent, and the Agent shall have received copies hereof (telefaxed or otherwise)
which, when taken together, bear the signatures of each Lender, and thereafter
this Credit Agreement shall be binding upon and inure to the benefit of the
Borrower, the Guarantors, the Agent and each Lender and their respective
successors and assigns.
11.17 CONFIDENTIALITY.
Each Lender agrees that it will use its reasonable best efforts to
keep confidential and to cause any representative designated under Section 7.11
to keep confidential any non-public information from time to time supplied to
it under any Credit Document; provided, however, that nothing herein shall
affect the disclosure of any such information to (i) the extent such Lender in
good faith believes is required by statute, rule, regulation or judicial
process, (ii) counsel for such Lender or to its accountants, (iii) bank
examiners or auditors or comparable Persons, (iv) any affiliate of such Lender,
(v) any other Lender, or any assignee, transferee or participant, or any
potential assignee, transferee or participant, of all or any portion of any
Lender's rights under this Credit Agreement who is notified of the confidential
nature of the information and agrees to be bound by this provision or
provisions
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115
reasonably comparable hereto, or (vi) any other Person in connection with any
litigation to which any one or more of the Lenders is a party; and provided
further that no Lender shall have any obligation under this Section 11.17 to
the extent any such information becomes available on a non-confidential basis
from a source other than a Credit Party or that any information becomes
publicly available other than by a breach of this Section 11.17. Each Lender
agrees it will use all confidential information exclusively for the purpose of
evaluating, monitoring, selling, protecting or enforcing its Loans and other
rights under the Credit Documents. Without affecting any other rights of the
Borrower and the Credit Parties, each Lender acknowledges that the Borrower
shall be entitled to seek the remedies of injunction, specific performance and
other equitable relief for any breach of the provisions of this Section 11.17.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: STEEL HEDDLE MFG. CO.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. Team
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Team
-------------------------------
Title: President
-------------------------------
GUARANTORS: STEEL HEDDLE INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. Team
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Team
-------------------------------
Title: President
-------------------------------
HEDDLE CAPITAL CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: President
-------------------------------
[Signatures continued]
117
Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
AGENT: NATIONSBANK, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title: Vice President
-------------------------------
SYNDICATION
AGENT: DLJ CAPITAL FUNDING, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Title: Managing Director
-------------------------------
LENDERS: NATIONSBANK, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title: Vice President
-------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Title: Managing Director
-------------------------------
118
SCHEDULE 1.1(a)
CONSOLIDATED EBIT SPECIAL ADJUSTMENTS
▇▇▇▇▇▇ HEDDLE MFG. CO.
EBIT SPECIAL ADJUSTMENTS
SEPTEMBER 30, JANUARY 3, MARCH 31, JUNE 30, TOTAL
1997 1998 1998 1998 -----
MANAGEMENT FEES 69,000 69,000 68,000 68,000 274,000
SUPPLEMENTAL BONUS COMPENSATION 222,000 197,000 0 0 419,000
COMPENSATION EXPENSE FOR ELIMINATED 65,000 65,000 69,000 0 199,000
POSITIONS
TOTAL 356,000 331,000 137,000 68,000 892,000
119
4
SCHEDULE 1.1(b)
EXISTING INVESTMENTS
120
Schedule 1.1(c)
LENDER ADDRESSES AND COMMITMENTS
=====================================================================================================================
REVOLVING REVOLVING TERMLOAN TERM LOAN
COMMITMENT COMMITMENT COMMITMENT COMMITMENT
OPERATIONS CONTACT CREDIT CONTACT $20MM PERCENTAGE $30MM PERCENTAGE
=====================================================================================================================
NationsBank, N.A. NationsBank, N.A. $16,000,000.00 80 % $24,000,000.00 80%
Corporate Credit Services NationsBank Plaza
Independence Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, 66th Floor
15th Floor Dallas, TX 75202
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇. Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ $4,000,000.00 20% $6,000,000.00 20%
▇▇▇▇ ▇▇▇▇▇▇ of the Stars, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇)▇▇▇-▇▇▇▇
=====================================================================================================================
$20,000,000.00 100% $30,000,000.00 100%
=====================================================================================================================
121
SCHEDULE 1.1(d)
EXISTING LETTERS OF CREDIT
Date of Issuance LOC# Undrawn amount Name of Beneficiary Date of Expiry
---------------- ---- -------------- ------------------- --------------
12/31/1997 919987 $671,000.00 Bureau of Solid and 02/21/1999
Hazardous Waste
Management
122
8
SCHEDULE 5.1(d)
MORTGAGED PROPERTIES
123
9
SCHEDULE 5.1(e)(i)
FORM OF OPINION OF ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
May 26, 1998
To the Lenders party to the Credit
Agreement referred to below and
NationsBank, N.A., as Agent thereunder
Re: Steel Heddle Mfg. Co.
Ladies and Gentlemen:
We have acted as counsel to Steel Heddle Mfg. Co., a Pennsylvania
corporation ("Borrower"), Steel Heddle Group, Inc., a _____________ corporation
(the "Parent"), and certain subsidiaries of the Borrower (each a "Guarantor",
and together, with the Borrower and the Parent, individually a "Credit Party
and collectively the "Credit Parties") in connection with the Credit Agreement
dated as of May 26, 1998 (the "Credit Agreement") among the Borrower, the
Guarantors, the several Lenders from time to time party thereto, NationsBank,
N.A., as Agent ("NationsBank"), and DLJ Capital Funding, Inc., as Syndication
Agent ("DLJ"), the other Credit Documents referred to and defined therein and
the transactions contemplated by the Credit Agreement and the other Credit
Documents.
This opinion is being delivered at the request of the Credit Parties
pursuant to Section 5.1(e)(i) of the Credit Agreement. Capitalized terms used
herein but not otherwise defined herein shall have the respective meanings
accorded such terms in the Credit Agreement.
In rendering this opinion, we have reviewed the following documents
(the documents referenced in subsection (1) through (9) below hereinafter may
be referred to collectively as the "Documents"):
(1) The Credit Agreement;
(2) Each of the Notes;
(4) The Security Agreement;
(5) The Pledge Agreement;
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10
(6) The UCC-1 Financing Statement(s) executed by Borrower in
connection with the Mortgages (the "Fixture Financing
Statements"), the UCC-1 Financing Statement(s) executed by the
Borrower and the Guarantors (the "Code Collateral Financing
Statements" and together with the Fixture Filing Statements,
the "UCC Financing Statements") in connection with the
Security Agreement, to be filed in the respective locations
described on Schedule A hereto (the "UCC Financing
Statements");
(7) The Mortgage Instruments and the Notices of Grant of Security
Interest in Patents and Trademarks to be filed pursuant to the
terms of the Security Agreement in the United States Patent
and Trademark Office (the "PTO Filings");
(8) The Purchase Agreement and all documents, approvals and
certificates executed in connection with the Purchase
Agreement (collectively, the "Acquisition Documents"); and
(9) (a) The Agreement and Plan of Merger, dated as of ___________,
1998 (the "Merger I Agreement") between Steel Heddle Group,
Inc., a Delaware corporation ("SH Group"), and SH Holdings
Corp., a Pennsylvania corporation ("Old Holdings"), (b) the
Agreement and Plan of Merger dated as of ___________, 1998
(the "Merger II Agreement") between ______________ and
____________ (collectively, the mergers consummated pursuant
to the Merger I Agreement and the Merger II Agreement referred
to herein as the "Mergers") and (c) all other documents,
approvals and certificates required in order to consummate the
Mergers (collectively, the "Merger Documents");
In rendering the opinions expressed below, we have examined the
Documents and originals or copies, certified or otherwise identified to our
satisfaction, of such corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of public officials
and of officers and representatives of the Credit Parties, and have made such
inquiries of such officers and representatives, as we have deemed relevant and
necessary as a basis for the opinions hereinafter set forth.
In making the examinations described above, we have assumed the
genuineness of all signatures (other than the signatures of the Credit
Parties), the capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such documents. We have also assumed the due
authorization, execution and delivery of the Documents by all parties thereto
(other than the Credit Parties) and the binding effect of such documents on
such parties.
125
11
We have also examined originals or copies of the Certificate of
Incorporation and Bylaws of each Credit Party, resolutions of the Board of
Directors of each Credit Party, and certificates of public officials concerning
the legal existence, qualifications to do business as a foreign corporation or
good standing of each Credit Party.
Based upon the foregoing and subject to the qualifications stated
herein, we are of the opinion that:
1. Each of the Credit Parties is a validly existing
corporation under the laws of the jurisdiction of its incorporation
and has the corporate power to own its properties and to transact the
business in which it is currently engaged, and is qualified to do
business in and is in good standing in the jurisdiction of its
incorporation and each other jurisdiction where it is required to be
qualified and in good standing given the nature of its business.
2. Each of the Credit Parties has the corporate power to
execute, deliver and carry out the terms and provisions of each of the
Documents to which it is a party and each Credit Party has duly taken
or caused to be taken all necessary corporate action to authorize the
execution, delivery and performance by it of each of such Documents.
3. Each of the Credit Parties has duly executed and
delivered each of the Documents to which it is a party.
4. Each of the Documents to which such Person is a party
constitutes a legal, valid and binding obligation of each Credit
Party, enforceable against such Person in accordance with its terms.
5. The execution and delivery of the Security Agreement
by the Credit Parties creates in favor of the Agent a valid lien on
and a security interest in the "Collateral" (as such term is defined
in the Security Agreement), to the extent the validity of a lien or
security interest in the Collateral is covered by Article 9 of the
Applicable UCC (as defined below) or applicable Federal law, as
security for the Secured Obligations referred to therein. Assuming
the filing of the financing statements on Form UCC-1 in the offices in
the jurisdictions indicated on Schedule A, such lien and security
interest is duly perfected to the extent a lien or security interest
in the Collateral owned (now or hereafter) by the Credit Parties may
be perfected by the filing of a financing statement under the Uniform
Commercial Code as in effect in the respective states in which such
filing offices are located (the "Applicable UCC") or applicable
Federal law.
6. The authorized capital stock and the issued and
outstanding shares of stock in each Credit Party, as set forth in
attached hereto, constitute all of the authorized, issued and
outstanding shares of stock in each Credit Party and all of such
issued and outstanding stock is owned in the manner provided in
Schedule B. All of the Pledged
126
12
Shares (as defined in the Pledge Agreement) have been duly authorized,
and validly issued and are fully paid and non-assessable.
7. The Pledge Agreement creates a legal, valid and
enforceable security interest in favor of the Agent in the Pledged
Collateral (as defined in the Pledge Agreement).
8. Assuming continued possession by the Agent of the
stock certificates representing the Pledged Shares, the Agent's
security interests in the Pledged Shares constitute first priority,
perfected security interests.
9. Neither the execution and delivery of the Documents
by any of the Credit Parties which is party thereto, nor the
consummation by a Credit Party of the transactions contemplated
therein, will (a) violate or conflict with any provision of the
articles or certificate of incorporation or bylaws of any Credit
Party, (b) violate, contravene or materially conflict with any law,
regulation (including, without limitation, Regulation U or Regulation
X), order, writ, judgment, injunction, decree or permit applicable to
any Credit Party, (c) violate, contravene or materially conflict with
contractual provisions of, or cause an event of default under, any
indenture, loan agreement, mortgage, deed of trust, contract or other
agreement or instrument to which any of the Credit Parties is a party
or by which any Credit Party may be bound, or (d) result in or require
the creation of any Lien (other than those contemplated in or created
in connection with the Documents) upon or with respect to the
properties of any Credit Party.
10. No consent, approval, authorization or order of, or
filing, registration or qualification with, any court or Governmental
Authority or third party in respect of any Credit Party is required in
connection with the execution, delivery or performance of the
Documents by a Credit Party, or if required, such consent, approval
and authorization has been obtained.
11. To the best of our knowledge, there are no actions,
suits or legal, equitable, arbitration or administrative proceedings,
pending or threatened against any Credit Party which will have or
might be reasonably expected to have a Material Adverse Effect.
12. None of the Credit Parties is an "investment company"
registered or required to be registered under the Investment Company
Act of 1940, as amended, or controlled by such a company, or a
"holding company," or a "Subsidiary company" of a "holding company,"
or an "affiliate" of a "holding company" or of a "Subsidiary" or a
"holding company," within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
127
13
13. Each Mortgage Instrument identified on Schedule C
attached hereto is in proper form for recording and upon recordation
of each Mortgage Instrument, as appropriate, such Mortgage Instrument
will provide the Agent, for the benefit of the Lenders, with a valid
lien on the property described therein.
14. The Acquisition Documents have been duly executed and
delivered by SH Group and SH Group has acquired all of the issued and
outstanding stock of Old Holdings in accordance with the terms of the
Acquisition Documents.
15. (a) The Merger Documents have been duly authorized by
all necessary corporate action on the part of the parties thereto, (b)
the Mergers have been consummated in accordance with all requirements
of the laws of the States of Delaware and Pennsylvania (including,
without limitation, the filing of certificates of merger with the
Secretary of State of the States of Delaware and Pennsylvania) and the
Certificate of Incorporation and Bylaws of each party thereto and (c)
the Mergers have become effective under the laws of the States of
Delaware and Pennsylvania.
16. As a result of the Mergers, all of the issued and
outstanding stock of Borrower is owned by SH Group.
17. [Opinions from Seller's counsel relating to the
Purchase Agreement]
The opinions herein are limited to the laws of the State of New York, the
General Corporation Law of the State of Delaware and the federal laws of the
United States, except to the extent the opinions set forth in paragraph 5 above
with respect to the perfection of certain security interests involve
conclusions under the laws of various states other than the State of New York,
in which case such opinion is based solely on our review of Article 9 of the
Uniform Commercial Code as in effect in such states as reported in the Secured
Transaction Guide published by Commerce Clearinghouse, Inc., updated through
______________, 1998, and have otherwise assumed that the laws of each such
state are in all relevant respects identical to the laws of the State of New
York.
This letter is rendered solely for your benefit in connection with the
transactions described above. This opinion may not be used or relied upon by
any other person, and may not be disclosed, quoted, filed with a governmental
agency or otherwise referred to without our prior written consent except to
your bank examiners, auditors and counsel and to prospective transferees of
your interests under the Credit Documents and their professional advisers, or
as required by law or pursuant to legal process.
128
14
Schedule A
Locations for UCC-1 Filings
129
15
Schedule B
[Ownership of Credit Parties]
130
16
Schedule C
Mortgage Instruments
131
May __, 1998
Page 1
SCHEDULE 5.1(e)(ii)
FORM OF LOCAL COUNSEL CORPORATE OPINION
May 26, 1998
To the Lenders party to the Credit
Agreement referred to below and
NationsBank, N.A., as Agent thereunder
Re: Steel Heddle Mfg. Co.
Ladies and Gentlemen:
We have acted as special <> counsel to ________________, a
______________ corporation (the "Company"), in connection with the Credit
Agreement dated as of May 26, 1998 (the "Credit Agreement") among Steel Heddle
Mfg. Co., a Pennsylvania corporation ("Borrower"), certain subsidiaries of the
Borrower (each a "Guarantor"), the several Lenders from time to time party
thereto, NationsBank, N.A., as Agent ("NationsBank") and DLJ Capital Funding,
Inc., as Syndication Agent ("DLJ"), the other Credit Documents referred to and
defined therein and the transactions contemplated by the Credit Agreement and
the other Credit Documents.
This opinion is being delivered at the request of the Credit Parties
pursuant to Section 5.1(e)(ii) of the Credit Agreement. Capitalized terms used
herein but not otherwise defined herein shall have the respective meanings
accorded such terms in the Credit Agreement.
In rendering the opinions expressed below, we have examined executed
copies of the Credit Agreement and the other Credit Documents and originals or
copies, certified or otherwise identified to our satisfaction, of such
corporate records, agreements, documents and other instruments, and such
certificates or comparable documents of public officials and of officers and/or
representatives of the Company, and have made such inquiries of such officers
and/or representatives as we have deemed relevant and necessary as a basis for
the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents.
132
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Page 2
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:
1. The Company is a corporation duly organized and validly
existing under the laws of the <>, has the corporate power and
authority, and 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, and is qualified to do business and in good standing in the
<>.
2. The Company has the corporate power and authority to execute,
deliver and perform each of the Credit Documents to which it is a party, and
the Company has taken all proper and necessary corporate action to authorize
the execution, delivery and performance of each of the Credit Documents to
which it is a party.
3. Each of the Credit Documents to which it is a party has been
duly executed and delivered by the Company.
The opinions herein are limited to the laws of <>, and we
express no opinion as to the effect on the matters covered by this opinion of
the laws of any other jurisdiction.
This opinion is rendered solely for your benefit in connection with the
transactions described above. This opinion may not be used or relied upon by
any other person, and may not be disclosed, quoted, filed with a governmental
agency or otherwise referred to without our prior written consent except to
your bank examiners, auditors and counsel and to prospective transferees of
your interests under the Credit Agreement and their professional advisers, or
as required by law or pursuant to legal process.
Very truly yours,
133
May __, 1998
3
Page
SCHEDULE 1
Name of Corporation Filing Office
134
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1
Page
SCHEDULE 5.1(e)(iii)
FORM OF LOCAL COUNSEL COLLATERAL OPINION
May 26, 1998
To the Lenders party to the Credit
Agreement referred to below and
NationsBank, N.A., as Agent thereunder
Re: Steel Heddle Mfg. Co.
Ladies and Gentlemen:
We have acted as special <> counsel to ______________, a
________ corporation (the "Company"), in connection with the Credit Agreement
dated as of May 26, 1998 (the "Credit Agreement"), among Steel Heddle Mfg. Co.,
a Pennsylvania corporation ("Borrower"), certain subsidiaries of the Borrower
(each a "Guarantor"), the several Lenders from time to time party thereto,
NationsBank, N.A., as Agent ("NationsBank") and DLJ Capital Funding, Inc., as
Syndication Agent ("DLJ"), the other Credit Documents referred to and defined
therein and the transactions contemplated by the Credit Agreement and the other
Credit Documents.
This opinion is being delivered at the request of the Credit Parties
pursuant to Section 5.1(e)(iii) of the Credit Agreement. Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
accorded such terms in the Credit Agreement.
In rendering the opinions expressed below, we have examined executed
copies of the Credit Agreement, the Security Agreement referred to and defined
therein (the "Security Agreement") and the Mortgage Instruments referred to and
defined therein for the locations identified on Schedule 2 attached hereto (the
"<> Mortgage Instruments") and originals or copies, certified or
otherwise identified to our satisfaction, of such corporate records,
agreements, documents and other instruments, and such certificates or
comparable documents of public officials and of officers and/or representatives
of the Company, and have made such inquiries of such officers and/or
representatives as we have deemed relevant and necessary as a basis for the
opinions hereinafter set forth.
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2
Page
In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents (other than the Credit Agreement, the
Security Agreement and the <> Mortgage Instruments) submitted to us as
originals, the conformity to original documents of documents submitted to us as
certified or photostatic copies and the authenticity of the originals of such
latter documents.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:
1. The execution and delivery of the Security Agreement by the
Company creates in favor of the Agent a valid lien on and a security interest
in the "Collateral" (as such term is defined in the Security Agreement), to the
extent the validity of a lien or security interest in the Collateral is covered
by Article 9 of the Uniform Commercial Code in effect in <> (the
"<> UCC"), as security for the Secured Obligations referred to therein.
Assuming the filing of the financing statements on Form UCC-1 in the offices in
the jurisdictions indicated on Schedule 1, such lien and security interest is
duly perfected to the extent a lien or security interest in the Collateral
owned (now or hereafter) by the Company may be perfected by the filing of a
financing statement under the <> UCC.
2. Each <> Mortgage is in proper form for recording in the
State of <> and upon recordation of each Mortgage Instrument, as
appropriate, such Mortgage Instrument will provide the Agent, for the benefit
of the Lenders, with a valid lien on the property described therein.
3. Assuming that the matter would be governed by the laws of the
State of <>, each of the Security Agreement and the <> Mortgage
Instruments constitutes a legal, valid and binding obligation of each Credit
Party which is a party thereto, enforceable against such Person in accordance
with its terms.
The opinions herein are limited to the laws of <>, and we
express no opinion as to the effect on the matters covered by this opinion of
the laws of any other jurisdiction.
This opinion is rendered solely for your benefit in connection with the
transactions described above. This opinion may not be used or relied upon by
any other person, and may not be disclosed, quoted, filed with a governmental
agency or otherwise referred to without our prior written consent except to
your bank examiners, auditors and counsel and to prospective transferees of
your interests under the Credit Agreement and their professional advisers, or
as required by law or pursuant to legal process.
Very truly yours,
136
May __, 1998
3
Page
137
May __, 1998
4
Page
SCHEDULE 1
Name of Corporation Filing Office
4
138
May __, 1998
5
Page
SCHEDULE 2
5
139
May __, 1998
6
Page
SCHEDULE 6.6
CONSENTS, APPROVALS AND AUTHORIZATIONS
6
140
May __, 1998
7
Page
SCHEDULE 6.10
EXISTING INDEBTEDNESS
7
141
May __, 1998
8
Page
SCHEDULE 6.11
LITIGATION
8
142
May __, 1998
9
Page
SCHEDULE 6.15
SUBSIDIARIES
9
143
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10
Page
SCHEDULE 6.18
ENVIRONMENTAL MATTERS
The report titled "Environmental Assessment of Certain Facilities of the Steel
Heddle Manufacturing Company" prepared by ENVIRON Corporation, and dated May
1998 is incorporated herein by reference and all matters set forth in such
report are deemed set forth on this Schedule 6.18.
10
144
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11
Page
SCHEDULE 6.19
INTELLECTUAL PROPERTY
11
145
May __, 1998
12
Page
SCHEDULE 6.22(a)
REAL PROPERTY LOCATIONS
12
146
May __, 1998
13
Page
SCHEDULE 6.22(b)
PERSONAL PROPERTY LOCATIONS
13
147
May __, 1998
14
Page
SCHEDULE 6.22(c)
CHIEF EXECUTIVE OFFICES
14
148
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15
Page
SCHEDULE 6.26
LABOR MATTERS
15
149
May __, 1998
16
Page
SCHEDULE 7.6
INSURANCE
16
150
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17
Page
SCHEDULE 11.1
ADDRESSES FOR NOTICE
NAME AND ADDRESS
ALL CREDIT PARTIES:
Steel Heddle Mfg. Co.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
AGENT:
NationsBank, N.A.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Independence Center, ▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LENDERS:
See Schedule 1.1(a)
17
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Page
EXHIBIT 2.1
FORM OF NOTICE OF BORROWING
NationsBank, N.A.,
as Agent for the Lenders
NC-001-15-04
Independence Center, 15th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, STEEL HEDDLE MFG. CO. (the "Borrower"), refers to the
Credit Agreement dated as of May 26, 1998 (as amended, modified, extended or
restated from time to time, the "Credit Agreement"), among the Borrower, the
Guarantors party thereto, the Lenders party thereto, NationsBank, N.A., as
Agent and DLJ Capital Funding, Inc. as Syndication Agent. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned
to such terms in the Credit Agreement. The Borrower hereby gives notice
pursuant to Section 2.1(b) of the Credit Agreement that it requests a Revolving
Loan advance under the Credit Agreement, and in connection therewith sets forth
below the terms on which such Loan advance is requested to be made:
(A) Date of Borrowing
(which is a Business Day)
(B) Principal Amount of
Borrowing
(C) Interest rate basis
(D) Interest Period and the
last day thereof
In accordance with the requirements of Section 5.2, the Borrower
hereby reaffirms the representations and warranties set forth in the Credit
Agreement as provided in subsection (b) of such Section, and confirms that the
matters referenced in subsections (c), (d), (e) and (f) of such Section, are
true and correct.
Very truly yours,
STEEL HEDDLE MFG. CO.
18
152
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19
Page
By:
Name:
Title:
153
May __, 1998
20
Page
EXHIBIT 2.4
FORM OF NOTICE OF CONTINUATION/CONVERSION
NationsBank, N.A.,
as Agent for the Lenders
NC-001-15-04
Independence Center, 15th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, STEEL HEDDLE MFG. CO. (the "Borrower"), refers to the
Credit Agreement dated as of May 26, 1998 (as amended, modified, extended or
restated from time to time, the "Credit Agreement"), among the Borrower, the
Guarantors party thereto, the Lenders party thereto, NationsBank, N.A., as
Agent and DLJ Capital Funding, Inc. as Syndication Agent. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned
to such terms in the Credit Agreement. The Borrower hereby gives notice
pursuant to Section 2.4 of the Credit Agreement that it requests a continuation
or conversion of a Revolving Loan outstanding under the Credit Agreement, and
in connection therewith sets forth below the terms on which such continuation
or conversion is requested to be made:
(A) Date of Continuation or Conversion
(which is the last day of the
the applicable Interest Period)
(B) Principal Amount of
Continuation or Conversion
(C) Interest rate basis
(D) Interest Period and the
last day thereof
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d), (e) and (f) of such Section, are true and
correct.
20
154
May __, 1998
21
Page
Very truly yours,
STEEL HEDDLE MFG. CO.
By:
Name:
Title:
155
May __, 1998
1
Page
EXHIBIT 2.6(a)
FORM OF REVOLVING NOTE
$_________________ May 26, 1998
FOR VALUE RECEIVED, STEEL HEDDLE MFG. CO., a Pennsylvania corporation (the
"Borrower"), hereby promises to pay to the order of __________________________,
its successors and permitted assigns (the "Lender"), at the office of
NationsBank, N.A., as Agent (the "Agent"), at Independence Center, 15th Floor,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (or at such other place or places as the holder hereof
may designate in writing to the Borrower pursuant to the terms of the Credit
Agreement), at the times set forth in the Credit Agreement dated as of the date
hereof among the Borrower, the Guarantors party thereto, the Lenders party
thereto and the Agent (as it may be amended, modified, extended or restated
from time to time, the "Credit Agreement"; all capitalized terms not otherwise
defined herein shall have the meanings set forth in the Credit Agreement), but
in no event later than the Revolving Loan Maturity Date, in Dollars and in
immediately available funds, the principal amount of ________________________
DOLLARS ($____________) or, if less than such principal amount, the aggregate
unpaid principal amount of all Revolving Loans made by the Lender to the
Borrower pursuant to the Credit Agreement, and to pay interest from the date
hereof on the unpaid principal amount hereof, in like money, at said office, on
the dates and at the rates provided in the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1(b)
of the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note,
and all other indebtedness of the Borrower to the Lender shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and
interest, all costs of collection, including reasonable attorneys' fees.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(d) of the Credit Agreement.
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2
Page
2
157
May __, 1998
3
Page
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
STEEL HEDDLE MFG. CO.
By:
Name:
Title:
3
158
May __, 1998
1
Page
EXHIBIT 2.6(b)
FORM OF TERM NOTE
$_________________ May 26, 1998
FOR VALUE RECEIVED, STEEL HEDDLE MFG. CO., a Pennsylvania corporation (the
"Borrower"), hereby promises to pay to the order of __________________________,
its successors and permitted assigns (the "Lender"), at the office of
NationsBank, N.A., as Agent (the "Agent"), at Independence Center, 15th Floor,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (or at such other place or places as the holder hereof
may designate in writing to the Borrower pursuant to the terms of the Credit
Agreement), at the times set forth in the Credit Agreement dated as of the date
hereof among the Borrower, the Guarantors party thereto, the Lenders party
thereto and the Agent (as it may be amended, modified, extended or restated
from time to time, the "Credit Agreement"; all capitalized terms not otherwise
defined herein shall have the meanings set forth in the Credit Agreement), but
in no event later than the Term Loan Maturity Date, in Dollars and in
immediately available funds, the principal amount of ________________________
DOLLARS ($____________), and to pay interest from the date hereof on the unpaid
principal amount hereof, in like money, at said office, on the dates and at the
rates provided in the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1(b)
of the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note,
and all other indebtedness of the Borrower to the Lender shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and
interest, all costs of collection, including reasonable attorneys' fees.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(d) of the Credit Agreement.
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2
Page
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
STEEL HEDDLE MFG. CO.
By:
Name:
Title:
2
160
May __, 1998
3
Page
EXHIBIT 7.1(c)
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, ____.
I, ______________________, [Title] of STEEL HEDDLE MFG. CO. (the
"Borrower") hereby certify that, to the best of my knowledge and belief, with
respect to that certain Credit Agreement dated as of May 26, 1998 (as amended,
modified, extended or restated from time to time, the "Credit Agreement"; all
of the defined terms in the Credit Agreement are incorporated herein by
reference) among the Borrower, the Guarantors party thereto, the Lenders party
thereto and NationsBank, N.A., as Agent:
a. The company-prepared financial statements which accompany this
certificate are true and correct in all material respects and have been
prepared in accordance with GAAP applied on a consistent basis, subject to
changes resulting from normal year-end audit adjustments.
b. Since ___________ (the date of the last similar certification,
or, if none, the Closing Date) no Default or Event of Default has occurred and
is continuing under the Credit Agreement; and
Delivered herewith are detailed calculations demonstrating compliance by the
Credit Parties with the financial covenants contained in Section 7.12 of the
Credit Agreement as of the end of the fiscal period referred to above.
This ______ day of ___________, ____.
STEEL HEDDLE MFG. CO.
By:
Name:
Title:
3
161
May __, 1998
4
Page
Attachment to Officer's Certificate
COMPUTATION OF FINANCIAL COVENANTS
4
162
May __, 1998
5
Page
EXHIBIT 7.13
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________,
____, is by and between _____________________, a ___________________ (the
"Subsidiary"), and NATIONSBANK, N.A., in its capacity as Agent under that
certain Credit Agreement (as it may be amended, modified, extended or restated
from time to time, the "Credit Agreement"), dated as of May 26, 1998, by and
among STEEL HEDDLE MFG. CO., a Pennsylvania corporation (the "Borrower"),
the Guarantors party thereto, the Lenders party thereto and NationsBank, N.A.,
as Agent. All of the defined terms in the Credit Agreement are incorporated
herein by reference.
The Subsidiary is an Additional Credit Party, and, consequently, the
Credit Parties are required by Section 7.13 of the Credit Agreement to cause
the Subsidiary to become a "Guarantor".
Accordingly, the Subsidiary hereby agrees as follows with the Agent, for
the benefit of the Lenders:
1. The Subsidiary hereby acknowledges, agrees and confirms that, by
its execution of this Agreement, the Subsidiary will be deemed to be a party to
the Credit Agreement and a "Guarantor" for all purposes of the Credit
Agreement, and shall have all of the obligations of a Guarantor thereunder as
if it had executed the Credit Agreement. The Subsidiary hereby ratifies, as of
the date hereof, and agrees to be bound by, all of the terms, provisions and
conditions applicable to the Guarantors contained in the Credit Agreement.
Without limiting the generality of the foregoing terms of this paragraph 1, the
Subsidiary hereby, jointly and severally together with the other Guarantors,
guarantees to each Lender and the Agent, as provided in Section 4 of the Credit
Agreement, the prompt payment and performance of the Borrower's Obligations in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise) strictly in accordance with the terms thereof.
2. The Subsidiary hereby acknowledges, agrees and confirms that, by
its execution of this Agreement, the Subsidiary will be deemed to be a party to
the Security Agreement and an "Obligor" for all purposes of the Security
Agreement, and shall have all of the obligations of an Obligor thereunder as if
it had executed the Security Agreement. The Subsidiary hereby ratifies, as of
the date hereof, and agrees to be bound by, all of the terms, provisions and
conditions applicable to the Obligors contained in the Security Agreement.
Without limiting the generality of the foregoing terms of this paragraph 2, the
Subsidiary hereby grants to the Agent, for the benefit of the Lenders, a
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Page
continuing security interest in, and a right of set off against, any and all
right, title and interest of the Subsidiary in and to the Collateral (as such
term is defined in Section 2 of the Security Agreement) of the Subsidiary. The
Subsidiary hereby represents and warrants to the Agent that:
(i) The Subsidiary's chief executive office and chief place of
business are (and for the prior four months have been) located at the
locations set forth in Schedule 1 attached hereto and the Subsidiary
keeps its books and records at such locations.
(ii) The type of Collateral owned by the Subsidiary and the
location of all Collateral owned by the Subsidiary is as shown on
Schedule 2 attached hereto.
(iii) The Subsidiary's legal name is as shown in this Agreement
and the Subsidiary has not changed its name, been party to a merger,
consolidation or other change in structure or used any tradenames
except as set forth in Schedule 3 attached hereto.
(iv) The patents, trademarks and copyrights listed on Schedule
4 attached hereto constitute all of the registrations and applications
for the patents, trademarks and copyrights owned by the Subsidiary.
3. The Subsidiary hereby acknowledges, agrees and confirms that, by
its execution of this Agreement, the Subsidiary will be deemed to be a party to
the Pledge Agreement and a "Pledgor" for all purposes of the Pledge Agreement,
and shall have all of the obligations of a Pledgor thereunder as if it had
executed the Pledge Agreement. The Subsidiary hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
applicable to the Pledgors contained in the Pledge Agreement. Without limiting
the generality of the foregoing terms of this paragraph 3, the Subsidiary
hereby pledges and assigns to the Agent, for the benefit of the Lenders, and
grants to the Agent, for the benefit of the Lenders, a continuing security
interest in any and all right, title and interest of the Subsidiary in and to
the Pledged Shares (as such term is defined in Section 2 of the Pledge
Agreement) listed on Schedule 5 attached hereto and the other Pledged
Collateral (as such term is defined in Section 2 of the Pledge Agreement).
4. The address of the Subsidiary for purposes of all notices and
other communications is ____________________, ____________________________,
Attention of ______________ (Facsimile No. ____________).
5. The Subsidiary hereby waives acceptance by the Agent and the
Lenders of the guaranty by the Subsidiary under Section 4 of the Credit
Agreement upon the execution of this Agreement by the Subsidiary.
6
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Page
6. This Agreement may be executed in two or more counterparts, each
of which shall constitute an original but all of which when taken together
shall constitute one contract.
7. This Agreement shall be governed by and construed and interpreted
in accordance with the laws of the State of New York.
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Page
IN WITNESS WHEREOF, the Subsidiary has caused this Joinder Agreement to
be duly executed by its authorized officers, and the Agent, for the benefit of
the Lenders, has caused the same to be accepted by its authorized officer, as
of the day and year first above written.
[SUBSIDIARY]
By:
Name:
Title:
Acknowledged and accepted:
NATIONSBANK, N.A., as Agent
By:
Name:
Title:
8
166
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Page
EXHIBIT 11.3
FORM OF ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE dated as of _______________, ____ is
entered into between ________________ ("Assignor") and ____________________
("Assignee").
Reference is made to the Credit Agreement dated as of May 26, 1998, as
amended and modified from time to time thereafter (the "Credit Agreement")
among STEEL HEDDLE MFG. CO., the Guarantors party thereto, the Lenders party
thereto, NationsBank, N.A., as Agent and DLJ Capital Funding, Inc., as
Syndication Agent. Terms defined in the Credit Agreement are used herein with
the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
effective as of the Effective Date set forth below, the interests set forth
below (the "Assigned Interest") in the Assignor's rights and obligations under
the Credit Agreement, including, without limitation, the interests set forth
below in the Commitments and outstanding Loans of the Assignor on the effective
date of the assignment designated below (the "Effective Date"), together with
unpaid fees accrued on the assigned Commitments to the Effective Date and
unpaid interest accrued on the assigned Loans to the Effective Date. Each of
the Assignor and the Assignee hereby makes and agrees to be bound by all the
representations, warranties and agreements set forth in Section 11.3(b) of the
Credit Agreement, a copy of which has been received by the Assignee. From and
after the Effective Date (i) the Assignee, if it is not already a Lender under
the Credit Agreement, shall be a party to and be bound by the provisions of the
Credit Agreement and, to the extent of the interests purchased and assumed by
the Assignee under this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
of the interests sold and assigned by the Assignor under this Assignment and
Acceptance, relinquish its rights and be released from its obligations under
the Credit Agreement.
2. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
3. Terms of Assignment
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment:
9
167
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Page
(e) Revolving Loan Commitment
Percentage Assigned (expressed
as a percentage set forth to at
least 8 decimals) %
10
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Page
(f) Revolving Loan Commitment
Percentage of Assignee after
giving effect to this Assignment
and Acceptance as of the Effective
Date (set forth to at least 8 decimals) %
(g) Revolving Loan Commitment
Percentage of Assignor after
giving effect to this Assignment
and Acceptance as of the Effective
Date (set forth to at least 8 decimals) %
(h) Revolving Committed Amount
as of Effective Date $_____________
(i) Dollar Amount of Assignor's
Revolving Loan Commitment
Percentage as of the Effective
Date (the amount set forth in
(h) multiplied by the percentage
set forth in (g)) $_____________
(j) Dollar Amount of Assignee's
Revolving Loan Commitment
Percentage as of the Effective
Date (the amount set forth in
(h) multiplied by the percentage
set forth in (f)) $_____________
(k) Term Loan Commitment Percentage
Assigned (expressed as a
percentage set forth to at
least 8 decimals) %
(l) Term Loan Commitment Percentage
of Assignee after giving effect
to this Assignment and Acceptance
on the Effective Date (set forth
to at least 8 decimals) %
(m) Term Loan Commitment Percentage
of Assignor after giving effect
to this Assignment and Acceptance
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on the Effective Date (set forth
to at least 8 decimals) %
(n) Outstanding Balance of Term Loan
as of Effective Date $_____________
(o) Principal Amount of Assignor's
portion of the Term Loan after
giving effect to this Assignment
and Acceptance on Effective
Date (the amount set forth
in (n) multiplied by the
percentage set forth in (m)) $_____________
(p) Principal Amount of Assignee's
portion of the Term Loan after
giving effect to this Assignment
and Acceptance on Effective
Date (the amount set forth
in (n) multiplied by the
percentage set forth in (l)) $_____________
4. This Assignment and Acceptance shall be effective only upon consent of
the Borrower and the Agent, if applicable, delivery to the Agent of this
Assignment and Acceptance together with the transfer fee payable pursuant to
Section 11.3(b) in connection herewith and recordation in the Register pursuant
to Section 11.3(d) of the terms hereof.
5. This Assignment and Acceptance may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Assignment and Acceptance to
produce or account for more than one such counterpart.
The terms set forth above
are hereby agreed to:
____________________, as Assignor
By:
Name:
Title:
_____________________, as Assignee
By:
Name:
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Title:
Notice address of Assignee:
<>
-----------------------------
Attn:
------------------------
Telephone: ( )
--- -----------
Telecopy: ( )
--- -----------
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CONSENTED TO:
NATIONSBANK, N.A.,
as Agent
By:
Name:
Title:
STEEL HEDDLE MFG. CO.
By:
Name:
Title:
14