CREDIT AGREEMENT
DATED AS OF APRIL 20, 1998,
AMONG
DIAMOND HOME SERVICES, INC.
THE BANKS PARTY HERETO,
AND
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Agent
TABLE OF CONTENTS
SECTION DESCRIPTION PAGE
SECTION 1. THE CREDIT FACILITIES 1
Section 1.1. Revolving Credit Commitments 1
Section 1.2. Letters of Credit 1
Section 1.3. Term Loan Commitments 4
Section 1.4. Applicable Interest Rates 4
Section 1.5. Minimum Borrowing Amounts 6
Section 1.6. Manner of Borrowing Loans and Designating Applicable
Interest Rates 6
Section 1.7. Interest Periods 8
Section 1.8. Maturity of Loans 9
Section 1.9. Prepayments 9
Section 1.10. Default Rate 11
Section 1.11. The Notes 12
Section 1.12. Funding Indemnity 12
Section 1.13. Commitment Terminations 13
Section 1.14. Swing Loans 14
SECTION 2. FEES 16
Section 2.1. Fees 16
SECTION 3. PLACE AND APPLICATION OF PAYMENTS 17
SECTION 4. COLLATERAL AND GUARANTIES 18
Section 4.1. Collateral 18
Section 4.2. Guaranties 19
Section 4.3. Further Assurances 19
SECTION 5. DEFINITIONS; INTERPRETATION 20
Section 5.1. Definitions 20
Section 5.2. Interpretation 33
Section 5.3. Change in Accounting Principles 33
SECTION 6. REPRESENTATIONS AND WARRANTIES 33
Section 6.1. Organization and Qualification 33
Section 6.2. Subsidiaries 34
Section 6.3. Authority and Validity of Obligations 34
Section 6.4. Use of Proceeds; Margin Stock 35
Section 6.5. Financial Reports 35
Section 6.6. No Material Adverse Change 36
Section 6.7. Full Disclosure 36
Section 6.8. Trademarks, Franchises, and Licenses 36
Section 6.9. Governmental Authority and Licensing 36
Section 6.10. Good Title 36
Section 6.11. Litigation and Other Controversies 37
Section 6.12. Taxes 37
Section 6.13. Approvals 37
Section 6.14. Affiliate Transactions 37
Section 6.15. Investment Company; Public Utility Holding Company 37
Section 6.16. ERISA 37
Section 6.17. Compliance with Laws 38
Section 6.18. Other Agreements 38
Section 6.19. Solvency 38
Section 6.20. ▇▇▇▇▇▇ Acquisition 38
Section 6.21. Year 2000 Compliance 39
Section 6.22. No Default 39
SECTION 7. CONDITIONS PRECEDENT 39
Section 7.1. Initial Credit Event 39
Section 7.2. All Credit Events 42
SECTION 8. COVENANTS 42
Section 8.1. Maintenance of Business 42
Section 8.2. Maintenance of Properties 43
Section 8.3. Taxes and Assessments 43
Section 8.4. Insurance 43
Section 8.5. Financial Reports 43
Section 8.6. Inspection 45
Section 8.7. Indebtedness for Borrowed Money 45
Section 8.8. Liens 46
Section 8.9. Investments, Acquisitions, Loans, Advances and
Guaranties 47
Section 8.10. Mergers, Consolidations and Sales 49
Section 8.11. Maintenance of Subsidiaries 50
Section 8.12. Dividends and Certain Other Restricted Payments 50
Section 8.13. ERISA 51
Section 8.14. Compliance with Laws 51
Section 8.15. Burdensome Contracts With Affiliates 51
Section 8.16. No Changes in Fiscal Year 51
Section 8.17. Formation of Subsidiaries 51
Section 8.18. Change in the Nature of Business 51
Section 8.19. Use of Loan Proceeds 52
Section 8.20. No Restrictions on Subsidiary Distributions 52
Section 8.21. Subordinated Debt 52
Section 8.22. Cash Flow Leverage Ratio 52
Section 8.23. Net Worth 53
Section 8.24. Fixed Charge Coverage Ratio 53
Section 8.25. Interest Coverage Ratio 53
Section 8.26. Minimum EBITDA 53
Section 8.27. Operating Leases 53
Section 8.28. Interest Rate Protection 53
Section 8.29. Seller Debt Payments 54
SECTION 9. EVENTS OF DEFAULT AND REMEDIES 54
Section 9.1. Events of Default 54
Section 9.2. Non-Bankruptcy Defaults 56
Section 9.3. Bankruptcy Defaults 57
Section 9.4. Collateral for Undrawn Letters of Credit 57
Section 9.5. Notice of Default 58
Section 9.6. Expenses 58
SECTION 10. CHANGE IN CIRCUMSTANCES 58
Section 10.1. Change of Law 58
Section 10.2. Unavailability of Deposits or Inability to Ascertain,
or Inadequacy of, LIBOR 58
Section 10.3. Increased Cost and Reduced Return 59
Section 10.4. Lending Offices 60
Section 10.5. Discretion of Bank as to Manner of Funding 60
SECTION 11. THE AGENT AND ISSUING BANK 60
Section 11.1. Appointment and Authorization of Agent 60
Section 11.2. Agent and its Affiliates 61
Section 11.3. Action by Agent 61
Section 11.4. Consultation with Experts 61
Section 11.5. Liability of Agent; Credit Decision 61
Section 11.6. Indemnity 62
Section 11.7. Resignation of Agent and Successor Agent 62
Section 11.8. Interest Rate Hedging Arrangements 63
Section 11.9. Issuing Bank 63
SECTION 12. MISCELLANEOUS 63
Section 12.1. Withholding Taxes 63
Section 12.2. No Waiver, Cumulative Remedies 64
Section 12.3. Non-Business Days 64
Section 12.4. Documentary Taxes 65
Section 12.5. Survival of Representations 65
Section 12.6. Survival of Indemnities 65
Section 12.7. Sharing of Set-Off 65
Section 12.8. Notices 65
Section 12.9. Counterparts 66
Section 12.10.Successors and Assigns 66
Section 12.11. Participants 66
Section 12.12.Assignment of Commitments by Banks 67
Section 12.13.Amendments 67
Section 12.14.Headings 68
Section 12.15.Costs and Expenses 68
Section 12.16.Set-off 68
Section 12.17.Entire Agreement 69
Section 12.18.Governing Law 69
Section 12.19.Severability of Provisions 69
Section 12.20.Excess Interest 69
Section 12.21.Confidentiality 70
Section 12.22.Single Bank 70
Section 12.23.Submission to Jurisdiction; Waiver of Jury Trial 70
Signature Page 71
EXHIBIT A - Notice of Payment Request
EXHIBIT B - Notice of Borrowing
EXHIBIT C - Notice of Continuation/Conversion
EXHIBIT D - Revolving Note
EXHIBIT E - Term Note
EXHIBIT F - Swing Line Note
EXHIBIT G - Compliance Certificate
EXHIBIT H - Assignment and Acceptance
SCHEDULE 6.2 - Subsidiaries
CREDIT AGREEMENT
To each of the Banks signatory hereto
Ladies and Gentlemen:
The undersigned, Diamond Home Services, Inc., a Delaware corporation
(the "Borrower"), applies to you for your several commitments, subject to
the terms and conditions hereof and on the basis of the representations
and warranties hereinafter set forth, to extend credit to the Borrower,
all as more fully hereinafter set forth. Each of you is hereinafter
referred to as a "Bank," all of you are hereinafter referred to
collectively as the "Banks," and ▇▇▇▇▇▇ Trust and Savings Bank in its
capacity as agent for the Banks hereunder is hereinafter referred to as
the "Agent."
SECTION 1. THE CREDIT FACILITIES.
Section 1.1. Revolving Credit Commitments. Subject to the terms and
conditions hereof, each Bank, by its acceptance hereof, severally agrees
to make a loan or loans (individually a "Revolving Loan" and collectively
the "Revolving Loans") to the Borrower in U.S. Dollars from time to time
on a revolving basis up to the amount of such Bank's revolving credit
commitment set forth on the applicable signature page hereof or pursuant
to Section 12.12 hereof (its "Revolving Credit Commitment" and,
cumulatively for all the Banks, the "Revolving Credit Commitments"),
subject to any reductions thereof pursuant to the terms hereof, before
the Revolving Credit Termination Date. The sum of the aggregate
principal amount of Revolving Loans, Swing Loans and L/C Obligations at
any time outstanding shall not exceed the Revolving Credit Commitments in
effect at such time. Each Borrowing of Revolving Loans shall be made
ratably from the Banks in proportion to their respective Revolver
Percentages. As provided in Section 1.6(a) hereof, the Borrower may
elect that each Borrowing of Revolving Loans be either Base Rate Loans or
Eurodollar Loans. Revolving Loans may be repaid and the principal amount
thereof reborrowed before the Revolving Credit Termination Date, subject
to the terms and conditions hereof.
Section 1.2. Letters of Credit. (a) General Terms. Subject to the
terms and conditions hereof, as part of the Revolving Credit, the Issuing
Bank shall issue standby and commercial letters of credit (each a "Letter
of Credit") for the Borrower's account in U.S. Dollars in an aggregate
undrawn face amount up to the amount of the L/C Commitment, provided that
the aggregate L/C Obligations at any time outstanding shall not exceed
(i) the L/C Commitment and (ii) the difference between the Revolving
Credit Commitments in effect at such time and the aggregate principal
amount of Revolving Loans and Swing Loans then outstanding. Each Letter
of Credit shall be issued by the Issuing Bank, but each Bank shall be
obligated to reimburse the Issuing Bank for such Bank's Revolver
Percentage of the amount of each drawing thereunder and, accordingly,
each Letter of Credit shall constitute usage of the Revolving Credit
Commitment of each Bank pro rata in an amount equal to its Revolver
Percentage of the L/C Obligations then outstanding.
(b) Applications. At any time before the Revolving Credit
Termination Date, the Issuing Bank shall, at the request of the Borrower,
issue one or more Letters of Credit, in a form satisfactory to the
Issuing Bank, with expiration dates no later than the earlier of 12
months from the date of issuance (or be cancelable not later than 12
months from the date of issuance and each renewal) or five Business Days
prior to the Revolving Credit Termination Date, in an aggregate face
amount not to exceed that set forth above, upon the receipt of an
application duly executed by the Borrower for the relevant Letter of
Credit in the form then customarily prescribed by the Issuing Bank for
the Letter of Credit requested (each an "Application"). Notwithstanding
anything contained in any Application to the contrary: (i) the Borrower
shall pay fees in connection with each Letter of Credit as set forth in
Section 2.1 hereof, (ii) except as otherwise provided in Section 1.9
hereof, unless an Event of Default has occurred and is continuing, the
Issuing Bank will not call for the funding by the Borrower of any amount
under a Letter of Credit before being presented with a drawing
thereunder, and (iii) if the Issuing Bank is not timely reimbursed for
the amount of any drawing under a Letter of Credit on the date such
drawing is paid, the Borrower's obligation to reimburse the Issuing Bank
for the amount of such drawing shall bear interest (which the Borrower
hereby promises to pay) from and after the date such drawing is paid at a
rate per annum equal to the sum of 2% plus the Applicable Margin for
Reimbursement Obligations plus the Base Rate from time to time in effect.
If the Issuing Bank issues any Letter of Credit with an expiration date
that is automatically extended unless the Issuing Bank gives notice that
the expiration date will not so extend beyond its then scheduled
expiration date, the Issuing Bank will give such notice of non-renewal
before the time necessary to prevent such automatic extension if before
such required notice date: (i) the expiration date of such Letter of
Credit if so extended would be after the Revolving Credit Termination
Date, (ii) the Revolving Credit Commitments have been terminated, or
(iii) a Default or an Event of Default exists and the Agent, at the
direction of the Required Banks, has given the Issuing Bank instructions
not to so permit the extension of the expiration date of such Letter of
Credit. The Issuing Bank agrees to issue amendments to the Letter(s) of
Credit increasing the amount, or extending the expiration date, thereof
at the request of the Borrower subject to the conditions of Section 7.2
hereof and the other terms of this Section 1.2.
(c) The Reimbursement Obligations. Subject to Section 1.2(b)
hereof, the obligation of the Borrower to reimburse the Issuing Bank for
all drawings under a Letter of Credit (a "Reimbursement Obligation")
shall be governed by the Application related to such Letter of Credit,
except that reimbursement shall be made by no later than 12:00 Noon
(Chicago time) on the date when each drawing is paid in immediately
available funds at the Issuing Bank's principal office in Chicago,
Illinois or such other office as the Issuing Bank may designate in
writing to the Borrower. If the Borrower does not make any such
reimbursement payment on the date due and the Participating Banks fund
their participations therein in the manner set forth in Section 1.2(d)
below, then all payments thereafter received by the Issuing Bank in
discharge of any of the relevant Reimbursement Obligations shall be
distributed in accordance with Section 1.2(d) below.
(d) The Participating Interests. Each Bank, by its acceptance
hereof, severally agrees to purchase from the Issuing Bank, and the
Issuing Bank hereby agrees to sell to each such Bank (a "Participating
Bank"), an undivided percentage participating interest (a "Participating
Interest"), to the extent of its Revolver Percentage, in each Letter of
Credit issued by, and each Reimbursement Obligation owed to, the Issuing
Bank. Upon any failure by the Borrower to pay any Reimbursement
Obligation at the time required on the date the related drawing is paid,
as set forth in Section 1.2(c) above, or if the Issuing Bank is required
at any time to return to the Borrower or to a trustee, receiver,
liquidator, custodian, or other Person any portion of any payment of any
Reimbursement Obligation, each Participating Bank shall, not later than
the Business Day it receives a certificate in the form of Exhibit A
hereto from the Issuing Bank to such effect, if such certificate is
received before 1:00 p.m. (Chicago time), or not later than 1:00 p.m.
(Chicago time) the following Business Day, if such certificate is
received after such time, pay to the Issuing Bank an amount equal to such
Participating Bank's Revolver Percentage of such unpaid or recaptured
Reimbursement Obligation together with interest on such amount accrued
from the date the related payment was made by the Issuing Bank to the
date of such payment by such Participating Bank at a rate per annum equal
to: (i) from the date the related payment was made by the Issuing Bank to
the date 2 Business Days after payment by such Participating Bank is due
hereunder, the Federal Funds Rate for each such day and (ii) from the
date 2 Business Days after the date such payment is due from such
Participating Bank to the date such payment is made by such Participating
Bank, the Base Rate in effect for each such day. Each such Participating
Bank shall thereafter be entitled to receive its Revolver Percentage of
each payment received in respect of the relevant Reimbursement Obligation
and of interest paid thereon, with the Issuing Bank retaining its
Revolver Percentage as a Bank hereunder.
The several obligations of the Participating Banks to the Issuing
Bank under this Section 1.2 shall be absolute, irrevocable, and
unconditional under any and all circumstances whatsoever and shall not be
subject to any set-off, counterclaim or defense to payment which any
Participating Bank may have or have had against the Borrower, the Agent,
the Issuing Bank, any other Bank, or any other Person whatsoever.
Without limiting the generality of the foregoing, such obligations shall
not be affected by any Default or Event of Default or by any reduction or
termination of any Commitment of any Bank occurring after any issuance,
extension or amendment of the related Letter of Credit (other than any
such reduction or termination of a Commitment by virtue of an assignment
thereof permitted hereby), and each payment by a Participating Bank under
this Section 1.2 shall be made without any offset, abatement, withholding
or reduction whatsoever. The Issuing Bank shall be entitled to offset
amounts received for the account of a Bank under this Agreement against
unpaid amounts due from such Bank to the Issuing Bank hereunder (whether
as fundings of participations, indemnities, or otherwise), but shall not
be entitled to offset against amounts owed to the Issuing Bank by any
Bank arising outside of this Agreement.
(e) Indemnification. The Participating Banks shall, to the extent
of their respective Revolver Percentages, indemnify the Issuing Bank (to
the extent not reimbursed by the Borrower) against any cost, expense
(including reasonable counsel fees and disbursements), claim, demand,
action, loss, or liability (except such as result from the Issuing Bank's
gross negligence or willful misconduct) that the Issuing Bank may suffer
or incur in connection with any Letter of Credit. The obligations of the
Participating Banks under this Section 1.2(e) and all other parts of this
Section 1.2 shall survive termination of this Agreement and of all
Applications, Letters of Credit, and all drafts and other documents
presented in connection with drawings thereunder.
Section 1.3. Term Loan Commitments. Subject to the terms and
conditions hereof, each Bank, by its acceptance hereof, severally agrees
to make a loan (individually a "Term Loan" and collectively the "Term
Loans") to the Borrower in the amount of such Bank's term loan commitment
set forth on the applicable signature page hereof or pursuant to
Section 12.12 hereof (its "Term Loan Commitment" and, cumulatively for
all the Banks, the "Term Loan Commitments"). The Term Loans shall be
made, if at all, on or before April 30, 1998, at which time the Term Loan
Commitments shall expire. The Term Loans shall be advanced in a single
Borrowing and shall be made ratably by the Banks in proportion to their
respective Term Loan Percentages. As provided in Section 1.6(a) hereof,
the Borrower may elect that the Term Loans be outstanding as Base Rate
Loans or Eurodollar Loans. No amount repaid or prepaid on any Term Loan
may be borrowed again.
Section 1.4. Applicable Interest Rates. (a) Base Rate Loans. Each
Base Rate Loan made or maintained by a Bank shall bear interest during
each Interest Period it is outstanding (computed on the basis of a year
of 365 or 366 days, as the case may be, and the actual days elapsed,
except that determinations made under clause (ii) of the definition of
Base Rate set forth below shall be computed on the basis of a year of
360 days and actual days elapsed) on the unpaid principal amount thereof
from the date such Loan is advanced, continued or created by conversion
from a Eurodollar Loan until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable Margin
plus the Base Rate from time to time in effect, payable on the last day
of its Interest Period and at maturity (whether by acceleration or
otherwise).
"Base Rate" means for any day, the greater of (i) the rate of
interest announced by the Agent from time to time as its prime commercial
rate, as in effect on such day (it being acknowledged and agreed that
rate may not be the Agent's best or lowest rate); and (ii) the sum of (x)
the rate determined by the Agent to be the average (rounded upwards, if
necessary, to the next higher 1/100 of 1%) of the rates per annum quoted
to the Agent at approximately 10:00 a.m. (Chicago time) (or as soon
thereafter as is practicable) on such day (or, if such day is not a
Business Day, on the immediately preceding Business Day) by two or more
Federal funds brokers selected by the Agent for the sale to the Agent at
face value of Federal funds in an amount equal or comparable to the
principal amount owed to the Agent for which such rate is being
determined, plus (y) 1/2 of 1% (0.5%).
(b) Eurodollar Loans. Each Eurodollar Loan made or maintained by a
Bank shall bear interest during each Interest Period it is outstanding
(computed on the basis of a year of 360 days and actual days elapsed) on
the unpaid principal amount thereof from the date such Loan is advanced,
continued, or created by conversion from a Base Rate Loan until maturity
(whether by acceleration or otherwise) at a rate per annum equal to the
sum of the Applicable Margin plus the Adjusted LIBOR applicable for such
Interest Period, payable on the last day of the Interest Period and at
maturity (whether by acceleration or otherwise), and, if the applicable
Interest Period is longer than three months, on each day occurring every
three months after the commencement of such Interest Period.
"Adjusted LIBOR" means, for any Borrowing of Eurodollar Loans, a
rate per annum determined in accordance with the following formula:
Adjusted LIBOR = LIBOR
1 - Eurodollar Reserve Percentage
"LIBOR" means, for an Interest Period for a Borrowing of Eurodollar
Loans, (a) the LIBOR Index Rate for such Interest Period, if such rate is
available, and (b) if the LIBOR Index Rate cannot be determined, the
arithmetic average of the rates of interest per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) at which deposits in U.S.
Dollars in immediately available funds are offered to the Agent at
11:00 a.m. (London, England time) 2 Business Days before the beginning of
such Interest Period by major banks in the interbank eurodollar market
selected by the Agent for delivery on the first day of and for a period
equal to such Interest Period and in an amount equal or comparable to the
principal amount of the Eurodollar Loan scheduled to be made by the Agent
as part of such Borrowing.
"LIBOR Index Rate" means, for any Interest Period, the rate per
annum (rounded upwards, if necessary, to the next higher one hundred-
thousandth of a percentage point) for deposits in U.S. Dollars for a
period equal to such Interest Period, which appears on the Telerate Page
3750 as of 11:00 a.m. (London, England time) on the day 2 Business Days
before the commencement of such Interest Period.
"Telerate Page 3750" means the display designated as "Page 3750" on
the Dow ▇▇▇▇▇ Telerate Service (or such other page as may replace Page
3750 on that service or such other service as may be nominated by the
British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association Interest Settlement Rates for
U.S. Dollar deposits).
"Eurodollar Reserve Percentage" means, for any Borrowing of
Eurodollar Loans, the daily average for the applicable Interest Period of
the maximum rate, expressed as a decimal, at which reserves (including,
without limitation, any supplemental, marginal, and emergency reserves)
are imposed during such Interest Period by the Board of Governors of the
Federal Reserve System (or any successor) on "eurocurrency liabilities",
as defined in such Board's Regulation D (or in respect of any other
category of liabilities that includes deposits by reference to which the
interest rate on Eurodollar Loans is determined or any category of
extensions of credit or other assets that include loans by non-United
States offices of any Bank to United States residents), subject to any
amendments of such reserve requirement by such Board or its successor,
taking into account any transitional adjustments thereto. For purposes
of this definition, the Eurodollar Loans shall be deemed to be
"eurocurrency liabilities" as defined in Regulation D without benefit or
credit for any prorations, exemptions or offsets under Regulation D.
(d) Rate Determinations. The Agent shall determine each interest
rate applicable to the Loans and the Reimbursement Obligations hereunder,
and its determination thereof shall be conclusive and binding except in
the case of manifest error.
Section 1.5. Minimum Borrowing Amounts. Each Borrowing of Base Rate
Loans advanced under a Credit shall be in an amount not less than
$500,000 or such greater amount which is an integral multiple of
$100,000. Each Borrowing of Eurodollar Loans advanced, continued, or
converted under a Credit shall be in an amount equal to $2,000,000 or
such greater amount which is an integral multiple of $500,000.
Section 1.6. Manner of Borrowing Loans and Designating Applicable
Interest Rates. (a) Notice to the Agent. The Borrower shall give notice
to the Agent by no later than 10:00 a.m. (Chicago time): (i) at least 3
Business Days before the date on which the Borrower requests the Banks to
advance a Borrowing of Eurodollar Loans and (ii) on the date the Borrower
requests the Banks to advance a Borrowing of Base Rate Loans. The Loans
included in each Borrowing shall bear interest initially at the type of
rate specified in such notice of a new Borrowing. Thereafter, the
Borrower may from time to time elect to change or continue the type of
interest rate borne by each Borrowing or, subject to the minimum amount
requirements for each outstanding Borrowing established by Section 1.5
hereof, a portion thereof, as follows: (i) if such Borrowing is of
Eurodollar Loans, on the last day of the Interest Period applicable
thereto, the Borrower may continue part or all of such Borrowing as
Eurodollar Loans or convert part or all of such Borrowing into Base Rate
Loans or (ii) if such Borrowing is of Base Rate Loans, on any Business
Day, the Borrower may convert all or part of such Borrowing into
Eurodollar Loans for an Interest Period or Interest Periods specified by
the Borrower. The Borrower shall give all such notices requesting the
advance, continuation, or conversion of a Borrowing to the Agent by
telephone or telecopy (which notice shall be irrevocable once given and,
if by telephone, shall be promptly confirmed in writing) substantially in
the form attached hereto as Exhibit B (Notice of Borrowing) or Exhibit C
(Notice of Continuation/Conversion), as applicable, or in such other form
acceptable to the Agent. Notices of the continuation of a Borrowing of
Eurodollar Loans for an additional Interest Period or of the conversion
of part or all of a Borrowing of Base Rate Loans into Eurodollar Loans
must be given by no later than 10:00 a.m. (Chicago time) at least 3
Business Days before the date of the requested continuation or
conversion. All such notices concerning the advance, continuation, or
conversion of a Borrowing shall specify the date of the requested
advance, continuation, or conversion of a Borrowing (which shall be a
Business Day), the amount of the requested Borrowing to be advanced,
continued, or converted, the type of Loans to comprise such new,
continued, or converted Borrowing and, if such Borrowing is to be
comprised of Eurodollar Loans, the Interest Period applicable thereto.
The Borrower agrees that the Agent may rely on any such telephonic or
telecopy notice given by any person the Agent in good faith believes is
an Authorized Representative without the necessity of independent
investigation, and in the event any such notice by telephone conflicts
with any written confirmation, such telephonic notice shall govern if the
Agent has acted in good faith in reliance thereon.
(b) Notice to the Banks. The Agent shall give prompt telephonic or
telecopy notice to each Bank of any notice from the Borrower received
pursuant to Section 1.6(a) above and, if such notice requests the Banks
to make Eurodollar Loans, the Agent shall give notice to the Borrower and
each Bank by like means of the interest rate applicable thereto promptly
after the Agent has made such determination.
(c) Borrower's Failure to Notify; Automatic Continuations and
Conversions. Any outstanding Borrowing of Base Rate Loans shall
automatically be continued for an additional Interest Period on the last
day of its then current Interest Period unless the Borrower has notified
the Agent within the period required by Section 1.6(a) that the Borrower
intends to convert such Borrowing, subject to Section 7.2 hereof, into a
Borrowing of Eurodollar Loans or such Borrowing is prepaid in accordance
with Section 1.9(a). If the Borrower fails to give notice pursuant to
Section 1.6(a) above of the continuation or conversion of any outstanding
principal amount of a Borrowing of Eurodollar Loans before the last day
of its then current Interest Period within the period required by
Section 1.6(a) or, whether or not such notice has been given, one or more
of the conditions set forth in Section 7.2 for the continuation or
conversion of a Borrowing of Eurodollar Loans would not be satisfied and
such Borrowing is not prepaid in accordance with Section 1.9(a), such
Borrowing shall automatically be converted into a Borrowing of Base Rate
Loans. In the event the Borrower fails to give notice pursuant to
Section 1.6(a) above of a Borrowing equal to the amount of a
Reimbursement Obligation and has not notified the Agent by 1:00 p.m.
(Chicago time) on the day such Reimbursement Obligation becomes due that
it intends to repay such Reimbursement Obligation through funds not
borrowed under this Agreement, the Borrower shall be deemed to have
requested a Borrowing of Base Rate Loans on such day in the amount of the
Reimbursement Obligation then due, subject to Section 7 hereof, which
Borrowing shall be applied to pay the Reimbursement Obligation then due.
(d) Disbursement of Loans. Not later than 1:00 p.m. (Chicago time)
on the date of any requested advance of a new Borrowing, subject to
Section 7 hereof, each Bank shall make available its Loan comprising part
of such Borrowing in funds immediately available at the principal office
of the Agent in Chicago, Illinois. The Agent shall make the proceeds of
each new Borrowing available to the Borrower at the Agent's principal
office in Chicago, Illinois (or by wire transfer of funds pursuant to the
Borrower's written instructions to the Agent).
(e) Agent Reliance on Bank Funding. Unless the Agent shall have
been notified by a Bank prior to (or, in the case of a Borrowing of Base
Rate Loans, by 1:00 p.m. (Chicago time) on) the date on which such Bank
is scheduled to make payment to the Agent of the proceeds of a Loan
(which notice shall be effective upon receipt) that such Bank does not
intend to make such payment, the Agent may assume that such Bank has made
such payment when due and the Agent may in reliance upon such assumption
(but shall not be required to) make available to the Borrower the
proceeds of the Loan to be made by such Bank and, if any Bank has not in
fact made such payment to the Agent, such Bank shall, on demand, pay to
the Agent the amount made available to the Borrower attributable to such
Bank together with interest thereon in respect of each day during the
period commencing on the date such amount was made available to the
Borrower and ending on (but excluding) the date such Bank pays such
amount to the Agent at a rate per annum equal to (i) from the date the
related advance was made by the Agent to the date 2 Business Days after
payment by such Bank is due hereunder, the Federal Funds Rate for each
such day and (ii) from the date 2 Business Days after the date such
payment is due from such Bank to the date such payment is made by such
Bank, the Base Rate in effect for each such day. If such amount is not
received from such Bank by the Agent immediately upon demand, the
Borrower will, on demand, repay to the Agent the proceeds of the Loan
attributable to such Bank with interest thereon at a rate per annum equal
to the interest rate applicable to the relevant Loan, but without such
payment being considered a payment or prepayment of a Loan under
Section 1.12 hereof, so that the Borrower will have no liability under
such Section with respect to such payment.
Section 1.7. Interest Periods. As provided in Section 1.6(a) hereof,
at the time of each request to advance, continue, or create by conversion
a Borrowing of Eurodollar Loans, the Borrower shall select an Interest
Period applicable to such Loans from among the available options. The
term "Interest Period" means the period commencing on the date a
Borrowing of Loans is advanced, continued, or created by conversion and
ending: (a) in the case of Base Rate Loans, on the last day of the
calendar quarter in which such Borrowing is advanced, continued, or
created by conversion (or on the last day of the following calendar
quarter if such Loan is advanced, continued or created by conversion on
the last day of a calendar quarter), (b) in the case of a Eurodollar
Loan, 1, 2, 3, or 6 months thereafter, and (c) in the case of Swing
Loans, on the date one (1) to seven (7) days thereafter as mutually
agreed by the Agent and the Borrower; provided, however, that:
(a) any Interest Period for a Borrowing of Revolving Loans
consisting of Base Rate Loans that otherwise would end after the
Revolving Credit Termination Date shall end on the Revolving
Credit Termination Date, and any Interest Period for a Borrowing
of Term Loans consisting of Base Rate Loans that otherwise would
end after the final maturity date of the Term Loans shall end on
the final maturity date of the Term Loans;
(b) no Interest Period with respect to any portion of the
Term Loans shall extend beyond the final maturity date of the
Term Loans, and no Interest Period with respect to any portion of
the Revolving Loans shall extend beyond the Revolving Credit
Termination Date;
(c) no Interest Period with respect to any portion of the
Term Loans consisting of Eurodollar Loans shall extend beyond a
date on which the Borrower is required to make a scheduled
payment of principal on the Term Loans, unless the sum of (a) the
aggregate principal amount of Term Loans that are Base Rate Loans
plus (b) the aggregate principal amount of Term Loans that are
Eurodollar Loans with Interest Periods expiring on or before such
date equals or exceeds the principal amount to be paid on the
Term Loans on such payment date;
(d) whenever the last day of any Interest Period would
otherwise be a day that is not a Business Day, the last day of
such Interest Period shall be extended to the next succeeding
Business Day, provided that, if such extension would cause the
last day of an Interest Period for a Borrowing of Eurodollar
Loans to occur in the following calendar month, the last day of
such Interest Period shall be the immediately preceding Business
Day; and
(e) for purposes of determining an Interest Period for a
Borrowing of Eurodollar Loans, a month means a period starting on
one day in a calendar month and ending on the numerically
corresponding day in the next calendar month; provided, however,
that if there is no numerically corresponding day in the month in
which such an Interest Period is to end or if such an Interest
Period begins on the last Business Day of a calendar month, then
such Interest Period shall end on the last Business Day of the
calendar month in which such Interest Period is to end.
Section 1.8. Maturity of Loans. (a) Revolving Loans and Swing Loans.
Each Revolving Loan shall mature and become due and payable by the
Borrower on the Revolving Credit Termination Date. Each Swing Loan shall
mature and become due and payable by the Borrower on the last day of the
Interest Period applicable thereto.
(b) Scheduled Payments of Term Loans. The Borrower shall make
principal payments on the Term Loans in installments on the last day of
each March, June, September and December in each year, commencing with
the calendar quarter ending December 31, 1998 and ending on March 31,
2003, with the amount of each such installment to aggregate $1,071,429,
and the last installment on all Term Loans to aggregate all principal of
the Term Loans not sooner paid on March 31, 2003 and with the amount of
each installment due on the Term Loans held by each Bank to be equal to
its Term Loan Percentage of each such aggregate amount.
Section 1.9. Prepayments. (a) Optional. The Borrower shall have the
privilege of prepaying in whole or in part (but, if in part, then: (i)
if such Borrowing is of Base Rate Loans, in an amount not less than
$100,000, (ii) if such Borrowing is of Eurodollar Loans, in an amount not
less than $500,000, and (iii) in each case, in an amount such that the
minimum amount required for a Borrowing pursuant to Section 1.5 hereof
remains outstanding) any Borrowing of Eurodollar Loans at any time upon 3
Business Days prior notice to the Agent or, in the case of a Borrowing of
Base Rate Loans, notice delivered to the Agent by the Borrower no later
than 10:00 a.m. (Chicago time) on the date of prepayment, such prepayment
to be made by the payment of the principal amount to be prepaid and
accrued interest thereon to the date fixed for prepayment plus any
amounts due the Banks under Section 1.12 hereof. Swing Loans bearing
interest at Agent's Quoted Rate may only be paid on the last day of the
Interest Period then applicable to such Loans. The Agent will promptly
advise each Bank of any such prepayment notice it receives from the
Borrower. Any amount of Revolving Loans paid or prepaid before the
Revolving Credit Termination Date may, subject to the terms and
conditions of this Agreement, be borrowed, repaid and borrowed again. No
amount of the Term Loans paid or prepaid may be reborrowed.
(b) Mandatory. (i) The Borrower shall, on each date the Revolving
Credit Commitments are reduced pursuant to Section 1.13 hereof, prepay
the Revolving Loans, Swing Loans and, if necessary, prefund the L/C
Obligations by the amount, if any, necessary to reduce the sum of the
aggregate principal amount of Revolving Loans, Swing Loans and L/C
Obligations then outstanding to the amount to which the Revolving Credit
Commitments have been so reduced.
(ii) On the deadline expressed in Section 8.5 below for the Banks'
receipt of the audited financial statements for the fiscal year of the
Borrower ending on or about December 31, 1998 and each fiscal year
thereafter, or, if earlier the Borrower's receipt of such financial
statements, the Borrower shall prepay the Term Loans by an amount equal
to 50% of Excess Cash Flow of Borrower and its Subsidiaries for the then
most recently completed fiscal year of the Borrower (for such year,
"Excess Cash Flow Net Proceeds"); provided, however, the Borrower shall
not be required to make any prepayment under this clause (i) if the Cash
Flow Leverage Ratio as of the last day of any two consecutive fiscal
quarters of the Borrower ending after the date hereof is or has been in
each case less than or equal to 2.5 to 1.0 (it being understood and
agreed upon that if such prepayments are not required because of the
foregoing proviso, the Borrower shall never again be required to make any
prepayments under this clause (i)). Each such prepayment shall be
applied to the remaining installments of the Term Notes in the inverse
order of maturity.
(iii) If the Borrower or any Subsidiary shall at any time or from
time to time make or agree to make a Disposition or shall suffer an Event
of Loss resulting in Net Cash Proceeds in excess of $500,000 on a
cumulative basis during any calendar year, then (x) the Borrower shall
promptly notify the Agent of such proposed Disposition or Event of Loss
(including the amount of the estimated Net Cash Proceeds to be received
by the Borrower or such Subsidiary in respect thereof) and (y) promptly
upon, and in no event later than the Business Day after, receipt by the
Borrower or the Subsidiary of the Net Cash Proceeds of such Disposition
or Event of Loss, the Borrower shall, or shall cause such Subsidiary to,
deposit with the Agent an aggregate amount equal to 100% of the amount of
such Net Cash Proceeds and the Agent will hold with it the amount of such
proceeds so deposited in the Account; provided, however, that no such
deposit shall be required, and accordingly the following described
prepayment shall not be required with respect to Net Cash Proceeds of any
Disposition made or Event of Loss suffered by ▇▇▇▇▇▇ or any of its
subsidiaries during the calendar year ended December 31, 1998 with
respect to Property owned by ▇▇▇▇▇▇ or any of its subsidiaries
immediately after giving effect to the ▇▇▇▇▇▇ Acquisition to the extent
such Net Cash Proceeds, when taken together with the Net Cash Proceeds of
all other Dispositions made and Events of Loss suffered by the Borrower
and its Subsidiaries during the same calendar year, aggregate less than
$2,500,000. From time to time upon the Borrower's request, the Agent
will release the proceeds so deposited in the Account to the Borrower or
such Subsidiary, as necessary, to pay for the replacement or rebuilding
of the Property disposed of, lost or condemned, as the case may be, if at
the time of such release, no Default or Event of Default shall have
occurred and be continuing. If such Property has not been replaced or
rebuilt within twelve (12) calendar months following the date of such
Disposition or Event of Loss, or if the Borrower fails to notify the
Agent in writing on or before sixty (60) days after such Disposition or
Event of Loss that the Borrower or such Subsidiary will commence the
replacement or rebuilding of such Property, or if the Borrower or such
Subsidiary shall not be committed by contract to so replace or rebuild
such Property within sixty (60) days after such Disposition or Event of
Loss, then, in any such case, the Agent may at any time thereafter apply
(without further notice to or demand on the Borrower) the proceeds so
deposited in the Account pursuant to this Section with respect to such
Disposition or Event of Loss and not yet released pursuant to this
Section so as to prepay the Term Loans. Each such prepayment shall be
applied to the remaining installments of the Term Notes in the inverse
order of maturity.
(iv) If after the date of this Agreement the Borrower or any
Subsidiary shall issue new equity securities (whether common or preferred
stock or otherwise), other than common stock issued in connection with
the exercise of employee stock options, or dispose of any treasury stock,
the Borrower shall promptly notify the Agent of the estimated Net Cash
Proceeds of such issuance or disposition, as the case may be, to be
received by or for the account of the Borrower or such Subsidiary in
respect thereof. Promptly upon, and in no event later than the Business
Day after, receipt by the Borrower or such Subsidiary of Net Cash
Proceeds of such issuance or disposition, the Borrower shall prepay the
Term Loans in an aggregate amount equal to 100% of the amount of such Net
Cash Proceeds. Each such prepayment shall be applied to the remaining
installments of the Term Notes in the inverse order of maturity.
(v) Unless the Borrower otherwise directs, prepayments of Loans
under this Section 1.9(b) shall be applied first to Borrowings of Base
Rate Loans until payment in full thereof with any balance applied to
Borrowings of Eurodollar Loans in the order in which their Interest
Periods expire. Each prepayment of Loans under this Section 1.9(b) shall
be made by the payment of the principal amount to be prepaid and accrued
interest thereon to the date of prepayment together with any amounts due
the Banks under Section 1.12 hereof. Each prefunding of L/C Obligations
shall be made in accordance with Section 9.4 hereof.
Section 1.10. Default Rate. Notwithstanding anything to the contrary
contained in Section 1.4 hereof, while any Event of Default exists or
(unless and until rescinded by the requisite Banks) after acceleration,
the Borrower shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the principal amount
of all Revolving Loans and Term Loans (computed on the basis of a year of
360 days and actual days elapsed) at a rate per annum equal to:
(a) for any Base Rate Loan, the sum of 2% plus the
Applicable Margin plus the Base Rate from time to time in effect;
and
(b) for any Eurodollar Loan, the sum of 2% plus the rate of
interest in effect thereon at the time of such default until the
end of the Interest Period applicable thereto and, thereafter, at
a rate per annum equal to the sum of 2% plus the Applicable
Margin for Base Rate Loans plus the Base Rate from time to time
in effect;
provided, however, that in the absence of acceleration, any adjustments
pursuant to this Section 1.10 shall be made at the election of the
Required Banks with written notice to the Borrower. While any Event of
Default exists or after acceleration, interest shall be paid on demand of
the Agent at the request or with the consent of the Required Banks.
Section 1.11. The Notes. (a) The Revolving Loans made to the Borrower
by a Bank shall be evidenced by a single promissory note of the Borrower
issued to such Bank in the form of Exhibit D hereto. Each such
promissory note is hereinafter referred to as a "Revolving Note" and
collectively such promissory notes are referred to as the "Revolving
Notes."
(b) The Term Loans made to the Borrower by a Bank shall be
evidenced by a single promissory note of the Borrower issued to such Bank
in the form of Exhibit E hereto. Each such promissory note is
hereinafter referred to as a "Term Note" and collectively such promissory
notes are referred to as the "Term Notes."
(c) The Swing Loans made to the Borrower by the Agent shall be
evidenced by a single promissory note of the Borrower issued to the Agent
in the form of Exhibit F hereto. This promissory note is hereinafter
referred to as the "Swing Line Note."
(d) Each Bank shall record on its books and records or on a
schedule to its appropriate Note the amount of each Loan advanced,
continued or converted by it, all payments of principal and interest and
the principal balance from time to time outstanding thereon, the type of
such Loan, and, for any Eurodollar Loan, the Interest Period and the
interest rate applicable thereto. The record thereof, whether shown on
such books and records of a Bank or on a schedule to the relevant Note,
shall be prima facie evidence as to all such matters; provided, however,
that the failure of any Bank to record any of the foregoing or any error
in any such record shall not limit or otherwise affect the obligation of
the Borrower to repay all Loans made to it hereunder together with
accrued interest thereon. At the request of any Bank and upon such Bank
tendering to the Borrower the appropriate Note to be replaced, the
Borrower shall furnish a new Note to such Bank to replace any outstanding
Note, and at such time the first notation appearing on a schedule on the
reverse side of, or attached to, such Note shall set forth the aggregate
unpaid principal amount of all Loans, if any, then outstanding thereon.
Section 1.12. Funding Indemnity. If any Bank (including for such
purposes, the Agent in the case of a Swing Loan which is a Fixed Rate
Loan) shall incur any loss, cost or expense (including, without
limitation, any loss of profit, and any loss, cost or expense incurred by
reason of the liquidation or re-employment of deposits or other funds
acquired by such Bank to fund or maintain any Fixed Rate Loan or the
relending or reinvesting of such deposits or amounts paid or prepaid to
such Bank) as a result of:
(a) any payment, prepayment or conversion of a Fixed Rate
Loan on a date other than the last day of its Interest Period
(unless and to the extent resulting solely from the operation of
Section 10.1 hereof),
(b) any failure (because of a failure to meet the
conditions of Section 7 or otherwise) by the Borrower to borrow a
Fixed Rate Loan on the date specified in a notice given pursuant
to Section 1.6(a) or 1.14(c), as the case may be,
(c) any failure (because of a failure to meet the
conditions of Section 7 or otherwise) by the Borrower to continue
a Eurodollar Loan, or to convert a Base Rate Loan into a
Eurodollar Loan, on the date specified in a notice given pursuant
to Section 1.6(a),
(d) any failure by the Borrower to make any payment of
principal on any Fixed Rate Loan when due (whether by
acceleration or otherwise), or
(e) any acceleration of the maturity of a Fixed Rate Loan
as a result of the occurrence of any Event of Default hereunder,
then, upon the demand of such Bank, the Borrower shall pay to such Bank
such amount as will reimburse such Bank for such loss, cost or expense.
If any Bank makes such a claim for compensation, it shall provide to the
Borrower, with a copy to the Agent, a certificate setting forth the
amount of such loss, cost or expense in reasonable detail (including an
explanation of the basis for and the computation of such loss, cost or
expense) and the amounts shown on such certificate shall be deemed prima
facie correct.
Section 1.13. Commitment Terminations. (a) Optional Revolving Credit
Terminations. The Borrower shall have the right at any time and from
time to time, upon 5 Business Days prior written notice to the Agent, to
terminate the Revolving Credit Commitments without premium or penalty and
in whole or in part, any partial termination to be (i) in an amount which
is not less than $5,000,000 and which is an integral multiple of
$1,000,000 and (ii) allocated ratably among the Banks in proportion to
their respective Revolver Percentages, provided that (x) the Revolving
Credit Commitments may not be reduced to an amount less than the sum of
the aggregate principal amount of Loans (whether Revolving Loans or Swing
Loans) and of L/C Obligations then outstanding and (y) any reduction of
the Revolving Credit Commitments to an amount less than the Swing Line
Commitment or L/C Commitment shall automatically reduce the Swing Line
Commitment or L/C Commitment, as the case may be, to such amount as well.
The Agent shall give prompt notice to each Bank of any such termination
of the Revolving Credit Commitments.
(b) Mandatory Termination Upon a Change of Control. After the
occurrence of a Change of Control, the Required Banks may, by written
notice to the Borrower at any time on or before the date occurring
90 days after the date the Borrower notifies the Banks of such Change of
Control, terminate the remaining Commitments and all other obligations of
the Banks hereunder on the date stated in such notice (which shall in no
event be sooner than (i) three (3) days after such notice is given or
(ii) the day on which the Borrower repays any other Indebtedness for
Borrowed Money). On the date the Commitments are so terminated, all
outstanding Obligations (including, without limitation, all principal of
and accrued interest on the Notes) shall forthwith be due and payable
without further demand, presentment, protest, or notice of any kind and
the Borrower shall immediately pay to the Banks the full amount then
available for drawing under each Letter of Credit, such amount to be held
in the Account referred to in Section 9.4 hereof (the Borrower agreeing
to immediately make such payment on the date the Commitments are so
terminated and acknowledging and agreeing that the Banks would not have
an adequate remedy at law for the failure by the Borrower to honor any
such demand and that the Banks, and the Agent on their behalf, shall have
the right to require the Borrower to specifically perform such
undertaking whether or not any drawings or other demands for payment have
been made under any of the Letters of Credit).
(c) Any termination of the Commitments pursuant to this
Section 1.13 may not be reinstated unless consented to in writing by all
the Banks in their discretion.
Section 1.14. Swing Loans.
(a) Generally. Subject to all of the terms and conditions hereof,
the Agent agrees to make loans in U.S. Dollars to the Borrower under the
Swing Line ("Swing Loans") which shall not in the aggregate at any time
outstanding exceed the lesser of (i) $5,000,000 (as the same may be
reduced pursuant hereto, the "Swing Line Commitment") or (ii) the
difference between the Revolving Credit Commitments in effect at such
time and the aggregate amount of all Revolving Loans and L/C Obligations
outstanding at the time of computation. The Swing Line Commitment shall
be available to the Borrower and may be availed of by the Borrower from
time to time and borrowings thereunder may be repaid and used again
during the period ending on the Revolving Credit Termination Date;
provided that each Swing Loan must be repaid on the last day of the
Interest Period applicable thereto. The Agent shall not make any Swing
Loan during the continuation of any Event of Default if the Required
Banks direct it not to do so. Without regard to the face principal
amount of the Swing Line Note, the actual principal amount at any time
outstanding and owing by the Borrower on account of the Swing Line Note
during the period ending on the Revolving Credit Termination Date shall
be the sum of all Swing Loans then or theretofore made thereon less all
payments actually received thereon during such period. The Agent shall
record on its books and records or on a schedule to the Swing Line Note
the amount of each Swing Loan made by it, all payments of principal and
interest and the principal balance from time to time outstanding thereon,
and, for any Swing Loan bearing interest at Agents' Quoted Rate, the
Interest Period and the interest rate applicable thereto. The record
thereof, whether shown on such books and records of the Agent or on a
schedule to the Swing Line Note, shall be prima facie evidence as to all
such matters; provided, however, that the Agent's failure to record any
of the foregoing or any error in any such record shall not limit or
otherwise affect the obligation of the Borrower to repay all Swing Loans
made to it hereunder together with accrued interest thereon.
(b) Interest on Swing Loans. Each Swing Loan shall bear interest
until maturity (whether by acceleration or otherwise) at a rate per annum
equal to (i) the sum of the Base Rate as in effect from time to time plus
the Applicable Margin for Base Rate Loans as from time to time in effect
or (ii) the Agent's Quoted Rate. Interest on each Swing Loan shall be
due and payable prior to such maturity on the last day of each Interest
Period applicable thereto. Notwithstanding anything to the contrary
contained in this Section 1.14(b) hereof, while any Event of Default
exists or after acceleration, the Borrower shall pay interest (after as
well as before entry of judgment thereon to the extent permitted by law)
on the principal amount of all Swing Loans (computed on the basis of a
year of 360 days and actual days elapsed) at a rate per annum equal to
(a) for any Swing Loan bearing interest with reference to the Base Rate,
the sum of 2% plus the Applicable Margin plus the Base Rate from time to
time in effect; and (b) for any Swing Loan bearing interest with
reference to the Agent's Quoted Rate, the sum of 2% plus the rate of
interest in effect thereon at the time of such default until the end of
the Interest Period applicable thereto and, thereafter, at a rate per
annum equal to the sum of 2% plus the Applicable Margin for Base Rate
Loans plus the Base Rate from time to time in effect; provided, however,
that in the absence of acceleration, any adjustments pursuant to this
Section 1.14(b) shall be made at the election of the Required Banks with
written notice to the Borrower. While any Event of Default exists or
(unless and until rescinded by the requisite Banks) after acceleration,
interest shall be paid on demand of the Agent at the request or with the
consent of the Required Banks.
(c) Requests for Swing Loans. The Borrower shall give the Agent
prior notice (which may be written or oral) no later than 12:00 Noon
(Chicago time) on the date upon which the Borrower requests that any
Swing Loan be made, of the amount and date of such Swing Loan and the
Interest Period selected therefor. Within thirty (30) minutes after
receiving such notice, Agent shall in its discretion quote an interest
rate to the Borrower at which the Agent would be willing to make such
Swing Loan available to the Borrower for a given Interest Period (the
rate so quoted for a given Interest Period being herein referred to as
"Agent's Quoted Rate"). The Borrower acknowledges and agrees that the
interest rate quote is given for immediate and irrevocable acceptance,
and if the Borrower does not so immediately accept Agent's Quoted Rate
for the full amount requested by the Borrower for such Swing Loan, the
Agent's Quoted Rate shall be deemed immediately withdrawn and such Swing
Loan shall bear interest at a rate per annum equal to the sum of the Base
Rate as in effect from time to plus the Applicable Margin for Base Rate
Loans as from time to time in effect. Subject to all of the terms and
conditions hereof, the proceeds of such Swing Loan shall be made
available to the Borrower on the date so requested at the offices of the
Agent in Chicago, Illinois. Anything contained in the foregoing to the
contrary notwithstanding (i) the obligation of Agent to make Swing Loans
shall be subject to all of the terms and conditions of this Agreement and
(ii) the Agent shall not be obligated to make more than one Swing Loan
during any one day.
(d) Refunding Loans. In its sole and absolute discretion, the
Agent may at any time, on behalf of the Borrower (which hereby
irrevocably authorizes the Agent to act on its behalf for such purpose)
and with notice to the Borrower, request each Bank to make a Revolving
Loan in the form of a Base Rate Loan in an amount equal to such Bank's
Revolver Percentage of the amount of the Swing Loans outstanding on the
date such notice is given. Unless any of the conditions of Section 7.2
are not fulfilled on such date, each Bank shall make the proceeds of its
requested Revolving Loan available to Agent, in immediately available
funds, at Agent's principal office in Chicago, Illinois, before 12:00
Noon (Chicago time) on the Business Day following the day such notice is
given. The proceeds of such Revolving Loans shall be immediately applied
to repay the outstanding Swing Loans.
(e) Participations. If any Bank refuses or otherwise fails to make
a Revolving Loan when requested by the Agent pursuant to Section 1.14(d)
above (because the conditions in Section 7.2 are not satisfied or
otherwise), such Bank will, by the time and in the manner such Revolving
Loan was to have been funded to the Agent, purchase from the Agent an
undivided participating interest in the outstanding Swing Loans in an
amount equal to its Revolver Percentage of the aggregate principal amount
of Swing Loans that were to have been repaid with such Revolving Loans,
provided no purchase of a participation in a Swing Loan bearing interest
at Agent's Quoted Rate need be made until after expiration of the
Interest Period applicable thereto. Each Bank that so purchases a
participation in a Swing Loan shall thereafter be entitled to receive its
Revolver Percentage of each payment of principal received on the Swing
Loan and of interest received thereon accruing from the date such Bank
funded to Agent its participation in such Loan. The several obligations
of the Banks under this Section 1.14(e) shall be absolute, irrevocable
and unconditional under any and all circumstances whatsoever and shall
not be subject to any set-off, counterclaim or defense to payment which
any Bank may have or have had against the Borrower, any other Bank or any
other Person whatever. Without limiting the generality of the foregoing,
such obligations shall not be affected by any Default or Event of Default
or by any reduction or termination of the Commitments of any Bank, and
each payment made by an Bank under this Section 1.14(e) shall be made
without any offset, abatement, withholding or reduction whatsoever.
SECTION 2. FEES.
Section 2.1. Fees. (a) Revolving Credit Commitment Fee. The
Borrower shall pay to the Agent for the ratable account of the Banks in
accordance with their Revolver Percentages a commitment fee at the rate
per annum equal to the Applicable Margin (computed on the basis of a year
of 360 days and the actual number of days elapsed) on the average daily
Unused Revolving Credit Commitments. Such commitment fee shall be
payable quarterly in arrears on the last day of each March, June,
September and December in each year (commencing June 30, 1998) and on the
Revolving Credit Termination Date, unless the Revolving Credit
Commitments are terminated in whole on an earlier date, in which event
the commitment fee for the period to the date of such termination in
whole shall be paid on the date of such termination.
(b) Letter of Credit Fees. Quarterly in advance, on the first day
of each calendar quarter, the Borrower shall pay to the Issuing Bank for
its own account a facing fee equal to .125% per annum (computed on the
basis of a year of 360 days and the actual number of days elapsed)
applied to the daily average face amount of standby Letters of Credit
which are scheduled to be outstanding during the immediately succeeding
quarter. Quarterly in arrears, on the last day of each calendar quarter
(commencing June 30, 1998), the Borrower shall pay to the Agent, for the
ratable benefit of the Banks in accordance with their Revolver
Percentages, a letter of credit fee on the daily average face amount of
standby Letters of Credit outstanding during such immediately preceding
quarter at a rate per annum equal to the Applicable Margin (computed on
the basis of a year of 360 days and the actual number of days elapsed)
then in effect. In addition, the Borrower shall pay to the Issuing Bank
for its own account the Issuing Bank's standard drawing, negotiation,
amendment, and other administrative fees for each Letter of Credit
(whether a commercial Letter of Credit or a standby Letter of Credit).
Such standard fees referred to in the preceding sentence may be
established by the Agent from time to time.
(c) Agent Fees. The Borrower shall pay to the Agent, for its own
use and benefit, the fees set forth in that certain mandate letter dated
March 19, 1998 by and between the Borrower and the Agent, or as otherwise
agreed to by the Agent and the Borrower.
(d) Audit Fees. The Borrower shall pay to the Agent for its own
use and benefit charges for audits of the Collateral performed by the
Agent or its agents or representatives in such amounts as the Agent may
from time to time request (the Agent acknowledging and agreeing that such
charges shall be computed in the same manner as it at the time
customarily uses for the assessment of charges for similar collateral
audits); provided, however, that in the absence of any Default and Event
of Default, the Borrower shall not be required to pay the Agent for more
than one such audit during any calendar year.
SECTION 3. PLACE AND APPLICATION OF PAYMENTS.
All payments of principal of and interest on the Loans and the
Reimbursement Obligations, and of all other Obligations payable by the
Borrower under this Agreement and the other Loan Documents, shall be made
by the Borrower to the Agent by no later than 12:00 Noon (Chicago time)
on the due date thereof at the office of the Agent in Chicago, Illinois
(or such other location in the State of Illinois as the Agent may
designate to the Borrower) for the benefit of the Bank or Banks entitled
thereto. Any payments received after such time shall be deemed to have
been received by the Agent on the next Business Day. All such payments
shall be made in U.S. Dollars, in immediately available funds at the
place of payment, in each case without set-off or counterclaim. The
Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest on Loans and on
Reimbursement Obligations in which the Banks have purchased Participating
Interests ratably to the Banks and like funds relating to the payment of
any other amount payable to any Bank to such Bank, in each case to be
applied in accordance with the terms of this Agreement.
Anything contained herein to the contrary notwithstanding, all
payments and collections received in respect of the Obligations and all
proceeds of the Collateral received, in each instance, by the Agent or
any of the Banks after the occurrence and during the continuation of an
Event of Default shall be remitted to the Agent and distributed as
follows:
(a) first, to the payment of any outstanding costs and
expenses reasonably incurred by the Agent, and any security trustee
therefor, in monitoring, verifying, protecting, preserving or
enforcing the Liens on the Collateral or by the Agent, and any
security trustee therefor, in protecting, preserving or enforcing
rights under the Loan Documents, and in any event all costs and
expenses of a character which the Borrower has agreed to pay the
Agent under Section 12.15 hereof (such funds to be retained by the
Agent for its own account unless it has previously been reimbursed
for such costs and expenses by the Banks, in which event such
amounts shall be remitted ratably to the Banks to reimburse them for
payments theretofore made to the Agent);
(b) second, to the payment of any outstanding interest or
other fees or amounts due under the Notes and the other Loan
Documents, in each case other than for principal on the Loans or in
reimbursement or collateralization of L/C Obligations, pro rata as
among the Agent and the Banks in accordance with the amount of such
interest and other fees or amounts owing each;
(c) third, to the payment of the principal of the Notes and
any unpaid Reimbursement Obligations and to the Agent to be held as
collateral security for any other L/C Obligations (until the Agent
is holding an amount of cash equal to the then outstanding amount of
all such L/C Obligations), the aggregate amount paid to or held as
collateral security for the Banks to be allocated pro rata as among
the Banks in accordance with the aggregate unpaid principal balances
of their Loans and interests in the Letters of Credit;
(d) fourth, to the Agent and the Banks ratably in accordance
with the amounts of any other indebtedness, obligations or
liabilities of the Borrower and its Subsidiaries owing to each of
them and secured by the Collateral Documents (other than for Hedging
Liability described in subsection (e) below), unless and until all
such indebtedness, obligations and liabilities have been fully paid
and satisfied;
(e) fifth, to the payment of the Hedging Liability (if any)
pro rata as among the Banks and their Affiliates to whom such
Hedging Liability is owed in accordance with the then respective
unpaid amounts of such liability; and
(f) sixth, to the Borrower or whoever else may be lawfully
entitled thereto.
SECTION 4.COLLATERAL AND GUARANTIES.
Section 4.1. Collateral. The Obligations shall be secured by
(a) valid, perfected, and enforceable Liens on all right, title, and
interest of the Borrower and each Subsidiary in all capital stock or
other equity interests held by such Person in each of its Subsidiaries
(including Marquise), whether now owned or hereafter formed or acquired,
and all proceeds thereof, and (b) valid, perfected (subject to the
proviso appearing at the end of this sentence) and enforceable Liens on
all right, title, and interest of the Borrower and each Material
Subsidiary in all accounts and account receivables, notes and note
receivables, contract rights, instruments, documents, chattel paper,
general intangibles (including, without limitation, patents, trademarks,
tradenames, copyrights, and other intellectual property rights, but in
any event excluding applications for trademarks based on "intent to
use"), investment property, deposit accounts, inventory, machinery and
equipment (but in any event excluding real estate), whether now owned or
hereafter acquired or arising, and all proceeds thereof; provided,
however, that: (i) neither Marquise nor any subsidiary of Marquise need
grant or perfect any Lien on any of its Property (it being understood
that capital stock held by the Borrower or any Subsidiary in Marquise
does not constitute Property of Marquise) if and so long as the terms of
a Permitted Marquise Financing would prohibit such a Lien and more than
$500,000 is outstanding, or committed to be extended, on such Permitted
Marquise Financing, (ii) the Lien of the Agent on Property subject to a
Capital Lease or conditional sale agreement or subject to a purchase
money lien in each instance permitted hereby shall be subject to the
rights of the lessor or lender thereunder, and the Lien of the Agent on
any such Property need not be perfected if and so long as the grant of a
security interest therein is prohibited by the terms of the relevant
Capital Lease, conditional sale agreement or purchase money financing
agreement, as the case may be, (iii) the Lien of the Agent on
intellectual property licensed to the Borrower or any Subsidiary shall be
subject to the rights of the licensor under such license, (iv) until an
Event of Default has occurred and is continuing and thereafter until
otherwise required by the Agent or the Required Banks, Liens on deposit
accounts maintained by the Borrower or any Material Subsidiary in
proximity to its operations for the purpose of paying amounts owing (as
opposed to receiving collections of the Collateral), Liens on note
receivables, Liens on office equipment and Liens on vehicles which are
subject to a certificate of title law need not be perfected provided that
the total value of such Property at any one time not so perfected does
not exceed $500,000 in the aggregate and (v) until an Event of Default
has occurred and is continuing and thereafter until otherwise required by
the Agent or the Required Banks, Liens on inventory of the Borrower or
any Subsidiary located at a job site and to be installed or otherwise
used in the ordinary course of business at that job need not be
perfected. The Borrower acknowledges and agrees that the Liens on the
Collateral shall be granted to the Agent for the benefit of itself and
the Banks and the Issuing Bank and shall be valid and perfected first
priority Liens subject, however, to the proviso appearing at the end of
the immediately preceding sentence, in each case pursuant to one or more
Collateral Documents from such Persons, each in form and substance
reasonably satisfactory to the Agent.
Section 4.2. Guaranties. The payment and performance of the
Obligations shall at all times be guaranteed by each existing or
hereafter acquired Material Subsidiary of the Borrower pursuant to one or
more guaranty agreements in form and substance reasonably acceptable to
the Agent, as the same may be amended, modified or supplemented from time
to time (individually a "Guaranty" and collectively the "Guaranties").
Section 4.3. Further Assurances. The Borrower agrees that it shall,
and shall cause each Material Subsidiary to, from time to time at the
request of the Agent or the Required Banks, execute and deliver such
documents and do such acts and things as the Agent or the Required Banks
may reasonably request in order to provide for or perfect or protect such
Liens on the Collateral. In the event the Borrower or any Subsidiary
forms or acquires any other Material Subsidiary after the date hereof,
the Borrower shall within 10 Business Days of such formation or
acquisition cause such newly formed or acquired Material Subsidiary to
execute a Guaranty and such Collateral Documents as the Agent may then
require, and the Borrower shall also deliver to the Agent, or cause such
Material Subsidiary to deliver to the Agent, at the Borrower's cost and
expense, such other instruments, documents, certificates, and opinions
reasonably required by the Agent in connection therewith.
SECTION 5.DEFINITIONS; INTERPRETATION.
Section 5.1. Definitions. The following terms when used herein shall
have the following meanings:
"Account" is defined in Section 9.4 hereof.
"Acquired Business" means the entity or assets acquired by the
Borrower or a Subsidiary in an Acquisition, whether before or after the
date hereof.
"Acquisition " means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in
(a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the acquisition
of in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise causing any
Person to become a Subsidiary, or (c) a merger or consolidation or any
other combination with another Person (other than a Person that is a
Subsidiary) provided that the Borrower or the Subsidiary is the surviving
entity.
"Acquisition Corp." means the Borrower's Wholly-owned Subsidiary,
Diamond Acquisition Corp., a Delaware corporation.
"Adjusted EBITDA" means, with reference to any period, EBITDA for
such period calculated on a pro forma basis, in accordance with the
balance sheets, income statements and other related financial statements
furnished to the Agent and the Banks pursuant to Section 8.9(j) hereof,
as if each Acquisition permitted by Section 8.9(j) hereof occurring
during such period had taken place on the first day of such period.
"Adjusted LIBOR" is defined in Section 1.4(b) hereof.
"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another
Person. A Person shall be deemed to control another Person for the
purposes of this definition if such Person possesses, directly or
indirectly, the power to direct, or cause the direction of, the
management and policies of the other Person, whether through the
ownership of voting securities, common directors, trustees or officers,
by contract or otherwise; provided that, in any event for purposes of
this definition, any Person that owns, directly or indirectly, 5% or more
of the securities having the ordinary voting power for the election of
directors or governing body of a corporation or 5% or more of the
partnership or other ownership interest of any other Person (other than
as a limited partner of such other Person) will be deemed to control such
corporation or other Person.
"Agent" means ▇▇▇▇▇▇ Trust and Savings Bank, and any successor
pursuant to Section 11.7 hereof.
"Agent's Quoted Rate" is defined in Section 1.14(c) hereof.
"Applicable Margin" means, with respect to Loans, Reimbursement
Obligations, and the Revolving Credit Commitment fees and letter of
credit fees payable under Section 2.1 hereof, from the date of this
Agreement through the first Pricing Date the rate per annum specified
below:
Applicable Margin for Base Rate Revolving Loans
and Reimbursement Obligations: 0.50%
Applicable Margin for Base Rate Term Loans:
0.75%
Applicable Margin for Eurodollar Revolving Loans:
2.00%
Applicable Margin for Eurodollar Term Loans 2.50%
Applicable Margin for Revolving Credit Commitment 0.375%
fee:
Applicable Margin for letter of credit fee: 2.00%
; provided that the Applicable Margin shall be subject to quarterly
adjustments on the first Pricing Date, and thereafter from one Pricing
Date to the next, so that the Applicable Margin means a rate per annum
determined in accordance with the following schedule:
APPLICABLE APPLICABLE APPLICABLE
CASH FLOW MARGIN FOR BASE MARGIN FOR MARGIN FOR
LEVERAGE RATIO RATE LOANS AND EURODOLLAR LOANS REVOLVING CREDIT
FOR SUCH PRICING REIMBURSEMENT AND, LETTER OF COMMITMENT FEE
DATE OBLIGATIONS CREDIT FEE SHALL SHALL BE:
SHALL BE: BE:
Greater than or 0.75% 2.50% 0.50%
equal to 3.5 to
1.0
Less than 3.5 to 0.50% 2.00% 0.375%
1.0, but greater
than or equal to
2.5 to 1.0
Less than 2.5 to 0.00% 1.50% 0.25%
1.0, but greater
than or equal to
1.5 to 1.0
Less than 1.5 to 0.00% 1.00% 0.25%
1.0
For purposes hereof, the term "Pricing Date" means, for any fiscal
quarter of the Borrower ending on or after December 31, 1998, the date on
which the Agent is in receipt of the Borrower's most recent financial
statements for the fiscal quarter then ended, pursuant to Section 8.5(a)
or (b) hereof. The Applicable Margin shall be established based on the
Cash Flow Leverage Ratio for the most recently completed fiscal quarter
and the Applicable Margin established on a Pricing Date shall remain in
effect until the next Pricing Date. If the Borrower has not delivered
its financial statements by the date such financial statements (and, in
the case of the year-end financial statements, audit report) are required
to be delivered under Section 8.5(a) or (b) hereof, until such financial
statements and audit report are delivered, the Applicable Margin shall be
the highest Applicable Margin (i.e., the Cash Flow Leverage Ratio shall
be deemed to be greater than 3.5 to 1.0). If the Borrower subsequently
delivers such financial statements before the next Pricing Date, the
Applicable Margin established by such late delivered financial statements
shall take effect from the date of delivery until the next Pricing Date.
In all other circumstances, the Applicable Margin established by such
financial statements shall be in effect from the Pricing Date that occurs
immediately after the end of the Borrower's fiscal quarter covered by
such financial statements until the next Pricing Date. Each
determination of the Applicable Margin made by the Agent in accordance
with the foregoing shall be conclusive and binding on the Borrower and
the Banks if reasonably determined.
"Application" is defined in Section 1.2(b) hereof.
"Authorized Representative" means those persons shown on the list of
officers provided by the Borrower pursuant to Section 7.1(h) hereof or on
any update of any such list provided by the Borrower to the Agent, or any
further or different officer of the Borrower so named by any Authorized
Representative of the Borrower in a written notice to the Agent.
"Bank" is defined in the introductory paragraph of this Agreement
and includes each assignee bank pursuant to Section 12.12 hereof.
"Base Rate" is defined in Section 1.4(a) hereof.
"Base Rate Loan" means a Loan bearing interest at a rate specified
in Section 1.4(a) hereof.
"Borrower" is defined in the introductory paragraph of this
Agreement.
"Borrowing" means the total of Loans of a single type advanced,
continued for an additional Interest Period, or converted from a
different type into such type by the Banks under a Credit on a single
date and, in the case of Eurodollar Loans, for a single Interest Period.
Borrowings of Loans are made and maintained ratably from each of the
Banks under a Credit according to their Percentages of such Credit. A
Borrowing is "advanced" on the day Banks advance funds comprising such
Borrowing to the Borrower, is "continued" on the date a new Interest
Period for the same type of Loans commences for such Borrowing, and is
"converted" when such Borrowing is changed from one type of Loans to the
other, all as requested by the Borrower pursuant to Section 1.6(a).
Borrowings of Swing Loans are made from the Agent in accordance with the
procedures of Section 1.14 hereof.
"Business Day" means any day (other than a Saturday or Sunday) on
which banks are not authorized or required to close in Chicago, Illinois
and, if the applicable Business Day relates to the advance or
continuation of, or conversion into, or payment of a Eurodollar Loan, on
which banks are dealing in U.S. Dollar deposits in the interbank
eurodollar market in London, England.
"Capital Expenditures" means, with respect to any Person for any
period, the aggregate amount of all expenditures (whether paid in cash or
accrued as a liability) by such Person during that period which, in
accordance with GAAP, are or should be included as "additions to
property, plant or equipment" or similar items reflected in the statement
of cash flows of such Person.
"Capital Lease" means any lease of Property which in accordance with
GAAP is required to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligation" means, for any Person, the amount of
the liability shown on the balance sheet of such Person in respect of a
Capital Lease determined in accordance with GAAP.
"Cash Flow Leverage Ratio" means, as of the last day of any fiscal
quarter of the Borrower, the ratio of (a) Total Funded Debt as of the
last day of such fiscal quarter, to (b) Adjusted EBITDA for the four
fiscal quarters then ended.
"Change of Control" means any of (a) the acquisition after the date
hereof by any "person" or "group" (as such terms are used in
sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) at any time of beneficial ownership of 30% or more of the
outstanding capital stock of the Borrower on a fully-diluted basis
(excluding, for such purposes, such an acquisition by any such "person"
or "group" which on and at all times after the date hereof held
beneficial ownership of 30% or more of the outstanding capital stock of
the Borrower on a fully-diluted basis), (b) the failure of individuals
who are members of the board of directors of the Borrower on the date of
this Agreement (together with any new or replacement directors whose
initial nomination for election was approved by a majority of the
directors who were either directors on the date of this Agreement or
previously so approved) to constitute a majority of the board of
directors of the Borrower, or (c) any "Change of Control" (or words of
like import), as defined in any agreement or indenture relating to any
issue of Subordinated Debt, shall occur, the effect of which is to cause
the acceleration of any issue of Subordinated Debt or to enable any
holder of Subordinated Debt to cause the Borrower or any Subsidiary to
repurchase, redeem or retire if any Subordinated Debt held by it.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"Collateral" means all properties, rights, interests and privileges
from time to time subject to the Liens granted to the Agent, or any
security trustee therefor, by the Collateral Documents.
"Collateral Documents" means the Security Agreement, the Pledge
Agreement, and all other security agreements, pledge agreements,
assignments, financing statements and other documents as shall from time
to time secure or relate to the Obligations or any part thereof.
"Commitments" means the Revolving Credit Commitments, the L/C
Commitment, the Swing Line Commitment, and the Term Loan Commitments.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Borrower or any Subsidiary,
are treated as a single employer under Section 414 of the Code.
"Credit" means any of the Revolving Credit or the Term Credit.
"Credit Event" means the advancing of any Loan, the continuation of
or conversion into a Eurodollar Loan, or the issuance of, or extension of
the expiration date or increase in the amount of, any Letter of Credit.
"Default" means any event or condition the occurrence of which
would, with the passage of time or the giving of notice, or both,
constitute an Event of Default.
"Disposition" means the sale, lease, conveyance, or other
disposition of Property, other than sales or other dispositions expressly
permitted under Section 8.10(a), 8.10(b), 8.10(d) or 8.10(h) hereof. The
parties hereto acknowledge and agree that any release to the Borrower or
any Subsidiary of any escrowed portion of the purchase price for the
▇▇▇▇▇▇ Acquisition, or any setoff in reduction of the Seller Debt, in
each case for environmental claims brought by the Borrower, shall not
constitute a Disposition.
"EBIT" means, with reference to any period, Net Income for such
period plus all amounts deducted in arriving at such Net Income amount in
respect of (i) Interest Expense for such period, plus (ii) federal, state
and local income taxes for such period.
"EBITDA" means, with reference to any period, Net Income for such
period plus the sum (without duplication) of all amounts deducted in
arriving at such Net Income amount in respect of (w) Interest Expense for
such period, (x) federal, state and local income taxes for such period,
and (y) depreciation of fixed assets and amortization of intangible
assets (including, without limitation, goodwill, deferred expenses and
organization costs) for such period.
"Eligible Line of Business" means the principal line of business in
which the Borrower is engaged as of the date hereof and each line of
business related thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, or any successor statute thereto.
"Eurodollar Loan" means a Loan bearing interest at the rate
specified in Section 1.4(b) hereof.
"Eurodollar Reserve Percentage" is defined in Section 1.4(b) hereof.
"Event of Default" means any event or condition identified as such
in Section 9.1 hereof.
"Event of Loss" means, with respect to any Property, any of the
following: (a) any loss, destruction or damage of such Property or
(b) any condemnation, seizure, or taking, by exercise of the power of
eminent domain or otherwise, of such Property, or confiscation of such
Property or the requisition of the use of such Property. The parties
hereto acknowledge and agree that any release to the Borrower or any
Subsidiary of any escrowed portion of the purchase price for the ▇▇▇▇▇▇
Acquisition, or any setoff in reduction of the Seller Debt, in each case
for environmental claims brought by the Borrower, shall not constitute an
Event of Loss.
"Excess Cash Flow" means, with respect to any period, the amount (if
any) by which (a) EBITDA during such period exceeds (b) the sum of
(i) Interest Expense during such period plus (ii) federal, state and
local taxes payable in cash during such period plus (iii) the aggregate
amount of payments required to be made in cash by the Borrower and its
Subsidiaries during such period in respect of all principal on the Seller
Debt and all other Indebtedness for Borrowed Money (whether at maturity,
as a result of mandatory sinking fund redemption, mandatory prepayment,
acceleration or otherwise) plus (iv) the aggregate amount of Capital
Expenditures incurred by the Borrower and its Subsidiaries during such
period.
"Excess Cash Flow Net Proceeds" is defined in Section 1.9(b)(i)
hereof.
"Existing Credit Agreement" means, collectively, (i) that certain
Loan and Security Agreement dated as of February 6, 1996 as amended by
the First, Second and Third Amendments thereto, among American National
Bank and Trust Company of Chicago and the Borrower, (ii) that certain
Credit Agreement dated February 21, 1995 between ▇▇▇▇▇▇ and NationsBank
of Florida, N.A. and (iii) that certain Second Amended and Restated
Revolving Credit and Term Loan, dated February 21, 1995 as amended by the
First Amendment thereto between ▇▇▇▇▇▇ and NationsBank of Florida, N.A.
"Existing Marquise Financing" means the loans available to Marquise
on a revolving basis in an aggregate principal amount of not to exceed
$10,000,000 at any one time outstanding under that certain Credit
Agreement dated December 5, 1997 by and between the Agent, Marquise and
each lender party thereto as the same may from time to time be modified
or amended.
"Federal Funds Rate" means the fluctuating interest rate per annum
described in part (x) of clause (ii) of the definition of Base Rate
appearing in Section 1.4(a) hereof.
"Fixed Charges" shall mean, with respect to any period, the sum
(without duplication) of (i) the aggregate amount of payments required to
be made in cash during such period in respect of the principal of the
Seller Debt (whether at maturity as a result of mandatory sinking fund
redemption, mandatory prepayment, acceleration or otherwise) plus
(ii) all payments of principal due under the terms of any Total Funded
Debt (other than the Seller Debt) within twelve calendar months after the
close of such period plus (iii) Interest Expense during such period, all
of the foregoing as determined for the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP plus (iv) the aggregate amount
expended by the Borrower during such period for its repurchase as
treasury stock of its common capital stock.
"Fixed Rate Loan" means any Eurodollar Loan and (to the extent
bearing interest with reference to the Agent's Quoted Rate) any Swing
Loan.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable statute
and authority within the U.S. accounting profession), which are
applicable to the circumstances as of the date of determination.
"Guaranty" is defined in Section 4.2 hereof.
"Hedging Liability" means the liability of the Borrower to any of
the Banks in respect of any interest rate swaps, interest rate caps,
interest rate collars, or other interest rate hedging arrangements as the
Borrower may from time to time enter into with any one or more of the
Banks party to this Agreement or their Affiliates. Unless and until the
amount of the Hedging Liability is fixed and determined, the Hedging
Liability shall be deemed to be the market value of the notional amount
of the hedge from the date of computation to the date the hedge expires.
"Hostile Acquisition" means the acquisition of the capital stock or
other equity interests of a Person through a tender offer or similar
solicitation of the owners of such capital stock or other equity
interests which has not been approved (prior to such acquisition) by
resolutions of the Board of Directors of such Person or by similar action
if such Person is not a corporation, or as to which such approval has
been withdrawn.
"Indebtedness for Borrowed Money" means for any Person (without
duplication) (i) all indebtedness created, assumed or incurred in any
manner by such Person representing money borrowed (including by the
issuance of debt securities), (ii) all indebtedness for the deferred
purchase price of property or services (other than trade accounts payable
arising in the ordinary course of business), (iii) all indebtedness
secured by any Lien upon Property of such Person, whether or not such
Person has assumed or become liable for the payment of such indebtedness,
(iv) all Capitalized Lease Obligations of such Person and (v) all
obligations of such Person on or with respect to letters of credit,
bankers' acceptances and other extensions of credit whether or not
representing obligations for borrowed money.
"Interest Expense" means, with reference to any period, the sum of
all interest charges (including imputed interest charges with respect to
Capitalized Lease Obligations and all amortization of debt discount and
expense) of the Borrower and its Subsidiaries for such period determined
on a consolidated basis in accordance with GAAP.
"Interest Period" is defined in Section 1.7 hereof.
"Issuing Bank" means ▇▇▇▇▇▇ Trust and Savings Bank.
"L/C Commitment" means $1,500,000, as reduced pursuant to the terms
hereof.
"L/C Obligations" means the aggregate undrawn face amounts of all
outstanding Letters of Credit and all unpaid Reimbursement Obligations.
"Lending Office" is defined in Section 10.4 hereof.
"Letter of Credit" is defined in Section 1.2(a) hereof.
"LIBOR" is defined in Section 1.4(b) hereof.
"Lien" means any mortgage, lien, security interest, pledge, charge
or encumbrance of any kind in respect of any Property, including the
interests of a vendor or lessor under any conditional sale, Capital Lease
or other title retention arrangement.
"Loan" means and includes Revolving Loans, Term Loans, and Swing
Loans, and each of them singly, and the term "type" of Loan refers to its
status as a Revolving Loan, Term Loan or Swing Loan, or, if a Revolving
Loan or Term Loan, to its status as a Base Rate Loan or Eurocurrency
Loan.
"Loan Documents" means this Agreement, the Notes, the Applications,
the Collateral Documents, the Guaranties, and each other instrument or
document to be delivered hereunder or thereunder or otherwise in
connection therewith.
"Marquise" means Marquise Financial Services, Inc., a Delaware
corporation.
"Marquise Support Letter" means that certain Capital Maintenance
Agreement dated December 5, 1997 by and between the Borrower and ▇▇▇▇▇▇
Trust and Savings Bank as currently in force and effect without giving
effect to any subsequent modification or amendment thereof.
"Material Adverse Effect" means (a) a material adverse change in, or
a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or business prospects of the Borrower,
or the Borrower and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of the Borrower or any Subsidiary to perform
its obligations under any Loan Document; or (c) a material adverse effect
upon the legality, validity, binding effect or enforceability against the
Borrower or any Subsidiary of any Loan Document.
"Material Subsidiary" shall mean each Subsidiary (i) which has
(together with its subsidiaries) consolidated total assets with an
aggregate book value as determined in accordance with GAAP of more than
$1,000,000 as of the close of any quarterly accounting period of the
Borrower ending on or after December 31, 1997, or (ii) which has
(together with its subsidiaries) annual consolidated total gross revenues
as determined in accordance with GAAP of more than $2,500,000 as of the
close of annual accounting period of the Borrower ending on or after
December 31, 1997, or (iii) which is obligated, or which has a subsidiary
which is obligated, as of any time after the date hereof on any Debt
aggregating in excess of $250,000; provided, however, that each
Subsidiary which would (but for the application of this proviso to such
Subsidiary) constitute a Non-Material Subsidiary with the greatest total
assets shall constitute a Material Subsidiary if (i) the consolidated
total gross revenues of such Subsidiary (together with its subsidiaries),
when taken together with the consolidated total gross revenues of all
other Non-Material Subsidiaries (together with their respective
subsidiaries), in each case for the most recently completed annual
accounting period of the Borrower for which audited financial statements
are available, equal or exceed $5,000,000 or (ii) the consolidated total
assets of such Subsidiary (together with its subsidiaries), when taken
together with the consolidated total assets of all other Non-Material
Subsidiaries (together with their respective subsidiaries), in each case
as of the close of any quarterly accounting period of the Borrower, equal
or exceed $2,000,000. Once a Subsidiary is a Material Subsidiary, it
shall remain a Material Subsidiary unless and until the Required Banks
agree otherwise.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Cash Proceeds" means, as applicable, (a) with respect to any
Disposition by a Person, cash and cash equivalent proceeds received by or
for such Person's account, net of (i) reasonable direct costs relating to
such Disposition, (ii) sale, use, or other transactional taxes paid or
payable by such Person as a direct result of such Disposition, and
(iii) amounts required to be applied to repay principal of, premium, if
any, and interest on any Indebtedness for Borrowed Money secured by a
Lien on the Property (or portion thereof) sold or otherwise disposed of
(other than the Obligations hereunder) which is required to be and is
repaid in connection with such Disposition; (b) with respect to any Event
of Loss of a Person, cash and cash equivalent proceeds received by or for
such Person's account (whether as a result of payments made under any
applicable insurance policy therefor or in connection with condemnation
proceedings or otherwise), net of (i) reasonable direct costs incurred in
connection with the collection of such proceeds, awards or other
payments, (ii) sale or other transactional taxes paid or payable by such
Person as a direct result of such Event of Loss, and (iii) amounts
required to be applied to repay principal of, premium, if any, and
interest on any Indebtedness for Borrowed Money secured by a Lien on the
Property (or portion thereof) so damaged or taken (other than the
Obligations hereunder) which is required to be and is repaid in
connection with such Event of Loss; and (c) with respect to any offering
of equity securities of a Person or the issuance of any Indebtedness for
Borrowed Money by a Person, cash and cash equivalent proceeds received
by or for such Person's account, net of reasonable legal, underwriting,
and other fees and expenses incurred as a direct result thereof.
"Net Income" means, with reference to any period, the net income (or
net loss) of the Borrower and its Subsidiaries for such period computed
on a consolidated basis in accordance with GAAP.
"Net Worth" means, at any time the same is to be determined, total
shareholders' equity (including capital stock, preferred stock,
additional paid-in capital and retained earnings after deducting treasury
stock) which would appear on the balance sheet of the Borrower and its
Subsidiaries prepared on a consolidated basis in accordance with GAAP.
"Non-Material Subsidiary" means each Subsidiary that is not a
Material Subsidiary.
"Notes" means and includes the Revolving Notes, Term Notes and Swing
Line Note.
"Obligations" means all fees payable hereunder, all obligations of
the Borrower to pay principal and interest on Loans and Reimbursement
Obligations, and all other payment obligations of the Borrower or any
Subsidiary arising under or in relation to any Loan Document, in each
case whether now existing or hereafter arising.
"Participating Bank" is defined in Section 1.2(d) hereof.
"Participating Interest" is defined in Section 1.2(d) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"Percentage" means for any Bank its Revolver Percentage or Term Loan
Percentage, as applicable.
"Permitted Marquise Financing" means the Existing Marquise Financing
and any refinancing (but not any increase) of the Existing Marquise
Financing on terms and conditions no more burdensome on the Borrower and
its Subsidiaries on the whole than those governing the Existing Marquise
Financing.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization or any
other entity or organization, including a government or agency or
political subdivision thereof.
"Plan" means any employee pension benefit plan covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of
the Code that either (i) is maintained by a member of the Controlled
Group for employees of a member of the Controlled Group or (ii) is
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to
which a member of the Controlled Group is then making or accruing an
obligation to make contributions or has within the preceding five plan
years made contributions.
"Pledge Agreement" means that certain Pledge Agreement dated of even
date herewith among the Borrower, certain of its Subsidiaries, and the
Agent, as the same may be amended, modified or restated from time to
time.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Reimbursement Obligation" is defined in Section 1.2(c) hereof.
"Required Banks" means, at any time, Banks whose outstanding Loans
and interests in Letters of Credit and Unused Revolving Credit
Commitments constitute more than 66-2/3% of the sum of the total
outstanding Loans, interests in Letters of Credit and Unused Revolving
Credit Commitments of the Banks.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Southeastern Corporation, a Florida
corporation.
"▇▇▇▇▇▇ Acquisition" means the acquisition of ▇▇▇▇▇▇ Southeastern
Corporation by Borrower pursuant to the ▇▇▇▇▇▇ Stock Purchase Agreement.
"▇▇▇▇▇▇ Stock Purchase Agreement" means that certain Agreement dated
as of March 5, 1998, by and among ▇▇▇▇▇▇, the Borrower, Acquisition
Corp., ▇▇▇▇▇▇ Southeastern Employee Stock Ownership Trust, and the
stockholders of ▇▇▇▇▇▇ Southeastern Corporation, all exhibits, schedules,
and attachments thereto, and all instruments and documents to be executed
and delivered in connection therewith.
"Revolving Credit" means the credit facility for making Revolving
Loans and issuing Letters of Credit described in Sections 1.1 and 1.2
hereof.
"Revolver Percentage" means, for each Bank, the percentage of the
Revolving Credit Commitments represented by such Bank's Revolving Credit
Commitment or, if the Revolving Credit Commitments have been terminated,
the percentage held by such Bank (including through participation
interests in Reimbursement Obligations) of the aggregate principal amount
of all Revolving Loans and L/C Obligations then outstanding.
"Revolving Credit Commitment" is defined in Section 1.1 hereof.
"Revolving Credit Termination Date" means April 20, 2003, or such
earlier date on which the Revolving Credit Commitments are terminated in
whole pursuant to Section 1.13, 9.2 or 9.3 hereof.
"Revolving Loan" is defined in Section 1.1 hereof and, as so
defined, includes a Base Rate Loan or a Eurodollar Loan, each of which is
a "type" of Revolving Loan hereunder.
"Revolving Note" is defined in Section 1.11(a) hereof.
"S&P" means Standard & Poor's Ratings Services Group, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Security Agreement" means that certain Security Agreement dated of
even date herewith among the Borrower, certain of its Subsidiaries, and
the Agent, as the same may be amended, modified or restated from time to
time.
"Seller Debt" means the $11,700,000 in aggregate amount of unsecured
Indebtedness of Acquisition Corp. to the ESOP and Stockholders identified
and defined in the ▇▇▇▇▇▇ Stock Purchase Agreement evidenced by those
certain promissory notes of Acquisition Corp. payable to the order of
ESOP and Stockholders in the aggregate amount of $11,700,000,
representing the deferred portion of the consideration due from
Acquisition Corp. for the ▇▇▇▇▇▇ Acquisition.
"Subordinated Debt" means Indebtedness for Borrowed Money of the
Borrower or any Subsidiary owing to any Person on terms and conditions,
and in such amounts, acceptable to the Agent and the Required Banks in
their sole discretion and which is subordinated in right of payment to
the prior payment in full of the Obligations pursuant to written
subordination provisions approved in writing by the Agent and the
Required Banks.
"subsidiary" means, as to any particular parent corporation or
organization, any other corporation or organization more than 50% of the
outstanding Voting Stock of which is at the time directly or indirectly
owned by such parent corporation or organization or by any one or more
other entities which are themselves subsidiaries of such parent
corporation or organization. The term "Subsidiary" means a subsidiary of
the Borrower or of any of its direct or indirect Subsidiaries.
"Swing Line" means the credit facility for making a Swing Loan
described in Section 1.14 hereof.
"Swing Loans" is defined in Section 1.14 hereof.
"Swing Line Note" is defined in Section 1.14 hereof.
"Swing Line Commitment" is defined in Section 1.14(a) hereof.
"Term Credit" means the credit facility for Term Loans described in
Section 1.3 hereof.
"Term Loan Commitment" is defined in Section 1.3 hereof.
"Term Loan" is defined in Section 1.3 hereof and, as so defined,
includes a Base Rate Loan or a Eurodollar Loan, each of which is a "type"
of Term Loan hereunder.
"Term Note" is defined in Section 1.11(b) hereof.
"Term Loan Percentage" means, for each Bank, the percentage of the
Term Loan Commitments represented by such Bank's Term Loan Commitment or,
if the Term Loan Commitments have been terminated or have expired, the
percentage held by such Bank of the aggregate principal amount of all
Term Loans then outstanding.
"Total Consideration" means the total amount (but without
duplication) of (a) cash paid in connection with any Acquisition, plus
(b) indebtedness payable to the seller in connection with such
Acquisition, plus (c) the fair market value of any equity securities,
including any warrants or options therefor, delivered in connection with
any Acquisition, plus (d) the present value of covenants not to compete
entered into in connection with such Acquisition or other future payments
which are required to be made over a period of time and are not
contingent upon the Borrower or its Subsidiary meeting financial
performance objectives (discounted at the Base Rate), but only to the
extent not included in clause (a), (b), or (c) above, plus (e) the amount
of indebtedness assumed in connection with such Acquisition.
"Total Funded Debt" means, at any time the same is to be determined,
the aggregate of all Indebtedness for Borrowed Money of the Borrower and
its Subsidiaries at such time, including all Indebtedness for Borrowed
Money of any other Person which is directly or indirectly guaranteed by
the Borrower or any of its Subsidiaries or which the Borrower or any of
its Subsidiaries has agreed (contingently or otherwise) to purchase or
otherwise acquire or in respect of which the Borrower or any of its
Subsidiaries has otherwise assured a creditor against loss.
"Unfunded Vested Liabilities" means, for any Plan at any time, the
amount (if any) by which the present value of all vested nonforfeitable
accrued benefits under such Plan exceeds the fair market value of all
Plan assets allocable to such benefits, all determined as of the then
most recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of a member of the
Controlled Group to the PBGC or the Plan under Title IV of ERISA.
"U.S. Dollars" and "$" each means the lawful currency of the United
States of America.
"Unused Revolving Credit Commitments" means, at any time, the
difference between the Revolving Credit Commitments then in effect and
the aggregate outstanding principal amount of Revolving Loans and L/C
Obligations.
"Voting Stock" of any Person means capital stock or other equity
interests of any class or classes (however designated) having ordinary
power for the election of directors or other similar governing body of
such Person, other than stock or other equity interests having such power
only by reason of the happening of a contingency.
"Welfare Plan" means a "welfare plan" as defined in Section 3(1) of
ERISA.
"Wholly-owned Subsidiary" means a Subsidiary of which all of the
issued and outstanding shares of capital stock (other than directors'
qualifying shares as required by law) or other equity interests are owned
by the Borrower and/or one or more Wholly-owned Subsidiaries within the
meaning of this definition.
Section 5.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined.
The words "hereof", "herein", and "hereunder" and words of like import
when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All references to
time of day herein are references to Chicago, Illinois time unless
otherwise specifically provided. Where the character or amount of any
asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is
required to be made for the purposes of this Agreement, it shall be done
in accordance with GAAP except where such principles are inconsistent
with the specific provisions of this Agreement.
Section 5.3. Change in Accounting Principles. If, after the date of
this Agreement, there shall occur any change in GAAP from those used in
the preparation of the financial statements referred to in Section 6.5
hereof and such change shall result in a change in the method of
calculation of any financial covenant, standard or term found in this
Agreement, either the Borrower or the Required Banks may by notice to the
Banks and the Borrower, respectively, require that the Banks and the
Borrower negotiate in good faith to amend such covenants, standards, and
term so as equitably to reflect such change in accounting principles,
with the desired result being that the criteria for evaluating the
financial condition of the Borrower and its Subsidiaries shall be the
same as if such change had not been made. No delay by the Borrower or
the Required Banks in requiring such negotiation shall limit their right
to so require such a negotiation at any time after such a change in
accounting principles. Until any such covenant, standard, or term is
amended in accordance with this Section 5.3, financial covenants shall be
computed and determined in accordance with GAAP in effect prior to such
change in accounting principles. Without limiting the generality of the
foregoing, the Borrower shall neither be deemed to be in compliance with
any financial covenant hereunder nor out of compliance with any financial
covenant hereunder if such state of compliance or noncompliance, as the
case may be, would not exist but for the occurrence of a change in
accounting principles after the date hereof.
SECTION 6.REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Agent and the Banks as
follows:
Section 6.1. Organization and Qualification. The Borrower is duly
organized, validly existing and in good standing as a corporation under
the laws of the state of its incorporation, has full and adequate
corporate power to own its Property and conduct its business as now
conducted, and is duly licensed or qualified and in good standing in each
jurisdiction in which the nature of the business conducted by it or the
nature of the Property owned or leased by it requires such licensing or
qualifying, except where the failure to do so would not have a Material
Adverse Effect.
Section 6.2. Subsidiaries. Each Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which
it is incorporated or organized, as the case may be, has full and
adequate power to own its Property and conduct its business as now
conducted, and is duly licensed or qualified and in good standing in each
jurisdiction in which the nature of the business conducted by it or the
nature of the Property owned or leased by it requires such licensing or
qualifying, except where the failure to do so would not have a Material
Adverse Effect. Schedule 6.2 hereto (as the same may be deemed amended
pursuant to Section 8.10(c) or 8.17 hereof) identifies each Subsidiary,
the jurisdiction of its incorporation or organization, as the case may
be, the percentage of issued and outstanding shares of each class of its
capital stock or other equity interests owned by the Borrower and the
other Subsidiaries and, if such percentage is not 100% (excluding
directors' qualifying shares as required by law), a description of each
class of its authorized capital stock and other equity interests and the
number of shares of each class issued and outstanding and whether such
Subsidiary is a Material or Non-Material Subsidiary. All of the
outstanding shares of capital stock and other equity interests of each
Subsidiary are validly issued and outstanding and fully paid and
nonassessable and all such shares and other equity interests indicated on
Schedule 6.2 (as the same may be deemed amended pursuant to
Section 8.10(c) or 8.17 hereof) as owned by the Borrower or a Subsidiary
are owned, beneficially and of record, by the Borrower or such Subsidiary
free and clear of all Liens other than the Liens granted in favor of the
Agent pursuant to the Collateral Documents. There are no outstanding
commitments or other obligations of any Subsidiary to issue, and no
options, warrants or other rights of any Person to acquire, any shares of
any class of capital stock or other equity interests of any Subsidiary.
Section 6.3. Authority and Validity of Obligations. The Borrower has
full right and authority to enter into this Agreement and the other Loan
Documents executed by it, to make the borrowings herein provided for, to
issue its Notes in evidence thereof, to grant to the Agent the Liens
described in the Collateral Documents executed by the Borrower, and to
perform all of its obligations hereunder and under the other Loan
Documents executed by it. Each Subsidiary has full right and authority
to enter into the Loan Documents executed by it, to guarantee the
Obligations to the extent required hereunder, to grant to the Agent the
Liens described in the Collateral Documents executed by such Person, and
to perform all of its obligations under the Loan Documents executed by
it. The Loan Documents delivered by the Borrower and by each Subsidiary
have been duly authorized, executed and delivered by such Person and
constitute valid and binding obligations of such Person enforceable in
accordance with their terms except as enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors' rights generally and general principles of equity (regardless
of whether the application of such principles is considered in a
proceeding in equity or at law); and this Agreement and the other Loan
Documents do not, nor does the performance or observance by the Borrower
or any Subsidiary of any of the matters and things herein or therein
provided for, (a) contravene or constitute a default under any provision
of law or any judgment, injunction, order or decree binding upon the
Borrower or any Subsidiary or any provision of the charter, articles of
incorporation, by-laws or comparable constituent documents of the
Borrower or any Subsidiary, (b) contravene or constitute a default under
any covenant, indenture or agreement of or affecting the Borrower or any
Subsidiary or any of its Property, in each case where such contravention
or default is reasonably likely to have a Material Adverse Effect, or
(c) result in the creation or imposition of any Lien on any Property of
the Borrower or any Subsidiary other than the Liens granted in favor of
the Agent pursuant to the Collateral Documents.
Section 6.4. Use of Proceeds; Margin Stock. The Borrower shall use
certain proceeds of the Revolving Loans for the purpose of refinancing
existing indebtedness and shall use all other Credit under the Revolving
Credit for its general corporate purposes. The Borrower shall use the
proceeds of the Term Loans to finance the ▇▇▇▇▇▇ Acquisition. Neither
the Borrower nor any Subsidiary is engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of any Loan or any other extension
of credit made hereunder will be used to purchase or carry any such
margin stock or to extend credit to others for the purpose of purchasing
or carrying any such margin stock. Margin stock (as hereinabove defined)
constitutes less than 25% of those assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or
other restriction hereunder.
Section 6.5. Financial Reports.
(a) Diamond. The consolidated balance sheet of the Borrower and
its Subsidiaries as at December 31, 1997, and the related consolidated
statements of income, retained earnings and cash flows of the Borrower
and its Subsidiaries for the fiscal year then ended, and accompanying
notes thereto, which financial statements are accompanied by the audit
report of Ernst & Young, independent public accountants, and the
unaudited interim consolidated balance sheet of the Borrower and its
Subsidiaries as at February 28, 1998, and the related consolidated
statements of income and retained earnings of the Borrower and its
Subsidiaries for the two months then ended, heretofore furnished to the
Banks, fairly present in all material respects the consolidated financial
condition of the Borrower and its Subsidiaries as at said dates and the
consolidated results of their operations and cash flows for the periods
then ended in conformity with GAAP applied on a consistent basis (other
than, in respect of interim statements, for the absence of notes and
normal year-end audit adjustments). Neither the Borrower nor any
Subsidiary has contingent liabilities which are material to it other than
as indicated on such financial statements or, with respect to future
periods, on the financial statements furnished pursuant to Section 8.5
hereof.
(b) ▇▇▇▇▇▇. The consolidated balance sheet of the ▇▇▇▇▇▇ and its
subsidiaries as at November 1, 1997, and the related consolidated
statements of income, retained earnings and cash flows of the ▇▇▇▇▇▇ and
its subsidiaries for the fiscal year then ended, and accompanying notes
thereto, which financial statements are accompanied by the audit report
of Coopers & ▇▇▇▇▇▇▇, independent public accountants, and the unaudited
interim consolidated balance sheet of the ▇▇▇▇▇▇ and its subsidiaries as
at February 28, 1998, and the related consolidated statements of income
and retained earnings of the ▇▇▇▇▇▇ and its subsidiaries for the four
months then ended, heretofore furnished to the Banks, fairly present in
all material respects the consolidated financial condition of the ▇▇▇▇▇▇
and its subsidiaries as at said dates and the consolidated results of
their operations and cash flows for the periods then ended in conformity
with GAAP applied on a consistent basis (other than, in respect of
interim statements, for the absence of notes and normal year-end audit
adjustments). Neither ▇▇▇▇▇▇ nor any subsidiary has contingent
liabilities which are material to it other than as indicated on such
financial statements or, with respect to future periods, on the financial
statements furnished pursuant to Section 8.5 hereof.
Section 6.6. No Material Adverse Change. Since December 31, 1997,
there has been no change in the condition (financial or otherwise) or
business prospects of the Borrower or any Subsidiary, except those
occurring in the ordinary course of business, none of which individually
or in the aggregate have been materially adverse.
Section 6.7. Full Disclosure. The statements and information
furnished by or on behalf of the Borrower to the Banks in connection with
the negotiation of this Agreement and the other Loan Documents and the
commitments by the Banks to provide all or part of the financing
contemplated hereby do not (x) contain any untrue statements of a fact or
(y) omit a fact necessary to make the material statements contained
herein or therein, in the light of the circumstances under which they
were made, not misleading, in either case where the correct or complete
facts would, if they constituted a change from the facts as originally
disclosed or stated, have been reasonably likely to have a Material
Adverse Effect; the Banks acknowledging that, as to any projections and
other forward-looking statements regarding future expectations and
beliefs (the "Statements") furnished by the Borrower to the Banks, the
Borrower only represents that, at the time the Statements were made by
the Borrower to the Banks the Statements were based upon information and
estimates the Borrower in good faith believed to be reasonable.
Section 6.8. Trademarks, Franchises, and Licenses. The Borrower and
each of the Subsidiaries own, possess, or have the right to use all
necessary patents, licenses, franchises, trademarks, trade names, trade
styles, copyrights, trade secrets, know how and confidential commercial
and proprietary information to conduct their businesses as now conducted,
without known conflict with any patent, license, franchise, trademark,
trade name, trade style, copyright or other proprietary right of any
other Person which conflict would reasonably be expected (x) to be
resolved adversely and (y) if so determined, to have a Material Adverse
Effect.
Section 6.9. Governmental Authority and Licensing. The Borrower and
each of the Subsidiaries have received all licenses, permits, and
approvals of all Federal, state, local, and foreign governmental
authorities, if any, necessary to conduct their business, in each case
where the failure to obtain or maintain the same is reasonably likely to
have a Material Adverse Effect. There is neither pending nor to the
Borrower's knowledge, threatened, any investigation or proceeding which,
if adversely determined, is reasonably likely to result in revocation or
denial of any material license, permit or approval, the revocation or
denial of which would reasonably be expected to have a Material Adverse
Effect.
Section 6.10. Good Title. The Borrower and each of the Subsidiaries
have good and defensible title (or valid leasehold interests) to their
assets as reflected on the most recent consolidated balance sheet of the
Borrower and its Subsidiaries furnished to the Banks (except for sales of
assets in the ordinary course of business), subject to no Liens other
than such thereof as are permitted by Section 8.8 hereof.
Section 6.11. Litigation and Other Controversies. After giving effect
to the indemnities in the ▇▇▇▇▇▇ Purchase Agreement for certain existing
environmental issues, there is no litigation or governmental proceeding
or labor controversy pending, nor to the knowledge of the Borrower
threatened, against the Borrower or any Subsidiary which if adversely
determined is reasonably likely to have a Material Adverse Effect.
Section 6.12. Taxes. All tax returns required to be filed by the
Borrower or any Subsidiary in any jurisdiction have, in fact, been filed,
and all taxes, assessments, fees and other governmental charges upon the
Borrower or any Subsidiary or upon any of its respective Property, income
or franchises, which are shown to be due and payable in such returns,
have been paid, except such taxes, assessments, fees and governmental
charges, if any, as are being contested in good faith and by appropriate
proceedings which prevent enforcement of the matter under contest and as
to which adequate reserves established in accordance with GAAP have been
provided. The Borrower does not know of any proposed additional tax
assessment against the Borrower or any Subsidiary for which adequate
provisions in accordance with GAAP have not been made on their accounts.
Adequate provisions in accordance with GAAP for taxes on the books of the
Borrower and each Subsidiary have been made for all open years, and for
its current fiscal period.
Section 6.13. Approvals. No authorization, consent, license, or
exemption from, or filing or registration with, any court or governmental
department, agency or instrumentality, nor any approval or consent of the
stockholders of the Borrower or any Subsidiary, or of any other Person,
is or will be necessary to the valid execution, delivery or performance
by the Borrower or any Subsidiary of this Agreement or any other Loan
Document, except for such approvals which have been obtained prior to the
date of this Agreement and remain in full force and effect.
Section 6.14. Affiliate Transactions. Neither the Borrower nor any
Subsidiary is a party to any contracts or agreements with any of its
Affiliates on terms and conditions which are less favorable to the
Borrower or such Subsidiary than would be usual and customary in similar
contracts or agreements between Persons not affiliated with each other.
Section 6.15. Investment Company; Public Utility Holding Company.
Neither the Borrower nor any Subsidiary is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "public utility holding
company" within the meaning of the Public Utility Holding Company Act of
1935, as amended.
Section 6.16. ERISA. The Borrower and each of its Subsidiaries, and
each member of its Controlled Group, have fulfilled their obligations
under the minimum funding standards of, and are in compliance in all
material respects with, ERISA and the Code to the extent applicable to
any Plan maintained by any one or more of them or for the benefit of
their employees and have not incurred any liability to the PBGC or a Plan
under Title IV of ERISA other than a liability to the PBGC for premiums
under Section 4007 of ERISA. Neither the Borrower nor any Subsidiary has
any material contingent liabilities with respect to any post-retirement
benefits under a Welfare Plan, other than liability for continuation
coverage described in article 6 of Title I of ERISA.
Section 6.17. Compliance with Laws. The Borrower and each of its
Subsidiaries are in compliance with the requirements of all federal,
state and local laws, rules and regulations applicable to or pertaining
to their Properties or business operations (including, without
limitation, the Occupational Safety and Health Act of 1970, the Americans
with Disabilities Act of 1990, laws and regulations relating to the
providing of health care services and products, and laws and regulations
establishing quality criteria and standards for air, water, land and
toxic or hazardous wastes and substances), where any such non-compliance,
individually or in the aggregate, after giving effect to the indemnities
in the ▇▇▇▇▇▇ Purchase Agreement for certain existing environmental
issues, is reasonably likely to have a Material Adverse Effect. Neither
the Borrower nor any Subsidiary has received notice to the effect that
its operations are not in compliance with any of the requirements of
applicable federal, state or local environmental, health and safety
statutes and regulations or are the subject of any governmental
investigation evaluating whether any remedial action is needed to respond
to a release of any toxic or hazardous waste or substance into the
environment, where any such non-compliance or remedial action,
individually or in the aggregate, after giving effect to the indemnities
in the ▇▇▇▇▇▇ Purchase Agreement for certain existing environmental
issues, is reasonably likely to have a Material Adverse Effect.
Section 6.18. Other Agreements. Neither the Borrower nor any
Subsidiary is in default under the terms of any covenant, indenture or
agreement of or affecting such Persons or any of their Properties, which
default if uncured is reasonably likely to have a Material Adverse
Effect.
Section 6.19. Solvency. The Borrower and its Subsidiaries are able to
pay their debts as they become due and have sufficient capital to carry
on their businesses and all businesses in which they are about to engage
in; and the amount that will be required to pay the Borrower's and each
Subsidiary's probable liabilities as they become absolute and mature is
less than the sum of the present fair sale value of its assets as a going
concern.
Section 6.20. ▇▇▇▇▇▇ Acquisition. The Borrower has heretofore
delivered to the Agent a true and correct copy of the ▇▇▇▇▇▇ Stock
Purchase Agreement and, except to the extent consented to in writing by
the Agent, the ▇▇▇▇▇▇ Stock Purchase Agreement has not been amended or
modified in any respect and no condition to the effectiveness thereof or
the obligations of the Borrower or Acquisition Corp. thereunder has been
waived. The Borrower and, to the best of the Borrower's knowledge,
▇▇▇▇▇▇, have all necessary right, power, and authority to consummate the
transactions contemplated by the ▇▇▇▇▇▇ Stock Purchase Agreement and to
perform all of their obligations thereunder. The ▇▇▇▇▇▇ Stock Purchase
Agreement has been duly authorized, executed, and delivered by the
Borrower and Acquisition Corp. and, to the best of the Borrower's
knowledge, ▇▇▇▇▇▇, and the ▇▇▇▇▇▇ Stock Purchase Agreement constitutes
the valid and binding obligation of the Borrower and Acquisition Corp.
and to the best of the Borrower's knowledge, ▇▇▇▇▇▇, enforceable against
each of them in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, fraudulent conveyance or similar
laws affecting creditors' rights generally and general principles of
equity (regardless of whether the application of such principles is
considered in a proceeding in equity or at law); and the ▇▇▇▇▇▇ Stock
Purchase Agreement does not, nor does the observance or performance by
the Borrower or Acquisition Corp. or, to the best of the Borrower's
knowledge, ▇▇▇▇▇▇, of any of the matters and things therein provided for,
contravene or constitute a default under any provision of law or any
judgment, injunction, order, or decree binding upon such Person or any
provision of the charter, articles of incorporation, or by-laws of such
Person or any covenant, indenture, or agreement of or affecting such
Person or any of its Property, or result in the creation or imposition of
any Lien on any such Person's Property. No authorization, consent,
license, or exemption from, or filing or registration with, any court or
governmental department, agency, or instrumentality, nor any approval or
consent of any other Person, is or will be necessary to the valid
execution, delivery, or performance by the Borrower or Acquisition Corp.
or, to the best of the Borrower's knowledge, ▇▇▇▇▇▇, of the ▇▇▇▇▇▇ Stock
Purchase Agreement or of any other instrument or document executed and
delivered in connection therewith, except for such thereof that have
heretofore been obtained and remain in full force and effect. Neither
the Borrower nor Acquisition Corp. nor, to the best of the Borrower's
knowledge, ▇▇▇▇▇▇, are in default in any of their respective obligations
under the ▇▇▇▇▇▇ Stock Purchase Agreement.
Section 6.21. Year 2000 Compliance. The Borrower and its Subsidiaries
are conducting or have conducted a comprehensive review and assessment of
its computer applications, and have made inquiry of their material
suppliers, vendors and customers, with respect to any defect in computer
software, data bases, hardware, controls and peripherals related to the
occurrence of the year 2000 or the use of any date after December 31,
1999, in connection therewith. Based on the foregoing review, assessment
and inquiry, the Borrower believes that no such defect could reasonably
be expected to have a Material Adverse Effect.
Section 6.22. No Default. No Default or Event of Default has occurred
and is continuing.
SECTION 7. CONDITIONS PRECEDENT.
The obligation of each Bank to advance, continue or convert any Loan
(whether a Revolving Loan or Swing Loan, but in any event other than the
continuation of, or conversion into, a Base Rate Loan) or of the Issuing
Bank to issue, extend the expiration date (including by not giving notice
of non-renewal) of or increase the amount of any Letter of Credit under
this Agreement, shall be subject to the following conditions precedent:
Section 7.1. Initial Credit Event. Before or concurrently with the
initial Credit Event:
(a) the Agent shall have received for each Bank this Agreement
duly executed by the Borrower and the Banks;
(b) the Agent shall have received for each Bank such Bank's
duly executed Notes of the Borrower dated the date hereof and
otherwise in compliance with the provisions of Section 1.11 hereof;
(c) the Agent shall have received the Security Agreement and
the Pledge Agreement duly executed by the Borrower and each Material
Subsidiary (other than Marquise), and the Guaranty duly executed by
each Material Subsidiary, together with (i) original stock
certificates or other similar instruments or securities representing
all of the issued and outstanding shares of capital stock or other
equity interest in each Subsidiary as of the date of this Agreement,
(ii) stock powers for the Collateral consisting of the stock or
other equity interest in each Subsidiary each to be executed in
blank and undated, and (iii) UCC financing statements to be filed
against the Borrower and each Material Subsidiary (other than
Marquise), as debtor, in favor of the Agent, as secured party;
(d) the Agent shall have received evidence of insurance
required to be maintained under the Loan Documents, naming the Agent
as loss payee;
(e) the Agent shall have received for each Bank copies of the
Borrower's and each Subsidiary's articles of incorporation and
bylaws (or comparable constituent documents) and any amendments
thereto, certified in each instance by its Secretary or Assistant
Secretary;
(f) the Agent shall have received for each Bank copies of
resolutions of the Borrower's and of each Subsidiary's Board of
Directors authorizing the execution, delivery and performance of
this Agreement and the other Loan Documents to which it is a party
and the consummation of the transactions contemplated hereby and
thereby, together with specimen signatures of the persons authorized
to execute such documents on the Borrower's and such Subsidiary's
behalf, all certified in each instance by its Secretary or Assistant
Secretary;
(g) the Agent shall have received for each Bank copies of the
certificates of good standing for the Borrower and for each
Subsidiary (dated no earlier than 30 days prior to the date hereof)
from the office of the secretary of the state of its incorporation
and of each state in which it is qualified to do business as a
foreign corporation;
(h) the Agent shall have received for each Bank a list of the
Borrower's Authorized Representatives;
(i) the Agent shall have received for itself and for the Banks
the fees forth in Section 2.1(c) hereof;
(j) the Banks shall have received and approved as satisfactory
to them, a proforma consolidated balance sheet for the Borrower
immediately after giving effect to the ▇▇▇▇▇▇ Acquisition;
(k) the Agent shall have received a field audit of the
Property of the Borrower and its Subsidiaries conducted by an
inhouse auditor and approved the results of such audit as
satisfactory to it;
(l) the Banks shall have completed its due diligence review of
the environmental liabilities of the Borrower and its Subsidiaries
and approved the results of such review as satisfactory to them;
(m) each Bank shall have received such evaluations and
certifications as it may reasonably require (including an officer's
certificate as to the solvency of the Borrower and its Subsidiaries
after giving effect to the transactions contemplated hereby and a
compliance certificate in the form attached hereto as Exhibit G
containing compliance calculations of the financial covenants as of
the date of this Agreement after giving effect to the ▇▇▇▇▇▇
Acquisition) in order to satisfy itself as to the value of the
Collateral, the financial condition of the Borrower and its
Subsidiaries, and the lack of material environmental and other
contingent liabilities of the Borrower and its Subsidiaries;
(n) the Agent shall have received a pay-off and lien release
letter from NationsBank, N.A. ("Nations") and American National Bank
and Trust Company ("American") setting forth, among other things,
the total amount of indebtedness outstanding under the Existing
Credit Agreement (or outstanding letters of credit issued for the
account of the Borrower or any of its Subsidiaries) and containing
an undertaking to cause to be delivered to the Agent each UCC
termination statement and any other lien release instrument
necessary to release Nations' and American's Lien on all assets of
the Borrower and its Subsidiaries, which pay-off and lien release
letters shall be in form and substance reasonably acceptable to the
Agent;
(o) the Agent shall have received evidence satisfactory to it
that (i) all conditions precedent to the ▇▇▇▇▇▇ Acquisition (except
for the Banks' funding of not more than $31,000,000 of the purchase
price therefor) have been satisfied in accordance with the terms of
the ▇▇▇▇▇▇ Stock Purchase Agreement (without giving effect to any
amendment, modification or waiver thereto not consented to in
writing by the Agent) and (ii) the ▇▇▇▇▇▇ Stock Purchase Agreement
is effective;
(p) all legal, tax and regulatory matters incident to the
Credits and the ▇▇▇▇▇▇ Acquisition shall be satisfactory to the
Agent;
(q) the Agent shall have received for each Bank the favorable
written opinions of counsel to the Borrower and its Subsidiaries, in
form and substance reasonably satisfactory to the Agent;
(r) the Agent shall have received and approved as to form and
substance the ▇▇▇▇▇▇ Stock Purchase Agreement and all other
instruments and documents applicable to the Seller Debt; and
(s) the Agent shall have received and approved (both as to
form and substance) such UCC financing statements and other
instruments and documents as it shall deem necessary to perfect the
Liens required hereunder and satisfactory lien searches confirming
the priority of such Liens.
References in this Section to Subsidiaries shall be deemed to
include ▇▇▇▇▇▇ and its subsidiaries prior to, as well as after,
consummation of the ▇▇▇▇▇▇ Acquisition.
Section 7.2. All Credit Events. As of the time of each Credit Event
hereunder:
(a) in the case of a Borrowing the Agent shall have received
the notice required by Section 1.6 hereof, in the case of a Swing
Loan, Agent shall have received the notice required in Section 1.14
hereof, in the case of the issuance of any Letter of Credit the
Agent shall have received a duly completed Application for such
Letter of Credit together with any fees called for by Section 2.1
hereof and, in the case of an extension or increase in the amount of
a Letter of Credit, a written request therefor in a form acceptable
to the Agent together with fees called for by Section 2.1 hereof;
(b) each of the representations and warranties set forth in
Section 6 hereof shall be and remain true and correct as of such
time, except to the extent that any such representation or warranty
relates solely to an earlier time or that any change therein is not
reasonably likely to have a Material Adverse Effect;
(c) the Borrower shall be in compliance with all of the terms
and conditions hereof, and no Default or Event of Default shall have
occurred and be continuing hereunder or would occur as a result of
such Credit Event; and
(d) such Credit Event shall not violate any order, judgment or
decree of any court or other authority or any provision of law or
regulation applicable to any Bank (including, without limitation,
Regulation U of the Board of Governors of the Federal Reserve
System).
Each request for a Borrowing hereunder and each request for the
issuance of, increase in the amount of, or extension of the expiration
date of, a Letter of Credit, shall be deemed to be a representation and
warranty by the Borrower on the date on such Credit Event as to the facts
specified in subsections (a) through (c), both inclusive, this
Section 7.2.
SECTION 8. COVENANTS.
The Borrower agrees that, so long as any Note or any L/C Obligation
is outstanding or any Commitment is available to or in use by the
Borrower hereunder, except to the extent compliance in any case or cases
is waived in writing by the Required Banks:
Section 8.1. Maintenance of Business. The Borrower shall, and shall
cause each Subsidiary to, preserve and maintain its existence, except
(i) as otherwise provided in Section 8.10(c) hereof and (ii) the
discontinuance of any Subsidiary (other than any Material Subsidiary or
any other Subsidiary which has furnished any Collateral or Guaranty) to
the extent such discontinuance would not reasonably be likely to have any
Material Adverse Effect. The Borrower shall, and shall cause each
Subsidiary to, preserve and keep in force and effect all licenses,
permits, franchises, approvals, patents, trademarks, trade names, trade
styles, copyrights, and other proprietary rights necessary to the proper
conduct of its business where the failure to do so is reasonably likely
to have a Material Adverse Effect.
Section 8.2. Maintenance of Properties. The Borrower shall, and shall
cause each Subsidiary to, maintain, preserve and keep its property, plant
and equipment in good repair, working order and condition (ordinary wear
and tear excepted) and shall from time to time make all needful and
proper repairs, renewals, replacements, additions and betterments thereto
so that at all times the efficiency thereof shall be fully preserved and
maintained, except to the extent that, in the reasonable business
judgment of such Person, any such Property is no longer necessary for the
proper conduct of the business of such Person.
Section 8.3. Taxes and Assessments. The Borrower shall duly pay and
discharge, and shall cause each Subsidiary to duly pay and discharge, all
taxes, rates, assessments, fees and governmental charges upon or against
it or its Properties, in each case before the same become delinquent and
before penalties accrue thereon, unless and to the extent that the same
are being contested in good faith and by appropriate proceedings which
prevent enforcement of the matter under contest and adequate reserves are
provided therefor.
Section 8.4. Insurance. The Borrower shall insure and keep insured,
and shall cause each Subsidiary to insure and keep insured, with
insurance companies with a general policyholder service rating of not
less than A as rated in the most current available Best's Insurance
Report, all insurable Property owned by it which is of a character
usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in
such amounts, as are insured by Persons similarly situated and operating
like Properties; and the Borrower shall insure, and shall cause each
Subsidiary to insure, such other hazards and risks (including employers'
and public liability risks) with insurance companies with a general
policyholder service rating of not less than A as rated in the most
current available Best's Insurance Report as and to the extent usually
insured by Persons similarly situated and conducting similar businesses.
The Borrower shall in any event maintain, and cause each Subsidiary to
maintain, insurance on the Collateral to the extent required by the
Collateral Documents. The Borrower shall, upon the request of the Agent,
furnish to the Agent and each Bank a certificate setting forth in summary
form the nature and extent of the insurance maintained pursuant to this
Section.
Section 8.5. Financial Reports. The Borrower shall, and shall cause
each Subsidiary to, maintain a standard system of accounting in
accordance with GAAP and shall furnish to the Agent, each Bank and each
of their duly authorized representatives such information respecting the
business and financial condition of the Borrower and each Subsidiary as
the Agent or such Bank may reasonably request; and without any request,
shall furnish to the Agent and the Banks:
(a) as soon as available, and in any event within 45 days
after the close of each of the first three fiscal quarters of each
fiscal year of the Borrower, a copy of the consolidated and
consolidating balance sheet of the Borrower and its Subsidiaries as
of the last day of such period and the consolidated and
consolidating statements of income, retained earnings and cash flows
of the Borrower and its Subsidiaries for the fiscal quarter and for
the fiscal year-to-date period then ended, each in reasonable detail
showing in comparative form the figures for the corresponding date
and period in the previous fiscal year, prepared by the Borrower in
accordance with GAAP (except with respect to the absence of notes
and for normal year-end adjustments) and certified to by the
Borrower's chief financial officer, or another officer of the
Borrower reasonably acceptable to the Agent;
(b) as soon as available, and in any event within 90 days
after the close of each fiscal year of the Borrower, a copy of the
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the last day of the period then ended and the
consolidated and consolidating statements of income, retained
earnings and cash flows of the Borrower and its Subsidiaries for the
period then ended, and accompanying notes thereto, each in
reasonable detail showing in comparative form the figures for the
previous fiscal year, accompanied in the case of the Borrower's
consolidated financial statements by an unqualified opinion of Ernst
& Young or another firm of independent public accountants of
recognized national standing, selected by the Borrower and
reasonably satisfactory to the Required Banks, to the effect that
the consolidated financial statements have been prepared in
accordance with GAAP and present fairly, in all material respects,
in accordance with GAAP the consolidated financial condition of the
Borrower and its Subsidiaries as of the close of such fiscal year
and the results of their operations and cash flows for the fiscal
year then ended and that an examination of such accounts in
connection with such financial statements has been made in
accordance with generally accepted auditing standards and,
accordingly, such examination included such tests of the accounting
records and such other auditing procedures as were considered
necessary in the circumstances;
(c) promptly after the sending or filing thereof, copies of
each financial statement, report, notice or proxy statement sent by
the Borrower or any Subsidiary to its stockholders, and copies of
each regular, periodic or special report, registration statement or
prospectus (including all Form 10-K, Form 10-Q, and Form 8-K reports
and proxy statements) filed by the Borrower or any Subsidiary with
any securities exchange or the Securities and Exchange Commission or
any successor agency;
(d) promptly after receipt thereof, a copy of each audit made
by any regulatory agency of the books and records of the Borrower or
any Subsidiary or of any notice of material noncompliance with any
applicable law, regulation, or guideline relating to the Borrower or
any Subsidiary or any of their respective businesses;
(e) as soon as available, and in any event within 30 days
prior to the end of each fiscal year of the Borrower, a copy of the
Borrower's consolidated and consolidating business plan for the
following fiscal year, such business plan to show the Borrower's
projected consolidated and consolidating revenues, expenses, and
balance sheet on month-by-month basis, such business plan to be in
reasonable detail prepared by the Borrower and in form reasonably
satisfactory to the Agent which shall include a summary of all
assumptions made in preparing such business plan;
(f) notice of any Change of Control; and
(g) promptly after knowledge thereof shall have come to the
attention of any responsible officer of the Borrower, written notice
of any threatened or pending litigation or governmental proceeding
or labor controversy against the Borrower or any Subsidiary which,
if adversely determined, is reasonably likely to have a Material
Adverse Effect or of the occurrence of any Default or Event of
Default hereunder.
Each of the financial statements furnished to the Banks pursuant to
subsections (a) and (b) of this Section 8.5 shall be accompanied by a
written certificate in the form attached hereto as Exhibit G signed by
the chief financial officer of the Borrower, or another officer of the
Borrower reasonably acceptable to the Agent, to the effect that to the
best of such officer's knowledge and belief no Default or Event of
Default has occurred during the period covered by such statements or, if
any such Default or Event of Default has occurred during such period,
setting forth a description of such Default or Event of Default and
specifying the action, if any, taken by the Borrower or any Subsidiary to
remedy the same. Such certificate shall also set forth the calculations
supporting such statements in respect of Sections 8.22, 8.23, 8.24, 8.25
and 8.26 of this Agreement.
Section 8.6. Inspection. The Borrower shall, and shall cause each
Subsidiary to, permit the Agent, each Bank and each of their duly
authorized representatives and agents to visit and inspect any of its
Properties, corporate books and financial records, to examine and make
copies of its books of accounts and other financial records, and to
discuss its affairs, finances and accounts with, and to be advised as to
the same by, its officers, employees and independent public accountants
(and by this provision the Borrower hereby authorizes such accountants to
discuss with the Agent and such Banks the finances and affairs of the
Borrower and each Subsidiary) at such reasonable times and intervals as
the Agent or any such Bank may designate.
Section 8.7. Indebtedness for Borrowed Money. The Borrower shall not,
nor shall it permit any Subsidiary to, issue, incur, assume, create or
have outstanding any Indebtedness for Borrowed Money; provided, however,
that the foregoing shall not restrict nor operate to prevent:
(a) the Obligations of the Borrower owing to the Agent and the
Banks hereunder;
(b) purchase money indebtedness and Capitalized Lease
Obligations of the Borrower and of its Subsidiaries in an aggregate
amount not to exceed $3,000,000 at any one time outstanding;
(c) obligations of the Borrower arising out of interest rate
hedging agreements entered into with financial institutions in the
ordinary course of business;
(d) the Seller Debt;
(e) indebtedness from time to time owing by the Borrower to
any Subsidiary or by any Subsidiary to the Borrower or any other
Subsidiary to the extent resulting from intercompany loans and
advances permitted by Section 8.9 hereof;
(f) indebtedness outstanding under the Existing Credit
Agreement which is paid and satisfied in full out of proceeds of the
initial Credit Event hereunder;
(g) Permitted Marquise Financing;
(h) other indebtedness existing on the date of this Agreement
and described on Schedule 8.7 attached hereto and made a part
hereof, as reduced from time to time by repayments thereof, and
refinancings thereof (but not increases) thereof on terms and
conditions on the whole no more burdensome in any material respect
on the relevant obligors;
(i) guaranties expressly permitted by Section 8.9 hereof; and
(j) other unsecured indebtedness of the Borrower and its
Subsidiaries not otherwise permitted by this Section in an aggregate
amount not to exceed $1,000,000 at any one time outstanding.
Section 8.8. Liens. The Borrower shall not, nor shall it permit any
other Subsidiary to, create, incur or permit to exist any Lien of any
kind on any Property owned by any such Person; provided, however, that
the foregoing shall not apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's
compensation, unemployment insurance, old age benefits, social
security obligations, taxes, assessments, statutory obligations or
other similar charges, good faith cash deposits in connection with
tenders, contracts or leases to which the Borrower or any Subsidiary
is a party or other cash deposits required to be made in the
ordinary course of business, provided in each case that the
obligation is not for borrowed money and that the obligation secured
is not overdue or, if overdue, is being contested in good faith by
appropriate proceedings which prevent enforcement of the matter
under contest and adequate reserves have been established therefor;
(b) mechanics', workmen's, materialmen's, landlords',
carriers', or other similar Liens arising in the ordinary course of
business with respect to obligations which are not due or which are
being contested in good faith by appropriate proceedings which
prevent enforcement of the matter under contest;
(c) the pledge of assets for the purpose of securing an
appeal, stay or discharge in the course of any legal proceeding,
provided that the aggregate amount of liabilities of the Borrower
and its Subsidiaries secured by a pledge of assets permitted under
this subsection, including interest and penalties thereon, if any,
shall not be in excess of $500,000 at any one time outstanding;
(d) the Liens granted in favor of the Agent for the benefit of
the Agent and the Banks pursuant to the Collateral Documents;
(e) Liens on property of the Borrower or any Subsidiary
created solely for the purpose of securing indebtedness permitted by
Section 8.7(b) hereof, representing or incurred to finance,
refinance or refund the purchase price of Property, provided that no
such Lien shall extend to or cover other Property of the Borrower or
such Subsidiary other than the respective Property so acquired, and
the principal amount of indebtedness secured by any such Lien shall
at no time exceed the original purchase price of such Property;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in
the aggregate, are not substantial in amount and which do not
materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of
the Borrower or any Subsidiary;
(g) Liens described on Schedule 8.8 hereof securing the
indebtedness described therein; and
(h) any interest or title of a lessor under any operating
lease.
Section 8.9. Investments, Acquisitions, Loans, Advances and
Guaranties. The Borrower shall not, nor shall it permit any Subsidiary
to, directly or indirectly, make, retain or have outstanding any
investments (whether through purchase of stock or obligations or
otherwise) in, or loans or advances (other than for travel advances and
other similar cash advances made to employees in the ordinary course of
business) to, any other Person, or acquire all or any substantial part of
the assets or business of any other Person or division thereof, or be or
become liable as endorser, guarantor, surety or otherwise for any debt,
obligation or undertaking of any other Person, or otherwise agree to
provide funds for payment of the obligations of another, or supply funds
thereto or invest therein or otherwise assure a creditor of another
against loss, or apply for or become liable to the issuer of a letter of
credit which supports an obligation of another, or subordinate any claim
or demand it may have to the claim or demand of any other Person;
provided, however, that the foregoing shall not apply to nor operate to
prevent:
(a) investments in direct obligations of the United States of
America or of any agency or instrumentality thereof whose
obligations constitute full faith and credit obligations of the
United States of America, provided that any such obligations shall
mature within one year of the date of issuance thereof;
(b) investments in commercial paper rated at least P-1 by
▇▇▇▇▇'▇ and at least A-1 by S&P maturing within one year of the date
of issuance thereof;
(c) investments in certificates of deposit issued by any Bank
or by any United States commercial bank having capital and surplus
of not less than $100,000,000 which have a maturity of one year or
less;
(d) endorsement of items for deposit or collection of
commercial paper received in the ordinary course of business;
(e) present equity investments in Subsidiaries;
(f) equity investments made after the date hereof in
Subsidiaries obligated on Guaranties provided the aggregate amount
of such investments in Marquise and its subsidiaries (if any) is
limited to those permitted by subsection (j) below;
(g) trade receivables from time to time owing to the Borrower
or any Subsidiary created or acquired in the ordinary course of its
business;
(h) guaranties by the Borrower or any Subsidiary guaranteeing
or otherwise supporting the repayment of indebtedness of the
Borrower or another Subsidiary permitted by Section 8.7(h) hereof;
(i) obligations of the Borrower under the Marquise Support
Letter provided (1) the aggregate amount paid by the Borrower in
satisfaction of its obligations thereunder on a cumulative basis on
and after the date hereof, when taken together with the aggregate
amount of intercompany advances by the Borrower or any Subsidiary to
Marquise also on a cumulative basis on and after the date hereof,
does not exceed $500,000 and (2) no payment is made on such
obligations during the continuance of any Default or Event of
Default;
(j) guaranties by the Borrower or any Subsidiary of the
obligations of any other Material Subsidiary, as lessee, under any
real estate leases entered into in the ordinary course of its
business;
(k) intercompany advances made from time to time between the
Borrower and one or more Material Subsidiaries or between
Subsidiaries obligated on Guaranties provided (1) the aggregate
amount of advances made to Marquise and its subsidiaries (if any) on
a cumulative basis on and after the date hereof, when taken together
with the aggregate amount paid by the Borrower under the Marquise
Support Letter also on a cumulative basis on and after the date
hereof, does not exceed $500,000 (2) no such advance is made during
the continuance of any Default or Event of Default;
(l) the ▇▇▇▇▇▇ Acquisition and other Acquisitions with respect
to which all of the following conditions have been satisfied:
(i) the Acquired Business is in an Eligible Line of Business and has
its primary operations in the United States, (ii) the Acquisition is
not a Hostile Acquisition, (iii) at the time of such Acquisition and
immediately after giving effect thereto the Total Consideration for
all Acquisitions (other than the ▇▇▇▇▇▇ Acquisition) during any
single fiscal year of the Borrower would not exceed $2,000,000 in
the aggregate, (iv) prior to consummating an Acquisition, the
Borrower shall have notified the Agent and the Banks in writing of
the proposed Acquisition in reasonable detail (including sources and
uses of funds therefor) and furnished the Agent and the Banks
historic and pro forma financial information and compliance
calculations reasonably satisfactory to the Agent, and (v) after
giving effect to the Acquisition, no Default or Event of Default
shall exist, including with respect to the covenants contained in
Sections 8.22, 8.23, 8.24, 8.25 and 8.26 hereof on a pro forma
basis;
(m) investments by the Borrower to establish and maintain a
captive insurance company to provide workers' compensation and
general liability insurance coverage to qualified independent
installers, primarily for their work for the Borrower and its
Subsidiaries, provided the aggregate amount of such investments does
not exceed $2,000,000 at any one time outstanding; and
(n) other investments, loans and advances in addition to those
otherwise permitted by this Section in an aggregate amount not to
exceed $1,000,000 at any one time outstanding.
In determining the amount of investments, acquisitions, loans, advances
and guaranties permitted under this Section, investments and acquisitions
shall always be taken at the original cost thereof (regardless of any
subsequent appreciation or depreciation therein), loans and advances
shall be taken at the principal amount thereof then remaining unpaid, and
guaranties shall be taken at the amount of the obligations guaranteed
thereby.
Section 8.10. Mergers, Consolidations and Sales. The Borrower shall
not, nor shall it permit any Subsidiary to, be a party to any merger or
consolidation, or sell, transfer, lease or otherwise dispose of its
Property, including any disposition of Property as part of a sale and
leaseback transaction, or in any event sell or discount (with or without
recourse) any of its notes or accounts receivable; provided, however,
that this Section shall not apply to nor operate to prevent:
(a) the sale or lease of inventory in the ordinary course of
business;
(b) the sale, transfer, lease, or other disposition of
Property of the Borrower or any Subsidiary to one another in the
ordinary course of its business;
(c) a merger of any Subsidiary with and into the Borrower or
any other Subsidiary; provided that, in the case of any merger
involving the Borrower, the Borrower is the corporation surviving
the merger and in the case of any other merger, a Wholly-owned
Subsidiary is the corporation surviving such merger;
(d) the sale of delinquent notes or accounts receivable in the
ordinary course of business for purposes of collection only (and not
for the purpose of any bulk sale or securitization transaction);
(e) the sale by Marquise of finance receivables in the
ordinary course of its business;
(f) the sale, transfer, or other disposition of any tangible
personal property that, in the reasonable business judgment of the
Borrower or its Subsidiary, has become uneconomical, obsolete, or
worn out, and which is disposed of in the ordinary course of
business;
(g) the sale by the Borrower of treasury stock acquired by it
as part of its stock repurchase program aggregating not more than
$2,000,000 during any 12-month period provided the proceeds of each
such sale are remitted as required by Section 1.9(b)(iv) hereof; and
(h) the sale, transfer, lease, or other disposition of other
Property of the Borrower or any Subsidiary aggregating for the
Borrower and its Subsidiaries not more than $500,000 during any 12-
month period.
In the event of any merger permitted by Section 8.10(c) above, the
Borrower shall give the Agent and the Banks prior written notice of any
such event and, immediately after giving effect to any such merger,
Schedule 6.2 of this Agreement shall be deemed amended excluding
reference to any such Subsidiary merged out of existence. So long as no
Default or Event of Default has occurred and is continuing or would arise
as a result thereof, upon the written request of the Borrower, the Agent
shall release its Lien on any Property sold pursuant to the provisions of
subsections (a), (d), (f) or (h) above.
Section 8.11. Maintenance of Subsidiaries. The Borrower shall not
assign, sell or transfer, nor shall it permit any Subsidiary to issue,
assign, sell or transfer, any shares of capital stock of a Subsidiary;
provided, however, that the foregoing shall not operate to prevent
(i) the Lien on the capital stock of each Subsidiary granted to the Agent
pursuant to the Collateral Documents, (ii) the issuance, sale and
transfer to any person of any shares of capital stock of a Subsidiary
solely for the purpose of qualifying, and to the extent legally necessary
to qualify, such person as a director of such Subsidiary, and (iii) any
transaction permitted by Section 8.10(c) above.
Section 8.12. Dividends and Certain Other Restricted Payments. The
Borrower shall not, nor shall it permit any Subsidiary to, (i) declare or
pay any dividends on or make any other distributions in respect of any
class or series of its capital stock (other than dividends payable solely
in its capital stock) or (ii) directly or indirectly purchase, redeem or
otherwise acquire or retire any of its capital stock; provided, however,
that the foregoing shall not operate to prevent:
(a) the making of dividends or distributions by any Wholly-
owned Subsidiary to its parent corporation or by any Subsidiary
solely to the Borrower or any Wholly-owned Subsidiary; and
(b) the repurchase by the Company of its common capital stock
pursuant to its stock repurchase program if at the time of each such
purchase and immediately after giving effect thereto, no Default or
Event of Default (including with respect to the covenant contained
in Section 8.24 hereof on a pro forma basis) shall occur or be
continuing.
Section 8.13. ERISA. The Borrower shall, and shall cause each
Subsidiary to, promptly pay and discharge all obligations and liabilities
arising under ERISA pertaining to a Plan of a character which if unpaid
or unperformed is reasonably likely to result in the imposition of a Lien
against any of its Properties. The Borrower shall, and shall cause each
Subsidiary to, promptly notify the Agent of (i) the occurrence of any
reportable event (as defined in ERISA) with respect to a Plan,
(ii) receipt of any notice from the PBGC of its intention to seek
termination of any Plan or appointment of a trustee therefor, (iii) its
intention to terminate or withdraw from any Plan, and (iv) the occurrence
of any event with respect to any Plan which would result in the
incurrence by the Borrower or any Subsidiary of any material liability,
fine or penalty, or any material increase in the contingent liability of
the Borrower or any Subsidiary with respect to any post-retirement
Welfare Plan benefit.
Section 8.14. Compliance with Laws. The Borrower shall, and shall
cause each Subsidiary to, comply in all respects with the requirements of
all federal, state and local laws, rules, regulations, ordinances and
orders applicable to or pertaining to its Properties or business
operations, where any such non-compliance, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect or is
reasonably likely to result in a Lien upon any material portion of their
Property.
Section 8.15. Burdensome Contracts With Affiliates. The Borrower shall
not, nor shall it permit any Subsidiary to, enter into any contract,
agreement or business arrangement with any of its Affiliates on terms and
conditions which are less favorable to the Borrower or such Subsidiary
than would be usual and customary in similar contracts, agreements or
business arrangements between Persons not affiliated with each other.
Section 8.16. No Changes in Fiscal Year. The Borrower shall not change
its fiscal year from its present basis without the prior written consent
of the Required Banks.
Section 8.17. Formation of Subsidiaries. Promptly upon the formation
or acquisition of any Subsidiary, the Borrower shall provide the Agent
and the Banks written notice thereof and shall do such acts and things as
are required of it to comply with Section 4 hereof, and then and
thereafter Schedule 6.2 of this Agreement shall be deemed amended from
and after such date to include reference to any such Subsidiary.
Section 8.18. Change in the Nature of Business. The Borrower shall not,
nor shall it permit any Subsidiary to, engage in any business or activity
if as a result the general nature of the business of the Borrower or any
Subsidiary would be changed in any material respect from the general
nature of the business engaged in by it as of the date of this Agreement
or as of the date such Person becomes a Subsidiary hereunder.
Section 8.19. Use of Loan Proceeds. The Borrower shall use the credit
extended under this Agreement solely for the purposes set forth in, or
otherwise permitted by, Section 6.4 hereof.
Section 8.20. No Restrictions on Subsidiary Distributions. Except as
provided herein, the Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly create or otherwise cause or suffer
to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of the Borrower or any Subsidiary to:
(a) guarantee the Obligations; (b) grant Liens on its assets to the Agent
for the benefit of the Banks as required by Section 4 hereof; (c) in the
case of any Subsidiary, pay dividends or make any other distribution on
any of such Subsidiary's capital stock or other equity interests owned by
the Borrower or any Subsidiary; (d) pay any indebtedness owed to the
Borrower or any Subsidiary; (e) make loans or advances to the Borrower or
any Subsidiary; or (f) transfer any of its property or assets to the
Borrower or any Subsidiary; provided, however, (i) clause (b) of the
foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness for Borrowed Money permitted
by this Agreement if such restrictions or conditions apply only to the
property or assets securing such Indebtedness and (ii) clause (b) of the
foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.
Section 8.21. Subordinated Debt. The Borrower shall not, nor shall it
permit any Subsidiary to, amend or modify any of the terms and conditions
relating to any Subordinated Debt or make any voluntary prepayment
thereof or affect any voluntary redemption thereof or make any payment on
account of Subordinated Debt which is prohibited under the terms of any
instrument or agreement subordinating the same to the Obligations. The
provisions of this Section shall not be in derogation of any other
covenant or obligation of the Borrower and its Subsidiaries under the
Loan Documents and shall not be construed as a waiver of, or a consent to
departure from, any such covenant or obligation.
Section 8.22. Cash Flow Leverage Ratio. As of the last day of each
fiscal quarter of the Borrower occurring during one of the periods
specified below, the Borrower shall not permit the Cash Flow Leverage
Ratio as of the last day of the relevant fiscal quarter to be greater
than or equal to the amount set forth below:
RATIO SHALL NOT BE
FROM AND INCLUDING TO AND INCLUDING GREATER THAN OR EQUAL TO
12/31/98 03/31/99 3.75 to 1.0
04/01/99 09/30/99 3.25 to 1.0
10/01/99 at all times 3.00 to 1.0
thereafter
Section 8.23. Net Worth. The Borrower shall, as of the last day of
each fiscal quarter, maintain Net Worth of not less than the Minimum
Required Amount. For purposes hereof, the term "Minimum Required Amount"
shall mean $31,000,000 and shall increase (but never decrease) as of the
last day of the fiscal second and fourth quarters of the Borrower ending
on or about June 30, 1998 and December 31, 1998 and as of the last day of
each fiscal second and fourth quarters of the Borrower thereafter by an
amount (if positive) equal to 50% of Net Income for the two fiscal
quarters then ended.
Section 8.24. Fixed Charge Coverage Ratio. As of the last day of each
fiscal quarter of the Borrower occurring during one of the periods
specified below, the Borrower shall maintain a ratio of (a) EBITDA for
the four fiscal quarters of the Borrower then ended less Capital
Expenditures incurred during such period to (b) Fixed Charges for the
same four fiscal quarter period then ended, of not less than the amount
set forth below:
RATIO SHALL NOT BE
FROM AND INCLUDING TO AND INCLUDING GREATER THAN OR EQUAL TO
12/31/98 09/30/99 1.25 to 1.0
10/01/99 at all times 1.50 to 1.0
thereafter
Section 8.25. Interest Coverage Ratio. The Borrower shall not, as of
the last day of each fiscal quarter of the Borrower (commencing with the
fiscal quarter ending on or about December 31, 1998), permit the ratio of
(a) EBIT for the four fiscal quarters of the Borrower then ended to (b)
Interest Expense for the same four fiscal quarters then ended to be less
than 3.0 to 1.0.
Section 8.26. Minimum EBITDA. (a) The Borrower shall as of the last
day of the fiscal quarter of the Borrower ending on or about June 30,
1998 maintain EBITDA at not less than $4,000,000, and (b) the Borrower
shall as of the last day of the fiscal quarter of the Borrower ending on
or about September 30, 1998 maintain EBITDA at not less than $4,500,000.
Section 8.27. Operating Leases. The Borrower shall not, nor shall it
permit any Subsidiary to, acquire the use or possession of any Property
under a lease or similar arrangement, whether or not the Borrower or any
Subsidiary has the express or implied right to acquire title to or
purchase such Property, at any time if, after giving effect thereto, the
aggregate amount of fixed rentals and other consideration payable by the
Borrower and its Subsidiaries under all such leases and similar
arrangements would exceed $6,500,000 during any fiscal year of the
Borrower. Capital Leases shall not be included in computing compliance
with this Section to the extent the Borrower's and its Subsidiaries'
liability in respect of the same is permitted by this Section.
Section 8.28. Interest Rate Protection. On or before May 31, 1998, the
Borrowers will hedge their interest rate risk on at least $10,000,000 in
principal amount of the Term Loans, or if less, the principal amount
outstanding on the Term Loans, through the use of one or more interest
rate swaps, interest rate caps, interest rate collars or other recognized
interest rate hedging arrangements (collectively, "Hedging
Arrangements"), with all of the foregoing to effectively limit the amount
of interest that the Borrowers must pay on notional amounts of not less
than such portion of the Term Loan to not more than a rate acceptable to
the Agent in its discretion for a period ending no earlier than April 20,
2001 and to be with the Banks, their respective Affiliates or with other
parties reasonably acceptable to the Required Banks. If the Borrower
enters into any Hedging Arrangements with any Bank, the Borrower's
obligations to such Bank in connection with such Hedging Arrangements do
not constitute usage of the Commitments of such Bank.
Section 8.29. Seller Debt Payments. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly make any payment or
other distribution on or in respect of any principal, interest or
premium, if any, of any of the Seller Debt or otherwise acquire, prepay
or retire any Seller Debt (such payments, distributions, acquisitions,
prepayments or retirements being hereinafter referred to collectively as
"Seller Debt Payments") if such Seller Debt Payment would be made prior
to the scheduled maturity thereof or prior to any other times required
for payment thereof as are in force and effect as of the date hereof.
SECTION ▇.▇▇▇▇▇▇ OF DEFAULT AND REMEDIES.
Section 9.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" hereunder:
(a) default for one Business Day in the payment when due of
all or any part of the principal of or interest on any Note (whether
at the stated maturity thereof or at any other time provided for in
this Agreement), or default for one Business Day in the payment when
due of any Reimbursement Obligation or of any fee or other
Obligation payable hereunder or under any other Loan Document;
(b) default in the observance or performance of any covenant
set forth in Sections 8.1, 8.4, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12,
8.19, 8.21, 8.22, 8.23, 8.24, 8.25, 8.26 or 8.29 hereof or of any
provision in any Loan Document dealing with the use, disposition or
remittance of the proceeds of Collateral or requiring the
maintenance of insurance thereon;
(c) default in the observance or performance of any covenant
set forth in Section 8.5 hereof which is not remedied within 5 days
after the earlier of (i) the date on which such failure shall first
become known to any responsible officer of the Borrower or
(ii) written notice thereof is given to the Borrower by the Agent;
(d) default in the observance or performance of any other
provision hereof or of any other Loan Document which is not remedied
within 30 days after the earlier of (i) the date on which such
failure shall first become known to any responsible officer of the
Borrower or (ii) written notice thereof is given to the Borrower by
the Agent;
(e) any representation or warranty made herein or in any other
Loan Document or in any certificate furnished to the Agent or the
Banks pursuant hereto or thereto or in connection with any
transaction contemplated hereby or thereby proves untrue in any
material respect as of the date of the issuance or making or deemed
making thereof;
(f) any event occurs or condition exists (other than those
described in subsections (a) through (e) above) which is specified
as an event of default under any of the other Loan Documents, or any
of the Loan Documents shall for any reason not be or shall cease to
be in full force and effect or is declared to be null and void, or
any of the Collateral Documents shall for any reason fail to create
a valid and perfected first priority Lien in favor of the Agent in
any Collateral purported to be covered thereby aggregating in excess
of $100,000 except as expressly permitted by the terms thereof, or
any Subsidiary takes any action for the purpose of terminating,
repudiating or rescinding any Loan Document executed by it or any of
its obligations thereunder;
(g) default shall occur under any Indebtedness for Borrowed
Money aggregating in excess of $1,000,000 issued, assumed or
guaranteed by the Borrower or any Subsidiary, or under any
indenture, agreement or other instrument under which the same may be
issued, and such default shall continue for a period of time
sufficient to permit the acceleration of the maturity of any such
Indebtedness for Borrowed Money (whether or not such maturity is in
fact accelerated), or any such Indebtedness for Borrowed Money shall
not be paid when due (whether by demand, lapse of time, acceleration
or otherwise);
(h) the Borrower shall not have in place a contract with
Sears, ▇▇▇▇▇▇▇ & Co. granting the Borrower a license on terms and
conditions reasonably acceptable to the Agent and Required Banks, to
sell, furnish and install roofing, gutters, doors and fencing under
the "Sears" name as a Sears authorized contractor to residential
customers;
(i) any judgment or judgments, writ or writs or warrant or
warrants of attachment, or any similar process or processes in an
aggregate amount in excess of $1,000,000 in excess of any applicable
insurance coverage shall be entered or filed against the Borrower or
any Subsidiary, or against any of its Property, and which remains
undischarged, unvacated, unbonded or unstayed for a period of 30
days;
(j) the Borrower or any Subsidiary, or any member of its
Controlled Group, shall fail to pay when due an amount or amounts
aggregating in excess of $1,000,000 which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or
notice of intent to terminate a Plan or Plans having aggregate
Unfunded Vested Liabilities in excess of $1,000,000 (collectively, a
"Material Plan") shall be filed under Title IV of ERISA by the
Borrower or any Subsidiary, or any other member of its Controlled
Group, any plan administrator or any combination of the foregoing;
or the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any
Material Plan or a proceeding shall be instituted by a fiduciary of
any Material Plan against the Borrower or any Subsidiary, or any
member of its Controlled Group, to enforce Section 515 or 4219(c)(5)
of ERISA and such proceeding shall not have been dismissed within 30
days thereafter; or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated;
(k) the Borrower or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make
an assignment for the benefit of creditors, (iv) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it
or any substantial part of its Property, (v) institute any
proceeding seeking to have entered against it an order for relief
under the United States Bankruptcy Code, as amended, to adjudicate
it insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its
debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or
other pleading denying the material allegations of any such
proceeding filed against it, (vi) take any corporate action in
furtherance of any matter described in parts (i) through (v) above,
or (vii) fail to contest in good faith any appointment or proceeding
described in Section 9.1(l) hereof; or
(l) a custodian, receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Borrower or any
Subsidiary or any substantial part of any of its Property, or a
proceeding described in Section 9.1(j)(v) shall be instituted
against the Borrower or any Subsidiary, and such appointment
continues undischarged or such proceeding continues undismissed or
unstayed for a period of 30 days.
Section 9.2. Non-Bankruptcy Defaults. When any Event of Default other
than those described in subsection (k) or (l) of Section 9.1 hereof has
occurred and is continuing, the Agent shall, by written notice to the
Borrower: (a) if so directed by the Required Banks, terminate the
remaining Commitments and all other obligations of the Banks hereunder on
the date stated in such notice (which may be the date thereof); (b) if so
directed by the Required Banks, declare the principal of and the accrued
interest on all outstanding Notes to be forthwith due and payable and
thereupon all outstanding Notes, including both principal and interest
thereon, shall be and become immediately due and payable together with
all other amounts payable under the Loan Documents without further
demand, presentment, protest or notice of any kind; and (c) if so
directed by the Required Banks, demand that the Borrower immediately pay
to the Agent the full amount then available for drawing under each or any
Letter of Credit, and the Borrower agrees to immediately make such
payment and acknowledges and agrees that the Banks would not have an
adequate remedy at law for failure by the Borrower to honor any such
demand and that the Agent, for the benefit of the Banks, shall have the
right to require the Borrower to specifically perform such undertaking
whether or not any drawings or other demands for payment have been made
under any Letter of Credit. The Agent, after giving notice to the
Borrower pursuant to Section 9.1(c) or this Section 9.2, shall also
promptly send a copy of such notice to the other Banks, but the failure
to do so shall not impair or annul the effect of such notice.
Section 9.3. Bankruptcy Defaults. When any Event of Default described
in subsections (k) or (l) of Section 9.1 hereof has occurred and is
continuing, then all outstanding Notes shall immediately become due and
payable together with all other amounts payable under the Loan Documents
without presentment, demand, protest or notice of any kind, the
obligation of the Banks to extend further credit pursuant to any of the
terms hereof shall immediately terminate and the Borrower shall
immediately pay to the Agent the full amount then available for drawing
under all outstanding Letters of Credit, the Borrower acknowledging and
agreeing that the Banks would not have an adequate remedy at law for
failure by the Borrower to honor any such demand and that the Banks, and
the Agent on their behalf, shall have the right to require the Borrower
to specifically perform such undertaking whether or not any draws or
other demands for payment have been made under any of the Letters of
Credit.
Section 9.4. Collateral for Undrawn Letters of Credit. (a) If the
prepayment of the amount available for drawing under any or all
outstanding Letters of Credit is required under Section 1.9(b) or under
Section 9.2 or 9.3 above, the Borrower shall forthwith pay the amount
required to be so prepaid, to be held by the Agent as provided in
subsection (b) below.
(b) All amounts prepaid pursuant to subsection (a) above, together
with amounts deposited with the Agent pursuant to Section 1.9(b)(iii)
hereof, shall be held by the Agent in a separate collateral account (such
account, and the credit balances, properties and any investments from
time to time held therein, and any substitutions for such account, any
certificate of deposit or other instrument evidencing any of the
foregoing and all proceeds of and earnings on any of the foregoing being
collectively called the "Account") as security for, and for application
by the Agent (to the extent available) to, the reimbursement of any
payment under any Letter of Credit then or thereafter made by the Agent,
and to the payment of the unpaid balance of any Loans and all other
Obligations. The Account shall be held in the name of and subject to the
exclusive dominion and control of the Agent for the benefit of the Agent
and the Banks. If and when requested by the Borrower, the Agent shall
invest funds held in the Account from time to time in direct obligations
of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America with a
remaining maturity of one year or less, provided that the Agent is
irrevocably authorized to sell investments held in the Account when and
as required to make payments out of the Account for application to
amounts due and owing from the Borrower to the Agent or Banks; provided,
however, that if (i) the Borrower shall have made payment of all such
obligations referred to in subsection (a) above, (ii) all relevant
preference or other disgorgement periods relating to the receipt of such
payments have passed, and (iii) no Letters of Credit, Commitments, Loans
or other Obligations remain outstanding hereunder, then the Agent shall
release to the Borrower any remaining amounts held in the Account.
Section 9.5. Notice of Default. The Agent shall give notice to the
Borrower under Section 9.1(c) hereof promptly upon being requested to do
so by any Bank and shall thereupon notify all the Banks thereof.
Section 9.6. Expenses. The Borrower agrees to pay to the Agent and
each Bank, and any other holder of any Note outstanding hereunder, all
expenses reasonably incurred or paid by the Agent and such Bank or any
such holder, including reasonable attorneys' fees and court costs, in
connection with any Default or Event of Default by the Borrower hereunder
or in connection with the enforcement of any of the Loan Documents.
SECTION 10.CHANGE IN CIRCUMSTANCES.
Section 10.1. Change of Law. Notwithstanding any other provisions of
this Agreement or any Note, if at any time any change in applicable law
or regulation or in the interpretation thereof makes it unlawful for any
Bank to make or continue to maintain any Eurodollar Loans or to perform
its obligations as contemplated hereby, such Bank shall promptly give
notice thereof to the Borrower and such Bank's obligations to make or
maintain Eurodollar Loans under this Agreement shall be suspended until
it is no longer unlawful for such Bank to make or maintain Eurodollar
Loans. The Borrower shall prepay on demand the outstanding principal
amount of any such affected Eurodollar Loans, together with all interest
accrued thereon and all other amounts then due and payable to such Bank
under this Agreement; provided, however, subject to all of the terms and
conditions of this Agreement, the Borrower may then elect to borrow the
principal amount of the affected Eurodollar Loans from such Bank by means
of Base Rate Loans from such Bank, which Base Rate Loans shall not be
made ratably by the Banks but only from such affected Bank.
Section 10.2. Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR. If on or prior to the first day of any Interest
Period for any Borrowing of Eurodollar Loans:
(a) the Agent determines that deposits in U.S. Dollars (in the
applicable amounts) are not being offered to it in the interbank
eurodollar market for such Interest Period, or that by reason of
circumstances affecting the interbank eurodollar market adequate and
reasonable means do not exist for ascertaining the applicable LIBOR,
or
(b) the Required Banks advise the Agent that (i) LIBOR as
determined by the Agent will not adequately and fairly reflect the
cost to such Banks of funding their Eurodollar Loans for such
Interest Period or (ii) that the making or funding of Eurodollar
Loans become impracticable,
then the Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, the
obligations of the Banks to make Eurodollar Loans shall be suspended.
Section 10.3. Increased Cost and Reduced Return. (a) If, on or after
the date hereof, the adoption of any applicable law, rule or regulation,
or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) shall subject any Bank (or its Lending Office) to any tax,
duty or other charge with respect to its Eurodollar Loans, its
Notes, its Letter(s) of Credit, or its participation in any thereof,
any Reimbursement Obligations owed to it or its obligation to make
Eurodollar Loans, issue a Letter of Credit, or to participate
therein, or shall change the basis of taxation of payments to any
Bank (or its Lending Office) of the principal of or interest on its
Eurodollar Loans, Letter(s) of Credit, or participations therein or
any other amounts due under this Agreement or any other Loan
Document in respect of its Eurodollar Loans, Letter(s) of Credit,
any participation therein, any Reimbursement Obligations owed to it,
or its obligation to make Eurodollar Loans, or issue a Letter of
Credit, or acquire participations therein (except for changes in the
rate of tax on the overall net income of such Bank or its Lending
Office imposed by the jurisdiction in which such Bank's principal
executive office or Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors
of the Federal Reserve System, but excluding with respect to any
Eurodollar Loans any such requirement included in an applicable
Eurodollar Reserve Percentage) against assets of, deposits with or
for the account of, or credit extended by, any Bank (or its Lending
Office) or shall impose on any Bank (or its Lending Office) or on
the interbank market any other condition affecting its Eurodollar
Loans, its Notes, its Letter(s) of Credit, or its participation in
any thereof, any Reimbursement Obligation owed to it, or its
obligation to make Eurodollar Loans, or to issue a Letter of Credit,
or to participate therein;
and the result of any of the foregoing is to increase the cost to such
Bank (or its Lending Office) of making or maintaining any Eurodollar
Loan, issuing or maintaining a Letter of Credit, or participating
therein, or to reduce the amount of any sum received or receivable by
such Bank (or its Lending Office) under this Agreement or under any other
Loan Document with respect thereto, by an amount deemed by such Bank to
be material, then, within 15 days after demand by such Bank (with a copy
to the Agent), the Borrower shall be obligated to pay to such Bank such
additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
(b) If, after the date hereof, any Bank or the Agent shall have
determined that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Lending Office)
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 had the effect of reducing the rate of return on
such Bank's capital as a consequence of its obligations hereunder to a
level below that which such Bank could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's
policies with respect to capital adequacy) by an amount deemed by such
Bank to be material, then from time to time, within 15 days after demand
by such Bank (with a copy to the Agent), the Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank for
such reduction.
(c) A certificate of a Bank claiming compensation under this
Section 10.3 and setting forth the additional amount or amounts to be
paid to it hereunder shall be prima facie correct. In determining such
amount, such Bank may use any reasonable averaging and attribution
methods.
(d) Notwithstanding the foregoing, no Bank shall be entitled to
make a claim for compensation under this Section 10.3 if such Bank has
not generally been making claims for compensation under similar
circumstances from other borrowers similarly situated under loan
agreements with provisions comparable to this Section entitling the Bank
to make such a claim.
Section 10.4. Lending Offices. Each Bank may, at its option, elect to
make its Loans hereunder at the branch, office or affiliate specified on
the appropriate signature page hereof (each a "Lending Office") for each
type of Loan available hereunder or at such other of its branches,
offices or affiliates as it may from time to time elect and designate in
a written notice to the Borrower and the Agent.
Section 10.5. Discretion of Bank as to Manner of Funding.
Notwithstanding any other provision of this Agreement, each Bank shall be
entitled to fund and maintain its funding of all or any part of its Loans
in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder with respect to
Eurodollar Loans shall be made as if each Bank had actually funded and
maintained each Eurodollar Loan through the purchase of deposits in the
interbank eurodollar market having a maturity corresponding to such
Loan's Interest Period and bearing an interest rate equal to LIBOR for
such Interest Period.
SECTION 11.THE AGENT AND ISSUING BANK.
Section 11.1. Appointment and Authorization of Agent. Each Bank hereby
appoints ▇▇▇▇▇▇ Trust and Savings Bank as the Agent under the Loan
Documents and hereby authorizes the Agent to take such action as Agent on
its behalf and to exercise such powers under the Loan Documents as are
delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto. The Banks expressly agree that the
Agent is not acting as a fiduciary of the Banks in respect of the Loan
Documents, the Borrower or otherwise, and nothing herein or in any of the
other Loan Documents shall result in any duties or obligations on the
Agent or any of the Banks except as expressly set forth herein.
Section 11.2. Agent and its Affiliates. The Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as
any other Bank and may exercise or refrain from exercising such rights
and power as though it were not the Agent, and the Agent and its
affiliates may accept deposits from, lend money to, and generally engage
in any kind of business with the Borrower or any Affiliate of the
Borrower as if it were not the Agent under the Loan Documents. The term
"Bank" as used herein and in all other Loan Documents, unless the context
otherwise clearly requires, includes the Agent in its individual capacity
as a Bank. References in Section 1 hereof to the Agent's Loans, or to
the amount owing to the Agent for which an interest rate is being
determined, refer to the Agent in its individual capacity as a Bank.
Section 11.3. Action by Agent. If the Agent receives from the Borrower
a written notice of an Event of Default pursuant to Section 9.5 hereof,
the Agent shall promptly give each of the Banks written notice thereof.
The obligations of the Agent under the Loan Documents are only those
expressly set forth therein. Without limiting the generality of the
foregoing, the Agent shall not be required to take any action hereunder
with respect to any Default or Event of Default, except as expressly
provided in Sections 9.2 and 9.5. Upon the occurrence of an Event of
Default, the Agent shall take such action to enforce its Lien on the
Collateral and to preserve and protect the Collateral as may be directed
by the Required Banks. Unless and until the Required Banks give such
direction, the Agent may (but shall not be obligated to) take or refrain
from taking such actions as it deems appropriate and in the best interest
of all the Banks. In no event, however, shall the Agent be required to
take any action in violation of applicable law or of any provision of any
Loan Document, and the Agent shall in all cases be fully justified in
failing or refusing to act hereunder or under any other Loan Document
unless it first receives any further assurances of its indemnification
from the Banks that it may require, including prepayment of any related
expenses and any other protection it requires against any and all costs,
expense, and liability which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall be entitled to
assume that no Default or Event of Default exists unless notified in
writing to the contrary by a Bank or the Borrower. In all cases in which
the Loan Documents do not require the Agent to take specific action, the
Agent shall be fully justified in using its discretion in failing to take
or in taking any action thereunder. Any instructions of the Required
Banks, or of any other group of Banks called for under the specific
provisions of the Loan Documents, shall be binding upon all the Banks and
the holders of the Obligations.
Section 11.4. Consultation with Experts. The Agent may consult with
legal counsel, independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken
by it in good faith in accordance with the advice of such counsel,
accountants or experts.
Section 11.5. Liability of Agent; Credit Decision. Neither the Agent
nor any of its directors, officers, agents, or employees shall be liable
for any action taken or not taken by it in connection with the Loan
Documents: (i) with the consent or at the request of the Required Banks
or (ii) in the absence of its own gross negligence or willful misconduct.
Neither the Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into or
verify: (i) any statement, warranty or representation made in connection
with this Agreement, any other Loan Document or any Credit Event;
(ii) the performance or observance of any of the covenants or agreements
of the Borrower or any Subsidiary contained herein or in any other Loan
Document; (iii) the satisfaction of any condition specified in Section 7
hereof, except receipt of items required to be delivered to the Agent; or
(iv) the validity, effectiveness, genuineness, enforceability,
perfection, value, worth or collectibility hereof or of any other Loan
Document or of any other documents or writing furnished in connection
with any Loan Document or of any Collateral; and the Agent makes no
representation of any kind or character with respect to any such matter
mentioned in this sentence. The Agent may execute any of its duties
under any of the Loan Documents by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Banks, the Borrower,
or any other Person for the default or misconduct of any such agents or
attorneys-in-fact selected with reasonable care. The Agent shall not
incur any liability by acting in reliance upon any notice, consent,
certificate, other document or statement (whether written or oral)
believed by it to be genuine or to be sent by the proper party or
parties. In particular and without limiting any of the foregoing, the
Agent shall have no responsibility for confirming the accuracy of any
compliance certificate or other document or instrument received by it
under the Loan Documents. The Agent may treat the payee of any Note as
the holder thereof until written notice of transfer shall have been filed
with the Agent signed by such payee in form satisfactory to the Agent.
Each Bank acknowledges that it has independently and without reliance on
the Agent or any other Bank, and based upon such information,
investigations and inquiries as it deems appropriate, made its own credit
analysis and decision to extend credit to the Borrower in the manner set
forth in the Loan Documents. It shall be the responsibility of each Bank
to keep itself informed as to the creditworthiness of the Borrower and
its Subsidiaries, and the Agent shall have no liability to any Bank with
respect thereto.
Section 11.6. Indemnity. The Banks shall ratably, in accordance with
their respective Percentages, indemnify and hold the Agent, and its
directors, officers, employees, agents and representatives harmless from
and against any liabilities, losses, costs or expenses suffered or
incurred by it under any Loan Document or in connection with the
transactions contemplated thereby, regardless of when asserted or
arising, except to the extent they are promptly reimbursed for the same
by the Borrower and except to the extent that any event giving rise to a
claim was caused by the gross negligence or willful misconduct of the
party seeking to be indemnified. The obligations of the Banks under this
Section shall survive termination of this Agreement.
Section 11.7. Resignation of Agent and Successor Agent. The Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrower. Upon any such resignation of the Agent, the Required Banks
shall have the right to appoint a successor Agent with (unless during the
continuance of any Default or Event of Default) the consent of the
Borrower (which shall not be unreasonably withheld or delayed). If no
successor Agent shall have been so appointed by the Required Banks, and
shall have accepted such appointment, within 30 days after the retiring
Agent's giving of notice of resignation then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be any Bank
hereunder or any commercial bank organized under the laws of the United
States of America or of any State thereof and having a combined capital
and surplus of at least $200,000,000. Upon the acceptance of its
appointment as the Agent hereunder, such successor Agent shall thereupon
succeed to and become vested with all the rights and duties of the
retiring Agent under the Loan Documents, and the retiring Agent shall be
discharged from its duties and obligations thereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this
Section 11 and all protective provisions of the other Loan Documents
shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent.
Section 11.8. Interest Rate Hedging Arrangements. By virtue of a
Bank's execution of this Agreement or an Assignment Agreement, as the
case may be, any Affiliate of such Bank with whom the Borrower has
entered into an agreement creating Hedging Liability shall be deemed a
Bank party hereto for purpose of any reference in a Loan Document to the
parties for whom the Agent is acting, it being understood and agreed that
the rights and benefits of such Affiliate under the Loan Documents
consist exclusively of such Affiliate's right to share in payments and
collections out of the Collateral and the Guaranties as more fully set
forth in other provisions hereof.
Section 11.9. Issuing Bank. The Issuing Bank shall act on behalf of
the Banks with respect to any Letters of Credit issued by it and the
documents associated therewith. The Issuing Bank shall have all of the
benefits and immunities (i) provided to the Agent in this Section 11 with
respect to any acts taken or omissions suffered by the Issuing Bank in
connection with Letters of Credit issued by it or proposed to be issued
by it and the Applications pertaining to such Letters of Credit as fully
as if the term "Agent", as used in this Section 11, included Issuing Bank
with respect to such acts or omissions and (ii) as additionally provided
in this Agreement with respect to such Issuing Bank.
SECTION 12. MISCELLANEOUS.
Section 12.1. Withholding Taxes. (a) Payments Free of Withholding.
Except as otherwise required by law and subject to Section 12.1(b)
hereof, each payment by the Borrower under this Agreement or the other
Loan Documents shall be made without withholding for or on account of any
present or future taxes (other than overall net income taxes on the
recipient) imposed by or within the jurisdiction in which the Borrower is
domiciled, any jurisdiction from which the Borrower makes any payment, or
(in each case) any political subdivision or taxing authority thereof or
therein. If any such withholding is so required, the Borrower shall make
the withholding, pay the amount withheld to the appropriate governmental
authority before penalties attach thereto or interest accrues thereon and
forthwith pay such additional amount as may be necessary to ensure that
the net amount actually received by each Bank and the Agent free and
clear of such taxes (including such taxes on such additional amount) is
equal to the amount which that Bank or the Agent (as the case may be)
would have received had such withholding not been made. If the Agent or
any Bank pays any amount in respect of any such taxes, penalties or
interest, the Borrower shall reimburse the Agent or such Bank for that
payment on demand in the currency in which such payment was made. If the
Borrower pays any such taxes, penalties or interest, it shall deliver
official tax receipts evidencing that payment or certified copies thereof
to the Bank or Agent on whose account such withholding was made (with a
copy to the Agent if not the recipient of the original) on or before the
thirtieth day after payment.
(b) U.S. Withholding Tax Exemptions. Each Bank that is not a
United States person (as such term is defined in Section 7701(a)(30) of
the Code) shall submit to the Borrower and the Agent on or before the
earlier of the date the initial Credit Event is made hereunder and
30 days after the date hereof, two duly completed and signed copies of
either Form 1001 (relating to such Bank and entitling it to a complete
exemption from withholding under the Code on all amounts to be received
by such Bank, including fees, pursuant to the Loan Documents and the
Loans) or Form 4224 (relating to all amounts to be received by such Bank,
including fees, pursuant to the Loan Documents and the Loans) of the
United States Internal Revenue Service. Thereafter and from time to
time, each Bank shall submit to the Borrower and the Agent such
additional duly completed and signed copies of one or the other of such
Forms (or such successor forms as shall be adopted from time to time by
the relevant United States taxing authorities) as may be (i) requested by
the Borrower in a written notice, directly or through the Agent, to such
Bank and (ii) required under then-current United States law or
regulations to avoid or reduce United States withholding taxes on
payments in respect of all amounts to be received by such Bank, including
fees, pursuant to the Loan Documents or the Loans.
(c) Inability of Bank to Submit Forms. If any Bank determines, as
a result of any change in applicable law, regulation or treaty, or in any
official application or interpretation thereof, that it is unable to
submit to the Borrower or the Agent any form or certificate that such
Bank is obligated to submit pursuant to subsection (b) of this
Section 12.1 or that such Bank is required to withdraw or cancel any such
form or certificate previously submitted or any such form or certificate
otherwise becomes ineffective or inaccurate, such Bank shall promptly
notify the Borrower and Agent of such fact and the Bank shall to that
extent not be obligated to provide any such form or certificate and will
be entitled to withdraw or cancel any affected form or certificate, as
applicable.
Section 12.2. No Waiver, Cumulative Remedies. No delay or failure on
the part of the Agent or any Bank or on the part of the holder or holders
of any of the Obligations in the exercise of any power or right under any
Loan Document shall operate as a waiver thereof or as an acquiescence in
any default, nor shall any single or partial exercise of any power or
right preclude any other or further exercise thereof or the exercise of
any other power or right. The rights and remedies hereunder of the
Agent, the Banks and of the holder or holders of any of the Obligations
are cumulative to, and not exclusive of, any rights or remedies which any
of them would otherwise have.
Section 12.3. Non-Business Days. Subject to Section 1.7(d) hereof, if
any payment hereunder becomes due and payable on a day which is not a
Business Day, the due date of such payment shall be extended to the next
succeeding Business Day on which date such payment shall be due and
payable. In the case of any payment of principal falling due on a day
which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in
effect, which accrued amount shall be due and payable on the next
scheduled date for the payment of interest.
Section 12.4. Documentary Taxes. The Borrower agrees to pay on demand
any documentary, stamp or similar taxes payable in respect of this
Agreement or any other Loan Document, including interest and penalties,
in the event any such taxes are assessed, irrespective of when such
assessment is made and whether or not any credit is then in use or
available hereunder.
Section 12.5. Survival of Representations. All representations and
warranties made herein or in any other Loan Document or in certificates
given pursuant hereto or thereto shall survive the execution and delivery
of this Agreement and the other Loan Documents, and shall continue in
full force and effect with respect to the date as of which they were made
as long as any credit is in use or available hereunder.
Section 12.6. Survival of Indemnities. All indemnities and other
provisions relative to reimbursement to the Banks of amounts sufficient
to protect the yield of the Banks with respect to the Loans and Letters
of Credit, including, but not limited to, Sections 1.12, 10.3 and 12.15
hereof, shall survive the termination of this Agreement and the other
Loan Documents and the payment of the Obligations.
Section 12.7. Sharing of Set-Off. Each Bank agrees with each other
Bank a party hereto that if such Bank shall receive and retain any
payment, whether by set-off or application of deposit balances or
otherwise, on any of the Loans or Reimbursement Obligations in excess of
its ratable share of payments on all such Obligations then outstanding to
the Banks, then such Bank shall purchase for cash at face value, but
without recourse, ratably from each of the other Banks such amount of the
Loans or Reimbursement Obligations, or participations therein, held by
each such other Banks (or interest therein) as shall be necessary to
cause such Bank to share such excess payment ratably with all the other
Banks; provided, however, that if any such purchase is made by any Bank,
and if such excess payment or part thereof is thereafter recovered from
such purchasing Bank, the related purchases from the other Banks shall be
rescinded ratably and the purchase price restored as to the portion of
such excess payment so recovered, but without interest. For purposes of
this Section, amounts owed to or recovered by the Issuing Bank in
connection with Reimbursement Obligations in which Banks have been
required to fund their participation shall be treated as amounts owed to
or recovered by the Issuing Bank as a Bank hereunder.
Section 12.8. Notices. Except as otherwise specified herein, all
notices hereunder and under the other Loan Documents shall be in writing
(including, without limitation, notice by telecopy) and shall be given to
the relevant party at its address or telecopier number set forth below,
or such other address or telecopier number as such party may hereafter
specify by notice to the Agent and the Borrower given by courier, by
United States certified or registered mail, by telecopy or by other
telecommunication device capable of creating a written record of such
notice and its receipt. Notices under the Loan Documents to the Banks
and the Agent shall be addressed to their respective addresses or
telecopier numbers set forth on the signature pages hereof, and to the
Borrower to:
Diamond Home Services, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (in case of notices of default) to:
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, P.C.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Each such notice, request or other communication shall be effective
(i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified in this Section or on the signature pages
hereof and a confirmation of such telecopy has been received by the
sender, (ii) if given by mail, 5 days after such communication is
deposited in the mail, certified or registered with return receipt
requested, addressed as aforesaid or (iii) if given by any other means,
when delivered at the addresses specified in this Section or on the
signature pages hereof; provided that any notice given pursuant to
Section 1 hereof shall be effective only upon receipt.
Section 12.9. Counterparts. This Agreement may be executed in any
number of counterparts, and by the different parties hereto on separate
counterpart signature pages, and all such counterparts taken together
shall be deemed to constitute one and the same instrument.
Section 12.10. Successors and Assigns. This Agreement shall be binding
upon the Borrower and its successors and assigns, and shall inure to the
benefit of the Agent and each of the Banks and the benefit of their
respective successors and assigns, including any subsequent holder of any
of the Obligations. The Borrower may not assign any of its rights or
obligations under any Loan Document without the written consent of all of
the Banks.
Section 12.11. Participants. Each Bank shall have the right at its own
cost to grant participations (to be evidenced by one or more agreements
or certificates of participation) in the Loans made and Reimbursement
Obligations and/or Commitments and/or participations in Swing Loans held
by such Bank at any time and from time to time to one or more other
Persons; provided that no such participation shall relieve any Bank of
any of its obligations under this Agreement, and, provided, further that
no such participant shall have any rights under this Agreement except as
provided in this Section, and the Agent shall have no obligation or
responsibility to such participant. Any agreement pursuant to which such
participation is granted shall provide that the granting Bank shall
retain the sole right and responsibility to enforce the obligations of
the Borrower under this Agreement and the other Loan Documents including,
without limitation, the right to approve any amendment, modification or
waiver of any provision of the Loan Documents, except that such agreement
may provide that such Bank will not agree to any modification, amendment
or waiver of the Loan Documents that would reduce the amount of or
postpone any fixed date for payment of any Obligation in which such
participant has an interest. Any party to which such a participation has
been granted shall have the benefits of Section 1.12 and Section 10.3
hereof. The Borrower authorizes each Bank to disclose to any participant
or prospective participant under this Section any financial or other
information pertaining to the Borrower.
Section 12.12. Assignment of Commitments by Banks. Each Bank shall have
the right at any time, with the prior consent of the Agent and, so long
as no Event of Default then exists, the Borrower (which consent of the
Borrower shall not be unreasonably withheld) to sell, assign, transfer or
negotiate all or any part of its Commitments (including the same
percentage of its Notes, outstanding Loans and Reimbursement Obligations
owed to it) to one or more commercial banks or other financial
institutions or investors, provided that such assignment shall be of a
fixed percentage (and not by its terms of varying percentage) of the
assigning Bank's Commitments; provided, however, that in order to make
any such assignment (i) unless the assignee Bank is assigning all of its
Commitments, the assigning Bank shall retain at least $5,000,000 in
outstanding Loans, interests in Letters of Credit and unused Commitments,
(ii) the assignee bank shall have outstanding Loans, interests in Letters
of Credit and unused Commitments of at least $5,000,000, (iii) each such
assignment shall be evidenced by a written agreement (substantially in
the form attached hereto as Exhibit H or in such other form acceptable to
the Agent) executed by such assigning Bank, such assignee bank or banks,
the Agent and, if required as provided above, the Borrower, which
agreement shall specify in each instance the portion of the Obligations
which are to be assigned to the assignee bank and the portion of the
Commitments of the assigning Bank to be assumed by the assignee bank or
banks, and (iv) the assigning Bank shall pay to the Agent a processing
fee of $3,500 and any out-of-pocket attorneys' fees and expenses incurred
by the Agent in connection with any such assignment agreement. Any such
assignee shall become a Bank for all purposes hereunder to the extent of
the Commitments it assumes and the assigning Bank shall be released from
its obligations, and will have released its rights, under the Loan
Documents to the extent of such assignment. The Borrower authorizes each
Bank to disclose to any purchaser or prospective purchaser of an interest
in the Loans and Reimbursement Obligations owed to it or its Commitments
under this Section any financial or other information pertaining to the
Borrower.
Section 12.13. Amendments. Any provision of this Agreement or the other
Loan Documents may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by (a) the Borrower, (b) the
Required Banks, and (c) if the rights or duties of the Agent are affected
thereby, the Agent; provided that:
(i) no amendment or waiver pursuant to this Section 12.13
shall (A) increase any Commitment of any Bank without the consent of
such Bank or (B) reduce the amount of or postpone the scheduled due
date for payment of any principal of or interest on any Loan or of
any Reimbursement Obligation or of any fee payable hereunder without
the consent of the Bank to which such payment is owing or which has
committed to make such Loan or Letter of Credit (or participate
therein) hereunder; and
(ii) no amendment or waiver pursuant to this Section 12.13
shall, unless signed by each Bank, change the definitions of
Revolving Credit Termination Date, or Required Banks, change the
provisions of this Section 12.13, Section 7, Section 9, release any
guarantor or all or any substantial part of the Collateral (except
as otherwise provided for in the Loan Documents), or affect the
number of Banks required to take any action hereunder or under any
other Loan Document.
Section 12.14. Headings. Section headings used in this Agreement are
for reference only and shall not affect the construction of this
Agreement.
Section 12.15. Costs and Expenses. The Borrower agrees to pay all costs
and expenses of the Agent in connection with the preparation,
negotiation, and administration of the Loan Documents, including, without
limitation, the reasonable fees and disbursements of counsel to the
Agent, in connection with the preparation and execution of the Loan
Documents, and any amendment, waiver or consent related thereto, whether
or not the transactions contemplated herein are consummated, together
with any fees and charges suffered or incurred by the Agent in connection
with periodic environmental audits, fixed asset appraisals, title
insurance policies, collateral filing fees and lien searches. The
Borrower further agrees to indemnify the Agent, each Bank, and their
respective directors, officers and employees, against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including,
without limitation, all reasonable expenses of litigation or preparation
therefor, whether or not the indemnified Person is a party thereto, or
any settlement arrangement arising from or relating to any such
litigation) which any of them may pay or incur arising out of or relating
to any Loan Document or any of the transactions contemplated thereby or
the direct or indirect application or proposed application of the
proceeds of any Loan or Letter of Credit, other than those which arise
from the gross negligence or willful misconduct of, or material breach of
the Loan Documents by, the party claiming indemnification and, except
with respect to the Agent, to the extent relating to the expenses of
preparing, executing and delivering this Agreement and the other Loan
Documents required as a condition precedent to the closing of the credit
facilities contemplated hereby. The Borrower, upon demand by the Agent
or a Bank at any time, shall reimburse the Agent or such Bank for any
legal or other expenses incurred in connection with investigating or
defending against any of the foregoing (including any settlement costs
relating to the foregoing) except if the same is directly due to the
gross negligence or willful misconduct of the party to be indemnified.
The obligations of the Borrower under this Section shall survive the
termination of this Agreement.
Section 12.16. Set-off. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such
rights, upon the occurrence of any Event of Default, each Bank and each
subsequent holder of any Obligation is hereby authorized by the Borrower
at any time or from time to time, without notice to the Borrower or to
any other Person, any such notice being hereby expressly waived, to set-
off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including
trust accounts, and in whatever currency denominated) and any other
indebtedness at any time held or owing by that Bank or that subsequent
holder to or for the credit or the account of the Borrower, whether or
not matured, against and on account of the Obligations of the Borrower to
that Bank or that subsequent holder under the Loan Documents, including,
but not limited to, all claims of any nature or description arising out
of or connected with the Loan Documents, irrespective of whether or not
(a) that Bank or that subsequent holder shall have made any demand
hereunder or (b) the principal of or the interest on the Loans or Notes
and other amounts due hereunder shall have become due and payable
pursuant to Section 9 and although said obligations and liabilities, or
any of them, may be contingent or unmatured.
Section 12.17. Entire Agreement. The Loan Documents constitute the
entire understanding of the parties thereto with respect to the subject
matter thereof and any prior agreements, whether written or oral, with
respect thereto are superseded hereby.
Section 12.18. Governing Law. This Agreement and the other Loan
Documents, and the rights and duties of the parties hereto, shall be
construed and determined in accordance with the internal laws of the
State of Illinois.
Section 12.19. Severability of Provisions. Any provision of any Loan
Document which is unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability
without invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
Section 12.20. Excess Interest. Notwithstanding any provision to the
contrary contained herein or in any other Loan Document, no such
provision shall require the payment or permit the collection of any
amount in excess of the maximum amount of interest permitted by
applicable law to be charged for the use or detention, or the forbearance
in the collection, of all or any portion of the Loans or other
obligations outstanding under this Agreement or any other Loan Document
("Excess Interest"). If any Excess Interest is provided for, or is
adjudicated to be provided for, herein or in any other Loan Document,
then in such event (a) the provisions of this Section 12.20 shall govern
and control; (b) neither the Borrower nor any guarantor or endorser shall
be obligated to pay any Excess Interest; (c) any Excess Interest that the
Agent or any Bank may have received hereunder shall, at the option of the
Agent, be (i) applied as a credit against the then outstanding principal
amount of Loans hereunder, accrued and unpaid interest thereon (not to
exceed the maximum amount permitted by applicable law) and any other
obligations, or all of the foregoing; (ii) refunded to the Borrower, or
(iii) any combination of the foregoing; (d) the interest rate payable
hereunder or under any other Loan Document shall be automatically subject
to reduction to the maximum lawful contract rate allowed under applicable
usury laws, and this Agreement and the other Loan Documents shall be
deemed to have been, and shall be, reformed and modified to reflect such
reduction in the relevant interest rate; and (e) neither the Borrower nor
any guarantor or endorser shall have any action against the Agent or any
Bank for any damages whatsoever arising out of the payment or collection
of any Excess Interest.
Section 12.21. Confidentiality. Any information disclosed by the
Borrower or any of its Subsidiaries to the Agent or any Bank which was
designated proprietary or confidential at the time of its receipt by the
Agent or such Bank, and which it is not otherwise in the public domain,
shall not be disclosed by the Agent or such Bank to any other Person
except (i) to its independent accountants and legal counsel (it being
understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such information and instructed to
keep such information confidential), (ii) pursuant to statutory and
regulatory requirements, (iii) pursuant to any mandatory court order,
subpoena or other legal process, (iv) to the Agent or any other Bank,
(v) pursuant to any agreement heretofore or hereafter made between such
Bank and the Borrower which permits such disclosure, (vi) in connection
with the exercise of any remedy under the Loan Documents, or
(vii) subject to an agreement containing provisions substantially the
same as those of this Section, to any participant in or assignee of, or
prospective participant in or assignee of, any Obligation or Commitments.
Section 12.22. Single Bank. If and so long as ▇▇▇▇▇▇ Trust and Savings
Bank is the only Bank hereunder, ▇▇▇▇▇▇ Trust and Savings Bank shall have
all rights, powers and privileges afforded to the Agent, the Banks, and
the Required Banks hereunder and under the other Loan Documents.
Section 12.23. Submission to Jurisdiction; Waiver of Jury Trial. The
Borrower hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Northern District of Illinois and of any
Illinois state court sitting in the ▇▇▇▇ County, Illinois for purposes of
all legal proceedings arising out of or relating to this Agreement, the
other Loan Documents or the transactions contemplated hereby or thereby.
The Borrower irrevocably waives, to the fullest extent permitted by law,
any objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an
inconvenient forum. THE BORROWER, THE AGENT AND EACH BANK HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED THEREBY.
[SIGNATURE PAGES TO FOLLOW]
Upon your acceptance hereof in the manner hereinafter set forth,
this Agreement shall constitute a contract between us for the uses and
purposes hereinabove set forth.
Dated as of this ____________ 1998.
DIAMOND HOME SERVICES, INC.
By
Name:
Title:
Accepted and agreed to as of the day and year last above written.
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, in
its individual capacity as a Bank
and as Agent
Address and Amount of Commitments: By . . . . . . . . . . . . . . . . .
Name: . . . . . . . . . . . . . .
Address: Title: Vice President
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with notices of Borrowing requests to:
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Revolving Credit Commitment:
$5,000,000
Term Loan Commitment:
$10,000,000
Lending Offices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LASALLE NATIONAL BANK
Address and Amount of Commitments: By . . . . . . . . . . . . . . . . .
Name: . . . . . . . . . . . . . .
Address: Title: Vice President
LaSalle National Bank
Suite 242
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with notices of Borrowing requests to:
Attention: ▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Revolving Credit Commitment:
$5,000,000
Term Loan Commitment:
$10,000,000
Lending Offices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
BANK OF AMERICA ILLINOIS
Address and Amount of Commitments: By . . . . . . . . . . . . . . . . .
Name: . . . . . . . . . . . . . .
Address: Title: Vice President
Bank of America Illinois
Suite 600
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with notices of Borrowing requests to:
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Revolving Credit Commitment:
$5,000,000
Term Loan Commitment:
$10,000,000
Lending Offices:
Suite 600
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT A
NOTICE OF PAYMENT REQUEST
[Date]
[Name of Bank]
[Address]
Attention:
Reference is made to the Credit Agreement, dated as of
______________, 1998, among Diamond Home Services, Inc., the Banks party
thereto, and ▇▇▇▇▇▇ Trust and Savings Bank, as Agent (the "Credit
Agreement"). Capitalized terms used herein and not defined herein have
the meanings assigned to them in the Credit Agreement. [The Borrower has
failed to pay its Reimbursement Obligation in the amount of $_________.
Your Bank's Percentage of the unpaid Reimbursement Obligation is
$_________] or [The undersigned has been required to return a payment by
the Borrower of a Reimbursement Obligation in the amount of $________.
Your Bank's Percentage of the returned Reimbursement Obligation is
$_________.]
Very truly yours,
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, as
Issuing Bank
By
Its
XHIBIT B
NOTICE OF BORROWING
Date: ______________, ____
To: ▇▇▇▇▇▇ Trust and Savings Bank, as Agent for the Banks parties to the
Credit Agreement dated as of ______________, 1998 (as extended,
renewed, amended or restated from time to time, the "Credit
Agreement") among Diamond Home Services, Inc., certain Banks which
are signatories thereto and ▇▇▇▇▇▇ Trust and Savings Bank, as Agent
Ladies and Gentlemen:
The undersigned, Diamond Home Services, Inc. (the "Borrower"),
refers to the Credit Agreement, the terms defined therein being used
herein as therein defined, and hereby gives you notice irrevocably,
pursuant to Section 1.6 of the Credit Agreement, of the Borrowing
specified below:
1. The Business Day of the proposed Borrowing is ___________,
____.
2. The aggregate amount of the proposed Borrowing is
$______________.
3. The Borrowing is being advanced under the [REVOLVING]
[TERM] Credit.
4. The Borrowing is to be comprised of $___________ of [BASE
RATE] [EURODOLLAR] Loans.
[5. THE DURATION OF THE INTEREST PERIOD FOR THE EURODOLLAR
LOANS INCLUDED IN THE BORROWING SHALL BE ____________ MONTHS.]
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed
Borrowing, before and after giving effect thereto and to the application
of the proceeds therefrom:
(a) the representations and warranties of the Borrower
contained in Section 6 of the Credit Agreement are true and correct
as though made on and as of such date (except to the extent such
representations and warranties relate to an earlier date, in which
case they are true and correct as of such date); and
(b) no Default or Event of Default has occurred and is
continuing or would result from such proposed Borrowing.
DIAMOND HOME SERVICES, INC.
By
Name
Title
EXHIBIT C
NOTICE OF CONVERSION/CONTINUATION
Date: ____________, ____
To: ▇▇▇▇▇▇ Trust and Savings Bank, as Agent for the Banks parties to the
Credit Agreement dated as of ___________, 1998 (as extended,
renewed, amended or restated from time to time, the "Credit
Agreement") among Diamond Home Services, Inc., certain Banks which
are signatories thereto and ▇▇▇▇▇▇ Trust and Savings Bank, as Agent
Ladies and Gentlemen:
The undersigned, Diamond Home Services, Inc. (the "Borrower"),
refers to the Credit Agreement, the terms defined therein being used
herein as therein defined, and hereby gives you notice irrevocably,
pursuant to Section 1.6 of the Credit Agreement, of the [CONVERSION]
[CONTINUATION] of the Loans specified herein, that:
1. The conversion/continuation Date is __________, ____.
2. The aggregate amount of the [REVOLVING] [TERM] Loans to be
[CONVERTED] [CONTINUED] is $______________.
3. The Loans are to be [CONVERTED INTO] [CONTINUED AS]
[EURODOLLAR] [BASE RATE] Loans.
4. [IF APPLICABLE:] The duration of the Interest Period for
the [REVOLVING] [TERM] Loans included in the [CONVERSION]
[CONTINUATION] shall be _________ months.
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the proposed
conversion/continuation date, before and after giving effect thereto and
to the application of the proceeds therefrom:
(a) the representations and warranties of the Borrower
contained in Section 6 of the Credit Agreement are true and correct
as though made on and as of such date (except to the extent such
representations and warranties relate to an earlier date, in which
case they are true and correct as of such date); provided, however,
that this condition shall not apply to the conversion of an
outstanding Eurodollar Loan to a Base Rate Loan; and
(b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed [CONVERSION]
[CONTINUATION].
DIAMOND HOME SERVICES, INC.
By:
Name
Title
EXHIBIT D
REVOLVING NOTE
U.S. $_______________ ________________, 19___
FOR VALUE RECEIVED, the undersigned, DIAMOND HOME SERVICES, INC., a
Delaware corporation (the "Borrower"), hereby promises to pay to the
order of ______________________ (the "Bank") on the Revolving Credit
Termination Date of the hereinafter defined Credit Agreement, at the
principal office of ▇▇▇▇▇▇ Trust and Savings Bank, as Agent, in Chicago,
Illinois, in immediately available funds, the principal sum of
___________________ Dollars ($__________) or, if less, the aggregate
unpaid principal amount of all Revolving Loans made by the Bank to the
Borrower pursuant to the Credit Agreement, together with interest on the
principal amount of each Revolving Loan from time to time outstanding
hereunder at the rates, and payable in the manner and on the dates,
specified in the Credit Agreement.
The Bank shall record on its books or records or on a schedule
attached to this Note, which is a part hereof, each Revolving Loan made
by it pursuant to the Credit Agreement, together with all payments of
principal and interest and the principal balances from time to time
outstanding hereon, whether the Revolving Loan is a Base Rate Loan or a
Eurodollar Loan, the interest rate and Interest Period applicable
thereto, provided that prior to the transfer of this Note all such
amounts shall be recorded on a schedule attached to this Note. The
record thereof, whether shown on such books or records or on a schedule
to this Note, shall be prima facie evidence of the same, provided,
however, that the failure of the Bank to record any of the foregoing or
any error in any such record shall not limit or otherwise affect the
obligation of the Borrower to repay all Revolving Loans made to it
pursuant to the Credit Agreement together with accrued interest thereon.
This Note is one of the Revolving Notes referred to in the Credit
Agreement dated as of ___________, 1998, among the Borrower, ▇▇▇▇▇▇ Trust
and Savings Bank, as Agent, and the Banks party thereto (the "Credit
Agreement"), and this Note and the holder hereof are entitled to all the
benefits and security provided for thereby or referred to therein, to
which Credit Agreement reference is hereby made for a statement thereof.
All defined terms used in this Note, except terms otherwise defined
herein, shall have the same meaning as in the Credit Agreement. This
Note shall be governed by and construed in accordance with the internal
laws of the State of Illinois.
Voluntary prepayments may be made hereon, certain prepayments are
required to be made hereon, and this Note may be declared due prior to
the expressed maturity hereof, all in the events, on the terms and in the
manner as provided for in the Credit Agreement.
The Borrower hereby waives demand, presentment, protest or notice of
any kind hereunder.
DIAMOND HOME SERVICES, INC.
By
Name
Title
EXHIBIT E
TERM NOTE
U.S. $_______________ ________________, 19___
FOR VALUE RECEIVED, the undersigned, DIAMOND HOME SERVICES, INC., a
Delaware corporation (the "Borrower"), hereby promises to pay to the
order of ______________________ (the "Bank") at the principal office of
▇▇▇▇▇▇ Trust and Savings Bank, as Agent, in Chicago, Illinois, in
immediately available funds, the principal sum of ___________________
Dollars ($__________) or, if less, the aggregate unpaid principal amount
of the Term Loan made or maintained by the Bank to the Borrower pursuant
to the Credit Agreement, in consecutive quarter-annual principal
installments in the amounts called for by Section 1.8(b) of the Credit
Agreement, commencing on December 31, 1998, and continuing on the last
day of each June, September, December and March occurring thereafter,
together with interest on the principal amount of such Term Loan from
time to time outstanding hereunder at the rates, and payable in the
manner and on the dates, specified in the Credit Agreement, except that
all principal and interest not sooner paid on the Term Loan evidenced
hereby shall be due and payable on March 31, 2003, the final maturity
date hereof.
The Bank shall record on its books or records or on a schedule
attached to this Note, which is a part hereof, the Term Loan made or
maintained by it pursuant to the Credit Agreement, together with all
payments of principal and interest and the principal balances from time
to time outstanding hereon, whether the Term Loan is a Base Rate Loan or
a Eurodollar Loan, the interest rate and Interest Period applicable
thereto, provided that prior to the transfer of this Note all such
amounts shall be recorded on a schedule attached to this Note. The
record thereof, whether shown on such books or records or on a schedule
to this Note, shall be prima facie evidence of the same, provided,
however, that the failure of the Bank to record any of the foregoing or
any error in any such record shall not limit or otherwise affect the
obligation of the Borrower to repay the Term Loan made to it pursuant to
the Credit Agreement together with accrued interest thereon.
This Note is one of the Term Notes referred to in the Credit
Agreement dated as of ______________, 1998, among the Borrower, ▇▇▇▇▇▇
Trust and Savings Bank, as Agent, and the Banks party thereto (the
"Credit Agreement"), and this Note and the holder hereof are entitled to
all the benefits and security provided for thereby or referred to
therein, to which Credit Agreement reference is hereby made for a
statement thereof. All defined terms used in this Note, except terms
otherwise defined herein, shall have the same meaning as in the Credit
Agreement. This Note shall be governed by and construed in accordance
with the internal laws of the State of Illinois.
Voluntary prepayments may be made hereon, certain prepayments are
required to be made hereon, and this Note may be declared due prior to
the expressed maturity hereof, all in the events, on the terms and in the
manner as provided for in the Credit Agreement.
The Borrower hereby waives demand, presentment, protest or notice of
any kind hereunder.
DIAMOND HOME SERVICES, INC.
By
Name
Title
XHIBIT F
SWING LINE NOTE
U.S. $______________ __________, 1998
On the Revolving Credit Termination Date, for value received, the
undersigned, DIAMOND HOME SERVICES, INC., a _________ corporation (the
"Borrower"), promises to pay to the order of ▇▇▇▇▇▇ Trust and Savings
Bank (the "Bank"), at the principal office of ▇▇▇▇▇▇ Trust and Savings
Bank in Chicago, Illinois, the principal sum of (i) _________________
Dollars ($______________), or (ii) such lesser amount as may at the time
of the maturity hereof, whether by acceleration or otherwise, be the
aggregate unpaid principal amount of all Swing Loans owing from the
Borrower to the Bank under the Swing Line Commitment provided for in the
Credit Agreement hereinafter mentioned.
This Note evidences Swing Loans made and to be made to the Borrower
by the Bank under the Swing Line Commitment provided for under that
certain Credit Agreement dated as of __________, 1998 by and between the
Borrower, ▇▇▇▇▇▇ Trust and Savings Bank individually and as Agent and
certain banks which are or may from time to time become parties thereto
(the "Credit Agreement"), and the Borrower hereby promises to pay
interest at the office specified above on each Swing Loan evidenced
hereby at the rates and times specified therefor in the Credit Agreement.
Each Swing Loan made under the Swing Line Commitment provided for in
the Credit Agreement by the Bank to the Borrower against this Note, any
repayment of principal hereon and the interest rates applicable thereto
shall be endorsed by the holder hereof on the reverse side of this Note
or recorded on the books and records of the holder hereof (provided that
such entries shall be endorsed on the reverse side hereof prior to any
negotiation hereof) and the Borrower agrees that in any action or
proceeding instituted to collect or enforce collection of this Note, the
entries so endorsed on the reverse side hereof or recorded on the books
and records of the Bank shall be prima facie evidence of the unpaid
balance of this Note and the interest rates applicable thereto.
This Note is issued by the Borrower under the terms and provisions
of the Credit Agreement, and this Note and the holder hereof are entitled
to all of the benefits and security provided for thereby or referred to
therein, to which reference is hereby made for a statement thereof. This
Note may be declared to be, or be and become, due prior to its expressed
maturity as specified in the Credit Agreement, and certain prepayments
are required to be made hereon, all in the events, on the terms and with
the effects provided in the Credit Agreement. All capitalized terms used
herein without definition shall have the same meaning herein as such
terms have in the Credit Agreement.
This Note shall be construed in accordance with, and governed by,
the internal laws of the State of Illinois without regard to principles
of conflict of law.
The Borrower hereby waives demand, presentment, protest or notice of
any kind hereunder.
DIAMOND HOME SERVICES, INC.
By
Its
EXHIBIT G
COMPLIANCE CERTIFICATE
FOR
DIAMOND HOME SERVICES, INC.
This Compliance Certificate is furnished to ▇▇▇▇▇▇ Trust and Savings
Bank, as Agent (the "Agent") pursuant to that certain Credit Agreement
dated as of ___________, 1998, among Diamond Home Services, Inc. (the
"Borrower"), ▇▇▇▇▇▇ Trust and Savings Bank, as Agent, and the Banks party
thereto (the "Credit Agreement"). Unless otherwise defined herein, the
terms used in this Compliance Certificate have the meanings ascribed
thereto in the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I a m t h e d u l y e l e c t e d
_____________________________________ of the Borrower;
2. I have reviewed the terms of the Credit Agreement and I
have made, or have caused to be made under my supervision, a
detailed review of the transactions and conditions of the Borrower
and its Subsidiaries during the accounting period covered by the
attached financial statements;
3. The examinations described in paragraph 2 did not
disclose, and I have no knowledge of, the existence of any condition
or the occurrence of any event which constitutes a Default or Event
of Default during or at the end of the accounting period covered by
the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. The Attachment hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain
covenants of the Credit Agreement, all of which data and
computations are, to the best of my knowledge, correct and have been
made in accordance with the relevant Sections of the Credit
Agreement.
Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period
during which it has existed and the action which the Borrower has taken,
is taking, or proposes to take with respect to each such condition or
event:
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
The foregoing certifications, together with the computations set
forth in the Attachment hereto and the financial statements delivered
with this Certificate in support hereof, are made and delivered this
_________ day of __________________ 19___.
DIAMOND HOME SERVICES, INC.
By
. . . . . . . ,
(Name)(Title)
ATTACHMENT TO COMPLIANCE CERTIFICATE
FOR
DIAMOND HOME SERVICES, INC.
Compliance Calculations for Credit Agreement
Dated as of ____________, 1998
Calculations as of _____________, 19___
_________________________________________________________________________
__
A. CASH FLOW LEVERAGE RATIO (SECTION 8.22)
1. Total Funded Debt, as defined
2. Net Income, as defined
3. Amounts deducted in arriving at Net Income in respect of
(a) Interest Expense as defined . . .
(b) Federal, state, local
income taxes . . . .
(c) Depreciation and amortization . .
4. Sum of Lines 2, 3(a), 3(b) and 3(c) ("EBITDA")
5. Net income attributable to acquired company
during same period not otherwise included above
6. Amounts deducted in arriving at Net Income (Line 5 above)
in respect of
(a) Interest expense
attributable to acquired
company . . . .
(b) Federal, state, local
income taxes
attributable to acquired
company . . . .
(c) Depreciation and amortization
attributable to acquired
company . . . .
7. Sum of Lines 5, 6(a), 6(b) and 6(c) ("Adjusted EBITDA")
8. Ratio of Total Funded Debt (Line 1)
to Adjusted EBITDA (Line 7) ("Cash Flow
Leverage Ratio")
:1
9. As listed in Section 8.22, for the date of
this Certificate, the Cash Flow Leverage Ratio shall
not be greater than
:1
10. Company is in compliance?
(Circle yes or no) Yes/No
B. NET WORTH (SECTION 8.23)
1. Net Worth, as defined
2. As listed in Section 8.23, for the
date of this Certificate, Net
Worth (Line 1) must not be less than the Minimum
Required Amount $
3. Company is in compliance?
(Circle yes or no) Yes/No
C. FIXED CHARGE COVERAGE RATIO (SECTION 8.24)
1. EBITDA
(from Line A4 above)
2. Capital Expenditures, as defined
3. Aggregate amount of principal
payments required to be made on
Seller Debt and Total Funded Debt . . .
4. Interest Expense, as defined . . . .
5. Aggregate amount expended to
repurchase common capital stock
of Borrower . . . .
6. Sum of Lines 3, 4 and 5 ("Fixed Charges")
7. Ratio of the (i) difference between (a)
EBITDA (Line 1) and (b) Capital Expenditures
(Line 2) to (ii) Fixed
Charges (Line 5) ("Fixed Charge
Coverage Ratio")
:1
8. As listed in Section 8.24, for
the date of this Certificate, the
Fixed Charge Coverage Ratio
must not be less than
:1
9. Company is in compliance?
(Circle yes or no) Yes/No
D. INTEREST COVERAGE RATIO (SECTION 8.25)
1. Net Income, as defined
2. Amounts deducted in arriving at Net Income in
respect of:
(a) Interest Expense . . . .
(b) Federal, state, and local
income taxes . . . .
3. Sum of Lines 1, 2(a) and 2(b) ("EBIT")
4. Interest Expense, as defined
5. Ratio of EBIT (Line 3) to
Interest Expense (Line 4)
("Interest Coverage Ratio")
:1
6. As listed in Section 8.25, for
the date of this Certificate,
the Interest Coverage Ratio must
not be less than
:1
7. Company is in compliance?
(Circle yes or no) Yes/No
E. MINIMUM EBITDA (SECTION 8.26)
1. EBITDA (From Line A4 above)
2. As listed in Section 8.26, for the date of this Certificate,
EBITDA (Line 1) must not be less than $
3. Company is in compliance?
(Circle yes or no) Yes/No
EXHIBIT H
ASSIGNMENT AND ACCEPTANCE
Dated _____________, _______
Reference is made to the Credit Agreement dated as of __________,
1998 (the "Credit Agreement") among Diamond Home Services, Inc., a
Delaware corporation, the Banks (as defined in the Credit Agreement) and
▇▇▇▇▇▇ Trust and Savings Bank, as Agent for the Banks (the "Agent").
Terms defined in the Credit Agreement are used herein with the same
meaning.
_____________________________________________________ (the
"Assignor") and _________________________ (the "Assignee") agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, a
_______% interest in and to all of the Assignor's rights and
obligations under the Credit Agreement as of the Effective Date (as
defined below), including, without limitation, such percentage
interest in the Assignor's Commitments as in effect on the Effective
Date and the Loans, if any, owing to the Assignor on the Effective
Date and the Assignor's Percentage of any outstanding L/C
Obligations and Swing Loans, if any.
2. The Assignor (i) represents and warrants that as of the
date hereof (A) its Revolving Credit Commitment is $_____________
and its Term Loan Commitment is $______________, (B) the aggregate
outstanding principal amount of Loans made by it under the Credit
Agreement that have not been repaid is $____________ ($_____________
of Revolving Loans and $_____________ of Term Loans ) and a
description of the interest rates and interest periods of such Loans
is attached as Schedule 1 hereto, (C) the aggregate principal amount
of Assignor's Percentage of outstanding L/C Obligations is
$____________, and (D) the aggregate amount of Assignor's
participations (whether or not funded) in outstanding Swing Loans is
$____________; (ii) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim, lien, or
encumbrance of any kind; (iii) makes no representation or warranty
and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant
thereto; and (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the
Borrower or any Subsidiary or performance or observance by the
Borrower or any Subsidiary of any of its obligations under the
Credit Agreement or any other instrument or document furnished
pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial
statements referred to in Section 8.5 thereof and such other
documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Bank 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 the Credit Agreement; (iii) appoints and
authorizes the Agent to take such action as Agent on its behalf and
to exercise such powers under the Credit Agreement and the other
Loan Documents as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto;
(iv) agrees that it will perform in accordance with their terms all
of the obligations which by the terms of the Credit Agreement are
required to be performed by it as a Bank; and (v) specifies as its
lending office (and address for notices) the offices set forth
beneath its name on the signature pages hereof.
4. As consideration for the assignment and sale contemplated
in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in Federal funds an amount equal to
$________________1. It is understood that commitment and/or
facility fees accrued to the Effective Date with respect to the
interest assigned hereby are for the account of the Assignor and
such fees accruing from and including the date hereof are for the
account of the Assignee. Each of the Assignor and the Assignee
hereby agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party hereto, it
shall receive the same for the account of such other party to the
extent of such other party's interest therein and shall promptly pay
the same to such other party.
5. The effective date for this Assignment and Acceptance
shall be _____________, 19___ (the "Effective Date"). Following the
execution of this Assignment and Acceptance, it will be delivered to
the Agent for acceptance and recording by the Agent and, if
required, the Borrower.
6. Upon such acceptance and recording, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the
rights and obligations of a Bank thereunder and (ii) the Assignor
shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the
Credit Agreement.
7. Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments under the Credit
Agreement in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor
and Assignee shall make all appropriate adjustments in payments
under the Credit Agreement for periods prior to the Effective Date
directly between themselves.
8. In accordance with Section 12.12 of the Credit Agreement,
the Assignor and the Assignee request and direct that the Agent
prepare and cause the Borrower to execute and deliver to the
1 Amount should combine principal together with accrued interest
and breakage compensation, if any, to be paid by the
Assignee, net of any portion of any upfront fee to be paid by the
Assignor to the Assignee. It may be preferable in an
appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.
Assignee the relevant Notes payable to the Assignee in the amount of
its Commitments and new Notes to the Assignor in the amount of its
Commitments after giving effect to this assignment.
9. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Illinois.
[ASSIGNOR BANK]
By
Name
Title
[ASSIGNEE BANK]
By
Name
Title
Lending office (and address for
notices):
Accepted and consented this
____ day of ___________, 19__
DIAMOND HOME SERVICES, INC.
By . . . . . . . . . . . . . . .
Name . . . . . . . . . . . . .
Title . . . . . . . . . . . .
Accepted and consented to by the Agent this
_______ day of ___________, 19__
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, as Agent
By . . . . . . . . . . . . . . .
Name . . . . . . . . . . . . .
Title . . . . . . . . . . . .
SCHEDULE I
PRINCIPAL AMOUNT TYPE OF LOAN INTEREST RATE MATURITY DATE
ATTACHMENT ONE
SCHEDULE 6.2
NAME JURISDICTION OF PERCENTAGE
INCORPORATION OWNERSHIP
Diamond Acquisition Corp. DELAWARE 100%
▇▇▇▇▇▇ Southeastern FLORIDA 100%
Corporation
Foreline Security Corporation FLORIDA 100%
Marquise Financial Services, DELAWARE 100%
Inc.
▇▇▇▇▇▇ Southeastern Realty, FLORIDA 100%
Inc.
Diamond Exteriors, Inc. DELAWARE 100%
All of the above-listed Subsidiaries are Material Subsidiaries.
SCHEDULE 8.7
OTHER INDEBTEDNESS
AT DECEMBER 31, 1997:
DESCRIPTION OUTSTANDING NOTES
12/31/97
$15,000,000 unsecured $0 To be terminated at
line of credit closing
Non-interest bearing $1,098,000
notes to stockholder
Notes to ▇▇▇▇▇▇ former $1,100,000 To be paid shortly
ESOP employees after closing
Guarantees by the $0
Borrower and Diamond
Acquisition Corp. of
$8,000,000 of the
Seller Debt
SCHEDULE 8.8
OTHER LIENS
Notes to ▇▇▇▇▇▇ former ESOP employees-secured by
receivables/inventory/fixed assets (See Schedule 8.7)
Permitted Marquise Financing-secured by loan receivables/other assets
$350,000 in Cash Collateral to secure $350,000 letter of credit issued by
American National Bank and Trust Company of Chicago for the account of
the Borrower and its subsidiaries
$700,000 in Cash Collateral to secure $700,000 letter of credit issued by
NationsBank for the account of ▇▇▇▇▇▇