EXHIBIT 10.1.21
$53,000,000
CREDIT AGREEMENT
among
▇▇▇▇▇▇▇ HOLDINGS INC.,
▇▇▇▇▇▇▇ ACQUISITION INC.,
KSCO ACQUISITION CORPORATION,
▇▇▇▇▇▇▇ FASTENERS INC.,
PCI GROUP, INC.,
▇▇▇ FASTENER COMPANY, LLC,
SCOMEX, INC.,
VARIOUS BANKS
and
CREDIT AGRICOLE INDOSUEZ,
as Administrative Agent
SWISS BANK CORPORATION, STAMFORD BRANCH,
as Documentation and Syndication Agent
and
SBC WARBURG DILLON READ INC.,
as Advisor and Arranger
__________________________________
Dated as of November 26, 1997
__________________________________
TABLE OF CONTENTS
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Section 1. Definitions and Accounting Terms 2
1.01 Defined Terms 2
1.02 Computation of Time Periods 24
1.03 Accounting Terms 24
Section 2. Amount and Terms of Credit 24
2.01 The Commitments 24
2.02 Minimum Amount of Each Borrowing 25
2.03 Notice of Borrowing 25
2.04 Disbursement of Funds 26
2.05 Notes 26
2.06 Conversions 27
2.07 Pro Rata Borrowings 28
2.08 Interest 28
2.09 Interest Periods 28
2.10 Increased Costs, Illegality, Etc. 29
2.11 Compensation 31
2.12 Change of Lending Office 32
2.13 Replacement of Banks 32
2.14 Notice of Certain Costs 33
Section 3. Letters of Credit 33
3.01 Letters of Credit 33
3.02 Minimum Stated Amount 34
3.03 Letter of Credit Requests 34
3.04 Letter of Credit Participations 34
3.05 Agreement to Repay Letter of Credit Drawings 36
3.06 Increased Costs 37
Section 4. Commitment Commission; Fees; Reductions of Commitment 37
4.01 Fees 37
4.02 Voluntary Termination of Unutilized Commitments 38
4.03 Mandatory Reduction of Commitments 38
Section 5. Prepayments; Payments; Taxes 39
5.01 Voluntary Prepayments 39
5.02 Mandatory Repayments and Commitment Reductions 39
5.03 Method and Place of Payment 43
5.04 Net Payments 43
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Section 6. Conditions Precedent to Loans on the Initial Borrowing Date 45
6.01 Execution of Agreement Notes 45
6.02 Officer's Certificate 46
6.03 Opinions of Counsel 46
6.04 Corporate Documents; Proceedings 46
6.05 Employee Benefit Plans; Shareholders Agreements;
Management Agreements; Employment Agreements;
and Debt Agreements 46
6.06 Equity Transactions; Capital Contributions 47
6.07 Consummation of the Acquisition 47
6.08 Security Agreement 48
6.09 Material Adverse Change, Etc. 49
6.10 Litigation 49
6.11 Fees, Etc. 49
6.12 Solvency Opinion; Environmental Assessments 49
6.13 Insurance Policies 50
6.14 Approvals 50
6.15 Financial Statements; Projections; Management Letters 50
6.16 Refinancing 51
6.17 Consent Letter 52
6.18 Mortgage; Title Insurance; Surveys; Etc. 52
6.19 Initial Borrowing Base Certificate 52
6.20 Direction Letters 52
Section 7. Conditions Precedent to All Credit Events 53
7.01 No Default; Representations and Warranties 53
7.02 Material Adverse Change, Etc. 53
7.03 Litigation 53
7.04 Notice of Borrowing; Letter of Credit Request;
Other Documents 54
Section 8. Representations, Warranties and Agreements 54
8.01 Corporate Status 54
8.02 Corporate Power and Authority 55
8.03 No Violation 55
8.04 Governmental Approvals 55
8.05 Financial Statements; Financial Conditions;
Undisclosed Liabilities; Projections; Etc. 55
8.06 Litigation 57
8.07 True and Complete Disclosure 57
8.08 Use of Proceeds; Margin Regulations 57
8.09 Tax Returns and Payments 58
8.10 Compliance with ERISA 58
8.11 The Security Documents 59
8.12 Representations and Warranties in Documents 60
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8.13 Properties 60
8.14 Capitalization 60
8.15 Subsidiaries 60
8.16 Compliance with Statutes, Etc. 60
8.17 Investment Company Act 61
8.18 Public Utility Holding Company Act 61
8.19 Environmental Matters 61
8.20 Labor Relations 62
8.21 Patents, Licenses, Franchises and Formulas 62
8.22 Indebtedness 63
8.23 Restrictions on or Relating to Subsidiaries 63
8.24 The Transaction 63
8.25 Leases 64
8.26 Collective Bargaining Agreements;
Tax Allocation Agreements 64
Section 9. Affirmative Covenants 64
9.01 Information Covenants 64
9.02 Books, Records and Inspections 68
9.03 Maintenance of Property and Insurance 68
9.04 Corporate Franchises 69
9.05 Compliance with Statutes, Etc. 69
9.06 Compliance with Environmental Laws 69
9.07 ERISA 70
9.08 End of Fiscal Years; Fiscal Quarters 71
9.09 Performance of Obligations 71
9.10 Payment of Taxes 71
9.11 Interest Rate Protection 71
9.12 Use of Proceeds 71
9.13 UCC Searches 71
9.14 Intellectual Property Rights 71
9.15 Registry 72
9.16 Ownership of Subsidiaries 72
9.17 Further Actions 72
9.18 Raw Material Purchases by the Borrower 74
9.19 Bank Deposit Accounts; Concentration Accounts 74
9.20 Conditions Subsequent to Initial Credit Event 74
Section 10. Negative Covenants 76
10.01 Liens 76
10.02 Consolidation, Merger, Purchase or Sale of Assets, Etc. 77
10.03 Dividends 79
10.04 Leases 80
10.05 Indebtedness 81
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10.06 Advances, Investments and Loans 81
10.07 Transactions with Affiliates 83
10.08 Capital Expenditures 83
10.09 Fixed Charge Coverage Ratio 84
10.10 Funded Indebtedness to Consolidated EBITDA 84
10.11 Limitation on Modifications of Certificate of
Incorporation, By-Laws and Certain Other Agreements; Etc. 85
10.12 Limitation on Certain Restrictions on Subsidiaries 86
10.13 Limitation on Issuance of Capital Stock 86
10.14 Business 87
10.15 Limitation on Creation of Subsidiaries 87
10.16 Concentration Account; Bank Deposit Accounts 88
10.17 Limitation on Creation of Plans 88
10.18 Negative Pledge 88
10.19 Partnerships, Etc 88
10.20 Minimum Net Worth 88
Section 11. Events of Default 88
11.01 Payments 88
11.02 Representations, Etc. 89
11.03 Covenants 89
11.04 Default Under Other Agreements 89
11.05 Bankruptcy, Etc. 89
11.06 ERISA 90
11.07 Security Documents 90
11.08 Parent Guaranty and Subsidiary Guaranty 90
11.09 Judgments 91
11.10 Credit Documents 91
11.11 Change of Control 91
Section 12. The Administrative Agent and the D&S Agent 92
12.01 Appointment 92
12.02 Delegation of Duties 92
12.03 Exculpatory Provisions 92
12.04 Reliance by the Administrative Agent and the D&S Agent 93
12.05 Notice of Default 93
12.06 Non-Reliance on Administrative Agent, D&S Agent
and Other Banks 93
12.07 Indemnification 94
12.08 The Administrative Agent and the D&S Agent in
Their Individual Capacities 94
12.09 Successor Administrative Agent 95
12.10 Resignation by Administrative Agent 95
Section 13. The Parent Guaranty 96
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13.01 The Guaranty 96
13.02 Bankruptcy 96
13.03 Nature of Liability 96
13.04 Guaranty Absolute 97
13.05 Independent Obligation 97
13.06 Authorization 97
13.07 Reliance 98
13.08 Subordination 98
13.09 Waiver 98
13.10 Guaranty Continuing 99
13.11 Binding Nature of Guaranties 99
13.12 Judgments Binding 99
Section 14. Subsidiary Guaranty 99
14.01 The Subsidiary Guaranty 99
14.02 Bankruptcy 100
14.03 Nature of Liability 101
14.04 Subsidiary Guaranty Absolute 101
14.05 Independent Obligation 101
14.06 Authorization 101
14.07 Reliance 102
14.08 Subordination 102
14.09 Waiver 102
14.10 Subsidiary Guaranty Continuing 103
14.11 Binding Nature of Guaranties 103
14.12 Judgments Binding 104
Section 15. Miscellaneous 104
15.01 Payment of Expenses, Etc. 104
15.02 Right of Setoff 105
15.03 Notices 105
15.04 Benefit of Agreement 106
15.05 No Waiver; Remedies Cumulative 107
15.06 Payment Pro Rata 107
15.07 Calculations; Computations 108
15.08 Effectiveness; Counterparts 108
15.09 Headings Descriptive 108
15.10 Amendment or Waiver 108
15.11 Survival 109
15.12 Domicile of Loans 109
15.13 Confidentiality 109
15.14 Governing Law; Submission to Jurisdiction;
Venue; Waiver of Jury Trial 110
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SCHEDULES
SCHEDULE I Commitments
SCHEDULE II Projections
SCHEDULE III Real Property
SCHEDULE IV Subsidiaries
SCHEDULE V Insurance
SCHEDULE VI ERISA Matters
SCHEDULE VII Environmental Matters
SCHEDULE VIII Litigation
SCHEDULE IX Bank Deposit Accounts
SCHEDULE X Existing Indebtedness
SCHEDULE XI Ownership of Parent Capital Stock
EXHIBITS
EXHIBIT A-1 Form of Notice of Borrowing
EXHIBIT A-2 Form of Notice of Conversion
EXHIBIT B-1 Form of Term Note
EXHIBIT B-2 Form of Revolving Note
EXHIBIT C Form of Letter of Credit Request
EXHIBIT D Form of Opinion
EXHIBIT E Form of Officers' Certificate of Credit Parties
EXHIBIT F Form of Security Agreement
EXHIBIT G Form of Consent Letter
EXHIBIT H Form of Section 5.04(b)(ii) Certificate
EXHIBIT I Form of Bank Assignment and Assumption Agreement
EXHIBIT J Form of Borrowing Base Certificate
This CREDIT AGREEMENT is dated as of November 26, 1997 (this
"Agreement") and is entered into by and among ▇▇▇▇▇▇▇ HOLDINGS INC., a
corporation organized and existing under the laws of the State of Delaware
(the "Parent"), ▇▇▇▇▇▇▇ ACQUISITION INC., a corporation organized and existing
under the laws of the State of Delaware ("Merger Sub", and, together with the
Surviving Corporation (as hereinafter defined) following the Mergers (as
hereinafter defined), the "Borrower"), KSCO ACQUISITION CORPORATION, a
corporation organized and existing under the laws of the State of Delaware
("KSCO"), ▇▇▇▇▇▇▇ FASTENERS INC., a corporation organized and existing under
the laws of the State of Delaware (the "Company"), PCI GROUP, INC., a
corporation organized and existing under the laws of the State of Delaware
("PCI"), ▇▇▇ FASTENER COMPANY, LLC, a Delaware limited liability company
("▇▇▇"), SCOMEX, INC., a corporation organized and existing under the laws of
the State of Delaware ("Scomex"), the financial institutions party hereto from
time to time, as Banks (as hereinafter defined), CREDIT AGRICOLE INDOSUEZ
("Indosuez"), as the Issuing Bank (as hereinafter defined), and Indosuez, as
administrative agent and as collateral agent (together with any successor
appointed pursuant to Section 12, the "Administrative Agent"), and SWISS BANK
CORPORATION, STAMFORD BRANCH ("SBC"), as documentation agent and as
syndication agent (the "D&S Agent") for the Banks and the Issuing Bank, and
SBC WARBURG DILLON READ INC. ("SBCWDR"), as advisor and arranger for the Banks
and the Issuing Bank. Unless otherwise defined herein, all capitalized terms
used herein and defined in Section 1 are used herein as therein defined.
PRELIMINARY STATEMENTS
(1) The Parent was organized by Saratoga Partners III, L.P., a limited
partnership organized and existing under the laws of the State of Delaware
("Saratoga"), to acquire through its wholly-owned Subsidiary (as hereinafter
defined), Merger Sub, control of KSCO and its wholly-owned Subsidiary, the
Company.
(2) Pursuant to the Stock Purchase Agreement dated as of October 10, 1997
(as modified, supplemented or amended from time to time in accordance with its
terms, to the extent permitted in accordance with the Credit Documents (as
hereinafter defined), the "Stock Purchase Agreement"), among the Parent, KSCO
and each of the stockholders of KSCO set forth on Schedule A thereto (the "KSCO
Stockholders"), the Parent has agreed to purchase (the "Acquisition") from the
KSCO Stockholders all of the shares of common stock, par value $.01 per share,
of KSCO owned on such date by the KSCO Stockholders as set forth opposite each
such KSCO Stockholder's name on Schedule A thereto.
(3) Pursuant to the Agreement and Plan of Merger dated as of November 26,
1997 (as modified, supplemented or amended from time to time in accordance with
its terms, to the extent permitted in accordance with the Credit Documents, the
"Merger Agreement"), and entered into by and among Merger Sub, KSCO and the
Company, immediately upon consummation of the Acquisition, Merger Sub will be
merged with and into KSCO, and KSCO will be merged with and into the Company
(the "Mergers") with the Company being the surviving corporation of such Mergers
(the "Surviving Corporation").
(4) In connection with the Acquisition, approximately $39,300,000 of
existing indebtedness will be repaid and obligations relating to approximately
$29,200,000 outstanding under a synthetic lease (the "Synthetic Lease") with
General Electric Credit Corporation will be repaid, together with a prepayment
penalty of approximately $1,700,000 in connection therewith (collectively, the
"Refinancings").
(5) In connection with the Acquisition, the Mergers and the Refinancings,
Saratoga and certain other investors will make a $36,600,000 equity investment
in the Parent, consisting of (i) $300,000 in shares of common stock, par value
$0.0001 per share, of the Parent (the "Parent Common Stock") and (ii)
$36,300,000 aggregate liquidation preference of Series B Preferred Stock, par
value $0.0001 per share, of the Parent (the "Series B Preferred Stock")
(collectively, the "Saratoga Investment"). Certain members of senior
management of the Company and the Chairman of the Board of the Company
(collectively, "Management") will roll over approximately $3,400,000 of their
Capital Stock and stock options in KSCO into options to purchase Parent Common
Stock and Series B Preferred Stock (the "Management Investment"). Concurrently
with the offering of the Senior Notes (as hereinafter defined), the Parent
will offer (the "Units Offering"), for gross proceeds of $10,000,000, 100,000
units, each unit consisting of $100 liquidation preference of 13-3/4% Series A
Cumulative Redeemable Exchangeable Preferred Stock, par value $0.001, of the
Parent (the "Senior Preferred Stock") and one warrant to purchase Parent
Common Stock. The Saratoga Investment, the Management Investment and the Units
Offering are referred to as the "Equity Transactions". The net cash proceeds
of the Equity Transactions will total approximately $46,000,000, after fees
and expenses to the Parent of $600,000. The Parent will contribute (the
"Equity Contribution") such amount to the Borrower in the form of common
equity. In addition, Merger Sub will issue approximately $100,000,000 in
Senior Notes.
(6) The Borrower has requested that, simultaneously with the consummation
of the Acquisition and the Mergers, the Banks lend to the Surviving Corporation
up to an aggregate of $53,000,000, of which (i) an aggregate principal amount of
up to $28,000,000 will be available under the Term Loan Facility (as hereinafter
defined) to be used solely to finance in part the Acquisition and the
Refinancings and to pay fees and expenses incurred in connection therewith and
in connection with the Mergers and (ii) an aggregate principal amount of up to
$25,000,000 will be available under the Revolving Loan Facility (as hereinafter
defined) to be used for working capital and general corporate purposes, and for
the issuance from time to time, by the Issuing Bank for the account of the
Borrower, of Letters of Credit (as hereinafter defined).
WHEREAS, subject to and upon the terms and conditions herein set forth, the
Banks and the Issuing Bank are willing to make available to the Borrower the
respective credit facilities provided for herein;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto hereby agree as
follows:
Section 1. Definitions and Accounting Terms.
1.01 Defined Terms. As used in this Agreement, the following terms shall
have the
following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Acquired Indebtedness" means, with respect to any specified Person, (a)
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person or
(b) assumed in connection with acquisitions of properties or assets from such
Person. Acquired Indebtedness shall be deemed to be incurred on the date the
acquired Person becomes a Subsidiary or the date of the related acquisition of
properties or assets from such Person.
"Acquisition" shall have the meaning provided in the Preliminary
Statements.
"Acquisition Documents" shall mean the Stock Purchase Agreement and the
Merger Agreement and all other documents entered into or delivered in connection
with the Stock Purchase Agreement, the Merger Agreement, the Acquisition, the
Mergers or the Refinancings.
"Additional Collateral" shall mean all property (whether real or personal)
in which security interests are granted (or purported to be granted) pursuant to
Section 9.17.
"Additional Security Documents" shall mean all mortgages, pledge
agreements, security agreements and other security documents entered into
pursuant to Section 9.17 with respect to Additional Collateral.
"Adjusted Consolidated Net Income" of any Person shall mean, for any
period, Consolidated Net Income of such Person for such period plus the sum of
the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred tax expense, non-cash interest expense and
other non-cash charges) included in arriving at Consolidated Net Income for such
period; provided, however, that in determining Adjusted Consolidated Net Income
there shall be excluded, in each case to the extent included in arriving at
Consolidated Net Income, (i) the proceeds of any insurance policies, (ii) the
proceeds of any Tax Refunds, (iii) gains or losses from the sale, exchange,
transfer or other disposition of property (other than sales of inventory in the
ordinary course of business), and (iv) any other extraordinary, unusual or non-
recurring gains or losses, in each case of or received by or on behalf of such
Person or any of its Subsidiaries.
"Adjusted Working Capital" shall mean Consolidated Current Assets
(excluding cash and Cash Equivalents) minus Consolidated Current Liabilities.
"Administrative Agent" shall have the meaning provided in the recital of
parties to this Agreement.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including, without limitation, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person; provided, however, that, for purposes of Section
10.07, an Affiliate of the Parent shall include any Person that directly or
indirectly (including through limited partner or general partner interests) owns
more than 5% of any
class of the capital stock of the Parent and, for all purposes of this
Agreement, none of the Agents, any Bank, the Issuing Bank or any of their
respective Affiliates shall be considered an Affiliate of the Parent or any of
its Subsidiaries. A Person shall be deemed to control another Person if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agents" shall mean, collectively, the Administrative Agent, the D&S Agent
and the Collateral Agent.
"Agreement" shall mean this Credit Agreement, as modified, supplemented or
amended from time to time.
"Applicable Margin" shall mean a percentage per annum equal to (i) in the
case of Term Loans and Revolving Loans which are maintained as Base Rate Loans,
1.50% and (ii) in the case of Term Loans and Revolving Loans that are maintained
as Eurodollar Loans, 2.50%.
"Bank" shall mean each financial institution listed on Schedule I, as well
as any institution that becomes a "Bank" hereunder pursuant to Section 15.04.
"Bank Default" shall mean (i) the refusal (which has not been retracted) of
a Bank to make available its portion of any Borrowing or to fund its portion of
any unreimbursed payment under Section 3.04(c) or (ii) a Bank's having notified
in writing the Borrower and/or the Administrative Agent that it does not intend
to comply with its obligations under Section 2.01 or Section 3, in either case
as a result of any takeover of such Bank by any regulatory authority or agency.
"Bank Deposit Account" shall have the meaning provided in Section 6.20.
"Bankruptcy Code" shall have the meaning provided in Section 11.05.
"Base Rate" shall mean the higher of (i) 1/2 of 1% in excess of the Federal
Funds Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean any Loan designated or deemed designated as
such by the Borrower at the time of the incurrence thereof or conversion
thereto.
"Borrower" shall have the meaning provided in the recital of parties to
this Agreement.
"Borrower Common Stock" shall have the meaning provided in Section 8.14.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Banks having Commitments with respect to such Tranche on a
pro rata basis on a given date (or resulting from a conversion or conversions on
such date) having in the case of Eurodollar Loans the same Interest Period;
provided that Base Rate Loans incurred pursuant to Section 2.10(b) shall be
considered part of the related Borrowing of Eurodollar Loans.
"Borrowing Base" shall mean, as at any date on which the amount thereof is
being determined, an amount equal to the sum of (a) 85% of Eligible Receivables
and (b) 60% of Eligible Inventory.
"Borrowing Base Certificate" shall have the meaning provided in Section
9.01(k).
"Borrowing Base Deficiency" shall mean, at any time, the amount, if any, by
which the sum of the aggregate principal amount of Revolving Loans then
outstanding plus the Letter of Credit Outstandings at such time exceeds the
Borrowing Base then in effect.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day that shall be in
New York City, New York or Stamford, Connecticut a legal holiday or a day on
which banking institutions are authorized or required by law or other
governmental action to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause (i) above
and which is also a day for trading by and between banks in the New York
interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person and its
Subsidiaries on a consolidated basis for any period, the sum of (i) all cash
expenditures made during such period for equipment, fixed assets, real property
or improvements reflected as additional property, plant or equipment on the
balance sheet of such Person, excluding Capital Lease Obligations, and (ii) all
cash expenditures made during such period to acquire (x) any other Person that
as a result of such acquisition becomes a Wholly-Owned Subsidiary of such Person
or (y) all or substantially all of the assets of any such other Person.
"Capital Lease", as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with U.S. GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"Capital Stock" of any Person shall mean any and all shares, rights to
purchase, warrants or options (whether or not currently exercisable),
participations or other equivalents of or interests in (however designated) the
equity (including, without limitation, common stock, preferred stock and
partnership interests) of such Person.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations under Capital Leases of such Person, in each case taken at the
amount thereof accounted for as Indebtedness in accordance with U.S. GAAP.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than six
months from the date of acquisition, (ii) time deposits and certificates of
deposit of any commercial bank organized under the laws of the United States,
any state thereof, or the District of Columbia having, or which is the principal
banking subsidiary of a bank holding company organized under the laws of the
United States, any state thereof, or the District of Columbia having, capital,
surplus and undivided profits aggregating in excess of $500,000,000 and having a
long-term unsecured debt rating of at least "A" or the equivalent thereof from
Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc. ("S&P"), or "A2" or the equivalent thereof from ▇▇▇▇▇'▇ Investors Service,
Inc. ("Moody's"), with maturities of not more than six months from the date of
acquisition by such Person, (iii) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in clause
(ii) above, (iv) commercial paper issued by any Person incorporated in the
United States rated at least A-1 or the equivalent thereof by S&P or at least
"P-1" or the equivalent thereof by Moody's and in each case maturing not more
than six months after the date of acquisition by such Person and (v) investments
in money market funds substantially all of the assets of which are comprised of
securities of the types described in clauses (i) through (iv) above.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as the same may be amended from time to time. 42
U.S.C. (S) (S) 9601 et seq.
"CERCLIS" shall have the meaning provided in Section 8.19(d).
"Change of Control" means the occurrence of one or more of the following:
(i) the Parent shall cease to own 100% of the outstanding capital stock of the
Borrower, (ii) the consummation of any transaction the result of which is (x) if
such transaction occurs prior to the first sale of Voting Stock of the Parent
pursuant to a registration statement under the Securities Act that results in at
least 20% of the then outstanding Voting Stock of the Parent having been sold to
the public, that Permitted Holders beneficially own, directly or indirectly,
Voting Stock representing less than 51% of the voting power of the Voting Stock
of the Parent, and (y) if such transaction occurs thereafter, that any Person or
group (as such term is used in Section 13(d)(3) of the Securities Exchange Act)
(other than Permitted Holders) is or becomes the beneficial owner (as defined in
Rule 13d-3 of the Securities Exchange Act), directly or indirectly, of Voting
Stock representing more than 35% of the voting power of the Voting Stock of the
Parent unless Permitted Holders beneficially own Voting Stock representing a
greater percentage of the voting power of the Voting Stock of the Parent, (iii)
the Parent consolidates with, or merges with or into, another Person or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of the assets of the Parent and its Subsidiaries taken as a
whole to any Person, or any Person consolidates with, or merges with or into,
the Parent, in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Parent is converted into or exchanged for cash, securities
or other property, other than any such transaction where the outstanding Voting
Stock of the Parent is converted into or exchanged for Voting Stock (other than
Disqualified Stock) of the surviving or transferee corporation and the
beneficial owners of the Voting Stock of the Parent immediately prior to such
transaction own, directly or indirectly, Voting Stock representing not less than
a majority of the voting power of the Voting Stock of the surviving or
transferee corporation immediately after such transaction, (iv) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of the Parent (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Parent was approved by either (a) a vote of
two-thirds of the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved or (b) a Permitted Holder) cease for any reason to
constitute a majority of the Board of Directors of the Parent then in office,
(v) the approval by the holders of Capital Stock of the Parent of any plan or
proposal for liquidation or dissolution of the Borrower or (vi)
the occurrence of any "Change of Control" under, and as defined in, the Senior
Notes Indenture.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims" contained in this Section 1.01.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code as in effect at the date of this
Agreement and to any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purport to be
granted) pursuant to any Security Document, including, without limitation, all
Security Agreement Collateral, all Mortgaged Properties, all Additional
Collateral and all cash and Cash Equivalents delivered as collateral pursuant to
this Agreement or any other Credit Document.
"Collateral Agent" shall mean the Administrative Agent acting as collateral
agent for the Secured Creditors pursuant to the Security Documents.
"Commitment" shall mean, with respect to each Bank, such Bank's Term Loan
Commitment and Revolving Loan Commitment, if any.
"Commitment Commission" shall have the meaning provided in Section 4.01(a).
"Company" shall have the meaning provided in the Preliminary Statements.
"Concentration Account" shall mean a separate account established and
maintained by the Borrower with the Concentration Account Bank for the benefit
of the Secured Creditors and in which the Collateral Agent has a security
interest pursuant to the Concentration Account Consent Letter.
"Concentration Account Bank" shall mean IBJ ▇▇▇▇▇▇▇▇ International Bank, or
any other bank that may become a Concentration Account Bank in accordance with
the provisions of the Security Agreement.
"Concentration Account Consent Letter" shall have the meaning provided in
Section 6.20(b).
"Consolidated Current Assets" of any Person shall mean the consolidated
current assets of such Person and its Subsidiaries.
"Consolidated Current Liabilities" of any Person shall mean the
consolidated current liabilities of such Person and its Subsidiaries, but, in
the case of the Borrower and its Subsidiaries, shall exclude the current portion
of any Loans and any long-term Indebtedness that would otherwise be included
therein.
"Consolidated EBITDA" of any Person shall mean, for any period,
Consolidated Net Income of such Person, plus the sum of (i) Consolidated
Interest Expense of such Person, (ii) provision for taxes of such Person, (iii)
the amount of all amortization of intangibles and depreciation that was deducted
in arriving at Consolidated Net Income of such Person for such period, and (iv)
all non- recurring or extraordinary losses that were deducted in arriving at
Consolidated Net Income of such Person for such period less the sum of (a)
interest income of such Person and its Subsidiaries, (b) all non- recurring or
extraordinary gains that were added in arriving at Consolidated Net Income of
such Person for such period and (c) the aggregate principal amount of all
Capitalized Lease Obligations of such Person and its Subsidiaries paid during
such period.
"Consolidated Interest Expense" of any Person shall mean, for any period,
the total consolidated cash interest expense of such Person and its Subsidiaries
for such period (calculated without regard to any limitations on the payment
thereof) payable during such period in respect of all Indebtedness of such
Person and its Subsidiaries, on a consolidated basis, for such period
(excluding that portion of obligations of such Person and its Subsidiaries
under Capital Leases representing the interest amount for such period and also
excluding amortization of financing fees and expenses, to the extent otherwise
required to be included pursuant to U.S. GAAP).
"Consolidated Net Income" of any Person shall mean, for any period, the net
income (or loss) of such Person and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period; provided that there shall be
excluded (i) the income (or loss) of any other Person (other than consolidated
Subsidiaries of such Person) in which any third Person (other than such Person
or any of its consolidated Subsidiaries) has a joint interest, except to the
extent of the amount of dividends or other distributions actually paid to such
Person or any of its consolidated Subsidiaries by such other Person during such
period, (ii) the income (or loss) of any other Person accrued prior to the date
it becomes a consolidated Subsidiary of such Person or is merged into or
consolidated with such Person or any of its consolidated Subsidiaries or such
other Person's assets are acquired by such Person or any of its consolidated
Subsidiaries and (iii) the income of any consolidated Subsidiary of such Person
to the extent that the declaration or payment of dividends or similar
distributions by such consolidated Subsidiary of such income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
such consolidated Subsidiary, other than, in the case of the Borrower, those
Subsidiaries of the Borrower that are Credit Parties.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonable anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Credit Documents" shall mean this Agreement, each Note, each Notice of
Borrowing, each Notice of Conversion, each Letter of Credit, each Letter of
Credit Request, each Security Document, each guaranty issued by any direct or
indirect Subsidiary of the Borrower pursuant to Section 9.17 and each other
agreement or document entered into in connection herewith and therewith.
"Credit Event" shall mean the making of any Loan or the issuance of any
Letter of Credit on or after the Effective Date.
"Credit Party" shall mean the Parent and each of its Subsidiaries party to
any Credit Document.
"D&S Agent" shall have the meaning provided in the recital of parties to
this Agreement.
"Debt Agreements" shall have the meaning provided in Section 6.05.
"Default" shall mean any event, act or condition which with the giving of
notice or the lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank Default
is then in effect.
"Deposit Bank" shall have the meaning provided in Section 6.20.
"Disqualified Stock" shall mean any Capital Stock of any Person that, by
its terms, by the terms of any agreement related thereto or by the terms of any
security into which it is convertible, putable or exchangeable, is, or upon the
happening of any event or the passage of time would be, required to be redeemed
or repurchased by such Person or any of its Subsidiaries, whether or not at the
option of the holder thereof, or matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, in whole or in part, on or prior to
the final Maturity Date of the Facilities; provided, however, that (i) any class
of Capital Stock of such Person that, by its terms, authorizes such Person to
satisfy in full its obligations with respect to the payment of dividends or upon
maturity, redemption (pursuant to a sinking fund or otherwise) or repurchase
thereof or otherwise by the delivery of Qualified Stock, and that is not
convertible, putable or exchangeable for Disqualified Stock or Indebtedness,
shall not be deemed to be Disqualified Stock so long as such Person satisfies
its obligations with respect thereto solely by the delivery of Qualified Stock
and (ii) any Capital Stock that would constitute Disqualified Stock solely
because the holders thereof (or of any security into which it is convertible or
for which it is exchangeable) have the right to require the issuer to repurchase
such Capital Stock (or such security into which it is exchangeable) upon the
occurrence of an "Asset Sale" or a "Change of Control" (as such terms are
defined in the Senior Notes Indenture) shall not constitute Disqualified Stock
if the terms of such Capital Stock (and of all such securities into which it is
convertible or for which it is exchangeable) provide that the issuer thereof
will not repurchase or redeem any such Capital Stock (or any such security into
which it is convertible or for which it is exchangeable) pursuant to such
provisions prior to compliance by the Parent with the provisions of Sections
1015 and 1019 of the Senior Notes Indenture and purchase of any Senior Notes
properly tendered pursuant to an offer to purchase required thereunder and not
withdrawn.
"Dividend" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
or authorized or made any other distribution, payment or delivery of property
(other than common stock of such Person) or cash to its stockholders in their
capacity as stockholders, or redeemed, retired, purchased or otherwise acquired,
directly or indirectly, for consideration any shares of any class of its Capital
Stock outstanding on or after the Effective Date (or any options or warrants
issued by such Person with respect to its Capital Stock), or set aside any funds
for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for consideration any shares of
any class of the Capital Stock of such Person outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect to
its Capital Stock). Without limiting the foregoing, "Dividends" with respect to
any Person shall also include all cash payments made or required to be made by
such Person with respect to any stock appreciation rights, equity incentive
plans or any similar plans or setting aside of any funds for the foregoing
purposes.
"Documents" shall mean the Credit Documents, the Acquisition Documents, the
Senior Notes and the Senior Notes Indenture and each consent or part thereof
required to be obtained in connection with the consummation of the Transaction.
"Dollars" and "$" shall each mean freely transferable lawful money of the
United States.
"Domestic Subsidiary" shall mean, as to any Person, at any time, any of the
direct or indirect Subsidiaries of such Person that is incorporated or organized
under the laws of any state of the United States of America or the District of
Columbia.
"Drawing" shall have the meaning provided in Section 3.05(b).
"Effective Date" shall mean the first date on which the conditions
precedent set forth in Section 6 shall have been satisfied.
"Eligible Inventory" shall mean the gross dollar value valued at the lower
of cost, determined on a last-in, first-out basis, or market value of the
inventory and spare parts (other than spare parts held for sale to customers
with attaching machinery), in each case, located in the United States of the
Credit Parties, that conforms to the representations and warranties contained in
the Security Agreement and that at all times continues to be acceptable to the
Administrative Agent in its reasonable judgment, including, without limitation,
that the Collateral Agent shall have and maintain a first priority perfected
security interest in all such inventory, which inventory constitutes raw
materials, work-in- progress or finished goods and that is not excess, obsolete
or unmerchantable, less (i) any supplies (other than raw materials) and goods to
be returned to suppliers and goods returned or rejected by customers, (ii)
inventory subject to any Lien other than the Liens created under the Security
Documents and (iii) any reserves required by the Administrative Agent in its
reasonable judgment for special order goods, market value declines and ▇▇▇▇ and
hold (deferred shipment) sales. Notwithstanding anything to the contrary
contained herein, Eligible Inventory shall in no event include any attaching
machinery.
"Eligible Receivables" shall mean the total face amount of the dollar
denominated receivables of the Credit Parties owing from account debtors located
in the United States that conform to the representations and warranties
contained in the Security Agreement (including, without limitation, the
representation that the Collateral Agent shall have and maintain a first
priority perfected security interest in all such receivables) and at all times
continue to be acceptable to the Collateral Agent in its reasonable judgment,
less any returns, discounts, claims, credits, charges and allowances of any
nature (whether issued, owing, granted or outstanding) and less reserves for any
other matter affecting the creditworthiness of account debtors with respect to
the receivables and excluding (i) ▇▇▇▇ and hold (deferred shipment)
transactions, (ii) contracts or sales to any Affiliate of the Borrower or any
governmental entity, (iii) all receivables that have not been paid in full
within 60 days after the due date thereof or that have been disputed by the
account debtor, (iv) sales to account debtors residing or located outside the
United States, (v) receivables of any account debtor with respect to which any
action or event of the types described in Section 11.05 has occurred and is
continuing and (vi) receivables of any account debtor of which 50% or more of
the aggregate outstanding receivables of such account debtor owed to the
Borrower and its Subsidiaries would be excluded pursuant to clause (iii) hereof.
"Eligible Transferee" shall mean and include a commercial bank or other
financial institution having a combined capital and surplus of at least
$100,000,000, or other "accredited investor" (as defined in Regulation D of the
Securities Act) other than individuals, or a "qualified institutional buyer" as
defined in Rule 144A of the Securities Act having assets under management of at
least $100,000,000.
"Employee Benefit Plans" shall mean all "employee benefit plans" as defined
in Section 3(3) of ERISA, any profit sharing plans and deferred compensation
plans and any other similar plans or arrangements for the benefit of current or
former employees of the Parent or any of its Subsidiaries, but excluding any
vacation plans and similar plans or policies that do not involve the payment or
deferral of cash compensation to employees.
"Employment Agreements" shall have the meaning provided in Section 6.05.
"Environmental Claims" shall mean any and all administrative, regulatory or
judicial actions, suits, proceedings, demand letters, claims, liens, notices of
noncompliance or violation or known investigations relating in any way to any
violation of, or liability under, any Environmental Law or any permit issued, or
any approval given, under any such Environmental Law (hereinafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief arising from
alleged injury or threat of injury to worker health or safety or to the
environment as a result of the presence, a Release or threatened Release of
Hazardous Materials.
"Environmental Law" shall mean any Federal, state, local or foreign law,
statute, rule, regulation, ordinance, code, policy having the force or effect of
law and rule of common law now or hereafter in effect (including, without
limitation, the legal requirements relating to asbestos abatement and removal)
and in each case as amended, and any legally binding judicial or administrative
interpretation thereof, including any legally binding judicial or administrative
order, consent decree or judgment to which the Parent or any of its Subsidiaries
is a party, relating to the environment, worker health or safety or Hazardous
Materials, including, without limitation, CERCLA; the Resource Conservation and
Recovery Act, 42 U.S.C. (S)(S) 6901 et seq.; the Federal Water Pollution Control
Act, as amended, 33 U.S.C. (S) 1251 et seq.; the Toxic Substances Control Act,
15 U.S.C. (S)(S) 7401 et seq.; the Clean Air Act, 42 U.S.C. (S)(S) 7401 et seq.;
the Safe Drinking Water Act, 42 U.S.C. (S)(S) 3803 et seq.; the Oil Pollution
Act of 1990, 33 U.S.C. (S) 2701 et seq.; the Occupational Safety and Health Act,
29 U.S.C. (S)(S) 651 et seq.; and any applicable state, local or foreign
counterparts or equivalents.
"Equity Contribution" shall have the meaning provided in the Preliminary
Statements.
"Equity Transactions" shall have the meaning provided in the Preliminary
Statements.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA as in effect at the date
of this Agreement and to any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which, together with the Parent or any Subsidiary of the Parent, would be
deemed to be a "single employer" within the meaning of Section 414(b), (c), (m)
or (o) of the Code.
"Eurodollar Loan" shall mean each loan designated as such by the Borrower
at the time of the incurrence thereof or conversion thereto.
"Event of Default" shall have the meaning provided in Section 11.
"Excess Cash Flow" of any Person shall mean, for any period, the amount by
which (i) the sum of (a) Adjusted Consolidated Net Income of such Person for
such period and (b) the decrease, if any, in Adjusted Working Capital of such
Person from the first day to the last day of such period exceeds (ii) the sum of
(a) the amount of cash Capital Expenditures (to the extent, in the case of the
Borrower and its Subsidiaries, not financed with Indebtedness but not in excess
of the amounts permitted pursuant to Section 10.08(a)) made by such Person on a
consolidated basis during such period, (b) the amount of permanent principal
payments of Indebtedness for borrowed money of such Person and its Subsidiaries
(other than, in the case of the Borrower and its Subsidiaries, (1) repayments in
respect of Refinanced Indebtedness and (2) repayments of Loans), (c) payments
made by such Person and its Subsidiaries in connection with, or in any way
related to, any Employee Benefit Plan except to the extent that such payments
reduce Consolidated EBITDA of such Person during the same period that such
payments were made and (d) payments made by such Person and its Subsidiaries in
any way related to any Environmental Law, Environmental Claim or Hazardous
Materials, including, without limitation, any payments to remediate or otherwise
respond to any environmental contamination or potential environmental
contamination, whether or not such remediation or response
is required by law or contract, except to the extent such payments constitute
Capital Expenditures of such Person or reduce Consolidated EBITDA of such
Person in the same period that such payments were made; provided that, in the
case of the Borrower, repayments of Loans shall be deducted in determining
Excess Cash Flow if such repayments were applied to Scheduled Term Loan
Repayments required to be made during such period pursuant to Section
5.02(A)(c), were made as a voluntary prepayment with internally generated
funds (but, in the case of a voluntary prepayment of Revolving Loans, only to
the extent accompanied by a voluntary reduction to the Total Revolving Loan
Commitment) during such period and (e) the increase, if any, in Adjusted
Working Capital of such Person from the first day to the last day of such
period.
"Excess Cash Flow Payment Period" shall mean each calendar year during the
term of this Agreement, with the initial Excess Cash Flow Payment Period
commencing on January 1, 1998.
"Existing Indebtedness" shall have the meaning provided in Section 8.22.
"Existing Letter of Credit" shall mean that letter of credit issued for the
account of the Borrower to Liberty Mutual Insurance Company prior to the Initial
Borrowing Date by Indosuez in a face amount of approximately $130,000.
"Facility" shall mean the Term Loan Facility or the Revolving Loan
Facility.
"Facing Fee" shall have the meaning provided in Section 4.01(b).
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in Section
4.01.
"Fixed Charge Coverage Ratio" for any period shall mean the ratio of
Consolidated EBITDA of the Borrower for such period to Fixed Charges of the
Borrower and its Subsidiaries for such period.
"Fixed Charges" of any Person shall mean, for any period, the sum of (i)
Consolidated Interest Expense of such Person paid during such period, (ii) the
aggregate principal amount of all scheduled payments of Indebtedness (excluding
the principal portion of rentals under Capitalized Lease Obligations of such
Person and, in the case of the Borrower, repayment of Revolving Loans not
accompanied by a permanent reduction to the Total Revolving Loan Commitment)
made by such Person and its Subsidiaries during such period, (iii) taxes paid by
such Person and its Subsidiaries for such period, (iv) payments made by such
Person and its Subsidiaries in connection with or in any way related to any
Pension Plan, except to the extent that such payments reduce Consolidated EBITDA
of
such Person during the same period that such payments were made, (v) payments
made by such Person and its Subsidiaries in any way related to any Environmental
Law, Environmental Claim or Hazardous Materials, including, without limitation,
any payments to remediate or otherwise respond to any environmental
contamination or potential environmental contamination, whether or not such
remediation or response is required by law or contract, except to the extent
such payments constitute Capital Expenditures of such Person or reduce
Consolidated EBITDA of such Person in the same period that such payments were
made, (vi) in the case of the Borrower, Watertown Remediation Payments paid by
the Borrower during such period, (vii) Maintenance Capital Expenditures made by
such Person and its Subsidiaries during such period and (viii) cash Dividends
paid by such Person other than, in the case of the Borrower and its
Subsidiaries, cash Dividends paid by any of the Borrower's Subsidiaries to the
Borrower or any of the Borrower's Wholly-Owned Subsidiaries for such period.
"Foreign Subsidiary" shall mean, as to any Person, at any time, any
Subsidiary of such Person that is not at such time a Domestic Subsidiary of such
Person.
"Funded Indebtedness" of any Person shall mean Indebtedness in respect of
the Loans, in the case of the Borrower, and all other Indebtedness of such
Person that by its terms matures more than one year after the date of its
creation or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one year after
such date or that arises under a revolving credit or similar agreement that
obligates the lender or lenders to extend credit during a period of more than
one year from such date, including, without limitation, all amounts of Funded
Indebtedness of such Person required to be paid or prepaid within one year from
the date of determination.
"Guarantors" shall mean the Parent and the Subsidiary Guarantors.
"Hazardous Materials" shall mean (a) petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contains
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definitions of "hazardous substances", "hazardous waste", "hazardous materials",
"extremely hazardous waste", "toxic substances", "contaminants" or "pollutants",
or words of similar meaning and regulatory effect, under any applicable
Environmental Law; and (c) any other chemical, material or substance exposure to
which is prohibited, limited or regulated under applicable Environmental Laws.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"Indebtedness" shall mean, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services
other than trade payables and accrued expenses arising in the ordinary course of
business, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types described in
clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any
Lien on any property owned by such Person, whether or not such Indebtedness has
been assumed by such Person, (iv) solely for purposes of Section 11.04, all
Capitalized Lease
Obligations of such Person, (v) all obligations of such Person to pay a
specified purchase price for goods or services, whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent
Obligations of such Person and (vii) all obligations under any Interest Rate
Protection or Other Hedging Agreement or under any similar types of agreements
entered into.
"Indemnified Matters" shall have the meaning provided in Section 15.01.
"Indemnitee" shall have the meaning provided in Section 15.01.
"Indosuez" shall have the meaning provided in the recital of parties to
this Agreement.
"Initial Borrowing Date" shall mean the date on which the initial Credit
Event occurs on or after the Effective Date.
"Intellectual Property" shall have the meaning provided in Section 8.21.
"Interest Determination Date" shall mean, with respect to any Eurodollar
Loan, the second Business Day prior to the commencement of any Interest Period
relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 2.09.
"Interest Rate Protection or Other Hedging Agreements" shall have the
meaning provided in the Security Documents.
"Issuing Bank" shall mean Indosuez.
"KSCO" shall have the meaning provided in the recital of parties to this
Agreement.
"KSCO Stockholders" shall have the meaning provided in the Preliminary
Statements.
"L/C Supportable Obligations" shall mean (i) obligations of the Borrower
consisting of trade payables and (ii) such other obligations of the Borrower as
are otherwise permitted to exist pursuant to the terms of this Agreement.
"Leaseholds" of any Person shall mean all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 3.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section 4.01(c).
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i) the
aggregate Stated Amount of all outstanding Letters of Credit and (ii) the amount
of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
3.03(a).
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing.
"Loan" shall mean each Term Loan and each Revolving Loan.
"Maintenance Capital Expenditures" shall mean, with respect to any Person
and its Subsidiaries on a consolidated basis for any period, all Capital
Expenditures made during such period to maintain equipment, other fixed assets
or real property of such Person and its Subsidiaries in proper operating
condition during such period to conduct the business of such Person and its
Subsidiaries as it is then being conducted.
"Management" shall have the meaning provided in the Preliminary Statements.
"Management Agreements" shall have the meaning provided in Section
6.05(iii).
"Management Investment" shall have the meaning provided in the Preliminary
Statements.
"New Incentive Stock Option Plan" shall mean the Stock Option Plan to be
entered into by Merger Sub and Borrower for key executives and managers which
will provide for the grant of stock options to purchase up to 12.5% of Parent
Common Stock on a fully diluted basis.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Subsidiary" shall mean, at any time, a Subsidiary of the Borrower
having at least 2% of the total consolidated assets of the Borrower and its
Subsidiaries (determined as of the last day of the most recent fiscal quarter of
the Borrower) or at least 2% of the total consolidated revenues or net income of
the Borrower and its Subsidiaries for the 12-month period ending on the last day
of the most recent fiscal quarter of the Borrower.
"Maturity Date" with respect to a Tranche shall mean either the Term Loan
Maturity Date or the Revolving Loan Maturity Date, as the case may be.
"Merger Agreement" shall have the meaning provided in the Preliminary
Statements.
"Merger Sub" shall have the meaning provided in the recital of parties to
this Agreement.
"Mergers" shall have the meaning provided in the Preliminary Statements.
"Minimum Borrowing Amount" shall mean $50,000.
"Mortgage" shall have the meaning provided in Section 6.18(a).
"Mortgage Policies" shall have the meaning provided in Section 6.18(b).
"Mortgaged Properties" shall have the meaning provided in Section 6.18(a).
"Multiemployer Plan" shall have the meaning provided in Section 8.10.
"Net Sale Proceeds" shall mean, for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such sale, net of reasonable transaction costs, the amount of such
gross cash proceeds required by the terms of any instrument governing
Indebtedness to be used to permanently repay any such Indebtedness that is
secured by the respective assets that were sold, and the estimated marginal
increase in income taxes, which will be payable by the Parent's consolidated
group as a result of such sale.
"Note" shall mean each Term Note and each Revolving Note.
"Notice of Borrowing" shall have the meaning provided in Section 2.03(a).
"Notice of Conversion" shall have the meaning provided in Section 2.06.
"Notice Office" shall mean the office of the Administrative Agent located
at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other office
as the Administrative Agent may hereafter designate in writing as such to the
other parties hereto.
"Obligations" shall mean all amounts owing to any of the Agents, the
Issuing Bank or any Bank pursuant to the terms of this Agreement or any other
Credit Document.
"Parent" shall have the meaning provided in the recital of parties to this
Agreement.
"Parent Common Stock" shall have the meaning provided in the Preliminary
Statements.
"Parent Guaranty" shall mean the guaranty of the Parent contained in
Section 13.
"Participant" shall have the meaning provided in Section 3.04(a).
"Payment Office" shall mean the office of the Administrative Agent located
at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other office
as the Administrative Agent may hereafter designate in writing as such to the
other parties hereto.
"Payment Restriction", with respect to a Subsidiary of any Person, shall
mean any consensual encumbrance, restriction or limitation, whether by operation
of the terms of its charter or by reason of any agreement, instrument, judgment,
decree, order, statute, rule or governmental
regulation, on the ability of (i) such Subsidiary to (a) pay dividends or make
other distributions on its Capital Stock or make payments on any obligation,
liability or Indebtedness owed to such Person or any other Subsidiary of such
Person, (b) make loans or advances to such Person or any other Subsidiary of
such Person or (c) transfer any of its properties or assets to such Person or
any other Subsidiary of such Person or (ii) such Person or any other
Subsidiary of such Person to receive or retain any such dividends,
distributions or payments, loans or advances or transfer of properties or
assets.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"PBGC Letter" shall mean the letter dated November 19, 1997 received by the
Company from the PBGC requesting the submission to the PBGC of certain financial
and other information.
"PCI" shall have the meaning provided in the recital of parties to this
Agreement.
"Pension Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA (other than a Multiemployer Plan) that is maintained by or to which
contributions are made by the Borrower or any of its ERISA Affiliates or as to
which the Borrower or any of its ERISA Affiliates may have liability.
"Percentage" of any Bank at any time shall mean a fraction (expressed as a
percentage) the numerator of which is the Revolving Loan Commitment of such Bank
at such time and the denominator of which is the Total Revolving Loan Commitment
at such time; provided that, if the Percentage of any Bank is to be determined
after the Total Revolving Loan Commitment has been terminated, then the
Percentages of the Banks shall be determined immediately prior (and without
giving effect) to such termination.
"Permitted Business" shall mean a line of business in which the Borrower or
any of its Subsidiaries is engaged on the Initial Borrowing Date and any
business reasonably related thereto.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged Property,
such exceptions to title as are set forth in the title insurance policy or title
commitment delivered with respect thereto, all of which exceptions must be
acceptable, on the date of delivery of such title insurance policy, to the
Administrative Agent and the Required Banks.
"Permitted Holders" shall mean (i) Saratoga, (ii) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
(iii) Permitted Transferees of the foregoing.
"Permitted Liens" shall have the meaning provided in Section 10.01.
"Permitted Transferees" shall mean, with respect to any Person, (x) in the
case of any Person that is a natural person, (i) such individual's spouse,
estate, lineal descendants, heirs, executors, legal representatives,
administrators or (ii) any trust for the benefit of any of the foregoing, and
(y) in
the case of any Person that is not a natural person, any other Person
controlled by such Person.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan, as defined in
Section 4001 of ERISA, that is maintained or to which contributions are made by
(or to which there is an obligation to contribute of) the Parent, a Subsidiary
of the Parent or an ERISA Affiliate, and each such plan for the five-year period
immediately following the latest date on which the Parent, a Subsidiary of the
Parent or an ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
"Pledged Securities" shall have the meaning provided in the Security
Agreement.
"Prime Lending Rate" shall mean the rate that the Administrative Agent
announces from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes. The Prime Lending Rate is
a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. The Administrative Agent may make commercial
loans or other loans at rates of interest at, above or below the Prime Lending
Rate.
"Projections" shall have the meaning provided in Section 6.15(b).
"Qualified Stock" of any Person shall mean any and all Capital Stock of
such Person other than Disqualified Stock.
"Quarterly Payment Date" shall mean the last Business Day of each March,
June, September and December of each calendar year.
"Quoted Rate" shall mean (a) the offered quotation to first-class banks in
the New York interbank Eurodollar market by the Administrative Agent for U.S.
dollar deposits of amounts in immediately available funds comparable to the
outstanding principal amount of the Eurodollar Loan of the Administrative Agent
for which an interest rate is then being determined with maturities comparable
to the Interest Period applicable to such Eurodollar Loan determined as of 10:00
A.M. (New York time) on the date which is two Business Days prior to the
commencement of such Interest Period, divided (and rounded upward to the next
whole multiple of 1/16 of 1%) by (b) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency funding
or liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"▇▇▇" shall have the meaning provided in the recital of parties to this
Agreement.
"Real Property" of any Person shall mean all the right, title and interest
of such Person in and to land, improvements and fixtures, including Leaseholds.
"Recovery Event" shall mean the receipt by the Parent or any Subsidiary of
the Parent
of any cash insurance proceeds payable by reason of theft, physical
destruction or damage or any other similar event with respect to any
properties or assets of the Parent or any Subsidiary of the Parent.
"Refinanced Indebtedness" shall have the meaning provided in Section 6.16.
"Refinancings" shall have the meaning provided in the Preliminary
Statements.
"Register" shall have the meaning provided in Section 9.15.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation G" shall mean Regulation G of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Release" shall mean disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing,
pouring and the like, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section 2.13.
"Replacement Bank" shall have the meaning provided in Section 2.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan, other than those events as to which the 30-day
notice period is waived by the PBGC.
"Required Banks" shall mean, at any time, Banks owed or holding outstanding
Term Loans, Term Loan Commitments and Revolving Loan Commitments (or, after the
termination thereof, the sum of outstanding Revolving Loans and Letter of Credit
Outstandings) which represent an amount greater than 50% of the sum of all
outstanding Term Loans, the Total Term Loan Commitment and the Total Revolving
Loan Commitment (or, after the termination thereof, the sum of the then total
outstanding Revolving Loans and Letter of Credit Outstandings) at such time.
"Returns" shall have the meaning provided in Section 8.09.
"Revolving Loan Commitment" shall mean, for each Bank, the amount set forth
opposite such Bank's name on Schedule I hereto directly below the column
entitled "Revolving Loan Commitment", as same may be (x) reduced or terminated
from time to time pursuant to Sections 4.02,
4.03, 5.02 and/or Section 11 or (y) adjusted from time to time as a result of
assignments to or from such Bank pursuant to Section 2.13 or Section 15.04.
"Revolving Loan Facility" shall mean the facility evidenced by the Total
Revolving Loan Commitment.
"Revolving Loan Maturity Date" shall mean the sixth anniversary of the
Initial Borrowing Date.
"Revolving Loans" shall have the meaning provided in Section 2.01(b).
"Revolving Note" shall have the meaning provided in Section 2.05(a)(ii).
"Saratoga" shall have the meaning provided in the Preliminary Statements.
"Saratoga Investment" shall have the meaning provided in the Preliminary
Statements.
"SBC" shall have the meaning provided in the recital of parties to this
Agreement.
"SBCWDR" shall have the meaning provided in the recital of parties to this
Agreement.
"Scheduled Term Loan Repayment" shall have the meaning provided in Section
5.02(A)(c).
"Scomex" shall have the meaning provided in the recital of parties to this
Agreement.
"Section 5.04(b)(ii) Certificate" shall have the meaning provided in
Section 5.04(b)(ii).
"Secured Creditors" shall mean (x) the Banks, the Issuing Bank and the
Agents and (y) any Bank which on the date hereof is, or subsequently becomes,
party to any Interest Rate Protection or Other Hedging Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in Section 6.08.
"Security Agreement Collateral" shall mean all "Collateral" as defined in
the Security Agreement.
"Security Documents" shall mean the Security Agreement, the Concentration
Account Consent Letter, each Additional Security Document and each Mortgage.
"Senior Notes" shall mean the senior unsecured notes of the Borrower in an
aggregate principal amount of $100,000,000 issued pursuant to the Senior Notes
Indenture.
"Senior Notes Indenture" shall mean the Indenture dated as of November 26,
1997 between the Borrower, as issuer, and United States Trust Company of New
York, as trustee, as modified, supplemented or amended from time to time in
accordance with its terms, to the extent permitted in accordance with the Credit
Documents.
"Senior Preferred Stock" shall have the meaning provided in the Preliminary
Statements.
"Series B Preferred Stock" shall have the meaning provided in the
Preliminary Statements.
"Shareholders Agreements" shall have the meaning provided in Section 6.05.
"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder at such time (in each case
determined without regard to whether any conditions to drawing could then be
met).
"Stock Purchase Agreement" shall have the meaning provided in the
Preliminary Statements.
"Stockholders Agreement" shall mean the Stockholders Agreement dated as of
November 26, 1997 among the Non-Management Investors, the Management Investors
(each as identified on the signature pages to the Stockholders Agreement), the
parties to be identified on the signature pages of any joinder agreements
executed and delivered pursuant to Section 7.2 of the Stockholders Agreement,
and the Parent, as in effect on the date hereof.
"Subsidiary" shall mean, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Subsidiary Guarantors" shall mean PCI, ▇▇▇ and Scomex and each other
Subsidiary of the Parent that shall be required under the terms of the Credit
Documents to execute and deliver a guaranty.
"Subsidiary Guaranty" shall mean the guaranty of the Subsidiary Guarantors
contained in Section 14 and any other guaranty executed and delivered by a
Subsidiary Guarantor.
"Surviving Corporation" shall have the meaning provided in the Preliminary
Statements.
"Synthetic Lease" shall have the meaning provided in the Preliminary
Statements.
"Tax Refund" shall mean any cash payment received by any Person or any of
its Subsidiaries as a rebate or refund relating to any federal, state or local
income taxes paid by such Person and its Subsidiaries or with respect to the
assets or properties of such Person.
"Taxes" shall have the meaning provided in Section 5.04(a).
"Term Loan Commitment" shall mean, with respect to each Bank, the amount
set forth opposite such Bank's name in Schedule I hereto directly below the
column entitled "Term Loan Commitment", as the same may be (x) reduced or
terminated pursuant to Section 4.03, 5.02 and/or 11 or (y) adjusted from time to
time as a result of assignments to or from such Bank pursuant to Section 2.13 or
15.04.
"Term Loan Facility" shall mean the facility evidenced by the Total Term
Loan Commitment.
"Term Loan Maturity Date" shall mean the sixth anniversary of the Initial
Borrowing Date.
"Term Loans" shall have the meaning provided in Section 2.01(a).
"Term Note" shall have the meaning provided in Section 2.05(a)(i).
"Termination Documents" shall have the meaning provided in Section 6.16.
"Total Commitment" shall mean, at any time, the sum of the Commitments of
each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of the
Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum of the Term
Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time, an
amount equal to the amount by which (x) the then Total Revolving Loan Commitment
exceeds (y) the sum of the aggregate principal amount of Revolving Loans then
outstanding plus the then aggregate amount of Letter of Credit Outstandings.
"Tranche" shall mean the respective facility and commitments utilized in
making Loans hereunder, with there being two separate Tranches, i.e., Term Loans
and Revolving Loans.
"Transaction" shall mean, collectively, (i) the incurrence of Loans
hereunder on the
Initial Borrowing Date, (ii) the consummation of the Acquisition, the
Refinancings and the Mergers, (iii) the repayment of all Refinanced
Indebtedness, together with all accrued interest, premiums, fees, commissions
and expenses owing in connection therewith, and the termination of all
commitments thereunder, (iv) the payment of the Transaction Fees and Expenses
in connection therewith, (v) the consummation of the Equity Transactions and
(vi) the consummation of the Equity Contribution from the Parent to Merger
Sub.
"Transaction Fees and Expenses" shall mean all fees and expenses incurred
by the Parent and its Subsidiaries in connection with the Transaction and the
transactions contemplated hereby and thereby; provided, however, that the
aggregate amount of such fees and expenses shall not exceed $12,000,000 in the
aggregate.
"Type" shall mean the type of Loan determined with regard to the interest
option applicable thereto, i.e., a Base Rate Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in effect
in the relevant jurisdiction.
"Unfunded Current Liability" of any Pension Plan means the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Pension Plan as of the date of its most recent actuarial valuation report
exceeds the fair market value of the assets allocable thereto, each determined
in accordance with Statement of Financial Accounting Standards No. 35, based
upon the actuarial assumptions used by the Pension Plan's actuary in the most
recent annual valuation of the Pension Plan.
"United States" and "U.S." shall each mean the United States of America.
"Units Offering" shall have the meaning provided in the Preliminary
Statements.
"U.S. GAAP" shall have the meaning provided in Section 15.07(a).
"Unpaid Drawing" shall have the meaning provided in Section 3.05(a).
"Voting Stock" shall mean, with respect to any specified Person, any class
or classes of Capital Stock of the specified Person pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of the
specified Person (irrespective of whether or not, at the time, stock of any
other class or classes has, or might have, voting power by reason of the
happening of any contingency).
"Watertown Remediation Payments" shall mean those payments scheduled to be
made by KSCO pursuant to Section 6.14 and Schedule 6.14 of the Stock Purchase
Agreement dated as of September 25, 1995 among KSCO, Saltire Industrial, Inc.,
First City Diversified Inc. and ▇▇▇▇▇ Holdings USA, Inc. for remedial activities
at the Watertown, Connecticut facility operated by the Company between 1969 and
1987, which payments were scheduled to begin on October 20, 1997.
"Wholly-Owned Subsidiary" shall mean, as to any Person, any Subsidiary to
the extent (i) all of the Capital Stock or other ownership interests in such
Subsidiary, other than any directors'
qualifying shares mandated by applicable law, is owned directly or indirectly
by such Person and/or one or more Wholly-Owned Subsidiaries of such Person or
(ii) such Subsidiary is organized in a foreign jurisdiction and is required by
the applicable laws and regulations of such foreign jurisdiction to be
partially owned by the government of such foreign jurisdiction or individual
or corporate citizens of such foreign jurisdiction in order for such
Subsidiary to transact business in such foreign jurisdiction; provided that
such Person, directly or indirectly, owns the remaining Capital Stock or
ownership interest in such Subsidiary and, by contract or otherwise, controls
the management and business of such Subsidiary and derives the economic
benefits of ownership of such Subsidiary to substantially the same extent as
if such Subsidiary were a wholly-owned Subsidiary.
1.02 Computation of Time Periods. In this Agreement, in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding".
1.03 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with U.S. GAAP.
Section 2. Amount and Terms of Credit.
2.01 The Commitments. (a) Subject to, and upon the terms and conditions
set forth herein, each Bank with a Term Loan Commitment severally agrees to
make, on the Initial Borrowing Date, a single term loan (each, a "Term Loan"
and, collectively, the "Term Loans") to the Borrower, which Term Loans:
(i) shall be made and initially maintained as a single Borrowing
of Base Rate Loans (subject to the option to convert such Base Rate
Loans pursuant to Section 2.06); and
(ii) shall not exceed for any Bank, in initial aggregate
principal amount, that amount which equals the Term Loan Commitment of
such Bank on such date (before giving effect to any reductions thereto
on such date pursuant to Section 4.03(b)(i) but after giving effect to
any reductions thereto on or prior to such date pursuant to Section
4.03(b)(ii)).
Once repaid, Term Loans borrowed hereunder may not be reborrowed.
(b) Subject to, and upon the terms and conditions set forth herein, each
Bank with a Revolving Loan Commitment severally agrees at any time and from time
to time after the Initial Borrowing Date and prior to the Revolving Loan
Maturity Date, to make a loan or loans (each a "Revolving Loan" and,
collectively, the "Revolving Loans") to the Borrower, which Revolving Loans:
(i) shall, at the option of the Borrower, be Base Rate Loans or
Eurodollar Loans; provided that except as otherwise specifically
provided in Section 2.10(b), all Revolving Loans comprising the same
Borrowing shall at all times be of the same Type;
(ii) may be repaid and reborrowed in accordance with the
provisions hereof;
(iii) shall not exceed for any Bank at any time outstanding that
aggregate principal amount which, when added to the product of (x)
such Bank's Percentage and (y) the aggregate
amount of all Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid with the proceeds of, and simultaneously
with the incurrence of, the respective incurrence of, Revolving Loans)
at such time, equals the Revolving Loan Commitment of such Bank at
such time; and
(iv) shall not exceed for all Banks at any time outstanding that
aggregate principal amount which, when added to the amount of all
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of Revolving Loans) at such time, equals
the lesser of (a) the Borrowing Base then in effect and (b) the Total
Revolving Loan Commitment at such time.
2.02 Minimum Amount of Each Borrowing. The aggregate principal amount of
each Borrowing hereunder shall not be less than the Minimum Borrowing Amount
and, if in excess of the Minimum Borrowing Amount, shall be in integral
multiples of $50,000. More than one Borrowing may occur on the same date, but
at no time shall there be outstanding more than five Borrowings of Eurodollar
Loans.
2.03 Notice of Borrowing. (a) Whenever the Borrower desires to make a
Borrowing hereunder, it shall give the Administrative Agent at its Notice
Office, prior to 12:00 Noon (New York time) on the proposed date of such
Borrowing written notice (or telephonic notice promptly confirmed in writing)
of each Borrowing of Base Rate Loans and at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Eurodollar Loans. Each such notice (each a "Notice of
Borrowing"), except as otherwise expressly provided in Section 2.10, shall be
irrevocable and shall be given by the Borrower in the form of Exhibit A-1,
appropriately completed to specify: (i) the aggregate principal amount of the
Loans to be made pursuant to such Borrowing which shall be at least the
Minimum Borrowing Amount; (ii) the date of such Borrowing (which shall be a
Business Day); (iii) whether the Loans being made pursuant to such Borrowing
shall constitute Term Loans or Revolving Loans; and (iv) whether the Loans
being made pursuant to such Borrowing are to be initially maintained as Base
Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the initial Interest
Period to be applicable thereto. The Administrative Agent shall promptly give
each Bank which is required to make Loans of the Tranche specified in the
respective Notice of Borrowing notice of such proposed Borrowing, of such
Bank's proportionate share thereof and of the other matters specified in the
Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to confirm
in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent or the Issuing Bank (in the case of Letters of Credit), as
the case may be, may, prior to receipt of written confirmation, act without
liability upon the basis of telephonic notice believed by the Administrative
Agent or the Issuing Bank (in the case of Letters of Credit), as the case may
be, in good faith to be from the President, the Chief Financial Officer or the
Controller of the Borrower. In each such case, the Administrative Agent's or
the Issuing Bank's record of the terms of such telephonic notice shall be
conclusive absent manifest error.
2.04 Disbursement of Funds. No later than 1:00 P.M. (New York time) on
the date specified in each Notice of Borrowing, each Bank with a Commitment of
the respective Tranche shall
make available its pro rata portion (determined in accordance with Section
2.07) of each such Borrowing requested to be made on such date. All such
amounts shall be made available in Dollars and in immediately available funds
at the Payment Office of the Administrative Agent, and the Administrative
Agent shall make available to the Borrower at the Payment Office the aggregate
of the amounts so made available by the Banks. Unless the Administrative Agent
shall have been notified by any Bank prior to the date of Borrowing that such
Bank does not intend to make available to the Administrative Agent such Bank's
portion of any Borrowing to be made on such date, the Administrative Agent may
assume that such Bank has made such amount available to the Administrative
Agent on such date of Borrowing and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the
Administrative Agent by such Bank, the Administrative Agent shall be entitled
to recover such corresponding amount on demand from such Bank. If such Bank
does not pay such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent shall promptly notify the
Borrower and the Borrower shall immediately pay such corresponding amount to
the Administrative Agent. The Administrative Agent shall also be entitled to
recover on demand from such Bank or the Borrower, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the
Borrower until the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (i) if recovered from such
Bank, the cost to the Administrative Agent of acquiring overnight federal
funds and (ii) if recovered from the Borrower, the rate of interest applicable
to the respective Borrowing, as determined pursuant to Section 2.08. Nothing
in this Section 2.04 shall be deemed to relieve any Bank from its obligation
to make Loans hereunder or to prejudice any rights which the Borrower may have
against any Bank as a result of any failure by such Bank to make Loans
hereunder.
2.05 Notes. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made by each Bank shall be evidenced (i) if Term Loans,
by a promissory note duly executed and delivered by the Borrower substantially
in the form of Exhibit B-1 with blanks appropriately completed in conformity
herewith (each, a "Term Note" and, collectively, the "Term Notes") and (ii) if
Revolving Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-2, with blanks appropriately
completed in conformity herewith (each, a "Revolving Note" and, collectively,
the "Revolving Notes").
(b) The Term Note issued to each Bank with a Term Loan Commitment shall (i)
be executed by the Borrower, (ii) be payable to the order of such Bank or its
registered assigns and be dated the Initial Borrowing Date, (iii) be in a stated
principal amount equal to the Term Loan made by such Bank on the Initial
Borrowing Date and be payable in the principal amount of the Term Loan evidenced
thereby, (iv) mature on the Term Loan Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 2.08 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to voluntary repayment as provided in Section 5.01, and mandatory
repayment as provided in Section 5.02 and (vii) be entitled to the benefits of
this Agreement and be secured by the Security Documents.
(c) The Revolving Note issued to each Bank with a Revolving Loan Commitment
shall (i) be executed by the Borrower, (ii) be payable to the order of such Bank
or its registered assigns and be dated the Initial Borrowing Date, (iii) be in a
stated principal amount equal to the Revolving
Loan Commitment of such Bank and be payable in the principal amount of the
Revolving Loans evidenced thereby, (iv) mature on the Revolving Loan Maturity
Date, (v) bear interest as provided in the appropriate clause of Section 2.08
in respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary repayment as provided in
Section 5.01, and mandatory repayment as provided in Section 5.02 and (vii) be
entitled to the benefits of this Agreement and be secured by the Security
Documents.
(d) Each Bank shall note on its internal records the amount of each Loan
made by it and each payment in respect thereof and shall, prior to any transfer
of any of its Notes, endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby; provided, however, that the failure
to make any such notation or the making of an incorrect notation shall not
affect the Borrower's obligations in respect of such Loans.
2.06 Conversions. The Borrower shall have the option to convert, at any
time after January 25, 1997, on any Business Day, all or a portion at least
equal to the Minimum Borrowing Amount and, if in excess thereof, in an
integral multiple of $50,000 of the outstanding principal amount of the Loans
made pursuant to one or more Borrowings (so long as of the same Tranche) of
one Type of Loan into a Borrowing or Borrowings (of the same Tranche) of the
other Type of Loan; provided that:
(i) except as otherwise provided in Section 2.10(b), Eurodollar
Loans may be converted into Base Rate Loans only on the last day of an
Interest Period applicable to the Loans being converted and no such
partial conversion of Eurodollar Loans shall reduce the outstanding
principal amount of such Eurodollar Loans made pursuant to a single
Borrowing to less than the Minimum Borrowing Amount;
(ii) Base Rate Loans may be converted into Eurodollar Loans only
if no Default or Event of Default is in existence on the date of the
conversion; and
(iii) no conversion pursuant to this Section 2.06 shall result in
a greater number of Borrowings than is permitted under Section 2.02.
Each such conversion shall be effected by the Borrower by giving to the
Administrative Agent at its Notice Office prior to 10:00 A.M. (New York time) at
least three Business Days' (or in the case of a conversion into Base Rate Loans,
one Business Day's notice) prior written notice (or telephonic notice promptly
confirmed in writing) (each a "Notice of Conversion") which notice shall be in
the form of Exhibit A-2, appropriately completed to specify the Loans to be so
converted, the Borrowing(s) pursuant to which such Loans were made and, if to be
converted into Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Bank prompt notice of any
such proposed conversion affecting any of its Loans. Upon any such conversion,
the proceeds thereof will be deemed to be applied directly on the day of such
conversion to prepay the outstanding principal amount of the Loans being
converted.
2.07 Pro Rata Borrowings. All Borrowings of Term Loans and Revolving
Loans under this Agreement shall be made from the Banks pro rata on the basis
of their respective Term Loan Commitments and Revolving Loan Commitments, as
the case may be. It is understood that no Bank
shall be responsible for any default by any other Bank of its obligation to
make Loans hereunder and that each Bank shall be obligated to make the Loans
provided to be made by it hereunder regardless of the failure of any other
Bank to make its Loans hereunder.
2.08 Interest. (a) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Base Rate Loan from the date of the Borrowing
thereof until the maturity thereof (whether by acceleration or otherwise), at
a rate per annum which shall at all times be equal to the sum of the
Applicable Margin plus the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid principal
amount of each Eurodollar Loan from the date of the Borrowing thereof until the
maturity thereof (whether by acceleration or otherwise), at a rate per annum
which shall, during each Interest Period applicable thereto, be equal to the sum
of the Applicable Margin plus the Quoted Rate for such Interest Period.
(c) Upon the occurrence and during the continuance of an Event of Default
specified in Section 11.01, overdue principal and, to the extent permitted by
law, overdue interest in respect of each Loan and any other overdue amount
payable hereunder shall, in each case, bear interest at a rate per annum equal
to the rate which is 2.0% in excess of the rate of interest then applicable to
such Loan, with such interest to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three-month intervals after the first
day of such Interest Period and (iii) in respect of each Loan, on any repayment
(on the amount repaid), at maturity (whether by acceleration or otherwise) and,
after such maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative Agent shall
determine the Quoted Rate for the Interest Period applicable to Eurodollar Loans
and shall promptly notify the Borrower and the Banks thereof. Each such
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
2.09 Interest Periods. At the time it gives any Notice of Borrowing or
Notice of Conversion in respect of the making of, or conversion into, a
Eurodollar Loan (in the case of the initial Interest Period applicable
thereto) or prior to 10:00 A.M. (New York time) on the third Business Day
prior to the expiration of an Interest Period applicable to such Eurodollar
Loan (in the case of any subsequent Interest Period), the Borrower shall have
the right to elect, by giving the Administrative Agent notice thereof, the
interest period (each an "Interest Period") applicable to such Eurodollar
Loan, which Interest Period shall, at the option of the Borrower, be a one-,
three- or six-month period; provided that:
(i) all Eurodollar Loans comprising a single Borrowing shall at
all times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Loan (including the date of
any conversion thereto from a Borrowing of
Base Rate Loans) and each Interest Period occurring
thereafter in respect of such Loan shall commence on the day on which
the next preceding Interest Period applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest
Period for a Eurodollar Loan would otherwise expire on a day which is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day;
(v) no Interest Period for a Borrowing under a Tranche shall be
selected which extends beyond the respective Maturity Date of such
Tranche;
(vi) no Interest Period may be selected at any time when any
Default or Event of Default is then in existence; and
(vii) no Interest Period in respect of any Borrowing of Term
Loans shall be selected which extends beyond any date upon which a
mandatory repayment of such Term Loans will be required to be made
under Section 5.02(A)(c) if, after giving effect to the selection of
such Interest Period, the aggregate principal amount of such Term
Loans maintained as Eurodollar Loans which have Interest Periods
expiring after such date will be in excess of the aggregate principal
amount of such Term Loans then outstanding less the aggregate amount
of such required prepayment.
If, upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrower has failed to elect, or is not permitted to
elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above in this Section 2.09 or a Default or Event of Default then
exists, the Borrower shall be deemed to have elected to convert such Eurodollar
Loans into Base Rate Loans effective as of the expiration date of such current
Interest Period.
2.10 Increased Costs, Illegality, Etc. (a) In the event that any Bank
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date, that by reason of any
changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Quoted Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loan because of (x) any change since the
date of this Agreement in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the
force of law) or in the
interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, order,
guideline or request, such as, for example, but not limited to: (A) a
change in the basis of taxation of payments to any Bank of the
principal of or interest on the Notes or any other amounts payable
hereunder (except for changes in the rate of tax on, or determined by
reference to, the net income or profits of such Bank imposed by the
jurisdiction in which its principal office or applicable lending
office is located) or (B) a change in official reserve requirements
(but, in all events, excluding reserves required under Regulation D to
the extent included in the computation of the Quoted Rate) and/or (y)
other circumstances since the date of this Agreement generally
affecting financial institutions substantially similar to such Bank or
the interbank Eurodollar market or the position of such Bank in such
market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Bank in
good faith with any governmental request (whether or not having the
force of law) or (z) impracticable as a result of a contingency
occurring after the date of this Agreement which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (if by telephone, promptly
confirmed in writing) to the Borrower and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter: (x) in the case of clause (i) above, Eurodollar Loans shall no
longer be available until such time as the Administrative Agent notifies the
Borrower and the Banks that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have not
yet been incurred (including by way of conversion) shall be deemed rescinded by
the Borrower; (y) in the case of clause (ii) above, the Borrower shall pay to
such Bank, upon written demand therefor, such additional amounts (in the form of
an increased rate of, or a different method of calculating, interest or
otherwise as such Bank in its sole discretion shall determine) as shall be
required to compensate such Bank for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the
additional amounts owed to such Bank, showing in reasonable detail the basis
for the calculation thereof, submitted to the Borrower by such Bank shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto); and (z) in the case of clause (iii) above, the Borrower shall take
one of the actions specified in Section 2.10(b) as promptly as possible and,
in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the circumstances
described in Section 2.10(a)(ii), the Borrower may, and in the case of a
Eurodollar Loan affected by the circumstances described in Section 2.10(a)(iii)
the Borrower shall, either (i) if the affected Eurodollar Loan is then being
made initially or pursuant to a conversion, by giving the Administrative Agent
telephonic notice (confirmed in writing) on the same date that the Borrower was
notified by the affected Bank or the Administrative Agent pursuant to Section
2.10(a)(ii) or (iii), cancel the respective Borrowing or conversion, or (ii) if
the affected Eurodollar Loan is then outstanding, upon at least three Business
Days' written notice to the Administrative Agent, require the affected Bank to
convert such Eurodollar Loan into a Base Rate Loan; provided that if more than
one Bank is affected at any time,
then all affected Banks must be treated the same pursuant to this Section
2.10(b).
(c) If at any time after the date hereof, any Bank determines that the
introduction after the date hereof of, or any change after the date hereof in,
any applicable law or governmental rule, regulation, order, guideline or request
(whether or not having the force of law) concerning capital adequacy, or any
change in interpretation or administration thereof by any governmental
authority, central bank or comparable agency made subsequent to the date hereof,
will have the effect of increasing the amount of capital required or expected to
be maintained by such Bank or any corporation controlling such Bank based on the
existence of such Bank's Commitments hereunder or its obligations hereunder,
then the Borrower shall pay to such Bank, upon such Bank's written demand
therefor, such additional amounts as shall be required to compensate such Bank
for the increased cost to such Bank or such corporation or the reduction in the
rate of return to such Bank or such corporation as a result of such increase of
capital. In determining such additional amounts, each Bank shall act reasonably
and in good faith and shall use averaging and attribution methods which are
reasonable; provided that such Bank's determination of compensation owing under
this Section 2.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto. Each Bank, upon determining that any
additional amounts will be payable pursuant to this Section 2.10(c), shall give
prompt written notice thereof to the Borrower, which notice shall show in
reasonable detail the basis for calculation of such additional amounts, although
the failure to give any such notice shall not release or diminish any of the
Borrower's obligations to pay additional amounts pursuant to this Section
2.10(c), except as provided in Section 2.14.
(d) Notwithstanding any other provision of this Section 2.10 or Section
3.06, each Bank and the Issuing Bank shall, to the extent the increased costs or
reductions in amounts receivable referred to in this Section 2.10 or in Section
3.06 relate to such Bank's or the Issuing Bank's loans, commitments or letters
of credit in general and are not specifically attributable to a Loan, Commitment
or Letter of Credit hereunder, use averaging and attribution methods which cover
all loans, commitments or letters of credit similar to the Loans, Commitments or
Letters of Credit made by such Bank or the Issuing Bank in similar circumstances
for comparable customers whether or not the loan documentation for such other
loans, commitments or letters of credit permits the Bank or the Issuing Bank to
make the determination specified in this Section 2.10 or in Section 3.06.
2.11 Compensation. The Borrower shall compensate each Bank, upon its
written request (which request shall set forth in reasonable detail the basis
for requesting such compensation), for all losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required
by such Bank to fund its Eurodollar Loans) which such Bank may sustain: (i) if
for any reason (other than a default by such Bank or the Administrative Agent)
a Borrowing of, or conversion from or into, Eurodollar Loans does not occur on
a date specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn by the Borrower or deemed withdrawn pursuant to
Section 2.10(a)); (ii) if any repayment (including any repayment made pursuant
to Section 5.01 or 5.02 or as a result of an acceleration of the Loans
pursuant to Section 11) or conversion of any of its Eurodollar Loans occurs on
a date which is not the last day of an Interest Period with respect thereto;
(iii) if any prepayment of any of its Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other default by the Borrower to repay its Loans when
required by the terms of this Agreement or any Note held by such Bank or (y)
any election made
pursuant to Section 2.10(b). A Bank's basis for requesting compensation
pursuant to this Section 2.11, and a Bank's calculations of the amount
thereof, shall, absent manifest error, be final and conclusive and binding on
all the parties hereto.
2.12 Change of Lending Office. Each Bank agrees that upon the occurrence
of any event giving rise to the operation of Section 2.10(a)(ii) or (iii),
Section 2.10(c), Section 3.06 or Section 5.04, with respect to such Bank, it
shall, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Bank) to designate another lending
office of such Bank for any Loans or Letters of Credit affected by such event;
provided that such designation is made on such terms that such Bank or its
respective lending offices suffer no economic, legal or regulatory
disadvantage as a result thereof, with the object of avoiding the consequence
of the event giving rise to the operation of such Section. Nothing in this
Section 2.12 shall affect or postpone any of the obligations of the Borrower
or the right of any Bank provided in such Section 2.10, 3.06 or 5.04.
2.13 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank,
(y) if any Bank (other than the Administrative Agent in its capacity as such)
refuses consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks as provided in Section 15.10(b) or (z) upon the occurrence of
any event giving rise to the operation of Section 2.10(a)(ii) or (iii),
Section 2.10(c), Section 3.06 or Section 5.04, with respect to any Bank (other
than the Administrative Agent) which results in such Bank charging to the
Borrower increased costs materially in excess of those being generally charged
by the other Banks, then the Borrower shall have the right, if no Default or
Event of Default then exists, to replace such Bank (the "Replaced Bank") with
any other Bank or with one or more Eligible Transferees, none of which shall
constitute a Defaulting Bank at the time of such replacement (collectively,
the "Replacement Bank") reasonably acceptable to the Administrative Agent and,
if the respective Replacement Bank will have a Revolving Loan Commitment, the
Issuing Bank; provided that:
(i) at the time of any replacement pursuant to this Section 2.13,
the Replacement Bank shall enter into one or more assignment
agreements pursuant to Section 15.04(b) (and with all fees payable
pursuant to Section 15.04(b) to be paid by the Replacement Bank)
pursuant to which the Replacement Bank shall acquire all of the
Commitments and outstanding Loans of, and participations in Letters of
Credit by, the Replaced Bank and, in connection therewith, shall pay
to (y) the Replaced Bank in respect thereof an amount equal to the sum
of (A) an amount equal to the principal of, and all accrued interest
on, all outstanding Loans of the Replaced Bank, (B) an amount equal to
such Replaced Bank's Percentage of all Unpaid Drawings that have been
funded by (and not reimbursed to) such Replaced Bank, together with
all then unpaid interest with respect thereto at such time and (C) an
amount equal to all accrued, but theretofore unpaid, fees owing to the
Replaced Bank pursuant to Section 4.01 hereof and (z) the Issuing Bank
an amount equal to such Replaced Bank's Percentage of any Unpaid
Drawing (which at such time remains an Unpaid Drawing) to the extent
such amount was not theretofore funded by such Replaced Bank; and
(ii) all obligations of the Borrower owing to the Replaced Bank
(other than those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full by the Borrower to
such Replaced Bank concurrently with such replacement.
Upon the execution of the respective assignment documentation, the payment of
amounts referred to in clauses (i) and (ii) above, recordation of the assignment
on the Register by the Administrative Agent pursuant to Section 9.15 and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Notes executed by the Borrower, the Replacement Bank shall become a
Bank hereunder and the Replaced Bank shall cease to constitute a Bank hereunder
with respect to the Loans and Commitments so transferred, except with respect
to indemnification provisions under this Agreement, which shall survive as to
such Replaced Bank, and the Percentages of the Banks shall be automatically
adjusted at such time to give effect to such replacement.
2.14 Notice of Certain Costs. Notwithstanding anything in this Agreement
to the contrary, to the extent any notice required by Section 2.10, 3.06 or
5.04 is given by any Bank (i) more than 60 days after such Bank obtained
knowledge of the occurrence of the event giving rise to the additional cost,
reduction in amounts or other additional amounts of the type described in such
Section or (ii) more than 365 days after such occurrence, such Bank shall not
be entitled to compensation under Section 2.10, 3.06 or 5.04, as the case may
be, for any such amounts incurred or accruing prior to the giving of such
notice to the Borrower.
Section 3. Letters of Credit.
3.01 Letters of Credit. (a) Subject to and upon the terms and conditions
herein set forth, the Borrower may request the Issuing Bank at any time and
from time to time after the Initial Borrowing Date and prior to the 30th
Business Day prior to the Revolving Loan Maturity Date to issue, for the
account of the Borrower, an irrevocable standby letter of credit or trade
letter of credit, as the case may be, in a form customarily used by the
Issuing Bank or in such other form as has been approved by the Issuing Bank in
support of said L/C Supportable Obligations (each such letter of credit,
together with the Existing Letter of Credit, a "Letter of Credit" and,
collectively, the "Letters of Credit"). All Letters of Credit shall be
denominated in Dollars.
(b) The Issuing Bank hereby agrees that it shall (subject to the terms and
conditions contained herein), at any time and from time to time after the
Initial Borrowing Date and prior to the 30th Business Day prior to the Revolving
Loan Maturity Date, following its receipt of the respective Letter of Credit
Request, issue for the account of the Borrower one or more Letters of Credit in
support of such L/C Supportable Obligations as are permitted to remain
outstanding without giving rise to a Default or Event of Default hereunder;
provided that the Issuing Bank shall be under no obligation to issue any Letter
of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority
or arbitrator shall purport by its terms to enjoin or restrain the
Issuing Bank from issuing such Letter of Credit or any requirement of
law applicable to the Issuing Bank or any request or directive
(whether or not having the force of law) from any governmental
authority with jurisdiction over the Issuing Bank shall prohibit, or
request that the Issuing Bank refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular or shall
impose upon the Issuing Bank with respect to the Letter of Credit any
restriction or reserve or capital requirement (for which such Issuing
Bank is not otherwise compensated) not in effect on the date hereof,
or any unreimbursed loss, cost or expense which was not applicable, in
effect or known to the Issuing
Bank as of the date hereof and which the Issuing Bank in good ▇▇▇▇▇
▇▇▇▇▇ material to it;
(ii) the Issuing Bank shall have received a notice of the type
described in the second sentence of Section 3.03(b) from any Bank
prior to the issuance of such Letter of Credit; or
(iii) a Bank Default exists, unless the Issuing Bank has entered
into arrangements satisfactory to it and the Borrower to eliminate the
Issuing Bank's risk with respect to the Bank which is the subject of
the Bank Default, including by cash collateralizing such Bank's
Percentage of the Letter of Credit Outstandings.
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be issued
the Stated Amount of which, when added to the Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid on the date of, or prior to, the
issuance of the respective Letter of Credit) at such time, would exceed either
(x) $2,000,000 or (y) when added to the aggregate principal amount of all
Revolving Loans then outstanding, an amount equal to the lesser of (A) the Total
Revolving Loan Commitment then in effect (after giving effect to any reductions
to the Total Revolving Loan Commitment on such date) and (B) the Borrowing Base
then in effect, and (ii) each Letter of Credit shall by its terms terminate on
or before the earlier of (x) the date which occurs 12 months after the date of
the issuance thereof (although any such Letter of Credit may be renewable for
successive periods of up to 12 months, but not beyond 15 Business Days prior
to the Revolving Loan Maturity Date, on terms acceptable to the Issuing Bank)
and (y) the 15th Business Day prior to the Revolving Loan Maturity Date.
(d) Effective as of the Initial Borrowing Date, the Existing Letter of
Credit will be deemed to have been issued as, and be, a Letter of Credit
hereunder.
3.02 Minimum Stated Amount. The Stated Amount of each Letter of Credit
shall be not less than $50,000 or such lesser amount as is acceptable to the
Issuing Bank.
3.03 Letter of Credit Requests. (a) Whenever the Borrower desires that a
Letter of Credit be issued for its account, the Borrower shall give the
Administrative Agent and the Issuing Bank at least ten Business Days' (or such
shorter period as is acceptable to the Issuing Bank in any given case) written
notice prior to the proposed date of issuance (which shall be a Business Day).
Each notice shall be in the form of Exhibit C (each a "Letter of Credit
Request").
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
3.01(c). Unless the Issuing Bank has received notice from any Bank before it
issues a Letter of Credit that one or more of the conditions specified in
Section 6 or 7, as the case may be, are not then satisfied, or that the issuance
of such Letter of Credit would violate Section 3.01(c), then the Issuing Bank
may issue the requested Letter of Credit for the account of the Borrower in
accordance with the Issuing Bank's usual and customary practices.
3.04 Letter of Credit Participations. (a) Immediately upon the issuance
by the Issuing Bank of any Letter of Credit, the Issuing Bank shall be deemed
to have sold and transferred to each
Bank with a Revolving Loan Commitment, other than the Issuing Bank (each such
Bank, in its capacity under this Section 3.04, a "Participant"), and each such
Participant shall be deemed irrevocably and unconditionally to have purchased
and received from the Issuing Bank, without recourse or warranty, an undivided
interest and participation, to the extent of such Participant's Percentage, in
such Letter of Credit, each substitute letter of credit, each drawing made
thereunder and the obligations of the Borrower under this Agreement with
respect thereto, and any security therefor or guaranty pertaining thereto.
Upon any change in the Revolving Loan Commitments of the Banks pursuant to
Section 2.13 or 15.04, it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic
adjustment to the participations pursuant to this Section 3.04 to reflect the
new Percentages of the assignor and assignee Bank or of all Banks with
Revolving Loan Commitments, as the case may be.
(b) In determining whether to pay under any Letter of Credit, the Issuing
Bank shall not have any obligation relative to the other Banks other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to comply on their face with
the requirements of such Letter of Credit. Any action taken or omitted to be
taken by the Issuing Bank under or in connection with any Letter of Credit, if
taken or omitted in the absence of gross negligence or willful misconduct, shall
not create for the Issuing Bank any resulting liability to the Borrower or any
Bank.
(c) In the event that the Issuing Bank makes any payment under any Letter
of Credit and the Borrower shall not have reimbursed such amount in full to the
Issuing Bank pursuant to Section 3.05(a), the Issuing Bank shall promptly notify
the Administrative Agent, which shall promptly notify each Participant of such
failure, and each Participant shall promptly and unconditionally pay to the
Administrative Agent for the account of the Issuing Bank the amount of such
Participant's Percentage of such unreimbursed payment in Dollars and in same day
funds. If the Administrative Agent so notifies, prior to 11:00 A.M. (New York
time) on any Business Day, any Participant required to fund a payment under a
Letter of Credit, such Participant shall make available to the Administrative
Agent at the Payment Office of the Administrative Agent for the account of the
Issuing Bank in Dollars such Participant's Percentage of the amount of such
payment on such Business Day in same day funds. If and to the extent such
Participant shall not have so made its Percentage of the amount of such
payment available to the Administrative Agent for the account of the Issuing
Bank, such Participant agrees to pay to the Administrative Agent for the
account of the Issuing Bank, forthwith on demand, such amount, together with
interest thereon, for each day from such date until the date such amount is
paid to the Administrative Agent for the account of the Issuing Bank at the
overnight Federal Funds Rate. The failure of any Participant to make available
to the Administrative Agent for the account of the Issuing Bank its Percentage
of any payment under any Letter of Credit shall not relieve any other
Participant of its obligation hereunder to make available to the
Administrative Agent for the account of such Issuing Bank its Percentage of
any Letter of Credit on the date required, as specified above, but no
Participant shall be responsible for the failure of any other Participant to
make available to the Administrative Agent for the account of such Issuing
Bank such other Participant's Percentage of any such payment.
(d) Whenever the Issuing Bank receives a payment of a reimbursement
obligation as to which the Administrative Agent has received for the account of
the Issuing Bank any payments from the Participants pursuant to Section 3.04(c),
the Issuing Bank shall pay to the Administrative
Agent and the Administrative Agent shall promptly pay to each Participant
which has paid its Percentage thereof, in Dollars and in same day funds, an
amount equal to such Participant's share (based on the proportionate aggregate
amount funded by such Participant to the aggregate amount funded by all
Participants) of the principal amount of such reimbursement obligation and
interest thereon accruing after the purchase of the respective participations.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of the Issuing Bank with respect to Letters
of Credit issued shall be irrevocable and not subject to any qualification or
exception whatsoever, and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against a beneficiary named in
a Letter of Credit, any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), any of the Agents,
any Participant, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction
between the Borrower and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
3.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse the Issuing Bank, by making payment to the
Administrative Agent in immediately available funds at the Payment Office (or
by making the payment directly to the Issuing Bank at such location as may
otherwise have been agreed upon by the Borrower and the Issuing Bank), for any
payment or disbursement made by the Issuing Bank under any Letter of Credit
(each such amount so paid until reimbursed, an "Unpaid Drawing"), immediately
after, and in any event on the date of, such payment or disbursement, with
interest on the amount so paid or disbursed by the Issuing Bank, to the extent
not reimbursed prior to 12:00 Noon (New York time) on the date of such payment
or disbursement, from the date paid or disbursed to the date the Issuing Bank
is reimbursed by the Borrower therefor at a rate per annum equal to the sum of
(i) the Base Rate in effect from time to time, (ii) the Applicable Margin for
Revolving Loans which are maintained as Base Rate Loans at such time and (iii)
2%, in each case with such interest to be payable on demand.
(b) The obligations of the Borrower under this Section 3.05 to reimburse
the
Issuing Bank with respect to Unpaid Drawings (including, in each case,
interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against any Bank (including in
its capacity as Issuing Bank or as Participant), including, without
limitation, any defense based upon the failure of any drawing under a Letter
of Credit (each, a "Drawing") to conform to the terms of the Letter of Credit
or any nonapplication or misapplication by the beneficiary of the proceeds of
such Drawing; provided, however, that the Borrower shall not be obligated to
reimburse any Issuing Bank for any wrongful payment made by the Issuing Bank
under a Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of the Issuing Bank.
3.06 Increased Costs. If at any time after the date hereof, the Issuing
Bank or any Participant determines that the introduction after the date hereof
of, or any change after the date hereof in, any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration, thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by the Issuing Bank or
any Participant, or any corporation controlling the Issuing Bank or such
Participant, with any request or directive by any such authority (whether or
not having the force of law) made subsequent to the date hereof, shall either
(i) impose, modify or make applicable any reserve, deposit, capital adequacy
or similar requirement against letters of credit issued by the Issuing Bank or
participated in by any Participant, or (ii) impose on the Issuing Bank or any
Participant, or any corporation controlling the Issuing Bank or such
Participant, any other conditions relating, directly or indirectly, to this
Agreement or any Letter of Credit; and the result of any of the foregoing is
to increase the cost to the Issuing Bank or any Participant of issuing,
maintaining or participating in any Letter of Credit, or reduce the amount of
any sum received or receivable by the Issuing Bank or any Participant
hereunder or reduce the rate of return on its capital with respect to Letters
of Credit, then, upon demand to the Borrower by the Issuing Bank or any
Participant (a copy of which demand shall be sent by the Issuing Bank or such
Participant to the Administrative Agent), the Borrower shall pay to the
Issuing Bank or such Participant such additional amount or amounts as will
compensate such Issuing Bank or such Participant for such increased cost or
reduction in the amount receivable or reduction on the rate of return on its
capital. The Issuing Bank or any Participant, upon determining that any
additional amounts will be payable pursuant to this Section 3.06, shall give
prompt written notice thereof to the Borrower, which notice shall include a
certificate submitted to the Borrower by the Issuing Bank or such Participant
(a copy of which certificate shall be sent by the Issuing Bank or such
Participant to the Administrative Agent), setting forth in reasonable detail
the basis for the calculation of such additional amount or amounts necessary
to compensate the Issuing Bank or such Participant, although failure to give
any such notice shall not release or diminish the Borrower's obligations to
pay additional amounts pursuant to this Section 3.06, except as provided in
Section 2.14. The certificate required to be delivered pursuant to this
Section 3.06 shall, absent manifest error, be final, conclusive and binding on
the Borrower.
Section 4. Commitment Commission; Fees; Reductions of Commitment.
4.01 Fees. (a) The Borrower agrees to pay to the Administrative Agent
for distribution to each of the Banks a commitment commission (the "Commitment
Commission") for the period from the Initial Borrowing Date, in the case of
each Bank party hereto, and on the date such Bank became a party to this
Agreement, in the case of each other Bank, to the Revolving Loan Maturity Date
(or such earlier date as the Total Commitment shall have been terminated)
computed at a
rate for each day equal to 1/2 of 1% per annum on the daily unused portion
of such Bank's Total Commitment. Accrued Commitment Commissions shall be due
and payable quarterly in arrears on each Quarterly Payment Date and on the
Revolving Loan Maturity Date or such earlier date upon which the Total
Commitment is terminated.
(b) The Borrower agrees to pay to the Issuing Bank, for its own account, a
facing fee in respect of each Letter of Credit issued by the Issuing Bank
hereunder (the "Facing Fee"), for the period from the date of issuance of such
Letter of Credit to the date of termination of such Letter of Credit, equal to
1/4 of 1% per annum of the daily Stated Amount of such Letter of Credit.
Accrued Facing Fees shall be due and payable in arrears to the respective
Issuing Bank in respect of each Letter of Credit issued by it on each Quarterly
Payment Date and the date of the termination of the Total Revolving Loan
Commitment on which no Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the Administrative Agent for distribution
to each Bank with a Revolving Loan Commitment a fee in respect of each Letter of
Credit issued hereunder (the "Letter of Credit Fee"), for the period from the
date of issuance of such Letter of Credit to the date of termination of such
Letter of Credit, computed at a rate per annum equal to 2 1/2% on the daily
Stated Amount of such Letter of Credit. Letter of Credit Fees shall be
distributed by the Administrative Agent to the Banks on the basis of the
respective Percentages of such Banks as in effect from time to time. Accrued
Letter of Credit Fees shall be due and payable quarterly in arrears on each
Quarterly Payment Date and on the date of the termination of the Total Revolving
Loan Commitment on which no Letters of Credit remain outstanding.
(d) The Borrower agrees to pay in immediately available funds directly to
the respective Issuing Bank upon each issuance of, drawing under, and/or
amendment of, a Letter of Credit issued by the Issuing Bank such amount as shall
at the time of such issuance, drawing or amendment be the administrative charge
which the Issuing Bank is customarily charging for issuances of, drawings under
(including wire charges) or amendments of, letters of credit issued by it or
such alternative amounts as may have been agreed upon in writing by the Borrower
and the Issuing Bank.
(e) The Borrower shall pay to the Administrative Agent, for its account,
such administrative fees as have been agreed to in writing by the Borrower or
any of its Affiliates and the Administrative Agent payable in advance on the
Effective Date and on each anniversary of the Effective Date thereafter.
4.02 Voluntary Termination of Unutilized Commitments. Upon at least
three Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent at its Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Banks
and to the Issuing Bank), the Borrower shall have the right, without premium
or penalty, to terminate the Total Unutilized Revolving Loan Commitment, in
whole or in part; provided that (i) each such reduction shall apply
proportionately to reduce the Revolving Loan Commitment of each Bank with such
a Commitment and (ii) any partial reduction pursuant to this Section 4.02
shall be in integral multiples of at least $500,000.
4.03 Mandatory Reduction of Commitments. (a) The Total Commitment (and
the Term Loan Commitment and the Revolving Loan Commitment of each Bank with
such a Commitment)
shall terminate on December 31, 1997 unless the Initial Borrowing Date has
occurred on or before such date.
(b) In addition to any other mandatory commitment reductions pursuant to
this Section 4.03, the Total Term Loan Commitment (and the Term Loan Commitment
of each Bank with such a Commitment) shall (i) terminate in its entirety on the
Initial Borrowing Date (after giving effect to the making of the Term Loans on
such date) and (ii) prior to the termination of the Total Term Loan Commitment
as provided in clause (i) above, be reduced from time to time to the extent
required by Section 5.02.
(c) In addition to any other mandatory commitment reductions pursuant to
this Section 4.03, the Total Revolving Loan Commitment (and the Revolving Loan
Commitment of each Bank) shall terminate on the Revolving Loan Maturity Date.
(d) Each reduction to the Total Term Loan Commitment and the Total
Revolving Loan Commitment pursuant to this Section 4.03 shall be applied
proportionately to reduce the Term Loan Commitment and the Revolving Loan
Commitment, as the case may be, of each Bank with such a Commitment.
Section 5. Prepayments; Payments; Taxes.
5.01 Voluntary Prepayments. The Borrower shall have the right to prepay
Loans, without premium or penalty, in whole or in part from time to time on
the following terms and conditions: (i) the Borrower shall give the
Administrative Agent prior to 11:00 A.M (New York time) at its Notice Office
at least one Business Day's prior written notice in the case of Eurodollar
Loans and same day prior written notice in the case of Base Rate Loans of the
Borrower's intent to prepay the Loans, whether Term Loans or Revolving Loans
shall be prepaid, the amount of such prepayment and the Types of Loans to be
prepaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, which notice the Administrative Agent shall
promptly transmit to each of the Banks; (ii) each prepayment shall be in an
aggregate principal amount of at least the Minimum Borrowing Amount and, if
greater, in integral multiples of $50,000; provided that no partial prepayment
of Eurodollar Loans made pursuant to any Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount; (iii) if prepayments of Eurodollar Loans
are made pursuant to this Section 5.01 on any day other than the last day of
an Interest Period applicable thereto, then the Borrower shall pay to the
Administrative Agent for the benefit of the Banks any compensation required to
be paid pursuant to Section 2.11; (iv) each prepayment in respect of any Loans
made pursuant to a Borrowing shall be applied pro rata among such Loans; and
(v) each prepayment of Term Loans pursuant to this Section 5.01 shall reduce
the then remaining Scheduled Term Loan Repayments on a pro rata basis.
5.02 Mandatory Repayments and Commitment Reductions.
(A) Requirements:
(a) On any day on which the sum of the aggregate outstanding principal
amount of Revolving Loans and Letter of Credit Outstandings at such time exceeds
the Total Revolving Loan
Commitment as then in effect, the Borrower shall prepay on such day the
principal of Revolving Loans in an amount equal to such excess. If, after
giving effect to the prepayment of all outstanding Revolving Loans, the
aggregate amount of the Letter of Credit Outstandings exceeds the Total
Revolving Loan Commitment as then in effect, the Borrower shall pay to the
Administrative Agent at its Payment Office on such date an amount of cash
equal to the amount of such excess, such cash to be held as security for all
Obligations of the Borrower hereunder in a cash collateral account to be
established and maintained (including the investments made pursuant thereto)
by the Administrative Agent pursuant to a cash collateral agreement in form
and substance reasonably satisfactory to the Administrative Agent.
(b) If any Borrowing Base Certificate shall disclose the existence of a
Borrowing Base Deficiency, the Borrower shall on the date of the delivery
thereof in accordance with Section 9.01(k) repay the principal of Revolving
Loans in an amount equal to such Borrowing Base Deficiency and, to the extent
such Borrowing Base Deficiency exceeds the principal amount of then outstanding
Revolving Loans required to be prepaid, the Borrower shall pay an amount of cash
equal to such excess to the Administrative Agent at the Payment Office, such
cash to be held as security for all Obligations of the Borrower hereunder in a
cash collateral account established and maintained (including the investments
made pursuant thereto) by the Administrative Agent pursuant to a cash collateral
agreement in form and substance reasonably satisfactory to the Administrative
Agent.
(c) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 5.02(A), the Borrower shall be required to repay on
each date set forth below the principal amount of the Term Loans, to the extent
then outstanding, set forth below opposite such date (each such repayment as the
same may be reduced as provided in Sections 5.01 and 5.02(B), a "Scheduled Term
Loan Repayment"):
Scheduled Repayment Date Amount
------------------------ ----------
December 31, 1998 $1,000,000
March 31, 1999 $ 750,000
June 30, 1999 $ 750,000
September 30, 1999 $ 750,000
December 31, 1999 $ 750,000
March 31, 2000 $1,250,000
June 30, 2000 $1,250,000
September 30, 2000 $1,250,000
December 31, 2000 $1,250,000
March 31, 2001 $1,500,000
June 30, 2001 $1,500,000
September 30, 2001 $1,500,000
December 31, 2001 $1,500,000
March 31, 2002 $1,500,000
June 30, 2002 $1,500,000
September 30, 2002 $1,500,000
December 31, 2002 $1,500,000
March 31, 2003 $2,250,000
June 30, 2003 $2,250,000
September 30, 2003 $2,250,000
November 26, 2003 $ 250,000
(d) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 5.02(A), no later than the Business Day immediately
following the date of the receipt thereof by the Parent or any of its
Subsidiaries, an amount equal to:
(i) 100% of the cash proceeds (net of underwriting discounts and
commissions and all other reasonable costs associated with such
transaction), in excess of $7,500,000 in the aggregate, from any sale
or issuance after the Effective Date of equity securities of the
Parent, the Borrower or any of the Borrower's Subsidiaries (other than
the Equity Transactions) otherwise permitted by Section 10.13;
provided, however, notwithstanding the foregoing, that with respect to
the issuance and sale of common stock by the Parent to any of the
Parent's then existing shareholders or to not more than 25 "accredited
investors" (as defined in Regulation D promulgated pursuant to the
Securities Act) pursuant to a private placement, no prepayment of the
Loans shall be required to be made with the cash proceeds of such
issuance and sale to the extent such cash proceeds are used to make an
acquisition permitted under (S) 10.02 and
(ii) 100% of the cash proceeds (net of underwriting discounts and
commissions, loan fees and all other reasonable costs associated with
such transaction) from any incurrence of any Indebtedness by the
Parent, the Borrower or any of the Borrower's Subsidiaries (other than
(a) the issuance by the Borrower of the Senior Notes and (b) other
Indebtedness permitted by Section 10.05),
shall be applied as provided in Section 5.02(B).
(e) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 5.02(A), no later than 90 days after the last day of
each fiscal year of the Borrower, an amount equal to 50% of Excess Cash Flow of
the Borrower and its Subsidiaries for the relevant Excess Cash Flow Payment
Period shall be applied as provided in Section 5.02(B).
(f) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 5.02(A), no later than the Business Day immediately
following each date after the Effective Date on which the Borrower or any of its
Subsidiaries receives cash proceeds from any sale of assets (including capital
stock and securities other than capital stock the proceeds from the sale of
which is recaptured pursuant to, or would be recaptured but for the exclusions
contained in, Section 5.02(A)(d)(i), but excluding (1) up to $500,000 of Net
Sale Proceeds from the sale of assets permitted to be sold pursuant to Section
10.02(ii)(A), (2) the sale of inventory (other than attaching machinery) in
the ordinary course of business, and (3) the sale of attaching machinery
permitted to be sold pursuant to Section 10.02(ii)(B) (so long as the proceeds
from the sale of such attaching machinery are used to purchase replacement
machinery), an amount equal to 100% of the Net Sale Proceeds thereof shall be
applied as provided in Section 5.02(B); provided, however, that to the extent
the Net Sale Proceeds from sales of assets permitted to be reinvested in the
business pursuant to Section 10.02(ii) are not so reinvested in accordance
with the provisions (including the timing provisions) of such Section
10.02(ii) and this Section 5.02(A)(f), then such Net Sale Proceeds shall
immediately be applied as provided in
Section 5.02(B)).
(g) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 5.02(A), no later than the Business Day immediately
following each date after the Effective Date of the receipt thereof by the
Parent or any of its Subsidiaries, an amount equal to 100% of the cash proceeds
of any Recovery Event (net of reasonable costs incurred in connection with such
Recovery Event (including the estimated marginal increase in income taxes which
will be payable as a result of such Recovery Event by the Parent or any of its
Subsidiaries)) shall be applied as provided in Section 5.02(B); provided that
(x) so long as no Event of Default pursuant to Section 11.01 then exists, on and
after the Effective Date and prior to the date on which there are no outstanding
Obligations, such proceeds shall not be required to be so applied on such date
to the extent that the Parent delivers a certificate to the Administrative Agent
on or prior to such date stating that such proceeds shall be used to replace or
restore any properties or assets in respect of which such proceeds were paid
with substantially the same properties or assets within a period specified in
such certificate not to exceed 180 days after the date of receipt of such
proceeds (which certificate shall set forth estimates of the proceeds to be so
expended), and (y) if all or any portion of such proceeds are not so used within
the period specified in the relevant certificate furnished pursuant to the
preceding clause (x), such remaining portion shall be applied on the last day of
such specified period as provided in Section 5.02(B).
(h) In addition to any other mandatory payments or commitment reductions
pursuant to this Section 5.02(A), no later than the Business Day immediately
following the date of the receipt thereof by the Parent or any of its
Subsidiaries, an amount equal to 50% of the proceeds of any Tax Refund shall be
applied as provided in Section 5.02(B).
(i) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 5.02(A), no later than the Business Day immediately
following the date of the receipt thereof by the Parent or any of its
Subsidiaries, an amount equal to 100% of any surplus assets of any Pension Plan
returned to the Parent or such Subsidiary, net of any applicable taxes, shall be
applied as provided in Section 5.02(B).
(j) Anything contained in this Section 5.02 to the contrary
notwithstanding, and in addition to any other mandatory payments or commitment
reductions pursuant to this Section 5.02(A), (A) if, following the occurrence of
any "Asset Sale" (as such term is defined in the Senior Notes Indenture) by any
Credit Party or any of its Subsidiaries, the Borrower is required to commit by a
particular date (a "Commitment Date") to apply or cause its Subsidiaries to
apply an amount equal to any of the "Net Available Proceeds" (as such term is
defined in the Senior Notes Indenture) thereof in a particular manner, or to
apply by a particular date (an "Application Date") an amount equal to any such
"Net Available Proceeds" in a particular manner, in either case in order to
excuse the Borrower from being required to make a "Net Proceeds Offer" (as such
term is defined in the Senior Notes Indenture) in connection with such "Asset
Sale", and the Borrower shall have failed to so commit or to so apply an amount
equal to such "Net Available Proceeds" at least 15 days before the Commitment
Date or the Application Date, as the case may be, or (B) if the Borrower at any
other time shall have failed to apply or commit or cause to be applied an amount
equal to any such "Net Available Proceeds", and, within 60 days thereafter
assuming no further application or commitment of an amount equal to such "Net
Available Proceeds" the Borrower would otherwise be required to make a "Net
Proceeds Offer"
in respect thereof, then in either such case the Borrower shall immediately
apply or cause to be applied an amount equal to such "Net Available Proceeds"
to the payment of the Loans in the manner set forth in Section 5.02(A)(f) in
such amounts as shall excuse the Borrower from making any such "Net Proceeds
Offer".
(B) Application:
(a) Each mandatory repayment of Loans pursuant to Section 5.02(A)(d)
through (j) shall be applied to prepay the principal of outstanding Term Loans
(or if the Initial Borrowing Date has not yet occurred, as a mandatory reduction
to the Total Term Loan Commitment), which prepayments (and mandatory reductions
to the Term Loan Commitment) shall be applied to reduce the then remaining
Scheduled Term Loan Repayments on a pro rata basis based upon the then remaining
Scheduled Term Loan Repayments after giving effect to all prior reductions
thereto (it being understood and agreed that the amount of any reduction to the
Total Term Loan Commitment shall be deemed to be an application of proceeds for
purposes of this Section 5.02(B)(a)(i) even though cash is not actually
applied).
(b) With respect to each repayment of Loans required by this Section 5.02,
the Borrower may designate the Types of Loans which are to be repaid and, in the
case of Eurodollar Loans, the specific Borrowing or Borrowings of the respective
Tranche pursuant to which made; provided that: (i) repayments of Eurodollar
Loans pursuant to this Section 5.02 may only be made on the last day of an
Interest Period applicable thereto unless all Eurodollar Loans of the respective
Tranche with Interest Periods ending on such date of required repayment and all
Base Rate Loans of the respective Tranche have been paid in full, in which case
the Borrower shall pay to the Administrative Agent for the benefit of the Banks
any compensation required to be paid pursuant to Section 2.11; (ii) if any
repayment of Eurodollar Loans made pursuant to a single Borrowing shall reduce
the outstanding Eurodollar Loans made pursuant to such Borrowing to an amount
less than the Minimum Borrowing Amount, such Borrowing shall immediately be
converted into Base Rate Loans; and (iii) each repayment of any Loans made
pursuant to a single Borrowing shall be applied pro rata among such Loans. In
the absence of a designation by the Borrower as described in the preceding
sentence, the Administrative Agent shall, subject to the above, make such
designation in its sole discretion.
(c) Notwithstanding anything to the contrary contained elsewhere in this
Agreement, (i) all then outstanding Term Loans shall be repaid in full on the
Term Loan Maturity Date and (ii) all then outstanding Revolving Loans shall be
repaid in full on the Revolving Loan Maturity Date.
(d) All prepayments made under this subsection (B) shall be made together
with accrued interest to the date of such prepayment on the principal amount
prepaid.
5.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or under any
Note shall be made to the Administrative Agent for the account of the Bank or
Banks entitled thereto not later than 12:00 Noon (New York time) on the date
when due and shall be made in Dollars in immediately available funds at the
Payment Office of the Administrative Agent. Whenever any payment to be made
hereunder or under any Note shall be stated
to be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day (except to the extent otherwise
required herein with respect to Eurodollar Loans) and, with respect to
payments of principal, interest shall be payable at the applicable rate during
such extension.
5.04 Net Payments. (a) All payments made by the Guarantors or the
Borrower hereunder, or by the Borrower under any Note, will be made without
setoff, counterclaim or other defense. Except as provided in Section 5.04(b),
all such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by
any jurisdiction or by any political subdivision or taxing authority thereof
or therein with respect to such payments (but excluding, except as provided in
the second succeeding sentence, any tax imposed on or measured by the net
income of a Bank or the Issuing Bank pursuant to the laws of the jurisdiction
or any political subdivision or taxing authority thereof or therein in which
the principal office or applicable lending office of such Bank, is located)
and all interest, penalties or similar liabilities with respect thereto
(collectively, "Taxes"). If any Taxes are so levied or imposed, the Borrower
and the Guarantors jointly and severally agree to pay the full amount of such
Taxes to the relevant taxation authority or other governmental authority in
accordance with applicable law, and such additional amounts as may be
necessary so that every payment of all amounts due hereunder or under any
Note, after withholding or deduction for or on account of any Taxes, will not
be less than the amount provided for herein or in such Note. If any amounts
are payable in respect of Taxes pursuant to the preceding sentence, then the
Borrower and the Guarantors shall jointly and severally be obligated to
reimburse each Bank or the Issuing Bank, as the case may be, within 60 days
from the date such Bank or the Issuing Bank makes written demand therefor for
taxes imposed on or measured by the net income of such Bank or the Issuing
Bank, as the case may be, pursuant to the laws of the jurisdiction or any
political subdivision or taxing authority thereof or therein in which the
principal office or applicable lending office of such Bank or the Issuing Bank
is located as such Bank or the Issuing Bank, as the case may be, shall
determine are payable by such Bank or the Issuing Bank in respect of such
amounts so paid to or on behalf of such Bank or the Issuing Bank pursuant to
the preceding sentence and in respect of any amounts paid to or on behalf of
such Bank or the Issuing Bank pursuant to this sentence. The Borrower or the
Guarantors, as the case may be, shall furnish to the Administrative Agent
within 60 days after the date of the payment of any Taxes due pursuant to
applicable law, certified copies of the receipts evidencing such payment by
the Borrower or the Guarantors or other written proof of payment reasonably
satisfactory to the Administrative Agent showing payment thereof. The Borrower
and the Guarantors jointly and severally agree to indemnify and hold harmless
each Bank, the Issuing Bank and each of the Agents, and to reimburse such
Bank, the Issuing Bank or such Agent (as the case may be) upon its written
request, for the amount of any Taxes and Other Taxes (as defined below) so
levied or imposed and paid by such Bank, the Issuing Bank or such Agent (as
the case may be). This indemnification shall be made with 60 days after the
date such Bank, the Issuing Bank or such Agent (as the case may be) makes
written demand therefor.
(b) The Issuing Bank (if appropriate) and each Bank that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code)
agrees to deliver to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the case of a Bank that is an assignee or transferee
of an interest under this Agreement pursuant to Section 15.04 (unless the
respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer), on
the date of such assignment or transfer to such Bank, (i) two accurate and
complete original signed copies of Internal Revenue Service Form 4224 or 1001
(or successor forms) certifying to such Bank's or the Issuing Bank's
entitlement to a complete exemption from or a reduced rate of United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Bank or the Issuing Bank is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 4224 or 1001 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit H (any such certificate, a
"Section 5.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's or the Issuing Bank's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement and under any Note. In addition, each
Bank and the Issuing Bank agrees from time to time after the Effective Date,
(i) when a change in circumstances renders the previous certification obsolete
or inaccurate in any material respect or (ii) upon the reasonable written
request of the Borrower to such Bank, the Issuing Bank and the Administrative
Agent, when a lapse in time renders the previous certification obsolete that
it will deliver to the Borrower and the Administrative Agent (unless the Bank
or the Issuing Bank is not lawfully able to do so solely as a result of a
change in law) two new accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001, or Form W-8 and a Section
5.04(b)(ii) Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Bank or the
Issuing Bank to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and under any
Note, or it shall immediately notify the Borrower and the Administrative Agent
of its inability to deliver any such Form or Certificate. If the form provided
by a Bank or the Issuing Bank at the time such Bank or the Issuing Bank first
becomes a party to this Agreement indicates a United States withholding tax in
excess of zero, withholding tax at such rate shall be considered excluded from
Taxes unless and until such Bank or the Issuing Bank provides the appropriate
form certifying that a lesser rate applies, whereupon withholding at such
lesser rate shall only be considered excluded from Taxes for periods governed
by such form. Notwithstanding anything to the contrary contained in Section
5.04(a), but subject to the immediately preceding and succeeding sentences,
the Borrower shall not be obligated pursuant to Section 5.04(a) hereof to
gross-up payments to be made to a Bank, the Issuing Bank or the Administrative
Agent in respect of income or similar taxes imposed by the United States (or
any political subdivision taxing authority thereof or therein) and shall be
entitled to deduct or withhold such taxes, to the extent it is required to do
so by law from interest, fees and other amounts payable hereunder, if (1) such
Bank or the Issuing Bank has not provided to the Borrower the appropriate form
described in this subsection (b) (other than if, due to a change in law
occurring after the date on which a form originally was required to be
provided, such form is not required under this subsection (b)) required to be
provided to the Borrower pursuant to this Section 5.04(b) or (2) in the case
of a payment, other than interest, to a Bank or the Issuing Bank described in
clause (ii) above, to the extent that such forms do not establish a complete
exemption from withholding of such taxes. Notwithstanding anything to the
contrary contained in the preceding sentence or elsewhere in this Section
5.04, the Borrower agrees to pay additional amounts and to indemnify each Bank
and the Issuing Bank in the manner set forth in Section 5.04(a) (without
regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any amounts deducted or withheld by it as described
in the immediately preceding sentence as a result of any changes after the
Effective Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the
deducting or withholding of income or similar Taxes.
(c) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges, levies that arise from
any payment made hereunder or under the Notes, if any, or from the execution,
delivery or registration of, or otherwise with respect to this Agreement or the
Notes, if any (herein referred to as "Other Taxes").
(d) In the event that an additional payment is made under this Section 5.04
for the account of any Bank and such Bank, in its sole opinion, determines that
it has finally and irrevocably received or been granted a refund in respect of
any Taxes paid pursuant to this Section 5.04, such Bank shall promptly remit
such refund to the Borrower, net of all out-of-pocket expenses of such Bank
related thereto; provided, however, that the Borrower upon the request of such
Bank, agrees to promptly return such refund to such Bank in the event such Bank
is required to repay such refund to the relevant taxing authority. Nothing
contained herein shall interfere with the right of a Bank to arrange its tax
affairs in whatever manner it thinks fit nor oblige any Bank to apply for any
refund or to disclose any information relating to its tax affairs or any
computations in respect thereof.
Section 6. Conditions Precedent to Loans on the Initial Borrowing Date.
The obligation of each Bank to make Loans on the Initial Borrowing Date and the
Issuing Bank to issue any Letter of Credit on the Initial Borrowing Date is
subject at the time of such Credit Events to the satisfaction of the following
conditions:
6.01 Execution of Agreement Notes. On or prior to the Initial Borrowing
Date (i) the Effective Date shall have occurred and (ii) there shall have been
delivered to the Administrative Agent for the account of each of the Banks the
appropriate Term Note or Revolving Note executed by the Borrower, in each case
in the amount, maturity and as otherwise provided herein.
6.02 Officer's Certificate. On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate dated the Initial
Borrowing Date signed on behalf of each of the Credit Parties by the
president, any executive vice president or any vice president of such Credit
Party stating that all of the conditions in Sections 6.06, 6.07, 6.09, 6.10,
6.14, 6.16, 6.18, 7.01, 7.02 and 7.03 have been satisfied on such date;
provided that such certificate shall not be required to certify as to the
acceptability of any items to the Agents, the Issuing Bank and/or the Banks or
as to whether the Agents, the Issuing Bank and/or the Banks are aware of or
are satisfied with any of the matters described in such Sections.
6.03 Opinions of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received from (i) ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
special counsel to the Credit Parties, an opinion addressed to each of the
Agents, the Issuing Bank and each of the Banks and dated the Initial Borrowing
Date in the form of Exhibit D, (ii) local counsel to the Banks, the Issuing Bank
and the Agents, opinions addressed to each of the Agents, the Issuing Bank and
each of the Banks and dated the Initial Borrowing Date, each of which shall be
in form and substance reasonably satisfactory to the Agents and shall cover the
perfection and priority of the security interests granted pursuant to the
Security Documents and such other matters incident to the transactions
contemplated hereby and by the other Credit Documents as the Agents may request
and (iii) counsel rendering such opinions, reliance letters with respect to all
legal opinions delivered in connection with the Transaction which shall be (x)
addressed to each of the Agents, the Issuing Bank and each of the Banks and
dated the Initial
Borrowing Date and (y) in form and substance reasonably satisfactory to the
Agents (it being understood that reliance language in an opinion delivered to
another Person shall be permitted to be substituted for reliance letters).
6.04 Corporate Documents; Proceedings. (a) On the Initial
Borrowing Date, the Administrative Agent shall have received from each Credit
Party a certificate, dated the Initial Borrowing Date, signed by the president
or any vice president of such Credit Party, and attested to by the secretary or
any assistant secretary of such Credit Party, in the form of Exhibit E with
appropriate insertions, together with copies of the Certificate of Incorporation
and By-Laws of such Credit Party and the resolutions of such Credit Party
referred to in such certificate, and the foregoing shall be reasonably
acceptable to the Agents and the Required Banks.
(b) All corporate and legal proceedings and all instruments and agreements
relating to the transactions contemplated by this Agreement and the other
Documents shall be reasonably satisfactory in form and substance to the Agents
and the Required Banks, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates,
certificates of merger and bring-down telegrams, if any, which the Agents or the
Required Banks may have reasonably requested in connection therewith, such
documents and papers, where appropriate, to be certified by proper corporate or
governmental authorities.
6.05 Employee Benefit Plans; Shareholders Agreements; Management
Agreements; Employment Agreements; and Debt Agreements. On or prior to the
Initial Borrowing Date, there shall have been delivered to the Administrative
Agent true and correct copies, certified as true and complete by an appropriate
officer of the Parent or the Borrower, as the case may be, of:
(i) all Employee Benefit Plans;
(ii) all agreements entered into by the Parent or any of its
Subsidiaries governing the terms and relative rights of its capital stock
and any agreements entered into by its shareholders relating to any such
entity with respect to their capital stock (collectively, the
"Shareholders Agreements");
(iii) all agreements with members of, or with respect to, the
management of the Parent or any of its Subsidiaries other than Employment
Agreements (collectively, the "Management Agreements");
(iv) any employment agreements entered into by the Parent or any of
its Subsidiaries (collectively, the "Employment Agreements"); and
(v) all agreements evidencing or relating to Indebtedness of the
Parent or any of its Subsidiaries which is to remain outstanding after
giving effect to the incurrence of Loans on the Initial Borrowing Date
(collectively, the "Debt Agreements");
all of which Employee Benefit Plans, Shareholders Agreements, Management
Agreements, Employment Agreements, and Debt Agreements shall be in form and
substance reasonably satisfactory
to the Agents and the Required Banks and shall be in full force and effect on
the Initial Borrowing Date.
6.06 Equity Transactions; Capital Contributions. (a) On or prior to the
Initial Borrowing Date, the Parent shall have received (i) not less than
$40,000,000, in the aggregate, in respect of Capital Stock of the Parent,
consisting of approximately $36,600,000 in cash and approximately $3,400,000
in the rollover of Capital Stock and stock options of the Parent pursuant to
the Saratoga Investment and the Management Investment and (ii) not less than
$10,000,000 in cash pursuant to the Units Offering.
(b) On or prior to the Initial Borrowing Date, the Parent shall have made
the Equity Contribution to the Borrower, to be used by the Borrower to finance
in part the Acquisition, the Refinancings and the Mergers.
(c) On or prior to the Initial Borrowing Date, the Borrower shall have
received at least $100,000,000 in gross cash proceeds from the issuance of the
Senior Notes.
(d) On or prior to the Initial Borrowing Date, the Administrative Agent
shall have received true and correct copies of all documents effecting and
evidencing the Equity Transactions and the Equity Contribution, each such
document of which shall have been duly authorized, executed and delivered by the
parties thereto and shall be in full force and effect and in form and substance
(including all terms and conditions thereof) reasonably satisfactory to the
Agents and the Required Banks.
6.07 Consummation of the Acquisition. On or prior to the
Initial Borrowing Date, there shall have been delivered to the Banks and the
Issuing Bank true and correct copies of all Acquisition Documents, all terms and
provisions of such Acquisition Documents (other than the Stock Purchase
Agreement) shall be in form and substance reasonably satisfactory to the Agents
and the Required Banks and none of the Acquisition Documents shall have been
amended without the consent of the Agents and the Required Banks (which consent
shall not be unreasonably withheld). The Acquisition, including all of the
terms and conditions thereof, shall have been duly approved by the board of
directors and (if required by applicable law) the shareholders of the parties
thereto, and all Acquisition Documents shall have been duly executed and
delivered by the parties thereto and shall be in full force and effect. The
representations and warranties set forth in the Acquisition Documents shall be
true and correct in all material respects as if made on and as of the Initial
Borrowing Date, except to the extent that such representations and warranties
are stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date. Each of the conditions precedent to the
Parent's and KSCO's obligations to consummate the Acquisition as set forth in
the Acquisition Documents shall have been satisfied to the reasonable
satisfaction of the Agents and the Required Banks or waived with the consent of
the Agents and the Required Banks. Merger Sub shall have used the proceeds from
the Equity Contribution, the Term Loan and the issuance of the Senior Notes to
consummate the Acquisition, the Refinancings and the Mergers and to pay all fees
and expenses in connection therewith. The Acquisition, the Refinancings and the
Mergers shall have been consummated in accordance with all applicable law, and
the Acquisition Documents (without giving effect to any amendment or
modification thereof or waiver with respect thereto unless consented to by the
Agents or the Required Banks, which consent shall not
be unreasonably withheld).
6.08 Security Agreement. On the Initial Borrowing Date, each
of the Credit Parties shall have duly authorized, executed and delivered a
Security Agreement in the form of Exhibit F (as modified, supplemented or
amended from time to time, the "Security Agreement") covering all of the present
and future Security Agreement Collateral of the Credit Parties, in each case
together with:
(i) proper financing statements (Form UCC-1 or UCC-3 or such other
financing statements or similar notices as shall be required by local
law) fully executed for filing under the UCC or other appropriate filing
offices of each jurisdiction as may be necessary or, in the opinion of
the Collateral Agent, desirable to perfect the security interests
purported to be created by the Security Agreement;
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all judgment liens, tax liens and
effective financing statements that name any of the Credit Parties, or a
division or other operating unit or trade name of any such Credit Party,
as debtor and that are filed in the jurisdictions referred to in clause
(i) of this Section 6.08, together with copies of such other financing
statements (none of which shall cover any Collateral except to the extent
evidencing Permitted Liens or for which the Collateral Agent shall
receive termination statements (Form UCC-3 or such other termination
statements as shall be required by local law) fully executed for filing);
(iii) to the extent required by the Collateral Agent, evidence of
the completion of all other recordings and filings of, or with respect
to, the Security Agreement as may be necessary or, in the opinion of the
Collateral Agent, desirable to perfect the security interests intended to
be created by such Security Agreement, except with respect to the
Mortgages, which are covered by Section 6.18;
(iv) evidence that all other actions necessary or, in the opinion of
the Collateral Agent, desirable to perfect and protect the security
interests purported to be created by the Security Agreement have been
taken; and
(v) all of the Pledged Securities referred to therein then owned by
each such Credit Party (x) endorsed in blank in the case of promissory
notes constituting Pledged Securities and (y) together with executed and
undated irrevocable stock powers, in the case of capital stock
constituting Pledged Securities;
and the Security Agreement and such other documents shall be in full force and
effect.
6.09 Material Adverse Change, Etc. Since December 31, 1996,
(i) there shall have occurred no material adverse change in the operations or
financial condition of the Parent, Merger Sub, KSCO and the Company, together
with their respective Subsidiaries, taken as a whole and (ii) nothing shall have
occurred (and the Banks and the Issuing Bank shall have become aware of no
facts, conditions or other information not previously known) which the Agents or
the Required Banks shall determine (a) could reasonably be expected to have a
material adverse effect on the rights or remedies of the Banks, the Issuing Bank
or the Agents or on the ability of the Parent or any of its Subsidiaries to
perform their obligations to the Agents, the Issuing Bank and the Banks under
this Agreement or under any other Credit Document, (b) could reasonably be
expected to have a material adverse effect on the Transaction or (c)
indicates the inaccuracy in any material respect of the information previously
provided to the Agents, the Issuing Bank or the Banks (taken as a whole) in
connection with their analysis of the transactions contemplated hereby or
indicates that the information previously provided omitted to disclose any
material information.
6.10 Litigation. Since October 10, 1997, there shall have been no
litigation or administrative proceedings or other legal or regulatory
developments, by any entity (private or governmental), actual or, other than in
the case of clause (a) below, threatened, and there shall have occurred no
adverse change in the status of any such proceedings or developments disclosed
to the Agents, the Issuing Bank and the Banks prior to October 10, 1997, in
either case that, in the reasonable judgment of the Agents, (a) would have a
material adverse effect on the operations or financial condition of the Parent,
Merger Sub, KSCO and the Borrower together with their respective Subsidiaries,
taken as a whole, or (b) involves a reasonable possibility of (i) a material
adverse effect on (x) the ability of any of the Credit Parties to perform their
respective obligations hereunder or under any of the other Credit Documents or
(y) the rights, remedies and benefits available to the Agents, the Issuing Bank
and the Banks hereunder or under any of the other Credit Documents, or (ii)
adversely affecting the ability of any Person to consummate any aspect of the
Transaction or the validity or enforceability of any of the Documents, or which
would be materially inconsistent with the assumptions underlying the forecasts
previously provided to the Agents, the Issuing Bank and the Banks.
6.11 Fees, Etc. On the Initial Borrowing Date, the Borrower shall have
paid in full to the Agents, the Issuing Bank and the Banks all costs, fees and
expenses (including, without limitation, all legal fees and expenses) payable to
the Agents, the Issuing Bank and the Banks to the extent then due pursuant
hereto or as otherwise agreed to between the Parent or any of its Affiliates and
any of the Agents.
6.12 Solvency Opinion; Environmental Assessments. On the Initial Borrowing
Date, the Borrower shall cause to be delivered to the Agents, the Issuing Bank
and the Banks:
(i) a solvency opinion from Houlihan, Lokey, ▇▇▇▇▇▇ & ▇▇▇▇▇
Financial Advisors, Inc., which shall be addressed to each of the Agents,
the Issuing Bank and each of the Banks and dated the Initial Borrowing
Date and in form and substance satisfactory to the Agents and the
Required Banks, and together with asset appraisals and other evidence, in
each case, satisfactory to the Administrative Agent and the Required
Banks, setting forth the conclusion that, before and after giving effect
to the consummation of the Transaction and the other transactions
contemplated hereby and by the Documents, the Parent and its Subsidiaries
(on a consolidated basis), are not insolvent and will not be rendered
insolvent by the Indebtedness incurred in connection herewith, will not
be left with unreasonably small capital with which to engage in their
respective businesses, will not have incurred debts beyond their ability
to pay such debts as they mature and become due, the fair value of the
property of such Credit Party is greater than the total amount of
liabilities (including, without limitation, contingent liabilities) of
such Credit Party and the present fair salable value of the assets of
such Credit Party is not less than the amount that will be required to
pay the probable liability of such Credit Party on its debts as they
become absolute and matured; and
(ii) environmental liability assessments of certain manufacturing
facilities of the Parent and each of its Subsidiaries prepared by ENVIRON
Corporation, which shall be in scope, and in form and substance,
acceptable to the Agents and the Required Banks (such acceptance not to
be unreasonably withheld), together with reliance letters with respect
thereto.
6.13 Insurance Policies. On the Initial Borrowing Date, the Administrative
Agent shall have received evidence (including, without limitation, certificates
with respect to each insurance policy listed in Schedule V and, with respect to
all casualty insurance, naming the Collateral Agent on behalf of the Secured
Creditors, as mortgagee/secured party and loss payee, and with respect to all
liability policies, naming each of the Administrative Agent, the Issuing Bank
and each of the Banks as an additional insured, and in all cases stating that
such insurance shall not be cancelled or revised without 30 days' prior written
notice by the insurer to the Administrative Agent) of insurance complying with
the requirements of Section 9.03 for the business and properties of Borrower and
each of its Subsidiaries, in form and substance reasonably satisfactory to the
Agents and the Required Banks.
6.14 Approvals. All requisite governmental and other third party approvals
necessary to consummate the Transaction and the other transactions contemplated
by the Documents and otherwise referred to herein or therein (including, but not
limited to, those approvals required in respect of existing permits, landlord
consents and transfers of contract rights) shall have been obtained and remain
in effect, and all applicable appeal periods and all applicable waiting periods,
including, without limitation, the HSR Act, shall have expired without any
action being taken by any competent authority which restrains, prevents or
imposes adverse conditions upon the consummation of the Transaction or the other
transactions contemplated by the Documents and otherwise referred to herein or
therein. Additionally, there shall not exist any actual or threatened judgment,
order, injunction or other restraint issued or filed or a hearing seeking
injunction relief or other restraint pending or notified that has a reasonable
likelihood of restraining, preventing or imposing burdensome conditions upon the
consummation of the Transaction, the other transactions contemplated by the
Documents, the making of the Loans or the issuance of Letters of Credit.
6.15 Financial Statements; Projections; Management Letters. (a) On or
prior to the Initial Borrowing Date, the Issuing Bank and the Banks shall have
received (i) the consolidated balance sheets of the Company and its Subsidiaries
as at December 31, 1996 and December 31, 1995, and the related statements of
earnings and stockholders' equity and cash flows of the Company and its
Subsidiaries for the fiscal periods ended as of such dates, which have been
examined by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent certified public accountants, who
delivered unqualified opinions in respect thereto, (ii) the consolidated balance
sheets of the Company and its Subsidiaries as at December 31, 1994, and the
related statements of earnings and stockholders' equity and cash flows of the
Company and its Subsidiaries for the fiscal period ended as of December 31,
1994, which have been examined by Deloitte & Touche LLP, independent certified
public accountants, who delivered an unqualified opinion in respect thereto,
(iii) the consolidated balance sheet of the Company and its Subsidiaries as at
September 30, 1997, and the related statements of earnings and stockholders'
equity and cash flows of the Company and its Subsidiaries for the fiscal period
ended as of such date, and (iv) the pro forma (both before and after giving
effect to the Transaction and the other transactions contemplated by the
Documents and the related financing thereof) consolidated balance sheet of the
Parent and its Subsidiaries as at the Initial Borrowing Date, all of which
financial statements shall be prepared in
accordance with U.S. GAAP consistent with past practices and shall be in form
and substance satisfactory to the Agents and the Required Banks, and the
Agents and the Required Banks shall be reasonably satisfied that such pro
forma balance sheet does not materially and adversely differ from the balance
sheet dated August 31, 1997, previously provided to the Agents, the Issuing
Bank and the Banks.
(b) On the Initial Borrowing Date, the Issuing Bank and the Banks shall
have received detailed consolidated financial projections, after giving effect
to the Transaction and the other transactions contemplated by the Documents, for
at least five years ended after the Initial Borrowing Date (the "Projections"),
which Projections shall be as set forth on Schedule II.
(c) On or prior to the Initial Borrowing Date, the Administrative Agent
shall have received a copy of any "management letter" received by KSCO, the
Company or any of their respective Subsidiaries from their certified public
accountants on or after December 31, 1990.
6.16 Refinancing. On the Initial Borrowing Date, after giving effect to
the Loans incurred on the Initial Borrowing Date, neither the Parent nor any of
its Subsidiaries shall have any preferred stock or Indebtedness outstanding
except for the Senior Preferred Stock, the Series B Preferred Stock, the Senior
Notes, the Loans and the indemnity obligations under the Acquisition Documents,
which indemnity obligations (other than any indemnity obligations set forth in
the Stock Purchase Agreement) shall be reasonably satisfactory to the Agents and
the Required Banks, and the Existing Indebtedness, the amount and terms of which
shall be reasonably satisfactory to the Agents and the Required Banks. On the
Initial Borrowing Date, the Refinancings shall have occurred. On or prior to the
Initial Borrowing Date, (i) each of the facilities, agreements and instruments
under which Indebtedness or the Synthetic Lease to be refinanced as part of the
Transaction was issued (collectively, the "Refinanced Indebtedness") shall have
been terminated, (ii) all commitments under the Refinanced Indebtedness shall
have been permanently cancelled, (iii) the amount of all accrued interest,
premiums, fees and commissions shall have been paid in full, (iv) all Liens in
connection with the repayment of such Refinanced Indebtedness shall have been
terminated (and all appropriate releases, termination statements or other
instruments of assignment with respect thereto shall have been obtained) and (v)
all material waivers and consents necessary for the consummation of the
Transaction and the other transactions contemplated by the Documents in respect
of any Indebtedness of the Borrower or the Company (including any Refinanced
Indebtedness) shall have been obtained. The Administrative Agent shall have
received copies, certified as true and complete by an appropriate officer of the
Parent, of all documents executed in connection with the Refinancings and the
repayment of the Refinanced Indebtedness and the release of the Liens thereunder
(collectively, the "Termination Documents").
6.17 Consent Letter. The Administrative Agent shall have received a letter
from National Corporate Research Ltd., presently located at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, substantially in the form of Exhibit G hereto,
indicating its consent to its appointment by the Parent and each other Credit
Party as their agent to receive service of process as specified in Section 15.14
of this Agreement.
6.18 Mortgage; Title Insurance; Surveys; Etc. On the Initial Borrowing
Date, the Collateral Agent shall have received:
(a) fully executed counterparts of a mortgage or deed to secure debt
or similar
documents in form and substance satisfactory to the Agents (as may be
amended, modified or supplemented from time to time in accordance with
the terms hereof and thereof, each, a "Mortgage" and collectively, the
"Mortgages"), which Mortgages shall cover such of the Real Property owned
by the Borrower or any of its Subsidiaries (after giving effect to the
Transaction) as designated on Schedule III (each, a "Mortgaged Property"
and collectively, the "Mortgaged Properties"), together with evidence
that counterparts of the Mortgages have been delivered to the title
insurance company insuring the Lien of the Mortgages for recording in all
places to the extent necessary and as contemplated by this Agreement or,
in the reasonable opinion of the Collateral Agent, desirable to
effectively create a valid and enforceable first priority mortgage lien
on each Mortgaged Property in favor of the Collateral Agent (or such
other trustee as may be required or desirable under local law) for the
benefit of the Secured Creditors;
(b) mortgagee title insurance policies in connection with the
Mortgaged Properties issued by First American Title Insurance Company or
an affiliate thereof or such other title insurers satisfactory to the
Agents and the Required Banks (the "Mortgage Policies") in amounts
satisfactory to the Agents and the Required Banks assuring the Collateral
Agent that the respective Mortgages on such Mortgaged Properties are
valid and enforceable first priority mortgage liens on the respective
Mortgaged Properties, free and clear of all defects and encumbrances
except Permitted Encumbrances, and such Mortgage Policies shall otherwise
be in form and substance reasonably satisfactory to the Agents and the
Required Banks and shall include, as appropriate, an endorsement for
future advances under this Agreement, the Notes and the Mortgages and for
any other matter that the Agents or the Required Banks in their
discretion may reasonably request, shall not include an exception for
mechanics' liens, and shall provide for affirmative insurance and such
reinsurance (including direct access agreements) as the Agents or the
Required Banks in their discretion may reasonably request; and
(c) surveys in form and substance reasonably satisfactory to the
Agents of each Mortgaged Property dated a recent date acceptable to the
Agents, certified in a manner satisfactory to the Agents by a licensed
professional surveyor satisfactory to the Agents.
6.19 Initial Borrowing Base Certificate. On the Initial Borrowing Date,
the Borrower shall have delivered to the Administrative Agent a Borrowing Base
Certificate meeting the requirements of Section 9.01(k).
6.20 Direction Letters. The Borrower shall, and shall have caused each of
its Domestic Subsidiaries to, have duly authorized and executed a letter to each
of the banking institutions listed on Schedule IX (each a "Deposit Bank"), a
copy of which letter shall be delivered to the Administrative Agent on the
Initial Borrowing Date and the original of which letter shall be delivered to
each of the applicable Deposit Banks no later than 15 days after the Initial
Borrowing Date (i) advising such Deposit Bank that each checking, savings or
other deposit account listed on Schedule IX as a bank deposit account (each a
"Bank Deposit Account") has been pledged to the Collateral Agent pursuant to the
Security Agreement and (ii) directing such Deposit Bank to transfer, in same day
funds, not later than 1:00 P.M. (New York City time) on each Business Day, an
amount equal to the available and collected credit balance of all Bank Deposit
Accounts as of the end of such Business Day to the
Concentration Account.
Section 7. Conditions Precedent to All Credit Events. The obligation of
each Bank to make any Loan (including any Loan made on the Initial Borrowing
Date) and the obligation of the Issuing Bank to issue any Letter of Credit
(including any Letter of Credit issued on the Initial Borrowing Date), is
subject, at the time of each such Credit Event (except as hereinafter
indicated), to the satisfaction of the following conditions:
7.01 No Default; Representations and Warranties. At the time
of each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event, except
for representations and warranties expressly stated to relate to a specific
earlier date, which shall be true and correct as of such date.
7.02 Material Adverse Change, Etc. Nothing shall have occurred since the
Effective Date which (i) could reasonably be expected to have a material
adverse effect on the rights or remedies of the Banks, the Issuing Bank or the
Agents, or on the ability of the Parent, the Borrower or any other Credit
Party to perform their respective obligations to the Agents, the Issuing Bank
and the Banks under this Agreement or under any other Credit Document or (ii)
could reasonably be expected to have a material adverse effect on the
operations or financial condition of the Merger Sub, KSCO and the Borrower
together with their respective Subsidiaries, taken as a whole.
7.03 Litigation. Other than with respect to the matters set
forth on Schedule VIII, at the time of each such Credit Event and also after
giving effect thereto, there shall be no litigation or administrative
proceedings or other legal or regulatory developments, by any entity (private or
governmental), actual or, other than in the case of clause (a) below in the case
of the initial Credit Event, threatened, and there shall have occurred no
adverse change in the status of any such proceedings or developments since the
Effective Date, in either case that, in the reasonable judgment of the
Administrative Agent, (a) would have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Parent and
its Subsidiaries taken as a whole, or (b) involves a reasonable possibility of
(i) a material adverse effect on (x) the ability of any of the Credit Parties to
perform their respective obligations hereunder or under any of the other Credit
Documents or (y) the rights, remedies and benefits available to the Agents, the
Issuing Bank and the Banks hereunder or under any of the other Credit Documents,
or (ii) adversely affecting the validity or enforceability of any Document, or
which would be materially inconsistent with the assumptions underlying the
forecasts previously provided to the Agents, the Issuing Bank and the Banks.
7.04 Notice of Borrowing; Letter of Credit Request; Other
Documents. (a) Prior to the making of each Loan, the Administrative Agent
shall have received a Notice of Borrowing meeting the requirements of Section
2.03.
(b) Prior to the issuance of each Letter of Credit, the Issuing Bank shall
have received a Letter of Credit Request meeting the requirements of Section
3.03.
(c) Prior to the making of each Loan and the issuance of each Letter of
Credit, the Administrative Agent shall have received such other approvals,
opinions or documents as any Bank or the Issuing Bank through the Administrative
Agent shall have reasonably requested in connection therewith.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to the Issuing Bank and each of the
Banks that (a) on the Initial Borrowing Date, all the conditions specified in
Section 6 exist as of that time and (b) on the date of each Credit Event, all
the conditions specified in this Section 7 exist as of that time. All of the
Notes, certificates, legal opinions and other documents and papers referred to
in Section 6 and in this Section 7, unless otherwise specified, shall be
delivered to the Administrative Agent at the Notice Office for the account of
the Issuing Bank and each of the Banks and, except for the Notes, in sufficient
counterparts for the Issuing Bank and each of the Banks and, unless otherwise
specified, shall be in form and substance reasonably satisfactory to the Issuing
Bank and the Banks.
Section 8. Representations, Warranties and Agreements. In order to
induce the Issuing Bank and the Banks to enter into this Agreement and to make
the Loans, and issue (or participate in) the Letters of Credit as provided
herein, each of the Credit Parties makes the following representations,
warranties and agreements as to itself and as to each of its Subsidiaries, as
of the Initial Borrowing Date (after giving effect to the Credit Events
occurring on such date, the Transaction and the other transactions
contemplated by the Documents, and all references to the Borrower herein and
elsewhere in this Agreement, shall, unless otherwise specifically indicated,
be references to the Borrower after giving effect to the Transaction) and as
of the date of each subsequent Credit Event, which representations, warranties
and agreements shall survive the execution and delivery of this Agreement and
the Notes and any subsequent Credit Event, with the occurrence of each Credit
Event on or after the Initial Borrowing Date being deemed to constitute a
representation and warranty that the matters specified in this Section 8 are
true and correct on and as of the Initial Borrowing Date and on the date of
each such Credit Event except to the extent that such representation and
warranty relates to a specific earlier date, in which case such representation
and warranty shall be true and correct in all material respects as of such
earlier date.
8.01 Corporate Status. Each of the Parent and its
Subsidiaries (i) is a duly organized and validly existing corporation or limited
liability company in good standing under the laws of the jurisdiction of its
incorporation or organization, (ii) has the corporate or other power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage and (iii) is duly qualified and
is authorized to do business and is in good standing in each jurisdiction where
the ownership, leasing or operation of property or the conduct of its business
requires such qualifications, except for failures to be so qualified which, in
the aggregate, would not be reasonably likely to have a material adverse effect
on the performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
8.02 Corporate Power and Authority. Each of the Parent and
its Subsidiaries has the power to execute, deliver and perform the terms and
provisions of each of the Documents to which it is party and has taken all
necessary corporate or other action to authorize the execution, delivery and
performance by it of each of such Documents. Each of the Parent and its
Subsidiaries has duly executed and delivered each of the Documents to which it
is party, and each of such Documents
constitutes the legal, valid and binding obligation of such party enforceable
in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by general equitable
principles (regardless of whether the issue of enforceability is considered in
a proceeding in equity or at law).
8.03 No Violation. Neither the execution, delivery or performance by the
Parent or any of its Subsidiaries of the Documents to which it is a party, nor
compliance by it with the terms and provisions hereof or thereof, (i) will
contravene any provision of any applicable law, statute, rule or regulation or
any order, writ, judgment, injunction or decree of any court or governmental
instrumentality, (ii) will conflict with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default or
event of default under, or result in the creation or imposition of (or the
obligation to create or impose), any Lien (except pursuant to the Security
Documents) upon any of the property or assets of the Parent or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other agreement, contract or
instrument to which the Parent or any of its Subsidiaries is a party or by
which it or any of its property or assets is bound, or to which it may be
subject (other than, in the case of any Document other than any Credit
Document, such conflicts, breaches, defaults, events of default or Liens as
could not reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower
and its Subsidiaries taken as a whole) or (iii) will violate any provision of
the Certificate of Incorporation or By-Laws (or similar organizational
documents) of the Parent or any of its Subsidiaries.
8.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as has been obtained or made on or prior to the Initial Borrowing Date
and as is in full force and effect), or exemption by, any governmental or
public body or authority, or any subdivision thereof (other than, in the case
of any Document other than any Credit Document, such orders, consents,
approvals, licenses, authorizations, validations, filings, recordings,
registrations or exemptions which if not obtained or made, could not
reasonably be expected to have a material adverse effect on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole, or which, as of the date this representation is
made or deemed to be made, are not yet required to have been received or
filed), is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of any Document, (ii) the legality,
validity, binding effect or enforceability of any such Document or (iii) the
Transaction.
8.05 Financial Statements; Financial Conditions; Undisclosed
Liabilities; Projections; Etc. (a) (i) The consolidated balance sheets of KSCO
and its Subsidiaries as at December 31, 1996 and December 31, 1995, and the
related consolidated statements of operations, stockholders' equity and cash
flows for the fiscal years ended as of such dates, which have been examined by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent certified public accountants, who delivered
unqualified opinions in respect thereto, (ii) the consolidated statements of
operations, changes in stockholders' equity and cash flows of the Company and
its Subsidiaries for the year ended December 31, 1994, which have been examined
by Deloitte & Touche LLP, independent certified public accountants, who
delivered an unqualified opinion in respect thereto and (iii) the pro forma
(both before and after giving effect to the Transaction and the other
transactions contemplated by the Documents and the related financing thereof)
consolidated
balance sheet of the Parent and its Subsidiaries as at the Initial Borrowing
Date prepared on a basis consistent with the Projections, copies of all of
which financial statements referred to in the preceding clauses (i), (ii) and
(iii) of this Section 8.05 have heretofore been furnished to each of the
Agents, the Issuing Bank and each of the Banks, present fairly in all material
respects the financial position of the respective entities at the dates of
such statements and the results of operations for the period covered thereby
(or, in the case of the pro forma balance sheet, present a good faith estimate
of the pro forma financial condition of the Parent and its Subsidiaries (both
before and after giving effect to the Transaction) on a consolidated basis at
the date thereof). All such financial statements have been prepared in
accordance with U.S. GAAP consistently applied, except to the extent provided
in the notes to such financial statements and with respect to interim
financial statements, subject to the absence of footnotes and to normal year
end adjustments. Since December 31, 1996 (and, in the case of the Parent,
solely as of the Initial Borrowing Date), there has been no material adverse
change in the operations or financial condition of the Parent, Merger Sub,
KSCO and the Company together with their respective Subsidiaries, taken as a
whole.
(b) On and as of the Initial Borrowing Date, on a pro forma basis after
giving effect to the Transaction and the other transactions contemplated by the
Documents, and to all Indebtedness (including the Loans) being incurred in
connection with the Transaction, and Liens created, and to be created, by each
Credit Party in connection therewith: (i) the fair value of the property of
each Credit Party is greater than the total amount of debt of such Credit Party;
(ii) the present fair salable value of the assets of each Credit Party is not
less than the amount that will be required to pay the probable liability of such
Credit Party on its debts as they become absolute and mature; (iii) no Credit
Party has incurred or intends to, or believes that it will, incur debts beyond
its ability to pay such debts as such debts mature; and (iv) each Credit Party
will have sufficient capital with which to conduct its business. For purposes of
this Section 8.05(b), "debt" means any liability on a claim, and "claim" means
(i) the right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (ii) the right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(c) Except as fully reflected in the financial statements and the notes
related thereto described in Section 8.05(a), there were as of the Initial
Borrowing Date (and after giving effect to the Transaction and the other
transactions contemplated by the Documents) no liabilities or obligations with
respect to the Parent or any of its Subsidiaries of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether or not due)
which, either individually or in aggregate, could reasonably be expected to be
material to the Parent and its Subsidiaries taken as a whole. As of the Initial
Borrowing Date, neither the Parent nor any of its Subsidiaries knows of any
basis for the assertion against the Parent or any of its Subsidiaries of any
liability or obligation of any nature whatsoever that is not fully reflected in
the financial statements and the notes related thereto described in Section
8.05(a) which, either individually or in the aggregate, could reasonably be
expected to be material to the Parent and its Subsidiaries taken as a whole.
(d) On and as of the Initial Borrowing Date, the Projections have been
prepared in good faith by Saratoga with the participation of management of the
Company, have been prepared on a basis consistent with the pro forma financial
statements referred to in Section 8.05(a) and there are no
statements or conclusions in any of the Projections which are based upon or
include information known to the Parent or the Company to be misleading or which
fail to take into account material information regarding the matters reported
therein. On the Initial Borrowing Date, each of the Parent and the Borrower
believes that the Projections were reasonable and attainable; it being
recognized by the Issuing Bank and the Banks, however, that projections as to
future events are not to be viewed as facts and that the actual results during
the period or periods covered by the Projections probably will differ from the
projected results and that the differences may be material.
8.06 Litigation. Other than with respect to matters set forth on
Schedule VIII, there are no actions, suits or proceedings pending or, to the
best knowledge of the Borrower or any of its Subsidiaries, threatened that (a)
would have a material adverse effect on the operations or financial condition
of the Parent, Merger Sub, KSCO and the Borrower together with their
respective Subsidiaries, taken as a whole, or (b) involves a reasonable
possibility of (i) a material adverse effect on (x) the ability of any of the
Credit Parties to perform their respective obligations hereunder or under any
of the other Credit Documents or (y) the rights, remedies and benefits
available to the Agents, the Issuing Bank and the Banks hereunder or under any
of the other Credit Documents, or (ii) adversely affecting the ability of any
Person to consummate any aspect of the Transaction or the validity or
enforceability of any Documents, or which would be materially inconsistent
with the assumptions underlying the forecasts previously provided to the
Agents, the Issuing Bank and the Banks.
8.07 True and Complete Disclosure. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of any of the
Parent or any of its Subsidiaries in writing to the Issuing Bank or any of the
Banks (including, without limitation, all information contained in the
Documents) for purposes of or in connection with this Agreement, the
Transaction or any other transaction contemplated hereby or by the other
Documents is, and all other such factual information (taken as a whole)
hereafter furnished by or on behalf of any of the Parent or any of its
Subsidiaries in writing to the Issuing Bank or any of the Banks will be, true
and accurate in all material respects on the date as of which such information
is dated or certified and not incomplete by omitting to state any material
fact.
8.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the Term
Loans incurred on the Initial Borrowing Date shall be used by the Borrower (i)
to finance, in part, the Acquisition, the Refinancings and the Mergers and
(ii) to pay Transaction Fees and Expenses.
(b) All proceeds of Revolving Loans borrowed after the Initial Borrowing
Date shall be used by the Borrower for general corporate and working capital
purposes of the Borrower, including making capital contributions or loans to
Subsidiaries of the Borrower to the extent such contributions and loans are
permitted by Section 10.06.
(c) No part of the proceeds of any Loan and no Letter of Credit will be
used to purchase or carry any Margin Stock or to extend credit for the purpose
of purchasing or carrying any Margin Stock. Neither the making of any Loan nor
the use of the proceeds thereof nor the occurrence of any other Credit Event
will violate or be inconsistent with the provisions of Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System.
8.09 Tax Returns and Payments. Each of the Parent and its Subsidiaries
has timely
filed or caused to be timely filed (including pursuant to any valid extensions
of time for filing) with the appropriate taxing authority, all returns,
statements, forms and reports for taxes (the "Returns") required to be filed
by or with respect to the income, properties or operations of the Parent
and/or any of its Subsidiaries. The Returns accurately reflect in all respects
all liability for taxes of the Parent and its Subsidiaries for the periods
covered thereby. Each of the Parent and its Subsidiaries has paid all material
taxes payable by them which have become due together with applicable interest
and penalties. As of the Initial Borrowing Date, there is no material action,
suit, proceeding, investigation, audit, or claim now pending or, to the best
knowledge of any of the Parent or any of its Subsidiaries, threatened by any
authority regarding any taxes relating to the Parent or any of its
Subsidiaries. As of the Initial Borrowing Date, there are no tax Liens on any
of the property or assets of the Parent or any of its Subsidiaries and no
enforcement, collection, levy or foreclosure proceedings have been commenced
and remain unstayed in respect thereof. As of the Initial Borrowing Date,
neither the Parent nor any of its Subsidiaries has entered into an agreement
or waiver or been requested to enter into an agreement or waiver extending any
statute of limitations relating to the payment or collection of taxes of the
Parent or any of its Subsidiaries, or is aware of any circumstances that would
cause the taxable years or other taxable periods of any of the Parent or any
of its Subsidiaries not to be subject to the normally applicable statute of
limitations. Neither the Parent nor any of its Subsidiaries has provided, with
respect to themselves or property held by them, any consent under Section 341
of the Code. Neither the Parent nor any of its Subsidiaries has incurred, or
will incur, any material tax liability in connection with the Transaction or
the other transactions contemplated by the Documents.
8.10 Compliance with ERISA. Except as could not reasonably be expected
to have a material adverse effect on the performance, business, assets, nature
of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of the Parent and its Subsidiaries taken as a whole
(it being agreed that the receipt of the PBGC Letter by the Company, without
more, is not expected to have such a material adverse effect) each Employee
Benefit Plan is in substantial compliance with ERISA and the Code; no
Reportable Event has occurred with respect to a Pension Plan; no Pension Plan
is insolvent or in reorganization; no Pension Plan has an Unfunded Current
Liability; no Pension Plan has an accumulated or waived funding deficiency or
has applied for an extension of any amortization period within the meaning of
Section 412 of the Code; all contributions required to be made by the Parent
and its Subsidiaries and their ERISA Affiliates with respect to a Plan have
been timely made; neither the Parent nor any of its Subsidiaries nor any ERISA
Affiliate (but only as to the following Sections of ERISA and the Code
pursuant to which the Parent could be liable with respect to such ERISA
Affiliate) has incurred any material liability to or on account of a Plan
pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201,
4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code or
expects to incur any material liability (including any indirect, contingent or
secondary liability) under any of the foregoing Sections with respect to any
Plan; no proceedings have been instituted to terminate or appoint a trustee to
administer any Pension Plan and no event or condition has occurred as
described in Section 4042 of ERISA; no condition exists which presents a
material risk to any of the Parent or any of its Subsidiaries or any ERISA
Affiliate (but only as to the foregoing provisions of ERISA and the Code
pursuant to which the Parent could be liable with respect to such ERISA
Affiliate) of incurring a material liability to or on account of a Plan
pursuant to the foregoing provisions of ERISA and the Code; there has been no
adoption of any amendment of any Pension Plan requiring the provision of
security to such Pension Plan, pursuant to Section 307 of ERISA; using
actuarial assumptions and computation methods consistent with Part I of
subtitle E of Title IV of ERISA, the Parent and its Subsidiaries and their
ERISA Affiliates would not
have any liability to any Plan which is a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA, a "Multiemployer Plan") in the event of a
complete withdrawal therefrom, as of the close of the most recent fiscal year
of each such Plan ended prior to the date of any Credit Event; neither the
Parent, any of its Subsidiaries, nor any ERISA Affiliate has been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of ERISA;
no lien imposed under the Code or ERISA on the assets of any of the Parent or
any of its Subsidiaries or any ERISA Affiliate exists or is likely to arise on
account of any Plan; and the Parent and its Subsidiaries have not amended,
since the Effective Date, any employee welfare benefit plan (as defined in
Section 3(l) of ERISA) which provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) increasing
benefits under any such Plan, and have not adopted, since the Effective Date,
any new Plan providing such benefits.
8.11 The Security Documents. (a) The provisions of the Security
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the respective Credit Parties in
the Collateral described therein and, the Collateral Agent, for the benefit of
the Secured Creditors, will have, upon making the necessary filings in the
appropriate filing office, a fully perfected first Lien on, and security
interest in, all right, title and interest of the respective Credit Parties,
in all of the Collateral described therein, subject to no other Liens other
than Permitted Liens.
(b) The recordation of the Security Agreement in the United States Patent
and Trademark Office, together with filings on Form UCC-1 in all applicable
jurisdictions made pursuant to the Security Agreement, will be effective, under
federal and state law, to perfect the security interest granted to the
Collateral Agent in the Trademarks and Patents covered by the Security Agreement
and the filing of the Security Agreement with the United States Copyright Office
together with filings on Form UCC-1 made pursuant to the Security Agreement will
be effective under federal and state law to perfect the security interest
granted to the Collateral Agent in the Copyrights covered by the Security
Agreement. Each of the Credit Parties party to the Security Agreement has good
and merchantable title to all Collateral described therein, free and clear of
all Liens except those described above in subsection (a) above and in this
subsection (b).
(c) From and after the Initial Borrowing Date, the Mortgages create, as
security for the obligations purported to be secured thereby, a valid and
enforceable and, upon making the necessary filings in the appropriate filing
office, perfected security interest in and Lien on all of the Mortgaged
Properties in favor of the Collateral Agent (or such other trustee as may be
required or desirable under local law) for the benefit of the Secured Creditors,
superior to and prior to the rights of all third persons (except that the
security interest created in the Mortgaged Properties may be subject to the
Permitted Encumbrances related thereto) and subject to no other Liens (other
than Permitted Liens). Schedule III contains a true and complete list of each
parcel of Real Property owned or leased by the Borrower and each of its Domestic
Subsidiaries on the Initial Borrowing Date, and the type of interest therein
held by the Borrower and each of its Subsidiaries. Each of the Borrower and its
Subsidiaries has good and marketable title at the time of the grant thereof and
at all times thereafter to all Mortgaged Properties, free and clear of all Liens
except those described in the first sentence of this subsection (c).
8.12 Representations and Warranties in Documents. All representations
and warranties set forth in the other Documents were true and correct in all
material respects at the time as of which such representations and warranties
were made (or deemed made) and shall be true and correct in all material
respects on the Initial Borrowing Date as if such representations and
warranties were made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date.
8.13 Properties. Each of the Borrower and its Subsidiaries has good
title to all properties owned by them, including all property reflected in the
pro forma consolidated balance sheet (after giving effect to the Transaction)
referred to in Section 8.05(a) (except as sold or otherwise disposed of since
the date of such balance sheet in the ordinary course of business or as
permitted by Section 10.02), free and clear of all Liens, other than (i) as
referred to in the financial statements referred to in Section 8.05 or (ii) as
otherwise permitted by Section 10.01.
8.14 Capitalization. On the Initial Borrowing Date, the authorized
capital stock of the Parent consists of (a) 6,000,000 shares of Parent Common
Stock, of which 3,665,500 shares are issued and outstanding, (b) 200,000
shares of Senior Preferred Stock, of which 1,000 shares are issued and
outstanding and (c) 6,200,000 shares of Series B Preferred Stock, of which
100,000 shares are issued and outstanding. Set forth on Schedule XI hereto, is
a complete and accurate list of all Persons who own any shares of Parent
Common Stock, Senior Preferred Stock or Series B Preferred Stock as of the
Initial Borrowing Date, showing opposite such Person's name the class of stock
owned by such Person, the number of shares owned by such Person and the
percentage of the outstanding shares of that class of stock owned by such
Person. As of the Initial Borrowing Date, all of the shares of stock described
on Schedule XI hereto are owned by the Persons listed on such Schedule free
and clear of all Liens. On the Initial Borrowing Date, the authorized capital
stock of the Borrower consists of 1,000 shares of common stock, $.01 par value
per share (the "Borrower Common Stock"), of which 100 shares are issued and
outstanding and all of which shares of Borrower Common Stock are owned by the
Parent, free and clear of all Liens, except those created under the Credit
Documents. All of such outstanding shares have been duly and validly issued,
are fully paid and nonassessable and are free of preemptive rights. On the
Effective Date, neither the Parent nor any of its Subsidiaries has outstanding
any securities convertible into or exchangeable for its capital stock or
outstanding any rights to subscribe for or to purchase, or any options for the
purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating
to, its capital stock other than pursuant to the New Incentive Stock Option
Plan and the Stockholders Agreement, each as in effect on the date hereof.
8.15 Subsidiaries. (a) On the Initial Borrowing Date, the
Persons listed on Schedule IV are the only Subsidiaries of the Borrower.
Schedule IV correctly sets forth, as of the Initial Borrowing Date, the
percentage ownership (direct and indirect) of the Borrower in each class of
capital stock of each of its Subsidiaries and also identifies the direct owner
thereof.
(b) On the Initial Borrowing Date, none of the Borrower's Foreign
Subsidiaries (other than ▇▇▇▇▇▇▇ Canada Inc. and Unifast-▇▇▇▇▇▇▇, ▇.▇.) has any
material assets and none of such Persons conducts any business of a material
nature.
8.16 Compliance with Statutes, Etc. Each of the Borrower and
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except with
respect to each of the foregoing, such noncompliance as could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
the performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
8.17 Investment Company Act. None of the Parent or any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
8.18 Public Utility Holding Company Act. None of the Parent
or any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
8.19 Environmental Matters. Except as set forth on Schedule VII, (a) the
Borrower and each of its Subsidiaries have complied with, and on the date of
each Credit Event will be in compliance with all applicable Environmental Laws
and the requirements of any permits issued under such Environmental Laws,
except such non-compliances which could not individually, or in the aggregate,
reasonably be expected to have a material adverse effect on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole. Except as set forth on Schedule VII, there are
no past, pending or, to the best knowledge of the Borrower, threatened
Environmental Claims against the Borrower or any of its Subsidiaries or any
Real Property currently owned or operated by the Borrower or any of its
Subsidiaries that could reasonably be expected to individually, or in the
aggregate, have a material adverse effect on the performance, business,
assets, nature of assets, liabilities, operations, properties, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries
taken as a whole. Except as set forth on Schedule VII, there are no facts,
circumstances, conditions or occurrences on any Real Property owned or
operated at any time by the Borrower or any of its Subsidiaries or, to the
knowledge of the Borrower, on any property adjoining any such Real Property
that could reasonably be expected (i) to form the basis of an Environmental
Claim against the Borrower or any of its Subsidiaries or any Real Property
owned or operated by the Borrower or any of its Subsidiaries or (ii) to cause
such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property under any
Environmental Law except such Environmental Claims and restrictions which
individually, or, in the aggregate, could not reasonably be expected to have a
material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
(b) Except as set forth on Schedule VII, other than in material compliance
with applicable Environmental Law or as described in the environmental liability
assessments referred to in Section 6.12(ii), neither the Borrower nor any of its
Subsidiaries has at any time generated, used, treated, stored, transported or
released Hazardous Materials on, to or from any Real Property owned,
leased or at any time operated by the Borrower or any of its Subsidiaries
except as could not reasonably be expected to result in material liability
under Environmental Laws.
(c) Except as set forth on Schedule VII, there are not now and, to the best
knowledge of the Borrower, never have been any underground storage tanks located
on any Real Property owned or operated by the Borrower or any of its
Subsidiaries.
(d) Except as set forth in Schedule VII, no Real Property owned or at any
time operated by the Borrower or any of its Subsidiaries is located on any site
listed on, or proposed in the Federal Register for listing on, the National
Priorities List, or listed on the Comprehensive Environmental Response
Compensation and Liability Information System ("CERCLIS"), each promulgated
pursuant to CERCLA or its state equivalents. With respect to the Newark, New
Jersey site, the CERCLIS has designated the site as requiring "no further
action".
8.20 Labor Relations. None of the Borrower nor any of its Subsidiaries
is engaged in any unfair labor practice that could reasonably be expected to
have a material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
There is (i) no significant unfair labor practice complaint pending against
any of the Borrower or any of its Subsidiaries or, to the best knowledge of
the Borrower, threatened against any of them, before the National Labor
Relations Board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against any of the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, threatened against any of them, (ii) no significant
strike, labor dispute, slowdown or stoppage pending against any of the
Borrower or any of its Subsidiaries or, to the best knowledge of the Borrower,
threatened against any of the Borrower or any of its Subsidiaries and (iii) no
union representation question existing with respect to the employees of any of
the Borrower or any of its Subsidiaries, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, either individually or in the
aggregate) those matters which could not reasonably be expected to have a
material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
8.21 Patents, Licenses, Franchises and Formulas. (a) The Borrower,
together with its Subsidiaries, owns, has a license to use or otherwise has
the right to use, free and clear of pending or, to the knowledge of the
Borrower and its Subsidiaries, threatened Liens (other than Permitted Liens),
all the material patents, patent applications, trademarks, service marks,
trade names, trade secrets, copyrights, proprietary information, computer
programs, databases, licenses, franchises and formulas, or rights with respect
to the foregoing (collectively, "Intellectual Property"), and has obtained all
licenses and other rights of whatever nature necessary for the present conduct
of its business, without any known conflict with the rights of others which,
or the failure to obtain which, as the case may be, could reasonably be
expected to have a material adverse effect on the performance, business,
assets, nature of assets, liabilities, operations, properties, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries
taken as a whole.
(b) As of the Initial Borrowing Date, the Borrower, together with its
Subsidiaries, has the right to practice under and use all Intellectual Property
which the Company and its Subsidiaries
had a right to practice under and use immediately prior to the Transaction.
(c) Neither the Borrower nor any of its Subsidiaries has knowledge of any
claim by any third party contesting the validity, enforceability, use or
ownership of the Intellectual Property, or of any existing state of facts that
would support a claim that use by any of the Borrower or any of its Subsidiaries
of any such Intellectual Property has infringed or otherwise violated any
Intellectual Property right of any other Person and that to the best knowledge
of the Borrower and its Subsidiaries no claim is threatened, except for such
claims that could not individually or in the aggregate reasonably be expected to
have a material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole.
8.22 Indebtedness. As of the Initial Borrowing Date, neither
the Parent nor any of its Subsidiaries has any Indebtedness or preferred stock
outstanding other than (i) the Loans, (ii) the indemnity obligations under the
Acquisition Agreements, (iii) the Senior Preferred Stock, (iv) the Series B
Preferred Stock, (v) the Senior Notes and (vi) the other Indebtedness described
on Schedule X (such other Indebtedness being the "Existing Indebtedness").
8.23 Restrictions on or Relating to Subsidiaries. There does
not exist any Payment Restriction with respect to any Subsidiary of the
Borrower, except for any such Payment Restriction existing under or by reason of
(a) applicable law, (b) customary non-assignment or net worth provisions in
leases or other contracts entered into in the ordinary course of business and
consistent with past practices, (c) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions on the
property so acquired, (d) customary restrictions imposed on the transfer of
copyrighted or patented materials, (e) the entering into of a contract for the
sale or other disposition of assets, directly or indirectly, so long as such
restrictions do not extend to assets that are not subject to such sale or other
disposition, (f) the terms of any agreement evidencing any Indebtedness of
Subsidiaries that was permitted hereby to be incurred that only restricts the
transfer of the assets purchased with the proceeds of such Indebtedness, (g) the
terms of the Senior Notes Indenture in effect on the Initial Borrowing Date or
any similar Payment Restriction under the Senior Note Indenture, (h) the terms
of any agreement evidencing any Acquired Indebtedness that was permitted to be
incurred pursuant to this Agreement, provided that such Payment Restriction only
applies to assets that were subject to such restriction and encumbrances prior
to the acquisition of such assets by the Borrower or any of its Subsidiaries,
(i) contracts of any Subsidiaries of the Borrower in effect prior to such Person
becoming a Subsidiary of the Borrower and not entered into in contemplation
thereof, so long as such restriction applies only to such Subsidiary or its
assets, (j) restrictions on transfer of property or assets pursuant to any Lien
permitted under this Agreement, (k) the terms of any agreement in effect on the
Initial Borrowing Date as such Payment Restriction is in effect on the Initial
Borrowing Date or as thereafter amended; provided that such Payment Restriction
is no more restrictive, (l) the Credit Documents, and (m) "Refinancing
Indebtedness" (as such term is defined in the Senior Notes Indenture); provided
that any such Payment Restrictions that arise under such "Refinancing
Indebtedness" are not, taken as a whole, more restrictive than those under the
agreement creating or evidencing the Indebtedness being refinanced.
8.24 The Transaction. All aspects of the Transaction have been effected
in all material respects in accordance with this Agreement and the other
Documents and all applicable law. At the
time of consummation of the Transaction, all consents and approvals of, and
filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities and third parties
required in order to consummate the Transaction will have been obtained,
given, filed or taken and are in full force and effect (or effective judicial
relief with respect thereto has been obtained). All applicable waiting
periods, including, without limitation, all waiting periods under the HSR Act,
with respect thereto have or, prior to the time when required, will have,
expired without, in all such cases, any action being taken by any competent
authority which restrains, prevents or imposes material adverse conditions
upon the consummation of the Transaction. Additionally, at the time of
consummation of the Transaction, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon the
consummation of the Transaction, and there does not exist any judgment, order
or injunction prohibiting or imposing any material adverse condition upon the
occurrence of any Credit Event or the performance by the Parent or any of its
Subsidiaries of their obligations under the Documents. All actions taken by
the Parent or any of its Subsidiaries pursuant to or in furtherance of the
Transaction have been taken in compliance in all material respects with the
respective Documents and all applicable law.
8.25 Leases. With respect to any material lease or material
rental agreement for Real Property to which the Borrower or any of its
Subsidiaries (either as lessor or lessee, as the case may be) is a party, (i)
such lease or rental agreement is in full force and effect, (ii) the Borrower or
any of its Subsidiaries has complied in all material respects with all of the
terms of such lease or rental agreement, (iii) there exists no default or an
event, act or condition which with notice or lapse of time, or both, would
constitute a material event of default thereunder by any of the Borrower or such
Subsidiary, or, to the extent any such party is a lessee or lessor thereunder,
to the knowledge of the Borrower or such Subsidiary, by the landlord thereunder
and (iv) the Borrower or one of its Subsidiaries is in possession of the
premises demised under all such leases and rental agreements to the extent any
such party is a lessee thereunder and is conducting business on such premise.
8.26 Collective Bargaining Agreements; Tax Allocation Agreements.
Neither the Parent nor any of its Subsidiaries has (i) any collective
bargaining agreement applying or relating to any employee of the Parent or any
of its Subsidiaries with respect to current employees of the Parent or any of
its Subsidiaries or (ii) any tax sharing, tax allocation or other similar
agreement.
Section 9. Affirmative Covenants. Each of the Parent and the Borrower
covenants and agrees that on and after the Effective Date and until the Total
Commitment and all Letters of Credit have terminated and the Loans, the Notes
and the Unpaid Drawings, together with interest, Fees and all other
Obligations are paid in full:
9.01 Information Covenants. The Borrower shall furnish to each of the
Agents, the Issuing Bank and to each of the Banks:
(a) Monthly Reports. Within 30 days after the end of each fiscal
month of the Borrower other than the last such month of any fiscal
quarter of the Borrower, (i) the balance sheets of the Borrower and its
Subsidiaries as at the end of such month and the related statements of
earnings and stockholders' equity and statement of cash flows for such
month and for the elapsed portion of the fiscal year of the Borrower
ended with the last day of such month, in each case setting forth
comparative figures for the corresponding month and elapsed
portion of such fiscal year of the Borrower for the prior fiscal year of
the Borrower and comparable budgeted figures for such period and, in any
event, in the form presented to the Board of Directors of the Borrower,
all of which shall be certified by the chief financial officer of the
Borrower, as being fairly stated in all material respects, subject to the
absence of footnotes and normal year-end audit adjustments and (ii) to
the extent such is provided to the Board of Directors of the Borrower,
management's discussion and analysis of the important operational and
financial developments during the month and year-to-date periods.
(b) Quarterly Financial Statements. Within 45 days after the close
of each of the first three quarterly accounting periods in each fiscal
year of each of the Parent and the Borrower, commencing with the fiscal
years of the Parent and the Borrower ended December 31, 1997, (i) the
consolidated and consolidating balance sheets of the Parent and its
Subsidiaries and the Borrower and its Subsidiaries, in each case, as at
the end of such quarterly period and the related consolidated and
consolidating statements of earnings and stockholders' equity and
statement of cash flows, in each case for such quarterly period and for
the elapsed portion of the fiscal year of each of the Parent and the
Borrower ended with the last day of such quarterly period, in each case
setting forth comparative figures for the related periods in the prior
fiscal years of the Parent and the Borrower and comparable budgeted
figures for such period, all of which shall be certified by the chief
financial officer or controller of the Parent or the Borrower, as the
case may be, as being fairly stated in all material respects subject to
the absence of footnotes and normal year-end audit adjustments and (ii)
management's discussion and analysis of the important operational and
financial developments during the quarter and year-to-date periods.
(c) Annual Financial Statements. Within 90 days after the close of
each fiscal year of each of the Parent and the Borrower, commencing with
the fiscal years of the Parent and the Borrower ended December 31, 1997,
(i) the consolidated and consolidating balance sheets of the Parent and
its Subsidiaries and the Borrower and its Subsidiaries, in each case, as
at the end of such fiscal year of the Parent and the Borrower and the
related consolidated and consolidating statements of earnings and
stockholders' equity and statement of cash flows for such fiscal years of
the Parent and the Borrower and setting forth comparative figures for the
preceding fiscal year of each of the Parent and the Borrower and
comparable budgeted figures for such period and certified as being fairly
stated in all material respects, (x) in the case of the consolidating
statements, by the chief financial officer or controller of the Parent or
the Borrower, as the case may be, and (y) in the case of the consolidated
financial statements of the Parent and its Subsidiaries and the Borrower
and its Subsidiaries, by any of the "big six" or other independent
certified public accountants of recognized national standing acceptable
to the Required Banks, together with a signed opinion of such accounting
firm (which opinion shall not be qualified in any respect) stating that
such financial statements present fairly in all material respects the
financial position of the Parent and its Subsidiaries and the Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and changes in their financial position for the periods
indicated in conformity with U.S. GAAP and that the examination by such
accounting firm in connection with such financial statements has been
made in accordance with generally accepted auditing standards and that,
in the course of its regular audit of the financial statements of the
Parent and the Borrower, such accounting firm obtained no knowledge of
any Default or Event of Default which has occurred or, if in the
opinion of such accounting firm such a Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof and (ii)
management's discussion and analysis of the important operational and
financial developments during such fiscal year of the Parent and the
Borrower.
(d) Management Letters. Promptly after the receipt thereof by the
Parent or any of its Subsidiaries, a copy of any "management letter"
received by the Parent or such Subsidiary from its certified public
accountants and the management's responses thereto.
(e) Budgets. As soon as available, but in no event later than 30
days after the first day of each fiscal year of the Borrower, a budget
for the Borrower and its Subsidiaries (including budgeted statements of
earnings and sources and uses of cash and balance sheets) prepared by the
Borrower for each calendar month of such fiscal year of the Borrower and
the immediately succeeding fiscal year of the Borrower prepared in
reasonable detail with appropriate presentation and discussion of the
principal assumptions upon which such budgets are based, accompanied by
the statement of the chief financial officer or controller of the
Borrower to the effect that, to the best of his or her knowledge, the
budget is a reasonable estimate for the period covered thereby.
(f) Officer's Certificate. At the time of the delivery of the
financial statements provided for in Sections 9.01(a), (b) and (c), a
certificate of the Borrower signed on behalf of the Borrower by its chief
financial officer to the effect that no Default or Event of Default has
occurred and is continuing or, if any Default or Event of Default has
occurred and is continuing, specifying the nature and extent thereof,
which certificate, (x) in the case of certificates delivered pursuant to
Section 9.01(b) or (c), shall set forth the calculations required to
establish whether the Borrower was in compliance with the provisions of
Sections 4.03, 5.02, 10.03, 10.04 and 10.08 through 10.11 at the end of
such fiscal quarter of the Borrower or fiscal year of the Borrower, as
the case may be, and (y) in the case of certificates delivered pursuant
to Section 9.01(b), shall set forth the amount of Excess Cash Flow of the
Borrower for the relevant Excess Cash Flow Payment Period.
(g) Notice of Default or Litigation. Promptly, and in any event
within four Business Days after an executive officer of the Parent or the
Borrower obtains knowledge thereof, notice of (i) the occurrence of any
event which constitutes a Default or Event of Default, (ii) any
litigation or governmental investigation or proceeding pending (x)
against the Borrower or any of its Subsidiaries which could reasonably be
expected to have a material adverse effect on the performance, business,
assets, nature of assets, liabilities, operations, properties, condition
(financial or otherwise) or prospects of the Parent and its Subsidiaries
taken as a whole or (y) with respect to any Document and (iii) any other
event which could reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise)
or prospects of the Parent and its Subsidiaries taken as a whole,
together with a statement as to what action the Credit Parties have taken
and propose to take with respect thereto.
(h) Other Reports and Filings. Promptly following transmission
thereof, copies of any financial information, proxy materials and other
information and reports, if any, which any
Credit Party (x) has filed with the Securities and Exchange Commission or
any successor thereto or (y) has delivered to holders of, or any agent or
trustee with respect to, Indebtedness of any Credit Party in its capacity
as such a holder, agent, or trustee.
(i) Environmental Matters. Promptly following, and in any event
within four Business Days after an officer of the Parent or the Borrower
obtains knowledge thereof, notice of any of the following post-closing
environmental matters: (i) any pending or threatened material
Environmental Claims against the Parent or any of its Subsidiaries or any
Real Property owned or operated at any time by the Parent or any of its
Subsidiaries; (ii) any condition or occurrence on or arising from any
Real Property owned or operated at any time by the Parent or any of its
Subsidiaries that (a) could reasonably be anticipated to result in a
material noncompliance by the Parent or any of its Subsidiaries with any
applicable Environmental Law, or (b) could reasonably be anticipated to
form the basis of a material Environmental Claim against the Parent or
any of its Subsidiaries or any Real Property owned or operated by the
Parent or any of its Subsidiaries; (iii) any condition or occurrence on
any Real Property owned or operated by the Parent or any of its
Subsidiaries or any property adjoining such Real Property that could
reasonably be anticipated to cause such Real Property to be subject to
any material restrictions on the ownership, occupancy, use or
transferability of such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to a
material Release or material threatened Release or the actual or alleged
presence of any Hazardous Material on or from any Real Property owned or
operated at any time by the Parent or any of its Subsidiaries in each
case as required by any Environmental Law or any governmental or other
administrative agency. All such notices shall describe in reasonable
detail the nature of the claim, investigation, condition, occurrence or
removal or remedial action and the Parent's or such Subsidiary's response
thereto. In addition, the Parent and the Borrower shall provide the Banks
and the Issuing Bank with copies of all material written communications
with any government or governmental agency relating to Environmental
Claims, all non-privileged material written communications with any
person relating to Environmental Claims, and such non-privileged detailed
reports of any Environmental Claim as may reasonably be requested by the
Required Banks.
(j) Annual Meetings with Banks. Within 120 days after the close of
each fiscal year of the Borrower, the Borrower shall, at the request of
the Administrative Agent or the Required Banks, hold a meeting at its
offices with the Issuing Bank and all Banks who choose to attend such
meeting, at which meeting shall be reviewed the financial results of the
previous fiscal year of the Borrower and the financial condition of the
Borrower and its Subsidiaries and the budgets presented for the current
fiscal year of the Borrower and its Subsidiaries.
(k) Borrowing Base Certificate. (i) On the Initial Borrowing Date
and (ii) thereafter, not later than 12:00 noon (New York time) on the
20th day after the end of each fiscal month of the Borrower, a borrowing
base certificate substantially in the form of Exhibit J (each, a
"Borrowing Base Certificate"), with respect to the Eligible Receivables
and the Eligible Inventory of the Borrower and its Subsidiaries as of (x)
in the case of clause (i), November 26, 1997 and (y) in the case of
clause (ii), the last day of the immediately preceding fiscal month of
the Parent, and in each case, certified by the chief financial officer of
the Borrower. In addition, each Borrowing Base Certificate shall have
attached to it such
additional schedules and/or other information as the Administrative Agent
may reasonably request. If the Borrower fails to deliver any such
Borrowing Base Certificate within 25 days after the end of any such
month, then the Borrowing Base shall be deemed to be $0 until such time
as the Borrower shall deliver such required Borrowing Base Certificate.
(l) Working Capital Review. At any time after the date hereof, the
Administrative Agent shall have the right to request a working capital
review, which shall be delivered to the Administrative Agent within a
reasonable period of time after such request and which shall be in form
and substance reasonably satisfactory to the Administrative Agent, of the
Eligible Receivables and Eligible Inventory of the Borrower and each of
the Borrower's Subsidiaries.
(m) Employee Benefit Plan Due Diligence Visitation Report. At any
time after the date hereof, the Administrative Agent shall have the right
to request an employee benefit plan due diligence visitation report,
which shall be delivered to the Administrative Agent within a reasonable
period of time after such request and which shall be in form and
substance reasonably satisfactory to the Administrative Agent.
(n) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to any of the Credit
Parties as the Administrative Agent or the Required Banks may reasonably
request.
9.02 Books, Records and Inspections. The Parent shall, and shall cause
each of its Subsidiaries to, keep proper books of record and account in which
full, true and correct entries, in conformity with U.S. GAAP and all
requirements of law, shall be made of all dealings and transactions in
relation to its business and activities. The Parent shall, and shall cause
each of its Subsidiaries to, permit officers and designated representatives of
any of the Agents, Issuing Bank or any of the Banks to visit and inspect,
under guidance of officers of the Parent or of such Subsidiary, any of the
properties of the Parent or such Subsidiary, and to examine the books of
record and account of the Parent or such Subsidiary and to discuss the
affairs, finances and accounts of the Parent or of such Subsidiary with, and
be advised as to the same by, its and their officers, all at such reasonable
times and intervals and to such reasonable extent as such Agent, the Issuing
Bank or such Bank may request.
9.03 Maintenance of Property and Insurance. (a) Schedule V
sets forth a true and complete listing of all insurance maintained by the
Borrower and each of its Subsidiaries as of the Effective Date. The Borrower
shall, and shall cause each of its Subsidiaries to, (i) keep all material
property useful and necessary in its business in good working order and
condition (ordinary wear and tear excepted), (ii) maintain with financially
sound and reputable insurance companies insurance on all its property and assets
in at least such amounts and against at least such risks as are described on
Schedule V, and (iii) furnish to the Issuing Bank and to each Bank, upon written
request, full information as to the insurance carried. The provisions of this
Section 9.03 shall be deemed to be supplemental to, but not duplicative of, the
provisions of any of the Security Documents that require the maintenance of
insurance.
(b) The Borrower shall at all times keep, and shall cause each of its
Subsidiaries at all times to keep, its property insured in favor of the
Collateral Agent, and all policies (including mortgage policies) or certificates
(or certified copies thereof) with respect to such insurance (and any
other insurance maintained by the Borrower or its Subsidiaries (other than
employee benefit insurance)) (i) shall be endorsed to the Collateral Agent's
satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as loss payee and naming each of
the Agents, the Issuing Bank and each of the Banks as an additional insured)
with respect to Collateral, (ii) shall state that such insurance policies
shall not be cancelled or revised without 30 days' prior written notice
thereof by the respective insurer to the Collateral Agent, (iii) shall
provide, to the extent available under applicable law, that the respective
insurers irrevocably waive any and all rights of subrogation with respect to
the Collateral Agent, (iv) shall contain the standard noncontributory
mortgagee clause endorsement in favor of the Collateral Agent with respect to
hazard insurance coverage, (v) shall provide that any losses shall be payable
notwithstanding (A) any act or neglect of the Borrower or any of its
Subsidiaries, (B) the occupation or use of the properties for purposes more
hazardous than those permitted by the terms of the respective policy if such
coverage is obtainable at commercially reasonable rates and is of the kind
from time to time customarily insured against by Persons owning or using
similar property and in such amounts as are customary, (C) any foreclosure or
other proceeding relating to the insured properties or (D) any change in the
title to or ownership or possession of the insured properties and (vi) shall
be deposited with the Collateral Agent. If the Borrower or any of its
Subsidiaries shall fail to insure its property in accordance with this Section
9.03, or if the Borrower or any of its Subsidiaries shall fail to endorse and
deposit all policies or certificates with respect thereto, then the Collateral
Agent shall have the right (but shall be under no obligation) to procure such
insurance and the Borrower agrees, to reimburse the Collateral Agent for all
costs and expenses of procuring such insurance.
9.04 Corporate Franchises. The Borrower shall do, and shall cause each
of its Subsidiaries to do or cause to be done, all things necessary to
preserve and keep in full force and effect its existence and its rights,
franchises, licenses and patents, except (i) if (A) in the reasonable business
judgment of the Borrower or such Subsidiary it is not in the best interests of
the Borrower and its Subsidiaries to maintain such rights, franchises,
licenses or patents and (B) the failure to preserve and maintain such rights,
franchises, licenses or patents could not reasonably be expected to have a
material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole
and (ii) transactions permitted pursuant to Section 10.02.
9.05 Compliance with Statutes, Etc. The Borrower shall, and
shall cause each of its Subsidiaries to, comply in all material respects with
all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by all governmental bodies, domestic or foreign, in respect
of, and material to, the conduct of its business and the ownership of its
property.
9.06 Compliance with Environmental Laws. (a) The Borrower
shall comply, and shall cause each of its Subsidiaries to comply, in all
material respects with all Environmental Laws applicable to ownership or use of
the Real Property owned or leased by the Borrower or any of its Subsidiaries,
shall promptly pay or cause the Borrower to pay all costs and expenses incurred
in connection with such compliance, and shall keep or cause to be kept all such
Real Properties free and clear of any material Liens imposed pursuant to such
Environmental Laws. None of the Borrower nor any of its Subsidiaries shall
generate, use, treat, store, or Release, or permit the generation, use,
treatment, storage, or Release of, Hazardous Materials on any Real Property
owned or leased by the Borrower or any of its Subsidiaries, or transport or
permit the transportation of Hazardous Materials to
or from any Real Property owned or leased by the Borrower or any of its
Subsidiaries, other than in material compliance with applicable Environmental
Laws.
(b) At the request of the Administrative Agent or the Required Banks, at
any time and from time to time during the existence of this Agreement: (i) if
an Event of Default has occurred and is continuing under this Agreement with
respect to environmental matters, (ii) upon the reasonable belief by the
Administrative Agent that the Borrower or any of its Subsidiaries has breached
any representation or covenant herein with respect to any environmental matters,
or (iii) in the event notice is provided under Section 9.01(i), the Borrower
shall provide, at its sole cost and expense, an environmental site assessment
report reasonable in scope concerning the Real Property owned or leased by the
Borrower or any of its Subsidiaries which is the subject of such Event of
Default, breach or notice, prepared by an environmental consulting firm approved
by the Administrative Agent and the Required Banks (such approval not to be
unreasonably withheld), which report shall evaluate the presence or Release of
Hazardous Materials on or from any such Real Property and the potential cost of
any removal or remedial action in connection with any Hazardous Materials on
such Real Property. If the Borrower fails to provide the same after 30 days'
notice, or such longer period as may be approved by the Administrative Agent and
the Required Banks (such approval not to be unreasonably withheld), the
Administrative Agent may (but shall be under no obligation to) order the same,
and the Borrower shall grant and hereby grants to the Agents, the Issuing Bank
and the Banks and their respective duly authorized representatives and agents
reasonable access to such Real Property for such purpose and specifically grants
to the Agents, the Issuing Bank and the Banks an irrevocable non-exclusive
license, subject to the rights of tenants, to undertake such an assessment all
at the Borrower's expense, which assessment, if obtained, shall be provided to
the Borrower.
9.07 ERISA. As soon as possible and, in any event, within ten Business
Days after the Parent or any of its Subsidiaries or any ERISA Affiliate knows
or has reason to know of the occurrence of any of the following which would
reasonably be expected to result in a liability in excess of $100,000, the
Parent shall deliver to the Issuing Bank and to each of the Banks a
certificate of the chief financial officer or controller of the Parent setting
forth details as to such occurrence and the action, if any, which the Parent,
such Subsidiary or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed with or
by the Parent, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto: (i) that a
Reportable Event has occurred; (ii) that an accumulated funding deficiency has
been incurred or an application may be or has been made to the Secretary of
the Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Pension
Plan; (iii) that a contribution required to be made to a Plan has not been
timely made; (iv) that a Plan has been or is reasonably likely to be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; (v) that a Pension Plan has an Unfunded Current Liability giving rise
to a lien under ERISA or the Code; (vi) that proceedings are likely to be or
have been instituted to terminate or appoint a trustee to administer a Pension
Plan; (vii) that a proceeding has been instituted pursuant to Section 515 of
ERISA to collect a delinquent contribution to a Plan; (viii) that the Parent
or any of its Subsidiaries or any ERISA Affiliate (but only as to the
following Sections of ERISA and the Code pursuant to which the Parent could be
liable with respect to such ERISA Affiliate) will or is reasonably likely to
incur any material liability (including any indirect, contingent or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Section 4062, 4063, 4064, 4069, 4201,
4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29),
4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(i) of ERISA; or
(ix) that the Parent or any of its Subsidiaries is reasonably likely to incur
any liability pursuant to any employee welfare benefit plan (as defined in
Section 3(l) of ERISA) that provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any
employee pension benefit plan (as defined in Section 3(2) of ERISA) in
addition to the liability pursuant to any such plan or plans existing on the
Initial Borrowing Date. At the request of the Administrative Agent, the Parent
shall deliver to the Issuing Bank and to each of the Banks a complete copy of
the annual report (Form 5500) of each Plan (including, to the extent required,
the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information) required to
be filed with the Internal Revenue Service. In addition to any certificates or
notices delivered to the Issuing Bank and to the Banks pursuant to the first
sentence hereof, any notices received by the Parent or any of its Subsidiaries
or any ERISA Affiliate (but only notices received by an ERISA Affiliate
regarding matters as to which the Parent or any of its Subsidiaries could have
liability under ERISA and/or the Code) from any governmental agency with
respect to any Plan shall be delivered to the Issuing Bank and to the Banks no
later than ten Business Days after the date such notice has been received by
the Parent or such Subsidiary or the ERISA Affiliate, as applicable.
9.08 End of Fiscal Years; Fiscal Quarters. The Parent shall cause its,
and each of its Subsidiaries', fiscal years to end on December 31 of each year
and each of its, and each of its Subsidiaries', first three fiscal quarters to
end on March 31, June 30 and September 30 of each year.
9.09 Performance of Obligations. The Parent shall, and shall cause each
of its Subsidiaries to, perform and observe all of the terms and provisions of
each Document to be performed or observed by it, maintain each such Document
in full force and effect, enforce such Document in accordance with its terms,
take all such action to such end as may be from time to time requested by the
Administrative Agent, make to each other party to each such Document such
demands and requests for information and reports or for action as the Parent
or such Subsidiary is entitled to make under such Document, except where the
failure to comply with any of the foregoing, either individually or in the
aggregate, would not be reasonably likely to have a material adverse effect on
the performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower
and its Subsidiaries taken as a whole.
9.10 Payment of Taxes. The Parent shall pay and discharge, and shall
cause each of its Subsidiaries to pay and discharge, all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
profits, or upon any properties belonging to it, prior to the date on which
penalties would otherwise attach thereto, and all lawful claims which, if
unpaid, might become a lien or charge upon any properties of the Parent or any
of its Subsidiaries; provided that neither the Parent nor any of its
Subsidiaries shall be required to pay any such tax, assessment, charge, levy
or claim which is being contested in good faith and by proper proceedings if
(i) it has maintained adequate reserves with respect thereto in accordance
with U.S. GAAP, unless and until any Lien resulting therefrom attaches to its
property and enforcement, collection, levy or foreclosure proceeding shall
have been commenced and remain unstayed in respect thereof or (ii) it has
provided to the Administrative Agent's satisfaction for the payment of such
amounts.
9.11 Interest Rate Protection. The Borrower shall no later than 90
days following the
Initial Borrowing Date enter into interest rate protection arrangements in
form and substance and with parties reasonably acceptable to the
Administrative Agent.
9.12 Use of Proceeds. All proceeds of the Loans shall be
used as provided in Section 8.08.
9.13 UCC Searches. On or prior to the 60th day following the
Initial Borrowing Date, the Credit Parties shall deliver to the Administrative
Agent (at each such Credit Party's own cost) copies of a Request for Information
or Copies (UCC-11), or equivalent reports for the purpose of verifying that all
financing statements necessary, or, in the opinion of the Collateral Agent
desirable, to perfect the security interests purported to be created by the
Security Agreement shall have been properly recorded and filed.
9.14 Intellectual Property Rights. The Borrower shall, and shall cause
each of its Subsidiaries to, make all filings in connection with the transfer
of the Intellectual Property rights pursuant to the Transaction. The Borrower
shall, and shall cause each of its Subsidiaries to, maintain in full force and
effect all Intellectual Property rights necessary or appropriate to the
business of the Borrower or any Subsidiary of the Borrower, except where the
failure to maintain such rights could not be reasonably expected to have a
material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole,
and shall take no action (including, without limitation, the licensing of
Intellectual Property), or fail to take an action, as the case may be, in
connection with such Intellectual Property rights which could reasonably be
expected to result in a material adverse effect on the performance, business,
assets, nature of assets, liabilities, operations, properties, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries
taken as a whole. The Borrower shall, and shall cause each of its Subsidiaries
to, diligently prosecute all pending applications filed in connection with
seeking, or seeking to perfect, the Intellectual Property rights and take all
other reasonable actions necessary for the protection and maintenance of the
Intellectual Property rights necessary or appropriate to the business of the
Borrower or any Subsidiary of the Borrower at all times from and after the
Initial Borrowing Date other than any such actions the failure of which, in
the aggregate, could not reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
9.15 Registry. The Borrower hereby designates the Administrative Agent
to serve as the Borrower's agent, solely for purposes of this Section 9.15, to
maintain a register (the "Register") on which it shall record the Commitments
from time to time of each of the Banks, the Loans made by each of the Banks
and each repayment in respect of the principal amount of the Loans of each
Bank. Failure to make any such recordation, or any error in such recordation
shall not affect the Borrower's obligations in respect of such Loans. With
respect to any Bank, the transfer of the Commitments of such Bank and the
rights to the principal of, and interest on, any Loan made pursuant to such
Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitments and Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans shall remain owing
to the transferor. The registration of an assignment or transfer of all or
part of any Commitments and Loans shall be recorded by the Administrative
Agent on the Register only upon the
acceptance by the Administrative Agent of a properly executed and delivered
assignment and assumption agreement pursuant to Section 15.04(b). Coincident
with the delivery of such an assignment and assumption agreement to the
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning
or transferor Bank shall surrender the Note evidencing such Loan, and
thereupon one or more new Notes in the same aggregate principal amount shall
be issued to the assigning or transferor Bank and/or the new Bank. The
Borrower agrees to indemnify the Administrative Agent from and against any and
all losses, claims, damages and liabilities of whatsoever nature which may be
imposed on, asserted against or incurred by the Administrative Agent in
performing its duties under this Section 9.15.
9.16 Ownership of Subsidiaries. Except as provided in Section 10.02, (i)
the Parent shall at all times own directly 100% of the Borrower Common Stock
(other than directors' qualifying shares), and (ii) each Subsidiary of the
Borrower shall be a Wholly-Owned Subsidiary.
9.17 Further Actions. (a) The Borrower shall, and shall cause each of
its Subsidiaries to, grant to the Collateral Agent, for the benefit of the
Secured Creditors, at the request of the Administrative Agent or the Required
Banks, at any time, a security interest in any Real Property, vehicles or
other property owned by any such Credit Party and not already subject to a
Mortgage or other security interest and shall take all actions requested by
the Administrative Agent or the Required Banks (including, without limitation,
the obtaining of mortgage policies, title surveys and real estate appraisals
satisfying the requirements of all applicable laws) in connection with the
granting of such security interest.
(b) The security interests required to be granted pursuant to Section
9.17(a) shall be granted pursuant to mortgages, deeds of trust and security
agreements, in each case satisfactory in form and substance to the
Administrative Agent and the Required Banks, which mortgages, deeds of trust and
security agreements shall create valid and enforceable perfected security
interests prior to the rights of all third Persons and subject to no other Liens
except such Liens as are permitted by Section 10.01. The mortgages, deeds of
trust and other instruments related thereto and the security agreements shall be
duly recorded or filed in such manner and in such places and at such times as
are required by law to establish, perfect, preserve and protect the Liens, in
favor of the Collateral Agent for the benefit of the Secured Creditors, required
to be granted pursuant to such documents and all taxes, fees and other charges
payable in connection therewith shall be paid in full by the Borrower. At the
time of the execution and delivery of the additional documents, the Borrower
shall cause to be delivered to the Collateral Agent such opinions of counsel,
mortgage policies, title surveys, real estate appraisals, certificates of title
and other related documents as may be reasonably requested by the Administrative
Agent or the Required Banks to assure themselves that this Section 9.17 has been
complied with.
(c) The Borrower shall, and shall cause each of its Subsidiaries to, at its
own expense, make, execute, endorse, acknowledge, file and/or deliver to the
Collateral Agent from time to time such conveyances, financing statements,
transfer endorsements, powers of attorney, certificates, reports and other
assurances or instruments and take such further steps relating to perfecting the
security interest of the Secured Creditors as the Collateral Agent may
reasonably require. Furthermore, at the time of any request by the
Administrative Agent or the Required Banks pursuant to Section 9.17(b) or this
subsection (c), the Borrower shall cause to be delivered to the Collateral
Agent such opinions of counsel and other documents as may be reasonably
requested by the Administrative
Agent or the Required Banks to assure themselves that Section 9.17(b) and this
subsection (c) have been complied with.
(d) The Borrower shall cause each of its Subsidiaries formed or acquired
after the date hereof to execute and deliver a guaranty, in substantially the
same form as the Subsidiary Guaranty delivered on the date hereof, to the
Administrative Agent, guaranteeing the Obligations of the other Credit Parties
under the Credit Documents.
(e) Each Credit Party agrees that each action required by Section
9.17(a), (b), (c) or (d) shall be completed within 60 days of the date such
action is requested to be taken; provided, however, that, notwithstanding
anything to the contrary in subsection (a), (b) or (d) above, no security
interest shall be required to be granted and no guaranty shall be required to
be given pursuant to this Section 9.17 in the event that the granting of such
security interest or the giving of such guaranty, as the case may be, will
conflict in any material respect with applicable law in the jurisdiction of
incorporation of such Subsidiary or is reasonably likely to cause a material
increase in the aggregate net consolidated tax liabilities of the Borrower and
its Subsidiaries.
(f) At any time and from time to time to the extent that the Required Banks
or any of the Agents request in order to fulfill the requirements of any
applicable statute, regulation or order of any governmental body, to preserve,
protect, enforce or realize upon the security interests granted to the Secured
Creditors pursuant to the Security Documents, each Credit Party shall, and shall
cause each of its Subsidiaries to, cooperate with and promptly take all actions
necessary to assist the Banks, the Issuing Bank and the Agents, including,
without limitation, to make, execute, acknowledge, file and/or deliver to the
Banks, the Issuing Bank or the Agents, as the case may be, such information,
documents, certificates, reports and other assurances or instruments, which the
Banks, the Issuing Bank or the Agents, as the case may be, deems appropriate or
advisable to comply with such statutes, regulations or orders so as to preserve,
protect, enforce or realize upon such security interests granted to the Secured
Creditors.
9.18 Raw Material Purchases by the Borrower. The Borrower shall purchase
brass materials, other metals and any other raw materials only to satisfy its
own manufacturing and hedging needs and shall not engage in speculative
trading. The Borrower shall make all purchases of brass materials, other
metals and any other raw materials in a manner consistent with past practice
and with a view to minimizing the risks of commodity price fluctuations. To
the extent that the Borrower enters into futures contracts, such contracts
shall be consistent with past practice and industry standards at such time.
9.19 Bank Deposit Accounts; Concentration Accounts. (a) Each Bank
Deposit Account shall be with a financial institution that is a member of the
syndicate bank group as of the Initial Borrowing Date or that shall become a
member of the bank syndicate group within 90 days after the Initial Borrowing
Date. The Borrower and each of its Subsidiaries represents and warrants that
it does not now maintain, and shall not in the future maintain, any other Bank
Deposit Account with any Deposit Bank other than the Bank Deposit Accounts;
provided, however, that the Borrower and each of its Subsidiaries shall be
permitted to establish new Bank Deposit Accounts pursuant to the terms of the
Security Agreement.
(b) The Borrower and each of its Subsidiaries represents and warrants that
it does not now maintain, and shall not in the future maintain, any other
Concentration Account with any Concentration Account Bank other than the
Concentration Account; provided, however, that the Borrower and each of its
Subsidiaries shall be permitted to establish a new Concentration Account
pursuant to the terms of the Security Agreement.
(c) Upon the request of the Collateral Agent, the Borrower shall, and shall
cause each of its Domestic Subsidiaries to, within a reasonable period of time
after such request (but in no event later than 60 days after receipt of such
request by the Borrower or such Domestic Subsidiary), duly authorize, execute
and deliver to the Collateral Agent a letter among the Collateral Agent, certain
banking institutions acceptable to the Collateral Agent and the Borrower or such
Domestic Subsidiary, acknowledging that each checking, savings or other deposit
account described in such letter is under the exclusive dominion and control of
the Collateral Agent and that all moneys, instruments and other securities
deposited in such accounts are to be held by such banking institution for the
benefit of the Collateral Agent.
9.20 Conditions Subsequent to Initial Credit Event. The Borrower shall,
and shall cause each of its Subsidiaries, to deliver to the Collateral Agent,
in form and substance satisfactory to the Collateral Agent and in sufficient
copies for each Bank, as soon as possible and in any event within 60 days
after the Initial Borrowing Date (or such later date as may be agreed by the
Borrower and the Collateral Agent):
(i) acknowledgment copies of proper financing statements, duly filed
under the Uniform Commercial Code of all jurisdictions that the
Collateral Agent may deem necessary or desirable in order to perfect and
protect the first priority liens and security interests created under the
Security Agreement, covering the Collateral described in the Security
Agreement,
(ii) completed requests for information, listing the financing
statements referred to in clause (i) above and all other effective
financing statements filed in the jurisdictions referred to in clause (i)
above that name any Credit Party as debtor, together with copies of such
financing statements,
(iii) evidence that counterparts of the Mortgages have been duly
recorded in all filing or recording offices that the Collateral Agent may
deem necessary or desirable in order to create a valid first and
subsisting Lien on the property described therein in favor of the Secured
Creditors subject only to Permitted Encumbrances (as defined in the
applicable Mortgage) and that all filing and recording taxes and fees
have been paid,
(iv) evidence of the completion of all recordings and filings of or
with respect to the Intellectual Property described in the Security
Agreement that the Collateral Agent may deem necessary or desirable in
order to perfect and protect the Liens created thereunder,
(v) evidence that such action as the Collateral Agent may deem
necessary or desirable in order to perfect and protect the Liens on the
capital stock held by any Credit Party in any of its Foreign Subsidiaries
has been taken, provided that in any event such Liens shall cover not
more than 66% of the outstanding capital stock of Foreign Subsidiaries
directly
owned by such Credit Party and shall not cover any capital stock of any
Foreign Subsidiary directly or indirectly owned by a Foreign Subsidiary,
(vii) evidence that all other action as the Collateral Agent may
deem necessary or desirable in order to perfect and protect the first
priority liens and security interests created under the Collateral
Documents has been taken,
(viii) The Borrower shall, and shall have caused each of its
Domestic Subsidiaries to, have duly authorized, executed and delivered a
Concentration Account Consent Letter (each as modified, amended or
supplemented from time to time in accordance with the terms hereof and
thereof, a "Concentration Account Consent Letter") within 30 days after
the Initial Borrowing Date with the Collateral Agent and the
Concentration Account Bank, acknowledging that the Concentration Account
listed on Schedule IX is under the exclusive dominion and control of the
Collateral Agent and that all moneys, instruments and other securities
deposited in such Concentration Account are to be held by the
Concentration Account Bank for the benefit of the Collateral Agent, and
(ix) No later than 30 days after the Initial Borrowing Date, the
Borrower shall have provided to the Issuing Bank and the Banks detailed
consolidated financial projections in a form substantially similar to the
Projections, after giving effect to the Transaction and the other
transactions contemplated by the Documents, for at least six years ended
after the Initial Borrowing Date.
Section 10. Negative Covenants. Each of the Parent and the Borrower
hereby covenants that, on and after the Effective Date and until the Total
Commitment and all Letters of Credit have terminated, and the Loans, Notes and
Unpaid Drawings, together with interest, Fees and all other Obligations are
paid in full:
10.01 Liens. The Parent shall not create, incur, assume or suffer to
exist any Lien upon or with respect to the Borrower Common Stock, whether now
owned or hereafter acquired, or assign any right to receive income or permit
the filing of any financing statement under the UCC or any other similar
notice of Lien under any similar recording or notice statute with respect to
the Borrower Common Stock. The Borrower shall not, and shall not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets (real or personal, tangible or
intangible) of the Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable with recourse to
the Borrower or any of its Subsidiaries), or assign any right to receive
income or permit the filing of any financing statement under the UCC or any
other similar notice of Lien under any similar recording or notice statute;
provided that the provisions of this Section 10.01 shall not prevent the
Borrower or any of its Subsidiaries from creating, incurring, assuming or
permitting the existence of the following (liens described below are herein
referred to as "Permitted Liens"):
(i) inchoate Liens with respect to the Borrower or any of its
Subsidiaries for taxes not yet due or Liens for taxes being contested in
good faith and by appropriate proceedings for which adequate reserves
have been established in accordance with U.S. GAAP;
(ii) Liens in respect of property or assets of the Borrower or any
of its Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for borrowed money,
such as carriers', warehousemen's, materialmen's, mechanics' and
landlords' liens and other similar Liens arising in the ordinary course
of business, and (x) which do not in the aggregate materially detract
from the value of the Borrower's or any of its Subsidiaries' property or
assets or materially impair the use thereof in the operation of the
business of the Borrower or any such Subsidiary or (y) which are being
contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property or
assets subject to any such Lien;
(iii) Permitted Encumbrances;
(iv) Liens created pursuant to the Security Documents;
(v) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances on the property of the Borrower or any of
its Subsidiaries arising in the ordinary course of business and not
materially interfering with the conduct of the business of the Borrower
or any of its Subsidiaries;
(vi) Liens on property of the Borrower subject to, and securing
only, Capitalized Lease Obligations to the extent such Capitalized Lease
Obligations are permitted by Section 10.05(iii); provided that such Liens
only serve to secure the payment of Indebtedness arising under such
Capitalized Lease Obligation and the Lien encumbering the asset giving
rise to the Capitalized Lease Obligation does not encumber any other
asset of the Borrower or any of its Subsidiaries;
(vii) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection (but not
incurred in connection with Indebtedness for borrowed money) with (x)
workers' compensation, unemployment insurance and other types of social
security or (y) to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
trade contracts, performance and return-of- money bonds and other similar
obligations; provided that the aggregate amount of cash and the fair
market value of the property encumbered by Liens described in this
subclause (y) shall not exceed $100,000;
(viii) purchase money Liens placed upon equipment or machinery
(which equipment or machinery is not owned by the Borrower or any of its
Subsidiaries as of the Initial Borrowing Date) used in the ordinary
course of the business of the Borrower at the time of purchase thereof by
the Borrower to secure Indebtedness incurred to pay all or a portion of
the purchase price thereof; provided that (v) the aggregate principal
amount of all Indebtedness secured by Liens permitted by this subclause
(v) does not exceed at any one time outstanding $2,000,000 with respect
to all machinery and equipment, (w) in all events, the Lien encumbering
the equipment or machinery so acquired thereto does not encumber any
other asset of the Borrower or any of its Subsidiaries, (x) the
Indebtedness secured by any such Lien does not exceed 75% of the fair
market value of the property being purchased at the time of the
incurrence of such Indebtedness, (y) no portion of the purchase price of
the equipment or machinery to be purchased is paid from the proceeds of
sales of equipment or attaching machinery sold as permitted by Section
10.02(ii)(B) and (z) the Borrower shall use commercially reasonable
efforts to ensure that any Indebtedness incurred as permitted by this
Section 10.01(viii) is on a non-recourse basis to the Borrower and its
Subsidiaries;
(ix) Liens arising from precautionary UCC-1 financing statement
filings regarding operating leases entered into in the ordinary course of
business;
(x) inchoate Liens (where there has been no execution or levy and no
pledge or delivery of collateral) arising from and out of judgments or
decrees in existence at such time not constituting an Event of Default;
(xi) Liens created by leases or subleases granted to third Persons
by the Borrower or any of its Subsidiaries not interfering in any
material respect with the business of the Borrower or any such
Subsidiary; and
(xii) statutory and common law landlords' liens under leases to
which the Borrower is a party; and
(xiii) Liens on the stock and assets of Unifast-▇▇▇▇▇▇▇ ▇.▇. and any
Subsidiary thereof securing Indebtedness permitted by Section 10.05(ix).
10.02 Consolidation, Merger, Purchase or Sale of Assets, Etc. The Parent
shall not convey, sell or otherwise dispose of (or agree to do any of the
foregoing at any future time) the Borrower Common Stock, whether now owned or
hereafter acquired. The Parent shall not purchase or otherwise acquire (in one
or a series of related transactions) all or substantially all of the Capital
Stock or the property or assets of any Person, except that the Parent may do
so with the cash proceeds received from the sale or issuance of equity
securities of the Parent or any of its Subsidiaries otherwise permitted by
Section 10.13 net of any amounts required to repay amounts outstanding under
the Term Loan Facility pursuant to Section 5.02(A)(d)(i) and with the cash
proceeds from the incurrence of any Indebtedness by the Borrower or any of its
Subsidiaries otherwise permitted hereunder; provided that (i)(A) such Person
is, at the time of such purchase or other acquisition, engaged in a line of
business substantially similar to the Permitted Business or (B) the property
or assets being purchased or otherwise acquired are used in a line of business
substantially similar to the Permitted Business, (ii) the Parent shall use
commercially reasonable efforts (including, if such purchase or other
acquisition would otherwise be in violation of Section 10.08, seeking the
consent of the Required Banks to the waiver of any such violation under such
Section) to cause such purchase or other acquisition to be made by the
Borrower or any of the Borrower's Subsidiaries and (iii) the Parent shall use
commercially reasonable efforts to cause any Indebtedness incurred in
connection with such purchase or other acquisition to be on a non-recourse
basis with respect to the Parent. The Borrower shall not, and shall not permit
any of its Subsidiaries to, wind up, liquidate or dissolve its affairs or
enter into any transaction of merger or consolidation, or convey, sell, lease
or otherwise dispose of (or agree to do any of the foregoing at any future
time) all or any part of its property or assets, or enter into any
partnerships, joint ventures or sale-leaseback transactions, or purchase or
otherwise acquire (in one or a series of related transactions) any part of the
property or assets (other than purchases or other acquisitions by the Borrower
of
inventory, materials and equipment in the ordinary course of business) of
any Person, except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries shall
be permitted to the extent not in violation of Section 10.08; provided,
however, that no Default or Event of Default (both before and after
giving effect to such transaction) shall have occurred and be continuing
and the Borrower is in pro forma compliance with Sections 10.09, 10.10
and 10.20 after giving effect to such transaction; provided, further,
however, that Maintenance Capital Expenditures by the Borrower and its
Subsidiaries shall be permitted to the extent not in violation of Section
10.08;
(ii) so long as there shall not exist a Default or an Event of
Default (both before and after giving effect to such sale), (A) the
Borrower and its Subsidiaries may sell for fair value and for cash
equipment in the ordinary course of business to any third party, so long
as the proceeds therefrom do not exceed $500,000 in any fiscal year of
the Borrower and (B) the Borrower and its Subsidiaries may sell for fair
value and for cash attaching machinery to third party customers of the
Borrower and its Subsidiaries, in the ordinary course of business, so
long as the proceeds therefrom do not exceed $2,500,000 in any fiscal
year of the Borrower and so long as such proceeds are used within 270
days after the receipt thereof to purchase or manufacture replacement
machinery or to prepay Loans pursuant to Section 5.02(A)(f);
(iii) each of the Borrower and each of its Subsidiaries may lease
(as lessee) real or personal property to the extent permitted by Section
10.04 (so long as such lease does not create Capitalized Lease
Obligations);
(iv) investments and other transactions to the extent permitted by
Section 10.06 shall be permitted;
(v) sales of inventory (other than attaching machinery) in the
ordinary course of business shall be permitted;
(vi) the Transaction shall be permitted as contemplated by the
Documents;
(vii) the Borrower may sell inventory and other assets used in the
ordinary course of business to (A) Subsidiaries of the Borrower that are
party to the Security Agreement and (B) Subsidiaries of the Borrower that
are not organized and that are not doing business in the United States;
provided, however, that sales described in subclause (B) above are for
cash at fair market value and do not exceed $5,000,000 per year for all
such Subsidiaries;
(viii) the Borrower and the Board of Directors of PCI may cause PCI
to be dissolved or PCI may be merged with and into the Borrower, with the
Borrower being the surviving corporation;
(ix) the Borrower may cause ▇▇▇ to be dissolved or merged with and
into the Borrower with the Borrower being the surviving corporation;
(x) ▇▇▇, PCI and any Subsidiary incorporated in Canada may transfer
assets to the Borrower; and
(xi) the Borrower may cause any Subsidiary incorporated in Canada to
be dissolved or merged with or into the Borrower with the Borrower being
the surviving corporation.
To the extent the Required Banks waive the provisions of this Section 10.02 with
respect to the sale of any Collateral (to the extent the Required Banks are
permitted to waive such provisions in accordance with Section 15.10), or any
Collateral is sold as permitted by this Section 10.02, such Collateral shall be
sold free and clear of the Liens created by the Security Documents, and the
Administrative Agent and Collateral Agent shall be authorized to take any
actions deemed appropriate in order to effect the foregoing.
10.03 Dividends. The Borrower shall not and shall not permit
any of its Subsidiaries to, declare or pay any Dividends on, or make redemptions
or repurchases of its capital stock, in each case with respect to the Borrower
or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay Dividends to the Borrower
or any Wholly-Owned Subsidiary of the Borrower;
(ii) except to the extent that the Borrower has already lent money
to the Parent for such purpose, the Borrower may pay cash Dividends to
the Parent for the purpose of paying, so long as all proceeds are
promptly used by the Parent to pay, and so long as there shall exist no
Default or Event of Default (both before and after giving effect to such
payment) and the Borrower shall be in pro forma compliance with Sections
10.09, 10.10 and 10.20 after giving effect to such payment, (x) at any
time after the date which is fifth anniversary of the date hereof,
dividends required to be paid by the Parent on the Senior Preferred Stock
and Series B Preferred Stock and (y) reasonable out-of-pocket expenses
incurred by the Parent specifically related to the Borrower or the
Parent's ownership of the Borrower (including, without limitation,
accounting fees, directors' fees and legal expenses); provided that the
expenses referred to in this subclause (y) shall not exceed $100,000 in
any fiscal year of the Borrower;
(iii) except to the extent that the Borrower has already lent money
to the Parent for such purpose, the Borrower may pay cash Dividends to
the Parent for the purpose of paying, so long as all proceeds are
promptly used by the Parent to pay (x) its franchise taxes and other fees
required to maintain its corporate existence, (y) Federal, state and
local income taxes payable by the Parent; provided that any refund of
taxes paid to the Parent shall be promptly returned by the Parent to the
Borrower; and provided further that amounts paid to the Parent pursuant
to subclause (y) above shall not exceed the cash taxes then due and
payable by the Borrower and its Subsidiaries;
(iv) except to the extent that the Borrower has already lent money
to the Parent for such purpose, the Borrower may pay Dividends to the
Parent for the purpose of providing funds for the Parent to redeem or
repurchase Parent Common Stock and Series B Preferred Stock (or options
to purchase such Parent Common Stock and Series B Preferred Stock), (so
long as such Dividends are immediately used for such purpose), from
officers, employees and directors (or their estates), provided that in
the case of each of clauses (a) and (b) below, no Default or Event of
Default shall have occurred and be continuing or would result therefrom,
and after giving effect to any such redemption or repurchase, the
Borrower shall be in pro forma compliance with Sections 10.09, 10.10 and
10.20 (a) upon the death, permanent disability, retirement or termination
of employment of any such Person in accordance with (x) the New Incentive
Stock Option Plan and (y) any stock option plan or any employee stock
ownership plan; provided that the aggregate amount of all cash paid in
respect of all such shares so redeemed or repurchased (1) in any fiscal
year of the Parent does not exceed $100,000 and (2) since the Effective
Date does not exceed $500,000 and (b) pursuant to, and in accordance with
the terms of, the Stockholders Agreement; provided that the aggregate
amount of cash paid in respect of all such shares so redeemed or
repurchased pursuant to this subclause (b) does not exceed $1,500,000 in
any fiscal year of the Parent and $3,400,000 in the aggregate; and
(v) except to the extent that the Borrower has already lent money to
the Parent for such purpose, the Borrower may pay cash Dividends to the
Parent for the purpose of paying, so long as all proceeds are promptly
used by the Parent to pay, and so long as there shall exist no Event of
Default (both before and after giving effect to such payment) pursuant to
Section 11.01 or 11.03 pursuant to the Management Agreement as in effect
on the date hereof, management fees to Saratoga to the extent permitted
under Section 10.07.
10.04 Leases. The Borrower shall not incur, and shall not permit any of
its Subsidiaries to incur, any expense (including, without limitation, any
property taxes paid as additional rent or lease payments) under any agreement
to rent or lease any real or personal property (or any extension or renewal
thereof) (excluding Capitalized Lease Obligations) and the Borrower shall not
permit the aggregate expense (including, without limitation, any property
taxes paid as additional rent or lease payments) incurred by the Borrower and
its Subsidiaries under any agreement to rent or lease any real or personal
property (or any extension or renewal thereof) (excluding Capitalized Lease
Obligations) to exceed at any time for any period of four consecutive fiscal
quarters of the Borrower commencing on or after the Initial Borrowing Date
(or, if shorter, the period beginning on the Initial Borrowing Date and ending
on the last day of a fiscal quarter of the Borrower), in each case taken as
one accounting period, an amount equal to $1,000,000.
10.05 Indebtedness. The Borrower shall not, and shall not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) Indebtedness of the Borrower under any Interest Rate Protection
or Other Hedging Agreement and under any similar type of agreement
entered into pursuant to Section 9.11;
(iii) indemnity obligations and other payment obligations under the
Acquisition Documents;
(iv) Indebtedness in amounts, and subject to Liens, permitted under
Section 10.01(viii);
(v) Indebtedness under any commodity hedging agreements or similar
agreements or arrangements designed to protect against the fluctuation in
commodity prices entered into in connection with the Borrower's operations
as long as management of the Borrower has determined that the entering into
of such hedging agreement or arrangement is a bona fide hedging activity
(and is not for speculative purposes), is in the ordinary course of
business and is consistent with past practices;
(vi) Indebtedness of Subsidiaries of the Borrower permitted to be
incurred pursuant to Section 10.06(viii);
(vii) Indebtedness of the Credit Parties under the Senior Notes
Indenture;
(viii) the Existing Indebtedness set forth on Schedule X; and
(ix) Indebtedness of Unifast-▇▇▇▇▇▇▇ ▇.▇. in an amount not exceeding
$5,000,000; provided that the terms and conditions of such Indebtedness are
substantially similar to those in effect on the Initial Borrowing Date,
that neither the Parent nor any of its Subsidiaries provides a guaranty to
the holder of such Indebtedness, that such Indebtedness is on a non-
recourse basis to the Parent and its Subsidiaries.
10.06 Advances, Investments and Loans. The Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly lend money or
credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents, except that the following shall be permitted:
(i) the Borrower and any of its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary terms;
(ii) the Borrower and any of its Subsidiaries may acquire and hold cash
and Cash Equivalents; provided that all such cash or Cash Equivalents held
by the Borrower or any Domestic Subsidiary shall be held in the
Concentration Account (in accordance with the terms of the Concentration
Account Consent Letter) or a Bank Deposit Account other than an amount not
exceeding $1,000,000 which the Borrower and its Subsidiaries may hold in
payroll, cafeteria, ▇▇▇▇▇ cash, insurance, payroll tax, hedging and freight
payment accounts and any other similar accounts in the ordinary course of
business;
(iii) the Borrower may enter into Interest Rate Protection or Other
Hedging Agreements permitted pursuant to Section 10.05(ii) or (vi);
(iv) the Borrower may make Capital Expenditures to the extent permitted
by Section 10.08;
(v) the Equity Contributions shall be permitted in accordance with the
provisions of Section 6.06;
(vi) the Borrower and any of its Subsidiaries may endorse negotiable
instruments for collection in the ordinary course of business;
(vii) the Borrower may make loans and advances in the ordinary course
of business consistent with past practices to their respective employees
for moving, travel, entertainment and emergency expenses and other similar
expenses, so long as the aggregate principal amount thereof at any one time
outstanding (determined without regard to any write-downs or write-offs of
such loans and advances) shall not exceed $250,000;
(viii) the Borrower may lend money to any of its Subsidiaries that are
not organized or doing business in the United States, or acquire capital
stock of any such Subsidiary, or make capital contributions to any such
Subsidiary so long as the aggregate amount of money lent and used to
acquire such capital stock or make such capital contributions with respect
to all such Subsidiaries shall not exceed $1,000,000 after the Effective
Date and the loans shall be evidenced by intercompany notes pledged to the
Collateral Agent pursuant to the Security Agreement; and
(ix) except to the extent that the Borrower has already paid cash
Dividends to the Parent for such purpose, the Borrower may lend money to
the Parent so long as such loans are evidenced by intercompany notes
pledged to the Collateral Agent pursuant to the Security Agreement and the
proceeds of such loans are promptly used by the Parent (i) to redeem or
repurchase Parent Common Stock or Series B Preferred Stock in accordance
with Section 10.03(iv) or (ii) for any purpose permitted by Section
10.03(ii), Section 10.03(iii) or Section 10.03(v); provided that the
Borrower is not otherwise prohibited by the terms of this Agreement from
paying Dividends to the Parent pursuant to such Sections.
10.07 Transactions with Affiliates. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of the Borrower or any Affiliate of any of the Borrower's
Subsidiaries, other than transactions by the Borrower or any of its Subsidiaries
in the ordinary course of business and on terms and conditions substantially as
favorable to the Borrower or such Subsidiary, as the case may be, as would be
obtainable by the Borrower or such Subsidiary, as the case may be, at that time
in a comparable arm's-length transaction with a Person other than an Affiliate,
except that (i) the Borrower and its Subsidiaries may effect the Transaction and
pay fees and expenses in connection therewith not to exceed $12,000,000 in the
aggregate, (ii) loans and advances made in accordance with Sections 10.06(vii),
10.06(viii), 10.06(ix) and 10.06(x) shall be permitted, (iii) customary fees to
non-officer directors of the Borrower and its Subsidiaries shall be permitted,
(iv) so long as there shall exist no Event of Default (both before and after
giving effect to such payment) pursuant to Section 11.01 or 11.03, the Borrower
may pay, pursuant to the Management Agreements as in effect on the date hereof,
management fees to Saratoga in an aggregate amount consistent with the amounts
as reflected in the Projections, but in no case to exceed $600,000 in any one
fiscal year of the Borrower, and may reimburse Saratoga for all reasonable out-
of-pocket expenses incurred in connection with the performance of this
Agreement, (v) Dividends paid in accordance with
Section 10.03 shall be permitted and (vi) the payment of fees to SBC and its
Affiliates, and including Saratoga, for financial services in an amount not
exceeding its usual and customary fees for similar services shall be permitted.
In no event shall any management or similar fees be paid or payable by the
Borrower or any of its Subsidiaries to any Person except as permitted by the
previous clauses (iv) and (vi).
10.08 Capital Expenditures. (a) The Borrower shall not, and
shall not permit any of its Subsidiaries to, make any Capital Expenditures,
except that the Borrower may make Capital Expenditures so long as the aggregate
amount thereof for any fiscal year of the Borrower does not exceed the sum of
(i) $6,500,000 and (ii) an amount equal to 50% of the excess of $6,500,000 over
the amount of Capital Expenditures made during the preceding fiscal year of the
Borrower; provided that amounts carried forward from the immediately preceding
fiscal year of the Borrower, if any, shall be utilized during the then current
fiscal year of the Borrower to make Capital Expenditures prior to the
utilization of the $6,500,000 allocation for Capital Expenditures for such
current fiscal year of the Borrower; provided, further, that Capital
Expenditures shall be permitted only if no Default or Event of Default (both
before and after giving effect to such transaction) shall have occurred and be
continuing and the Borrower is in pro forma compliance with Sections 10.09,
10.10 and 10.20 after giving effect to such transaction; provided, however, that
notwithstanding the immediately preceding proviso, the Borrower and its
Subsidiaries shall be permitted to make Maintenance Capital Expenditures.
(b) The amounts set forth above in any fiscal year of the Borrower shall be
increased by the amount of cash proceeds received by the Borrower during the
immediately preceding fiscal year of the Borrower (as certified to the Banks by
the Borrower) from the sale of equipment and from the sale of attaching
machinery to the extent such assets are permitted to be sold pursuant to Section
10.02(ii) and the proceeds from such sale are permitted to be reinvested in the
business pursuant to Sections 10.02(ii) and 5.02(A)(f).
10.09 Fixed Charge Coverage Ratio. The Borrower shall not
permit the Fixed Charge Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower, in each case taken as one accounting period, ended on
a date set forth below to be less than the ratio set forth opposite such date:
Fiscal Quarter
Ended Ratio
-------------- --------
March 31, 1998 1.10:1.0
June 30, 1998 1.10:1.0
September 30, 1998 1.10:1.0
December 31, 1998 1.10:1.0
March 31, 1999 1.10:1.0
June 30, 1999 1.10:1.0
September 30, 1999 1.10:1.0
December 31, 1999 1.10:1.0
March 31, 2000 1.15:1.0
June 30, 2000 1.15:1.0
September 30, 2000 1.15:1.0
December 31, 2000 1.15:1.0
March 31, 2001
and each fiscal
quarter thereafter 1.20:1.0
10.10 Funded Indebtedness to Consolidated EBITDA. The
Borrower shall not permit the ratio of Funded Indebtedness (measured as of the
applicable date listed below in this Section 10.10) of the Borrower and its
Subsidiaries on a consolidated basis to Consolidated EBITDA of the Borrower for
any period of four consecutive fiscal quarters of the Borrower, in each case
taken as one accounting period, ending on a date set forth below to be greater
than the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
-------------- --------
March 31, 1998 6.50:1.0
June 30, 1998 6.50:1.0
September 30, 1998 6.50:1.0
December 31, 1998 6.50:1.0
March 31, 1999 6.25:1.0
June 30, 1999 6.25:1.0
September 30, 1999 6.25:1.0
December 31, 1999 6.25:1.0
March 31, 2000 5.75:1.0
June 30, 2000 5.75:1.0
September 30, 2000 5.75:1.0
December 31, 2000 5.75:1.0
March 31, 2001 5.50:1.0
June 30, 2001 5.50:1.0
September 30, 2001 5.50:1.0
December 31, 2001 5.50:1.0
March 31, 2002 5.00:1.0
June 30, 2002 5.00:1.0
September 30, 2002 5.00:1.0
December 31, 2002 5.00:1.0
March 31, 2003 4.50:1.0
June 30, 2003 4.50:1.0
September 30, 2003
and each fiscal
quarter thereafter 4.50:1.0
10.11 Limitation on Modifications of Certificate of
Incorporation, By-Laws and Certain Other Agreements; Etc. The Borrower shall
not, and shall not permit any of its Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary, optional or
unscheduled mandatory payment or prepayment on or redemption (including,
without limitation, pursuant to any change of control provision) or
acquisition for value of (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities before
due for the purpose of paying when due) any Indebtedness other than
prepayments of amounts outstanding under the Credit Documents.
(ii) amend or modify, or permit the amendment or modification of, any
material provision of any Indebtedness or the Acquisition Documents or of
any agreement relating to any of the foregoing in any material respect,
other than any such amendment or modification which could not reasonably be
expected to be materially adverse to the Issuing Bank or any Bank in its
capacity as such;
(iii) amend, modify, or change its Certificate of Incorporation
(including, without limitation, by the filing or modification of any
certificate of designation) (other than certificates of merger with respect
to Merger Sub, KSCO and the Company) or By-Laws, except for such amendments
to the Certificate of Incorporation of the Borrower or any of its
Subsidiaries which do not impose any monetary liabilities on the Borrower
or any of its Subsidiaries and could not reasonably be expected to be
materially adverse to the Issuing Bank or any Bank in its capacity as such;
(iv) amend, modify, change or terminate any existing Shareholders
Agreement or any Shareholders Agreement entered into in connection with the
Transaction, or enter into any new Shareholders Agreement, except for such
amendments, modifications, changes, terminations or new agreements which,
individually or in the aggregate, could not reasonably be expected to be
materially adverse to the Issuing Bank or any Bank in its capacity as such,
do not violate or breach, and are not inconsistent with the terms of this
Agreement and which do not, and will not, involve the payment by the
Borrower or any of its Subsidiaries of any
amounts and do not result in the Borrower or any of its Subsidiaries
incurring then or at any time in the future any material liability or
monetary obligation, in each case, except as otherwise permitted hereunder;
(v) enter into any tax sharing agreement; or
(vi) amend, modify, change or terminate any existing Management
Agreement, Employee Benefit Plan, Employment Agreement or the New Incentive
Stock Option Plan, or enter into any new Management Agreement, Employee
Benefit Plan or Employment Agreement, except if the aggregate cost to the
Borrower and its Subsidiaries as a result of such amendments, modifications
or changes to or termination of such plans and agreements and new plans and
agreements is not reasonably likely to have a material adverse effect on
the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries taken as a whole.
10.12 Limitation on Certain Restrictions on Subsidiaries. The Borrower
shall not, and shall not permit any of its Subsidiaries to, create or otherwise
cause or suffer to exist or become effective any consensual Payment Restriction
with respect to any of its Subsidiaries, except for any such Payment Restriction
existing under or by reason of (a) applicable law, (b) customary non-assignment
or net worth provisions in leases or other contracts entered into in the
ordinary course of business and consistent with past practices, (c) purchase
money obligations for property acquired in the ordinary course of business that
impose restrictions on the property so acquired, (d) customary restrictions
imposed on the transfer of copyrighted or patented materials, (e) the entering
into of a contract for the sale or other disposition of assets, directly or
indirectly, so long as such restrictions do not extend to assets that are not
subject to such sale or other disposition, (f) the terms of any agreement
evidencing any Indebtedness of Subsidiaries that was permitted hereby to be
incurred that only restricts the transfer of the assets purchased with the
proceeds of such Indebtedness, (g) the terms of the Senior Notes Indenture in
effect on the Initial Borrowing Date, (h) the terms of any agreement evidencing
any Acquired Indebtedness that was permitted to be incurred pursuant to this
Agreement, provided that such Payment Restriction only applies to assets that
were subject to such restriction and encumbrances prior to the acquisition of
such assets by the Borrower or any of its Subsidiaries, (i) contracts of any
Subsidiaries of the Borrower in effect prior to such Person becoming a
Subsidiary of the Borrower and not entered into in contemplation thereof, so
long as such restriction applies only to such Subsidiary or its assets, (j)
restrictions on transfer of property or assets pursuant to any Lien permitted
under this Agreement, (k) the terms of any agreement in effect on the Initial
Borrowing Date as such Payment Restriction is in effect on the Initial Borrowing
Date or as thereafter amended; provided that such Payment Restriction is no more
restrictive, (l) this Agreement, the Notes, the Parent Guaranty or the
Subsidiary Guaranty, and (m) "Refinancing Indebtedness" (as such term is defined
in the Senior Notes Indenture); provided that any such Payment Restrictions that
arise under such "Refinancing Indebtedness" are not, taken as a whole, more
restrictive than those under the agreement creating or evidencing the
Indebtedness being refinanced.
10.13 Limitation on Issuance of Capital Stock. (a) The Borrower shall not,
and shall not permit any of its Subsidiaries to, issue any capital stock
(including by way of sales of treasury stock) or any options or warrants to
purchase, or securities convertible into, capital stock, except (i) for
transfers and replacements of then outstanding shares, (ii) for stock splits,
stock dividends and similar
issuances which do not decrease the percentage ownership of any person in any
class of the capital stock of the Borrower or such Subsidiary, (iii) additional
stock issued to the Borrower in connection with investments in Subsidiaries
permitted pursuant to Section 10.06(viii) (iv) director's qualifying shares and
(v) the issuance of shares of capital stock which are necessary to allow a
Foreign Subsidiary to be partially owned by the government of the jurisdiction
in which such Foreign Subsidiary is organized or by individual or corporate
citizens of such jurisdiction in order for such Foreign Subsidiary to transact
business in such jurisdiction in compliance with applicable laws and regulations
of such jurisdiction. Any stock issued by the Borrower or any of its
Subsidiaries as expressly permitted by this Section 10.13, if owned by the
Parent or any of its Subsidiaries (so long as the issuer of such stock is
incorporated in the United States), shall be immediately pledged as Collateral
and delivered pursuant to the Security Agreement.
(b) The Parent shall not issue any capital stock, except for the Equity
Transactions and issuances of Parent Common Stock with respect to which, after
giving effect to such issuance, no Default or Event of Default will exist under
Section 11.11.
10.14 Business. (a) Except as otherwise contemplated by
this Agreement in connection with the consummation of the Transaction, the
Parent shall only be permitted to own Capital Stock and engage in activities
incidental thereto.
(b) The Borrower and its Subsidiaries shall not engage (directly or
indirectly) in any business other than a Permitted Business.
10.15 Limitation on Creation of Subsidiaries. The Borrower
shall not, and shall not permit any of its Subsidiaries to, establish, create or
acquire any new Subsidiary (other than in connection with the Transaction on or
prior to the Initial Borrowing Date) except that new Subsidiaries may be created
so long as such Subsidiary is either (a) incorporated under the laws of the
United States or any political subdivision thereof and such Subsidiary executes
and delivers to the Administrative Agent (i) a "Security Agreement Supplement"
(as such term is defined in the Security Agreement) assigning, pledging and
granting to the Collateral Agent for its benefit and the ratable benefit of the
Secured Creditors a lien on and security interest in, all of such Subsidiary's
right, title and interest, in and to all of the Collateral of such Subsidiary
and such other mortgages, deeds of trust and pledge agreements as shall be
required by Section 9.17, in each case in accordance with the terms of Section
9.17, (ii) a guaranty, in substantially the same form as the Subsidiary Guaranty
delivered on the date hereof, guaranteeing the Obligations of the other Credit
Parties under the Credit Documents, in accordance with the terms of Section
9.17, and (iii) a copy of each letter, which letter shall be substantially
similar to those letters delivered pursuant to Section 6.20(a), delivered to
each Deposit Bank in which such new Subsidiary maintains any checking, savings
or other deposit account and a Concentration Account Consent Letter among such
new Subsidiary, the Collateral Agent and a Concentration Account Bank or (b)
incorporated outside of the United States and is doing business outside of the
United States; provided that, in the event the aggregate amount of revenues of
any one Subsidiary incorporated or doing business outside of the United States
exceeds $2,000,000 in any one fiscal year of the Borrower or exceeds $3,000,000
in any one fiscal year of the Borrower for all Subsidiaries of the Borrower
incorporated or doing business outside of the United States (or exceeds an
amount during any one month period which on an annual basis would exceed
$2,000,000 or $3,000,000, as the case may be, in revenues in any fiscal year of
the Borrower), without any request or
notification by any of the Agents, the Issuing Bank or any of the Banks, (A) the
Borrower shall take all actions necessary to provide to the Collateral Agent a
fully perfected security interest in 66% of the outstanding Voting Stock and
100% of all other outstanding Capital Stock of (1) such Subsidiary whose
revenues exceed (or would exceed) $2,000,000 or (2) all such Subsidiaries (in
the event the $3,000,000 threshold is exceeded (or would be exceeded)) in
accordance with the provisions of Section 9.17 and (B) to the extent that taking
the actions described in this subclause (B) will not conflict in any material
respect with any applicable law in the jurisdiction of incorporation of such
Subsidiary or Subsidiaries, as the case may be, and is not reasonably likely to
cause a material increase in the aggregate net consolidated tax liabilities of
the Borrower and its Subsidiaries, such Subsidiary or Subsidiaries, as the case
may be, executes and delivers to the Administrative Agent (I) a "Security
Agreement Supplement" (as such term is defined in the Security Agreement)
assigning, pledging and granting to the Collateral Agent for its benefit and the
ratable benefit of the Secured Creditors a lien on and security interest in, all
of such Subsidiary's or Subsidiaries', as the case may be, right, title and
interest, in and to all of the Collateral of such Subsidiary or Subsidiaries, as
the case may be, and such other mortgages, deeds of trust and pledge agreements
as shall be required by Section 9.17, in each case in accordance with the terms
of Section 9.17, and (II) executes and delivers a guaranty, in substantially the
same form as the Subsidiary Guaranty delivered on the date hereof, guaranteeing
the Obligations of the other Credit Parties under the Credit Documents in
accordance with the terms of Section 9.17.
10.16 Concentration Account; Bank Deposit Accounts. The
Borrower shall not, and shall not permit any of its Domestic Subsidiaries to,
directly or indirectly, open, maintain or otherwise have any checking, savings
or other deposit accounts at any other financial institution where cash or Cash
Equivalents is or may be deposited or maintained with any Person other than (i)
the Bank Deposit Accounts, (ii) the Concentration Account or (iii) as permitted
by Section 10.06(ii).
10.17 Limitation on Creation of Plans. The Parent shall not,
and shall not permit any of its Subsidiaries or ERISA Affiliates to, establish,
create, become a party to, maintain, contribute to or have any legal obligation
with respect to any multiemployer or single employer plan as defined in Section
4001 of ERISA other than the Employee Benefit Plans.
10.18 Negative Pledge. The Borrower shall not enter into or
suffer to exist, or permit any of its Subsidiaries to enter into or suffer to
exist, any agreement prohibiting or conditioning the creation or assumption of
any Lien upon any of its property or assets other than (i) in favor of the
Secured Creditors, (ii) pursuant to the Senior Notes Indenture or (iii) in
connection with (A) any Indebtedness outstanding on the date such Subsidiary
first becomes a Subsidiary or (B) any Indebtedness permitted by Section
10.05(iv) or Section 10.05(ix).
10.19 Partnerships, Etc. The Borrower shall not, and shall
not permit any of its Subsidiaries to, become a general partner in any general
or limited partnership or joint venture.
10.20 Minimum Net Worth. The Borrower shall maintain at all times an
excess of consolidated total assets over consolidated total liabilities
(excluding any amount otherwise included in consolidated total liabilities as a
result of accrued but unpaid scheduled Dividends), in each case, of the Borrower
and its Subsidiaries of not less than $28,000,000.
Section 11. Events of Default. Upon the occurrence of any of the following
specified
events (each an "Event of Default"):
11.01 Payments. The Borrower shall (i) default in the payment when due of
any principal of any Loan or any Note or any Unpaid Drawing or (ii) default, and
such default shall continue unremedied for two or more Business Days, in the
payment when due of any interest on any Loan or Note or Unpaid Drawing, or any
Fees or any other amounts owing by it under any Credit Document; or
11.02 Representations, Etc. Any representation, warranty or statement made
by any Credit Party herein or in any other Credit Document or in any certificate
delivered pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
11.03 Covenants. Any Credit Party shall (i) default in the due performance
or observance by it of any term, covenant or agreement contained in Section
9.01(g)(i), 9.08, 9.11, 9.12, 9.16, 9.17, 9.20 or 10 or (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement and such default shall continue unremedied for a
period of 10 days after the date of such default; or
11.04 Default Under Other Agreements. The Parent, the Borrower or any of
the Borrower's Subsidiaries shall (i) default in any payment of any Indebtedness
(other than the Indebtedness referred to in Section 11.01) beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument or agreement
under which such Indebtedness was created, (ii) default in the observance or
performance of any agreement or condition relating to any Indebtedness (other
than the Indebtedness referred to in Section 11.01) or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice is required), any
Indebtedness to become due prior to its stated maturity, or (iii) any
Indebtedness (other than the Indebtedness referred to in Section 11.01) of the
Parent, the Borrower or any of the Borrower's Subsidiaries shall be declared to
be due and payable or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption) purchased or defeased, or
an offer to prepay, redeem, purchase or defease such Indebtedness shall be
required to be made, in each case, prior to the stated maturity thereof;
provided that it shall not constitute an Event of Default pursuant to this
Section 11.04 unless the aggregate amount of all Indebtedness referred to in the
preceding clauses (i) through (iii) above exceeds $500,000 at any one time; or
11.05 Bankruptcy, Etc. The Parent, the Borrower or any of the Borrower's
Material Subsidiaries shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts generally, or
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy", as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against the Parent, the Borrower or any of the Borrower's Material Subsidiaries
and the petition is not controverted within 10 days, or is not dismissed or
discharged, within 60 days, after commencement of the case; or a custodian (as
defined in the Bankruptcy Code) is appointed for, or takes charge of, all or
substantially all of the property of the Parent, the Borrower or any of the
Borrower's Material Subsidiaries, or the Parent, the Borrower or
any of the Borrower's Material Subsidiaries commences any other proceeding under
any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Parent, the Borrower or any
of the Borrower's Material Subsidiaries, or there is commenced against the
Parent, the Borrower or any of the Borrower's Material Subsidiaries any such
proceeding which remains undismissed or undischarged for a period of 60 days, or
the Parent, the Borrower or any of the Borrower's Material Subsidiaries is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Parent, the Borrower or
any of the Borrower's Material Subsidiaries suffers any appointment of any
custodian or the like for it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or the Parent, the Borrower or
any of the Borrower's Material Subsidiaries makes a general assignment for the
benefit of creditors; or any corporate action is taken by the Parent, the
Borrower or any of the Borrower's Material Subsidiaries for the purpose of
effecting any of the foregoing; or
11.06 ERISA. (a) Any Pension Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code; any Pension Plan shall have had or is likely to have a
trustee appointed pursuant to Section 4042 of ERISA to administer such Plan; a
contribution required to be made to a Pension Plan is not timely made; any
Pension Plan is, shall have been or is reasonably likely to be terminated or the
subject of termination proceedings under ERISA; any Pension Plan shall have an
Unfunded Current Liability; the Parent, any Subsidiary of the Parent or any
ERISA Affiliate (but only as to the following Sections of ERISA and the Code
pursuant to which the Parent or any of its Subsidiaries could be liable with
respect to such ERISA Affiliate) has incurred or is reasonably likely to incur a
liability to or on account of a Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code; or the Parent or any Subsidiary of the Parent has incurred
or is likely to incur materially increased liabilities pursuant to an amendment
to or the adoption of, after the Effective Date, one or more employee welfare
benefit plans (as defined in Section 3(l) of ERISA) which provide benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA) or employee pension benefit plans (as defined in Section 3(2) of
ERISA); (b) there shall result from any such event or events the imposition of a
lien, the granting of a security interest, or a liability or a material risk of
incurring a liability; and (c) which lien, security interest or liability,
individually or in the aggregate, is reasonably likely to have a material
adverse effect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole, provided,
however, that the receipt by the Company of the PBGC Letter does not, without
more, constitute an Event of Default under this Section 11.06; or
11.07 Security Documents. At any time after the execution and delivery
thereof, any of the Security Documents shall cease to be in full force and
effect or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral) in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except in connection
with Permitted Liens), and subject to no other Liens (other than Permitted
Liens), or any Credit Party shall default in the due performance or observance
of any term, covenant or agreement on its part to be performed or observed
pursuant to any of the Security Documents and such
default shall continue beyond any grace period specifically applicable thereto
pursuant to the terms of such Security Document; or
11.08 Parent Guaranty and Subsidiary Guaranty. At any time after the
execution and delivery thereof, the Parent Guaranty or the Subsidiary Guaranty
or any provision thereof shall cease to be in full force and effect as to any of
the Guarantors, or any of the Guarantors or any Person acting by or on behalf of
any of the Guarantors shall deny or disaffirm any of the Guarantors' obligations
under the Parent Guaranty or the Subsidiary Guaranty, or any of the Guarantors
shall default in the due performance or observance of any term, covenant or
agreement on its respective part to be performed or observed pursuant to the
Parent Guaranty or the Subsidiary Guaranty and such default shall continue
beyond any grace period specifically applicable thereto; or
11.09 Judgments. One or more judgments or decrees shall be entered against
the Parent, the Borrower or any of the Borrower's Subsidiaries involving in the
aggregate for the Parent, the Borrower and the Borrower's Subsidiaries a
liability (not paid or fully covered by a reputable insurance company which has
accepted full liability in writing) of $500,000 or more and all such judgments
or decrees shall not be satisfied, vacated, discharged or stayed or bonded
pending appeal for any period of 10 consecutive days; or any non-monetary
judgment or order shall be rendered against the Parent, the Borrower or any of
the Borrower's Subsidiaries that could be reasonably likely to have a material
adverse effect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of the Parent, the Borrower or any of the Borrower's Subsidiaries
taken as a whole, and there shall be any period of 10 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
11.10 Credit Documents. Any material provision of any Credit Document
(excluding mortgages covering Collateral which, in the aggregate, is immaterial)
after delivery thereof pursuant to Section 6 or 9.17 shall for any reason cease
to be valid and binding on or enforceable against any Credit Party party to it
and, in the case of any Security Document, there shall not exist legally
adequate remedies for a realization of the principal benefits afforded thereby,
or any such Credit Party shall so state in writing; or
11.11 Change of Control. There shall be a Change in Control;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Banks, shall by written notice to the Borrower, take any or all of
the following actions, without prejudice to the rights of any of the Agents, the
Issuing Bank, any of the Banks or the holder of any Note to enforce its claims
against any Credit Party (provided that, if an Event of Default specified in
Section 11.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent to the
Borrower as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Commitment
terminated, whereupon all Commitments of each Bank shall forthwith terminate
immediately and any Commitment Commission and other Fees shall forthwith become
due and payable without any other notice of any kind; (ii) declare the principal
of and any accrued interest in respect of all Loans and the Notes and all
Obligations owing under the Credit Documents to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Credit Party; (iii)
terminate any Letter of Credit which may be terminated in accordance with its
terms; (iv) direct the
Borrower to pay (and the Borrower agrees that upon receipt of such notice, or
upon the occurrence of an Event of Default specified in Section 11.05, it shall
pay) to the Collateral Agent at the Payment Office such additional amount of
cash, to be held as security by the Collateral Agent for the benefit of the
Banks in a cash collateral account established and maintained by the Collateral
Agent pursuant to a cash collateral agreement in form and substance satisfactory
to the Collateral Agent, as is equal to the aggregate Stated Amount of all
Letters of Credit then outstanding; (v) exercise any rights or remedies under
the Parent Guaranty or the Subsidiary Guaranty; (vi) enforce, as Collateral
Agent, all of the Liens and security interests created pursuant to the Security
Documents.
Section 12. The Administrative Agent and the D&S Agent.
12.01 Appointment. Each Bank and the Issuing Bank hereby expressly
designates and appoints Indosuez, as Administrative Agent (such term to include
the Administrative Agent acting as Collateral Agent or in any other
representative capacity under any other Credit Document) of such Bank and the
Issuing Bank and designates and appoints SBC as D&S Agent of such Bank and the
Issuing Bank, in each case, to act as specified herein and in the other Credit
Documents, and each such Bank and the Issuing Bank hereby irrevocably authorizes
the Administrative Agent and the D&S Agent to take such action on its behalf
under the provisions of this Agreement and the other Credit Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent and the D&S Agent by the terms of this Agreement and the
other Credit Documents, together with such other powers as are reasonably
incidental thereto. The Administrative Agent and the D&S Agent each agree to act
as such upon the express conditions contained in this Section 12.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent and the D&S Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in the other Credit
Documents, or any fiduciary relationship with any Bank or the Issuing Bank, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent or the D&S Agent. The provisions of this Section 12 are
solely for the benefit of the Administrative Agent, the D&S Agent, the Issuing
Bank and the Banks, and no Credit Party shall have any rights as a third party
beneficiary of any of the provisions hereof, other than with respect to Section
12.10(b) and 12.10(c) as set forth therein. In performing its functions and
duties under this Agreement, each of the Administrative Agent and the D&S Agent
shall act solely as agent of the Banks and the Issuing Bank and do not assume
and shall not be deemed to have assumed any obligation or relationship of agency
or trust with or for any Credit Party.
12.02 Delegation of Duties. The Administrative Agent and the D&S Agent may
execute any of their respective duties under this Agreement or under any other
Credit Document by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. Neither
the Administrative Agent nor the D&S Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care except to the extent otherwise required by Section 12.03.
12.03 Exculpatory Provisions. Neither the Administrative Agent, the D&S
Agent nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Banks or the Issuing
Bank for any recitals, statements, representations or warranties by the Parent,
any Subsidiary of the Parent or any of their respective officers contained in
this Agreement, any other Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent or the D&S Agent under or in connection with, this Agreement or any other
Document or for any failure of the Parent or any Subsidiary of the Parent or any
of their respective officers to perform its obligations hereunder or thereunder.
Neither the Administrative Agent nor the D&S Agent shall be under any obligation
to any Bank or the Issuing Bank to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of the Parent or any
Subsidiary of the Parent. Neither the Administrative Agent nor the D&S Agent
shall be responsible to any Bank or the Issuing Bank for the effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, this Agreement or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statement or in any
financial or other statements, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished or made by the
Administrative Agent or the D&S Agent to the Banks or the Issuing Bank or by or
on behalf of the Parent to the Administrative Agent, the D&S Agent, the Issuing
Bank or any Bank or be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained herein or therein or as to the use of the proceeds of the Loans or of
the existence of any Default or Event of Default.
12.04 Reliance by the Administrative Agent and the D&S Agent. The
Administrative Agent and the D&S Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Credit Parties), independent accountants and other experts
selected by the Administrative Agent or the D&S Agent, as the case may be. The
Administrative Agent and the D&S Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Credit Document
unless it shall first receive such advice or concurrence of the Required Banks
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Banks or the Issuing Bank against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent and the D&S Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement and the other
Credit Documents in accordance with a request of the Required Banks (or, to the
extent specifically provided in Section 15.10, all of the Banks), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all of the Banks.
12.05 Notice of Default. Neither the Administrative Agent nor the D&S
Agent shall be deemed to have knowledge of the occurrence of any Default or
Event of Default, other than a default in the payment of principal or interest
on the Loans hereunder, unless it has received notice from a Bank, the Issuing
Bank or the Borrower or any other Credit Party referring to this Agreement
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent or the D&S Agent
receives such a notice, the Administrative Agent or the D&S Agent, as the case
may be, shall give prompt notice thereof to the Banks and the Issuing
Bank. The Administrative Agent and the D&S Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Banks; provided that, unless and until the Administrative Agent or
the D&S Agent shall have received such directions, the Administrative Agent and
the D&S Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Banks and the Issuing Bank.
12.06 Non-Reliance on Administrative Agent, D&S Agent and Other Banks.
Each Bank and the Issuing Bank expressly acknowledges that neither the
Administrative Agent, the D&S Agent nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Administrative Agent
or the D&S Agent hereinafter taken, including any review of the affairs of the
Parent or any Subsidiary of the Parent, shall be deemed to constitute any
representation or warranty by the Administrative Agent or the D&S Agent to any
Bank or the Issuing Bank. Each Bank and the Issuing Bank represents to the
Administrative Agent and the D&S Agent that it has, independently and without
reliance upon the Administrative Agent, the D&S Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Parent and its Subsidiaries and made its own decision to make its Loans
hereunder and enter into this Agreement and the other agreements contemplated
hereby. Each Bank and the Issuing Bank also represents that it shall,
independently and without reliance upon the Administrative Agent, the D&S Agent
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 analysis, appraisals
and decisions in taking or not taking action under this Agreement, and to make
such investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Parent and its Subsidiaries. Except for notices, reports
and other documents expressly required to be furnished to the Banks and the
Issuing Bank by the Administrative Agent or the D&S Agent hereunder, neither the
Administrative Agent nor the D&S Agent shall have any duty or responsibility to
provide any Bank or the Issuing Bank with any credit or other information
concerning the business, operations, assets, property, financial and other
conditions, prospects or creditworthiness of the Parent or any of its
Subsidiaries which may come into the possession of the Administrative Agent, the
D&S Agent or any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates.
12.07 Indemnification. The Banks agree to indemnify the Administrative
Agent and the D&S Agent, in their respective capacities as such or in any other
representative capacities under any other Credit Document, ratably according to
their aggregate Commitments or, if the Commitments under a Facility have been
terminated, the aggregate Loans under such Facility owing to them, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, reasonable expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Obligations) be imposed on, incurred by or
asserted against the Administrative Agent or the D&S Agent in their respective
capacities as such in any way relating to or arising out of this Agreement or
any other Credit Document, or any documents contemplated by or referred to
herein or the transactions contemplated hereby or any action taken or omitted to
be taken by the Administrative Agent or the D&S Agent under or in connection
with any of the foregoing, but only to the extent that any of the foregoing is
not paid by the Parent or any of its
Subsidiaries; provided that no Bank shall be liable to the Administrative Agent
or the D&S Agent for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the gross negligence or willful
misconduct of the Administrative Agent or the D&S Agent, as the case may be. If
any indemnity furnished to the Administrative Agent or the D&S Agent for any
purpose shall, in the opinion of the Administrative Agent or the D&S Agent be
insufficient or become impaired, the Administrative Agent or the D&S Agent may
call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished. The agreements
in this Section 12.07 shall survive the payment of all Obligations.
12.08 The Administrative Agent and the D&S Agent in Their Individual
Capacities. The Administrative Agent, the D&S Agent and their respective
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Parent, any Subsidiary of the Parent and any other
Affiliates of the Parent as though the Administrative Agent were not the
Administrative Agent hereunder and the D&S Agent were not the D&S Agent
hereunder. With respect to the Loans made by it and all Obligations owing to it,
the Administrative Agent and the D&S Agent shall have the same rights and powers
under this Agreement as any Bank and may exercise the same as though it were not
the Administrative Agent or the D&S Agent, and the terms "Bank" and "Banks"
shall include the Administrative Agent and the D&S Agent in their individual
capacities.
12.09 Successor Administrative Agent. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, the term "Administrative Agent" shall include such successor agent
effective upon its appointment, and the resigning Administrative Agent's rights,
powers and duties as Administrative Agent shall be terminated, without any other
or further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement. After the retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this Section 12
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
12.10 Resignation by Administrative Agent. (a) The Administrative Agent
may resign from the performance of all its functions and duties hereunder at any
time by giving 15 Business Days' prior written notice to the Borrower, the
Issuing Bank and the Banks. Such resignation shall take effect upon the
acceptance by a successor Administrative Agent of appointment pursuant to
subsection (b) or (c) below or as otherwise provided below.
(b) Upon any such notice of resignation of the Administrative Agent, the
Required Banks shall appoint a successor Administrative Agent which, so long as
no Event of Default shall have occurred and be continuing, shall be reasonably
acceptable to the Borrower.
(c) If a successor Administrative Agent shall not have been so appointed
within such 15 Business Day period, the resigning Administrative Agent, with, so
long as no Event of Default shall have occurred and be continuing, the consent
(which shall not be unreasonably withheld or delayed) of the Borrower, shall
then appoint a successor Administrative Agent who shall serve as Administrative
Agent until such time, if any, as the Required Banks may appoint a successor
Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant to
subsection (b) or (c) above by the 20th Business Day after the date such notice
of resignation was given by the resigning Administrative Agent, such
Administrative Agent's resignation shall become effective and the Required Banks
shall thereafter perform all the duties of Administrative Agent hereunder until
such time, if any, as the Required Banks appoint a successor Administrative
Agent as provided above.
(e) Notwithstanding anything to the contrary contained in this Section 12,
Indosuez, as Administrative Agent, may transfer its rights and obligations to
perform all of its functions and duties hereunder to any Affiliate of it, which
Affiliate is at least 50% owned, directly or indirectly, by Indosuez.
Section 13. The Parent Guaranty.
13.01 The Guaranty. (a) In order to induce the Banks and the Issuing Bank
to enter into this Agreement and to extend credit hereunder and in recognition
of the direct benefits to be received by the Parent from the proceeds of the
Loans and issuance of the Letters of Credit, the Parent hereby agrees with the
Secured Creditors as follows: the Parent hereby unconditionally and irrevocably
guarantees as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, by acceleration or otherwise, of any
and all indebtedness of each other Credit Party to the Banks, the Issuing Bank
and the Agents under this Agreement and the other Credit Documents and under
each Interest Rate Protection or Other Hedging Agreement entered into by a Bank
with the Borrower. If any or all of the indebtedness of any other Credit Party
to the Banks, the Issuing Bank or the Agents becomes due and payable hereunder
or under such other Credit Documents or Interest Rate Protection or Other
Hedging Agreements, the Parent unconditionally promises to pay such indebtedness
to the Secured Creditors, or to their order, on demand, together with any and
all expenses which may be incurred by the Agents, the Issuing Bank or the Banks
in collecting any of the indebtedness. The word "indebtedness" is used in this
Section 13 in its most comprehensive sense and means any and all advances,
debts, obligations and liabilities of the Credit Parties arising in connection
with this Agreement or any other Credit Documents or under any Interest Rate
Protection or Other Hedging Agreement with a Bank, in each case, heretofore,
now, or hereafter made, incurred or created, whether voluntarily or
involuntarily, absolute or contingent, liquidated or unliquidated, determined or
undetermined, whether or not such indebtedness is from time to time reduced, or
extinguished and thereafter increased or incurred, whether any Credit Party may
be liable individually or jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any statute of limitations,
and whether or not such indebtedness may be or hereafter become otherwise
unenforceable.
(b) The Parent hereby unconditionally and irrevocably agrees that, in the
event any payment shall be required to be made to the Secured Creditors under
this Parent Guaranty, the Subsidiary Guaranty or any other guarantee, the Parent
shall contribute, to the fullest extent permitted by applicable law, such
amounts to each of the Subsidiaries of the Parent party to the Subsidiary
Guaranty and each other guarantor as would maximize the aggregate amount paid to
the Secured Creditors under or in respect of the Credit Documents.
13.02 Bankruptcy. Additionally, the Parent unconditionally and irrevocably
guarantees the payment of any and all indebtedness of each other Credit Party to
the Banks, the Issuing
Bank and the Agents whether or not due or payable by such Credit Party upon the
occurrence of any of the events specified in Section 11.05, and unconditionally
and irrevocably promises to pay such indebtedness to the Banks, the Issuing
Bank, the Agents, or to their order, on demand, in lawful money of the United
States.
13.03 Nature of Liability. The liability of the Parent hereunder is
exclusive and independent of any security for or other guaranty of the
indebtedness of the other Credit Party whether executed by the Guarantors, any
other guarantor or by any other party, and the liability of the Parent hereunder
shall not be affected or impaired by (a) any direction as to application of
payment by the Borrower or by any other party, or (b) any other continuing or
other guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the indebtedness of any Credit Party, or (c) any payment on or in
reduction of any such other guaranty or undertaking, or (d) any dissolution,
termination or increase, decrease or change in personnel by any Credit Party, or
(e) any payment made to the Agents, the Issuing Bank or the Banks on the
indebtedness that such Agents, the Issuing Bank or such Banks repay any Credit
Party pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and the Parent waives any right to
the deferral or modification of its obligations hereunder by reason of any such
proceeding.
13.04 Guaranty Absolute. No invalidity, irregularity or unenforceability
of all or any part of the indebtedness guaranteed hereby or of any security
thereof shall affect, impair or be a defense to this Parent Guaranty, and this
Parent Guaranty shall be primary, absolute and unconditional notwithstanding the
occurrence of any event or the existence of any other circumstances that might
constitute a legal or equitable discharge of a surety or guarantor except
payment in full of the indebtedness guaranteed herein.
13.05 Independent Obligation. The Obligations of the Parent hereunder are
independent of the obligations of any other guarantor or the Borrower, and a
separate action or actions may be brought and prosecuted against the Parent
whether or not action is brought against any other guarantor or the Borrower and
whether or not any other guarantor or the Borrower be joined in any such action
or actions. The Parent waives, to the fullest extent permitted by law, the
benefit of any statute of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by any other Credit Party or other circumstance
that operates to toll any statute of limitations as to such Credit Party shall
operate to toll the statute of limitations as to the Parent.
13.06 Authorization. The Parent authorizes the Agents, the Issuing Bank
and the Banks without notice or demand, and without affecting or impairing its
liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of
the indebtedness (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and this Parent Guaranty shall
apply to the indebtedness as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the indebtedness and
sell, exchange, release, surrender, realize upon or otherwise deal with in
any manner and in any order any
property by whomsoever at any time pledged or mortgaged to secure, or
howsoever securing, the indebtedness or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against any Credit
Party or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, any
Credit Party or other obligors;
(e) settle or compromise any of the indebtedness, any security
therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate
the payment of all or any part thereof to the payment of any liability
(whether due or not) of any Credit Party to its creditors other than the
Banks;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of any Credit Party to the Banks or the Issuing
Bank regardless of what liability or liabilities of the Parent or any other
Credit Party remain unpaid;
(g) consent to or waive any breach of, or any act, omission or default
under, this Agreement or any of the instruments or agreements referred to
herein, or otherwise amend, modify or supplement this Agreement or any of
such other instruments or agreements; and/or
(h) take any other action that would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
the Parent from its liabilities under this Section 13.
13.07 Reliance. It is not necessary for the Agents, the Issuing Bank or
the Banks to inquire into the capacity or powers of the Borrower or its
Subsidiaries or the officers, directors, partners or agents acting or purporting
to act on its behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
13.08 Subordination. Any indebtedness of the Borrower now or hereafter
held by the Parent is hereby subordinated to the indebtedness of the Borrower to
the Agents, the Issuing Bank and the Banks; and such indebtedness of the
Borrower to the Parent, if the Administrative Agent (at the direction of the
Required Banks), after an Event of Default has occurred, so requests, shall be
collected, enforced and received by the Parent as trustee for the Banks, the
Issuing Bank and the Agents and be paid over to the Banks, the Issuing Bank or
the Agents on account of the indebtedness of the Borrower to the Banks, the
Issuing Bank and the Agents, but without affecting or impairing in any manner
the liability of the Parent under the other provisions of this Parent Guaranty.
Prior to the transfer by the Parent of any note or negotiable instrument
evidencing any indebtedness of the Borrower to the Parent, the Parent shall ▇▇▇▇
such note or negotiable instrument with a legend that the same is subject to
this subordination.
13.09 Waiver. (a) The Parent waives any right to require the Agents, the
Issuing Bank or the Banks to (i) proceed against the Borrower, any other
guarantor or any other party,
(ii) proceed against or exhaust any security held from the Borrower, any other
guarantor or any other party or (iii) pursue any other remedy in the Agents',
the Issuing Bank's or the Banks' power whatsoever. The Parent waives any defense
based on or arising out of any defense of the Borrower, any other guarantor or
any other party other than payment in full of the indebtedness, including,
without limitation, any defense based on or arising out of the disability of the
Borrower, any other guarantor or any other party, or the unenforceability of the
indebtedness or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower or any other Credit Party other than payment in
full of the indebtedness. The Agents, the Issuing Bank and the Banks may, in
accordance with the Credit Documents, at their election, foreclose on any
security held by the Agents, the Issuing Bank or the Banks by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Agents, the Issuing Bank and the
Banks may have against any Credit Party or any other party, or any security,
without affecting or impairing in any way the liability of the Parent hereunder
except to the extent the indebtedness has been paid. The Parent waives any
defense arising out of any such election by the Agents, the Issuing Bank and the
Banks, even though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of the Parent against any
Credit Party or any other party or any security.
(b) The Parent waives all presentments, demands for performance, protests
and notices, including, without limitation, notices of nonperformance, notices
of protest, notices of dishonor notices of acceptance of this Parent Guaranty,
and notices of the existence, creation or incurrence of new or additional
indebtedness. The Parent assumes all responsibility for being and keeping
itself informed of the each other Credit Party's financial condition and assets,
and of all other circumstances bearing upon the risk of non-payment of the
indebtedness and the nature, scope and extent of the risks that the Parent
assumes and incurs hereunder, and agrees that the Agents, the Issuing Bank and
the Banks shall have no duty to advise the Parent of information known to them
regarding such circumstances or risks.
13.10 Guaranty Continuing. This Parent Guaranty is a continuing one and
all liabilities to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon. No failure or
delay on the part of the Issuing Bank, any of the Banks, any of the Agents, of
any holder of any Note, or issuer of, or participant in, any Letter of Credit in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
that the Issuing Bank, any of the Banks, any of the Agents or any subsequent
holder of a Note, or issuer of, or participant in, a Letter of Credit would
otherwise have. No notice to or demand on the Parent in any case shall entitle
the Parent to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Issuing Bank, any of
the Banks, any of the Agents or any holder, creator or purchaser to any other or
further action in any circumstances without notice or demand.
13.11 Binding Nature of Guaranties. This Parent Guaranty shall be binding
upon the Parent and its successors and assigns and shall inure to the benefit of
the Issuing Bank, the Banks and their successors and assigns.
13.12 Judgments Binding. If claim is ever made upon the Issuing Bank, any
of the
Banks, any of the Agents, any subsequent holder of a Note or issuer of, or
participant in, any Letter of Credit for repayment or recovery of any amount or
amounts received in payment or on account of any of the indebtedness and any of
the aforesaid payees repays all or part of said amount by reason of (a) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (b) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrower) then and in such event the Parent agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon the
Parent, notwithstanding any revocation hereof or the cancellation of any Note or
other instrument evidencing any liability of any other Credit Party and the
Parent shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
Section 14. Subsidiary Guaranty.
14.01 The Subsidiary Guaranty. (a) In order to induce the Banks and the
Issuing Bank to enter into this Agreement and to extend credit hereunder and in
recognition of the direct benefits to be received by the Subsidiary Guarantors
from the proceeds of the Loans and the issuance of the Letters of Credit, the
Subsidiary Guarantors hereby jointly and severally agree with the Secured
Creditors as follows: each of the Subsidiary Guarantors hereby unconditionally
and irrevocably guarantees as primary obligors and not merely as sureties the
full and prompt payment when due, whether upon maturity, by acceleration or
otherwise, of any and all indebtedness of each other Credit Party to the Banks,
the Issuing Bank and the Agents under this Agreement and the other Credit
Documents and under each Interest Rate Protection or Other Hedging Agreement
entered into by a Bank with the Borrower. If any or all of the indebtedness of
any other Credit Party to the Banks, the Issuing Bank or the Agents becomes due
and payable hereunder or under such other Credit Documents or Interest Rate
Protection or Other Hedging Agreements, each of the Subsidiary Guarantors
unconditionally promises to pay such indebtedness to the Secured Creditors, or
to their order, on demand, together with any and all expenses which may be
incurred by the Agents, the Issuing Bank or the Banks in collecting any of the
indebtedness. The word "indebtedness" is used in this Section 14 in its most
comprehensive sense and means any and all advances, debts, obligations and
liabilities of Credit Parties arising in connection with this Agreement or any
other Credit Documents or under any Interest Rate Protection or Other Hedging
Agreement with a Bank, in each case, heretofore, now, or hereafter made,
incurred or created, whether voluntarily or involuntarily, absolute or
contingent, liquidated or unliquidated, determined or undetermined, whether or
not such indebtedness is from time to time reduced, or extinguished and
thereafter increased or incurred, whether any Credit Party may be liable
individually or jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any statute of limitations,
and whether or not such indebtedness may be or hereafter become otherwise
unenforceable.
(b) Each of the Subsidiary Guarantors, and by its acceptance of this
Subsidiary Guaranty, each of the Agents and each of the Secured Creditors,
hereby confirms that it is the intention of all such Persons that this
Subsidiary Guaranty and the Obligations of each of the Subsidiary Guarantors
hereunder not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law covering the protection of
creditors' rights or the relief of debtors to the extent applicable to this
Subsidiary Guaranty and the Obligations of each of the Subsidiary Guarantors
hereunder. To effectuate the foregoing intention, each of the Subsidiary
Guarantors, each of the Agents and each of the Secured Creditors hereby
irrevocably agrees that, solely with respect to the indebtedness of each of the
Subsidiary Guarantors under this Subsidiary Guaranty that results from or arise
out of its guarantee under subsection (a) of this Section 14.01 of the
indebtedness of each other Credit Party under or in respect of the Credit
Documents, such indebtedness shall be limited to the maximum amount as will,
after giving effect to such maximum amount and all other contingent and fixed
liabilities of such Subsidiary Guarantor that are relevant under such laws, and
after giving effect to any collections from, any rights to receive contributions
from, or payments made by or on behalf of, the Parent in respect of the
indebtedness of the Parent under the Parent Guaranty and the other Subsidiary
Guarantors in respect of the indebtedness of such other Subsidiary Guarantors
under the Subsidiary Guaranty, result in the indebtedness of such Subsidiary
Guarantor under this Subsidiary Guaranty not constituting a fraudulent transfer
or conveyance.
(c) Each of the Subsidiary Guarantors hereby unconditionally and
irrevocably agrees that, in the event any payment shall be required to be made
to the Secured Creditors under this Subsidiary Guaranty, the Parent Guaranty or
any other guarantee, such Subsidiary Guarantor shall contribute, to the fullest
extent permitted by applicable law, such amounts to the Parent under the Parent
Guaranty and each Subsidiary Guarantor and each other guarantor as would
maximize the aggregate amount paid to the Secured Creditors under or in respect
of the Credit Documents.
14.02 Bankruptcy. Additionally, the Subsidiary Guarantors unconditionally
and irrevocably guarantee, jointly and severally, the payment of any and all
indebtedness of each other Credit Party to the Banks, the Issuing Bank and the
Agents whether or not due or payable by such Credit Party upon the occurrence of
any of the events specified in Section 11.05, and each of the Subsidiary
Guarantors unconditionally and irrevocably promises to pay such indebtedness to
the Banks, the Issuing Bank, the Agents, or to their order, on demand, in lawful
money of the United States.
14.03 Nature of Liability. The liability of each of the Subsidiary
Guarantors hereunder is exclusive and independent of any security for or other
guaranty of the indebtedness of the other Credit Parties whether executed by the
Guarantors, any other guarantor or by any other party, and the liability of the
Subsidiary Guarantors hereunder shall not be affected or impaired by (a) any
direction as to application of payment by the Borrower or by any other party, or
(b) any other continuing or other guaranty, undertaking or maximum liability of
a guarantor or of any other party as to the indebtedness of any Credit Party, or
(c) any payment on or in reduction of any such other guaranty or undertaking, or
(d) any dissolution, termination or increase, decrease or change in personnel by
any Credit Party, or (e) any payment made to the Agents, the Issuing Bank or the
Banks on the indebtedness that such Agents, the Issuing Bank or such Banks repay
any Credit Party pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each Subsidiary
Guarantor waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding.
14.04 Subsidiary Guaranty Absolute. No invalidity, irregularity or
unenforceability of all or any part of the indebtedness guaranteed hereby or of
any security therefor shall affect, impair or be a defense to this Subsidiary
Guaranty, and this Subsidiary Guaranty shall be primary, absolute and
unconditional notwithstanding the occurrence of any event or the existence of
any other circumstances that might constitute a legal or equitable discharge of
a surety or guarantor except payment in full of
the indebtedness guaranteed herein.
14.05 Independent Obligation. The obligations of each of the Subsidiary
Guarantors hereunder are independent of the obligations of any other guarantor
or the Borrower, and a separate action or actions may be brought and prosecuted
against the Subsidiary Guarantors whether or not action is brought against any
other guarantor or the Borrower and whether or not any other guarantor or the
Borrower be joined in any such action or actions. The Subsidiary Guarantors
waive, to the fullest extent permitted by law, the benefit of any statue of
limitations affecting its liability hereunder or the enforcement thereof. Any
payment by any other Credit Party or other circumstance that operates to toll
any statute of limitations as to such Credit Party shall operate to toll the
statute of limitations as to the Subsidiary Guarantors.
14.06 Authorization. Each of the Subsidiary Guarantors authorizes the
Agents, the Issuing Bank and the Banks without notice or demand, and without
affecting or impairing their liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter any of
the indebtedness (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and this Subsidiary Guaranty
shall apply to the indebtedness as so changed, extended, renewed or
altered;
(b) take and hold security for the payment of the indebtedness and
sell, exchange, release, surrender, realize upon or otherwise deal with in
any manner and in any order any property by whomsoever at any time pledged
or mortgaged to secure, or howsoever securing, the indebtedness or any
liabilities (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against any Credit
Party or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
(e) settle or compromise any of the indebtedness, any security
therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate
the payment of all or any part thereof to the payment of any liability
(whether due or not) of any Credit Party to its creditors other than the
Banks;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of any Credit Party to the Banks and the Issuing
Bank regardless of what liability or liabilities of the Subsidiary
Guarantors or any other Credit Party remains unpaid;
(g) consent to or waive any breach of, or any act, omission or default
under, this Agreement or any of the instruments or agreements referred to
herein, or otherwise amend, modify or supplement this Agreement or any of
such other instruments or agreements; and/or
(h) take any other action that would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
the Subsidiary Guarantors from their liabilities under this Section 14.
14.07 Reliance. It is not necessary for the Agents, the Issuing Bank or
the Banks to inquire into the capacity or powers of the Borrower or its
Subsidiaries or the officers, directors, partners or agents acting or purporting
to act on its behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
14.08 Subordination. Any indebtedness of the Borrower now or hereafter
held by the Subsidiary Guarantors is hereby subordinated to the indebtedness of
the Borrower to the Agents, the Issuing Bank and the Banks, and such
indebtedness of the Borrower to the Subsidiary Guarantors, if the Administrative
Agent (at the direction of the Required Banks), after an Event of Default has
occurred, so requests, shall be collected, enforced and received by the
Subsidiary Guarantors as trustees for the Banks, the Issuing Bank and the Agents
and be paid over to the Banks, the Issuing Bank and the Agents on account of the
indebtedness of the Borrower to the Banks, the Issuing Bank and the Agents, but
without affecting or impairing in any manner the liability of the Subsidiary
Guarantors under the other provisions of this Subsidiary Guaranty. Prior to the
transfer by the Subsidiary Guarantors of any note or negotiable instrument
evidencing any indebtedness of the Borrower to the Subsidiary Guarantors, the
Subsidiary Guarantors shall ▇▇▇▇ such note or negotiable instrument with a
legend that the same is subject to this subordination.
14.09 Waiver. (a) Each of the Subsidiary Guarantors waives any right to
require the Agents, the Issuing Bank or the Banks to (i) proceed against the
Borrower, any other guarantor or any other party, (ii) proceed against or
exhaust any security held from the Borrower, any other guarantor or any other
party or (iii) pursue any other remedy in the Agents', the Issuing Bank's or the
Banks' power whatsoever. Each of the Subsidiary Guarantors waives any defense
based on or arising out of any defense of the Borrower, any other guarantor or
any other party other than payment in full of the indebtedness, including,
without limitation, any defense based on or arising out of the disability of the
Borrower, any other guarantor or any other party, or the unenforceability of the
indebtedness or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower or any other Credit Party other than payment in
full of the indebtedness. The Agents, the Issuing Bank and the Banks may, in
accordance with the Credit Documents, at their election, foreclose on any
security held by the Agents, the Issuing Bank or the Banks by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Agents, the Issuing Bank and the
Banks may have against any Credit Party or any other party, or any security,
without affecting or impairing in any way the liability of the Subsidiary
Guarantors hereunder except to the extent the indebtedness has been paid. Each
of the Subsidiary Guarantors waives any defense arising out of any such election
by the Agents, the Issuing Bank and the Banks, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of the Subsidiary Guarantors against any Credit Party or
any other party or any security.
(b) Each of the Subsidiary Guarantors waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of
protest, notices of dishonor, notices of acceptance of this Subsidiary Guaranty,
and notices of the existence, creation or incurrence of new or additional
indebtedness. Each of the Subsidiary Guarantors assumes all responsibility for
being and keeping itself informed of each other Credit Party's financial
condition and assets, and of all other circumstances bearing upon the risk of
non-payment of the indebtedness and the nature, scope and extent of the risks
that each such Subsidiary Guarantor assumes and incurs hereunder, and each
agrees that the Agents, the Issuing Bank and the Banks shall have no duty to
advise the Subsidiary Guarantors of information known to them regarding such
circumstances or risks.
14.10 Subsidiary Guaranty Continuing. This Subsidiary Guaranty is a
continuing one and all liabilities to which it applies or may apply under the
terms hereof shall be conclusively presumed to have been created in reliance
hereon. No failure or delay on the part of any of the Banks, the Issuing Bank,
any of the Agents, of any holder of any Note, or issuer of, or participant in,
any Letter of Credit in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein expressly specified are cumulative and not exclusive of any
rights or remedies that any of the Banks, the Issuing Bank, any of the Agents or
any subsequent holder of a Note, or issuer of, or participant in, a Letter of
Credit would otherwise have. No notice to or demand on any of the Subsidiary
Guarantors in any case shall entitle any of the Subsidiary Guarantors to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of any of the Banks, the Issuing Bank, any of
the Agents or any holder, creator or purchaser to any other or further action in
any circumstances without notice or demand.
14.11 Binding Nature of Guaranties. This Subsidiary Guaranty shall be
binding upon each of the Subsidiary Guarantors and each of their respective
successors and assigns and shall inure to the benefit of the Banks, the Issuing
Bank and each of their successors and assigns.
14.12 Judgments Binding. If claim is ever made upon any of the Banks, the
Issuing Bank, any of the Agents, any subsequent holder of a Note or issuer of,
or participant in, any Letter of Credit for repayment or recovery of any amount
or amounts received in payment or on account of any of the indebtedness and any
of the aforesaid payees repays all or part of said amount by reason of (a) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (b) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrower) then and in such event each of the Subsidiary
Guarantors agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon the Subsidiary Guarantors, notwithstanding any
revocation hereof or the cancellation of any Note, or other instrument
evidencing any liability of any other Credit Party, and each of the Subsidiary
Guarantors shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
Section 15. Miscellaneous.
15.01 Payment of Expenses, Etc. Each of the Parent and the Borrower
jointly and severally agrees to, whether or not the transactions contemplated
herein or in the other Documents are consummated: (i) pay on demand all
reasonable out-of-pocket costs and expenses of each of the Agents (including,
without limitation, the reasonable fees and disbursements of counsel) in
connection with the
preparation, execution, delivery and administration of this Agreement and the
other Credit Documents and the documents and instruments referred to herein and
therein and any amendment, modification, waiver or consent relating hereto or
thereto (including, without limitation, all reasonable due diligence, collateral
review, primary syndication, transportation, computer duplication, appraisal,
audit, insurance, consultant, search, filing and recording fees and expenses),
and of each of the Agents, the Issuing Bank and each of the Banks in connection
with the enforcement of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein, whether in any action,
suit or litigation, any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally (including, without limitation, the
reasonable fees and disbursements of counsel for each of the Agents and for each
of the Banks and the Issuing Bank); (ii) pay and hold each of the Banks and the
Issuing Bank harmless from and against any and all present and future stamp,
excise and other similar taxes with respect to the foregoing matters and save
each of the Banks and the Issuing Bank harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Bank or the Issuing Bank) to pay such taxes;
and (iii) defend, protect, indemnify and hold harmless each of the Agents, the
Issuing Bank, each of the Banks, and each of their Affiliates and each of their
respective officers, directors, employees, representatives, attorneys and agents
(each an "Indemnitee") from and against any and all liabilities, obligations
(including removal or remedial actions), losses, damages (including foreseeable
and unforeseeable consequential damages and punitive damages), penalties,
claims, actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys' and consultants' fees and disbursements) of any kind or
nature whatsoever that may at any time be incurred by, imposed on, asserted or
awarded against any Indemnitee directly or indirectly based on, or arising or
resulting from, or in any way related to, or by reason of (a) any investigation,
litigation or other proceeding (whether or not such investigation, litigation or
proceeding is brought by any Credit Party, its directors, shareholders or
creditors or an Indemnitee or any Indemnitee is otherwise a party thereto)
related to, or in connection with, the entering into and/or performance of this
Agreement or any other Document or the use of any Letter of Credit or the
proceeds of any Loans hereunder or the consummation of any transactions
contemplated herein (including, without limitation, the Transaction) or in any
other Document or the exercise of any of their rights or remedies provided
herein or in the other Credit Documents; or (b) the actual or alleged
generation, presence or Release of Hazardous Materials on or from, or the
transportation of Hazardous Materials to or from, any Real Property owned or at
any time operated by the Parent or any of its Subsidiaries; or (c) any
Environmental Claim relating in any way to the Parent or any of its Subsidiaries
or any Real Property owned or at any time operated by the Parent or any of its
Subsidiaries; or (d) the exercise of the rights of any of the Agents, the
Issuing Bank and any of the Banks under any of the provisions of this Agreement,
any Security Document, or any other Document or any Letter of Credit or any
Loans hereunder; or (e) the consummation of any transaction contemplated herein
(including, without limitation, the Transaction) or in any other Credit Document
(collectively, the "Indemnified Matters") regardless of when such Indemnified
Matter arises, but excluding any such Indemnified Matter which is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted primarily from such Indemnitee's gross negligence or willful
misconduct. Each Credit Party agrees not to assert any claim against any of the
Agents, any of the Banks, the Issuing Bank or any of their Affiliates, or any of
their respective officers, directors, employees, attorneys and agents, on any
theory of liability, for special, indirect, consequential or punitive damages
arising out of or otherwise relating to the Facilities, the actual or proposed
use of the proceeds of the Loans or the Letters of Credit, the Credit Documents
or any of the transactions contemplated hereby. If any Credit Party fails to pay
when due any costs, expenses or other amounts
payable by it under any Credit Document, including, without limitation, fees and
expenses of counsel and indemnities, such amount may be paid on behalf of such
Credit Party by any of the Agents or any of the Credit Parties, in its sole
discretion.
15.02 Right of Setoff. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default,
each Bank and the Issuing Bank is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to any
Credit Party or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by such Bank or
the Issuing Bank (including, without limitation, by branches and agencies of
such Bank or the Issuing Bank wherever located) to or for the credit or the
account of each Credit Party against and on account of the Obligations and
liabilities of such Credit Party to such Bank or the Issuing Bank under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by such Bank pursuant to
Section 15.06(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Document, irrespective of
whether or not such Bank or the Issuing Bank shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
15.03 Notices. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered: if to the Borrower, the Collateral
Agent, the D&S Agent or any other Credit Party, to its address specified
opposite its signature below; if to any Bank or to the Issuing Bank, to its
address specified opposite its name below; and if to the Administrative Agent,
to its Notice Office, or, as to any Credit Party or any of the Agents, to such
other address as shall be designated by such party in a written notice to the
other parties hereto and, as to each Bank and the Issuing Bank, to such other
address as shall be designated by such Bank or the Issuing Bank in a written
notice to the Borrower and the Administrative Agent. All such notices and
communications shall, when mailed, telegraphed, telexed, facsimilied, or cabled
or sent by overnight courier, be effective three Business Days after deposited
in the mails, certified, return receipt requested, when delivered to the
telegraph company, cable company or one day following delivery to an overnight
courier, as the case may be, or sent by telex or facsimile device, except that
notices and communications to any of the Agents shall not be effective until
received by such Agent.
15.04 Benefit of Agreement. (a) This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that no Credit Party may
assign or transfer any of its rights, obligations or interests hereunder or
under any other Credit Document without the prior written consent of the Banks;
and provided further that although any Bank may transfer, assign or grant
participations in its rights, obligations and interests hereunder, such Bank
shall remain a "Bank" for all purposes hereunder (and may not transfer or assign
all or any portion of its Commitments or Loans hereunder except as provided in
Section 15.04(b)) and the transferee, assignee or participant, as the case may
be, shall not constitute a "Bank" hereunder; and provided further that no Bank
shall transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such amendment
or waiver would: (i) extend the final scheduled maturity of any Loan, Note or
Letter of Credit (unless such Letter of Credit is not extended beyond the
Revolving Loan Maturity Date) in which such participant is participating, or
reduce the rate or extend the time of payment of interest or Fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or increase
the Commitments in which such participant is participating over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of a mandatory reduction in the Total Commitment or of a
mandatory prepayment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment shall be permitted without
the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
any Credit Party of any of its rights and obligations under this Agreement or
(iii) release all or substantially all of the Collateral under all of the
Security Documents (except as expressly provided in the Credit Documents)
supporting the Loans hereunder in which such participant is participating. In
the case of any such participation, the participant shall not have any rights
under this Agreement or any of the other Credit Documents (the participant's
rights against such Bank in respect of such participation to be those set forth
in the agreement executed by such Bank in favor of the participant relating
thereto) and all amounts payable by the Parent or the Borrower hereunder shall
be determined as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together with one
or more other Banks) may (x) (A) pledge its Loans and/or Notes hereunder to a
Federal Reserve Bank in support of borrowings made by such Bank from such
Federal Reserve Bank or (B) assign all or a portion of its Loans or Commitments
and related outstanding Obligations hereunder to its parent company and/or any
Affiliate of such Bank which is at least 50% owned by such Bank or its parent
company or one or more other Banks or (y) assign all or a portion equal to at
least $5,000,000 or, if less, all of such Bank's Loans or Commitments in the
aggregate for the assigning Bank or assigning Banks, of such Loans or
Commitments and related outstanding Obligations hereunder to one or more
Eligible Transferees each of which assignees shall become a party to this
Agreement as a Bank by execution of an assignment and assumption agreement
substantially in the form of Exhibit I (appropriately completed); provided that:
(i) each such assignment shall be of a uniform, and not a varying, percentage of
all rights and obligations under and in respect of all of the Facilities; (ii)
at such time Schedule I shall be deemed modified to reflect the Commitments of
such new Bank and of the existing Banks; (iii) new Notes will be issued to such
new Bank and to the assigning Bank upon the request of such new Bank or
assigning Bank, such new Notes to be in conformity with the requirements of
Section 2.05 to the extent needed to reflect the revised Commitments; (iv) the
consent of the Administrative Agent and, so long as no Event of Default shall
have occurred and be continuing, the Borrower shall be required in connection
with any assignment other than an assignment to a Bank or an Affiliate of a
Bank; and (v) the Administrative Agent shall receive at the time of each such
assignment, from the assigning Bank, the payment of a non-refundable assignment
fee of $3,000. To the extent of any assignment pursuant to this Section
15.04(b), the assigning Bank shall be relieved of its obligations hereunder with
respect to its assigned Commitments. No transfer or assignment under this
Section 15.04(b) will be effective until recorded by the Administrative Agent on
the Register pursuant to Section 9.15. At the time of each assignment pursuant
to this Section 15.04(b) to a Person which is not already a Bank hereunder and
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Bank shall provide
to the Borrower and the Administrative Agent the appropriate Internal Revenue
Service Forms (and, if applicable, a Section 5.04(b)(ii) Certificate) required
by Section 5.04(b).
15.05 No Waiver; Remedies Cumulative. No failure or delay on the part of
any of the Agents, the Issuing Bank or any of the Banks or any holder of any
Note in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between the Parent or the Borrower or
any other Credit Party and any of the Agents, the Issuing Bank or any of the
Banks or the holder of any Note shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which any of the Agents, the Issuing Bank or any of the Banks or the holder of
any Note would otherwise have. No notice to or demand on any Credit Party in any
case shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of any of
the Agents, the Issuing Bank or any of the Banks or the holder of any Note to
any other or further action in any circumstances without notice or demand.
15.06 Payment Pro Rata. (a) The Administrative Agent agrees that promptly
after its receipt of each payment from or on behalf of the Borrower in respect
of any Obligations hereunder, it shall distribute such payment to the Banks pro
rata based upon their respective shares, if any, of the Obligations with respect
to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Fees, of a sum which,
with respect to the related sum or sums received by other Banks, is in a greater
proportion than the total of such Obligation then owed and due to such Bank
bears to the total of such Obligation then owed and due to all of the Banks
immediately prior to such receipt, then such Bank receiving such excess payment
shall purchase for cash without recourse or warranty from the other Banks an
interest in the Obligations of the respective Credit Party to such Banks in such
amount as shall result in a proportional participation by all the Banks in such
amount; provided that if all or any portion of such excess amount is thereafter
recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
15.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks and the Issuing Bank pursuant hereto shall be made and
prepared in accordance with generally accepted accounting principles in the
United States ("U.S. GAAP") consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Parent or the Borrower to the Banks and the Issuing Bank and except that
accounting for inventory shall be made and prepared on a LIFO basis instead of a
FIFO basis); provided that, except as otherwise specifically provided herein,
all computations of Excess Cash Flow and all computations determining compliance
with Sections 10.04 and 10.08 through 10.11 and 10.20, including the definitions
used therein, shall utilize accounting principles and policies in conformity
with those used to
prepare the historical financial statements for the fiscal year of the Parent
ended December 31, 1996 delivered to the Banks and the Issuing Bank pursuant to
Section 8.05(a).
(b) All computations of interest and Fees hereunder shall be made on the
basis of a year of 365 days or 366 days, as the case may be, for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such interest or Fees are payable; provided, however, that
all computations of interest on Eurodollar Loans and Commitment Commission shall
be made on the actual number of days elapsed over a year of 360 days.
15.08 Effectiveness; Counterparts. This Agreement shall become effective
when it shall have been executed by each of the Credit Parties and each of the
Agents and when the Administrative Agent shall have been notified by each of the
Banks and the Issuing Bank that such Bank and the Issuing Bank has executed it
and thereafter shall be binding upon and inure to the benefit of each of the
Credit Parties, each of the Agents, the Issuing Bank and each of the Banks and
their respective permitted successors and assigns. This Agreement may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with the Borrower and the Administrative Agent.
15.09 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
15.10 Amendment or Waiver. (a) Neither this Agreement nor any other Credit
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the respective Credit Parties party thereto and the Required Banks;
provided that no such change, waiver, discharge or termination shall, without
the consent of each Bank (with Obligations of the respective types being
directly affected thereby): (i) extend the final scheduled maturity of any Loan
or Note or extend the stated maturity of any Letter of Credit or Unpaid Drawing
beyond the Revolving Loan Maturity Date, or reduce the rate or extend the time
of payment of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof; (ii) release all or substantially all of the
Collateral (except as expressly provided in the respective Credit Documents);
(iii) amend, modify or waive any provision of this Section 15.10; (iv) reduce
the percentage specified in, or otherwise modify, the definition of Required
Banks; (v) reduce or limit the Obligations of any Guarantor owing to any of the
Agents, the Issuing Bank or any of the Banks or release any Guarantor (provided
that at such time as any Subsidiary Guarantor is sold in accordance with the
terms of this Agreement, such Guarantor shall be automatically released from any
and all obligations under the Subsidiary Guaranty); or (vi) consent to the
assignment to transfer by the Parent or the Borrower or any other Credit Party
of any of their rights and obligations under this Agreement; provided further
that no such change, waiver, discharge or termination shall: (x) increase the
Commitments of any Bank over the amount thereof then in effect (it being
understood that a waiver of any conditions precedent, covenants, Defaults or
Events of Default or of a mandatory reduction in the Total Commitment or of a
mandatory prepayment shall not
constitute an increase of the Commitment of any Bank, and that an increase in
the available portion of any Commitment of any Bank shall not constitute an
increase in the Commitment of such Bank) without the consent of such Bank; or
(y) without the consent of the Issuing Bank, amend, modify or waive any
provision of Section 3 or alter its rights or obligations with respect to
Letters of Credit; or (z) without the consent of the applicable Agent, amend,
modify or waive any provision of Section 12 or any other provision relating to
the rights or obligations of such Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by clause
(i) through (vi) of the first proviso to Section 15.10(a), the consent of the
Required Banks is obtained but the consent of one or more of such other Banks
whose consent is required is not obtained, then the Borrower shall have the
right to replace each such non-consenting Bank or Banks (so long as all such
non-consenting Banks are so replaced) with one or more Replacement Banks
pursuant to Section 2.13 so long as at the time of such replacement, each such
Replacement Bank consents to the proposed change, waiver, discharge or
termination; provided that the Borrower shall not have the right to replace a
Bank solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to clauses (x) and
(y) of the second proviso to Section 15.10(a).
(c) Notwithstanding anything to the contrary contained above in this
Section 15.10, the Collateral Agent may enter into security documents to satisfy
the requirements of Section 9.17 without the consent of the Required Banks.
15.11 Survival. All indemnities set forth herein including, without
limitation, in Sections 2.10. 2.11, 3.06, 5.04, 12.07 and 15.01 shall survive
the execution and delivery of this Agreement and the Notes and the making and
repayment of the Loans and Letters of Credit.
15.12 Domicile of Loans. Each Bank may transfer and carry its Loans at, to
or for the account of any office, Subsidiary or Affiliate of such Bank.
15.13 Confidentiality. (a) Subject to the provisions of subsection (b) of
this Section 15.13, each Bank and the Issuing Bank agrees that it shall use its
best efforts not to disclose without the prior consent of the Borrower (other
than to its employees, auditors, advisors or counsel or to another Bank if the
Bank or such Bank's holding or parent company in its sole discretion determines
that any such Person should have access to such information; provided that such
Persons shall be subject to the provisions of this Section 15.13 to the same
extent as such Bank and the Issuing Bank) any information with respect to the
Parent, the Borrower or any of its Subsidiaries which is now or in the future
furnished pursuant to this Agreement or any other Credit Document and which is
designated by the Parent or the Borrower to the Banks or the Issuing Bank in
writing as confidential; provided that any Bank or the Issuing Bank may disclose
any such information (i) as has become generally available to the public (other
than through the release of such information by such Bank or the Issuing Bank in
violation of this Section 15.13), (ii) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or Federal
regulatory body having or claiming to have jurisdiction over such Bank or the
Issuing Bank or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors, (iii) as may be required or appropriate in response to any
summons or subpoena or in connection with any litigation, (iv) in order to
comply with any law, order, regulation or ruling applicable to such Bank or the
Issuing Bank, (v) to the Collateral Agent to the extent reasonably
required in connection with the exercise of any remedy hereunder and (vi) to any
prospective or actual transferee or participant which receives such information
having been made aware of the confidential nature thereof in connection with any
contemplated transfer of or participation in any of the Loans or Commitments or
any interest therein by such Bank.
(b) The Credit Parties hereby acknowledge and agree that each Bank and the
Issuing Bank may share with any of its Affiliates any information related to the
Credit Parties or any of their Subsidiaries (including, without limitation, any
nonpublic customer information regarding the creditworthiness of the Parent, the
Borrower or any of their respective Subsidiaries; provided such Persons shall be
subject to the provisions of this Section 15.13 to the same extent as such Bank
and the Issuing Bank).
15.14 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH CREDIT PARTY HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH CREDIT PARTY
HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS NATIONAL CORPORATE
RESEARCH, LTD. WITH OFFICES ON THE DATE HEREOF AT ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF
ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND
AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH CREDIT PARTY AGREES TO
DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT ON THE TERMS AND FOR THE PURPOSES
OF THIS PROVISION SATISFACTORY TO THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT.
EACH CREDIT PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF
ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH
CREDIT PARTY AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE
TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF ANY OF THE AGENTS UNDER THIS AGREEMENT, ANY OF THE BANKS, THE ISSUING
BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT
PARTY IN ANY OTHER JURISDICTION.
(b) EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN SUBSECTION (a) ABOVE AND
HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH
COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY OR THE ACTIONS OF ANY OF THE AGENTS OR ANY OF THE BANKS OR THE ISSUING
BANK IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
Address of chief place of business and
chief executive office and for notices:
c/o Saratoga Partners III, ▇.▇. ▇▇▇▇▇▇▇ ACQUISITION INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ By
---------------------------
Name:
Title:
c/o Saratoga Partners III, ▇.▇. ▇▇▇▇▇▇▇ HOLDINGS INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ By
---------------------------
Name:
Title:
c/o Kohlberg & Company KSCO ACQUISITION CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ By
---------------------------
Name:
Title:
▇.▇. ▇▇▇ ▇▇ ▇▇▇▇▇▇▇ FASTENERS INC.
Highway ▇▇▇ ▇▇▇▇▇/
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ By
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ ---------------------------
Name:
Title:
▇.▇. ▇▇▇ ▇▇ PCI GROUP, INC.
Highway ▇▇▇ ▇▇▇▇▇/
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ By
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ ---------------------------
Name:
Title:
▇.▇. ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ COMPANY, L.L.C.
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇/
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ By
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ ---------------------------
Name:
Title:
▇.▇. ▇▇▇ ▇▇ SCOMEX, INC.
Highway ▇▇▇ ▇▇▇▇▇/
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ By
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ ---------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ DILLON READ INC.,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as Advisor and Arranger
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ By
---------------------------
Name:
Title:
By
---------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ SWISS BANK CORPORATION,
Stamford, Connecticut 06912-0305 STAMFORD BRANCH,
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Individually and as Documentation Agent
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ and Syndication Agent
By
---------------------------
Name:
Title:
By
---------------------------
Name:
Title:
1211 Avenue of the Americas CREDIT AGRICOLE INDOSUEZ
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Individually and as Administrative Agent
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ By
---------------------------
Name:
Title:
By
---------------------------
Name:
Title: