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REVOLVING CREDIT
AGREEMENT
DATED as of July 30, 1998
among
TRANSPRO, INC.
▇▇▇▇▇ HEAT TRANSFER PRODUCTS, INC.
AHTP II, INC.
EI ACQUISITION CORP.
GO/▇▇▇ INDUSTRIES
as Borrowers
and
CERTAIN LENDING INSTITUTIONS, as Banks
BANKBOSTON, N.A., as Agent
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TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION. .......................................................1
1.1. Definitions. ........................................................................1
1.2. Rules of Interpretation. ............................................................24
2. THE REVOLVING CREDIT FACILITY. .................................................................26
2.1. Commitment to Lend. .................................................................26
2.2. Commitment Fee. .....................................................................26
2.3. Reduction of Total Commitment. ......................................................27
2.3.1. Optional Reduction of Total Commitment. ..................................27
2.3.2. Mandatory Reduction of Total Commitment. ................................27
2.4. The Notes. ..........................................................................28
2.5. Interest on Loans. ..................................................................28
2.6. Requests for Loans. .................................................................29
2.6.1. General. .................................................................29
2.6.2. Swing Line. ..............................................................29
2.7. Conversion Options. .................................................................30
2.7.1. Conversion to Different Type of Loan. ....................................30
2.7.2. Continuation of Type of Loan. ............................................31
2.7.3. Eurodollar Rate Loans. ...................................................31
2.8. Funds for Loan. .....................................................................31
2.8.1. Funding Procedures. ......................................................31
2.8.2. Advances by Agent. .......................................................32
2.9. Change in Borrowing Base. ...........................................................32
2.10. Settlements. .......................................................................33
2.10.1. General. ................................................................33
2.10.2. Failure to Make Funds Available. ........................................34
2.10.3. No Effect on Other Banks. ...............................................34
3. REPAYMENT OF THE LOANS. ........................................................................34
3.1. Maturity. ...........................................................................34
3.2. Mandatory Repayments of Revolving Credit Loans. .....................................35
3.3. Optional Repayments of Loans. .......................................................35
4. LETTERS OF CREDIT. .............................................................................36
4.1. Letter of Credit Commitments..........................................................36
4.1.1. Commitment to Issue Letters of Credit. ...................................36
4.1.2. Letter of Credit Applications. ...........................................36
4.1.3. Terms of Letters of Credit. ..............................................37
4.1.4. Reimbursement Obligations of Banks. ......................................37
4.1.5. Participations of Banks. .................................................37
4.1.6. Notice to Agent. .........................................................37
4.2. Reimbursement Obligation of the Borrowers. ..........................................37
4.3. Letter of Credit Payments. ..........................................................38
4.4. Obligations Absolute. ...............................................................39
4.5. Reliance by Issuer. .................................................................40
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4.6. Letter of Credit Fee. ...............................................................40
4.7. Existing Letters of Credit. .........................................................41
5. CERTAIN GENERAL PROVISIONS. ....................................................................41
5.1. Closing Fee. ........................................................................41
5.2. Agent and Arranger Fees. ............................................................41
5.3. Funds for Payments. .................................................................41
5.3.1. Payments to Agent. .......................................................41
5.3.2. No Offset, etc. ..........................................................41
5.4. Computations. .......................................................................42
5.5. Inability to Determine Eurodollar Rate. .............................................42
5.6. Illegality. .........................................................................43
5.7. Additional Costs, etc. ..............................................................43
5.8. Capital Adequacy. ...................................................................45
5.9. Certificate. ........................................................................46
5.10. Indemnity. .........................................................................46
5.11. Interest After Default. ............................................................47
5.11.1. Overdue Amounts. ........................................................47
5.11.2. Amounts Not Overdue. ....................................................47
5.12. Joint and Several Liability of the Borrower. .......................................47
6. COLLATERAL SECURITY. ...........................................................................51
6.1. Security of Borrowers. ..............................................................51
6.2. Release of Security. ................................................................51
7. REPRESENTATIONS AND WARRANTIES. ................................................................52
7.1. Corporate Authority. ................................................................52
7.1.1. Incorporation; Good Standing. ............................................52
7.1.2. Authorization. ...........................................................52
7.1.3. Enforceability. ..........................................................53
7.2. Governmental Approvals. .............................................................53
7.3. Title to Properties; Leases. ........................................................53
7.4. Financial Statements and Projections. ...............................................53
7.4.1. Fiscal Year. .............................................................53
7.4.2. Financial Statements. ....................................................54
7.4.3. Projections. .............................................................54
7.5. No Material Changes, etc. ...........................................................55
7.6. Franchises, Patents, Copyrights, etc. ...............................................55
7.7. Litigation. .........................................................................55
7.8. No Materially Adverse Contracts, etc. ...............................................55
7.9. Compliance with Other Instruments, Laws, etc. .......................................56
7.10. Tax Status. ........................................................................56
7.11. No Event of Default. ...............................................................56
7.12. Holding Company and Investment Company Acts. .......................................56
7.13. Absence of Financing Statements, etc. ..............................................57
7.14. Perfection of Security Interest. ...................................................57
7.15. Certain Transactions. ..............................................................57
7.16. Employee Benefit Plans. ............................................................57
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7.16.1. In General. .............................................................57
7.16.2. Terminability of Welfare Plans. .........................................58
7.16.3. Guaranteed Pension Plans. ...............................................58
7.16.4. Multiemployer Plans. ....................................................59
7.17. Regulations U and X. ...............................................................59
7.18. Environmental Compliance. ..........................................................59
7.19. Subsidiaries, etc. .................................................................61
7.20. Bank Accounts. .....................................................................61
7.21. Year 2000 Problem. .................................................................61
7.22. Disclosure. ........................................................................61
7.23. Use of Proceeds. ...................................................................62
7.24. Ineligible Securities. .............................................................62
8. AFFIRMATIVE COVENANTS OF THE BORROWER. .........................................................62
8.1. Punctual Payment. ...................................................................62
8.2. Maintenance of Office. ..............................................................62
8.3. Records and Accounts. ...............................................................63
8.4. Financial Statements, Certificates and Information. .................................63
8.5. Notices. ............................................................................65
8.5.1. Defaults. ................................................................65
8.5.2. Environmental Events. ....................................................66
8.5.3. Notification of Claim against Collateral. ................................66
8.5.4. Notice of Litigation and Judgments. ......................................66
8.6. Corporate Existence; Maintenance of Properties. .....................................67
8.7. Insurance. ..........................................................................67
8.8. Taxes. ..............................................................................67
8.9. Inspection of Properties and Books, etc. ............................................68
8.9.1. General. .................................................................68
8.9.2. Collateral Reports. ......................................................68
8.9.3. Appraisals. ..............................................................68
8.9.4. Environmental Assessments. ...............................................69
8.9.5. Communications with Accountants. .........................................70
8.10. Compliance with Laws, Contracts, Licenses, and Permits. ............................71
8.11. Employee Benefit Plans. ............................................................71
8.12. Use of Proceeds. ...................................................................71
8.13. Additional Mortgaged Property. ......................................................71
8.14. Bank Accounts. .....................................................................72
8.15. EVAP Acquisition. ..................................................................72
8.16. Further Assurances. ................................................................73
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. ....................................................73
9.1. Restrictions on Indebtedness. .......................................................73
9.2. Restrictions on Liens. ..............................................................74
9.3. Restrictions on Investments. ........................................................76
9.4. Distributions. ......................................................................77
9.5. Merger, Consolidation and Disposition of Assets. ....................................77
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9.5.1. Mergers and Acquisitions. ................................................77
9.5.2. Disposition of Assets. ...................................................78
9.6. Sale and Leaseback. .................................................................79
9.7. Compliance with Environmental Laws. .................................................79
9.8. Employee Benefit Plans. .............................................................79
9.9. Business Activities. ................................................................80
9.10. Fiscal Year. .......................................................................80
9.11. Transactions with Affiliates. ......................................................80
9.12. Bank Accounts. .....................................................................80
10. FINANCIAL COVENANTS OF THE BORROWER. ..........................................................81
10.1. Leverage Ratio. ....................................................................81
10.2. Interest Coverage Ratio. ...........................................................81
10.3. Capital Expenditures. ..............................................................82
10.4. Liabilities to Worth Ratio. ........................................................82
10.5. Consolidated Tangible Net Worth. ...................................................82
11. CLOSING CONDITIONS. ...........................................................................82
11.1. Loan Documents. ....................................................................82
11.2. Certified Copies of Charter Documents. .............................................82
11.3. Corporate, Action. .................................................................82
11.4. Incumbency Certificate. ............................................................83
11.5. Validity of Liens. .................................................................83
11.6. Perfection Certificates and UCC Search Results. ....................................83
11.7. Taxes. .............................................................................83
11.8. Title Insurance. ...................................................................83
11.9. Landlord Consents. .................................................................84
11.10. Certificates of Insurance. ........................................................84
11.11. Borrowing Base Report. ............................................................84
11.12. Accounts Receivable Aging Report. .................................................84
11.13. Hazardous Waste Assessments. ......................................................84
11.14. Solvency Certificate. .............................................................84
11.15. Opinion of Counsel. ...............................................................84
11.16. Payment of Fees. ..................................................................85
11.17. Payoff Letter. ....................................................................85
12. CONDITIONS TO ALL BORROWINGS. .................................................................85
12.1. Representations True; No Event of Default. .........................................85
12.2. No Legal Impediment. ...............................................................86
12.3. Governmental Regulation. ...........................................................86
12.4. Proceedings and Documents. .........................................................86
12.5. Borrowing Base Report. .............................................................86
13. EVENTS OF DEFAULT; ACCELERATION; ETC. .........................................................86
13.1. Events of Default and Acceleration. ................................................86
13.2. Termination of Commitments. ........................................................90
13.3. Remedies. ..........................................................................91
13.4. Distribution of Collateral Proceeds. ...............................................91
14. SETOFF. .......................................................................................92
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15. THE AGENT. ....................................................................................93
15.1. Authorization. .....................................................................93
15.2. Employees and Agents. ..............................................................94
15.3. No Liability. ......................................................................94
15.4. No Representations. ................................................................94
15.4.1. General. ................................................................94
15.4.2. Closing Documentation, etc. .............................................95
15.5. Payments. ..........................................................................95
15.5.1. Payments to Agent. ......................................................95
15.5.2. Distribution by Agent. ..................................................95
15.5.3. Delinquent Banks. .......................................................96
15.6. Holders of Notes. ..................................................................96
15.7. Indemnity. .........................................................................97
15.8. Agent as Bank. .....................................................................97
15.9. Resignation. .......................................................................97
15.10. Notification of Defaults and Events of Default. ...................................97
15.11. Duties in the Case of Enforcement. ................................................98
16. EXPENSES AND INDEMNIFICATION. .................................................................98
16.1. Expenses. ..........................................................................98
16.2. Indemnification. ...................................................................99
16.3. Survival. ..........................................................................100
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION. ................................................100
17.1. Sharing of Information with Section 20 Subsidiary. .................................100
17.2. Confidentiality. ...................................................................100
17.3. Prior Notification. ................................................................101
17.4. Other. .............................................................................101
18. SURVIVAL OF COVENANTS, ETC. ...................................................................101
19. ASSIGNMENT AND PARTICIPATION. .................................................................102
19.1. Conditions to Assignment by Banks. .................................................102
19.2. Certain Representations and Warranties; Limitations; Covenants. ....................103
19.3. Register. ..........................................................................104
19.4. New Notes. .........................................................................104
19.5. Participations. ....................................................................105
19.6. Disclosure. ........................................................................105
19.7. Assignee or Participant Affiliated with the Borrower. ..............................105
19.8. Miscellaneous Assignment Provisions. ...............................................106
19.9. Assignment by Borrowers. ...........................................................107
20. NOTICES, ETC. .................................................................................107
21. GOVERNING LAW. ................................................................................107
22. HEADINGS. .....................................................................................108
23. COUNTERPARTS. .................................................................................108
24. ENTIRE AGREEMENT, ETC. ........................................................................108
25. WAIVER OF JURY TRIAL. .........................................................................108
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26. CONSENTS, AMENDMENTS, WAIVERS, ETC. ...........................................................109
27. SEVERABILITY. .................................................................................110
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EXHIBITS AND SCHEDULES
Exhibit A Form of Borrowing Base
Exhibit B Form of Revolving Credit Note
Exhibit C Form of Loan Request
Exhibit D Form of Compliance Certificate
Exhibit E Form of Assignment and Acceptance
Schedule 1 Banks; Commitments;
Commitment Percentages
Schedule 4.7 Existing Letters of Credit
Schedule 7.3 Title to Properties
Schedule 7.7 Litigation
Schedule 7.18 Environmental Matters
Schedule 7.20 Bank Accounts
Schedule 9.1 Existing Indebtedness
Schedule 9.2 Existing Liens
Schedule 9.3 Existing Investments
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This REVOLVING CREDIT AGREEMENT is made as of July 30, 1998, by and
among (a) TRANSPRO, INC. (the "Parent"), a Delaware corporation having its
principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
HEAT TRANSFER PRODUCTS, INC. ("AHTP"), a Delaware corporation having its
principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
AHTP II, INC. ("AHTP II"), a Delaware corporation having its principal place of
business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, GO/▇▇▇ INDUSTRIES
("GDI"), a New York general partnership having its principal place of business
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and EI ACQUISITION CORP.
("EI"), a Texas corporation having its principal place of business at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Parent, AHTP, AHTP II, GDI and EI are each
a "Borrower" and are collectively the "Borrowers"), and (b) BANKBOSTON, N.A., a
national banking association and the other lending institutions listed on
Schedule 1 and (c) BANKBOSTON, N.A. as agent for itself and such other lending
institutions.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this Section 1 or elsewhere in the provisions of this Credit Agreement
referred to below:
Accounts Receivable. All rights of any of the Borrowers and Crown
Canada to payment for goods sold, leased or otherwise marketed in the ordinary
course of business and all rights of any of the Borrowers and Crown Canada to
payment for services rendered in the ordinary course of business and all sums of
money or other proceeds due thereon pursuant to transactions with account
debtors, except for that portion of the sum of money or other proceeds due
thereon that relate to sales, use or property taxes in conjunction with such
transactions, recorded on books of account in accordance with generally accepted
accounting principles.
Adjustment Date. Each date which is the first day of the month
immediately following the month in which the Borrowers' quarterly unaudited
financial statements and related Compliance Certificate are required to be
delivered by the Borrowers pursuant to Section 8.4(b) and Section 8.4(d),
respectively.
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Affiliate. Any Person that would be considered to be an affiliate of
any of the Borrowers under Rule 144(a) of the Rules and Regulations of the
Securities and Exchange Commission, as in effect on the date hereof, if such
Borrower were issuing securities.
Agency Account Agreement. See Section 8.14.1.
Agent's Head Office. The Agent's head office located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Agent may
by notice in writing designate from time to time.
Agent. BankBoston, N.A. acting as agent for the Banks and any
predecessor in such capacity.
Agent Fee Letter. The letter agreement regarding fees, dated or to be
dated on or prior to the Closing Date, among the Borrowers, the Agent and the
Arranger and in form and substance satisfactory to the Agent and the Arranger.
Agent's Special Counsel. ▇▇▇▇▇▇▇ ▇▇▇▇ LLP or such other counsel as may
be approved by the Agent.
Applicable Margin. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin or
rate (in each case per annum) set forth below based on the range into which the
Leverage Ratio then falls in accordance with the following table, as determined
as of the end of and for the period of four consecutive fiscal quarters of the
Borrowers ending immediately prior to the applicable Rate Adjustment Period and
pertaining to such Adjustment Date:
Applicable Applicable Base Commitment
Leverage Eurodollar Rate Margin Fee
Level Ratio Margin
I greater than or 2.000% 0.250% 0.375%
equal to 3.75 to
1.00
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II less than 3.75 to 1.750% 0.00% 0.375%
1.00 but greater
than or equal to
3.50 to 1.00
III less than 3.50 to 1.500% 0.00% 0.250%
1.00 but greater
than or equal to
3.00 to 1.00
IV less than 3.00 to 1.250% 0.00% 0.250%
1.00 but greater
than or equal to
2.50 to 1.00
V less than 2.50 to 1.000% 0.00% 0.250%
1.00 but greater
than or equal to
2.00 to 1.00
VI less than 2.00 to 0.750% 0.00% 0.250%
1.00
Notwithstanding the foregoing, for Loans outstanding, Letter of Credit
Fees and commitment fees payable during the Rate Adjustment Period commencing on
the Closing Date through the Adjustment Date following the receipt of the
Compliance Certificate for the June 30, 1998 reporting period, the Applicable
Margin shall be set at Level I. From the Adjustment Date following receipt of
the Compliance Certificate for June 30, 1998 until the Adjustment Date following
the receipt of the Compliance Certificate for the December 31, 1998 reporting
period, the Applicable Margin shall be no lower than the Level determined by the
Banks based on the June 30, 1998 Compliance Certificate.
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Arranger. BancBoston Securities Inc., in its capacity as exclusive
syndication agent and arranger for the credit facility provided hereunder.
Assignment and Acceptance. See Section 19.1.
Balance Sheet Date. December 31, 1997.
Banks. BKB and the other lending institutions listed on Schedule 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to Section 19.
Base Rate. The higher of (i) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (ii) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, 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 Agent from three funds brokers of recognized
standing selected by the Agent.
Base Rate Loans. Loans bearing interest calculated by reference to the
Base Rate.
BKB. BankBoston, N.A., a national banking association, in its
individual capacity.
Borrowers. As defined in the preamble hereto.
Borrowing Base. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Agent pursuant to Section 8.4(f) and the most recent appraisal
of the Eligible Fixed Assets delivered to the Banks and the Agent pursuant to
Section 8.4(h), as adjusted pursuant to the provisions below, which is equal to
the sum of:
(a) 80% of Crown, Crown Canada and G&O Eligible Accounts
Receivable for which invoices have been issued and are payable; plus
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(b) 75% of GDI Eligible Accounts Receivable for which invoices
have been issued and are payable; plus
(c) EVAP Determined Eligible Accounts Receivable Percentage
for EVAP Eligible Accounts Receivable which invoices have been issued
and are payable; plus
(d) 25% of the Net Book Value of Crown and G&O Eligible
Inventory; plus
(e) 50% of the Net Book Value of GDI Eligible Inventory; plus
(f) EVAP Determined Eligible Inventory Percentage of EVAP
Eligible Inventory; plus
(g) the lesser of (i) $10,000,000; provided, however, such
amount shall be reduced by $1,000,000 on each anniversary of the
Closing Date, and (ii) the Determined Value; minus
(h) Reserves; minus
(i) Environmental Liabilities.
Borrowing Base Report. A Borrowing Base Report signed by the chief
financial officer of the Parent and in substantially the form of Exhibit A
hereto or as such form is modified by the Agent to more accurately reflect the
component parts of the Borrowing Base pursuant to Section 2.9.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business other than a
Saturday, a Sunday or a legal holiday and, in the case of Eurodollar Rate Loans,
also a day which is a Eurodollar Business Day.
Canadian Security Documents. The Security Agreement, dated or to be
dated on or prior to the Closing Date, between Crown Canada and the Agent and
the other documents executed in connection therewith, each in form and substance
satisfactory to the Agent.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12)
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months or less in accordance with generally accepted accounting principles.
Capital Expenditures. Amounts paid or Indebtedness incurred by any of
the Borrowers or their Subsidiaries in connection with (i) the purchase or lease
by any of the Borrowers or their Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles or (ii) the lease of
any assets by any of the Borrowers or their Subsidiaries as lessee under any
synthetic lease referred to in clause (vi) of the definition of the term
"Indebtedness" to the extent that such assets would have been Capital Assets had
the synthetic lease been treated for accounting purposes as a Capitalized Lease.
Capitalized Leases. Leases under which any of the Borrowers or any of
their Subsidiaries is the lessee or obligor, the discounted future rental
payment obligations under which are required to be capitalized on the balance
sheet of the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See Section 7.18(a).
Closing Date. The first date on which the conditions set forth in
Section 11 have been satisfied and any Loans are to be made or any Letter of
Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests of the Borrowers
and their Subsidiaries that are or are intended to be subject to the security
interests and mortgages created by the Security Documents.
Collateral Release Date. See Section 6.2.
Commitment. With respect to each Bank, the principal amount set forth
on Schedule 1 hereto (or on the signature page of the Assignment and Acceptance
by which it became a Bank) as the amount of such Bank's commitment to make Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, each of the Borrowers, as the same may be reduced
from time to time; or if such commitment is terminated pursuant to the
provisions hereof, zero.
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Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks (subject to adjustment pursuant to any
assignments made under Section 19 hereof), as from time to time modified
pursuant to the provisions hereof.
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrowers and
their Subsidiaries, consolidated in accordance with generally accepted
accounting principles.
Consolidated EBIT. Consolidated Net Income (or Deficit) of the
Borrowers and their Subsidiaries for any period, before provision for any income
taxes or interest expense for such period, determined in accordance with
generally accepted accounting principles; provided, however, for the fiscal
periods ending June 30, 1998 and September 30, 1998, the calculations shall be
annualized based on the Parent's fiscal period beginning January 1, 1998 and
ending on such date.
Consolidated EBITDA. For any period, an amount equal to the sum of (i)
Consolidated EBIT for such period, plus (ii) depreciation and amortization for
such period, determined in accordance with generally accepted accounting
principles; provided, however, for the fiscal periods ending June 30, 1998 and
September 30, 1998, the calculations shall be annualized based on the Parent's
fiscal period beginning January 1, 1998 and ending on such date.
Consolidated Funded Debt. For any period, the average outstanding
amount of all liabilities of the Borrowers and their Subsidiaries for money
borrowed (including without limitation obligations under Capitalized Leases).
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Borrowers and their Subsidiaries, after deduction of all
expenses, taxes, and other proper charges, determined in accordance with
generally accepted accounting principles, after eliminating therefrom (a) all
extraordinary unusual or infrequently occurring items of income and (b) up to
$1,000,000 per annum of extraordinary unusual or infrequently occurring items of
loss.
Consolidated Net Worth. As of any date of determination, the excess of
Consolidated Total Assets over Consolidated Total Liabilities less, to the
extent otherwise includable in the computations of Consolidated Net Worth, any
equity subscriptions receivable.
16
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Consolidated Tangible Net Worth. As of any date of determination, the
excess of Consolidated Total Assets over Consolidated Total Liabilities, and
less the sum of:
(a) the total book value of all assets of the Borrowers and
their Subsidiaries properly classified as intangible assets under
generally accepted accounting principles, including such items as good
will, the purchase price of acquired assets in excess of the fair
market value thereof, trademarks, trade names, service marks, brand
names, copyrights, patents and licenses, and rights with respect to the
foregoing; plus
(b) all amounts representing any write-up in the book value of
any assets of the Borrowers or their Subsidiaries resulting from a
revaluation thereof subsequent to the Balance Sheet Date (or with
respect to assets acquired after the Closing Date, after the date of
acquisition of such assets), determined in accordance with generally
accepted accounting principles; plus
(c) to the extent otherwise includable in the computation of
Consolidated Tangible Net Worth, any equity subscriptions receivable.
Consolidated Total Assets. As of any date of determination, all assets
of the Borrowers and their Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest required to be paid or accrued by the Borrowers and their
Subsidiaries during such period on all Indebtedness of the Borrowers and their
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including commitment fees, agency fees, facility fees, balance
deficiency fees and similar fees or expenses in connection with the borrowing of
money, determined in accordance with generally accepted accounting principles;
provided, however, Consolidated Total Interest Expense shall only include
expenses incurred by the Borrowers and their Subsidiaries in connection with the
closing of this Agreement to the extent that they exceed $500,000; provided,
further, Consolidated Total Interest Expense shall not include any accelerated
interest expense incurred by the Borrower in connection with the termination of
the Existing Facility.
17
-9-
Consolidated Total Liabilities. As of any date of determination, all
liabilities of the Borrowers and their Subsidiaries determined on a consolidated
basis in accordance with generally accepted accounting principles and classified
as such on the consolidated balance sheet of the Borrowers and their
Subsidiaries.
Conversion Request. A notice given by the Borrowers to the Agent of the
Borrowers' election to convert or continue a Loan in accordance with Section
2.7.
Credit Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
Crown. The Crown division of the Parent.
Crown Canada. Crown-VMS Canada Ltd., a corporation organized under the
laws of Ontario and wholly owned subsidiary of the Parent.
Default. See Section 13.1.
Delinquent Bank. See Section 15.5.3.
Depreciation Expense. The Borrowers' annual expenses for depreciation,
determined on a consolidated basis in accordance with generally accepted
accounting principles.
Derivative Contracts. See part (ix) of the definition of Indebtedness.
Determined Value. At the relevant time of reference thereto, the lesser
of (i) 50% of the net book value of Eligible Fixed Assets, determined in
accordance with generally accepted accounting principles, and (ii) 75% of the
sum of (A) the appraised value of Eligible Fixed Assets which constitute Real
Estate on a fair market basis and (B) the appraised value of Eligible Fixed
Assets which constitute machinery and equipment on an orderly liquidation basis
determined by the most recent appraisal thereof conducted by the Agent.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of any of the Borrowers,
other than dividends payable solely in shares of common stock of the Borrowers;
the purchase, redemption, or other retirement of any shares of any class of
capital stock of any of the Borrowers, directly or indirectly through a
Subsidiary of the Borrowers or
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otherwise; the return of capital by any of the Borrowers to its shareholders as
such; or any other distribution on or in respect of any shares of any class of
capital stock of any of the Borrowers.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
Drawdown Date. The date on which any Loan is made or is to be made, and
the date on which any Revolving Loan is converted or continued in accordance
with Section 2.7.
Eligible Accounts Receivable. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable) (i) that the Borrowers reasonably and in good faith
determine to be collectible; (ii) that are with account debtors or other
obligors that (A) are not Affiliates of any of the Borrowers, (B) purchased the
goods or services giving rise to the relevant Account Receivable in an arm's
length transaction, (C) are not insolvent or involved in any case or proceeding,
whether voluntary or involuntary, under any bankruptcy, reorganization,
arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar
law of any jurisdiction and (D) are, in the Agent's reasonable judgment,
creditworthy; (iii) that are in payment of obligations that have been fully
performed, do not consist of progress ▇▇▇▇▇▇▇▇ or ▇▇▇▇ and hold invoices and are
not subject to dispute or any other similar claims that would reduce the cash
amount payable therefor; (iv) that are not subject to any pledge, restriction,
security interest or other lien or encumbrance other than those created by the
Loan Documents; (v) at all times prior to the Collateral Release Date, in which
the Agent has a valid and perfected first priority security interest; (vi) that
are not outstanding for more than sixty (60) days past the due date of the
respective original invoices thereof; (vii) that are payable in Dollars; (viii)
that are not payable from an office outside of the United States; provided,
however, Eligible Accounts Receivable may include up to $1,000,000 of Accounts
Receivable payable from account debtors located in the United Kingdom and the
Dominion of Canada; and (ix) that are not secured by a letter of credit unless
the Agent has a prior, perfected security interest in such letter of credit.
Notwithstanding the
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foregoing, the Agent shall have the right to impose additional eligibility
criteria for Eligible Accounts Receivable of EVAP based upon the EVAP Exam.
Eligible Assignee. Any of (i) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (ii)
a savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (iii) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OED"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OED; (iv) the central
bank of any country which is a member of the OED; and (v) if, but only if, any
Event of Default has occurred and is continuing, any other bank, insurance
company, commercial finance company or other financial institution or other
Person approved by the Agent, such approval not to be unreasonably withheld. In
addition, those institutions set forth in (i)-(iv) above shall also have the
capability to fund Loans at the interest rates provided in this Credit
Agreement.
Eligible Fixed Assets. Those fixed assets (excluding all leaseholds)
owned by any of the Borrowers or any of their Subsidiaries (other than EVAP
until the EVAP Exam Date) at the relevant time of reference thereto and which
are properly insured in accordance with the provisions of Section 8.7 and prior
to the Collateral Release Date, as to which the Agent has a perfected first
priority lien.
Eligible Inventory. With respect to any of the Borrowers', finished
goods, work in progress and raw materials and component parts inventory owned by
such Borrower, other than shop supplies and packaging supplies; provided that
Eligible Inventory shall not include any inventory (i) held on consignment to
the Borrowers, or not otherwise owned by such Borrower, or of a type no longer
sold by such Borrower, (ii) which has been returned by a customer or is damaged
or subject to any legal encumbrance other than Permitted Liens, (iii) which is
not in the possession of such Borrower unless the Agent has received a waiver
from the party in possession of such inventory in form and substance
satisfactory to the Agent, (iv) which is held by such Borrower on property
leased by any Borrower, unless the Agent
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has received a waiver from the lessor of such leased property and, if any,
sublessor thereof in form and substance satisfactory to the Agent, (v) at all
times prior to the Collateral Release Date, as to which appropriate Uniform
Commercial Code financing statements showing such Borrower as debtor and the
Agent as secured party have not been filed in the proper filing office or
offices in order to perfect the Agent's security interest therein, (vi) which
has been shipped to a customer of such Borrower regardless of whether such
shipment is on a consignment basis, (vii) which is not located within the United
States of America, provided, however, Eligible Inventory may include up to
$2,500,000 of inventory located in Mexico, (viii) which is slow moving, obsolete
or revalued inventory, or (ix) which the Agent reasonably deems to be not
marketable. Notwithstanding the foregoing, the Agent shall have the right to
impose additional eligibility criteria for Eligible Inventory of EVAP based upon
the EVAP Exam.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained of contributed to by any of the Borrowers or
any ERISA Affiliate, other than a Guaranteed Pension Plan or a Multiemployer
Plan.
Environmental Laws. See Section 7.18(a).
Environmental Liabilities. The sum total of the cost estimates required
pursuant to Section 8.9.4(c)
EPA. See Section 7.18(b).
Equity Securities. With respect to the Borrowers, all equity securities
of the Borrowers, including any (a) common or preferred stock, (b) limited or
general partnership interests, (c) membership interests or limited liability
company units, (d) options, warrants, or other rights to purchase or acquire any
equity security, or (e) securities convertible into any equity security.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
the Borrower under Section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
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Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other office of such
Bank, if any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (i) the arithmetic average of the rates
per annum for each Reference Bank (rounded upwards to the nearest 1/16 of one
percent) of the rate at which such Reference Bank's Eurodollar Lending Office is
offered Dollar deposits two Eurodollar Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations of such Eurodollar Lending Office are
customarily conducted, for delivery on the first day of such Interest Period for
the number of days comprised therein and in an amount comparable to the amount
of the Eurodollar Rate Loan of such Reference Bank to which such Interest Period
applies, divided by (ii) a number equal to 1.00 minus the Eurocurrency Reserve
Rate, if applicable.
Eurodollar Rate Loans. Loans bearing interest calculated by reference
to the Eurodollar Rate.
EVAP. EI at all times following the EVAP Acquisition.
EVAP Acquisition. The merger of EVAP Target with and into EI for a
consideration to the shareholders of EVAP Target not to exceed $9,750,000, of
which the cash portion thereof shall not exceed $3,000,000 on the closing of the
acquisition with up to an additional
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$1,000,000 at some point not less than two (2) years after the closing of such
acquisition.
EVAP Determined Eligible Accounts Receivable Percentage. Zero percent
(0%) until the EVAP Exam Date and at all times thereafter a percentage to be
determined by the Agent.
EVAP Determined Eligible Inventory Percentage. Zero percent (0%) until
the EVAP Exam Date and at all times thereafter a percentage to be determined by
the Agent.
EVAP Exam. A commercial finance exam and review of the assets of EVAP
conducted by the Agent.
EVAP Exam Date. The date on which the EVAP Exam is completed to the
satisfaction of the Agent.
EVAP Target. EVAP Inc., a Texas corporation.
Event of Default. See Section 13.1.
Existing Facility. The existing loan facility pursuant to the Revolving
Credit and Term Loan Agreement, dated as of September 18, 1995, between the
Borrowers and the Banks.
Fee Letter(s). The letter agreements regarding fees, dated or to be
dated on or prior to the Closing Date, among the Borrowers and the Banks and in
form and substance satisfactory to the Banks.
G&O. The G&O Division of the Parent.
generally accepted accounting principles. (i) When used in Section 10,
whether directly or indirectly through reference to a capitalized term used
therein, means (A) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(B) to the extent consistent with such principles, the accounting practice of
the Borrowers reflected in its financial statements for the year ended on the
Balance Sheet Date, and (ii) when used in general, other than as provided above,
means principles that are (A) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (B) consistently applied with past financial
statements of the Borrowers adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified
23
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public accountant would, insofar as the use of such accounting principles is
pertinent, be in a position to deliver an unqualified opinion (other than a
qualification regarding changes in generally accepted accounting principles) as
to financial statements in which such principles have been properly applied.
GO/▇▇▇ Mexico. GO/▇▇▇ de Mexico, S.A. de C.V., a corporation organized
under the laws of the United Mexican States and a subsidiary of the Parent.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by any of the
Borrowers or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.
Guarantor(s). GO/▇▇▇ Mexico, Radiadores and Crown Canada.
Guaranty. A Guaranty, made by a Subsidiary of a Borrower in favor of
the Banks and the Agent pursuant to which such Subsidiary of the Borrower
guaranties to the Banks and the Agent the payment and performance of the
Obligations and in form and substance satisfactory to the Agent.
Hazardous Substances. See Section 7.18(b).
Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person,
(iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of
24
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business which are not overdue or which are being contested in good
faith),
(v) every obligation of such Person under any Capitalized
Lease,
(vi) every obligation of such Person under any lease (a
"synthetic lease") treated as an operating lease under generally
accepted accounting principles and as a loan or financing for U.S.
income tax purposes,
(vii) all sales by such Person of (A) accounts or general
intangibles for money due or to become due, (B) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (C) other receivables (collectively "receivables"), whether
pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating
thereto or a disposition of defaulted receivables for collection and
not as a financing arrangement, and together with any obligation of
such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection therewith,
(viii) every obligation of such Person (an "equity related
purchase obligation") to purchase, redeem, retire or otherwise acquire
for value any shares of capital stock of any class issued by such
Person, any warrants, options or other rights to acquire any such
shares, or any rights measured by the value of such shares, warrants,
options or other rights,
(ix) every obligation of such Person under any forward
contract, futures contract, swap, option or other financing agreement
or arrangement (including, without limitation, caps, floors, collars
and similar agreements), the value of which is dependent upon interest
rates, currency exchange rates, commodities or other indices
("Derivative Contracts"),
(x) every obligation in respect of Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent that such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such
entity, except to the extent that the terms of such Indebtedness
provide that such Person is not liable therefor and such terms are
enforceable under applicable law,
25
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(xi) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of
clauses (i) through (x) (the "primary obligation") of another Person
(the "primary obligor"), in any manner, whether directly or indirectly,
and including, without limitation, any obligation of such Person (A) to
purchase or pay (or advance or supply funds for the purchase of) any
security for the payment of such primary obligation, (B) to purchase
property, securities or services for the purpose of assuring the
payment of such primary obligation, or (C) to maintain working capital,
equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (u) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (v) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (w) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser (other than the Borrowers or any of
their wholly-owned Subsidiaries) thereof, excluding amounts representative of
yield or interest earned on such investment, (x) any synthetic lease shall be
the stipulated loss value, termination value or other equivalent amount, (y) any
derivative contract shall be the maximum amount of any termination or loss
payment required to be paid by such Person if such derivative contract were, at
the time of determination, to be terminated by reason of any event of default or
early termination event thereunder, whether or not such event of default or
early termination event has in fact occurred and (z) any equity related purchase
obligation shall be the maximum fixed redemption or purchase price thereof
inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price.
Ineligible Securities. Securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1993 (12 U.S.C. Section 24, Seventh), as amended.
26
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Interest Coverage Ratio. For any period, the ratio of (i) Consolidated
EBIT to (ii) Consolidated Total Interest Expense.
Interest Payment Date. (i) As to any Base Rate Loan, the last day of
the calendar quarter with respect to interest accrued during such calendar
quarter, including, without limitation, the calendar quarter which includes the
Drawdown Date of such Base Rate Loan; (ii) as to any Eurodollar Rate Loan in
respect of which the Interest Period is (A) 3 months or less, the last day of
such Interest Period and (B) more than 3 months, the date that is 3 months from
the first day of such Interest Period and, in addition, the last day of such
Interest Period.
Interest Period. With respect to each Loan, (i) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrower in a Loan Request or
as otherwise required by the terms of this Credit Agreement (A) for any Base
Rate Loan, the last day of the calendar quarter; and (B) for any Eurodollar Rate
Loan, 1, 2, 3, or 6 months; and (ii) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to such Loan and
ending on the last day of one of the periods set forth above, as selected by the
Borrowers in a Conversion Request; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a Eurodollar Rate
Loan would otherwise end on a day that is not a Eurodollar Business
Day, that Interest Period shall be extended to the next succeeding
Eurodollar Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Eurodollar
Business Day;
(b) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period
shall end on the next succeeding Business Day;
(c) if the Borrowers shall fail to give notice as provided in
Section 2.7, the Borrowers shall be deemed to have requested a
conversion of the affected Eurodollar Rate Loan to a Base Rate Loan and
the continuance of all Base Rate Loans as Base Rate Loans on the last
day of the then current Interest Period with respect thereto;
27
-19-
(d) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Eurodollar Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Eurodollar Business
Day of a calendar month; and
(e) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date.
Investments. All expenditures made and all liabilities incurred (contingently
or otherwise) for the acquisition of stock or Indebtedness of, or for loans,
advances, capital contributions or transfers of property to, or in respect of
any guaranties (or other commitments as described under Indebtedness), or
obligations of, any Person. In determining the aggregate amount of Investments
outstanding at any particular time: (i) the amount of any Investment represented
by a guaranty shall be taken at not less than the principal amount of the
obligations guaranteed and still outstanding; (ii) there shall be included as an
Investment all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (iii) there shall be deducted
in respect of each such Investment any amount received as a return of capital
(but only by repurchase, redemption, retirement, repayment, liquidating dividend
or liquidating distribution); (iv) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (ii) may be deducted when paid; and (v) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
Letter of Credit. See Section 4.1.1.
Letter of Credit Application. See Section 4.6.
Letter of Credit Banks. The Agent, The First National Bank of
Chicago and The Bank of New York.
Letter of Credit Fee. See Section 4.1.1.
Letter of Credit Participation. See Section 4.1.4.
Leverage Ratio. For any period, the ratio of (i) Consolidated Funded
Debt during such period to (ii) Consolidated EBITDA for such period.
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-20-
Loan Documents. This Credit Agreement, the Fee Letter, the Notes, the
Letter of Credit Applications, the Letters of Credit, each Guaranty and the
Security Documents, and all other documents, agreements and/or certificates
executed and/or delivered pursuant hereto or thereto.
Loan Request. See Section 2.6.
Loans. The revolving credit loans made or to be made by the Banks to
the Borrowers pursuant to Subsection 2.8.
Local Accounts. Depository accounts of the Borrowers in which proceeds
of Collateral are held.
Majority Banks. As of any date, the Banks holding at least fifty-one
percent (51%) of the outstanding principal amount of the Notes on such date; and
if no such principal is outstanding, the Banks whose aggregate Commitments
constitute at least fifty-one percent (51%) of the Total Commitment.
Maturity Date. July 1, 2003.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Mexican Security Documents. The Mercantile Pledge Agreements,
Gratuitous Bailment Agreements and Guaranty, each dated or to be dated on or
prior to the Closing Date, between GO/▇▇▇ Mexico and the Agent and Radiadores
and the Agent and each in form and substance satisfactory to the Banks and the
Agent.
Mortgaged Property. Any Real Estate which is subject to any Mortgage.
Mortgages. The several mortgages and deeds of trust, dated or to be
dated on or prior to the Closing Date, from the Borrowers and their Subsidiaries
to the Agent with respect to the fee and leasehold interests of the Borrowers
and their Subsidiaries in the Real Estate and in form and substance satisfactory
to the Banks and the Agent.
Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by any of the Borrowers or
any ERISA Affiliate.
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Net Book Value. At the relevant time of reference thereto, the net book
value of Eligible Inventory determined on a first-in first-out basis and at
lower of cost or market.
Net Cash Proceeds. All net proceeds received by the Borrowers in
connection with (a) the disposition of assets (other than pursuant to Section
9.5.2(i)), after deduction of the out-of-pocket expenses of the disposition
incurred by the Borrowers including any sales or transfer taxes incurred by the
Borrowers in connection with such disposition, (b) any insured loss or casualty,
after payment of reasonable expenses for the repair or replacement of the assets
subject to such loss or casualty, (c) any tax refunds in excess of $100,000, and
(d) the incurrence of any Indebtedness after the date hereof with the prior
written consent of the Majority Banks and the Agent which is not otherwise
permitted under Subsection 9.1, after deduction of the out-of-pocket expenses
incurred by the Borrowers in arranging for the provision of such Indebtedness.
Net Equity Proceeds. All net proceeds received by the Borrowers in
connection with any offering of Equity Securities of the Borrowers previously
approved in writing by the Majority Banks and the Agent, after deduction of the
customary expenses of the offering borne by the Borrowers, including
underwriting discount and commissions.
Notes. The revolving credit notes.
Note Record. A Record with respect to a Note.
Obligations. All indebtedness, obligations and liabilities of any of
the Borrowers and their Subsidiaries to any of the Banks and the Agent,
individually or collectively, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Loans made or Reimbursement Obligations incurred or any of
the Notes, Letter of Credit Applications, Letters of Credit or obligations under
Derivative Contracts between the Borrowers and the Banks or other instruments at
any time evidencing any thereof.
Operating Account. See Section 2.6.2.
outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
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PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
Partnership Pledge Agreement. The Collateral Assignment of Partnership
Interests, dated or to be dated on or prior to the Closing Date, between GDI and
the Agent and in form and substance satisfactory to the Banks and the Agent.
Perfection Certificates. The Perfection Certificates as defined in the
Security Agreements.
Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 9.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Radiadores. Radiadores GDI, S.A. de C.V., a corporation organized under
the laws of the United States of Mexico and a subsidiary of the Parent.
Rate Adjustment Period. See definition of Applicable Margin.
RCRA. See Section 7.18(a).
Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by any of the Borrowers or any of their Subsidiaries.
Record. The grid attached to a Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
Reference Bank. The Agent.
Register. See Section 19.3.
Reimbursement Obligation. The Borrowers' joint and several obligation
to reimburse the applicable Letter of Credit Bank on account of any drawing
under Letter of Credit issued by it as provided in Section 4.2.
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Rental Obligations. All present or future obligations of any of the
Borrowers or any of their Subsidiaries under any rental agreements or leases of
real or personal property, other than (i) obligations that can be terminated by
the giving of notice without liability to such Borrower or such Subsidiary in
excess of the liability for rent due as of the date on which such notice is
given and under which no penalty or premium is paid as a result of any such
termination, and (ii) obligations in respect of any Capitalized Leases or any
synthetic leases referred to in clause (vi) of the definition of the term
"Indebtedness".
Reserves. As determined by the Agent, such amounts as the Agent may
from time to time establish and revise (a) to reflect events, conditions,
contingencies or risks which do or may (i) adversely affect either (A) any
Collateral, the rights of the Agent or any of the Banks in any Collateral or its
value or (B) the security interest and other rights of the Agent or any of the
Banks in the Collateral (including the enforceability, perfection and priority
thereof) or (ii) adversely affect in any material respect the assets (other than
any Collateral) or business or financial condition of any of the Borrowers or
any of their Subsidiaries or (b) to reflect the belief of the Agent that any
Borrowing Base Report or other collateral report or financial information
furnished by or on behalf of the Borrowers to the Agent or any of the Banks is
or may have been incomplete, inaccurate or misleading in any material respect.
Section 20 Subsidiary. A Subsidiary of the bank holding company
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
Security Agreement. The Security Agreement, dated or to be dated on or
prior to the Closing Date, between the Borrowers and their Subsidiaries and the
Agent and in form and substance satisfactory to the Banks and the Agent.
Security Documents. The Security Agreement, the Mortgages, the Stock
Pledge Agreements, the Partnership Pledge Agreement, the Canadian Security
Documents, the Mexican Security Documents and all other instruments and
documents, including without limitation Uniform Commercial Code financing
statements, required to be executed or delivered pursuant to any Security
Document.
Settlement. The making or receiving of payments, in immediately
available funds, by the Banks, to the extent necessary to
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cause each Bank's actual share of the outstanding amount of Loans (after giving
effect to any Loan Request) to be equal to such Bank's Commitment Percentage of
the outstanding amount of such Loans (after giving effect to any Loan Request),
in any case where, prior to such event or action, the actual share is not so
equal.
Settlement Amount. See Section 2.10.1.
Settlement Date. (a) The Drawdown Date relating to any Loan Request,
(b) Friday of each week, or if a Friday is not a Business Day, the Business Day
immediately following such Friday, (c) at the option of the Agent, on any
Business Day following a day on which the account officers of the Agent active
upon the Borrowers' account become aware of the existence of an Event of
Default, (d) any Business Day on which the amount of Loans outstanding from BKB
plus BKB's Commitment Percentage of the sum of the Maximum Drawing Amount and
any Unpaid Reimbursement Obligations is equal to or greater than BKB's
Commitment Percentage of the Total Commitment, (e) the Business Day immediately
following any Business Day on which the amount of Loans outstanding increases or
decreases by more than $5,000,000 as compared to the previous Settlement Date,
(f) any day on which any conversion of a Base Rate Loan to a Eurodollar Rate
Loan occurs, or (g) any Business Day on which (i) the amount of outstanding
Loans decreases and (ii) the amount of BKB's Loans outstanding equals zero
Dollars ($0).
Settling Bank. See Section 2.10.1.
Stock Pledge Agreement(s). The Stock Pledge Agreements, dated or to be
dated on or prior to the Closing Date, between (i) Parent, AHTP, AHTP II, Crown
Canada and the Agent and (ii) GDI, GO/▇▇▇ Mexico, Radiadores and the Agent, both
in form and substance satisfactory to the Banks and the Agent.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
Title Insurance Company. Lawyers Title Insurance Corporation.
Title Policy. In relation to each Mortgaged Property, an ALTA standard
form title insurance policy issued by the Title Insurance Company (with such
reinsurance or co-insurance as the Agent may require, any such reinsurance to be
with direct access endorsements) in such amount as may be determined by the
Agent insuring the
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priority of the Mortgage of such Mortgaged Property and that any of the
Borrowers or their Subsidiaries holds marketable fee simple or leasehold title
to such Mortgaged Property, subject only to the encumbrances permitted by such
Mortgage and which shall not contain exceptions for mechanics liens, persons in
occupancy or matters which would be shown by a survey (except as may be
permitted by such Mortgage), shall not insure over any matter except to the
extent that any such affirmative insurance is acceptable to the Agent in its
sole discretion, and shall contain such endorsements and affirmative insurance
as the Agent in its discretion may require.
Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time.
Type. As to any Loan, its nature as a Base Rate Loan or a Eurodollar
Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the applicable Letter of Credit Bank in the ordinary course of its business
as a letter of credit issuer and in effect at the time of issuance of such
Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrowers do not reimburse the Agent and the Banks on the date specified in,
and in accordance with, Section 4.2.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Credit
Agreement.
(b) The singular includes the plural and the plural includes
the singular.
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(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "Section" refers to that section
of this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation
of periods of time from a specified date to a later specified date, the
word "from" means "from and including," the words "to" and "until" each
mean "to but excluding," and the word "through" means "to and
including."
(k) This Credit Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the
same or similar matters. All such limitations, tests and measurements
are, however, cumulative and are to be performed in accordance with the
terms thereof.
(l) This Credit Agreement and the other Loan Documents are the
result of negotiation among, and have been reviewed by counsel to,
among others, the Agent and the Borrower and are the product of
discussions and negotiations among all parties. Accordingly, this
Credit Agreement and the other Loan
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Documents are not intended to be construed against the Agent or any of
the Banks merely on account of the Agent's or any Bank's involvement in
the preparation of such documents.
2. THE REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each of the Banks severally agrees to lend to the
Borrowers and the Borrowers may on a joint and several basis borrow, repay, and
reborrow from time to time from the Closing Date up to but not including the
Maturity Date upon notice by the Borrowers to the Agent given in accordance with
Section 2.6, such sums as are requested by the Borrowers up to a maximum
aggregate amount outstanding (after giving effect to all amounts requested) at
any one time equal to such Bank's Commitment minus such Bank's Commitment
Percentage of the sum of the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations, provided that the sum of the outstanding amount of the Loans (after
giving effect to all amounts requested) plus the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations shall not at any time exceed the lesser of (i)
the Total Commitment and (ii) the Borrowing Base. The Loans shall be made pro
rata in accordance with each Bank's Commitment Percentage. Each request for a
Loan hereunder shall constitute a representation and warranty by the Borrowers
that the conditions set forth in Section 11 and Section 12, in the case of the
initial Loans to be made on the Closing Date, and Section 12, in the case of all
other Loans, have been satisfied on the date of such request.
2.2. COMMITMENT FEE. The Borrowers jointly and severally agree to pay
to the Agent for the accounts of the Banks in accordance with their respective
Commitment Percentages a commitment fee calculated at the rate per annum equal
to the Applicable Margin specified for the commitment fees herein multiplied by
the average daily amount during each calendar quarter or portion thereof from
the Closing Date to the Maturity Date by which the Total Commitment minus the
sum of the Maximum Drawing Amount and all Unpaid Reimbursement Obligations
exceeds the outstanding amount of Loans during such calendar quarter. The
commitment fee shall be payable quarterly in arrears on the first day of each
calendar quarter for the immediately preceding calendar quarter commencing on
the first such date following the date hereof, with a final payment on the
Maturity Date or any earlier date on which the Commitment shall terminate.
2.3. REDUCTION OF TOTAL COMMITMENT.
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2.3.1. OPTIONAL REDUCTION OF TOTAL COMMITMENT. The Borrowers
shall have the right at any time and from time to time upon five (5)
Business Days prior written notice to the Agent to permanently reduce
by $1,000,000 or integral multiple of $500,000 or permanently terminate
entirely the Total Commitment, whereupon the Commitments of the Banks
shall be reduced pro rata in accordance with their respective
Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice of the
Borrowers delivered pursuant to this Section 2.3, the Agent will notify
the Banks of the substance thereof. Upon the effective date of any such
reduction or termination, the Borrowers shall pay to the Agent for the
respective accounts of the Banks the full amount of any commitment fee
then accrued on the amount of the reduction. No reduction or
termination of the Commitments may be reinstated.
2.3.2. MANDATORY REDUCTION OF TOTAL COMMITMENT. (a) Unless
terminated earlier pursuant to the provisions of this Section 2.3, on
each of the dates set forth in the table below (each such date being
referred to as a "Reduction Date"), the Total Commitment shall be
automatically reduced by the amount set forth opposite such date in the
column headed "Reduction Amount" set forth below, as such Reduction
Amount may be adjusted and in effect from time to time pursuant to this
Section 2.3 whereupon the Commitments of the Banks shall be reduced pro
rata in accordance with their respective Commitment Percentages:
Reduction Date Reduction Amount
-------------- ----------------
September 30, 1998 $500,000
December 31, 1998 $500,000
March 31, 1999 $500,000
June 30, 1999 $500,000
September 30, 1999 $1,250,000
December 31, 1999 $1,250,000
March 31, 2000 $1,250,000
June 30, 2000 $1,250,000
September 30, 2000 $1,500,000
December 31, 2000 $1,500,000
March 31, 2001 $1,500,000
June 30, 2001 $1,500,000
September 30, 2001 $1,500,000
December 31, 2001 $1,500,000
March 31, 2002 $1,500,000
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June 30, 2002 $1,500,000
September 30, 2002 $1,500,000
December 31, 2002 $1,500,000
March 31, 2003 $1,500,000
June 30, 2003 $1,500,000
On each Reduction Date there shall become absolutely and
unconditionally due and payable, and the Borrowers hereby absolutely
and unconditionally, jointly and severally, promise to pay to the Agent
for the account of the Banks, the amount by which the sum of the
aggregate principal amount of all Loans outstanding plus the Maximum
Drawing Amount of all Letters of Credit and all Unpaid Reimbursement
Obligations exceeds the Total Commitment after giving effect to the
reduction of the Total Commitment as set forth herein. No reduction of
the Total Commitment may be reinstated.
(b) The Total Commitment shall be automatically reduced in an
amount equal to (i) one hundred percent (100%) of Net Cash Proceeds,
and (ii) one hundred percent (100%) of Net Equity Proceeds, upon the
realization of any such proceeds.
2.4. THE NOTES. The Loans shall be evidenced by separate promissory
notes of the Borrowers in substantially the form of Exhibit B hereto (each a
"Note"), dated as of the Closing Date and completed with appropriate insertions.
One Note shall be payable to the order of each Bank in a principal amount equal
to such Bank's Commitment or, if less, the outstanding amount of all Loans made
by such Bank, plus interest accrued thereon, as set forth below. Each of the
Borrowers irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Loan or at the time of receipt of any
payment of principal on such Bank's Note, an appropriate notation on such Bank's
Note Record reflecting the making of such Loan or (as the case may be) the
receipt of such payment. The outstanding amount of the Loans set forth on such
Bank's Note Record shall be prima facie evidence of the principal amount thereof
owing and unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount on such Bank's Note Record shall not limit or
otherwise affect the obligations of the Borrower hereunder or under any Note to
make payments of principal of or interest on any Note when due.
2.5. INTEREST ON LOANS. Except as otherwise provided in Section 5.11,
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(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the Base Rate plus the
Applicable Margin for Base Rate Loans.
(b) Each Eurodollar Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at the Eurodollar Rate
plus the Applicable Margin for Eurodollar Rate Loans.
(c) The Borrowers promise to pay interest on each Loan in
arrears on each Interest Payment Date with respect thereto.
2.6. REQUESTS FOR LOANS.
2.6.1. GENERAL. The Borrowers shall give to the Agent written
notice in the form of Exhibit C hereto (or telephonic notice confirmed
in a writing in the form of Exhibit C hereto) of each Loan requested
hereunder (a "Loan Request") by 11:00 a.m. (Boston time) (i) on or
before the Business Day of the proposed Drawdown Date of any Base Rate
Loan and (ii) three (3) Eurodollar Business Days prior to the proposed
Drawdown Date of any Eurodollar Rate Loan. Each such notice shall
specify (A) the principal amount of the Loan requested, (B) the
proposed Drawdown Date of such Loan, (C) the Interest Period for such
Loan and (D) the Type of such Loan. Promptly upon receipt of any such
notice, the Agent shall notify each of the Banks thereof. Each Loan
Request shall be irrevocable and binding on the Borrowers and shall
obligate the Borrowers to accept the Loan requested from the Banks on
the proposed Drawdown Date. Each Loan Request shall be in a minimum
aggregate amount of $500,000.00 or an integral multiple of $100,000.00
in excess thereof.
2.6.2. SWING LINE. Notwithstanding the notice and minimum
amount requirements set forth in Section 2.6.1 but otherwise in
accordance with the terms and conditions of this Credit Agreement, the
Agent may, in its sole discretion and without conferring with the
Banks, make Loans to the Borrowers (i) by entry of credits to the
Borrowers' account with the Agent designated by the Agent in its
discretion for such purpose (collectively, the "Operating Accounts") to
cover checks or other charges which the Borrowers have drawn or made
against such account or (ii) in an amount as otherwise requested by the
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Borrowers. The Borrowers hereby request and authorize the Agent to make
from time to time such Loans by means of appropriate entries of such
credits sufficient to cover checks and other charges then presented for
payment from the Operating Account or as otherwise so requested. Each of
the Borrowers acknowledges and agrees that the making of such Loans
shall, in each case, be subject in all respects to the provisions of
this Credit Agreement as if they were Loans covered by a Loan Request
including, without limitation, the limitations set forth in Section 2.1
and the requirements that the applicable provisions of Section 11 (in
the case of Loans made on the Closing Date) and Section 12 be satisfied.
All actions taken by the Agent pursuant to the provisions of this
Section 2.6.2 shall be conclusive and binding on the Borrowers and the
Banks absent the Agent's gross negligence or willful misconduct. Loans
made pursuant to this Section 2.6.2 shall be in an aggregate amount not
to exceed $2,500,000, shall be Base Rate Loans until converted in
accordance with the provisions of the Credit Agreement and, prior to a
Settlement, such interest shall be for the account of the Agent.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF LOAN. The Borrowers may
elect from time to time to convert any outstanding Loan to a Loan of
another Type, provided that (i) with respect to any such conversion of a
Loan to a Base Rate Loan, the Borrowers shall give the Agent prior
written notice of such election on or before the Business Day of such
election; (ii) with respect to any such conversion of a Base Rate Loan
to a Eurodollar Rate Loan, the Borrowers shall give the Agent at least
three (3) Eurodollar Business Days prior written notice of such
election; (iii) with respect to any such conversion of a Eurodollar Rate
Loan into a Loan of another Type, such conversion shall only be made on
the last day of the Interest Period with respect thereto and (iv) no
Loan may be converted into a Eurodollar Rate Loan when any Default or
Event of Default has occurred and is continuing. On the date on which
such conversion is being made each Bank shall take such action as is
necessary to transfer its Commitment Percentage of such Loans to its
Domestic Lending Office or its Eurodollar Lending Office, as the case
may be. All or any part of outstanding Loans of any Type may be
converted into a Loan of another Type as provided herein, provided that
any partial conversion shall be in a minimum aggregate principal amount
of $500,000.00 or a whole multiple of $100,000.00 in excess thereof.
Each Conversion Request
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relating to the conversion of a Loan shall be irrevocable by the
Borrowers.
2.7.2. CONTINUATION OF TYPE OF LOAN. Any Loan of any Type may
be continued as a Loan of the same Type upon the expiration of an
Interest Period with respect thereto by compliance by the Borrowers
with the notice provisions contained in Section 2.7.1; provided that no
Eurodollar Rate Loan may be continued as such when any Default or Event
of Default has occurred and is continuing, but shall be automatically
converted to a Base Rate Loan on the last day of the first Interest
Period relating thereto ending during the continuance of any Default or
Event of Default of which officers of the Agent active upon the
Borrowers' account have actual knowledge. In the event that the
Borrowers fail to provide any such notice with respect to the
continuation of any Eurodollar Rate Loan as such, then such Eurodollar
Rate Loan shall be automatically converted to a Base Rate Loan on the
last day of the first Interest Period relating thereto. The Agent shall
notify the Banks promptly when any such automatic conversion
contemplated by this Section 2.7 is scheduled to occur.
2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from
Eurodollar Rate Loans shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate
principal amount of all Eurodollar Rate Loans having the same Interest
Period shall not be less than $500,000.00. The Borrowers may not have
more than three (3) Eurodollar Rate Loans outstanding at any time.
2.8. FUNDS FOR LOAN.
2.8.1. FUNDING PROCEDURES. Not later than 1:00 p.m. (Boston
time) on the proposed Drawdown Date of any Loans, each of the Banks
will make available to the Agent, at the Agent's Head Office, in
immediately available funds, such Bank's Commitment Percentage of the
amount of the requested Loans. Upon receipt from each Bank of such
amount, and upon receipt of the documents required by Section 11
and 12 and the satisfaction of the other conditions set forth therein,
to the extent applicable, the Agent will make available to the
Borrowers the aggregate amount of such Loans made available to the
Agent by the Banks. The failure or refusal of any Bank to make
available to the Agent at the aforesaid time and place on any Drawdown
Date the amount of its Commitment Percentage of the requested
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Loans shall not relieve any other Bank from its several obligation
hereunder to make available to the Agent the amount of such other
Bank's Commitment Percentage of any requested Loans.
2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to
the contrary by any Bank prior to a Drawdown Date, assume that such
Bank has made available to the Agent on such Drawdown Date the amount
of such Bank's Commitment Percentage of the Loans to be made on such
Drawdown Date, and the Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Bank makes available to the Agent such
amount on a date after such Drawdown Date, such Bank shall pay to the
Agent on demand an amount equal to the product of (i) the average,
computed for the period referred to in clause (iii) below, of the
weighted average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period, times
(ii) the amount of such Bank's Commitment Percentage of such Loans,
times (iii) a fraction, the numerator of which is the number of days
that elapse from and including such Drawdown Date to the date on which
the amount of such Bank's Commitment Percentage of such Loans shall
become immediately available to the Agent, and the denominator of which
is 365. A statement of the Agent submitted to such Bank with respect to
any amounts owing under this paragraph shall be prima facie evidence of
the amount due and owing to the Agent by such Bank. If the amount of
such Bank's Commitment Percentage of such Loans is not made available
to the Agent by such Bank within three (3) Business Days following such
Drawdown Date, the Agent shall be entitled to recover such amount from
the Borrowers on demand, with interest thereon at the rate per annum
applicable to the Loans made on such Drawdown Date.
2.9. CHANGE IN BORROWING BASE. The Borrowing Base shall be determined
monthly (or at such other interval as may be specified pursuant to Section
8.4(f)) by the Agent by reference to the Borrowing Base Report, commercial
finance and collateral audit reports, and the appraisals of Eligible Fixed
Assets delivered to the Banks and the Agent pursuant to Section 8.4(h) and other
information obtained by or provided to the Agent. The Agent shall give the
Borrowers written notice of any change in the Borrowing Base determined by the
Agent. Without modifying the advance rate percentages, the Agent reserves the
right to modify the methodology used for calculating the
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Borrowing Base and the Borrowing Base Report to more accurately reflect the
calculations of Eligible Accounts Receivable and Eligible Inventory. In the case
of a reduction in the lending formula with respect to Eligible Accounts
Receivable or Eligible Inventory, such notice shall be effective 5 days after
its receipt by the Borrowers, in the case of any change in the general criteria
for Eligible Accounts Receivable or Eligible Inventory, such notice shall be
effective upon its receipt by the Borrowers, and in the case of a change in the
Borrowing Base resulting from a change in the Determined Value of Eligible Fixed
Assets based upon the results of any such appraisal or reappraisal, such notice
shall be effective 30 days after its receipt by the Borrowers. Prior to the time
that such notice becomes effective the Borrowing Base shall be computed as it
would have been computed in the absence of such notice.
2.10. SETTLEMENTS.
2.10.1. GENERAL. On each Settlement Date, the Agent shall, not
later than 12:00 noon (Boston time), give telephonic or facsimile
notice (i) to the Banks and the Borrowers of the respective outstanding
amount of Loans made by the Agent on behalf of the Banks from the
immediately preceding Settlement Date through the close of business on
the prior day and the amount of any Eurodollar Rate Loans or Base Rate
Loans to be made (following the giving of notice pursuant to
Section 2.6.1(ii)) on such date pursuant to a Loan Request and (ii) to
the Banks of the amount (a "Settlement Amount") that each Bank (a
"Settling Bank") shall pay to effect a Settlement of any Loan. A
statement of the Agent submitted to the Banks and the Borrowers or to
the Banks with respect to any amounts owing under this Section 2.10
shall be prima facie evidence of the amount due and owing. Each
Settling Bank shall, not later than 3:00 p.m. (Boston time) on such
Settlement Date, effect a wire transfer of immediately available funds
to the Agent in the amount of the Settlement Amount for such Settling
Bank. All funds advanced by any Bank as a Settling Bank pursuant to
this Section 2.10 shall for all purposes be treated as a Loan made by
such Settling Bank to the Borrowers and all funds received by any Bank
pursuant to this Section 2.10 shall for all purposes be treated as
repayment of amounts owed with respect to Loans made by such Bank. In
the event that any bankruptcy, reorganization, liquidation,
receivership or similar cases or proceedings in which any of the
Borrowers is a debtor prevents a Settling Bank from making any Loan to
effect a Settlement as contemplated hereby, such Settling Bank will
make such dispositions and arrangements
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with the other Banks with respect to such Loans, either by way of
purchase of participations, distribution, pro tanto assignment of
claims, subrogation or otherwise as shall result in each Bank's share
of the outstanding Loans being equal, as nearly as may be, to such
Bank's Commitment Percentage of the outstanding amount of the Loans.
2.10.2. FAILURE TO MAKE FUNDS AVAILABLE. The Agent may, unless
notified to the contrary by any Settling Bank prior to a Settlement
Date, assume that such Settling Bank has made or will make available to
the Agent on such Settlement Date the amount of such Settling Bank's
Settlement Amount, and the Agent may (but it shall not be required to),
in reliance upon such assumption, make available to the Borrowers a
corresponding amount. If any Settling Bank makes available to the Agent
such amount on a date after such Settlement Date, such Settling Bank
shall pay to the Agent on demand an amount equal to the product of (i)
the average, computed for the period referred to in clause (iii) below,
of the weighted average interest rate paid by the Agent for federal
funds acquired by the Agent during each day included in such period,
times (ii) the amount of such Settlement Amount, times (iii) a
fraction, the numerator of which is the number of days that elapse from
and including such Settlement Date to the date on which the amount of
such Settlement Amount shall become immediately available to the Agent,
and the denominator of which is 360. A statement of the Agent submitted
to such Settling Bank with respect to any amounts owing under this
Section 2.10.2 shall be prima facie evidence of the amount due and
owing to the Agent by such Settling Bank. If such Settling Bank's
Settlement Amount is not made available to the Agent by such Settling
Bank within three (3) Business Days following such Settlement Date, the
Agent shall be entitled to recover such amount from the Borrowers on
demand, with interest thereon at the rate per annum applicable to the
Loans as of such Settlement Date.
2.10.3. NO EFFECT ON OTHER BANKS. The failure or refusal of
any Settling Bank to make available to the Agent at the aforesaid time
and place on any Settlement Date the amount of such Settling Bank's
Settlement Amount shall not (i) relieve any other Settling Bank from
its several obligations hereunder to make available to the Agent the
amount of such other Settling Bank's Settlement Amount or (ii) impose
upon any Bank, other than the Settling Bank so failing or refusing, any
liability with
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respect to such failure or refusal or otherwise increase the Commitment
of such other Bank.
3. REPAYMENT OF THE LOANS.
3.1. MATURITY. The Borrowers jointly and severally promise to pay on
the Maturity Date, and there shall become absolutely due and payable on the
Maturity Date, all of the Loans outstanding on such date, together with any and
all accrued and unpaid interest and fees thereon.
3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS.
(a) If at any time the sum of the outstanding amount of the
Loans, the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations exceeds the lesser of (i) the Total Commitment and (ii) the
Borrowing Base, then the Borrowers shall immediately pay the amount of
such excess to the Agent for the respective accounts of the Banks for
application: first, to any Unpaid Reimbursement Obligations; second, to
the Loans; and third, to provide to the Agent cash collateral for
Reimbursement Obligations as contemplated by Section 4.2(b) and (c).
Each payment of any Unpaid Reimbursement Obligations or prepayment of
Loans shall be allocated among the Banks, in proportion, as nearly as
practicable, to each Reimbursement Obligation or (as the case may be)
the respective unpaid principal amount of each Bank's Note, with
adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.
(b) The Borrowers shall prepay the Loans in the same order set
forth in Section 3.2(a) in an amount equal to (i) one hundred percent
(100%) of Net Cash Proceeds, and (ii) one hundred percent (100%) of Net
Equity Proceeds, upon the realization of any such proceeds.
3.3. OPTIONAL REPAYMENTS OF LOANS.
(a) The Borrowers shall have the right, at the Parent's
election, to repay the outstanding amount of the Loans, as a whole or
in part, at any time without penalty or premium, provided that any full
or partial prepayment of the outstanding amount of any Eurodollar Rate
Loans pursuant to this Section 3.3 may be made only on the last day of
the Interest Period relating thereto. The Borrowers shall give the
Agent, no later than 10:00 a.m., Boston time, on the Business Day of
the proposed
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prepayment irrevocable written notice of any proposed prepayment
pursuant to this Section 3.3 of Base Rate Loans, and three (3)
Eurodollar Business Days notice of any proposed prepayment pursuant to
this Section 3.3 of Eurodollar Rate Loans, in each case specifying the
proposed date of prepayment of Loans and the principal amount to be
prepaid. Each such partial prepayment of the Loans shall be in a
minimum amount of $500,000.00 or an integral multiple of $100,000.00 in
excess thereof, shall be accompanied by the payment of accrued interest
on the principal prepaid to the date of prepayment and shall be
applied, in the absence of instruction by the Borrowers, first to the
principal of Base Rate Loans and then to the principal of Eurodollar
Rate Loans. Each partial prepayment shall be allocated among the Banks,
in proportion, as nearly as practicable, to the respective unpaid
principal amount of each Bank's Note, with adjustments to the extent
practicable to equalize any prior repayments not exactly in proportion.
(b) Notwithstanding the foregoing, subject to the provisions
of Section 2.5, the Agent may, in its sole discretion and without
consulting with the Banks, allow the Borrower to repay the swing line
Loans (i) from collections received by the Borrower, or (ii) in such
other amounts requested by the Borrower.
4. LETTERS OF CREDIT.
4.1. LETTER OF CREDIT COMMITMENTS.
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the
terms and conditions hereof and the execution and delivery by the
Borrowers of a letter of credit application on the applicable Letter of
Credit Bank's customary form (a "Letter of Credit Application"), the
Letter of Credit Banks, on behalf of the Banks and in reliance upon the
agreement of the Banks set forth in Section 4.1.4 and upon the
representations and warranties of the Borrowers contained herein,
agree, in their individual capacities, to issue, extend and renew for
the account of the Borrowers one or more standby or documentary letters
of credit (individually, a "Letter of Credit"), in such form as may be
requested from time to time by the Borrowers and agreed to by the
Letter of Credit Banks; provided, however, that, after giving effect to
such request, (a) the sum of the aggregate Maximum Drawing Amount and
all Unpaid Reimbursement Obligations shall not exceed $25,000,000 at
any one time and (b) the sum of (i) the Maximum
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Drawing Amount on all Letters of Credit, (ii) all Unpaid Reimbursement
Obligations, and (iii) the amount of all Loans outstanding shall not
exceed the lesser of (A) the Total Commitment and (B) the Borrowing
Base. Such request shall be made to the Agent, specifying the proposed
Letter of Credit Bank and the Borrower for whose account the Letter of
Credit is to be issued.
4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the applicable
Letter of Credit Bank. In the event that any provision of any Letter of
Credit Application shall be inconsistent with any provision of this
Credit Agreement, then the provisions of this Credit Agreement shall,
to the extent of any such inconsistency, govern.
4.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (i)
provide for the payment of sight drafts for honor thereunder when
presented in accordance with the terms thereof and when accompanied by
the documents described therein, and (ii) have an expiry date no later
than the date which is thirty (30) days (or, if the Letter of Credit is
confirmed by a confirmer or otherwise provides for one or more
nominated persons, forty-five (45) Business Days) prior to the Maturity
Date other than Letters of Credit listed on Schedule 4.7 hereto. Each
Letter of Credit so issued, extended or renewed shall be subject to the
Uniform Customs.
4.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. Each Bank severally
agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition
precedent or circumstance whatsoever, to the extent of such Bank's
Commitment Percentage, to reimburse each Letter of Credit Bank on
demand for the amount of each draft paid by such Letter of Credit Bank
under each Letter of Credit to the extent that such amount is not
reimbursed by the Borrowers pursuant to Section 4.2 (such agreement for
a Bank being called herein the "Letter of Credit Participation" of such
Bank).
4.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a
Bank shall be treated as the purchase by such Bank of a participating
interest in the Borrowers' Reimbursement Obligation under Section 4.2
in an amount equal to such payment.
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Each Bank shall share in accordance with its participating interest in
any interest which accrues pursuant to Section 4.2.
4.1.6. NOTICE TO AGENT. Prior to the Issuance of any Letter of
Credit by a Letter of Credit Bank (other than the Agent) such Letter of
Credit Bank shall inform the Agent of the details regarding such Letter
of Credit and the Agent shall notify each Bank of the principal amount,
the Letter of Credit number, the expiration date thereof and the amount
of such Bank's participation therein.
4.2. REIMBURSEMENT OBLIGATION OF THE BORROWERS. In order to induce the
Letter of Credit Banks to issue, extend and renew each Letter of Credit and the
Banks to participate therein, the Borrowers hereby jointly and severally agree
to reimburse or pay to the Agent, for the account of the applicable Letter of
Credit Bank or, with respect to each Letter of Credit issued, extended or
renewed by such Letter of Credit Bank hereunder,
(a) except as otherwise expressly provided in Section 4.2(b)
and (c), on each date that any draft presented under such Letter of
Credit is honored by any Letter of Credit Bank, or any Letter of Credit
Bank otherwise makes a payment with respect thereto, (i) the amount
paid by such Letter of Credit Bank under or with respect to such Letter
of Credit, and (ii) the amount of any taxes, fees, charges or other
costs and expenses whatsoever incurred by such Letter of Credit Bank in
connection with any payment made by such Letter of Credit Bank under,
or with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Agent for
the benefit of the Letter of Credit Banks, the Banks and the Agent as
cash collateral for all Reimbursement Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with Section 13, an amount equal to the
then Maximum Drawing Amount on all Letters of Credit, which amount
shall be held by the Agent for the benefit of the Letter of Credit
Banks, Banks and the Agent as cash collateral for all Reimbursement
Obligations.
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Each such payment shall be made to the Agent for the account of the applicable
Letter of Credit Bank at the Agent's Head Office in immediately available funds.
Interest on any and all amounts remaining unpaid by the Borrowers under this
Section 4.2 at any time from the date such amounts become due and payable
(whether as stated in this Section 4.2, by acceleration or otherwise) until
payment in full (whether before or after judgment) shall be payable to the
applicable Letter of Credit Bank on demand at the rate specified in Section 5.11
for overdue principal on the Loans.
4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the
applicable Letter of Credit Bank and/or the Agent shall notify the Agent and the
Banks and the Borrowers of the date and amount of the draft presented or demand
for payment and of the date and time when it expects to pay such draft or honor
such demand for payment. If the Borrowers fail to reimburse any Letter of Credit
Bank as provided in Section 4.2 on or before the date that such draft is paid or
other payment is made by the Letter of Credit Bank, such Letter of Credit Bank
and/or the Agent may at any time thereafter notify the Banks of the amount of
any such Unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston time)
on the Business Day next following the receipt of such notice, each Bank shall
make available to the Agent, for the account of the applicable Letter of Credit
Bank, at its office listed on Schedule 1, in immediately available funds, such
Bank's Commitment Percentage of such Unpaid Reimbursement Obligation, together
with an amount equal to the product of (i) the average, computed for the period
referred to in clause (iii) below, of the weighted average interest rate paid by
such Letter of Credit Bank for federal funds acquired by such Letter of Credit
Bank during each day included in such period, times (ii) the amount equal to
such Bank's Commitment Percentage of such Unpaid Reimbursement Obligation, times
(iii) a fraction, the numerator of which is the number of days that elapse from
and including the date such Letter of Credit Bank paid the draft presented for
honor or otherwise made payment to the date on which such Bank's Commitment
Percentage of such Unpaid Reimbursement obligation shall become immediately
available to such Letter of Credit Bank, and the denominator of which is 360.
The responsibility of any Letter of Credit Bank to the Borrowers and the Banks
shall be only to determine that the documents (including each draft) delivered
under each Letter of Credit in connection with such presentment shall be in
conformity in all material respects with such Letter of Credit.
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4.4. OBLIGATIONS ABSOLUTE. The Borrowers' obligations under this
Section 4 shall be absolute and unconditional under any and all circumstances
and irrespective of the occurrence of any Default or Event of Default or any
condition precedent or other circumstance whatsoever or any setoff, counterclaim
or defense to payment which any of the Borrowers may have or have had against
any Letter of Credit Bank, any Bank or any beneficiary of a Letter of Credit.
Each of the Borrowers further agrees with the Letter of Credit Banks and the
Banks that the Letter of Credit Banks, the Agent and the Banks shall not be
responsible for, and the Borrowers' Reimbursement Obligations under Section 4.2
shall not be affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, fraudulent or forged, or any dispute
between or among any of the Borrowers, the beneficiary of any Letter of Credit
or any financing institution or other party to which any Letter of Credit may be
transferred or any claims or defenses whatsoever of any of the Borrowers against
the beneficiary of any Letter of Credit or any such transferee. The Letter of
Credit Banks, the Agent and the Banks shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit.
Each of the Borrowers agrees that any action taken or omitted by the Letter of
Credit Banks, the Agent or any Bank under or in connection with each Letter of
Credit and the related drafts and documents, if done in good faith, shall be
binding upon the Borrowers and shall not result in any liability on the part of
any Letter of Credit Bank, the Agent or any Bank to the Borrowers.
4.5. RELIANCE BY ISSUER. To the extent not inconsistent with
Section 4.4, any Letter of Credit Bank shall be entitled to rely, and shall be
fully protected in relying upon, any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons and upon advice and statements of legal
counsel, independent accountants and other experts selected by such Letter of
Credit Bank. The Letter of Credit Banks shall be fully justified in failing or
refusing to take any action under this Credit Agreement unless it shall first
have received such advice or concurrence of the Majority Banks as it reasonably
deems appropriate or it shall first be indemnified to its reasonable
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. Each
Letter of Credit Bank shall in all cases be fully
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protected in acting, or in refraining from acting, under this Credit Agreement
in accordance with a request of the Majority Banks, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the Banks
and all future holders of the Notes or of a Letter of Credit Participation.
4.6. LETTER OF CREDIT FEE. The Borrowers shall pay fees to the Agent
(in each case, a "Letter of Credit Fee") with respect to each Letter of Credit
outstanding hereunder, in arrears on the last day of each calendar quarter with
respect to the immediately preceding calendar quarter, a Letter of Credit Fee
calculated at a rate per annum equal to the Applicable Margin for Eurodollar
Rate Loans at the date of issuance, extension or renewal of such Letter of
Credit multiplied by the face amount of each such Letter of Credit, plus an
issuance fee in respect to each Letter of Credit equal to 1/8% on the face
amount of each such Letter of Credit (the "Fronting Fee") and the Agent shall in
turn remit to each Bank its Commitment Percentage of such Letter of Credit Fee
(but not the Fronting Fee which shall be for the account of the issuing Letter
of Credit Bank). In respect of each Letter of Credit, the Borrowers shall also
pay to the applicable Letter of Credit Bank for such Letter of Credit Bank's own
account, at such other time or times as such charges are customarily made by
such Letter of Credit Bank, such Letter of Credit Bank's customary issuance,
amendment, negotiation or document examination and other administrative fees as
in effect from time to time.
4.7. EXISTING LETTERS OF CREDIT. The parties hereto agree that on the
Closing Date the existing letters of credit listed on Schedule 4.7 hereto shall
be deemed Letters of Credit hereunder and the outstanding unpaid face amount of
such existing letters of credit shall be deemed Letters of Credit Outstanding
hereunder and the issuer of any such Letters of Credit shall be deemed a Letter
of Credit Bank hereunder with regard to such Letters of Credit.
5. CERTAIN GENERAL PROVISIONS.
5.1. CLOSING FEE. The Borrowers agree to pay all fees referred to in
the Fee Letter which are payable on the Closing Date in accordance with the
terms of the Fee Letter.
5.2. AGENT AND ARRANGER FEES. The Borrowers agree to pay each of the
Agent and the Arranger the fees described in the Agent Fee Letter in accordance
with the terms of such Agent Fee Letter.
5.3. FUNDS FOR PAYMENTS.
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5.3.1. PAYMENTS TO AGENT. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the other Loan
Documents shall be made to the Agent, for the respective accounts of
the Banks, the Letter of Credit Banks, and/or the Agent, as applicable,
at the Agent's Head Office or at such other location in the Boston,
Massachusetts, area that the Agent may from time to time designate, in
each case in immediately available funds.
5.3.2. NO OFFSET, ETC. All payments made by the Borrowers
hereunder and under any of the other Loan Documents shall be made
without setoff or counterclaim and free and clear of and without
deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions
of any nature now or hereafter imposed or levied by any jurisdiction or
any political subdivision thereof or taxing or other authority therein
unless the Borrowers are compelled by law to make such deduction or
withholding. If any such obligation is imposed upon the Borrowers with
respect to any amount payable by it hereunder or under any of the other
Loan Documents, the Borrowers will pay to the Agent, for the account of
the Banks, the Letter of Credit Bank and/or (as the case may be) the
Agent, on the date on which such amount is due and payable hereunder or
under such other Loan Document, such additional amount in Dollars as
shall be necessary to enable the Banks, the Letter of Credit Bank
and/or the Agent to receive the same net amount which the Banks, the
Letter of Credit Bank and/or the Agent would have received on such due
date had no such obligation been imposed upon the Borrowers. The
Borrowers will deliver promptly to the Agent (which the Agent will
promptly deliver to the affected Bank) certificates or other valid
vouchers for all taxes or other charges deducted from or paid with
respect to payments made by the Borrower hereunder or under such other
Loan Document. This Section 5.3.2 shall survive the termination of the
Commitments and the payment of the Obligations.
5.4. COMPUTATIONS. All computations of interest on the Base Rate Loans,
commitment fees, Letter of Credit Fees or other fees shall, unless otherwise
expressly provided herein, be based on a 365/366 day year and paid for the
actual number of days elapsed. All computation of interest with respect to
Eurodollar Rate Loans shall, unless otherwise expressly provided herein, be
based on a 360 day year and paid for the actual number of days elapsed. Except
as
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otherwise provided in the definition of the term "Interest Period" with respect
to Eurodollar Rate Loans, whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Loans as
reflected on the Note Records from time to time shall be considered prima facie
evidence of such outstanding amount.
5.5. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrowers and the
Banks) to the Borrowers and the Banks. In such event (i) any Loan Request or
Conversion Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (ii) each
Eurodollar Rate Loan will automatically, on the last day of the then current
Interest Period relating thereto, become a Base Rate Loan, and (iii) the
obligations of the Banks to make Eurodollar Rate Loans shall be suspended until
the Agent or the Majority Bank determine that the circumstances giving rise to
such suspension no longer exist, whereupon the Agent or, as the case may be, the
Agent upon the instruction of the Majority Banks, shall so notify the Borrowers
and the Banks.
5.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrowers and the other Banks and thereupon (i) the
commitment of such Bank to make Eurodollar Rate Loans or convert Loans of
another Type to Eurodollar Rate Loans shall forthwith be suspended and (ii) such
Bank's Loans then outstanding as Eurodollar Rate Loans, if any, shall be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such earlier period as
may be required by law. The Borrowers hereby agree promptly to pay the Agent for
the account of such Bank, upon demand by such Bank, any additional amounts
necessary to compensate such Bank for any costs incurred by such Bank in making
any conversion in accordance with this Section 5.6, including any
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interest or fees payable by such Bank to lenders of funds obtained by it in
order to make or maintain its Eurodollar Rate Loans hereunder. In addition, if
any of the events contemplated in the first sentence hereof occurs, the
Borrowers may require, at their expense (including any assignment fees due
pursuant to Section 19.3 hereof), such Bank to assign (in accordance with
Section 19 hereof) all its interests, rights and obligations hereunder
(including all of its Commitment, the Loans at the time owing to it, and the
Notes held by it to a financial institution specified by the Borrowers (a
"Substitute Bank"), provided that (i) such assignment shall not conflict with or
violate any law, rule or regulation or order of any court or other governmental
agency or instrumentality, (ii) the Borrowers shall have received the written
consent of Agent which consent shall not be unreasonably withheld, to such
assignment, (iii) the Borrowers shall have paid to the assigning Bank all monies
then due it under the Loan Documents (including pursuant to this Section 5.6)
with the Substitute Bank purchasing for the full face amount thereof all accrued
but not yet due Obligations owed such assigning Bank.
5.7. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank, any Letter of Credit Bank, or the Agent by any
central bank or other fiscal, monetary or other authority (whether or not having
the force of law), shall:
(a) subject any Bank, any Letter of Credit Bank, or the Agent
to any tax, levy, impost, duty, charge, fee, deduction or withholding
of any nature with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, such Bank's Commitment or the Loans
(other than taxes based upon or measured by the income or profits of
such Bank, such Letter of Credit Bank or the Agent), or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Bank of the
principal of or the interest on any Loans or to any Letter of Credit
Bank or any other amounts payable to any Bank, any Letter of Credit
Bank or the Agent under this Credit Agreement or any of the other Loan
Documents, or
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(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or other
similar requirements (whether or not having the force of law) against
assets held by, or deposits in or for the account of, or loans by, or
letters of credit issued by, or commitments of an office of any Bank or
Letter of Credit Bank, or
(d) impose on any Bank, any Letter of Credit Bank or the Agent any
other conditions or requirements with respect to this Credit Agreement,
the other Loan Documents, any Letters of Credit, the Loans, such Bank's
Commitment, or any class of loans, letters of credit or commitments of
which any of the Loans or such Bank's Commitment forms a part, and the
result of any of the foregoing is
(i) to increase the cost to any Bank or Letter of Credit Bank
of making, funding, issuing, renewing, extending or maintaining any
of the Loans or issuing any Letter of Credit or such Bank's
Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank or the
Agent hereunder on account of such Bank's Commitment, any Letter of
Credit or any of the Loans, or
(iii) to require such Bank, such Letter of Credit Bank or the
Agent to make any payment or to forego any interest or Reimbursement
Obligation or other sum payable hereunder, the amount of which
payment or foregone interest or Reimbursement Obligation or other
sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank, such Letter of Credit
Bank or the Agent from the Borrowers hereunder,
then, and in each such case, the Borrowers will, upon demand made by such Bank,
such Letter of Credit Bank or (as the case may be) the Agent at any time and
from time to time and as often as the occasion therefor may arise, pay to such
Bank, such Letter of Credit Bank or the Agent such additional amounts as will be
sufficient to compensate such Bank, such Letter of Credit Bank or the Agent for
such
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additional cost, reduction, payment or foregone interest or Reimbursement
Obligation or other sum. This Section 5.7 shall survive the termination of the
Commitments and the payment of the Obligations.
5.8. CAPITAL ADEQUACY. If after the date hereof any Bank, any Letter of
Credit Bank or the Agent determines that (i) the adoption of or change in any
law, governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) regarding capital requirements for banks or bank
holding companies or any change in the interpretation or application thereof by
a court or governmental authority with appropriate jurisdiction, or (ii)
compliance by such Bank, such Letter of Credit Bank or the Agent or any
corporation controlling such Bank, such Letter of Credit Bank or the Agent with
any law, governmental rule, regulation, policy, guideline or directive (whether
or not having the force of law) of any such entity regarding capital adequacy,
has the effect of reducing the return on such Bank's, such Letter of Credit
Bank's or the Agent's commitment with respect to any Loans to a level below that
which such Bank, such Letter of Credit Bank or the Agent could have achieved but
for such adoption, change or compliance (taking into consideration such Bank's,
such Letter of Credit Bank's or the Agent's then existing policies with respect
to capital adequacy and assuming full utilization of such entity's capital) by
any amount deemed by such Bank or (as the case may be) the Agent to be material,
then such Bank, such Letter of Credit Bank or the Agent, as applicable, may
notify the Borrowers of such fact. To the extent that the amount of such
reduction in the return on capital is not reflected in the Base Rate, the
Borrowers and such Bank or Letter of Credit Bank, as applicable, shall
thereafter attempt to negotiate in good faith, within thirty (30) days of the
day on which the Borrowers receive such notice, an adjustment payable hereunder
that will adequately compensate such Bank in light of these circumstances. If
the Borrowers and such Bank or Letter of Credit Bank, as applicable, are unable
to agree to such adjustment within thirty (30) days of the date on which the
Borrowers receive such notice, then commencing on the date of such notice (but
not earlier than the effective date of any such increased capital requirement),
the fees payable hereunder shall increase by an amount that will, in such Bank's
or Letter of Credit Bank's reasonable determination, provide adequate
compensation. Each Bank or each Letter of Credit Bank shall allocate such cost
increases among its customers in good faith and on an equitable basis. This
Section 5.8 shall survive the termination of the Commitments and the payment of
the Obligations.
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5.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Sections 5.7 or 5.8 and a brief explanation of such amounts
which are due, submitted by any Bank, any Letter of Credit Bank or the Agent to
the Borrowers, shall be conclusive, absent manifest error, that such amounts are
due and owing. In addition, in the event any Bank, or Letter of Credit Bank
delivers such a certificate pursuant to this Section 5.9, the Borrowers may
require, at their expense, such Bank to assign (in accordance with Section 19
hereof) all its interests, rights and obligations hereunder (including all of
its Commitment, the Loans at the time owing to it, and the Notes held by it) to
a Substitute Bank, provided that (i) such assignment shall not conflict with or
violate any law, rule or regulation or order of any court or other governmental
agency or instrumentality, (ii) the Borrowers shall have received the written
consent of the Agent which consent shall not be unreasonably withheld, to such
assignment, (iii) the Borrowers shall have paid to the assigning Bank all monies
then due it under the Loan Documents (including pursuant to this Section 5.9)
with the Substitute Bank purchasing for the full face amount thereof all accrued
but not yet due Obligations owed such assigning Bank.
5.10. INDEMNITY. The Borrowers jointly and severally agree to indemnify
each Bank, or Letter of Credit Bank and to hold each Bank or Letter of Credit
Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (i)
default by the Borrowers in payment of the principal amount of or any interest
on any Eurodollar Rate Loans as and when due and payable, including any such
loss or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, (ii)
default by the Borrowers in making a borrowing or conversion or continuation
after the Borrowers have given (or is deemed to have given) a Loan Request or a
Conversion Request relating thereto in accordance with Section 2.6 or Section
2.7 or (iii) the making of any payment of a Eurodollar Rate Loan or the making
of any conversion of any such Loan to a Base Rate Loan on a day that is not the
last day of the applicable Interest Period with respect thereto, including
interest or fees payable by such Bank to lenders of funds obtained by it in
order to maintain any such Loans. This Section 5.10 shall survive the
termination of the Commitments and the payment of the Obligations.
5.11. INTEREST AFTER DEFAULT.
5.11.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other overdue
amounts payable hereunder or under any of the
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other Loan Documents shall bear interest compounded monthly and payable on
demand at a rate per annum equal to two percent (2%) above the Base Rate
until such amount shall be paid in full (after as well as before
judgment).
5.11.2. AMOUNTS NOT OVERDUE. During the continuance of a Default or
an Event of Default the principal of the Loans not overdue shall, until
such Default or Event of Default has been cured or remedied or such
Default or Event of Default has been waived by the Majority Banks pursuant
to Section 26, bear interest at a rate per annum equal to two percent (2%)
above the Base Rate.
5.12. JOINT AND SEVERAL LIABILITY OF THE BORROWER.
(a) Each of the Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the
financial accommodations to be provided by the Banks and the Agent under
this Credit Agreement, for the mutual benefit, directly and indirectly, of
each of the Borrowers and in consideration of the undertakings of each
other Borrower to accept joint and several liability for the Obligations.
(b) Each of the Borrowers, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with
respect to the payment and performance of all of the Obligations
(including, without limitation, any Obligations arising under this
Section 5.12), it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each of the
Borrowers without preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall fail to
make any payment with respect to any of the Obligations as and when due or
to perform any of the Obligations in accordance with the terms thereof,
then in each such event the other Borrowers will make such payment with
respect to, or perform, such Obligation.
(d) The Obligations of each of the Borrowers under the provisions of
this Section 5.12 constitute the full recourse Obligations of each of the
Borrowers enforceable against each such corporation to the full extent of
its properties and assets, irrespective of the validity, regularity or
enforceability of this
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Credit Agreement or the other Loan Documents or any other circumstance
whatsoever as to any other Borrower.
(e) Except as otherwise expressly provided herein, each Borrower
hereby waives promptness, diligence, presentment, demand, protest, notice
of acceptance of its joint and several liability, notice of any and all
advances of the Loans made or Letters of Credit issued under this Credit
Agreement and the Notes, notice of occurrence of any Default or Event of
Default (except to the extent notice is expressly required to be given
pursuant to the terms of this Credit Agreement or any of the other Loan
Documents), or of any demand for any payment under this Credit Agreement,
notice of any action at any time taken or omitted by the Agent, Letter of
Credit Banks or the Banks under or in respect of any of the Obligations
hereunder, any requirement of diligence and, generally, all demands,
notices and other formalities of every kind in connection with this Credit
Agreement and the other Loan Documents. Each Borrower hereby waives all
defenses which may be available by virtue of any valuation, stay,
moratorium law or other similar law now or hereafter in effect, any right
to require the marshaling of assets of the Borrowers and any other entity
or Person primarily or secondarily liable with respect to any of the
Obligations, and all suretyship defenses generally. Each Borrower hereby
assents to, and waives notice of, any extension or postponement of the
time for the payment, or place or manner for payment, compromise,
refinancing, consolidation or renewals of any of the Obligations
hereunder, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by the Agent, Letter of Credit
Banks and the Banks at any time or times in respect of any default by any
Borrower in the performance or satisfaction of any term, covenant,
condition or provision of this Credit Agreement and the other Loan
Documents, any and all other indulgences whatsoever by the Agent, Letter
of Credit Banks and the Banks in respect of any of the Obligations
hereunder, and the taking, addition, substitution or release, in whole or
in part, at any time or times, of any security for any of such Obligations
or the addition, substitution or release, in whole or in part, of any
Borrower or any other entity or Person primarily or secondarily liable for
any Obligation. Such Borrower further agrees that its Obligations shall
not be released or discharged, in whole or in part, or otherwise affected
by the adequacy of any rights which the Agent, any Letter of Credit Bank
or any Bank may have against any collateral security or other means of
obtaining
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repayment of any of the Obligations, the impairment of any collateral
security securing the Obligations, including, without limitation, the
failure to protect or preserve any rights which the Agent, any Letter of
Credit Bank or any Bank may have in such collateral security or the
substitution, exchange, surrender, release, loss or destruction of any
such collateral security, any other act or omission which might in any
manner or to any extent vary the risk of such Borrower, or otherwise
operate as a release or discharge of such Borrower, all of which may be
done without notice to such Borrower; provided, however, that the
foregoing shall in no way be deemed to create commercially unreasonable
standards as to the Agent's duties as secured party under the Loan
Documents (as such rights and duties are set forth therein). If for any
reason any of the other Borrowers has no legal existence or is under no
legal obligation to discharge any of the Obligations, or if any of the
Obligations have become irrecoverable from any of the other Borrowers by
reason of such other Borrower's insolvency, bankruptcy or reorganization
or by other operation of law or for any reason, this Credit Agreement and
the other Loan Documents to which it is a party shall nevertheless be
binding on such Borrower to the same extent as if such Borrower at all
times had been the sole obligor on such Obligations. Without limiting the
generality of the foregoing, each Borrower assents to any other action or
delay in acting or failure to act on the part of the Agent, the Letter of
Credit Banks and the Banks, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to
comply fully with applicable laws or regulations thereunder which might,
but for the provisions of this Section 5.12, afford grounds for
terminating, discharging or relieving such Borrower, in whole or in part,
from any of its obligations under this Section 5.12, it being the
intention of each Borrower that, so long as any of the Obligations
hereunder remain unsatisfied, the obligations of such Borrower under this
Section 5.12 shall not be discharged except by performance and then only
to the extent of such performance. The Obligations of each Borrower under
this Section 5.12 shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation, reconstruction or
similar proceeding with respect to any reconstruction or similar
proceeding with respect to any Borrower, or any of the Banks. The joint
and several liability of the Borrowers hereunder shall continue in full
force and effect notwithstanding any absorption, merger, amalgamation or
any other change whatsoever in the name, ownership, membership,
constitution or place of formation of any Borrower, any Letter of
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Credit Bank or any Bank. Each of the Borrowers acknowledges and confirms
that it has itself established its own adequate means of obtaining from
each of the other Borrowers on a continuing basis all information desired
by such Borrower concerning the financial condition of each of the other
Borrowers and that each such Borrower will look to each of the other
Borrowers and not to the Agent, any Letter of Credit Bank or any Bank in
order for such Borrower to keep adequately informed of changes in each of
the other Borrowers' respective financial conditions.
(f) The provisions of this Section 5.12 are made for the benefit of
the Banks, the Letter of Credit Banks and the Agent and their respective
successors and assigns, and may be enforced by it or them from time to
time against any or all of the Borrowers as often as occasion therefor may
arise and without requirement on the part of the Banks, the Letter of
Credit Banks or the Agent or such successor or assign first to ▇▇▇▇▇▇▇▇
any of its or their claims or to exercise any of its or their rights
against any of the other Borrowers or to exhaust any remedies available to
it or them against any of the other Borrowers or to resort to any other
source or means of obtaining payment of any of the Obligations hereunder
or to elect any other remedy. The provisions of this Section 5.12 shall
remain in effect until all of the Obligations shall have been paid in full
or otherwise fully satisfied. If at any time, any payment, or any part
thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by any Lender or the Agent upon the
insolvency, bankruptcy or reorganization of any of the Borrowers, or
otherwise, the provisions of this Section 5.12 will forthwith be
reinstated in effect, as though such payment had not been made.
(g) Each of the Borrowers hereby agrees that it will not enforce any
of its rights of reimbursement, contribution, subrogation or the like
against the other Borrowers with respect to any liability incurred by it
hereunder or under any of the other Loan Documents, any payments made by
it to any of the Banks, the Letter of Credit Banks or the Agent with
respect to any of the Obligations or any collateral security therefor
until such time as all of the Obligations have been irrevocably paid in
full in cash and the Commitment of each Bank has terminated. Any claim
which any Borrower may have against any other Borrower with respect to any
payments to the Banks, the Letter of Credit Banks or the Agent hereunder
or under any other Loan
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Documents are hereby expressly made subordinate and junior in right of
payment, without limitation as to any increases in the Obligations arising
hereunder or thereunder, to the prior payment in full of the Obligations
and, in the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization or other similar proceeding under the laws of
any jurisdiction relating to any Borrower, its debts or its assets,
whether voluntary or involuntary, all such Obligations shall be paid in
full before any payment or distribution of any character, whether in cash,
securities or other property, shall be made to any other Borrower
therefor.
(h) Each of the Borrowers hereby agrees that the payment of any
amounts due with respect to the indebtedness owing by any Borrower to any
other Borrower is hereby subordinated to the prior payment in full in cash
of the Obligations. Each Borrower hereby agrees that after the occurrence
and during the continuance of any Default or Event of Default, such
Borrower will not demand, ▇▇▇ for or otherwise attempt to collect any
indebtedness of any other Borrower owing to such Borrower until the
Obligations shall have been paid in full in cash and the Commitment of
each Bank has terminated; provided that the Borrowers (other than the
Parent) may make payments to the Parent in respect of (i) taxes payable by
the Borrowers, and (ii) operating expenses of the Parent incurred for the
benefit of its Subsidiaries in the ordinary course of business. If such
Borrower shall collect, enforce or receive any amounts in respect of such
indebtedness, such amounts shall be collected, enforced and received by
such Borrower as trustee for the Agent and be paid over to the Agent for
the pro rata accounts of the Banks to be applied to repay the Obligations.
6. COLLATERAL SECURITY.
6.1. SECURITY OF BORROWERS. The Obligations shall be secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the Collateral of the
Borrowers, whether now owned or hereafter acquired, pursuant to the terms of the
Security Documents to which each of the Borrowers is a party.
6.2. RELEASE OF SECURITY. At the request of the Borrowers, the Agent and
the Banks will release their security interests in the Collateral within thirty
(30) days after the Agent and the Banks shall have received from the Borrowers
evidence reasonably satisfactory to
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the Agent and the Banks in all respects (the "Collateral Release Date") of the
occurrence of either of the following events:
(a) the Borrowers shall have achieved a senior debt rating of either
BBB-, if rated by Standard & Poor's Rating Group, a Division of
▇▇▇▇▇▇-▇▇▇▇, Inc., or Baa3, if rated by ▇▇▇▇▇'▇ Investors Services; or
(b) commencing with the two quarters commencing December 31, 1998
and March 31, 1999, as of two consecutive fiscal quarter ending dates, the
Borrowers, on a consolidated basis, shall have achieved both a (i)
Leverage Ratio of less than 3.00:1.00 for the four fiscal quarters ending
on each of such two periods, and (ii) a minimum Consolidated EBITDA of
$17.5 million for the four fiscal quarters ending on each of such two
periods.
7. REPRESENTATIONS AND WARRANTIES.
Each of the Borrowers represents and warrants to the Banks and the Agent
as follows:
7.1. CORPORATE AUTHORITY.
7.1.1. INCORPORATION; GOOD STANDING. Each of the Borrowers and their
Subsidiaries (i) is a corporation or general partnership, as the case may
be, duly organized, validly existing and in good standing under the laws
of its state of incorporation, (ii) has all requisite corporate,
partnership or other power to own its property and conduct its business as
now conducted and as presently contemplated, and (iii) is in good standing
as a foreign Person and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a failure
to be so qualified would not have a materially adverse effect on the
business, assets or financial condition of the Borrowers and their
Subsidiaries taken as a whole.
7.1.2. AUTHORIZATION. The execution, delivery and performance of
this Credit Agreement and the other Loan Documents to which any of the
Borrowers or any of their Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (i) are within the corporate
or other organizational authority of such Person, (ii) have been duly
authorized by all necessary corporate, partnership or other organizational
proceedings (including, without limitation,
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stockholder and partner consents), (iii) do not conflict with or result in
any breach or contravention of any provision of law, statute, rule or
regulation to which the Borrowers or any of their Subsidiaries is subject
or any judgment, order, writ, injunction, license or permit applicable to
the Borrowers or any of their Subsidiaries, (iv) do not conflict with any
provision of the corporate charter, bylaws, agreement or certificate of
limited partnership or other constituent documents of any of the Borrowers
or their Subsidiaries, and (v) do not conflict with any agreement or other
instrument binding upon, the Borrowers or any of their Subsidiaries.
7.1.3. ENFORCEABILITY. The execution and delivery of this Credit
Agreement and the other Loan Documents to which the Borrowers or any of
their Subsidiaries is or is to become a party will result in valid and
legally binding obligations of such Person enforceable against it in
accordance with the respective terms and provisions hereof and thereof,
except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
7.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
any of the Borrowers and any of their Subsidiaries of this Credit Agreement and
the other Loan Documents to which the Borrowers or any of their Subsidiaries is
or is to become a party and the transactions contemplated hereby and thereby do
not require the approval or consent of, or filing with, any governmental agency
or authority other than those already obtained.
7.3. TITLE TO PROPERTIES; LEASES. Except as indicated on Schedule 7.3
hereto, the Borrowers and their Subsidiaries own all of the assets reflected in
the consolidated balance sheet of the Borrowers and their Subsidiaries as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
7.4. FINANCIAL STATEMENTS AND PROJECTIONS.
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7.4.1. FISCAL YEAR. The Borrowers and their Subsidiaries have a
fiscal year which is the twelve months ending on December 31 of each
calendar year.
7.4.2. FINANCIAL STATEMENTS.
(a) There has been furnished to each of the Banks a
consolidated balance sheet of the Borrowers and their Subsidiaries
as at the Balance Sheet Date, and a consolidated statement of income
of the Borrowers and their Subsidiaries for the fiscal year then
ended, certified by Coopers & ▇▇▇▇▇▇▇. Such balance sheet and
statement of income have been prepared in accordance with generally
accepted accounting principles and fairly present the financial
condition of the Borrowers as at the close of business on the date
thereof and the results of operations for the fiscal year then
ended. There are no contingent liabilities of any of the Borrowers
or any of their Subsidiaries as of such date involving material
amounts, known to the officers of any of the Borrowers, which were
not disclosed in such balance sheet and the notes related thereto.
(b) There has been furnished to each of the Banks a
consolidated balance sheet of the Borrowers and their Subsidiaries
for the January 1, 1998 to March 31, 1998 fiscal quarter, and a
consolidated statement of income of the Borrowers and their
Subsidiaries for such fiscal quarter. Such balance sheet and
statement of income have been prepared in accordance with generally
accepted accounting principles and fairly present the financial
condition of the Borrowers as at the close of business on the date
thereof and the results of operations for the fiscal year then
ended. There are no contingent liabilities of any of the Borrowers
or any of their Subsidiaries as of such date involving material
amounts, known to the officers of any of the Borrowers, which were
not disclosed in such balance sheet and the notes related thereto.
7.4.3. PROJECTIONS. The projections of the annual operating budgets
of the Borrowers and their Subsidiaries on a consolidated basis, balance
sheets and cash flow statements for the 1998 to 2002 fiscal years, copies
of which have been delivered to each Bank, disclose all assumptions made
with respect to general business, financial and market conditions
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used in formulating such projections. To the knowledge of any of the
Borrowers or any of their Subsidiaries, no facts exist that (individually
or in the aggregate) would result in any material change in any of such
projections. The projections are based upon reasonable estimates and
assumptions, have been prepared on the basis of the assumptions stated
therein and reflect the reasonable estimates of the Borrowers and their
Subsidiaries of the results of operations and other information projected
therein.
7.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
any of the Borrowers and their Subsidiaries as shown on or reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date, or the consolidated statement of income for the fiscal year
then ended, other than changes in the ordinary course of business that have not
had any materially adverse effect either individually or in the aggregate on the
business or financial condition of the Borrowers or any of their Subsidiaries.
Since the Balance Sheet Date, the Borrowers have not made any Distribution.
7.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Borrowers and their
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, necessary
or adequate for the conduct of its business substantially as now conducted
without known conflict with any rights of others.
7.7. LITIGATION. Except as set forth in Schedule 7.7 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or threatened
against any of the Borrowers or any of their Subsidiaries before any court,
tribunal or administrative agency or board that, if adversely determined, might,
either in any case or in the aggregate, materially adversely affect the
properties, assets, financial condition or business of any of the Borrowers and
their Subsidiaries or materially impair the right of any of the Borrowers and
their Subsidiaries, considered as a whole, to carry on business substantially as
now conducted by them, or result in any substantial liability not adequately
covered by insurance, or for which adequate reserves are not maintained on the
consolidated balance sheet of the Borrowers and their Subsidiaries, or which
question the validity of this Credit Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.
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7.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither any of the Borrowers
nor any of their Subsidiaries is subject to any charter, corporate or other
legal restriction, or any judgment, decree, order, rule or regulation that has
or is expected in the future to have a materially adverse effect on the
business, assets or financial condition of the Borrower or any of its
Subsidiaries. Neither the Borrower nor any of its Subsidiaries is a party to any
contract or agreement that has or is expected, in the judgment of the Borrowers'
officers, to have any materially adverse effect on the business of the Borrowers
or any of their Subsidiaries taken as a whole.
7.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither any of the
Borrowers nor any of their Subsidiaries is in violation of any provision of its
charter or organizational documents, bylaws, or any agreement or instrument to
which it may be subject or by which it or any of its properties may be bound or
any decree, order, judgment, statute, license, rule or regulation, in any of the
foregoing cases in a manner that could result in the imposition of substantial
penalties or materially and adversely affect the financial condition, properties
or business of the Borrowers or any of their Subsidiaries taken as a whole.
7.10. TAX STATUS. The Borrowers and their Subsidiaries (i) have made or
filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which any of them is subject, (ii)
have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (iii) have set
aside on their books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of any of
the Borrowers know of no basis for any such claim. The Borrowing Base Report
most recently delivered to the Agent sets forth the amount of reserves
established by the Borrowers and each of their Subsidiaries to cover the
Borrowers' or Subsidiaries' sales or use tax obligations in each jurisdiction
where any of the Borrowers or any of their Subsidiaries is required to pay such
taxes. Such reserves are adequate for the payment of all of such obligations.
7.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred and
is continuing.
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7.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither any of the
Borrowers nor any of their Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935; nor is
it an "investment company", or an "affiliated company" or a "principal
underwriter" of an "investment company", as such terms are defined in the
Investment Company Act of 1940.
7.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of any of the Borrowers or any of their Subsidiaries
or any rights relating thereto.
7.14. PERFECTION OF SECURITY INTEREST. At all times prior to the
Collateral Release Date, filings, assignments, pledges and deposits of documents
or instruments have been made and all other actions have been taken that are
necessary or advisable, under applicable law, to establish and perfect the
Agent's security interest in any Collateral (other than Real Estate not subject
to Mortgages). Such Collateral and the Agent's rights with respect to such
Collateral are not subject to any setoff, claims, withholdings or other
defenses. The Borrowers are the owners of such Collateral free from any lien,
security interest, encumbrance and any other claim or demand, except for
Permitted Liens.
7.15. CERTAIN TRANSACTIONS. Except for arm's length transactions pursuant
to which the Borrowers or any of their Subsidiaries makes payments in the
ordinary course of business upon terms no less favorable than such Borrower or
such Subsidiary could obtain from third parties, none of the officers,
directors, or employees of any of the Borrowers or any of its Subsidiaries is
presently a party to any transaction with any of the Borrowers or any of their
Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of any of the Borrowers, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
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7.16. EMPLOYEE BENEFIT PLANS.
7.16.1. IN GENERAL. Each Employee Benefit Plan and each Guaranteed
Pension Plan has been maintained and operated in compliance in all
material respects with the provisions of ERISA and, to the extent
applicable, the Code, including but not limited to the provisions
thereunder respecting prohibited transactions and the bonding of
fiduciaries and other persons handling plan funds as required by
Section 412 of ERISA. The Borrowers have heretofore delivered to the Agent
the most recently completed annual report, Form 5500, with all required
attachments, and actuarial statement required to be submitted under
Section 103(d) of ERISA, with respect to each Guaranteed Pension Plan.
7.16.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit Plan,
which is an employee welfare benefit plan within the meaning of
Section 3(1) or Section 3(2)(B) of ERISA, provides benefit coverage
subsequent to termination of employment, except as required by Title I,
Part 6 of ERISA or the applicable state insurance laws. The Borrowers may
terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of
the Borrowers without liability to any Person other than for claims
arising prior to termination.
7.16.3. GUARANTEED PENSION PLANS. Each contribution required to be
made to a Guaranteed Pension Plan, whether required to be made to avoid
the incurrence of an accumulated funding deficiency, the notice or lien
provisions of Section 302(f) of ERISA, or otherwise, has been timely made.
No waiver of an accumulated funding deficiency or extension of
amortization periods has been received with respect to any Guaranteed
Pension Plan, and neither any of the Borrowers nor any ERISA Affiliate is
obligated to or has posted security in connection with an amendment to a
Guaranteed Pension Plan pursuant to Section 307 of ERISA or
Section 401(a)(29) of the Code. No liability to the PBGC (other than
required insurance premiums, all of which have been paid) has been
incurred by any Borrower or any ERISA Affiliate with respect to any
Guaranteed Pension Plan and there has not been any ERISA Reportable Event
(other than an ERISA Reportable Event as to which the requirement of 30
days notice has been waived), or any other event or condition which
presents a material risk of termination of any Guaranteed Pension Plan by
the PBGC. Based on the latest valuation of each
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Guaranteed Pension Plan (which in each case occurred within twelve months
of the date of this representation), and on the actuarial methods and
assumptions employed for that valuation, the aggregate benefit liabilities
of all such Guaranteed Pension Plans within the meaning of Section 4001 of
ERISA did not exceed the aggregate value of the assets of all such
Guaranteed Pension Plans, disregarding for this purpose the benefit
liabilities and assets of any Guaranteed Pension Plan with assets in
excess of benefit liabilities, by more than $4,000,000.
7.16.4. MULTIEMPLOYER PLANS. Neither any Borrower nor any ERISA
Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under Section 4201 of ERISA or as
a result of a sale of assets described in Section 4204 of ERISA. Neither
any Borrower nor any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent under and within the
meaning of Section 4241 or Section 4245 of ERISA or is at risk of entering
reorganization or becoming insolvent, or that any Multiemployer Plan
intends to terminate or has been terminated under Section 4041A of ERISA.
7.17. REGULATIONS U AND X. No portion of any Loan is to be used, and no
portion of any Letter of Credit is to be obtained, for the purpose of purchasing
or carrying any "margin security" or "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.
7.18. ENVIRONMENTAL COMPLIANCE. Each of the Borrowers represents that:
(a) none of the Borrowers, their Subsidiaries or any operator of the
Real Estate or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("▇▇▇▇"), the Federal Clean Water Act, the
Federal Clean Air Act, the Toxic Substances Control Act, or any state or
local statute, regulation, ordinance, order or decree relating to health,
safety or the environment (hereinafter "Environmental Laws"), which
violation
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would have a material adverse effect on the environment or the business,
assets or financial condition of the Borrowers or any of their
Subsidiaries;
(b) neither any of the Borrowers nor any of their Subsidiaries has
received notice from any third party including, without limitation, any
federal, state or local governmental authority, (i) that any one of them
has been identified by the United States Environmental Protection Agency
("EPA") as a potentially responsible party under CERCLA with respect to a
site listed on the National Priorities List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇
▇; (ii) that any hazardous waste, as defined by 42 U.S.C. Section 6903(5),
any hazardous substances as defined by 42 U.S.C. Section 9601(14), any
pollutant or contaminant as defined by 42 U.S.C. Section 9601(33) and any
toxic substances, oil or hazardous materials or other chemicals or
substances regulated by any Environmental Laws ("Hazardous Substances")
which any one of them has generated, transported or disposed of has been
found at any site at which a federal, state or local agency or other third
party has conducted or has ordered that any of the Borrowers or any of
their Subsidiaries conduct a remedial investigation, removal or other
response action pursuant to any Environmental Law; or (iii) that it is or
shall be a named party to any claim, action, cause of action, complaint,
or legal or administrative proceeding (in each case, contingent or
otherwise) arising out of any third party's incurrence of costs, expenses,
losses or damages of any kind whatsoever in connection with the release of
Hazardous Substances;
(c) except as set forth on Schedule 7.18 attached hereto: (i) no
portion of the Real Estate has been used for the handling, processing,
storage or disposal of Hazardous Substances except in accordance with
applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on any
portion of the Real Estate; (ii) in the course of any activities conducted
by any of the Borrowers, their Subsidiaries or operators of its
properties, no Hazardous Substances have been generated or are being used
on the Real Estate except in accordance with applicable Environmental
Laws; (iii) there have been no releases (i.e. any past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping) or threatened
releases of Hazardous Substances on, upon, into or from the properties of
any of the Borrowers or their Subsidiaries, which releases would have a
material adverse
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effect on the value of any of the Real Estate or adjacent properties or
the environment; (iv) to the best of the Borrowers' knowledge, there have
been no releases on, upon, from or into any real property in the vicinity
of any of the Real Estate which, through soil or groundwater
contamination, may have come to be located on, and which would have a
material adverse effect on the value of, the Real Estate; and (v) in
addition, any Hazardous Substances that have been generated on any of the
Real Estate have been transported offsite only by carriers having an
identification number issued by the EPA, treated or disposed of only by
treatment or disposal facilities maintaining valid permits as required
under applicable Environmental Laws, which transporters and facilities
have been and are, to the best of the Borrowers' knowledge, operating in
compliance with such permits and applicable Environmental Laws; and
(d) None of the Borrowers and their Subsidiaries, any Mortgaged
Property or any of the other Real Estate is subject to any applicable
environmental law requiring the performance of Hazardous Substances site
assessments, or the removal or remediation of Hazardous Substances, or the
giving of notice to any governmental agency or the recording or delivery
to other Persons of an environmental disclosure document or statement by
virtue of the transactions set forth herein and contemplated hereby, or as
a condition to the recording of any Mortgage or to the effectiveness of
any other transactions contemplated hereby.
7.19. SUBSIDIARIES, ETC. Schedule 7.19 lists all Subsidiaries of each
Borrower. Except as set forth on Schedule 7.19 hereto, none of the Borrowers nor
their Subsidiaries is engaged in any joint venture or partnership with any other
Person.
7.20. BANK ACCOUNTS. Schedule 7.20 sets forth the account numbers and
location of all Local Accounts and other bank accounts of the Borrowers and
their Subsidiaries.
7.21. YEAR 2000 PROBLEM. The Borrowers and their Subsidiaries have
reviewed the areas within their businesses and operations which could be
adversely affected by, and have developed or are developing a program to address
on a timely basis, the "Year 2000 Problem" (i.e. the risk that computer
applications used by any of the Borrowers or any of their Subsidiaries may be
unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999). Based upon such
review, the Borrowers reasonably believe that the "Year 2000 Problem"
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will not have any materially adverse effect on the business or financial
condition of the Borrowers or any of their Subsidiaries.
7.22. DISCLOSURE. None of this Credit Agreement or any of the other Loan
Documents contains any untrue statement of a material fact or omits to state a
material fact (known to any of the Borrowers or any of their Subsidiaries in the
case of any document or information not furnished by any of the Borrowers or any
of their Subsidiaries) necessary in order to make the statements herein or
therein not misleading. There is no fact known to the Borrowers or any of their
Subsidiaries which materially adversely affects, or which is reasonably likely
in the future to materially adversely affect, the business, assets, financial
condition or prospects of any of the Borrowers or any of their Subsidiaries,
exclusive of effects resulting from changes in general economic conditions,
legal standards or regulatory conditions.
7.23. USE OF PROCEEDS. The proceeds of the Loans shall be used to
refinance existing Indebtedness and for working capital and general corporate
purposes. The Borrowers will obtain Letters of Credit solely for general
corporate purposes.
7.24. INELIGIBLE SECURITIES. No portion of the proceeds of any Loans is to
be used, and no portion of any Letter of Credit is to be obtained, for the
purpose of (a) knowingly purchasing, or providing credit support for the
purchase of, Ineligible Securities from a Section 20 Subsidiary during any
period in which such Section 20 Subsidiary makes a market in such Ineligible
Securities, (b) knowingly purchasing, or providing credit support for the
purchase of, during the underwriting or placement period, any Ineligible
Securities being underwritten or privately placed by a Section 20 Subsidiary, or
(c) making, or providing credit support for the making of, payments of principal
or interest on Ineligible Securities underwritten or privately placed by a
Section 20 Subsidiary and issued by or for the benefit of any of the Borrowers
or any Subsidiary or other Affiliate of any of the Borrowers.
8. AFFIRMATIVE COVENANTS OF THE BORROWER.
Each of the Borrowers covenants and agrees that, so long as any Loan,
Unpaid Reimbursement Obligation, Letter of Credit, Note or other Obligation is
outstanding or any Bank has any obligation to make any Loans or the Letter of
Credit Banks have any obligation to issue, extend or renew any Letters of
Credit:
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8.1. PUNCTUAL PAYMENT. The Borrowers will duly and punctually pay or cause
to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the commitment fees, the Agent's fee and
all other amounts provided for in this Credit Agreement and the other Loan
Documents to which any of the Borrowers or any of its Subsidiaries is a party,
all in accordance with the terms of this Credit Agreement and such other Loan
Documents.
8.2. MAINTENANCE OF OFFICE. Each of the Borrowers will maintain its chief
executive office in ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such
other place in the United States of America as such Borrower shall designate
upon written notice to the Agent, where notices, presentations and demands to or
upon such Borrower in respect of the Loan Documents to which the Borrower is a
party may be given or made.
8.3. RECORDS AND ACCOUNTS. Each of the Borrowers will (i) keep, and cause
each of its Subsidiaries to keep, true and accurate records and books of account
in which full, true and correct entries will be made in accordance with
generally accepted accounting principles, (ii) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties and the properties of its
Subsidiaries, contingencies, and other reserves, and (iii) at all times engage
Coopers & ▇▇▇▇▇▇▇ or other independent certified public accountants reasonably
satisfactory to the Agent as the independent certified public accountants of the
Borrowers and their Subsidiaries and will not permit more than thirty (30) days
to elapse between the cessation of such firm's (or any successor firm's)
engagement as the independent certified public accountants of the Borrowers and
their Subsidiaries and the appointment in such capacity of a successor firm as
shall be reasonably satisfactory to the Agent.
8.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrowers
will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than one
hundred (100) days after the end of each fiscal year of the Borrowers, the
consolidated balance sheet of the Borrowers and their Subsidiaries and the
consolidating (by GDI, Crown, G&O and corporate entity) balance sheet of
the Borrowers and their Subsidiaries, each as at the end of such year, and
the related consolidated statement of income and consolidated statement of
cash flow and consolidating (by GDI, Crown, G&O and corporate
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entity) statement of income and consolidating (by GDI, Crown, G&O and
corporate entity) statement of cash flow for such year, and all such
consolidated statements setting forth in comparative form the figures for
the previous fiscal year and all such consolidated and consolidating
statements to be in reasonable detail, prepared in accordance with
generally accepted accounting principles and, in the case of the
consolidated statements, certified without qualification by Coopers &
▇▇▇▇▇▇▇ or by other independent certified public accountants reasonably
satisfactory to the Agent, together with a written statement from such
accountants to the effect that they have read the relevant sections of
this Credit Agreement, and that, in making the examination necessary to
said certification, they have obtained no knowledge of any Default or
Event of Default, or, if such accountants shall have obtained knowledge of
any then existing Default or Event of Default they shall disclose in such
statement any such Default or Event of Default; provided that such
accountants shall not be liable to the Banks for failure to obtain
knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
fifty-five (55) days after the end of each of the fiscal quarters of the
Borrowers, copies of the unaudited consolidated balance sheet of the
Borrowers and their Subsidiaries and the unaudited consolidating (by GDI,
Crown, G&O and corporate entity) balance sheet of the Borrowers and their
Subsidiaries, each as at the end of such quarter, and the related
consolidated statement of income and consolidated statement of cash flow
and consolidating (by GDI, Crown, G&O and corporate entity) statement of
income and consolidating (by GDI, Crown, G&O and corporate entity)
statement of cash flow for the portion of the Borrowers' (by division and
corporate entity); fiscal year then elapsed, all in reasonable detail and
prepared in accordance with generally accepted accounting principles,
together with a certification by the principal financial or accounting
officer of each of the Borrowers that the information contained in such
financial statements fairly presents the financial position of the
Borrowers and their Subsidiaries on the date thereof (subject to year-end
adjustments);
(c) as soon as practicable, but in any event within thirty (30) days
after the end of each month in each fiscal year of the Borrowers,
unaudited monthly consolidated financial statements of the Borrowers and
their Subsidiaries for such month and
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unaudited monthly consolidating (by GDI, Crown, G&O and corporate entity)
financial statements of the Borrowers and their Subsidiaries for such
month, each prepared in accordance with generally accepted accounting
principles, together with a certification by the principal financial or
accounting officer of each of the Borrowers that the information contained
in such financial statements fairly presents the financial condition of
the Borrowers and their Subsidiaries on the date thereof (subject to
year-end adjustments);
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of each of the Borrowers in
substantially the form of Exhibit D hereto (the "Compliance Certificate")
and setting forth in reasonable detail computations evidencing compliance
with the covenants contained in Section 10 and (if applicable)
reconciliations to reflect changes in generally accepted accounting
principles since the Balance Sheet Date;
(e) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the Securities and Exchange
Commission or sent to the stockholders of the Borrowers;
(f) within seventeen (17) days after the end of each calendar month
or at such earlier time as the Agent may reasonably request, a Borrowing
Base Report setting forth the Borrowing Base as at the end of such
calendar month or other date so requested by the Agent;
(g) within seventeen (17) days after the end of each calendar month,
an Accounts Receivable aging report;
(h) as soon as practicable, but in any event not later than 45 days
after request by the Agent made after determining in its discretion that
an appraisal or reappraisal of the value of Eligible Fixed Assets of any
of the Borrowers or any Subsidiary of the Borrowers is necessary to insure
the accuracy of the Borrowing Base, an appraisal or reappraisal, as the
case may be, of the value of such Eligible Fixed Assets, which appraisal
or reappraisal shall be conducted at the expense of the Borrowers or such
Subsidiary by an appraiser selected by the Agent in form and substance
satisfactory to the Agent;
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(i) from time to time upon request of the Agent, projections of the
Borrowers and their Subsidiaries updating those projections delivered to
the Banks and referred to in Section 7.4.2 or, if applicable, updating any
later such projections delivered in response to a request pursuant to this
Section 8.4(i); and
(j) from time to time such other financial data and information as
the Agent or any Bank may reasonably request.
8.5. NOTICES.
8.5.1. DEFAULTS. The Borrowers will promptly notify the Agent and
each of the Banks in writing of the occurrence of any Default or Event of
Default. If any Person shall give any notice or take any other action in
respect of a claimed default (whether or not constituting an Event of
Default) under this Credit Agreement or any other note, evidence of
indebtedness, indenture or other obligation to which or with respect to
which any of the Borrowers or any of their Subsidiaries is a party or
obligor, whether as principal, guarantor, surety or otherwise, the
Borrowers shall forthwith give written notice thereof to the Agent and
each of the Banks, describing the notice or action and the nature of the
claimed default.
8.5.2. ENVIRONMENTAL EVENTS. Each of the Borrowers will promptly
give notice to the Agent and each of the Banks (i) of any violation of any
Environmental Law that the Borrowers or any of their Subsidiaries reports
in writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal,
state or local environmental agency and (ii) upon becoming aware thereof,
of any inquiry, proceeding, investigation, or other action, including a
notice from any agency of potential environmental liability, of any
federal, state or local environmental agency or board, that has the
potential to materially affect the assets, liabilities, financial
conditions or operations of any of the Borrowers or any of their
Subsidiaries, or the Agent's mortgages, deeds of trust or security
interests pursuant to the Security Documents.
8.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. Each of the
Borrowers will, immediately upon becoming aware thereof, notify the Agent
and each of the Banks in writing of any setoff, claims (including, with
respect to the Real Estate, environmental claims), withholdings or other
defenses to which any of the
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Collateral, or the Agent's rights with respect to the Collateral, are
subject.
8.5.4. NOTICE OF LITIGATION AND JUDGMENTS. Each of the Borrowers
will, and will cause each of their Subsidiaries to, give notice to the
Agent and each of the Banks in writing within fifteen (15) days of
becoming aware of any litigation or proceedings threatened in writing or
any pending litigation and proceedings affecting any of the Borrowers or
any of their Subsidiaries or to which the Borrowers or any of their
Subsidiaries is or becomes a party involving an uninsured claim against
the Borrowers or any of their Subsidiaries that could reasonably be
expected to have a materially adverse effect on the Borrowers or any of
their Subsidiaries and stating the nature and status of such litigation or
proceedings. Each of the Borrowers will, and will cause each of their
Subsidiaries to, give notice to the Agent and each of the Banks, in
writing, in form and detail satisfactory to the Agent, within ten (10)
days of any judgment not covered by insurance, final or otherwise, against
any of the Borrowers or any of their Subsidiaries in an amount in excess
of $1,000,000.
8.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. Each of the Borrowers
will do or cause to be done all things necessary to preserve and keep in full
force and effect its legal existence, rights and franchises and those of their
Subsidiaries and will not, and will not cause or permit any of their
Subsidiaries to, convert to a limited liability company. Each of the Borrowers
(i) will cause all of its properties and those of its Subsidiaries used or
useful in the conduct of its business or the business of its Subsidiaries to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment, (ii) will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of such Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times,
and (iii) will, and will cause each of its Subsidiaries to, continue to engage
primarily in the businesses now conducted by them and in related businesses;
provided that nothing in this Section 8.6 shall prevent such Borrower from
discontinuing the operation and maintenance of any of its properties or any of
those of its Subsidiaries if such discontinuance is, in the judgment of such
Borrower, desirable in the conduct of its or their business and that do not in
the aggregate materially adversely affect the business of the Borrowers and
their Subsidiaries on a consolidated basis.
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8.7. INSURANCE. Each of the Borrowers will, and will cause each of their
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent and if provided therein, in accordance with the terms of
the Security Agreements. Each of the Borrowers will, and will cause each of its
Subsidiaries to, maintain insurance on the Mortgaged Properties in accordance
with the terms of the Mortgages.
8.8. TAXES. Each of the Borrowers will, and will cause each of its
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; provided that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if such Borrower or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto; and provided further that each of the
Borrowers and each Subsidiary of the Borrowers will pay all such taxes,
assessments, charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security therefor.
8.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
8.9.1. GENERAL. Each of the Borrowers shall permit the Banks,
through the Agent or any of the Banks' other designated representatives,
to visit and inspect any of the properties of the Borrowers or any of
their Subsidiaries, to examine the books of account of the Borrowers and
their Subsidiaries (and to make copies thereof and extracts therefrom),
and to discuss the affairs, finances and accounts of the Borrowers and
their Subsidiaries with, and to be advised as to the same by, its and
their officers, all at such reasonable times and intervals as the Agent or
any Bank may reasonably request. The Agent may, at the Borrowers' expense,
participate in or observe any physical count of inventory included in the
Collateral.
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8.9.2. COLLATERAL REPORTS. No more frequently than two times during
each calendar year commencing after the Closing Date, or more frequently
as determined by the Agent if an Event of Default shall have occurred and
be continuing, upon the request of the Agent, the Borrowers will obtain
and deliver to the Agent, or, if the Agent so elects, will cooperate with
the Agent in the Agent's obtaining, a report of an independent collateral
auditor satisfactory to the Agent (which may be affiliated with one of the
Banks) with respect to the Accounts Receivable and inventory components
included in the Borrowing Base, which report shall indicate whether or not
the information set forth in the Borrowing Base Report most recently
delivered is accurate and complete in all material respects based upon a
review by such auditors of the Accounts Receivable (including verification
with respect to the amount, aging, identity and credit of the respective
account debtors and the billing practices of the Borrowers or its
applicable Subsidiary) and inventory (including verification as to the
value, location and respective types). All such collateral value reports
shall be conducted and made at the expense of the Borrowers.
8.9.3. APPRAISALS. The Borrowers shall deliver to each of the Banks,
as soon as practicable, but in any event not later than thirty (30) days
after the Closing Date, appraisal reports in form and substance and from
appraisers satisfactory to the Agent stating (i) the current fair market,
orderly liquidation and forced liquidation values of all or any portion of
the equipment or real estate owned by any of the Borrowers or any of their
Subsidiaries and (ii) the current business value of each of the Borrowers
and their Subsidiaries. Thereafter, no more frequently than once each
calendar year, or more frequently as determined by the Agent if an Event
of Default shall have occurred and be continuing, upon the request of the
Agent, the Borrowers will obtain and deliver to the Agent then current
appraisal reports in form and substance and from appraisers satisfactory
to the Agent. All such appraisals shall be conducted and made at the
expense of the Borrowers; provided, however, prior to the occurrence of a
Default or an Event of Default the Borrowers shall not be required to pay
for more than one appraisal report every two calendar years (excluding the
appraisals done prior to the Closing Date).
8.9.4. ENVIRONMENTAL ASSESSMENTS. The Borrowers shall deliver to
each of the Banks:
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(a) as soon as practicable, but in any event not later than
thirty (30) days after the Closing Date, a copy of a Phase I
Environmental Site Assessment consistent with the ASTM Practice E
1527-97 ("ESA") for each of the Mortgaged Properties. The Banks
shall have the same rights to rely on the ESAs as the Borrowers. The
ESAs must be prepared by an environmental consulting firm approved
by the Agent, which approval shall not be unreasonably withheld
("Borrowers' Consultant"). The ESAs shall be prepared at Borrowers'
sole cost and expense.
(b) as soon as practicable, but in any event not later than
forty-five (45) days after a copy of the ESAs are received by the
Banks, a copy of a Phase II Subsurface Investigation Report in a
scope agreed upon between the Borrowers and the Agent (the Phase
II), in the event that the Agent deems, in its sole discretion based
upon the results of the ESAs, that subsurface investigations are
warranted for any or all of the Mortgaged Properties. The Banks
shall have the same rights to rely on the Phase IIs as the
Borrowers. Any Phase II required by the Agent shall be prepared at
Borrowers' sole cost and expense.
(c) as soon as practicable, but in any event not later than
fifteen (15) days after requested by the Agent, based upon either an
ESA or a Phase II, that assessment or remediation work is required
at a Mortgaged Property under any Environmental Law or the
occurrence of an Environmental Event as set forth in Section 8.5.2
herein, Borrowers shall provide the Banks with a copy of a cost
estimate prepared by Borrowers' Consultant for conducting such
assessment or remediation, curing such violation or defending such
inquiry, proceeding, investigation or other action set forth in
Section 8.5.2, which estimate shall be reasonably acceptable to the
Agent.
(d) whether or not an Event of Default shall have occurred,
upon the request of the Agent, from time to time, in its discretion
for the purpose of assessing and ensuring the value of any Mortgaged
Property, environmental assessments or audits of such Mortgaged
Property prepared by a hydrogeologist, an independent engineer or
other qualified consultant or expert approved
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by the Agent to evaluate or confirm (i) whether any Hazardous
Materials are present in the soil or water at such Mortgaged
Property and (ii) whether the use and operation of such Mortgaged
Property complies with all Environmental Laws. Environmental
assessments may include without limitation detailed visual
inspections of such Mortgaged Property including any and all storage
areas, storage tanks, drains, dry ▇▇▇▇▇ and leaching areas, and the
taking of soil samples, surface water samples and ground water
samples, as well as such other investigations or analyses as the
Agent deems appropriate. All such environmental assessments shall be
conducted and made at the expense of the Borrowers.
8.9.5. COMMUNICATIONS WITH ACCOUNTANTS. If accompanied by a
representative of the Borrowers, each of the Borrowers authorizes the
Agent and, if accompanied by the Agent, the Banks to communicate directly
with the Borrowers' independent certified public accountants and
authorizes such accountants to disclose to the Agent and the Banks any and
all financial statements and other supporting financial documents and
schedules including copies of any management letter with respect to the
business, financial condition and other affairs of the Borrowers or any of
their Subsidiaries. At the request of the Agent, the Borrowers shall
deliver a letter addressed to such accountants instructing them to comply
with the provisions of this Section 8.9.5.
8.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. Each of the
Borrowers will, and will cause each of its Subsidiaries to, comply with (i) the
applicable laws and regulations wherever its business is conducted, including
all Environmental Laws, (ii) the provisions of its charter documents and
by-laws, (iii) all agreements and instruments by which it or any of its
properties may be bound and (iv) all applicable decrees, orders, and judgments.
If any authorization, consent, approval, permit or license from any officer,
agency or instrumentality of any government shall become necessary or required
in order that any of the Borrowers or any of their Subsidiaries may fulfill any
of its obligations hereunder or any of the other Loan Documents to which such
Borrower or such Subsidiary is a party, the Borrower will, or (as the case may
be) will cause such Subsidiary to, immediately take or cause to be taken all
reasonable steps within the power of such Borrower or such Subsidiary to obtain
such authorization, consent, approval, permit or license and furnish the Agent
and the Banks with evidence thereof.
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8.11. EMPLOYEE BENEFIT PLANS. The Borrowers will (i) promptly upon filing
the same with the Department of Labor or Internal Revenue Service upon request
of the Agent, furnish to the Agent a copy of the most recent actuarial statement
required to be submitted under Section 103(d) of ERISA and Annual Report, Form
5500, with all required attachments, in respect of each Guaranteed Pension Plan
and (ii) promptly upon receipt or dispatch upon request of the Agent, furnish to
the Agent any notice, report or demand sent or received in respect of a
Guaranteed Pension Plan under Sections 302, 4041, 4042, 4043, 4063, 4065, 4066
and 4068 of ERISA, or in respect of a Multiemployer Plan, under Sections 4041A,
4202, 4219, 4242, or 4245 of ERISA.
8.12. USE OF PROCEEDS. The Borrowers will use the proceeds of the Loans
solely to refinance existing Indebtedness and for working capital and general
corporate purposes. The Borrowers will obtain Letters of Credit solely for
general corporate purposes.
8.13. ADDITIONAL MORTGAGED PROPERTY.
(a) as soon as practicable, but in any event not later than thirty (30)
days after the Closing Date, with respect to the property located on Terminal
Drive in Lorain, Ohio, the Borrowers shall deliver to the Agent a fully executed
mortgage or deed of trust over such real estate, in form and substance
satisfactory to the Agent, together with a title insurance policy, evidence of
insurance with the Agent named as loss payee and additional insured, legal
opinion and other documents and certificates with respect to such real estate as
was required for Real Estate of the Borrowers and their Subsidiaries as of the
Closing Date. Each of the Borrowers further agrees that, following the taking of
such actions with respect to such real estate, the Agent shall have for the
benefit of the Banks and the Agent a valid and enforceable first priority
mortgage or deed of trust over such real estate, free and clear of all defects
and encumbrances except for Permitted Liens.
(b) if, after the Closing Date, the Borrowers or any of their Subsidiaries
acquires real estate which in the aggregate is valued at more than $500,000.00
and is used as a manufacturing or warehouse facility, the Borrowers shall, or
shall cause such Subsidiary to, forthwith deliver to the Agent a fully executed
mortgage or deed of trust over such real estate, in form and substance
satisfactory to the Agent, together with title insurance policies, surveys,
evidences of insurance with the Agent named as loss payee and additional
insured, legal opinions and other documents and certificates with respect to
such real estate as was required for Real Estate of the Borrowers and their
Subsidiary as of the Closing Date. Each of the Borrowers further
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agrees that, following the taking of such actions with respect to such real
estate, the Agent shall have for the benefit of the Banks and the Agent a valid
and enforceable first priority mortgage or deed of trust over such real estate,
free and clear of all defects and encumbrances except for Permitted Liens.
8.14. BANK ACCOUNTS. The Borrower will, and will cause each of its
Subsidiaries to, together with the employees, agents and other Persons acting on
behalf of the Borrower or such Subsidiary, receive and hold in trust for the
Agent and the Banks all payments constituting proceeds of Accounts Receivable or
other Collateral which come into their possession or under their control and,
immediately upon receipt thereof, deposit such payments in the form received,
with any appropriate endorsements, in one of the accounts designated as a
central depository account on Schedule 7.20. The Borrowers shall cause each bank
or financial institution at which proceeds of Collateral are to be held to enter
into an Agency Account Agreement in form and substance satisfactory to the Agent
("Agency Account Agreements"), and the Agent shall have received an Agency
Account Agreement executed by each depository institution within sixty (60) days
of the Closing Date.
8.15. EVAP ACQUISITION. Upon completion of EVAP Acquisition, EVAP shall
deliver to the Agent a fully executed assumption agreement, together with a
Perfection Certificate, filings, assignments, pledges and deposits of all
documents necessary or advisable, under applicable law, to establish and perfect
the Agent's security interest in any Collateral and legal opinions, all in form
and substance satisfactory to the Agent.
8.16. FURTHER ASSURANCES. Each of the Borrowers will, and will cause each
of its Subsidiaries to, cooperate with the Banks and the Agent and execute such
further instruments and documents as the Banks or the Agent shall reasonably
request to carry out to their satisfaction the transactions contemplated by this
Credit Agreement and the other Loan Documents.
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
Each of the Borrowers covenants and agrees that, so long as any Loan,
Unpaid Reimbursement Obligation, Letter of Credit, Note or other Obligation is
outstanding or any Bank has any obligation to make any Loans or the Letter of
Credit Banks have any obligations to issue, extend or renew any Letters of
Credit:
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9.1. RESTRICTIONS ON INDEBTEDNESS. None of the Borrowers will and none
will permit any of its Subsidiaries to, create, incur, assume, guarantee or be
or remain liable, contingently or otherwise, with respect to any Indebtedness
other than:
(a) Indebtedness to the Banks and the Agent arising under any of the
Loan Documents;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;
(c) Indebtedness incurred in connection with the acquisition after
the date hereof of any real or personal property by such Borrower or such
Subsidiary or under any Capitalized Lease, provided that the aggregate
principal amount of such Indebtedness of the Borrowers and their
Subsidiaries shall not exceed the aggregate amount of $3,000,000 at any
one time (including such Indebtedness under Section 9.1(d) hereof other
than obligations under the Demand Promissory Note issued to General Motors
Acceptance Corporation on February, 1996 in the principal amount of
$5,000,000);
(d) Indebtedness existing on the date hereof and listed and
described on Schedule 9.1 hereto; and
(e) Indebtedness of a Subsidiary of any of the Borrowers existing on
the date hereof to any of the Borrowers;
(f) Indebtedness of one Borrower to another then existing Borrower;
provided that all such intercompany Indebtedness permitted by this
Section 9.1, and all instruments evidencing any thereof shall be pledged
and delivered to the Agent, for the benefit of the Banks and the Agent as
security for the Obligations pursuant to the provisions of the applicable
Security Documents, and the Agent shall have a first priority perfected
lien and security interest therein;
(g) Indebtedness to the Banks and the Agent arising under any
Derivative Contract which purpose is to hedge the Borrowers interest rate
risk in connection with the Obligations;
(h) Indebtedness to the Banks and the Agent arising under any
foreign currency exchange not to exceed $5,000,000 which purpose is to
hedge the Borrowers currency risk in connection with the Obligations; and
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(i) additional Indebtedness of any of the Borrowers not exceeding
$1,000,000 in the aggregate principal amount outstanding at any one time
outstanding for all of the Borrowers.
9.2. RESTRICTIONS ON LIENS. None of the Borrowers will, and none will
permit any of its Subsidiaries to, (i) create or incur or suffer to be created
or incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (ii) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (iii) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (iv) suffer to
exist for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or (v) sell, assign, pledge or otherwise
transfer any "receivables" as defined in clause (vii) of the definition of the
term "Indebtedness," with or without recourse; or (vi) enter into or permit to
exist any arrangement or agreement, enforceable under applicable law, which
directly or indirectly prohibits any of the Borrowers or any of their
Subsidiaries from creating or incurring any lien, encumbrance, mortgage, pledge,
charge, restriction or other security interest other than in favor of the Agent
for the benefit of the Banks and the Agent under the Loan Documents and other
than customary anti-assignment provisions in leases and licensing agreements
entered into by such Borrower or such Subsidiary in the ordinary course of its
business, provided that the Borrowers or any of their Subsidiaries may create or
incur or suffer to be created or incurred or to exist:
(a) liens in favor of any of the Borrowers on all or part of the
assets of Subsidiaries of any Borrower securing Indebtedness owing by
Subsidiaries of any Borrower to any Borrower;
(b) liens in favor of any of the Borrowers on all or part of the
assets of any other Borrower securing Indebtedness owing by any of the
Borrowers to any other Borrower;
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(c) liens to secure taxes, assessments and other government charges
in respect of obligations not overdue or liens on properties to secure
claims for labor, material or supplies in respect of obligations not
overdue;
(d) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(e) liens on properties in respect of judgments or awards that have
been in force for less than the applicable period for taking an appeal so
long as execution is not levied thereunder or in respect of which such
Borrower or such Subsidiary shall at the time in good faith be prosecuting
an appeal or proceedings for review and in respect of which a stay of
execution shall have been obtained pending such appeal or review;
(f) liens of carriers, warehousemen, mechanics and materialmen, and
other like liens on properties, in existence less than 120 days from the
date of creation thereof in respect of obligations not overdue;
(g) encumbrances on Real Estate consisting of easements, rights of
way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
liens under leases to which such Borrower or such Subsidiary is a party,
and other minor liens or encumbrances none of which in the opinion of the
Borrowers interferes materially with the use of the property affected in
the ordinary conduct of the business of the Borrowers and their
Subsidiaries, which defects do not individually or in the aggregate have a
materially adverse effect on the business of the Borrowers individually or
of the Borrowers and their Subsidiaries on a consolidated basis;
(h) liens existing on the date hereof and listed on Schedule 9.2
hereto;
(i) purchase money security interests in or purchase money mortgages
on real or personal property other than Mortgaged Properties acquired
after the date hereof to secure purchase money Indebtedness of the type
and amount permitted by Section 9.1(c), incurred in connection with the
acquisition of such property, which security interests or mortgages cover
only the real or personal property so acquired;
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(j) liens and encumbrances on each Mortgaged Property as and to the
extent permitted by the Mortgage applicable thereto;
(k) liens in favor of the Agent for the benefit of the Banks and the
Agent under the Loan Documents; and
(l) liens securing other Indebtedness permitted by Section 9.1(i).
9.3. RESTRICTIONS ON INVESTMENTS. None of the Borrowers will, and none
will permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United States
of America that mature within one (1) year from the date of purchase by
the Borrower;
(b) demand deposits, certificates of deposit, bankers acceptances
and time deposits of United States banks having total assets in excess of
$1,000,000,000;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated
and the ratings for which are not less than "P 1" if rated by ▇▇▇▇▇'▇
Investors Service, Inc., and not less than "A 1" if rated by Standard and
Poor's Rating Group;
(d) Investments existing on the date hereof and listed on Schedule
9.3 hereto;
(e) Investments with respect to Indebtedness permitted by
Section 9.1(e) so long as such entities remain Subsidiaries of the
Borrowers;
(f) Investments by the Borrowers in Subsidiaries of any of the
Borrowers existing on the Closing Date;
(g) Investments consisting of promissory notes received as proceeds
of asset dispositions permitted by Section 9.5.2;
(h) Investments consisting of loans and advances to employees for
moving, entertainment, travel and other similar expenses in the ordinary
course of business not to exceed $750,000 in the aggregate at any time
outstanding; and
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(i) additional Investments not to exceed $2,500,000 in the
aggregate amount outstanding at any one time for all of the
Borrowers;
provided, however, that, with the exception of demand deposits referred to in
Section 9.3(b) and loans and advances referred to in Section 9.3(h), such
Investments will be considered Investments permitted by this Section 9.3 only if
all actions have been taken to the satisfaction of the Agent to provide to the
Agent, for the benefit of the Banks and the Agent, a first priority perfected
security interest in all of such Investments free of all encumbrances other than
Permitted Liens.
9.4. DISTRIBUTIONS. None of the Borrowers will make any Distributions
except for the following:
(a) Distributions payable to any of the Borrowers; and
(b) Distributions in any fiscal year not to exceed in the aggregate
$2,000,000; provided, however, the Borrowers may make distributions up to
$3,000,000 in the aggregate in any fiscal year if Consolidated Funded Debt
to Consolidated EBITDA is less than 3.00 to 1.00.
9.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
9.5.1. MERGERS AND ACQUISITIONS. None of the Borrowers will and none
will permit any of their Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition or stock
acquisition (other than the acquisition of assets in the ordinary course
of business consistent with past practices) except the merger or
consolidation of one or more of the Subsidiaries of any of the Borrowers
with and into any of the Borrowers so long as such Borrower is the
survivor of such merger, or the merger or consolidation of two or more
Subsidiaries of any of the Borrowers; provided however, that (a) prior to
December 31, 1998 the Borrower may make the EVAP Acquisition and (b) prior
to the occurrence of a Default or Event of Default the Borrowers or a
Subsidiary may make acquisitions (including, without limitations, mergers
or consolidations in which the Borrowers or one of their Subsidiaries is
the surviving corporation) so long as (i) the acquired entity conducts the
same or similar line of business as the Borrowers in all material
respects, (ii) any of the Borrowers shall take title to all of the assets
of the acquired entity, (iii) the consummation of the acquisition would
not otherwise cause a Default or an Event of
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Default or have caused a Default or Event of Default if such acquisition
had occurred during the prior fiscal year and the Borrowers have
demonstrated to the reasonable satisfaction of the Agent that after giving
effect to such acquisition and the incurrence of Indebtedness in
connection therewith, the Borrowers shall be in compliance, on a pro forma
basis, with the financial covenants set forth in Section 10 recomputed for
the most recent month for which information is available and shall be in
compliance with all other terms of the Credit Agreement, and (iv) the
aggregate total consideration constituting the total purchase price of all
assets acquired after the Closing Date does not exceed $5,000,000 per
annum.
9.5.2. DISPOSITION OF ASSETS. None of the Borrowers will, and none
will permit any of their Subsidiaries to, become a party to or agree to or
effect any disposition of assets, other than (i) the sale of inventory and
obsolete equipment in the ordinary course of business; (ii) so long as no
Default or Event of Default has occurred and is continuing, the sales of
other assets on an arms-length basis for fair value in an aggregate amount
not to exceed at any time, 10% of Consolidated Total Assets as of the
Balance Sheet Date in the aggregate; so long as not less than 66% of the
total consideration received by the Borrowers and their Subsidiaries in
connection with such sale is in cash; or (iii) sales of assets with the
prior written consent of the Majority Banks; provided, however, after
giving effect to such disposition of assets and the prepayment of
Indebtedness with the proceeds thereof, the Borrowers shall be in
compliance, on a pro forma basis, with the financial covenants, set forth
in Section 10 recomputed for the most recent month for which information
is available and shall be in compliance with all other terms of the Credit
Agreement.
9.6. SALE AND LEASEBACK. None of the Borrowers will, and none will permit
any of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby such Borrower or Subsidiary shall sell or transfer any property owned by
it in order then or thereafter to lease such property or lease other property
that such Borrower or Subsidiary intends to use for substantially the same
purpose as the property being sold or transferred.
9.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. None of the Borrowers will, and
none will permit any of its Subsidiaries to, (i) use any of the Real Estate or
any portion thereof for the handling, processing, storage or disposal of
Hazardous Substances, (ii) cause or
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permit to be located on any of the Real Estate any underground tank or other
underground storage receptacle for Hazardous Substances, (iii) generate any
Hazardous Substances on any of the Real Estate, (iv) conduct any activity at any
Real Estate or use any Real Estate in any manner so as to cause a release (i.e.
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) or threatened release of
Hazardous Substances on, upon or into the Real Estate or (v) otherwise conduct
any activity at any Real Estate or use any Real Estate in any manner that would
violate any Environmental Law or bring such Real Estate in violation of any
Environmental Law except for violations which do not and would not reasonably be
expected to have a materially adverse effect on the business, assets, operations
or financial condition of the Borrowers and their Subsidiaries taken as a whole.
9.8. EMPLOYEE BENEFIT PLANS. Neither any of the Borrowers nor any ERISA
Affiliate will
(a) engage in any "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code which could result in a
material liability for any of the Borrowers or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in Section 302 of ERISA,
whether or not such deficiency is or may be waived, in excess of
$4,000,000; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of the
Borrower or any of its Subsidiaries pursuant to Section 302(f) or
Section 4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to Section 307 of ERISA or Section 401(a)(29)
of the Code; or
(e) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of Section 4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Plans by more than $4,000,000, disregarding for this purpose the
benefit liabilities and assets of
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any such Plan with assets in excess of benefit liabilities, by more than
the amount set forth in Section 8.16.3.
9.9. BUSINESS ACTIVITIES. None of the Borrowers will, and none will permit
any of its Subsidiaries to, engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than the businesses
conducted by them on the Closing Date and in substantially related businesses.
9.10. FISCAL YEAR. None of the Borrowers will, and none will permit any of
it Subsidiaries to, change the date of the end of its fiscal year from that set
forth in Section 7.4.1.
9.11. TRANSACTIONS WITH AFFILIATES. None of the Borrowers will, and none
will permit any of its Subsidiaries to, engage in any transaction with any
Affiliate (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
Affiliate or, to the knowledge of the Borrowers, any corporation, partnership,
trust or other entity in which any such Affiliate has a substantial interest or
is an officer, director, trustee or partner, on terms more favorable to such
Person than would have been obtainable on an arm's-length basis in the ordinary
course of business.
9.12. BANK ACCOUNTS. None of the Borrowers will, and none will permit any
of its Subsidiaries to, (i) establish any bank accounts other than those with
the Agent and other accounts listed on Schedule 7.20, without the Agent's prior
written consent, (ii) violate directly or indirectly any Agency Account
Agreement or other bank agency or lock box agreement in favor of the Agent for
the benefit of the Banks and the Agent with respect to such account, or (iii)
deposit into any of the payroll accounts listed on Schedule 7.20 any amounts in
excess of amounts necessary to pay current payroll obligations from such
accounts.
10. FINANCIAL COVENANTS OF THE BORROWER.
Each of the Borrowers covenants and agrees that, so long as any Loan,
Unpaid Reimbursement Obligation, Letter of Credit, Note or other Obligation is
outstanding or any Bank has any obligation to make any Loans or any Letter of
Credit Bank has any obligation to issue, extend or renew any Letters of Credit:
10.1. LEVERAGE RATIO.
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(a) Prior to the Collateral Release Date, the Borrowers will not
permit the Leverage Ratio for the four consecutive fiscal quarters of the
Parent ending during the periods described in the table set forth below to
be greater than the ratio set forth opposite such period in such table:
Period Ratio
------ -----
June 30, 1998 4.25:1.00
July 1, 1998 - March 31, 1999 3.75:1.00
April 1, 1999 - March 31, 2000 3.50:1.00
April 1, 2000 - March 31, 2001 3.00:1.00
April 1, 2001 and thereafter 2.75:1.00
(b) Following the Collateral Release Date, the Borrowers will not
permit as of the last day of any of the Parent's fiscal quarters, the
Leverage Ratio for the four fiscal quarters then ended to be greater than
(i) prior to April 1, 2001, 3:00:1.00, and (ii) April 1, 2001 and
thereafter 2.75:100.
10.2. INTEREST COVERAGE RATIO. The Borrowers will not permit the Interest
Coverage Ratio for the four fiscal quarters of the Parent ending during the
periods described in the table set forth below to be less than the ratio set
forth opposite such period in such table:
Period Ratio
------ -----
June 30, 1998 1.50:100
July 1, 1998 - December 31, 1998 1.70:1.00
January 1, 1999 - June 30, 1999 2.50:1.00
July 1, 1999 - December 31, 1999 3.00:1.00
January 1, 2000 and thereafter 3.50:1.00
10.3. CAPITAL EXPENDITURES. The Borrowers will not make, or permit any
Subsidiary of the Borrowers to make, Capital Expenditures in any fiscal year
that exceed, 140% of Depreciation Expense for such fiscal year.
10.4. LIABILITIES TO WORTH RATIO. The Borrowers will not at any time
permit the ratio of Consolidated Total Liabilities to Consolidated Tangible Net
Worth to exceed 1.50 to 1.00.
10.5. CONSOLIDATED TANGIBLE NET WORTH. The Borrowers will not at any time
permit Consolidated Tangible Net Worth to be less than (i) 90% of Consolidated
Tangible Net Worth as of the Balance
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Sheet Date plus, (ii) on a cumulative basis, 50% of positive Consolidated Net
Income for each Fiscal Year subsequent to the Closing Date plus (iii) 50% of Net
Equity Proceeds.
11. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Loans and of the Letter
of Credit Banks to issue any initial Letters of Credit shall be subject to the
satisfaction of the following conditions precedent on or prior to August 1,
1998:
11.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.
11.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall have
received from each of the Borrowers and each of their Subsidiaries a copy,
certified by a duly authorized officer of such Person to be true and complete on
the Closing Date, of each of its charter documents, bylaws, agreement and
certificate of limited partnership or other constituent documents, as
applicable, in each case as in effect on such date of certification.
11.3. CORPORATE, ACTION. All corporate or other action necessary for the
valid execution, delivery and performance by each of the Borrowers and each of
their Subsidiaries of this Credit Agreement and the other Loan Documents to
which it is or is to become a party shall have been duly and effectively taken,
and evidence thereof satisfactory to the Banks shall have been provided to each
of the Banks.
11.4. INCUMBENCY CERTIFICATE. Each of the Banks shall have received from
each of the Borrowers and each of their Subsidiaries an incumbency certificate,
dated as of the Closing Date, signed by a duly authorized officer of such
Borrower or such Subsidiary, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (i) to sign, in the name
and on behalf of such Borrower of such Subsidiary, each of the Loan Documents to
which such Borrower or such Subsidiary is or is to become a party; (ii) in the
case of any Borrower, to make Loan Requests and Conversion Requests and to apply
for Letters of Credit; and (iii) to give notices and to take other action on its
behalf under the Loan Documents.
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11.5. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Agent a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) security interest in
and lien upon the Collateral. All filings, recordings, deliveries of instruments
and other actions necessary or desirable in the opinion of the Agent to protect
and preserve such security interests shall have been duly effected. The Agent
shall have received evidence thereof in form and substance satisfactory to the
Agent.
11.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The Agent shall have
received (i) from each of the Borrowers and their Subsidiaries a completed and
fully executed Perfection Certificate and (ii) the results of UCC searches with
respect to the Collateral, indicating no liens other than Permitted Liens and
otherwise in form and substance satisfactory to the Agent.
11.7. TAXES. The Agent shall have received evidence of payment of real
estate taxes and municipal charges on all Real Estate subject to a Mortgage not
delinquent on or before the Closing Date.
11.8. TITLE INSURANCE. The Agent shall have received a Title Policy
covering each Mortgaged Property (or commitments to issue such policies, with
all conditions to issuance of the Title Policy deleted by an authorized agent of
the Title Insurance Company) together with proof of payment of all fees and
premiums for such policies, from the Title Insurance Company and in amounts
satisfactory to the Agent, insuring the interest of the Agent and each of the
Banks as mortgagee under the Mortgages.
11.9. LANDLORD CONSENTS. The Borrowers and their Subsidiaries shall have
delivered to the Agent all consents required for the Agent to receive, as part
of the Security Documents, a collateral assignment of each material leasehold of
personal property, and a mortgage of each material leasehold of real property,
together in each case with such estoppel certificates as the Agent may request.
11.10. CERTIFICATES OF INSURANCE. The Agent shall have received a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of the Security Agreements.
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11.11. BORROWING BASE REPORT. The Agent shall have received from the
Borrowers the initial Borrowing Base Report dated as of the Closing Date
calculated as of the last day of the month most recently ended.
11.12. ACCOUNTS RECEIVABLE AGING REPORT. The Agent shall have received
from the Borrowers the most recent Accounts Receivable aging report of the
Borrowers and their Subsidiaries dated as of a date which shall be no more than
fifteen (15) days prior to the Closing Date and the Borrowers shall have
notified the Agent in writing on the Closing Date of any material deviation from
the Accounts Receivable values reflected in such Accounts Receivable aging
report and shall have provided the Agent with such supplementary documentation
as the Agent may reasonably request.
11.13. HAZARDOUS WASTE ASSESSMENTS. The Agent shall have received
hazardous waste site assessments from environmental engineers and in form and
substance satisfactory to the Agent, covering all Real Estate subject to a
Mortgage and all other real property in respect of which any of the Borrowers or
any of their Subsidiaries may have material liability, whether contingent or
otherwise, for dumping or disposal of Hazardous Substances.
11.14. SOLVENCY CERTIFICATE. Each of the Banks shall have received an
officer's certificate of each of the Borrowers dated as of the Closing Date as
to the solvency of each of the Borrowers and their Subsidiaries following the
consummation of the transactions contemplated herein and in form and substance
satisfactory to the Banks.
11.15. OPINION OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from:
(a) ▇▇▇▇▇▇ & ▇▇▇▇, counsel to the Borrowers and their Subsidiaries;
(b) local counsel, as applicable, in each of Connecticut, Ohio,
Mississippi, Mexico and Canada.
11.16. PAYMENT OF FEES. The Borrowers shall have paid to the Agent the
closing fee and the first year's Agent's fee required by the Fee Letter, and the
Borrowers shall have complied with all other arrangements set forth in the Fee
Letter to be complied with as of the Closing Date. The Borrowers shall have
reimbursed the Agent for, or
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paid directly, all fees, costs and expenses incurred by the Agent's Special
Counsel and local counsel to the Agent in all relevant jurisdictions in
connection with the closing of the transactions contemplated hereby.
11.17. PAYOFF LETTER. The Agent shall have received evidence of payment in
full under the Existing Facility and the Borrowers termination of commitments
under the Existing Facility.
12. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan, and of the Letter of Credit
Banks to issue, extend or renew any Letter of Credit, in each case whether on or
after the Closing Date, shall also be subject to the satisfaction of the
following conditions precedent:
12.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of the Borrowers and their Subsidiaries contained
in this Credit Agreement, the other Loan Documents or in any document or
instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Loan or the issuance, extension or
renewal of such Letter of Credit, with the same effect as if made at and as of
that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
12.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of any Letter of Credit Bank would make it illegal for
such Letter of Credit Bank to issue, extend or renew such Letter of Credit.
12.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of
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the Currency or the Board of Governors of the Federal Reserve System.
12.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
12.5. BORROWING BASE REPORT. The Agent shall have received the most recent
Borrowing Base Report required to be delivered to the Agent in accordance with
Section 8.4(f) and, if requested by the Agent, a Borrowing Base Report dated
within five (5) days of the Drawdown Date of such Loan or of the date of
issuance, extension or renewal of such Letter of Credit.
13. EVENTS OF DEFAULT; ACCELERATION; ETC.
13.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
(a) the Borrowers shall fail to pay any principal of the Loans or
any Reimbursement Obligation when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity
or at any other date fixed for payment;
(b) the Borrowers or any of their Subsidiaries shall fail to pay
within five (5) days any interest on the Loans, the commitment fee, any
Letter of Credit Fee, the Agent's fee, or other sums due hereunder or
under any of the other Loan Documents, when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment;
(c) the Borrowers shall fail to comply with any of its covenants
contained in Section 8, 9 or 10 or any of the covenants contained in any
of the Mortgages;
(d) any of the Borrowers or any of its Subsidiaries shall fail to
perform any term, covenant or agreement contained
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herein or in any of the other Loan Documents (other than those specified
elsewhere in this Section 13.1) for thirty (30) days after written notice
of such failure has been given to the Borrower by the Agent;
(e) any representation or warranty of any of the Borrowers or any of
their Subsidiaries in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument delivered pursuant to or
in connection with this Credit Agreement shall prove to have been false in
any material respect upon the date when made or deemed to have been made
or repeated;
(f) any of the Borrowers or any of their Subsidiaries shall fail to
pay at maturity, or within any applicable period of grace, any
Indebtedness for amounts which individually or in the aggregate equal or
exceed $1,000,000, or fail to observe or perform any material term,
covenant or agreement contained in any agreement by which it is bound,
evidencing or securing such Indebtedness for amounts which individually or
in the aggregate equal or exceed $1,000,000 for such period of time as
would permit (assuming the giving of appropriate notice if required) the
holder or holders thereof or of any obligations issued thereunder to
accelerate the maturity thereof;
(g) any of the Borrowers or any of their Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing its inability
to pay or generally fail to pay its debts as they mature or become due, or
shall petition or apply for the appointment of a trustee or other
custodian, liquidator or receiver of any of the Borrowers or any of their
Subsidiaries or of any substantial part of the assets of any of the
Borrowers or any of their Subsidiaries or shall commence any case or other
proceeding relating to any of the Borrowers or any of their Subsidiaries
under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or shall take any action to
authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other
proceeding shall be commenced against any of the Borrowers or any of their
Subsidiaries and any of the Borrowers or any of their Subsidiaries shall
indicate its approval thereof, consent thereto or acquiescence therein or
such petition or application shall not
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have been dismissed within forty-five (45) days following the filing
thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any of the Borrowers or
any of their Subsidiaries bankrupt or insolvent, or approving a petition
in any such case or other proceeding, or a decree or order for relief is
entered in respect of any of the Borrowers or their Subsidiaries in an
involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final
judgment against any of the Borrowers or their Subsidiaries that, with
other outstanding final judgments, undischarged, against any of the
Borrowers or any of their Subsidiaries exceeds in the aggregate
$1,000,000;
(j) if any of the Loan Documents shall be canceled, terminated,
revoked or rescinded or the Agent's security interests, mortgages or liens
in a substantial portion of the Collateral shall cease to be perfected, or
shall cease to have the priority contemplated by the Security Documents,
in each case otherwise than in accordance with the terms thereof or with
the express prior written agreement, consent or approval of the Banks, or
any action at law, suit or in equity or other legal proceeding to cancel,
revoke or rescind any of the Loan Documents shall be commenced by or on
behalf of the Borrowers or their Subsidiaries party thereto or any of
their respective stockholders, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
(k) any Borrower or any ERISA Affiliate incurs any liability to the
PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an
aggregate amount exceeding $4,000,000, or any Borrower or any ERISA
Affiliate is assessed withdrawal liability pursuant to Title IV of ERISA
by a Multiemployer Plan requiring aggregate annual payments exceeding
$4,000,000, or any of the following occurs with respect to a Guaranteed
Pension Plan: (i) an ERISA Reportable Event, or a failure to make a
required
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installment or other payment (within the meaning of Section 302(f)(1) of
ERISA), provided that the Agent determines in its reasonable discretion
that such event (A) could be expected to result in liability of the
Borrower or any of its Subsidiaries to the PBGC or such Guaranteed Pension
Plan in an aggregate amount exceeding $4,000,000 and (B) could constitute
grounds for the termination of such Guaranteed Pension Plan by the PBGC,
for the appointment by the appropriate United States District Court of a
trustee to administer such Guaranteed Pension Plan or for the imposition
of a lien in favor of such Guaranteed Pension Plan; or (ii) the
appointment by a United States District Court of a trustee to administer
such Guaranteed Pension Plan; or (iii) the institution by the PBGC of
proceedings to terminate such Guaranteed Pension Plan;
(l) any of the Borrowers or any of their Subsidiaries shall be
enjoined, restrained or in any way prevented by the order of any court or
any administrative or regulatory agency from conducting any material part
of its business and such order shall continue in effect for more than
thirty (30) days;
(m) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy,
or other casualty, which in any such case causes, for more than fifteen
(15) consecutive days, the cessation or substantial curtailment of revenue
producing activities at any facility of any of the Borrowers or any of
their Subsidiaries if such event or circumstance is not covered by
business interruption insurance and would have a material adverse effect
on the business or financial condition of the Borrowers and their
Subsidiaries taken as a whole;
(n) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by
any of the Borrowers or their Subsidiaries if such loss, suspension,
revocation or failure to renew would have a material adverse effect on the
business or financial condition of the Borrowers and their Subsidiaries
taken as a whole;
(o) any of the Borrowers or their Subsidiaries shall be indicted for
a state or federal crime, or any civil or criminal action shall otherwise
have been brought against any of the Borrowers or their Subsidiaries, a
punishment for which in any such case could include the forfeiture of any
assets of any of the
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Borrower or such Subsidiary included in the Borrowing Base or any assets
of any of the Borrowers or their Subsidiaries not included in the
Borrowing Base but having a fair market value in excess of $1,000,000;
(p) AHTP and AHTP II shall at any time, legally or beneficially own
less than 100% of the partnership interest in GDI or the Parent shall at
any time, legally or beneficially own less than 100% of the stock of AHTP
and AHTP II;
(q) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of
30% or more of the outstanding shares of common stock of any of the
Borrowers; or, during any period of twelve consecutive calendar months,
individuals who were directors of any of the Borrowers on the first day of
such period shall cease to constitute a majority of the board of directors
of such Borrower;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrowers declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents and all Reimbursement Obligations to be,
and they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by each of the Borrowers; provided that in the event of
any Event of Default specified in Sections 13.1(g) or 13.1(h), the
obligation of the Banks to make Loans and to issue Letters of Credit shall be
terminated automatically and all such amounts shall become immediately due and
payable automatically and without any requirement of notice from the Agent or
any Bank.
13.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in Section 13.1(g) or Section 13.1(h) shall occur, any unused
portion of the credit hereunder shall forthwith terminate and each of the Banks
shall be relieved of all further obligations to make Loans to the Borrowers and
to participate in any Letter of Credit not then issued and the Letter of Credit
Banks shall be relieved of all further obligations to issue, extend or renew
Letters of Credit. If any other Event of Default shall have occurred and be
continuing, the Agent may and, upon the request of the Majority Banks, shall, by
notice to the Borrowers, terminate the unused portion of the credit
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hereunder, and upon such notice being given such unused portion of the credit
hereunder shall terminate immediately and each of the Banks shall be relieved of
all further obligations to make Loans and to participate in any Letter of Credit
not then issued and the Letter of Credit Banks shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. No termination of the
credit hereunder shall relieve the Borrowers or any of their Subsidiaries of any
of the Obligations.
13.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to Section 13.1, each Bank, if
owed any amount with respect to the Loans or the Reimbursement Obligations, may,
with the consent of the Majority Banks but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Bank are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.
13.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that, following
the occurrence or during the continuance of any Default or Event of Default, the
Agent or any Bank, as the case may be, receives any monies in connection with
the enforcement of any the Loan Documents, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be distributed for
application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies by
the Agent, for the exercise, protection or enforcement by the Agent of all
or any of the rights, remedies, powers and privileges of the Agent under
this
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Credit Agreement or any of the other Loan Documents or in respect of the
Collateral or in support of any provision of adequate indemnity to the
Agent against any taxes or liens which by law shall have, or may have,
priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference as
the Majority Banks may determine; provided, however, that (i)
distributions shall be made (A) pari passu among Obligations with respect
to the Agent's fee payable pursuant to Section 5.2 and all other
Obligations and (B) with respect to each type of Obligation owing to the
Banks, such as interest, principal, fees and expenses, among the Banks pro
rata, and (ii) the Agent may in its discretion make proper allowance to
take into account any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Banks and the Agent of all of the
Obligations, to the payment of any obligations required to be paid
pursuant to Section 9-504(1)(c) of the Uniform Commercial Code of the
Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.
14. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to any of the Borrowers and any securities or other property of any of
the Borrowers in the possession of such Bank may be applied to or set off by
such Bank against the payment of Obligations and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of any of the Borrowers to such Bank. Each of the Banks
agrees with each other Bank that (i) if an amount to be set off is to be applied
to Indebtedness of any of the Borrowers to such Bank, other than Indebtedness
evidenced by the Notes held by such Bank or constituting Reimbursement
Obligations owed to such Bank, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness evidenced by all such Notes held by
such Bank or constituting Reimbursement Obligations owed to such Bank, and (ii)
if such Bank shall receive from any of the Borrowers, whether by voluntary
payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced
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by the Notes held by, or constituting Reimbursement Obligations owed to, such
Bank by proceedings against any of the Borrowers at law or in equity or by proof
thereof in bankruptcy, reorganization, liquidation, receivership or similar
proceedings, or otherwise, and shall retain and apply to the payment of the Note
or Notes held by, or Reimbursement Obligations owed to, such Bank any amount in
excess of its ratable portion of the payments received by all of the Banks with
respect to the Notes held by, and Reimbursement Obligations owed to, all of the
Banks, such Bank will make such disposition and arrangements with the other
Banks with respect to such excess, either by way of distribution, pro tanto
assignment of claims, subrogation or otherwise as shall result in each Bank
receiving in respect of the Notes held by it or Reimbursement Obligations owed
it, its proportionate payment as contemplated by this Credit Agreement; provided
that if all or any part of such excess payment is thereafter recovered from such
Bank, such disposition and arrangements shall be rescinded and the amount
restored to the extent of such recovery, but without interest.
15. THE AGENT.
15.1. AUTHORIZATION.
(a) The Agent is authorized to take such action on behalf of each of
the Banks and to exercise all such powers as are hereunder and under any
of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident thereto,
provided that no duties or responsibilities not expressly assumed herein
or therein shall be implied to have been assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is that
of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the
Banks. Nothing contained in this Credit Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other fiduciary
relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities hereunder
and under the other Loan Documents, the Agent is nevertheless a
"representative" of the Banks, as that term is defined in Article 1 of the
Uniform
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Commercial Code, for purposes of actions for the benefit of the Banks and
the Agent with respect to all collateral security and guaranties
contemplated by the Loan Documents. Such actions include the designation
of the Agent as "secured party", "mortgagee" or the like on all financing
statements and other documents and instruments, whether recorded or
otherwise, relating to the attachment, perfection, priority or enforcement
of any security interests, mortgages or deeds of trust in collateral
security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Banks and the Agent.
15.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and execute
its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel concerning all matters pertaining to its rights
and duties under this Credit Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrowers.
15.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
15.4. NO REPRESENTATIONS.
15.4.1. GENERAL. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the
Notes, the Letters of Credit, any of the other Loan Documents or any
instrument at any time constituting, or intended to constitute, collateral
security for the Notes, or for the value of any such collateral security
or for the validity, enforceability or collectability of any such amounts
owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan
Documents or in any certificate or instrument hereafter furnished to it by
or on behalf of any of the Borrowers or their Subsidiaries, or be bound to
ascertain or inquire as to the
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performance or observance of any of the terms, conditions, covenants or
agreements herein or in any instrument at any time constituting, or
intended to constitute, collateral security for the Notes or to inspect
any of the properties, books or records of any of the Borrowers or their
Subsidiaries. The Agent shall not be bound to ascertain whether any
notice, consent, waiver or request delivered to it by any of the Borrowers
or any holder of any of the Notes shall have been duly authorized or is
true, accurate and complete. The Agent has not made nor does it now make
any representations or warranties, express or implied, nor does it assume
any liability to the Banks, with respect to the credit worthiness or
financial conditions of any of the Borrowers or their Subsidiaries. Each
Bank acknowledges that it has, independently and without reliance upon the
Agent or any other Bank, and based upon such information and documents as
it has deemed appropriate, made its own credit analysis and decision to
enter into this Credit Agreement.
15.4.2. CLOSING DOCUMENTATION, ETC. For purposes of determining
compliance with the conditions set forth in Section 11, each Bank that has
executed this Credit Agreement shall be deemed to have consented to,
approved or accepted, or to be satisfied with, each document and matter
either sent, or made available, by the Agent or Arranger to such Bank for
consent, approval, acceptance or satisfaction, or required thereunder to
be to be consent to or approved by or acceptable or satisfactory to such
Bank, unless an officer of the Agent or Arranger active upon the
Borrowers' account shall have received notice from such Bank prior to the
Closing Date specifying such Bank's objection thereto and such objection
shall not have been withdrawn by notice to the Agent or Arranger to such
effect on or prior to the Closing Date.
15.5. PAYMENTS.
15.5.1. PAYMENTS TO AGENT. A payment by any of the Borrowers to the
Agent hereunder or any of the other Loan Documents for the account of any
Bank shall constitute a payment to such Bank. The Agent agrees promptly to
distribute to each Bank such Bank's pro rata share of payments received by
the Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.
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15.5.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent the
distribution of any amount received by it in such capacity hereunder,
under the Notes or under any of the other Loan Documents might involve it
in liability, it may refrain from making distribution until its right to
make distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Agent is to be repaid, each Person
to whom any such distribution shall have been made shall either repay to
the Agent its proportionate share of the amount so adjudged to be repaid
or shall pay over the same in such manner and to such Persons as shall be
determined by such court.
15.5.3. DELINQUENT BANKS. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any
Bank that fails (i) to make available to the Agent its pro rata share of
any Loan or to purchase any Letter of Credit Participation or (ii) to
comply with the provisions of Section 15 with respect to making
dispositions and arrangements with the other Banks, where such Bank's
share of any payment received, whether by setoff or otherwise, is in
excess of its pro rata share of such payments due and payable to all of
the Banks, in each case as, when and to the full extent required by the
provisions of this Credit Agreement, shall be deemed delinquent (a
"Delinquent Bank") and shall be deemed a Delinquent Bank until such time
as such delinquency is satisfied. A Delinquent Bank shall be deemed to
have assigned any and all payments due to it from the Borrower, whether on
account of outstanding Loans, Unpaid Reimbursement Obligations, interest,
fees or otherwise, to the remaining nondelinquent Banks for application
to, and reduction of, their respective pro rata shares of all outstanding
Loans and Unpaid Reimbursement Obligations. The Delinquent Bank hereby
authorizes the Agent to distribute such payments to the nondelinquent
Banks in proportion to their respective pro rata shares of all outstanding
Loans and Unpaid Reimbursement Obligations. A Delinquent Bank shall be
deemed to have satisfied in full a delinquency when and if, as a result of
application of the assigned payments to all outstanding Loans and Unpaid
Reimbursement Obligations of the nondelinquent Banks, the Banks'
respective pro rata shares of all outstanding Loans and Unpaid
Reimbursement Obligations have returned to those in effect immediately
prior to such delinquency and without giving effect to the nonpayment
causing such delinquency.
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15.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of any Note
or the purchaser of any Letter of Credit Participation as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a subsequent holder, assignee
or transferee.
15.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has not
been reimbursed by the Borrowers as required by Section 16), and liabilities of
every nature and character arising out of or related to this Credit Agreement,
the Notes, or any of the other Loan Documents or the transactions contemplated
or evidenced hereby or thereby, or the Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly caused
by the Agent's willful misconduct or gross negligence.
15.8. AGENT AS BANK. In its individual capacity, BKB shall have the same
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes and
as the purchaser of any Letter of Credit Participations, as it would have were
it not also the Agent.
15.9. RESIGNATION. The Agent may resign at any time by giving sixty (60)
days prior written notice thereof to the Banks and the Borrowers. Upon any such
resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the
Borrowers. If no successor Agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within thirty (30) days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent, which shall be a financial
institution having a rating of not less than A or its equivalent by Standard &
Poor's Corporation. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
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15.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this Section 15.10 it shall promptly notify the
other Banks of the existence of such Default or Event of Default.
15.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (i) so requested by
the Majority Banks and (ii) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
16. EXPENSES AND INDEMNIFICATION.
16.1. EXPENSES. The Borrowers jointly and severally agree to pay (i) the
reasonable costs of producing and reproducing this Credit Agreement, the other
Loan Documents and the other agreements and instruments mentioned herein, (ii)
any taxes (including any interest and penalties in respect thereto) payable by
the Agent or any of the Banks (other than taxes based upon the Agent's or any
Bank's net income) on or with respect to the transactions contemplated by this
Credit Agreement (each of the Borrowers hereby agreeing to indemnify the Agent
and each Bank with respect thereto), (iii) the reasonable fees, expenses and
disbursements of the Agent's Special Counsel or any local counsel to the Agent
incurred in connection with the preparation, syndication, administration or
interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, any amendments, modifications, approvals, consents or
waivers hereto or hereunder, or the cancellation of any Loan Document upon
payment in full in cash of all of the Obligations or pursuant to any terms of
such Loan Document for providing for such
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cancellation, (iv) the fees, expenses and disbursements of the Agent or any of
its affiliates incurred by the Agent or such affiliate in connection with the
preparation, syndication, administration or interpretation of the Loan Documents
and other instruments mentioned herein, including all title insurance premiums
and surveyor, engineering and appraisal charges, (v) any fees, costs, expenses
and bank charges, including bank charges for returned checks, incurred by the
Agent in establishing, maintaining or handling agency accounts, lock box
accounts and other accounts for the collection of any of the Collateral; (vi)
all reasonable out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, which attorneys may be employees of any Bank or the
Agent, and reasonable consulting, accounting, appraisal, investment banking and
similar professional fees and charges) incurred by any Bank or the Agent in
connection with (A) the enforcement of or preservation of rights under any of
the Loan Documents against any of the Borrowers or their Subsidiaries or the
administration thereof after the occurrence of a Default or Event of Default and
(B) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to any Bank's or the Agent's relationship with any
of the Borrowers or their Subsidiaries and (vii) all reasonable fees, expenses
and disbursements of any Bank or the Agent incurred in connection with UCC
searches, UCC filings or mortgage recordings.
16.2. INDEMNIFICATION. The Borrowers jointly and severally agree to
indemnify and hold harmless the Agent, its affiliates and the Banks from and
against any and all claims, actions and suits whether groundless or otherwise,
and from and against any and all liabilities, losses, damages and expenses of
every nature and character arising out of this Credit Agreement or any of the
other Loan Documents or the transactions contemplated hereby including, without
limitation, (i) any actual or proposed use by any of the Borrowers or their
Subsidiaries of the proceeds of any of the Loans or Letters of Credit, (ii) the
reversal or withdrawal of any provisional credits granted by the Agent upon the
transfer of funds from lock box, bank agency or concentration accounts or in
connection with the provisional honoring of checks or other items, (iii) any
actual or alleged infringement of any patent, copyright, trademark, service ▇▇▇▇
or similar right of any of the Borrowers or their Subsidiaries comprised in the
Collateral, (iv) any of the Borrowers or their Subsidiaries entering into or
performing this Credit Agreement or any of the other Loan Documents or (v) with
respect to the Borrowers and their Subsidiaries and their respective properties
and assets, the violation of any Environmental Law, the presence, disposal,
escape, seepage, leakage, spillage, discharge, emission, release or threatened
release of any Hazardous Substances
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or any action, suit, proceeding or investigation brought or threatened with
respect to any Hazardous Substances (including, but not limited to, claims with
respect to wrongful death, personal injury or damage to property), in each case
including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. In litigation, or the preparation
therefor, the Banks and the Agent and its affiliates shall be entitled to select
their own counsel and, in addition to the foregoing indemnity, the Borrowers
jointly and severally agree to pay promptly the reasonable fees and expenses of
such counsel if (i) in the written opinion of counsel to the Agent, use of
counsel of the Borrowers' choice could reasonably be expected to give rise to a
conflict of interest or (ii) the Borrowers shall not have employed counsel
reasonably satisfactory to the Agent within reasonable time after notice of the
institution of any such litigation or proceeding. If, and to the extent that the
obligations of the Borrowers under this Section 16.2 are unenforceable for any
reason, each of the Borrowers hereby agrees to make the maximum contribution to
the payment in satisfaction of such obligations which is permissible under
applicable law.
16.3. SURVIVAL. The covenants contained in this Section 16 shall survive
payment or satisfaction in full of all other Obligations.
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
17.1. SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY. Each of the
Borrowers acknowledges that from time to time financial advisory, investment
banking and other services may be offered or provided to the Borrowers or one or
more of their Subsidiaries, in connection with this Credit Agreement or
otherwise, by a Section 20 Subsidiary. Each of the Borrowers, for itself and
each of its Subsidiaries, hereby authorizes (a) such Section 20 Subsidiary to
share with the Agent and each Bank any information delivered to such Section 20
Subsidiary by any of the Borrowers or their Subsidiaries, and (b) the Agent and
each Bank to share with such Section 20 Subsidiary any information delivered to
the Agent or such Bank by any of the Borrowers or their Subsidiaries pursuant to
this Credit Agreement, or in connection with the decision of such Bank to enter
into this Credit Agreement; it being understood, in each case, that any such
Section 20 Subsidiary receiving such information shall be bound by the
confidentiality provisions of this Credit Agreement. Such authorization shall
survive the payment and satisfaction in full of all of Obligations.
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17.2. CONFIDENTIALITY. Each of the Banks and the Agent agrees, on behalf
of itself and each of its affiliates, directors, officers and employees, to use
reasonable precautions to keep confidential, in accordance with their customary
procedures for handling confidential information of the same nature and in
accordance with safe and sound banking practices, any non-public information
supplied to it by any of the Borrowers or their Subsidiaries pursuant to this
Credit Agreement that is identified by such Person as being confidential at the
time the same is delivered to the Banks or the Agent, provided that nothing
herein shall limit the disclosure of any such information (a) after such
information shall have become public other than through a violation of this
Section 17, (b) to the extent required by statute, rule, regulation or judicial
process, (c) to counsel for any of the Banks or the Agent, (d) to bank examiners
or any other regulatory authority having jurisdiction over any Bank or the
Agent, or to counsel, auditors or accountants, (e) to the Agent, any Bank or any
Section 20 Subsidiary, (f) in connection with any litigation to which any one or
more of the Banks, the Agent or any Section 20 Subsidiary is a party, or in
connection with the enforcement of rights or remedies hereunder or under any
other Loan Document, (g) to a Subsidiary or affiliate of such Bank as provided
in Section 17.1 or (h) to any assignee or participant (or prospective assignee
or participant) so long as such assignee or participant agrees to be bound by
the provisions of Section 19.6 or (i) with the consent of the Parent.
17.3. PRIOR NOTIFICATION. Unless specifically prohibited by applicable law
or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Borrowers of any request for disclosure of any such
non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency or any customary examination
by bank examiners or other regulatory authorities having jurisdiction over such
Bank) or pursuant to legal process.
17.4. OTHER. In no event shall any Bank or the Agent be obligated or
required to return any materials furnished to it or any Section 20 Subsidiary by
any of the Borrowers or their Subsidiaries. The obligations of each Bank under
this Section 17 shall supersede and replace the obligations of such Bank under
any confidentiality letter in respect of this financing signed and delivered by
such Bank to any of the Borrowers prior to the date hereof and shall be binding
upon any assignee of, or purchaser of any participation in, any interest in any
of the Loans or Reimbursement Obligations from any Bank.
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18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrowers or their Subsidiaries pursuant
hereto shall be deemed to have been relied upon by the Banks and the Agent,
notwithstanding any investigation heretofore or hereafter made by any of them,
and shall survive the making by the Banks of any of the Loans and the issuance,
extension or renewal of any Letters of Credit, as herein contemplated, and shall
continue in full force and effect so long as any Letter of Credit or any amount
due under this Credit Agreement or the Notes or any of the other Loan Documents
remains outstanding or any Bank has any obligation to make any Loans or the
Letter of Credit Banks have any obligation to issue, extend or renew any Letter
of Credit, and for such further time as may be otherwise expressly specified in
this Credit Agreement. All statements contained in any certificate or other
paper delivered to any Bank or the Agent at any time by or on behalf of any of
the Borrowers or their Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by the Borrowers or such Subsidiary hereunder.
19. ASSIGNMENT AND PARTICIPATION.
19.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein, each
Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); provided that (i) other
than assignments from a Bank to its Affiliate, each of the Agent and, unless a
Default or Event of Default shall have occurred and be continuing, the Borrowers
shall have given its prior written consent to such assignment, which consent
will not be unreasonably withheld, (ii) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Bank's rights and
obligations under this Credit Agreement, (iii) each assignment shall be in an
amount that is a whole multiple of $5,000,000.00 and (v) the parties to such
assignment shall execute and deliver to the Agent, for recording in the Register
(as hereinafter defined), an Assignment and Acceptance, substantially in the
form of Exhibit E hereto (an "Assignment and Acceptance"), together with any
Notes subject to such assignment. Upon such execution, delivery, acceptance and
recording, from and
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after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (i) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Bank hereunder, and (ii) the assigning Bank shall, to the extent provided in
such assignment and upon payment to the Agent of the registration fee referred
to in Section 19.3, be released from its obligations under this Credit
Agreement.
19.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection
with this Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or the attachment, perfection or priority of any
security interest or mortgage,
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
of the Borrowers and their Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the
performance or observance by any of the Borrowers and their Subsidiaries
or any other Person primarily or secondarily liable in respect of any of
the Obligations of any of their obligations under this Credit Agreement or
any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement and the other Loan Documents, together with copies of the
most recent financial statements referred to in Section 7.4 and Section
8.4 and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment
and Acceptance;
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(d) such assignee will, independently and without reliance upon the
assigning Bank, the 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 decisions in taking or not taking action under this Credit
Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this
Credit Agreement and the other Loan Documents as are delegated to the
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit
Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements with
the assigning Bank satisfactory to such assignee with respect to its pro
rata share of Letter of Credit Fees in respect of outstanding Letters of
Credit.
19.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Loans owing to and Letter of Credit
Participations purchased by, the Banks from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrowers, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Credit Agreement.
The Register shall be available for inspection by the Borrowers and the Banks at
any reasonable time and from time to time upon reasonable prior notice. Upon
each such recordation, the assigning Bank agrees to pay to the Agent a
registration fee in the sum of $3,500.00.
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19.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance executed
by the parties to such assignment, together with each Note subject to such
assignment, the Agent shall (i) record the information contained therein in the
Register, and (ii) give prompt notice thereof to the Borrowers and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such in Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this Section 20.4, the Borrower shall deliver an opinion of counsel,
addressed to the Banks and the Agent, relating to the due authorization,
execution and delivery of such new Notes and the legality, validity and binding
effect thereof, in form and substance satisfactory to the Banks. The surrendered
Notes shall be canceled and returned to the Borrowers.
19.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (i) each such participation shall be in an amount of not less than
$5,000,000, (ii) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrowers and (iii) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant, reduce
the amount of any commitment fees or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.
19.6. DISCLOSURE. Each of the Borrowers agrees that in addition to
disclosures made in accordance with standard and customary banking practices any
Bank may disclose information obtained by such Bank pursuant to this Credit
Agreement to
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assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (i) to treat in confidence such information unless such
information otherwise becomes public knowledge, (ii) not to disclose such
information to a third party, except as required by law or legal process and
(iii) not to make use of such information for purposes of transactions unrelated
to such contemplated assignment or participation.
19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of any of the Borrowers, then any such assignee
Bank shall have no right to vote as a Bank hereunder or under any of the other
Loan Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to Section 13.1 or
Section 13.2, and the determination of the Majority Banks shall for all purposes
of this Credit Agreement and the other Loan Documents be made without regard to
such assignee Bank's interest in any of the Loans or Reimbursement Obligations.
If any Bank sells a participating interest in any of the Loans or Reimbursement
Obligations to a participant, and such participant is one of the Borrowers or an
Affiliate of one of the Borrowers, then such transferor Bank shall promptly
notify the Agent of the sale of such participation. A transferor Bank shall have
no right to vote as a Bank hereunder or under any of the other Loan Documents
for purposes of granting consents or waivers or for purposes of agreeing to
amendments or modifications to any of the Loan Documents or for purposes of
making requests to the Agent pursuant to Section 13.1 or Section 13.2 to the
extent that such participation is beneficially owned by one of the Borrowers or
any Affiliate of one of the Borrowers, and the determination of the Majority
Banks shall for all purposes of this Credit Agreement and the other Loan
Documents be made without regard to the interest of such transferor Bank in the
Loans or Reimbursement Obligations to the extent of such participation.
19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall retain
its rights to be indemnified pursuant to Section 16 and to the other
reimbursement and indemnification provisions contained in this Agreement with
respect to any claims or actions arising prior to the date of such assignment.
If any assignee Bank is not incorporated under the laws of the United States of
America or any state thereof, it shall, prior to the date on which any interest
or fees are payable hereunder or under any of the other Loan Documents for its
account, deliver to the Borrowers and the Agent certification as to its
exemption
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from deduction or withholding of any United States federal income taxes. If any
Reference Bank transfers all of its interest, rights and obligations under this
Credit Agreement, the Agent shall, in consultation with the Borrowers and with
the consent of the Borrowers and the Majority Banks, appoint another Bank to act
as a Reference Bank hereunder. Anything contained in this Section 19 to the
contrary notwithstanding, any Bank may at any time pledge all or any portion of
its interest and rights under this Credit Agreement (including all or any
portion of its Notes) to any of the twelve Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or
the enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
19.9. ASSIGNMENT BY BORROWERS. None of the Borrowers shall assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit Applications shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier, or sent
by telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, addressed as follows:
(a) if to the Borrower, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, III, Chief Financial Officer, or at such other
address for notice as the Borrowers shall last have furnished in writing
to the Person giving the notice;
(b) if to the Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., or such other address for
notice as the Agent shall last have furnished in writing to the Person
giving the notice; and
(c) if to any Bank, at such Bank's address set forth on Schedule 1
hereto, or such other address for notice as such Bank shall have last
furnished in writing to the Person giving the notice.
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Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE
BORROWERS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH
OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON SUCH BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 20.
EACH OF THE BORROWERS HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS
BROUGHT IN AN INCONVENIENT COURT.
22. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
23. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
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24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
Section 26.
25. WAIVER OF JURY TRIAL.
Each of the Borrowers hereby waives its right to a jury trial with respect
to any action or claim arising out of any dispute in connection with this Credit
Agreement, the Notes or any of the other Loan Documents, any rights or
obligations hereunder or thereunder or the performance of which rights and
obligations. Except as prohibited by law, each of the Borrowers hereby waives
any right it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. Each of the Borrowers
(i) certifies that no representative, agent or attorney of any Bank or the Agent
has represented, expressly or otherwise, that such Bank or the Agent would not,
in the event of litigation, seek to enforce the foregoing waivers and (ii)
acknowledges that the Agent and the Banks have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement to
be given by the Banks may be given, and any term of this Credit Agreement, the
other Loan Documents or any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by any of the Borrowers or
their Subsidiaries of any terms of this Credit Agreement, the other Loan
Documents or such other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrower and the written consent of the Majority Banks. Notwithstanding the
foregoing, the rate of interest on the Notes (other than interest accruing
pursuant to Section 5.11.2 following the effective date of any waiver by the
Majority Banks of the Default or Event of Default relating thereto), the
definition of Applicable Margin, the amount of the Commitments of the Banks, the
Reduction of the Total Commitment set forth in Section 2.3.2,
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and commitment fee or Letter of Credit Fees hereunDER may not be changed without
the written consent of the Borrower and the written consent of each Bank
affected thereby; without the consent of each Bank, Section 9.5.2 may not be
amended to permit additional sales or dispositions of assets in excess of sales
and dispositions of assets having a value in excess of $10,000,000 per annum and
the Agent shall not release the lien securing the Obligations except to the
extent that the Borrowers are permitted to sell or otherwise dispose of such
assets; the Maturity Date may not be postponed without the written consent of
each Bank; this Section 26 and the definition of Majority Banks may not be
amended, without the written consent of all of the Banks; and the amount of the
Agent's Fee or any Letter of Credit Fees payable for the Agent's account and
Section 16 may not be amended without the written consent of the Agent. No
waiver shall extend to or affect any obligation not expressly waived or impair
any right consequent thereon. No course of dealing or delay or omission on the
part of the Agent or any Bank in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. No notice to or demand upon any of
the Borrowers shall entitle any of the Borrowers to other or further notice or
demand in similar or other circumstances.
27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
TRANSPRO, INC.
By: _____________________________________
Name:
Title:
▇▇▇▇▇ HEAT TRANSFER PRODUCTS, INC.
By: _____________________________________
Name:
Title:
AHTP II, INC.
By: _____________________________________
Name:
Title:
EI ACQUISITION CORP.
By: _____________________________________
Name:
Title:
GO/▇▇▇ INDUSTRIES
By: ▇▇▇▇▇ HEAT TRANSFER
PRODUCTS, INC., its
Partner
By: _________________________________
Name:
123
-115-
Title:
By: AHTP II, INC., its Partner
By: _________________________________
Name:
Title:
BANKBOSTON, N.A., individually and
as Agent
By: _________________________________
Name:
Title:
PEOPLE'S BANK
By: _________________________________
Name:
Title:
THE BANK OF NEW YORK
By: _________________________________
Name:
Title:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: _________________________________
Name:
Title:
124
-116-
THE FIRST NATIONAL BANK OF CHICAGO
By: _________________________________
Name:
Title:
NBD BANK, as Letter of Credit Bank
pursuant to Section 4.7
By: _________________________________
Name:
Title: