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CREDIT AGREEMENT
dated as of
May 21, 1997
Among
SAFETY COMPONENTS INTERNATIONAL, INC.
PHOENIX AIRBAG GmbH & CO. KG
And
AUTOMOTIVE SAFETY COMPONENTS INTERNATIONAL LIMITED,
as Borrowers
THE LENDING INSTITUTIONS NAMED THEREIN
as Lenders
And
KEYBANK NATIONAL ASSOCIATION
as Administrative Agent
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS AND TERMS......................................1
1.1 Certain Defined Terms......................................1
1.2 Computation of Time Periods...............................22
1.3 Accounting Terms..........................................22
1.4 Currency Equivalents......................................22
SECTION 2. AMOUNT AND TERMS OF LOANS.................................23
2.1 Commitments for Loans.....................................23
2.2 Minimum Borrowing Amounts, etc.; Pro Rata Borrowings......24
2.3 Notice of Borrowing.......................................24
2.4 Disbursement of Funds from Borrowings.....................26
2.5 Notes.....................................................27
2.6 Voluntary Conversion of Dollar Denominated Loans..........28
2.7 Interest on Loans.........................................28
2.8 Interest Periods..........................................29
2.9 Increased Costs, Illegality, etc..........................30
2.10 Compensation..............................................33
2.11 Change of Lending Office; Replacement of Lenders..........33
SECTION 3. LETTERS OF CREDIT.........................................34
3.1 Letters of Credit.........................................34
3.2 Letter of Credit Requests: Notices of Issuance............35
3.3 Agreement to Repay Letter of Credit Drawings..............36
3.4 Letter of Credit Participations...........................37
3.5 Increased Costs...........................................39
3.6 Guaranty of Subsidiary Letter or Credit Obligations.......40
SECTION 4. FEES; COMMITMENTS...............................................42
4.1 Fees......................................................42
4.2 Voluntary Reduction of Commitments........................43
4.3 Mandatory Adjustments of Commitments, etc.................43
4.4 Extension of Maturity Date................................43
SECTION 5. PAYMENTS........................................................44
5.1 Voluntary Prepayments.....................................44
5.2 Mandatory Prepayments and Scheduled Repayments............44
5.3 Method and Place of Payment...............................47
5.4 Net Payments..............................................47
SECTION 6. CONDITIONS PRECEDENT............................................49
6.1 Conditions Precedent at Initial Borrowing Date............49
6.2 Conditions Precedent to All Credit Events.................52
SECTION 7. REPRESENTATIONS AND WARRANTIES..................................53
7.1 Corporate Status, etc.....................................53
7.2 Subsidiaries..............................................53
7.3 Corporate Power and Authority, etc........................53
7.4 No Violation..............................................53
7.5 Governmental Approvals....................................54
7.6 Litigation................................................54
7.7 Use of Proceeds; Margin Regulations.......................54
7.8 Financial Statements, etc.................................54
7.9 No Material Adverse Change................................56
7.10 Tax Returns and Payments..................................56
7.11 Title to Properties, etc..................................56
7.12 Lawful Operations, etc....................................56
7.13 Environmental Matters.....................................57
7.14 Compliance with ERISA.....................................57
7.15 Intellectual Property, etc................................58
7.16 Investment Company Act, etc...............................58
7.17 Burdensome Contracts; Labor Relations.....................58
7.18 Existing Indebtedness.....................................59
7.19 Security Interests........................................59
7.20 True and Complete Disclosure..............................59
SECTION 8. AFFIRMATIVE COVENANTS...........................................60
8.1 Reporting Requirements....................................60
8.2 Books, Records and Inspections............................63
8.3 Insurance.................................................63
8.4 Payment of Taxes..........................................64
8.5 Corporate Franchises......................................64
8.6 Good Repair...............................................65
8.7 Compliance with Statutes, etc.............................65
8.8 Compliance with Environmental Laws........................65
8.9 Fiscal Years, Fiscal Quarters.............................65
8.10 Certain Subsidiaries to Join in Subsidiary Guaranty.......66
8.11 Additional Security; Further Assurances...................66
8.12 Corporate Separateness....................................68
8.13 ERISA.....................................................69
8.14 Hedge Agreements, etc.....................................69
8.15 Senior Debt...............................................70
SECTION 9. NEGATIVE COVENANTS..............................................70
9.1 Changes in Business.......................................70
9.2 Consolidation, Merger or Sale of Assets, etc..............70
9.3 Liens.....................................................72
9.4 Indebtedness..............................................74
9.5 Advances, Investments, Loans and Guaranty Obligations.....75
9.6 Dividends, etc............................................76
9.7 Total Indebtedness/EBITDA Ratio...........................77
9.8 Fixed Charge Coverage Ratio...............................77
9.9 Capital Expenditures......................................77
9.10 Certain Leases............................................77
9.11 Minimum Consolidated Net Worth............................77
9.12 Prepayments and Refinancings of Subordinated Debt, etc....78
9.13 Transactions with Affiliates..............................78
9.14 Limitation on Certain Restrictions on Subsidiaries........78
9.15 Limitation on Sale and Lease-Back Transactions............79
SECTION 10. EVENTS OF DEFAULT..............................................79
10.1 Events of Default.........................................79
10.2 Acceleration, etc.........................................81
10.3 Application of Liquidation Proceeds.......................82
SECTION 11. THE ADMINISTRATIVE AGENT.......................................82
11.1 Appointment...............................................82
11.2 Delegation of Duties......................................83
11.3 Exculpatory Provisions....................................83
11.4 Reliance by Administrative Agent..........................84
11.5 Notice of Default.........................................84
11.6 Non-Reliance..............................................84
11.7 Indemnification...........................................85
11.8 The Administrative Agent in Individual Capacity...........85
11.9 Successor Administrative Agent............................86
11.10 Other Agents.....................................86
SECTION 12. GUARANTY BY THE COMPANY........................................86
12.1 Guaranty of Subsidiary Borrowings.........................86
12.2 Additional Undertaking....................................86
12.3 Guaranty Unconditional, etc...............................87
12.4 Company Obligations to Remain in Effect; Restoration......87
12.5 Waiver or Acceptance, etc.................................88
12.6 Subrogation...............................................88
12.7 Effect of Stay............................................88
SECTION 13. MISCELLANEOUS..................................................88
13.1 Payment of Expenses, etc..................................88
13.2 Right of Setoff...........................................89
13.3 Notices...................................................89
13.4 Benefit of Agreement......................................90
13.5 No Waiver: Remedies Cumulative............................92
13.6 Payments Pro Rata.........................................92
13.7 Calculations: Computations................................93
13.8 Governing Law; Submission to Jurisdiction; Venue;
Waiver of Jury Trial.........................93
13.9 Counterparts..............................................94
13.10 Effectiveness.............................................94
13.11 Headings Descriptive......................................94
13.12 Amendment or Waiver.......................................94
13.13 Survival..................................................95
13.14 Domicile of Loans.........................................95
13.15 Confidentiality...........................................95
13.16 Lender Register...........................................96
13.17 Limitations on Liability of the Letter of Credit Issuers..96
13.18 General Limitation of Liability...........................97
13.19 No Duty...................................................97
13.20 Lenders and Administrative Agent Not Fiduciary to
Company, etc...........................................97
13.21 Judgment Currency.........................................97
13.22 Survival of Representations and Warranties................99
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of May 21, 1997, among the following:
(i) SAFETY COMPONENTS INTERNATIONAL, INC., a Delaware
corporation (herein, together with its successors and assigns, the
"Company" or a "Borrower")
(ii) PHOENIX AIRBAG GmbH & CO. KG., a company organized under
the laws of the Federal Republic of Germany (herein, together with its
successors and assigns, the "German Borrower" or a "Borrower"), which
is a Wholly-Owned Subsidiary of the Company;
(iii) AUTOMOTIVE SAFETY COMPONENTS INTERNATIONAL
LIMITED, a company organized under the laws of the United Kingdom
(herein, together with its successors and assigns, the "British
Borrower" or a "Borrower"), which is a Wholly-Owned Subsidiary of the
Company;
(iv) the lending institutions listed in Annex I hereto (each a
"Lender" and collectively, the "Lenders"); and
(v) KEYBANK NATIONAL ASSOCIATION, a national banking
association, as administrative agent (the "Administrative Agent"):
PRELIMINARY STATEMENTS:
(1) Unless otherwise defined herein, all capitalized terms used herein
and defined in section 1 are used herein as so defined.
(2) The Borrowers have applied to the Lenders for credit facilities in
order to refinance certain indebtedness of the Borrowers and in order to provide
working capital and funds for other lawful purposes.
(3) Subject to and upon the terms and conditions set forth herein, the
Lenders are willing to make available to the Borrowers the credit facilities
provided for herein.
NOW, THEREFORE, it is agreed:
SECTION 1. DEFINITIONS AND TERMS.
1.1 Certain Defined Terms. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
1
"Additional Security Document" shall have the meaning provided
in section 8.12(a).
"Administrative Agent" shall have the meaning provided in the
first paragraph of this Agreement and shall include any successor to
the Administrative Agent appointed pursuant to section 11.9.
"Affiliate" shall mean, with respect to any person, any other
person directly or indirectly controlling, controlled by, or under
direct or indirect common control with such person. A person shall be
deemed to control a second person if such first person possesses,
directly or indirectly, the power (i) to vote 10% or more of the
securities having ordinary voting power for the election of directors
or managers of such second person or (ii) to direct or cause the
direction of the management and policies of such second person, whether
through the ownership of voting securities, by contract or otherwise.
Notwithstanding the foregoing a director, officer or employee of a
person shall not, solely by reason of such status, be considered an
Affiliate of such person.
"Agreement" shall mean this Credit Agreement, as the same may
be from time to time further modified, amended and/or supplemented.
"Alternative Currency" shall mean and include (i) Pounds
Sterling and Deutsche Marks, if at the time any such currency is
readily and freely transferable and convertible into Dollars; and (ii)
any other lawful currency other than Dollars which is readily and
freely transferable and convertible into Dollars and is acceptable to
the Required Lenders and any applicable Letter of Credit Issuer.
"Applicable Commitment Fee Rate" shall mean 37.50 basis points
per annum, provided that the Applicable Commitment Fee Rate will
automatically reduce to 25 basis points per annum at the effective time
the Applicable Eurocurrency Margin for Revolving Loans is reduced to
100 basis points.
"Applicable Eurocurrency Margin" shall mean (i) in the case of
any Term Loan which is a Eurocurrency Loan, 100 basis points per annum;
and (ii) in the case of any Revolving Loan which is a Eurocurrency
Loan, 125 basis points per annum, provided that if (A) the Company
shall have successfully completed (and shall have received the net
proceeds of) a public offering, Rule 144A offering or private placement
with institutional investors, of at least $50,000,000 principal amount
of its subordinated notes with a weighted average life to maturity
(computed in accordance with standard financial practice) of at least
five years, and shall have provided to the Administrative Agent
evidence satisfactory to the Administrative Agent of such completion
and receipt, and (B) at such time no Default under section 10.1(a) or
Event of Default shall have occurred and be continuing, then the
foregoing 125 basis points per annum shall be reduced to 100 basis
points per annum effective on the first day of the month after which
the Company shall
2
have completed such offering or private placement and received the net
proceeds thereof. The Administrative Agent shall notify the Company (on
behalf of all Borrowers) and the Lenders of any such reduction and the
effective date thereof.
"Applicable Lending Office" shall mean, with respect to each
Lender, (i) such Lender's Domestic Lending Office in the case of
Borrowings consisting of Prime Rate Loans and (ii) such Lender's
Eurocurrency Lending Office in the case of Borrowings consisting of
Eurocurrency Loans.
"Asset Sale" shall mean the sale, transfer or other
disposition (including by means of mergers, consolidations, and
liquidations of a corporation, partnership or limited liability company
of the interests therein of the Company or any Subsidiary) by the
Company or any Subsidiary to any person other than the Company or any
Subsidiary of any of their respective assets (other than sales,
transfers or other dispositions of obsolete or excess furniture,
fixtures, equipment or other property, tangible or intangible, in the
ordinary course of business).
"Assignment Agreement" shall mean an Assignment Agreement
substantially in the form of Exhibit J hereto.
"Authorized Officer" shall mean any officer or employee of any
applicable Borrower designated as such in writing to the Administrative
Agent by such Borrower.
"Bankruptcy Code" shall have the meaning provided in section
10.1(g).
"Borrower" shall mean any of the Company, the German Borrower
or the British Borrower, as the case may be.
"Borrowing" shall mean a Revolving Borrowing or a Term Loan
Borrowing, as the case may be.
"Borrowing Subsidiary" shall mean either the German Borrower
or the British Borrower, as the case may be.
"British Borrower" shall have the meaning provided in the
first paragraph of this Agreement.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and
any day which shall be in the city in which the applicable Payment
Office is located a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to
close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on,
Eurocurrency Loans, any day which is a Business Day described in clause
(i)
3
and which is also a day on which dealings are carried on in the London
interbank market and banks are open for business in London and in the
country of issue of any Alternative Currency in which any applicable
Eurocurrency Loans are denominated.
"Capital Lease" as applied to any person shall mean any lease
of any property (whether real, personal or mixed) by that person as
lessee which, in conformity with GAAP, is accounted for as a capital
lease on the balance sheet of that person.
"Capitalized Lease Obligations" shall mean all obligations
under Capital Leases of the Company or any of its Subsidiaries in each
case taken at the amount thereof accounted for as liabilities on a
consolidated balance sheet of the Company and its Subsidiaries in
accordance with GAAP.
"Cash Equivalents" shall mean (i) securities issued or
directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in
support thereof) having maturities of not more than one year from the
date of acquisition, (ii) U.S. dollar denominated or Eurocurrency
denominated time deposits, certificates of deposit and bankers'
acceptances of (x) any Lender or (y) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent
thereof or from Moodys is at least P-1 or the equivalent thereof (any
such bank, an "Approved Lender"), in each case with maturities of not
more than 90 days from the date of acquisition, (iii) commercial paper
issued by any Lender or Approved Lender or by the parent company of any
Lender or Approved Lender and commercial paper issued by, or guaranteed
by, any industrial or financial company with a short- term commercial
paper rating of at least A-1 or the equivalent thereof by S&P or at
least P-1 or the equivalent thereof by ▇▇▇▇▇'▇, or guaranteed by any
industrial company with a long term unsecured debt rating of at least A
or A2, or the equivalent of each thereof, from S&P or ▇▇▇▇▇'▇, as the
case may be, and in each case maturing within 90 days after the date of
acquisition, and (iv) investments in money market funds substantially
all the assets of which are comprised of securities of the types
described in clauses (i) through (iii) above.
"Cash Proceeds" shall mean, with respect to any Asset Sale,
the aggregate cash payments (including any cash received by way of
deferred payment pursuant to a note receivable issued in connection
with such Asset Sale, other than the portion of such deferred payment
constituting interest, but only as and when so received) received by
the Company and/or any Subsidiary from such Asset Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended
from time to time, 42 U.S.C. ss. 9601 et seq.
4
"Change of Control" shall mean and include (i) during any
period of two consecutive calendar years, individuals who at the
beginning of such period constituted the Company's Board of Directors
(together with any new directors whose election by the Company's Board
of Directors or whose nomination for election by the Company's
shareholders was approved by a vote of at least a majority of the
directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a
majority of the directors then in office (ii) any person or group (as
such term is defined in section 13(d)(3) of the 1934 Act), other than
the Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (and trusts
for the benefit of such person, his family and descendants), shall
acquire, directly or indirectly, beneficial ownership (within the
meaning of Rule 13d-3 and 13d-5 of the ▇▇▇▇ ▇▇▇) of more than 25%, on a
fully diluted basis, of the economic or voting interest in the
Company's capital stock, (iii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (and trusts for the
benefit of such person, his family and descendants) shall cease for any
reason to have beneficial ownership (within the meaning of Rule 13d-3
and 13d-5 of the ▇▇▇▇ ▇▇▇) of at least 5%, on a fully diluted basis, of
the economic or voting interest in the Company's capital stock, (iv)
during any period of 60 consecutive days, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, shall cease, for any reason, to be actively employed as a full
time executive officer of the Company, unless a successor reasonably
acceptable to the Required Lenders shall have been appointed or elected
within four months following said period, in which case the name of
such successor shall be substituted for the name of the person he or
she replaces for purposes of this clause (iv), (v) the shareholders of
the Company approve (A) a merger or consolidation of the Company with
any other person, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted or exchanged for voting securities of the
surviving or resulting entity) more than 75% of the combined voting
power of the voting securities of the Company or such surviving or
resulting entity outstanding after such merger or consolidation, or (B)
a merger or consolidation effected to implement a recapitalization of
the Company (or similar transaction), other than any such transaction
in which no person or group (as hereinabove defined) not excepted from
the provisions of clause (ii) above acquires more than 25% of the
combined voting power, on a fully diluted basis, of the Company's then
outstanding voting securities, (vi) the shareholders of the Company
approve a plan of complete liquidation of the Company or an agreement
or agreements for the sale or disposition by the Company of all or
substantially all of the Company's assets, and/or
(vii) any "change in control" or any similar term as defined in any of
the indentures, credit agreements or other instruments governing any
Indebtedness of the Company or any of its Subsidiaries with an
outstanding principal amount, or providing for commitments to lend in
an outstanding principal amount, of at least $5,000,000 (or the
equivalent amount in any other currency).
5
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and the
rulings issued thereunder. Section references to the Code are to the
Code, as in effect at the Effective Date and any subsequent provisions
of the Code, amendatory thereof, supplemental thereto or substituted
therefor.
"Collateral" shall mean any collateral covered by any Security
Document.
"Collateral Agent" shall mean any Administrative Agent acting
as Collateral Agent for the Lenders pursuant to the Security Documents.
"Commitment" shall mean, with respect to each Lender, its Term
Loan Commitment or its Revolving Commitment, or both if such Lender
shall have both a Term Loan Commitment and a Revolving Commitment.
"Commitment Fee" shall have the meaning provided in section
4.1(a).
"Company" shall have the meaning provided in the first
paragraph of this Agreement.
"Consolidated Capital Expenditures" shall mean, for any
period, the aggregate of all expenditures (whether paid in cash or
accrued as liabilities and including in all events amounts expended or
capitalized under Capital Leases but excluding any amount representing
capitalized interest) by the Company and its Subsidiaries during that
period that, in conformity with GAAP, are or are required to be
included in the property, plant or equipment reflected in the
consolidated balance sheet of the Company and its Subsidiaries.
"Consolidated Net Income" shall mean for any period, the net
income (or loss), without deduction for minority interests, of the
Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP.
"Consolidated Net Worth" shall mean at any time for the
determination thereof all amounts which, in conformity with GAAP, would
be included under the caption "total stockholders' equity" (or any like
caption) on a consolidated balance sheet of the Company as at such
date.
"Credit Documents" shall mean this Agreement, the Notes, the
Security Documents and any Letter of Credit Document.
"Credit Event" shall mean the making of any Loans and/or the
issuance of any Letter of Credit.
6
"Credit Party" shall mean each Borrower and each Subsidiary
which is a party to any Credit Document.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with, respect to
which a Lender Default is in effect.
"Designated Hedge Agreement" shall mean any Hedge Agreement to
which the Company or any of its Subsidiaries is a party which, pursuant
to a written instrument signed by the Required Lenders, has been
designated as a Designated Hedge Agreement so that the Company's or
Subsidiaries's counterparty's credit exposure thereunder will be
entitled to share in the benefits of the Subsidiary Guaranty and the
Security Documents to the extent such Subsidiary Guaranty and Security
Documents provide guarantees or security for creditors of the Company
or any Subsidiary under Designated Hedge Agreements.
"Dividends" shall have the meaning provided in section 9.6.
"Dollars", "U.S. dollars" and the sign "$" each means lawful
money of the United States.
"Domestic Lending Office" shall mean, with respect to any
Lender, the office of such Lender specified as its Domestic Lending
Office in Annex I or in the Assignment Agreement pursuant to which it
became a Lender, or such other office of such Lender as such Lender may
from time to time specify to the Company and the Administrative Agent.
"EBITDA" shall mean, for any period, (A) the sum of the
amounts for such period of, without duplication, (i) Consolidated Net
Income (exclusive of the effect thereon of any foreign currency
translation adjustments made thereto), (ii) provisions for taxes based
on income and franchise taxes, (iii) Total Interest Expense, (vi)
depreciation and amortization, and (v) extraordinary non-cash losses
and non-cash charges, less (B) gains on sales of assets (excluding
sales in the ordinary course of business) and extraordinary gains, all
as determined for the Company and its Subsidiaries on a consolidated
basis in accordance with GAAP.
"Effective Date" shall have the meaning provided in section
13.10.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution or other "accredited investor" (as defined
in SEC Regulation D), in each case which (i) so long as no Default
under section 10.1(a) or Event of Default shall have occurred and be
continuing, and so long as the financial covenants contained in section
7
9.7, 9.8, 9.9, 9.10 or 9.11 of this Agreement have not been modified
(or compliance therewith waived) following a deterioration in the
financial condition or results of operations of the Company and its
Subsidiaries, is not disapproved in writing by the Company in a notice
given to a requesting Lender and the Administrative Agent, specifying
the reasons for such disapproval, within five Business Days following
the giving of notice to the Company of the identity of any proposed
transferee (any such disapproval by the Company must be reasonable),
and (ii) is not a direct competitor of the Company or engaged in the
same or similar business as the Company, or any of its respective
Subsidiaries or is not an Affiliate of any such competitors of the
Company or any of its respective Subsidiaries.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of non-compliance or violation, investigations or
proceedings arising under any Environmental Law or any permit issued
under any such law (hereafter "Claims"), including, without limitation,
(a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or
damages pursuant to any applicable Environmental Law, and (b) any and
all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief
resulting from the storage, treatment or Release (as defined in CERCLA)
of any Hazardous Materials or arising from alleged injury or threat of
injury to health, safety or the environment.
"Environmental Law" shall mean any applicable Federal, state,
foreign or local statute, law, rule, regulation, ordinance, code,
binding and enforceable guideline, binding and enforceable written
policy and rule of common law now or hereafter in effect and in each
case as amended, and any binding and enforceable judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment issued to or rendered
against the Company or any of its Subsidiaries relating to the
environment, employee health and safety or Hazardous Materials,
including, without limitation, CERCLA; RCRA; the Federal Water
Pollution Control Act, 33 U.S.C. ss. 2601 et seq.; the Clean Air Act,
42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. ss.
3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et
seq.; the Emergency Planning and the Community Right-to-Know Act of
1986, 42 U.S.C. ss. 11001 et seq., the Hazardous Material
Transportation Act, 49 U.S.C. ss. 1801 et seq. and the Occupational
Safety and Health Act, 29 U.S.C. ss. 651 et seq. (to the extent it
regulates occupational exposure to Hazardous Materials); and any state
and local or foreign counterparts or equivalents, in each case as
amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated
and rulings issued thereunder. Section references to ERISA are to
ERISA, as in effect at the Effective Date
8
and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
section 3(9) of ERISA) which together with the Company or a Subsidiary
of the Company would be deemed to be a "single employer" (i) within the
meaning of section 414(b),(c), (m) or (o) of the Code or (ii) as a
result of the Company or a Subsidiary of the Company being or having
been a general partner of such person.
"Eurocurrency Lending Office" shall mean, with respect to any
Lender, the office of such Lender specified as its Eurocurrency Lending
Office in Annex I or in the Assignment Agreement pursuant to which it
became a Lender, or such other office or offices (for Eurocurrency
Loans denominated in Dollars or particular Alternative Currencies) of
such Lender as such Lender may from time to time specify to the Company
and the Administrative Agent.
"Eurocurrency Loans" shall mean each Loan, denominated in U.S.
Dollars or in an Alternative Currency, bearing interest at the rates
provided in section 2.7(b).
"Eurocurrency Rate" shall mean with respect to each Interest
Period for a Eurocurrency Loan, (A) either (i) the rate per annum for
deposits in Dollars or in the relevant Alternative Currency for a
maturity most nearly comparable to such Interest Period which appears
on page 3740 or 3750, as applicable, of the Dow ▇▇▇▇▇ Telerate Screen
as of 11:00 A.M. (local time at the Notice Office) on the date which is
two Business Days prior to the commencement of such Interest Period, or
(ii) if such a rate does not appear on such a page, an interest rate
per annum equal to the average (rounded upward to the nearest whole
multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in Dollars or in the
relevant Alternative Currency are offered by each of the Reference
Banks to prime banks in the London interbank Eurocurrency market for
deposits of amounts in same day funds comparable to the outstanding
principal amount of the Eurocurrency Loan for which an interest rate is
then being determined with maturities comparable to the Interest Period
to be applicable to such Eurocurrency Loan, determined as of 11:00 A.M.
(London time) on the date which is two Business Days prior to the
commencement of such Interest Period, in each case divided (and rounded
upward to the nearest whole multiple of 1/16th of 1%) by (B) a
percentage equal to 100% minus the then stated maximum rate of all
reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) applicable to any
member bank of the Federal Reserve System in respect of Eurocurrency
liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"Event of Default" shall have the meaning provided in section
10.1.
9
"Existing Indebtedness" shall have the meaning provided in
section 7.18.
"Existing Indebtedness Agreements" shall have the meaning
provided in section 7.18.
"Existing Letter of Credit" shall have the meaning provided in
section 3.1(d).
"Federal Funds Effective Rate" shall mean, for any period, a
fluctuating interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal Funds transactions
with members of the Federal Reserve System arranged by Federal Funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative
Agent.
"Fees" shall mean all amounts payable pursuant to, or referred
to in, section 4.1.
"Fixed Charge Coverage Ratio" shall mean, for any Testing
Period, the ratio of (i) EBITDA less unfunded Consolidated Capital
Expenditures, to (ii) the sum of (A) Total Interest Expense, (B)
scheduled or mandatory repayments, prepayments or redemptions of the
principal of Indebtedness (including required reductions in committed
credit facilities), (C) without duplication of any amount included
under the preceding clause (B), scheduled payments representing the
principal portion of Capitalized Lease Obligations, (D) payments under
the Phoenix Earnout, (E) Dividends, and (F) payments or provisions for
payments of taxes based on income and franchise taxes, in each case for
such Testing Period. In determining the Fixed Charge Coverage Ratio, up
to 80% of the Consolidated Capital Expenditures shall be deemed to be
"funded" for purposes of determining the unfunded amount thereof under
clause (i) above if and to the extent such Consolidated Capital
Expenditures have actually been financed or the Company or any of its
Subsidiaries could have financed the same out of the Unutilized Total
Revolving Commitment.
"Foreign Subsidiary" shall mean any Subsidiary (i) which is
not incorporated in the United States and substantially all of whose
assets and properties are located, or substantially all of whose
business is carried on, outside the United States, or (ii)
substantially all of whose assets consist of Subsidiaries that are
Foreign Subsidiaries as defined in clause (i) of this definition.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect from time to time; it being
understood and agreed that
10
determinations in accordance with GAAP for purposes of section 9,
including defined terms as used therein, are subject (to the extent
provided therein) to section 13.7(a).
"German Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Guaranteed Obligations" shall have the meaning provided in
section 12.1.
"Guaranty Obligations" shall mean as to any person (without
duplication) any obligation of such person guaranteeing any
Indebtedness ("primary Indebtedness") of any other person (the "primary
obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such person, whether or not
contingent, (a) to purchase any such primary Indebtedness or any
property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such
primary Indebtedness or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner
of any such primary Indebtedness of the ability of the primary obligor
to make payment of such primary Indebtedness, or (d) otherwise to
assure or hold harmless the owner of such primary Indebtedness against
loss in respect thereof, provided, however, that the term Guaranty
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any
Guaranty Obligation shall be deemed to be an amount equal to the stated
or determinable amount of the primary Indebtedness in respect of which
such Guaranty Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming
such person is required to perform thereunder) as determined by such
person in good faith.
"Hedge Agreement" shall mean (i) any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar
agreement or other similar agreement or arrangement designed to protect
against fluctuations in interest rates, and (ii) any currency swap
agreement, forward currency purchase agreement or similar agreement or
arrangement designed to protect against fluctuations in currency
exchange rates.
"Hazardous Materials" shall mean (i) any petrochemical or
petroleum products, radioactive materials, asbestos in any form that is
or could become friable, urea formaldehyde foam insulation,
transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas; and (ii)
any chemicals, materials or substances defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous
materials", "restricted hazardous materials", "extremely hazardous
wastes", "restrictive hazardous wastes", "toxic substances", "toxic
pollutants", "contaminants" or "pollutants", or words of similar
meaning and regulatory effect under any applicable Environmental Law.
11
"Indebtedness" of any person shall mean without duplication:
(i) all indebtedness of such person for borrowed
money,
(ii) all bonds, notes, debentures and similar debt
securities of such person,
(iii) the deferred purchase price of capital assets
or services which in accordance with GAAP would be shown on
the liability side of the balance sheet of such person,
(iv) the face amount of all letters of credit issued
for the account of such person and, without duplication, all
drafts drawn thereunder,
(v) all Indebtedness of a second person secured by
any Lien on any property owned by such first person, whether
or not such indebtedness has been assumed,
(vi) all Capitalized Lease Obligations of such
person,
(vii) all obligations of such person to pay a
specified purchase price for goods or services whether or not
delivered or accepted, i.e., take-or-pay and similar
obligations,
(viii) all net obligations of such person under Hedge
Agreements,
(ix) the full outstanding balance of trade
receivables sold with full or limited recourse, other than
solely for purposes of collection of delinquent accounts, and
(x) all Guaranty Obligations of such person
provided that neither trade payables and accrued expenses, in
each case arising in the ordinary course of business, nor obligations
in respect of insurance policies or performance or surety bonds which
themselves are not guarantees of Indebtedness, shall constitute
Indebtedness.
"Initial Borrowing Date" shall mean the date, on or after the
Effective Date, upon which the conditions specified in section 6.1 are
satisfied.
"Interest Period" with respect to any Eurocurrency Loan shall
mean the interest period applicable thereto, as determined pursuant to
section 2.8.
12
"KeyBank" shall mean KeyBank National Association, a national
banking association, together with its successors and assigns.
"Leaseholds" of any person means all the right, title and
interest of such person as lessee or licensee in, to and under leases
or licenses of land, improvements and/or fixtures.
"Lender" shall have the meaning provided in the first
paragraph of this Agreement.
"Lender Default" shall mean (i) the refusal (which has not
been retracted) of a Lender in violation of the requirements of this
Agreement to make available its portion of any incurrence of Loans or
to fund its portion of any unreimbursed payment under section 3.4(c) or
(ii) a Lender having notified the Administrative Agent and/or the
Company that it does not intend to comply with the obligations under
section 2.1 and/or section 3.4(c), in the case of either (i) or (ii) as
a result of the appointment of a receiver or conservator with respect
to such Lender at the direction or request of any regulatory agency or
authority.
"Lender Register" shall have the meaning provided in section
13.16.
"Letter of Credit" shall have the meaning provided in section
3.1(a).
"Letter of Credit Documents" shall have the meaning specified
in section 3.2(a).
"Letter of Credit Fee" shall have the meaning provided in
section 4.1(b).
"Letter of Credit Issuer" shall mean (i) KeyBank; (ii) in
respect of each Existing Letter of Credit, the Lender that has issued
same as of the Effective Date; and/or (iii) any other Lender that is
requested, and agrees, to so act by the Company, and is approved by the
Administrative Agent and the Required Lenders.
"Letter of Credit Outstandings" shall mean, at any time, the
sum, without duplication, of (i) the aggregate Stated Amount of all
outstanding Letters of Credit and (ii) the aggregate amount of all
Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
section 3.2(a).
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title
retention agreement or any lease in the nature thereof).
"Loan" shall mean a Revolving Loan or Term Loan, as the case
may be.
13
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Adverse Effect" shall mean a material adverse effect
on the business, operations, property, assets, liabilities or condition
(financial or otherwise) of, when used with reference to the Company,
the Company and its Subsidiaries, taken as a whole, or when used with
reference to any other person, such person and its Subsidiaries, taken
as a whole, as the case may be.
"Material Subsidiary" shall mean, at any time, with reference
to any person, any Subsidiary of such person that (x) has assets at
such time comprising 5% or more of the consolidated assets of such
person and its Subsidiaries or (y) had net income in the most recently
ended fiscal year of such person comprising 5% or more of the
consolidated net income of such person and its Subsidiaries for such
fiscal year.
"Maturity Date" shall mean May 31, 2002, unless earlier
terminated, or extended in accordance with section 4.4.
"Minimum Borrowing Amount" shall mean (i) for Loans which are
Prime Rate Loans, $100,000, with minimum increments thereafter of
$100,000 and (ii) for Loans which are Eurocurrency Loans, $100,000 (or
the substantial equivalent thereof in any Alternative Currency), with
minimum increments thereafter of $100,000 (or the substantial
equivalent thereof in any Alternative Currency).
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. and its
successors.
"Multiemployer Plan" shall mean a multiemployer plan, as
defined in section 4001(a)(3) of ERISA to which the Company or any
ERISA Affiliate is making or accruing an obligation to make
contributions or has within any of the preceding three plan years made
or accrued an obligation to make contributions.
"Multiple Employer Plan" shall mean an employee benefit plan,
other than a Multiemployer Plan, to which the Company or any ERISA
Affiliate, and one or more employers other than the Company or an ERISA
Affiliate, is making or accruing an obligation to make contributions
or, in the event that any such plan has been terminated, to which the
Company or an ERISA Affiliate made or accrued an obligation to make
contributions during any of the five plan years preceding the date of
termination of such plan.
"Net Cash Proceeds" shall mean, with respect to any Asset
Sale, the Cash Proceeds resulting therefrom net of (i) reasonable and
customary expenses of sale incurred in connection with such Asset Sale,
and other reasonable and customary fees and expenses incurred, and all
state, and local taxes paid or reasonably estimated to be payable by
such person, as a consequence of such Asset Sale and the payment of
principal, premium and
14
interest of Indebtedness secured by the asset which is the subject of
the Asset Sale and required to be, and which is, repaid under the terms
thereof as a result of such Asset Sale, (ii) amounts of any
distributions payable to borders of minority interests in the relevant
person or in the relevant property or assets and (iii) incremental
income taxes paid or payable as a result thereof.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Non-Defaulting Lender"shall mean each Lender other than a
Defaulting Lender.
"Note" shall mean a Term Note or Revolving Note, as the case
may be.
"Notice of Borrowing" shall have the meaning provided in
section 2.3(a).
"Notice of Conversion" shall have the meaning provided in
section 2.6.
"Notice Office" shall mean the office of the Administrative
Agent at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (telephone: (▇▇▇) ▇▇▇-▇▇▇▇; facsimile: (914)
694-8463), or such other office, located in a city in the United States
Eastern Time Zone, as the Administrative Agent may designate to the
Company from time to time.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time
existing, owing to the Administrative Agent or any Lender pursuant to
the terms of this Agreement or any other Credit Document.
"Participant" shall have the meaning provided in section
3.4(a).
"Payment Office" shall mean the office of the Administrative
Agent at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (telephone: (914) ▇▇▇- ▇▇▇▇; facsimile: (914)
694-8463), or such other office, located in a city in the United States
Eastern Time Zone, as the Administrative Agent may designate to the
Borrowers from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor
thereto.
"Percentage" shall mean, at any time for each Lender with a
Commitment, the percentage obtained by dividing such Lender's
Commitment by the Total Commitment, provided that if the Total
Commitment has been terminated, the Percentage of each Lender shall be
determined by dividing such Lender's Commitment immediately prior to
such termination by the Total Commitment immediately prior to such
termination.
15
"Permitted Acquisitions" shall mean and include, exclusive of
expenditures (including the purchase of adjacent land) to expand then
existing facilities owned by the Company or any Subsidiary on the
Effective Date or acquired pursuant to a Permitted Acquisition, and
exclusive of any loans, advances or investments otherwise permitted
pursuant to section 9.5: (i) acquisitions (whether by purchase, lease
or otherwise) of facilities and businesses operated by persons who are
not Subsidiaries of the Company, and (ii) acquisitions of equity or
other similar interests in such persons; provided, that (A) the
Required Lenders consent to such transaction, (B) all of the Lenders
consent to such transaction, if such transaction is actively opposed by
the Board of Directors (or similar governing body) of the selling
person or the person whose equity interests are to be acquired, and (C)
if as a result thereof the Company or any Subsidiary acquires any
equity interest in any person, such person by virtue of such
transaction becomes a Subsidiary of the Company.
"Permitted Liens" shall mean Liens described in section 9.3.
"person" shall mean any individual, partnership, joint
venture, firm, corporation, limited liability company, association,
trust or other enterprise or any government or political subdivision or
any agency, department or instrumentality thereof.
"Phoenix Earnout" shall mean the amounts payable as part of
the purchase price by the Company pursuant to the Stock Purchase
Agreement dated August 6, 1996, pursuant to which the Company acquired
Phoenix, depending on whether annual performance targets for Phoenix
during the years 1996-1998 are met.
"Plan" shall mean any multiemployer or single-employer plan as
defined in section 4001 of ERISA, which is maintained or contributed to
by (or to which there is an obligation to contribute by) the Company or
a Subsidiary of the Company or an ERISA Affiliate, and each such plan
for the five year period immediately following the latest date on which
the Company, or a Subsidiary of the Company or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such
plan.
"Pledge Agreement" shall have the meaning provided in section
6.1(c).
"Prime Rate" shall mean, for any period, a fluctuating
interest rate per annum as shall be in effect from time to time which
rate per annum shall at all times be equal to the greater of (i) the
rate of interest established by KeyBank in Cleveland, Ohio, from time
to time, as its prime rate, whether or not publicly announced, which
interest rate may or may not be the lowest rate charged by it for
commercial loans or other extensions of credit; and (ii) the Federal
Funds Effective Rate in effect from time to time plus 1/2 of 1% per
annum.
"Prime Rate Loan" shall mean each Loan, denominated in U. S.
Dollars, bearing interest at the rates provided in section 2.7(a).
16
"Prohibited Transaction" shall mean a transaction with respect
to a Plan that is prohibited under section 4975 of the Code or section
406 of ERISA and not exempt under section 4975 of the Code or section
408 of ERISA.
"RCRA" shall mean the Resource Conservation and Recovery Act,
as the same maybe amended from time to time, 42 U.S.C. ss. 6901 d seq.
"Real Property" of any person shall mean all of the right,
title and interest of such person in and to land, improvements and
fixtures, including Leaseholds.
"Reference Banks" shall mean (i) KeyBank and (ii) any other
Lender or Lenders selected as a Reference Bank by the Administrative
Agent and the Required Lenders, provided, that if any of such Reference
Banks is no longer a Lender, such other Lender or Lenders as may be
selected by the Administrative Agent acting on instructions from the
Required Lenders.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect
and any successor to all or a portion thereof establishing reserve
requirements.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect
and any successor to all or a portion thereof establishing margin
requirements.
"Reportable Event" shall mean an event described in section
4043(c) of ERISA with respect to a Plan other than those events as to
which the 30-day notice period is waived under subsection .13, .14,
.16, .18, .19 or .20 of PBGC Regulation section 2615.
"Required Lenders" shall mean Non-Defaulting Lenders whose
outstanding Revolving Loans and Unutilized Commitments constitute at
least 66+2/3% of the sum of the total outstanding Revolving Loans and
Unutilized Commitments of Non-Defaulting Lenders (provided that, for
purposes hereof, neither the Company, nor any of its Affiliates, shall
be included in (i) the Lenders holding such amount of the Revolving
Loans or having such amount of the Unutilized Commitments, or (ii)
determining the aggregate unpaid principal amount of the Revolving
Loans or Unutilized Commitments).
"Revolving Borrowing" shall mean the incurrence of Revolving
Loans consisting of one Type of Loan, by any Borrower from all of the
Lenders having Commitments in respect thereof on a pro rata basis on a
given date (or resulting from conversions on a given date), having in
the case of Eurocurrency Loans the same Interest Period.
"Revolving Facility" shall mean the facility evidenced by the
Total Revolving Commitment.
17
"Revolving Facility Percentage" shall mean at any time for any
Lender with a Revolving Commitment, the percentage obtained by dividing
such Lender's Revolving Commitment by the Total Revolving Commitment,
provided, that if the Total Revolving Commitment has been terminated,
the Revolving Facility Percentage for each Lender shall be determined
by dividing such Lender's Revolving Commitment immediately prior to
such termination by the Total Revolving Commitment immediately prior to
such termination.
"Revolving Loan" shall have the meaning provided in section
2.1.
"Revolving Commitment" shall mean, with respect to each
Lender, the amount, if any, set forth opposite such Lender's name in
Annex I as its "Revolving Commitment" as the same may be reduced from
time to time pursuant to section 4.2, 4.3 and/or 10 or adjusted from
time to time as a result of assignments to or from such Lender pursuant
to section 13.4.
"Revolving Note" shall have the meaning provided in section
2.5(a).
"Sale and Lease-Back Transaction" shall mean any arrangement
with any person providing for the leasing by the Company or any
Subsidiary of the Company of any property (except for temporary leases
for a term, including any renewal thereof, of not more than one year
and except for leases between the Company and a Subsidiary or between
Subsidiaries), which property has been or is to be sold or transferred
by the Company or such Subsidiary to such person.
"S&P" shall mean Standard & Poor's Ratings Group, a division
of McGraw Hill, Inc., and its successors.
"Scheduled Repayment" shall have the meaning provided in
section 5.2(b).
"SEC" shall mean the United States Securities and Exchange
Commission.
"SEC Regulation D" shall mean Regulation D as promulgated
under the Securities Act of 1933, as amended, as the same may be in
effect from time to time.
"Section 5.4(b)(ii) Certificate" shall have the meaning
provided in section 5.4(b)(ii).
"Security Agreement" shall have the meaning provided in
section 6.1(c).
"Security Documents" shall mean the Security Agreement, the
Pledge Agreement and each other document pursuant to which any Lien or
security interest is granted by any Credit Party to the Collateral
Agent as security for any of the Obligations.
18
"Stared Amount" of each Letter of Credit shall mean the
maximum available to be drawn thereunder (regardless of whether any
conditions or other requirements for drawing could then be met).
"Subsidiary" of any person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having
by the terms thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at the
time stock of any class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency)
is at the time owned by such person directly or indirectly through
Subsidiaries and (ii) any partnership, association, joint venture or
other entity in which such person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless
otherwise expressly provided, all references herein to "Subsidiary"
shall mean a Subsidiary of the Company.
"Subsidiary Guaranty" shall have the meaning provided in
section 6.1(c).
"Subordinated Indebtedness" shall mean any Indebtedness which
has been subordinated to the Obligations in such manner and to such
extent as the Required Lenders may require.
"Term Loan" shall have the meaning provided in section 2.1.
"Term Loan Borrowing" shall mean the incurrence of Term Loans
consisting of one Type of Loan, by the Company from all of the Lenders
having Commitments in respect thereof on a pro rata basis on a given
date (or resulting from conversions on a given date), having in the
case of Eurocurrency Loans the same Interest Period.
"Term Loan Commitment" shall mean, with respect to each
Lender, the amount, if any, set forth opposite such Lender's name in
Annex I as its "Term Loan Commitment" as the same may be reduced from
time to time pursuant to sections 4.2, 4.3 and/or 10 or adjusted from
time to time as a result of assignments to or from such Lender pursuant
to section 13.4.
"Term Loan Facility" shall mean the facility evidenced by the
Total Term Loan Commitment.
"Term Note" shall have the meaning provided in section 2.5(a).
"Testing Period' shall mean (i) for determinations made prior
to March 31, 1998, amounts determined on an annualized basis based on
the fiscal year to date through the fiscal quarter most recently ended,
and (ii) for determinations made thereafter a single period consisting
of the four consecutive fiscal quarters of the Company most recently
ended (whether or not such quarters are all within the same fiscal
year).
19
"Total Commitment" shall mean the sum of the Commitments of
the Lenders.
"Total Indebtedness" shall mean the sum (without duplication)
of the following, for the Company and/or any of its Subsidiaries, all
as determined on a consolidated basis of:
(i) all indebtedness for borrowed money,
(ii) all bonds, notes, debentures and similar debt
securities,
(iii) the deferred purchase price of capital assets
or services which in accordance with GAAP would be shown on
the liability side of a consolidated balance sheet of the
Company and its Subsidiaries,
(iv) the face amount of all letters of credit issued
for the account of the Company or any Subsidiary, and, without
duplication, all drafts drawn thereunder,
(v) all Indebtedness of a second person secured by
any Lien on any property owned by such first person, whether
or not such Indebtedness has been assumed,
(vi) all Capitalized Lease Obligations,
(vii) all obligations of the Company or any
Subsidiary to pay a specified purchase price for goods or
services whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations,
(viii) the full outstanding balance of trade
receivables sold with full or limited recourse, other than
solely for purposes of collection of delinquent accounts,
provided that if the structure of any receivables sales
program provides for "over-collateralization", the outstanding
balance of the trade receivables attributable to the
"over-collateralization" may be excluded, and
(ix) all Guaranty Obligations of such person,
provided that neither trade payables and accrued expenses, in each case
arising in the ordinary course of business, nor obligations in respect
of insurance policies or performance or surety bonds which themselves
are not guarantees of Indebtedness, shall be included.
"Total Interest Expense" shall mean, for any period, total
interest expense (including that which is capitalized and that which is
attributable to Capital Leases, in accordance with GAAP) of the Company
and its Subsidiaries on a consolidated basis with
20
respect to all outstanding Indebtedness of the Company and its
Subsidiaries including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and
net costs under Hedge Agreements, but excluding, however, any
amortization of deferred financing costs, all as determined in
accordance with GAAP.
"Total Revolving Commitment" shall mean the sum of the
Revolving Commitments of the Lenders.
"Total Term Loan Commitment" shall mean the sum of the Term
Loan Commitments of the Lenders.
"Type" shall mean any type of Loan determined with respect to
the interest option applicable thereto, i.e., a Prime Rate Loan or a
Eurocurrency Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current liability" of any Plan shall mean the
amount, if any, by which the actuarial present value of the accumulated
plan benefits under the Plan as of the close of its most recent plan
year exceeds the fair market value of the assets allocable thereto,
each determined in accordance with Statement of Financial Accounting
Standards No. 87, based upon the actuarial assumptions used by the
Plan's actuary in the most recent annual valuation of the Plan.
"United States" and "U.S." each means United States of
America.
"Unpaid Drawing" shall have the meaning provided in section
3.3(a).
"Unutilized Commitment" for any Lender at any time shall mean
the excess of (i) such Lender's Commitment at such time over (ii) the
sum of the principal amount of Loans made by such Lender and
outstanding at such time and (y) such Lender's Revolving Facility
Percentage of Letter of Credit Outstandings at such time.
"Unutilized Total Commitment" shall mean, at any time, the
excess of (i) the Total Commitment at such time over (ii) the sum of
(x) the aggregate principal amount of all Loans then outstanding plus
(y) the aggregate Letter of Credit Outstandings at such time.
"Unutilized Total Revolving Commitment"shall mean, at any
time, the excess of (i) the Total Revolving Commitment at such time
over (ii) the sum of (x) the aggregate principal amount of all
Revolving Loans then outstanding plus (y) the aggregate Letter of
Credit Outstandings at such time.
21
"Unutilized Total Term Loan Commitment" shall mean, at any
time, the excess of (i) the Total Term Loan Commitment at such time
over (ii) the aggregate principal amount of all Term Loans then
outstanding at such time.
"Value" shall mean, with respect to a Sale and Lease-Back
Transaction, as of any particular time, the amount equal to the greater
of (i) the net proceeds of the sale or transfer of the property leased
pursuant to such Sale and Lease-Back Transaction or (ii) the fair value
in the opinion of the Company, acting in good faith, of such property
at the time of entering into such Sale and Lease-Back Transaction.
"Wholly-Owned Subsidiary" shall mean each Subsidiary of the
Company at least 95% of whose capital stock, equity interests and
partnership interests, other than director's qualifying shares or
similar interests, are owned directly or indirectly by the Company.
"Written", "written" or "in writing" shall mean any form of
written communication or a communication by means of telex, facsimile
transmission, telegraph or cable.
1.2 Computation of Time Periods. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each means "to
but excluding".
1.3 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistent with those applied in the preparation of the financial
statements referred to in section 7.8(a).
1.4 Currency Equivalents. For purposes of this Agreement, except as
otherwise specified herein, (i) the equivalent in Dollars of any Alternative
Currency shall be determined by using the quoted spot rate at which the
Administrative Agent offers to exchange Dollars for such Alternative Currency at
its Payment Office at 9:00 A.M. (local time at the Payment Office) two Business
Days prior to the date on which such equivalent is to be determined, (ii) the
equivalent in any Alternative Currency of any other Alternative Currency shall
be determined by using the quoted spot rate at which the Administrative Agent's
Payment Office offers to exchange such Alternative Currency for the equivalent
in Dollars of such other Alternative Currency at such Payment Office at 9:00
A.M. (local time at the Payment Office) two Business Days prior to the date on
which such equivalent is to be determined, and (iii) the equivalent in any
Alternative Currency of Dollars shall be determined by using the quoted spot
rate at which the Administrative Agent's Payment Office offers to exchange such
Alternative Currency for Dollars at the Payment Office at 9:00 A.M. (local time
at the Payment Office) two Business Days prior to the date on which such
equivalent is to be determined; provided, that (A) the equivalent in Dollars of
each Eurocurrency Loan made in an Alternative Currency shall be recalculated
hereunder on each date that it shall be necessary (or the Administrative Agent
shall elect) to determine the unused portion of each Lender's Commitment, or any
or all Loan or Loans outstanding on such date; (B) the equivalent in Dollars of
any Unpaid Drawing in respect of any Letter of Credit denominated in an
22
Alternative Currency shall be determined at the time the drawing under such
Letter of Credit was paid or disbursed by the applicable Letter of Credit
Issuer; (C) for purposes of sections 2.1(a), 3.1(b) and 5.2(a), the equivalent
in Dollars of the Stated Amount of any Letter of Credit denominated in an
Alternative Currency shall be calculated (x) on the date of the issuance of the
respective Letter of Credit, (y) on the first Business Day of each calendar
month thereafter and (z) in any other case where the same is required or
permitted to be calculated, on such other day as the Administrative Agent may,
in its sole discretion, consider appropriate; and (D) for purposes of sections
4.1(b) and (c), the equivalent in Dollars of the Stated Amount of any Letter of
Credit denominated in an Alternative Currency shall be calculated on the first
day of each calendar month in the quarterly period in which the respective
payment is due pursuant to said sections.
SECTION 2. AMOUNT AND TERMS OF LOANS.
2.1 Commitments for Loans. Subject to and upon the terms and conditions
herein set forth, each Lender severally agrees to make a loan or loans (each a
"Loan" and, collectively, the "Loans") to the respective Borrowers, which Loans
shall be drawn, to the extent such Lender has a commitment under a Facility,
under the applicable Facility, as set forth below:
(a) Term Loan Facility. Loans under the Term Loan Facility
(each a "Term Loan" and, collectively, the "Term Loans"): (i) may only
be incurred by the Company; (ii) are to be made pursuant to a Borrowing
on the Initial Borrowing Date; (iii) except as otherwise provided, may,
at the option of the Company, be incurred and maintained as, or
converted into, Term Loans which are Prime Rate Loans, or Eurocurrency
Loans denominated in Dollars, provided that all Term Loans made as part
of the same Borrowing shall, unless otherwise specifically provided
herein, consist of Term Loans of the same Type; and (iv) shall not
exceed for any Lender at the time of incurrence thereof the aggregate
principal amount of the Term Loan Commitment, if any, of such Lender at
such time. Once prepaid or repaid, Term Loans may not be reborrowed.
(b) Revolving Facility. Loans under the Revolving Facility
(each a "Revolving Loan" and, collectively, the "Revolving Loans"): (i)
may be incurred by any Borrower, provided that (A) the aggregate
principal amount of the Revolving Loans of the Company may not exceed
$7,500,000 at any time, and (B) the principal amount of the Revolving
Loans of the German Borrower and the British Borrower may not exceed,
in the aggregate for both such Borrowers, $2,000,000 at any time; (ii)
may be made at any time and from time to time on and after the Initial
Borrowing Date and prior to the Maturity Date; (iii) except as
otherwise provided, may, at the option of the applicable Borrower, be
incurred and maintained as, or converted into, Revolving Loans which
are Prime Rate Loans, or Eurocurrency Loans denominated in Dollars or
in an Alternative Currency, provided that all Revolving Loans made as
part of the same Borrowing shall, unless otherwise specifically
provided herein, consist of Revolving Loans of the same currency and
Type; (iv) may be repaid or prepaid and reborrowed in accordance with
the provisions hereof; and (v) shall not exceed for any Lender at any
time outstanding that aggregate
23
principal amount which, when added to the product at such time of (A)
such Lender's Revolving Facility Percentage, times (B) the aggregate
Letter of Credit Outstandings, equals the Revolving Commitment of such
Lender at such time. Revolving Loans to the Company which are
Eurocurrency Loans may only be denominated in Dollars.
2.2 Minimum Borrowing Amounts, etc.; Pro Rata Borrowings. (a) The
aggregate principal amount of each Borrowing by any Borrower shall not be less
than the Minimum Borrowing Amount. More than one Borrowing may be incurred by
any Borrower on any day, provided that (i) if there are two or more Borrowings
on a single day by the same Borrower under the same Facility which consist of
Eurocurrency Loans denominated in the same currency, each such Borrowing shall
have a different initial Interest Period, and at no time shall there be more
than 10 Borrowings of Eurocurrency Loans outstanding hereunder.
(b) All Borrowings under a Facility shall be made by the Lenders having
Commitments under such Facility pro rata on the basis of their respective
Commitments under such Facility. It is understood that no Lender shall be
responsible for any default by any other Lender in its obligation to make Loans
hereunder and that each Lender shall be obligated to make the Loans provided to
be made by it hereunder, regardless of the failure of any other Lender to
fulfill its Commitments hereunder.
2.3 Notice of Borrowing. (a) Whenever any Borrower desires to incur
Loans, the Company (on behalf of any applicable Borrower) shall give the
Administrative Agent at its Notice Office,
(A) prior to 11:00 A.M. (local time at its Notice Office), at
least three Business Days' prior written or telephonic notice (in the
case of telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent) of each Borrowing of
Eurocurrency Loans denominated in Dollars to be made hereunder,
(B) prior to 11:00 A.M. (local time at its Notice Office), at
least five Business Days' prior written or telephonic notice (in the
case of telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent) of each Borrowing of Revolving
Loans consisting of Eurocurrency Loans denominated in an Alternative
Currency to be made hereunder, and
(C) prior to 11:00 A.M. (local time at its Notice Office) on
the proposed date thereof written or telephonic notice (in the case of
telephonic notice, promptly confirmed in writing if so requested by the
Administrative Agent) of each Borrowing of Prime Rate Loans to be made
hereunder.
Each such notice (each such notice, a "Notice of Borrowing") shall (if requested
by the Administrative Agent to be confirmed in writing), be substantially in the
form of Exhibit B-1, and in any event shall be irrevocable and shall specify:
(i) the Facility under which the Borrowing is to
24
be incurred, (ii) the name of the Borrower which is to incur such Borrowing,
(iii) the aggregate principal amount of the Loans to be made pursuant to such
Borrowing; (iv) the date of the Borrowing (which shall be a Business Day); (v)
whether the Borrowing shall consist of Prime Rate Loans or Eurocurrency Loans;
(vi) if the requested Borrowing consists of Eurocurrency Loans, the Interest
Period to be initially applicable thereto; and (vii) in the case of a requested
Borrowing consisting of Revolving Loans which are Eurocurrency Loans, the
currency, if other than Dollars, in which such Revolving Loans are requested.
The Administrative Agent shall promptly give each Lender which has a commitment
under any applicable Facility written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing under the applicable Facility,
of such Lender's proportionate share thereof and of the other matters covered by
the Notice of Borrowing relating thereto. Each Borrower other than the Company
hereby authorizes the Company to give any Notice of Borrowing on its behalf.
(b) In the case of a proposed Borrowing comprised of Revolving Loans
which are Eurocurrency Loans denominated in an Alternative Currency, the
obligation of each affected Lender to make its Eurocurrency Loan in the
requested Alternative Currency as part of such Borrowing is subject to:
(A) if such requested Alternative Currency is an Alternative
Currency described in clause (i) of the definition of the term
Alternative Currency, the confirmation by the Administrative Agent to
the Company (on behalf of any applicable Borrower) not later than the
fourth Business Day before the requested date of such Borrowing that
such Alternative Currency is readily and freely transferable and
convertible into Dollars, or
(B) if such requested Alternative Currency is not an
Alternative Currency described in clause (i) of the definition of the
term Alternative Currency, the confirmation by such Lender to the
Administrative Agent not later than the fourth Business Day before the
requested date of such Borrowing that such Alternative Currency is
acceptable to such Lender, which confirmation shall be notified
immediately by the Administrative Agent to the Company (on behalf of
any applicable Borrower).
If the Administrative Agent shall not have provided the confirmation referred to
in clause (A) above, or any affected Lender shall not have so provided to the
Administrative Agent the confirmation referred to in clause (B) above, the
Administrative Agent shall promptly notify the Company (on behalf of any
applicable Borrower) and each affected Lender that a Lender has not provided any
such confirmation referred to in such clause (B), whereupon the Company (on
behalf of any applicable Borrower) may, by notice to the Administrative Agent
not later than the third Business Day before the requested date of such
Borrowing, withdraw the Notice of Borrowing relating to such requested
Borrowing. If the Company (on behalf of any applicable Borrower) does so
withdraw such Notice of Borrowing, the Borrowing requested in such Notice of
Borrowing shall not occur and the Administrative Agent shall promptly so notify
each affected Lender. If the Company (on behalf of any applicable Borrower) does
not so withdraw such Notice of Borrowing, the Administrative Agent shall
promptly so notify each affected Lender and such
25
Notice of Borrowing shall be deemed to be a Notice of Borrowing which requests a
Borrowing of Revolving Loans comprised of Eurocurrency Loans denominated in
Dollars and in an aggregate amount of Dollars equivalent, on the date the
Administrative Agent so notifies each affected Lender, to the amount of the
originally requested Borrowing in an Alternative Currency; and in such notice by
the Administrative Agent to each affected Lender the Administrative Agent shall
state such aggregate equivalent amount of such Borrowing in Dollars and such
Lender's ratable portion of such Borrowing. Each Borrower other than the Company
hereby authorizes the Company to give or receive on its behalf any notice
referred to above.
(c) Without in any way limiting the obligation of the Company (on
behalf of any applicable Borrower) to confirm in writing any telephonic notice
permitted to be given hereunder, the Administrative Agent may act prior to
receipt of written confirmation without liability upon the basis of such
telephonic notice believed by the Administrative Agent in good faith to be from
an Authorized Officer of the Company entitled to give telephonic notices under
this Agreement on behalf of any applicable Borrower. In each such case, the
Administrative Agent's record of the terms of such telephonic notice shall be
conclusive absent manifest error.
2.4 Disbursement of Funds from Borrowings. (a) No later than 2:00 P.M.
(local time at the Payment Office of the Administrative Agent) on the date
specified in each Notice of Borrowing relating to Eurocurrency Loans, and no
later than 2:00 P.M. (local time at the Payment Office of the Administrative
Agent) on the date specified in each Notice of Borrowing relating to Prime Rate
Loans, each Lender with a Commitment under the applicable Facility relating to
such Loans will make available its pro rata share, if any, of each Borrowing
under such Facility requested to be made on such date in the manner provided
below. All amounts relating to any Borrowing by a Borrower shall be made
available to the Administrative Agent in U.S. dollars or the applicable
Alternative Currency and immediately available funds at the Administrative
Agent's Payment Office and the Administrative Agent promptly will make available
to the applicable Borrower by depositing to its account at such Payment Office,
or at such other account in another financial institution designated by such
Borrower to the Administrative Agent, the aggregate of the amounts so made
available in the currency and type of funds received. Unless the Administrative
Agent shall have been notified by any Lender prior to the date of a Borrowing
that such Lender does not intend to make available to the Administrative Agent
its portion of the Borrowing or Borrowings to be made on such date, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent on such date of Borrowing, and the Administrative
Agent, in reliance upon such assumption, may (in its sole discretion and without
any obligation to do so) make available to the applicable Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Lender and the Administrative Agent has made
available same to the applicable Borrower, the Administrative Agent shall be
entitled to recover such corresponding amount from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Company (on
behalf of any applicable Borrower), and the applicable Borrower shall
immediately pay such corresponding amount to the Administrative Agent. The
Administrative
26
Agent shall also be entitled to recover from such Lender or the applicable
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Administrative Agent to the applicable Borrower to the date such corresponding
amount is recovered by the Administrative Agent at a rate per annum equal to (x)
if paid by such Lender, the overnight Federal Funds Effective Rate or (y) if
paid by the applicable Borrower, the then applicable rate of interest,
calculated in accordance with section 2.7, for the respective Loan (but without
any requirement to pay any amounts in respect thereof pursuant to section 2.10).
(b) Nothing herein and no subsequent termination of the Commitments
pursuant to section 4.2 or 4.3 shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder and in existence from time to
time or to prejudice any rights which any Borrower may have against any Lender
as a result of any default by such Lender hereunder.
2.5 Notes. (a) Each applicable Borrower's obligation to pay the
principal of, and interest on, the Loans made to it by each Lender shall be
evidenced (i) if a Term Loan, by a promissory note of the Company substantially
in the form of Exhibit A-1 (each a "Term Note" and, collectively, the "Term
Notes") and (ii) if a Revolving Loan, by a promissory note of the applicable
Borrower substantially in the form of Exhibit A-2 with blanks appropriately
completed in conformity herewith (each a "Revolving Note" and, collectively, the
"Revolving Notes").
(b) The Term Note issued to a Lender with a Term Loan Commitment shall:
(i) be executed by the Company; (ii) be payable to the order of such Lender and
be dated on or prior to the Initial Borrowing Date; (iii) be in a stated
principal amount equal to the Term Loan Commitment of such Lender and be payable
in the principal amount of Term Loans evidenced thereby; (iv) mature on the
Maturity Date; (v) bear interest as provided in section 2.7 in respect of the
Prime Rate Loans or Eurocurrency Loans, as the case may be, evidenced thereby;
(vi) provide for installment payments of principal thereof in accordance with
section 5.2(b); (vii) be subject to mandatory prepayment as provided in section
5.2; and (viii) be entitled to the benefits of this Agreement and the other
Credit Documents.
(c) The Revolving Note issued by any Borrower to a Lender with a
Revolving Commitment shall: (i) be executed by such Borrower; (ii) be payable to
the order of such Lender and be dated on or prior to the Initial Borrowing Date;
(iii) be payable in the principal amount of Revolving Loans evidenced thereby;
(iv) mature on the Maturity Date; (v) bear interest as provided in section 2.7
in respect of the Prime Rate Loans or Eurocurrency Loans, as the case may be,
evidenced thereby; (vi) be subject to mandatory prepayment as provided in
section 5.2; and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
(d) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of any of the Notes issued to it by any Borrower, endorse on the
reverse side thereof or the grid attached thereto the outstanding
27
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in any such notation shall not affect any Borrower's obligations in
respect of such Loans.
2.6 Voluntary Conversion of Dollar Denominated Loans. Each Borrower
shall have the option to convert on any Business Day all or a portion at least
equal to the applicable Minimum Borrowing Amount of the outstanding principal
amount of its Loans denominated in Dollars of one Type owing by it pursuant to a
single Facility into a Borrowing or Borrowings pursuant to the same Facility of
another Type of Loans denominated in Dollars which can be made pursuant to such
Facility, provided that: (i) no partial conversion of a Borrowing of
Eurocurrency Loans shall reduce the outstanding principal amount of the
Eurocurrency Loans made pursuant to such Borrowing to less than the Minimum
Borrowing Amount applicable thereto; (ii) any conversion of Eurocurrency Loans
into Prime Rate Loans shall be made on, and only on, the last day of an Interest
Period for such Eurocurrency Loans; (iii) Prime Rate Loans may only be converted
into Eurocurrency Loans if no Default under section 10.1(a) or Event of Default
is in existence on the date of the conversion unless the Required Lenders
otherwise agree; and (iv) Borrowings of Eurocurrency Loans resulting from this
section 2.6 shall conform to the requirements of section 2.2. Each such
conversion shall be effected by such Borrower giving the Administrative Agent at
its Notice Office, prior to 11:00 A.M. (local time at such Notice Office), at
least three Business Days' (or prior to 11:00 A.M. (local time at such Notice
Office) same Business Day's, in the case of a conversion into Prime Rate Loans)
prior written notice (or telephonic notice promptly confirmed in writing if so
requested by the Administrative Agent) (each a "Notice of Conversion"),
substantially in the form of Exhibit B-2, specifying the Loans to be so
converted, the Type of Loans to be converted into and, if to be converted into a
Borrowing of Eurocurrency Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Lender prompt notice of any
such proposed conversion affecting any of its Loans. For the avoidance of doubt,
the prepayment or repayment of any Revolving Loans out of the proceeds of other
Revolving Loans by a Borrower is not considered a conversion of Revolving Loans
into other Revolving Loans.
2.7 Interest on Loans. (a) The unpaid principal amount of each Loan
which is a Prime Rate Loan shall bear interest from the date of the Borrowing
thereof until maturity (whether by acceleration or otherwise) at a fluctuating
rate per annum which shall at all times be equal to the Prime Rate in effect
from time to time.
(b) The unpaid principal amount of each Loan which is a Eurocurrency
Loan shall bear interest from the date of the Borrowing thereof until maturity
(whether by acceleration or otherwise) at a rate per annum which shall at all
times be the Applicable Eurocurrency Margin (as defined below) for such Loan
plus the relevant Eurocurrency Rate.
(c) Notwithstanding the above provisions, if a Default under section
10.1(a) or Event of Default is in existence, all outstanding amounts of
principal and, to the extent permitted by law, all overdue interest, in respect
of each Loan shall bear interest, payable on demand, at a rate per annum equal
to 2% per annum above the interest rate otherwise applicable thereto. If any
amount
28
(other than the principal of and interest on the Loans) payable by any Borrower
under the Credit Documents is not paid when due, such amount shall bear
interest, payable on demand, at a rate per annum equal to the Prime Rate in
effect from time to time plus 2% per annum.
(d) Interest shall accrue from and including the date of any Borrowing
to but excluding the date of any prepayment or repayment thereof and shall be
payable (i) in respect of each Prime Rate Loan, quarterly in arrears on the last
Business Day of March, June, September and December, (ii) in respect of each
Eurocurrency Loan, on the last day of each Interest Period applicable thereto
and, in the case of an Interest Period in excess of three months, on the dates
which are successively three months after the commencement of such Interest
Period, and (iii) in respect of each Loan, on any prepayment or conversion (on
the amount prepaid or converted), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in accordance
with section 13.7(b).
(f) Each Reference Bank agrees to furnish the Administrative Agent
timely information for the purpose of determining the Eurocurrency Rate for any
Borrowing consisting of Eurocurrency Loans. If any one or more of the Reference
Banks shall not timely furnish such information, the Administrative Agent shall
determine the Eurocurrency Rate on the basis of timely information furnished by
the remaining Reference Banks. The Administrative Agent upon determining the
interest rate for any Borrowing shall promptly notify the Company (on behalf of
any applicable Borrower) and the Lenders thereof.
2.8 Interest Periods. (a) At the time the Company (on behalf of any
applicable Borrower) gives a Notice of Borrowing or Notice of Conversion in
respect of the making of, or conversion into, a Borrowing of Eurocurrency Loans
(in the case of the initial Interest Period applicable thereto) or prior to
11:00 A.M. (local time at the applicable Notice Office) on the third Business
Day prior to the expiration of an Interest Period applicable to a Borrowing of
Eurocurrency Loans, it shall have the right (on behalf of any applicable
Borrower) to elect by giving the Administrative Agent written or telephonic
notice (in the case of telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent) of the Interest Period applicable to such
Borrowing, which Interest Period shall, at the option of the Company (on behalf
of any applicable Borrower), be a one, two, three or six month period.
Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of
Eurocurrency Loans shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing of Prime Rate
Loans) and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding
Interest Period expires;
29
(ii) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, provided that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day,
(iv) no Interest Period with respect to any Borrowing of Term
Loans may be elected that would extend beyond any date upon which a
Scheduled Repayment is required to be made in respect of such Loans if,
after giving effect to the selection of such Interest Period, the
aggregate principal amount of Term Loans maintained as Eurocurrency
Loans with Interest Periods ending after such date would exceed the
aggregate principal amount of Term Loans permitted to be outstanding
after such Scheduled Repayment;
(v) no Interest Period for any Loan may be selected which
would end after the Maturity Date; and
(vi) no Interest Period may be elected at any time when a
Default under section 10.1(a) or an Event of Default is then in
existence unless the Required Lenders otherwise agree.
(b) If upon the expiration of any Interest Period the Company (on
behalf of any applicable Borrower) has failed to (or may not) elect a new
Interest Period to be applicable to the respective Borrowing of Eurocurrency
Loans as provided above, the Company (on behalf of any applicable Borrower)
shall be deemed to have elected to convert such Borrowing to Prime Rate Loans
effective as of the expiration date of such current Interest Period.
2.9 Increased Costs, Illegality, etc. (a) In the event that (x) in the
case of clause (i) below, the Administrative Agent or (y) in the case of clauses
(ii) and (iii) below, any Lender, shall have determined on a reasonable basis
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
(i) on any date for determining the Eurocurrency Rate for
Eurocurrency Loans for any Interest Period that, by reason of any
changes arising after the Effective Date affecting the interbank
Eurocurrency market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Eurocurrency Rate; or
30
(ii) at any time, that such Lender shall incur increased costs
or reductions in the amounts received or receivable hereunder in an
amount which such Lender deems material with respect to any
Eurocurrency Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a
change in the rate of taxes or similar charges) because of any change
since the Effective Date in any applicable law, governmental rule,
regulation, guideline, order or request (whether or not having the
force of law), or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule,
regulation, guideline, order or request (such as, for example, but not
limited to, a change in official reserve requirements, but, in all
events, excluding reserves includable in the Eurocurrency Rate pursuant
to the definition thereof); or
(iii) at any time, that the making or continuance of any
Eurocurrency Loan denominated in Dollars or in an Alternative Currency
has become unlawful by compliance by such Lender in good faith with any
change since the Effective Date in any law, governmental rule,
regulation, guideline or order, or the interpretation or application
thereof, or would conflict with any thereof not having the force of law
but with which such Lender customarily complies;
then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on such date and (y) within 10 Business Days
of the date on which such event no longer exists give notice (by telephone
confirmed in writing) to the Company (on behalf of any applicable Borrower) and
to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other applicable
Lenders). Thereafter (x) in the case of clause (i) above, Eurocurrency Loans
shall no longer be available until such time as the Administrative Agent
notifies the Company (on behalf of the applicable Borrowers) and the applicable
Lenders that the circumstances giving rise to such notice by the Administrative
Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given
by or on behalf of a Borrower with respect to Eurocurrency Loans which have not
yet been incurred or converted shall be deemed rescinded by such Borrower or, in
the case of a Notice of Borrowing, shall, at the option of the Company (on
behalf of such Borrower), be deemed converted into a Notice of Borrowing for
Prime Rate Loans to be made on the date of Borrowing contained in such Notice of
Borrowing, (y) in the case of clause (ii) above, the applicable Borrower shall
pay to such Lender, upon written demand therefor, such additional amounts (in
the form of an increased rate of, or a different method of calculating, interest
or otherwise as such Lender shall determine) as shall be required to compensate
such Lender, for such increased costs or reductions in amounts receivable
hereunder (a written notice as to the additional amounts owed to such Lender,
showing the basis for the calculation thereof, which basis must be reasonable,
submitted to the Company (on behalf of such Borrower) by such Lender shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto) and (z) in the case of clause (iii) above, the applicable Borrower shall
take one of the actions specified in section 2.9(b) as promptly as possible and,
in any event, within the time period required by law.
31
(b) At any time that any Eurocurrency Loan is affected by the
circumstances described in section 2.9(a)(ii) or (iii), the applicable Borrower
may (and in the case of a Eurocurrency Loan affected pursuant to section
2.9(a)(iii) the applicable Borrower shall) either (i) if the affected
Eurocurrency Loan is then being made pursuant to a Borrowing, by giving the
Administrative Agent telephonic notice (confirmed promptly in writing if
requested) thereof on the same date that such Borrower was notified by a Lender
pursuant to section 2.9(a)(ii) or (iii), cancel said Borrowing, convert the
related Notice of Borrowing into one requesting a Borrowing of Prime Rate Loans
or require the affected Lender to make its requested Loan as a Prime Rate Loan,
or (ii) if the affected Eurocurrency Loan is then outstanding, upon at least one
Business Days notice to the Administrative Agent, require the affected Lender to
convert each such Eurocurrency Loan into a Prime Rate Loan, provided that if
more than one Lender is affected at any time, then all affected Lenders must be
treated the same pursuant to this section 2.9(b).
(c) If any Lender shall have determined that after the Effective Date,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged by law with the interpretation or administration thereof, or
compliance by such Lender or its parent corporation with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank, or comparable agency, in each case made
subsequent to the Effective Date, has or would have the effect of reducing by an
amount reasonably deemed by such Lender to be material the rate of return on
such Lender's or its parent corporation's capital or assets as a consequence of
such Lender's commitments or obligations hereunder to a level below that which
such Lender or its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's or
its parent corporation's policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), each applicable Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or its parent
corporation for such reduction. Each Lender, upon determining in good faith that
any additional amounts will be payable pursuant to this section 2.9(c), will
give prompt written notice thereof to the Company (who will in turn give notice
to the other Borrowers), which notice shall set forth, in reasonable detail, the
basis of the calculation of such additional amounts, which basis must be
reasonable, although the failure to give any such notice shall not release or
diminish any applicable Borrower's obligations to pay additional amounts
pursuant to this section 2.9(c) upon the subsequent receipt of such notice.
(d) Notwithstanding anything in this Agreement to the contrary, (i) no
Lender shall be entitled to compensation or payment or reimbursement of other
amounts under section 2.9, 3.5 or 5.4 for any amounts incurred or accruing more
than 180 days prior to the giving of notice to the Company of additional costs
or other amounts of the nature described in such sections, and (ii) no Lender
shall demand compensation for any reduction referred to in section 2.9(c) or
payment or reimbursement of other amounts under section 3.5 or 5.4 if it shall
not at the time be the general
32
policy or practice of such Lender to demand such compensation, payment or
reimbursement in similar circumstances under comparable provisions of other
credit agreements.
2.10 Compensation. Each applicable Borrower shall compensate each
applicable Lender, upon its written request (which request shall set forth the
detailed basis for requesting and the method of calculating such compensation),
for all reasonable losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by reason of the liquidation
or reemployment of deposits or other funds required by such Lender to fund its
Eurocurrency Loans) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender or the Administrative Agent) a Borrowing of
Eurocurrency Loans by such Borrower does not occur on a date specified therefor
in a Notice of Borrowing or Notice of Conversion (whether or not withdrawn by or
on behalf of such Borrower or deemed withdrawn pursuant to section 2.9(a)); (ii)
if any repayment, prepayment or conversion of any of its Eurocurrency Loans
occurs on a date which is not the last day of an Interest Period applicable
thereto; (iii) if any prepayment of any of its Eurocurrency Loans is not made on
any date specified in a notice of prepayment given by or on behalf of such
Borrower; or (iv) as a consequence of (x) any other default by such Borrower to
repay its Eurocurrency Loans when required by the terms of this Agreement or (y)
an election made pursuant to section 2.9(b).
2.11 Change of Lending Office; Replacement of Lenders. (a) Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
section 2.9(a)(ii) or (iii), 2.9(c), 3.5 or 5.4 with respect to such Lender, it
will, if requested by the Company (on behalf of any applicable Borrower), use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another Applicable Lending Office for any Loans or Commitment affected
by such event, provided that such designation is made on such terms that such
Lender and its Applicable Lending Office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of any such section.
(b) If any Lender requests any compensation, reimbursement or other
payment under section 2.9(a)(ii) or (iii), 2.9(c) or 3.5 with respect to such
Lender, or if any applicable Borrower is required to pay any additional amount
to any Lender or governmental authority pursuant to section 5.4, or if any
Lender is a Defaulting Lender, then the Company may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with the
restrictions contained in section 13.4(b)), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Company shall have received the prior written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or any applicable
Borrower (in the case of all other amounts), and (iii) in the case of any such
assignment resulting from a claim for compensation, reimbursement or other
payments required to be made under section
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2.9(a)(ii) or (iii), 2.9(c) or 3.5 with respect to such Lender, or resulting
from any required payments to any Lender or governmental authority pursuant to
section 5.4, such assignment will result in a reduction in such compensation,
reimbursement or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Company to require such
assignment and delegation cease to apply.
(c) Nothing in this section 2.11 shall affect or postpone any of the
obligations of any Borrower or the right of any Lender provided in section 2.9,
3.5 or 5.4.
SECTION 3. LETTERS OF CREDIT.
3.1 Letters of Credit. (a) Subject to and upon the terms and conditions
herein set forth, the Company may request a Letter of Credit Issuer at any time
and from time to time on or after the Initial Borrowing Date and prior to the
date that is 15 Business Days prior to the Maturity Date to issue, for the
account of the Company or any of its Subsidiaries and in support of (i) trade
obligations of the Company and its Subsidiaries incurred in the ordinary course
of business and/or (ii) worker compensation, liability insurance, releases of
contract retention obligations, contract performance guarantee requirements and
other bonding obligations of the Company or any such Subsidiary incurred in the
ordinary course of its business, the Phoenix Earnout, and such other standby
obligations of the Company and its Subsidiaries that are acceptable to the
Letter of Credit Issuer, and subject to and upon the terms and conditions herein
set forth, such Letter of Credit Issuer agrees to issue from time to time,
irrevocable documentary or standby letters of credit denominated in Dollars or
an Alternative Currency in such form as may be approved by such Letter of Credit
Issuer and the Administrative Agent (each such letter of credit (and each
Existing Letter of Credit described in section 3.1(d)), a "Letter of Credit" and
collectively, the "Letters of Credit").
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings at such time, would exceed either (x) $8,000,000 or (y) when added
to the aggregate principal amount of all Revolving Loans then outstanding, an
amount equal to the Total Revolving Commitment at such time, and (ii) each
Letter of Credit shall have an expiry date (including any renewal periods)
occurring not later than the earlier of (A) one year from the date of issuance
thereof (two years in the case of the Letter of Credit issued to support the
Phoenix Earnout), unless a longer period is approved by the relevant Letter of
Credit Issuer and Lenders (other than any Defaulting Lender) holding a majority
of the Total Revolving Commitment, and (B) 15 Business Days prior to the
Maturity Date, in each case on terms acceptable to the Administrative Agent and
the relevant Letter of Credit Issuer.
(c) Notwithstanding the foregoing, in the event a Lender Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless either (i) such Letter of Credit Issuer has entered into
arrangements satisfactory to it and the Company to eliminate such Letter
34
of Credit Issuer's risk with respect to the participation in Letters of Credit
of the Defaulting Lender or Lenders, including by cash such Defaulting Lender's
or Lenders' Percentage of the Letter of Credit Outstandings; or (ii) the
issuance of such Letter of Credit, taking into account the potential failure of
the Defaulting Lender or Lenders to risk participate therein, will not cause the
Letter of Credit Issuer to incur aggregate credit exposure hereunder with
respect to Revolving Loans and Letter of Credit Outstandings in excess of its
Revolving Commitment, and the Company has undertaken for the benefit of such
Letter of Credit Issuer, pursuant to an instrument satisfactory in form and
substance to such Letter of Credit Issuer, not to thereafter incur Loans or
Letter of Credit Outstandings hereunder which would cause the Letter of Credit
Issuer to incur aggregate credit exposure hereunder with respect to Revolving
Loans and Letter of Credit Outstandings in excess of its Revolving Commitment.
(d) Annex VI hereto contains a description of all letters of credit
outstanding on, and to continue in effect after, the Initial Borrowing Date.
Each such letter of credit issued by a bank that is or becomes a Lender under
this Agreement on the Effective Date (each, an "Existing Letter of Credit")
shall constitute a "Letter of Credit" for all purposes of this Agreement,
issued, for purposes of section 3.4(a), on the Initial Borrowing Date, and the
Company, the Administrative Agent and the applicable Lenders hereby agree that,
from and after such date, the terms of this Agreement shall apply to such
Letters of Credit, superseding any other agreement theretofore applicable to
them to the extent inconsistent with the terms hereof.
3.2 Letter of Credit Requests: Notices of Issuance. (a) Whenever it
desires that a Letter of Credit be issued, the Company shall give the
Administrative Agent and the Letter of Credit Issuer written or telephonic
notice (in the case of telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent) which, if in the form of written notice
shall be substantially in the form of Exhibit B-3, prior to 11:00 A.M. (local
time at its Notice Office) at least three Business Days (or such shorter period
as may be acceptable to the relevant Letter of Credit Issuer) prior to the
proposed date of issuance (which shall be a Business Day) (each a "Letter of
Credit Request"), which Letter of Credit Request shall include such supporting
documents that such letter of Credit Issuer customarily requites in connection
therewith (including, in the case of a Letter of Credit for an account party
other than the Company, an application for, and if applicable a reimbursement
agreement with respect to, such Letter of Credit). Any such documents executed
in connection with the issuance of a Letter of Credit, including the Letter of
Credit itself, are herein referred to as "Letter of Credit Documents". In the
event of any inconsistency between any of the terms or provisions of any Letter
of Credit Document and the terms and provisions of this Agreement respecting
Letters of Credit, the terms and provisions of this Agreement shall control. The
Administrative Agent shall promptly notify each Lender of each Letter of Credit
Request.
(b) Each Letter of Credit Issuer shall, on the date of each issuance of
a Letter of Credit by it, give the Administrative Agent, each applicable Lender
and the Company written notice of the issuance of such Letter of Credit,
accompanied by a copy to the Administrative Agent of the Letter of Credit or
Letters of Credit issued by it. Each Letter of Credit Issuer shall
35
provide to the Administrative Agent a quarterly (or monthly if requested by any
applicable Lender) summary describing each Letter of Credit issued by such
Letter of Credit Issuer and then outstanding and an identification for the
relevant period of the daily aggregate Letter of Credit Outstandings represented
by Letters of Credit issued by such Letter of Credit Issuer.
3.3 Agreement to Repay Letter of Credit Drawings. (a) The Company
hereby agrees to reimburse (or cause any Subsidiary for whose account a Letter
of Credit was issued to reimburse) each Letter of Credit Issuer, by making
payment directly to such Letter of Credit Issuer in immediately available funds
at the payment office of such Letter of Credit Issuer, for any payment or
disbursement made by such Letter of Credit Issuer under any Letter of Credit
(each such amount so paid or disbursed until reimbursed, an "Unpaid Drawing")
immediately after, and in any event on the date on which, such Letter of Credit
Issuer notifies the Company (or any such Subsidiary for whose account such
Letter of Credit was issued) of such payment or disbursement (which notice to
the Company (or such Subsidiary) shall be delivered reasonably promptly after
any such payment or disbursement), such payment to be made in Dollars (and in
the amount which is the Dollar equivalent of any such payment or disbursement
made or denominated in an Alternative Currency), with interest on the amount so
paid or disbursed by such Letter of Credit Issuer, to the extent not reimbursed
prior to 1:00 P.M. (local time at the payment office of the Letter of Credit
Issuer) on the date of such payment or disbursement, from and including the date
paid or disbursed to but not including the date such Letter of Credit Issuer is
reimbursed therefor at a rate per annum which shall be the rate then applicable
to Revolving Loans which are Prime Rate Loans (plus an additional 3% per annum
if not reimbursed by the third Business Day after the date of such payment or
disbursement), any such interest also to be payable on demand.
(b) The Company's obligation under this section 3.3 to reimburse, or
cause a Subsidiary to reimburse, each Letter of Credit Issuer with respect to
Unpaid Drawings (including, in each case, interest thereon) shall be absolute
and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which the Company may have or have
had against such Letter of Credit Issuer, the Administrative Agent, any other
Letter of Credit Issuer or any Lender, including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit to
conform to the terms of the Letter of Credit or any non- application or
misapplication by the beneficiary of the proceeds of such drawing, provided,
however that the Company shall not be obligated to reimburse, or cause a
Subsidiary to reimburse, a Letter of Credit Issuer for any wrongful payment made
by such Letter of Credit Issuer under a Letter of Credit as a result of acts or
omissions constituting willful misconduct or negligence on the part of such
Letter of Credit Issuer.
3.4 Letter of Credit Participations. (a) Immediately upon the issuance
by a Letter of Credit Issuer of any Letter of Credit (and on the Initial
Borrowing Date with respect to any Existing Letter of Credit), such Letter of
Credit Issuer shall be deemed to have sold and transferred to each Lender with a
Commitment under the Revolving Loan Facility, and each such Lender (each a
"Participant") shall be deemed irrevocably and unconditionally to have purchased
and received from such Letter of Credit Issuer, without recourse or warranty, an
undivided
36
interest and participation, to the extent of such Lender's Revolving Facility
Percentage, in such Letter of Credit, each substitute letter of credit, each
drawing made thereunder, the obligations of the Company under this Agreement
with respect thereto (although Letter of Credit Fees shall be payable directly
to the Administrative Agent for the account of the Lenders as provided in
section 4.1(b) and the Participants shall have no right to receive any portion
of any fees of the nature contemplated by section 4.1(c)), the obligations of
any Subsidiary of the Company under any Letter of Credit Documents pertaining
thereto, and any security for, or guaranty pertaining to, any of the foregoing.
Upon any change in the Revolving Commitments of the Lenders pursuant to section
13.4(b), it is hereby agreed that, with respect to all outstanding Letters of
Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participations pursuant to this section 3.4 to reflect the new Revolving
Facility Percentages of the assigning and assignee Lender.
(b) In determining whether to pay under any Letter of Credit, a Letter
of Credit Issuer shall not have any obligation relative to the Participants
other than to determine that any documents required to be delivered under such
Letter of Credit have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by a Letter of Credit Issuer under or in connection with any Letter
of Credit if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for such Letter of Credit Issuer any resulting
liability.
(c) In the event that a Letter of Credit Issuer makes any payment under
any Letter of Credit and the Company shall not have reimbursed (or caused any
applicable Subsidiary to reimburse) such amount in full to such Letter of Credit
Issuer pursuant to section 3.3(a), such Letter of Credit Issuer shall promptly
notify the Administrative Agent, and the Administrative Agent shall promptly
notify each Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Administrative Agent for the account of such Letter
of Credit Issuer, the amount of such Participant's Revolving Facility Percentage
of such payment in U.S. Dollars (the Administrative Agent having determined in
the case of any payment by a Letter of Credit Issuer made in an Alternative
Currency the equivalent thereof in Dollars) and in same day funds, provided,
however, that no Participant shall be obligated to pay to the Administrative
Agent its Revolving Facility Percentage of such unreimbursed amount for any
wrongful payment made by such Letter of Credit Issuer under a Letter of Credit
as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of such Letter of Credit Issuer. If the Administrative
Agent so notifies any Participant required to fund a payment under a Letter of
Credit prior to 11:00 A.M. (local time at its Notice Office) on any Business
Day, such Participant shall make available to the Administrative Agent for the
account of the relevant Letter of Credit Issuer such Participant's Revolving
Facility Percentage of the amount of such payment on such Business Day in same
day funds. If and to the extent such Participant shall not have so made its
Revolving Facility Percentage of the amount of such payment available to the
Administrative Agent for the account of the relevant Letter of Credit Issuer,
such Participant agrees to pay to the Administrative Agent for the account of
such Letter of Credit Issuer, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is
37
paid to the Administrative Agent for the account of such Letter of Credit Issuer
at the Federal Funds Effective Rate. The failure of any Participant to make
available to the Administrative Agent for the account of the relevant Letter of
Credit Issuer its Revolving Facility Percentage of any payment under any Letter
of Credit shall not relieve any other Participant of its obligation hereunder to
make available to the Administrative Agent for the account of such Letter of
Credit Issuer its Revolving Facility Percentage of any payment under any Letter
of Credit on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to the
Administrative Agent for the account of such Letter of Credit Issuer such other
Participant's Revolving Facility Percentage of any such payment.
(d) Whenever a Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the Participants
pursuant to section 3.4(c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its Revolving Facility Percentage thereof, in U.S.
dollars and in same day funds, an amount equal to such Participant's Revolving
Facility Percentage of the principal amount thereof and interest thereon
accruing after the purchase of the respective participations, as and to the
extent so received.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of each Letter of Credit Issuer with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off defense or other
right which the Company (or any Subsidiary) may have at any time
against a beneficiary named in a Letter of Credit, any transferee of
any Letter of Credit (or any person for whom any such transferee may be
acting), the Administrative Agent, any Letter of Credit Issuer, any
Lender, or other person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Company
(or any Subsidiary) and the beneficiary named in any such Letter of
Credit), other than any claim which the Company (or any Subsidiary
which is the account party with respect to a Letter of Credit) may have
against any applicable Letter of Credit Issuer for gross negligence or
wilful misconduct of such Letter of Credit Issuer in making payment
under any applicable Letter of Credit;
38
(iii) any draft, certificate or other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
(f) To the extent the Letter of Credit Issuer is not indemnified by the
Company, the Participants will reimburse and indemnify the Letter of Credit
Issuer, in proportion to their respective Revolving Loan Facility Percentages,
for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by the Letter of Credit Issuer in performing its respective duties in any way
related to or arising out of its issuance of Letters of Credit, provided that no
Participants shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, claims, actions, judgments, costs, expenses or
disbursements resulting from the Letter of Credit Issuer's gross negligence or
willful misconduct.
3.5 Increased Costs. If after the Effective Date, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Letter of Credit Issuer or any Lender with any
request or directive (whether or not having the force of law) by any such
authority, central bank or comparable agency (in each case made subsequent to
the Effective Date) shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against Letters of
Credit issued by such Letter of Credit Issuer or such Lender's participation
therein, or (ii) shall impose on such Letter of Credit Issuer or any Lender any
other conditions affecting this Agreement, any Letter of Credit or such Lender's
participation therein; and the result of any of the foregoing is to increase the
cost to such Letter of Credit Issuer or such Lender of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Letter of Credit Issuer or such Lender hereunder
(other than any increased cost or reduction in the amount received or receivable
resulting from the imposition of or a change in the rate of taxes or similar
charges), then, upon demand to the Company by such Letter of Credit Issuer or
such Lender (a copy of which notice shall be sent by such Letter of Credit
Issuer or such Lender to the Administrative Agent), the Company shall pay to
such Letter of Credit Issuer or such Lender such additional amount or amounts as
will compensate any such Letter of Credit Issuer or such Lender for such
increased cost or reduction. A certificate submitted to the Company by any
Letter of Credit Issuer or any Lender, as the case may be (a copy of which
certificate shall be sent by such Letter of Credit Issuer or such Lender to the
Administrative Agent), setting forth, in reasonable detail, the basis for the
determination of such additional amount or amounts necessary to compensate any
Letter of Credit Issuer or such Lender as aforesaid shall be conclusive and
binding on the Company
39
absent manifest error, although the failure to deliver any such certificate
shall not release or diminish any of the Company's obligations to pay additional
amounts pursuant to this section 3.5. Reference is hereby made to the provisions
of section 2.9(d) for certain limitations upon the rights of a Letter of Credit
Issuer or Lender under this section.
3.6 Guaranty of Subsidiary Letter or Credit Obligations. (a) The
Company hereby unconditionally guarantees, for the benefit of the Administrative
Agent and the Lenders, the full and punctual payment of the Obligations of each
Subsidiary under each Letter of Credit Document to which such Subsidiary is now
or hereafter becomes a party. Upon failure by any such Subsidiary to pay
punctually any such amount, the Company shall forthwith on demand by the
Administrative Agent pay the amount not so paid at the place and in the currency
and otherwise in the manner specified in this Agreement or any applicable Letter
of Credit Document.
(b) As a separate, additional and continuing obligation, the Company
unconditionally and irrevocably undertakes and agrees, for the benefit of the
Administrative Agent and the Lenders, that, should any amounts not be
recoverable from the Company under section 3.6(a) for any reason whatsoever
(including, without limitation, by reason of any provision of any Credit
Document or any other agreement or instrument executed in connection therewith
being or becoming void, unenforceable, or otherwise invalid under any applicable
law) then, notwithstanding any notice or knowledge thereof by any Lender, the
Administrative Agent, any of their respective Affiliates, or any other person,
at any time, the Company as sole, original and independent obligor, upon demand
by the Administrative Agent, will make payment to the Administrative Agent, for
the account of the Lenders and the Administrative Agent, of all such obligations
not so recoverable by way of full indemnity, in such currency and otherwise in
such manner as is provided in the Credit Documents.
(c) The obligations of the Company under this section shall be
unconditional and absolute and, without limiting the generality of the foregoing
shall not be released, discharged or otherwise affected by the occurrence, one
or more times, of any of the following:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect to any obligation of any Subsidiary under any Letter
of Credit Document, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to this
Agreement, any Note or any other Credit Document;
(iii) any release, non-perfection or invalidity of any direct
or indirect security for any obligation of the Company under this
Agreement, any Note or any other Credit Document or of any Subsidiary
under any Letter of Credit Document;
(iv) any change in the corporate existence, structure or
ownership of any Subsidiary or any insolvency, bankruptcy,
reorganization or other similar proceeding
40
affecting any Subsidiary or its assets or any resulting release or
discharge of any obligation of any Subsidiary contained in any Letter
of Credit Document;
(v) the existence of any claim, set-off or other rights which
the Company may have at any time against any Subsidiary, the
Administrative Agent, any Lender or any other person, whether in
connection herewith or any unrelated transactions;
(vi) any invalidity or unenforceability relating to or against
any Subsidiary for any reason of any Letter of Credit Document, or any
provision of applicable law or regulation purporting to prohibit the
payment by any Subsidiary of any Obligations in respect of any Letter
of Credit; or
(vii) any other act or omission to act or delay of any kind by
any Subsidiary, the Administrative Agent, any Lender or any other
person or any other circumstance whatsoever which might, but for the
provisions of this section, constitute a legal or equitable discharge
of the Company's obligations under this section.
(d) The Company's obligations under this section shall remain in full
force and effect until the Commitments shall have terminated and the principal
of and interest on the Notes and all other amounts payable by the Company under
the Credit Documents and by any Subsidiary under the Letter of Credit Documents
shall have been paid in full. If at any time any payment of any of the
Obligations of any Subsidiary in respect of any Letter of Credit Documents is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of such Subsidiary, the Company's obligations under
this section with respect to such payment shall be reinstated at such time as
though such payment had been due but not made at such time.
(e) The Company irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any person against any
Subsidiary or any other person, or against any collateral or guaranty of any
other person.
(f) Until the indefeasible payment in full of all of the Obligations
and the termination of the Commitments of the Lenders hereunder, the Company
shall have no rights, by operation of law or otherwise, upon making any payment
under this section to be subrogated to the rights of the payee against any
Subsidiary with respect to such payment or otherwise to be reimbursed,
indemnified or exonerated by any Subsidiary in respect thereof.
(g) In the event that acceleration of the time for payment of any
amount payable by any Subsidiary under any Letter of Credit Document is stayed
upon insolvency, bankruptcy or reorganization of such Subsidiary, all such
amounts otherwise subject to acceleration under the terms of any applicable
Letter of Credit Document shall nonetheless be payable by the Company under this
section forthwith on demand by the Administrative Agent.
41
SECTION 4. FEES; COMMITMENTS.
4.1 Fees. (a) The Company agrees to pay to the Administrative Agent a
Commitment Fee ("Commitment Fee") for the account of each Non-Defaulting Lender
which has a Revolving Commitment for the period from and including the Effective
Date to, but not including, the Maturity Date or, if earlier, the date upon
which the Total Revolving Commitment has been terminated, computed for each day
at a rate per annum equal to the Applicable Commitment Fee Rate for such day on
such Lender's Unutilized Revolving Commitment for such day. Such Commitment Fee
shall be due and payable in arrears on the last Business Day of each June,
September, December and March and on the Maturity Date or, if earlier, the date
upon which the Total Revolving Commitment has been terminated.
(b) The Company agrees to pay to the Administrative Agent, for the
account of each Non-Defaulting Lender, pro rata on the basis of its Revolving
Facility Percentage, a fee in respect of each Letter of Credit (the "Letter of
Credit Fee"), computed for each day at the rate per annum equal to the
Applicable Eurocurrency Margin then in effect on the Stated Amount of all
Letters of Credit outstanding on such day. Accrued Letter of Credit Fees shall
be due and payable quarterly in arrears on the last Business Day of each March,
June, September and December and on the date on which the Total Revolving
Commitment is terminated.
(c) The Company agrees to pay directly to each Letter of Credit Issuer
upon each drawing under, and/or amendment, extension, renewal or transfer of, a
Letter of Credit issued by it such amount as shall at the time of such drawing,
amendment, extension, renewal or transfer be the administrative charge which
such Letter of Credit Issuer is customarily charging for drawings under or
amendments, extensions, renewals or transfers of, letters of credit issued by
it.
(d) The Company shall pay lo the Administrative Agent on the Effective
Date and thereafter for its own account and/or for distribution to the Lenders
such fees as heretofore agreed by the Borrower and the Administrative Agent.
(e) All computations of Fees shall be made in accordance with section
13.7(b).
4.2 Voluntary Reduction of Commitments. Upon at least three Business
Days' prior written notice (or telephonic notice confirmed in writing) to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), the Company shall have the
right (on behalf of all Borrowers), without premium or penalty, to terminate or
to partially and permanently reduce (x) the Unutilized Total Revolving
Commitment, and/or (y) with the consent of each Lender which has a Term Loan
Commitment, the Unutilized Total Term Loan Commitment, provided that (i) any
such termination or reduction shall apply to proportionately and permanently
reduce the Revolving Commitment or Term Loan Commitment, as the case may be, if
any, of each of the affected Lenders, and (ii) any partial reduction of the
Unutilized Total Revolving Commitment or Unutilized Total Term Loan
42
Commitment, as the case may be, pursuant to this section 4.2 shall be in the
amount of at least $100,000 (or, if greater, in integral multiples of $100,000)
4.3 Mandatory Adjustments of Commitments, etc. (a) The Total Commitment
(and the Term Loan Commitment and the Revolving Commitment of each Lender) shall
terminate on June 15, 1997, unless the Initial Borrowing Date has occurred on or
prior to such date.
(b) The Total Term Loan Commitment shall (i) be reduced at the time of
each incurrence of Term Loans in an amount equal to the aggregate principal
amount of the Term Loans so incurred; and (ii) terminate (and the Term Loan
Commitment of each Lender shall terminate) on the earlier of (x) the Maturity
Date and (y) the date on which a Change of Control occurs.
(c) The Total Revolving Commitment (and the Revolving Commitment of
each Lender) shall terminate on the earlier of (x) the Maturity Date and (y) the
date on which a Change of Control occurs.
(d) The Total Revolving Commitment shall be permanently reduced,
without premium or penalty, at the time that any mandatory prepayment of
Revolving Loans would be made pursuant to section 5.2(c), (d), (e) or (g) if
Revolving Loans were then outstanding in the full amount of the Total Revolving
Commitment, in an amount at least equal to the required prepayment of principal
of Revolving Loans which would be required to be made in such circumstance. Any
such reduction shall apply to proportionately and permanently reduce the
Revolving Commitment of each of the affected Lenders, and any partial reduction
of the Total Revolving Commitment pursuant to this section 4.3(d) shall be in
the amount of at least $100,000 (or, if greater, in integral multiples of
$100,000). The Company will provide at least three Business Days' prior written
notice (or telephonic notice confirmed in writing) to the Administrative Agent
at its Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Lenders), of any reduction of the Total Revolving
Commitment pursuant to this section 4.3(d), specifying the date and amount of
the reduction.
4.4 Extension of Maturity Date. At any time after February 1, 2000 and
during the 30 day period following delivery by the Company pursuant to section
8.1(a) of its consolidated financial statements for its fiscal year then most
recently ended, and annually thereafter during the 30 day period following
delivery by the Company of its consolidated financial statements pursuant to
section 8.1(a), the Company may request the Administrative Agent to determine if
all of the Lenders are then willing to extend the Maturity Date for a single
additional year. If the Company so requests, the Administrative Agent will so
advise the Lenders. If the Lenders in their sole discretion are all willing to
so extend the Maturity Date, after taking into account such considerations as
any Lender may deem relevant, the Company, the other Borrowers, the
Administrative Agent and all of the Lenders (including each Letter of Credit
Issuer) shall execute and deliver a definitive written instrument so extending
the Maturity Date. No such extension of the Maturity Date shall be valid or
effective for any purpose unless such definitive written
43
instrument is so signed and delivered within 60 days following the giving by the
Administrative Agent of notice to the Lenders that the Company has requested
such an extension.
SECTION 5. PAYMENTS.
5.1 Voluntary Prepayments. Any Borrower shall have the right to prepay
any of its Loans, in whole or in part, without premium or penalty, from time to
time on the following terms and conditions: (i) such Borrower (or the Company on
its behalf) shall give the Administrative Agent at the Notice Office written or
telephonic notice (in the case of telephonic notice, promptly confirmed in
writing if so requested by the Administrative Agent) of its intent to prepay the
Term Loans or the Revolving Loans, as the case may be, the amount of such
prepayment and (in the case of Eurocurrency Loans) the specific Borrowing(s)
pursuant to which made, which notice shall be received by the Administrative
Agent by (x) 11:00 A.M. (local time at the Notice Office) three Business Days
prior to the date of such prepayment, in the case of any prepayment of
Eurocurrency Loans, or (y) 12:00 noon (local time at the Notice Office) on the
date of such prepayment, in the case of any prepayment of Prime Rate Loans, and
which notice shall promptly be transmitted by the Administrative Agent to each
of the affected Lenders; (ii) each partial prepayment of any Borrowing shall be
in an aggregate principal of at least $100,000 or an integral multiple of
$100,000 in excess thereof, in the case of Loans which are Prime Rate Loans, and
at least $100,000 or an integral multiple of $100,000 in excess thereof, in the
case of Loans which are Eurocurrency Loans, provided that no partial prepayment
of Eurocurrency Loans made pursuant to a Borrowing shall reduce the aggregate
principal amount of the Loans outstanding pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount applicable thereto; (iii) each
prepayment in respect of any Loans made pursuant to a Borrowing shall be applied
pro rata among such Loans; (iv) each prepayment of Eurocurrency Loans pursuant
to this section 5.1 on any date other than the last day of the Interest Period
applicable thereto shall be accompanied by any amounts payable in respect
thereof under section 2.10; and (v) each prepayment of any Term Loans pursuant
to this section 5.1 shall be applied to reduce the then remaining Scheduled
Repayments applicable to such Term Loans in inverse order of maturity.
5.2 Mandatory Prepayments and Scheduled Repayments. (a) If on any date
(after giving effect to any other payments on such date) the sum of (i) the
aggregate outstanding principal amount of Revolving Loans plus (ii) the
aggregate amount of Letter of Credit Outstandings, exceeds the Total Revolving
Commitment as then in effect, the Borrowers shall prepay on such date that
principal amount of Revolving Loans and, after Revolving Loans have been paid in
full, Unpaid Drawings, in an aggregate amount equal to such excess. If, after
giving effect to the prepayment of Revolving Loans and Unpaid Drawings, the
aggregate amount of Letter of Credit Outstandings exceeds the Total Revolving
Commitment as then in effect, the Company shall pay to the Administrative Agent
an amount in cash and/or Cash Equivalents equal to such excess and the
Administrative Agent shall hold such payment as security for the obligations of
the Company hereunder pursuant to a cash collateral agreement to be entered into
in form and substance reasonably satisfactory to the Administrative Agent and
the Company
44
(which shall permit certain investments in Cash Equivalents satisfactory to the
Administrative Agent and the Company until the proceeds are applied to the
secured obligations).
(b) On the last Business Day of each March, June, September and
December, commencing on the last Business Day of September 1997 and continuing
through the last Business Day of March 2002, the Company shall be required to,
and shall, repay the principal amount of the Term Loans in the amount of
$750,000, with a final installment of principal being due and payable by the
Company on the Maturity Date in the amount of the then remaining principal
balance of the Term Loans (each such repayment, as the same may be reduced
pursuant to section 5.1 or 5.2(g), a "Scheduled Repayment").
(c) If during any fiscal year of the Company, the Company and its
Subsidiaries have received cumulative aggregate Cash Proceeds from one or more
Asset Sales of at least $1,000,000, not later than the third Business Day
following the date of receipt of any Cash Proceeds in excess of such amount, an
amount at least equal to 100% of the Net Cash Proceeds then received in excess
of such amount shall be applied as a mandatory prepayment of principal of (x)
first, the then outstanding Term Loans and (y) second, once no Term Loans remain
outstanding, the then outstanding Revolving Loans.
(d) Not later than the Business Day following the date of the receipt
thereof by the Company, an amount equal to 100% of the cash proceeds (net of
underwriting discounts and commissions, placement agent commissions and other
customary fees and costs associated therewith) from the public sale or private
placement of subordinated debt securities, or any similar incurrence of
subordinated Indebtedness for borrowed money, by the Company as contemplated by
section 9.4(c), shall be applied as a mandatory prepayment of principal of (x)
first, the then outstanding Term Loans, and (y) second, once no Term Loans
remain outstanding, the then outstanding Revolving Loans.
(e) Not later than the Business Day following the date of the receipt
thereof by the Company and/or any Subsidiary, an amount equal to 100% of the
cash proceeds (net of underwriting discounts and commissions, placement agent
fees and other customary fees and costs associated therewith) from any sale or
issuance of equity securities by the Company or any Subsidiary after the Initial
Borrowing Date (other than (i) any inter-company sale to the Company or any
Subsidiary and (ii) any sale or issuance to management, employees (or key
employees) or directors pursuant to stock option or similar plans for the
benefit of management, employees (key employees) or directors generally) shall
be applied as a mandatory repayment of principal of (x) first, the then
outstanding Term Loans, and (y) second, once no Term Loans remain outstanding,
the then outstanding Revolving Loans.
(f) On the date of which a Change of Control occurs, notwithstanding
anything to the contrary contained in this Agreement, no further Revolving
Borrowings shall be made and the then outstanding principal amount of all Loans,
if any, shall become due and payable and shall be prepaid in full, and the
Company shall contemporaneously either (i) cause all outstanding Letters
45
of Credit to be surrendered for cancellation (any such Letters of Credit to be
replaced by letters of credit issued by other financial institutions), or (ii)
the Company shall pay to the Administrative Agent an amount in cash and/or Cash
Equivalents equal to 100% of the Letter of Credit Outstandings and the
Administrative Agent shall hold such payment as security for the obligations of
the Company hereunder pursuant to a cash collateral agreement to be entered into
in form and substance reasonably satisfactory to the Administrative Agent and
the Company (which shall permit certain investments in Cash Equivalents
satisfactory to the Administrative Agent and the Company until the proceeds are
applied to the secured obligations).
(g) If Safety Components International, s.r.o., a Foreign Subsidiary of
the Company, shall not have received by July 31, 1997, proceeds of approximately
$7,500,000 from the incurrence of the Indebtedness referred to in section
9.4(b), the Company and the other Borrowers will immediately prepay any
outstanding Revolving Loans in an aggregate principal amount not less than the
lesser of $7,500,000 and the aggregate principal amount of Revolving Loans then
outstanding.
(h) Each mandatory prepayment of Term Loans pursuant to section 5.2(c),
(d) or (e) shall be applied to reduce the Scheduled Repayments in inverse order
of maturity.
(i) With respect to each prepayment of Loans required by this section
5.2, the Company shall (on behalf of any applicable Borrower) designate the
Types of Loans which are to be prepaid and the specific Borrowing(s) pursuant to
which such prepayment is to be made, provided that (i) the Company shall first
so designate all Loans that are Prime Rate Loans and Eurocurrency Loans with
Interest Periods ending on the date of prepayment prior to designating any other
Eurocurrency Loans for prepayment, (ii) if the outstanding principal amount of
Eurocurrency Loans made pursuant to a Borrowing is reduced below the applicable
Minimum Borrowing Amount as a result of any such prepayment, then all the Loans
outstanding pursuant to such Borrowing shall be converted into Prime Rate Loans,
and (iii) each prepayment of any Loans made pursuant to a Borrowing shall be
applied pro rata among such Loans. In the absence of a designation by the
Company as described in the preceding sentence, the Administrative Agent shall,
subject to the above, make such designation in its sole discretion with a view,
but no obligation, to minimize breakage costs owing under section 2.10. Any
prepayment of Eurocurrency Loans pursuant to this section 5.2 shall in all
events be accompanied by such compensation as is required by section 2.10.
5.3 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable (based on its pro rata share) account of
the Lenders entitled thereto, not later than 11:00 A.M. (local time at the
Payment Office) on the date when due and shall be made in immediately available
funds and in lawful money of the United States of America (or in the applicable
Alternative Currency, in the case of Revolving Loans denominated in an
Alternative Currency) at the Payment Office, it being understood that written
notice by any Borrower to the Administrative Agent to make a payment from the
funds in such Borrower's account at the Payment Office shall
46
constitute the making of such payment to the extent of such funds held in such
account. Any payments under this Agreement which are made later than 11:00 A.M.
(local time at the Payment Office) shall be deemed to have been made on the next
succeeding Business Day. Whenever any payment to be made hereunder shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest shall be payable during such extension at the
applicable rate in effect immediately prior to such extension.
5.4 Net Payments. (a) All payments made by any Borrower hereunder,
under any Note or any other Credit Document, will be made without setoff,
counterclaim or other defense. Except as provided for in section 5.4(b), all
such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax, imposed on or measured by the net income or
net profits of a Lender pursuant to the laws of the jurisdiction under which
such Lender is organized or the jurisdiction in which the principal office or
Applicable Lending Office of such Lender is located or any subdivision thereof
or therein) and all interest, penalties or similar liabilities with respect to
such non excluded taxes, levies imposts, duties, fees, assessments or other
charges (all such nonexcluded taxes levies, imposts, duties, fees assessments or
other charges being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the applicable Borrower agrees to pay the full amount of such
Taxes and such additional amounts as may be necessary so that every payment by
it of all amounts due hereunder, under any Note or under any other Credit
Document, after withholding or deduction for or on account of any Taxes will not
be less than the amount provided for herein or in such Note or in such other
Credit Document. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the applicable Borrower agrees to reimburse each Lender,
upon the written request of such Lender for taxes imposed on or measured by the
net income or profits of such Lender pursuant to the laws of the jurisdiction in
which such Lender is organized or in which the principal office or Applicable
Lending Office of such Lender is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which the principal
office or Applicable Lending Office of such Lender is located and for any
withholding of income or similar taxes imposed by the United States of America
as such Lender shall determine are payable by, or withheld from, such Lender in
respect of such amounts so paid to or on behalf of such Lender pursuant to the
preceding sentence, which request shall be accompanied by a statement from such
Lender setting forth, in reasonable detail, the computations used in determining
such amounts. The applicable Borrower will furnish to the Administrative Agent
within 45 days after the date the payment of any Taxes, or any withholding or
deduction on account thereof, is due pursuant to applicable law certified copies
of tax receipts, or other evidence satisfactory to the Lender, evidencing such
payment by the applicable Borrower. The applicable Borrower will indemnify and
hold harmless the Administrative Agent and each Lender, and reimburse the
Administrative Agent or such Lender upon its written request, for the amount of
any Taxes so levied or imposed and paid or withheld by such Lender.
47
(b) Each Lender that is not a United States person (as such term is
defined in section 7701(a)(30) of the Code) for Federal income tax purposes
agrees to provide to each applicable Borrower and the Administrative Agent on or
prior to the Effective Date, or in the cases of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to section 13.4 (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer and such Lender is in compliance with the provisions of
this section 5.4(b)), on the date of such assignment or transfer to such Lender,
(i) two accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001 (or successor forms) certifying to such Lender's entitlement
to a complete exemption from United States withholding tax with respect to
payments to be made under this Agreement, any Note or any other Credit Document,
or (ii) if the Lender is not a "bank" within the meaning of section 881(c)(3)(A)
of the Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit K (any such certificate, a "Section 5.4(b)(ii) Certificate") and (y) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 (or successor form) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement, any Note or any other Credit Document.
In addition, each Lender agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the applicable Borrower and the Administrative Agent two new accurate and
complete original signed copies of Internal Revenue Service Form 4224 or 1001,
or Form W-8 and a Section 5.4(b)(ii) Certificate, as the case may be, and such
other forms as may be required in order to confirm or establish the entitlement
of such Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement, any Note or any
other Credit Document, or it shall immediately notify the applicable Borrower
and the Administrative Agent of its inability to deliver any such Form or
Certificate, in which case such Lender shall not be required to deliver any such
Form or Certificate pursuant to this section 5.4(b). Notwithstanding anything to
the contrary contained in section 5.4(a), but subject to section 13.4(b) and the
immediately succeeding sentence, (x) the applicable Borrower shall be entitled,
to the extent it is required to do so by law, to deduct or withhold income or
other similar taxes imposed by the United States (or any political subdivision
or taxing authority thereof or therein) from interest, fees or other amounts
payable hereunder for the account of any Lender which is not a United States
person (as such term is defined in section 7701(a)(30) of the Code) for United
States federal income tax purposes and which has not provided to the applicable
Borrower such forms that establish a complete exemption from such deduction or
withholding and (y) the applicable Borrower shall not be obligated pursuant to
section 5.4(a) hereof to gross- up payments to be made to a Lender in respect of
income or similar taxes imposed by the United States or any additional amounts
with respect thereto (I) if such Lender has not provided to the applicable
Borrower the Internal Revenue Service forms required to be provided to the
applicable Borrower pursuant to this section 5.4(b) or (II) in the case of a
payment other than interest, to a Lender described in clause (ii) above, to the
extent that such forms do not establish a complete exemption from withholding of
such taxes. Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this section 5.4 and except as specifically provided
for in
48
section 13.4(b), the applicable Borrower agrees to pay additional amounts and
indemnify each Lender in the manner set forth in section 5.4(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any Taxes deducted or withheld by it as described in the previous
sentence as a result of any changes after the Effective Date in any applicable
law, treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of income or
similar Taxes.
(c) If any Lender, in its sole opinion, determines that it has finally
and irrevocably received or been granted a refund in respect of any Taxes paid
as to which indemnification has been paid by the applicable Borrower pursuant to
this section, it shall promptly remit such refund (including any interest
received in respect thereof), net of all out-of-pocket costs and expenses;
provided, that the applicable Borrower agrees to promptly return any such refund
(plus interest) to such Lender in the event such Lender is required to repay
such refund to the relevant taxing authority. Any such Lender shall provide the
applicable Borrower with a copy of any notice of assessment from the relevant
taxing authority (redacting any unrelated confidential information contained
therein) requiring repayment of such refund. Nothing contained herein shall
impose an obligation on any Lender to apply for any such refund.
(d) Reference is hereby made to the provisions of section 2.9(d) for
certain limitations upon the rights of a Lender under this section.
SECTION 6. CONDITIONS PRECEDENT.
6.1 Conditions Precedent at Initial Borrowing Date. The obligation of
the Lenders to make Term Loans and/or Revolving Loans, and of any Letter of
Credit Issuer to issue Letters of Credit, is subject to the satisfaction of each
of the following conditions on the Initial Borrowing Date:
(a) Effectiveness; Notes. On or prior to the Initial Borrowing
Date, (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Administrative Agent for the account of each
Lender each appropriate Note executed by each Borrower, in each case,
in the amount, maturity and as otherwise provided herein.
(b) Fees, etc. The Company shall have paid or caused to be
paid all fees required to be paid by it on or prior to such date
pursuant to section 4 hereof and all reasonable fees and expenses of
the Administrative Agent and of special counsel to the Administrative
Agent which have been invoiced on or prior to such date in connection
with the preparation, execution and delivery of this Agreement and the
other Credit Documents and the consummation of the transactions
contemplated hereby and thereby.
(c) Other Credit Documents. The Credit Parties named therein
shall have duly executed and delivered and there shall be in full force
and effect, and original counterparts shall have been delivered to the
Administrative Agent, in sufficient quantities for the
49
Administrative Agent and the Lenders, of, (i) the Subsidiary Guaranty
(as modified, amended or supplemented from time to time in accordance
with the terms thereof and hereof, the "Subsidiary Guaranty"),
substantially in the form attached hereto as Exhibit C; (ii) the
Security Agreement (as modified, amended or supplemented from time to
time in accordance with the terms thereof and hereof, the "Security
Agreement"), substantially in the form attached hereto as Exhibit D;
(iii) the Pledge Agreement (as modified, amended or supplemented from
time to time in accordance with the terms thereof and hereof, the
"Pledge Agreement'), substantially in the form attached hereto as
Exhibit E; (iv) the Assignment of Life Insurance Policy as Collateral
(as modified, amended or supplemented from time to time in accordance
with the terms thereof and hereof, the "Assignment of Life Insurance
Policy"), substantially in the form attached hereto as Exhibit F; and
(v) the Agreement on the Creation of a Security Interest in
Receivables, Inventory and Equipment, the Mortgage, and the Open End
Mortgage, Assignment of Leases and Security Agreement, substantially in
the forms attached hereto as Exhibit G-1, G-2 and G- 3.
(d) Recordation of Security Documents, Delivery of Collateral,
Taxes, etc. The Security Documents (or proper notices or financing
statements in respect thereof) shall have been duly recorded, published
and filed in such manner and in such places as is required by law to
establish, perfect, preserve and protect the rights and security
interests of the parties thereto and their respective successors and
assigns, all collateral items required to be physically delivered to
the Collateral Agent thereunder shall have been so delivered,
accompanied by any appropriate instruments of transfer, and all taxes,
fees and other charges then due and payable in connection with the
execution, delivery, recording, publishing and filing of such
instruments and the issue and delivery of the Notes shall have been
paid in full.
(e) Corporate Resolutions and Approvals. The Administrative
Agent shall have received, in sufficient quantity for the
Administrative Agent and the Lenders, certified copies of the
resolutions of the Board of Directors of each Borrower and each other
Credit Party, approving the Credit Documents to which such Borrower or
any such other Credit Party, as the case may be, is or may become a
party, and of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to the execution,
delivery and performance by such Borrower or any such other Credit
Party of the Credit Documents to which it is or may become a party.
(f) Incumbency Certificate. The Administrative Agent shall
have received, in sufficient quantity for the Administrative Agent and
the Lenders, a certificate of the Secretary or an Assistant Secretary
of each Borrower and of each other Credit Party, certifying the names
and true signatures of the officers of such Borrower or such other
Credit Party, as the case may be, authorized to sign the Credit
Documents to which such Borrower or such other Credit Party is a party
and any other documents to which such
50
Borrower or any such other Credit Party is a party which may be
executed and delivered in connection herewith.
(g) Solvency Certificate. The Administrative Agent shall have
received, in sufficient quantity for the Administrative Agent and the
Lenders, a solvency certificate of the chief financial officer of the
Company, substantially in the form attached hereto as Exhibit H.
(h) Opinion of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received an opinion, addressed to the
Administrative Agent and each of the Lenders and dated the Initial
Borrowing Date, from Shereff, Friedman, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to
the Company, substantially in the form of Exhibit I hereto and covering
such other matters incident to the transactions contemplated hereby as
the Administrative Agent may reasonably request, such opinion to be in
form and substance satisfactory to the Administrative Agent.
(i) Existing Credit Agreements. Contemporaneously with the
initial Borrowing hereunder, the Company and the other borrowers named
therein shall have terminated the commitments of the lenders under the
Loan Agreement, dated as of August 1, 1996, as amended, shall have
prepaid all borrowings thereunder, shall have made effective provision
satisfactory to the Administrative Agent for the termination, or
assignment to the Collateral Agent, of the liens and security
thereunder, and if required in connection with such termination, made
effective provision for any letters of credit issued thereunder to be
supported by Letters of Credit issued hereunder.
(j) Approvals, etc. On the Initial Borrowing Date, (i) all
material governmental and third party approvals in connection with the
transactions contemplated by the Credit Documents and otherwise
referred to herein shall have been obtained and remain in effect, and
all applicable waiting periods shall have expired without any action
being taken by any competent authority (including any court having
jurisdiction) which restrains or prevents such transactions or imposes,
in the judgment of the Required Lenders or the Administrative Agent,
materially adverse conditions upon the consummation of such
transactions; and (ii) there shall be no legal restriction upon any
Lender which prohibits, or imposes any material burdens upon any Lender
in connection with, the extensions of credit contemplated by the Credit
Documents.
(k) Environmental Report re Galion, Ohio Facility. The Lenders
shall have received a report prepared by an environmental consulting
firm acceptable to the Required Lenders concerning the environmental
aspects of the Galion, Ohio Facility, and the Lenders shall be
satisfied in all respects, in their sole discretion, with the scope and
conclusions contained in such report.
51
(l) Evidence of Insurance. The Collateral Agent shall have
received certificates of insurance and other evidence, satisfactory to
it, of compliance with the insurance requirements of this Agreement and
the Security Documents.
(m) Proceedings and Documents. All corporate and other
proceedings and all documents incidental to the transactions
contemplated hereby shall be satisfactory in substance and form to the
Administrative Agent and the Lenders and the Administrative Agent and
its special counsel and the Lenders shall have received all such
counterpart originals or certified or other copies of such documents as
the Administrative Agent or its special counsel or any Lender may
reasonably request.
6.2 Conditions Precedent to All Credit Events. The obligations of the
Lenders to make each Term Loan, Revolving Loan and/or of a Letter of Credit
Issuer to issue each Letter of Credit is subject, at the time thereof, to the
satisfaction of the following conditions:
(a) Notice of Borrowing, etc. The Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of section
2.3 with respect to the incurrence of Loans or a Letter of Credit
Request meeting the requirement of section 3.2 with respect to the
issuance of a Letter of Credit.
(b) No Default; Representations and Warranties. At the time
thereof and also after giving effect thereto, (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in the other Credit Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of
such Revolving Loan or issuance of such Letter of Credit, except to the
extent that such representations and warranties expressly relate to an
earlier date.
The acceptance of the benefits of each Loan or issuance of a Letter of Credit
shall constitute a representation and warranty by the applicable Borrower to
each of the Lenders that all of the applicable conditions specified in section
6.1 and/or 6.2, as the case may be, exist as of that time. All of the
certificates, legal opinions and other documents and papers referred to in
section 6.1 or this section 6.2, unless otherwise specified, shall be delivered
to the Administrative Agent for the account of each of the Lenders and, except
for the Notes, in sufficient counterparts for each of the Lenders, and the
Administrative Agent will promptly distribute to the Lenders their respective
Notes and the copies of such other certificates, legal opinions and documents.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to make
the Loans, and/or to issue and/or to participate in the Letters of Credit
provided for herein, the Company makes the following representations and
warranties to, and agreements with, the Lenders, all of which shall survive the
execution and delivery of this Agreement and each Credit Event:
52
7.1 Corporate Status, etc. Each of the Company and its Subsidiaries (i)
is a duly organized or formed and validly existing corporation, partnership or
limited liability company, as the case may be, in good standing under the laws
of the jurisdiction of its formation and has the corporate, partnership or
limited liability company power and authority, as applicable, to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage, and (ii) has duly qualified and is authorized to
do business in all jurisdictions where it is required to be so qualified except
where the failure to be so qualified would not have a Material Adverse Effect.
7.2 Subsidiaries. Annex II hereto lists, as of the date hereof, each
Subsidiary of the Company (and the direct and indirect ownership interest of the
Company therein).
7.3 Corporate Power and Authority, etc. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Credit Documents to which it is party. Each Credit Party has duly
executed and delivered each Credit Document to which it is party and each Credit
Document to which it is party constitutes the legal, valid and binding agreement
or obligation of such Credit Party enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
7.4 No Violation. Neither the execution, delivery, performance by any
Credit Party of the Credit Documents to which it is party nor compliance with
the terms and provisions thereof, nor the consummation of the loan transactions
contemplated therein (i) will contravene any provision of any law, statute,
rule, regulation, order, writ, injunction or decree of any court or governmental
instrumentality applicable to such Credit Party or its properties and assets,
(ii) will conflict with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(other than the Liens of any Credit Document) upon any of the property or assets
of the Company or any of its Subsidiaries pursuant to the terms of any
promissory note, bond, debenture, indenture, mortgage, deed of trust, credit or
loan agreement, or any other material agreement or other instrument, to which
the Company or any of its Subsidiaries is a party or by which it or any of its
property or assets are bound or to which it may be subject, or (iii) will
violate any provision of the certificate or articles of incorporation, code of
regulations or by-laws, or other charter documents of any Credit Party.
7.5 Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required as a
condition to (i) the execution, delivery and performance by any Credit Party of
any
53
Credit Document or (ii) the legality, validity, binding effect or enforceability
of any Credit Document, other than the filings and recordings contemplated by
section 7.19.
7.6 Litigation. There are no actions, suits or proceedings pending or,
to, the knowledge of the Company, threatened with respect to the Company or any
of its Subsidiaries (i) that have, or could reasonably be expected to have, a
Material Adverse Effect, or (ii) which question the validity or enforceability
of any of the Credit Documents, or of any action to be taken by any Credit Party
pursuant to any of the Credit Documents.
7.7 Use of Proceeds; Margin Regulations. (a) The proceeds of all Loans
shall be utilized (i) to retire the Indebtedness referred to in sections 6.1(i)
and (j), and (ii) for other lawful purposes not inconsistent with the
requirements of this Agreement.
(b) No part of the proceeds of any Credit Event will be used directly
or indirectly to purchase or carry Margin Stock, or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock. Neither any Credit
Event, nor the use of the proceeds thereof, will violate or be inconsistent with
the provisions of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System. No Borrower is engaged in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. At no time
would more than 25% of the value of the assets of the Company or of the Company
and its consolidated Subsidiaries that are subject to any "arrangement" (as such
term is used in section 221.2(g) of such Regulation U) hereunder be represented
by Margin Stock.
7.8 Financial Statements, etc. (a) The Company has furnished to the
Lenders and the Administrative Agent complete and correct copies of (i) the
audited consolidated balance sheets of the Company and its consolidated
subsidiaries as of March 31, 1996 and March 31, 1995 and the related audited
consolidated statements of income, shareholders' equity, and cash flows of the
Company and its consolidated subsidiaries for the fiscal years then ended,
accompanied by the unqualified report thereon of the Company's independent
accountants, as contained in the Annual Reports on Form 10-K of the Company for
each of the fiscal years then ended filed with the SEC; and (ii) the unaudited
condensed consolidated balance sheets of the Company and its consolidated
subsidiaries as of December 31, 1997, and the related consolidated statements of
income and of cash flows of the Company and its consolidated subsidiaries for
the fiscal quarter then ended, as contained in the Form 10-Q Quarterly Report of
the Company filed with the SEC. All such financial statements have been prepared
in accordance with GAAP, consistently applied (except as stated therein), and
fairly present the financial position of the Company and its consolidated
subsidiaries as of the respective dates indicated and the consolidated results
of their operations and cash flows for the respective periods indicated, subject
to adjustments related to deferred product launch costs and the write off of
Citibank finance expenses and subject in the case of any such financial
statements which are unaudited, to normal audit adjustments, none of which will
involve a Material Adverse Effect.
54
(b) Each Borrower has received consideration which is the reasonable
equivalent value of the obligations and liabilities that such Borrower has
incurred to the Administrative Agent and the Lenders. Each Borrower now has
capital sufficient to carry on its business and transactions and all business
and transactions in which it is about to engage and is now solvent and able to
pay its debts as they mature and each Borrower, as of the Initial Borrowing
Date, owns property having a value, both at fair valuation and at present fair
salable value, greater than the amount required to pay such Borrower's debts;
and no Borrower is entering into the Credit Documents with the intent to hinder,
delay or defraud its creditors. Without limitation of the foregoing, on and as
of the Initial Borrowing Date, (i) the sum of the assets, at a fair valuation,
of the Company will exceed its debts, (ii) the Company will not have incurred or
intended to, or believe that it will, incur debts beyond its ability to pay such
debts as such debts mature and (iii) the Company will have sufficient capital
with which to conduct its business. For purposes of this section 7.8(b), "debt"
means any liability on a claim, and "claim" means (x) right to payment whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured; or (y) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(c) The Company has delivered to the Lenders prior to the execution and
delivery of this Agreement (i) a copy of the Company's Report on Form 10-K as
filed (without Exhibits) with the SEC for its fiscal year ended March 31, 1996,
which contains a general description of the business and affairs of the Borrower
and its Subsidiaries, and (ii) financial projections prepared by management of
the Company for the Company and its Subsidiaries for the fiscal years 1998 and
1999 which take into account, on a pro forma basis, the acquisition of Valentec
International Corporation (the "Financial Projections"). The Financial
Projections were prepared on behalf of the Company in good faith after taking
into account the existing and historical levels of business activity of the
Company and its Subsidiaries, historical financial information with respect to
the properties and business acquired in the acquisition of Valentec
International Corporation, as supplied by the sellers, known trends, including
general economic trends, and all other information, assumptions and estimates
considered by management of the Company and its Subsidiaries to be pertinent
thereto, taking into account the fact that such management is not intimately
familiar with the properties and business acquired in the acquisition of
Valentec International Corporation. The Financial Projections were considered by
management of the Company, as of such date of preparation, to be realistically
achievable; provided, that no representation or warranty is made as to the
impact of future general economic conditions or as to whether the Company's
projected consolidated results as set forth in the Financial Projections will
actually be realized; and provided, further, that the Company undertakes no
responsibility for the accuracy of any historical information concerning the
business or operations acquired in the acquisition of Valentec International
Corporation which is included in the Financial Projections. No facts are known
to the Company at the date hereof which, if reflected in the Financial
Projections, would result in a material adverse change in the assets,
liabilities, results of operations or cash flows reflected therein.
55
7.9 No Material Adverse Change. Since December 31, 1996, there has been
no change in the condition, business or affairs of the Company and its
Subsidiaries taken as a whole, or their properties and assets considered as an
entirety, except for changes none of which, individually or in the aggregate,
has had or could reasonably be expected to have a Material Adverse Effect.
7.10 Tax Returns and Payments. Each of the Company and each of its
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in good faith. The
Company and each of its Subsidiaries has established on its books such charges,
accruals and reserves in respect of taxes, assessments, fees and other
governmental charges for all fiscal periods as are required by GAAP. The Company
knows of no proposed assessment for additional federal, foreign or state taxes
for any period, or of any basis therefor, which, individually or in the
aggregate, taking into account such charges, accruals and reserves in respect
thereof as the Company and its Subsidiaries have made, could reasonably be
expected to have a Material Adverse Effect.
7.11 Title to Properties, etc. The Company and each of its Subsidiaries
has good and marketable title, in the case of real property, and good title (or
valid leasehold interests, in the case of any leased property), in the case of
all other property, to all of its properties and assets free and clear of Liens
other than Liens permitted by section 9.3. The interests of the Company and each
of its Subsidiaries in the properties reflected in the most recent balance sheet
referred to in section 7.8, taken as a whole, were sufficient, in the judgment
of the Company, as of the date of such balance sheet for purposes of the
ownership and operation of the businesses conducted by the Company and such
Subsidiaries.
7.12 Lawful Operations, etc. Except for known situations or incidents
which are reserved for on the most recent consolidated balance sheet referred to
in section 7.8 or which, if not so reserved, could not reasonably be expected to
have a Material Adverse Effect, the Company and each of its Subsidiaries is in
full compliance with all material requirements imposed by law, whether federal
or state, including (without limitation) Environmental Laws and zoning
ordinances.
7.13 Environmental Matters. (a) The Company and each of its
Subsidiaries is in compliance with all Environmental Laws governing its business
except to the extent that any such failure to comply (together with any
resulting penalties, fines or forfeitures) would not reasonably be expected to
have a Material Adverse Effect. All licenses, permits, registrations or
approvals required for the business of the Company and each of its Subsidiaries,
as conducted as of the Initial Borrowing Date, under any Environmental Law have
been secured and the Company and each of its Subsidiaries is in substantial
compliance therewith, except for such licenses, permits, registrations or
approvals the failure to secure or to comply therewith is not reasonably likely
to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received
56
written notice, or otherwise knows, that it is in any respect in noncompliance
with breach of or default under any applicable writ, order, judgment,
injunction, or decree to which the Company or such Subsidiary is a party or
which would affect the ability of the Company or such Subsidiary to operate any
real property and no event has occurred and is continuing which, with the
passage of time or the giving of notice or both, would constitute noncompliance,
breach of or default thereunder, except in each such case, such noncompliance,
breaches or defaults as would not reasonably be expected to, in the aggregate,
have a Material Adverse Effect. There are as of the Initial Borrowing Date no
Environmental Claims pending or, to the best knowledge of the Company,
threatened wherein an unfavorable decision, ruling or finding would reasonably
be expected to have a Material Adverse Effect. There are no facts,
circumstances, conditions or occurrences on any Real Property now or at any time
owned, leased or operated by the Company or any of its Subsidiaries or on any
property adjacent to any such Real Property, which are known by the Company or
as to which the Company or any such Subsidiary has received written notice, that
could reasonably be expected (i) to form the basis of an Environmental Claim
against the Company or any of its Subsidiaries or any Real Property of the
Company or any of its Subsidiaries, or (ii) to cause such Real Property to be
subject to any restrictions on the ownership, occupancy, use or transferability
of such Real Property under any Environmental Law, except in each such case,
such Environmental Claims or restrictions that individually or in the aggregate
would not reasonably be expected to have a Material Adverse Effect.
(b) Hazardous Materials have not at any time been (i) generated, used,
treated or stored on, or transported to or from, any Real Property of the
Company or any of its Subsidiaries or (ii) released on any such Real Property,
in each case where such occurrence or event is not in compliance with
Environmental Laws and is reasonably likely to have a Material Adverse Effect.
7.14 Compliance with ERISA. Compliance by the Company with the
provisions hereof and Credit Events contemplated hereby will not involve any
prohibited transaction within the meaning of ERISA or section 4975 of the Code.
The Company and each of its Subsidiaries, (i) has fulfilled all obligations
under minimum funding standards of ERISA and the Code with respect to each Plan
that is not a Multiemployer Plan or a Multiple Employer Plan, (ii) has satisfied
all respective contribution obligations in respect of each Multiemployer Plan
and each Multiple Employer Plan, (iii) is in compliance in all material respects
with all other applicable provisions of ERISA and the Code with respect to each
Plan, each Multiemployer Plan and each Multiple Employer Plan, and (iv) has not
incurred any liability under the Title IV of ERISA to the PBGC with respect to
any Plan, any Multiemployer Plan, any Multiple Employer Plan, or any trust
established thereunder. No Plan or trust created thereunder has been terminated,
and there have been no Reportable Events, with respect to any Plan or trust
created thereunder or with respect to any Multiemployer Plan or Multiple
Employer Plan, which termination or Reportable Event will or could result in the
termination of such Plan, Multiemployer Plan or Multiple Employer Plan and give
rise to a Material Adverse Effect in respect thereof. Neither the Company nor
any ERISA Affiliate is at the date hereof, or has been at any time within the
two years preceding the date hereof, an employer required to contribute to any
Multiemployer Plan or Multiple Employer Plan, or a "contributing sponsor" (as
such term is defined in section 4001 of ERISA) in any
57
Multiemployer Plan or Multiple Employer Plan. Neither the Company nor any ERISA
Affiliate has any contingent liability with respect to any post-retirement
"welfare benefit plan" (as such term is defined in ERISA) except as has been
disclosed to the Lenders in writing.
7.15 Intellectual Property, etc. The Company and each of its
Subsidiaries has obtained or has the right to use all material patents,
trademarks, servicemarks, trade names, copyrights, licenses and other rights
with respect to the foregoing necessary for the present and planned future
conduct of its business, without any known conflict with the rights of others,
except for such patents, trademarks, servicemarks, trade names, copyrights,
licenses and rights, the loss of which, and such conflicts, which in any such
case individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
7.16 Investment Company Act, etc. Neither the Company nor any of its
Subsidiaries is subject to regulation with respect to the creation or incurrence
of Indebtedness under the Investment Company Act of 1940, as amended, the
Interstate Commerce Act, as amended, the Federal Power Act, as amended, the
Public Utility Holding Company Act of 1935, as amended, or any applicable state
public utility law.
7.17 Burdensome Contracts; Labor Relations. The Company and the
Subsidiaries (i) are not subject to any materially burdensome contract,
agreement, corporate restriction, judgment, decree or order, (ii) are not
parties to any labor dispute, (iii) are not subject to any material strikes,
slow downs, workouts or other concerted interruptions of operations by employees
of the Company or any Subsidiary, whether or not relating to any labor
contracts, (iv) are not subject to any significant pending or, to the knowledge
of the Company, threatened, unfair labor practice complaint, before the National
Labor Relations Board, and (v) are not subject to any pending or, to the
knowledge of the Company, threatened, grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement, (vi) are
not subject to any significant pending or, to the knowledge of the Company,
threatened, significant strike, labor dispute, slowdown or stoppage, and (vii)
to the knowledge of the Company, no union representation question exists with
respect to the employees of the Company or any of its Subsidiaries, except (with
respect to any matter specified in any of the above clauses), for such matters
as, individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
7.18 Existing Indebtedness. Annex III sets forth a true and complete
list, as of the date or dates set forth therein, of all Indebtedness of the
Company and each of its Subsidiaries which (i) has an outstanding principal
amount of at least $1,000,000 (all such Indebtedness, whether or not so listed,
the "Existing Indebtedness") or (ii) is secured by any Lien on any property of
the Company or any Subsidiary, and which will be outstanding on the Initial
Borrowing Date after giving effect to the initial Borrowing hereunder, other
than the Indebtedness created under the Credit Documents. The Company has
provided to the Administrative Agent prior to the date of execution hereof true
and complete copies of all agreements and instruments governing the Indebtedness
listed on Annex III (the "Existing Indebtedness Agreements").
58
7.19 Security Interests. Once executed and delivered, and until
terminated in accordance with the terms thereof, each of the Security Documents
creates, as security for the obligations purported to be secured thereby, a
valid and enforceable perfected security interest in and Lien on all of the
Collateral subject thereto from time to time, in favor of the Collateral Agent
for the benefit of the Secured Creditors referred to in the Security Documents,
superior to and prior to the rights of all third persons and subject to no other
Liens (except that the Collateral under the Security Agreement may be subject to
Permitted Liens). No filings or recordings are required in order to perfect the
security interests created under any Security Document except for filings or
recordings required in connection with any such Security Document which shall
have been made, or for which satisfactory arrangements have been made, upon or
prior to the execution and delivery thereof. All recording, stamp, intangible or
other similar taxes required to be paid by any person under applicable legal
requirements or other laws applicable to the property encumbered by the Security
Documents in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement thereof have been paid.
7.20 True and Complete Disclosure. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the Company
or any of its Subsidiaries in writing to the Administrative Agent or any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated herein, other than the Financial Projections (as to which
representations are made only as provided in section 7.8), is, and all other
such factual information (taken as a whole) hereafter furnished by or on behalf
of such person in writing to any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided, except that any such
future information consisting of financial projections prepared by management of
the Company is only represented herein as being based on good faith estimates
and assumptions believed by such persons to be reasonable at the time made, it
being recognized by the Lenders that such projections as to future events are
not to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ materially from the projected
results. As of the Effective Date, there is no fact known to the Company or any
of its Subsidiaries which has, or could reasonably be expected to have, a
Material Adverse Effect which has not theretofore been disclosed to the Lenders.
SECTION 8. AFFIRMATIVE COVENANTS.
The Company hereby covenants and agrees that so long as this Agreement
is in effect and until such time as the Total Commitment has been terminated, no
Notes are outstanding and the Loans, together with interest, Fees and all other
Obligations hereunder, have been paid in full:
59
8.1 Reporting Requirements. The Company will furnish to each Lender and
the Administrative Agent:
(a) Annual Financial Statements. As soon as available and in
any event within 105 days after the close of each fiscal year of the
Company, the consolidated and consolidating balance sheets of the
Company and its consolidated Subsidiaries as at the end of such fiscal
year and the related consolidated and consolidating statements of
income and consolidated statements of stockholder's equity and of cash
flows for such fiscal year, in each case setting forth comparative
figures for the preceding fiscal year, all in reasonable detail and
accompanied by the opinion with respect to such consolidated financial
statements of independent public accountants of recognized national
standing selected by the Company, which opinion shall be unqualified
and shall (i) state that such accountants audited such consolidated
financial statements in accordance with generally accepted auditing
standards, that such accountants believe that such audit provides a
reasonable basis for their opinion, and that in their opinion such
consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Company and its
consolidated subsidiaries as at the end of such fiscal year and the
consolidated results of their operations and cash flows for such fiscal
year in conformity with generally accepted accounting principles, or
(ii) contain such statements as are customarily included in unqualified
reports of independent accountants in conformity with the
recommendations and requirements of the American Institute of Certified
Public Accountants (or any successor organization).
(b) Quarterly Financial Statements. As soon as available and
in any event within 60 days after the close of each of the first three
quarterly accounting periods in each fiscal year of the Company, the
unaudited, condensed consolidated and consolidating balance sheets of
the Company and its consolidated Subsidiaries as at the end of such
quarterly period and the related unaudited, condensed consolidated and
consolidating statements of income and consolidated statements of cash
flows for such quarterly period, and setting forth, in the case of such
unaudited consolidated statements of income and of cash flows,
comparative figures for the related periods in the prior fiscal year
(except to the extent that a business or Subsidiary was not owned in
such prior year), and which shall be certified on behalf of the Company
by the Chief Financial Officer or other Authorized Officer of the
Company, subject to changes resulting from normal year-end audit
adjustments.
(c) Officer's Compliance Certificates. At the time of the
delivery of the financial statements provided for in sections 8.1(a)
and (b), a certificate on behalf of the Company of the Chief Financial
Officer or other Authorized Officer of the Company to the effect that,
to the best knowledge of the Company, no Default or Event of Default
exists or, if any Default or Event of Default does exist, specifying
the nature and extent thereof, which certificate shall set forth the
calculations required to establish compliance with the provisions of
sections 9.4, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10 and 9.11 of this Agreement.
60
(d) Notice of Default, Litigation or Certain Matters Involving
Major Customers. Promptly, and in any event within three Business Days,
in the case of clause (i) below, or 10 Business Days, in the case of
clause (ii) or (ii) below, after the Company or any of its Subsidiaries
obtains knowledge thereof, notice of
(i) the occurrence of any event which constitutes a
Default or Event of Default, which notice shall specify the
nature thereof, the period of existence thereof and what
action the Company proposes to take with respect thereto,
(ii) any litigation or governmental or regulatory
proceeding pending against the Company or any of its
Subsidiaries which is likely to have a Material Adverse Effect
or a material adverse effect on the ability of the Company to
perform its obligations hereunder or under any other Credit
Document, and
(iii) any significant adverse change in the Company's
or any Subsidiary's relationship with, or any significant
event or circumstance which is likely to adversely affect the
Company's or any Subsidiary's relationship with, any customer
representing more than 10% of the Company's consolidated
revenues during its most recent fiscal year, and which adverse
change is reasonably likely to have a Material Adverse Effect.
(e) Auditors' Internal Control Comment Letters, etc. Promptly
upon receipt thereof, a copy of each letter or memorandum commenting on
internal accounting or auditing controls or procedures which is
submitted to the Company by its independent accountants in connection
with any annual audit made by them of the books of the Company.
(f) ERISA. Promptly, and in any event within 10 Business Days
after the Company, any Subsidiary of the Company or any ERISA Affiliate
becomes aware of the occurrence of any of the following, the Company
will deliver to each of the Lenders a certificate on behalf of the
Company of an Authorized Officer of the Company setting forth the full
details as to such occurrence and the action, if any, that the Company,
such Subsidiary or such ERISA Affiliate is required or proposes to
take, together with any notices required or proposed to be given to or
filed with or by the Company, the Subsidiary, the ERISA Affiliate, the
PBGC, a Plan participant or the Plan administrator with respect
thereto:
(i) that a Reportable Event has occurred with respect
to any Plan;
(ii) the institution of any steps by the Company, any
ERISA Affiliate, the PBGC or any other person to terminate any
Plan which has funding requirements;
61
(iii) the institution of any steps by the Company or
any ERISA Affiliate to withdraw from any Plan;
(iv) the institution of any steps by the Company or
any Subsidiary to withdraw from any Multiemployer Plan or
Multiple Employer Plan, if such withdrawal could result in
withdrawal liability (as described in Part 1 of Subtitle E of
Title IV of ERISA) in excess of $1,000,000;
(v) a non-exempt "prohibited transaction" within the
meaning of section 406 of ERISA in connection with any Plan;
(vi) that a Plan has an Unfunded Current Liability
exceeding $1,000,000;
(vii) any material increase in the contingent
liability of the Company or any Subsidiary with respect to any
post-retirement welfare liability; or
(viii) the taking of any action by, or the
threatening of the taking of any action by, the Internal
Revenue Service, the Department of Labor or the PBGC with
respect to any of the foregoing.
(g) Environmental Matters. Promptly upon, and in any event
within 10 Business Days after, an officer of the Company or any of its
Subsidiaries obtains knowledge thereof, notice of any of the following
environmental matters which involves any reasonable likelihood (in the
Company's reasonable judgment) of resulting in a Material Adverse
Effect: (i) any pending or threatened (in writing) Environmental Claim
against the Company or any of its Subsidiaries or any Real Property
owned or operated by the Company or any of its Subsidiaries; (ii) any
condition or occurrence on or arising from any Real Property owned or
operated by the Company or any of its Subsidiaries that (A) results in
noncompliance by the Company or any of its Subsidiaries with any
applicable Environmental Law or (B) would reasonably be expected to
form the basis of an Environmental Claim against the Company or any of
its Subsidiaries or any such Real Property; (iii) any condition or
occurrence on any Real Property owned, leased or operated by the
Company or any of its Subsidiaries that could reasonably be expected to
cause such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability by the Company or any of
its Subsidiaries of such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real
Property owned, leased or operated by the Company or any of its
Subsidiaries as required by any Environmental Law or any governmental
or other administrative agency. All such notices shall describe in
reasonable detail the nature of the Environmental Claim and the
Company's or such Subsidiary's response thereto.
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(h) SEC Reports and Registration Statements. Promptly upon
transmission thereof or other filing with the SEC, copies of all
registration statements (other than the exhibits thereto and any
registration statement on Form S-8 or its equivalent) and annual,
quarterly or current reports that the Company or any of its
Subsidiaries files with the SEC.
(i) Other Information. With reasonable promptness, such other
information or documents (financial or otherwise) relating to the
Company or any of its Subsidiaries as any Lender may reasonably request
from time to time.
8.2 Books, Records and Inspections. The Company will, and will cause
each of its Subsidiaries to, (i) keep proper books of record and account, in
which full and correct entries shall be made of all financial transactions and
the assets and business of the Company or such Subsidiaries, as the case may be,
in accordance with GAAP; and (ii) permit during regular business hours, upon at
least five Business Days' notice to the Chief Financial Officer or any other
Authorized Officer of the Company, officers and designated representatives of
the Administrative Agent or any of the Lenders to visit and inspect any of the
properties or assets of the Company and any of its Subsidiaries in whomsoever's
possession (but only to the extent the Company or such Subsidiary has the right
to do so to the extent in the possession of another person), and to examine the
books of account of the Company and any of its Subsidiaries and discuss the
affairs, finances and accounts of the Company and of any of its Subsidiaries
with, and be advised as to the same by, its and their officers and independent
accountants and independent actuaries, if any, all at such reasonable times and
intervals and to such reasonable extent as the Administrative Agent or any of
the Lenders may request.
8.3 Insurance. (a) The Company will, and will cause each of its
Subsidiaries to, (b) maintain insurance coverage by such insurers and in such
forms and amounts and against such risks as are generally consistent with the
insurance coverage maintained by the Company and its Subsidiaries at the date
hereof, and (c) forthwith upon any Lender's written request, furnish to such
Lender such information about such insurance as such Lender may from time to
time reasonably request, which information shall be prepared in form and detail
satisfactory to such Lender and certified by an Authorized Officer of the
Company.
(d) The Company will, and will cause each of its Subsidiaries to, at
all times keep their respective property which is subject to the Lien of any
Security Document insured in favor of the Collateral Agent, and all policies or
certificates (or certified copies thereof) with respect to such insurance (and
any other insurance maintained by the Company or any such Subsidiary) (i) shall
be endorsed to the Collateral Agent's satisfaction for the benefit of the
Collateral Agent (including, without limitation, by naming the Collateral Agent
as loss payee (with respect to Collateral) or, to the extent permitted by
applicable law, as an additional insured), (ii) shall state that such insurance
policies shall not be canceled without 30 days' prior written notice thereof (or
10 days' prior written notice in the case of cancellation for the non-payment of
premiums) by the respective insurer to the Collateral Agent, (iii) shall provide
that the respective insurers irrevocably waive any and all rights of subrogation
with respect to the Collateral Agent and the Lenders, and (iv)
63
shall in the case of any such certificates or endorsements in favor of the
Collateral Agent, be deposited with the Collateral Agent. In no event shall the
Company be required to deposit the actual insurance policies with the Collateral
Agent. The Administrative Agent shall deliver copies of any certificates of
insurance to a Lender upon such Lender's request.
(e) Without limitation of the foregoing, the Company will maintain in
full force and effect with an insurance company acceptable to the Required
Lenders a key man life insurance policy on the life of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ in the
amount of at least $2,500,000, which insurance policy shall at all times be
subject to the Assignment of Life Insurance Policy.
(f) If the Company or any of its Subsidiaries shall fail to maintain
all insurance in accordance with this section 8.3, or if the Company or any of
its Subsidiaries shall fail to so endorse and deposit all policies or
certificates with respect thereto, the Administrative Agent and/or the
Collateral Agent shall have the right (but shall be under no obligation), upon
prior notice to the Company, to procure such insurance and the Company agrees to
reimburse the Administrative Agent or the Collateral Agent, as the case may be,
for all costs and expenses of procuring such insurance.
8.4 Payment of Taxes. The Company will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, might become a Lien or charge
upon any properties of the Company or any of its Subsidiaries; provided that
neither the Company nor any of its Subsidiaries shall be required to pay any
such tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings if it has maintained adequate reserves with
respect thereto in accordance with GAAP; and provided, further, that the Company
will not be considered to be in default of any of the provisions of this
sentence if the Company or any Subsidiary fails to pay any such amount which,
individually or in the aggregate, is immaterial.
8.5 Corporate Franchises. The Company will do, and will cause each of
its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its corporate existence, rights and authority,
provided that any transaction permitted by section 9.2 will not constitute a
breach of this section 8.5.
8.6 Good Repair. The Company will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements, thereto, to the extent and in the manner customary for
companies in similar businesses.
64
8.7 Compliance with Statutes, etc. The Company will, and will cause
each of its Subsidiaries to, comply, in all material respects, with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, other than those the
noncompliance with which would not have, and which would not be reasonably
expected to have, a Material Adverse Effect or a material adverse effect on the
ability of the Company to perform its obligations under any Credit Document.
8.8 Compliance with Environmental Laws. Without limitation of the
covenants contained in section 8.7, the Company will comply, and will cause each
of its Subsidiaries to comply, in all material respects, with all Environmental
Laws applicable to the ownership, lease or use of all Real Property now or
hereafter owned, leased or operated by the Company or any of its Subsidiaries,
will promptly pay or cause to be paid all costs and expenses incurred in
connection with such compliance, and will keep or cause to be kept all such Real
Property free and clear of any Liens imposed pursuant to such Environmental Laws
which are not permitted under section 9.3. Neither the Company nor any of its
Subsidiaries will generate, use, treat, store, release or dispose of, or permit
the generation, use, treatment, storage, release or disposal of, Hazardous
Materials on any Real Property now or hereafter owned, leased or operated by the
Company or any of its Subsidiaries or transport or permit the transportation of
Hazardous Materials to or from any such Real Property other than in compliance
with applicable Environmental Laws and in the ordinary course of business,
except for such noncompliance as would not have, and which would not be
reasonably expected to have, a Material Adverse Effect or a material adverse
effect on the ability of the Company to perform its obligations under any Credit
Document. If required to do so under any applicable order of any governmental
agency, the Company will undertake, and cause each of its Subsidiaries to
undertake, any clean up, removal, remedial or other action necessary to remove
and clean-up any Hazardous Materials from any Real Property owned, leased or
operated by the Company or any of its Subsidiaries in accordance with, in all
material respects, the requirements of all applicable Environmental Laws and in
accordance with, in all material respects, such orders of all governmental
authorities, except to the extent that the Company or such Subsidiary is
contesting such order in good faith and by appropriate proceedings and for which
adequate reserves have been established to the extent required by GAAP.
8.9 Fiscal Years, Fiscal Quarters. The Company will, for consolidated
financial reporting purposes, continue to use March 31 as the end of its fiscal
year and June 30, September 30, and December 31 as the end of its fiscal
quarters. If the Company shall change any of its Subsidiaries' fiscal years or
fiscal quarters (other than the fiscal year or fiscal quarters of a person which
becomes a Subsidiary, made at the time such person becomes a Subsidiary to
conform to the Company's fiscal year and fiscal quarters), the Company will
promptly, and in any event within 30 days following any such change, deliver a
notice to the Administrative Agent and the Lenders describing such change and
any material accounting entries made in connection therewith and stating whether
such change will have any impact upon any financial computations to be made
hereunder, and if any such impact is foreseen, describing in reasonable detail
the nature and extent of such impact. If the Required Lenders determine that any
such change will have any impact
65
upon any financial computations to be made hereunder which is adverse to the
Lenders, the Company will, if so requested by the Administrative Agent, enter
into an amendment to this Agreement, in form and substance satisfactory to the
Administrative Agent and the Required Lenders, modifying any of the financial
covenants or related provisions hereof in such manner as the Required Lenders
determine is necessary to eliminate such adverse effect.
8.10 Certain Subsidiaries to Join in Subsidiary Guaranty. (a) In the
event that at any time after the Initial Borrowing Date the Company has any
Material Subsidiary which is not a party to the Subsidiary Guaranty, the Company
will notify the Administrative Agent in writing of such event, identifying the
Material Subsidiary in question and referring specifically to the rights of the
Administrative Agent and the Lenders under this section. The Company will,
within 30 days following request therefor from the Administrative Agent (who may
give such request on its own initiative or upon request by the Required
Lenders), cause such Material Subsidiary to deliver to the Administrative Agent,
in sufficient quantities for the Lenders, (i) a joinder supplement, satisfactory
in form and substance to the Administrative Agent and the Required Lenders, duly
executed by such Material Subsidiary, pursuant to which such Material Subsidiary
joins in the Subsidiary Guaranty as a guarantor thereunder, and (ii) if such
Material Subsidiary is a corporation, resolutions of the Board of Directors of
such Material Subsidiary, certified by the Secretary or an Assistant Secretary
of such Material Subsidiary as duly adopted and in full force and effect,
authorizing the execution and delivery of such joinder supplement, or if such
Material Subsidiary is not a corporation, such other evidence of the authority
of such Material Subsidiary to execute such joinder supplement as the
Administrative Agent may reasonably request.
(b) Notwithstanding the foregoing or the provisions of section 8.11
hereof, the Company shall not be required to cause a Foreign Subsidiary to join
in the Subsidiary Guaranty or to become a party to an Additional Security
Document if (i) to do so would subject the Company to liability for additional
United States income taxes by virtue of section 956 of the Code in an amount the
Company considers material, and (ii) the Company provides the Administrative
Agent with documentation, including computations prepared by the Company's
internal tax officer, its independent accountants or tax counsel, acceptable to
the Required Lenders, in support thereof.
8.11 Additional Security; Further Assurances. (a) In the event that the
Company or any Subsidiary at any time owns or holds an interest in any Real
Property or any other property or interest which is not at the time included in
the Collateral and is not subject to a Permitted Lien securing Indebtedness, the
Company will, or will cause such Subsidiary to, within 20 days following request
by the Collateral Agent (who may make such request on its own initiative or upon
instructions from the Required Lenders), grant the Collateral Agent for the
benefit of the Secured Creditors (as defined in the Security Documents) security
interests and mortgages (each an "Additional Security Document") in such
interests or properties of the Company or any Subsidiary, subject to obtaining
any required consents from third parties (including third party lessors and
co-venturers) necessary to be obtained for the granting of a Lien on the
interests or assets involved (with the Company hereby agreeing to use its
reasonable best efforts to obtain such consents), and subject to the provisions
of section 8.10(b). Each Additional Security
66
Document (i) shall be granted pursuant to documentation satisfactory in form and
substance to the Administrative Agent and the Collateral Agent, which
documentation shall in the case of Real Property or interests therein be
accompanied by such Phase I environmental assessments, surveys and surveyor's
certifications, a mortgage policy of title insurance, consents of landlords and
other supporting documentation requested by and satisfactory in form and
substance to the Administrative Agent and the Collateral Agent; and (ii) shall
constitute a valid and enforceable perfected Lien upon the interests or
properties so included in the Collateral, superior to and prior to the rights of
all third persons and subject to no other Liens except those permitted by
section 9.3 or otherwise agreed by the Administrative Agent at the time of
perfection thereof and (in the case of Real Property or interests therein) such
other encumbrances as may be set forth in the mortgage policy, if any, relating
to such Additional Security Document which shall be delivered to the Collateral
Agent together with such Additional Security Document and which shall be
satisfactory in form and substance to the Collateral Agent. The Company, at its
sole cost and expense, will cause each Additional Security Document or
instruments related thereto to be duly recorded or filed in such manner and in
such places as are required by law to establish, perfect, preserve and protect
the Liens created thereby required to be granted pursuant to the Additional
Security Document, and will pay or cause to be paid in full all taxes, fees and
other charges payable in connection therewith.
(b) Within 60 days following the Initial Borrowing Date, the Company
will, and will cause any of its applicable Subsidiaries to, (i) contribute to
the capital of a newly formed Delaware corporation ("Intermediate Holding Co."),
which shall be a direct Wholly-Owned Subsidiary of the Company, all of the stock
and Indebtedness of each Subsidiary which is a corporation organized under the
laws of a country other than the United States (the "Contributed Stock and
Debt") which is owned by the Company or any Subsidiary, pursuant to a tax free
reorganization (or other tax free transaction) under the Code, and (ii) enter
into an amendment to the Pledge Agreement, satisfactory in form and substance to
the Administrative Agent, pursuant to which, among other things, (A) the Company
pledges all of the outstanding capital stock of Intermediate Holding Co., and
(B) the 65% of the outstanding capital stock of each such foreign corporation,
which was previously pledged under the Pledge Agreement by other Pledgors, is
pledged thereunder by Intermediate Holding Co.
(c) The Company will, and will cause each of its Subsidiaries to, at
the expense of the Company, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, and other
assurances or instruments and take such further steps relating to the Collateral
covered by any of the Security Documents as the Collateral Agent may reasonably
require. If at any time the Collateral Agent determines, based on applicable
law, that all applicable taxes (including, without limitation, mortgage
recording taxes or similar charges) were not paid in connection with the
recordation of any mortgage or deed of trust, the Company shall promptly pay the
same upon demand. Furthermore, the Company shall cause to be delivered to the
Collateral Agent such opinions of local counsel, appraisals, title insurance,
surveys, environmental assessments, consents of landlords, lien waivers from
landlords or mortgagees and other related
67
documents as may be reasonably requested by the Administrative Agent or the
Collateral Agent in connection therewith, all of which documents shall be in
form and substance satisfactory to the Administrative Agent and the Collateral
Agent, except that no title insurance or surveys shall be required for any
leasehold properties (unless the lessee has a nominal or bargain purchase
option).
(d) The Company will if requested by any Lender at any time, in order
to meet any legal requirement applicable to such Lender, provide to
Administrative Agent, the Collateral Agent and the Lenders, at the sole cost and
expense of the Company, appraisals and other supporting documentation relating
to any mortgage or deed of trust delivered as an Additional Security Document
hereunder, as specified by any Lender, meeting the appraisal and other
documentation requirements of the Real Estate Reform Amendments of the Financial
Institution Reform, Recovery and Enforcement Act of 1989, as amended, or any
other legal requirements applicable to any Lender, which in the case of any such
appraisal shall be prepared by one or more valuation firms of national standing,
acceptable to the Required Lenders, utilizing appraisal standards satisfying
such Amendments, Act or other legal requirements.
(e) The Company will provide the Administrative Agent with sufficient
copies of each Additional Security Document and any additional supporting
documents delivered in connection therewith for distribution of copies thereof
to the Lenders, and the Administrative Agent will promptly so distribute such
copies.
8.12 Corporate Separateness. The Company will take, and will cause each
of its Subsidiaries to take, all such action as is necessary to keep the
operations of the Company and its Subsidiaries separate and apart from those of
each Subsidiary which has outstanding Indebtedness, including, without
limitation, ensuring that all customary formalities regarding corporate
existence, including holding regular board of directors' meetings and
maintenance of corporate records, are followed. All financial statements of the
Company and its Subsidiaries provided to creditors will clearly evidence the
corporate separateness of the Company and its other Subsidiaries from each
Subsidiary which has Indebtedness outstanding. Finally, neither the Company nor
any of its other Subsidiaries will take any action, or conduct its affairs in a
manner which is likely to result in the corporate existence of a Subsidiary
which has Indebtedness outstanding, on the one hand, and the Company and its
other Subsidiaries, on the other hand, being ignored, or in the assets and
liabilities of the Company or any of its other Subsidiaries being substantively
consolidated with those of a Subsidiary which has Indebtedness outstanding in a
bankruptcy, reorganization or other insolvency proceeding. No action or
indemnity, or provision of support in the form of a letter of credit, expressly
permitted by this Agreement will breach this covenant.
8.13 ERISA. As soon as possible and, in any event, within 10 days after
the Company, any Subsidiary of the Company or any ERISA Affiliate knows or has
reason to know of the occurrence of any of the following, the Company will
deliver to each of the Lenders a certificate of the chief financial officer of
the Company setting forth the full details as to such occurrence and the action,
if any, that the Company, such Subsidiary or such ERISA Affiliate is required or
68
proposes to take, together with any notices required or proposed to be given to
or filed with or by the Company, the Subsidiary, the ERISA Affiliate, the PBGC,
a Plan participant or the Plan administrator with respect thereto: that a
Reportable Event has occurred; that an accumulated funding deficiency, within
the meaning of section 412 of the Code or section 302 of ERISA, has been
incurred or an application may be or has been made for a waiver or modification
of the minimum funding standard (including any required installment payments) or
an extension of any amortization period under section 412 of the Code or section
303 or 304 of ERISA with respect to a Plan; that any contribution required to be
made with respect to a Plan has not been timely made; that a Plan has been or
may be terminated, reorganized, partitioned or declared insolvent under Title IV
of ERISA; that a Plan has an Unfunded Current Liability; that proceedings may be
or have been instituted to terminate or appoint a trustee to administer a Plan
which is subject to Title IV of ERISA; that a proceeding has been instituted
pursuant to section 515 of ERISA to collect a delinquent contribution to a Plan;
that the Company, any Subsidiary of the Company or any ERISA Affiliate will or
may incur any liability (including any indirect, contingent, or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under section 401(a)(29), 4971, 4975 or 4980 of the Code or
section 409 or 502(i) or 502(1) of ERISA or with respect to a group health plan
(as defined in section 607(1) of ERISA or section 4980B(g)(2) of the Code) under
section 4980B of the Code; or that the Company or any Subsidiary of the Company
may incur any material liability pursuant to any employee welfare benefit plan
(as defined in section 3(1) of ERISA) that provides benefits to retired
employees or other former employees (other than as required by section 601 of
ERISA) or any Plan.
8.14 Hedge Agreements, etc. The Company may, and may permit any of its
Subsidiaries to, enter into Hedge Agreements (i) in order to provide protection
to the Company or any such Subsidiary from fluctuations and other changes in
interest rates and currency exchange rates, as and to the extent considered
reasonably necessary by the Company, but no such Hedge Agreement shall expose
the Company or its Subsidiaries to predominantly speculative risks unrelated to
the amount of Indebtedness or assets intended to be subject to coverage on a
notional basis under any such Hedge Agreement; and (ii) in the case of any Hedge
Agreement entered into after the Effective Date, only if the proposed form
thereof (including any proposed pricing or other material terms) has been
provided to the Administrative Agent contemporaneously with the entry into such
Hedge Agreement.
8.15 Senior Debt. The Company will at all times ensure that (a) the
claims of the Lenders in respect of the Obligations of the Company will not be
subordinate to, and will in all respects at least rank pari passu with, the
claims of every other senior secured or unsecured creditor of the Company, and
(b) any Indebtedness subordinated in any manner to the claims of any senior
secured or unsecured creditor of the Company will be subordinated in like manner
to such claims of the Lenders.
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SECTION 9. NEGATIVE COVENANTS.
The Company hereby covenants and agrees that on the Effective Date and
thereafter for so long as this Agreement is in effect and until such time as the
Total Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder are
paid in full:
9.1 Changes in Business. Neither the Company nor any of its
Subsidiaries will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Company and its Subsidiaries, would be substantially changed from the
general nature of the business engaged in by the Company and its Subsidiaries on
the date hereof, which includes the production of automotive airbag systems and
components thereof, it being understood that the vertical integration of
businesses into the Company in order to avoid reliance on outside suppliers
shall not be considered a substantial change in the Company's business.
9.2 Consolidation, Merger or Sale of Assets, etc. The Company will not,
and will not permit any Subsidiary to, wind up, liquidate or dissolve its
affairs, or enter into any transaction of merger or consolidation or sell or
otherwise dispose of any of its property or assets (but excluding any sale or
disposition of obsolete or excess furniture, fixtures or equipment or excess
vacant land in the ordinary course of business), or purchase, lease or otherwise
acquire (in one transaction or a series of related transactions) all or any part
of the property or assets of any person (excluding any purchases, leases or
other acquisitions of property or assets in, and for use in, the ordinary course
of business) or agree to do any of the foregoing at any future time, except that
the following shall be permitted:
(a) Capital Expenditures: Consolidated Capital Expenditures
permitted by section 9.9;
(b) Permitted Investments: the investments permitted pursuant
to section 9.5;
(c) Certain Intercompany Mergers, etc.: if no Default or Event
of Default shall have occurred and be continuing or would result
therefrom, (i) the merger or consolidation of any Wholly-Owned
Subsidiary with or into the Company or another Wholly-Owned Subsidiary,
so long as in any merger or consolidation involving any Borrower the
Borrower is the surviving or continuing corporation, or the liquidation
or dissolution of any Subsidiary, or (ii) the transfer or other
disposition of any property by the Company to any Wholly-Owned
Subsidiary or by any Wholly-Owned Subsidiary to the Company or any
other Wholly-Owned Subsidiary of the Company;
(d) Valentec International Transaction: the acquisition of
Valentec International Corporation pursuant to the Stock Purchase
Agreement (the "Valentec Stock Purchase Agreement"), among ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the Valentec International
70
Corporation Employee Stock Ownership Plan, and the Company, in
compliance with all applicable laws, provided that, (i) there shall
have been no amendment to or other modification of the terms or
conditions since the date hereof of the Valentec Stock Purchase
Agreement, or any waiver of performance of any of the terms thereof,
which in the opinion of the Required Lenders is materially adverse;
(ii) the Indebtedness for borrowed money of Valentec International
Corporation under the credit facility with Congress Financial
Corporation (Western) shall have been repaid or prepaid in full, any
commitments for further borrowings thereunder terminated, and any
related Liens discharged; (iii) all material governmental and third
party approvals shall have been obtained; and (iv) none of the proceeds
of any Loan is used to pay any indebtedness of Valentec International
Corporation under the credit facility with ▇▇▇▇▇▇ & Co. AG;
(e) Permitted Acquisitions: if no Default or Event of Default
shall have occurred and be continuing or would result therefrom, the
Company or any Subsidiary may make any Permitted Acquisition, provided
that any consents of the Required Lenders (or all Lenders) required by
the terms of the definition of the term Permitted Acquisition shall
first have been obtained and the Administrative Agent shall have
confirmed in writing that such consents have been obtained;
(f) Permitted Dispositions: if no Default or Event of Default
shall have occurred and be continuing or would result therefrom, the
Company or any of its Subsidiaries may (i) sell any property, land or
building (including any related receivables or other intangible assets)
to any person which is not a Subsidiary of the Company, or (ii) sell
the entire capital stock (or other equity interests) and Indebtedness
of any Subsidiary owned by the Company or any other Subsidiary to any
person which is not a Subsidiary of the Company, or (iii) permit any
Subsidiary to be merged or consolidated with a person which is not an
Affiliate of the Company, or (iv) consummate any other Asset Sale with
a person who is not a Subsidiary of the Company; provided that (A) the
consideration for such transaction represents fair value (as determined
by management of the Company), and at least 90% of such consideration
consists of cash, (B) in the case of any such transaction involving
consideration in excess of $1,000,000, at least five Business Days
prior to the date of completion of such transaction the Company shall
have delivered to the Administrative Agent an officer's certificate
executed on behalf of the Company by an Authorized Officer of the
Company, which certificate shall contain a description of the proposed
transaction, the date such transaction is scheduled to be consummated,
the estimated purchase price or other consideration for such
transaction, financial information pertaining to compliance with the
preceding clause (A), and which shall (if requested by the
Administrative Agent) include a certified copy of the draft or
definitive documentation pertaining thereto, and (C) contemporaneously
therewith, the Company prepays Loans as and to the extent contemplated
by section 5.2(c); and
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(g) Leases: the Company or any of its Subsidiaries may enter
into leases of property or assets not constituting Permitted
Acquisitions in the ordinary course of business not otherwise in
violation of this Agreement.
To the extent the Required Lenders (or all of the Lenders as shall be required
by section 13.12) waive the provisions of this section 9.2 with respect to the
sale, transfer or other disposition of any Collateral, or any Collateral is
sold, transferred or disposed of as permitted by this section 9.2, (i) such
Collateral shall be sold, transferred or disposed of free and clear of the Liens
created by the respective Security Documents; (ii) if such Collateral includes
all of the capital stock of a Subsidiary which is a Party to the Subsidiary
Guaranty or other Security Document, such capital stock shall be released from
the Pledge Agreement and such Subsidiary shall be released from the Subsidiary
Guaranty; and (iii) the Administrative Agent and the Collateral Agent shall be
authorized to take actions deemed appropriate by them in order to effectuate the
foregoing.
9.3 Liens. The Company will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of the Company or any such Subsidiary whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable or notes with or without recourse to the
Company or any of its Subsidiaries, other than for purposes of collection in the
ordinary course of business) or assign any right to receive income, or file or
permit the filing of any financing statement under the UCC or any other similar
notice of Lien under any similar recording or notice statute, except that the
foregoing restrictions shall not apply to:
(a) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith and by appropriate proceedings for which
adequate reserves (in the good faith judgment of the management of the
Company) have been established;
(b) Liens in respect of property or assets imposed by law
which were incurred in the ordinary course of business, such as
carriers', warehousemen's, materialmen's and mechanics' Liens and other
similar Liens arising in the ordinary course of business, which do not
in the aggregate materially detract from the value of such property or
assets or materially impair the use thereof in the operation of the
business of the Company or any Subsidiary;
(c) Liens created by this Agreement or the other Credit
Documents;
(d) Liens (i) in existence on the Initial Borrowing Date which
are listed, and the Indebtedness secured thereby and the property
subject thereto on the Initial Borrowing Date described, in Annex IV,
or (ii) arising out of the refinancing, extension, renewal or refunding
of any Indebtedness secured by any such Liens, provided that the
principal amount of such Indebtedness is not increased and such
Indebtedness is not secured by any additional assets;
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(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under section
10.1(f);
(f) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security; and mechanic's Liens, carrier's Liens, and other Liens to
secure the performance of tenders, statutory obligations, contract
bids, government contracts, performance and return-of-money bonds and
other similar obligations, incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed
money), whether pursuant to statutory requirements, common law or
consensual arrangements;
(g) Leases or subleases granted to others not interfering in
any material respect with the business of the Company or any of its
Subsidiaries and any interest or title of a lessor under any lease not
in violation of this Agreement;
(h) easements, rights-of-way, zoning or deed restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary
conduct of the business of the Company or any of its Subsidiaries;
(i) Liens created by virtue of Capitalized Lease Obligations
or other leases not in violation of the requirements of this Agreement,
provided that such Liens are only in respect of the property or assets
subject to, and secure only, the respective Capital Lease or other
lease (and any other Capital Lease or other lease with the same or a
related group of lessors);
(j) Liens placed upon Real Property, improvements thereto and
related fixtures and equipment or machinery, in each case located in
the Czech Republic, provided the Indebtedness secured thereby is
permitted by section 9.4(b); and
(k) Liens (i) placed upon Real Property, improvements thereto,
equipment or machinery used in the ordinary course of business of the
Company or any Subsidiary at the time of (or within 270 days after) the
acquisition or completion of construction thereof by the Company or any
such Subsidiary to secure Indebtedness incurred to pay all or a portion
of the purchase price or construction cost thereof, or (ii) existing on
property or other assets at the time acquired by the Company or any
Subsidiary or on assets of a person at the time such person first
becomes a Subsidiary of the Company (other than any such Liens which
were created at the time of or in contemplation of the acquisition of
such assets or person by the Company or any of its Subsidiaries);
provided (A) in the case of any such acquisition of a person, any such
Lien attaches only to the property and assets of such person, (B) in
the case of any such acquisition of property or assets by the Company
or any Subsidiary, any such Lien attaches only to the property and
assets so acquired or
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constructed and not to any other property or assets of the Company or
any Subsidiary, and (C) the Indebtedness secured by any such Lien is
permitted by section 9.4(c).
9.4 Indebtedness. The Company will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness of the Company or any of its Subsidiaries, except:
(a) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(b) Indebtedness of Automotive Safety Components
International, s.r.o., a Foreign Subsidiary, in the original aggregate
principal amount of approximately $7,500,000 (or the equivalent in any
applicable currency or currencies), used to finance Real Property,
improvements and related properties subject to Liens permitted by
section 9.3(j), and an unsecured guaranty by the Company of such
Indebtedness; and any refinancing, extension, renewal or refunding of
any such Indebtedness not involving an increase in the principal amount
thereof or a reduction of more than 10% in the remaining weighted
average life to maturity thereof (computed in accordance with standard
financial practice);
(c) Indebtedness of the Company or any Subsidiary (i) subject
to Liens permitted by section 9.3(k), or (ii) in respect of Capital
Leases; provided that the aggregate principal amount of such
Indebtedness (and the principal portion of any Capital Leases) incurred
in any fiscal year shall not exceed an amount equal to 80% of
Consolidated Capital Expenditures for such year; and any refinancing,
extension, renewal or refunding of any such Indebtedness not involving
an increase in the principal amount thereof or a reduction of more than
10% in the remaining weighted average life to maturity thereof
(computed in accordance with standard financial practice);
(d) unsecured Subordinated Indebtedness of the Company in the
aggregate principal amount of up to $5,000,000 (or such larger amount
as may be approved by the Required Lenders), having a weighted average
life to maturity (computed in accordance with standard financial
practice) at the time of incurrence thereof in excess of 5 years,
incurred pursuant to a public offering, Rule 144A offering, or private
placement with institutional investors, of the Company's subordinated
unsecured debt securities;
(e) to the extent not otherwise permitted pursuant to the
foregoing clauses, Indebtedness of Foreign Subsidiaries of the Company,
and Indebtedness of branches of the Company that are incorporated under
the laws of a country other than the United States, not in excess of
$500,000 (or the equivalent in any applicable currency or currencies)
outstanding at any time;
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(f) Existing Indebtedness, to the extent not otherwise
permitted pursuant to the foregoing clauses; and any refinancing,
extension, renewal or refunding of any such Existing Indebtedness not
involving an increase in the principal amount thereof or a reduction of
more than 10% in the remaining weighted average life to maturity
thereof (computed in accordance with standard financial practice);
(g) Indebtedness of the Company or any Subsidiary under Hedge
Agreements;
(h) Indebtedness of the Company to any of its Subsidiaries,
and Indebtedness of any of the Company's Subsidiaries to the Company or
to another Subsidiary of the Company, in each case to the extent
permitted under section 9.5; and
(i) Guaranty Obligations permitted under section 9.5.
9.5 Advances, Investments, Loans and Guaranty Obligations. The Company
will not, and will not permit any of its Subsidiaries to, (a) lend money or
credit or make advances to any person, (b) purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any person, (c) create, acquire or hold any Subsidiary, (d) be
or become a party to any joint venture or partnership, or (e) be or become
obligated under any Guaranty Obligations (other than those created in favor of
the Lenders pursuant to the Credit Documents), except:
(i) the Company or any of its Subsidiaries may invest in cash
and Cash Equivalents;
(ii) any endorsement of a check or other medium of payment for
deposit or collection, or any similar transaction in the normal course
of business;
(iii) the Company and its Subsidiaries may acquire and hold
receivables owing to them in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
(iv) investments acquired by the Company or any of its
Subsidiaries (A) in exchange for any other investment held by the
Company or any such Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer
of such other investment, or (B) as a result of a foreclosure by the
Company or any of its Subsidiaries with respect to any secured
investment or other transfer of title with respect to any secured
investment in default;
(v) any unsecured guaranty by the Company of the Indebtedness
described in section 9.4(b), (c) or (e);
(vi) investments of the Company and its Subsidiaries in Hedge
Agreements;
75
(vii) the existing investments and guarantees described on
Annex V hereto;
(viii) existing investments in Foreign Subsidiaries and
Subsidiaries which are not Wholly-Owned Subsidiaries (and any increases
thereof attributable to increases in retained earnings)
(ix) investments in the capital of Wholly-Owned Subsidiaries
which are not Foreign Subsidiaries;
(x) loans and advances by any Subsidiary of the Company to the
Company, provided that the Indebtedness represented thereby constitutes
Subordinated Indebtedness;
(xi) to the extent not permitted by the foregoing clauses,
loans and advances by the Company or by any Subsidiary of the Company
to, or other investments in, any person (including, without limitation,
Subsidiaries of the Company and employees, officers and directors of
the Company and its Subsidiaries); provided that the cumulative
aggregate amount of all such loans, advances and investments after
March 31, 1997, after giving effect to any repayment of any such loans
or advances, shall not exceed $500,000 at any time outstanding; and
(xii) Guaranty Obligations of (A) the Company or any
Subsidiary in respect of leases which are not prohibited by under this
Agreement and (B) the Company or any Subsidiary in respect of any other
person (other than in respect of Indebtedness for borrowed money)
arising as a matter of applicable law because the Company or such
Subsidiary is or is deemed to be a general partner of such other
person, or arising in the ordinary course of business, shall be
permitted.
9.6 Dividends, etc. The Company will not declare or pay any dividends
(other than dividends payable solely in common stock of the Company) on, or make
any other distribution or payment on account of (other than in shares of the
common stock of the Company), and the Company will not, and will not permit any
of its Subsidiaries to, purchase, redeem, retire or otherwise acquire, any
shares of any class of the capital stock of the Company, whether now or
hereafter outstanding (all of the foregoing "Dividends"), except that if no
Event of Default shall have occurred or be continuing or would result therefrom,
the Company may repurchase shares of its common stock for cash consideration,
provided that the cumulative aggregate cash consideration so expended after
March 31, 1997 does not exceed $500,000.
9.7 Total Indebtedness/EBITDA Ratio. The Company will not at any time
permit the ratio of (i) the amount of Total Indebtedness at such time to (ii)
EBITDA for any Testing Period, to exceed 2.50 to 1.00.
76
9.8 Fixed Charge Coverage Ratio. The Company will not permit its Fixed
Charge Coverage Ratio for any Testing Period to be less than the ratio shown
below for any applicable period:
Period Ratio
Initial Borrowing Date
through March 31, 2000 1.00 to 1.00
Thereafter 1.20 to 1.00
================================ ================================
9.9 Capital Expenditures. The Company will not, and will not permit any
of its Subsidiaries to, make or incur Consolidated Capital Expenditures during
any fiscal year of the Company, commencing with its fiscal year ended March 31,
1998, in an aggregate amount in excess of $8,000,000.
9.10 Certain Leases. The Company will not (a) permit the aggregate
payments (excluding any property taxes, insurance or maintenance obligations
paid by the Company and its Subsidiaries as additional rent or lease payments)
by the Company and its Subsidiaries on a consolidated basis under agreements to
rent or lease any personal property for a period exceeding 12 months (including
any renewal or similar option periods), other than pursuant to Capital Leases,
to exceed $1,000,000 in any fiscal year of the Company; or (b) permit the
aggregate fair value of property leased by the Company and/or its Subsidiaries
pursuant to one or more Capital Leases from any single lessor (or related group
of lessors), determined at the time of any applicable Capital Lease, to exceed
$5,000,000.
9.11 Minimum Consolidated Net Worth. The Company will not permit its
Consolidated Net Worth, without regard to foreign currency translation
adjustments subsequent to March 31, 1997, at any time to be less than
$37,000,000, except that (i) effective as of the end of the Borrower's fiscal
quarter ended June 30, 1997, and as of the end of each fiscal quarter
thereafter, the foregoing amount (as it may from time to time be increased as
herein provided), shall be increased by 100% of Consolidated Net Income for the
fiscal quarter ended on such date, if any (there being no reduction in the case
of any such Consolidated Net Income which reflects a deficit); and (ii) the
foregoing amount (as it may from time to time be increased as herein provided),
shall be decreased by the amount of Dividends paid in accordance with section
9.6.
9.12 Prepayments and Refinancings of Subordinated Debt, etc. The
Company will not, and will not permit any of its Subsidiaries to, make (or give
any notice in respect thereof) any voluntary or optional payment or prepayment
or redemption or acquisition for value of (including, without limitation, by way
of depositing with the trustee with respect thereto money or securities before
due for the purpose of paying when due) or exchange of, or refinance or refund,
any
77
Subordinated Indebtedness of the Company referred to in section 9.4(c); provided
that the Company may refinance or refund any such Subordinated Indebtedness if
the aggregate principal amount thereof is not increased, the weighted average
life to maturity thereof (computed in accordance with standard financial
practice) is not reduced by more than 10%, and there is no change in the
subordination provisions applicable thereto which is materially adverse to the
Lenders.
9.13 Transactions with Affiliates. The Company will not, and will not
permit any Subsidiary to, enter into any transaction or series of transactions
with any Affiliate (other than, in the case of the Company, any Subsidiary, and
in the case of a Subsidiary, the Company or another Subsidiary) other than in
the ordinary course of business of and pursuant to the reasonable requirements
of the Company's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Company or such Subsidiary than would obtain in a
comparable arm's- length transaction with a person other than an Affiliate,
except (i) loans, advances and investments permitted by section 9.5, (ii) sales
of goods to an Affiliate for use or distribution outside the United States which
in the good faith judgment of the Company complies with any applicable legal
requirements of the Code, or (iii) agreements and transactions with and payments
to officers, directors and shareholders which are either (A) entered into in the
ordinary course of business and not prohibited by any of the provisions of this
Agreement, or (B) entered into outside the ordinary course of business, approved
by the directors or shareholders of the Company, and not prohibited by any of
the provisions of this Agreement.
9.14 Limitation on Certain Restrictions on Subsidiaries. The Company
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
contractual encumbrance or restriction in or on the ability of any such
Subsidiary to (a) pay dividends or make any other distributions on its capital
stock or any other interest or participation in its profits owned by the Company
or any Subsidiary of the Company, or pay any Indebtedness owed to the Company or
a Subsidiary of the Company, (b) make loans or advances to the Company or any of
the Company's other Subsidiaries, or transfer any of its property or assets to
the Company or any of the Company's other Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (i) applicable law,
(ii) this Agreement and the other Credit Documents, (iii) customary provisions
restricting subletting or assignment of any lease governing a leasehold interest
of a Subsidiary of the Company, (iv) customary provisions restricting assignment
of any licensing agreement entered into by any Subsidiary of the Company in the
ordinary course of business, (v) customary provisions restricting the transfer
of assets subject to Liens permitted under section 9.3(k), (vi) encumbrances and
restrictions contained in the Existing Indebtedness Agreements as in effect on
the Effective Date and customary restrictions governing any of the Indebtedness
of a Subsidiary permitted pursuant to section 9.4, (vii) any document relating
to Indebtedness secured by a Lien permitted by section 9.3, insofar as the
provisions thereof limit grants of junior liens on the assets securing such
Indebtedness, and (viii) any operating lease or Capital Lease, insofar as the
provisions thereof limit grants of a security interest in, or other assignments
of, the related leasehold interest to any other person.
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9.15 Limitation on Sale and Lease-Back Transactions. The Company will
not, nor will it permit any Subsidiary to, enter into any Sale and Lease-Back
Transaction involving any individual property (or related group of properties as
part of the same Sale and Lease-Back Transaction) having a Value over $1,000,000
unless either (a) the Company or such Subsidiary would be entitled to incur
Indebtedness secured by a Lien on such property pursuant to section 9.4(c), or
(b) the Company shall prepay Term Loans, or voluntarily and permanently reduce
the Unutilized Total Revolving Commitment, by an amount at least equal to the
Value of such Sale and Lease-Back Transaction.
SECTION 10. EVENTS OF DEFAULT.
10.1 Events of Default. Upon the occurrence of any of the following
specified events (each an "Event of Default"):
(a) Payments: any Borrower shall (i) default in the payment when due of
any principal of the Loans or any reimbursement obligation in respect of any
Unpaid Drawing; or (ii) default in the payment when due of any interest on the
Loans or any Fees or any other amounts owing hereunder or under any other Credit
Document, and such default shall continue for five days; or
(b) Representations, etc.: any representation, warranty or statement
made by the Company or any other Credit Party herein or in any other Credit
Document or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
(c) Covenants: the Company shall (i) default in the due performance or
observance by it of any term, covenant or agreement contained in section 9.2,
9.3, 9.4, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10 or 9.11 of this Agreement, or (ii)
default in the due performance or observance by it of any term, covenant or
agreement (other than those referred to in clause (a) or (b) above or the
preceding clause (i) of this clause (c)) contained in this Agreement or any
other Credit Document and such default shall continue unremedied for a period of
at least 30 days after notice by the Administrative Agent or the Required
Lenders; or
(d) Cross Default Under Other Agreements: the Company or any of its
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) having an unpaid principal amount of $1,000,000 or
greater, and such default shall continue after the applicable grace period, if
any, specified in the agreement or instrument relating to such Indebtedness, or
(ii) default in the observance or performance of any agreement or condition
relating to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto (and all grace periods applicable to
such observance, performance or condition shall have expired), or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause any such Indebtedness to become due prior to its stated maturity; or any
such Indebtedness of the
79
Company or any of its Subsidiaries shall be declared to be due and payable, or
shall be required to be prepaid (other than by a regularly scheduled required
prepayment or redemption, prior to the stated maturity thereof); or
(e) Other Credit Documents: the Subsidiary Guaranty or any Security
Document (once executed and delivered) shall cease for any reason (other than
termination in accordance with its terms) to be in full force and effect; or any
Credit Party shall default in any payment obligation thereunder; or any Credit
Party shall default in any material respect in the due performance and
observance of any other obligation thereunder and such default shall continue
unremedied for a period of at least 30 days after notice by the Administrative
Agent or the Required Lenders; or any Credit Party shall (or seek to) disaffirm
or otherwise limit its obligations thereunder otherwise than in strict
compliance with the terms thereof; or
(f) Judgments: one or more judgments or decrees shall be entered
against the Company and/or any of its Subsidiaries involving a liability
(whether or not covered by insurance) of $500,000 or more in the aggregate for
all such judgments and decrees for the Company and its Subsidiaries and any such
judgments or decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within 30 days from the entry thereof; or
(g) Bankruptcy, etc.: any Borrower or any of its Material Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against any Borrower or any of its Material Subsidiaries and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
any Borrower or any of its Material Subsidiaries; or any Borrower or any of its
Material Subsidiaries commences (including by way of applying for or consenting
to the appointment of, or the taking of possession by, a rehabilitator,
receiver, custodian, trustee, conservator or liquidator (collectively, a
"conservator") of itself or all or any substantial portion of its property) any
other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency, liquidation, rehabilitation,
conservatorship or similar law of any jurisdiction whether now or hereafter in
effect relating to any Borrower or any of its Material Subsidiaries; or any such
proceeding is commenced against any Borrower or any of its Material Subsidiaries
to the extent such proceeding is consented by such person or remains undismissed
for a period of 60 days; or any Borrower or any of its Material Subsidiaries is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or any Borrower or any of its
Material Subsidiaries suffers any appointment of any conservator or the like for
it or any substantial part of its property which continues undischarged or
unstayed for a period of 60 days; or any Borrower or any of its Material
Subsidiaries makes a general assignment for the benefit of creditors; or any
corporate (or similar organizational) action is taken by any Borrower or any of
its Material Subsidiaries for the purpose of effecting any of the foregoing; or
80
(h) ERISA: (i) any of the events described in clauses (i) through
(viii) of section 8.1(f) shall have occurred; or (ii) there shall result from
any such event or events the imposition of a lien, the granting of a security
interest, or a liability or a material risk of incurring a liability; and (iii)
any such event or events or any such lien, security interest or liability,
individually, and/or in the aggregate, in the opinion of the Required Lenders,
has had, or could reasonably be expected to have, a Material Adverse Effect; or
(i) Material Adverse Effect: any event or circumstance shall occur or
exist which has a Material Adverse Effect upon the Company, as compared to the
business, operations, property, assets, liabilities or condition (financial or
otherwise) of the Company and its Subsidiaries as reflected in the financial
statements referred to in section 7.8.
10.2 Acceleration, etc. Upon the occurrence of any Event of Default,
and at any time thereafter, if any Event of Default shall then be continuing,
the Administrative Agent shall, upon the written request of the Required
Lenders, by written notice to the Company (which shall in turn immediately
furnish a copy of the same to the other Borrowers), take any or all of the
following actions, without prejudice to the rights of the Administrative Agent
or any Lender to enforce its claims against any Borrower, except as otherwise
specifically provided for in this Agreement (provided that, if an Event of
Default specified in section 10.1(g) shall occur with respect to any Borrower,
the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon the Commitment of each Lender shall forthwith
terminate immediately without any other notice of any kind; (ii) declare the
principal of and any accrued interest in respect of all Loans, all Unpaid
Drawings and all obligations owing hereunder and thereunder to be, whereupon the
same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Borrower; (iii) terminate any Letter of Credit which may be terminated in
accordance with its terms; and (iv) direct the Company to pay (and the Company
hereby agrees that on receipt of such notice or upon the occurrence of an Event
of Default with respect to any Borrower under section 10.1(g), it will pay) to
the Administrative Agent an amount of cash equal to the aggregate Stated Amount
of all Letters of Credit then outstanding (such amount to be held as security
after the Borrower's reimbursement obligations in respect thereof).
10.3 Application of Liquidation Proceeds. All monies received by the
Administrative Agent or any Lender from the exercise of remedies hereunder or
under the other Credit Documents or under any other documents relating to this
Agreement shall, unless otherwise required by the terms of the other Credit
Documents or by applicable law, be applied as follows:
(i) first, to the payment of all expenses (to the extent not
paid by the Borrowers) incurred by the Administrative Agent and the
Lenders in connection with the exercise of such remedies, including,
without limitation, all reasonable costs and expenses of collection,
attorneys' fees, court costs and any foreclosure expenses;
81
(ii) second, to the payment pro rata of interest then accrued
on the outstanding Loans;
(iii) third, to the payment pro rata of any fees then accrued
and payable to the Administrative Agent, any Letter of Credit Issuer or
any Lender under this Agreement in respect of the Loans or the Letter
of Credit Outstandings;
(iv) fourth, to the payment pro rata of (A) the principal
balance then owing on the outstanding Loans, (B) the amounts then due
under Designated Hedge Agreements to creditors of the Company or any
Subsidiary, subject to confirmation by the Administrative Agent of any
calculations of termination or other payment amounts being made in
accordance with normal industry practice, and (C) the Stated Amount of
the Letter of Credit Outstandings (to be held and applied by the
Administrative Agent as security for the reimbursement obligations in
respect thereof);
(v) fifth, to the payment to the Lenders of any amounts then
accrued and unpaid under sections 2.9, 2.10 and 3.5 hereof, and if such
proceeds are insufficient to pay such amounts in full, to the payment
of such amounts pro rata;
(vi) sixth, to the payment pro rata of all other amounts owed
by the Borrowers to the Administrative Agent, to any Letter of Credit
Issuer or any Lender under this Agreement or any other Credit Document,
and to any counterparties under Designated Hedge Agreements of the
Company and its Subsidiaries, and if such proceeds are insufficient to
pay such amounts in full, to the payment of such amounts pro rata; and
(vii) finally, any remaining surplus after all of the
Obligations have been paid in full, to the Borrowers or to whomsoever
shall be lawfully entitled thereto.
SECTION 11. THE ADMINISTRATIVE AGENT.
11.1 Appointment. Each Lender hereby irrevocably designates and
appoints KeyBank as Administrative Agent (such term to include, for the purposes
of this section 11, KeyBank acting as Collateral Agent) to act as specified
herein and in the other Credit Documents, and each such Lender hereby
irrevocably authorizes KeyBank as the Administrative Agent for such Lender, to
take such action on its behalf under the provisions of this Agreement and the
other Credit Documents and to exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent by the terms of this
Agreement and the other Credit Documents, together with such other powers as are
reasonably incidental thereto. The Administrative Agent agrees to act as such
upon the express conditions contained in this section 11. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Administrative Agent
shall not have any duties or responsibilities, except those expressly set forth
herein or in the other Credit Documents, nor any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise
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exist against the Administrative Agent. The provisions of this section 11 are
solely for the benefit of the Administrative Agent, and the Lenders, and the
Company and its Subsidiaries shall not have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement, the Administrative Agent shall act solely as agent
of the Lenders and does not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for the Company or any of
its Subsidiaries.
11.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by section 11.3.
11.3 Exculpatory Provisions. Neither the Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such person under or in connection with this Agreement (except
for its or such person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Company or of its Subsidiaries or any
of their respective officers contained in this Agreement, any other Credit
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Credit Document or for any failure
of the Company or any Subsidiary of the Company or any of their respective
officers to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Company or any of its Subsidiaries. The Administrative Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any Credit
Document or for any representations, warranties, recitals or statements made
herein or therein or made in any written or oral statement or in any financial
or other statements, instruments, reports, certificates or any other documents
in connection herewith or therewith furnished or made by the Administrative
Agent to the Lenders or by or on behalf of the Company or any of its
Subsidiaries to the Administrative Agent or any Lender or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
11.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile transmission, telex or teletype message, statement, order or
other document or conversation believed by it, in good faith, to be genuine
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and correct and to have been signed, sent or made by the proper person or
persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Company or any of its Subsidiaries), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Credit Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Credit Documents in accordance with a request of
the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.
11.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
any Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders, provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
11.6 Non-Reliance. Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates have made any representations or warranties to
it and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Company or any of its Subsidiaries, shall be deemed
to constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent, or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Company and its Subsidiaries and made its own decision
to make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent, or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Company and its Subsidiaries.
The Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, assets, property, financial and other conditions, prospects or
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creditworthiness of the Company or any of its Subsidiaries which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
11.7 Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such ratably according to their respective Loans and
Unutilized Commitments, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, reasonable
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Administrative
Agent in its capacity as such in any way relating to or arising out of this
Agreement or any other Credit Document, or any documents contemplated by or
referred to herein or the transactions contemplated hereby or any action taken
or omitted to be taken by the Administrative Agent under or in connection with
any of the foregoing, but only to the extent that any of the foregoing is not
paid by the Borrowers, provided that no Lender shall be liable to the
Administrative Agent for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting solely from the Administrative
Agent's gross negligence or willful misconduct. If any indemnity furnished to
the Administrative Agent for any purpose shall, in the opinion of the
Administrative Agent, be insufficient or become impaired, the Administrative
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished. The
agreements in this section 11.7 shall survive the payment of all Obligations.
11.8 The Administrative Agent in Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Company, its Subsidiaries
and their Affiliates as though not acting as Administrative Agent hereunder.
With respect to the Loans made by it and all Obligations owing to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
11.9 Successor Administrative Agent. The Administrative Agent may
resign as the Administrative Agent upon 20 days' notice to the Lenders and the
Company (which shall in turn immediately furnish a copy of the same to the other
Borrowers). The Required Lenders shall appoint from among the Lenders a
successor Administrative Agent for the Lenders subject to prior approval by the
Company (such approval not to be unreasonably withheld or delayed), whereupon
such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall include such
successor agent effective upon its appointment, and the resigning Administrative
Agent's rights, powers and duties as the Administrative Agent shall be
terminated, without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement. After the retiring
Administrative Agent's resignation hereunder as the Administrative Agent, the
provisions
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of this section 11 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement.
11.10 Other Agents. Any Lender identified herein as a Co-Agent,
Syndication Agent or any other corresponding title, other than "Administrative
Agent or "Collateral Agent", shall have no right, power, obligation, liability,
responsibility or duty under this Agreement or any other Credit Document except
those applicable to all Lenders as such. Each Lender acknowledges that it has
not relied, and will not rely, on any Lender so identified in deciding to enter
into this Agreement or in taking or not taking any action hereunder.
SECTION 12. GUARANTY BY THE COMPANY.
12.1 Guaranty of Subsidiary Borrowings. The Company hereby
unconditionally guarantees, for the benefit of the Administrative Agent and the
Lenders, the full and punctual payment by each Borrowing Subsidiary of all
Indebtedness of each Borrowing Subsidiary incurred pursuant to this Agreement
(herein, the "Guaranteed Obligations"). Upon failure by any Borrowing Subsidiary
to pay punctually any such amount, the Company shall forthwith on demand by the
Administrative Agent pay the amount not so paid at the place and in the currency
and otherwise in the manner specified in this Agreement.
12.2 Additional Undertaking. As a separate, additional and continuing
obligation, the Company unconditionally and irrevocably undertakes and agrees,
for the benefit of the Administrative Agent and the Lenders, that, should any
amounts not be recoverable from the Company under section 12.1 for any reason
whatsoever (including, without limitation, by reason of any provision of any
Credit Document or any other agreement or instrument executed in connection
therewith being or becoming void, unenforceable, or otherwise invalid under any
applicable law) then, notwithstanding any notice or knowledge thereof by any
Lender, the Administrative Agent, any of their respective Affiliates, or any
other person, at any time, the Company as sole, original and independent
obligor, upon demand by the Administrative Agent, will make payment to the
Administrative Agent, for the account of the Lenders and the Administrative
Agent, of all such obligations not so recoverable by way of full indemnity, in
such currency and otherwise in such manner as is provided in the Credit
Documents.
12.3 Guaranty Unconditional, etc. The obligations of the Company under
this section shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by the occurrence, one or more times, of any of the following:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect to any Guaranteed Obligation of any Borrowing
Subsidiary under any agreement or instrument, by operation of law or
otherwise;
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(ii) any modification or amendment of or supplement to this
Agreement, any Note, any other Credit Document, or any agreement or
instrument evidencing or relating to any Guaranteed Obligation;
(iii) any release, non-perfection or invalidity of any direct
or indirect security for any Guaranteed Obligation of any Borrowing
Subsidiary under any agreement or instrument evidencing or relating to
any Guaranteed Obligation;
(iv) any change in the corporate existence, structure or
ownership of any Borrowing Subsidiary or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Borrowing
Subsidiary or its assets or any resulting release or discharge of any
obligation of any Borrowing Subsidiary contained in any agreement or
instrument evidencing or relating to any Guaranteed Obligation;
(v) the existence of any claim, set-off or other rights which
the Company may have at any time against any Borrower Subsidiary, the
Administrative Agent, any Lender or any other person, whether in
connection herewith or any unrelated transactions;
(vi) any invalidity or unenforceability relating to or against
any Borrowing Subsidiary for any reason of any agreement or instrument
evidencing or relating to any Guaranteed Obligation, or any provision
of applicable law or regulation purporting to prohibit the payment by
any Borrowing Subsidiary of any Guaranteed Obligations; or
(vii) any other act or omission to act or delay of any kind by
any Borrowing Subsidiary, the Administrative Agent, any Lender or any
other person or any other circumstance whatsoever which might, but for
the provisions of this section, constitute a legal or equitable
discharge of the Borrower's obligations under this section.
12.4 Company Obligations to Remain in Effect; Restoration. The
Company's obligations under this section shall remain in full force and effect
until the Commitments shall have terminated and the principal of and interest on
the Notes and all other amounts payable by the Company under the Credit
Documents shall have been paid in full. If at any time any payment of any of the
Guaranteed Obligations of any Borrowing Subsidiary in respect of any Guaranteed
Obligations is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of such Borrowing Subsidiary, the
Company's obligations under this section with respect to such payment shall be
reinstated at such time as though such payment had been due but not made at such
time.
12.5 Waiver or Acceptance, etc. The Company irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
person against any Borrowing Subsidiary or any other person, or against any
collateral or guaranty of any other person.
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12.6 Subrogation. Until the indefeasible payment in full of all of the
Obligations and the termination of the Commitments of the Lenders hereunder, the
Company shall have no rights, by operation of law or otherwise, upon making any
payment under this section to be subrogated to the rights of the payee against
any Borrowing Subsidiary with respect to such payment or otherwise to be
reimbursed, indemnified or exonerated by any Borrowing Subsidiary in respect
thereof.
12.7 Effect of Stay. In the event that acceleration of the time for
payment of any amount payable by any Borrowing Subsidiary under any Guaranteed
Obligation is stayed upon insolvency, bankruptcy or reorganization of such
Borrowing Subsidiary, all such amounts otherwise subject to acceleration under
the terms of any applicable agreement or instrument evidencing or relating to
any Guaranteed Obligation shall nonetheless be payable by the Company under this
section forthwith on demand by the Administrative Agent.
SECTION 13. MISCELLANEOUS.
13.1 Payment of Expenses, etc. The Company agrees to: (i) whether or
not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent in connection with
the negotiation, preparation, execution and delivery of the Credit Documents and
the documents and instruments referred to therein and any amendment, waiver or
consent relating thereto (including, without limitation, the reasonable fees and
disbursements of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel to the
Administrative Agent), and of the Administrative Agent and each of the Lenders
in connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and disbursements of counsel for the Administrative Agent and for each of
the Lenders); (ii) in the event of the bankruptcy, insolvency, rehabilitation or
other similar proceeding in respect of the Company or any of its Subsidiaries,
pay all costs of collection and defense, including reasonable attorneys' fees in
connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, which shall be due and payable together
with all required service or use taxes; (iii) pay and hold each of the Lenders
harmless from and against any and all present and future stamp and other similar
taxes with respect to the foregoing matters and save each of the Lenders
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission (other than to the extent attributable to such
Lender) to pay such taxes; and (iv) indemnify each Lender, its officers,
directors, employees, representatives and agents (collectively, the
"Indemnitees") from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses reasonably incurred by any of them as a
result of, or arising out of, or in any way related to, or by reason of (a) any
investigation, litigation or other proceeding (whether or not any Lender is a
party thereto) related to the entering into and/or performance of any Credit
Document or the use of the proceeds of any Loans hereunder or the consummation
of any transactions contemplated in any Credit Document, other than any such
investigation, litigation or proceeding arising out of transactions solely
between any of the Lenders or the Administrative Agent, transactions solely
involving the assignment by a Lender of all or a portion of its Loans and
Commitment, or the
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granting of participations therein, as provided in this Agreement, or arising
solely out of any examination of a Lender by any regulatory authority having
jurisdiction over it, or (b) any Environmental Claim in respect of any Real
Property owned, leased or at any time operated by the Company or any of its
Subsidiaries, including, in each case, without limitation, the reasonable fees
and disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the negligence
or willful misconduct of the person to be indemnified or of any other Indemnitee
who is such person or an Affiliate of such person). To the extent that the
undertaking to indemnify, pay or hold harmless any person set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Company shall make the maximum contribution to the payment
and satisfaction of each of the indemnified liabilities which is permissible
under applicable law.
13.2 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to any Borrower or to any other person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Lender (including, without limitation, by
branches and agencies of such Lender wherever located) to or for the credit or
the account of any Borrower against and on account of the Obligations and
liabilities of the Borrowers (or any of them) to such Lender under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by such Lender pursuant to
section 13.4(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Lender shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
13.3 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile transmission or cable communication)
and mailed, telegraphed, telexed, transmitted, cabled or delivered, (a) if to
any Borrower, to such Borrower at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice President & Chief Financial Officer
(facsimile: (▇▇▇) ▇▇▇-▇▇▇▇); (b) if to any Lender at its address specified for
such Lender on Annex I hereto; (c) if to the Administrative Agent, at its Notice
Address; or (d) at such other address as shall be designated by any party in a
written notice to the other parties hereto. All such notices and communications
shall be mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, and shall be effective when received.
13.4 Benefit of Agreement. (a) This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns, provided that no Borrower may assign or
transfer any of its rights or obligations hereunder without the prior written
consent of all the Lenders. Each Lender may at any time grant
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participations in any of its rights hereunder or under any of the Notes to
another financial institution or any other "accredited investor" (as defined in
SEC Regulation D), provided that in the case of any such participation, (i) the
participant shall not have any rights under this Agreement or any of the other
Credit Documents, including rights of consent, approval or waiver (the
participant's rights against such Lender in respect of such participation to be
those set forth in the agreement executed by such Lender in favor of the
participant relating thereto), (ii) such Lender's obligations under this
Agreement (including, without limitation, its Commitment hereunder) shall remain
unchanged, (iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iv) such Lender shall
remain the holder of any Note for all purposes of this Agreement and (v) the
Borrowers, the Administrative Agent, and the other Lenders shall continue to
deal solely and directly with the selling Lender in connection with such
Lender's rights and obligations under this Agreement, and all amounts payable by
the Borrowers hereunder shall be determined as if such Lender had not sold such
participation, except that the participant shall be entitled to the benefits of
sections 2.9, 2.10 and 5.4 of this Agreement to the extent that such Lender
would be entitled to such benefits if the participation had not been entered
into or sold, and, provided further, that no Lender shall transfer, grant or
sell any participation under which the participant shall have rights to approve
any amendment to or waiver of this Agreement or any other Credit Document except
to the extent such amendment or waiver would (x) extend the final scheduled
maturity of the Loans in which such participant is participating (it being
understood that any waiver of the making of, or the application of any
amortization payment or other prepayment or the method of any application of any
prepayment to the amortization of the Loans shall not constitute an extension of
the final maturity date thereof), or reduce the rate or extend the time of
payment of interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant's participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of any mandatory prepayment
or a mandatory reduction in the Total Commitment, or a mandatory prepayment,
shall not constitute a change in the terms of any Commitment) or (y) release
substantially all of the Collateral, or release any Credit party from any
obligations under any Security Document or the Subsidiary Guaranty, except in
accordance with the explicit terms hereof or thereof, or (z) consent to the
assignment or transfer by any Borrower of any of its rights and obligations
under this Agreement.
(b) Notwithstanding the foregoing, (x) any Lender may assign all or a
portion of its Loans and/or Commitments, which does not have to be pro rata
among the Facilities, and its rights and obligations hereunder to another Lender
that is not a Defaulting Lender, or to an Affiliate of any Lender (including
itself) which is not a Defaulting Lender which is a commercial bank, financial
institution or other "accredited investor" (as defined in SEC Regulation D), and
(y) any Lender may assign all, or if less than all, a portion equal to at least
$5,000,000 in the aggregate for the assigning Lender or assigning Lenders, of
its Loans and/or Commitments and its rights and obligations hereunder, which
assignment does not have to be pro rata between the Facilities, to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Lender by execution of an Assignment Agreement, provided that,
(i) at the
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time of any such assignment Annex I shall be deemed modified to reflect the
Commitments of such new Lender and of the existing Lenders, (ii) upon surrender
of the old Notes, new Notes will be issued, at the Company's expense, to such
new Lender and to the assigning Lender, such new Notes to be in conformity with
the requirements of section 2.5 (with appropriate modifications) to the extent
needed to reflect the revised Commitments, (iii) in the case of clause (y) only,
the consent of the Administrative Agent and each Letter of Credit Issuer shall
be required in connection with any such assignment (which consent shall not be
unreasonably withheld or delayed), and (iv) the Administrative Agent shall
receive at the time of each such assignment, from the assigning or assignee
Lender, the payment of a non-refundable assignment fee of $3,000 and, provided
further, that such transfer or assignment will not be effective until recorded
by the Administrative Agent on the Lender Register maintained by it as provided
herein. To the extent of any assignment pursuant to this section 13.4(b), the
assigning Lender shall be relieved of its obligations hereunder with respect to
its assigned Commitments. At the time of each assignment pursuant to this
section 13.4(b) to a person which is not already a Lender hereunder and which is
not a United States person (as such term is defined in section 7701(a)(30) of
the Code) for Federal income tax purposes, the respective assignee Lender shall
provide to the Company and the Administrative Agent the appropriate Internal
Revenue Service Forms (and, if applicable, a Section 5.4(b)(ii) Certificate)
described in section 5.4(b). To the extent that an assignment of all or any
portion of a Lender's Commitment and related outstanding Obligations pursuant to
this section 13.4(b) would, at the time of such assignment, result in increased
costs under section 2.9 from those being charged by the respective assigning
Lender prior to such assignment, then the applicable Borrower shall not be
obligated to pay such increased costs (although the applicable Borrower shall be
obligated to any other increased costs of the type described above resulting
from changes after the date of the respective assignment). Nothing in this
section 13.4(b) shall prevent or prohibit any Lender from pledging its Notes or
Loans to a Federal Reserve Bank in support of borrowings made by such Lender
from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this section 13.4, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participation therein shall be permitted if such transfer,
assignment or grant would require any Borrower to file a registration statement
with the SEC or to qualify the Loans under the "Blue Sky" laws of any State.
(d) Each Lender initially party to this Agreement hereby represents,
and each person that became a Lender pursuant to an assignment permitted by this
section 13.4 will, upon its becoming party to this Agreement, represent that it
is a commercial lender, other financial institution or other "accredited"
investor (as defined in SEC Regulation D) which makes or acquires loans in the
ordinary course of its business and that it will make or acquire Loans for its
own account in the ordinary course of such business, provided that subject to
the preceding sections 13.4(a) and (b), the disposition of any promissory notes
or other evidences of or interests in Indebtedness held by such Lender shall at
all times be within its exclusive control.
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13.5 No Waiver: Remedies Cumulative. No failure or delay on the part of
the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between any Borrower and the Administrative Agent or any Lender shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Administrative
Agent or any Lender would otherwise have. No notice to or demand on any Borrower
in any case shall entitle such Borrower to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
13.6 Payments Pro Rata. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of any Borrower in
respect of any Obligations, it shall distribute such payment to the Lenders
(other than any Lender that has expressly waived in writing its right to receive
its pro rata share thereof) pro rata based upon their respective shares, if any,
of the Obligations with respect to which such payment was received. As to any
such payment received by the Administrative Agent prior to 1:00 P.M. (local time
at its Payment Office) in funds which are immediately available on such day, the
Administrative Agent will use all reasonable efforts to distribute such payment
in immediately available funds on the same day to the Lenders as aforesaid.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations to such Lenders in such amount as shall result in a proportional
participation by all of the Lenders in such amount, provided that if all or any
portion of such excess amount is thereafter recovered from such Lender, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding sections 13.6(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Lenders which are not Defaulting Lenders, as opposed to
Defaulting Lenders.
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13.7 Calculations: Computations. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Company to the Lenders); provided, that if at any time the computations
determining compliance with section 9 utilize accounting principles different
from those utilized in the financial statements furnished to the Lenders, such
computations shall set forth in reasonable detail a description of the
differences and the effect upon such computations.
(b) All computations of interest on Eurocurrency Loans and Prime Rate
Loans hereunder and all computations of Commitment Fees, Letter of Credit Fees
and other Fees hereunder shall be made on the actual number of days elapsed over
a year of 360 days.
13.8 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury
Trial. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. TO THE
FULLEST EXTENT PERMITTED BY LAW, EACH BORROWER HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER
THAN THE STATE OF NEW YORK GOVERNS THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS. Any legal action or proceeding with respect to this Agreement or any
other Credit Document may be brought in the Courts of the State of New York, or
of the United States for the Southern District of New York, and, by execution
and delivery of this Agreement, each Borrower hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each Borrower hereby further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to such Borrower at its address for notices
pursuant to section 13.3, such service to become effective 30 days after such
mailing or at such earlier time as may be provided under applicable law. Nothing
herein shall affect the right of the Administrative Agent or any Lender to serve
process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Borrower in any other jurisdiction.
(b) Each Borrower hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in section 13.8(a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) Each of the parties to this Agreement hereby irrevocably waives all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement, the other Credit Documents or the transactions
contemplated hereby or thereby.
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13.9 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same agreement. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective on the date
(the "Effective Date")on which each Borrower and each of the Lenders shall have
signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Administrative Agent at the Notice Office of the
Administrative Agent or, in the case of the Lenders, shall have given to the
Administrative Agent telephonic (confirmed in writing), written telex or
facsimile transmission notice (actually received) at such office that the same
has been signed and mailed to it.
13.11 Headings Descriptive. The headings of the several sections and
other portions of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
13.12 Amendment or Waiver. Neither this Agreement nor any terms hereof
or thereof may be changed, waived, discharged or terminated unless such change,
waiver, discharge or termination is in writing signed by the Borrowers and the
Required Lenders, provided that no such change, waiver, discharge or termination
shall, without the consent of each Lender (other than a Defaulting Lender)
affected thereby, (i) extend any interim or final maturity date provided for
herein (including any extension of any interim maturity date to be effected in
accordance with section 4.4 hereof) applicable to a Loan or a Commitment under a
Facility (it being understood that any waiver of the making of, or application
of any prepayment of or the method of application of any amortization payment or
other prepayment to, the amortization of, the Loans shall not constitute an
extension of such final maturity thereof), reduce the rate or extend the time of
payment of interest (other than as a result of waiving the applicability of any
post-default increase in interest rates) or Fees thereon, or reduce the
principal amount thereof, or increase the Commitment of any Lender over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of any mandatory prepayment or a mandatory reduction in
the Total Commitment shall not constitute a change in the terms of any
Commitment of any Lender), (ii) release the Company from any obligations as a
guarantor of its Subsidiaries' obligations under any Credit Document, (iii)
release any Credit Party from the Subsidiary Guaranty, except in connection with
a transaction permitted by section 9.2(f), (iv) release all or substantially all
of the Collateral (in each case except as expressly provided in the Credit
Documents), (v) change the definition of the term "Change of Control" or any of
the provisions of section 5.2(f) which are applicable upon a Change of Control,
(vi) change the definition of the term "Permitted Acquisition" or any of the
provisions of section 9.2(e) which are applicable to a Permitted Acquisition,
(vii) amend, modify or waive any provision of this section 13.12, or section
11.7, 13.1, 13.4, 13.6 or 13.7(b), (viii) reduce the percentage specified in, or
otherwise modify, the definition of Required Lenders, or (ix) consent to the
assignment or transfer by any
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Borrower of any of its rights and obligations under this Agreement. No provision
of section 3 or 11 may be amended without the consent of (x) any Letter of
Credit Issuer adversely affected thereby or (y) the Administrative Agent,
respectively.
13.13 Survival. All indemnities set forth herein including, without
limitation, in sections 2.9, 2.10, 3.5, 11.7 and 13.1, shall survive the
execution and delivery of this Agreement and the making, prepayment and
repayment of Loans.
13.14 Domicile of Loans. Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender, provided that no Borrower shall be responsible for costs arising under
section 2.9 resulting from any such transfer (other than a transfer pursuant to
section 2.11) to the extent not otherwise applicable to such Lender prior to
such transfer.
13.15 Confidentiality. Subject to section 13.4, the Lenders shall hold
all non-public information obtained pursuant to the requirements of this
Agreement which has been identified as such by any Borrower in accordance with
its customary procedure for handling confidential information of this nature and
in accordance with safe and sound banking practices and in any event may make
disclosure reasonably required by any bona fide transferee or participant in
connection with the contemplated transfer of any Loans or Commitment or
participation therein (provided that each such prospective transferee and/or
participant shall execute an agreement for the benefit of the Borrowers with
such prospective transferor Lender containing provisions substantially identical
to those contained in this section 13.15), to its auditors, attorneys or as
required or requested by any governmental agency or representative thereof or
pursuant to legal process, provided that, unless specifically prohibited by
applicable law or court order, each Lender shall notify the Company of any
request by any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information, and provided further that
in no event shall any Lender be obligated or required to return any materials
furnished by or on behalf of the Company or any of its Subsidiaries. Each
Borrower hereby agrees that the failure of a Lender to comply with the
provisions of this section 13.15 shall not relieve any Borrower of any of the
obligations to such Lender under this Agreement and the other Credit Documents.
13.16 Lender Register. Each Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this section
13.16, to retain a copy of each Assignment Agreement delivered to and accepted
by it and to maintain a register (the "Lender Register") on or in which it will
record the names and addresses of the Lenders, and the Commitments from time to
time of each of such Lenders to such Borrower, the Loans made to such Borrower
by each of such Lenders and each repayment or prepayment in respect of the
principal amount of such Loans of each such Lender. Failure to make any such
recordation, or (absent manifest error) any error in such recordation, shall not
affect such Borrower's obligations in respect of such Loans. With respect to any
Lender, the transfer of the Commitments of such
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Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Lender Register maintained by the Administrative Agent with
respect to ownership of such Commitments and Loans and prior to such recordation
all amounts owing to the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. The registration of assignment or transfer
of all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Lender Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment Agreement
pursuant to section 13.4(b). Each Borrower agrees to indemnify the
Administrative Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by such Administrative Agent in performing its duties under this
section 13.16. The Lender Register shall be available for inspection by any
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
13.17 Limitations on Liability of the Letter of Credit Issuers. The
Company assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letters of
Credit. Neither any Letter of Credit Issuer nor any of its officers or directors
shall be liable or responsible for: (a) the use which may be made of any Letter
of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
or of any endorsement thereon, even if such documents should prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (c) payment by a
Letter of Credit Issuer against presentation of documents that do not comply
with the terms of a Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that the Company (or a Subsidiary which is the account party
in respect of the Letter of Credit in question) shall have a claim against a
Letter of Credit Issuer, and a Letter of Credit Issuer shall be liable to the
Company (or such Subsidiary), to the extent of any direct, but not
consequential, damages suffered by the Company (or such Subsidiary) which the
Company (or such Subsidiary) proves were caused by (i) such Letter of Credit
Issuer's willful misconduct or gross negligence in determining whether documents
presented under a Letter of Credit comply with the terms of such Letter of
Credit or (ii) such Letter of Credit Issuer's willful failure to make lawful
payment under any Letter of Credit after the presentation to it of documentation
strictly complying with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing, a Letter of Credit Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation.
13.18 General Limitation of Liability. No claim may be made by any
Borrower, any Lender, the Administrative Agent, any Letter of Credit Issuer or
any other person against the Administrative Agent, any Letter of Credit Issuer,
or any other Lender or the Affiliates, directors, officers, employees, attorneys
or agents of any of them for any damages other than actual compensatory damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement or
any of the
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other Credit Documents, or any act, omission or event occurring in connection
therewith; and each Borrower, each Lender, each Administrative Agent and each
Letter of Credit Issuer hereby, to the fullest extent permitted under applicable
law, waives, releases and agrees not to ▇▇▇ or counterclaim upon any such claim
for any special, consequential or punitive damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
13.19 No Duty. All attorneys, accountants, appraisers, consultants and
other professional persons (including the firms or other entities on behalf of
which any such person may act) retained by the Administrative Agent or any
Lender with respect to the transactions contemplated by the Credit Documents
shall have the right to act exclusively in the interest of the applicable
Administrative Agent or such Lender, as the case may be, and shall have no duty
of disclosure, duty of loyalty, duty of care, or other duty or obligation of any
type or nature whatsoever to the Company, to any of its Subsidiaries, or to any
other person, with respect to any matters within the scope of such
representation or related to their activities in connection with such
representation.
13.20 Lenders and Administrative Agent Not Fiduciary to Company, etc.
The relationship among the Company and its Subsidiaries, on the one hand, and
the Administrative Agent, each Letter of Credit Issuer and the Lenders, on the
other hand, is solely that of debtor and creditor, and the Administrative Agent,
each Letter of Credit Issuer and the Lenders have no fiduciary or other special
relationship with the Company and its Subsidiaries, and no term or provision of
any Credit Document, no course of dealing, no written or oral communication, or
other action, shall be construed so as to deem such relationship to be other
than that of debtor and creditor.
13.21 Judgment Currency. (a) The Credit Parties' obligations hereunder
and under the other Credit Documents to make payments in U.S. dollars shall not
be discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than U.S. dollars, except to
the extent that such tender or recovery results in the effective receipt by the
Administrative Agent or the applicable Lender of the full amount of U.S. dollars
expressed to be payable to the Administrative Agent or such Lender under this
Agreement or the other Credit Documents. If, for the purpose of obtaining or
enforcing judgment against any Credit Party in any court or in any jurisdiction,
it becomes necessary to convert into or from any currency other than U.S.
dollars (such other currency being hereinafter referred to as the "Judgment
Currency") an amount due in U.S. dollars, the conversion shall be made at the
equivalent thereof in Dollars determined as of the Business Day immediately
preceding the day on which the judgment is given (such Business Day being
hereinafter referred to as the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, each applicable Borrower covenants and agrees to pay, or cause to be paid,
such additional amounts, if any (but in any event not a lesser amount) as may be
necessary to ensure that the amount paid in the Judgment
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Currency, when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of U.S. dollars which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the equivalent in Dollars for this
section, such amount shall include any premium and costs payable in connection
with the conversion into or from the Judgment Currency.
[The balance of this page is intentionally blank.]
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13.22 Survival of Representations and Warranties. All representations
and warranties herein shall survive the making of Loans and the issuance of
Letters of Credit hereunder, the execution and delivery of this Agreement, the
Notes and the other documents the forms of which are attached as Exhibits
hereto, the issue and delivery of the Notes, any disposition thereof by any
holder thereof, and any investigation made by the Administrative Agent or any
Lender or any other holder of any of the Notes or on its behalf. All statements
contained in any certificate or other document delivered to the Administrative
Agent or any Lender or any holder of any Notes by or on behalf of the Company or
of its Subsidiaries pursuant hereto or otherwise specifically for use in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Company hereunder, made as of the
respective dates specified therein or, if no date is specified, as of the
respective dates furnished to the Administrative Agent or any Lender.
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first above
written.
SAFETY COMPONENTS INTERNATIONAL, INC.
By:
------------------------------
Executive Vice President
PHOENIX AIRBAG GmbH & CO. K.G.
By:
------------------------------
Executive Vice President
AUTOMOTIVE SAFETY COMPONENTS
INTERNATIONAL LIMITED
By:
------------------------------
Executive Vice President
KEYBANK NATIONAL ASSOCIATION,
individually and as Administrative
Agent
By:
------------------------------
Executive Vice President
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