EXHIBIT 10.1
Credit Agreement
dated as of
December 11, 1995
among
FOODBRANDS AMERICA, INC.
as Borrower,
the Lenders parties hereto,
CHEMICAL BANK
as Administrative Agent, Collateral Agent
and Issuing Lender
and
CITIBANK, N.A.
as Managing Agent
TABLE OF CONTENTS
Page
ARTICLE I
Definitions. . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 1.01. Defined Terms. . . . . . . . . . . . . . . .2
SECTION 1.02. Terms Generally. . . . . . . . . . . . . . 24
ARTICLE II
The Credits. . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.01. Commitments. . . . . . . . . . . . . . . . 24
SECTION 2.02. Loans. . . . . . . . . . . . . . . . . . . 25
SECTION 2.03. Notice of Borrowings . . . . . . . . . . . 26
SECTION 2.04. Repayment of Loans . . . . . . . . . . . . 27
SECTION 2.05. Fees . . . . . . . . . . . . . . . . . . . 27
SECTION 2.06. Interest on Loans. . . . . . . . . . . . . 28
SECTION 2.07. Default Interest . . . . . . . . . . . . . 29
SECTION 2.08. Alternate Rate of Interest . . . . . . . . 29
SECTION 2.09. Termination and Reduction of Commitments . 29
SECTION 2.10. Conversion and Continuation of Term
Borrowings and Acquisition Loan Borrowings . . . . . . 30
SECTION 2.11. Repayment of Term Borrowings and Acquisition
Loan Borrowings 31
SECTION 2.12. Optional Prepayment. . . . . . . . . . . . 32
SECTION 2.13. Mandatory Prepayments. . . . . . . . . . . 33
SECTION 2.14. Reserve Requirements; Change in
Circumstances. . . . . . . . . . . . . . . . .. . . 35
SECTION 2.15. Change in Legality . . . . . . . . . . . . 37
SECTION 2.16. Indemnity. . . . . . . . . . . . . . . . . 37
SECTION 2.17. Pro Rata Treatment . . . . . . . . . . . . 38
SECTION 2.18. Sharing of Setoffs . . . . . . . . . . . . 38
SECTION 2.19. Payments . . . . . . . . . . . . . . . . . 39
SECTION 2.20. Taxes. . . . . . . . . . . . . . . . . . . 39
SECTION 2.21. Assignment of Commitments under Certain
Circumstances 42
ARTICLE III
Letters of Credit. . . . . . . . . . . . . . . . . . . . 43
SECTION 3.01. Issuance of Letters of Credit. . . . . . . 43
SECTION 3.02. Participation; Unconditional Obligations . 43
SECTION 3.03. LC Fees. . . . . . . . . . . . . . . . . . 44
SECTION 3.04. Agreement To Repay LC Disbursements. . . . 44
SECTION 3.05. Letter of Credit Operations. . . . . . . . 45
SECTION 3.06. Cash Collateralization . . . . . . . . . . 45
SECTION 3.07. Termination of LC Commitment . . . . . . . 46
SECTION 3.08. Issuing Lender Fees. . . . . . . . . . . . 46
SECTION 3.09. Resignation or Removal of Issuing Lender . 46
SECTION 3.10. Existing Letters of Credit. . . . . . . . 47
ARTICLE IV
Representations and Warranties . . . . . . . . . . . . . 47
SECTION 4.01. Organization; Powers . . . . . . . . . . . 47
SECTION 4.02. Authorization. . . . . . . . . . . . . . . 48
SECTION 4.03. Enforceability . . . . . . . . . . . . . . 48
SECTION 4.04. Governmental Approvals . . . . . . . . . . 48
SECTION 4.05. Financial Statements . . . . . . . . . . . 48
SECTION 4.06. No Material Adverse Change . . . . . . . . 49
SECTION 4.07. Title to Properties; Possession Under
Leases . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 4.08. Subsidiaries . . . . . . . . . . . . . . . 50
SECTION 4.09. Litigation; Compliance with Laws . . . . . 50
SECTION 4.10. Federal Reserve Regulations. . . . . . . . 50
SECTION 4.11. Investment Company Act; Public Utility
Holding Company Act 51
SECTION 4.12. Use of Proceeds. . . . . . . . . . . . . . 51
SECTION 4.13. Tax Returns. . . . . . . . . . . . . . . . 51
SECTION 4.14. No Material Misstatements. . . . . . . . . 51
SECTION 4.15. Employee Benefit Plans . . . . . . . . . . 51
SECTION 4.16. Environmental and Safety Matters . . . . . 52
SECTION 4.17. Solvency . . . . . . . . . . . . . . . . . 52
SECTION 4.18. Employment and Management Agreements . . . 52
SECTION 4.19. Capitalization . . . . . . . . . . . . . . 53
SECTION 4.20. Security Documents . . . . . . . . . . . . 53
SECTION 4.21. Labor Matters. . . . . . . . . . . . . . . 54
SECTION 4.22. Location of Real Property and Leased
Premises. . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 4.23. Insurance. . . . . . . . . . . . . . . . . 54
SECTION 4.24. Delivery of Documents. . . . . . . . . . . 54
SECTION 4.25. Fees and Expenses. . . . . . . . . . . . . 55
SECTION 4.26. Designated Senior Indebtedness . . . . . . 55
SECTION 4.27. No Defaults. . . . . . . . . . . . . . . . 55
ARTICLE V
Conditions of Lending and Issuance of Letters of Credit. 56
SECTION 5.01. All Credit Events. . . . . . . . . . . . . 56
SECTION 5.02. First Borrowing. . . . . . . . . . . . . . 57
SECTION 5.03. Acquisitions . . . . . . . . . . . . . . . 61
ARTICLE VI
Affirmative Covenants. . . . . . . . . . . . . . . . . . 64
SECTION 6.01. Existence; Businesses and Properties . . . 64
SECTION 6.02. Insurance. . . . . . . . . . . . . . . . . 64
SECTION 6.03. Obligations and Taxes. . . . . . . . . . . 66
SECTION 6.04. Financial Statements, Reports, etc.. . . . 66
SECTION 6.05. Litigation and Other Notices . . . . . . . 68
SECTION 6.06. ERISA. . . . . . . . . . . . . . . . . . . 68
SECTION 6.07. Maintaining Records; Access to Properties
and Inspections . . . . . . . . . . . . . . . . . . . 68
SECTION 6.08. Use of Proceeds. . . . . . . . . . . . . . 69
SECTION 6.09. Fiscal Year. . . . . . . . . . . . . . . . 69
SECTION 6.10. Further Assurances . . . . . . . . . . . . 69
SECTION 6.11. Environmental and Safety Laws. . . . . . . 70
SECTION 6.12 Collection Account Arrangements . . . . . . 71
ARTICLE VII
Negative Covenants . . . . . . . . . . . . . . . . . . . 71
SECTION 7.01. Indebtedness . . . . . . . . . . . . . . . 71
SECTION 7.02. Liens. . . . . . . . . . . . . . . . . . . 73
SECTION 7.03. Sale and Leaseback Transactions. . . . . . 74
SECTION 7.04. Investments, Loans and Advances. . . . . . 75
SECTION 7.05. Mergers, Consolidations, Sales of Assets
and Acquisitions . . . . . . . . . . . . . . . . . . . 76
SECTION 7.06. Dividends and Distributions. . . . . . . . 77
SECTION 7.07. Transactions with Affiliates . . . . . . . 77
SECTION 7.08. Business of Borrower and the Subsidiaries. 77
SECTION 7.09. Limitations on Debt Prepayments. . . . . . 77
SECTION 7.10. Amendment of Certain Documents and
Subordinated Notes . . . . . . . . . . . . . . . . . .78
SECTION 7.11. Limitation on Leases . . . . . . . . . . . 78
SECTION 7.12. Credit Standards . . . . . . . . . . . . . 79
SECTION 7.13. Limitation on Negative Pledge Clauses. . . 79
SECTION 7.14. Reserved . . . . . . . . . . . . . . . . . 79
SECTION ▇.▇▇.▇▇▇▇▇ Debt Ratio. . . . . . . . . . . . . . 79
SECTION 7.16. Consolidated Interest Expense Coverage
Ratio . . . . . . . . . . . . . . . . . . . . . .. . . 80
ARTICLE VIII
Events of Default. . . . . . . . . . . . . . . . . . . . 81
ARTICLE IX
The Administrative Agent and Collateral Agent. . . . . . 84
ARTICLE X
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . 86
SECTION 10.01. Notices . . . . . . . . . . . . . . . . . 86
SECTION 10.02. Survival of Agreement . . . . . . . . . . 87
SECTION 10.03. Binding Effect. . . . . . . . . . . . . . 87
SECTION 10.04. Successors and Assigns. . . . . . . . . . 87
SECTION 10.05. Expenses; Indemnity . . . . . . . . . . . 91
SECTION 10.06. Right of Setoff . . . . . . . . . . . . . 93
SECTION 10.07. APPLICABLE LAW. . . . . . . . . . . . . . 93
SECTION 10.08. Waivers; Amendment. . . . . . . . . . . . 93
SECTION 10.09. Interest Rate Limitation. . . . . . . . . 94
SECTION 10.10. Entire Agreement. . . . . . . . . . . . . 94
SECTION 10.11. WAIVER OF JURY TRIAL. . . . . . . . . . . 94
SECTION 10.12. Severability. . . . . . . . . . . . . . . 95
SECTION 10.13. Counterparts. . . . . . . . . . . . . . . 95
SECTION 10.14. Headings. . . . . . . . . . . . . . . . . 95
SECTION 10.15. Jurisdiction; Consent to Service of
Process . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 10.16. Mortgaged Property Casualty and
Condemnation. . . . . . . . . . . . . . . . . . . . . 96
SECTION 10.17. Investment of Certain Escrowed Amounts. .101
SECTION 10.18. Confidentiality . . . . . . . . . . . . .101
SECTION 10.19 Sharing of Proceeds of Certain
Collateral . . . . . . . . . . . . . . . . . . .. . .102
SECTION 10.20 Designated Senior Indebtedness. . . . . .102
EXHIBITS
EXHIBIT A -- Form of Administrative Questionnaire
EXHIBIT B -- Form of Assignment and Acceptance
EXHIBIT C -- Form of Borrowing Base Certificate
EXHIBIT D -- Form of Collateral Assignment with Annex
EXHIBIT E -- Form of Guarantee Agreement with Annex
EXHIBIT F -- Form of Indemnity, Subrogation and
Contribution Agreement with Annex
EXHIBIT G -- Form of Mortgage
EXHIBIT H -- Form of Pledge Agreement with Annex
EXHIBIT I -- Form of Security Agreement with Annex
EXHIBIT J -- Form of Trademark Security Agreement with
Annex
EXHIBIT K -- Form of KPR Letter of Credit
EXHIBIT L-1 -- Form of McAfee and ▇▇▇▇ Opinion
EXHIBIT L-2 -- Form of ▇▇▇▇▇ & Lardner Opinion
EXHIBIT L-3 -- Form of Shook, Hardy & Bacon Opinion
EXHIBIT L-4 -- Form of Sutin, Thayer & ▇▇▇▇▇▇ Opinion
EXHIBIT L-5 -- Form of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Opinion
EXHIBIT L-6 -- Form of Sidley & Austin Opinions
EXHIBIT M -- Post-Closing Documents
EXHIBIT N -- Form of Confidentiality Agreement
SCHEDULES
Schedule 1.01(a) -- Concentration
Limits
Schedule 1.01(b) -- Credit and Collection Policy
Schedule 1.01(c) -- Mortgage Filing Offices
Schedule 1.01(d) -- Mortgaged Properties
Schedule 2.01 -- Commitments
Schedule 4.07(a) -- Title; Possession under Leases
Schedule 4.07(c) -- Condemnation
Schedule 4.08 -- Subsidiaries
Schedule 4.09 -- Litigation
Schedule 4.15 -- Reportable Events
Schedule 4.16(b) -- Environmental Disclosure - Notices
Schedule 4.16(c) -- Environmental Disclosure - Releases
Schedule 4.18 -- Employment Agreements
Schedule 4.19(c) -- Options, etc.
Schedule 4.20 -- UCC Filing Offices
Schedule 4.22(a) -- Owned Real Property
Schedule 4.24(c) -- Exceptions to Representations and
Warranties
Schedule 7.01 -- Existing Indebtedness
Schedule 7.02 -- Existing Liens
Schedule 7.11(a) -- Leases (real and personal)
CONFORMED COPY
CREDIT AGREEMENT dated as of December 11, 1995, among
FOODBRANDS AMERICA, INC., a Delaware corporation (the
"Borrower"), the financial institutions party hereto
(the "Lenders"), CHEMICAL BANK, a New York banking
corporation, as syndication agent, documentation
agent and administrative agent for the Lenders (in
such capacity, the "Administrative Agent") and as
issuing lender (in such capacity, the "Issuing
Lender"), and Citibank, N.A., as managing agent (in
such capacity, the "Managing Agent").
The Borrower has requested (a) the Lenders to extend credit
in order to enable the Borrower, on the terms and subject to the
conditions of this Agreement, to borrow (i) on a term basis on
the Closing Date, Term Loans (such term and each other
capitalized term used but not defined in this introductory
statement having the meaning given to such terms in Article I) in
an aggregate principal amount not to exceed $145,000,000, (ii) on
a revolving basis, at any time and from time to time prior
to the Acquisition Facility Commitment Termination Date, an
aggregate principal amount at any time outstanding not to exceed
$100,000,000 and (iii) on a revolving basis, at any time and from
time to time prior to the Maturity Date, an aggregate principal
amount at any time outstanding not in excess of the excess of (A)
the lesser of (I) $75,000,000 and (II) the Borrowing Base at such
time over (B) the LC Exposure at such time and (b) the Issuing
Lender to issue, on the terms and subject to the conditions of
this Agreement, Letters of Credit in an aggregate face amount at
any time outstanding not in excess of $7,000,000.
The Borrower has entered into a Purchase Agreement dated as
of November 14, 1995 (as in effect on the date hereof, the "KPR
Purchase Agreement") with KPR Holdings, Inc., a Delaware
corporation, and certain individuals party thereto (collectively,
the "Seller"), to purchase all the outstanding limited
partnership interests of KPR Holdings, L.P., a Delaware limited
partnership (the "KPR Partnership"), and the equity securities of
RKR-GP, Inc., a Delaware corporation and the sole general partner
of the KPR Partnership, for an aggregate purchase price of
approximately $93,000,000. The purchases pursuant to the KPR
Purchase Agreement are referred to herein as the "KPR
Acquisition".
The proceeds of the Term Loans will be used by the Borrower
solely (a) to finance the purchase price for the KPR Acquisition,
(b) to pay fees and expenses in connection with the KPR
Acquisition and (c) to pay amounts outstanding under the Existing
Credit Agreement.
The proceeds of the Acquisition Loans will be used by the
Borrower solely to finance the purchase price for Qualified
Acquisitions and to pay fees and expenses in connection
therewith.
The proceeds of the Revolving Loans made on the Closing Date
will be used to pay amounts outstanding under the Existing Credit
Agreement. The proceeds of the Revolving Loans made after
the Closing Date will be used (a) for general corporate purposes
in the ordinary course of the Borrower's business, including
funding the working capital requirements of the Borrower and its
Subsidiaries, and (b) in an amount not to exceed $55,000,000 from
and including the Closing Date, to finance all or part of the
purchase price to be paid in connection with any Qualified
Acquisition other than the Proposed TNT Acquisition or any
Acquisition made in lieu of the Proposed TNT Acquisition pursuant
to Section 7.05.
Any standby letter of credit (each, a "Standby Letter of
Credit") issued hereunder will be used to support the obligations
of the Borrower or the Subsidiaries, contingent or otherwise, in
respect of insurance, worker's compensation and similar
obligations incurred in the ordinary course of the business of
the Borrower or the Subsidiaries, as applicable, or to support
the Borrower's obligations in respect of any unpaid purchase
price for the KPR Acquisition (the "KPR Letter of Credit"). Any
commercial letter of credit (each, a "Commercial Letter of
Credit") issued hereunder will be used to provide the primary
means of payment for the purchase of goods or services by the
Borrower or any Subsidiary in the ordinary course of the business
of the Borrower or such Subsidiary, as applicable.
Accordingly, the Borrower, the Lenders, the Administrative
Agent and the Issuing Lender agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have
the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR
Loans.
"ABR Loan" shall mean any ABR Term Loan, ABR Revolving
Loan or ABR Acquisition Loan.
"ABR Acquisition Loan" shall mean any Acquisition Loan
bearing interest at a rate determined by reference to the
Alternate Base Rate in accordance with the provisions of Article
II.
"ABR Revolving Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Alternate Base
Rate in accordance with the provisions of Article II.
"ABR Spread" shall mean 1.00% per annum, subject to
adjustment pursuant to the table set forth below based on the
Total Debt Ratio as of the last day of the Borrower's most
recently ended fiscal quarter:
Total Debt Ratio ABR Spread
Greater than or
equal to 4.75 to 1 1.50%
Less than 4.75 to 1
but greater than or
equal to 4.25 to 1 1.25%
Less than 4.25 to 1
but greater than or
equal to 4 to 1 1.00%
Less than 4 to 1 0.75%
The ABR Spread shall be adjusted from time to time, effective on
the first Business Day after the delivery of the Borrower's
annual or quarterly financial statements pursuant to Section
6.04(a) or (b), provided that (i) if the proceeds of any
Borrowing are used to finance a Qualified Acquisition and
the Pro Forma Total Debt Ratio after giving effect to such
Qualified Acquisition would result in a change in the ABR Spread
(if the foregoing table were based on the Pro Forma Total Debt
Ratio rather than the Total Debt Ratio), such change shall become
effective for all purposes simultaneously with such Borrowing,
and (ii) if timely delivery of such financial statements is not
made, for purposes of determining the ABR Spread, the Total Debt
Ratio shall be assumed to be greater than 4.75 to 1 until such
delivery is made.
"ABR Term Loan" shall mean any Term Loan bearing interest
at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"Acquisition" shall mean the KPR Acquisition or any
Qualified Acquisition.
"Acquisition Facility" shall mean the aggregate of the
Lenders' Acquisition Loan Commitments.
"Acquisition Loan Borrowing" shall mean a Borrowing
comprised of Acquisition Loans.
"Acquisition Loan Commitment" shall mean, with respect to
each Lender, the commitment of such Lender to make Acquisition
Loans hereunder as set forth in clause (c) of Section 2.01, as
the same may be reduced from time to time pursuant to Section
2.09.
"Acquisition Loan Commitment Termination Date" shall mean
the first anniversary of the Closing Date.
"Acquisition Loans" shall mean the revolving loans made by
the Lenders to the Borrower pursuant to clause (c) of Section
2.01. Each Acquisition Loan shall be a Eurodollar Acquisition
Loan or an ABR Acquisition Loan.
"Adjusted LIBO Rate" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate
per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the product of (a) the LIBO Rate in effect for such
Interest Period and (b) Statutory Reserves. For purposes hereof,
the term LIBO Rate shall mean the rate at which dollar deposits
approximately equal in principal amount to the Administrative
Agent's portion of such Eurodollar Borrowing and for a maturity
comparable to such Interest Period are offered to the principal
London office of the Administrative Agent in immediately
available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Administrative Fees" shall have the meaning assigned to
such term in Section 2.05(c).
"Administrative Questionnaire" shall mean an
Administrative Questionnaire in the form of Exhibit A.
"Affiliate" shall mean, when used with respect to a
specified Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by
or is under common Control with the Person specified.
"Administrative Agent" shall have the meaning assigned to
such term in the introductory statement to this Agreement.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the greatest of (a) the Prime Rate in effect on such
day, (b) the Base CD Rate in effect on such day plus 1% and (c)
the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof, the term "Prime Rate" shall mean
the rate of interest per annum publicly announced from time to
time by the Administrative Agent as its prime rate in effect at
its principal office in New York City; each change in the Prime
Rate shall be effective on the date such change is publicly
announced as being effective. The term "Base CD Rate" shall mean
the sum of (a) the product of (i) the Three-Month Secondary CD
Rate and (ii) Statutory Reserves and (b) the Assessment Rate. The
term "Three-Month Secondary CD Rate" shall mean, for
any day, the secondary market rate for three-month certificates
of deposit reported as being in effect on such day (or, if such
day shall not be a Business Day, the next preceding Business Day)
by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day)
or, if such rate shall not be so reported on such day or such
next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money
center banks in New York City received at approximately 10:00
a.m., New York City time, on such day (or, if such day shall not
be a Business Day, on the next preceding Business Day) by the
Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by
it. The term "Federal Funds Effective Rate" shall mean, for any
day, 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 on the next succeeding
Business Day by the Federal Reserve Bank of New York or, if such
rate is not so published for any day that is a Business Day, the
average of the quotations for the day of such transactions
received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it
is unable to ascertain the Base CD Rate or the Federal Funds
Effective Rate or both for any reason, including the inability or
failure of the Administrative Agent to obtain sufficient
quotations in accordance with the terms thereof, the Alternate
Base Rate shall be determined without regard to clause (b) or
(c), or both, of the first sentence of this definition, as
appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate
due to a change in the Prime Rate, the Three-Month Secondary CD
Rate or the Federal Funds Effective Rate shall be effective on
the effective date of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective
Rate, respectively.
"Amount Due" shall mean, with respect to any Receivable,
the actual amount due and to become due to the Borrower or any
Subsidiary Guarantor on account of such Receivable, as
determined by the Borrower or such Subsidiary Guarantor in
accordance with its customary business practices and as reported
in any Borrowing Base Certificate.
"Applicable Percentage" of any Participating Lender shall
mean the percentage of the aggregate Revolving Credit Commitments
represented by such Participating Lender's Revolving Credit
Commitment, except that in the case of the KPR Letter of Credit,
"Applicable Percentage" shall mean the percentage of the
aggregate Unfunded Term Loan Commitments represented by such
Participating Lender's Unfunded Term Loan Commitment.
"Assessment Rate" shall mean for any date the annual rate
(rounded upwards, if necessary, to the next 1/100 of 1%) most
recently estimated by the Administrative Agent as the
then-current net annual assessment rate that will be employed in
determining amounts payable by the Administrative Agent to the
Federal Deposit Insurance Corporation (or any successor) for
insurance by such Corporation (or such successor) of time
deposits made in dollars at the Administrative Agent's domestic
offices.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted
by the Administrative Agent, in the form of Exhibit B or such
other form as shall be approved by the Administrative Agent.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrower" shall have the meaning assigned to such term in
the introductory paragraph hereof.
"Borrower's Portion of Excess Cash Flow" shall mean, at any
date of determination, the amount of Excess Cash Flow for the
applicable fiscal year of the Borrower, commencing with the
fiscal year ending December 31, 1996, that was not required to
be applied to the prepayment of Loans under Section 2.13(d).
"Borrowing" shall mean a group of Loans of a single Type
made by the Lenders on a single date and as to which a single
Interest Period is in effect.
"Borrowing Base" shall mean at the time of any
determination an amount equal to the sum, without duplication, of
(a) 75% of (i) the aggregate Amount Due in respect of all
Eligible Accounts Receivable at such time minus (ii) the
aggregate amount under clause (c) below at such time and
(b) 50% of the lower of the aggregate cost (calculated on a
first-in-first-out basis) or the aggregate market value of all
Eligible Inventory at such time and (c) the aggregate amount of
all Uncollected Friday Receipts at such time. All determinations
in connection with the Borrowing Base shall be made by the
Borrower and certified to the Administrative Agent by a
Responsible Officer and delivered pursuant to Section 6.04(e);
provided, however, that the Administrative Agent shall have
the final right to review and adjust, in its reasonable judgment,
any such determination to the extent such determination is not in
accordance with this Agreement.
"Borrowing Base Certificate" shall mean a certificate in
the form of Exhibit C, duly completed and executed by a
Responsible Officer of the Borrower.
"Business Day" shall mean any day (other than a Saturday,
Sunday or legal holiday in the State of New York) on which banks
are open for business in New York City; provided, however,
that, when used in connection with a Eurodollar Loan, the term
Business Day shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank
market.
"Capital Expenditures" shall mean, for any period, the
sum of all amounts that would, in accordance with GAAP, be
included as additions to property, plant and equipment and other
capital expenditures on a consolidated statement of cash flows
for the Borrower and its consolidated subsidiaries during such
period (and in addition, but without duplication, the aggregate
amount of the principal component of Capital Lease Obligations
paid during such period).
"Capital Lease Obligations" of any Person shall mean the
obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real
or personal property, or a combination thereof, which obligations
are required to be classified and accounted for as capital leases
on a balance sheet of such Person under GAAP and, for the
purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.
"Casualty" shall have the meaning assigned to such term in
Section 10.16.
"CERCLA" shall have the meaning assigned to such term in
the definition of the term "Environmental and Safety Laws".
A "Change in Control" shall be deemed to have occurred if:
(a) any Person or group (within the meaning of Rule
13d-5 of the Securities and Exchange Commission as in effect
on the date hereof), other than JLL and its Affiliates,
shall own directly or indirectly, beneficially or of record,
shares representing 30% or more (or, at any time that JLL
and its Affiliates shall own directly, beneficially and of
record, shares representing at least 15% of the aggregate
ordinary voting power represented by the issued and
outstanding capital stock of the Borrower, 50% or more) of
the aggregate ordinary voting power represented by the
issued and outstanding capital stock of the Borrower;
(b) during any period of two consecutive calendar
years, individuals who at the beginning of such period
constituted the Borrower's board of directors (together with
any new directors whose election to the Borrower's board of
directors or whose nomination for election to the Borrower's
Board of Directors by the Borrower's shareholders was
approved by a vote of at least two-thirds of the Borrower's
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 Borrower's directors
then in office; or
(c) any Change of Control Triggering Event (as defined
in the Subordinated Note Indenture) shall have occurred.
"Closing Date" shall mean the date of the first Borrowing
hereunder.
"Code" shall mean the Internal Revenue Code of 1986, or
any successor statute thereto, as the same may be amended from
time to time.
"Collateral" shall mean all the Collateral as defined in
any Security Document and shall also include the Mortgaged
Properties.
"Collateral Agent" shall mean Chemical Bank, as Collateral
Agent under the Security Documents and the Guarantee Agreement,
and any successor Collateral Agent appointed pursuant
to Article IX.
"Collateral Assignment" shall mean the Collateral
Assignment, substantially in the form of Exhibit D, from the
Borrower and the Subsidiary Guarantors to the Collateral Agent,
providing for the assignment to the Collateral Agent of the KPR
Purchase Agreement and certain other agreements specified in such
Collateral Assignment.
"Commitment" shall mean, with respect to each Lender, such
Lender's Funded Term Loan Commitment, Unfunded Term Loan
Commitment, Revolving Credit Commitment and Acquisition
Loan Commitment.
"Commitment Fee" shall have the meaning assigned to such
term in Section 2.05(a).
"Concentration Limit" shall mean, (a) for any Obligor
(other than any Obligor set forth on Schedule 1.01(a)), in the
aggregate with respect to all Receivables payable by such
Obligor, $5,000,000 or such higher or lower amount for such
Obligor as may be reasonably specified in writing by the Required
Lenders and (b) for any Obligor set forth on Schedule 1.01(a), in
the aggregate with respect to all Receivables payable by such
Obligor, the amount set forth on such Schedule with respect to
such Obligor; provided, however, that the Concentration Limit for
any Obligor and its Affiliates and subsidiaries shall be
calculated as if such Persons were a single Obligor.
"Condemnation Proceeds" shall have the meaning assigned to
such term in Section 10.16.
"Confidential Information Memorandum" shall mean the
Confidential Information Memorandum of the Borrower dated
November, 1995.
"Consolidated Interest Expense" shall mean (without
duplication), with respect to any Person for any period, total
interest expense (including the interest component of Capital
Lease Obligations) net of interest income, whether paid or
accrued, of such Person and its consolidated subsidiaries for
such period, all as determined in conformity with GAAP, but only
to the extent that such interest expense is payable in cash.
"Consolidated Interest Expense Coverage Ratio" shall mean
with respect to the Borrower and its consolidated subsidiaries
for any period, the ratio of (a) EBITDA minus Capital
Expenditures for such period to (b) Consolidated Interest Expense
for such period. For the first four fiscal quarters following
each Qualified Acquisition, EBITDA and Capital Expenditures shall
include, for any period of calculation prior to the date of such
Qualified Acquisition, the EBITDA and Capital Expenditures
(determined in each case on a pro forma basis if no actual
financial information is available) of the company or business
that was the subject of such Qualified Acquisition for such
prior period, and Consolidated Interest Expense shall include Pro
Forma Interest Expense for the company or business that was the
subject of such Qualified Acquisition for such prior period.
Notwithstanding the foregoing, for the first four fiscal quarters
following the Closing Date the Consolidated Interest Expense
Coverage Ratio shall be determined for the period from the first
day of the Borrower's 1996 fiscal year to the end of the fiscal
quarter then most recently ended.
"Contract" shall mean any written agreement or invoice
between the Borrower or any Subsidiary Guarantor on the one hand
and any Obligor on the other hand, pursuant to or under which
such Obligor may obtain goods or services from time to time from
the Borrower or any such Subsidiary Guarantor and under which
such Obligor is obligated to pay for such goods or services.
"Contractual Obligation", as applied to any Person, means
any provision of any equity or debt securities issued by that
Person or any indenture, mortgage, deed of trust, security
agreement, pledge agreement, guaranty, contract, undertaking,
agreement or instrument, in any case in writing, to which that
Person is a party or by which it or any of its properties is
bound, or to which it or any of its properties is subject.
"Control" shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership
of voting securities, by contract or otherwise, and the terms
Controlling and Controlled shall have meanings correlative
thereto.
"Credit and Collection Policy" shall mean the Credit and
Collection Policies and Practices of the Borrower and the
Subsidiary Guarantors relating to Receivables and Contracts as
set forth on Schedule 1.01(b).
"Credit Event" shall have the meaning assigned to such
term in Article V.
"Default" shall mean any event or condition that upon
notice, lapse of time or both would constitute an Event of
Default.
"Default Rate" shall have the meaning assigned to such
term in Section 2.07.
"dollars" or "$" shall mean lawful money of the United
States.
"EBITDA" shall mean, with respect to the Borrower and its
consolidated subsidiaries for any period, the sum of (a) Net
Income for such period, (b) all Federal, state, local and foreign
income taxes deducted in determining such Net Income, (c)
interest expense deducted in determining such Net Income, (d)
depreciation and amortization of the write-up of assets resulting
from the Acquisition deducted in determining such Net Income, and
(e) other depreciation, amortization and other noncash charges
deducted in determining such Net Income.
"Eligible Accounts Receivable" shall mean at the time of
any determination, all Receivables of the Borrower and the
Subsidiary Guarantors arising in the ordinary course of their
respective businesses, except:
(a) any Receivable that (i) remains unpaid as of the
date that is 60 days after the date of the original invoice for
such Receivable, (ii) is from an Obligor that has more than 30%
of its accounts with the Borrower and the Subsidiary Guarantors
outstanding more than 60 days after the date payment was due in
accordance with terms of the original invoices, (iii) is from an
Obligor that is, to the Borrower's or any Subsidiary Guarantor's
knowledge, not Solvent, (iv) is from an Obligor previously
disapproved by the Administrative Agent in the exercise of its
reasonable discretion after consultation with and notice to the
Borrower, (v) is in dispute (to the extent of such dispute), (vi)
consistent with the Credit and Collection Policy, would be
classified as delinquent or written-off as uncollectible, or
(vii) is in excess of the applicable Obligor's Concentration
Limit;
(b) any Receivable that (i) is not free and clear of
all Liens (other than Liens created by or pursuant to the
Security Documents), (ii) does not arise under a Contract
representing the legal, valid and binding payment obligation of
the Obligor thereunder, enforceable by the Borrower or any
Subsidiary Guarantor in accordance with its terms, (iii) together
with the related Contract does not comply in all material
respects with all legal requirements of the federal, state and
local jurisdictions where it originated, (iv) is not payable in
dollars,(v) does not provide, according to its original terms,
that the amount payable thereunder will be due within 31 days
following the date upon which the related Obligor became
obligated thereon, or 45 days in the case of special promotions
that are conducted by the Borrower or any Subsidiary Guarantor
from time to time in the ordinary course of business, (vi) is
payable by an Obligor which is located in any jurisdiction
outside of the United States of America, (vii) is payable by an
Obligor that is an Affiliate of the Borrower or any of the
Subsidiary Guarantors, (viii) is payable by an Obligor that is an
agency or instrumentality of the federal government of the United
States of America unless all applicable requirements of the
Assignment of Claims Act of 1940, as amended, including the
giving of all requisite notices of assignment (in form
satisfactory to the Administrative Agent) to all Persons to
whom such notice must be given and the acknowledgment of receipt
thereof by all such Persons, shall have been complied with in all
respects and unless the Administrative Agent shall have been
provided with evidence thereof in form and substance satisfactory
to the Administrative Agent, (ix) is payable by an Obligor as to
which a case (voluntary or involuntary) has been commenced under
any law relating to bankruptcy, insolvency, reorganization or
relief of debtors or that has made a general assignment for the
benefit of creditors or (x) is not subject to the valid and
perfected Liens created by or pursuant to the Security Documents
in favor of the Administrative Agent for the ratable benefit of
the Secured Parties;
(c) any Receivable with respect to which the Borrower
or any Subsidiary Guarantor has received a guaranty or a letter
of credit providing credit support therefor or collateral
security therefor unless the Borrower or such Subsidiary
Guarantor shall have granted a security interest to the
Collateral Agent (for the ratable benefit of the Secured Parties
in form and substance satisfactory to the Administrative Agent
and the Required Lenders) in such guaranty, letter of credit or
collateral security (that constitutes a first perfected security
interest in the case of any such guaranty or collateral security)
and such guaranty, letter of credit or collateral security is
not, to the Borrower's or such Subsidiary Guarantor's knowledge,
subject to any Lien in favor of any other Person;
(d) any Receivable that shall be subject to any
requirement of law or regulation, whether federal, state or local
(including usury laws, the Federal Truth in Lending Act and
Regulation Z of the Board), unless such laws and regulations
shall have been duly complied with in all material respects;
(e) any Receivable that is subject to a matured
offset, counterclaim, or other defense, to the extent of such
offset, counterclaim or defense;
(f) any Receivable that the Borrower or any Subsidiary
Guarantor rescinds or cancels or modifies (except that the
Borrower or the applicable Subsidiary Guarantor may, in the
ordinary course of business in a manner consistent with the
Credit and Collection Policy and provided that the same is
reflected in the next Borrowing Base Certificate delivered to the
Administrative Agent pursuant to Section 6.04(e), grant rebates,
refunds or adjustments with respect to Receivables, including as
a result of the application of any special or other discounts or
any reconciliation);
(g) any and all Receivables as to which any
representation or warranty applicable thereto contained herein or
in any other Loan Document shall not be true and correct in any
material respect or as to which any covenant applicable thereto
contained herein or in any other Loan Document shall not have
been complied with in any material respect; or
(h) any and all Receivables that the Administrative
Agent in its reasonable judgment after consultation with the
Borrower shall deem not to be Eligible Receivables, based on
such credit and collateral considerations as the Administrative
Agent may reasonably deem appropriate.
"Eligible Inventory" shall mean, at any date of
determination thereof, all Inventory of the Borrower and the
Subsidiary Guarantors classified as raw materials, finished
goods or Work in Process, but shall exclude (a) all Inventory
that in the reasonable opinion of the Administrative Agent is
obsolete or unmerchantable, (b) all Inventory that is not free
and clear of all Liens (other than Liens created by or pursuant
to the Security Documents and Liens of the type described in
Section 7.02(d)), (c) all Inventory that is not subject to the
valid and perfected Liens created by or pursuant to the Security
Documents in favor of the Collateral Agent for the ratable
benefit of the Secured Parties, and (d) all Inventory that the
Administrative Agent in its reasonable judgment after
consultation with the Borrower shall deem not to be Eligible
Inventory, based on such credit and collateral considerations as
the Administrative Agent may reasonably deem appropriate.
"Environmental and Safety Laws" shall mean any and all
applicable current and future treaties, laws, regulations,
enforceable requirements, binding determinations, orders,
decrees, judgments, injunctions, permits, approvals,
authorizations, licenses, permissions, notices or binding
agreements issued, promulgated or entered by any Governmental
Authority, relating to the environment, to employee health or
safety as it pertains to the use or handling of, or exposure to,
Hazardous Substances, to preservation or reclamation of natural
resources or to the management, release or threatened release of
contaminants or noxious odors, including the Hazardous Materials
Transportation Act, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of ▇▇▇▇ ( ▇▇▇▇▇▇ ),
the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and the Hazardous and Solid
Waste Amendments of 1984, the Federal Water Pollution Control
Act, as amended by the Clean Water Act of 1977, the Clean Air Act
of 1970, as amended, the Toxic Substances Control Act of 1976,
the Occupational Safety and Health Act of 1970, as amended, the
Emergency Planning and Community Right-to-Know Act of 1986, the
Safe Drinking Water Act of 1974, as amended, and any similar or
implementing state law and all amendments or regulations
promulgated thereunder.
"Environmental Claim" shall mean any written notice by any
Governmental Authority or other Person alleging potential
liability for penalties, costs of response, damage to the
environment or personal injury (including sickness, disease or
death), in either case, resulting from or based upon (a) the
presence or Release (including intentional and unintentional,
negligent and nonnegligent, sudden or nonsudden, accidental or
nonaccidental leaks or spills) of any Hazardous Substance at,
in or from the property of, whether owned or leased by, the
Borrower or any Subsidiary, or (b) any other circumstances
forming the basis of any violation, or alleged violation, by the
Borrower or any Subsidiary of any Environmental and Safety Law.
"Environmental Reports" shall mean the reports of GaiaTech
Inc. delivered to the Lenders prior to the date hereof with
respect to properties that shall be owned or leased by the
Borrower or any Subsidiary upon consummation of the KPR
Acquisition.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, or any successor statute, together with the
regulations thereunder, as the same may be amended from time to
time.
"ERISA Affiliate" shall mean any trade or business
(whether or not incorporated) that, together with the Borrower,
is treated as a single employer under Section 414 of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Acquisition Loan" shall mean any Acquisition
Loan bearing interest at a rate determined by reference to the
Adjusted LIBO Rate in accordance with the provisions of Article
II.
"Eurodollar Loan" shall mean any Eurodollar Term Loan,
Eurodollar Revolving Loan or Eurodollar Acquisition Loan.
"Eurodollar Revolving Loan" shall mean any Revolving Loan
bearing interest at a rate determined by reference to the
Adjusted LIBO Rate in accordance with the provisions of Article
II.
"Eurodollar Term Loan" shall mean any Term Loan bearing
interest at a rate determined by reference to the Adjusted LIBO
Rate in accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such
term in Article VIII.
"Excess Cash Flow" shall mean, for any period, without
duplication, an amount equal to the excess, if any, of (a) the
sum of (i) the consolidated net cash flow from operations for
such period of the Borrower and its consolidated subsidiaries
determined on a consolidated basis in accordance with GAAP, (ii)
to the extent deducted in determining such net cash flow from
operations, the aggregate amount of repurchases or redemptions of
the Subordinated Notes under Section 7.09(a) during such period,
(iii) net cash provided (used) by investing activities during
such period (excluding cash received as proceeds of any sale,
transfer or other disposition of any business unit, asset or
other property to the extent such sale, transfer or other
disposition constitutes a Prepayment Event hereunder) and (iv)
the aggregate proceeds of all Indebtedness incurred under
Sections 7.01(d) and (e) during such period over (b) the sum of
(i) scheduled payments during such period of the principal of the
Term Loans and the Acquisition Loans, (ii) scheduled payments
during such period of the principal of permitted Indebtedness
other than the Loans, but only to the extent that such
payments cannot by their terms be reborrowed or redrawn, (iii)
prepayments during such period of the Term Loans and the
Acquisition Loans pursuant to Section 2.12, but only to the
extent that such payments, in the case of payments of the
Acquisition Loans, cannot by their terms be reborrowed
or redrawn, and (iv) $1,000,000, in each case determined in
accordance with GAAP.
"Existing Credit Agreement" shall mean the Credit
Agreement dated as of May 25, 1994, among the Borrower, the
lenders named therein and Chemical Bank, as Agent for such
lenders.
"Facilities" shall mean, collectively, the Term Facility,
the Revolving Facility and the Acquisition Facility.
"Fees" shall mean the Administrative Fees, the Commitment
Fees, the LC Fees, the fees specified in Section 2.05(d) and the
fees specified in Section 3.08.
"Financial Officer" of any corporation shall mean the
chief financial officer, principal accounting officer, Treasurer,
Assistant Treasurer or Controller of such corporation.
"Funded Term Loan Commitment" shall mean, with respect to
each Lender, the commitment of such Lender to make Term Loans
hereunder on the Closing Date as set forth in clause (a) of
Section 2.01, as the same may be reduced from time to time
pursuant to Section 2.09.
"GAAP" shall mean generally accepted accounting principles
in the United States.
"Governmental Authority" shall mean any Federal, state,
local or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Guarantee" of or by any Person shall mean any obligation,
contingent or otherwise, of such Person guaranteeing or having
the economic effect of guaranteeing any Indebtedness of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including any obligation of such Person, direct or
indirect, (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or to purchase (or
to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase property,
securities or services for the purpose of assuring the owner of
such Indebtedness of the payment of such Indebtedness or (c) to
maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness;
provided, however, that the term Guarantee shall not include
endorsements for collection or deposit, in either case in the
ordinary course of business.
"Guarantee Agreement" shall mean the Guarantee Agreement,
substantially in the form of Exhibit E, between the Subsidiary
Guarantors and the Collateral Agent.
"Hazardous Substances" shall mean any toxic, radioactive,
mutagenic, carcinogenic, noxious, caustic or otherwise hazardous
substance, material or waste, including petroleum, its
derivatives, by-products and other hydrocarbons, or any substance
having any constituent elements displaying any of the foregoing
characteristics, including, without limitation, polychlorinated
biphenyls ("PCBs"), asbestos or asbestos-containing material, and
any substance, waste or material regulated under Environmental
and Safety Laws.
"IMI" shall have the meaning assigned to such term in
Section 7.04(i).
"Indebtedness" of any Person shall mean, without
duplication, (a) all obligations of such Person for borrowed
money or with respect to deposits or advances of any kind, (b)
all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of
such Person under conditional sale or other title retention
agreements relating to assets purchased by such Person, (d) all
obligations of such Person issued or assumed as the deferred
purchase price of property or services (excluding trade accounts
payable and accrued expenses arising in the ordinary course of
business in accordance with customary trade terms), (e) all
Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or other-
wise, to be secured by) any Lien on property owned or acquired by
such Person, whether or not the obligations secured thereby have
been assumed by such Person, (f) all Guarantees by such Person
of Indebtedness of others, (g) all Capital Lease Obligations of
such Person, (h) all obligations of such Person in respect of
interest rate protection agreements, foreign currency exchange
agreements or other interest or exchange rate hedging
arrangements and (i) all obligations of such Person as an
account party to reimburse any bank or any other Person in
respect of letters of credit and bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture in which such Person is a general
partner or member, other than to the extent that the instrument
or agreement evidencing such Indebtedness expressly limits the
liability of such Person in respect thereof pursuant to
provisions and terms reasonably satisfactory to the
Administrative Agent.
"Indemnity, Subrogation and Contribution Agreement" shall
mean the Indemnity, Subrogation and Contribution Agreement,
substantially in the form of Exhibit F, between the Borrower, the
Subsidiary Guarantors and the Collateral Agent.
"Insurance Proceeds" shall have the meaning assigned to
such term in Section 10.16.
"Interest Payment Date" shall mean, with respect to any
Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three
months' duration, each day that would have been an Interest
Payment Date had successive Interest Periods of three months'
duration been applicable to such Borrowing and, in addition, the
date of any refinancing or conversion of such Borrowing with or
to a Borrowing of a different Type.
"Interest Period" shall mean (a) as to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing or
on the last day of the immediately preceding Interest Period
applicable to such Borrowing, as the case may be, and ending on
the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is
1, 2, 3 or 6 months thereafter, as the Borrower may elect, and
(b) as to any ABR Borrowing, the period commencing on the date of
such Borrowing or on the last day of the immediately preceding
Interest Period applicable to such Borrowing, as the case may be,
and ending on the earliest of (i) the next succeeding March 31,
June 30, September 30 or December 31, (ii) the Maturity Date and
(iii) the date such Borrowing is converted to a Borrowing of a
different Type in accordance with Section 2.10 or repaid or
prepaid in accordance with Section 2.11, 2.12 or 2.13; provided,
however, that, if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless, in the case of a
Eurodollar Borrowing only, such next succeeding Business Day
would fall in the next calendar month, in which case such
Interest Period shall end on the next preceding Business Day.
Interest shall accrue from and including the first day
of an Interest Period to but excluding the last day of such
Interest Period.
"Inventory" shall mean all goods now owned or hereafter
acquired by the Borrower or any Subsidiary Guarantor (wherever
located, whether in the possession of the Borrower or any
Subsidiary Guarantor or of a bailee or other person for sale,
storage, transit, processing or use or otherwise consisting of
whole goods, components, supplies, materials, or consigned,
returned or repossessed goods) that are held for sale or lease
or to be furnished (or have been furnished) under any contract of
service or that are raw materials, Work in Process, farm products
or materials used or consumed in the Borrower's or any Subsidiary
Guarantor's business or processed by or on behalf of the Borrower
or such Subsidiary Guarantor.
"Issuing Lender" shall have the meaning assigned to such
term in the introductory paragraph hereof.
"JLL" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ Fund, L.P., a
Delaware limited partnership.
"Joint Venture" shall mean a joint venture, partnership or
other similar arrangement, whether in corporate, partnership or
other legal form.
"KPR Acquisition" shall have the meaning assigned to such
term in the introductory statement to this Agreement.
"KPR LC Exposure" shall mean, at any time of
determination, the sum of (a) the undrawn amount of the KPR
Letter of Credit at such time and (b) the aggregate amount that
has been drawn under the KPR Letter of Credit and (i) has not
been converted into Term Loans pursuant to Section 2.02(f), or
(ii) for which the Issuing Lender or the Lenders, as the case may
be, have not been reimbursed by the Borrower at such time.
"KPR Lease" shall have the meaning assigned to such term
in Section 7.03.
"KPR Letter of Credit" shall have the meaning assigned to
such term in the preamble to this Agreement.
"KPR Litigation" shall mean the litigation described in
[item __] of Schedule 4.09.
"KPR Purchase Agreement" shall have the meaning assigned
to such term in the preamble to this Agreement.
"LC Commitment" shall mean $7,000,000, as the same may be
reduced from time to time pursuant to Section 3.07. The LC
Commitment shall automatically and permanently terminate on
the LC Maturity Date.
"LC Disbursement" shall mean any payment or disbursement
made by the Issuing Lender under or pursuant to a Letter of
Credit.
"LC Exposure" shall mean, at any time of determination, the
sum of (a) the aggregate undrawn amount of all Letters of Credit
other than the KPR Letter of Credit outstanding at such time
and (b) the aggregate amount that has been drawn under such
Letters of Credit but for which the Issuing Lender or the
Lenders, as the case may be, have not been reimbursed by the
Borrower at such time.
"LC Fees" shall have the meaning given such term in Section
3.03.
"LC Maturity Date" shall mean the fifth Business Day prior
to the Maturity Date.
"Leasehold Mortgage" shall mean any Mortgage that is a
leasehold or subleasehold mortgage.
"Lenders" shall have the meaning assigned to such term in
the introductory paragraph hereof.
"Letters of Credit" shall mean the Standby Letters of
Credit and the Commercial Letters of Credit issued by the Issuing
Lender for the account of the Borrower pursuant to Section
3.01(a).
"LIBOR Spread" shall mean 2.00% per annum, subject to
adjustment pursuant to the table set forth below based on the
Total Debt Ratio as of the last day of the Borrower's most
recently ended fiscal quarter:
Total Debt Ratio LIBOR Spread
Greater than or
equal to 4.75 to 1 2.50%
Less than 4.75 to 1
but greater than or
equal to 4.25 to 1 2.25%
Less than 4.25 to 1
but greater than or
equal to 4 to 1 2.00%
Less than 4 to 1 1.75%
The LIBOR Spread shall be adjusted effective on the first
Business Day after the delivery of the Borrower's annual or
quarterly financial statements pursuant to Section 6.04(a) or
(b), provided that (i) if the proceeds of any Borrowing are used
to finance a Qualified Acquisition and the Pro Forma Total Debt
Ratio after giving effect to such Qualified Acquisition would
result in a change in the LIBOR Spread (if the foregoing table
were based on the Pro Forma Total Debt Ratio rather than the
Total Debt Ratio), such change shall become effective for all
purposes simultaneously with such Borrowing, and (ii) if timely
delivery of such financial statements is not made, for purposes
of determining the LIBOR Spread, the Total Debt Ratio shall be
assumed to be greater than 4.75 to 1 until such delivery is made.
"Lien" shall mean, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, assignment for security
(whether collateral or otherwise), hypothecation, encumbrance,
easement, lease, sublease, charge or security interest in or on
such asset, (b) the interest of a vendor or a lessor
under any conditional sale agreement, capital lease or title
retention agreement or financing lease having substantially the
same economic effect as any of the foregoing relating to such
asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to
such securities, or the granting of control (as defined in
Article 9 of the Uniform Commercial Code as in effect in the
State of Oklahoma as of February 1, 1996) over such securities to
any Person.
"Loan Documents" shall mean this Agreement, the Letters of
Credit, the Security Documents, the Guarantee Agreement, the
Indemnity, Subrogation and Contribution Agreement and any and all
Rate Protection Agreements entered into from time to time between
the Borrower or any Subsidiary Guarantor and any Lender.
"Loans" shall mean the Term Loans, the Revolving Loans and
the Acquisition Loans.
"Margin Stock" shall have the meaning assigned to such
term under Regulation U.
"Material Adverse Effect" shall mean (a) a materially
adverse effect on the business, assets, properties, operations or
condition, financial or otherwise, or prospects of the Borrower
and the Subsidiaries, taken as a whole, (b) a materially adverse
effect on the Transactions, (c) a material impairment of the
ability of the Borrower or any Subsidiary Guarantor to perform
any of its material obligations under any Transaction Document to
which it is or will be a party or (d) a material impairment of
the rights of or benefits available to the Administrative Agent,
the Issuing Lender, the Collateral Agent or the Lenders under any
Loan Document.
"Maturity Date" shall mean January 15, 2000.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. or
any successor thereto.
"Mortgaged Property" shall mean each of the owned real
properties and leasehold and subleasehold interests of the
Borrower and the Subsidiary Guarantors specified on Schedule
1.01(d) and each owned real property or leasehold or subleasehold
interest of the Borrower or any Subsidiary Guarantor on which a
lien is granted after the date hereof in favor of the Collateral
Agent, for the benefit of the Lenders, pursuant to Section 6.10.
"Mortgages" shall mean the mortgages, deeds of trust,
leasehold mortgages, assignments of leases and rents,
modifications and other security documents delivered pursuant to
clause (i) of Section 5.02(l) or pursuant to Section 6.10, based
upon (except in the case of any Leasehold Mortgage) the form of
Mortgage attached hereto as Exhibit G.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower or
any ERISA Affiliate (other than one considered an ERISA Affiliate
only pursuant to subsection (m) or (o) of Section 414 of the
Code) is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"Net Cash Proceeds" shall mean, with respect to any
Prepayment Event, (a) the gross cash proceeds (including
Insurance Proceeds, Condemnation Proceeds and payments from time
to time in respect of installment obligations, if applicable)
received by or on behalf of the Borrower or any Subsidiary in
respect of such Prepayment Event, less (b) the sum of (i) the
amount, if any, of all taxes (other than income taxes) payable by
the Borrower or any Subsidiary in connection with such Prepayment
Event and the Borrower's or such Subsidiary's good-faith best
estimate of the amount of all income taxes payable in connection
with such Prepayment Event (to the extent that such amount shall
have been set aside for the purpose of paying such income taxes),
(ii) in the case of a Prepayment Event that is an asset sale or
disposition, (A) the amount of any reasonable reserve established
in accordance with GAAP against any liabilities associated with
the assets sold or disposed of and retained by the Borrower or
any Subsidiary, provided that the amount of any subsequent
reduction of such reserve (other than in connection with a
payment in respect of any such liability) shall be deemed to be
Net Cash Proceeds of a Prepayment Event occurring on the date of
such reduction, and (B) the amount applied to repay any
Indebtedness (other than the Loans) to the extent such
Indebtedness is required by its terms to be repaid as a result
of such Prepayment Event and (iii) reasonable and customary fees,
commissions and expenses and other costs paid by the Borrower or
any Subsidiary in connection with such Prepayment Event (other
than those payable to the Borrower or any Affiliate of the
Borrower), including any such expenses and other costs incurred
by the Borrower or the applicable Subsidiary in connection with
any attempt to sell, within the twelve months preceding such
sale, any asset the sale of which has given rise to such
Prepayment Event, in each case only to the extent not already
deducted in arriving at the amount referred to in clause (a).
"Net Income" shall mean, for any period, the net earnings
(or loss) of the Borrower and its subsidiaries determined on a
consolidated basis for such period in accordance with GAAP.
"Obligations" shall mean all obligations defined as
Obligations in the Guarantee Agreement and the Security
Documents.
"Obligor" shall mean any purchaser of goods or services
from, or any other Person obligated to make payment to, the
Borrower or any Subsidiary Guarantor in respect of a purchase of
such goods or services.
"Outstanding Letters of Credit" shall mean at any time the
Letters of Credit outstanding at such time.
"Participating Lender" shall mean at any time (i) in the
case of any Letter of Credit other than the KPR Letter of Credit,
any Lender with a Revolving Credit Commitment at such time, and
(ii) in the case of the KPR Letter of Credit, any Lender with an
Unfunded Term Loan Commitment.
"Patent Security Agreement" shall mean Patent Security
Agreement among the Borrower, the Subsidiary Guarantors and the
Collateral Agent, similar in form to the Trademark Security
Agreement with such changes as the Collateral Agent shall
reasonably require.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA or any successor thereto.
"Perfection Certificate" shall mean the Perfection
Certificate, substantially in the form of Annex 2 to the Security
Agreement, prepared by the Borrower.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the
United States of America (or by any agency thereof to the extent
such obligations are backed by the full faith and credit of the
United States of America), in each case maturing within three
months from the date of acquisition thereof;
(b) without limiting the provisions of paragraph (d)
below, investments in commercial paper maturing within three
months from the date of acquisition thereof and having, at such
date of acquisition, a credit rating of at least A-1 or the
equivalent thereof from Standard & Poor's and at least P-1 or the
equivalent thereof from Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits (including eurodollar time
deposits) maturing within three months from the date of
acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, (i) any
domestic office of the Administrative Agent or (ii) any domestic
office of any other commercial bank of recognized standing
organized under the laws of the United States of America or any
state thereof that has a combined capital and surplus and
undivided profits of not less than $250,000,000 and which is
rated (or the senior debt securities of the holding company of
which are rated) A or better (or BBB+ or better in the case of
the domestic office of any Lender) by Standard & Poor's or A2 or
better (or Baa2 or better in the case of the domestic office of
any Lender) by Moody's, or carrying an equivalent rating by
another nationally recognized rating agency if neither of the two
named rating agencies shall rate such commercial bank (or the
holding company of such commercial bank);
(d) investments in commercial paper maturing within
three months from the date of acquisition thereof and issued by
(i) the holding company of the Administrative Agent or (ii) the
holding company of any other commercial bank of recognized
standing organized under the laws of the United States of America
or any state thereof that has (A) a combined capital and surplus
in excess of $250,000,000 and (B) commercial paper rated at least
A-1 or the equivalent thereof (or A-2 or the equivalent thereof
in the case of the holding company of any Lender) by Standard &
Poor's or at least P-1 or the equivalent thereof (or P-2 or the
equivalent thereof in the case of the holding company of any
Lender) by Moody's, or carrying an equivalent rating by another
nationally recognized rating agency, if both of the two named
rating agencies cease publishing ratings of investments;
(e) repurchase agreements having a term of seven days
or less with (i) any domestic office of the Administrative Agent
or (ii) any domestic office of any other commercial bank of
recognized standing organized under the laws of the United States
of America or any state thereof that has a combined capital and
surplus and undivided profits of not less than $250,000,000 and
which is rated (or the senior debt securities of the holding
company of such commercial bank are rated) A or better (or BBB+
or better in the case of the domestic office of any Lender) by
Standard & Poor's or A2 or better (or Baa2 or better in the case
of the domestic office of any Lender) by Moody's or carrying an
equivalent rating by another nationally recognized rating agency
if neither of the two named rating agencies shall rate such bank
relating to marketable direct obligations issued or
unconditionally guaranteed by the United States but only if the
securities collateralizing such repurchase agreements are
delivered to or to the order of the Collateral Agent;
(f) investments in mutual funds investing solely in
instruments of the types described in clauses (a) through (e)
above;
(g) other investment instruments approved in writing by
the Required Lenders and offered by financial institutions that
have a combined capital and surplus and undivided profits of not
less than $250,000,000; and
(h) investments in mutual funds that are sold by
nationally recognized registered broker-dealers, which mutual
funds invest in repurchase agreements having a term of seven
days or less and relating to debt securities issued by
corporations (i) organized and validly existing under the laws of
the United States of America, any state thereof or the District
of Columbia and (ii) the senior debt securities of which are
rated AA or better by Standard & Poor's or Aa or better by
Moody's or carrying an equivalent rating by another nationally
recognized rating agency if neither of the two named rating
agencies shall rate such debt securities.
"Person" shall mean any natural person, corporation,
business trust, joint venture, association, company, partnership
or government, or any agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV
of ERISA or Section 412 of the Code that is maintained for
current or former employees, or any beneficiary thereof, of the
Borrower or any ERISA Affiliate.
"Pledge Agreement" shall mean the Pledge Agreement,
substantially in the form of Exhibit H, among the Borrower, the
Subsidiary Guarantors and the Collateral Agent.
"Prepayment Event" shall mean (a) any sale, transfer or
other disposition of any business units, assets or other
properties of the Borrower or any Subsidiary (including
dispositions in the nature of casualties (to the extent covered
by insurance) or condemnations (including any Casualty or
Condemnation in respect of a Mortgaged Property as contemplated
in Section 10.16)), (b) any sale and leaseback of any asset or
the mortgaging of any real property other than pursuant to a
Mortgage (or a modification thereof) by the Borrower or any
Subsidiary, (c) the issuance or incurrence by the Borrower or any
Subsidiary of any Indebtedness (excluding Indebtedness permitted
under Sections 7.01(d), 7.01(f), 7.01(h) and 7.01(k) and
Specified Permitted Debt), or the issuance or sale by the
Borrower or any Subsidiary of any debt securities or any
obligations convertible into or exchangeable for, or giving any
Person or entity any right, option or warrant to acquire from the
Borrower or any Subsidiary any Indebtedness or any such debt
securities or any such convertible or exchangeable obligations
(excluding Specified Permitted Debt) or (d) the issuance or
incurrence by the Borrower of any Specified Permitted Debt.
Notwithstanding the foregoing, the term Prepayment Event shall
not include:
(i) sales, transfers and other dispositions of used or
surplus equipment, vehicles and other assets in the ordinary
course of business permitted pursuant to Section 7.05(b) not
exceeding in the aggregate $250,000 in any fiscal year, provided
that (A) at any time when such sales, transfers and other
dispositions in the ordinary course of business shall exceed
$250,000 in any fiscal year, the resultant Prepayment Event shall
include the entire amount of such sales, transfers and
dispositions since the date of such most recent payment, if any,
with respect to such fiscal year and not just amounts above such
dollar threshold and (B) to the extent that the Borrower or any
Subsidiary shall have reinvested on the date of such Prepayment
Event (or certified to the Administrative Agent that it intends
to reinvest within 360 days of such Prepayment Event) any of the
proceeds of such sales, transfers and dispositions in equipment,
vehicles or other assets used in the principal lines of business
of the Borrower or such Subsidiary, the resultant Prepayment
Event shall be reduced by the lesser of (I) $250,000 and (II) the
amount so reinvested or to be reinvested;
(ii) sales of inventory in the ordinary course of
business;
(iii) the receipt of insurance or condemnation proceeds
(other than Condemnation Proceeds and Insurance Proceeds in
respect of Mortgaged Properties), provided that (A) such
proceeds are reinvested in equipment, vehicles or other assets
used in the Borrower's or any Subsidiary's principal lines of
business within 360 days after the receipt thereof and (B) if the
aggregate of such proceeds exceeds $2,000,000, the Borrower or
any Subsidiary, pending such reinvestment, promptly deposits the
entire aggregate amount of such proceeds so received and
unreinvested, if such proceeds exceed $2,000,000, in a cash
collateral account established with the Collateral Agent for the
benefit of the Secured Parties;
(iv) the receipt of Condemnation Proceeds and Insurance
Proceeds in respect of Mortgaged Properties to the extent that
(A) such Condemnation Proceeds or Insurance Proceeds are used to
restore, repair or locate, acquire and replace the related
Mortgaged Property in accordance with Section 10.16, (B) such
Condemnation Proceeds or Insurance Proceeds, pursuant to Section
10.16, are not otherwise required to be applied as a mandatory
prepayment pursuant to Section 2.13(c) or (C) to the extent
permitted by Section 10.16, any Condemnation Proceeds or
Insurance Proceeds are (I) reinvested in equipment, vehicles or
other assets used in the Borrower's or any Subsidiary's principal
lines of business within 360 days after the receipt thereof and
(II) the Borrower or any Subsidiary, pending such reinvestment,
has deposited such amounts in an escrow account with the
Collateral Agent as contemplated in Section 10.16;
(v) the receipt of proceeds of business interruption
insurance; and
(vi) if the Borrower exercises its option to acquire
the plant presently leased by it located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, the receipt of proceeds from a
sale and leaseback of such property permitted by Section 7.03.
"Pro Forma Balance Sheet" shall have the meaning given
such term in Section 4.05(a).
"Pro Forma Interest Expense" shall mean, with respect to
any Acquisition for any period, (a) the sum of (i) the principal
amount of Indebtedness assumed or to be assumed by the Borrower
in connection with such Acquisition and (ii) the principal amount
of the Loans made to finance such Acquisition, multiplied by (b)
the "Average Interest Rate" for such period, multiplied by (c)
the number of days in such period divided by 365. For purposes
of this definition, Average Interest Rate shall mean the
Borrower's aggregate interest expense under this Credit Agreement
from the Closing Date to the last day of the most-recently-ended
fiscal quarter of the Borrower, divided by the average daily
outstanding principal balance of the Loans from the Closing Date
to the last day of the most-recently-ended fiscal quarter of the
Borrower.
"Pro Forma Total Debt Ratio" shall mean, with respect to
any Qualified Acquisition, the Total Debt Ratio determined on a
pro forma basis immediately after giving effect to such Qualified
Acquisition.
"Proposed TNT Acquisition" shall mean the Borrower's
proposed acquisition of all of the outstanding capital stock of
TNT, on the terms and subject to the conditions disclosed to the
Lenders before the Closing Date.
"Qualified Acquisition" shall mean the Proposed TNT
Acquisition and any acquisition satisfying each of the criteria
set forth in Section 7.05(d).
"Rate Protection Agreement" shall mean any interest rate
swap, cap, collar or floor agreement or any other similar
interest rate protection agreement, foreign currency exchange
agreement or other interest or exchange rate hedging arrangement
designed to protect the Borrower from fluctuations in interest or
currency rates.
"Receivables" shall mean all rights to receive payment for
goods sold or leased or for services rendered in the ordinary
course of business to the extent not evidenced by an instrument
or chattel paper, together with all interest, finance charges or
other amounts payable by an Obligor in respect thereof.
"Register" shall have the meaning given such term in
Section 10.04(d).
"Regulation G" shall mean Regulation G of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Release" means any discharge, emission, release, or
threat thereof, including a Release as defined in CERCLA at 42
U.S.C. Section 9601(22), and the term "Released" has a meaning
correlative thereto.
"Reportable Event" shall mean any reportable event as
defined in Section 4043(b) of ERISA or the regulations issued
thereunder with respect to a Plan (other than a Plan maintained
by an ERISA Affiliate that is considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Section 414 of the Code),
other than any reportable event for which the requirement to
deliver notice within 30 days to the PBGC has been waived by the
PBGC.
"Required Lenders" shall mean, at any time, Lenders
holding Loans, a share of the used LC Commitment and unused
Commitments representing more than 51% of the aggregate of (a)
the aggregate principal amount of the Loans at such time, (b) the
LC Exposure and KPR LC Exposure at such time and (c) the
aggregate unused Commitments at such time; provided, however,
that solely for purposes of Section 5.03 with respect to an
Acquisition other than the Proposed TNT Acquisition, Required
Lenders shall mean Lenders holding Loans and Commitments
necessary to approve such Acquisition in accordance with Section
7.05(d).
"Responsible Officer" of any corporation shall mean any
executive officer or Financial Officer of such corporation and
any other officer or similar official thereof responsible for the
administration of the obligations of such corporation in respect
of this Agreement.
"Revolving Credit Borrowing" shall mean a Borrowing
comprised of Revolving Loans.
"Revolving Credit Commitment" shall mean, with respect to
each Lender, the commitment of such Lender to make Revolving
Loans hereunder as set forth in clause (b) of Section 2.01, as
the same may be reduced from time to time pursuant to Section
2.09.
"Revolving Credit Utilization" shall mean, at any time of
determination, the sum of (a) the aggregate principal amount of
Revolving Loans outstanding at such time and (b) the LC Exposure
at such time.
"Revolving Facility" shall mean the aggregate of the
Lenders' Revolving Credit Commitments.
"Revolving Loans" shall mean the revolving loans made by
the Lenders to the Borrower pursuant to clause (b) of Section
2.01. Each Revolving Loan shall be a Eurodollar Revolving Loan
or an ABR Revolving Loan.
"Secured Parties" shall have the meaning assigned to such
term in the Security Agreement.
"Security Agreement" shall mean the Security Agreement,
substantially in the form of Exhibit I, among the Borrower, the
Subsidiary Guarantors and the Collateral Agent.
"Security Documents" shall mean the Mortgages (including
any Leasehold Mortgage), the Security Agreement, the Pledge
Agreement, the Collateral Assignment, the Patent Security
Agreement, the Trademark Security Agreement and each of the
security agreements, mortgages and other instruments and
documents executed and delivered pursuant to any of the foregoing
or pursuant to Section 6.10.
"Seller" shall have the meaning assigned to such term in
the preamble to this Agreement.
"Solvent" shall mean, with respect to any Person at any
time, that (a) the fair saleable value of such Person's assets at
such time is greater than the amount that would be required to
pay its probable liability on its then-existing legal
liabilities, either matured or unmatured, liquidated or
unliquidated, absolute, fixed or contingent, as they become
absolute or matured, and (b) such Person does not have
unreasonably small capital at such time for the business or
transaction in which it is engaged or is about to engage.
"Specified Permitted Debt" shall have the meaning assigned
to such term in Section 7.01.
"Standard and Poor's" shall mean Standard & Poor's Ratings
Group, a division of McGraw Hill, Inc., or any successor thereto.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which equals 1 and the denominator of
which equals (i) 1 minus (ii) the aggregate of the maximum
applicable reserve percentages, including any marginal, special,
emergency or supplemental reserves (expressed as a decimal)
established by the Board and any other banking authority to which
the Administrative Agent is subject (a) with respect to the Base
CD Rate (as such term is used in the definition of the term
Alternate Base Rate ) for new negotiable nonpersonal time
deposits in dollars of over $100,000 with maturities
approximately equal to three months and (b) with respect to the
Adjusted LIBO Rate, for Eurocurrency Liabilities (as defined in
Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to Regulation D of the Board.
Eurodollar Loans shall be deemed to constitute Eurocurrency
Liabilities and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such
Regulation D. Statutory Reserves shall be adjusted auto-
matically on and as of the effective date of any change in any
reserve percentage.
"Subordinated Note Indenture" shall mean the Indenture
dated as of April 28, 1993, among the Borrower and First Fidelity
Bank, National Association, New York, as Trustee, relating to the
Subordinated Notes, as the same may be amended, modified or
supplemented in accordance with the provisions of this Agreement.
"Subordinated Notes" shall mean $110,000,000 aggregate
principal amount of the Borrower's 9-3/4% Senior Subordinated
Redeemable Securities due 2000 issued under the Subordinated Note
Indenture.
"Subsidiary" shall mean, with respect to any Person
(herein referred to as the "parent" ), any corporation,
partnership, association or other business entity (a) of which
securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power
or more than 50% of the general partnership interests are, at the
time any determination is being made, owned, controlled or held
or (b) that is, at the time any determination is made, other-
wise Controlled by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the
parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Subsidiary Guarantor" shall mean each of RKR-GP, Inc.,
Continental Deli Foods, Inc., ▇▇▇▇▇▇▇▇ Specialty Brands Company,
Pafco Importing Company, Inc., National Service Center, Inc.,
▇▇▇▇▇▇▇▇ Food Service Company, L.L.C., KPR Holdings, L.P., ▇▇▇▇▇▇
Certified Express, Inc., FBAI Investments Corporation, ▇▇▇▇▇▇▇
Packing Co., Inc. and each person that shall be required to
become a Subsidiary Guarantor pursuant to Section 6.10.
"Term Borrowing" shall mean a Borrowing comprised of Term
Loans.
"Term Facility" shall mean the aggregate amount of the
Lenders' Term Loan Commitments.
"Term Loan Commitment" shall mean, with respect to each
Lender, such Lender's Funded Term Loan Commitment and Unfunded
Term Loan Commitment.
"Term Loan Repayment Amount" shall have the meaning set
forth in Section 2.11(a).
"Term Loan Repayment Date" shall have the meaning set
forth in Section 2.11(a).
"Term Loans" shall mean the term loans made by the Lenders
to the Borrower pursuant to clause (a) of Section 2.01. Each Term
Loan shall be a Eurodollar Term Loan or an ABR Term Loan.
"TNT" shall mean TNT Crust, Inc., a Wisconsin corporation.
"TNT Purchase Agreement" shall mean that certain Stock
Purchase Agreement dated as of November 22, 1995 by and among the
Borrower, TNT and the shareholders of TNT.
"Total Debt Ratio" shall mean, with respect to the
Borrower and its consolidated subsidiaries for any fiscal
quarter, the ratio of (a) the aggregate amount of Indebtedness of
the Borrower and its consolidated subsidiaries outstanding as of
the last day of such fiscal quarter, determined in accordance
with GAAP, to (b) EBITDA for the period of four consecutive
fiscal quarters ending on the last day of such fiscal quarter.
For the first four fiscal quarters following the KPR Acquisition
and each Qualified Acquisition, EBITDA shall include, for any
period of calculation prior to the date of the KPR Acquisition or
such Qualified Acquisition, as the case may be, the EBITDA
(determined on a pro forma basis if no actual financial
information is available) of the company or business that
was the subject of the KPR Acquisition or such Qualified
Acquisition for such prior period.
"Trademark Security Agreement" shall mean the Trademark
Security Agreement, substantially in the form of Exhibit J, among
the Borrower, the Subsidiary Guarantors and the Collateral Agent.
"Transaction Documents" shall mean the KPR Purchase
Agreement and the Loan Documents.
"Transactions" shall have the meaning assigned to such
term in Section 4.02.
"Type" when used in respect of any Loan or Borrowing,
shall refer to the Rate by reference to which interest on such
Loan or on the Loans comprising such Borrowing is determined. For
purposes hereof, the term Rate shall include the Adjusted LIBO
Rate and the Alternate Base Rate.
"Uncollected Friday Receipts" shall mean remittances
received from Obligors in respect of Receivables that are
deposited in a lockbox account of the Borrower on the applicable
Friday and which are transferred electronically to the Borrower's
concentration account on such Friday, but which are not credited
to such concentration account until the following Monday.
"Unfunded Term Loan Commitment" shall mean, with respect
to each Lender, the commitment of such Lender to purchase a
participating interest in the KPR Letter of Credit and to
make a Term Loan hereunder as set forth in clause (f) of Section
2.02, as the same may be reduced from time to time pursuant to
Section 2.09.
"Work in Process" shall mean any item of inventory (not
otherwise obsolete or unmerchantable) that is neither a raw
material nor a finished good as accounted for by the Borrower
or the applicable Subsidiary Guarantor in a manner consistent
with the accounting practices of the Borrower or such Subsidiary
Guarantor during the period of twelve consecutive months
immediately preceding the Closing Date.
"Withdrawal Liability" shall mean liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section
1.01 shall apply equally to both the singular and plural forms of
the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter
forms. The words "include", includes and including shall be
deemed to be followed by the phrase without limitation . All
references herein to Articles, Sections, Exhibits and Schedules
shall be deemed to be references to Articles and Sections of, and
Exhibits and Schedules to, this Agreement unless the context
shall otherwise require. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made and all financial
statements required to be delivered hereunder shall be prepared
in accordance with GAAP (subject, where provided herein, to
normal year-end audit adjustments and to the absence of footnotes
required thereby) as in effect from time to time; provided,
however, that, for purposes of determining compliance with any
covenant set forth in Article VII, such terms shall be construed
in accordance with GAAP as in effect on the date of this
Agreement applied on a basis consistent with the applica-
tion used in the financial statements referred to in Section
4.05(c).
ARTICLE II
The Credits
SECTION 2.01. Commitments. On the terms and subject to the
conditions and relying upon the representations and warranties
herein set forth, each Lender agrees, severally and not jointly:
(a) to make Term Loans to the Borrower on the Closing
Date in an aggregate principal amount up to but not exceeding the
Funded Term Loan Commitment set forth opposite such Lender's name
on Schedule 2.01;
(b) to make Revolving Loans to the Borrower, at any
time and from time to time on or after the Closing Date and prior
to the earlier of the Maturity Date and the termination of
the Revolving Credit Commitment of such Lender in accordance with
the terms hereof, in an aggregate principal amount at any time
outstanding up to but not exceeding an amount equal to the
difference between (i) the lesser of (A) the Revolving Credit
Commitment set forth opposite such Lender's name on Schedule
2.01, as the same may be reduced from time to time pursuant to
Section 2.09, and (B) such Lender's Applicable Percentage of the
Borrowing Base at such time and (ii) such Lender's Applicable
Percentage of the LC Exposure at such time; and
(c) to make Acquisition Loans to the Borrower, at any
time and from time to time on or after the Closing Date and prior
to the Acquisition Loan Commitment Termination Date in accordance
with the terms hereof, in an aggregate principal amount at any
time outstanding up to but not exceeding the Acquisition Loan
Commitment set forth opposite such Lender's name on Schedule
2.01, as the same may be reduced from time to time pursuant to
Section 2.09. Acquisition Loans prepaid after the Acquisition
Loan Commitment Termination Date may not be reborrowed.
Within the limits set forth in clauses (b) and (c) of the
preceding sentence, the Borrower may borrow, pay or prepay and
reborrow Revolving Loans on or after the Closing Date and prior
to the Maturity Date, and may borrow, pay or prepay and reborrow
Acquisition Loans on or after the Closing Date and prior to the
Acquisition Loan Commitment Termination Date, on the terms and
subject to the conditions and limitations set forth herein.
Amounts paid or prepaid in respect of Term Loans may not be
reborrowed. Amounts paid or prepaid in respect of the
Acquisition Loans after the Acquisition Loan Commitment
Termination Date may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of
a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their respective Funded Term Loan Commitments,
Revolving Credit Commitments or Acquisition Loan Commitments, as
the case may be; provided, however, that the failure of any
Lender to make any Loan shall not in itself relieve any
other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the
failure of any other Lender to make any Loan required to be made
by such other Lender). The Loans comprising each Borrowing shall
be in an aggregate principal amount that is (i) in the case of
ABR Borrowings, an integral multiple of $500,000 and not less
than $1,000,000 and (ii) in the case of Eurodollar Borrowings, an
integral multiple of $500,000 and not less than $1,000,000 (or if
less in the case of any Revolving Credit Borrowing or Acquisition
Loan Borrowing, an aggregate principal amount equal to the
remaining balance of the Revolving Credit Commitments or the
Acquisition Loan Commitments, as the case may be).
(b) Each Borrowing shall be comprised entirely of ABR Loans
or Eurodollar Loans, as the Borrower may request pursuant to
Section 2.03; provided that, notwithstanding anything to the
contrary contained in this Agreement, no Borrowing comprised of
Eurodollar Loans having an Interest Period the duration of which
is six months may be requested until the earlier of (i) the date
that is 90 days after the Closing Date and (ii) the date on which
Chemical Bank shall notify the Borrower that the syndication of
the Facilities has been completed. Each Lender may at its option
fulfill its Commitment with respect to any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan, provided that any exercise of such
option shall not affect the obligation of the Borrower to repay
such Loan in accordance with the terms of this Agreement.
Borrowings of more than one Type may be outstanding at the same
time; provided, however, that the Borrower shall not be entitled
to request any Borrowing that, if made, would result in an
aggregate of more than ten (10) separate Eurodollar Loans of any
Lender being outstanding hereunder at any one time. For purposes
of the foregoing, Loans having different Interest Periods,
regardless of whether they commence on the same date, shall be
considered separate Loans.
(c) Subject to paragraph (e) below, each Lender shall make a
Loan in the amount of its pro rata portion, as determined under
Section 2.17, of each Borrowing hereunder on the proposed
date thereof by wire transfer of immediately available funds to
the Administrative Agent in New York, New York, not later than
12:00 noon, New York City time, and the Administrative Agent
shall by 3:00 p.m., New York City time, credit the amounts so
received to the general deposit account of the Borrower with the
Administrative Agent or, if a Borrowing shall not occur on such
date because any condition precedent herein specified shall not
have been met, return the amounts so received to the respective
Lenders. Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Borrowing that such
Lender will not make available to the Administrative Agent such
Lender's portion of such Borrowing, the Administrative Agent may
assume that such Lender has made such portion available to the
Administrative Agent on the date of such Borrowing in accordance
with this paragraph (c) and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such
Lender shall not have made such portion available to the
Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand
such corresponding amount together with interest thereon, for
each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds
Effective Rate. If such Lender shall repay such corresponding
amount to the Administrative Agent, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this
Agreement.
(d) Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request any Revolving
Credit Borrowing if the Interest Period requested with respect
thereto would end after the Maturity Date.
(e) The Borrower may refinance all or any part of any
Revolving Credit Borrowing with a Revolving Credit Borrowing of
the same or a different Type and, at any time prior to the
Acquisition Loan Commitment Termination Date, may refinance all
or any part of any Acquisition Loan Borrowing with an Acquisition
Loan Borrowing of the same or a different Type, subject in each
case to the conditions and limitations set forth in this
Agreement. Any Revolving Credit Borrowing, Acquisition Loan
Borrowing or part thereof so refinanced shall be deemed to be
repaid or prepaid in accordance with Section 2.04 or 2.12, as
applicable, with the proceeds of a new Revolving Credit
Borrowing or Acquisition Loan Borrowing, as the case may be, and
the proceeds of the new Borrowing, to the extent they do not
exceed the principal amount of the Borrowing being refinanced,
shall not be paid by the Lenders to the Administrative Agent or
by the Administrative Agent to the Borrower pursuant to paragraph
(c) above.
(f) On the date the Issuing Lender notifies the
Administrative Agent and the Borrower that payment of a draft
presented under the KPR Letter of Credit will be made, or if the
Administrative Agent has not received evidence of the payment
required by Section 3.04(a) by 11:00 a.m., New York City time, on
the date on which the Issuing Lender has notified the Borrower
that payment of a draft presented under any other Letter of
Credit will be made (or such later time as is not later than
one hour after the Borrower shall have received such notice or,
if the Borrower shall have received such notice later than 4:00
p.m., New York City time, on such Business Day, not later than
10:00 a.m., New York City time, on the immediately following
Business Day), as provided in Section 3.04(a)), the
Administrative Agent will notify the Issuing Lender and each
Participating Lender of the LC Disbursement not later than 12:00
noon, New York City time, and, in the case of each Participating
Lender, its Applicable Percentage of such LC Disbursement. Each
Participating Lender will pay to the Administrative Agent not
later than 4:00 p.m., New York City time, on such date an amount
equal to such Participating Lender's Applicable Percentage of
such LC Disbursement (it being understood that such amount shall,
in the case of the KPR Letter of Credit, constitute an ABR Term
Loan of such Lender and shall be deemed to have reduced the KPR
LC Exposure at such time, and in the case of any other Letter of
Credit shall constitute an ABR Revolving Loan of such
Lender and shall be deemed to have reduced the LC Exposure at
such time), and the Administrative Agent will promptly pay such
amount to the Issuing Lender. The Administrative Agent will
promptly remit to each Participating Lender its Applicable
Percentage of any amounts subsequently received by the
Administrative Agent from the Borrower in respect of such LC
Disbursement. If any Lender shall not have made its Applicable
Percentage of such LC Disbursement available to the Issuing
Lender as provided above, such Lender agrees to pay interest on
such amount, for each day from and including the date such amount
is required to be paid in accordance with this paragraph
(f) to but excluding the date an amount equal to such amount is
paid to the Administrative Agent for prompt payment to the
Issuing Lender at, for the first such day, the Federal Funds
Effective Rate, and thereafter, the Alternate Base Rate. Once
paid to the Administrative Agent, each Lender's LC
Disbursement in respect of the KPR Letter of Credit shall
constitute part of such Lender's Term Loan, and shall no longer
constitute an LC Disbursement, for all purposes of this
Agreement. Such Term Loans, when made, shall be deemed to
constitute a single Borrowing advanced on the date the
Issuing Lender pays the draft presented under the KPR Letter of
Credit.
SECTION 2.03. Notice of Borrowings. The Borrower shall give
the Administrative Agent written or telex notice (or telephone
notice promptly confirmed in writing or by telex) (a) in the case
of a Eurodollar Borrowing, not later than 10:00 a.m., New York
City time, three Business Days before the proposed Borrowing, (b)
in the case of an ABR Borrowing of Acquisition Loans, not later
than 12:00 noon, New York City time, one Business Day before the
proposed Borrowing and (c) in the case of an ABR Borrowing of
Revolving Credit Loans, not later than 12:00 noon, New York City
time, on the Business Day of the proposed Borrowing. Such notice
shall be irrevocable and shall in each case refer to this
Agreement and specify (a) whether the Borrowing then being
requested is to be a Term Borrowing, a Revolving Credit Borrowing
or an Acquisition Loan Borrowing, and whether such Borrowing is
to be a Eurodollar Borrowing or an ABR Borrowing; (b) the date of
such Borrowing (which shall be a Business Day) and the amount
thereof; and (c) if such Borrowing is to be a Eurodollar
Borrowing, the Interest Period with respect thereto. If no
election as to the Type of Borrowing is specified in any such
notice, then the requested Borrowing shall be an ABR Borrowing.
If no Interest Period with respect to any Eurodollar Borrowing is
specified in any such notice, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. If
the Borrower shall not have given notice in accordance with this
Section 2.03 of its election to refinance a Revolving Credit
Borrowing or Acquisition Loan Borrowing prior to the end
of the Interest Period in effect for such Borrowing, then the
Borrower shall (unless such Borrowing is repaid at the end of
such Interest Period) be deemed to have given notice of an
election to refinance such Borrowing with an ABR Borrowing. In
addition, the Borrower shall give the Administrative Agent at
least 5 Business Days' prior written notice of the anticipated
closing date for any Qualified Acquisition, which notice may be
revoked or amended at any time (it being understood that the
Borrowing notice with respect to the Loans for such Qualified
Acquisition must be given in accordance with the preceding
provisions of this Section 2.03). The Agent shall promptly
advise the Lenders of any notice given pursuant to this Section
2.03 and of each Lender's portion of the requested Borrowing.
SECTION 2.04. Repayment of Loans. The outstanding principal
balance of each Loan shall be payable (a) in the case of a
Revolving Loan, or, at any time prior to the Acquisition Loan
Commitment Termination Date, an Acquisition Loan, on the last day
of the Interest Period applicable to such Loan and on the
Maturity Date and (b) in the case of a Term Loan or, from and
after the Acquisition Loan Commitment Termination Date, an
Acquisition Loan, as provided in Section 2.11. The Loans shall
bear interest from and including the Closing Date on the
outstanding principal balance thereof as set forth in Section
2.06. Each Lender shall, and each hereby is authorized by the
Borrower to, record in its internal records, an appropriate
notation evidencing the date and amount of each Loan from such
Lender, each payment and prepayment of principal of any such
Loan, each payment of interest on any such Loan and the other
information provided for on such schedule; provided, however,
that the failure of any Lender to make such a notation or any
error therein shall not affect the obligation of the Borrower to
repay the Loans made by such Lender in accordance with
the terms of this Agreement.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each
Lender, through the Administrative Agent, the following fees
(each, a Commitment Fee ): on the Closing Date and on the last
day of March, June, September and December in each year,
commencing December 31, 1995, and on each date on which any of
the Commitments of such Lender shall expire or be terminated as
provided herein, a commitment fee of 3/8 of 1% per annum on the
average daily unused amount of each of the Term Loan Commitment,
Acquisition Loan Commitment and the Revolving Credit Commitment
of such Lender during the preceding quarter (or other period
commencing with the date upon which such Lender's Commitments
were accepted or the Closing Date, as applicable, or ending with
the date on which any of such Commitments of such Lender shall
expire or be terminated), it being understood that the issuance
of the KPR Letter of Credit shall constitute usage of the
Unfunded Term Loan Commitments. The Commitment Fee due to each
Lender in respect of its Acquisition Loan Commitment and
Revolving Credit Commitment pursuantto the immediately preceding
sentence shall accrue from and including the date upon which such
Commitments of such Lender were accepted. For purposes of
calculating Commitment Fees in respect of Revolving Credit
Commitments, any portion of such Revolving Credit Commitments
unavailable due to outstanding Letters of Credit shall be deemed
to be used amounts. All Commitment Fees shall be computed on the
basis of the actual number of days elapsed in a year of
360 days.
(b) The rate at which the Commitment Fee is calculated shall
increase to 1/2% per annum on each occasion that, as of the end
of any fiscal year or quarter, the Total Debt Ratio at the end of
such fiscal year or quarter shall equal or exceed 4.25 to 1.00,
with such increase to be effective one Business Day after the
date of the delivery to the Administrative Agent of the annual or
quarterly financial statements described in Section 6.04(a) or
(b) relating to such fiscal year or quarter. If the Total Debt
Ratio shall subsequently be less than 4.25 to 1.00 as of the end
of any subsequent fiscal quarter, (i) the increase in the rate at
which the Commitment Fee is calculated provided for in the
preceding sentence shall cease to be effective for all purposes
one Business Day after the date of delivery to the Administrative
Agent of the annual or quarterly financial statements described
in Section 6.04(a) or (b) relating to such subsequent fiscal
quarter and (ii) the rate at which the Commitment Fee is
calculated shall be 3/8% per annum. Notwithstanding the
foregoing, (1) at any time during which the Borrower has failed
to deliver the certificate described in Section 6.04(c) in
accordance with the provisions thereof, the commitment fee shall
be calculated at a rate equal to 1/2% per annum from and
including the date on which the Borrower was required to deliver
such certificate pursuant to Section 6.04(c) to but excluding the
date on which the Borrower shall deliver such certificate in
accordance with the provisions of Section 6.04(c), and (2) if the
proceeds of any Borrowing are used to finance a Qualified
Acquisition and the Pro Forma Total Debt Ratio after
giving effect to such Qualified Acquisition exceeds 4.25 to 1,
the rate at which the Commitment Fee is calculated shall increase
to 1/2% simultaneously with such Borrowing.
(c) The Borrower agrees to pay to the Administrative Agent,
for its own account, administrative fees (the Administrative
Fees ) at the time and in the amounts agreed upon in the
administration fee letter dated November 9, 1995, between the
Borrower and the Administrative Agent.
(d) The Borrower agrees to pay to the Administrative Agent
on the Closing Date the other fees specified in the fee letter
dated November 9, 1995 executed by the Borrower, the
Administrative Agent and the Managing Agent.
(e) The Borrower agrees to pay to the Issuing Lender, for
its own account, the fees specified in Section 3.08.
(f) All Fees (other than the fees payable to the Issuing
Lender under Section 3.08) shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for
distribution, if and as appropriate, among the Lenders. Once
paid, none of the Fees shall be refundable under any
circumstances (other than corrections of error in payment).
SECTION 2.06. Interest on Loans. (a) Subject to the
provisions of Section 2.07, the Loans comprising each ABR
Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as
the case may be, when the Alternate Base Rate is determined by
reference to the Prime Rate and over a year of 360 days at all
other times) at a rate per annum equal to the Alternate Base Rate
plus the ABR Spread.
(b) Subject to the provisions of Section 2.07, the Loans
comprising each Eurodollar Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over
a year of 360 days) at a rate per annum equal to the Adjusted
LIBO Rate for the Interest Period in effect for such Borrowing
plus the LIBOR Spread.
(c) Interest on each Loan shall be payable on the Interest
Payment Dates applicable to such Loan except as otherwise
provided in this Agreement. The applicable ABR Spread or LIBOR
Spread for each Interest Period or day within an Interest Period,
as the case may be, shall be determined by the Administrative
Agent, and such determination shall be presumptively correct
absent manifest error.
SECTION 2.07. Default Interest. If the Borrower shall
default in the payment of the principal of or interest on any
Loan or any other amount becoming due hereunder or under any
Security Document, by acceleration or otherwise, the Borrower
shall on demand from time to time pay interest, to the extent
permitted by law, on such defaulted amount up to (but not
including) the date of actual payment (after as well as before
judgment) at a rate per annum (the "Default Rate")
(computed on the basis of the actual number of days elapsed over
a year of 360 days) equal to (a) in the case of any Loan, the
rate applicable to such Loan under Section 2.06 plus 2% per annum
and (b) in the case of any other amount, the rate that would be
applicable to an ABR Loan under Section 2.06 plus 2% per annum.
SECTION 2.08. Alternate Rate of Interest. If, and on each
occasion, that on the day two Business Days prior to the
commencement of any Interest Period for a Eurodollar Borrowing
the Administrative Agent shall have determined that dollar
deposits in the principal amounts of the Loans comprising such
Borrowing are not generally available in the London interbank
market, or that the rates at which such dollar deposits are being
offered will not adequately and fairly reflect the cost to any
Lender of making or maintaining its Eurodollar Loan during such
Interest Period, or that reasonable means do not exist for
ascertaining the Adjusted LIBO Rate, the Administrative
Agent shall, as soon as practicable thereafter, give written or
telex notice of such determination to the Borrower and the
Lenders. In the event of any such determination, any request by
the Borrower for a Eurodollar Borrowing pursuant to Section 2.03
or 2.10 shall, until the Administrative Agent shall have advised
the Borrower and the Lenders that the circumstances giving rise
to such notice no longer exist, be deemed to be a request for an
ABR Borrowing. Each determination by the Administrative Agent
hereunder shall be conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a)
The Funded Term Loan Commitments shall be automatically
terminated at 5:00 p.m., New York City time, on the Closing Date.
The Unfunded Term Loan Commitments shall be automatically
terminated at 5:00 p.m., New York City time, on January 31, 1996,
provided that the KPR Letter of Credit shall have been fully
drawn, terminated or canceled by that time. The Revolving Credit
Commitments, the LC Commitment and the Acquisition Loan
Commitments shall be automatically terminated at 5:00 p.m., New
York City time, on the Maturity Date, the LC Maturity Date and
the Acquisition Loan Commitment Termination Date, respectively.
Notwithstanding the foregoing, all the Commitments and the LC
Commitment shall be automatically terminated at 5:00 p.m., New
York City time, on December 29, 1995, if the initial Borrowing
under the Facilities has not occurred by such time.
(b) Upon at least three Business Days' prior irrevocable
written or telex notice to the Administrative Agent, the Borrower
may at any time in whole permanently terminate, or from time
to time in part permanently reduce, the Revolving Credit
Commitments or the Acquisition Loan Commitments; provided,
however, that (i) each partial reduction of the Revolving Credit
Commitments or the Acquisition Loan Commitments shall be in an
integral multiple of $1,000,000 and in a minimum principal amount
of $1,000,000, (ii) the Borrower shall not be permitted to
terminate or reduce the Revolving Credit Commitments if (A) as
the result of such termination or reduction, the LC Commitment
would exceed the aggregate remaining amount of the Revolving
Credit Commitments, (B) as the result of such termination or
reduction, the Revolving Credit Utilization would exceed the
aggregate remaining Revolving Credit Commitments, or (C) unless
the Term Loans and Acquisition Loans have been paid in full and
the Acquisition Loan Commitment has terminated. The LC Commitment
may be voluntarily terminated or reduced by the Borrower as
provided in Section 3.07.
(c) Each reduction in the Revolving Credit Commitments, the
LC Commitment or the Acquisition Loan Commitments hereunder shall
be made ratably among the applicable Lenders in accordance with
their respective applicable Commitments. The Borrower shall pay
to the Administrative Agent for the account of the applicable
Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Commitments so terminated or
reduced accrued to but excluding the date of such termination or
reduction.
SECTION 2.10. Conversion and Continuation of Term Borrowings
and Acquisition Loan Borrowings. The Borrower shall have the
right at any time (subject to Section 2.08) upon prior
irrevocable notice to the Administrative Agent (i) not later than
12:00 noon, New York City time, on the Business Day of such
conversion, to convert any Eurodollar Borrowing consisting of
Term Loans or Acquisition Loans into an ABR Borrowing, (ii) not
later than 10:00 a.m., New York City time, three Business Days
prior to conversion or continuation, to convert any ABR Borrowing
consisting of Term Loans or Acquisition Loans into a Eurodollar
Borrowing or to continue any Eurodollar Borrowing consisting of
Term Loans or Acquisition Loans as a Eurodollar Borrowing
for an additional Interest Period and (iii) not later than 10:00
a.m., New York City time, three Business Days prior to
conversion, to convert the Interest Period with respect to any
Eurodollar Borrowing consisting of Term Loans or Acquisition
Loans to another permissible Interest Period, subject in each
case to the following:
(a) each conversion or continuation shall be made pro
rata among the Lenders in accordance with the respective
principal amounts of the Loans comprising the converted or
continued Term Borrowing or Acquisition Loan Borrowing;
(b) if less than all the outstanding principal amount
of any Term Borrowing or Acquisition Loan Borrowing shall be
converted or continued, the aggregate principal amount
of such Term Borrowing or Acquisition Loan Borrowing converted or
continued shall be an integral multiple of $1,000,000;
(c) each conversion shall be effected by each Lender by
applying the proceeds of the new Term Loan or Acquisition Loan of
such Lender resulting from such conversion to the Term Loan or
Acquisition Loan (or portion thereof) of such Lender being
converted, and accrued interest on a Term Loan or Acquisition
Loan (or portion thereof) being converted shall be paid by the
Borrower at the time of conversion;
(d) if any Eurodollar Borrowing consisting of Term
Loans or Acquisition Loans is converted at a time other than the
end of the Interest Period applicable thereto, the Borrower
shall pay, upon demand, any amounts due to the Lenders pursuant
to Section 2.16;
(e) any portion of a Borrowing consisting of Term Loans
or Acquisition Loans maturing or required to be repaid in less
than one month may not be converted into or continued as a
Eurodollar Borrowing and shall automatically be converted at the
end of the Interest Period in effect for such Borrowing into an
ABR Borrowing;
(f) no Interest Period may be selected for any
Eurodollar Borrowing consisting of Term Loans that would end
later than a Term Loan Repayment Date occurring on or after
the first day of such Interest Period if, after giving effect to
such selection, the aggregate outstanding amount of (i) the
Eurodollar Borrowings consisting of Term Loans with Interest
Periods ending on or prior to such Term Loan Repayment Date and
(ii) the ABR Borrowings consisting of Term Loans would not be at
least equal to the principal amount of Term Borrowings to be paid
on such Term Loan Repayment Date.
(g) no Interest Period may be selected for any
Eurodollar Borrowing consisting of Acquisition Loans that would
end later than a Term Loan Repayment Date occurring on or
after the first day of such Interest Period if, after giving
effect to such selection, the aggregate outstanding amount of (i)
the Eurodollar Borrowings consisting of Acquisition Loans with
Interest Periods ending on or prior to such Term Loan Repayment
Date and (ii) the ABR Borrowings consisting of Acquisition Loans
would not be at least equal to the principal amount of
Acquisition Loan Borrowings to be paid on such Term Loan
Repayment Date.
Each notice pursuant to this Section 2.10 shall be
irrevocable and shall refer to this Agreement and specify (i) the
identity and amount of the Term Borrowing or Acquisition Loan
Borrowing that the Borrower requests be converted or continued,
(ii) whether such Term Borrowing or Acquisition Loan Borrowing is
to be converted to or continued as a Eurodollar Borrowing or an
ABR Borrowing, (iii) if such notice requests a conversion, the
date of such conversion (which shall be a Business Day) and (iv)
if such Borrowing is to be converted to or continued as a
Eurodollar Borrowing, the Interest Period with respect thereto.
If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar
Borrowing, the Borrower shall be deemed to have selected an
Interest Period of one month's duration. The Administrative
Agent shall advise the other Lenders of any notice given pursuant
to this Section 2.10 and of each Lender's portion of any
converted or continued Term Borrowing or Acquisition Loan
Borrowing. If the Borrower shall not have given notice in
accordance with this Section 2.10 to continue any
Term Borrowing or Acquisition Loan Borrowing into a subsequent
Interest Period (and shall not otherwise have given notice in
accordance with this Section 2.10 to convert such Borrowing),
such Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof),
automatically be continued into a new Interest Period as an ABR
Borrowing.
SECTION 2.11. Repayment of Term Borrowings and Acquisition
Loan Borrowings. (a) The Borrower shall pay to the Administrative
Agent, for the account of the Lenders, on each date set
forth below (each such date being a Term Loan Repayment Date ) a
principal amount of the Term Loans (such amount, as adjusted from
time to time pursuant to Sections 2.12(b) and 2.13(e), being
called the Term Loan Repayment Amount ) equal to the amount set
forth below for such date, together in each case with accrued and
unpaid interest on the principal amount to be paid to but
excluding the date of such payment:
Date Amount
May 31, 1996 $ 5,625,000
August 31, 1996 $ 5,625,000
November 30, 1996 $ 5,625,000
February 28, 1997 $ 5,625,000
May 31, 1997 $ 7,750,000
August 31, 1997 $ 7,750,000
November 30, 1997 $ 7,750,000
February 28, 1998 $ 7,750,000
May 31, 1998 $10,937,500
August 31, 1998 $10,937,500
November 30, 1998 $10,937,500
February 28, 1999 $10,937,500
May 31, 1999 $11,937,500
August 31, 1999 $11,937,500
November 30, 1999 $11,937,500
January 15, 2000 $11,937,500
On each Term Loan Repayment Date, the Administrative Agent shall
apply the Term Loan Repayment Amount paid to the Administrative
Agent to pay the Term Loans.
(b) The Borrower shall pay to the Administrative Agent, for
the account of the Lenders, on May 31, 1997 and on each Term Loan
Repayment Date thereafter, a principal amount of the Acquisition
Loans (such amount, as adjusted from time to time pursuant to
Sections 2.12(b) and 2.13(e), being called the Acquisition Loan
Repayment Amount ) equal to one-twelfth (1/12) of the outstanding
principal balance of the Acquisition Loans as of the close of
business on the Acquisition Loan Commitment Termination Date,
together in each case with accrued and unpaid interest on the
principal amount to be paid to but excluding the date of such
payment. On each Term Loan Repayment Date, the Administrative
Agent shall apply the Acquisition Loan Repayment Amount
paid to the Administrative Agent to pay the Acquisition Loans.
(c) To the extent not previously paid, all Term Borrowings
and Acquisition Loan Borrowings shall be due and payable on the
Maturity Date, together with accrued and unpaid interest on the
principal amount to be paid to but excluding the date of payment.
(d) All repayments pursuant to this Section 2.11 shall be
subject to Section 2.16, but shall otherwise be without premium
or penalty.
SECTION 2.12. Optional Prepayment. (a) The Borrower shall
have the right at any time and from time to time to prepay
Revolving Credit Borrowings, and except as provided below, the
Borrower shall have the right at any time and from time to time
to prepay Term Borrowings and Acquisition Loan Borrowings, in
each case in whole or in part, upon (A) in the case of
prepayments of ABR Loans, at least one Business Day's prior
written or telex notice (or telephone notice promptly
confirmed by written or telex notice) to the Administrative Agent
and (B) in the case of Eurodollar Loans, at least three Business
Days' prior written or telex notice (or telephone notice promptly
confirmed by written or telex notice) to the Administrative
Agent; provided, however, that each partial prepayment shall be
in an amount that is an integral multiple of $500,000 and not
less than $1,000,000. After the Acquisition Loan Commitment
Termination Date, each optional prepayment of Term Loans or
Acquisition Loans shall be divided ratably between the
outstanding principal balance of the Term Loans and the
outstanding principal balance of the Acquisition Loans.
(b) Each prepayment of principal of the Term Borrowings
pursuant to paragraph (a) above shall be applied pro rata to
reduce the scheduled payments of principal due under Section
2.11(a) after the date of such prepayment, and each prepayment of
principal of the Acquisition Loan Borrowings after the
Acquisition Loan Commitment Termination Date pursuant to
paragraph (a) above shall be applied pro rata to reduce the
scheduled payments of principal due under Section 2.11(b) after
the date of such prepayment; provided, however, that prepayments
of principal of the Term Borrowings and Acquisition Loan
Borrowings pursuant to paragraph (a) above with the proceeds of
the issuance of equity securities by the Borrower after the
Closing Date will be applied to reduce the scheduled payments of
principal due under Section 2.11 after the date of such
prepayment in the order of their maturity.
(c) Each notice of prepayment shall specify (i) the amount
to be prepaid, (ii) the prepayment date, (iii) whether the
prepayment relates to Revolving Credit Borrowings, to Term
Borrowings or to Acquisition Loan Borrowings and (iv) the
principal amount to be prepaid. Each such notice shall
be irrevocable and shall commit the Borrower to prepay such
obligations by the amount specified therein on the date specified
therein. All prepayments of Borrowings under this Section 2.12
shall be subject to Section 2.16 but otherwise without premium or
penalty. All prepayments under this Section 2.12 shall be
accompanied by accrued interest on the principal amount being
prepaid to but excluding the date of payment.
(d) No optional prepayment of Term Borrowings or Acquisition
Loan Borrowings made by the Borrower pursuant to this Section
2.12 shall reduce the Borrower's obligation to make mandatory
prepayments pursuant to Section 2.13(c) or Section 2.13(d).
SECTION 2.13. Mandatory Prepayments. (a) On the date of any
termination or reduction of the Revolving Credit Commitments
pursuant to Section 2.09, the Borrower shall pay or prepay
so much of the Revolving Credit Borrowings as shall be necessary
in order that the aggregate principal amount of the Revolving
Loans outstanding at such time will not exceed the aggregate
Revolving Credit Commitments (after giving effect to such
termination or reduction) less the aggregate LC Exposure at such
time.
(b) If and on each occasion that Revolving Credit
Utilization exceeds the then-current Borrowing Base, the Borrower
shall forthwith pay or prepay Revolving Credit Borrowings in a
principal amount at least equal to such excess; provided,
however, that if the aggregate principal amount of Revolving
Credit Borrowings then outstanding is less than the amount of
such excess (because of any LC Exposure), the Borrower shall, to
the extent of any remaining excess (after the prepayment
of Revolving Credit Borrowings), replace outstanding Letters of
Credit and/or deposit an amount in cash in a cash collateral
account established with the Administrative Agent for the benefit
of the Secured Parties.
(c) If and on each occasion that a Prepayment Event occurs,
the Borrower shall apply an amount equal to 100% of the Net Cash
Proceeds therefrom to prepay obligations outstanding under
this Agreement in accordance with this paragraph (c), except
that in the case of a Prepayment Event described in clause (b) of
the definition of Prepayment Event, the Borrower shall apply an
amount equal to 75% of such Net Cash Proceeds. Substantially
simultaneously with (and in any event not later than the Business
Day next following) the occurrence of a Prepayment Event, the
Borrower shall pay to the Administrative Agent (for application
to the prepayment of obligations outstanding under this Agreement
in accordance with paragraph (e) below) an amount equal to the
Net Cash Proceeds from such Prepayment Event.
(d) No later than the earlier of (i) 105 days after the end
of each fiscal year, commencing with the fiscal year ending on
December 31, 1996, and (ii) the date on which the financial
statements with respect to such period are delivered pursuant to
6.04(a), the Borrower shall prepay obligations outstanding under
this Agreement in accordance with paragraph (e) below in an
aggregate principal amount equal to 75% of Excess Cash Flow for
such period.
(e) Mandatory prepayments of outstanding obligations under
this Agreement made by the Borrower pursuant to paragraphs (c)
and (d) above and paragraph (g) below shall be applied first,
to prepay, ratably, scheduled payments of principal due on the
Term Borrowings and Acquisition Loan Borrowings under Sections
2.11(a) and (b) after the date of such prepayment in the manner
described in the immediately following sentence and second, to
prepay Revolving Credit Borrowings. Each such mandatory
prepayment of principal of the Term Borrowings and Acquisition
Loan Borrowings shall be applied pro rata to reduce the scheduled
payments of principal due under Sections 2.11(a) and (b) after
the date of such prepayment. Each mandatory prepayment applied to
Revolving Credit Borrowings shall reduce the aggregate amount of
the Revolving Credit Commitments by the amount of such
prepayment.
(f) Notwithstanding the foregoing provisions of Section
2.13(e):
(i) if a mandatory prepayment arises from a sale or
other event described in clause (a) of the definition of
Prepayment Event , then at the Borrower's option such prepayment
may be applied first to Revolving Credit Borrowings in an amount
not to exceed the sum of (i) seventy-five percent (75%) of the
aggregate Amount Due in respect of all Eligible Accounts
Receivable subject to such sale or other event plus (ii) fifty
percent (50%) of the lower of the aggregate cost (calculated on a
first-in-first-out basis) or the aggregate market value of all
Eligible Inventory subject to such sale or other event; and
(ii) Until the Term Loans have been repaid in full,
each Lender holding a Term Loan shall have the right to decline
any mandatory prepayment thereof. The Administrative Agent shall
assume, however, that each Lender holding a Term Loan has elected
to receive such prepayments unless and until such Lender notifies
the Administrative Agent in writing to the contrary. If any
Lender holding a Term Loan elects not to receive any such
prepayment, then the part of the prepayment otherwise allocable
to such Lender shall be applied pro rata to the outstanding
principal balance of the Term Loans (other than Term Loans owed
to Lenders that have declined such prepayment) and the
Acquisition Loans and, after payment in full thereof, to the
outstanding principal balance of the Revolving Credit Loans.
(g) The Borrower shall deliver to the Administrative Agent,
(i) at the time of each pre-payment required under paragraph (c)
or paragraph (d) of this Section 2.13, a certificate signed by
a Financial Officer of the Borrower setting forth in reasonable
detail the calculation of the amount of such prepayment and (ii)
at least three Business Days prior to the time of each prepayment
required under this Section 2.13 (if known at such time), a
notice of such prepayment. Each required notice of prepayment
shall specify the prepayment date, the Type of each Borrowing
being prepaid and the principal amount of each Borrowing (or
portion thereof) to be prepaid, shall be irrevocable
and shall commit the Borrower to prepay such obligations by the
amount stated therein on the date stated therein. All prepayments
of Borrowings under this Section 2.13 shall be subject to Sec-
tion 2.16, but shall otherwise be without premium or penalty. All
prepayments of Borrowings under this Section 2.13 (other than
prepayments pursuant to paragraph (d) above) shall be accompanied
by accrued interest on the principal amount being prepaid to but
excluding the date of payment. All prepayments of Borrowings
pursuant to paragraph (d) of this Section 2.13 shall be applied
first to the payment of accrued interest and then to the payment
of principal.
(h) Net Cash Proceeds and such other amounts to be applied
pursuant to this Section 2.13 to the prepayment of Term
Borrowings, Acquisition Loan Borrowings and Revolving Credit
Borrowings shall be applied, as applicable, first to reduce
outstanding ABR Borrowings consisting of Term Loans, Acquisition
Loans or Revolving Credit Loans, as the case may be. Any amounts
remaining after each such application shall, at the option of the
Borrower, be applied to prepay Eurodollar Borrowings consisting
of Term Loans, Acquisition Loans or Revolving Credit Loans, as
the case may be, immediately or shall be deposited in the
Prepayment Account (as defined below). The Administrative Agent
shall apply any cash deposited in the Prepayment Account (i)
allocable to Term Borrowings to prepay Eurodollar Borrowings
consisting of Term Loans, (ii) allocable to Acquisition Loan
Borrowings to prepay Eurodollar Borrowings consisting of
Acquisition Loans, and (iii) allocable to Revolving Credit
Borrowings to prepay Eurodollar Borrowings consisting of
Revolving Credit Loans, in each case on the last day of their
respective Interest Periods (or, at the direction of the
Borrower, on any earlier date) until all outstanding Term
Borrowings, Acquisition Loan Borrowings or Revolving Credit
Borrowings, as the case may be, have been prepaid or until
all the allocable cash on deposit with respect to such Borrowings
has been exhausted. For purposes of this Agreement, the term
Prepayment Account shall mean an account established by the
Borrower with the Administrative Agent and over which the
Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal for application in
accordance with this paragraph (h). The Administrative Agent
will, at the request of the Borrower, invest amounts on deposit
in the Prepayment Account in Permitted Investments maturing prior
to the last day of the applicable Interest Periods of the
Eurodollar Borrowings to be prepaid; provided, however, that
(i) the Administrative Agent shall not be required to make any
investment that, in its sole judgment, would require or cause the
Administrative Agent to be in, or would result in any, violation
of any law, statute, rule or regulation and (ii) the
Administrative Agent shall have no obligation to invest
amounts on deposit in the Prepayment Account if a Default or
Event of Default shall have occurred and be continuing. The
Borrower shall indemnify the Administrative Agent for any losses
relating to the investments so that the amount available to
prepay Eurodollar Borrowings on the last day of the applicable
Interest Periods is not less than the amount that would have been
available had no investments been made pursuant thereto. Other
than any interest earned on such investments, the Prepayment
Account shall not bear interest. Interest or profits, if any, on
such investments shall be deposited in the Prepayment Account and
reinvested as specified above. If the maturity of the Loans
has been accelerated pursuant to Article VIII, the Administrative
Agent may, in its sole discretion, apply all amounts on deposit
in the Prepayment Account to satisfy any of the Obligations. The
Borrower hereby grants to the Administrative Agent, for its
benefit and the benefit of the Issuing Lender and the Lenders, a
security interest in the Prepayment Account to secure the
Obligations.
SECTION 2.14. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the date
of this Agreement any change in applicable law or regulation
or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or
administration thereof (whether or not having the force of law)
shall change the basis of taxation of payments to any Lender or
the Issuing Lender of the principal of or interest on any
Eurodollar Loan made by such Lender or any Letter of Credit
reimbursement obligations, Fees or other amounts payable
hereunder (other than changes in respect of income and franchise
taxes imposed on such Lender or the Issuing Lender by the
jurisdiction in which such Lender or the Issuing Lender is
organized or has its principal office or by any political
subdivision or taxing authority thereof or therein), or shall
impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for
the account of or credit extended by such Lender or the Issuing
Lender (except any such reserve requirement that is reflected in
the Adjusted LIBO Rate or in the Alternate Base Rate) or shall
impose on such Lender or the Issuing Lender or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit
issued hereunder, and the result of any of the foregoing shall be
to increase the cost to such Lender of making or maintaining any
Eurodollar Loan or increase the cost of issuing or maintaining
any Letter of Credit or to reduce the amount of any sum
received or receivable by such Lender or the Issuing Lender
hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender or the Issuing Lender to be
material, then the Borrower shall pay to such Lender or the
Issuing Lender following receipt of a certificate of such
Lender or the Issuing Lender to such effect in accordance with
Section 2.14(c) such additional amount or amounts as will
compensate such Lender or the Issuing Lender on an after-tax
basis for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Lender shall have
determined that the adoption after the date hereof of any law,
rule, regulation, agreement or guideline regarding capital
adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by
any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by any Lender (or any lending office of such Lender)
or the Issuing Lender or any Lender's or the Issuing Lender's
holding company with any request or directive regarding capital
adequacy issued under any law, rule, regulation or guideline
(whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect
of reducing the rate of return on such Lender's or the Issuing
Lender's capital or on the capital of such Lender's or the
Issuing Lender's holding company, if any, as a consequence of
this Agreement or the Loans made by such Lender or the Letters of
Credit issued by the Issuing Lender pursuant hereto to a level
below that which such Lender or the Issuing Lender or such
Lender's or the Issuing Lender's holding company could have
achieved but for such applicability, adoption, change or
compliance (taking into consideration such Lender's or the
Issuing Lender's policies and the policies of such Lender's or
the Issuing Lender's holding company with respect to capital
adequacy) by an amount deemed by such Lender or the Issuing
Lender to be material, then from time to time the Borrower shall
pay to such Lender or the Issuing Lender such additional amount
or amounts as will compensate such Lender or the Issuing Lender
or such Lender's or the Issuing Lender's holding company on an
after-tax basis for any such reduction suffered. Notwithstanding
any other provision in this paragraph (b), no Lender or the
Issuing Lender shall be entitled to demand compensation pursuant
to this paragraph (b) if it shall not be the general practice of
such Lender or the Issuing Lender, as applicable, to demand such
compensation in similar circumstances under comparable provisions
of other comparable credit agreements.
(c) A certificate of each Lender or the Issuing Lender
setting forth such amount or amounts as shall be necessary to
compensate such Lender or the Issuing Lender or its holding
company as specified in paragraph (a) or (b) above, as the case
may be, and setting forth in reasonable detail an explanation of
the basis of requesting such compensation in accordance with
paragraph (a) or (b) above, including calculations in reasonable
detail, shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay each
Lender or the Issuing Lender the amount shown as due on any such
certificate delivered by it within 10 days after its receipt of
the same.
(d) Failure on the part of any Lender or the Issuing Lender
to demand compensation for any increased costs or reduction in
amounts received or receivable or reduction in return on capital
with respect to any period shall not constitute a waiver of such
Lender's or the Issuing Lender's right to demand compensation
with respect to such period or any other period, except that no
Lender or the Issuing Lender shall be entitled to compensation
under this Section 2.14 for any costs incurred or reduction
suffered with respect to any date unless such Lender or the
Issuing Lender, as applicable, shall have notified the Borrower
that it will demand compensation for such costs or reductions
under paragraph (c) above, not more than six months after the
later of (i) such date and (ii) the date on which such Lender or
the Issuing Lender, as applicable, shall have become aware of
such costs or reductions. The protection of this Section 2.14
shall be available to each Lender or the Issuing Lender
regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline or other
change or condition that shall have occurred or been imposed.
(e) Each Lender and the Issuing Lender will, at the request
of the Borrower, designate a different lending office if such
designation (i) will avoid the need for, or minimize the amount
of, any compensation to which such Lender or the Issuing Lender
is entitled pursuant to this Section 2.14 and (ii) will not, in
the sole judgment of such Lender or the Issuing Lender, be
otherwise disadvantageous to such Lender or the Issuing Lender,
as the case may be.
SECTION 2.15. Change in Legality. (a) Notwithstanding any
other provision herein, if any change in any law or regulation or
in the interpretation thereof by any governmental authority
charged with the administration or interpretation thereof shall
make it unlawful for any Lender to make or maintain any
Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent,
such Lender may:
(i) declare that Eurodollar Loans will not thereafter
be made by such Lender hereunder, whereupon any request by the
Borrower for a Eurodollar Borrowing shall, as to such Lender
only, be deemed a request for an ABR Loan unless such declaration
shall be subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made
by it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically converted to ABR Loans as
of the effective date of such notice as provided in paragraph (b)
below.
If any Lender shall exercise its rights under (i) or (ii) above,
all payments and prepayments of principal that would otherwise
have been applied to repay the Eurodollar Loans that would have
been made by such Lender or the converted Eurodollar Loans of
such Lender shall instead be applied to repay the ABR Loans made
by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.15, a notice to the
Borrower by any Lender shall be effective as to each Eurodollar
Loan, if lawful, on the last day of the Interest Period currently
applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt by the Borrower.
SECTION 2.16. Indemnity. The Borrower shall indemnify each
Lender against any loss or expense that such Lender may sustain
or incur as a consequence of (a) any failure by the Borrower
to fulfill on the date of any borrowing hereunder the applicable
conditions set forth in Article V, (b) any failure by the
Borrower to borrow or to refinance, convert or continue any Loan
hereunder after irrevocable notice of such borrowing,
refinancing, conversion or continuation has been given
pursuant to Section 2.03 or 2.10, (c) any payment, prepayment or
conversion of a Eurodollar Loan required by any other provision
of this Agreement or otherwise made or deemed made on a date
other than the last day of the Interest Period applicable
thereto, (d) any default in payment or prepayment of the
principal amount of any Loan or any part thereof or interest
accrued thereon, as and when due and payable (at the due date
thereof, whether by scheduled maturity, acceleration,
irrevocable notice of prepayment or otherwise) or (e) the
occurrence of any Event of Default, including, in each such case,
any loss or reasonable expense sustained or incurred or to be
sustained or incurred in liquidating or employing deposits from
third parties acquired to effect or maintain such Loan or any
part thereof as a Eurodollar Loan. Such loss or reasonable
expense shall include an amount equal to the excess, if any, as
reasonably determined by such Lender of (a) its cost of
obtaining the funds for the Loan being paid, prepaid, converted
or not borrowed, converted or continued (assumed to be the
Adjusted LIBO Rate applicable thereto) for the period from and
including the date of such payment, prepayment, conversion or
failure to borrow, convert or continue to but excluding the last
day of the Interest Period for such Loan (or, in the case of a
failure to borrow, convert or continue, the Interest Period for
such Loan that would have commenced on the date of such failure)
over (b) the amount of interest (as reasonably determined by such
Lender) that would be realized by such Lender in reemploying the
funds so paid, prepaid, converted or not borrowed, converted or
continued for such period or Interest Period, as the case may be.
A certificate of any Lender setting forth any amount or amounts
that such Lender is entitled to receive pursuant to this Section
2.16 shall be delivered to the Borrower and shall be conclusive
absent manifest error.
SECTION 2.17. Pro Rata Treatment. Except as required under
Section 2.15 or as provided in Section 2.13(f)(ii), each
Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of
the Commitment Fees, each payment of the LC Fees, each reduction
of the Funded Term Loan Commitments, the Unfunded Term Loan
Commitments, the Revolving Credit Commitments or the Acquisition
Loan Commitments and each refinancing of any Borrowing with,
conversion of any Borrowing to or continuation of any
Borrowing as a Borrowing of any Type shall be allocated pro rata
among the Lenders in accordance with their respective applicable
Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts
of their applicable outstanding Loans). Each Lender agrees that
in computing such Lender's portion of any Borrowing to be made
hereunder, the Administrative Agent may, in its discretion, round
each Lender's percentage of such Borrowing, computed in
accordance with Section 2.01, to the next higher or lower whole
dollar amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if
it shall, through the exercise of a right of banker's lien,
setoff or counterclaim against the Borrower, or pursuant to a
secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of,
such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary)
in respect of any Loan or Loans or LC Exposure or KPR LC Exposure
as a result of which the unpaid principal portion of its Loans,
its LC Exposure or its KPR LC Exposure shall be proportionately
less than the unpaid principal portion of the Loans of any other
Lender or any other Lender's LC Exposure or KPR LC Exposure, such
Lender shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other
Lender the purchase price for, a participation in the Loans of
such other Lender or the LC Exposure or KPR LC Exposure of such
other Lender, so that the aggregate unpaid principal amount of
the Loans, LC Exposure and KPR LC Exposure and participation in
Loans, LC Exposure and KPR LC Exposure held by each Lender shall
be in the same proportion to the aggregate unpaid principal
amount of all Loans, LC Exposure and KPR LC Exposure then
outstanding as the principal amount of such Lender's Loans, LC
Exposure and KPR LC Exposure prior to such exercise of banker's
lien, setoff or counterclaim or other event was to the principal
amount of all Loans, LC Exposure and KPR LC Exposure outstanding
prior to such exercise of banker's lien, setoff or counterclaim
or other event; provided, however, that, if any such purchase or
purchases or adjustments shall be made pursuant to this Section
2.18 and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price
or prices or adjustment restored without interest. The Borrower
expressly consents to the foregoing arrangements and agrees that
any Lender holding a participation in a Loan, LC Exposure or KPR
LC Exposure deemed to have been so purchased may exercise any and
all rights of banker's lien, setoff or counterclaim with respect
to any and all moneys owing by the Borrower to such Lender by
reason thereof as fully as if such Lender had made a Loan
directly to the Borrower in the amount of such participation.
SECTION 2.19. Payments. (a) Except as provided in Section
2.05(c) and (e), the Borrower shall make (and the Administrative
Agent shall have received evidence that the Borrower has made)
each payment (including principal of or interest on any Borrowing
or any Fees or other amounts) hereunder and under any other Loan
Document not later than 12:00 noon, New York City time, on
the date when due in dollars to the Administrative Agent (for the
account of the Administrative Agent, the Issuing Lender or the
Lenders, as the case may be), at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, in immediately available funds. The
Administrative Agent shall promptly remit in dollars to the
Administrative Agent, the Issuing Lender or the Lenders, as the
case may be, its share of such payments received by the
Administrative Agent.
(b) Whenever any payment (including principal of or interest
on any Borrowing or any Fees or other amounts) hereunder or under
any other Loan Document shall become due, or otherwise
would occur, on a day that is not a Business Day, such payment
may be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the
computation of interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by the
Borrower hereunder shall be made, in accordance with Section
2.19, free and clear of and without deduction for any and all
current or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding
taxes imposed on the net income of the Administrative Agent, the
Managing Agent, the Issuing Lender or any Lender (or any
transferee or assignee thereof, including a participation holder
(any such entity being called a Transferee )) and franchise
taxes imposed on the Administrative Agent, the Managing Agent,
the Issuing Lender or any Lender (or Transferee), in each case by
the United States or any jurisdiction under the laws of which the
Administrative Agent, the Managing Agent, the Issuing Lender or
any such Lender (or Transferee) is organized or has its principal
office or lending office or any political subdivision or taxing
authority thereof or therein (all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities
being hereinafter referred to as Taxes ). If any Taxes are
required to be deducted from or in respect of any sum payable
hereunder to any Lender (or any Transferee), the Administrative
Agent, the Managing Agent or the Issuing Lender, (i) the sum
payable shall be increased by the amount necessary so that after
making all required deductions (including deductions applicable
to additional sums payable under this Section 2.20) such Lender
(or Transferee), the Administrative Agent, the Managing Agent or
the Issuing Lender (as the case may be) shall receive an amount
equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions and (iii)
the Borrower shall pay the full amount deducted to the relevant
taxing authority or other Governmental Authority in accordance
with applicable law; provided, however, that no Transferee of any
Lender shall be entitled to receive any greater payment under
this paragraph (a) than such Lender would have been entitled to
receive with respect to the rights assigned, participated
or otherwise transferred unless (x) such assignment,
participation or transfer shall have been made at a time when the
circumstances (including a Change of Law as defined in Section
2.20(f)) giving rise to such greater payment did not exist or had
not yet occurred or (y) such assignment, participation or
transfer shall have been at the request of the Borrower.
(b) In addition, the Borrower agrees to pay any current or
future stamp, intangible or documentary taxes or any other excise
or property taxes, charges or similar levies (including, without
limitation, mortgage recording taxes and similar fees) that arise
from any payment made hereunder or from the execution, delivery
or registration of, or otherwise with respect to, this Agreement
or any other Loan Document (hereinafter referred to as Other
Taxes ).
(c) The Borrower will indemnify each Lender (or Transferee),
the Administrative Agent, the Managing Agent and the Issuing
Lender for the full amount of Taxes and Other Taxes (including
any Taxes or Other Taxes on amounts payable under this Section
2.20) paid by such Lender (or Transferee), the Administrative
Agent, the Managing Agent or the Issuing Lender, as the case may
be, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted
by the relevant taxing authority or other Governmental Authority;
provided, however, that the Borrower shall not indemnify any
Lender (or Transferee), the Administrative Agent, the Managing
Agent or the Issuing Lender for Taxes, penalties, additions to
tax, interest and expenses arising as a result of its own
wilful misconduct or gross negligence. Such indemnification
shall be made within 30 days after the date any Lender (or
Transferee), the Administrative Agent, the Managing Agent or the
Issuing Lender, as the case may be, makes written demand therefor
and provides the Borrower with either a copy of any assessment
thereof from the relevant taxing authority (deleting any
confidential information contained therein) or proof of payment
of a tax for which the Borrower is liable hereunder. If a Lender
(or Transferee), the Administrative Agent, the Managing Agent or
the Issuing Lender shall become aware that it is entitled to
receive a refund (including interest and penalties, if any) in
respect of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower pursuant to this Section 2.20, it
shall promptly notify the Borrower of the availability of such
refund (including interest and penalties, if any) and shall,
within 30 days after receipt of a request by the Borrower, apply
for such refund at the Borrower's expense. If any Lender (or
Transferee), the Administrative Agent, the Managing Agent or the
Issuing Lender receives a refund (including interest and
penalties, if any) in respect of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower pursuant to this
Section 2.20, it shall promptly notify the Borrower of such
refund and shall, within 15 days of receipt, repay such refund to
the Borrower (but only to the extent of amounts that have been
paid by the Borrower under this Section 2.20 with respect to such
refund and not reimbursed), net of all out-of-pocket expenses of
such Lender, the Administrative Agent, the Managing Agent or the
Issuing Lender and without any interest (other than the interest,
if any, included in such refund); provided, however, that the
Borrower, upon the request of such Lender (or Transferee), the
Administrative Agent, the Managing Agent or the Issuing Lender,
agrees to return such refund (plus penalties, interest or other
charges) to such Lender (or Transferee), the Administrative
Agent, the Managing Agent or the Issuing Lender if such Lender
(or Transferee), the Administrative Agent, the Managing Agent or
the Issuing Lender is required to repay such refund. The
Borrower shall return such refund within 30 days after such
Lender (or Transferee), the Administrative Agent, the Managing
Agent or the Issuing Lender provides the Borrower with a copy
of any notice or assessment from the relevant taxing authority
(deleting any confidential information contained therein)
requiring repayment of such refund. Nothing contained in this
paragraph (c) shall require any Lender (or Transferee), the
Administrative Agent, the Managing Agent or the Issuing
Lender to make available any of its tax returns (or any other
information relating to its taxes that it deems to be
confidential).
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes withheld by the Borrower in respect of any payment to
any Lender (or Transferee), the Administrative Agent, the
Managing Agent or the Issuing Lender, the Borrower will furnish
to the Administrative Agent, such Lender (or Transferee), the
Managing Agent or the Issuing Lender, at its respective address
referred to in Section 10.01, the original or a certified copy of
a receipt evidencing payment thereof or other evidence of such
payment reasonably satisfactory to such Lender (or Transferee),
the Administrative Agent, the Managing Agent or the Issuing
Lender, as the case may be.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in
this Section 2.20 shall survive the payment in full of the
principal of and interest on all Loans made hereunder until the
expiration of the relevant statute of limitations.
(f) Each of the Administrative Agent, the Issuing Lender and
any Lender (or Transferee) that is not incorporated or otherwise
formed under the laws of the United States of America or a state
thereof (a Non-U.S. Person ) agrees that, within one month after
the Closing Date or, if later, the date it becomes a Lender (or
Transferee), the Administrative Agent or the Issuing Lender
hereunder, it will deliver to each of the Borrower and the
Administrative Agent one duly completed copy of United States
Internal Revenue Service Form 1001 or 4224 or any successor
applicable form (a Form 1001 or Form 4224 ) certifying in each
case that such Lender (or Transferee), the Administrative Agent
or the Issuing Lender is entitled to receive payments hereunder
payable to it without deduction or withholding of any United
States Federal income taxes, or subject to a reduced rate
thereof, as the case may be, or, in the case of any Lender (or
Transferee) exempt from United States Federal withholding tax
pursuant to Sections 871(h) or 881(c) of the Code, a Form W-8 or
any successor applicable form (a Form W-8 ) together with a
statement under penalty of perjury that such Lender is not a
"bank" under Section 881(c)(3) of the Code. Each of the
Administrative Agent, the Issuing Lender or any Lender (or
Transferee) that delivers to the Borrower and the
Administrative Agent a Form 1001, 4224 or W-8 pursuant to the
immediately preceding sentence further undertakes to deliver to
the Borrower and the Administrative Agent further copies of such
Form 1001, 4224 or W-8, as the case may be, or other manner of
certification reasonably satisfactory to the Borrower on or
before the date that any such form or certification expires or
becomes obsolete or of the occurrence of any event requiring a
change in the most recent form or certification previously
delivered by it to the Borrower or the Administrative Agent, and
such extensions or renewals thereof as may reasonably be
requested by the Borrower or the Administrative Agent,
certifying that such Agent, Issuing Lender or Lender (or
Transferee), as the case may be, is entitled to receive payments
hereunder without deduction or withholding of any United States
Federal income taxes or subject to a reduced rate thereof, or
exempt from United States federal withholding tax on interest
pursuant to Sections 871(h) or 881(c) of the Code, as the case
may be. If at any time there has occurred, on or prior to the
date on which any delivery of such Form 1001, 4224 or W-8,
as the case may be, would otherwise be required, any change in
law, rule, regulation, treaty, convention or directive, or any
change in the interpretation or application of any thereof (
Change of Law ), that renders all such forms inapplicable or
which would prevent such Agent, Issuing Lender or Lender (or
Transferee), as the case may be, from duly completing and
delivering any such form or certification with respect to it,
such Agent, Issuing Lender or Lender (or Transferee), as the
case may be, shall advise the Borrower that it shall be subject
to withholding of United States Federal income tax at the full
statutory rate. A Non-U.S. Person shall be required to furnish
a Form 1001, 4224 or W-8 only if it is entitled to claim an
exemption from or reduced rate of withholding. Each of the
Administrative Agent, the Issuing Lender and any Lender that is a
Non-U.S. Person and that is a party hereto as of the Closing Date
hereby represents and warrants that, as of the Closing
Date, payments made to it hereunder are exempt from the
withholding of United States Federal income taxes (i) because
such payments are effectively connected with a United States
trade or business conducted by such Non-U.S. Person; (ii)
pursuant to the terms of an income tax treaty between the United
States and such Non-U.S. Person's country of residence; or (iii)
because such payments are portfolio interest exempt pursuant to
Sections 871(h) or 881(c) of the Code. Notwithstanding any
provision of paragraph (a) above to the contrary, the Borrower
shall not have any obligation to pay any Taxes or Other Taxes or
to indemnify any Lender (or Transferee), the Administrative Agent
or the Issuing Lender for such Taxes or Other Taxes pursuant to
this Section 2.20 to the extent that such Taxes or Other Taxes
result from (i) the failure of any Lender (or Transferee), the
Administrative Agent, or the Issuing Lender to comply with its
obligations pursuant to this paragraph (f) or (ii) any
representation made on Form 1001, 4224 or W-8 or successor
applicable form or certification by any Lender (or Transferee),
the Administrative Agent or the Issuing Lender incurring such
Taxes or Other Taxes proving to have been incorrect, false or
misleading in any material respect when so made or deemed to be
made.
(g) Any of the Administrative Agent, the Managing Agent, the
Issuing Lender or any Lender (or Transferee) claiming any
additional amounts payable pursuant to this Section 2.20 shall
use reasonable efforts (consistent with legal and regulatory
restrictions) (including reasonable efforts to change the
jurisdiction of its applicable lending office) to avoid the need
for or reduce the amount of any such additional amounts that may
thereafter accrue, provided that such efforts would not, in
the sole determination of such Lender (or Transferee), the
Administrative Agent, the Managing Agent or Issuing Lender, as
the case may be, be otherwise disadvantageous to such Lender (or
Transferee), the Administrative Agent, the Managing Agent or the
Issuing Lender.
(h) If any Lender (or Transferee) changes its applicable
lending office as provided in Section 2.14(e), such Lender (or
Transferee) shall not be entitled to receive any greater payment
under this Section 2.20 than such Lender (or Transferee) would
have been entitled to receive had such change not occurred,
unless (i) such greater payment rises as a result of a Change in
Law occurring after the date of such change in applicable lending
office or (ii) such change in applicable lending office shall
have been made at the request of the Borrower.
SECTION 2.21. Assignment of Commitments under Certain
Circumstances. If (a) any Lender (i) shall have delivered a
notice or certificate pursuant to Section 2.14, (ii) shall become
subject to the provisions of Section 2.15 or (iii) shall fail or
refuse to fund its portion of any Loan for any reason other than
the failure of the Borrower to satisfy the conditions precedent
to the making of such Loan hereunder, (b) the Borrower shall be
required to make additional payments to any Lender under Section
2.20 or (c) any Lender shall fail or refuse, for any reason, to
approve any amendment, waiver or consent hereunder that has been
approved by Lenders holding more than 85% of the aggregate
principal amount of (i) the Loans at such time, (ii) the LC
Exposure at such time and (iii) the aggregate unused Commitments
at such time, the Borrower shall have the right, but not
the obligation, at its own expense, upon notice to such Lender
and the Administrative Agent, to replace such Lender with an
assignee (in accordance with and subject to the restrictions
contained in Section 10.04(b)), and such Lender hereby agrees to
transfer and assign to such assignee without recourse (in
accordance with and subject to the restrictions contained in
Section 10.04(b)) all its interests, rights and obligations under
this Agreement; provided, however, that (A) no such assignment
shall conflict with any law or any rule, regulation or order of
any Governmental Authority, (B) such assignee shall pay to the
affected Lender in immediately available funds on the date of
such assignment the principal of the Loans made by such Lender
hereunder, (C) in the case of an assignment pursuant to clause
(c) above, the Borrower must exercise its right to replace such
Lender within 90 days of such Lender's failure to approve the
applicable amendment, waiver or consent, as applicable, and (D)
the Borrower shall pay to the affected Lender in immediately
available funds on the date of such assignment the interest
accrued to the date of payment on the Loans made by such Lender
hereunder and all other amounts accrued for such Lender's account
or owed to it hereunder.
ARTICLE III
Letters of Credit
SECTION 3.01. Issuance of Letters of Credit. (a) The Issuing
Lender agrees, on the terms and subject to the conditions
hereinafter set forth, to issue Letters of Credit, in a form
reasonably acceptable to the Administrative Agent and the Issuing
Lender, appropriately completed, for the account of the Borrower,
at any time and from time to time on and after the Closing Date
until the earlier of the LC Maturity Date and the termination of
the LC Commitment in accordance with the terms hereof; provided,
however, that except in the case of the KPR Letter of Credit, any
Letter of Credit shall be issued by the Issuing Lender only if,
and each request by the Borrower for the issuance of any Letter
of Credit shall be deemed a representation and warranty of the
Borrower that, immediately following the issuance of any such
Letter of Credit, (i) the LC Exposure shall not exceed the LC
Commitment in effect at such time and (ii) the Revolving Credit
Utilization at such time shall not exceed the aggregate Revolving
Credit Commitments at such time.
(b) Each Letter of Credit shall expire no later than the LC
Maturity Date, and the KPR Letter of Credit shall expire no later
than January 31, 1996. Each Letter of Credit shall provide for
payments of drawings in dollars.
(c) Each issuance of any Letter of Credit shall be made on
at least two Business Days' prior written or facsimile notice
from the Borrower to the Issuing Lender and the Administrative
Agent (which shall give prompt notice thereof to each
Participating Lender) specifying the date of issuance,
the date on which such Letter of Credit is to expire (which shall
not be later than the earlier of (i) the LC Maturity Date and
(ii) subject to extension, 360 days, in the case of Standby
Letters of Credit, and 180 days, in the case of Commercial
Letters of Credit, after the date of any such Letter of
Credit), the amount of such Letter of Credit, the name and
address of the beneficiary of such Letter of Credit and such
other information as may be necessary or desirable to complete
such Letter of Credit. The Issuing Lender will give the
Administrative Agent and the Administrative Agent will
give to each Participating Lender reasonably prompt notice of the
issuance and amount of each Letter of Credit and the expiration
of each Letter of Credit.
(d) Notwithstanding the foregoing provisions of this Section
3.01, the Issuing Lender shall issue the KPR Letter of Credit on
the Closing Date provided that the Borrower has given the Issuing
Lender and the Administrative Agent at least two Business Days'
prior written or facsimile notice thereof. The Issuing Lender
shall have no obligation to issue the KPR Letter of Credit on any
date other than the Closing Date.
SECTION 3.02. Participation; Unconditional Obligations. (a)
By the issuance of a Letter of Credit and without any further
action on the part of the Issuing Lender or the Participating
Lenders in respect thereof, the Issuing Lender grants to each
Participating Lender, and each Participating Lender agrees to
acquire from the Issuing Lender, a participation in such Letter
of Credit equal to such Participating Lender's Applicable
Percentage of the face amount of such Letter of Credit, effective
upon the issuance of such Letter of Credit. In consideration and
in furtherance of the foregoing, each Participating Lender hereby
absolutely and unconditionally agrees to pay to the
Administrative Agent, on behalf of the Issuing Lender, in
accordance with Section 2.02(f), such Participating Lender's
Applicable Percentage of each LC Disbursement made by the Issuing
Lender; provided, however, that the Participating Lenders shall
not be obligated to make any such payment to the Issuing Lender
with respect to any wrongful payment or disbursement made under
any Outstanding Letter of Credit as a result of the gross
negligence or wilful misconduct of the Issuing Lender.
(b) Each Participating Lender acknowledges and agrees that
its obligation to acquire participations pursuant to paragraph
(a) of this Section 3.02 in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance
of an Event of Default or Default hereunder, and that each such
payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
SECTION 3.03. LC Fees. The Borrower agrees to pay to the
Administrative Agent for the account of the Participating Lenders
for each calendar quarter (or shorter period commencing with
the date hereof or ending with the first date on which the LC
Commitment shall have expired or been terminated and there shall
be no Outstanding Letters of Credit) fees (the LC Fees ) equal
to the LIBOR Spread in effect from time to time multiplied by the
average daily aggregate face amount of the Outstanding Letters of
Credit. The LC Fees shall be computed on the basis of the actual
number of days elapsed over a year of 360 days and shall be paid
in arrears on the last day of March, June, September and December
of each year, commencing December 31, 1995, and on the LC
Maturity Date (or, if earlier, the first date on which the LC
Commitment shall have expired or been terminated and there shall
be no Outstanding Letters of Credit), commencing on the first
such date following the Closing Date. Once paid, the LC Fees
shall not be refundable in any circumstances (other than
corrections of error in payment).
SECTION 3.04. Agreement To Repay LC Disbursements. (a) If
the Issuing Lender shall pay any draft presented under a Letter
of Credit other than the KPR Letter of Credit, the Borrower shall
pay to the Administrative Agent, on behalf of the Issuing Lender,
an amount equal to the amount of such draft before 11:00 a.m.,
New York City time, on the Business Day on which the Issuing
Lender shall have notified the Borrower that payment of such
draft will be made (or such later time as is not later than one
hour after the Borrower shall have received such notice or, if
the Borrower shall have received such notice later than 4:00
p.m., New York City time, on any Business Day, not later than
10:00 a.m., New York City time, on the immediately following
Business Day). The Administrative Agent will promptly pay any
such amounts received by it to the Issuing Lender. If, after the
payment of any such amount to the Issuing Lender, the Issuing
Lender shall not pay such amount in respect of such draft, the
Issuing Lender shall return to the Administrative Agent, for the
account of the Borrower, any such unpaid amount, together with
interest thereon accrued at the Federal Funds Effective Rate then
in effect from and including the date such amount was paid by the
Borrower to the Administrative Agent to but excluding the date
such amount was repaid by the Issuing Lender to the
Administrative Agent. If the Issuing Lender shall pay any draft
presented under the KPR Letter of Credit, the Participating
Lenders shall reimburse the Issuing Lender therefor by making
payment to the Administrative Agent in accordance with Section
2.02(f).
(b) The Borrower's obligation to repay the Issuing Lender
for LC Disbursements made by the Issuing Lender under the
Outstanding Letters of Credit shall be absolute, unconditional
and irrevocable under any and all circumstances and irrespective
of, without limitation, the following:
(i) any lack of validity or enforceability of any
Letter of Credit;
(ii) the existence of any claim, setoff, defense or
other right that the Borrower or any other Person may at any time
have against the beneficiary under any Letter of Credit, the
Issuing Lender, the Administrative Agent or any other Lender or
any other Person (other than the defense of payment in accordance
with the terms of this Agreement or a defense based on the gross
negligence or wilful misconduct of the Issuing Lender) in
connection with this Agreement or any other agreement or
transaction;
(iii) any draft or other document presented under a
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, provided that payment by the
Issuing Lender under such Letter of Credit against presentation
of such draft or document shall not have constituted gross
negligence or wilful misconduct of the Issuing Lender;
(iv) payment by the Issuing Lender under a Letter of
Credit against presentation of a draft or other document that
does not comply with the terms of such Letter of Credit, provided
that such payment shall not have constituted gross negligence or
wilful misconduct of the Issuing Lender; and
(v) any other circumstance or event whatsoever, whether
or not similar to any of the foregoing, provided that such
circumstance shall not have been the result of the gross
negligence or wilful misconduct of the Issuing Lender.
It is understood that in making any payment under a Letter
of Credit (A) the Issuing Lender's exclusive reliance on the
documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the
amount of any draft presented under such Letter of Credit,
whether or not the amount due to the beneficiary equals the
amount of such draft and whether or not any document presented
pursuant to such Letter of Credit proves to be insufficient in
any respect, if such document on its face appears to be in order,
and whether or not any other statement or any other document
presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or
untrue in any respect whatsoever, and (B) any noncompliance in
any immaterial respect of the documents presented under a Letter
of Credit with the terms thereof shall, in each case, not be
deemed wilful misconduct or gross negligence of the Issuing
Lender.
SECTION 3.05. Letter of Credit Operations. The Issuing
Lender shall, promptly following its receipt thereof, examine all
documents purporting to represent a demand for payment under an
Outstanding Letter of Credit to ascertain that the same appear on
their face to be in conformity with the terms and conditions of
such Outstanding Letter of Credit. The Issuing Lender shall as
promptly as possible, but in no event later than two hours after
such demand for payment, give oral notification, confirmed by
facsimile notice, to the Administrative Agent and the Borrower of
such demand for payment and shall as promptly as possible, but in
no event later than two hours prior to any payment in respect of
such demand, give oral notification, confirmed by facsimile
notice, to the Administrative Agent and the Borrower of the
determination by the Issuing Lender as to whether such demand for
payment was in accordance with the terms and conditions of such
Outstanding Letter of Credit and whether the Issuing Lender has
made or will make an LC Disbursement thereunder, provided that
the failure to give such notice shall not relieve the Borrower of
its obligation to reimburse the Issuing Lender with respect to
any such LC Disbursement, and the Administrative Agent shall
promptly give each Participating Lender notice thereof.
SECTION 3.06. Cash Collateralization. If any Event of
Default shall occur and be continuing, the Borrower shall on the
Business Day it receives notice from the Administrative Agent
or the Required Lenders (or, if the maturity of the Loans has
been accelerated, Participating Lenders holding participations in
Outstanding Letters of Credit representing at least 51% of the
aggregate undrawn amount of all Outstanding Letters of Credit)
therefor, deposit in an account with the Collateral Agent, for
the benefit of the Participating Lenders, an amount in cash equal
to the sum of the LC Exposure and the KPR LC Exposure as of such
date. Such deposit shall be held by the Collateral Agent as
collateral for the payment and performance of the Obligations.
The Collateral Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account.
Other than any interest earned on the investment of such deposits
in Permitted Investments, which investments shall be made at the
option and sole discretion of the Collateral Agent, such deposits
shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such
account shall (a) automatically be applied by the Administrative
Agent to reimburse the Issuing Lender for LC Disbursements, (b)
be held for the satisfaction of the reimbursement obligations of
the Borrower for the then-outstanding LC Exposure and (c) if the
maturity of the Loans has been accelerated (but subject to the
consent of Participating Lenders holding participation in
Outstanding Letters of Credit representing at least 51% of the
aggregate undrawn amount of all Outstanding Letters of Credit),
such amount (to the extent not applied as aforesaid) shall be
applied to satisfy the Obligations. Any cash collateral provided
by the Borrower hereunder (to the extent not applied as
aforesaid) shall be returned to the Borrower within three
Business Days after all Events of Default have been cured or
waived in accordance with the terms hereof.
SECTION 3.07. Termination of LC Commitment. The Borrower may
permanently terminate, or from time to time in part permanently
reduce, the LC Commitment, in each case upon at least three
Business Days' prior written or facsimile notice to the
Administrative Agent and the Issuing Lender, provided that (a)
after giving effect to such termination or reduction, the LC
Commitment shall not be less than the LC Exposure at such time or
greater than the aggregate Revolving Credit Commitments at such
time and (b) no reduction of the LC Commitment shall have the
effect of reducing the Revolving Credit Commitment of any Lender.
SECTION 3.08. Issuing Lender Fees. (a) The Borrower shall
pay to the Issuing Lender, for its own account, such commissions,
issuance fees, amendment fees, transfer fees and other fees and
charges in connection with the issuance or administration of each
Letter of Credit as the Borrower and the Issuing Lender shall
agree. The Issuing Lender shall, upon the Borrower's request,
provide the Borrower with a schedule of such charges from time to
time.
(b) The Borrower shall pay to the Issuing Lender, for its
own account, a fronting fee on the average daily aggregate
maximum amount available to be drawn (assuming compliance with
all conditions to drawing) under all Outstanding Letters of
Credit at the rate of 1/4 of 1% per annum, payable in arrears on
the last day of March, June, September and December of each year,
commencing December 31, 1995, and on the LC Maturity Date.
SECTION 3.09. Resignation or Removal of Issuing Lender. (a)
The Issuing Lender may, subject to the appointment of a successor
Issuing Lender hereunder, resign at any time by giving at least
180 days' prior written notice to the Administrative Agent, the
Lenders and the Borrower, and may be removed at any time by the
Borrower by notice to the Issuing Lender, the Administrative
Agent and the Lenders. The Borrower shall use commercially
reasonable efforts to appoint a successor Issuing Lender within
180 days after receipt from the Issuing Lender of a notice of
resignation contemplated by the preceding sentence. Upon any such
removal, the Borrower shall (within 180 days after such notice of
removal) either appoint a Lender (with the consent of such
Lender) as successor, or (subject to the proviso contained in
Section 3.07) terminate the unutilized LC Commitment; provided,
however, that, if the Borrower elects to terminate the unutilized
LC Commitment, the Borrower may at any time thereafter that the
Revolving Credit Commitments are in effect reinstate by notice to
the Administrative Agent and the Lenders the LC Commitment in
connection with the appointment of a successor Issuing Lender.
Subject to paragraph (b) below, upon the acceptance of any
appointment as Issuing Lender hereunder by a successor Issuing
Lender, such successor shall succeed to and become vested with
all the interests, rights and obligations of the retiring Issuing
Lender and the retiring Issuing Lender shall be discharged from
its obligations to issue additional Letters of Credit hereunder.
At the time such removal or resignation shall become effective,
the Borrower shall pay all accrued and unpaid fees pursuant to
Section 2.05(e). The acceptance of any appointment as Issuing
Lender hereunder by a successor issuing bank shall be evi-
denced by an agreement entered into by such successor, in a form
satisfactory to the Borrower and the Administrative Agent, and,
from and after the effective date of such agreement, (i) such
successor shall be a party hereto and have all the rights and
obligations of the Issuing Lender under this Agreement and the
other Loan Documents and (ii) references herein and in the other
Loan Documents to the Issuing Lender shall be deemed to refer
to such successor or to any previous Issuing Lender, or to such
successor and all previous Issuing Lenders, as the context shall
require.
(b) After the resignation or removal of the Issuing Lender
hereunder, the retiring Issuing Lender shall remain a party
hereto and shall continue to have all the rights and obligations
of the Issuing Lender under this Agreement and the other Loan
Documents with respect to Letters of Credit issued by it prior to
such resignation or removal, but shall not be required to issue
additional Letters of Credit.
SECTION 3.10. Existing Letters of Credit. On the Closing
Date, each letter of credit issued pursuant to the Existing
Credit Agreement and then remaining outstanding shall be deemed
to have been issued hereunder and to constitute a Letter of
Credit for all purposes hereof and, in furtherance of the
foregoing, the Issuing Lender hereby grants to each Participating
Lender, and each Participating Lender hereby agrees to acquire
from the Issuing Lender, a participation in each such
letter of credit equal to such Participating Lender's Applicable
Percentage of the face amount of such letter of credit, effective
on the Closing Date. The Issuing Lender will give the
Administrative Agent and the Administrative Agent shall give each
Participating Lender the notice contemplated by the last sentence
of Section 3.01(c) with respect to such letters of credit
promptly following the Closing Date. By executing this
Agreement, the Issuing Lender agrees that on the Closing Date the
lenders under the Existing Credit Agreement that acquired
participations in such letters of credit issued pursuant to the
Existing Credit Agreement that are deemed to constitute Letters
of Credit hereunder shall be released from all further
obligations and liabilities with respect thereto, other than
liabilities that accrued prior to the Closing Date.
ARTICLE IV
Representations and Warranties
The Borrower represents and warrants to each of the Lenders,
the Administrative Agent and the Issuing Lender that:
SECTION 4.01. Organization; Powers. Each of the Borrower and
the Subsidiaries (a) is a corporation, limited liability
corporation or limited partnership duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its organization, (b) has all requisite power and authority
to own its property and assets and to carry on its business as
now conducted and as proposed to be conducted, (c) is qualified
to do business and in good standing in every jurisdiction where
such qualification is required (after giving effect to the KPR
Acquisition), except where the failure so to qualify or be in
good standing could not reasonably be expected to result in a
Material Adverse Effect and (d) has the power and authority to
execute, deliver and perform its obligations under each of the
Transaction Documents and each other agreement or instrument
contemplated thereby to which it is or will be a party and, in
the case of Borrower, to borrow hereunder.
SECTION 4.02. Authorization. The execution, delivery and
performance by the Borrower and each Subsidiary Guarantor of each
of the Transaction Documents to which it is a party, the
borrowings hereunder, the creation of the security interests
contemplated by the Security Documents, the termination of the
Existing Credit Agreement and all agreements related thereto and
the repayment of all amounts outstanding thereunder and the other
transactions contemplated by the Transaction Documents (including
the KPR Acquisition) (all the foregoing, collectively, the
Transactions ) (a) have been duly authorized by all action
necessary under the organizational documents of the Borrower and
each Subsidiary Guarantor and, if required, stockholder, partner
or member action, as applicable, and (b) will not (i) violate (A)
any provision of law, statute, rule or regulation, or of the
Certificate of Incorporation or other constitutive documents or
By-laws of the Borrower or any Subsidiary, except where the
violation could not reasonably be expected to result in a
Material Adverse Effect, (B) any order of any Governmental
Authority or (C) any provision of any indenture or other material
agreement or instrument to which the Borrower or any Subsidiary
is a party or by which any of them or any of their property
(including the Mortgaged Properties) or assets is or may
be bound, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a
default under any such indenture, agreement or instrument or
(iii) result in the creation or imposition of any Lien (other
than any Lien created under the Security Documents) upon or
with respect to any property or assets now owned or hereafter
acquired by the Borrower or any Subsidiary.
SECTION 4.03. Enforceability. This Agreement has been duly
executed and delivered by the Borrower and constitutes, and each
other Transaction Document to which the Borrower or any
Subsidiary Guarantor is a party when executed and delivered by it
will constitute, a legal, valid and binding obligation of the
Borrower or such Subsidiary Guarantor, as the case may be,
enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar
laws affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability
is considered in a proceeding at law or in equity).
SECTION 4.04. Governmental Approvals. No action, consent or
approval of, registration or filing with or any other action by
any Governmental Authority is or will be required to be made or
obtained by the Borrower or any Subsidiary in connection with the
Transactions, except such as have been made or obtained and are
in full force and effect and other than filings, recordings and
approvals (i) to record deeds and leases with respect to real
properties, (ii) to record and/or perfect the security interest
created by the Security Documents and (iii) to record a leasehold
memorandum, if currently unrecorded, in respect of any leasehold
interest to which a Leasehold Mortgage relates.
SECTION 4.05. Financial Statements. (a) The unaudited pro
forma consolidated balance sheet of the Borrower and the
Subsidiaries as of the Closing Date (including the notes thereto)
(the Pro Forma Balance Sheet ), copies of which have heretofore
been furnished to each Lender, has been prepared giving effect
(as if such events had occurred on such date) to (i) the
Transactions (including the KPR Acquisition and the Borrowings
under this Agreement contemplated to be made on the Closing Date)
and (ii) the payment of fees and expenses in connection with the
foregoing. The Pro Forma Balance Sheet has been prepared based on
the assumptions used to prepare the pro forma financial
information contained in the Confidential Information Memorandum,
is based on the best information available to the Borrower as of
the date of delivery thereof, and presents fairly on a pro
forma basis the estimated consolidated financial position of the
Borrower and the Subsidiaries as of the Closing Date, assuming
that the events specified in the preceding sentence had actually
occurred at the Closing Date.
(b) The Borrower has heretofore furnished to the Lenders
consolidated financial statements of the KPR Partnership as of
and for the fiscal years ended December 26, 1992, January 1, 1994
and December 31, 1994, audited by and accompanied by the opinion
of Deloitte & Touche, LLP, independent public accountants and
accompanied by management discussion and analysis relating
thereto, and an income statement for the interim period ended
October 7, 1995. Such financial statements present fairly the
financial condition and results of operations of the KPR
Partnership and its consolidated subsidiaries as of such dates
and for such periods. Such financial statements and the
notes thereto disclose all material liabilities required under
GAAP to be disclosed, direct or contingent, of the KPR
Partnership and its consolidated subsidiaries as of the dates
thereof. Such financial statements were prepared in accordance
with GAAP applied on a consistent basis.
(c) The Borrower has heretofore furnished to the Lenders
consolidated financial statements of the Borrower and its
consolidated subsidiaries as of and for the fiscal year ended
December 31, 1994, audited by and accompanied by the opinion of
Coopers & ▇▇▇▇▇▇▇, LLP, independent public accountants. Such
financial statements present fairly the financial condition and
results of operations of the Borrower and its consolidated
subsidiaries as of such date and for such period. Such financial
statements and the notes thereto disclose all material
liabilities required under GAAP to be disclosed, direct or
contingent, of the Borrower and its consolidated subsidiaries as
of the date thereof. Such financial statements were prepared in
accordance with GAAP applied on a consistent basis.
(d) The Borrower has heretofore furnished to the Lenders
consolidated financial statements of TNT as of and for the fiscal
years ended August 31, 1993, August 31, 1994 and August 31, 1995,
audited by and accompanied by the opinion of a firm of nationally
recognized independent public accountants and accompanied by
management discussion and analysis relating thereto. Such
financial statements present fairly the financial condition and
results of operations of TNT and its consolidated subsidiaries as
of such dates and for such periods. Such financial statements and
the notes thereto disclose all material liabilities required
under GAAP to be disclosed, direct or contingent, of TNT and its
consolidated subsidiaries as of the dates thereof. Such financial
statements were prepared in accordance with GAAP applied on a
consistent basis.
SECTION 4.06. No Material Adverse Change. There has been no
material adverse change in the business, assets, operations,
properties, financial condition or contingent liabilities of the
Borrower and the Subsidiaries, taken as a whole, since January 1,
1995, other than any such change that could result from the KPR
Litigation.
SECTION 4.07. Title to Properties; Possession Under Leases.
(a) After giving effect to the consummation of the KPR
Acquisition, on the Closing Date: each of the Borrower and the
Subsidiaries will have good and marketable title to, or valid
leasehold interests in, all its material properties and assets
(including each Mortgaged Property); all such material properties
and assets shall be free and clear of Liens, other than Liens
expressly permitted by Section 7.02; and no material portion of
any Mortgaged Property shall be subject to any lease, license,
sublease or other agreement granting to any Person any right to
use, occupy or enjoy the same, except as set forth on
Schedule 4.07(a).
(b) After giving effect to the consummation of the KPR
Acquisition, on the Closing Date, (i) all material leases shall
be in full force and effect and (ii) the Borrower and the
Subsidiaries shall enjoy peaceful and undisturbed possession
under all such material leases under which it is tenant.
(c) Except as set forth on Schedule 4.07(c), neither the
Borrower nor any Subsidiary has received any notice of, or has
any knowledge of, any pending or contemplated condemnation
proceeding affecting the Mortgaged Properties or any material
properties or assets to be acquired in connection with the KPR
Acquisition, or any sale or disposition thereof in lieu of
condemnation.
(d) Neither the Borrower nor any Subsidiary is obligated
under any right of first refusal, option or other contractual
right to sell, assign or otherwise dispose of any Mortgaged
Property or any interest therein.
SECTION 4.08. Subsidiaries. Schedule 4.08 sets forth all the
subsidiaries of the Borrower as of the Closing Date and the
percentage ownership of the Borrower therein.
SECTION 4.09. Litigation; Compliance with Laws. (a) Except
as set forth on Schedule 4.09, there are no actions, suits or
proceedings at law or in equity or by or before any Governmental
Authority now pending or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any Subsidiary or
any business, property, assets or rights of any such Person (i)
that involve any Transaction Document or the Transactions or (ii)
as to which there is a reasonable possibility of an adverse
determination and which, if adversely determined, could
reasonably be expected to, individually or in the aggregate,
result in a Material Adverse Effect.
(b) Except as set forth on Schedule 4.09, none of the
Borrower, any Subsidiary or any of their respective properties or
assets, are in violation of, nor will the continued operation of
their properties and assets violate any law, rule, regulation or
statute (including any zoning, building, Environmental
and Safety Law, ordinance, code or approval or any building
permits) or any restrictions of record or agreements affecting
the Mortgaged Property or in default with respect to any
judgment, writ, injunction, decree or order of any Governmental
Authority, where such violation or default could reasonably be
expected to result in a Material Adverse Effect.
(c) The issuance of the Letters of Credit will not violate
any applicable law or regulation or violate or be prohibited by
any judgment, writ, injunction, decree or order of any
Governmental Authority.
(d) Certificates of occupancy and permits (or other
documents expressly provided for under applicable law in lieu
thereof) are in effect for each Mortgaged Property as currently
constructed.
SECTION 4.10. Federal Reserve Regulations. (a) None of the
Borrower or any Subsidiary is engaged principally, or as one of
its important activities, in the business of extending credit for
the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Letter of Credit or any
Loan will be used by the Borrower or any Subsidiary, whether
directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to purchase or carry Margin Stock or to extend
credit to others for the purpose of purchasing or carrying Margin
Stock or to refund indebtedness originally incurred for such
purpose or (ii) for any purpose that entails a violation of, or
is inconsistent with, the provisions of the Regulations of the
Board, including Regulations G, U and X.
SECTION 4.11. Investment Company Act; Public Utility Holding
Company Act. None of the Borrower or any Subsidiary (a) is an
investment company as defined in, or is subject to regulation
under, the Investment Company Act of 1940 or (b) is a holding
company as defined in, or is subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 4.12. Use of Proceeds. The Borrower will use the
Letters of Credit and the proceeds of the Loans only for the
purposes specified in the preamble to this Agreement.
SECTION 4.13. Tax Returns. Each of the Borrower and the
Subsidiaries has filed or caused to be filed all Federal, state
and material local tax returns required to have been filed by it
or with respect to it and has paid or caused to be paid all
material taxes shown to be due and payable on such
returns or on any assessments received by it or with respect to
it, except taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or the
applicable Subsidiary shall have set aside on its books adequate
reserves in accordance with GAAP. Each of the Borrower and the
Subsidiaries has filed or made adequate provision in accordance
with GAAP on its books for any taxes payable by it in connection
with the Transactions (including, without limitation, any such
taxes payable in respect of indemnities).
SECTION 4.14. No Material Misstatements. The written
information, reports, financial statements, exhibits and
schedules furnished by or on behalf of the Borrower or any of the
Subsidiaries to the Administrative Agent or any Lender in
connection with the negotiation of any Loan Document or included
therein or delivered pursuant thereto, when taken as a whole, did
not contain, does not contain and will not contain any material
misstatement of fact and did not omit, does not omit and will not
omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were,
are or will be made, not misleading. The projections and pro
forma financial information contained in such materials are based
on good faith estimates and assumptions believed by the Borrower
to be reasonable as of the date such projections and pro forma
financial information were furnished by the Borrower. Such pro
forma financial information was prepared in accordance with GAAP
applied on a basis consistent with the financial statements
referred to in Section 4.05(c).
SECTION 4.15. Employee Benefit Plans. Each of the Borrower
and its ERISA Affiliates is in compliance in all material
respects with the applicable provisions of ERISA and the
regulations and published interpretations thereunder. Except as
set forth on Schedule 4.15, no Reportable Event has occurred in
respect of any Plan of the Borrower or any ERISA Affiliate. The
present value of all benefit liabilities under each Plan (based
on those assumptions used to fund such Plan and calculated on an
ongoing basis) did not, as of the last annual valuation date
applicable thereto, exceed by more than $19,000,000 (or, in the
event of an increase in the underfunding of such Plan
solely as a result of a change after the date hereof in any
discount rate applicable to such Plan, $23,000,000) the value of
the assets of such Plan, and the present value of all benefit
liabilities of all underfunded Plans (based on those assumptions
used to fund each such Plan) did not, as of the last annual
valuation dates applicable thereto, exceed by more than
$19,000,000 (or, in the event of an increase in the underfunding
of such Plan solely as a result of a change after the date
hereof in any discount rate applicable to such Plans,
$23,000,000) the value of the assets of all such underfunded
Plans. Neither the Borrower nor any ERISA Affiliate has incurred
any Withdrawal Liability that materially adversely affects the
financial condition of the Borrower and its ERISA Affiliates,
taken as a whole. Neither the Borrower nor any ERISA Affiliate
has received any notification that any Multiemployer Plan is in
reorganization or has been terminated within the meaning of Title
IV of ERISA, and no Multiemployer Plan is reasonably expected to
be in reorganization or to be terminated where such
reorganization or termination has resulted or could
reasonably be expected to result in an increase in the
contributions required to be made to such Plan that would
materially adversely affect the financial condition of the
Borrower and its ERISA Affiliates, taken as a whole.
SECTION 4.16. Environmental and Safety Matters. (a) After
giving effect to the KPR Acquisition, each of the Borrower and
the Subsidiaries is in compliance with all Environmental and
Safety Laws, with the exceptions of instances that will not in
the aggregate result in any Material Adverse Effect.
(b) Except as set forth on Schedule 4.16(b), (i) none of the
Borrower or any Subsidiary has received notice of any failure to
comply with Environmental and Safety Laws except for any such
failure to comply that has been remedied or that, together with
all other such failures, could not reasonably be expected to
result in a Material Adverse Effect; (ii) after giving effect to
the KPR Acquisition, the Borrower's and the Subsidiaries' plants
and facilities do not use, manage, treat, store or dispose of any
Hazardous Substances in violation of any Environmental and Safety
Laws in any material respect; (iii) after giving effect to the
KPR Acquisition, all material licenses, permits or registrations
(or any extensions thereof) required under any Environmental and
Safety Law for the business of the Borrower and the Subsidiaries
as conducted or as contemplated by the KPR Purchase Agreement
have been obtained and each of the Borrower and the Subsidiaries
is in compliance therewith in all material respects; and (iv)
neither the Borrower nor any Subsidiary is in non-compliance
with, breach of or default under any applicable writ, order,
judgment, injunction or decree where such noncompliance, breach
or default will materially and adversely affect the ability
of the Borrower or any Subsidiary, as applicable, to operate any
real property owned or leased by it, and, to the best knowledge
of the Borrower, no event has occurred and is continuing that,
with the passage of time or the giving of notice or both, will
constitute such noncompliance, breach or default thereunder.
(c) Except as set forth on Schedule 4.16(c), (i) no
Hazardous Substance has been Released at, on or under any
property owned, leased or operated by the Borrower or any
Subsidiary during the period of Borrower's or any Subsidiary's
ownership, lease or operation of such property, or to the
knowledge of the Borrower at any time previous to such ownership,
lease or operation, under conditions that (1) require remedial
action under applicable Environmental and Safety Laws and (ii)
could reasonably be expected to result in any material liability
on the part of the Borrower or any Subsidiary, individually or
collectively, (ii) neither the Borrower nor any Subsidiary, to
the best knowledge of the Borrower and the Subsidiaries,
transported or arranged for the transportation of
any Hazardous Substances to any site listed, or proposed for
listing, on the National Priorities List promulgated pursuant to
CERCLA, on CERCLIS (as defined in CERCLA) or on any similar state
or foreign list of sites requiring investigation or cleanup and
(iii) the Borrower is not aware of any event, condition or
circumstance involving environmental pollution or contamination,
or employee safety or health relating to the use or handling of,
or exposure to, Hazardous Substances, that could reasonably be
expected to result in any material liability on the part of the
Borrower or any Subsidiary, individually or collectively.
SECTION 4.17. Solvency. After giving effect to the
Transactions to occur on the Closing Date, (a) each of (i) the
Borrower and the Subsidiaries on a consolidated basis, (ii) the
Borrower and (iii) the Subsidiaries individually, is Solvent and
(b) none of the Borrower or the Subsidiaries intends to, nor do
they believe that they will, incur debts beyond their ability to
pay such debts as they mature (taking into account the timing and
amounts of cash to be received by them and the amounts to be
payable on or in respect of their obligations).
SECTION 4.18. Employment and Management Agreements. Except
as disclosed on Schedule 4.18, as of the Closing Date there are
no (a) employment agreements covering management employees of the
Borrower or any Subsidiary or other material agreements relating
to the compensation of management employees (including the
issuance of securities of the Borrower or any Subsidiary to
management employees), (b) agreements for management or
consulting services to which the Borrower or any Subsidiary is a
party or by which any of them is bound or (c) collective
bargaining agreements or other labor agreements covering any of
the employees of the Borrower or any Subsidiary.
SECTION 4.19. Capitalization. (a) As of the Closing Date,
the authorized capital stock of the Borrower consists of
20,000,000 shares of common stock and 4,000,000 shares of
preferred stock.
(b) As of the Closing Date and after giving effect to the
Transactions, the authorized partnership interests of the KPR
Partnership consist of limited partnership interests owned by FBA
Investments Corporation and a general partnership interest owned
by RKR-GP, Inc., all of which will be issued and outstanding. As
of the Closing Date and after giving effect to the Transactions,
the Borrower will own and control, directly or indirectly, of
record and beneficially, 100% of each class of outstanding
partnership interests of the KPR Partnership, free and clear of
all adverse claims or Liens (other than any Lien under the
Security Documents).
(c) Except as set forth on Schedule 4.19(c), as of the
Closing Date there are, and thereafter there will be, no
outstanding subscriptions, options, warrants, calls, rights
(including preemptive rights) or other agreements or commitments
(including pursuant to management or employee stock plan or
similar plan) of any nature relating to any capital stock or
partnership interests of any Subsidiary.
SECTION 4.20. Security Documents. (a) The Pledge Agreement
is effective to create in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid and
enforceable security interest in the Collateral (as defined in
the Pledge Agreement) and proceeds thereof and, when the
Collateral is delivered to the Collateral Agent, the Pledge
Agreement shall constitute a fully perfected first priority Lien
on, and security interest in, all right, title and interest of
the Borrower and the Subsidiary Guarantors in such Collateral and
the proceeds thereof, in each case prior and superior in right to
any other Person.
(b) The Security Agreement is effective to create in favor
of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Security Agreement) and proceeds
thereof, and when financing statements in appropriate form are
filed in the offices specified on Schedule 4.20, the Security
Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the
Borrower and the Subsidiary Guarantors in such Collateral and the
proceeds thereof, in each case prior and superior in right to any
other Person, other than with respect to Liens expressly
permitted by Section 7.02.
(c) The Mortgages are effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties,
a legal, valid and enforceable Lien on all of the Subsidiary
Guarantors' right, title and interest in and to the Mortgaged
Properties thereunder and the proceeds thereof, and,
when the Mortgages are filed in the offices specified on Schedule
1.01(c), the Mortgages shall constitute fully perfected Liens on,
and security interests in, all right, title and interest of the
Borrower and the Subsidiary Guarantors in such Mortgaged
Properties and the proceeds thereof, in each case
prior and superior in right to any other Person, other than with
respect to the rights of Persons pursuant to Liens expressly
permitted by Section 7.02.
(d) The Trademark Security Agreement is effective to create
in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable security interest
in the Collateral (as defined in the Trademark Security
Agreement) and the proceeds thereof, and upon the filing of
assignment statements with the United States Patent and Trademark
Office, together with financing statements in appropriate form
filed in the offices specified on Schedule 4.20, the Trade-
▇▇▇▇ Security Agreement shall constitute a fully perfected Lien
on, and security interest in, all right title and interest of the
Borrower and the Subsidiary Guarantors in such Collateral and the
proceeds thereof, in each case prior and superior in right to any
other Person, other than with respect to Liens expressly
permitted by Section 7.02.
(e) The Collateral Assignment is effective to create in
favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable assignment of,
transfer of all right, title and interest of the Borrower and
the Subsidiary Guarantors in, and security interest in,
the Assigned Contracts (as defined in the Collateral Agreement)
and proceeds thereof, and when financing statements in
appropriate form are filed in the offices specified on Schedule
4.20, the Collateral Assignment shall constitute a fully
perfected Lien on, and security interest in, all right,
title and interest of the Borrower and the Subsidiary Guarantors
in such Assigned Contracts and the proceeds thereof, in each case
prior and superior in right to any other Person, other than with
respect to Liens expressly permitted by Section 7.02.
SECTION 4.21. Labor Matters. As of the Closing Date, there
are no strikes, lockouts or slowdowns against the Borrower or any
Subsidiary pending or, to the Borrower's knowledge,
threatened. The hours worked by and payment made to employees of
the Borrower and each Subsidiary have not been in violation of
the Fair Labor Standards Act or any other applicable Federal,
state, local or foreign law dealing with such matters, where such
violations could reasonably be expected to result in a Material
Adverse Effect. The consummation of the Transactions will not
give rise to a right of termination or right of renegotiation on
the part of any union under any collective bargaining agreement
to which the Borrower or any Subsidiary is a party or by which
the Borrower or any Subsidiary is bound on the Closing Date.
SECTION 4.22. Location of Real Property and Leased Premises.
(a) Schedule 4.22(a) lists completely and correctly as of the
Closing Date all real property owned by the Borrower and the
Subsidiaries and the addresses thereof. The Borrower or the
applicable Subsidiary own in fee all the real property set forth
on Schedule 4.22(a).
(b) Schedule 4.22(b) lists completely and correctly as of
the Closing Date all real property leased or subleased by the
Borrower and the Subsidiaries and the addresses thereof. The
Borrower or the applicable Subsidiary has a valid lease or
sublease in all the real property set forth on Schedule 4.22(b).
SECTION 4.23. Insurance. Each of the Borrower and the
Subsidiaries maintains with financially sound insurance companies
insurance on all its properties in at least such amounts and
against at least such risks (but, including in any event,
all-risk casualty, public liability, product liability and
business interruption) as are usually insured against in the same
general geographic area by companies engaged in the same or
similar business.
SECTION 4.24. Delivery of Documents. (a) The Borrower has
previously made available to the Administrative Agent true,
correct and complete copies of all real property leases or
subleases, easement agreements, option agreements and other
agreements, instruments and documents (whether or not recorded)
that encumber or otherwise affect the real property listed on
Schedules 4.22(a) and 4.22(b).
(b) On or prior to the Closing Date, each Lender has
received complete certified copies (as certified to by the
Secretary or an Assistant Secretary of the Borrower) of the KPR
Purchase Agreement and the TNT Purchase Agreement, including in
each case all exhibits, schedules and disclosure letters referred
to therein or delivered pursuant thereto (if any), and all
amendments thereto, waivers relating thereto and other side
letters or agreements affecting the terms thereof in existence as
of December 4, 1995. On or prior to the Closing Date, the
Administrative Agent has received complete certified copies (as
certified to by the Secretary or an Assistant Secretary of the
Borrower) of all exhibits, schedules and disclosure letters
referred to in the KPR Purchase Agreement or the TNT Purchase
Agreement or delivered pursuant thereto (if any), and all
amendments thereto, waivers relating thereto and other side
letters or agreements affecting the terms thereof, executed on or
after December 5, 1995. None of such documents and agreements has
been amended, supplemented or otherwise modified in any respect,
nor have any of the provisions thereof been waived, except
pursuant to a written agreement or instrument that has heretofore
been consented to by the Required Lenders.
(c) The KPR Purchase Agreement has been duly executed and
delivered by each party thereto and each of the material terms
and provisions thereof is in full force and effect. Except as set
forth on Schedule 4.24(c), to the Borrower's knowledge, each of
the representations and warranties of the Seller set forth in the
KPR Purchase Agreement is true and correct on and as of the date
hereof. The TNT Purchase Agreement has been duly executed and
delivered by each party thereto and each of the material terms
and provisions thereof is in full force and effect. Except as set
forth on Schedule 4.24(c), to the Borrower's knowledge, each of
the representations and warranties of the Seller set forth in the
TNT Purchase Agreement is true and correct on and as of the date
hereof.
SECTION 4.25. Fees and Expenses. The aggregate amount of
fees and expenses incurred in connection with the Transactions by
the Borrower and the Subsidiaries has not exceeded and will
not exceed $7,500,000.
SECTION 4.26. Designated Senior Indebtedness. The
Obligations and the guarantees thereof pursuant to the Guarantee
Agreement constitute "Designated Senior Indebtedness" under the
Subordinated Note Indenture.
SECTION 4.27. No Defaults. Neither the Borrower nor any of
the Subsidiaries is a party to any agreement or instrument or
subject to any charter or other corporate restriction which will
have or is reasonably likely to have a Material Adverse Effect.
Except as set forth on Schedule 4.09, neither the Borrower nor
any of the Subsidiaries has received notice or has actual
knowledge that (i) it is in default in the performance,
observance or fulfillment of any of the obligations, covenants
or conditions contained in any Contractual Obligation applicable
to it, or (ii) any condition exists which, with the giving of
notice or the lapse of time or both, would constitute a default
with respect to any such Contractual Obligation, in each case,
except where such default or defaults, if any, will not have or
are not reasonably likely to have a Material Adverse Effect. No
Default or Event of Default has occurred that has not been cured
or waived in accordance with the terms of this Agreement.
ARTICLE V
Conditions of Lending and Issuance of Letters of Credit
The obligations of the Lenders to make Loans hereunder and
the obligation of the Issuing Lender to issue any Letter of
Credit (each, a Credit Event ) hereunder are subject to the
satisfaction of the following conditions:
SECTION 5.01. All Credit Events. On the date of each Credit
Event, other than any Revolving Loan made pursuant to Section
2.02(e) that does not exceed the principal amount of the
Borrowing being refinanced thereby or any Revolving Loan made
pursuant to Section 2.02(f):
(a) The Administrative Agent and, where applicable, the
Issuing Lender shall have received a notice of such Credit Event
as required by Section 2.03 and Section 3.01(c), respectively.
(b) The representations and warranties set forth in
Article IV hereof shall be true and correct in all material
respects on and as of the date of such Credit Event with the same
effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an
earlier date.
(c) The Borrower and each Subsidiary Guarantor shall be
in compliance with all terms and provisions set forth herein and
in each other Loan Document on its part to be observed or
performed, and at the time of and immediately after such Credit
Event no Event of Default or Default shall have occurred and be
continuing.
(d) In the case of each Revolving Credit Borrowing or
issuance of a Letter of Credit, (i) the Administrative Agent
shall have received a Borrowing Base Certificate in accordance
with Section 6.04(e) and (ii) at such time, Revolving Credit
Utilization (after giving effect to such Credit Event) shall not
exceed the then-current Borrowing Base.
(e) In the case of a Revolving Credit Borrowing all or
part of the proceeds of which are to be used to finance all or
part of the purchase price to be paid in connection with any
Qualified Acquisition other than the Proposed TNT Acquisition or
a replacement therefor made in accordance with Section 7.05(d),
the principal amount of such Borrowing so applied shall not
exceed the lesser of (i) the purchase price paid in connection
with such Qualified Acquisition, together with the costs and
reasonable expenses related to such Qualified Acquisition, and
(ii) the difference between (A) $55,000,000 and (B) the amount of
all Borrowings used to finance all or part of the purchase price
to be paid and such related costs and expenses in connection with
Qualified Acquisitions (other than the Proposed TNT Acquisition)
since the Closing Date.
Each Credit Event shall be deemed to constitute a representation
and warranty by the Borrower on the date of such Credit Event as
to the matters specified in paragraphs (b) and (c) of this
Section 5.01. Neither (a) continuations and conversions of Term
Borrowings or Acquisition Borrowings pursuant to Section 2.10 nor
(b) Revolving Credit Borrowings pursuant to Section 2.02(e) in
which Revolving Loans are refinanced without any increase in the
aggregate principal amount of Revolving Loans outstanding shall
be deemed to be Borrowings for purposes of this Section 5.01.
SECTION 5.02. First Borrowing. On the Closing Date:
(a) The Administrative Agent shall have received a
favorable written opinion of (i) McAfee and ▇▇▇▇, counsel for the
Borrower and the Subsidiary Guarantors, to the effect set
forth in Exhibit L-1, (ii) ▇▇▇▇▇ & Lardner, special Wisconsin
counsel to the Borrower and the Subsidiary Guarantors, to the
effect set forth in Exhibit L-2, (iii) Shook, Hardy & Bacon,
P.C., special Kansas and Missouri counsel to the Borrower and
the Subsidiary Guarantors, to the effect set forth in Exhibit
L-3, (iv) Sutin, Thayer & ▇▇▇▇▇▇, special New Mexico counsel to
the Borrower and the Subsidiary Guarantors, to the effect set
forth in Exhibit L-4, (v) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C.,
special Texas counsel to the Administrative Agent, to the effect
set forth in Exhibit L-5, and (vi) Sidley & Austin, counsel to
the Administrative Agent, to the effect set forth in Exhibits
L-6-A and L-6-B, in each case (A) dated the Closing Date, (B)
addressed to the Administrative Agent, the Issuing Lender, the
Lenders and the Collateral Agent and (C) covering such other
matters incidental to the Loan Documents and the Transactions as
the Administrative Agent shall request. The Borrower hereby
instructs each of its counsel listed above to deliver its opinion
to the Administrative Agent.
(b) All legal matters incident to this Agreement and
the Borrowings hereunder shall be satisfactory to the Lenders and
their counsel and to Sidley & Austin, counsel for the
Administrative Agent.
(c) The Administrative Agent shall have received (i) a
copy of the certificate of incorporation, including all
amendments thereto, of each of the Borrower and each
Subsidiary Guarantor, certified as of a recent date by the
Secretary of State or other applicable office of the state of its
incorporation, and a certificate as to the good standing of
each of the Borrower and each Subsidiary Guarantor as of a recent
date, from such Secretary of State; (ii) a certificate of the
Secretary or Assistant Secretary of each of the Borrower and
each Subsidiary Guarantor dated the Closing Date and certifying
(A) that attached thereto is a true and complete copy of the
by-laws of the Borrower or such Subsidiary Guarantor, as the case
may be, as in effect on the Closing Date and at all times since a
date prior to the date of the resolutions described in clause (B)
below, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of the
Borrower or such Subsidiary Guarantor, as the case may be,
authorizing the execution, delivery and performance of the
Transaction Documents and the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are
in full force and effect, (C) that the certificate of
incorporation of the Borrower or such Subsidiary Guarantor, as
the case may be, has not been amended since the date of the last
amendment thereto shown on the certificate of good standing
furnished pursuant to clause (i) above and (D) as to the
incumbency and specimen signature of each officer executing any
Transaction Document or any other document delivered in
connection herewith on behalf of the Borrower or such
Subsidiary Guarantor, as the case may be; (iii) a certificate of
another officer as to the incumbency and specimen signature of
the Secretary or Assistant Secretary executing the certificate
pursuant to (ii) above; and (iv) such other documents as the
Lenders or their counsel or Sidley & Austin, counsel for the
Administrative Agent, may reasonably request.
(d) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Financial
Officer of the Borrower, confirming compliance with the
conditions precedent set forth in paragraphs (b) and (c) of
Section 5.01.
(e) The Lenders shall have received all Fees and other
amounts due and payable on or prior to the Closing Date.
(f) (i) The Existing Credit Agreement and all
commitments thereunder to lend shall terminate concurrently with
the making of the initial Loans hereunder, all amounts
outstanding thereunder shall be paid in full from the proceeds of
the initial Loans hereunder and all Liens on the property or
assets of the Borrower or any Subsidiary securing any
obligations thereunder or under any related agreement shall be
released concurrently with the making of the initial Loans
hereunder, and (ii) the Administrative Agent shall have
received evidence satisfactory in form and substance to it
demonstrating such termination, payment and release.
(g) The Guarantee Agreement shall have been duly
executed by the Subsidiary Guarantors and the Collateral Agent,
and shall be in full force and effect. The Indemnity,
Subrogation and Contribution Agreement shall have been duly
executed by the Borrower, the Subsidiary Guarantors and the
Collateral Agent and shall be in full force and effect.
(h) The Pledge Agreement shall have been duly executed
by the parties thereto and delivered to the Collateral Agent and
shall be in full force and effect, and all capital stock and debt
securities to be pledged thereunder shall have been duly and
validly pledged to the Collateral Agent for the ratable benefit
of the Secured Parties and certificates representing such shares
and securities, accompanied by instruments of transfer and stock
powers endorsed in blank, shall be in the actual possession of
the Collateral Agent.
(i) Each of the Security Agreement, the Trademark
Security Agreement and the Collateral Assignment required to be
executed by the Collateral Agent shall have been duly executed by
the Borrower and all other parties thereto and shall have been
delivered to the Collateral Agent and shall be in full force and
effect on such date and each document (including each Uniform
Commercial Code financing statement) required by law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the
Collateral Agent for the benefit of the Secured Parties a valid,
legal and perfected first-priority security interest in or lien
on the Collateral (subject to any Lien expressly permitted by
Section 7.02) described in each of such agreements shall have
been delivered to the Collateral Agent.
(j) The Collateral Agent shall have received the
results of a recent search or searches of the Uniform Commercial
Code filings (or equivalent filings) made with respect to the
Borrower and the Subsidiary Guarantors in the States (or other
jurisdictions) in which are located the chief executive offices
of such Persons, any offices of such Persons in which records
have been kept relating to Receivables and the other
jurisdictions in which Uniform Commercial Code filings (or
equivalent filings) are to be made pursuant to the preceding
paragraph, together with copies of the financing statements (or
similar documents) disclosed by such search, and accompanied by
evidence satisfactory to the Administrative Agent that the Liens
indicated in any such financing statement (or similar document)
would be permitted under Section 7.02 or have been released.
(k) The Collateral Agent shall have received a
Perfection Certificate with respect to each of the Borrower and
each Subsidiary Guarantor dated the Closing Date and duly
executed by a Responsible Officer of the Borrower.
(l) (i) Each of the Security Documents, in form and
substance satisfactory to the Lenders, relating to each of the
Mortgaged Properties (including each Mortgage) shall have been
duly executed by the parties thereto and delivered to the
Collateral Agent and shall be in full force and effect, (ii) each
of such Mortgaged Properties shall not be subject to any Lien
other than those permitted under Section 7.02, (iii) each of such
Security Documents shall have been filed and recorded in the
recording office as specified on Schedule 1.01(c)(or a lender's
title insurance policy, in form and substance acceptable to
Agent, insuring such Security Document as a first lien on such
Mortgaged Property (subject to any Lien expressly permitted by
Section 7.02) shall have been received by Agent) and, in
connection therewith, the Administrative Agent shall have
received evidence satisfactory to it of each such filing
and recordation and (iv) the Collateral Agent shall have received
such other documents, including a policy or policies of title
insurance issued by a nationally recognized title insurance
company, together with such endorsements, coinsurance and
reinsurance as may be requested by the Administrative Agent, the
Issuing Lender and the Lenders, insuring the Mortgages as valid
first liens on the Mortgaged Properties, free of Liens other than
those permitted under Section 7.02, together with such surveys,
abstracts, appraisals and legal opinions required to be furnished
pursuant to the terms of the Mortgages or as reasonably
requested by the Administrative Agent, the Issuing Lender or the
Lenders.
(m) The Borrower and the Subsidiaries shall have
obtained insurance on their respective properties and assets in
compliance with Section 6.02 and the applicable provi-
sions of the Security Documents.
(n) All policies of insurance maintained by the
Borrower and the Subsidiaries pursuant to Section 6.02 shall have
been endorsed or otherwise amended to include a standard or New
York lender's loss payable endorsement, in form and substance
reasonably satisfactory to the Administrative Agent and the
Collateral Agent, which endorsement shall provide that, from and
after the Closing Date, the insurance carrier shall pay all
proceeds otherwise payable to the Borrower or the Subsidiaries
under such policies directly to the Collateral Agent if the
insurance carrier shall have received written notice from the
Administrative Agent or the Collateral Agent that an Event of
Default has occurred.
(o) The KPR Acquisition shall have been consummated or
shall be consummated simultaneously with the closing of the
Facilities in accordance with applicable law and the KPR Purchase
Agreement (as in effect on the Closing Date) and on terms
satisfactory to the Lenders, and no material provision thereof
shall have been waived, amended, supplemented or otherwise
modified without the consent of each Lender.
(p) After giving effect to the KPR Acquisition and the
other Transactions, the Borrower and the Subsidiaries shall have
no liabilities other than (i) the Loans under the Facilities,
(ii) the Subordinated Notes and (iii) other liabilities
satisfactory to the Lenders and Indebtedness permitted under
Section 7.01.
(q) The Lenders shall have received a pro forma
consolidated balance sheet of the Borrower and the Subsidiaries
as of the Closing Date, after giving effect to the KPR
Acquisition and the other Transactions, and the Lenders shall be
satisfied with such balance sheet.
(r) The Lenders shall have received audited
consolidated financial statements of the KPR Partnership for the
fiscal years ended December 26, 1992, January 1, 1994 and
December 31, 1994, which financial statements shall have been
prepared in accordance with GAAP and shall be in form and
substance satisfactory to the Lenders and be accompanied by a
report thereon prepared by Deloitte & Touche, LLP. The Lenders
shall have received audited consolidated financial statements of
TNT for the fiscal years ended August 31, 1993, August 31, 1994
and August 31, 1995, which financial statements shall have been
prepared in accordance with GAAP and shall be in form and
substance satisfactory to the Lenders and be accompanied by a
report thereon prepared by a firm of nationally recognized
certified public accountants.
(s) The Lenders shall have received unaudited
consolidated financial statements of (i) the Borrower for the
fiscal quarters ended July 1 and September 30, 1995, and (ii) the
KPR Partnership for the interim period October 7, 1995, which
financial statements shall have been prepared in accordance with
GAAP applied on a basis consistent with the financial statements
referred to in paragraph (r) above, subject to normal year-end
audit adjustments and to the absence of footnotes required
thereby.
(t) The Lenders shall be satisfied with the results of
an examination of the accounts receivable and inventory of the
Borrower and the Subsidiary Guarantors.
(u) The Borrower and the Subsidiaries shall have
established cash management procedures, including concentration
accounts, satisfactory to the Lenders.
(v) The Lenders shall be satisfied with all
arrangements to be in place following the Closing Date between
the Borrower (and/or the KPR Partnership) and the Seller,
including arrangements relating to trademark licensing, real
estate leases, agreements not to compete and agreements to
provide transitional services. Unless otherwise agreed to by the
Lenders, all such arrangements shall be on an arm's-length basis.
(w) The Lenders shall be satisfied with all legal, tax
and accounting matters relating to the KPR Acquisition, the
financing therefor and all other transactions contemplated
hereby.
(x) All requisite Governmental Authorities and third
parties shall have approved or consented (excluding any lessor's
consent relating to the Borrower's facility located at Cherokee,
Iowa) to the KPR Acquisition and the other Transactions to the
extent required, all applicable appeal periods shall have expired
and there shall be no governmental or judicial action, actual or
threatened, that has or would have a reasonable likelihood of
restraining, preventing or imposing burdensome conditions on the
transactions contemplated hereby.
(y) Except for the KPR Litigation, there shall be no
litigation or administrative proceedings or other legal or
regulatory developments, actual or threatened (including any
proposed statute, rule or regulation), that, in the judgment of
the Lenders, involve a reasonable possibility of a Material
Adverse Effect or a material adverse effect on the KPR
Acquisition.
(z) Except for the KPR Litigation, there shall not have
occurred, since January 1, 1995, any change that in the judgment
of the Lenders could reasonably be expected to result in a
Material Adverse Effect or a material adverse effect on the KPR
Acquisition.
(aa) The Mortgaged Properties shall each be in
substantial compliance with all applicable material laws, rules,
regulations, statutes (including any zoning, building,
Environmental and Safety Law, ordinance, code or approval or any
building permits) and all restrictions of record and all material
agreements affecting the Mortgaged Property and all decrees or
orders of any Governmental Authority with jurisdiction with
respect thereto.
(bb) Each Lender shall have received the certified
documents required to be delivered to it pursuant to Section
4.24(b).
(cc) The Administrative Agent shall have received one
of the following for each of the Mortgaged Properties:
(A) a written confirmation from the applicable
zoning commission or other appropriate Governmental Authority
stating that each Mortgaged Property complies with existing land
use and zoning ordinances, regulations and restrictions
applicable to such Mortgaged Property, (B) an opinion from local
counsel acceptable to the Administrative Agent to the same effect
as covered by clause (A) above, or (C) a zoning endorsement
satisfactory to the Administrative Agent in connection with the
Collateral Agent's mortgagee title insurance policy of such
Mortgaged Property.
(dd) Neither the Borrower nor any Subsidiary shall be
in default in any manner under any provision of any indenture or
other agreement or instrument evidencing Indebtedness, or any
other material agreement or instrument to which it is a party or
by which it or any of its properties are or may be bound, where
such default could reasonably be expected to result in a Material
Adverse Effect.
(ee) The Borrower shall have consummated a corporate
restructuring pursuant to which, among other things, the Borrower
shall have become a holding company, and such restructuring shall
be satisfactory in all material respects to the Lenders.
SECTION 5.03. Acquisitions. (A) On the date of each Credit
Event to be made to finance the KPR Acquisition or any Qualified
Acquisition other than the Proposed TNT Acquisition:
(a) The corporate and capital structure of the
Borrower and each Subsidiary and the management of each entity
subject to such Acquisition, in each case after giving effect
thereto, shall be satisfactory to the Required Lenders in all
respects.
(b) The agreements, instruments and documents
governing and relating to such Acquisition shall be satisfactory
to the Required Lenders and no material provision thereof
shall have been waived, amended, supplemented or otherwise
modified without the prior written consent of the Required
Lenders.
(c) All fees payable to the Lenders in respect of such
Acquisition shall have been paid to the Administrative Agent on
or before the date such Acquisition is consummated.
(d) All requisite Governmental Authorities and third
parties shall have approved or consented (including landlords'
and other consents) to such Acquisition to the extent required,
all applicable appeal or waiting periods shall have expired, and
there shall be no governmental or judicial action, actual or
threatened, that has or would have a reasonable likelihood of
restraining, preventing or imposing burdensome conditions on the
transactions contemplated hereby.
(e) The Lenders shall have received an updated pro
forma consolidated balance sheet of the Borrower after giving
effect to the consummation of such Acquisition, and the Required
Lenders shall be satisfied with such balance sheet.
(f) All actions necessary or reasonably requested
(including all actions required or requested pursuant to Section
6.10) to perfect the liens of the Collateral Agent and the
Lenders with respect to the assets subject to such Acquisition
(including, if applicable, the stock, partnership or other equity
interests of any Person acquired) shall have been taken, or
shall be taken concurrently with the consummation of such
Acquisition, and all fees and taxes payable in connection
therewith shall have been paid, or shall be paid concurrently
with the consummation of such Acquisition.
(g) The Lenders shall have received a certificate of
an appropriate officer of the Borrower attesting to the solvency
of the Borrower and each of the Subsidiaries after giving
effect to such Acquisition.
(h) The Lenders shall have received the Environmental
Reports or another environmental audit with respect to the real
property relating to such Acquisition from a firm satisfactory to
the Administrative Agent, and the Required Lenders shall be
satisfied with such audit.
(i) The Required Lenders shall be satisfied that the
Borrower's net operating loss carryforward will not be materially
reduced after giving effect to such Acquisition.
(j) Chemical Bank's asset-based lending group shall
have completed an audit of the accounts receivable and inventory
of the company or business that is the subject of such
Acquisition and the results of such audit shall be satisfactory
to the Required Lenders.
(k) The Collateral Agent shall have received the
results of a recent search or searches of the Uniform Commercial
Code filings (or equivalent filings) made with respect to the
Borrower, the Subsidiary Guarantors and the Person that is the
subject of such Acquisition in the States (or other
jurisdictions) in which are located the chief executive offices
of such Persons, any offices of such Persons in which records
have been kept relating to Receivables and the other
jurisdictions in which Uniform Commercial Code filings (or
equivalent filings) are to be made pursuant to this Section 5.03,
together with copies of the financing statements (or similar
documents) disclosed by such search, and accompanied by evidence
satisfactory to the Administrative Agent that the Liens indicated
in any such financing statement (or similar document) would be
permitted under Section 7.02 or have been released.
(l) The Lenders shall have received (to the extent not
previously delivered) (i) satisfactory audited consolidated (and
consolidating, if available) financial statements of the
company or business that is the subject of such Acquisition for
the three most recent fiscal years ended prior to the Closing
Date as to which such financial statements are available and
(ii) satisfactory unaudited interim consolidated and
consolidating financial statements of such company or business
for each fiscal quarter period ended subsequent to the date of
the latest financial statements delivered pursuant to clause (i)
of this paragraph as to which such financial statements are
available.
(m) The Lenders shall have received such legal
opinions (including opinions (i) from counsel to the Borrower and
its subsidiaries and (ii) from such special and local counsel as
may be required by the Administrative Agent) in connection with
such Acquisition as the Required Lenders may reasonably request.
(B) On the date of the Credit Event to be made to
finance the Proposed TNT Acquisition:
(a) No material provision of the TNT Purchase
Agreement, as previously provided to the Lenders, shall have been
waived, amended, supplemented or otherwise modified without the
prior written consent of the Required Lenders.
(b) All fees payable to the Lenders in respect of the
Proposed TNT Acquisition shall have been paid to the
Administrative Agent on or before the date such Acquisition is
consummated.
(c) All requisite Governmental Authorities and third
parties shall have approved or consented (including landlords'
and other consents) to such Acquisition to the extent
required, all applicable appeal or waiting periods shall have
expired, and there shall be no governmental or judicial action,
actual or threatened, that has or would have a reasonable
likelihood of restraining, preventing or imposing burdensome
conditions on the transactions contemplated hereby.
(d) The Lenders shall have received an updated pro
forma consolidated balance sheet of the Borrower after giving
effect to the consummation of such Acquisition.
(e) All actions necessary or reasonably requested
(including all actions required or requested pursuant to Section
6.10) to perfect the liens of the Collateral Agent and the
Lenders with respect to the assets subject to such Acquisition
(including, if applicable, the stock of TNT) shall have been
taken, or shall be taken concurrently with the consummation of
such Acquisition, and all fees and taxes payable in connection
therewith shall have been paid, or shall be paid concurrently
with the consummation of such Acquisition.
(f) The Lenders shall have received a certificate of
an appropriate officer of the Borrower attesting to the solvency
of the Borrower and each of the Subsidiaries after giving
effect to such Acquisition.
(h) Chemical Bank's asset-based lending group shall
have completed an audit of TNT and the results of such audit
shall have been distributed to the Lenders.
(i) The Collateral Agent shall have received the
results of a recent search or searches of the Uniform Commercial
Code filings (or equivalent filings) made with respect to the
Borrower, the Subsidiary Guarantors and TNT in the States (or
other jurisdictions) in which are located the chief executive
offices of such Persons, any offices of such Persons in which
records have been kept relating to Receivables and the other
jurisdictions in which Uniform Commercial Code filings (or
equivalent filings) are to be made pursuant to this Section 5.03,
together with copies of the financing statements (or similar
documents) disclosed by such search, and accompanied by evidence
satisfactory to the Administrative Agent that the Liens indicated
in any such financing statement (or similar document) would be
permitted under Section 7.02 or have been released.
(j) The Lenders shall have received such legal
opinions (including opinions (i) from counsel to the Borrower and
its subsidiaries and (ii) from such special and local counsel as
may be required by the Administrative Agent) in connection with
the Proposed TNT Acquisition as the Administrative Agent may
reasonably request.
ARTICLE VI
Affirmative Covenants
The Borrower covenants and agrees with each Lender, the
Administrative Agent and the Issuing Lender that, so long as the
principal of or interest on any Loan or LC Disbursement, any Fees
or any other expenses or amounts payable under any Loan Document
shall be unpaid, unless the Required Lenders shall otherwise
consent in writing, the Borrower shall and shall cause each of
the Subsidiaries to:
SECTION 6.01. Existence; Businesses and Properties. (a)
Except as expressly permitted by Section 7.05, do or cause to be
done all things necessary to preserve, renew and keep in full
force and effect its legal existence.
(b) Do or cause to be done all things necessary to obtain,
preserve, renew, extend and keep in full force and effect the
rights, licenses, permits, franchises, authorizations, patents,
copyrights, trademarks and trade names material to the conduct of
its business; maintain and operate such business in substantially
the manner in which it is currently conducted and operated (or,
in the case of any business acquired in a Qualified Acquisition,
in substantially the manner in which it is conducted and operated
as of the date on which such Qualified Acquisition is
consummated); comply in all material respects with all applicable
laws, rules, regulations and statutes (including any zoning,
building, Environmental and Safety Law, ordinance, code or
approval or any building permits or any restrictions of record or
agreements affecting the Mortgaged Property) and decrees and
orders of any Governmental Authority, whether now in effect or
hereafter enacted; and at all times maintain and preserve all
property material to the conduct of such business and keep such
property in good repair, working order and condition and from
time to time make, or cause to be made, all needful and proper
repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times.
(c) Maintain all financial records in accordance with GAAP.
SECTION 6.02. Insurance. (a) Keep its properties (including
Improvements and Personal Property (each as defined in the
Mortgages)) insured at all times by financially sound and
reputable insurers against loss by fire, casualty and such other
hazards as may be afforded by an all risk policy or a fire
policy covering special causes of loss, including building
ordinance law endorsements; cause all such policies to be
endorsed or otherwise amended to include a standard or New York
lender's loss payable endorsement, in form and substance
reasonably satisfactory to the Administrative Agent and the
Collateral Agent, which endorsement shall provide that, from and
after the Closing Date, the insurance carrier shall pay all
proceeds otherwise payable to the Borrower or the applicable
Subsidiary under such policies directly to the Collateral Agent
if the insurance carrier shall have received written notice from
the Administrative Agent or the Collateral Agent that an Event of
Default has occurred; cause all such policies to provide that
neither the Borrower, the Administrative Agent, the Collateral
Agent nor any other party shall be a coinsurer thereunder and
to contain a Replacement Cost Endorsement , without any
deduction for depreciation, and such other provisions as the
Administrative Agent or the Collateral Agent may reasonably
require from time to time to protect its interest; deliver
original or certified copies of all such policies to the
Collateral Agent at its request; cause each such policy to
provide that it shall not be canceled, modified or not renewed
(i) by reason of nonpayment of premium upon not less than 10
days' prior written notice thereof by insurer to the
Administrative Agent and the Collateral Agent or (ii) for any
other reason upon not less than 30 days' prior written notice
thereof by insurer to the Administrative Agent and the Collateral
Agent; deliver to the Administrative Agent and the Collateral
Agent, prior to the cancellation, modification or nonrenewal of
any such policy of insurance, a copy of a renewal or replacement
policy (or other evidence of renewal of a policy previously
delivered to the Administrative Agent and the Collateral Agent)
together with evidence satisfactory to the Administrative Agent
and the Collateral Agent of payment of the premium therefor; and
cause each all risk policy to be endorsed to provide for a waiver
by the related insurer of all its rights to recovery against the
Borrower or any Subsidiary for damage covered by such policy.
(b) If at any time the area in which the Premises (as
defined in the Mortgages) are located is designated (i) a
special flood hazard area in any Flood Insurance Rate Map or
Flood Hazard Boundary Map published by the Federal Emergency
Management Agency, obtain flood insurance in such total amount as
the Collateral Agent or the Administrative Agent may from time to
time reasonably require, and otherwise comply with the National
Flood Insurance Program as set forth in said Flood Disaster
Protection Act of 1973, as it may be amended from time to time or
(ii) a Zone 1 area, obtain earthquake insurance in such total
amount as the Administrative Agent, the Collateral Agent or the
Required Lenders may from time to time require.
(c) With respect to any Mortgaged Property, carry and
maintain comprehensive general liability insurance including the
broad form CGL endorsement and coverage on an occurrence
basis against claims made for personal injury (including bodily
injury, death and property damage) and umbrella liability
insurance against any and all claims, in no event for a combined
single limit of less than $5,000,000, naming the Collateral Agent
as an additional insured, on forms reasonably satisfactory to the
Collateral Agent.
(d) Notify the Administrative Agent and the Collateral Agent
immediately whenever any separate insurance concurrent in form or
contributing in the event of loss with that required to be
maintained under this Section 6.02 is taken out by the Borrower
or any Subsidiary; and promptly deliver to the Administrative
Agent and the Collateral Agent a duplicate original copy of such
policy or policies.
(e) In connection with the covenants set forth in this
Section 6.02, it is understood and agreed that:
(i) neither the Administrative Agent, the Lenders, the
Issuing Lender, nor their agents or employees shall be liable for
any loss or damage insured by the insurance policies required
to be maintained under this Section 6.02, it being understood
that (A) the Borrower and the Subsidiaries shall look solely to
its insurance company or any other parties other than the
aforesaid parties for the recovery of such loss or damage and (B)
such insurance company shall have no rights of subrogation
against the Administrative Agent, the Collateral Agent, the
Lenders, the Issuing Lender or their agents or employees. If,
however, the insurance policies do not provide waiver of
subrogation rights against such parties, as requested above,
then the Borrower hereby agrees, to the extent permitted by law,
to waive (or cause the applicable Subsidiary to waive) its right
of recovery, if any, against the Administrative Agent, the
Collateral Agent, the Lenders, the Issuing Lender and their
agents and employees; and
(ii) the designation of any form, type or amount of
insurance coverage by the Administrative Agent or the Collateral
Agent under this Section 6.02, shall in no event be deemed a
representation, warranty or advice by the Administrative Agent or
the Collateral Agent or any Lender that such insurance is
adequate for the purposes of the Borrower's or any Subsidiary's
business or the protection of the Borrower's or any Subsidiary's
properties.
SECTION 6.03. Obligations and Taxes. Pay and discharge
promptly when due all material taxes, assessments and
governmental charges or levies imposed upon it or upon its income
or profits or in respect of its property, before the same shall
become delinquent or in default, as well as all lawful claims for
labor, materials and supplies or otherwise that, if unpaid, might
give rise to a Lien upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be
required with respect to any such obligation, tax, assessment,
charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and
the Borrower or the applicable Subsidiary shall have set aside on
its books adequate reserves with respect thereto in accordance
with GAAP and such contest operates to suspend collection of the
contested obligation, tax, assessment or charge and enforcement
of a Lien and, in the case of a Mortgaged Property, there is no
risk of forfeiture of such property.
SECTION 6.04. Financial Statements, Reports, etc. Furnish to
the Administrative Agent and each Lender:
(a) as soon as available, and in no event later than 90
days after the end of each fiscal year (or 105 days if the
Securities and Exchange Commission has granted an extension to
the Borrower of the time to file its financial statements for
such fiscal period), the consolidated and consolidating balance
sheets and related statements of income and cash flow, showing
the consolidated financial condition of the Borrower and its
consolidated subsidiaries as of the close of such fiscal year and
the results of their operations during such year, audited by
Coopers & ▇▇▇▇▇▇▇ or other independent public accountants of
recognized national standing reasonably acceptable to the
Required Lenders and accompanied by an opinion of such
accountants (which shall not be qualified in any material
respect) to the effect that such consolidated financial
statements fairly present the consolidated financial condition
and results of operations of the Borrower and its consolidated
subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;
(b) as soon as available, and in no event later than 45
days (or 50 days if the Securities and Exchange Commission has
granted an extension to the Borrower of the time to file its
financial statements for such fiscal period) after the end of
each of the first three fiscal quarters of each fiscal year, the
unaudited consolidated and consolidating balance sheets and
related statements of income and changes in financial position,
showing the consolidated financial condition of the Borrower and
its consolidated subsidiaries as of the close of such fiscal
quarter and the results of their operations during such fiscal
quarter and the then elapsed portion of the fiscal year, all
certified by a Financial Officer of the Borrower as fairly
presenting the consolidated financial condition and results of
operations of the Borrower and its consolidated subsidiaries in
accordance with GAAP consistently applied, subject to normal
year-end audit adjustments;
(c) concurrently with any delivery of financial
statements under (a) or (b) above, a certificate of the
accounting firm or a Financial Officer of the Borrower opining on
or certifying such statements (which certificate, when furnished
by an accounting firm, may be limited to accounting matters and
disclaim responsibility for legal interpretations) (i) certifying
that no Event of Default or Default has occurred or, if such an
Event of Default or Default has occurred, specifying the nature
and extent thereof and any corrective action taken or proposed to
be taken with respect thereto and (ii) setting forth computations
in reasonable detail satisfactory to the Administrative Agent
demonstrating compliance with the covenants contained in Article
VII hereof;
(d) promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and
other materials filed by Borrower or any of the Subsidiaries with
the Securities and Exchange Commission, or any governmental
authority succeeding to any of or all the functions of said
Commission, or with any national securities exchange, or
distributed to any of their shareholders or holders of their debt
securities, as the case may be;
(e) promptly after the end of each fiscal month (but in
no event later than the sixth Business Day of the following
month) a Borrowing Base Certificate as of the last day of the
fiscal month most recently ended (it being understood that
nothing in this paragraph (e) shall limit the ability of the
Borrower to deliver a Borrowing Base Certificate more frequently
than once each fiscal month);
(f) promptly following the preparation thereof, copies
of each management letter prepared by the Borrower's auditors
(together with any response thereto prepared by the Borrower);
(g) not later than 30 days (or 60 days in the case of
the fiscal year ending December 30, 1995) after the commencement
of each fiscal year, forecasted financial projections through the
end of such fiscal year, in substantially the same form and
format as set forth in Section 11 of the Confidential Information
Memorandum (including a specification of the underlying
assumptions), all certified by a Financial Officer of the
Borrower to be a good faith estimate of the forecasted financial
projections for such fiscal year;
(h) at least ten Business Days prior to any Qualified
Acquisition, financial projections covering the period from the
date of such Qualified Acquisition through the Maturity Date
giving effect to such Qualified Acquisition and demonstrating
compliance by the Borrower on a pro forma basis with the
covenants set forth in Article VII from and after the date of,
and after giving effect to, such Qualified Acquisition through
the Maturity Date;
(i) upon the earlier of (i) 105 days after the end of
each fiscal year of the Borrower, commencing with the fiscal year
ending on or about December 31, 1996 and (ii) the date on
which the financial statements with respect to such period are
delivered pursuant to paragraph (a) above, a certificate of a
Financial Officer of the Borrower setting forth, in detail
reasonably satisfactory to the Administrative Agent, the amount
of Excess Cash Flow, if any, for such period;
(j) promptly, from time to time, such other information
regarding the operations, business affairs and financial
condition of the Borrower and the Subsidiaries, or compliance
with the terms of any Loan Document, as the Administrative Agent,
the Issuing Lender or any Lender may reasonably request;
(k) promptly, a copy of any notice of a default
received by the Borrower or any Subsidiary Guarantor under any
other Loan Document;
(l) promptly, notice of any material change in or
addition to the types of Inventory maintained on the date hereof;
and
(m) promptly, each of the items listed on the schedule
of post-closing documents set forth on Exhibit M.
SECTION 6.05. Litigation and Other Notices. Furnish to the
Administrative Agent, the Issuing Lender, the Collateral Agent
and each Lender prompt written notice of the occurrence of the
following:
(a) any Event of Default or Default, specifying the
nature and extent thereof and the corrective action (if any)
proposed to be taken with respect thereto;
(b) the filing or commencement of, or any threat or
notice of intention of any Person to file or commence, any
action, suit or proceeding, whether at law or in equity or by or
before any Governmental Authority, against the Borrower or any
Affiliate thereof that, if adversely determined, could reasonably
be expected to result in a Material Adverse Effect; and
(c) any development that has resulted in, or could
reasonably be anticipated to result in, a Material Adverse
Effect.
SECTION 6.06. ERISA. (a) Comply in all material respects
with the applicable provisions of ERISA and the Code and (b)
furnish to the Administrative Agent, the Issuing Lender and each
Lender (i) as soon as possible, and in any event within 30 days
after any Responsible Officer of the Borrower or any ERISA
Affiliate either knows or has reason to know that any Reportable
Event has occurred that alone or together with any other
Reportable Event could reasonably be expected to result in
liability of the Borrower or any ERISA Affiliate to the PBGC in
an aggregate amount exceeding $19,000,000 (or, in the event of an
increase in the underfunding of any Plan solely as a result of a
change after the date hereof in any discount rate applicable to
such Plan, $23,000,000), a statement of a Financial Officer of
the Borrower setting forth details as to such Reportable Event
and the action proposed to be taken by the Borrower with respect
thereto, together with a copy of the notice, if any, of such
Reportable Event given to the PBGC, (ii) promptly after receipt
thereof, a copy of any notice the Borrower or any ERISA Affiliate
may receive from the PBGC relating to the intention of the PBGC
to terminate any Plan or Plans (other than a Plan maintained by
an ERISA Affiliate that is considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Section 414 of the Code) or
to appoint a trustee to administer any such Plan, (iii) promptly,
and in any event within 20 days after the due date for filing
with the PBGC pursuant to Section 412(n) of the Code of a notice
of failure to make a required installment or other payment with
respect to a Plan, a statement of a Financial Officer of the
Borrower setting forth details as to such failure and the action
proposed to be taken with respect thereto, together with a copy
of such notice given to the PBGC and (iv) promptly and in any
event within 30 days after receipt thereof by the Borrower or any
ERISA Affiliate from the sponsor of a Multiemployer Plan, a copy
of each notice received by the Borrower or any ERISA Affiliate
concerning (A) the imposition of Withdrawal Liability or (B) a
determination that a Multiemployer Plan is, or is expected to be,
terminated or in reorganization, in each case within the meaning
of Title IV of ERISA.
SECTION 6.07. Maintaining Records; Access to Properties and
Inspections. Maintain all financial records in accordance with
GAAP and permit, upon reasonable notice and during business
hours, any representatives designated by the Administrative
Agent, the Issuing Lender, the Collateral Agent or any Lender to
visit and inspect the financial records and the properties of the
Borrower and any Subsidiary as often as reasonably requested and
to make extracts from and copies of such financial records, and
permit any representatives designated by the Administrative
Agent, the Issuing Lender, the Collateral Agent or any Lender to
discuss the affairs, finances and condition of the Borrower and
any Subsidiary or any properties of Borrower and any Subsidiary
with the officers thereof and independent accountants therefor
(it being understood that the Borrower may participate in any
such discussion); and permit the Administrative Agent, at the
Borrower's expense, to audit the computations in any Borrowing
Base Certificate and to audit the existence and condition of
accounts receivable and inventory included in the Borrowing Base.
SECTION 6.08. Use of Proceeds. Use the Letters of Credit and
the proceeds of the Loans only for the purposes set forth in the
preamble to this Agreement.
SECTION 6.09. Fiscal Year. Cause its fiscal year to end on
the Saturday closest to January 1 of each year.
SECTION 6.10. Further Assurances. (a) Execute any and all
further documents, financing statements, agreements and
instruments, and take all further action (including filing
Uniform Commercial Code and other financing statements, mortgages
and deeds of trust) that may be required under applicable law, or
which the Required Lenders, the Administrative Agent or the
Collateral Agent may reasonably request, in order to effectuate
the transactions contemplated by the Transaction Documents and in
order to grant, preserve, protect and perfect the validity and
first priority of the security interests created or intended to
be created by the Security Documents. In addition, from time to
time, the Borrower will, and will cause the Subsidiaries to, at
the Borrower's or such Subsidiary's cost and expense, promptly
secure the Obligations by pledging or creating, or causing to be
pledged or created, perfected security interests with respect to
such of its assets and properties as the Administrative Agent or
the Required Lenders shall designate (it being understood that it
is the intent of the parties that the Obligations shall be
secured by, among other things, substantially all the assets of
the Borrower and the Subsidiaries (including (i) any real
property and improvements thereon acquired after the Closing Date
the fair market value of which equals or exceeds $3,000,000 on
the date of acquisition thereof, (ii) any leasehold interest in
property acquired after the Closing Date upon which the Borrower
or any Subsidiary intends, as of the date of such acquisition, to
conduct material operations and (iii) any other material
properties (other than any properties the acquisition of which
was financed with Indebtedness under Section 7.01(d) or 7.01(e))
acquired after the Closing Date)). Such security interests and
Liens will be created under the Security Documents and other
security agreements, mortgages, deeds of trust and other
instruments and documents in form and substance satisfactory to
the Required Lenders, and each of the Borrower and the
Subsidiaries shall deliver or cause to be delivered to the
Lenders all such instruments and documents (including legal
opinions, appraisals, title insurance policies and lien searches)
as the Administrative Agent or the Required Lenders shall
reasonably request to evidence compliance with this Section
6.10. Each of the Borrower and the Subsidiaries agrees to provide
such evidence as the Required Lenders shall reasonably request as
to the perfection and priority status of each such security
interest and Lien.
(b)(i) Without limiting the generality of paragraph (a)
above, promptly cause each subsidiary created or acquired by it
from time to time in accordance with the terms of this Agreement
to undertake the obligation of and to become (A) a Subsidiary
Guarantor under the Guarantee Agreement pursuant to one or more
instruments or agreements substantially in the form of Annex
1 to the Guarantee Agreement, (B) a Subsidiary Guarantor under
the Indemnity, Subrogation and Contribution Agreement pursuant to
one or more instruments or agreements substantially in the form
of Annex 1 to the Indemnity, Subrogation and Contribution
Agreement, (C) a Pledgor under the Pledge Agreement pursuant to
one or more instruments or agreements substantially in the form
of Annex 1 to the Pledge Agreement, (D) to the extent such
subsidiary owns or leases any real property, a Mortgagor under a
Mortgage or Leasehold Mortgage, as applicable, (E) a Grantor
under the Security Agreement pursuant to one or more instruments
or agreements substantially in the form of Annex 3 to the
Security Agreement, (F) a Grantor under the Trademark Security
Agreement pursuant to one or more instruments or agreements
substantially in the form of Annex 1 to the Trademark Security
Agreement, (G) a Grantor under the Patent Security Agreement
pursuant to one or more instruments or agreements substantially
in the form of Annex 1 to the Patent Security Agreement, and (H)
a Grantor under the Collateral Assignment pursuant to one or more
instruments or agreements substantially in the form of Annex 1 to
the Collateral Assignment and (ii) pledge the shares of capital
stock of each such subsidiary to the Collateral Agent for the
benefit of the Lenders pursuant to the Pledge Agreement.
(c) Without limiting the generality of paragraphs (a) and
(b) above, cause each Subsidiary that shall deliver a guarantee
pursuant to Section 4.17 of the Subordinated Note Indenture to
become (to the extent not already a party thereto) a Subsidiary
Guarantor under the Guarantee Agreement pursuant to one or more
instruments or agreements substantially in the form of Annex 1 to
the Guarantee Agreement.
SECTION 6.11. Environmental and Safety Laws. (a) Comply
with, and ensure compliance by all tenants and subtenants with,
all Environmental and Safety Laws and obtain and comply with
and maintain, and ensure that all tenants and subtenants obtain
and comply with and maintain, any and all licenses, approvals,
registrations or permits required by Environmental and Safety
Laws, except to the extent that failure to so comply or to obtain
and comply with and maintain such licenses, approvals,
registrations and permits does not have, and could not reasonably
be expected to result in, a Material Adverse Effect.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other
actions, required under Environmental and Safety Laws and
promptly comply with all lawful orders and directives of all
Governmental Authorities respecting Environmental and
Safety Laws, except to the extent that the same are being
contested in good faith by appropriate proceedings and the
pendency of such proceedings and the failure to so conduct,
complete or comply would not have a Material Adverse Effect.
(c) Promptly notify the Administrative Agent of any of the
following that is reasonably likely to result in liability of the
Borrower or any Subsidiary in excess of $5,000,000:
(i) any Environmental Claim that the Borrower or any
Subsidiary receives, including one to take or pay for any
remedial, removal, response or cleanup or other action with
respect to any Hazardous Substance contained on any property
owned, leased or operated by the Borrower or any Subsidiary;
(ii) any notice of any alleged violation of any
Environmental and Safety Law; and
(iii) any commencement or threatened commencement of
any judicial or administrative proceeding or investigation
alleging a violation or potential violation of any requirement of
Environmental and Safety Law.
(d) Without limiting the generality of Section 10.05(b),
indemnify the Administrative Agent, the Issuing Lender, the
Collateral Agent and each Lender and each of their respective
directors, officers, employees, agents and Affiliates (each such
Person being called an Indemnitee ) against, and to hold each
Indemnitee harmless from, any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses (including
reasonable counsel fees, charges and disbursements) of whatever
kind or nature arising out of, or in any way relating to, the
violation of, noncompliance with or liability under any
Environmental and Safety Laws applicable to the operations of the
Borrower or any Subsidiary on the Mortgaged Properties, or any
orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, reasonable
attorney's and consultant's fees, reasonable investigation and
laboratory fees, response costs, court costs and litigation
expenses, except to the extent that any of the foregoing are
found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the gross negligence
or wilful misconduct of the Indemnitee seeking indemnification
therefor. This indemnity shall continue in full force and effect
regardless of the termination of this Agreement and the other
Loan Documents.
SECTION 6.12 Collection Account Arrangements. (a) In the
case of the Borrower and each Subsidiary Guarantor, establish not
later than six (6) months after the Closing Date and thereafter
maintain at all times all its collection or deposit accounts with
the Collateral Agent or one or more Lenders.
(b) Cause all payments and remittances in respect of
Receivables and Inventory that are collected by or on behalf of
the Borrower or any Subsidiary Guarantor to be promptly deposited
on a daily basis in the collection or deposit accounts referred
to in paragraph (a) above.
ARTICLE VII
Negative Covenants
The Borrower covenants and agrees with each Lender, the
Administrative Agent and the Issuing Lender that, so long as the
principal of or interest on any Loan or LC Disbursement, any Fees
or any other expenses or amounts payable under any Loan Document
shall be unpaid, unless the Required Lenders shall otherwise
consent in writing, the Borrower shall not and shall not permit
any of the Subsidiaries to, directly or indirectly:
SECTION 7.01. Indebtedness. Incur, create, assume or permit
to exist any Indebtedness, except:
(a) Indebtedness for borrowed money existing on the
date hereof (other than the Subordinated Notes) and set forth on
Schedule 7.01 (and any extensions, renewals or replacements of
such Indebtedness to the extent that the aggregate principal
amount of such Indebtedness is not at any time increased);
(b) in the case of the Borrower, the Loans;
(c) in the case of the Subsidiary Guarantors, their
respective guarantees of the Obligations pursuant to the
Guarantee Agreement;
(d) Indebtedness consisting of purchase money
Indebtedness incurred in the ordinary course of business after
the Closing Date to finance Capital Expenditures; provided,
however, that (i) the sum of (A) the aggregate principal amount
of Indebtedness permitted pursuant to this Section 7.01(d), (B)
any Capital Lease Obligations permitted pursuant to Sections
7.01(e) and 7.11(b) other than Capital Lease Obligations in
respect of the KPR Lease and (C) the aggregate principal amount
of Indebtedness permitted pursuant to Section 7.01(k) shall not
exceed $20,000,000 at any time outstanding and (ii) such
Indebtedness is incurred within 120 days after the making of the
Capital Expenditures financed thereby;
(e) Indebtedness in respect of Capital Lease
Obligations permitted under Section 7.11(b);
(f) in the case of the Borrower, the Subordinated Notes
and any Indebtedness ( Subordinated Note Refinancing Debt ) the
proceeds of which are used to refinance all or any portion of the
Subordinated Notes, provided that (i) the maximum principal
amount of such Subordinated Note Refinancing Debt shall not
exceed the sum of (x) the then-outstanding principal amount of
the Subordinated Notes so refinanced, (y) the amount of accrued
and unpaid interest thereon and (z) the amount of any premium
payable in connection with such refinancing, (ii) the weighted
average life to maturity of the Subordinated Note Refinancing
Debt shall be greater than or equal to the weighted average
life to maturity of the Subordinated Notes and the first
scheduled principal payment in respect of such Subordinated Note
Refinancing Debt shall be no earlier than the first scheduled
principal payment in respect of the Subordinated Notes, (iii) the
stated maturity of such Subordinated Note Refinancing Debt shall
be no earlier than the stated maturity of the Subordinated Notes,
(iv) no material terms applicable to such Subordinated Note
Refinancing Debt (including the subordination provisions thereof)
shall be more favorable to the refinancing lenders than the terms
that are applicable to the holders of the Subordinated Notes, (v)
such Subordinated Note Refinancing Debt shall be Indebtedness of
the Borrower, (vi) such Subordinated Note Refinancing Debt shall
be unsecured and shall not be guaranteed by any Subsidiary on
terms (including subordination terms) more favorable to the
refinancing lenders than the terms of the guarantees of the
Subordinated Notes existing as of the date hereof, (vii) after
giving effect to the incurrence of such Subordinated Note
Refinancing Debt as if it had been incurred on first day of the
Borrower's most recently completed period of four consecutive
fiscal quarters, the Borrower would have been in compliance with
the covenant set forth in Section 7.15 as of the last day of such
four-fiscal-quarter period and the covenant set forth in Section
7.16 for such four-fiscal-quarter period and (viii) such
Subsidiary Note Refinancing Debt may not be incurred if, at the
time of such incurrence, a Default or Event of Default has
occurred and is continuing or would result therefrom;
(g) open-account advances among the Borrower and any
Subsidiary Guarantor the capital stock of which is pledged under
the Pledge Agreement, or among any Subsidiary that is not a
Subsidiary Guarantor and any other Subsidiary that is not a
Subsidiary Guarantor, which advances shall be made in the
ordinary course of business and consistent with past practice;
(h) in the case of the Borrower, Indebtedness incurred
or assumed in connection with any Qualified Acquisition, provided
that such Indebtedness is permitted to be so incurred or
assumed under Section 7.05(d);
(i) In the case of any Subsidiary, any guarantee
delivered or incurred pursuant to Section 4.17 of the
Subordinated Note Indenture;
(j) In the case of the Borrower, unsecured senior or
subordinated Indebtedness having terms and conditions (including
terms and conditions relating to interest rate, principal
amount, maturity, fees, covenants, defaults, remedies and, if
applicable, subordination) satisfactory in all respects to the
Required Lenders if, after giving effect to the incurrence of
such Indebtedness as if it had been incurred on the first day of
the most recently completed period of four consecutive fiscal
quarters, the Borrower and the Subsidiaries would be in
compliance with Sections 7.15 and 7.16 with respect to such
period of four consecutive fiscal quarters (any Indebtedness
satisfying each of the criteria set forth in this clause (j) is
referred to herein as Specified Permitted Debt );
(k) other unsecured Indebtedness in an aggregate
principal amount at any time outstanding not in excess of
$20,000,000 less the sum of (i) the aggregate principal amount
of Indebtedness permitted pursuant to Section 7.01(d) and (ii)
any Capital Lease Obligations permitted pursuant to Sections
7.01(e) and (b) other than Capital Lease Obligations in respect
of the KPR Lease; provided, however, that not more than
$5,000,000 of such unsecured Indebtedness shall be the obligation
of any of the Borrower s Subsidiaries; and
(l) in the case of the Borrower, any Rate Protection
Agreement entered into after consultation with the Administrative
Agent.
SECTION 7.02. Liens. Create, incur, assume or permit to
exist any Lien on any property or assets (including stock or
other securities of any Person) now owned or hereafter acquired
by it or on any income or revenues or rights in respect of any
thereof, except:
(a) Liens on property or assets of the Borrower and the
Subsidiaries existing on the date hereof and set forth on
Schedule 7.02, provided that such Liens shall secure only those
obligations that they secure on the date hereof;
(b) any Lien existing on any property or asset prior to
the acquisition thereof (other than any property or assets
acquired in connection with a Qualified Acquisition) by the
Borrower or any Subsidiary, provided that (i) such Lien is not
created in contemplation of or in connection with such
acquisition, (ii) such Lien does not apply to any other property
or assets of the Borrower or any Subsidiary and (iii) such Lien
does not (A) materially interfere with the use, occupancy and
operation of any property, (B) materially reduce the fair market
value of such property but for such Lien or (C) result in any
material increase in the cost of operating, occupying or owning
(or leasing) such property;
(c) Liens for taxes, assessments or governmental
charges not yet due and payable or which are being contested in
compliance with Section 6.03;
(d) carriers', warehousemen's, mechanics',
materialmen's, repairmen's, landlord's or other like Liens
arising in the ordinary course of business and securing
obligations that are not due and payable or which are being
contested in compliance with Section 6.03;
(e) pledges and deposits made in the ordinary course of
business in compliance with workmen's compensation, unemployment
insurance and other social security laws or regulations;
(f) pledges and deposits to secure the performance of
bids, trade contracts (other than for Indebtedness), leases,
statutory obligations, surety and appeal bonds (provided that
such appeal bonds shall not secure judgments or other orders
requiring the payment of more than $5,000,000 in the aggregate),
performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(g) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar
encumbrances that do not materially impair the current use or the
value of the property subject thereto;
(h) purchase money security interests in real property,
improvements thereto or equipment hereafter acquired (or, in the
case of improvements, constructed) (other than any such real
property, improvements or equipment acquired in connection with a
Qualified Acquisition) by the Borrower or any Subsidiary,
provided that (i) such security interests secure Indebtedness
permitted by Section 7.01(d), (ii) such security interests are
incurred, and the Indebtedness secured thereby is created, within
120 days after such acquisition (or construction), (iii) the
Indebtedness secured thereby does not exceed 90% of the lesser of
the cost or the fair market value of such real property,
improvements or equipment at the time of such acquisition (or
construction) and (iv) such security interests do not apply to
any other property or assets of the Borrower or any Subsidiary;
(i) Liens in connection with Capital Lease Obligations
incurred pursuant to Section 7.01(e), provided that such Liens
attach or apply only to the property subject to the capital lease
under which such Capital Lease Obligations arise;
(j) any Lien created under the Loan Documents; and
(k) extensions, renewals and replacements of Liens
referred to in clauses (a), (b), (h) and (i) above, provided
that any such extension, renewal or replacement Lien is limited
to the property or assets covered by the Lien so extended,
renewed or replaced and does not secure any Indebtedness in
addition to that secured immediately prior to such extension,
renewal or replacement.
SECTION 7.03. Sale and Leaseback Transactions. Enter into
any arrangement, directly or indirectly, with any Person whereby
it shall sell or transfer any property, real or personal, used or
useful in its business, whether now owned or hereafter acquired,
and thereafter rent or lease such property or other property that
it intends to use for substantially the same purpose or purposes
as the property being sold or transferred except to the extent
that the aggregate principal amount of the Capital Lease
Obligations of the Borrower and its Subsidiaries under such
arrangements does not exceed $15,000,000. Notwithstanding the
foregoing, if the Borrower exercises its option to acquire
the plant presently leased by the Borrower located at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, the Borrower may sell and
lease back that property (the KPR Lease ); provided that, after
giving effect to the KPR Lease, the Borrower, on a pro forma
basis (as reflected in projections based upon reasonable
assumptions and delivered to the Lenders), will comply with the
covenants in Sections 7.15 and 7.16 throughout the term of the
Facilities and will have cash flow (including, for purposes of
such projections, amounts available to be borrowed under the
Revolving Credit Facility) sufficient to meet all scheduled
payments of principal of and interest on the Facilities through
the Maturity Date.
SECTION 7.04. Investments, Loans and Advances. Purchase,
hold or acquire any capital stock, evidences of Indebtedness or
other securities of, make or permit to exist any loans or
advances to, or make or permit to exist any investment or any
other interest in, any other Person, except:
(a) (i) investments by the Borrower and the
Subsidiaries existing on the date hereof in the capital stock of
the Subsidiaries and (ii) investments after the date hereof by
the Borrower and the Subsidiaries in the capital stock of any
Subsidiary Guarantor the capital stock of which is pledged under
the Pledge Agreement;
(b) Permitted Investments;
(c) pledges and deposits permitted under paragraph (f)
of Section 7.02;
(d) investments by the Borrower or any Subsidiary
Guarantor that is a wholly owned Subsidiary in capital stock in
connection with any Qualified Acquisition, so long as the
Borrower, such Subsidiary Guarantor and any subsidiary formed or
acquired in connection with such Qualified Acquisition shall have
complied with Section 6.10;
(e) loans or advances among the Borrower and the
Subsidiaries to the extent permitted under Section 7.01(g);
(f) investments received in connection with the
bankruptcy or reorganization of suppliers and customers in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of
business;
(g) loans or advances to employees of the Borrower or
any Subsidiary in an aggregate principal amount not to exceed
$1,000,000 at any time outstanding;
(h) investments in promissory notes issued by a
purchaser as consideration for the purchase of assets or property
from the Borrower or any Subsidiary, provided that (i) the
principal amount of any such promissory note does not exceed 25%
of the purchase price paid by such purchaser in connection with
such purchase, except that notes received by the Borrower upon
the sale of Pafco Importing Company, Inc. and/or ▇▇▇▇▇▇ Certified
Express, Inc. may exceed 25% of the applicable purchase price,
(ii) such sale of assets or property is permitted under Section
7.05, (iii) the aggregate principal amount of all such notes held
by the Borrower and its Subsidiaries shall not exceed $5,000,000
at any time and (iv) such notes shall have been pledged to the
Collateral Agent under the Pledge Agreement for the ratable
benefit of the Secured Parties;
(i) investments in Joint Ventures (or other similar
investments outside the United States) in the Borrower's primary
line of business or a related business, provided that the
aggregate amount of such investments, determined on the basis of
the original cost of such investments on the respective dates of
such investments, shall not at any time exceed the sum of (i)
$10,000,000 (excluding the cost of the Borrower's investment in
International Meat Ingredients, Ltd. ( IMI )) and (ii) the amount
of cash received by the Borrower by way of dividend or
distribution as a return on such investments (excluding amounts
received in respect of the Borrower's investment in IMI; and
provided, further, that the Borrower and the Subsidiaries shall
not make investments in IMI in excess of $1,000,000 after the
Closing Date until the Borrower has pledged all of its right,
title and interest in and to IMI to the Collateral Agent in a
manner satisfactory to the Collateral Agent; and
(j) investments in futures contracts in the ordinary
course of business pursuant to an Inventory hedging program
developed after consultation with the Administrative Agent.
SECTION 7.05. Mergers, Consolidations, Sales of Assets and
Acquisitions. Merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it,
or sell, transfer, assign, lease, sublease or otherwise dispose
of (in one transaction or in a series of transactions) all or any
substantial part of any asset (whether now owned or hereafter
acquired) or any capital stock of any Subsidiary, or purchase,
lease or otherwise acquire (in one transaction or a series of
transactions) all or any substantial part (to the extent such
assets constitute one or more distinct business units or
operations) of the assets of any other Person; provided, however,
that:
(a) the Borrower and any Subsidiary may sell Permitted
Investments for cash;
(b) the Borrower and any Subsidiary may sell, transfer
or otherwise dispose of used or surplus equipment, vehicles and
other assets in the ordinary course of business (to the
extent that the Borrower shall have complied with the provisions
of Section 2.13(c));
(c) the Borrower and any Subsidiary may purchase and
sell inventory in the ordinary course of business;
(d) subject to the provisions of this Section 7.05
below, the Borrower or any Subsidiary Guarantor that is a
wholly-owned Subsidiary may make acquisitions of assets or
equity securities of any Person organized and validly existing
under the laws of the United States, any State thereof or the
District of Columbia, so long as:
(i) the Person or business to be acquired shall
have positive cash flow (determined in accordance with GAAP) for
its most recent four fiscal quarters preceding such acquisition;
(ii) the Borrower, on a pro forma basis after
giving effect to such acquisition (as reflected in projections
based upon reasonable assumptions and delivered to the Lenders),
will comply with the covenants in Sections 7.15 and 7.16
throughout the term of the Facilities and will have cash flow
(including, for purposes of such projections, amounts available
to be borrowed under the Revolving Credit Facility) sufficient
to meet all scheduled payments of principal of and interest on
the Facilities through the Maturity Date;
(iii) the Person or business to be acquired is in
the same line of business as the Borrower; and
(iv) the Borrower has received the prior written
approval of the necessary Lenders, as provided in this clause (d)
below, it being understood that any Lender may withhold such
consent in its sole and absolute discretion.
Notwithstanding the provisions of this Section 7.05(d), the
Borrower may consummate only one Qualified Acquisition in
addition to the Proposed TNT Acquisition, or two Qualified
Acquisitions if the Borrower elects not to consummate the
Proposed TNT Acquisition, and the Borrower may consummate each
such additional Qualified Acquisition only with the prior written
approval of Lenders holding 66 2/3 % or more of the Commitments
and 66 2/3% of the outstanding Loans; any other Qualified
Acquisition shall be subject to the prior written approval of
100% of the Lenders. Together with each request for the Lenders'
consent to a Qualified Acquisition, the Borrower shall submit any
updated Schedules that the Borrower proposes to use in connection
with such Qualified Acquisition, and if such Qualified
Acquisition is approved the Schedules shall automatically be
deemed amended to reflect the changes set forth in such updated
Schedules.
(e) the Borrower may consummate the Proposed TNT
Acquisition in all material respects on the terms and conditions
disclosed to the Lenders prior to the Closing Date, with such
modifications and amendments to such terms and conditions as the
Required Lenders may approve; and
(f)(i) any Subsidiary Guarantor may merge into or be
liquidated into the Borrower in a transaction in which the
Borrower is the surviving cooporation, (ii) any Subsidiary
Guarantor may merge into or be liquidated into or consolidate
with any other Subsidiary Guarantor, in either case in a
transaction in which no person other than the Borrower or a
Subsidiary Guarantor receives any consideration and (iii) any
Subsidiary that is not a Subsidiary Guarantor may merge into or
be liquidated into or consolidate with any other Subsidiary that
is not a Subsidiary Guarantor.
SECTION 7.06. Dividends and Distributions. Declare or pay,
directly or indirectly, any dividend or make any other
distribution (by reduction of capital or otherwise), whether in
cash, property, securities (other than capital stock or the right
to acquire capital stock) or a combination thereof, with respect
to any shares of its capital stock or directly or indirectly
redeem, purchase, retire or otherwise acquire for value any
shares of any class of its capital stock or set aside any
amount for any such purpose; provided, however, that (i) any
Subsidiary may declare and pay dividends or make other
distributions to any other Subsidiary and to the Borrower (except
that no Subsidiary Guarantor may declare or pay dividends or make
other distributions to any Subsidiary that is not a Subsidiary
Guarantor) and (ii)notwithstanding anything to the contrary
contained in this Agreement, the Borrower may purchase common
stock of the Borrower from any shareholder owning less than 100
shares of such common stock for a purchase price that does not
exceed $500,000 in the aggregate for all such purchases.
SECTION 7.07. Transactions with Affiliates. Sell or transfer
any property or assets to, or purchase or acquire any property or
assets from, or otherwise engage in any other transactions with,
any of its Affiliates (other than the Borrower and its
Subsidiaries), except that as long as no Default or Event of
Default shall have occurred and be continuing, the Borrower and
any Subsidiary may engage in any of the foregoing transactions in
the ordinary course of business at prices and on terms
and conditions no less favorable to the Borrower or such
Subsidiary as the case may be, than could be obtained on an
arm's-length basis from unrelated third parties.
SECTION 7.08. Business of Borrower and the Subsidiaries.
Engage at any time in any business or business activity other
than the business currently conducted by it or any other business
related thereto and business activities reasonably incidental or
related thereto.
SECTION 7.09. Limitations on Debt Prepayments. (a)
Optionally prepay, repurchase or redeem or otherwise defease or
segregate funds with respect to any Specified Permitted Debt, the
Subordinated Notes or any guarantee delivered in accordance with
Section 4.17 of the Subordinated Note Indenture.
(b) Permit any amendment or modification to the terms of any
Specified Permitted Debt, the Subordinated Notes, the
Subordinated Note Indenture or any guarantee delivered or
incurred pursuant to Section 4.17 of the Subordinated Note
Indenture if the effect of such amendment or modification is to
impose additional or increased scheduled or mandatory repayment,
retirement, repurchase or redemption obligations in respect of
such Indebtedness or to require any scheduled or mandatory
payment to be made in respect of such Indebtedness prior to the
date that such payment would otherwise be due.
(c) Take any action in violation of, or permit any amendment
or modification that is adverse in any respect to the Lenders
with respect to, any applicable subordination provisions of any
Indebtedness.
(d) Pay interest, principal or premium on, or the purchase
price of, the Subordinated Notes to any holder thereof or trustee
therefor prior to the date on which any such principal, premium,
interest or purchase price is due.
(e) Deliver any notice to the trustee under the Subordinated
Note Indenture or the holders of the Subordinated Notes of its
offer to purchase the Subordinated Notes under Section 4.13 of
the Subordinated Note Indenture.
SECTION 7.10. Amendment of Certain Documents and
Subordinated Notes. Permit any termination of, or any amendment
or modification that in the reasonable judgment of the
Administrative Agent is adverse in any material respect to the
Lenders to, (i) the Certificate of Incorporation of the Borrower
or any Subsidiary, (ii) the By-laws of the Borrower or any
Subsidiary, (iii) the Subordinated Notes and/or the Subordinated
Note Indenture, (iv) the KPR Purchase Agreement and (v) any
instrument or agreement governing any Specified Permitted Debt or
pursuant to which any Specified Permitted Debt is issued, in each
case without the prior written consent of the Required Lenders.
Without limiting the generality of the foregoing, with respect to
the Subordinated Notes and the Subordinated Note Indenture, it is
understood that any increase in the interest, fees or other
amounts payable in connection therewith, or any amendment that
imposes additional covenants or events of default or makes more
restrictive the covenants or events of default contained therein,
shall require the consent of the Required Lenders.
SECTION 7.11. Limitation on Leases. Create or suffer to
exist any obligations for the payment of rents for any property
under leases or agreements to lease, except:
(a) leases in existence on the date hereof and listed
on Schedule 7.11(a) (and any extensions, renewals or replacements
of such leases, provided that the annual lease payment under any
such extension, renewal or replacement shall be no greater than
the fair market rental value of the leased property, as of the
date of such extension, renewal or replacement for the term of
such extension, renewal or replacement);
(b) Capital Lease Obligations incurred to finance the
acquisition of equipment and other property, provided that (i)
the aggregate of (A) the aggregate annual rental payments in
respect of the principal amount of all such Capital Lease
obligations other than Capital Lease Obligations in respect of
the KPR Lease, (B) any purchase money Indebtedness permitted
pursuant to Section 7.01(d) and (C) any Indebtedness permitted
pursuant to Section 7.01(k) shall not exceed $20,000,000 at any
time outstanding, (ii) each Capital Lease Obligation (other than
(i) any Capital Lease Obligation set forth on Schedule 7.11(a)
and (ii) any Capital Lease Obligation the Indebtedness in respect
of which is less than $100,000) at the time of its incurrence
shall have an average life to maturity greater than the average
life to maturity of the outstanding Term Loans and Acquisition
Loans, and (iii) none of the related leases shall contain
financial covenants; and
(c) other operating leases entered into after the
Closing Date.
SECTION 7.12. Credit Standards. Modify in any respect
materially adverse to the interests of the Secured Parties the
Credit and Collection Policy.
SECTION 7.13. Limitation on Negative Pledge Clauses. Enter
into with any Person any agreement, other than (a) this Agreement
and the Subordinated Note Indenture, and (b) any purchase money
mortgage or Capital Lease Obligation permitted by this Agreement
(which prohibition or limitation shall, in the case of this
clause (b), be effective only against the assets financed
thereby), which prohibits or limits the ability of the Borrower
or any of the Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of their respective property, assets or
revenues, whether now owned or hereafter acquired.
SECTION 7.14. Reserved.
SECTION ▇.▇▇.▇▇▇▇▇ Debt Ratio. Permit the Total Debt Ratio
for any period of four consecutive fiscal quarters ending on or
about any of the following dates to be greater than the ratio
set forth opposite such date:
Fiscal Period Ending: Ratio:
March 31, 1996 5.50 to 1.00
June 30, 1996 5.50 to 1.00
September 30, 1996 5.25 to 1.00
December 31, 1996 5.00 to 1.00
March 31, 1997 5.00 to 1.00
June 30, 1997 5.00 to 1.00
September 30, 1997 4.50 to 1.00
December 31, 1997 4.50 to 1.00
March 31, 1998 4.00 to 1.00
June 30, 1998 4.00 to 1.00
September 30, 1998 3.50 to 1.00
December 31, 1998 3.50 to 1.00
March 31, 1999 3.00 to 1.00
June 30, 1999 3.00 to 1.00
September 30, 1999
and thereafter 2.50 to 1.00
SECTION 7.16. Consolidated Interest Expense Coverage Ratio.
Permit the Consolidated Interest Expense Coverage Ratio for any
period of four consecutive fiscal quarters ending on the last
day of or during any period indicated below to be less than the
ratio set forth opposite such period:
Fiscal Period Ending: Ratio:
March 31, 1996 1.00 to 1.00
June 30, 1996 1.20 to 1.00
September 30, 1996 1.20 to 1.00
December 31, 1996 1.40 to 1.00
March 31, 1997 1.50 to 1.00
June 30, 1997 1.50 to 1.00
September 30, 1997 1.75 to 1.00
December 31, 1997 2.00 to 1.00
March 31, 1998 2.25 to 1.00
June 30, 1998 2.25 to 1.00
September 30, 1998 2.50 to 1.00
December 31, 1998 2.50 to 1.00
March 31, 1999 2.75 to 1.00
June 30, 1999 3.00 to 1.00
September 30, 1999
and thereafter 3.25 to 1.00
ARTICLE VIII
Events of Default
In case of the happening of any of the following events (
Events of Default ):
(a) any representation or warranty made or deemed made
in or in connection with any Loan Document or the borrowings
hereunder, or any representation, warranty, statement or
information contained in any report, certificate, financial
statement or other instrument furnished in connection with or
pursuant to any Loan Document, shall prove to have been false or
misleading in any material respect when so made, deemed made or
furnished;
(b) default shall be made in the payment of any
principal of any Loan or LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment thereof or by acceleration thereof
or otherwise;
(c) default shall be made in the payment of any
interest on any Loan or any Fee or any other amount (other than
an amount referred to in (b) above) due under any Loan Document,
when and as the same shall become due and payable, and such
default shall continue unremedied for a period of three Business
Days;
(d) default shall be made in the due observance or
performance by the Borrower of any covenant, condition or
agreement contained in Section 2.13(c), 2.13(d), 6.01(a), 6.05,
6.08, or 10.16 or in Article VII;
(e) default shall be made in the delivery of a
Borrowing Base Certificate when due pursuant to Section 6.04(e)
and such default shall continue unremedied for a period of five
Business Days after notice thereof from the Administrative Agent
or any Lender to the Borrower (with a copy to the Administrative
Agent, in the case of any such notice given by a Lender);
(f) default shall be made in the due observance or
performance by the Borrower or any Subsidiary Guarantor of any
covenant, condition or agreement contained in any Loan Document
(other than those defaults specified in (b), (c), (d) or (e)
above) and such default shall continue unremedied for a period of
the earlier of (i) 15 days after an executive officer of the
Borrower or any Subsidiary Guarantor first becomes aware or
should have become aware thereof and (ii) seven Business Days
after notice thereof from the Administrative Agent or any Lender
to the Borrower or the applicable Subsidiary Guarantor (with a
copy to the Administrative Agent, in the case of any such notice
given by a Lender);
(g) the Borrower or any of the Subsidiaries shall (i)
fail to pay any principal or interest, regardless of amount, due
in respect of any Indebtedness in a principal amount in excess of
$5,000,000, when and as the same shall become due and payable or
(ii) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness if the effect of
any failure referred to in this clause (ii) is to cause, or to
permit the holder or holders of such Indebtedness or a trustee on
its or their behalf (after giving effect to any applicable grace
period) to cause, such Indebtedness to become due prior to its
stated maturity;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or
any of the Subsidiaries, or of a substantial part of the property
or assets of the Borrower or any of the Subsidiaries, under Title
11 of the United States Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any of the Subsidiaries or (iii) the
winding-up or liquidation of the Borrower or any of the
Subsidiaries; and such proceeding or petition shall continue
undismissed for 30 days or an order or decree approving or
ordering any of the foregoing shall be entered;
(i) the Borrower or any of the Subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law, (ii) consent
to the institution of, or fail to contest in a timely and
appropriate manner (but within 30 days in any event), any
proceeding or the filing of any petition described in paragraph
(h) above, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any of the Subsidiaries or
for a substantial part of the property or assets of the Borrower
or any of the Subsidiaries, (iv) file an answer admitting the
material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or
fail generally to pay its debts as they become due or (vii) take
any action (corporate or otherwise) for the purpose of effecting
any of the foregoing;
(j) one or more judgments for the payment of money in
an aggregate amount in excess of $5,000,000 (exclusive of any
amount thereof covered by insurance, or covered by an indemnity
as to which the Borrower has received payment) shall be rendered
against the Borrower, any Subsidiary or any combination thereof
and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of the Borrower or any
Subsidiary to enforce any such judgment;
(k)(i) a Reportable Event or Reportable Events, or a
failure to make a required installment or other payment (within
the meaning of Section 412(n)(l) of the Code), shall have
occurred with respect to any Plan or Plans that reasonably could
be expected to result in liability of the Borrower or any ERISA
Affiliate to the PBGC or to a Plan in an aggregate amount
exceeding $19,000,000 (or, in the event of an increase in the
underfunding of any Plan solely as a result of a change after the
date hereof in any discount rate applicable to such Plan,
$23,000,000) and, within 30 days after the reporting of any such
Reportable Event to the Administrative Agent or after the receipt
by the Administrative Agent of the statement required pursuant to
Section 6.06(b)(iii), the Administrative Agent shall have
notified the Borrower in writing that (A) the Required Lenders
have determined that, on the basis of such Reportable Event or
Reportable Events or the failure to make a required payment,
there are reasonable grounds for the termination of such Plan or
Plans by the PBGC, the appointment by the appropriate United
States District Court of a trustee to administer such Plan or
Plans or the imposition of a lien in favor of a Plan and (B) as a
result thereof an Event of Default exists hereunder; or (ii) a
trustee shall be appointed by a United States District Court to
administer any such Plan or Plans; or (iii) the PBGC shall
institute proceedings (including giving notice of intent thereof)
to terminate any Plan or Plans;
(l) (i) the Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that it has
incurred Withdrawal Liability to such Multiemployer Plan, (ii)
the Borrower or such ERISA Affiliate does not have reasonable
grounds for contesting such Withdrawal Liability or is not in
fact contesting such Withdrawal Liability in a timely and
appropriate manner and (iii) the amount of the Withdrawal
Liability specified in such notice, when aggregated with all
other amounts required to be paid to Multiemployer Plans in
connection with Withdrawal Liabilities (determined as of the date
or dates of such notification), either (A) exceeds $1,000,000 or
requires payments exceeding $250,000 in any year or (B) is less
than $1,000,000 but any Withdrawal Liability payment remains
unpaid 30 days after such payment is due;
(m) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if solely as
a result of such reorganization or termination the aggregate
annual contributions of the Borrower and its ERISA
Affiliates to all Multiemployer Plans that are then in
reorganization or have been or are being terminated have been or
will be increased over the amounts required to be contributed to
such Multiemployer Plans for their most recently completed plan
years by an amount exceeding $1,000,000;
(n) there shall have occurred a Change in Control;
(o) any material security interest purported to be
created by any Security Document shall cease to be, or shall be
asserted by the Borrower or any Subsidiary not to be, a valid,
perfected, first priority (except as otherwise expressly provided
in this Agreement or such Security Document) security interest in
the securities, assets or properties covered thereby, except to
the extent that any such loss of perfection or priority results
from the failure of the Collateral Agent to maintain possession
of certificates representing securities pledged under the Pledge
Agreement;
(p) any Loan Document shall not be for any reason or
shall be asserted by the Borrower or any Subsidiary not to be in
full force and effect and enforceable in all material respects in
accordance with its terms;
(q) the Obligations and the guarantees thereof pursuant
to the Guarantee Agreement shall cease to constitute, or shall be
asserted by the Borrower or any Subsidiary not to constitute,
senior indebtedness under the subordination provisions of the
Subordinated Notes and of all other subordinated Indebtedness
(including any guarantee delivered or incurred in accordance with
Section 4.17 of the Subordinated Note Indenture) of the Borrower
or any Subsidiary or such subordination provisions shall be
invalidated or otherwise cease to be a legal, valid and binding
obligation of the parties thereto, enforceable in accordance with
their terms; or
(r) any material provision of the Guarantee Agreement
or any other Loan Document shall cease to be in full force and
effect and enforceable in accordance with its terms for any
reason whatsoever or any Subsidiary Guarantor shall contest or
deny in writing the validity or enforceability of any of its
obligations under the Guarantee Agreement or the Obligations
hereunder shall cease to be entitled to the benefits of any
Security Document or this Agreement for any reason whatsoever;
then, and in every such event (other than an event with respect
to the Borrower or any Subsidiary Guarantor described in
paragraph (h) or (i) above), and at any time thereafter during
the continuance of such event, the Administrative Agent may and,
at the request of the Required Lenders, shall, by notice to the
Borrower, take any of or all the following actions, at the same
or different times: (i) terminate forthwith the Commitments and
the LC Commitment, (ii) declare the Loans then outstanding to be
forthwith due and payable in whole or in part, whereupon the
principal of the Loans so declared to be due and payable,
together with accrued interest thereon and any unpaid accrued
Fees and all other liabilities of the Borrower accrued hereunder
and under any other Loan Document, shall become forthwith due and
payable, without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document
to the contrary notwithstanding, (iii) require cash collateral as
contemplated by Section 3.06 and (iv) exercise any remedies
available under any Loan Document or otherwise; and in any event
with respect to the Borrower or any Subsidiary Guarantor
described in paragraph (h) or (i) above, the Commitments and the
LC Commitment shall automatically terminate and the principal of
the Loans then outstanding, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of
the Borrower accrued hereunder and under any other Loan Document,
shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained
herein or in any other Loan Document to the contrary
notwithstanding.
ARTICLE IX
The Administrative Agent and Collateral Agent
In order to expedite the transactions contemplated by this
Agreement, Chemical Bank is hereby appointed to act as the
Administrative Agent (which term for purposes of this Article
shall be deemed to refer to the Administrative Agent and the
Collateral Agent) of the Issuing Lender and the Lenders. Each of
the Lenders, and each subsequent holder of any Loan by its
acceptance thereof and the Issuing Lender hereby irrevocably
authorize the Administrative Agent to take such actions on their
behalf and to exercise such powers as are specifically delegated
to the Administrative Agent by the terms and provisions hereof
and of the other Loan Documents, together with such actions and
powers as are reasonably incidental thereto. The Administrative
Agent shall have no implied duties or fiduciary duties to the
Lenders, or any obligation to the Lenders to take any action
hereunder or under any of the other Loan Documents except any
action specifically provided by the Loan Documents required to be
taken by the Agent. The Administrative Agent is hereby expressly
authorized by the Lenders and the Issuing Lender, without hereby
limiting any implied authority, (a) to receive on behalf of the
Lenders and the Issuing Lender all payments of principal of and
interest on the Loans and LC Disbursements and all other amounts
due to the Lenders and the Issuing Lender hereunder, and promptly
to distribute to each Lender and the Issuing Lender its proper
share of each payment so received; (b) to give notice on behalf
of each of the Lenders and the Issuing Lender to the Borrower of
any Event of Default specified in this Agreement of which the
Administrative Agent has actual knowledge acquired in connection
with its agency hereunder; and (c) to promptly distribute to each
Lender and the Issuing Lender copies of all notices, financial
statements and other materials delivered by the Borrower pursuant
to this Agreement as received by the Administrative Agent
(including notices of an occurrence of any Event of Default).
Nothing in the preceding sentence shall be construed to relieve
the Borrower of its obligation to furnish any notice, financial
statement or other materials directly to the Lenders as required
hereunder.
Notwithstanding the use of the defined terms "Administrative
Agent" and "Collateral Agent," it is expressly understood and
agreed that the Administrative Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement and
that the Administrative Agent is merely acting as the
representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan
Documents. In its capacity as the Lenders' contractual
representative, the Administrative Agent (i) does not assume any
fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section
9-105 of the Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are
limited to those expressly set forth in this Agreement and the
other Loan Documents. Each of the Lenders agrees to assert no
claim against the Administrative Agent on any agency theory or
any other theory of liability for breach of fiduciary duty, all
of which claims each Lender waives.
Neither the Administrative Agent nor any of its affiliates,
directors, officers, employees or agents shall be liable as such
for any action taken or omitted by any of them except for its,
his or her own gross negligence or wilful misconduct, or be
responsible for any statement, warranty or representation herein
or the contents of any document delivered in connection herewith,
or be required to ascertain or to make any inquiry concerning the
performance or observance by the Borrower or any Subsidiary
Guarantor of any of the terms, conditions, covenants or
agreements contained in any Loan Document. The Administrative
Agent shall not be responsible to the Lenders or the holders of
the Loans or the Issuing Lender for the due execution,
genuineness, validity, enforceability or effectiveness of this
Agreement or any other Loan Documents or other instruments
or agreements. The Administrative Agent shall in all cases be
fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Required
Lenders and, except as otherwise specifically provided herein,
such instructions and any action or inaction pursuant thereto
shall be binding on all the Lenders and each subsequent holder of
any Loan and the Issuing Lender. The Administrative Agent shall,
in the absence of knowledge to the contrary, be entitled to rely
on any instrument or document believed by it in good faith to be
genuine and correct and to have been signed or sent by the proper
Person or Persons. Neither the Administrative Agent nor any of
its directors, officers, employees or agents shall have any
responsibility to the Borrower or any Subsidiary on account of
the failure of or delay in performance or breach by any Lender or
the Issuing Lender of any of its obligations hereunder or to any
Lender or to the Issuing Lender on account of the failure of or
delay in performance or breach by any other Lender or the Issuing
Lender or the Borrower or any Subsidiary Guarantor of any of
their respective obligations hereunder or under any other Loan
Document or in connection herewith or therewith. The
Administrative Agent may execute any and all duties hereunder by
or through agents or employees and shall be entitled to rely upon
the advice of legal counsel selected by it with respect to all
matters arising hereunder and shall not be liable for any action
taken or suffered in good faith by it in accordance with the
advice of such counsel.
The Lenders and the Issuing Lender hereby acknowledge that
the Administrative Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement unless it shall be requested in
writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor
Agent as provided below, the Administrative Agent may resign at
any time by notifying the Lenders, the Issuing Lender and the
Borrower. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor. If no successor shall have
been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on
behalf of the Lenders and the Issuing Lender, appoint a successor
Agent, which shall be a bank with an office in New York, New
York, having a combined capital and surplus of at least
$500,000,000 or an Affiliate of any such bank. Upon the
acceptance of any appointment as Agent hereunder by a successor
bank, such successor shall succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Agent
and the retiring Agent shall be discharged from its duties and
obligations hereunder. After the Administrative Agent's
resignation hereunder, the provisions of this Article and
Sections 6.11(d) and 10.05 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Agent.
With respect to the Loans made by it hereunder, the
Administrative Agent, in its individual capacity and not as
Agent, shall have the same rights and powers as any other Lender
and may exercise the same as though it were not the
Administrative Agent, and the Administrative Agent and
its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower, any
Subsidiary or any Affiliate thereof as if the Administrative
Agent were not the Administrative Agent.
Each Lender and the Issuing Lender agree (a) to reimburse
the Administrative Agent, on demand, in the amount of its pro
rata share (based on its Commitment hereunder) of any expenses
incurred for the benefit of the Lenders and the Issuing Lender by
the Administrative Agent, including counsel fees and compensation
of agents and employees paid for services rendered on behalf of
the Lenders and the Issuing Lender, that shall not have been
reimbursed by the Borrower and (b) to indemnify and hold harmless
the Administrative Agent and any of its affiliates, directors,
officers, employees or agents, on demand, in the amount of such
pro rata share, from and against any and all liabilities, taxes,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by or asserted
against it in its capacity as the Administrative Agent or any of
them in any way relating to or arising out of this Agreement or
any other Loan Document or any action taken or omitted by
it or any of them under this Agreement or any other Loan
Document, to the extent the same shall not have been reimbursed
by the Borrower; provided that no Lender shall be liable to the
Administrative Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross
negligence or wilful misconduct of the Administrative Agent or
any of its affiliates, directors, officers, employees or agents.
Each Lender and the Issuing Lender acknowledge that they
have, independently and without reliance upon the Administrative
Agent, any other Lender and the Issuing Lender and based on such
documents and information as they have deemed appropriate, made
their own credit analysis and decision to enter into this
Agreement. Each Lender and the Issuing Lender also acknowledge
that they will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such
documents and information as they shall from time to time deem
appropriate, continue to make their own decisions in taking or
not taking action under or based upon this Agreement or any other
Loan Document, any related agreement or any document furnished
hereunder or thereunder.
ARTICLE X
Miscellaneous
SECTION 10.01. Notices. Notices and other communications
provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed or sent by telex,
graphic scanning or other telegraphic communications equipment of
the sending party, as follows:
(a) If to the Borrower or any Subsidiary Guarantor, at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Telecopy No. (▇▇▇)▇▇▇-▇▇▇▇,
with a copy to McAfee & ▇▇▇▇, a Professional Corporation, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇.
(b) If to the Administrative Agent or the Issuing
Lender, at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Telecopy No. (312) 807-
4077); with a copy to Chemical Bank Agent Bank Services, Grand
Central Tower, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇.
(c) If to a Lender, at its address (or telecopy number)
set forth on Schedule 2.01 or in the Assignment and Acceptance
pursuant to which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed
to have been given on the date of receipt if delivered by hand or
overnight courier service or sent by telex, telecopy or other
telegraphic communications equipment of the sender, or on the
date five Business Days after dispatch by certified or registered
mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 10.01 or in
accordance with the latest unrevoked direction from such party
given in accordance with this Section 10.01.
SECTION 10.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by the Borrower
or any Subsidiary Guarantor herein and/or in the certificates or
other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the Lenders and the
Issuing Lender and shall survive the making of the Loans by the
Lenders and the issuance of Letters of Credit by the Issuing
Lender, regardless of any investigation made by the Lenders and
the Issuing Lender or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued
interest on any Loan or any Fee or any other amount payable under
this Agreement or any other Loan Document is outstanding and
unpaid or any Letter of Credit is outstanding and so long
as the Commitments and the LC Commitment have not been
terminated.
SECTION 10.03. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower, the
Administrative Agent and the Issuing Lender and when the
Administrative Agent shall have received copies hereof that, when
taken together, bear the signatures of each Lender, and
thereafter shall be binding upon and inure to the benefit of the
Borrower, the Administrative Agent, the Issuing Lender and each
Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior consent of all
the Lenders.
SECTION 10.04. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns
of such party; and all covenants, promises and agreements by or
on behalf of the Borrower, the Administrative Agent, the Issuing
Lender or the Lenders that are contained in this Agreement shall
bind and inure to the benefit of their respective successors and
assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this
Agreement (including all or a portion of its Commitments and the
Loans at the time owing to it and the Loans held by it, which may
include non-pro-rata interests in the Revolving Credit Loans,
Acquisition Loans and Term Loans held by it); provided, however,
that (i) except in the case of (A) any assignment to a Lender or
an Affiliate of such Lender or (B) any assignment to an assignee
reasonably acceptable to the Borrower (it being understood that
any Lender and any Affiliate of any Lender shall be deemed to be
acceptable to the Borrower for purposes of this clause) if such
assignment was required by any Governmental Authority having
jurisdiction over the assigning Lender, each of the
Administrative Agent and, if any such assignment includes all or
a portion of any Lender's Revolving Credit Commitment, the
Issuing Lender, and, provided that no Default or Event of Default
has occurred and is continuing, the Borrower, must give its prior
written consent to such assignment (provided that the Borrower's
consent shall not be unreasonably withheld),
(ii) except in the case of (A) any assignment to
a Lender or an Affiliate of such Lender or (B) any assignment to
an assignee reasonably acceptable to the Borrower (it being
understood that any Lender and any Affiliate of any Lender shall
be deemed to be acceptable to the Borrower for purposes of this
clause) if such assignment was required by any Governmental
Authority having jurisdiction over the assigning Lender, the
amount of the Commitment of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 (or, if
the amount of the assigning Lender's Commitment is less than
$5,000,000, an amount equal to the amount of such Commitment)
and, unless the assigning Lender assigns all of its Commitments
hereunder, such assigning Lender shall have remaining Commitments
and Loans aggregating not less than $5,000,000;
(iii) the parties to each such assignment shall
execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of
$3,500 (which shall be paid by the Borrower in the case of any
assignment pursuant to Section 2.21) and (iv) the assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire. Upon acceptance and recording
pursuant to paragraph (e) of this Section 10.04, from and after
the effective date specified in each Assignment and Acceptance,
which effective date shall be (unless this clause is waived by
the Administrative Agent) at least five Business Days after the
execution thereof, (i) the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement and (ii) the assigning Lender
thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.14, 2.16, 2.20, 6.11(d)
and 10.05, as well as to any Fees accrued for its account and not
yet paid).
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each
other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the
legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim and that its Commitments and
LC Commitment, and the outstanding balances of its Term Loans,
Acquisition Loans and Revolving Loans, in each case without
giving effect to assignments thereof that have not become
effective, are as set forth in such Assignment and Acceptance;
(ii) except as set forth in clause (i) above, such
assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any other Loan Document
or any other instrument or document furnished pursuant hereto, or
the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary
Guarantor of any of its obligations under this Agreement, any
other Loan Document or any other instrument or document furnished
pursuant hereto;
(iii) such assignee represents and warrants that
it is legally authorized to enter into such Assignment and
Acceptance;
(iv) such assignee confirms that it has received a
copy of this Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 6.04 and such
other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such
Assignment and Acceptance;
(v) such assignee will independently and without
reliance upon the Administrative Agent, such assigning Lender or
any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement;
(vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated
to the Administrative Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in
accordance with their terms all the obligations that by the terms
of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as
agent of the Borrower, shall maintain at one of its offices in
The City of New York a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitments and LC
Commitment of, and principal amount of the Loans owing to, each
Lender pursuant to the terms hereof from time to time (the
Register ). The entries in the Register shall be conclusive in
the absence of manifest error and the Borrower, the
Administrative Agent, the Issuing Lender and the Lenders shall
treat each Person whose name is recorded in the Register pursuant
to the terms hereof as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection
by the Borrower, the Issuing Lender and any Lender, at any
reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an
Administrative Questionnaire completed in respect of the
assignee (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in
paragraph (b) above and the written consent of the Administrative
Agent to such assignment, the Administrative Agent shall (i)
accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give
prompt notice thereof to the Lenders and the Issuing Lender.
(f) Each Lender may without the consent of the Borrower, the
Administrative Agent or the Issuing Lender sell participations to
one or more banks or other entities in all or a portion of its
rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans owing to it and the
Loans held by it, which may include non-pro-rata interests in the
Revolving Credit Loans, Acquisition Loans and Term Loans held by
it); provided, however, that
(i) such Lender's obligations under this
Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible
to the other parties hereto for the performance of such
obligations,
(iii) the participating banks or other entities
shall be entitled to the benefit of the cost protection
provisions contained in Sections 2.14, 2.16 and 2.20 to the same
extent as if they were Lenders, provided that the Borrower
shall not be required to reimburse the participating lenders or
other entities pursuant to Section 2.14, 2.16 or 2.20 in an
amount which exceeds the amount that would have been payable
thereunder to such Lender had such Lender not sold such
participation, and (iv) the Borrower, the Administrative Agent,
the Issuing Lender and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such
Lender shall retain the sole right to enforce the obligations of
the Borrower relating to the Loans or LC Disbursements and
to approve any amendment, modification or waiver of any provision
of this Agreement (provided that the participating bank or other
entity may be provided with the right to approve amendments,
modifications or waivers affecting it with respect to (A) any
decrease in the Fees payable hereunder with respect to Loans in
which the participating bank or other entity has purchased a
participation, (B) any decrease in the amount of principal of, or
decrease in the rate at which interest is payable, on the Loans
in which the participating bank or other entity has purchased a
participation, (C) any extension of the dates fixed for scheduled
payments of principal of or interest on the Loans in which the
participating bank or other entity has purchased a participation
or (D) any release of all or substantially all the Collateral).
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this Section 10.04, disclose to the
assignee or participant or proposed assignee or participant any
information relating to the Borrower and the Subsidiaries
furnished to such Lender by or on behalf of the Borrower;
provided that, prior to any such disclosure of such information,
each such assignee or participant or proposed assignee or
participant shall execute an agreement substantially in the form
of Exhibit N, whereby such assignee or participant shall agree
(subject to the exceptions set forth therein) to preserve the
confidentiality of such information.
(h) If Standard & Poor's, ▇▇▇▇▇'▇ and ▇▇▇▇▇▇▇▇'▇ BankWatch
(or InsuranceWatch Ratings Service, in the case of Lenders that
are insurance companies (or Best's Insurance Reports, if such
insurance company is not rated by InsuranceWatch Ratings
Service)) shall, after the date that any Lender becomes a Lender,
downgrade the long-term certificate of deposit ratings of such
Lender, and the resulting ratings shall be below BBB-, Baa3 and C
(or BB, in the case of a Lender that is an insurance company (or
B, in the case of an insurance company not rated by
InsuranceWatch Ratings Service)), then the Issuing Lender shall
have the right, but not the obligation, at its own expense,
upon notice to such Lender and the Administrative Agent, to
replace (or to request the Borrower to use its reasonable efforts
to replace) such Lender with an assignee (in accordance with and
subject to the restrictions contained in paragraph (b) above),
and such Lender hereby agrees to transfer and assign without
recourse (in accordance with and subject to the restrictions
contained in paragraph (b) above) all its interests, rights and
obligations in respect of its Revolving Credit Commitment to
such assignee; provided, however, that (i) no such assignment
shall conflict with any law, rule and regulation or order of any
Governmental Authority and (ii) the Issuing Lender or such
assignee, as the case may be, shall pay to such Lender in
immediately available funds on the date of such assignment the
principal of and interest accrued to the date of payment on the
Loans made by such Lender hereunder and all other amounts accrued
for such Lender's account or owed to it hereunder.
(i) Any Lender may at any time assign all or any portion of
its rights under this Agreement to a Federal Reserve Bank
provided that no such assignment shall release a Lender from any
of its obligations hereunder. In order to facilitate such an
assignment to a Federal Reserve Bank, the Borrower shall, at the
request of the assigning Lender, promptly execute and deliver to
the assigning Lender a note, in a form reasonably acceptable to
such Lender, the Administrative Agent and the Borrower,
evidencing the Loans made to the Borrower by the assigning Lender
hereunder.
(j) The Borrower shall not assign or delegate any of its
rights or duties hereunder without the prior written consent of
the Administrative Agent, the Issuing Lender and each Lender.
Except as provided in Section 3.09, the Issuing Lender may not
assign or delegate any of its respective rights and duties
hereunder without the prior written consent of the Borrower and
the Administrative Agent.
SECTION 10.05. Expenses; Indemnity. (a) The Borrower agrees
to pay all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Issuing Lender and the Collateral Agent
in connection with the preparation of this Agreement and the
other Loan Documents, in connection with the administration of
this Agreement and the other Loan Documents (including, without
limitation, the costs and expenses of an audit of the Borrower's
accounts receivable and inventory by Chemical Bank's asset-based
lending group and real property appraisals conducted by a firm or
firms satisfactory to the Administrative Agent) or in connection
with any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the
Administrative Agent, the Issuing Lender, the Collateral
Agent or any Lender in connection with the enforcement or
protection of their rights in connection with this Agreement and
the other Loan Documents or in connection with the Loans made or
the Letters of Credit issued hereunder (including expenses in
connection with a restructuring or "workout" of the Borrower's
obligations hereunder), including the reasonable fees, other
charges and disbursements of Sidley & Austin, counsel for the
Administrative Agent, the Collateral Agent and the Issuing Lender
and of local counsel, and, in connection with any such
enforcement or protection, the reasonable fees, other charges and
disbursements of any other counsel for the Administrative
Agent, the Issuing Lender, the Collateral Agent, the Managing
Agent or any Lender. The Borrower further agrees that it shall
indemnify (i) the Administrative Agent, the Managing Agent, the
Issuing Lender, the Collateral Agent and the Lenders from and
hold them harmless against any documentary taxes, assessments or
charges made by any Governmental Authority by reason of the
execution and delivery and/or recordation of this Agreement or
any of the other Loan Documents and (ii) to reimburse the
Administrative Agent for any out-of-pocket expenses and charges
incurred by it in connection with its initial and on-going
examinations of the Collateral.
(b) The Borrower agrees to indemnify the Administrative
Agent, the Managing Agent, the Issuing Lender, the Collateral
Agent and each Lender and each of their respective directors,
officers, employees, agents and Affiliates (each such Person
being called an Indemnitee ) against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel
fees, charges and disbursements, incurred by or asserted against
any Indemnitee arising out of, in any way connected with, or as a
result of (i) the execution or delivery of this Agreement or any
other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereby or
thereto of their respective obligations hereunder or thereunder
or the consummation of the Transactions and the other
transactions contemplated hereby or thereby, (ii) the use of the
Letters of Credit or the proceeds of the Loans or (iii) any
claim, litigation, investigation or proceeding relating to any of
the foregoing, whether or not any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment
to have resulted from the gross negligence or wilful misconduct
of such Indemnitee; provided, however, that the Borrower shall
only be required to indemnify the Administrative Agent, the
Managing Agent, the Issuing Lender and the Lenders for the fees
and expenses of one law firm in connection with any indemnified
claim unless (i) applicable rules of professional responsibility
or conflict of interest preclude a single law firm from
representing the Administrative Agent, the Managing Agent, the
Issuing Lender and the Lenders, or (ii) any Lender or group of
Lenders may assert defenses not generally available to the
Administrative Agent, the Managing Agent, the Issuing Lender and
the Lenders as a group, in which cases the Borrower shall
indemnify the Administrative Agent, the Managing Agent, the
Issuing Lender and the Lenders for the fees and expenses of the
fewest number of law firms properly able to represent the
Administrative Agent, the Managing Agent, the Issuing Lender and
the Lenders under the circumstances. Each indemnified party
shall give the Borrower prior written notice of any proposed
settlement of an indemnified claim and shall consult with the
Borrower regarding such proposed settlement, provided that each
indemnified party shall have the sole right to approve any such
proposed settlement. None of the Administrative Agent, the
Managing Agent, the Issuing Lender, any Lender or any of their
respective affiliates, directors, officers, employees, attorneys
and agents shall be responsible or liable to any other party
hereto or any other person or entity for consequential damages
which may be alleged as a result of the transactions contemplated
hereby.
(c) The provisions of this Section 10.05 shall remain
operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the
Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent,
the Issuing Lender, the Collateral Agent, the Issuing Lender
or any Lender. All amounts due under this Section 10.05 shall be
payable on written demand therefor.
SECTION 10.06. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized
at any time and from time to time, to the fullest extent
permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower
now or hereafter existing under this Agreement and other Loan
Documents held by such Lender, irrespective of whether such
Lender shall have made any demand under this Agreement or such
other Loan Document and although such obligations may be
unmatured. The rights of each Lender under this Section 10.06 are
in addition to other rights and remedies (including other rights
of setoff) that such Lender may have; provided, however, that no
Lender shall exercise any right of setoff under this Section
10.06, or any other right of setoff, without the prior written
consent of the Administrative Agent, and each Lender shall
exercise any right of setoff available to it upon the
written direction of the Administrative Agent.
SECTION 10.07. APPLICABLE LAW. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY PROVIDED IN THE
MORTGAGES, THE TRADEMARK SECURITY AGREEMENT AND THE PATENT
SECURITY AGREEMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 10.08. Waivers; Amendment. (a) No failure or delay
on the part of the Administrative Agent, the Issuing Lender, the
Collateral Agent or any Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Issuing Lender, the Collateral
Agent and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any
provision of this Agreement or any other Loan Document or consent
to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b)
below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No
notice or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or
other circumstances.
(b) Neither this Agreement, the Guarantee Agreement or any
of the Security Documents nor any provision hereof or thereof may
be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders, or, in the
case of the Guarantee Agreement or any of the Security Documents,
pursuant to an agreement or agreements in writing entered into by
the Borrower, the Subsidiary Guarantors and the Collateral Agent
and consented to by the Required Lenders; provided, however, that
no such agreement shall:
(i) reduce the principal amount of, or extend the
scheduled maturity (including the maturity of any scheduled Term
Loan Repayment Amount) of, any principal of or interest on, any
Loan (it being understood that the waiver of a mandatory
prepayment under Section 2.13 shall not constitute the extension
of the scheduled maturity of any principal of any Loan), or
forgive any such payment or any part thereof, or reduce the rate
of interest on any Loan, without the prior written consent of
each holder of a Loan affected thereby,
(ii) increase the amount or extend the expiry date of
any Commitment of any Lender, as specified on Schedule 2.01 or
reduce the Fees of any Lender without the prior written consent
of such Lender,
(iii) amend or modify the provisions of Section 2.17,
Section 7.05(d), the provisions of this Section 10.08(b) or the
definition of the term Required Lenders without the prior
written consent of each Lender,
(iv) release all or substantially all of the Collateral
under any Security Document other than as expressly permitted
hereunder or under such Security Document without the prior
written consent of each Lender, or release Collateral not
constituting all or substantially all of the Collateral under any
Security Document but having an aggregate book value in excess of
$10,000,000 without the prior written consent of Lenders holding
Loans, a share of the used LC Commitment and unused Commitments
representing more than 66% of the aggregate of (a) the aggregate
principal amount of the Loans at such time, (b) the LC Exposure
and KPR LC Exposure at such time and (c) the aggregate unused
Commitments at such time, or (v) waive any of the conditions
precedent to the initial availability of the Commitments without
the prior written consent of each Lender; provided further that
no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent or the Issuing
Lender hereunder without the prior written consent of the
Administrative Agent or the Issuing Lender, as the case may be.
SECTION 10.09. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the applicable
interest rate, together with all fees and charges that are
treated as interest under applicable law (collectively, the
Charges ), as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed
the maximum lawful rate (the Maximum Rate ) that may be
contracted for, charged, taken, received or reserved by such
Lender in accordance with applicable law, the rate of interest
payable under the Loans held by such Lender, together with all
Charges payable to such Lender, shall be limited to the Maximum
Rate.
SECTION 10.10. Entire Agreement. This Agreement, the other
Loan Documents, the fee letters referred to in Sections 2.05(c)
and (d) and the letter agreement setting forth the Issuing Lender
fees described in Section 3.08 constitute the entire contract
between the parties relative to the subject matter hereof. Any
previous agreement among the parties with respect to the subject
matter hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan
Documents, expressed or implied, is intended to confer upon any
party other than the parties hereto and thereto any rights,
remedies, obligations or liabilities under or by reason of this
Agreement or the other Loan Documents.
SECTION 10.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.11.
SECTION 10.12. Severability. In the event any one or more of
the provisions contained in this Agreement or in any other Loan
Document should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in
any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions, the
economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
SECTION 10.13. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall constitute an
original but all of which when taken together shall constitute
but one contract, and shall become effective as provided in
Section 10.03.
SECTION 10.14. Headings. Article and Section headings and
the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 10.15. Jurisdiction; Consent to Service of Process.
(a) The Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction
of any New York State court or Federal court of the United States
of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be
heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect
any right that any Lender may otherwise have to bring any action
or proceeding relating to this Agreement or the other Loan
Documents against the Borrower or its properties in the courts of
any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or
relating to this agreement or the other Loan Documents in any New
York State or Federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section
10.01. Nothing in this Agreement will affect the right of any
party to this Agreement to serve process in any other manner
permitted by law.
SECTION 10.16. Mortgaged Property Casualty and Condemnation.
(a) Notwithstanding any other provision of this Agreement
or the Security Documents, the Collateral Agent is authorized, at
its option (for the benefit of the Secured Parties) when a
Default shall have occurred and be continuing, to collect and
receive, to the extent payable to the Borrower or any Subsidiary
Guarantor, all insurance proceeds, damages, claims and rights of
action and the right thereto under any insurance policies with
respect to any casualty or other insured damage ( Casualty ) to
any portion of any Mortgaged Property (collectively, Insurance
Proceeds ). The Borrower agrees to notify, and to cause each
Subsidiary Guarantor to notify, the Collateral Agent and the
Administrative Agent, in writing, promptly after the Borrower or
any Subsidiary Guarantor obtains notice or knowledge of any
Casualty to a Mortgaged Property, which notice shall set forth
a description of such Casualty and the Borrower's or such
Subsidiary Guarantor's good faith estimate of the amount of
related damages and the effect of such Casualty on the Borrower's
or such Subsidiary Guarantor's business operations. If the
Borrower or any Subsidiary Guarantor shall receive any Insurance
Proceeds, the Borrower agrees, subject to the foregoing
limitations, to endorse and transfer, and to cause any Subsidiary
Guarantor to endorse and transfer, any Insurance Proceeds
it receives to the Collateral Agent.
(b) The Borrower will notify, and cause each Subsidiary
Guarantor to notify, the Collateral Agent and the Administrative
Agent immediately upon obtaining knowledge of the institution of
any action or proceeding for the taking of any Mortgaged
Property, or any part thereof or interest therein, for public or
quasi-public use under the power of eminent domain, by reason of
any public improvement or condemnation proceeding, or in any
other manner (a Condemnation ). No settlement or compromise of
any claim in connection with any such action or proceeding shall
be made without the consent of the Collateral Agent, which
consent shall not be unreasonably withheld. The Collateral Agent
is authorized, at its option (for the benefit of the Secured
Parties), to collect and receive all proceeds of any such
Condemnation (in each case, the Condemnation Proceeds ).
The Borrower agrees to execute, and to cause any Subsidiary
Guarantor to execute, such further assignments of any
Condemnation Proceeds as the Collateral Agent may reasonably
require.
(c) In the event of a Condemnation of all or substantially
all of any Mortgaged Property (which determination shall be made
by the Collateral Agent in its reasonable discretion), unless the
Borrower shall have notified the Collateral Agent in writing
promptly after such Condemnation that it or the applicable
Subsidiary Guarantor intends to replace the applicable Mortgaged
Property (and no Default or Event of Default shall have occurred
and be continuing at the time of such election), the Collateral
Agent may deem such event to be a Prepayment Event, and shall
apply the Condemnation Proceeds received as a result of such
Condemnation (less the reasonable costs, if any, incurred by the
Collateral Agent or the Borrower or any Subsidiary Guarantor in
the recovery of such Condemnation Proceeds, including reasonable
attorneys' fees, other charges and disbursements (the Collateral
Agent having agreed to reimburse the Borrower or such Subsidiary
Guarantor from such Condemnation Proceeds for such costs incurred
by the Borrower or such Subsidiary Guarantor)) to prepay
obligations outstanding under this Agreement to the extent
required under Section 2.13(c), with any remaining Condemnation
Proceeds being returned to the Borrower or such Subsidiary
Guarantor. If the Borrower or the applicable Subsidiary Guarantor
shall elect to replace a Mortgaged Property as contemplated
above, (i) the replacement property shall be of utility
comparable to that of the replaced Mortgaged Property and (ii)
the insufficiency of any Condemnation Proceeds to defray the
entire expense of the related location, acquisition and
replacement of such replacement property shall in no way relieve
the Borrower or such Subsidiary Guarantor of its obligation to
complete the construction of any replacement property if the
Borrower or such Subsidiary Guarantor shall have made such
election and shall have acquired the related real property.
(d) In the event of any Condemnation of the Mortgaged
Property, or any part thereof (other than a Condemnation
described in paragraph (c) above (unless such Condemnation shall
not be deemed to be a Prepayment Event or the Borrower or the
applicable Subsidiary Guarantor shall be permitted and shall have
elected to replace the applicable Mortgaged Property, in each
case, as provided in paragraph (c) above) and subject to the
provisions of paragraph (f) below, the Collateral Agent shall
apply the Condemnation Proceeds, first, in the case of a partial
Condemnation, to the repair or restoration of any integrated
structure subject to such Condemnation or, in the case of a
total or substantially all Condemnation, to the location of a
replacement property, acquisition of such replacement property
and construction of the replacement structures, in each case,
under the conditions specified in paragraph (f) below, and,
second, shall apply the remainder of such Condemnation Proceeds
(less the reasonable costs, if any, incurred by the Collateral
Agent or the Borrower or the applicable Subsidiary Guarantor in
the recovery of such Condemnation Proceeds, including reasonable
attorneys' fees (the Collateral Agent having agreed to reimburse
the Borrower or such Subsidiary Guarantor from such Condemnation
Proceeds for such costs incurred by the Borrower or such
Subsidiary Guarantor)) to prepay obligations outstanding under
this Agreement to the extent required under Section 2.13(c), with
any remaining Condemnation Proceeds being returned to the
Borrower or such Subsidiary Guarantor.
(e) In the event of any Casualty of less than 50% of the
useable square footage of the improvements of any Mortgaged
Property, the Borrower shall, and shall cause each Subsidiary
Guarantor to, subject to the conditions contained in clause (f),
restore the Mortgaged Property to substantially its same
condition immediately prior to such Casualty. In the event of any
Casualty of greater than 50% of the useable square footage of the
improvements of any Mortgaged Property and so long as no Default
or Event of Default has occurred and is continuing, subject to
Section 10.16(f) below, the Borrower shall have the option to
either:
(i) restore (or cause the applicable Subsidiary
Guarantor to restore) the Mortgaged Property to a condition
substantially similar to its condition immediately prior to such
Casualty and to invest the balance, if any, of any Insurance
Proceeds, in equipment, vehicles or other assets used in the
Borrower's or such Subsidiary Guarantor's principal lines of
business within 180 days after the receipt thereof, provided that
the Borrower or such Subsidiary Guarantor, pending such
reinvestment, promptly deposits such excess Insurance Proceeds in
a cash collateral account established with the Collateral Agent
for the benefit of the Secured Parties;
(ii) replace (or cause the applicable Subsidiary
Guarantor to replace) the Mortgaged Property with property of
utility comparable to that of the replaced Mortgage Property and
to invest the balance, if any, of any Insurance Proceeds, in
equipment, vehicles or other assets used in the Borrower's or
such Subsidiary Guarantor's principal lines of business within
180 days after the receipt thereof, provided that the Borrower or
such Subsidiary Guarantor, pending such reinvestment, promptly
deposits such excess Insurance Proceeds in a cash collateral
account established with the collateral Agent for the benefit of
the Secured Parties; or
(iii) direct (or cause the applicable Subsidiary
Guarantor to direct) the Collateral Agent to apply the related
Insurance Proceeds to prepay obligations outstanding under this
Agreement to the extent required under Section 2.13(c), with any
remaining Insurance Proceeds being returned to the Borrower or
such Subsidiary Guarantor.
It is understood that any excess Insurance Proceeds that are not
reinvested in the Borrower's or the applicable Subsidiary
Guarantor's principal lines of business as contemplated above
will be applied to prepay obligations outstanding under this
Agreement to the extent required under Section 2.13(c).
If required to do so, the Borrower shall make, or cause the
applicable Subsidiary Guarantor to make, the election
contemplated by the immediately preceding paragraph by notifying
the Collateral Agent and the Administrative Agent promptly after
the later to occur of (A) five days after the Borrower or such
Subsidiary Guarantor and their respective insurance carriers
reach a final determination of the amount of any Insurance
Proceeds and (B) 30 days after the occurrence of the Casualty. If
the Borrower or such Subsidiary Guarantor shall be required or
shall elect to restore or replace the Mortgaged Property, the
insufficiency of any Insurance Proceeds or Condemnation Proceeds
to defray the entire expense of such restoration or replacement
shall in no way relieve the Borrower or such Subsidiary Guarantor
of such obligation to so restore or so replace if it is so
required or once such election has been made. In the event the
Borrower or such Subsidiary Guarantor shall be required to
restore or replace or shall notify the Collateral Agent and the
Administrative Agent of its election to restore or replace, the
Borrower shall diligently and continuously prosecute, or cause
such Subsidiary Guarantor to so prosecute, the restoration or
replacement of the Mortgaged Property to completion. In the
circumstance where the Borrower or such Subsidiary Guarantor
shall be required to restore or replace or shall so elect to
restore or replace and no Default or Event of Default has
occurred and is continuing the Borrower or such Subsidiary
Guarantor shall not be required to comply with the requirements
of paragraph (f) below in connection with such restoration or
replacement (except as required by clause (f)(ii)(A) and (B)), so
long as the cost of such restoration or replacement shall be less
than $200,000. In the event of a Casualty where the Borrower or
such Subsidiary Guarantor is required to make the election set
forth above and the Borrower either shall fail to notify or to
cause such Subsidiary Guarantor to notify the Collateral Agent
and the Administrative Agent of its election within the period
set forth above or the Borrower or such Subsidiary Guarantor
shall elect not to restore or replace the Mortgaged Property, the
Collateral Agent shall (after being reimbursed for all reasonable
costs of recovery of such Insurance Proceeds including reasonable
attorneys' fees and after reimbursing the Borrower or such
Subsidiary Guarantor for all such reasonable costs incurred by
the Borrower or such Subsidiary Guarantor) apply such Insurance
Proceeds to prepay obligations outstanding under this Agreement
to the extent required under Section 2.13(c). In addition, upon
such prepayment, the Borrower shall be obligated to place, or
cause such Subsidiary Guarantor to place, the remaining portion,
if any, of the Mortgaged Property in a safe condition that is
otherwise in compliance with all applicable laws and regulations
and the requirements of applicable Governmental Authorities and
the provisions of this Agreement and the applicable Mortgage.
(f) Except as otherwise specifically provided in this
Section 10.16, all Insurance Proceeds and all Condemnation
Proceeds recovered by the Collateral Agent (A) are to be applied
to the restoration or replacement of the applicable Mortgaged
Property (or, if permitted in the event of a total or
substantially all Condemnation as contemplated in paragraph (c)
above, to the replacement of the applicable Mortgaged Property)
(less the reasonable cost, if any, to the Collateral Agent of
such recovery and of paying out such proceeds, including
reasonable attorneys' fees, other charges and disbursements and
costs allocable to inspecting the Work (as defined below) and (B)
shall be applied by the Collateral Agent to the payment of the
cost of restoring or replacing the Mortgaged Property so damaged,
destroyed or taken or of the portion or portions of the Mortgaged
Property not so taken (the Work ) and (C) shall be paid out from
time to time to the Borrower or the applicable Subsidiary
Guarantor as and to the extent the Work (or the location and
acquisition of any replacement of any Mortgaged Property)
progresses for the payment thereof, but subject to each of
the following conditions:
(i) the Borrower or the applicable Subsidiary Guarantor
must promptly commence the restoration process or the replacement
process in connection with the Mortgaged Property;
(ii) the Work shall be in the charge of a qualified
architect or engineer and before the Borrower or the applicable
Subsidiary Guarantor commences any Work, other than temporary
work to protect property or prevent interference with business,
the Collateral Agent shall have received the plans and
specifications and the general contract for the Work from the
Borrower or the applicable Subsidiary Guarantor. Said plans and
specifications shall provide for such Work that, upon completion
thereof, the improvements shall (A) be in compliance with all
applicable laws and regulations and all requirements of
applicable Governmental Authorities such that all representations
or warranties of the Borrower or such Subsidiary Guarantor
relating to the compliance of such Mortgaged Property with
applicable laws, rules or regulations in this Credit Agreement or
the Security Documents will be correct in all respects and (B) be
at least equal in value and general utility to the improvements
that were on such Mortgaged Property (or that were on the
Mortgaged Property that has been replaced, if applicable) prior
to the Casualty or Taking, and in the case of a Taking, subject
to the effect of such Taking;
(iii) except as provided in (iv) below, each request
for payment shall be made on seven days' prior notice to the
Collateral Agent and shall be accompanied by a certificate to
be made by such architect or engineer, stating (A) that all the
Work completed has been done in substantial compliance with the
plans and specifications, (B) that the sum requested is justly
required to reimburse the Borrower or the applicable Subsidiary
Guarantor for payments by the Borrower or such Subsidiary
Guarantor to, or is justly due to, the contractor,
subcontractors, materialmen, laborers, engineers, architects or
other Persons rendering services or materials for the Work
(giving a brief description of such services and materials)
and that, when added to all sums previously paid out by the
Collateral Agent, does not exceed the value of the Work done to
the date of such certificate;
(iv) each request for payment in connection with the
acquisition of a replacement Mortgaged Property shall be made on
30 days' prior notice to the Collateral Agent and, in connection
therewith, (A) each such request shall be accompanied by a copy
of the sales contract or other document governing the acquisition
of the replacement property by the Borrower or the applicable
Subsidiary Guarantor and a certificate of the Borrower or such
Subsidiary Guarantor stating that the sum requested represents
the sales price under such contract or document and the related
reasonable transaction fees and expenses (including brokerage
fees) and setting forth in sufficient detail the various
components of such requested sum and (B) the Borrower shall (and
shall cause such Subsidiary Guarantor to) (I) in addition to any
other items required to be delivered under this Section 10.16,
provide the Administrative Agent and the Collateral Agent with
such opinions, documents, certificates, title insurance policies
(as required by Section 5.02(m)), surveys and other insurance
policies as they may reasonably request and (II) take such other
actions as the Administrative Agent and the Collateral Agent may
reasonably deem necessary or appropriate (including actions with
respect to the delivery to the Collateral Agent of a first
priority Mortgage as required by Section 5.02(m) and assignment
with respect to such real property for ratable benefit of the
Secured Parties);
(v) each request shall be accompanied by waivers of
lien satisfactory to the Collateral Agent covering that part of
the Work for which payment or reimbursement is being requested
and, if required by the Collateral Agent, by a search prepared by
a title company or licensed abstractor or by other evidence
satisfactory to the Collateral Agent, that there has not been
filed with respect to such Mortgaged Property any mechanics' or
other lien or instrument for the retention of title in respect of
any part of the Work not discharged of record or bonded to the
reasonable satisfaction of the Collateral Agent;
(vi) there shall be no Default or Event of Default that
has occurred and is continuing;
(vii) the request for any payment after the Work has
been completed shall be accompanied by a copy of any certificate
or certificates required by law to render occupancy of the
improvements being rebuilt, repaired or restored legal; and
(viii) after commencing the Work, the Borrower shall
(and shall cause the applicable Subsidiary Guarantor to) continue
to perform the Work diligently and in good faith to completion in
accordance with the approved plans and specifications.
Upon completion of the Work and payment in full therefor, the
Collateral Agent will disburse to the Borrower or the applicable
Subsidiary Guarantor the amount of any Insurance Proceeds or
Condemnation Proceeds then or thereafter in the hands of the
Collateral Agent on account of the Casualty or Taking that
necessitated such Work to be applied (x) to prepay obligations
outstanding under this Agreement to the extent required under
Section 2.13(c), with any excess being returned to the Borrower
or the applicable Subsidiary Guarantor, or (y) to be reinvested
in the Borrower's or such Subsidiary Guarantor's principal lines
of business within 180 days after the receipt thereof,
provided that the Borrower, pending such reinvestment, promptly
deposits (or causes the applicable Subsidiary Guarantor to so
deposit) such amounts in a cash collateral account established
with the Collateral Agent for the benefit of the Secured Parties.
(g) Notwithstanding any other provisions of this Section
10.16, if the Borrower or the applicable Subsidiary Guarantor
shall have elected to replace a Mortgaged Property as
contemplated in paragraphs (c) and (e) above, all Condemnation
Proceeds or Insurance Proceeds held by the Collateral Agent in
connection therewith shall be applied to prepay obligations
outstanding under this Agreement to the extent required under
Section 2.13(c) if (i) the Borrower subsequently notifies
the Collateral Agent and the Administrative Agent that it or the
applicable Subsidiary Guarantor does not intend to replace the
applicable Mortgaged Property, (ii) a Responsible Officer of the
Borrower shall not have notified the Administrative Agent and the
Collateral Agent in writing that the Borrower or the applicable
Subsidiary Guarantor has acquired or has entered into a binding
contract to acquire land upon which it will construct the
replacement property within six months after the related
Condemnation or Casualty or (iii) the Borrower shall have not
notified the Administrative Agent and the Collateral Agent in
writing that it or the applicable Subsidiary Guarantor has begun
construction of the replacement structures within one year after
the related Condemnation or Casualty. Any funds not required to
be applied in accordance with Section 2.13(c) shall be returned
to the Borrower or the applicable Subsidiary Guarantor.
(h) Nothing in this Section 10.16 shall prevent the
Collateral Agent from applying at any time all or any part of the
Insurance Proceeds or Condemnation Proceeds to the curing of any
Event of Default under this Credit Agreement.
(i) The execution of a Mortgage or a Leasehold Mortgage by
any Subsidiary Guarantor shall be deemed to be an acknowledgment
and acceptance of the provisions of this Section 10.16 and the
provisions of Section 10.17.
SECTION 10.17. Investment of Certain Escrowed Amounts. (a)
If the Borrower deposits (or causes any Subsidiary to deposit)
money with the Collateral Agent, or such money is received
directly by the Collateral Agent, pursuant to or in connection
with (a) the definition of the term Prepayment Event (in
connection with any deposit of Net Cash Proceeds pending any
permitted reinvestment contemplated by such definition (other
than with respect to any Mortgaged Property Casualty or
Condemnation governed by Section 10.16)) or (b) Section 10.16 (in
connection with any Mortgaged Property Casualty or Condemnation),
the Borrower and each applicable Subsidiary understands and
agrees that (i) such amounts shall be held as collateral for the
payment of the Obligations in separate escrow accounts (or
sub-accounts of a single escrow account) with the Collateral
Agent for the benefit of the Secured Parties, (ii) the Collateral
Agent shall have exclusive dominion and control over such
accounts (or subaccounts), (iii) other than any interest earned
on the investment of such deposits in Permitted Investments,
which investments shall be made at the option and sole discretion
of the Collateral Agent, such deposits shall not bear interest,
(iv) interest or profits, if any, on such investments shall
accumulate in such accounts (or sub-accounts) and (v) amounts
held in such accounts (or sub-accounts) shall be released or
applied (A) in the case of Section 10.16, as provided in (and
subject to the provisions of) such Section and (B) in all other
cases, upon the demand by the Borrower in connection with the
Borrower's or the applicable Subsidiary's reinvestment of such
amounts within the specified period of time.
(b) Nothing in this Section 10.17 shall prevent the
Collateral Agent from applying at any time all or any part of the
amounts on deposit in the above-contemplated accounts (or
sub-accounts) to the curing of any Event of Default under this
Credit Agreement.
SECTION 10.18. Confidentiality. Except as otherwise provided
in Section 10.04(g), each of the Administrative Agent, the
Issuing Lender, and each of the Lenders agrees and will cause
each of its affiliates, representatives, agents and employees to
agree, to keep confidential the Information (as defined below)
and all copies thereof, extracts therefrom and analyses or other
materials based thereon, except that the Administrative Agent,
the Issuing Lender or any Lender shall be permitted to disclose
such Information (a) at the request of a bank regulatory agency
or in connection with an examination by bank examiners, (b)
pursuant to subpoena or other court process, (c) at the express
discretion of any other authorized government agency, (d) to the
independent auditors of the Administrative Agent, Issuing Lender
or such Lender, (e) otherwise as required by law or (f) in
connection with the enforcement of this Agreement or any other
Loan Document. For the purposes of this Section, "Information"
shall mean all information that is received from the Borrower and
relates to the Borrower or the Subsidiaries or to candidates for
acquisition by the Borrower or a Subsidiary, other than any such
information available to the Administrative Agent, the Issuing
Lender or any Lender on a non-confidential basis prior to its
disclosure hereunder and information which becomes available to
the Administrative Agent, Issuing Lender or any Lender on a non-
confidential basis from a source that is not bound to keep such
information confidential. The provisions of this Section 10.18
shall remain operative and in full force and effect until the
expiration of this Agreement. Notwithstanding the foregoing, the
parties hereto agree that the filing of any of the Loan Documents
(to the extent necessary in the judgment of the Collateral Agent)
to properly assure the validity or priority of the Collateral
Agent's Lien under any Security Document or to the extent
required by local counsel in order to render an opinion in form
and substance reasonably satisfactory to the Collateral Agent in
connection with such Lien will not result in a violation of the
foregoing confidentiality provisions.
SECTION 10.19 Sharing of Proceeds of Certain Collateral.
(a) If the Collateral Agent receives any amounts in respect of
any Mortgaged Property and the related Mortgage omits as a
secured obligation the Revolving Loans (including the Letters of
Credit) or the Acquisition Loans outstanding prior to the
Acquisition Loan Commitment Termination Date (each such Mortgage
being a Partial Mortgage ), and the application by the
Collateral Agent of such amounts in accordance with the terms of
such Partial Mortgage would result in the unpaid principal
portion of any Lender's Loans being proportionately less than the
unpaid principal portion of any other Lender's Loans, then
the Collateral Agent shall be permitted to reallocate such
amounts so that the aggregate unpaid principal amount of the
Loans, LC Exposure and KPR LC Exposure and participations in
Loans, LC Exposure and KPR LC Exposure held by each Lender shall
be in the same proportion to the aggregate unpaid principal
amount of all Loans, LC Exposure and KPR LC Exposure then
outstanding as the principal amount of such Lender's Loans, LC
Exposure and KPR LC Exposure prior to the initial application of
the amounts by the Collateral Agent was to the principal amount
of all Loans, LC Exposure and KPR LC Exposure prior to the
initial application of such amounts. The Borrower expressly
consents to the foregoing arrangements.
SECTION 10.20 Designated Senior Indebtedness. The Borrower
designates the Obligations under this Agreement and the other
Loan Documents as "Designated Senior Indebtedness" under and
as defined in the Subordinated Note Indenture.
IN WITNESS WHEREOF, the Borrower, the Administrative Agent,
the Managing Agent, the Issuing Lender and the Lenders have
caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
FOODBRANDS AMERICA, INC.
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
CHEMICAL BANK, individually, as
Administrative Agent, as Collateral Agent
and as Issuing Lender,
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
CITIBANK, N.A., individually and as
Managing Agent,
/S/ ▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Attorney-n-Fact
CREDIT LYONNAIS, Cayman Island
Branch
/S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signature
CREDIT LYONNAIS - New York Branch
/S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signature
FIRST BANK NATIONAL
ASSOCIATION,
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
THE FIRST NATIONAL BANK OF
BOSTON,
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇ FINANCIAL, INC.,
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., CHICAGO BRANCH,
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President and Deputy
General Manager
THE MITSUBISHI TRUST AND
BANKING CORPORATION,
/S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
Title: Senior Vice President
NATIONSBANK OF TEXAS, N.A.,
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR,
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: VP-Group Manager
LIBERTY BANK AND TRUST
COMPANY OF OKLAHOMA CITY, N.A.,
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLAND
BRANCHES,
/S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
BANQUE PARIBAS,
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Vice President
/S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL
PRIME RATE INCOME TRUST,
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Sr. Vice Pres. - Portfolio Mgr.