Exhibit 10.9
EXECUTION COPY
U.S. $2,500,000
AMENDED AND RESTATED CREDIT AGREEMENT (364 DAYS)
among
NASCO INTERNATIONAL, INC.,
as the Borrower,
and
VARIOUS FINANCIAL INSTITUTIONS
NOW OR HEREAFTER PARTIES HERETO,
as the Lenders,
BANK ONE, WISCONSIN
as Documentation Agent
and
BANK OF AMERICA, N.A.,
as the Administrative Agent for the Lenders
BANC OF AMERICA SECURITIES LLC
as Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS ............................. 1
SECTION 1.1 Defined Terms ........................................... 1
SECTION 1.2 Use of Defined Terms .................................... 19
SECTION 1.3 Cross-References ........................................ 19
SECTION 1.4 Accounting and Financial Determinations ................. 19
ARTICLE II. COMMITMENTS, BORROWING PROCEDURES AND NOTES ................. 19
SECTION 2.1 Commitments ............................................. 19
SECTION 2.1.1 Commitment of Each Lender ............................. 19
SECTION 2.1.2 Lenders Not Permitted or Required to Make Loans ....... 19
SECTION 2.2 Reduction of Commitment Amount .......................... 20
SECTION 2.3 Borrowing Procedure ..................................... 20
SECTION 2.3.1 Borrowings ............................................ 20
SECTION 2.3.2 All Borrowings ........................................ 20
SECTION 2.4 Continuation and Conversion Elections ................... 20
SECTION 2.5 Funding ................................................. 20
SECTION 2.6 Notes ................................................... 21
ARTICLE III. REPAYMENTS, PREPAYMENTS, INTEREST AND FEES ................. 21
SECTION 3.1 Repayments and Prepayments .............................. 21
SECTION 3.2 Interest Provisions ..................................... 22
SECTION 3.2.1 Rates ................................................. 22
SECTION 3.2.2 Default Rates ......................................... 22
SECTION 3.2.3 Payment Dates ......................................... 23
SECTION 3.3 Fees .................................................... 23
SECTION 3.3.1 [Reserved] ............................................. 23
SECTION 3.3.2 Agents Fee ............................................ 23
SECTION 3.3.3 Non-Use Fees .......................................... 23
SECTION 3.4 Extension of Stated Maturity Date ....................... 24
ARTICLE IV. CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS ................ 24
SECTION 4.1 Eurodollar Rate Lending Unlawful ........................ 24
SECTION 4.2 Deposits Unavailable .................................... 24
SECTION 4.3 Increased Costs, etc. ................................... 25
SECTION 4.4 Funding Losses .......................................... 25
SECTION 4.5 Increased Capital Costs ................................. 25
SECTION 4.6 Taxes ................................................... 26
SECTION 4.7 Payments, Computations, etc ............................. 27
SECTION 4.8 Sharing of Payments ..................................... 27
SECTION 4.9 Setoff .................................................. 28
SECTION 4.10 Use of Proceeds ........................................ 28
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ARTICLE V. CONDITIONS TO EFFECTIVENESS AND BORROWINGS ..................... 28
SECTION 5.1 Effectiveness ............................................ 28
SECTION 5.1.1 Resolutions, etc. ...................................... 29
SECTION 5.1.2 Delivery of Notes ...................................... 29
SECTION 5.1.3 Credit Agreements ...................................... 29
SECTION 5.1.4 Confirmation ........................................... 29
SECTION 5.1.5 Satisfaction with Tax Sharing Agreement ................ 29
SECTION 5.1.6 Opinions of Counsel .................................... 29
SECTION 5.1.7 Closing Fees, Expenses, etc. ........................... 29
SECTION 5.1.8 No Materially Adverse Effect ........................... 29
SECTION 5.1.9 Satisfactory Legal Form ................................ 29
SECTION 5.1.10 Compliance with Warranties, No Default, etc. .......... 30
SECTION 5.1.11 Consents, etc. ........................................ 30
SECTION 5.2 All Borrowings ........................................... 30
SECTION 5.2.1 Compliance with Warranties, No Default, etc. ........... 30
SECTION 5.2.2 Borrowing Request ...................................... 31
SECTION 5.2.3 Satisfactory Legal Form ................................ 31
ARTICLE VI. REPRESENTATIONS AND WARRANTIES ................................ 32
SECTION 6.1 Organization, etc. ....................................... 32
SECTION 6.2 Due Authorization, Non-Contravention, etc. ............... 32
SECTION 6.3 Government Approval, Regulation, etc. .................... 32
SECTION 6.4 Validity, etc. ........................................... 33
SECTION 6.5 Financial Information .................................... 33
SECTION 6.6 No Material Adverse Change ............................... 33
SECTION 6.7 Litigation, Labor Controversies, etc. .................... 33
SECTION 6.8 Subsidiaries ............................................. 33
SECTION 6.9 Ownership of Properties .................................. 34
SECTION 6.10 Taxes ................................................... 34
SECTION 6.11 Pension and Welfare Plans ............................... 34
SECTION 6.12 Environmental Warranties ................................ 34
SECTION 6.13 Regulations U and X ..................................... 35
SECTION 6.14 Real Property; Mortgage, etc. ........................... 36
SECTION 6.15 The Collateral Documents ................................ 36
SECTION 6.16 Accuracy of Information ................................. 36
SECTION 6.17 Subordinated Debt ....................................... 36
SECTION 6.18 Intellectual Property ................................... 37
ARTICLE VII. COVENANTS .................................................... 37
SECTION 7.1 Affirmative Covenants .................................... 37
SECTION 7.1.1 Financial Information, Reports, Notices, etc. .......... 37
SECTION 7.1.2 Compliance with Laws, etc. ............................. 39
SECTION 7.1.3 Maintenance of Properties .............................. 39
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SECTION 7.1.4 Insurance .............................................. 39
SECTION 7.1.5 Books and Records ...................................... 40
SECTION 7.1.6 Environmental Covenant ................................. 40
SECTION 7.1.7 Fourth Amendment to Mortgage ........................... 40
SECTION 7.1.8 Modesto Property ....................................... 41
SECTION 7.1.9 Further Assurances. .................................... 42
SECTION 7.2 Negative Covenants ....................................... 42
SECTION 7.2.1 Business Activities .................................... 42
SECTION 7.2.2 Indebtedness ........................................... 42
SECTION 7.2.3 Liens .................................................. 43
SECTION 7.2.4 Financial Condition .................................... 44
SECTION 7.2.5 Investments ............................................ 44
SECTION 7.2.6 Restricted Payments, etc. .............................. 45
SECTION 7.2.7 Capital Expenditures, etc. ............................. 46
SECTION 7.2.8 Take or Pay Contracts .................................. 46
SECTION 7.2.9 Consolidation, Merger, etc. ............................ 46
SECTION 7.2.10 Asset Dispositions, etc. .............................. 46
SECTION 7.2.11 Modification of Tax Sharing Agreement and
Subordinated Debt .................................... 47
SECTION 7.2.12 Transactions with Affiliates .......................... 47
SECTION 7.2.13 Inconsistent Agreements ............................... 47
SECTION 7.2.14 Negative Pledges, Restrictive Agreements, etc. ........ 47
SECTION 7.2.15 Management Fees ....................................... 48
SECTION 7.2.16 Tax Sharing Payments .................................. 48
SECTION 7.2.17 Use of Proceeds ....................................... 48
ARTICLE VIII. EVENTS OF DEFAULT .......................................... 48
SECTION 8.1 Listing of Events of Default ............................. 48
SECTION 8.1.1 Non-Payment of Obligations ............................. 48
SECTION 8.1.2 Breach of Warranty ..................................... 49
SECTION 8.1.3 Non-Performance of Certain Covenants and Obligations ... 49
SECTION 8.1.4 Non-Performance of Other Covenants and Obligations ..... 49
SECTION 8.1.5 Default on Other Indebtedness .......................... 49
SECTION 8.1.6 Judgments .............................................. 49
SECTION 8.1.7 Pension Plans .......................................... 49
SECTION 8.1.8 Control of the Borrower ................................ 50
SECTION 8.1.9 Bankruptcy, Insolvency, etc. ........................... 50
SECTION 8.1.10 Impairment of Security, etc. .......................... 50
SECTION 8.2 Action if Bankruptcy ..................................... 51
SECTION 8.3 Action if Other Event of Default ......................... 51
SECTION 8.4 Cumulative Remedies ...................................... 51
ARTICLE IX. THE AGENT .................................................... 51
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SECTION 9.1 Actions ................................................. 51
SECTION 9.2 Funding Reliance, etc. .................................. 52
SECTION 9.3 Exculpation ............................................. 52
SECTION 9.4 Successor ............................................... 52
SECTION 9.5 Loans by Bank of America ................................ 53
SECTION 9.6 Credit Decisions ........................................ 53
SECTION 9.7 Copies, etc. ............................................ 53
SECTION 9.8 Action Through Agent .................................... 53
SECTION 9.9 Documentation Agents .................................... 53
SECTION 9.10 Collateral Matters ..................................... 54
ARTICLE X. MISCELLANEOUS PROVISIONS ..................................... 54
SECTION 10.1 Waivers, Amendments, etc. .............................. 54
SECTION 10.2 Notices ................................................ 55
SECTION 10.3 Payment of Costs and Expenses .......................... 55
SECTION 10.4 Indemnification ........................................ 56
SECTION 10.5 Survival ............................................... 57
SECTION 10.6 Severability ........................................... 57
SECTION 10.7 Headings ............................................... 57
SECTION 10.8 Execution in Counterparts .............................. 57
SECTION 10.9 Governing Law; Entire Agreement ........................ 58
SECTION 10.10 Successors and Assigns ................................ 58
SECTION 10.11 Sale and Transfer of Loans and Notes; Participations
in Loans and Notes ................................... 58
SECTION 10.11.1 Assignments ......................................... 58
SECTION 10.11.2 Participations ...................................... 59
SECTION 10.11.3 Information and Assistance .......................... 60
SECTION 10.12 Other Transactions .................................... 60
SECTION 10.13 Maximum Interest ...................................... 60
SECTION 10.14 Forum Selection and Consent to Jurisdiction ........... 62
SECTION 10.15 Waiver of Jury Trial .................................. 62
SCHEDULES
SCHEDULE I -- Disclosure Schedule
SCHEDULE II -- Pricing Schedule
EXHIBITS
EXHIBIT A -- Form of Note
EXHIBIT B -- Form of Borrowing Request
EXHIBIT C -- Form of Continuation/Conversion Notice
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EXHIBIT D -- Copy of Pledge Agreement
EXHIBIT E -- Copy of Security Agreement
EXHIBIT F -- Form of Opinion of Counsel to the Borrower
EXHIBIT G -- Form of Lender Assignment Agreement
EXHIBIT H -- Form of Confirmation
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (364 DAYS), dated as of May
29, 2001, among NASCO INTERNATIONAL, INC., a Wisconsin corporation (the
"Borrower"), the various financial institutions which are now, or in accordance
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with Section 10.11.1 hereafter become, parties hereto (collectively, the
---------------
"Lenders"), BANK ONE, WISCONSIN, as Documentation Agent (in such capacity, the
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"Documentation Agent"), and BANK OF AMERICA, N.A., as administrative agent (in
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such capacity, the "Agent") for the Lenders.
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W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower, various financial institutions and the Agent
have entered into a Credit Agreement dated as of March 31, 2000 (the "Existing
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Credit Agreement");
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WHEREAS, the parties hereto have agreed to amend and restate the
Existing Credit Agreement so as to, among other things, decrease the amount of
the facility and amend certain covenants and various other provisions of the
Existing Credit Agreement;
WHEREAS, proceeds of the Loans will be used to meet working capital
requirements of the Borrower;
WHEREAS, the parties hereto intend that this Agreement and the
documents executed in connection herewith not effect a novation of the
obligations of the Borrower under the Existing Credit Agreement, but merely a
restatement of and, where applicable, an amendment to the terms governing such
obligations;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants herein contained, the parties agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Defined Terms. The following terms (whether or not
-------------
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Affiliate" of any Person means (a) any other Person which, directly
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or indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan) and (b) any Person who is a general partner, director
or officer of such Person or of any Person described in the foregoing
1
clause (a). A Person shall be deemed to be "controlled by" any other Person if
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such other Person possesses, directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or
managing general partners; or
(b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise,
or the ownership, direct or indirect or beneficial, of 10% or more of any class
of stock of such Person.
"Agent" is defined in the preamble and includes each other Person
----- --------
which shall have subsequently been appointed as the successor Agent pursuant to
Section 9.4.
-----------
"Agent's Fee Letter" means that certain Appendix A to the Summary of
------------------
Terms and Conditions dated May 29, 2001 regarding fees.
"Agreement" means this Amended and Restated Credit Agreement (364
---------
Days) as the same may thereafter from time to time be further amended,
supplemented, amended and restated or otherwise modified in accordance with the
terms hereof.
"Applicable Margin" means the rate per annum determined pursuant to
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Schedule II.
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"Assignee Lender" is defined in Section 10.11.1.
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"Authorized Officer" means, relative to the Borrower, those of its
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officers whose signatures and incumbency shall have been certified to the Agent
and the Lenders pursuant to Section 5.1.1.
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"Bank of America" means Bank of America, N.A.
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"Base Rate" means a fluctuating rate per annum equal to the higher of
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(a) the Federal Funds Rate plus 1/2 of 1% and, (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its "prime rate." Such rate is a rate set by Bank of America based upon
various factors including Bank of America's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate.
Any change in such rate announced by Bank of America shall take effect at the
opening of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
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determined by reference to the Base Rate.
"Borrower" is defined in the preamble.
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2
"Borrowing" means the Loans of the same type and, in the case of
Eurodollar Rate Loans, having the same Interest Period made by all Lenders on
the same Business Day and pursuant to the same Borrowing Request in accordance
with Section 2.1.
"Borrowing Request" means a loan request and certificate duly executed
by an Authorized Officer of the Borrower, substantially in the form of Exhibit B
hereto.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ or Ft. ▇▇▇▇▇▇▇▇, Wisconsin; and
(b) relative to the making, continuing, prepaying or repaying of
any Eurodollar Rate Loans, including with respect to the giving of
notices required under this Agreement therefor, any day described in
the foregoing clause (a) which is also a day on which dealings in
Dollars are carried on in the London interbank market.
"Business Plan" means the business plan for the Borrower entitled
"Nasco International, Inc. Consolidated Business Plan for Year Ended December
31, 2001", heretofore delivered to the Lenders.
"Capital Expenditures" means, for any period, the sum of
--------------------
(a) the aggregate amount of all expenditures of the Borrower and
its Subsidiaries for fixed or capital assets made during such period
which, in accordance with GAAP, would be classified as capital
expenditures and, without duplication, all amounts expended under
Section 7.2.9(b); and
(b) the aggregate amount of all Capitalized Lease Liabilities
incurred during such period.
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrower or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness issued or guaranteed by the
United States Government;
3
(b) commercial paper, maturing not more than nine months from the date
of issue, which is issued by
(i) a corporation (other than an Affiliate of the Borrower)
organized under the laws of any state of the United States or of the
District of Columbia and rated at least A-l by Standard & Poor's
Ratings Services or P-l by ▇▇▇▇▇'▇ Investors Service, Inc., or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers acceptance, maturing not
more than one year after such time, which is issued by either
(i) a commercial banking institution that is a member of the
Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000, or
(ii) any Lender; or
(d) any repurchase agreement entered into with any Lender, any other
commercial banking institution of the stature referred to in clause (c)(i)
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or any investment banking firm or broker which (directly or through a
parent or subsidiary corporation) issues commercial paper maturing not more
than nine months from the date of issue with a rating of at least A-1 by
Standard & Poor's Ratings Group or P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.,
which repurchase agreement
(i) is secured by a fully perfected security interest in any
obligation of the type described in any of clauses (a) through (c),
----------- ---
and
(ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of
such Lender (or other commercial banking institution) thereunder.
"CERCLA" means the Comprehensive Environmental Response, Compensation
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and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
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Liability Information System List.
"Change in Control" means
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(a) at any time when the aggregate principal amount of Indebtedness
outstanding hereunder exceeds $10,000,000, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and members of his
family shall cease to own and control, individually or in the aggregate,
directly or through corporations controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇ and members of
his family, for any reason, free
4
and clear of all Liens, options or other encumbrances or rights (other
than any pledge of capital stock of Geneve granted in favor of a commercial
lender securing Indebtedness, which Indebtedness may not exceed $10,000,000
in principal amount unless and until the outstanding principal amount of
all Loans is equal to or less than $10,000,000, it being understood and
agreed that foreclosure upon such Lien shall constitute a "Change in
Control"), at least 51% of the outstanding shares of capital stock having
ordinary voting power for the election of directors of Geneve on a fully
diluted basis, other than by reason of death or legal incapacity, in which
case a "Change in Control" shall not be deemed to occur until the date
which is six months after such death or legal incapacity; or
(b) the failure of Geneve to own and control, directly (or indirectly
through no more than one intermediate corporation) and free and clear of
all Liens, options or other encumbrances or rights, at least 80% of the
outstanding shares of capital stock having ordinary voting power for the
election of directors of the Borrower on a fully diluted basis.
"Code" means the Internal Revenue Code of 1986, as amended, reformed
----
or otherwise modified from time to time.
"Collateral Documents" means, collectively, the Pledge Agreement, the
--------------------
Security Agreement, the Mortgage, the Fourth Amendment to Mortgage, the Second
Amendment to Modesto Mortgage, and any other agreement, document or instrument
executed and delivered in connection therewith.
"Commitment" means, relative to any Lender, such Lender's obligation
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to make Loans pursuant to Section 2.1.1; collectively, for all the Lenders, the
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"Commitments".
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"Commitment Amount" means, on any date on or prior to the Commitment
-----------------
Termination Date, $2,500,000, as such amount may be reduced from time to time
pursuant to Section 2.2.
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"Commitment Termination Date" means the earliest of
---------------------------
(a) the Stated Maturity Date;
(b) the date on which the Commitment Amount is terminated in full
or reduced to zero pursuant to Section 2.2; and
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(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clauses (a), (b) or (c), the
--- --- ---
Commitments shall terminate automatically and without any further action.
5
"Commitment Termination Event" means
----------------------------
(a) the occurrence of any Default described in clauses (a)
---
through (d) of Section 8.1.9 with respect to the Borrower or any
--- -------------
Significant Subsidiary; or
(b) the occurrence and continuance of any other Event of Default
and either
(i) the declaration of the Loans to be due and payable
pursuant to Section 8.3, or
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(ii) in the absence of such declaration, the giving of
notice by the Agent, acting at the direction of the Required
Lenders, to the Borrower that the Commitments have been
terminated.
"Confirmation" means the Confirmation executed and delivered by the
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Borrower pursuant to Section 5.1.4, substantially in the form of Exhibit H
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hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time.
"Consolidated Current Assets" means, as of the close of any month in
---------------------------
each Fiscal Year, all amounts which, in accordance with GAAP consistently
applied, would be included as current assets on a consolidated balance sheet of
the Borrower and each of its Subsidiaries at such time, but in any event not
including any cash or Cash Equivalent Investments.
"Consolidated Current Assets Level" means, as of the last day of any
---------------------------------
Fiscal Quarter, the sum of (i) 80% of all amounts which, in accordance with GAAP
consistently applied, would be included as gross accounts receivable on a
consolidated balance sheet of the Borrower and each of its Subsidiaries at such
time plus (ii) 60% of all amounts which, in accordance with GAAP consistently
applied, would be included as gross inventory on a consolidated balance sheet of
the Borrower and each of its Subsidiaries at such time.
"Consolidated Current Liabilities" means, as of the close of any month
--------------------------------
in each Fiscal Year, all amounts which, in accordance with GAAP consistently
applied, would be included as current liabilities on a consolidated balance
sheet of the Borrower and each of its Subsidiaries at such time, but shall
exclude the current portion of long-term Indebtedness.
"Consolidated Current Ratio" means, as of the close of any month in
--------------------------
each Fiscal Year, the ratio of Consolidated Current Assets to Consolidated
Current Liabilities at such time.
"Consolidated Debt Service Coverage Ratio" means, as of the close of
----------------------------------------
any Fiscal Quarter, the ratio of:
(a) EBITDA computed for the four consecutive Fiscal Quarters
ending on the computation date to
6
(b) the sum of
(i) Consolidated Interest Expense computed for four consecutive Fiscal
Quarters ending on the computation date,
plus
----
(ii) Required Principal Payments as of such computation date.
"Consolidated Funded Debt" means, as of the date of any determination
------------------------
thereof, the aggregate outstanding principal amount of all Indebtedness of the
Borrower and each of its Subsidiaries of the nature referred to in clauses (a),
-----------
(b), (c) and (f) of the definition of "Indebtedness".
--- --- --- ------------
"Consolidated Interest Expense" means, for any Fiscal Quarter, the
-----------------------------
aggregate interest expense of the Borrower and each of its Subsidiaries for such
Fiscal Quarter, as determined in accordance with GAAP consistently applied,
including, without limitation, all commissions, discounts and other fees and
charges owed with respect to letters of credit and banker's acceptances and net
costs under interest rate swap or exchange agreements and the portion of any
obligation under capital leases allocable to interest expense but excluding in
any event any amounts payable under the Agent's Fee Letter.
"Consolidated Net Income" means, for any period, all amounts which, in
-----------------------
conformity with GAAP consistently applied, would be included under net income on
a consolidated income statement of the Borrower and each of its Subsidiaries for
such period.
"Consolidated Net Worth" means, at any time, all amounts which, in
----------------------
accordance with GAAP consistently applied, would be included under shareholders'
equity on a consolidated balance sheet of the Borrower and each of its
Subsidiaries at such time; provided that, in any event, such amounts are to be
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net of amounts carried on the books of the Borrower and each of its Subsidiaries
for treasury stock.
"Contingent Liability" means any agreement, undertaking or arrangement
--------------------
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount (or maximum principal amount, if larger) of the debt,
obligation or other liability guaranteed thereby.
7
"Continuation/Conversion Notice" means a notice of continuation or
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conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
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"Controlled Group" means all members of a controlled group of
----------------
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or section 4001 of ERISA.
"Credit Agreement (Five Year)" means the Amended and Restated Credit
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Agreement (Five Year) of the Borrower dated the date hereof providing for loans
in the principal amount of up to $51,000,000, as the same may thereafter from
time to time be amended, supplemented, amended and restated or otherwise
modified in accordance with the terms thereof.
"Default" means any Event of Default or any condition, occurrence or
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event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
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Schedule I, as it may be amended, supplemented or otherwise modified from time
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to time by the Borrower with the written consent of the Agent and the Required
Lenders.
"Dollar" and the sign "$" mean lawful money of the United States.
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"Domestic Office" means, relative to any Lender, the office of such
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Lender designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by notice from such Lender to each other Person party hereto.
"Effective Date" is defined in Section 5.1.
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"Environmental Laws" means all applicable federal, state or local
------------------
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"EBITDA" means, for any period, Consolidated Net Income for such period
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plus to the extent deducted in determining such Consolidated Net Income,
----
Consolidated Interest Expense, income tax expense, depreciation and amortization
for such period; provided that for purposes of calculating EBITDA for any
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Period, the consolidated net income of any Person acquired by the Borrower or
any Subsidiary during such period (plus, to the extent deducted in determining
such consolidated net income, interest expense, income tax expense, depreciation
and amortization of such Person) shall be included on a pro forma basis for such
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period (assuming the consummation of each such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred on the first day
of such period, but adjusted to add back non-recurring expenses (such as owner
compensation) to the extent disclosed to and approved by the Required Lenders)
based upon (a) to the extent available, (i) the audited consolidated balance
sheet of such
8
acquired Person and its consolidated Subsidiaries as at the end of the fiscal
year of such Person preceding the acquisition of such Person and the related
audited consolidated statements of income, stockholders' equity and cash flows
for such fiscal year and (ii) any subsequent unaudited financial statements for
such Person for the period prior to the acquisition of such Person so long as
such statements were prepared on a basis consistent with the audited financial
statements referred to above or (b) to the extent the items listed in clause (a)
----------
are not available, such historical financial statements and other information as
is disclosed to, and approved by, the Required Lenders.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"Eurodollar Office" means, relative to any Lender, the office of such
-----------------
Lender designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) as may be designated from time to time by notice from
such Lender to the Borrower and the Agent, whether or not outside the United
States, which shall be making or maintaining Eurodollar Rate Loans of such
Lender hereunder.
"Eurodollar Rate" means for any Interest Period with respect to any
---------------
Eurodollar Rate Loan, a rate per annum determined by Agent pursuant to the
following formula:
Eurodollar Rate = Eurodollar Base Rate
--------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Base Rate" means, for such Interest Period:
--------------------
(a) the rate per annum (carried out to the fifth decimal place) equal
to the rate determined by Agent to be the offered rate that appears on the
page of the Telerate Screen that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for delivery
on the first day of such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or
(b) in the event the rate referenced in the preceding subsection (a)
does not appear on such page or service or such page or service shall cease
to be available, the rate per annum (carried out to the fifth decimal
place) equal to the rate determined by Agent to be the offered rate on such
other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for delivery
on the
9
first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, or
(c) in the event the rates referenced in the preceding subsections (a)
and (b) are not available, the rate per annum determined by Agent as the
rate of interest at which Dollar deposits (for delivery on the first day of
such Interest Period) in same day funds in the approximate amount of the
applicable Eurodollar Rate Loan and with a term equivalent to such Interest
Period would be offered by its London Branch to major banks in the Offshore
Dollar market at their request at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period.
"Eurodollar Reserve Percentage" means, for any day during any Interest
-----------------------------
Period, the reserve percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day, whether or not applicable to any
Bank, under regulations issued from time to time by the Board of Governors of
the Federal Reserve System for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Eurodollar Rate for each outstanding Eurodollar Rate Loan
shall be adjusted automatically as of the effective date of any change in the
Eurodollar Reserve Percentage.
The determination of the Eurodollar Reserve Percentage and the Eurodollar
Base Rate by Agent shall be conclusive in the absence of manifest error.
"Eurodollar Rate Loan" means a Loan bearing interest, at all times during
--------------------
an Interest Period applicable to such Loan, at a fixed rate of interest
determined by reference to the Eurodollar Rate.
"Event of Default" is defined in Section 8.1.
---------------- -----------
"Excess Cash Flow" means, for any period, the remainder of
----------------
(a) Consolidated Net Income for such period,
plus
----
(b) to the extent deducted in determining such Consolidated Net
Income, income tax expense, depreciation and amortization for such period,
plus
----
(c) any decrease in working capital during such period
plus
----
(d) any non-cash charges
10
less
----
(e) the sum, without duplication of
(i) scheduled repayments of the loans under the Credit
Agreement (Five Year) made during such period pursuant to
Section 3.1.1 of such agreement,
plus
----
(ii) voluntary prepayments of the Loans pursuant to Section
-------
3.1 during such period,
---
plus
----
(iii) cash payments made in such period with respect to
Capital Expenditures,
plus
----
(iv) all federal, state, local and foreign income taxes
paid by the Borrower and its Subsidiaries during such period,
plus
----
(v) any increases in working capital during such period.
"Existing Credit Agreement" is defined in the recitals.
-------------------------
"Existing Note" means any promissory note of the Borrower payable to
-------------
the initial Lender, executed and delivered by the Borrower in favor of such
Lender pursuant to the Existing Credit Agreement, evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from the Loans made to the
Borrower under the Existing Credit Agreement.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
------------------
per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by Bank of America from three federal funds
brokers of recognized standing selected by it.
"Fiscal Quarter" means any quarter of a Fiscal Year.
--------------
11
"Fiscal Year" means any period of twelve consecutive calendar months
-----------
ending on December 31; references to a Fiscal Year with a number corresponding
to any calendar year (e.g., the "2001 Fiscal Year") refer to the Fiscal Year
---
ending on December 31 occurring during such calendar year.
"Fourth Amendment to Mortgage" means the Fourth Amendment to Mortgage
----------------------------
executed and delivered by the Borrower pursuant to Section 7.1.7, in form
-------------
satisfactory to the Agent, as amended, supplemented, restated, extended,
renewed, partially released or otherwise modified from time to time.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
------------
System or any successor thereto.
"GAAP" is defined in Section 1.4.
---- -----------
"Geneve" means Geneve Corporation, a Delaware corporation which
------
directly owns 80% of the voting stock of Holdings and, indirectly through such
ownership interest, owns 80% of the voting stock of the Borrower.
"Hazardous Material" means
------------------
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material or substance within the meaning of any other
applicable federal, state or local law, regulation, ordinance or
requirement (including consent decrees and administrative orders)
relating to or imposing liability or standards of conduct concerning
any hazardous, toxic or dangerous waste, substance or material, all as
amended or hereafter amended.
"Hedging Obligations" means, with respect to any Person, all
-------------------
liabilities of such Person under interest rate swap agreements, interest rate
cap agreements and interest rate collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency exchange rates.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
------ ------ ------ ---------
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
12
"Highest Lawful Rate" means, with respect to any indebtedness owed to
-------------------
any Lender hereunder or under any other Loan Document, the maximum nonusurious
interest rate, if any, that at any time or from time to time may be contracted
for, taken, reserved, charged or received by such Lender with respect to such
indebtedness under applicable law.
"Holdings" means NASCO Holdings, Inc., a Wisconsin corporation.
--------
"Impermissible Qualification" means, relative to the opinion or
---------------------------
certification of any independent public accountant as to any financial statement
of the Borrower, any qualification or exception to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause the Borrower to be in default of any of its
obligations under Section 7.2.4.
-------------
"including" means including without limiting the generality of any
---------
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto hereby agree that the rule of ejusdem
-------
generis shall not be applicable to limit a general statement, which is followed
-------
by or referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
------------
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases
which have been or should be, in accordance with GAAP, recorded as
Capitalized Lease Liabilities;
(d) all other items which, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of
such Person as of the date at which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging
Obligations;
13
(f) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred purchase
price of property or services, and indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being
purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited
in recourse; and
(g) all Contingent Liabilities of such Person in respect of
any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer.
"Indemnified Liabilities" is defined in Section 10.4.
-----------------------
"Indemnified Parties" is defined in Section 10.4.
-------------------
"Insignificant Subsidiary" means Nasco Exports.
------------------------
"Interest Period" means, relative to any Eurodollar Rate Loans, the
period beginning on (and including) the date on which such Eurodollar Rate Loan
is made or continued as, or converted into, a Eurodollar Rate Loan pursuant to
Section 2.3 or 2.4 and shall end on (but exclude) the day which numerically
----------- ---
corresponds to such date one, two, three or, if available (as determined in the
sole discretion of the Lenders), six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), as the
Borrower may select in its relevant notice pursuant to Section 2.3 or 2.4;
----------- ---
provided, however, that
-------- -------
(a) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than five different dates;
(b) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
following Business Day unless such next following Business Day is the
first Business Day of a calendar month, in which case such Interest
Period shall end on the Business Day next preceding such numerically
corresponding day;
(c) Interest Periods shall be selected in a manner such that
principal amounts of the Notes required to be repaid pursuant to
Section 3.1(b) hereof shall not require the breakage of any Interest
--------------
Periods; and
(d) no Interest Period may end later than the Stated
Maturity Date.
"Investment" means, relative to any Person,
----------
14
(a) any loan or advance made by such Person to any other Person
(excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business);
(b) any Contingent Liability of such Person; and
(c) any ownership or similar interest held by such Person in any other
Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.
"Lead Arranger" means Banc of America Securities LLC, in its capacity as
-------------
sole lead arranger and sole book manager.
"Lender Assignment Agreement" means a Lender Assignment Agreement
---------------------------
substantially in the form of Exhibit D hereto.
"Lenders" is defined in the preamble.
------- --------
"Lien" means any security interest, mortgage, pledge, hypothecation,
----
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Loan" is defined in Section 2.1.1.
---- -------------
"Loan Documents" means, collectively, this Agreement, the Notes, the
--------------
Collateral Documents, the Confirmation, and any other document executed in
connection or pursuant hereto or thereto from time to time which sets forth that
it constitutes a "Loan Document", in each case as amended, supplemented, amended
and restated or otherwise modified from time to time.
"Materially Adverse Effect" means, relative to any occurrence of whatever
-------------------------
nature (including, without limitation, any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), a
materially adverse effect on:
(a) the consolidated business, assets, revenues, financial condition,
operations, or prospects of the Borrower and its Subsidiaries; or
(b) the ability of the Borrower to perform any of its payment or other
material obligations under this Agreement, the Notes, the Mortgage, any
other Collateral Document or any other Loan Document.
15
"Modesto Mortgage" means Deed of Trust, Security Agreement, Assignment of
----------------
Rents and Leases and Fixture Filing dated as of August 5, 1997 as amended,
supplemented, restated, extended, reviewed, partially released or otherwise
modified from time to time.
"Modesto Property" means lots 3 and 4 of Landmark Business Center, as per
----------------
map thereof, recorded October 4, 1988 in Book 33, page 31, Stanislaus County,
California Records.
"Monthly Payment Date" means the last day of each calendar month or, if any
--------------------
such day is not a Business Day, the next succeeding Business Day.
"Mortgage" means the Original Mortgage, as amended by the Fourth Amendment
--------
to Mortgage, and as amended, supplemented, restated, extended, renewed,
partially released or otherwise modified from time to time.
"Mortgaged Collateral" means the Collateral (as such term is defined in the
--------------------
Mortgage).
"Mortgaged Real Property" means the Property (as such term is defined in
-----------------------
the Mortgage).
"Nasco Exports" means Nasco Exports, Inc., a Wisconsin corporation and a
-------------
direct, wholly-owned Subsidiary of the Borrower.
"Note" means a promissory note of the Borrower payable to any Lender,
----
executed and delivered by the Borrower in accordance with this Agreement,
substantially in the form of Exhibit A hereto (as such promissory note may be
---------
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Loans, and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"Obligations" means all obligations (monetary or otherwise) of the Borrower
-----------
arising under or in connection with this Agreement, the Notes, the Mortgage,
each other Collateral Document and each other Loan Document.
"Original Credit Agreement" means the Third Amended and Restated Credit
-------------------------
Agreement dated as of January 2, 1996 among the Borrower, certain Lenders and
Bank of America, N.A., as agent.
"Original Mortgage" means that certain Mortgage (and Security Agreement)
-----------------
executed and delivered by the Borrower pursuant to the Original Credit
Agreement, dated as of June 25, 1992, as amended, supplemented, amended and
restated and otherwise modified through the date hereof.
"Organic Document" means, relative to the Borrower, its certificate of
---------------
incorporation, its by-laws and all shareholder agreements, voting trusts and
similar arrangements applicable to any of its authorized shares of capital
stock.
16
"Participant" is defined in Section 10.11.
-----------
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
----
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in section
------------
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in section 4001(a)(3) of ERISA), and to which the Borrower or
any corporation, trade or business that is, along with the Borrower, a member of
a Controlled Group, may have liability, including any liability by reason of
having been a substantial employer within the meaning of section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under section 4069 of ERISA.
"Percentage" means, relative to any Lender, the percentage set forth
----------
opposite its signature hereto or set forth in the Lender Assignment Agreement,
as such percentage may be adjusted from time to time pursuant to Lender
Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and
delivered pursuant to Section 10.11.
-------------
"Person" means any natural person, corporation, partnership, limited
------
liability company, firm, association, trust, government, governmental agency or
any other entity, whether acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
----
"Pledge Agreement" means the Pledge Agreement, executed and delivered by
----------------
the Borrower, a copy of which is attached as Exhibit D hereto, as amended,
---------
supplemented, amended and restated or otherwise modified from time to time.
"Quarterly Payment Date" means the last day of each March, June, September
----------------------
and December or, if any such day is not a Business Day, the next succeeding
Business Day.
"Release" means a "release", as such term is defined in CERCLA.
-------
"Required Lenders" means, at any time prior to the Effective Date, Lenders
----------------
having at least 66 2/3% of the Commitments and, from and after the Effective
Date, Lenders holding at least 66 2/3% of the then aggregate outstanding
principal amount of the Notes then held by the Lenders, or, if no such principal
amount is then outstanding, Lenders having at least 66 2/3% of the Commitments.
"Required Principal Payments" means the principal amount of the scheduled
---------------------------
repayments set forth in Section 3.1.1 of the Credit Agreement (Five Year) for
the four consecutive Fiscal Quarters following the date on which such payments
are computed.
"Resource Conservation and Recovery Act" means the Resource Conservation
--------------------------------------
and Recovery Act, 42 U.S.C. Section 690, et seq., as in effect from time to
------
time.
17
"Second Amendment to Modesto Mortgage" means the Second Amendment to the
------------------------------------
Modesto Mortgage executed and delivered by Borrower pursuant to Section 7.1.8,
-------------
in form satisfactory to the Agent, as amended, supplemented, restated, extended,
renewed, partially released or otherwise modified from time to time.
"Security Agreement" means the Security Agreement, executed and delivered
------------------
by the Borrower, a copy of which is attached as Exhibit E hereto, together with
---------
the intellectual property agreements relating thereto, as amended, supplemented,
amended and restated or otherwise modified from time to time.
"Senior Debt" means the remainder of (a) Consolidated Funded Debt minus (b)
----------- -----
Subordinated Debt.
"Senior Debt to EBITDA Ratio" means, at any date, the ratio of (a) Senior
---------------------------
Debt as of such date to (b) the sum of EBITDA for such period of four
consecutive Fiscal Quarters then most recently ended. For purposes of
calculating the Senior Debt to EBITDA Ratio as at any date, EBITDA shall be
calculated on a pro forma basis (as certified by the Borrower to the Agent)
--- -----
assuming all acquisitions made, and all divestitures completed, during the four
consecutive Fiscal Quarters then most recently ended had been made on the first
day of such period (but without adjustment for expected cost savings or other
synergies).
"Significant Subsidiaries" means all Subsidiaries of the Borrower other
------------------------
than the Insignificant Subsidiary.
"Stated Maturity Date" means March 31, 2002 as such date may be extended
--------------------
pursuant to Section 3.4.
"Subordinated Debt" means unsecured Indebtedness of the Borrower for money
-----------------
borrowed which is subordinated, upon terms satisfactory to the Agent and the
Required Lenders in their sole discretion, in right of payment to the payment in
full in cash of all Obligations.
"Subsidiary" means, with respect to any Person, any corporation of which
----------
more than 50% of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person, by such
Person and one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person.
"Taxes" is defined in Section 4.6.
----- -----------
"type" means, relative to any Loan, the portion thereof, if any, being
----
maintained as a Base Rate Loan or a Eurodollar Rate Loan.
"United States" or "U.S." means the United States of America, its fifty
------------- ---
States and the District of Columbia.
18
"Welfare Plan" means a "welfare plan", as such term is defined in section
------------
3(1) of ERISA.
SECTION 1.2 Use of Defined Terms. Unless otherwise defined or the context
--------------------
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in the Disclosure Schedule and in each Note,
Borrowing Request, Continuation/Conversion Notice, Loan Document, notice and
other communication delivered from time to time in connection with this
Agreement or any other Loan Document.
SECTION 1.3 Cross-References. Unless otherwise specified, references in
----------------
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4 Accounting and Financial Determinations. Unless otherwise
---------------------------------------
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under Section 7.2.4) shall be made, and all financial
-------------
statements required to be delivered hereunder or thereunder shall be prepared,
in accordance with those generally accepted accounting principles ("GAAP")
----
applied in the preparation of the financial statements referred to in Section
6.5 .
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1 Commitments. On the terms and subject to the conditions of
-----------
this Agreement (including Article V), each Lender severally agrees to make
---------
revolving loans to the Borrower pursuant to its Commitment as follows:
SECTION 2.1.1 Commitment of Each Lender. From time to time on any Business
-------------------------
Day occurring prior to the Commitment Termination Date, each Lender will make
loans (relative to such Lender, and of any type, its "Loans") to the Borrower
-----
equal to such Lender's Percentage of the aggregate amount of the Borrowing
requested by the Borrower to be made on such day. The commitment of each Lender
described in this Section 2.1.1 is herein referred to as its "Commitment". On
------------- ----------
the terms and subject to the conditions hereof, the Borrower may from time to
time borrow, prepay and reborrow Loans.
SECTION 2.1.2 Lenders Not Permitted or Required to Make Loans. No Lender
-----------------------------------------------
shall be permitted or required to make any Loan if, after giving effect thereto,
the aggregate outstanding principal amount of all Loans
(a) of all Lenders would exceed the Commitment Amount, or
(b) of such Lender would exceed such Lender's Percentage of the
Commitment Amount.
19
SECTION 2.2 Reduction of Commitment Amount. The Borrower may, from time to
------------------------------
time on any Business Day occurring after the time of the initial Borrowing
hereunder, voluntarily reduce the Commitment Amount; provided, however, that all
-------- -------
such reductions shall be irrevocable and shall require at least three Business
Days' prior notice to the Agent and be permanent, and any partial reduction of
the Commitment Amount shall be in a minimum amount of $500,000 and in an
integral multiple of $250,000.
SECTION 2.3 Borrowing Procedure.
-------------------
SECTION 2.3.1 Borrowings. By delivering a Borrowing Request to the Agent
----------
on or before 9:00 a.m., Chicago time, on a Business Day subsequent to the date
of the initial Borrowing hereunder, the Borrower may from time to time
irrevocably request, on not less than three nor more than five Business Days
notice, that a Borrowing be made in a minimum amount of $500,000 and an integral
multiple of $250,000, or in the unused amount of the Commitments.
SECTION 2.3.2 All Borrowings. On the terms and subject to the conditions
--------------
of this Agreement, each such Borrowing pursuant to Sections 2.3.1 and 2.3.2
-------------- -----
shall be comprised of the type of Loans specified in the Borrowing Request and
shall be made on the Business Day specified in such Borrowing Request. On or
before 10:00 a.m. (Chicago time), on such Business Day, each Lender shall
deposit with the Agent same day funds in an amount equal to such Lender's
Percentage of the requested Borrowing. Such deposit will be made to an account
which the Agent shall specify from time to time by notice to the Lenders. To the
extent funds are received from the Lenders, the Agent shall make such funds
available to the Borrower by wire transfer to the account the Borrower shall
have specified in its Borrowing Request. No Lender's obligation to make any Loan
shall be affected by any other Lender's failure to make any Loan.
SECTION 2.4 Continuation and Conversion Elections. By delivering a
-------------------------------------
Continuation/Conversion Notice to the Agent on or before 9:00 a.m., Chicago
time, on a Business Day, the Borrower may from time to time irrevocably elect,
on not less than three nor more than five Business Days' notice, that all, or
any portion in an aggregate minimum amount of $500,000 and an integral multiple
of $250,000, of any Loans be, in the case of Base Rate Loans, converted into
Eurodollar Rate Loans or, in the case of Eurodollar Rate Loans, be converted
into a Base Rate Loan (in the absence of delivery of a Continuation/Conversion
Notice with respect to any Eurodollar Rate Loan at least three Business Days
before the last day of the then current Interest Period with respect thereto,
such Eurodollar Rate Loan shall, on such last day, automatically convert to a
Base Rate Loan); provided, however, that (a) each such conversion or
-------- -------
continuation shall be prorated among the applicable outstanding Loans of all
Lenders, and (b) no portion of the outstanding principal amount of any Loans may
be continued as, or be converted into, Eurodollar Rate Loans when any Default
has occurred and is continuing.
SECTION 2.5 Funding. Each Lender may, if it so elects, fulfill its
-------
obligation to make, continue or convert Eurodollar Rate Loans hereunder by
causing one of its foreign branches or Affiliates (or an international banking
facility created by such Lender) to make or maintain such Eurodollar Rate Loan;
provided, however, that such Eurodollar Rate Loan shall nonetheless be deemed to
-------- -------
have been made and to be held by such Lender, and the obligation of the Borrower
to
20
repay such Eurodollar Rate Loan shall nevertheless be to such Lender for the
account of such foreign branch, Affiliate or international banking facility. In
addition, the Borrower hereby consents and agrees that, for purposes of any
determination to be made for purposes of Section 4.1, 4.2, 4.3 or 4.4, it shall
----------- --- --- ---
be conclusively assumed that each Lender elected to fund all Eurodollar Rate
Loans by purchasing, as the case may be, Dollar certificates of deposit in the
U.S. or Dollar deposits in its Eurodollar Office's interbank eurodollar market.
SECTION 2.6 Notes. Each Lender's Loans under its Commitment shall be
-----
evidenced by a Note payable to the order of such Lender in a maximum principal
amount equal to such Lender's Percentage (as of the Effective Date) of the
Commitment Amount. The Note issued hereunder and as of the Effective Date shall
be issued in substitution and exchange for, and not in satisfaction or payment
of, the Existing Notes and the Indebtedness (together with the obligation to pay
accrued interest thereon) originally evidenced by the Existing Notes which is
now to be evidenced by the replacement Notes delivered pursuant to this
Agreement shall be (and the Borrower hereby acknowledges and agrees that such
Indebtedness is) a continuing Indebtedness, and nothing herein contained shall
be construed to deem such Existing Notes paid, or to release or terminate any
Lien or security interest given to secure such Existing Notes, which Liens and
security interests shall continue to secure such Indebtedness as evidenced by
such Notes. The Borrower hereby irrevocably authorizes each Lender to make (or
cause to be made) appropriate notations on the grid attached to such Lender's
Note (or on any continuation of such grid), which notations, if made, shall
evidence, inter alia, the date of, the outstanding principal of, and the
----------
interest rate and Interest Period applicable to the Loans evidenced thereby.
Such notations shall be conclusive and binding on the Borrower absent manifest
error; provided, however, that the failure of any Lender to make any such
-------- -------
notations shall not limit or otherwise affect any Obligations of the Borrower.
ARTICLE III.
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1 Repayments and Prepayments. On the Stated Maturity Date, the
--------------------------
Borrower shall repay in full the entire unpaid principal amount of all
outstanding Loans, together with all accrued and unpaid interest thereon, all
fees in connection therewith and all other Obligations hereunder. Prior thereto,
the Borrower
(a) may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of any
Loans; provided, however, that
-------- -------
(i) any such prepayment shall be made pro rata among Loans of the
--- ----
same type and, if applicable, having the same Interest Period of all
Lenders,
(ii) no such prepayment of any Eurodollar Rate Loan may be made
on any day other than the last day of the Interest Period for such
Loan,
21
(iii) all such voluntary prepayments shall require at least three
but no more than five Business Days' prior written notice to the
Agent, and
(iv) all such voluntary partial prepayments shall be in an
aggregate minimum amount of $100,000 and an integral multiple of
$50,000 in excess thereof; and
(b) shall, on each date when any reduction in the Commitment Amount
shall become effective, including pursuant to Section 2.2, make a mandatory
-----------
prepayment of all Loans equal to the excess, if any, of the aggregate,
outstanding principal amount of all Loans over the Commitment Amount as so
reduced; and
(c) shall, immediately upon any acceleration of the Stated Maturity
Date of any Loans pursuant to Section 8.2 or Section 8.3, repay all such
----------- -----------
Loans so accelerated.
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4. No voluntary
-----------
prepayment of principal of any Loans shall cause a reduction in the Commitment
Amount.
SECTION 3.2 Interest Provisions. Interest on the outstanding principal
-------------------
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
-----------
SECTION 3.2.1 Rates. Pursuant to an appropriately delivered Borrowing
-----
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a Base Rate
Loan, equal to the sum of the Base Rate plus the Applicable Margin from
time to time in effect; and
(b) on that portion maintained as a Eurodollar Rate Loan, during
each Interest Period applicable thereto, equal to the sum of the Eurodollar
Rate for such Interest Period plus the Applicable Margin.
All Eurodollar Rate Loans shall bear interest from and including the first
day of the applicable Interest Period to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such
Eurodollar Rate Loan. All Base Rate Loans shall bear interest from and including
the date such Loans are made to (but not including) the day such Loans are
repaid or converted into Eurodollar Rate Loans.
SECTION 3.2.2 Default Rates. So long as any Event of Default shall have
-------------
occurred and be continuing hereunder, interest on the unpaid principal amount of
the Loans outstanding shall be paid on demand at a rate per annum equal to the
Base Rate plus the Applicable Margin for Base Rate Loans plus 2%, and after the
date any principal amount of any Loan has become due and payable (whether on the
Stated Maturity Date, upon acceleration or otherwise), or after any other
monetary Obligation of the Borrower shall have become due and
22
payable, the Borrower shall pay interest (after as well as before judgment) on
demand on all of such amounts at a rate per annum equal to the Base Rate plus
the Applicable Margin for Base Rate Loans plus 2%.
SECTION 3.2.3 Payment Dates. Interest accrued on each Loan shall be
-------------
payable, without duplication:
(a) upon payment in full thereof;
(b) on that portion of the Loans being paid or prepaid, on the
date of any such payment or prepayment;
(c) with respect to Base Rate Loans, on each Monthly Payment Date
occurring after the Effective Date;
(d) with respect to Eurodollar Rate Loans, the last day of each
applicable Interest Period (and, if such Interest Period shall exceed three
months, on the day three months after the commencement of such Interest
Period);
(e) with respect to any Base Rate Loans converted into Eurodollar
Rate Loans on a day when interest would not otherwise have been payable
pursuant to clause (c), on the date of such conversion; and ----------
(f) on that portion of any Loans the Stated Maturity Date of which
is accelerated pursuant to Section 8.2 or Section 8.3, immediately upon
----------- -----------
such acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
SECTION 3.3 Fees. The Borrower agrees to pay the fees set forth in this
----
Section 3.3. All such fees shall be non-refundable.
-----------
SECTION 3.3.1 [Reserved].
SECTION 3.3.2 Agent's Fee. The Borrower agrees to pay to the Agent for its
-----------
own account on or prior to the occurrence of the Effective Date the fees set
forth in the Agent's Fee Letter.
SECTION 3.3.3 Non-Use Fees. The Company shall pay to the Agent for the
------------
account of each Lender a non-use fee of .5% on the average daily unused portion
of such Lender's Percentage of the Commitment Amount, computed on a quarterly
basis in arrears on the last Business Day of each calendar quarter based upon
the daily utilization for that quarter as calculated by the Agent. For purposes
of calculating utilization under this subsection, the Commitment Amount shall be
deemed used to the extent of the principal amount of all Loans
23
then outstanding. Such non-use fee shall accrue from the Effective Date to the
Commitment Termination Date and shall be due and payable quarterly in arrears on
the last Business Day of each calendar quarter commencing June 30, 2001 through
the Commitment Termination Date, with the final payment to be made on the
Commitment Termination Date; provided that, in connection with any reduction or
--------
termination of the Commitments under Section 2.2, the accrued non-use fee
-----------
calculated for the period ending on such date shall also be paid on the date of
such reduction or termination with (in the case of a reduction) the following
quarterly payment being calculated on the basis of the period from such
reduction date to the quarterly payment date. The non-use fees shall accrue at
all times after the above-mentioned commencement date, including at any time
during which one or more conditions in Article V are not met.
---------
SECTION 3.4 Extension of Stated Maturity Date. Ninety days prior to the
---------------------------------
Stated Maturity Date, the Borrower may, by notice to the Agent, request that all
Lenders extend for 364 additional days the Stated Maturity Date. Such extension
so requested shall become effective if (and only if) on or prior to 30 days
after such notice, each Lender shall have consented to such extension in writing
by notice to the Agent. If a Lender shall not respond to any such request, it
shall be deemed to have refused to extend.
ARTICLE IV.
CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS
SECTION 4.1 Eurodollar Rate Lending Unlawful. If any Lender shall
--------------------------------
determine (which determination shall, upon notice thereof to the Borrower and
the Lenders, be conclusive and binding on the Borrower) that the introduction of
or any change in or in the interpretation of any law makes it unlawful, or any
central bank or other governmental authority asserts that it is unlawful, for
such Lender to make, continue or maintain any Loan as, or to convert any Loan
into, a Eurodollar Rate Loan of a certain type, the obligations of all Lenders
to make, continue, maintain or convert any such Loans shall, upon such
determination, forthwith be suspended until such Lender shall notify the Agent
that the circumstances causing such suspension no longer exist, and all
Eurodollar Rate Loans of such type shall automatically convert into Base Rate
Loans at the end of the then current Interest Periods with respect thereto or
sooner, if required by such law or assertion.
SECTION 4.2 Deposits Unavailable. If the Agent shall have determined that
--------------------
(a) Dollar certificates of deposit or Dollar deposits, as the case
may be, in the relevant amount and for the relevant Interest Period are not
available to Bank of America in its relevant market; or
(b) by reason of circumstances affecting Bank of America's
relevant market, adequate means do not exist for ascertaining the interest
rate applicable hereunder to Eurodollar Rate Loans of such type,
24
then, upon notice from the Agent to the Borrower and the Lenders, the
obligations of all Lenders under Section 2.3 and Section 2.4 to make or continue
----------- -----------
any Loans as, or to convert any Loans into, Eurodollar Rate Loans of such type
shall forthwith be suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist.
SECTION 4.3 Increased Costs, etc. The Borrower agrees to reimburse each
--------------------
Lender, upon demand, for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender, in respect of
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, Eurodollar Rate Loans (including without limitation by reason of any
increase in any reserve requirements or taxes).
Each Lender shall promptly notify the Borrower in writing of the occurrence
of any such event, such notice to state, in reasonable detail, the reasons
therefor and the additional amount required fully to compensate such Lender for
such increased cost or reduced amount. Such additional amounts shall be payable
by the Borrower directly to such Lender within five days of its receipt of such
notice, and such notice shall, in the absence of manifest error, be conclusive
and binding on the Borrower. Such Lender will use such method of allocation as
it deems reasonable and appropriate.
SECTION 4.4 Funding Losses. In the event any Lender shall incur any loss
--------------
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a Eurodollar Rate
Loan) as a result of
(a) any conversion or repayment or prepayment of the principal
amount of any Eurodollar Rate Loan on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to Section
3.1 or otherwise;
(b) any Loans not being made as Eurodollar Rate Loans in
accordance with the Borrower's request therefor; or
(c) any Loans not being continued as, or converted into,
Eurodollar Rate Loans in accordance with the Continuation/Conversion Notice
therefor,
then, upon the written notice of such Lender to the Borrower (with a copy to the
Agent), the Borrower shall, within five days of its receipt thereof, pay
directly to such Lender such amount as will (in the reasonable determination of
such Lender) reimburse such Lender for such loss or expense. Such written notice
(which shall include calculations in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Borrower.
SECTION 4.5 Increased Capital Costs. If any change in, or the
-----------------------
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank,
25
regulator or other governmental authority affects or would affect the amount of
capital required or expected to be maintained by any Lender or any Person
controlling such Lender, and such Lender determines (in its sole and absolute
discretion) that the rate of return on its or such controlling Person's capital
as a consequence of its Commitment or the Loans made by such Lender is reduced
to a level below that which such Lender or such controlling Person could have
achieved but for the occurrence of any such circumstance, then, in any such case
upon notice from time to time by such Lender to the Borrower, the Borrower shall
immediately pay directly to such Lender additional amounts sufficient to
compensate such Lender or such controlling Person for such reduction in rate of
return. A statement of such Lender as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Borrower. In determining such
amount, such Lender may use any method of averaging and attribution that it (in
its sole and absolute discretion) shall deem applicable.
SECTION 4.6 Taxes. All payments by the Borrower of principal of, and
-----
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender's net
income or receipts (such non-excluded items being called "Taxes"). In the event
-----
that any withholding or deduction from any payment to be made by the Borrower
hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then the Borrower will
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the Agent for the account of the Lenders such
additional amount or amounts as is necessary to ensure that the net amount
actually received by each Lender will equal the full amount such Lender
would have received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or any Lender
with respect to any payment received by the Agent or such Lender hereunder, the
Agent or such Lender may pay such Taxes and the Borrower will promptly pay such
additional amounts (including any penalties, interest or expenses) as is
necessary in order that the net amount received by such person after the payment
of such Taxes (including any Taxes on such additional amount) shall equal the
amount such person would have received had not such Taxes been asserted.
If the Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent, for the account of the respective
Lenders, the required receipts or other required documentary evidence, the
Borrower shall indemnify the Lenders for any incremental Taxes, interest or
penalties that may become payable by any Lender as a result of
26
any such failure. For purposes of this Section 4.6, a distribution hereunder by
-----------
the Agent or any Lender to or for the account of any Lender shall be deemed a
payment by the Borrower.
Upon the request of the Borrower or the Agent, each Lender that is
organized under the laws of a jurisdiction other than the United States shall,
prior to the due date of any payments under the Notes, execute and deliver to
the Borrower and the Agent, on or about the first scheduled payment date in each
Fiscal Year, one or more (as the Borrower or the Agent may reasonably request)
United States Internal Revenue Service Forms W-8BEN or Forms W-8ECI or such
other forms of documents (or successor forms or documents), appropriately
completed, as may be applicable to establish the extent, if any, to which a
payment to such Lender is exempt from withholding or deduction of Taxes.
SECTION 4.7 Payments, Computations, etc. Unless otherwise expressly
---------------------------
provided, all payments by the Borrower pursuant to this Agreement, the Notes or
any other Loan Document shall be made by the Borrower to the Agent for the pro
---
rata account of the Lenders entitled to receive such payment. All such payments
----
required to be made to the Agent shall be made, without setoff, deduction or
counterclaim, not later than 10:00 a.m., Chicago time, on the date due, in same
day or immediately available funds, to such account as the Agent shall specify
from time to time by notice to the Borrower. Funds received after that time
shall be deemed to have been received by the Agent on the next succeeding
Business Day. The Agent shall promptly remit in same day funds to each Lender
its share, if any, of such payments received by the Agent for the account of
such Lender. The Borrower hereby authorizes the Agent to charge any account
maintained by the Borrower with the Agent or Bank of America for any amount due
and payable under this Agreement as and when so due and payable. All interest
and fees shall be computed on the basis of the actual number of days (including
the first day but excluding the last day) occurring during the period for which
such interest or fee is payable over a year comprised of 360 days. Whenever any
payment to be made shall otherwise be due on a day which is not a Business Day,
such payment shall (except as otherwise required by clause (c) of the definition
----------
of the term "Interest Period" with respect to Eurodollar Rate Loans) be made on
---------------
the next succeeding Business Day and such extension of time shall be included in
computing interest and fees, if any, in connection with such payment.
SECTION 4.8 Sharing of Payments. If any Lender shall obtain any payment or
-------------------
other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Sections
--------
4.3, 4.4 and 4.5) in excess of its pro rata share of payments then or therewith
--- --- --- --- ----
obtained by all Lenders, such Lender shall purchase from the other Lenders such
participations in Loans made by them as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of the excess
-------- -------
payment or other recovery is thereafter recovered from such purchasing Lender,
the purchase shall be rescinded and each Lender which has sold a participation
to the purchasing Lender shall repay to the purchasing Lender the purchase price
to the ratable extent of such recovery together with an amount equal to such
selling Lender's ratable share (according to the proportion of
27
(a) the amount of such selling Lender's required repayment to the
purchasing Lender
to
--
(b) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section may, to
the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 4.9) with respect to such participation as fully
-----------
as if such Lender were the direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.
SECTION 4.9 Setoff. Each Lender shall, upon the occurrence of any Default
------
described in clauses (a) through (d) of Section 8.1.9 or, with the consent of
----------- --- -------------
the Required Lenders, upon the occurrence of any other Event of Default, have
the right to appropriate and apply to the payment of the Obligations owing to it
(whether or not then due), and (as security for such Obligations) the Borrower
hereby grants to each Lender a continuing security interest in, any and all
balances, credits, deposits, accounts or moneys of the Borrower then or
thereafter maintained with or otherwise held by such Lender; provided, however,
-------- -------
that any such appropriation and application shall be subject to the provisions
of Section 4.8. Each Lender agrees promptly to notify the Borrower and the Agent
-----------
after any such setoff and application made by such Lender; provided, however,
-------- -------
that the failure to give such notice shall not affect the validity of such
setoff and application. The rights of each Lender under this Section are in
addition to other rights and remedies (including other rights of setoff under
applicable law or otherwise) which such Lender may have.
SECTION 4.10 Use of Proceeds. The Borrower shall apply the proceeds of the
---------------
Loans in accordance with the recitals; provided that, in no event shall the
-------- ----
proceeds of the Loans be used by the Borrower or any of its Subsidiaries to
acquire all or any portion of the ownership or assets of any other Person or
entity except as otherwise permitted by this Agreement.
ARTICLE V
CONDITIONS TO EFFECTIVENESS AND BORROWINGS
SECTION 5.1 Effectiveness. This Agreement shall become effective, and all
-------------
loans outstanding under the Existing Credit Agreement shall be deemed to be
loans hereunder on the date (the "Effective Date") that each of the conditions
--------------
precedent set forth in this Section 5.1 have been satisfied.
-----------
28
SECTION 5.1.1 Resolutions, etc. The Agent shall have received from the
-----------------
Borrower a certificate, dated the date hereof, of its Secretary or Assistant
Secretary as to
(a) resolutions of its Board of Directors then in full force and
effect authorizing the execution, delivery and performance of this
Agreement, the Notes, each Collateral Document and each other Loan Document
executed or to be executed by it; and
(b) the incumbency and signatures of those of its officers authorized
to act with respect to this Agreement, the Notes, each Collateral Document
and each other Loan Document executed or to be executed by it,
upon which certificate the Agent and each Lender may conclusively rely until the
Agent shall have received a further certificate of the Secretary of the Borrower
canceling or amending such prior certificate, which further certificate shall be
reasonably satisfactory to the Agent.
SECTION 5.1.2 Delivery of Notes. The Agent shall have received from the
-----------------
Borrower, for the account of each Lender, a duly executed Note, dated as of the
date hereof.
SECTION 5.1.3 Credit Agreements. The Agent shall have received executed
-----------------
counterparts of this Agreement and the Credit Agreement (Five Year) dated as of
the date hereof, duly executed by the Borrower, the Agent, and each of the
Lenders.
SECTION 5.1.4 Confirmation. The Agent shall have received executed
------------
counterparts of the Confirmation, dated as of the date hereof, duly executed by
the Borrower
SECTION 5.1.5 Satisfaction with Tax Sharing Agreement The Agent and the
---------------------------------------
Lenders shall have received true copies (as certified by an authorized officer
of the Borrower) of, and reviewed and become satisfied with the provisions of,
any tax sharing agreement to which the Borrower has become a party since March
31, 2000.
SECTION 5.1.6 Opinions of Counsel. The Agent shall have received opinions,
-------------------
dated the date hereof and addressed to the Agent and each Lender, from ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, general counsel to the Borrower, substantially in the form of Exhibit F
---------
hereto.
SECTION 5.1.7 Closing Fees, Expenses, etc. The Agent shall have received
---------------------------
for its own account all fees, and all costs and expenses for which invoices have
been provided, due and payable pursuant to Sections 3.3 and 10.3.
------------ ----
SECTION 5.1.8 No Materially Adverse Effect. No events have occurred which,
----------------------------
as determined by the Agent, individually or in the aggregate, comprise a
Materially Adverse Effect since December 31, 2000.
SECTION 5.1.9 Satisfactory Legal Form. All documents executed or submitted
-----------------------
pursuant hereto by the Borrower or on behalf of the Borrower or any of its
Subsidiaries shall be
29
satisfactory in form and substance to the Agent and its counsel; the Agent and
its counsel shall have received all information, approvals, opinions, documents
or instruments as the Agent or its counsel may reasonably request.
SECTION 5.1.10 Compliance with Warranties, No Default, etc. Both before and
-------------------------------------------
after the Effective Date, the following statements shall be true and correct:
(a) the representations and warranties set forth in Article VI
----------
(excluding, however, those contained in Section 6.7) of this Agreement,
-----------
Article III of the Pledge Agreement, Article III of the Security Agreement,
and Article I of the Mortgage shall be true and correct in all material
respects with the same effect as if then made (unless stated to relate
solely to an earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date);
(b) except as disclosed by the Borrower to the Agent and the Lenders
pursuant to Section 6.7,
-----------
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or, to the
knowledge of the Borrower, threatened against the Borrower or any of
its Subsidiaries which might have a Materially Adverse Effect or which
purports to affect the legality, validity or enforceability of this
Agreement, the Notes, any Collateral Document or any other Loan
Document, and
(ii) no development shall have occurred in any labor controversy,
litigation, arbitration or governmental investigation or proceeding
disclosed pursuant to Section 6.7 which might have a Materially
-----------
Adverse Effect; and
(c) no Default shall have then occurred and be continuing, and
neither the Borrower nor any of its Subsidiaries shall be in violation of
any law or governmental regulation or court order or decree, the violation
of which could have a Materially Adverse Effect.
SECTION 5.1.11 Consents, etc. Certified copies of all documents evidencing
-------------
any necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance by the Borrower of each
document referred to in this Section 5.1.
-----------
SECTION 5.2 All Borrowings. The obligation of each Lender to fund any Loan
--------------
on the occasion of any Borrowing shall be subject to the satisfaction of each of
the conditions precedent set forth in this Section 5.2.
-----------
SECTION 5.2.1 Compliance with Warranties, No Default, etc. Both before and
-------------------------------------------
after giving effect to any Borrowing (but, if any Default of the nature referred
to in Section 8.1.5 shall have occurred with respect to any other Indebtedness,
-------------
without giving effect to the
30
application, directly or indirectly, of the proceeds thereof) the following
statements shall be true and correct
(a) the representations and warranties set forth in Article VI
----------
(excluding, however, those contained in Section 6.7) of this Agreement,
-----------
Article III of the Pledge Agreement, Article III of the Security Agreement
and Article I of the Mortgage shall be true and correct with the same
effect as if then made (unless stated to relate solely to an earlier date,
in which case such representations and warranties shall be true and correct
as of such earlier date);
(b) except as disclosed by the Borrower to the Agent and the Lenders
pursuant to Section 6.7
-----------
(i) no labor controversy, litigation, arbitration or governmental
investigation or proceeding shall be pending or, to the knowledge of
the Borrower, threatened against the Borrower or any of its
Subsidiaries which might have a Materially Adverse Effect or which
purports to affect the legality, validity or enforceability of this
Agreement, the Notes, any Collateral Document or any other Loan
Document; and
(ii) no development shall have occurred in any labor controversy,
litigation, arbitration or governmental investigation or proceeding
disclosed pursuant to Section 6.7 which might have a Materially
-----------
Adverse Effect; and
(c) no Default shall have then occurred and be continuing, and neither
the Borrower nor any of its Subsidiaries shall be in violation of any law
or governmental regulation or court order or decree, the violation of which
could have a Materially Adverse Effect.
SECTION 5.2.2 Borrowing Request. The Agent shall have received a Borrowing
-----------------
Request for such Borrowing. Each of the delivery of a Borrowing Request and the
acceptance by the Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
(both immediately before and after giving effect to such Borrowing and the
application of the proceeds thereof) the statements made in Section 5.2.1 are
-------------
true and correct.
SECTION 5.2.3 Satisfactory Legal Form. All documents executed or submitted
-----------------------
pursuant hereto by the Borrower or any of its Subsidiaries shall be satisfactory
in form and substance to the Agent and its counsel; the Agent and its counsel
shall have received all information, approvals, opinions, documents or
instruments as the Agent or its counsel may reasonably request.
31
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into this Agreement
and to make Loans hereunder, the Borrower represents and warrants unto the Agent
and each Lender as set forth in this Article VI.
----------
SECTION 6.1 Organization, etc. The Borrower and each of its Subsidiaries is
------------------
a corporation validly organized and existing and in good standing under the laws
of the State of its incorporation, is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction where the nature of
its business requires such qualification (except where the failure to be so
qualified would not have a Materially Adverse Effect), and has full power and
authority and holds all requisite governmental licenses, permits and other
approvals to enter into and perform its Obligations under this Agreement, the
Notes, the Fourth Amendment to Mortgage, the Second Amendment to Modesto
Mortgage, each Collateral Document and each other Loan Document and to own and
hold under lease its property and to conduct its business substantially as
currently conducted by it.
SECTION 6.2 Due Authorization, Non-Contravention, etc. The execution,
------------------------------------------
delivery and performance by the Borrower of this Agreement, the Notes, the
Fourth Amendment to Mortgage, the Second Amendment to Modesto Mortgage, each
other Collateral Document and each other Loan Document executed or to be
executed by it are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and do not
(a) contravene the Borrower's Organic Documents;
(b) contravene any contractual restriction, law or governmental
regulation or court decree or order binding on or affecting the Borrower;
or
(c) result in, or require the creation or imposition of, any Lien
on any of the Borrower's properties (except pursuant to the Loan
Documents).
SECTION 6.3 Government Approval, Regulation, etc. No authorization or
-------------------------------------
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person is required for the due execution,
delivery or performance by the Borrower of this Agreement, the Notes, the Fourth
Amendment to Mortgage, the Second Amendment to Modesto Mortgage, any other
Collateral Document or any other Loan Document. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended. Neither the Borrower nor any of its Subsidiaries is in
violation of any provision of the Investment Company
32
Act of 1940, as amended, or the Public Utility Holding Company Act of 1935, as
amended, and, without limiting the generality of the foregoing, neither the
Borrower nor any of its Subsidiaries has performed, or has omitted to perform,
any action which, pursuant to any provision of either such Act, would result in
the Borrower being incapable of performing any of its obligations or agreements
hereunder or under the Notes, the Fourth Amendment to Mortgage, the Second
Amendment to Modesto Mortgage, any other Collateral Document or any other Loan
Document executed in connection with or pursuant hereto.
SECTION 6.4 Validity, etc. This Agreement and each Original Collateral
--------------
Document constitutes, and the Notes, the Fourth Amendment to Mortgage, the
Second Amendment to Modesto Mortgage, each other Collateral Document and each
other Loan Document executed by the Borrower will, on the due execution and
delivery thereof, constitute, the legal, valid and binding obligations of the
Borrower enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws applying to creditors' rights generally or general equitable principles.
SECTION 6.5 Financial Information. The consolidated and consolidating
---------------------
balance sheets of the Borrower and each of its Subsidiaries as at December 31,
2000 for the Fiscal Year then ended and the related consolidated statements of
earnings and cash flow and the related consolidating statement of earnings of
the Borrower and each of its Subsidiaries, copies of which have been furnished
to the Agent and each Lender, have been prepared in accordance with GAAP
consistently applied, and present fairly the consolidated or consolidating, as
applicable, financial condition of the corporation(s) covered thereby as at the
date thereof and the results of their operations for the period then ended.
Neither the Borrower nor any of its Subsidiaries has any material liability,
contingent liability, liability for taxes, long-term leases or forward or
long-term commitments which are not reflected in the foregoing financial
statements (including the footnotes thereto).
SECTION 6.6 No Material Adverse Change. Since the respective dates of the
--------------------------
financial statements described in Section 6.5, there has been no material
-----------
adverse change on a consolidated basis in the financial condition, operations,
assets, business, properties or prospects of the Borrower and its Significant
Subsidiaries or in the ability of the Borrower to repay the Obligations when due
in accordance with the terms thereof.
SECTION 6.7 Litigation, Labor Controversies, etc. There is no pending or,
-------------------------------------
to the knowledge of the Borrower, threatened litigation, action, proceeding, or
labor controversy affecting the Borrower or any of its Significant Subsidiaries,
or any of their respective properties, businesses, assets or revenues, which has
any reasonable likelihood of having a Materially Adverse Effect or which
purports to affect the legality, validity or enforceability of this Agreement,
the Notes, any Collateral Document or any other Loan Document.
SECTION 6.8 Subsidiaries. The Borrower has no Subsidiaries, except those
------------
Subsidiaries
33
(a) which are identified in Item 6.8 ("Existing Subsidiaries") of
--------
the Disclosure Schedule and; or
(b) which are permitted to have been acquired after the Effective
Date, if any, in accordance with Section 7.2.5 or 7.2.9.
------------- -----
SECTION 6.9 Ownership of Properties. The Borrower and each of its
-----------------------
Subsidiaries has good and marketable title to all of the properties and assets,
real and personal, tangible and intangible, of any nature whatsoever (including
patents, trademarks, trade names, service marks and copyrights) that it owns,
and a valid leasehold interest in all of such property which it leases, free and
clear of all Liens, charges or claims (including infringement claims with
respect to patents, trademarks, copyrights and the like) except as permitted
pursuant to Section 7.2.3.
-------------
SECTION 6.10 Taxes. Each of the Borrower and its Significant Subsidiaries
-----
has filed all tax returns and reports required by law to have been filed by it
and has paid all taxes and governmental charges thereby shown to be owing,
except any such taxes or charges which are being contested in good faith by
appropriate action and for which adequate reserves in accordance with GAAP shall
have been set aside on its books.
SECTION 6.11 Pension and Welfare Plans. During the twelve-consecutive-
-------------------------
month period prior to the initial closing date of the Original Credit Agreement
and since such time through and including the date of the occurrence of the
Effective Date, no steps have been taken to terminate any Pension Plan, and no
contribution failure has occurred with respect to any Pension Plan sufficient to
give rise to a Lien under section 302(f) of ERISA. No condition exists or event
or transaction has occurred with respect to any Pension Plan which might result
in the incurrence by the Borrower or any member of the Controlled Group of any
material liability, fine or penalty. Except as disclosed in Item 6.11
("Post-Retirement Benefits") of the Disclosure Schedule, neither the Borrower
nor any member of the Controlled Group has any contingent liability with respect
to any post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.
SECTION 6.12 Environmental Warranties. Except as set forth in Item 6.12
------------------------ ---------
("Environmental Matters") of the Disclosure Schedule:
(a) all facilities and property (including underlying groundwater)
owned or leased or operated by the Borrower or any of its Subsidiaries have
been, and continue to be, owned or leased by the Borrower and its
Subsidiaries in material compliance with all Environmental Laws;
(b) there have been no past, and there are no pending or, to the best
of the Borrower's knowledge, threatened
(i) claims, complaints, notices or requests for information
received by the Borrower or any of its Subsidiaries with respect to
any alleged violation of any Environmental Law, or
34
(ii) complaints, notices or inquiries to the Borrower or any of
its Subsidiaries regarding potential liability under any Environmental
Law;
(c) there have been no Releases of Hazardous Materials at, on or
under any property now or previously owned or leased or operated by the
Borrower or any of its Subsidiaries that, singly or in the aggregate, have,
or may reasonably be expected to have, a Materially Adverse Effect;
(d) the Borrower and its Subsidiaries have been issued and are in
material compliance with all permits, certificates, approvals, licenses and
other authorizations relating to environmental matters and appropriate for
their businesses;
(e) no property now or previously owned or leased by the Borrower or
any of its Subsidiaries is listed or, to the best of the Borrower's
knowledge, proposed for listing (with respect to owned property only) on
the National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list of sites requiring investigation or clean-up;
(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased or operated by the Borrower or any of its
Subsidiaries that, singly or in the aggregate, have, or may reasonably be
expected to have, a Materially Adverse Effect;
(g) neither the Borrower nor any of its Subsidiaries has directly
transported or directly arranged for the transportation of any Hazardous
Material to any location which is listed or, to the best of the Borrower's
knowledge, proposed for listing on the National Priorities List pursuant to
CERCLA, on the CERCLIS or on any similar state list or which is the subject
of federal, state or local enforcement actions or other investigations
which may lead to claims that, singly or in the aggregate, would be
material against the Borrower or any of its Significant Subsidiaries for
any remedial work, damage to natural resources or personal injury,
including claims under CERCLA;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased or operated by
the Borrower or any of its Subsidiaries that, singly or in the aggregate,
have, or may reasonably be expected to have, a Materially Adverse Effect;
and
(i) no conditions exist at, on or under any property now or
previously owned or leased or operated by the Borrower which, with the
passage of time, or the giving of notice or both, would give rise to
liability which would have, or may reasonably be expected to have, singly
or in the aggregate, a Materially Adverse Effect under any Environmental
Law.
SECTION 6.13 Regulations U and X. The Borrower is not engaged in the
-------------------
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any
35
Loans will be used for a purpose which violates, or would be inconsistent with,
F.R.S. Board Regulation U or X. Less than 25% of the assets of the Borrower and
the consolidated assets of the Borrower and its Subsidiaries consist of margin
stock. Terms for which meanings are provided in F.R.S. Board Regulation U or X
or any regulations substituted therefor, as from time to time in effect, are
used in this Section with such meanings.
SECTION 6.14 Real Property; Mortgage, etc. The Mortgaged Real Property and
-----------------------------
the Modesto Property constitute all of the real property in which the Borrower
has an ownership interest with a book value in excess of $50,000.
SECTION 6.15 The Collateral Documents. The provisions of the Collateral
------------------------
Documents executed by the Borrower or any of its Subsidiaries in favor of Bank
of America, as agent for the benefit of the Lenders, are effective to create, in
favor of the Lenders, securing the Notes and all other Obligations from time to
time outstanding, a legal, valid and enforceable security interest in all right,
title and interest of the Borrower and such Subsidiaries in any and all of the
collateral described therein, and all appropriate filings and recordings having
been made or appropriately provided for, each of such Collateral Documents
constitutes a fully perfected security interest in all right, title and interest
of the Borrower and such Subsidiaries in such collateral superior in right to
any liens, existing or future, which the Borrower or any such Subsidiary or any
creditors of or purchasers from, or any other Person, may have against such
collateral or interests therein, except to the extent, if any, otherwise
provided therein.
SECTION 6.16 Accuracy of Information. All factual information heretofore or
-----------------------
contemporaneously furnished by or on behalf of the Borrower in writing to the
Agent or any Lender for purposes of or in connection with this Agreement or any
transaction contemplated hereby (including the Business Plan, true and complete
copies of which were furnished to the Agent and each Lender in connection with
its execution and delivery hereof) is, and all other such factual information
hereafter furnished by or on behalf of the Borrower to the Agent or any Lender
will be, true and accurate in every material respect on the date as of which
such information is dated or certified and, as to information (other than
financial statements but, subject to the proviso below; including the Business
Plan) provided prior to the Effective Date, as of the Effective Date, and such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary to make such information not misleading;
provided that projections contained in the Business Plan or other materials
--------
furnished by the Borrower to the Agent or the Lenders were prepared in good
faith by the Borrower in a manner consistent with GAAP (as applied in the
financial statements referred to in Section 6.5) and represent the Borrower's
-----------
reasonable estimates, as of the respective dates thereof, of the Borrower's
reasonably expected future performance. The Borrower has furnished the Lenders a
true and complete copy of each tax sharing agreement to which it has become a
party since March 31, 2000.
SECTION 6.17 Subordinated Debt. Notwithstanding any bankruptcy, insolvency,
-----------------
reorganization, moratorium or similar proceeding in respect of the Borrower, at
all times, (a) the subordination provisions of any Subordinated Debt will be
enforceable by the Lender with
36
respect to the Obligations, (b) all Obligations, including the Obligations to
pay principal of and interest on the Loans and fees in connection therewith,
constitute "Senior Indebtedness" under any Subordinated Debt, and all such
Obligations will be entitled to the benefits of subordination created by any
Subordinated Debt, and (c) all payments of principal of or interest on any
Subordinated Debt made by the Borrower or from the liquidation of its property
will be subject to such subordination provisions. The Borrower acknowledges that
the Lenders are entering into this Agreement, and making the Loans, in reliance
upon the subordination provisions contained in all Subordinated Debt. The
Borrower shall have furnished to the Lenders a true and complete copy of the
proposed documents for any proposed Subordinated Debt at least ten Business Days
prior to the issuance thereof.
SECTION 6.18 Intellectual Property. The Borrower has no patents, trademarks
---------------------
or copyrights except those listed on the Annexes to the Security Agreement.
ARTICLE VII
COVENANTS
SECTION 7.1 Affirmative Covenants. The Borrower agrees with the Agent and
---------------------
each Lender that, so long as the Commitments are outstanding and, thereafter,
until all Obligations have been paid and performed in full, the Borrower will
perform the obligations set forth in this Section 7.1.
-----------
SECTION 7.1.1 Financial Information, Reports, Notices, etc. The Borrower
---------------------------------------------
will furnish, or will cause to be furnished, to each Lender and the Agent copies
of the following financial statements, reports, notices and information:
(a) as soon as available and in any event within 60 days after the end
of each of the first three Fiscal Quarters of each Fiscal Year of the
Borrower, consolidated and consolidating balance sheets of the Borrower and
its Subsidiaries as of the end of such Fiscal Quarter, consolidated
statements of earnings and cash flow of the Borrower and its Subsidiaries
for such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter and a
consolidating statement of earnings of the Borrower and its Subsidiaries
for such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter,
certified by the chief financial Authorized Officer of the Borrower;
(b) as soon as available and in any event within 120 days after the
end of each Fiscal Year of the Borrower, an appropriately updated business
plan substantially in the form of, and containing the same scope of
information as, the Business Plan and a copy of the annual audit report for
such Fiscal Year for the Borrower and its Subsidiaries including therein
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of the end of such Fiscal Year, consolidated statements of
earnings and cash flow of the Borrower and its Subsidiaries for such Fiscal
Year and consolidating statements of earnings of the Borrower and its
Subsidiaries for such Fiscal Year, in each
37
case certified (without any Impermissible Qualification) in a manner
acceptable to the Agent and the Required Lenders by KPMG LLP or other
independent public accountants of recognized standing acceptable to the
Agent and the Required Lenders, together with (i) a certificate from such
accountants containing a computation of, and showing compliance with, each
of the financial ratios and restrictions contained in Section 7.2.4 and to
-------------
the effect that, in making the examination necessary for the signing of
such annual report by such accountants, they have not become aware of any
Default that has occurred and is continuing, or, if they have become aware
of such Default, describing such Default and the steps, if any, being taken
to cure it, and (ii) unaudited consolidated and consolidating financial
statements for the Borrower and its Subsidiaries prepared on the basis of,
and with figures used in the preparation of, such audited financial
statements and comprised of balance sheets and statements of earnings and
cash flow;
(c) as soon as available and in any event within 60 days after the end
of each Fiscal Quarter, a certificate, executed by the chief financial
Authorized Officer of the Borrower, showing (in reasonable detail and with
appropriate calculations and computations in all respects satisfactory to
the Agent) compliance with the financial covenants set forth in Section
-------
7.2.4 and with the provisions of Sections 7.2.6, 7.2.7 and 7.2.10 and also
----- -------------- ----- ------
showing the amount of any inter-company advances by the Borrower to any of
its Subsidiaries (broken out by Subsidiary);
(d) as soon as possible and in any event within three Business Days
after the occurrence of each Default, a statement of the chief financial
Authorized Officer of the Borrower setting forth details of such Default
and within four Business Days thereafter, the action which the Borrower has
taken and proposes to take with respect thereto;
(e) as soon as possible and in any event within five Business Days
after (x) the occurrence of any adverse development with respect to any
litigation, action, proceeding or labor controversy described in Section
-------
6.7, or (y) the commencement of any labor controversy, litigation, action,
---
proceeding of the type described in Section 6.7, notice thereof and copies
-----------
of all documentation relating thereto;
(f) promptly after the sending or filing thereof, copies of any
reports and registration statements which the Borrower or any of its
Subsidiaries may file with the Securities and Exchange Commission or any
national securities exchange or pursuant to the Investment Company Act of
1940, as amended, or the Public Utility Holding Company Act of 1935, as
amended, and promptly after the receipt of any communication from any
governmental authority or agency administering either of such Acts, copies
thereof, as well as copies of any reports the Borrower furnishes to its
securityholders which the Borrower reasonably determines to be material to
the Lender or the Obligations;
(g) immediately upon and in any event within five Business Days of
becoming aware of the institution of any steps by the Borrower or any other
Person to terminate any Pension Plan, or the failure to make a required
contribution to any Pension
38
Plan if such failure is sufficient to give rise to a Lien under section
302(f) of ERISA, or the taking of any action with respect to a Pension Plan
which could result in the requirement that the Borrower furnish a bond or
other security to the PBGC or such Pension Plan, or the occurrence of any
event with respect to any Pension Plan which could result in the incurrence
by the Borrower of any material liability, fine or penalty, or any material
increase in the contingent liability of the Borrower with respect to any
post-retirement Welfare Plan benefit, notice thereof and copies of all
documentation relating thereto; and
(h) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries as any
Lender through the Agent may from time to time reasonably request.
SECTION 7.1.2 Compliance with Laws, etc. Other than with respect to the
--------------------------
Mortgaged Real Property (as to which the provisions of the Mortgage shall govern
and control), the Borrower will, and will cause each of its Subsidiaries to,
comply in all material respects with all applicable laws, rules, regulations and
orders, such compliance to include (without limitation):
(a) the maintenance and preservation of its corporate existence and
qualification as a foreign corporation (except where the failure to be so
qualified would not have a material adverse effect on the consolidated
financial condition, operations, assets, business, properties or prospects
of the Borrower and its Significant Subsidiaries); and
(b) the payment, before the same become delinquent, of all taxes,
assessments and governmental charges imposed upon it or upon its property
except to the extent being contested in good faith by appropriate action
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books.
SECTION 7.1.3 Maintenance of Properties. Other than with respect to the
-------------------------
Mortgaged Real Property (as to which the provisions of the Mortgage shall govern
and control), the Borrower will, and will cause each of its Significant
Subsidiaries to, maintain, preserve, protect and keep its properties in good
repair, working order and condition, and make necessary and proper repairs,
renewals and replacements so that its business carried on in connection
therewith may be properly conducted in all material respects at all times unless
the Borrower determines in good faith that the continued maintenance of any of
its properties is no longer economically desirable.
SECTION 7.1.4 Insurance. Other than with respect to the Mortgaged Real
---------
Property (as to which the provisions of the Mortgage shall govern and control),
the Borrower will, and will cause each of its Significant Subsidiaries to,
maintain or cause to be maintained with responsible insurance companies
insurance with respect to its properties and business (including business
interruption insurance) against such casualties and contingencies and of such
types and in such amounts as is customary in the case of similar businesses and
will, upon request of the
39
Agent, furnish to each Lender at reasonable intervals a certificate of an
Authorized Officer of the Borrower setting forth the nature and extent of all
insurance maintained by the Borrower and its Subsidiaries in accordance with
this Section.
SECTION 7.1.5 Books and Records. The Borrower will, and will cause each of
-----------------
its Significant Subsidiaries to, keep books and records which accurately reflect
all of its material business affairs and transactions and permit the Agent and
each Lender or any of their respective representatives, at reasonable times and
intervals, to visit all of its offices, to discuss its financial matters with
its officers and independent public accountant (and the Borrower hereby
authorizes such independent public accountant to discuss the Borrower's
financial matters with each Lender or its representatives whether or not any
representative of the Borrower is present) and to examine (and, at the expense
of the Borrower, photocopy extracts from) any of its books or other corporate
records. The Borrower shall pay any fees of such independent public accountant
incurred in connection with the Agent's or any Lender's exercise of its rights
pursuant to this Section.
SECTION 7.1.6 Environmental Covenant. The Borrower will, and will cause
----------------------
each of its Subsidiaries to,
(a) use and operate all of its facilities and properties in material
compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in material compliance
therewith, and handle all Hazardous Materials in material compliance with
all applicable Environmental Laws;
(b) immediately and in any event within five Business Days notify the
Agent and provide copies upon receipt of all written claims, complaints,
notices or inquiries relating to the condition of its facilities and
properties or compliance with Environmental Laws, and shall promptly take
all action to seek to cure and have dismissed with prejudice to the
satisfaction of the relevant governmental authorities and agencies any
actions and proceedings relating to compliance with Environmental Laws; and
(c) provide such information and certifications which the Agent may
reasonably request from time to time to evidence compliance with this
Section 7.1.6.
-------------
SECTION 7.1.7 Fourth Amendment to Mortgage. No later than 90 days after the
----------------------------
date hereof, the Borrower shall deliver to the Agent executed counterparts of
the Fourth Amendment to Mortgage, duly executed by the Borrower, together with
(a) evidence of the completion (or satisfactory arrangements for the
completion) of all recordings and filings (including fixture filings) of
the Fourth Amendment to Mortgage as may be necessary or desirable, in the
reasonable opinion of the Agent and its counsel, to create (and continue) a
valid, perfected first priority mortgage or deed of trust Lien, of record,
against the properties purported to be covered thereby;
40
(b) a mortgagee's title insurance policy endorsement in favor of the
Agent and the Lenders in amounts and in form and substance and issued by
issuers, in each case reasonably satisfactory to the Agent, with respect to
the Mortgaged Real Property, insuring that title to such Mortgaged Real
Property is marketable and that the interest created by the Mortgage
constitutes a valid, perfected first mortgage Lien, of record, on the title
to such property free and clear of all defects and encumbrances other than
as approved by the Agent, and such policy shall also include such
endorsements as the Agent shall request and shall be accompanied by
evidence of the payment in full of all premiums thereon;
(c) an opinion of Wisconsin counsel, dated a date satisfactory to the
Agent, addressed to the Agent and each Lender, in form of satisfactory to
the Agent and each Lender and
(d) evidence reasonably satisfactory to the Agent that the Borrower
has in effect the insurance with respect to the Mortgaged Real Property
required to be carried by the Borrower pursuant to the terms of the
Mortgage, such evidence to include, without limitation (i) a loss payable
endorsement, in form satisfactory to the Agent, naming the Agent, as agent
for the Lenders, as a loss payee with respect to all casualty insurance
policies and (ii) an endorsement naming the Agent, as agent for the
Lenders, as an additional insured with respect to all liability insurance
policies.
SECTION 7.1.8 Modesto Property. No later than 90 days after the date
----------------
hereof, the Borrower shall deliver to the Agent executed counterparts of an
Second Amendment to Modesto Mortgage, duly executed by the Borrower, together
with
(a) evidence of the completion (or satisfactory arrangements for the
completion) of all recordings and filings (including fixture filings) of
the Second Amendment to Modesto Mortgage as may be necessary or desirable,
in the reasonable opinion of the Agent and its counsel, to create (and
continue) a valid, perfected first priority mortgage or deed of trust Lien,
of record, against the properties purported to be covered thereby;
(b) a mortgagee's title insurance policy endorsement in favor of the
Agent and the Lenders in amounts and in form and substance and issued by
issuers, in each case reasonably satisfactory to the Agent, with respect to
the Modesto Property, insuring that title to such Modesto Property is
marketable and that the interest created by the Modesto Mortgage
constitutes a valid, perfected first mortgage Lien, of record, on the title
to such property free and clear of all defects and encumbrances other than
as approved by the Agent, and such policy shall also include such
endorsements as the Agent shall request and shall be accompanied by
evidence of the payment in full of all premiums thereon;
(c) an opinion of California counsel, dated a date satisfactory to the
Agent, addressed to the Agent and each Lender, in form of satisfactory to
the Agent and each Lender and
41
(d) evidence reasonably satisfactory to the Agent that the Borrower
has in effect the insurance with respect to the Modesto Property required
to be carried by the Borrower pursuant to the terms of the Modesto
Mortgage, such evidence to include, without limitation (i) a loss payable
endorsement, in form satisfactory to the Agent, naming the Agent, as agent
for the Lenders, as a loss payee with respect to all casualty insurance
policies and (ii) an endorsement naming the Agent, as agent for the
Lenders, as an additional insured with respect to all liability insurance
policies.
SECTION 7.1.9 Further Assurances. Promptly upon the written request of the
------------------
Agent, or the Required Lenders, the Borrower shall, and shall cause each
Subsidiary to, execute, acknowledge, deliver, record, re-record, file, re-file,
register and re-register, any and all such further acts, deeds, conveyances,
security agreements, mortgages, assignments, estoppel certificates, financing
statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments the Agent
or the Required Lenders as the case may be, may reasonably request from time to
time in order (a) to ensure that (i) the Obligations are secured by
substantially all assets of the Borrower and (ii) the Obligations are secured by
substantially all of the assets of each Subsidiary (including, promptly upon the
acquisition or creation thereof, any Subsidiary created or acquired after the
date hereof), (b) to perfect and maintain the validity, effectiveness and
priority of any of the Loan Documents and the Liens intended to be created
thereby, and (c) to better assure, convey, grant, assign, transfer, preserve,
protect and confirm to the Agent and the Lenders the rights granted or now or
hereafter intended to be granted to the Agent and the Lenders under any Loan
Documents or under any other document executed in connection therewith.
Contemporaneously with the execution and delivery of any document referred to
above, the Borrower shall, and shall cause each Subsidiary to, deliver all
resolutions, opinions and corporate documents as the Agent or the Required
Lenders may reasonably request to confirm the enforceability of such document
and the perfection of the security interest created thereby, if applicable.
SECTION 7.2 Negative Covenants. The Borrower agrees with the Agent and each
------------------
Lender that, so long as the Commitments shall be outstanding and, thereafter,
until all Obligations have been paid and performed in full, the Borrower will
perform the obligations set forth in this Section 7.2.
-----------
SECTION 7.2.1 Business Activities. The Borrower will not, and will not
-------------------
permit any of its Subsidiaries to, engage in any business activity, other than
the business of selling, primarily through mail order and electronic means,
teaching aids and equipment to educators and specialized equipment and supplies
to farmers, ranchers, laboratories, hospitals and emergency services, and in the
financial services business and such activities as may be incidental or directly
related thereto.
SECTION 7.2.2 Indebtedness. The Borrower will not, and will not permit any
------------
of its Subsidiaries to, create, incur, assume or suffer to exist or otherwise
become or be liable in respect of any Indebtedness, other than, without
duplication, the following:
(a) Indebtedness in respect of the Loans and other Obligations;
42
(b) unsecured Indebtedness incurred in the ordinary course of business
(including open accounts extended by suppliers on normal trade terms in
connection with purchases of goods and services, but excluding Indebtedness
incurred through the borrowing of money and Contingent Liabilities);
(c) Indebtedness of the Borrower and its Subsidiaries in respect of
Capitalized Lease Liabilities to the extent permitted in Section 7.2.7;
-------------
(d) Indebtedness under the Credit Agreement (Five Year);
(e) Indebtedness of the Borrower comprising reimbursement obligations
in respect of letters of credit issued to support imported merchandise
purchased from time to time by the Borrower, provided that the aggregate
--------
amount of all such letters of credit and, in turn, of all such
reimbursement obligations, shall not exceed $500,000; and
(f) Indebtedness of the Borrower incurred in connection with the
Guaranty, dated as of April 16, 2001 in favor of J-Star Industries, Inc.
pursuant to which the Borrower has guaranteed the obligations of NHI, LLC
under the Environmental Remediation and Indemnification Agreement, dated as
of April 16, 2001, by and between NHI, LLC and J-Star Industries, Inc. and
the Environmental Escrow Agreement, dated as of April 16, 2001, by and
between NHI, LLC and J-Star Industries, Inc.
SECTION 7.2.3 Liens. The Borrower will not, and will not permit any of its
-----
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of
its property, revenues or assets, whether now owned or hereafter acquired,
except:
(a) Liens securing payment of the Obligations and the "Obligations"
under the Credit Agreement (Five Year), granted pursuant to any Loan
Document;
(b) Other than with respect to the Mortgaged Real Property and the
Modesto Property (as to which the provisions of the Mortgage and the
Modesto Mortgage shall govern and control), liens for taxes, assessments or
other governmental charges or levies not at the time delinquent or
thereafter payable without penalty or being contested in good faith by
appropriate action and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(c) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue
or being contested in good faith by appropriate action and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books;
(d) Liens incurred in the ordinary course of business in connection
with worker's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases
43
and contracts (other than for borrowed money) entered into in the ordinary
course of business or to secure obligations on surety or appeal bonds;
(e) judgment Liens in existence less than 15 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies;
(f) Liens to secure the reimbursement obligations permitted under
Section 7.2.2(e) on the merchandise financed with the letters of credit
----------------
described therein; and
(g) Permitted Encumbrances (as defined in the Mortgage) with respect
to the Mortgaged Real Property and the Modesto Property.
SECTION 7.2.4 Financial Condition. The Borrower hereby covenants and agrees
-------------------
as set forth below:
(a) Current Ratio. The Borrower will not permit its Consolidated
-------------
Current Ratio, as of the end of any month during any Fiscal Year, to be
less than 2.0 to 1.
(b) Consolidated Net Worth. The Borrower will not permit its
----------------------
Consolidated Net Worth, at any time during any Fiscal Year, to be less than
an amount equal to the sum of (i) $8,000,000 plus (ii) an amount equal to
----
50% of Consolidated Net Income for the period from the date hereof to the
date of determination thereof (if positive).
(c) Consolidated Current Assets Levels. The Borrower will not permit
----------------------------------
its Consolidated Current Assets Level, as of the last day of any Fiscal
Quarter, to be less than the amounts set forth below:
Fiscal Quarter Amount
-------------- ------
March 31 $27,000,000
June 30 $31,000,000
September 30 $34,000,000
December 31 $25,000,000
(d) Consolidated Debt Service Coverage Ratio. The Borrower will not
----------------------------------------
permit its Consolidated Debt Service Coverage Ratio to be less than (x)
1.25 to 1 from the Effective Date through September 29, 2001, (y) 1.50 to 1
from September 30, 2001 through December 30, 2001 and (2) 1.75 to 1
thereafter.
SECTION 7.2.5 Investments. The Borrower will not, and will not permit any
-----------
of its Subsidiaries to, make, incur, assume or suffer to exist any Investment in
any other Person, except:
(a) Cash Equivalent Investments;
44
(b) without duplication, Investments permitted as Indebtedness
pursuant to Section 7.2.2;
-------------
(c) without duplication, Investments permitted as Capital Expenditures
pursuant to Section 7.2.7; and
-------------
(d) (i) Investments made prior to the Effective Date in its
Subsidiaries, (ii) from and after the Effective Date and in the ordinary
course of business, Investments by the Borrower in its Subsidiaries in an
aggregate amount not to exceed $3,000,000 at any one time outstanding, or
by any such Subsidiary in any of its Subsidiaries, by way of contributions
to capital or loans or advances and (iii) from and after the Effective
Date, Investments by the Borrower in Geneve in an aggregate amount not to
exceed $3,000,000 at any one time outstanding (provided, that all such
--------
Investments shall be by way of loans to Geneve made by the Borrower and
evidenced by one or more promissory notes (each such promissory note to be
in form and substance reasonably satisfactory to the Agent) duly executed
and delivered in pledge to the Agent;
provided, however, that
-------- -------
(e) any Investment which when made complies with the requirements of
the definition of the term "Cash Equivalent Investment" may continue to be
--------------------------
held notwithstanding that such Investment if made thereafter would not
comply with such requirements; and
(f) no Investment otherwise permitted by clause (b), (c) or (d) shall
---------- --- ---
be permitted to be made if, immediately before or after giving effect
thereto, any Default shall have occurred and be continuing.
SECTION 7.2.6 Restricted Payments, etc. On and at all times after the
-------------------------
Effective Date:
(a) the Borrower will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any class
of capital stock (now or hereafter outstanding) of the Borrower or on any
warrants, options or other rights with respect to any shares of any class
of capital stock (now or hereafter outstanding) of the Borrower (other than
dividends or distributions payable in its common stock or warrants to
purchase its common stock or splitups or reclassifications of its stock
into additional or other shares of its common stock), or apply, or permit
any of its Subsidiaries to apply, any of its funds, property or assets to
the purchase, redemption, sinking fund or other retirement of, or agree or
permit any of its Subsidiaries to purchase or redeem, any shares of any
class of capital stock (now or hereafter outstanding) of, the Borrower, or
warrants, options or other rights with respect to any shares of any class
of capital stock (now or hereafter outstanding) of the Borrower;
45
(b) the Borrower will not prepay any other Indebtedness or prepay or
repay any Subordinated Debt, except as expressly permitted under clause (d)
----------
of Section 7.2.2; and
-------------
(c) the Borrower will not, and will not permit any Subsidiary to, make
any deposit for any of the foregoing purposes;
provided, however, that,(i) the Borrower may pay a dividend of up to $1,800,000
-------- -------
to Holdings from the date hereof to December 31, 2001 and (ii) each year
thereafter the Borrower may pay a dividend up to an amount equal to 50% of the
Excess Cash Flow for the preceding Fiscal Year (so long as the Borrower has
first made the mandatory prepayment of the loans under the Credit Agreement
(Five Year) pursuant to Section 3.1.2(d) therein).
SECTION 7.2.7 Capital Expenditures, etc. The Borrower will not, and will
--------------------------
not permit any of its Subsidiaries to, make or commit to make Capital
Expenditures in any Fiscal Year in excess of $2,700,000 in the aggregate.
SECTION 7.2.8 Take or Pay Contracts. The Borrower will not, and will not
---------------------
permit any of its Subsidiaries to, enter into or be a party to any arrangement
for the purchase of materials, supplies, other property or services if such
arrangement by its express terms requires that payment be made by the Borrower
or such Subsidiary regardless of whether such materials, supplies, other
property or services are delivered or furnished to it, unless the aggregate
amount payable under all such arrangements shall not exceed $100,000 in any
calendar year.
SECTION 7.2.9 Consolidation, Merger, etc. The Borrower will not, and will
---------------------------
not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with,
or merge into or with, any other corporation, or purchase or otherwise acquire
all or substantially all of the assets of any Person (or of any division
thereof) except
(a) any such Subsidiary may liquidate or dissolve voluntarily into,
and may merge with and into, the Borrower or any wholly-owned Subsidiary,
and the assets or stock of any Subsidiary may be purchased or otherwise
acquired by the Borrower or any wholly-owned Subsidiary; and
(b) so long as no Default has occurred and is continuing or would
occur after giving effect thereto, the Borrower or any of its Subsidiaries
may purchase all or substantially all of the assets of any Person, or
acquire such Person by merger, if permitted (without duplication) by
Section 7.2.7 to be made as a Capital Expenditure (provided that any
------------- --------
amounts so expended shall count as Capital Expenditures for purposes of
Section 7.2.7).
-------------
SECTION 7.2.10 Asset Dispositions, etc. The Borrower will not, and will not
------------------------
permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other rights with respect to,
all or any part of its assets (including accounts receivable and capital stock
of Subsidiaries) to any Person, other than the sale of inventory in the ordinary
46
course of business, unless (a) permitted by Section 7.2.6 or 7.2.9 or (b) in
------------- -----
addition to the exceptions provided in the foregoing clause (a), the net book
----------
value of such assets, together with the net book value of all other assets sold,
transferred, leased, contributed or conveyed by the Borrower or any of its
Subsidiaries pursuant to this clause (b) since the Effective Date, does not
----------
exceed $250,000.
SECTION 7.2.11 Modification of Tax Sharing Agreement and Subordinated Debt.
-----------------------------------------------------------
The Borrower will not consent to any amendment, supplement or other modification
of any of the terms or provisions contained in, or applicable to, the tax
sharing agreement delivered to the Lenders pursuant to this Agreement or, after
the issuance thereof, the terms or provisions of any Subordinated Debt.
SECTION 7.2.12 Transactions with Affiliates. The Borrower will not, and
----------------------------
will not permit any Significant Subsidiary to, enter into, or cause, suffer or
permit to exist:
(a) any arrangement or contract with any of its other Affiliates of a
nature customarily entered into by Persons which are Affiliates of each
other for tax or financial reporting purposes (including, without
limitation, management or similar contracts or arrangements relating to the
allocation of revenues, taxes and expenses or otherwise) unless such
arrangement or contract is fair and equitable to the Borrower or such
Significant Subsidiary; or
(b) any other transaction, arrangement or contract with any of its
other Affiliates which would not be entered into by a prudent Person in the
position of the Borrower or such Significant Subsidiary with, or which is
on terms which are less favorable than are obtainable from, any Person
which is not one of its Affiliates.
SECTION 7.2.13 Inconsistent Agreements. The Borrower will not enter into
-----------------------
any agreement containing any provision which would be violated or breached by
any borrowing by the Borrower made hereunder or by the performance by the
Borrower of its obligations hereunder or under any instrument executed pursuant
hereto.
SECTION 7.2.14 Negative Pledges, Restrictive Agreements, etc. The Borrower
----------------------------------------------
will not, and will not permit any of its Subsidiaries to, enter into any
agreement (excluding this Agreement and any other Loan Document) prohibiting
(a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired, or the ability
of the Borrower to amend or otherwise modify this Agreement or any other
Loan Document; or
(b) the ability of any Subsidiary to make any payments, directly or
indirectly, to the Borrower by way of dividends, advances, repayments of
loans or advances, reimbursements of management and other intercompany
charges, expenses and accruals or other returns on investments, or any
other agreement or arrangement which restricts
47
the ability of any such Subsidiary to make any payment, directly or
indirectly, to the Borrower.
SECTION 7.2.15 Management Fees. The Borrower will not, and will not permit
---------------
any of its Subsidiaries to, pay management or similar fees to any Affiliate
(other than payments by any of the Borrower's Subsidiaries to the Borrower)
without the written approval of the Required Lenders which, when aggregated with
all other management fees paid by the Borrower and its Subsidiaries in any
Fiscal Year, would exceed the amounts set forth below opposite such Fiscal Year:
Fiscal Year Amount
----------- ------
2001 $1,611,624
2002 $1,708,321
2003 $1,810,821
2004 $1,919,470
2005 $2,034,638
2006 $2,156,716
provided that, in any event and at all times, no management fees may be paid
--------
when any Default has occurred and is continuing or would occur after giving
effect thereto.
SECTION 7.2.16 Tax Sharing Payments. The Borrower will not, and will not
--------------------
permit any of its Subsidiaries to, make any tax sharing payments to Holdings
which, when aggregated with all other tax sharing payments made by the Borrower
and its Subsidiaries in any Fiscal Quarter, would exceed the estimated quarterly
tax sharing payments required to be made pursuant to the tax sharing agreement
heretofore delivered to the Lenders pursuant to this Agreement; provided that,
--------
in any event and at all times, no tax sharing payment may be paid when any
Default has occurred and is continuing or would occur after giving effect
thereto.
SECTION 7.2.17 Use of Proceeds. The Borrower will not use the proceeds of
---------------
the Loans for any purpose other than to meet working capital needs.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1 Listing of Events of Default. Each of the following events or
----------------------------
occurrences described in this Section 8.1 shall constitute an "Event of
----------- --------
Default".
-------
SECTION 8.1.1 Non-Payment of Obligations. The Borrower shall default in the
--------------------------
payment or prepayment when due of any principal of any Loan, or the Borrower
shall default
48
(and such default shall continue unremedied for a period of five days) in the
payment when due of any interest on any Loan or any other Obligation.
SECTION 8.1.2 Breach of Warranty. Any representation or warranty of the
------------------
Borrower or any of its other Affiliates made or deemed to be made hereunder or
in any other Loan Document or in any other writing or certificate furnished by
or on behalf of the Borrower or any of its Affiliates to the Agent or any Lender
for the purposes of or in connection with this Agreement or any such other Loan
Document (including any certificates delivered pursuant to Article V) is or
---------
shall be incorrect when made in any material respect.
SECTION 8.1.3 Non-Performance of Certain Covenants and Obligations. The
----------------------------------------------------
Borrower shall default in the due performance and observance of any of its
obligations under Section 7.2.1 through 7.2.16.
------------- ------
SECTION 8.1.4 Non-Performance of Other Covenants and Obligations. The
--------------------------------------------------
Borrower shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document (other than the
Mortgage), and such default shall continue unremedied for a period of 30 days
after notice thereof shall have been given to the Borrower by the Agent or an
Event of Default shall occur under (and as defined in) the Mortgage.
SECTION 8.1.5 Default on Other Indebtedness. A default shall occur in the
-----------------------------
payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than the Loans) equal to
or in excess of $1,000,000 of the Borrower or any of the Borrower's Significant
Subsidiaries, or a default shall occur in the performance or observance of any
obligation or condition with respect to such Indebtedness if the effect of such
default is to accelerate the maturity of any such Indebtedness or such default
shall continue unremedied for any applicable period of time sufficient to permit
the holder or holders of such Indebtedness, or any trustee or agent for such
holders, to cause such Indebtedness to become due and payable prior to its
expressed maturity.
SECTION 8.1.6 Judgments. Any judgment or order for the payment of money in
---------
excess of $250,000 shall be rendered against the Borrower or any of its
Significant Subsidiaries and there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect or, during such 30 day
period, enforcement proceedings shall have been commenced by any creditor and
not stayed or withdrawn.
SECTION 8.1.7 Pension Plans. Any of the following events shall occur with
-------------
respect to any Pension Plan
(a) the institution of any steps by the Borrower, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, the Borrower or any such member could be
required to make a contribution to such Pension Plan, or could reasonably
expect to incur a liability or obligation to such Pension Plan, in excess
of $250,000; or
49
(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA.
SECTION 8.1.8 Control of the Borrower. Any Change in Control shall
-----------------------
occur.
SECTION 8.1.9 Bankruptcy, Insolvency, etc. The Borrower or any of its
---------------------------
Significant Subsidiaries shall
(a) become insolvent or generally fail to pay, or admit in writing
its inability or unwillingness to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for the Borrower or any
of its Significant Subsidiaries or any property of any thereof, or make a
general assignment for the benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for the Borrower or any of its Significant
Subsidiaries or for a substantial part of the property of any thereof, and
such trustee, receiver, sequestrator or other custodian shall not be
discharged within 60 days, provided that the Borrower and each Significant
Subsidiary hereby expressly authorizes the Agent and each Lender to appear
in any court conducting any relevant proceeding during such 60-day period
to preserve, protect and defend their rights under the Loan Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect of the Borrower or any of its Significant
Subsidiaries, and, if any such case or proceeding is not commenced by the
Borrower or such Significant Subsidiary, such case or proceeding shall be
consented to or acquiesced in by the Borrower or such Significant
Subsidiary or shall result in the entry of an order for relief or shall
remain for 60 days undismissed, provided that the Borrower and each
Significant Subsidiary hereby expressly authorizes the Agent and each
Lender to appear in any court conducting any such case or proceeding during
such 60-day period to preserve, protect and defend their rights under the
Loan Documents; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
SECTION 8.1.10 Impairment of Security, etc. Any Collateral Document or any
---------------------------
other Loan Document, or any Lien granted thereunder, shall (except in accordance
with its terms), in whole or in part, terminate, cease to be effective or cease
to be the legally valid, binding and enforceable obligation of any Obligor party
thereto; the Borrower, any other Obligor or any other party shall, directly or
indirectly, contest in any manner such effectiveness, validity,
50
binding nature or enforceability; or any Lien securing any Obligation shall, in
whole or in part, cease to be a perfected first priority Lien.
SECTION 8.2 Action if Bankruptcy. If any Event of Default described in
--------------------
clauses (a) through (d) of Section 8.1.9 shall occur, the outstanding principal
----------- --- -------------
amount of all outstanding Loans and all other Obligations shall automatically be
and become immediately due and payable, and the Commitments shall automatically
be terminated, without notice or demand.
SECTION 8.3 Action if Other Event of Default. If any Event of Default
--------------------------------
(other than any Event of Default described in clauses (a) through (d) of Section
----------- --- -------
8.1.9) shall occur for any reason, whether voluntary or involuntary, and be
-----
continuing, the Agent, upon the direction of the Required Lenders, shall by
notice to the Borrower declare the Commitments to be terminated and all or any
portion of the outstanding principal amount of the Loans and other Obligations
to be due and payable, whereupon the full unpaid amount of such Loans and other
Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment.
SECTION 8.4 Cumulative Remedies. The remedies provided herein are
-------------------
cumulative and not exclusive of any remedies provided by law.
ARTICLE IX
THE AGENT
SECTION 9.1 Actions. Each Lender hereby appoints Bank of America as its
-------
Agent under and for purposes of this Agreement, the Notes, each Collateral
Document and each other Loan Document. Each Lender authorizes the Agent to act
on behalf of such Lender under this Agreement, the Notes, each Collateral
Document and each other Loan Document and, in the absence of other written
instructions from the Required Lenders received from time to time by the Agent
(with respect to which the Agent agrees that it will comply, except as otherwise
provided in this Section or as otherwise advised by counsel), to exercise such
powers hereunder and thereunder as are specifically delegated to or required of
the Agent by the terms hereof and thereof, together with such powers as may be
reasonably incidental thereto. Each Lender hereby indemnifies (which indemnity
shall survive any termination of this Agreement) the Agent, pro rata according
--- ----
to such Lender's Percentage, from and against any and all liabilities,
obligations, losses, damages, claims, costs or expenses of any kind or nature
whatsoever which may at any time be imposed on, incurred by, or asserted
against, the Agent in any way relating to or arising out of this Agreement, the
Notes, any Collateral Document and any other Loan Document, including reasonable
attorneys' fees, and as to which the Agent is not reimbursed by the Borrower;
provided, however, that no Lender shall be liable for the payment of any portion
-------- -------
of such liabilities, obligations, losses, damages, claims, costs or expenses
which are determined by a court of competent jurisdiction in a final proceeding
to have resulted solely from the Agent' s gross negligence or wilful misconduct.
The Agent shall not be required to take any action hereunder, under the Notes,
under any Collateral Document or under any other Loan Document, or to prosecute
or defend any suit in respect of this Agreement, the Notes, any Collateral
Document or any other Loan Document, unless it is indemnified hereunder to its
satisfaction. If
51
any indemnity in favor of the Agent shall be or become, in the Agent's
determination, inadequate, the Agent may call for additional indemnification
from the Lenders and cease to do the acts indemnified against hereunder until
such additional indemnity is given.
SECTION 9.2 Funding Reliance, etc. Unless the Agent shall have been
---------------------
notified by telephone, confirmed in writing, by any Lender by 4:00 p.m., Chicago
time, on the day prior to the date of any proposed Borrowing that such Lender
will not make available the amount which would constitute its Percentage of the
Loans of such proposed Borrowing, the Agent may assume that such Lender has made
such amount available to the Agent and, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If and to the extent that such
Lender shall not have made such amount available to the Agent, such Lender and
the Borrower severally agree to repay the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
the Agent made such amount available to the Borrower to the date such amount is
repaid to the Agent, at the interest rate applicable at the time to Loans.
SECTION 9.3 Exculpation. Neither the Agent nor any of its directors,
-----------
officers, employees or agents shall be liable to any Lender for any action taken
or omitted to be taken by it under this Agreement, the Notes, any Collateral
Document or any other Loan Document, or in connection herewith or therewith,
except for its own wilful misconduct or gross negligence, nor responsible for
any recitals or warranties herein or therein, nor for the effectiveness,
enforceability, validity or due execution of this Agreement, the Notes, any
Collateral Document or any other Loan Document, nor for the creation, perfection
or priority of any Liens purported to be created by any of the Loan Documents,
or the validity, genuineness, enforceability, existence, value or sufficiency of
any collateral security, nor to make any inquiry respecting the performance by
the Borrower of its obligations hereunder or under the Notes, any Collateral
Document or any other Loan Document. Any such inquiry which may be made by the
Agent shall not obligate it to make any further inquiry or to take any action.
The Agent shall be entitled to rely upon advice of counsel concerning legal
matters and upon any notice, consent, certificate, statement or writing which
the Agent believes to be genuine and to have been presented by a proper Person.
SECTION 9.4 Successor. The Agent may resign as such at any time upon at
---------
least 30 days' prior notice to the Borrower and all Lenders. If the Agent at any
time shall resign, the Required Lenders may appoint another Lender as a
successor Agent which shall thereupon become the Agent hereunder. If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the retiring Agent's giving
notice of resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be one of the Lenders or a commercial
banking institution organized under the laws of the U.S. (or any State thereof)
or a U.S. branch or agency of a commercial banking institution, and having a
combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall be entitled to receive from the retiring Agent such documents of transfer
and assignment as such successor Agent may reasonably request, and shall
thereupon
52
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring Agent's resignation
hereunder as the Agent, the provisions of
(a) this Article IX shall inure to its benefit as to any actions
----------
taken or omitted to be taken by it while it was the Agent under this
Agreement; and
(b) Section 10.3 and Section 10.4 shall continue to inure to its
------------ ------------
benefit.
SECTION 9.5 Loans by Bank of America. Bank of America shall have the
------------------------
same rights and powers with respect to (x) the Loans made by it or any of its
Affiliates, and (y) the Notes held by it or any of its Affiliates as any other
Lender and may exercise the same as if it were not the Agent. Bank of America
and its Affiliates may accept deposits from, lend money to, and generally engage
in any kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if Bank of America were not the Agent hereunder.
SECTION 9.6 Credit Decisions. Each Lender acknowledges that it has,
----------------
independently of the Agent and each other Lender, and based on such Lender's
review of the financial information of the Borrower, this Agreement, the other
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such Lender
has deemed appropriate, made its own credit decision to extend its Commitment.
Each Lender also acknowledges that it will, independently of the Agent and each
other Lender, and based on such other documents, information and investigations
as it shall deem appropriate at any time, continue to make its own credit
decisions as to exercising or not exercising from time to time any rights and
privileges available to it under this Agreement or any other Loan Document.
SECTION 9.7 Copies, etc. The Agent shall give prompt notice to each
-----------
Lender of each notice or request required to be given by the Agent to the
Lenders pursuant to the terms of this Agreement (unless concurrently delivered
to the Lenders by the Borrower). The Agent will distribute to each Lender each
document or instrument received for the account of the Lenders and copies of all
other communications received by the Agent from the Borrower for distribution to
the Lenders by the Agent in accordance with the terms of this Agreement.
SECTION 9.8 Action Through Agent. All actions taken with respect to any
--------------------
collateral security or guaranties provided under the Loan Documents shall be
taken solely by the Agent, and no Lender shall have any right to take any
actions individually with respect thereto.
SECTION 9.9 Documentation Agents. None of the Lenders identified on the
--------------------
facing page or signature pages of this Agreement as a "documentation agent"
shall have any right, power, obligation, liability, responsibility or duty under
this Agreement other than those applicable to all Lenders as such. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
53
SECTION 9.10 Collateral Matters. (a) The Agent is authorized on behalf
------------------
of all the Lenders, without the necessity of any notice to or further consent
from the Lenders, from time to time to take any action with respect to any
Collateral or the Collateral Documents which may be necessary to perfect and
maintain perfected the security interest in and Liens upon the Collateral
granted pursuant to the Collateral Documents.
(b) The Lenders irrevocably authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment in full of all
Loans and all other Obligations known to the Agent and payable under this
Agreement or any other Loan Document; (ii) constituting property sold or to be
sold or disposed of as part of or in connection with any disposition permitted
hereunder; (iii) constituting property in which the Borrower or any Subsidiary
owned no interest at the time the Lien was granted or any time thereafter; (iv)
constituting property leased to the Borrower or any Subsidiary under a lease
which has expired or been terminated in a transaction permitted under this
Agreement or is about to expire and which has not been, and is not intended by
the Borrower or such Subsidiary to be, renewed or extended;(v) consisting of an
instrument evidencing Indebtedness or other debt instrument, if the indebtedness
evidenced thereby has been paid in full; or (vi) if approved, authorized or
ratified in writing by the Required Lenders or all of the Lenders, as the case
may be, as provided in subsection 10.1(d). Upon request by the Agent at any
------------------
time, the Lenders will confirm in writing the Agent's authority to release
particular types or items of Collateral pursuant to this subsection 9.10(a),
------------------
provided that the absence of any such confirmation for whatever reason shall not
--------
affect the Agent's rights under this Section 9.11.
------------
(c) Each Lender agrees with and in favor of each other (which agreement
shall not be for the benefit of the Borrower or any Subsidiary) that the
Borrower's obligation to such Lender under this Agreement and the other Loan
Documents is not and shall not be secured by any real property collateral now or
hereafter acquired by such Lender other than the Mortgaged Real Property and the
Modesto Property.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Waivers, Amendments, etc. The provisions of this Agreement
------------------------
and of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by the Borrower and the Required Lenders; provided, however, that no such
-------- -------
amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular action be
taken by all the Lenders or by the Required Lenders shall be effective
unless consented to by each Lender;
(b) modify this Section 10.1, change the definition of "Required
------------ --------
Lenders", increase the Commitment Amount or the Percentage of any Lender,
-------
reduce any fees
54
described in Article III, release any collateral security, except as
-----------
otherwise specifically provided or contemplated in this Agreement or in any
Loan Document, or extend the Commitment Termination Date shall be made
without the consent of each Lender and each holder of a Note;
(c) extend the due date for, or reduce the amount of, any scheduled
repayment or prepayment of principal of or interest on any Loan (or reduce
the principal amount of or rate of interest on any Loan) shall be made
without the consent of the holder of that Note evidencing such Loan; or
(d) affect adversely the interests, rights or obligations of the
Agent in its capacity as the Agent shall be made without consent of the
Agent.
No failure or delay on the part of the Agent, any Lender or the holder of any
Note in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Borrower in any case shall entitle it to any notice or demand in similar or
other circumstances. No waiver or approval by the Agent, any Lender or the
holder of any Note under this Agreement or any other Loan Document shall, except
as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 10.2 Notices. All notices and other communications provided to
-------
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth below its signature hereto or set
forth in the Lender Assignment Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed given when
received; any notice, if transmitted by facsimile, shall be deemed given when
transmitted (upon receipt of electronic confirmation of transmission).
SECTION 10.3 Payment of Costs and Expenses. The Borrower agrees to pay
-----------------------------
on demand all expenses of the Agent and the Lead Arranger (including the fees
and out-of-pocket expenses of counsel to the Agent and the Lead Arranger
(including the reasonable allocated cost of internal legal services and all
disbursements of internal counsel) and of local counsel, if any, who may be
retained by counsel to the Agent and the Lead Arranger) in connection with
(a) the negotiation, preparation, execution and delivery of this
Agreement, the Notes, each Collateral Document and of each other Loan
Document, including schedules and exhibits, and any amendments, waivers,
consents, supplements or other modifications to this Agreement, the Notes,
any Collateral Document or any other Loan Document as may from time to time
hereafter be required or requested, whether or not the transactions
contemplated hereby or thereby are consummated;
55
(b) the filing, recording, refiling or rerecording of the Fourth
Amendment to Mortgage, the Second Amendment to Modesto Mortgage, the Pledge
Agreement and the Security Agreement and/or any Uniform Commercial Code
financing statements relating thereto and all amendments, supplements and
modifications to any thereof and any and all other documents or instruments
of further assurance required to be filed or recorded or refiled or
rerecorded by the terms hereof or of the Mortgage, the Pledge Agreement or
the Security Agreement;
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement, the Notes, any Collateral Document
or any other Loan Document; and
(d) the administration of this Agreement, the Notes, the Collateral
Documents and the other Loan Documents and the consideration of legal
questions relevant hereto and thereto.
The Borrower further agrees to pay, and to hold the Agent and the Lenders
harmless from all liability for, any stamp or other taxes which may be payable
in connection with the execution or delivery of this Agreement, the borrowings
hereunder, or the issuance of the Notes or any other Loan Documents. The
Borrower also agrees to reimburse the Agent, the Lead Arranger and each Lender
upon demand for all reasonable out-of-pocket expenses (including reasonable
attorneys' fees and legal expenses) incurred by the Agent or the Lead Arranger
or such Lender in connection with (x) the negotiation of any restructuring or
"work-out", whether or not consummated, of any Obligations, and (y) the
enforcement of any Obligations.
SECTION 10.4 Indemnification. In consideration of the execution and
---------------
delivery of this Agreement by each Lender and the extension of the Commitments,
the Borrower hereby indemnifies, exonerates and holds the Agent and each Lender
and each of their respective officers, directors, employees and agents
(collectively, the "Indemnified Parties") free and harmless from and against any
-------------------
and all actions, causes of action, suits, losses, costs, liabilities and
damages, and expenses incurred in connection therewith (irrespective of whether
any such Indemnified Party is a party to the action for which indemnification
hereunder is sought), including reasonable attorneys' fees and disbursements
(collectively, the "Indemnified Liabilities"), incurred by the Indemnified
-----------------------
Parties or any of them as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan;
(b) the entering into and performance of this Agreement and any other
Loan Document by any of the Indemnified Parties (including any action
brought by or on behalf of the Borrower as the result of any determination
by the Required Lenders pursuant to Article V not to fund any Loans);
---------
56
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any Person,
whether or not the Agent or such Lender is party thereto;
(d) any investigation, litigation or proceeding related to any
Aenvironmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Borrower or any of its
Subsidiaries of any Hazardous Material; and
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary thereof of any
Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, the Borrower or
such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
SECTION 10.5 Survival. The obligations of the Borrower under Sections
-------- --------
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under
--- --- --- --- ---- ----
Section 9.1, shall in each case survive any termination of this Agreement, the
-----------
payment in full of all Obligations and the termination of all Commitments. The
representations and warranties made by the Borrower in this Agreement and in
each other Loan Document shall survive the execution and delivery of this
Agreement and each such other Loan Document.
SECTION 10.6 Severability. Any provision of this Agreement, the Notes,
------------
any Collateral Document or any other Loan Document which is prohibited or
unenforceable in any jurisdiction shall, as to such provision and such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement, the Notes, any Collateral Document or such Loan Document or affecting
the validity or enforceability of such provision in any other jurisdiction.
SECTION 10.7 Headings. The various headings of this Agreement and of each
--------
other Loan Document are inserted for convenience only and shall not affect the
meaning or interpretation of this Agreement or such other Loan Document or any
provisions hereof or thereof.
SECTION 10.8 Execution in Counterparts. This Agreement may be executed by
-------------------------
the parties hereto in several counterparts, each of which shall be executed by
the Borrower and the Agent and be deemed to be an original and all of which
shall constitute together but one and the same agreement.
57
SECTION 10.9 Governing Law; Entire Agreement. THIS AGREEMENT, THE NOTES,
-------------------------------
EACH COLLATERAL DOCUMENT AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE
A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
ILLINOIS, EXCEPT AS TO ANY COLLATERAL DOCUMENT WHICH EXPRESSLY SPECIFIES THAT
THE LAWS OF ANOTHER STATE SHALL GOVERN SUCH DOCUMENT. This Agreement, the Notes,
the Collateral Documents and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersede any prior agreements, written or oral, with respect thereto.
SECTION 10.10 Successors and Assigns. This Agreement shall be binding upon
----------------------
and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
-------- -------
(a) the Borrower may not assign or transfer its rights or obligations
hereunder without the prior written consent of the Agent and all Lenders;
and
(b) the rights of sale, assignment and transfer of the Lenders are
subject to Section 10.11.
-------------
SECTION 10.11 Sale and Transfer of Loans and Notes; Participations in
-------------------------------------------------------
Loans and Notes. Each Lender may assign, or sell participations in, its Loans
---------------
and Commitment to one or more other Persons in accordance with this Section
-------
10.11.
-----
SECTION 10.11.1 Assignments. Any Lender, with notice to the Borrower and
-----------
the Agent, but without the consent of the Borrower or the Agent, may assign and
delegate to any of its Affiliates or any other Lender, or with the consent of
the Borrower and the Agent one or more commercial banks or other financial
institutions or funds (each such Affiliate, Lender, commercial bank, financial
institution or fund described as being the Person to whom such assignment and
delegation is to be made, being hereinafter referred to as an "Assignee
--------
Lender"), all or any fraction of such Lender's total Loans (which assignment and
------
delegation shall be of a constant, and not a varying, percentage of all the
assigning Lender's Loans) in a minimum aggregate amount of $2,500,000; provided,
--------
however, that any such Assignee Lender will comply, if applicable, with the
-------
provisions contained in the last sentence of Section 4.6 and further, provided,
----------- ------- --------
however, that the Borrower and the Agent shall be entitled to continue to deal
-------
solely and directly with such Lender in connection with the interests so
assigned and delegated to an Assignee Lender until
(a) written notice of such assignment and delegation, together with
payment instructions, addresses and related information with respect to
such Assignee Lender, shall have been given to the Borrower and the Agent
by such Lender and such Assignee Lender;
(b) such Assignee Lender shall have executed and delivered to the
Borrower and the Agent a Lender Assignment Agreement, accepted by the
Agent; and
58
(c) the processing fees described below shall have been paid.
From and after the date that the Agent accepts such Lender Assignment Agreement,
(x) the Assignee Lender thereunder shall be deemed automatically to have become
a party hereto and to the extent that rights and obligations hereunder have been
assigned and delegated to such Assignee Lender in connection with such Lender
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and under the other Loan Documents, (y) the assignor Lender, to the
extent that rights and obligations hereunder have been assigned and delegated by
it in connection with such Lender Assignment Agreement, shall be released from
its obligations hereunder and under the other Loan Documents and (z) the
assignor Lender and the Assignee Lender shall have the respective Percentages
set forth in the Lender Assignment Agreement. Within five Business Days after
its receipt of notice that the Agent has received an executed Lender Assignment
Agreement, the Borrower shall execute and deliver to the Agent (for delivery to
the relevant Assignee Lender) a new Note evidencing such Assignee Lender's
assigned Loans and, if the assignor Lender has retained Loans hereunder, a
replacement Note in the principal amount of the Loans retained by the assignor
Lender hereunder (such Note to be in exchange for, but not in payment of, that
Note then held by such assignor Lender). Each such Note shall be dated the date
of the predecessor Note. The assignor Lender shall ▇▇▇▇ the predecessor Note
"exchanged" and deliver it to the Borrower. Accrued interest on that part of the
predecessor Note evidenced by the new Note, and accrued fees, shall be paid as
provided in the Lender Assignment Agreement. Accrued interest on that part of
the predecessor Note evidenced by the replacement Note shall be paid to the
assignor Lender. Accrued interest and accrued fees shall be paid at the same
time or times provided in the predecessor Note and in this Agreement. Unless
otherwise agreed to by the Agent, such assignor Lender or such Assignee Lender
must also pay a processing fee to the Agent upon delivery of any Lender
Assignment Agreement in the amount of $5,000. Any attempted assignment and
delegation not made in accordance with this Section 10.11.1 shall be null and
---------------
void.
SECTION 10.11.2 Participations. Any Lender may at any time sell to one or
--------------
more commercial banks or other Persons (each of such commercial banks and other
Persons being herein called a "Participant") participating interests in any of
-----------
the Loans or other interests of such Lender hereunder; provided, however, that
-------- ------
(a) no participation contemplated in this Section 10.11 shall relieve
-------------
such Lender from its other obligations hereunder or under any other Loan
Document;
(b) such Lender shall remain solely responsible for the performance
of such other obligations;
(c) the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and each of the other Loan Documents;
(d) no Participant, unless such Participant is an Affiliate of such
Lender, or is itself a Lender, shall be entitled to require such Lender to
take or refrain from taking any
59
action hereunder or under any other Loan Document, except that such Lender
may agree with any Participant that such Lender will not, without such
Participant's consent, take any actions of the type described in clause (b)
----------
or (c) of Section 10.1; and
--- ------------
(e) the Borrower shall not be required to pay any amount under
Section 4.6 that is greater than the amount which it would have been
-----------
required to pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and 10.4, shall be considered a
------------ --- --- --- --- --- ---- ----
Lender.
SECTION 10.11.3 Information and Assistance. The Borrower hereby agrees to
--------------------------
provide prompt and reasonable assistance with respect to any contemplated or
proposed assignments or participations, and hereby further agrees that any
information supplied to a Lender pursuant hereto may be supplied by such Lender
to any bona fide potential assignee or participant.
SECTION 10.12 Other Transactions. Nothing contained herein shall preclude
------------------
the Agent or any other Lender from engaging in any transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Affiliates in which the Borrower or such Affiliate is not
restricted hereby from engaging with any other Person.
SECTION 10.13 Maximum Interest. (a) It is the intention of the parties
----------------
hereto that each Lender shall conform strictly to usury laws applicable to it.
Accordingly, the parties hereto stipulate and agree that none of the terms and
provisions contained in the Notes, this Agreement, any Collateral Document or
any other Loan Document shall ever be construed to create a contract to pay to
any Lender for the use, forbearance, or retention of money at a rate in excess
of the Highest Lawful Rate applicable to such Lender, and that for purposes
hereof, "interest" shall include the aggregate of all charges or other
consideration which constitute interest under applicable law and are contracted
for, taken, reserved, charged, or received under any of this Agreement, the
Notes, the Collateral Documents or the other Loan Documents or otherwise in
connection with the transactions contemplated by this Agreement. Further, if the
transactions contemplated hereby would be usurious as to any Lender under laws
applicable to it, then, in that event, notwithstanding anything to the contrary
in the Notes, this Agreement, any Collateral Document or in any other Loan
Document or agreement entered into in connection with or as security for the
Notes, it is agreed as follows: the aggregate of all consideration which
constitutes interest under law applicable to each such Lender that is contracted
for, taken, reserved, charged, or received by such Lender under the Notes, this
Agreement, or under any of the other aforesaid Loan Documents or agreements or
otherwise in connection with the Notes shall under no circumstances exceed the
maximum amount allowed by the law applicable to such Lender, and any excess
shall be credited by such Lender on the principal amount of the Indebtedness of
the Borrower owed to such Lender (or, if the principal amount of such
Indebtedness shall have been paid in full, to the extent such interest has been
received by a Lender it shall be refunded by such Lender to the Borrower). The
provisions of this Section 10.13(a) shall control over all other provisions of
----------------
this Agreement, the Notes, the Collateral
60
Documents and the other Loan Documents which may be in apparent conflict
herewith. The parties further stipulate and agree that, without limitation on
the foregoing, all calculations of the rate or amount of interest contracted
for, taken, reserved, charged or received under any of this Agreement, the
Notes, the Collateral Documents and the other Loan Documents which are made for
the purpose of determining whether such rate or amount exceed the Highest Lawful
Rate shall be made, to the extent permitted by applicable law, by amortizing,
prorating, allocating, and spreading during the period of the full stated term
of the Indebtedness, and if longer and if permitted by applicable law, until
payment in full, all interest at any time so contracted for, taken, reserved,
charged, or received.
(b) If at any time the effective rate of interest which would otherwise
apply to any Indebtedness hereunder or evidenced by any Lender's Notes would
exceed the Highest Lawful Rate applicable to such Lender (taking into account
the interest rate applicable to such Indebtedness pursuant to the other
provisions of this Agreement, plus all additional charges and consideration
which have been contracted for, taken, reserved, charged, or received under this
Agreement, such Lender's Notes, the Collateral Documents, and the other Loan
Documents, or any of them, and which additional charges or consideration (the
"Additional Charges") constitute interest with respect to such Indebtedness),
------------------
the effective interest rate to apply to such Indebtedness made by such Lender
shall be limited to the Highest Lawful Rate, but any subsequent reductions in
the interest rate applicable to such Indebtedness owed to such Lender shall not
reduce the effective interest rate to apply to such Indebtedness owed to such
Lender below the Highest Lawful Rate applicable to such Lender until the total
amount of interest accrued on such Indebtedness equals the amount of interest
which would have accrued if the interest rate from time to time applicable to
such Indebtedness owed to such Lender had at all times been in effect with
respect to such Indebtedness pursuant to the other provisions of this Agreement
and the other Loan Documents and if the Lenders had collected all Additional
Charges called for under this Agreement, the Notes, the Collateral Documents and
the other Loan Documents. If at maturity or final payment of such Lender's
Obligations the total amount of interest paid to any Lender hereunder and under
the other Loan Documents (including amounts designated as "interest" plus any
Additional Charges which constitute interest with respect to such Lenders, and
taking into account the limitations of the first sentence of this Section
-------
10.13(b)) is less than the total amount of such "interest" which would have been
--------
paid if all amounts were paid as required by this Agreement (without giving
effect to this Section 10.13) and the other Loan Documents (the amount of the
-------------
difference described above, the "Deficiency"), then the Borrower agrees, to the
----------
fullest extent permitted by the laws applicable to such Lender, to pay to such
Lender an amount equal to the lesser of (i) the difference between (1) the
amount of such "interest" which would have accrued on such Lender's Notes if the
Highest Lawful Rate had at all times been in effect, and (2) the amount of
interest actually paid on such Lender's Notes (including amounts designated as
"interest" plus any Additional Charges which constitute interest with respect to
such Lender's Notes) and (ii) the amount of the Deficiency.
(c) Notwithstanding anything to the contrary contained above in this
Section 10.13, it is understood and agreed that (i) all representations and
-------------
warranties contained in this Agreement, in the Collateral Documents and in the
other Loan Documents have been made without reliance
61
upon, or giving effect to, the provisions of Section 10.13(a) and (ii) that the
----------------
Lenders have relied upon the accuracy of such representations and warranties.
Furthermore, the Borrower acknowledges and agrees that each Lender shall, to the
fullest extent permitted by law, be entitled to recover damages from the
Borrower in the event of a material misrepresentation by the Borrower.
SECTION 10.14 Forum Selection and Consent to Jurisdiction. ANY LITIGATION
-------------------------------------------
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT,
THE NOTES, ANY COLLATERAL DOCUMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE AGENT, THE LENDERS OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT
-------- -------
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS
AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES
TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF ILLINOIS. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT, THE NOTES, THE COLLATERAL DOCUMENTS AND THE OTHER LOAN DOCUMENTS.
SECTION 10.15 Waiver of Jury Trial. THE AGENT, THE LENDERS AND THE
--------------------
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
62
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT, THE NOTES, ANY COLLATERAL DOCUMENT OR ANY OTHER LOAN DOCUMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR THE BORROWER. THE BORROWER
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH COLLATERAL
DOCUMENT AND EACH SUCH OTHER LOAN DOCUMENT.
63
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
NASCO INTERNATIONAL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Title: Chief Financial Officer
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Financial Officer
Copy to:
Geneve Corporation
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
BANK OF AMERICA, N.A.
as Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------
Title: Managing Director
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
S-1
PERCENTAGE LENDERS
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53.2710% BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------
Title: Managing Director
Domestic
Office: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Eurodollar
Office: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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S-2
46.7290% BANK ONE, WISCONSIN
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Senior Vice President
Domestic
Office: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Code WI1-2032
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Attention: ▇▇▇▇ ▇▇▇▇▇
S-3
EXHIBIT A
NOTE
$1,331,775.00 Date: May 29, 2001
FOR VALUE RECEIVED, Nasco International, Inc., a Wisconsin corporation (the
"Borrower") hereby unconditionally promises to pay to the order of Bank of
America, N.A. (the "Lender"):
(1) prior to or on the Stated Maturity Date the principal amount
of One million three hundred thirty-one thousand seven
hundred seventy-five Dollars ($1,331,775.00), or, if less,
the aggregate unpaid principal amount of Loans advanced by
the Lender to such Borrower pursuant to the Amended and
Restated Credit Agreement (364 Day) dated as of May 29, 2001
(as amended and in effect from time to time, the "Credit
Agreement"), among the Borrower, BankOne, Wisconsin, as
Documentation Agent, Bank of America, N.A. as Administrative
Agent, and the various financial institutions (including the
Lender) which are, or may from time to time become parties
thereto; and
(2) interest on the principal balance hereof from time to time
outstanding from the Effective Date (as defined in the Credit
Agreement) through and including the maturity date hereof at
the times and at the rates provided in the Credit Agreement.
This Note evidences borrowings under and has been issued by the Borrower in
accordance with the terms of the Credit Agreement. The Lender and any holder
hereof is entitled to the benefits of the Credit Agreement and the other Loan
Documents, and may enforce the agreements of the Borrower contained therein, and
any holder hereof may exercise the respective remedies provide for thereby or
otherwise available in respect thereof, all in accordance with the respective
terms thereof. All capitalized terms used in this Note and not otherwise defined
herein shall have the same meanings herein as in the Credit Agreement.
The Borrower irrevocably authorizes the Lender to make or cause to be made,
at or about the date of any Loan made to such Borrower or at the time of receipt
of any payment of principal of this Note, an appropriate notation on the grid
attached to this Note, or the continuation of such grid, or any other similar
record, including computer records, reflecting the making of such Loan or (as
the case may be) the receipt of such payment. The outstanding amount of the
Loans set forth on the grid attached to this Note, or the continuation of such
grid, or any other similar record including computer records, maintained by the
Lender with respect
Exhibit A-1
to any Loans made to the Borrower shall be prima facie evidence of the principal
-----------
amount thereof owing and unpaid by the Borrower to the Lender, but the failure
to record, or any error in so recording, any such amount on any such grid,
continuation or other record shall not limit or otherwise affect the obligation
of the Borrower hereunder or under the Credit Agreement to make payments of
principal and of interest on this Note when due.
The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note severally owing by the Borrower on the terms and conditions
specified in the Credit Agreement.
If any one or more of the Events of Default shall occur and be continuing
with respect to the Borrower, the entire unpaid principal amount of this Note
owing by such Borrower and all of the unpaid interest accrued thereon may become
or be declared due and payable in the manner and with the effect provided in the
Credit Agreement.
No delay or omission on the part of the Lender or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Lender or such holder, nor shall any delay, omission or
waiver on any one occasion be deemed a bar or waiver of the same or any other
right on any further occasion.
Except to the extent otherwise provided in the Credit Agreement, the
Borrower hereby waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, and assents to any extension or
postponement of time of payment or any other indulgence, to any substitution,
exchange or release of collateral and to the addition or release of any other
party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
ILLINOIS.
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed as
of the day and year first above written.
NASCO INTERNATIONAL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Title: Chief Financial Officer
Exhibit A-2
EXHIBIT A
NOTE
$1,168,225.00 Date: May 29, 2001
FOR VALUE RECEIVED, Nasco International, Inc., a Wisconsin corporation (the
"Borrower") hereby unconditionally promises to pay to the order of Bank One,
Wisconsin (the "Lender"):
(a) prior to or on the Stated Maturity Date the principal amount of
One million one hundred sixty-eight thousand two hundred twenty-five
Dollars ($1,168,225.00), or, if less, the aggregate unpaid principal amount
of Loans advanced by the Lender to such Borrower pursuant to the Amended
and Restated Credit Agreement (364 Days) dated as of May 29, 2001 (as
amended and in effect from time to time, the "Credit Agreement"), among the
Borrower, Bank One, Wisconsin, as Documentation Agent, Bank of America,
N.A. as Administrative Agent, and the various financial institutions
(including the Lender) which are, or may from time to time become parties
thereto; and
(b) interest on the principal balance hereof from time to time
outstanding from the date of this Loan through and including the maturity
date hereof at the times and at the rates provided in the Credit Agreement.
This Note evidences borrowings under and has been issued by the Borrower in
accordance with the terms of the Credit Agreement. The Lender and any holder
hereof is entitled to the benefits of the Credit Agreement and the other Loan
Documents, and may enforce the agreements of the Borrower contained therein, and
any holder hereof may exercise the respective remedies provide for thereby or
otherwise available in respect thereof, all in accordance with the respective
terms thereof. All capitalized terms used in this Note and not otherwise defined
herein shall have the same meanings herein as in the Credit Agreement.
The Borrower irrevocably authorizes the Lender to make or cause to be made,
at or about the date of any Loan made to such Borrower or at the time of receipt
of any payment of principal of this Note, an appropriate notation on the grid
attached to this Note, or the continuation of such grid, or any other similar
record, including computer records, reflecting the making of such Loan or (as
the case may be) the receipt of such payment. The outstanding amount of the
Loans set forth on the grid attached to this Note, or the continuation of such
grid, or any other similar record including computer records, maintained by the
Lender with respect to any Loans made to the Borrower shall be prima facie
----- -----
evidence of the principal amount thereof owing and unpaid by the Borrower to the
Lender, but the failure to record, or any error is so recording, any such amount
on any such grid, continuation or other record shall not limit or
Exhibit A-3
otherwise affect the obligation of the Borrower hereunder of under the Credit
Agreement to make payments of principal and of interest on this Note when due.
The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note severally owing by the Borrower on the terms and conditions
specified in the Credit Agreement.
If any one or more of the Events of Default shall occur and be continuing
with respect to the Borrower, the entire unpaid principal amount of this Note
owing by such Borrower and all of the unpaid interest accrued thereon may become
or be declared due and payable in the manner and with the effect provided in the
Credit Agreement.
No delay or omission on the part of the Lender or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Lender or such holder, nor shall any delay, omission or
waiver on any one occasion be deemed a bar or waiver of the same or any other
right on any further occasion.
Except to the extent otherwise provided in the Credit Agreement, the
Borrower hereby waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, and assents to any extension or
postponement of time of payment or any other indulgence, to any substitution,
exchange or release of collateral and to the addition or release of any other
party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
ILLINOIS.
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed as
of the day and year first above written.
NASCO INTERNATIONAL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Title: Chief Financial Officer
Exhibit A-4
EXHIBIT B
FORM OF BORROWING REQUEST
Bank of America, N.A., as Administrative Agent
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: [Name]
[Title]
Ladies and Gentlemen:
This Borrowing Request is delivered to you pursuant to Section 2.3 of the
-----------
Amended and Restated Credit Agreement (364 Days), dated as of May 29, 2001
(together with all amendments, if any, from time to time made thereto, the
"Credit Agreement"), among Nasco International, Inc., a Wisconsin corporation
----------------
(the "Borrower"), certain financial institutions which are, or may from time to
--------
time become parties thereto, Bank One, Wisconsin, as documentation agent and
Bank of America, N.A., as administrative agent (the "Agent"). Unless otherwise
-----
defined herein or the context otherwise requires, terms used herein have the
meanings provided in the Credit Agreement.
The Borrower hereby requests that a Loan be made in the aggregate principal
amount of $ __________ on ___________, 200_ as a [Eurodollar Rate Loan having an
Interest Period of ________] [Base Rate Loan].
The Borrower hereby acknowledges that, pursuant to Section 5.2.2 of the
-------------
Credit Agreement, each of the delivery of this Borrowing Request and the
acceptance by the Borrower of the proceeds of the Loans requested hereby
constitute a representation and warranty by the Borrower that, on the date of
such Loans, and before and after giving effect thereto and to the application of
the proceeds therefrom, all statements set forth in Section 5.2.1 are true and
-------------
correct in all material respects.
The Borrower agrees that if prior to the time of the Borrowing requested
hereby any matter certified to herein by it will not be true and correct at such
time as if then made, it will immediately so notify the Agent. Except to the
extent, if any, that prior to the time of the Borrowing requested hereby the
Agent shall receive written notice to the contrary from the Borrower, each
matter certified to herein shall be deemed once again to be certified as true
and correct at the date of such Borrowing as if then made.
Please transfer the proceeds of the Borrowing to the accounts of the
following persons at the financial institutions indicated:
Exhibit B-1
Amount to Person to be Paid Name, Address, etc.
be Transferred ----------------- of Transferee Lender
-------------- --------------------
Name Account No.
---- ----------
$____________ ____________ ______________ ____________________
____________________
Attention: _________
$____________ ____________ ______________ ____________________
____________________
Attention: _________
Balance of such The Borrower ______________ ____________________
proceeds
____________________
Attention: _________
The Borrower has caused this Borrowing Request to be executed and
delivered, and the certification and warranties contained herein to be made, by
its duly Authorized Officer this day of ____________, 200_.
NASCO INTERNATIONAL, INC.
By:_________________________________
Title:
Exhibit B-2
EXHIBIT C
FORM OF CONTINUATION/CONVERSION NOTICE
Bank of America, N.A., as Administrative Agent
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: [Name]
[Title]
Ladies and Gentlemen:
This Continuation/Conversion Notice is delivered to you pursuant to Section
-------
2.4 of the Amended and Restated Credit Agreement (364 Days), dated as of May 29,
---
2001 (together with all amendments, if any, from time to time made thereto, the
"Credit Agreement"), among Nasco International, Inc., a Wisconsin corporation
----------------
(the "Borrower"), certain financial institutions which are, or may from time to
--------
time become parties thereto, Bank One, Wisconsin, as documentation agent and
Bank of America, N.A., as administrative agent, (the "Agent"). Unless otherwise
-----
defined herein or the context otherwise requires, terms used herein have the
meanings provided in the Credit Agreement.
The Borrower hereby requests that on ________ , 200_,
(1) $______ of the presently outstanding principal amount of the
Loans originally made on ________, 200_ [and $____________ of the presently
outstanding principal amount of the originally made on ___________, 200_],
(2) and all presently being maintained as * [Base Rate Loans]
[Eurodollar Rate Loans],
(3) be [converted into] [continued as],
(4) [Eurodollar Rate Loans having an Interest Period of __ months]
[Base Rate Loans].
The Borrower hereby:
(a) certifies and warrants that no Default has occurred and is
continuing; and
___________________
* Select appropriate interest rate option.
Exhibit C-1
(b) agrees that if prior to the time of such continuation or
conversion any matter certified to herein by it will not be true and
correct at such time as if then made, it will immediately so notify the
Agent.
Except to the extent, if any, that prior to the time of the continuation or
conversion requested hereby the Agent shall receive written notice to the
contrary from the Borrower, each matter certified to herein shall be deemed to
be certified at the date of such continuation or conversion as if then made.
The Borrower has caused this Continuation/Conversion Notice to be executed
and delivered, and the certification and warranties contained herein to be made,
by its Authorized Officer this __day of __________, 200_.
NASCO INTERNATIONAL, INC.
By:_____________________________________
Title:
Exhibit C-2
EXHIBIT D
[COPY OF EXECUTED PLEDGE AGREEMENT TO BE ATTACHED]
Exhibit D-1
EXHIBIT E
[COPY OF EXECUTED SECURITY AGREEMENT TO BE ATTACHED]
Exhibit E-1
EXHIBIT F
FORM OF OPINION OF COUNSEL
__________, 2001
Bank of America, N.A.
as Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-and-
The Lenders from time
to time parties to the
Credit Agreement referred
to below.
Re: Amended and Restated Credit Agreement (Five Year) (herein referred to as
the "Credit Agreement (Five Year)") among Nasco International, Inc., a
---------------------------
Wisconsin corporation (the "Borrower"), the financial institutions from
--------
time to time parties thereto (the "Lenders"), Bank One, Wisconsin, as
-------
documentation agent and Bank of America, N.A., as administrative agent for
the Lenders (in such capacity, the "Five Year Agreement Agent") and the
-------------------------
Amended and Restated Credit Agreement (364 Days) (herein referred to as the
----------------
"Credit Agreement (364 Days) and together with the Credit Agreement (Five
Years) as the "Credit Agreements") among the Borrower, the financial
-----------------
institutions from time to time parties thereto, Bank One, Wisconsin, as
documentation agent and Bank of America, N.A. as administrative agent (in
such capacity, the "364 Day Agent" and in both its capacities as the Five
Year Agent and the 364 Day Agent, the "Agent").
-----
Ladies and Gentlemen:
I am the General Counsel of the Borrower and this letter is being furnished
to you as a condition to the occurrence on the date hereof of the Effective
Dates (as defined in the Credit Agreements).
I have examined executed counterparts of (a) the Credit Agreements, (b) the
Notes delivered on the Effective Date to the Agent for the account of Bank One,
Wisconsin and Bank of America, N.A. under the Credit Agreements and (c)
originals or copies certified to my satisfaction of all such corporate records
of the Borrower and agreements and other instruments and certificates of public
officials and officers and representatives of the Borrower, and I have made such
other investigations, reviewed such other documents and considered such
questions of
Exhibit F-1
law, as in each case I have deemed necessary or appropriate in connection with
the opinions hereinafter expressed.
Based on the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the State of Wisconsin and is duly
qualified to do business and in good standing as a foreign corporation
in each jurisdiction where the nature of its business makes such
qualification necessary and where the failure to so qualify might have
a Materially Adverse Effect (as defined in each Credit Agreement).
2. The Borrower has full power, authority and legal right to conduct its
business substantially as presently conducted by it and to own its
properties, to execute and deliver the Credit Agreements and the
Notes, to borrow under the Credit Agreements, and to perform and
observe its obligations under, and the terms and provisions of, the
Credit Agreements.
3. The execution and delivery by the Borrower of the Credit Agreements
and the Notes and the performance and observance by it of its
obligations under, and the terms and provisions of, and the borrowings
by it under and the grant of the security interests and other Liens
(as defined in each Credit Agreement) under, the Credit Agreements and
the Notes, have been duly authorized by all necessary corporate
action, require no governmental registrations, filings, consents or
approvals, and do not violate or contravene or require any consent
under (i) any provision of the certificate of incorporation or by-laws
of the Borrower, (ii) any law or governmental regulation, (iii) any
order or decree of any court or governmental agency, or (iv) any
indenture, agreement or other instrument, in each case to which the
Borrower is a party or which is binding upon any of its properties,
and will not result in the creation or imposition of any security
interest in or other Lien on any of its properties pursuant to the
provisions of any agreement (excluding, however, the Credit Agreements
and any instrument executed pursuant thereto) or other instrument
binding upon or applicable to it.
4. The Credit Agreements and the Notes have been duly executed and
delivered on behalf of the Borrower, and the Credit Agreements and the
Notes constitute the legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their
respective terms, subject, as to enforcement only, to bankruptcy,
insolvency, reorganization, moratorium or similar laws at the time in
effect affecting the enforceability of rights of creditors generally.
5. Neither the Borrower nor any Significant Subsidiary (as defined in
each Credit Agreement) is in default (including after giving effect to
the execution and delivery of the Credit Agreements and the making of
the initial Loans and the consummation of the other transactions
contemplated therein) under any agreement or instrument governing any
Indebtedness which would cause an
Exhibit F-2
Event of Default under Section 8.1.5 of either Credit Agreement or is
in default under any law or governmental regulation or court decree or
order the default under which would have a Materially Adverse Effect,
nor am I aware of any facts or circumstances which would give rise to
any such default.
6. No litigation, labor controversy, arbitration or governmental
investigation or proceeding of the character referred to in Section
6.7 of either Credit Agreement is pending, or, to the best of my
knowledge (after due inquiry), threatened.
I am a member of the Bar of the State of New York and I do not express any
opinions herein concerning any laws other than the State of New York. I note
that the Loan Documents are governed by Illinois law. For the purpose of the
opinion set forth in paragraph 4, however, I have assumed that New York law was
applicable.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Exhibit F-3
EXHIBIT G
FORM OF LENDER ASSIGNMENT AGREEMENT
To: Nasco International, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
To: Bank of America, N.A., as Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
NASCO INTERNATIONAL, INC.
------------------------
Ladies and Gentlemen:
We refer to clause (b) of Section 10.11.1 of the Amended and Restated
Credit Agreement (364 Days), dated as of May 29, 2001 (together with all
amendments and other modifications, if any, from time to time thereafter made
thereto, the "Credit Agreement"), among Nasco International, Inc., a Wisconsin
----------------
corporation (the "Borrower"), the various financial institutions which are, or
--------
shall from time to time become, parties thereto (the "Lenders"), Bank One,
-------
Wisconsin as documentation agent and Bank of America, N.A. as administrative
agent (in such capacity, the "Agent") for the Lenders. Unless otherwise defined
-----
herein or the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.
This agreement is delivered to you pursuant to clause (b) of Section
10.11.1 of the Credit Agreement and also constitutes notice to each of you,
pursuant to Section 10.11.1 of the Credit Agreement, of the assignment and
delegation to _____________________ (the "Assignee") of __% of the Loans and
--------
Commitment of _______________ (the "Assignor") outstanding under the Credit
--------
Agreement on the date hereof and of all related rights and obligations under the
Credit Agreement and the other Loan Documents. After giving effect to the
foregoing assignment and delegation, the Assignor's and the Assignee's
Percentages for the purposes of the Credit Agreement are set forth opposite such
Person's name on the signature pages hereof.
[Add paragraph dealing with accrued interest and any fees with respect to
Loans assigned.]
The Assignee hereby acknowledges and confirms that it has received and
reviewed to its satisfaction a copy of the Credit Agreement and the exhibits
related thereto, together with copies of the documents which were required to be
delivered under the Credit Agreement as a condition to the making of the Loans
thereunder. The Assignee further confirms and agrees that in becoming a Lender
and in making its Commitment and Loans under the Credit Agreement, such actions
have and will be made without recourse to, or representation or warranty by, the
Agent or
Exhibit G-1
the Assignor, and expressly confirms for the benefit of the Agent each of the
provisions set forth in Article IX of the Credit Agreement.
Except as otherwise provided in the Credit Agreement, effective as of the
date of acceptance hereof by the Agent
(a) the Assignee
(i) shall be deemed automatically to have become a party to the
Credit Agreement, have all the rights and obligations of a "Lender"
under the Credit Agreement and the other Loan Documents as if it were
an original signatory thereto to the extent specified in the second
paragraph hereof; and
(ii) agrees to be bound by the terms and conditions set forth in
the Credit Agreement and the other Loan Documents as if it were an
original signatory thereto; and
(b) the Assignor shall be released from its obligations under the
Credit Agreement and the other Loan Documents to the extent specified in
the second paragraph hereof.
The Assignor and the Assignee hereby agree that the [Assignor] [Assignee]
will pay to the Agent the processing fee referred to in Section 10.11.1 of the
Credit Agreement upon the delivery hereof.
The Assignee hereby advises each of you of the following administrative
details with respect to the assigned Loans and Commitment and requests the Agent
to acknowledge receipt of this document:
(A) Address for Notices:
Domestic Office
: Address:
Attention:
Telephone:
Facsimile:
Eurodollar Office
Address:
Attention:
Telephone:
Exhibit G-2
Facsimile:
(B) Payment Instructions:
The Assignee agrees to furnish the tax form required by the last paragraph
of Section 4.6. (if so required) of the Credit Agreement no later than the date
of acceptance hereof by the Agent.
Exhibit G-3
This Agreement may be executed by the Assignor and Assignee and accepted by
the Agent in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement, and shall be governed by the internal
laws of the State of Illinois.
Adjusted Percentage [ASSIGNOR]
-------------------
Commitment ______% By:_______________________________
and Loans: Title:
Adjusted Percentage [ASSIGNEE]
-------------------
Commitment ______% By:_______________________________
and Loans: Title:
Accepted and Acknowledged
this ___ day of ________, 200_
Bank of America, N.A. as Agent
By: _____________________________
Title:___________________________
Exhibit G-4
EXHIBIT H
CONFIRMATION
Dated as of _______ ___, 2001
To: Bank of America, N.A., individually and as administrative agent (in such
capacity, the "Administrative Agent"), and the other financial institutions
party to the Restated Credit Agreement referred to below
Please refer to the following:
(a) the Amended and Restated Credit Agreement dated as of the date hereof
(the "Restated Credit Agreement") among NASCO International, Inc. (the
"Borrower"), certain lenders, Bank One, Wisconsin, as documentation agent and
the Agent;
(b) the Pledge Agreement dated as of March 31, 2000 (as amended, the
"Pledge Agreement") between Borrower and the Agent;
(c) the Security Agreement dated as of March 31, 2000 (as amended, the
"Security Agreement") between the Borrower and the Agreement;
(d) the Original Mortgage dated as of June 25, 1992 executed by the
Borrower in favor of the Agent; and
(e) the Modesto Mortgage dated as of August 5, 1997 executed by the
Borrower in favor of the Agent.
Each document referred to in items (b) through (e) above is called a
-------- -
"Credit Document". Capitalized terms used but not defined herein shall have the
---------------
meanings set forth in the Restated Credit Agreement;
The Borrower hereby confirms to the Lenders (as defined in the Restated
Credit Agreement) and the Agent that each Credit Document to which the Borrower
is a party continues in full force and effect on the date hereof after giving
effect to this Confirmation and is the legal, valid and binding obligation of
the Borrower, enforceable against the Borrower in accordance with its terms.
Exhibit H-1
IN WITNESS WHEREOF, the Borrower has executed this Confirmation to be duly
executed and delivered by its officer thereunto duly authorized as the date
first above written.
NASCO INTERNATIONAL, INC.
By:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Financial Officer
copy to: Geneve Corporation
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Telecopier No. ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
Accepted and Agreed as of ___________, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, N.A.
By: _______________________________
Title:_____________________________