Amended and Restated
Multicurrency Revolving Credit Agreement
dated as of November 30, 1995
by and among
United States Filter Corporation,
its Subsidiaries listed on Schedule 1 hereto,
(the "Borrowers"),
The First National Bank of Boston,
First Interstate Bank of California,
ABN Amro Bank N.V.,
Bank of America Illinois,
The Bank of California, N.A.,
The Bank of New York,
Banque Paribas,
NatWest Bank N.A.
and
Union Bank
(the "Lenders"),
First Interstate Bank of California
and
ABN Amro Bank N.V.
(the "Co-Agents"),
and
The First National Bank of Boston,
as Managing Agent
TABLE OF CONTENTS
Page
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(S)1. DEFINITIONS; RULES OF INTERPRETATION.............................. 2
(S)2. REVOLVING CREDIT LOANS............................................ 16
(S)2.1. Commitment to Lend....................................... 16
(S)2.2. Reduction of Revolving Credit Commitment................. 16
(S)2.3. Requests for Revolving Credit Loans...................... 17
(S)2.4. Election of Eurocurrency Rate; Notice of Election;
Interest Periods; Minimum Amounts........................ 17
(S)3. LETTERS OF CREDIT................................................. 18
(S)3.1. Letter of Credit Issuance................................ 18
(S)3.2. Reimbursement Obligation of the Borrowers................ 18
(S)3.3. Letter of Credit Payments................................ 19
(S)3.4. Obligations Absolute..................................... 19
(S)3.5. Reliance by Agent........................................ 20
(S)3.6. Letter of Credit Fee..................................... 20
(S)3.7 Reimbursement Obligations of Lenders..................... 20
(S)4. THE MULTICURRENCY FACILITY........................................ 21
(S)4.1. Commitment to Lend....................................... 21
(S)4.2. Reduction of Multicurrency Commitment.................... 21
(S)4.3. Requests for Multicurrency Loans......................... 22
(S)4.4 Optional Currencies...................................... 22
(S)5. PROVISIONS RELATING TO ALL LOANS.................................. 23
(S)5.1. The Notes................................................ 23
(S)5.2. Maturity of the Loans.................................... 23
(S)5.3. Funds for Loans.......................................... 23
(S)5.4. Interest on Loans........................................ 24
(S)5.5. Interest on Overdue Amounts.............................. 25
(S)5.6. Interest Limitation...................................... 25
(S)5.7. Optional Repayments...................................... 25
(S)5.8. Mandatory Repayments..................................... 26
(S)5.9. Application of Repayments................................ 27
(S)5.10. Mandatory Reduction of Total Commitment.................. 27
(S)5.11. Commitment Fees.......................................... 27
(S)5.12. Payments................................................. 27
(S)5.13. Computations............................................. 29
(S)5.14. Additional Costs, Etc.................................... 29
(S)5.15. Capital Adequacy......................................... 31
(S)5.16. Eurocurrency Indemnity................................... 31
(S)5.17. Illegality; Inability to Determine Eurocurrency Rate..... 31
(S)5.18. Concerning Joint and Several Liability of the Borrowers.. 32
(S)5.19. Representations and Warranties upon Loan Request......... 35
(S)5.20. New Borrowers............................................ 36
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Page
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(S)5.21. Up Front Fee............................................. 36
(S)6. REPRESENTATIONS AND WARRANTIES.................................... 36
(S)6.1. Corporate Authority....................................... 36
(a) Incorporation; Good Standing.......................... 36
(b) Authorization......................................... 36
(c) Enforceability........................................ 37
(S)6.2. Governmental Approvals.................................... 37
(S)6.3. Title to Properties; Leases............................... 37
(S)6.4. Financial Statements; Solvency............................ 37
(S)6.5. No Material Changes, Etc.................................. 38
(S)6.6. Franchises, Patents, Copyrights, Etc...................... 38
(S)6.7. Litigation................................................ 38
(S)6.8. No Materially Adverse Contracts, Etc...................... 38
(S)6.9. Compliance With Other Instruments, Laws, Etc.............. 38
(S)6.10. Tax Status............................................... 39
(S)6.11. No Event of Default...................................... 39
(S)6.12. Holding Company and Investment Company Acts.............. 39
(S)6.13. Absence of Financing Statements, Etc..................... 39
(S)6.14. Certain Transactions..................................... 39
(S)6.15. Employee Benefit Plans................................... 40
(a) In General........................................... 40
(b) Terminability of Welfare Plans....................... 40
(c) Guaranteed Pension Plans............................. 40
(d) Multiemployer Plans.................................. 40
(S)6.16. Use of Proceeds.......................................... 40
(S)6.17. Environmental Compliance................................. 40
(S)6.18. Perfection of Security Interests......................... 42
(S)6.19. True Copies of Charter and Other Documents............... 42
(S)6.20. Subsidiaries............................................. 42
(S)7. AFFIRMATIVE COVENANTS OF THE BORROWERS............................ 42
(S)7.1. Punctual Payment......................................... 42
(S)7.2. Maintenance of Office.................................... 42
(S)7.3. Records and Accounts..................................... 42
(S)7.4. Financial Statements, Certificates and Information....... 43
(S)7.5. Corporate Existence and Conduct of Business.............. 44
(S)7.6. Maintenance of Properties................................ 44
(S)7.7. Insurance................................................ 44
(S)7.8. Taxes.................................................... 45
(S)7.9. Inspection of Properties, Books, and Contracts........... 45
(S)7.10. Compliance with Laws, Contracts, Licenses and Permits.... 45
(S)7.11. Further Assurances....................................... 45
(S)7.12. Notice of Potential Claims or Litigation................. 46
(S)7.13. Environmental Indemnification............................ 46
(S)7.14. Notice of Certain Events Concerning Insurance and
Environmental Claims..................................... 46
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Page
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(S)7.15. Notice of Default........................................ 47
(S)7.16. Ownership of Borrowers................................... 47
(S)8. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS....................... 47
(S)8.1. Restrictions on Indebtedness............................. 47
(S)8.2. Restrictions on Liens.................................... 49
(S)8.3. Restrictions on Investments.............................. 51
(S)8.4. Mergers, Consolidations, Sales........................... 51
(S)8.5. Sale and Leaseback....................................... 52
(S)8.6. Restricted Distributions and Redemptions................. 52
(S)8.7. Employee Benefit Plans................................... 53
(S)8.8. Subordinated Debt; Smogless Note......................... 53
(S)8.9. Negative Pledges......................................... 54
(S)9. FINANCIAL COVENANTS............................................... 54
(S)9.1. Current Ratio............................................ 54
(S)9.2. Leverage Ratio........................................... 54
(S)9.3. Interest Coverage Ratio.................................. 54
(S)9.4. Profitable Operations.................................... 55
(S)9.5. Debt Service............................................. 55
(S)10. CLOSING CONDITIONS............................................... 55
(S)10.1. Representations and Warranties........................... 55
(S)10.2. Performance; No Default.................................. 55
(S)10.3. Corporate Action......................................... 55
(S)10.4. Loan Documents, Etc...................................... 56
(S)10.5. Certified Copies of Charter Documents.................... 56
(S)10.6. Incumbency Certificate................................... 56
(S)10.7. Validity of Liens........................................ 56
(S)10.8. Payment of Fees and Interest............................. 56
(S)10.9. Financial Statements..................................... 56
(S)10.10. Opinions of Counsel..................................... 56
(S)10.11. Lien Searches........................................... 57
(S)10.12. Environmental Reports................................... 57
(S)11. CONDITIONS OF ALL LOANS.......................................... 57
(S)11.1. Representations True..................................... 57
(S)11.2. Performance; No Default or Event of Default.............. 57
(S)11.3. No Legal Impediment...................................... 57
(S)11.4. Governmental Regulation.................................. 58
(S)11.5. Proceedings and Documents................................ 58
(S)12. EVENTS OF DEFAULT; ACCELERATION; TERMINATION
OF COMMITMENTS; REMEDIES......................................... 58
(S)12.1 Events of Default and Acceleration....................... 58
(S)12.2. Termination of Commitments............................... 60
(S)12.3. Remedies................................................. 60
(S)13. COLLATERAL SECURITY.............................................. 61
(S)14. SETOFF........................................................... 61
(S)15. EXPENSES......................................................... 61
(S)16. THE AGENTS....................................................... 62
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Page
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(S)16.1 Authorization........................................... 62
(S)16.2 Employees and Agents.................................... 62
(S)16.3 No Liability............................................ 62
(S)16.4 No Representations...................................... 62
(S)16.5 Payments................................................ 63
(S)16.6 Holders of Notes........................................ 64
(S)16.7 Indemnity............................................... 64
(S)16.8 Agents as Lenders....................................... 64
(S)16.9 Resignation............................................. 64
(S)16.10 Certain Intercreditor Provisions........................ 65
(S)17. INDEMNIFICATION.................................................. 65
(S)18. SURVIVAL OF COVENANTS, ETC....................................... 66
(S)19. ASSIGNMENT AND PARTICIPATION..................................... 66
(S)19.1 Conditions to Assignment by Lenders..................... 66
(S)19.2 Certain Representations and Warranties;
Limitations; Covenants.................................. 67
(S)19.3 Register................................................ 68
(S)19.4 New Notes............................................... 68
(S)19.5 Participations.......................................... 68
(S)19.6 Disclosure.............................................. 69
(S)19.7 Assignee or Participant Affiliated with the Borrowers... 69
(S)19.8 Miscellaneous Assignment Provisions..................... 69
(S)19.9 Assignment by Borrowers................................. 70
(S)20. PARTIES IN INTEREST.............................................. 70
(S)21. NOTICES, ETC..................................................... 70
(S)22. MISCELLANEOUS.................................................... 71
(S)23. ENTIRE AGREEMENT, ETC............................................ 71
(S)24. WAIVER OF JURY TRIAL............................................. 71
(S)25. SEVERABILITY..................................................... 71
(S)26. GOVERNING LAW.................................................... 72
(S)27. CONSENTS, AMENDMENTS, WAIVERS, ETC............................... 72
AMENDED AND RESTATED
--------------------
MULTICURRENCY REVOLVING
-----------------------
CREDIT AGREEMENT
----------------
This AMENDED AND RESTATED MULTICURRENCY REVOLVING CREDIT AGREEMENT is made
as of November 30, 1995 among UNITED STATES FILTER CORPORATION, a Delaware
corporation with its chief executive office at ▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Parent"), the Subsidiaries of the
Parent other than the Excluded Subsidiaries, each as herein defined (the Parent
and such Subsidiaries other than the Excluded Subsidiaries herein referred to
collectively as the "Borrowers" and, individually, as a "Borrower"), THE FIRST
NATIONAL BANK OF BOSTON ("FNBB"), a national banking association having its
principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
FIRST INTERSTATE BANK OF CALIFORNIA ("First Interstate"), ABN AMRO BANK N.V.
("ABN"), BANK OF AMERICA ILLINOIS ("BAI"), THE BANK OF CALIFORNIA, N.A. ("BOC"),
THE BANK OF NEW YORK ("BNY"), BANQUE PARIBAS ("Paribas"), NATWEST BANK N.A.
("NatWest") and UNION BANK ("Union") (such financial institutions and any
financial institutions which become parties hereto in accordance with (S)19
hereof are collectively referred to herein as the "Lenders" and individually as
a "Lender"), FNBB, as Administrative and Managing Agent for the Lenders (in such
capacity, the "Managing Agent"), and First Interstate and ABN as Co-Agents for
the Lenders (the "Co-Agents" and, collectively with the Managing Agent, the
"Agents").
RECITALS
--------
WHEREAS, pursuant to a Revolving Credit and Term Loan Agreement, dated as
of September 20, 1993, which was amended and restated in its entirety by the
Multicurrency Revolving Credit Agreement dated as of March 31, 1995 (as amended
and in effect as of the date hereof, the "Original Credit Agreement"), among the
Parent, certain Subsidiaries of the Parent, First Interstate and FNBB
(individually and as Agent), FNBB and First Interstate have made loans and
issued letters of credit to the Parent and certain of the Parent's Subsidiaries
(the "Existing Loans");
WHEREAS, the Borrowers, the Lenders and the Agents desire to amend and
restate the Original Credit Agreement to modify the terms and structure of the
Existing Loans, to increase the amount which the Lenders are committed to lend
to the Borrowers, to modify certain financial covenants, and to join ABN, BAI,
BOC, BNY, Paribas, NatWest and Union and certain Subsidiaries of the Parent as
parties to this Agreement; and
NOW THEREFORE, subject to the satisfaction of the conditions set forth in
(S)10 hereof, the Borrowers, the Lenders and the Agents hereby agree that the
Original Credit Agreement is hereby amended and restated in its entirety as set
forth herein.
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(S)1. DEFINITIONS: RULES OF INTERPRETATION.
-------------------------------------
(S)1.1. Definitions. The following terms shall have the meanings set
-----------
forth in this (S)1 or elsewhere in the provisions of this Agreement referred to
below:
ABN. See Preamble.
---
Accountants. See (S)7.4(a).
-----------
Affiliate. Any Person that would be considered to be an affiliate of any
---------
Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if such Borrower were
issuing securities.
Agents. See Preamble.
------
Agreement. This Amended and Restated Multicurrency Revolving Credit
---------
Agreement, including the Exhibits and Schedules hereto, as amended from time to
time.
Applicable Commitment Fee. The applicable Commitment Fee set forth in the
-------------------------
following table:
APPLICABLE
LEVERAGE RATIO COMMITMENT FEE
less than 2.50:1 0.25% per annum
greater than or equal to 2.50:1 but less than 0.30% per annum
3.00:1
greater than or equal to 3.00:1 but less than 0.35% per annum
3.50:1
greater than or equal to 3.50:1 0.375% per annum
The effective date of a change in the Applicable Commitment Fee shall be the
earlier of (a) forty-five (45) days after the end of a fiscal quarter, or (b)
the first day after receipt by the Lenders of financial statements delivered
pursuant to (S)7.4(a) or (b) hereof which indicate a change in the Leverage
Ratio and in the Applicable Commitment Fee in accordance with the above table.
Notwithstanding the foregoing, until receipt by the Lenders of financial
statements delivered pursuant to (S)7.4(a) or (b) hereof for the fiscal quarter
ended March 31, 1996, the Applicable Commitment Fee shall be 0.3% per annum. If
at the time of calculation of the Commitment Fee the most recent financial
statements required to be delivered pursuant to (S)7.4(a) or (b) hereof have not
been delivered, the Applicable Commitment Fee shall be 0.375, subject to
adjustment upon actual receipt of such financial statements.
Applicable Laws. See (S)7.10.
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Applicable L/C Fee. The applicable rate per annum of fees for Letters of
------------------
Credit, as set forth in the following table:
Applicable L/C Fee for Applicable L/C Fee for
Performance Letters all other Letters of
Leverage Ratio of Credit Credit
Less than 2.00:1 0.25% 0.75%
greater than or equal to 2.00:1 0.5% 1%
but less than 2.50:1
greater than or equal to 2.50:1 0.75% 1.25%
but less than 3.00:1
greater than or equal to 3.00:1 0.875% 1.375%
but less than 3.50:1
greater than or equal to 3.50:1 1.25% 1.75%
The effective date of a change in the Applicable L/C Fee shall be the first day
after receipt by the Lenders of financial statements delivered pursuant to
(S)7.4(a) or (b) hereof which indicate a change in the Leverage Ratio and in the
Applicable L/C Fee in accordance with the above table. Notwithstanding the
foregoing, until receipt by the Lenders of financial statements delivered
pursuant to (S)7.4(a) or (b) hereof for the fiscal quarter ended March 31, 1996,
the Applicable L/C Fee shall be 0.75% per annum for all Performance Letters of
Credit and 1.25% per annum for all other Letters of Credit. If at any time the
financial statements required to be delivered pursuant to (S)7.4(a) or (b)
hereof are not delivered within the time periods specified in such subsections,
the Applicable L/C Fee shall be 1.75% with respect to any Letter of Credit
issued after the date on which such financial statements were required to be
delivered but before actual receipt of such financial statements, subject to
adjustment upon actual receipt of such financial statements.
Applicable Margin. The applicable interest rate margin per annum set forth
-----------------
in the following table:
Leverage
Ratio Applicable Margin
less than 2.00:1 0.75%
greater than or equal to
2.00: 1, but less than 2.50:1 1.00%
greater than or equal to
2.50:1 but less than 3.00:1 1.25%
greater than or equal to
3.00: 1, but less than 3.50:1 1.375%
greater than or equal to
3.50:1 1.75%
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Any change in the Applicable Margin shall become effective on the first day
of each Interest Period which begins three (3) or more days after receipt by the
Lenders of financial statements delivered pursuant to (S)7.4(a) or (b) hereof
which indicate a change in the Leverage Ratio and in the Applicable Margin in
accordance with the above table. Notwithstanding the foregoing, until receipt by
the Lenders of financial statements delivered pursuant to (S)7.4(a) or (b)
hereof for the fiscal quarter ended March 31, 1996, the Applicable Margin shall
be 1.25%. If at any time the financial statements required to be delivered
pursuant to (S)7.4(a) or (b) hereof are not delivered within the time periods
specified in such subsections, the Applicable Margin shall be 1.75% with respect
to any Eurocurrency Loan requested on or after the date on which such financial
statements were required to be delivered but before the time of actual receipt
of such financial statements.
Assignment and Acceptance. See (S)19.1
-------------------------
Balance Sheet Date. March 31, 1995.
------------------
Base Rate. The higher of (a) the rate per annum (rounded upward, if
-----------
necessary, to the next higher 1/100 of 1%) equal to the annual rate of interest
announced from time to time by the Managing Agent at its head office in Boston,
Massachusetts, as its "Base Rate" or (b) one-half percent (1/2%) above the
overnight federal funds effective rate, as published by the Board of Governors
of the Federal Reserve System as in effect from time to time.
Base Rate Loans. Loans bearing interest by reference to the Base Rate.
---------------
Borrowers. See Preamble.
---------
Business Day. Any day on which commercial banking institutions in Boston,
------------
Massachusetts, New York, New York, and in Los Angeles, California are open for
the transaction of banking business.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
--------------
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and goodwill); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with GAAP.
Capital Expenditures. Amounts paid or indebtedness incurred by any Person
--------------------
in connection with the purchase or lease by such Person of Capital Assets that
would be required to be capitalized and shown on the balance sheet of such
Person in accordance with GAAP (excluding any Capital Assets associated with a
distinct revenue stream from a customer contract).
-5-
Certified. With respect to the financial statements of any Person, such
---------
statements as audited by a firm of independent auditors, whose report expresses
the opinion, without qualification, that such financial statements present
fairly the financial position of such Person, as of and on the date therein
specified.
Change of Control. (a) The acquisition by any Person (including any
-----------------
syndicate or group deemed to be a "person" under Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") or any
successor provision to either of the foregoing) of beneficial ownership,
directly or indirectly, of shares of capital stock of the Parent entitling such
person to exercise more than 50% of the total voting power of all voting shares
of the Parent; or (b) any consolidation of the Parent with, or merger of the
Parent into, any other person, any merger of another Person into the Parent, or
any sale or transfer of all or substantially all of the assets of the Parent to
another Person other than (i) a consolidation or merger which does not result in
any reclassification, conversion, exchange or cancellation of outstanding shares
of capital stock other than shares of capital stock owned by any of the parties
to the consolidation or merger and in which the consolidated net worth of the
surviving corporation immediately after the transaction equals or exceeds the
Consolidated Net Worth of the Parent immediately prior to such transaction, or
(ii) a merger which is effected solely to change the jurisdiction of
incorporation of the Parent or (iii) any consolidation with or merger of the
Parent into a Subsidiary of the Parent with the prior written consent of the
Lenders, or any sale or transfer by the Parent with the written consent of the
Lenders of all or substantially all of its assets to one or more of its wholly
owned Subsidiaries in any one transaction or a series of transactions, provided
that in each case set forth in clause (b) hereof that the resulting corporation
or each such Subsidiary assumes or guarantees the obligations of the Parent
under this Agreement and the FNBB Agreement and the consolidated net worth of
the surviving or acquiring corporation in any such consolidation, merger or sale
of assets immediately after the consummation of such transaction equals or
exceeds the consolidated net worth of the Parent immediately prior to such
transaction; or (c) any Change of Control as defined in the Subordinated
Indenture or the Second Subordinated Indenture (which definitions are
incorporated herein by reference as if expressly set forth herein).
Co-Agents. See Preamble.
---------
CFO. See (S)7.4(b).
---
Code. The Internal Revenue Code of 1986, as amended and in effect from time
----
to time.
Collateral. The shares of the Domestic Borrowers which are Subsidiaries of
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the Parent (other than Excluded Subsidiaries) that are or are intended to be
subject to the security interests created by the Pledge Agreement.
Commitment. With respect to each Lender, the amount set forth on Schedule 2
----------
hereto as the amount of such Lender's commitment to make Loans to, and to
participate in the
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issuance, extension and renewal of Letters of Credit for the account of, the
Borrowers, as the same may be reduced from time to time or adjusted from time to
time in accordance with (S)19 hereof; or if such commitment is terminated
pursuant to the provisions hereof, zero.
Commitment Fee. See (S)5.11.
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Commitment Percentage. With respect to each Lender, the percentage set
---------------------
forth on Schedule 2 hereto as such Lender's percentage of the aggregate
Commitments of all of the Lenders, as such percentage may be adjusted from time
to time in accordance with (S)19 hereof.
Certificate. See (S)7.4(c).
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Consolidated or consolidated. With reference to any term defined herein,
----------------------------
shall mean that term as applied to the accounts of the Borrowers, consolidated
in accordance with GAAP, after eliminating all intercompany items.
Consolidated Current Assets. All assets of the Borrowers on a consolidated
---------------------------
basis that, in accordance with GAAP, are properly classified as current assets,
provided that notes shall be included only if payable on demand or within one
(1) year from the date as of which Consolidated Current Assets are to be
determined and if not directly or indirectly renewable or extendible at the
option of the debtors, by their terms, or by the terms of any instrument or
agreement relating thereto, beyond such year, and such notes and accounts
receivable shall be taken at their face value less reserves determined to be
sufficient in accordance with GAAP.
Consolidated Current Liabilities. All liabilities of the Borrowers on a
--------------------------------
consolidated basis maturing on demand or within one (1) year from the date as of
which Consolidated Current Liabilities are to be determined (but, until December
31, 1998, excluding the Loans), and such other liabilities as may properly be
classified as current liabilities in accordance with GAAP.
Consolidated Earnings Before Interest and Taxes or EBIT. For any period,
-------------------------------------------------------
the Consolidated Net Income (or Deficit) of the Borrowers determined in
accordance with GAAP, plus (a) interest expense, (b) income taxes and (c)
extraordinary non-cash losses for such period, and minus (d) extraordinary gains
------
for such period, all as determined in accordance with GAAP.
Consolidated Earnings Before Interest, Taxes, Depreciation, and
---------------------------------------------------------------
Amortization, or EBITDA. For any period, the Consolidated Net Income (or
-----------------------
Deficit) of the Borrowers determined in accordance with GAAP, plus (a) interest
-----
expense, (b) income taxes, (c) depreciation, (d) amortization and (e)
extraordinary non-cash losses for such period, and minus (f) extraordinary gains
------
for such period, all as determined in accordance with GAAP.
-7-
Consolidated Net Income (or Deficit) or Net Income (or Deficit). The
------------------------------------ -----------------------
consolidated net income (or deficit) of the Borrowers, or the net income or
deficit of any Borrower on an individual basis, determined in accordance with
GAAP.
Consolidated Total Interest Expense. For any period, the aggregate amount
-----------------------------------
of interest required to be paid or accrued by the Borrowers during such period
on all Indebtedness of the Borrowers outstanding during all or any part of such
period, whether such interest was or is required to be reflected as an item of
expense or capitalized, including commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees or expenses in connection with the
borrowing of money.
Default. See (S)12.1.
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Disposal. See "Release."
--------
Distribution. The declaration or payment of any dividend on or in respect
------------
of any shares of any class of capital stock of any Person, other than dividends
payable solely in shares of common stock of such Person; or the purchase,
redemption, or other retirement of any shares of any class of capital stock of
such Person, directly or indirectly through a Subsidiary or otherwise; the
return of capital by any Person to its shareholders as such; or any other
distribution on or in respect of any shares of any class of capital stock of
such Person.
Dollar Equivalent. With respect to any amounts denominated in a currency
-----------------
other than Dollars, the amount of Dollars which would be obtained upon
conversion of such currency into Dollars, converted at the spot rate of
exchange, at or about 11:00 a.m., local time, on the date of determination, of
the Nassau Branch.
Dollars or $. Dollars in lawful currency of the United States of America.
------------
Domestic Borrowers. The Parent and the Subsidiaries of the Parent listed as
------------------
Domestic Borrowers on Schedule 1 hereto.
Domestic L/Cs. Letters of Credit issued at the request of any Domestic
-------------
Borrower pursuant to (S)3.1 hereof.
Drawdown Date. The date on which any Loan is made or is to be made.
-------------
Effective Date. The date on which the conditions precedent set forth in (S)
--------------
10 hereof are satisfied.
Eligible Assignee. Any of (i) a commercial bank, insurance company, or
-----------------
finance company organized under the laws of the United States, or any State
thereof or the District of Columbia, and having total assets in excess of
$1,000,000,000; (ii) a savings and loan association or savings bank organized
under the laws of the United
-8-
States, or any State thereof or the District of Columbia, and having a net worth
of at least $100,000,000, calculated in accordance with GAAP; (iii) a commercial
bank organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the OECD; (iv) the central bank of any country which is a member of
the OECD; and (v) if, but only if, any Event of Default has occurred and is
continuing, any other bank, insurance company, commercial finance company or
other financial institution approved by the Managing Agent, such approval not to
be unreasonably withheld.
Employee Benefit Plan. Any employee benefit plan within the meaning of
---------------------
(S)3(3) of ERISA maintained or contributed to by any Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. All applicable federal, state, provincial, municipal,
------------------
local and foreign laws, principles of common law or civil law, regulations, by-
laws, guidelines and codes, as such laws, principles, regulations, by-laws and
guidelines and codes may be amended from time to time, as well as orders,
decrees, judgments, seizures or injunctions issued, promulgated, approved or
entered thereunder relating to pollution, protection of the environment, or
protection of the public from pollution or employee health and safety,
including, but not limited to the Release or threatened Release of Hazardous
Substances into the environment or otherwise relating to the presence,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances.
EPA. See (S)6.17(b).
---
ERISA. The Employee Retirement Income Security Act of 1974, as amended and
-----
in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer with any
---------------
of the Borrowers under (S)414(b) and (c) of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
----------------------
Pension Plan within the meaning of (S)4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Business Day. Any Business Day on which dealings in foreign
-------------------------
currency and exchange are carried on among banks in Boston, Massachusetts,
Nassau, The Bahamas, Paris, France and London, England.
Eurocurrency Interest Determination Date. For any Interest Period, the date
----------------------------------------
two (2) Eurocurrency Business Days prior to the first day of such Interest
Period.
-9-
Eurocurrency Loans. Loans bearing interest calculated by reference to the
------------------
Eurocurrency Rate.
Eurocurrency Offered Rate. The rate per annum at which deposits of Dollars
-------------------------
or Optional Currency, as applicable, are offered to the Managing Agent by prime
banks in whatever Eurocurrency interbank market may be selected by the Managing
Agent, in its sole discretion, acting in good faith, at or about 11:00 a.m.
local time in such interbank market, on the Eurocurrency Interest Determination
Date for a period equal to the period of such Interest Period in an amount
substantially equal to the principal amount requested to be loaned at or
converted to a rate based on the Eurocurrency Offered Rate. With respect to the
Revolving Credit Loans which will bear interest by reference to the Eurocurrency
Rate, the Managing Agent shall select a Eurodollar market.
Eurocurrency Rate.
-----------------
(a) With respect to Revolving Credit Loans, the rate per annum,
rounded upwards to the nearest 1/16 of 1%, determined by the Managing Agent
with respect to an Interest Period, in accordance with the following
formula:
Eurocurrency Rate = Eurocurrency Offered Rate
-------------------------
1-Reserve Rate
(b) With respect to Multicurrency Loans, the Eurocurrency Rate plus
the cost to the Lenders, expressed as a percentage, of complying with any
law as described in (S)5.14 hereof.
Event of Default. See (S)12.1.
----------------
Excluded Subsidiaries. The Subsidiaries of the Parent listed as Excluded
---------------------
Subsidiaries on Schedule 1 hereto.
Existing Loans. See the Recitals hereto.
--------------
First Interstate. See Preamble.
----------------
FNBB. See Preamble.
----
FNBB Credit Agreement. The Revolving Credit Agreement dated as of the date
---------------------
hereof among the Borrowers and FNBB, as the same may be amended and in effect
from time to time as permitted by the provisions of (S)16.10 hereof.
FNBB Obligations. The obligations of the Borrowers to FNBB and its branch
----------------
offices under the FNBB Credit Agreement, in an aggregate principal amount
(calculating all amounts denominated in Optional Currencies at their Dollar
Equivalent) not to exceed $10,000,000.
-10-
Foreign Borrowers. The Subsidiaries of the Parent listed as Foreign
-----------------
Borrowers on Schedule 1 hereto.
Foreign L/Cs. Letters of Credit issued at the request of any Foreign
------------
Borrower pursuant to (S)3.1 hereof.
Funded Debt. Indebtedness of the Borrowers for borrowed money determined on
-----------
a consolidated basis in accordance with GAAP minus the amount by which the cash
------
and cash equivalents of the Borrowers determined in accordance with GAAP exceeds
$10,000,000.
GAAP. (i) When used in general, GAAP means principles which are (1)
----
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors or successors, in effect for the
fiscal year ended on the Balance Sheet Date and (2) such that a certified public
accountant would, insofar as the use of accounting principles is pertinent, be
in a position to deliver an unqualified opinion as to financial statements in
which such principles have been properly applied; and (ii) when used with
reference to the Borrowers, such principles shall include (to the extent
consistent with such principles) the accounting practice of the Borrowers
reflected in their financial statements for the year ended on the Balance Sheet
Date.
Guaranteed Pension Plan. Any pension benefit plan within the meaning of
-----------------------
(S)3(2) of ERISA maintained or contributed to by any Borrower or any ERISA
Affiliate the benefits of which are guaranteed on termination in full or in part
by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.
Hazardous Substances. Any waste, contaminant, pollutant, hazardous
--------------------
substance, toxic substance, hazardous waste, special waste, industrial substance
or waste, radio-active materials, petroleum or petroleum-derived substance or
waste, or any constituent or combination of any such substance or waste, which
substance, contaminant, pollutant or material or waste is or shall hereafter
become regulated under, governed by, or defined by any Environmental Law.
Indebtedness. All obligations, contingent and otherwise, which in
------------
accordance with GAAP should be classified upon the obligor's balance sheet as
liabilities, or to which reference should be made by footnotes thereto,
including, without limitation, in any event and whether or not so classified:
(i) all debt and similar monetary obligations, whether direct or indirect; (ii)
all liabilities secured by any mortgage, pledge, security interest, lien,
charge, or other encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been assumed;
and (iii) all guarantees, endorsements and other contingent obligations whether
direct or indirect in respect of Indebtedness of others, including any
obligation to supply funds to or in any manner to invest in, directly or
indirectly, the debtor, to purchase Indebtedness, or to assure the owner of
Indebtedness against loss, through an agreement to purchase goods, supplies, or
services for the purpose of enabling the
-11-
debtor to make payment of the Indebtedness held by such owner or otherwise,
obligations with respect to interest rate protection agreements, and the
obligations to reimburse the issuer of any letters of credit or guaranties.
Interest Period. With respect to each Eurocurrency Loan:
---------------
(a) initially, the period commencing on the date of a conversion from a
Base Rate Loan into a Eurocurrency Loan or the making of a Eurocurrency
Loan, and ending one (1), two (2), three (3) or six (6) months thereafter,
as the case may be, as the Borrowers may select; and
(b) thereafter, each subsequent Interest Period shall begin on the last day
of the preceding Interest Period, and end one (1), two (2), three (3) or
six (6) months thereafter, as the case may be, as the Borrowers may select;
provided that any Interest Period which would otherwise end on a day which
is not a Eurocurrency Business Day shall end on the next succeeding
Eurocurrency Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Eurocurrency
Business Day, and provided further that no Interest Period may extend
beyond the Maturity Date.
Investments. All cash expenditures made and all liabilities incurred
-----------
(contingently or otherwise) for the acquisition of stock, all or substantially
all of the assets of, or Indebtedness of, or for loans, advances, capital
contributions or transfers of property to, or in respect of any guaranties (or
other commitments as described under Indebtedness), or obligations of, any
Person. In determining the aggregate amount of Investments outstanding at any
particular time, (i) the amount of any Investment represented by a guaranty
shall be taken at not less than the principal amount of the obligations
guaranteed and still outstanding; (ii) there shall be included as an Investment
all interest accrued with respect to Indebtedness constituting an Investment
unless and until such interest is paid, (iii) there shall be deducted in respect
of each such Investment any amount received as a return of capital (but only by
repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (iv) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (ii) may be deducted when paid; and (v) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
Lenders. See Preamble
-------
Letters of Credit. Letters of Credit issued or to be issued by the Managing
-----------------
Agent under (S)3 hereof for the account of the Borrowers.
-12-
Letter of Credit Applications. Letter of Credit Applications in such form
-----------------------------
as may be agreed upon by the Borrowers and the Managing Agent from time to time
which are entered into pursuant to (S)3 hereof as such Letter of Credit
Applications are amended, varied or supplemented from time to time.
Letter of Credit Participation. See (S)3.7.
------------------------------
Letter of Credit Fee. See (S)3.6.
--------------------
Leverage Ratio. See (S)9.2.
--------------
Loans. The Revolving Credit Loans and the Multicurrency Loans made or to be
-----
made by the Lenders to the Borrowers pursuant to this Agreement.
Loan Documents. Collectively, this Agreement, the Notes, the Letter of
--------------
Credit Applications, and the Security Documents, as each may be amended,
modified, or restated from time to time.
Majority Lenders. Subject to adjustment as set forth in (S)16.10 hereof, as
----------------
of any date, the Lenders holding at least fifty-one percent (51%) of the sum of
(a) the outstanding principal amount of the Loans plus (b) the Maximum Drawing
----
Amount of all outstanding Letters of Credit on such date (calculating all
amounts denominated in Optional Currencies at their Dollar Equivalent); and if
no principal amount or Letters of Credit are outstanding, the Lenders whose
aggregate Commitments constitute fifty-one percent (51%) of the Total
Commitment.
Managing Agent. See Preamble.
--------------
Managing Agent's Head Office. The head office of the Managing Agent located
----------------------------
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Maturity Date. November 30, 1999.
-------------
Maximum Drawing Amount. The maximum aggregate amount (calculating all
----------------------
amounts denominated in any Optional Currency at their Dollar Equivalent) from
time to time that the beneficiaries may draw under outstanding Letters of
Credit.
Multicurrency Commitment. $20,000,000 or the Dollar Equivalent thereof, in
------------------------
the Optional Currencies, as such amount may be reduced pursuant to (S)(S)4.2 and
5.10 hereof.
Multicurrency Loan Request. See (S)4.3.
--------------------------
Multicurrency Loans. Loans made by the Lenders to the Foreign Borrowers
-------------------
pursuant to (S)4.1 hereof.
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Multiemployer Plan. Any multiemployer plan within the meaning of (S)3(37)
------------------
of ERISA maintained or contributed to by any Borrower or any ERISA Affiliate.
Nassau Branch. The Managing Agent's Nassau, The Bahamas, branch office.
-------------
Non-U.S. Lender. See (S)5.12(c).
---------------
Notes. The promissory notes of the Borrowers in favor of each Lender which
-----
is or becomes a party hereto pursuant to the terms hereof, substantially in the
form of Exhibit A hereto.
Obligations. With respect to the Domestic Borrowers, all indebtedness,
-----------
obligations and liabilities of every nature of all of the Borrowers,
collectively, to the Agents and the Lenders arising or incurred under this
Agreement or the other Loan Documents or in respect of Loans made, Letters of
Credit issued and the Notes or other documents or instruments at any time
evidencing any thereof, including, without limitation, all Reimbursement
Obligations, and, with respect to the Foreign Borrowers, all indebtedness,
obligations and liabilities of every nature of all of the Foreign Borrowers,
collectively, to the Agents, the Nassau Branch and the Lenders arising or
incurred under this Agreement or the other Loan Documents or in respect of Loans
made, the Letters of Credit issued and the Notes or other documents or
instruments at any time evidencing any thereof, including, without limitation,
Reimbursement Obligations.
Optional Currency shall mean the currency of Great Britain, Germany,
-----------------
Switzerland, France, Italy, the Netherlands, or Spain which is freely
convertible into Dollars and which is traded on the Nassau inter-bank foreign
currency deposits market.
Optional Credit Agreement. See the Recitals hereto.
-------------------------
Parent. See Preamble.
------
PBGC. The Pension Benefit Guaranty Corporation created by (S)4002 of ERISA
----
and any successor entity or entities having similar responsibilities.
Performance Letter of Credit. A Letter of Credit where the event which
----------------------------
triggers payment is performance-related, such as failure to ship a product or
provide a service, and not financial, such as the failure to pay money, as set
forth in greater detail in the letter dated March 30, 1995 from the Board of
Governors of the Federal Reserve System attached hereto as Exhibit J or in any
applicable directive or letter ruling of the Board of Governors of the Federal
Reserve System issued subsequent thereto.
Permitted Liens. See (S)8.2.
---------------
-14-
Person. Any individual, corporation, partnership, trust, unincorporated
------
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Pledge Agreement. The Second Amended and Restated Pledge Agreement dated as
----------------
of the date hereof, among certain of the Domestic Borrowers and the Managing
Agent for the benefit of the Lenders to secure the Obligations and for the
benefit of FNBB to secure the FNBB Obligations, in the form attached hereto as
Exhibit K.
Preferred Dividends. Distributions permitted by (S)8.6 hereof with respect
-------------------
to the preferred shares of the Parent outstanding as of the Effective Date.
Real Property. The real properties owned or operated by the Borrowers.
-------------
Register. See (S)19.3.
--------
Reimbursement Obligation. The Borrowers' obligation to reimburse the
------------------------
Managing Agent for the benefit of the Lenders on account of any drawing under
any Letter of Credit as provided in (S)3.2.
Release. Shall mean any release, issuance, spill, emission, leaking,
-------
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment or into or out of any property,
including the movement of Hazardous Substances through or in the air, soil,
surface water, ground water, or property other than as permitted by and in
compliance with all Environmental Laws.
Reserve Rate. The highest rate, expressed as a decimal, at which any Lender
------------
would be required to maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System (or any subsequent or similar regulation
relating to such reserve requirements) against "Eurocurrency Liabilities" (as
such term is defined in Regulation D), or against any other category of
liabilities which might be incurred by any Lender to fund Loans bearing interest
based on the Eurocurrency Rate, if such liabilities were outstanding.
Revolving Credit Commitment. $105,000,000, as the same may be reduced
---------------------------
pursuant to (S)(S)2.2 and 5.10 hereof.
Revolving Credit Loan and Letter of Credit Request. See (S)2.3.
--------------------------------------------------
Revolving Credit Loans. Loans made by the Lenders to the Domestic Borrowers
----------------------
pursuant to (S)2.1 hereof.
Second Subordinated Indenture. The indenture dated September 18, 1995 from
-----------------------------
the Parent to State Street Bank & Trust Company, as trustee, with respect to the
convertible
-15-
subordinated debentures of the Parent due 2005, in an aggregate principal amount
of $140,000,000.
Security Documents. The Pledge Agreement, as amended and in effect from
------------------
time to time, and any additional documents evidencing or perfecting the Managing
Agent's lien on the Collateral.
Smogless. USF Smogless S.p.A., a corporation organized under the laws of
--------
Italy.
Smogless Note. Promissory note of Smogless in an aggregate principal amount
-------------
not to exceed $45,000,000 payable to the Parent.
Subordinated Debt. Indebtedness of the Parent owing pursuant to (a) the
-----------------
Subordinated Indenture, and (b) the Second Subordinated Indenture.
Subordinated Indenture. The indenture dated October 19, 1993 from the
----------------------
Parent to State Street Bank & Trust Company, as trustee with respect to the
convertible subordinated debentures of the Parent due 2000, in an aggregate
principal amount of $60,000,000.
Subsidiary. Any corporation, association, trust, or other business entity
----------
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority of the outstanding
capital stock or other interest entitled to vote generally.
Total Commitment. A maximum aggregate principal amount with respect to
----------------
Loans made and the Maximum Drawing Amount of Letters of Credit issued hereunder
not to exceed $125,000,000 (calculating all amounts denominated in Optional
Currencies at their Dollar Equivalent), as the same may be reduced pursuant to
(S)2.2, (S)4.2, or (S)5.10 hereof.
(S)1.2. RULES OF INTERPRETATION.
------------------------
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification
to such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
-16-
(e) Accounting terms capitalized but not otherwise defined herein
have the meanings assigned to them by GAAP applied on a consistent basis by
the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by GAAP, which
terms are defined in the Uniform Commercial Code as in effect in The
Commonwealth of Massachusetts, have the meanings assigned to them therein.
(h) Reference to a particular "(S)" refers to that section of this
Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
(S)2. REVOLVING CREDIT LOANS.
----------------------
(S)2.1. Commitment to Lend. Subject to the terms and conditions set forth
------------------
in this Agreement, each of the Lenders severally agrees to lend to the Domestic
Borrowers, and the Domestic Borrowers may borrow and reborrow from time to time
from the Effective Date until the Maturity Date, upon notice to the Managing
Agent given in accordance with (S)2.3 hereof, such sums in Dollars as are
requested by the Domestic Borrowers up to a maximum aggregate principal amount
outstanding (after giving effect to all amounts requested) at any one time equal
to such Lender's Commitment Percentage of the Revolving Credit Commitment. In no
event shall (a) the aggregate principal outstanding balance of the Revolving
Credit Loans (after giving effect to all amounts requested) plus the Maximum
Drawing Amount of all Domestic L/Cs exceed at any one time the Revolving Credit
Commitment, (b) any Lender be obligated to fund or maintain Revolving Credit
Loans and participate in Domestic L/Cs in excess of such Lender's Commitment
Percentage of the Revolving Credit Commitment, or (c) the aggregate outstanding
principal balance of all Loans plus the Maximum Drawing Amount of all Letters of
Credit exceed at any one time the Total Commitment (in each case calculating all
amounts denominated in Optional Currencies at their Dollar Equivalent). The
Revolving Credit Loans shall be made pro rata in accordance with each Lender's
Commitment Percentage.
(S)2.2. Reduction of Revolving Credit Commitment. The Domestic Borrowers
----------------------------------------
shall have the right at any time and from time to time upon five (5) Business
Days' written notice to the Managing Agent (which shall then give prompt notice
thereof to each of the Lenders) to reduce by $1,000,000 or an integral multiple
thereof or terminate entirely the amount of the unborrowed or unutilized portion
of the Revolving Credit Commitment, provided that the Domestic Borrowers may not
reduce the Revolving Credit Commitment to an amount less than the sum of the
then outstanding Revolving Credit Loans plus the Maximum Drawing Amount of all
Domestic L/Cs and provided further that the Domestic Borrowers may not reduce
the Revolving Credit Commitment to an amount less than $75,000,000 (unless the
Domestic
-17-
Borrowers elect to terminate the Revolving Credit Commitment). Upon the
effective date of any such reduction or termination, the Domestic Borrowers
shall pay to the Managing Agent for the respective accounts of the Lenders the
full amount of any Commitment Fee then accrued on the amount of the reduction.
No reduction of the Revolving Credit Commitment hereunder shall be subject to
reinstatement.
(S)2.3. Requests for Revolving Credit Loans. The Parent, on behalf of
-----------------------------------
itself and the other Domestic Borrowers as their agent, shall give to the
Managing Agent written notice in the form of Exhibit B-1 hereto (or telephonic
notice confirmed by telecopy the same day in the form of Exhibit B-1 hereto) of
each Revolving Credit Loan requested hereunder (a "Revolving Credit Loan and
Letter of Credit Request") not later than 2:00 P.M. (Boston time) (a) one
Business Day prior to the proposed Drawdown Date of any Base Rate Loan, or (b)
three (3) Business Days prior to the Drawdown Date of any Eurocurrency Loan. The
Managing Agent shall promptly notify the Lenders of such notice. Each request
for a Revolving Credit Loan hereunder shall be made in the minimum amount of
$500,000 or a greater integral multiple of $100,000, and shall be irrevocable
and binding on the Domestic Borrowers and shall obligate the Domestic Borrowers
to accept the Revolving Credit Loan requested on the proposed Drawdown Date.
(S)2.4. Election of Eurocurrency Rate; Notice of Election; Interest
------------------------------------------------------------
Periods; Minimum Amounts.
------------------------
(a) With respect to the Revolving Credit Loans, at the Domestic
Borrowers' option, so long as no Default or Event of Default has occurred
and is then continuing, the Domestic Borrowers may (i) elect to convert any
Base Rate Loan or a portion thereof to a Eurocurrency Loan, (ii) at the
time of any request for a Revolving Credit Loan, specify that such
requested Revolving Credit Loan shall be a Eurocurrency Loan, or (iii) upon
expiration of the applicable Interest Period, elect to maintain an existing
Eurocurrency Loan as such, provided that the Domestic Borrowers give timely
notice to the Managing Agent pursuant to (S)2.4(b) hereof. Upon determining
any Eurocurrency Rate, the Managing Agent shall forthwith provide notice
thereof to the Domestic Borrowers and the Lenders, and each such notice to
the Borrowers and the Lenders shall be considered prima facie correct and
binding, absent manifest error.
(b) With respect to the Revolving Credit Loans, three (3) Business
Days prior to the making of any Eurocurrency Loan or the conversion of any
Base Rate Revolving Credit Loan to a Eurocurrency Loan, or, in the case of
an outstanding Eurocurrency Loan, the expiration date of the applicable
Interest Period, the Domestic Borrowers shall give written, telex or
telecopy notice received by the Managing Agent not later than 2:00 P.M.
(Boston time) of their election pursuant to (S)2.4(a) hereof. Each such
notice delivered to the Managing Agent shall specify the aggregate
principal amount of the Revolving Credit Loans to be borrowed or maintained
as or converted to Eurocurrency Loans and the requested duration of the
Interest Period that will be applicable to such Eurocurrency Loan, and
shall be irrevocable and binding upon the
-18-
Domestic Borrowers. If the Domestic Borrowers shall fail to give the
Managing Agent notice of their election hereunder together with all of the
other information required by this (S)2.4(b) with respect to any Revolving
Credit Loan, whether at the end of an Interest Period or otherwise, such
Loan shall be deemed to be a Base Rate Loan.
(c) Notwithstanding anything herein to the contrary, the Domestic
Borrowers may not specify an Interest Period that would extend beyond the
Maturity Date. In no event shall the Domestic Borrowers have more than five
(5) different maturities of Eurocurrency Loans outstanding at any time.
(S)3. LETTERS OF CREDIT.
(S)3.1. Letter of Credit Issuance. Subject to the terms and conditions
-------------------------
hereof and the execution and receipt of a Letter of Credit Application from the
Borrowers at least four (4) Business Days prior to issuance, the Managing Agent
on behalf of the Lenders and in reliance upon the representations and warranties
of the Borrowers contained herein and upon the agreement of the Lenders set
forth in (S)3.7 hereof, will issue Letters of Credit denominated in Dollars or
any Optional Currency in such form as may be requested from time to time by the
Borrowers and agreed to by the Managing Agent (which Letters of Credit may
provide for automatic annual renewals); provided, however, that after giving
effect to such request, (a) the aggregate Maximum Drawing Amount of all Domestic
L/Cs plus the aggregate outstanding principal amount of all Revolving Credit
Loans shall not exceed the Revolving Credit Commitment, (b) the aggregate
Maximum Drawing Amount of all Foreign L/Cs plus the aggregate outstanding
principal amount of all Multicurrency Loans shall not exceed the Multicurrency
Commitment, (c) the aggregate Maximum Drawing Amount of all Letters of Credit
plus the aggregate outstanding principal amount of all Loans shall not exceed
the Total Commitment, (d) the Maximum Drawing Amount of all Domestic L/Cs shall
not exceed seventy-five percent (75%) of the then effective Revolving Credit
Commitment, and (e) the Maximum Drawing Amount of all Foreign L/Cs shall not
exceed seventy-five percent (75%) of the then effective Multicurrency Commitment
(in each case calculating all amounts denominated in Optional Currencies at
their Dollar Equivalent). No Letter of Credit shall have an expiration date
later than thirty (30) days (or, if the Letter of Credit is confirmed by a
confirmer or otherwise provides for one or more nominated Persons, forty-five
(45) days) prior to the Maturity Date. The Borrowers shall not be required to
make requests for Letters of Credit in a minimum amount. All letters of credit
issued pursuant to the Original Credit Agreement and outstanding on the
Effective Date (including, without limitation, those listed on SCHEDULE 3.1
hereto) shall be Letters of Credit under this Agreement. To the extent that the
provisions of any Letter of Credit Application conflict with the provisions of
this Agreement, the provisions of this Agreement shall control.
(S)3.2. Reimbursement Obligation of the Borrowers. In order to induce the
-----------------------------------------
Managing Agent to issue, extend and renew the Letters of Credit, the Domestic
Borrowers (with respect to all Letters of Credit) and the Foreign Borrowers
(with respect to the Foreign L/Cs) hereby agree jointly and severally to
reimburse or pay to the Managing Agent for the benefit of the
-19-
Lenders with respect to each Letter of Credit issued, extended or renewed by the
Managing Agent hereunder as follows:
(a) On each date that any draft presented under any Letter of
Credit is honored by the Managing Agent or the Managing Agent otherwise
makes payment with respect thereto, (i) the amount paid by the Managing
Agent under or with respect to such Letter of Credit, and (ii) the amount
of any taxes (other than income taxes), fees, charges or other costs and
expenses whatsoever incurred by the Managing Agent in connection with any
payment made by the Managing Agent under, or with respect to, such Letter
of Credit.
(b) Each such payment shall be made to the Managing Agent in
accordance with (S)3.3 hereof.
(S)3.3. Letter of Credit Payments. If any draft shall be presented or other
-------------------------
demand for payment shall be made under any Letter of Credit, the Managing Agent
shall notify the Borrowers of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. On the date that such draft is paid or other
payment is made by the Managing Agent, the Managing Agent shall promptly notify
the Borrowers of the amount of any unpaid Reimbursement Obligation. Any
Reimbursement Obligations with respect to Domestic L/Cs which are not paid by
the Domestic Borrowers to the Managing Agent on the date that such draft is paid
or other payment is made by the Managing Agent shall be deemed to be Revolving
Credit Loans for all purposes hereunder and shall bear interest at the Base Rate
until converted in accordance with (S)2.4 hereof. Any Reimbursement Obligations
with respect to Foreign L/Cs which are not paid by the Borrowers to the Managing
Agent on the date that such draft is paid or other payment is made by the
Managing Agent shall bear interest until payment in full (whether before or
after judgment) at the rate specified in specified in (S)5.5 hereof for overdue
amounts. The responsibility of the Managing Agent to the Borrowers and the
Lenders shall be only to determine that all documents (including each draft)
required to be delivered under each Letter of Credit in connection with such
presentment have been delivered and are in conformity in all material respects
with such Letter of Credit.
(S)3.4. Obligations Absolute. The Borrowers' obligations under this (S)3
--------------------
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrowers may have or have had against the Agents, the Lenders or any
beneficiary of a Letter of Credit. The Borrowers further agree with the Agents
and the Lenders that the Agents and the Lenders shall not be responsible for,
and the Borrowers' Reimbursement Obligations under (S)3.2 shall not be affected
by, among other things, (i) any lack of validity or enforceability of any
documents or endorsements thereon; (ii) any amendment or waiver of, or consent
to departure from, any provision of this Agreement or any of the other Loan
Documents; (iii) any statement or any other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect
-20-
(unless the Managing Agent has engaged in any willful misconduct) or any
statement therein being untrue or inaccurate in any respect whatsoever; (iv)
payment by the Managing Agent under any Letter of Credit against presentation of
a draft or certificate which does not comply with the terms of such Letter of
Credit (unless due to the willful misconduct of the Managing Agent); or (v) any
dispute between or among the Borrowers, the beneficiary of any Letter of Credit
or any financing institution or other party to which any Letter of Credit may be
transferred or any claims or defenses whatsoever of the Borrowers, or against
the beneficiary of any Letter of Credit or any such transferee. The Agents and
the Lenders shall not be liable for any error, omission, interruption or delay
in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except to the extent of
their own willful misconduct. The Borrowers agree that any action taken or
omitted by any Agent or any Lender under or in connection with each Letter of
Credit and the related drafts and documents, if done in good faith, shall be
binding upon the Borrowers and shall not result in any liability on the part of
any Agent or any Lender to the Borrowers. Nothing herein shall constitute a
waiver by any Borrower of any of its rights against any beneficiary of a Letter
of Credit.
(S)3.5. Reliance by Agent. To the extent not inconsistent with (S)(S)3.3
-----------------
and 3.4, the Managing Agent shall be entitled to rely, and shall be fully
protected in relying upon, any Letter of Credit, draft, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Managing Agent. The Managing Agent
shall be fully justified in failing or refusing to take any action under this
Agreement unless it shall first have received such advice or concurrence of the
Majority Lenders as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Managing Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Majority Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the
Lenders and all future holders of the Revolving Credit Notes or of a Letter of
Credit Participation.
(S)3.6. Letter of Credit Fee. The Borrowers shall (a) pay to the Managing
--------------------
Agent in advance on the date of issuance of the applicable Letter of Credit, the
Managing Agent's customary issuance fee, and (b) pay a fee (the "Letter of
Credit Fee") to the Managing Agent equal to the Applicable L/C Fee. Such Letter
of Credit Fee is for the accounts of the Lenders in accordance with their
respective Commitment Percentages and shall be payable quarterly in arrears on
the first day of each calendar quarter for the quarter just ended, and on the
Maturity Date.
(S)3.7 Reimbursement Obligations of Lenders. Each Lender severally agrees
------------------------------------
that it shall be absolutely liable, without regard to the occurrence of any
Default or Event of Default or any other condition precedent whatsoever, to the
extent of such Lender's Commitment
-21-
Percentage, to reimburse the Managing Agent on demand for the amount of each
draft paid by the Managing Agent under each Letter of Credit to the extent that
such amount is not reimbursed by the Borrowers pursuant to (S)3.2 (such
agreement for a Lender being called herein the "Letter of Credit Participation"
of such Lender). Each such payment made by a Lender shall be treated as the
purchase by the Lender of a participating interest in the Borrowers'
Reimbursement Obligation under (S)3.2 in an amount equal to such payment. Each
Lender shall share in accordance with its participating interest in any interest
which accrues pursuant to (S)3.2. Each Lender agrees that its obligation to
reimburse the Managing Agent pursuant to this (S)3.7 shall not be affected in
any way by any circumstance other than the gross negligence or willful
misconduct of the Managing Agent.
(S)4. THE MULTICURRENCY FACILITY.
--------------------------
(S)4.1. Commitment to Lend. Subject to the terms and conditions set forth
------------------
in this Agreement, each of the Lenders severally agrees to lend to the Foreign
Borrowers, and the Foreign Borrowers may borrow and reborrow from time to time
from the Effective Date until the Maturity Date, upon notice to the Nassau
Branch given in accordance with (S)4.3 hereof, such sums in Dollars or Optional
Currencies as are requested by the Foreign Borrowers up to a maximum Dollar
Equivalent aggregate principal amount outstanding (after giving effect to all
amounts requested) at any one time equal to such Lender's Commitment Percentage
of the Multicurrency Commitment. In no event shall (a) the aggregate principal
outstanding balance of all Multicurrency Loans plus the Maximum Drawing Amount
of all Foreign L/Cs exceed at any one time the Multicurrency Commitment, (b) any
Lender be obligated to fund or maintain Multicurrency Loans and participate in
Foreign L/Cs in excess of such Lender's Commitment Percentage of the
Multicurrency Commitment, or (c) the aggregate outstanding principal balance of
all Loans plus the Maximum Drawing Amount of all Letters of Credit exceed at any
one time the Total Commitment (in each case calculating all amounts denominated
in Optional Currencies at their Dollar Equivalent). The Multicurrency Loans
shall be made pro rata in accordance with each Lender's Commitment Percentage.
(S)4.2. Reduction of Multicurrency Commitment. The Foreign Borrowers shall
-------------------------------------
have the right at any time and from time to time upon five (5) Business Days'
written notice to the Managing Agent (which shall give prompt notice thereof to
each of the Lenders) to reduce by $1,000,000 or an integral multiple thereof or
terminate entirely the amount of the unborrowed or unutilized portion of the
Multicurrency Commitment, provided that the Foreign Borrowers may not reduce the
Multicurrency Commitment to an amount less than the Dollar Equivalent of the sum
of the outstanding Multicurrency Loans plus the Maximum Drawing Amount of all
Foreign L/Cs. If the Domestic Borrowers elect to terminate the Revolving Credit
Commitment pursuant to (S)2.2 hereof, then the Multicurrency Commitment shall
automatically terminate. Upon the effective date of any such reduction or
termination, the Foreign Borrowers shall pay to the Managing Agent for the
respective accounts of the Lenders the full amount of any Commitment Fee then
accrued on the amount of the reduction. No reduction of the Multicurrency
Commitment hereunder shall be subject to reinstatement.
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(S)4.3. Requests for Multicurrency Loans. Any Foreign Borrower shall give
--------------------------------
to the Nassau Branch written notice in the form of EXHIBIT B-2 hereto (or
telephonic notice confirmed by telecopy the same day in the form of EXHIBIT B-2
hereto) of each Multicurrency Loan requested hereunder (a "Multicurrency Loan
Request") not later than 2:00 P.M. (Boston time) three (3) Eurocurrency Business
Days prior to the proposed Drawdown Date of a Multicurrency Loan (which must be
a Eurocurrency Business Day). The Nassau Branch shall promptly notify the
Lenders of such notice. Each request for a Multicurrency Loan hereunder shall be
made in a minimum amount of $500,000 or the Dollar Equivalent thereof in an
Optional Currency, and shall be irrevocable and binding on the Foreign Borrowers
and shall obligate the Foreign Borrowers to accept the Multicurrency Loan
requested on the proposed Drawdown Date.
(S)4.4 Optional Currencies.
-------------------
(a) Subject to the terms and conditions of (S)5.17 hereof, the
Foreign Borrowers may elect, prior to the Maturity Date, to draw down or
convert a portion of the funds available under (S)4 of this Agreement in,
or to, an Optional Currency, provided that (i) the Dollar Equivalent of the
aggregate principal amount of Multicurrency Loans outstanding under this
Agreement immediately following any such drawdown or conversion shall not
exceed the Multicurrency Commitment, (ii) the aggregate principal amount of
Loans outstanding under this Agreement immediately following any such
drawdown or conversion plus the Maximum Drawing Amount of all Letters of
Credit (calculating all amounts denominated in any Optional Currency at
their Dollar Equivalent) shall not exceed the Total Commitment, and (iii)
the Dollar Equivalent of any funds proposed to be converted at any one time
under this (S)4.4 shall be not less than $500,000. In order to exercise the
foregoing option, the Foreign Borrowers must deliver to the Nassau Branch,
which shall promptly give to the Lenders notice thereof, a written notice,
subject to any other notice requirements under this Agreement, designating
the currency into which the designated portion of the Loans is to be drawn
down or, as the case may be converted, at least three (3) Eurocurrency
Business Days prior to the commencement of the subsequent Interest Period
relating to such portion of the Loans and any such conversion shall be
effected on such date. If any such notice is not delivered to the Nassau
Branch by the Foreign Borrowers within the required time, the Foreign
Borrowers shall be deemed to have requested that the amount of the relevant
Loan continue to be denominated in the currency in which it then currently
stands denominated.
(b) For all purposes of this Agreement, except as provided in
(S)5.11 hereof, the amount in one currency which shall be equivalent on any
particular date to a specified amount in another currency shall be that
amount (as conclusively ascertained by the Managing Agent absent manifest
error) in the first currency which is or could be purchased by the Managing
Agent (in accordance with its normal banking practices) with such specified
amount in the second currency in the Nassau foreign currency
-23-
deposits market for delivery on such date at the spot rate of exchange
prevailing at or about 11:00 a.m., Nassau time, on such date.
(c) In the event that any portion of the funds available under the
terms of this Agreement is denominated in one or more Optional Currencies,
the Dollar Equivalent of such portion of the funds shall be calculated
pursuant to paragraph (b) above by the Nassau Branch at the time the
Borrowers request a Loan and otherwise no less frequently than once per
week. The amount so determined shall then be added to the amount already
outstanding in Dollars for the purpose of determining the remaining
availability of funds under (S)(S)4.1 and 4.4(a) hereof, and any required
repayments under (S)5.8(a)-(c) hereof.
(d) Notwithstanding anything herein to the contrary, the Foreign
Borrowers may not specify an Interest Period that would extend beyond the
Maturity Date. In no event shall the Foreign Borrowers have more than five
(5) different maturities of Multicurrency Loans outstanding at any one
time.
(S)5. PROVISIONS RELATING TO ALL LOANS.
(S)5.1. The Notes. The Loans shall be evidenced by separate promissory
---------
notes of the Borrowers in substantially the form of EXHIBIT A hereto (each a
"Note"), dated as of the Effective Date and completed with appropriate
insertions. One Note shall be payable to the order of each Lender in a principal
amount equal to such Lender's Commitment Percentage of the Total Commitment or,
if less, the outstanding amount of all Loans made by such Lender, plus interest
accrued thereon, as set forth below. The Borrowers irrevocably authorize each
Lender to make or cause to be made, at or about the time of the Drawdown Date of
any Loan or at the time of receipt of any payment of principal on such Lender's
Note, an appropriate notation on such Lender's Note record reflecting the making
of such Loan or (as the case may be) the receipt of such payment. The
outstanding amount of the Loans set forth on such Lender's Note record shall be
prima facie evidence of the principal amount thereof owing and unpaid to such
Lender, but the failure to record, or any error in so recording, any such amount
on such Lender's Note record shall not limit, increase, or otherwise affect the
obligations of the Borrowers hereunder or under any Note to make payments of
principal of or interest on any Loans advanced to the Borrowers and evidenced by
such Note when due.
(S)5.2. Maturity of the Loans. The Loans shall be due and payable on the
---------------------
Maturity Date or on such earlier date on which such Loans become due and payable
pursuant to (S)12 hereof. The Borrowers promise to pay on the Maturity Date or
on such earlier date on which the Loans become due and payable all Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
(S)5.3. Funds for Loans.
---------------
(a) Not later than 4:30 p.m. (Boston time) on the proposed Drawdown
Date of any Loan, each of the Lenders will make available to the Managing
Agent, at the
-24-
Managing Agent's Head Office (in the case of a Revolving Credit Loan) or to
the Nassau Branch (in the case of a Multicurrency Loan), in immediately
available funds, the amount of such Lender's Commitment Percentage of the
amount of the requested Loan. Upon receipt from each Lender of such amount,
and upon receipt of the documents required by (S)(S)10 and 11 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Managing Agent or the Nassau Branch, as appropriate, will
make available to the Borrowers the aggregate amount of such Loan made
available to the Managing Agent or the Nassau Branch by the Lenders. The
failure or refusal of any Lender to make available at the aforesaid time
and place on any Drawdown Date the amount of its Commitment Percentage of
the requested Loan shall not relieve any other Lender from its several
obligation hereunder to make available to the Managing Agent or the Nassau
Branch, as the case may be, the amount of such other Lender's Commitment
Percentage of any requested Loan.
(b) The Managing Agent or the Nassau Branch, as appropriate, may
assume that each of the Lenders has made available its ratable portion of
the Loans in accordance with (S)2.1 or (S)4.1, as applicable, and the
Managing Agent or the Nassau Branch, as applicable, may (but it shall not
be required to), in reliance upon such assumption, make available on the
relevant Drawdown Date a corresponding amount to the Borrowers. If any
Lender makes available to the Managing Agent or the Nassau Branch its
Commitment Percentage of the Loans on a date after such Drawdown Date, such
Lender shall pay to the Managing Agent on demand an amount equal to the
product of (i) the average computed for the period referred to in clause
(iii) below, of the weighted average interest rate paid by the Managing
Agent for federal funds acquired by the Managing Agent during each day
included in such period, times (ii) the amount of such Lender's Commitment
-----
Percentage of such Loans, times (iii) a fraction, the numerator of which is
-----
the number of days that elapse from and including such Drawdown Date to the
date on which the amount of such Lender's Commitment Percentage of such
Loans shall become immediately available to the Managing Agent, and the
denominator of which is 360. A statement of the Managing Agent submitted to
such Lender with respect to any amounts owing under this paragraph shall be
prima facie evidence of the amount due and owing to the Managing Agent by
such Lender. If the amount of such Lender's Commitment Percentage of such
Loans is not made available to the Managing Agent or the Nassau Branch, as
appropriate, by such Lender within three (3) Business Days following such
Drawdown Date, the Managing Agent shall be entitled to recover such amount
from the Borrowers on demand (but only after demand for payment has first
been made to such Lender), with interest thereon at the rate per annum
applicable to the Loans made on such Drawdown Date, for each day from the
date the Managing Agent shall make such amount available to the Borrowers
until the date such amount is paid or prepaid to the Managing Agent or the
Nassau Branch, as the case may be.
(S)5.4. Interest on Loans. The outstanding principal amount of the Loans
-----------------
shall bear interest at the rate per annum equal to (a) with respect to Revolving
Credit Loans, the Base
-25-
Rate, or, at the Domestic Borrowers' option as provided in (S)2.4 hereof, at the
Eurocurrency Rate plus the Applicable Margin and (b) with respect to
Multicurrency Loans, the Eurocurrency Rate plus the Applicable Margin. Interest
with respect to the Loans shall be payable (i) quarterly in arrears on the last
Business Day of each fiscal quarter of each year on Base Rate Loans, (ii) on the
last day of the applicable Interest Period, and if such Interest Period is
longer than three (3) months, also on the day of the third month following the
beginning of such Interest Period which corresponds to the day on which such
Interest Period began on Eurocurrency Loans, (iii) on any prepayment date with
respect to accrued interest on amounts prepaid, and (iv) on the Maturity Date
and on any date on which any amounts owing under any of the Loan Documents are
declared immediately due and payable for all Loans.
(S)5.5. Interest on Overdue Amounts. Except as otherwise limited by (S)5.6
---------------------------
hereof, overdue principal and (to the extent permitted by applicable law)
interest on the Loans and all other overdue amounts payable hereunder or under
any of the other Loan Documents shall bear interest compounded monthly and
payable on demand at a rate per annum equal to the rate of two percent (2%)
above the Base Rate until such amount shall be paid in full (after as well as
before judgment).
(S)5.6. Interest Limitation. Notwithstanding any other term of this
-------------------
Agreement or any Note or any other document referred to herein or therein, the
maximum amount of interest which may be charged to or collected from any Person
liable hereunder or under any Note by the Lenders shall be absolutely limited
to, and shall in no event exceed, the maximum amount of interest which could
lawfully be charged or collected under applicable law (including, to the extent
applicable, the provisions of Section 5197 of the Revised Statutes of the United
States of America, as amended, 12 U.S.C. Section 85, as amended), so that the
maximum of all amounts constituting interest under applicable law, howsoever
computed, shall never exceed as to any Person liable therefor such lawful
maximum, and any term of this Agreement, any Note, or any other document
referred to herein or therein which could be construed as providing for interest
in excess of such lawful maximum shall be and hereby is made expressly subject
to and modified by the provisions of this paragraph.
(S)5.7. Optional Repayments. The Borrowers shall have the right, at their
-------------------
election, to repay the outstanding amount of the Loans, as a whole or in part,
at any time without penalty or premium (other than the obligation to reimburse
the Lenders and the Agents pursuant to (S)5.16 hereof). The Borrowers shall give
the Managing Agent, no later than 2:00 P.M., Boston time, one (1)Business Day
prior written notice of any proposed repayment of Base Rate Loans and at least
three (3) Eurocurrency Business Days prior written notice of any proposed
repayment of Eurocurrency Loans, in each case specifying the proposed date of
repayment of Loans and the principal amount to be repaid. Each such partial
repayment of the Loans shall be $500,000 or a greater integral multiple of
$100,000, and shall be accompanied by the payment of accrued interest on the
principal prepaid to the date of repayment. Unless the Borrowers elect to repay
the total aggregate outstanding amount of the Loans, the Borrowers may not elect
to make any repayments which would reduce the total aggregate outstanding amount
of the Revolving Credit Loans or the Multicurrency Loans (calculated at their
Dollar Equivalent) to an amount less than $500,000.
-26-
(S)5.8. Mandatory Repayments.
--------------------
(a) If at any time the aggregate principal amount of the outstanding
Loans and the Maximum Drawing Amount of all Letters of Credit (calculating
all amounts denominated in any Optional Currency at their Dollar
Equivalent) shall exceed the Total Commitment, whether as a result of
fluctuations in currency exchange rates, by operation of (S)(S)2.2, 4.2,
5.10, or otherwise, the Borrowers shall pay immediately upon demand made by
the Managing Agent all amounts (calculated at the Dollar Equivalent)
required in order to reduce such amount outstanding to the Total
Commitment, and, if no Loans are then outstanding, shall deposit with the
Managing Agent cash collateral in an amount equal to the amount by which
the Maximum Drawing Amount of all Letters of Credit (calculating all
amounts denominated in Optional Currencies at their Dollar Equivalent)
exceeds the Total Commitment.
(b) If at any time the aggregate principal amount of the outstanding
Revolving Credit Loans and the Maximum Drawing Amount of all Domestic L/Cs
(calculating all amounts denominated in Optional Currencies at their Dollar
Equivalent) shall exceed the Revolving Credit Commitment, whether by
operation of (S)(S)2.2 or 5.10 or otherwise, the Borrowers shall pay
immediately upon demand made by the Managing Agent all amounts required in
order to reduce such amount outstanding to the Revolving Credit Commitment
and, if no Loans are then outstanding and the Dollar Equivalent of the
Maximum Drawing Amount of all Domestic L/Cs exceeds by $100,000 or more the
Revolving Credit Commitment, the Borrowers shall deposit with the Managing
Agent cash collateral in an amount equal to the amount by which the Dollar
Equivalent of the Maximum Drawing Amount of all Domestic L/Cs exceeds the
Revolving Credit Commitment.
(c) If at any time the Dollar Equivalent of the aggregate principal
amount of the outstanding Multicurrency Loans plus the Maximum Drawing
Amount of all Foreign L/Cs shall exceed the Multicurrency Commitment,
whether as a result of currency exchange rates, by operation of (S)(S)4.2,
5.10, or otherwise, the Borrowers shall pay immediately upon demand made by
the Managing Agent all amounts (calculated at the Dollar Equivalent)
required in order to reduce such amount outstanding to the Multicurrency
Commitment, and, if no Loans are then outstanding and the Dollar Equivalent
of the Maximum Drawing Amount of all Foreign L/Cs exceeds by $100,000 or
more the Multicurrency Commitment, the Borrowers, shall deposit with the
Managing Agent cash collateral in an amount equal to the amount by which
the Dollar Equivalent of the Maximum Drawing Amount of all Foreign L/Cs
exceeds the Multicurrency Commitment.
(d) Upon any issuance of common stock of the Parent on or before March
31, 1997, the Borrowers shall prepay the Loans in an amount equal to the
least of (i) the net proceeds of such issuance received by the Parent, (ii)
the amount necessary to reduce the Leverage Ratio to a value of no more
than 3.50:1 or (iii) the then
-27-
outstanding principal amount of the Loans, provided that the Borrowers
shall not be required to make such prepayment to the extent that such
common stock is being issued by the Parent as consideration for a pending
acquisition permitted by (S)8.4 hereof.
(S)5.9. Application of Repayments. All repayments of principal made
-------------------------
pursuant to (S)5.7 or (S)5.8 (other than as expressly provided in (S)5.8(b) or
(c) hereof) shall be applied, in the absence of instruction by the Borrowers,
first to the principal of Base Rate Loans and then to the principal of
Eurocurrency Loans. Each partial repayment shall be allocated among the Lenders,
in proportion, as nearly as practicable, to the respective unpaid aggregate
principal amount of each Lender's Loans, with adjustments to the extent
practicable to equalize any prior repayments not exactly in proportion.
(S)5.10. Mandatory Reduction of Total Commitment. Upon a sale, or
---------------------------------------
combination of sales, of the assets of the Borrowers (other than sales in the
ordinary course of business) which results in receipt by the Borrowers of an
aggregate of more than $15,000,000 (a) in cash proceeds (net of expenses) in any
twelve-month period, and/or (b) in repayment of any Indebtedness owing to the
Borrowers resulting from any such sale, or combination of sales, of assets, the
Total Commitment shall be reduced by an amount equal to the amount of such net
cash proceeds. Upon such reduction in the Total Commitment, the Revolving
Credit Commitment shall be reduced by an amount equal to (a) the amount of the
net cash proceeds multiplied by (b) the quotient of (i) the amount of the
Revolving Commitment, and (ii) the amount of the Total Commitment, each as in
effect prior to the reduction in the Total Commitment. The Multicurrency
Commitment shall be reduced by an amount equal to the reduction in the Total
Commitment minus the reduction in the Revolving Credit Commitment calculated in
accordance with the previous sentence.
(S)5.11. Commitment Fees. The Borrowers agree to pay to the Managing Agent
---------------
for the accounts of the Lenders in accordance with their respective Commitment
Percentages a fee (the "Commitment Fee") in an amount equal to the Applicable
Commitment Fee on the unused portion of the Total Commitment during each fiscal
quarter or portion thereof from the Effective Date to the Maturity Date (or to
the date of termination in full of the Total Commitment, if earlier). The
Commitment Fee shall be payable in arrears on the first day of each fiscal
quarter for the immediately preceding fiscal quarter with a final payment on the
Maturity Date (or to the date of termination in full of the Total Commitment, if
earlier). For purposes of computing the Commitment Fee, the Maximum Drawing
Amount of all Letters of Credit shall be considered usage with respect to the
Total Commitment. For purposes of determining the unused portion of the Total
Commitment, the Dollar Equivalent of each Multicurrency Loan as determined on
the Drawdown Date, and on the date of subsequent adjustments made twice per
month shall be the amount used in connection with the Multicurrency Loan.
(S)5.12. Payments.
--------
(a) All payments of principal, interest, Commitment Fees, and any
other amounts due hereunder (i) denominated in Dollars shall be made by the
Borrowers to
-28-
the Managing Agent in immediately available funds at the Managing Agent's
Head Office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or (ii)
denominated in any Optional Currency shall be made in immediately available
funds, for the account of the Managing Agent at the Nassau Branch's office.
The Managing Agent shall be entitled to debit the Borrowers' accounts with
the Managing Agent or the Nassau Branch in the amount of each such payment
when due in order to effect timely payment thereof. The Managing Agent
will, promptly after its receipt thereof, distribute like funds relating to
the payment of principal, interest, or Commitment Fees ratably to the
Lenders.
(b) All payments by the Borrowers hereunder and under any of the other
Loan Documents shall be made without set-off or counterclaim and free and
clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Borrowers are compelled by law to make such
deduction or withholding. If any such obligation is imposed upon the
Borrowers with respect to any amount payable by them hereunder or under any
of the other Loan Documents, the Borrowers will pay to the Managing Agent,
on the date on which such amount is due and payable hereunder or under such
other Loan Document, such additional amount in Dollars as shall be
necessary to enable the Lenders to receive the same net amount which the
Lenders would have received on such due date had no such obligation been
imposed upon the Borrowers. The Borrowers will deliver promptly to the
Managing Agent certificates or other valid vouchers for all taxes or other
charges deducted from or paid with respect to payments made by the
Borrowers hereunder or under such other Loan Document. The provisions of
this (S)5.12(b) shall survive repayment of the Obligations and termination
of this Agreement.
(c) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof or the District of Columbia (a "Non-
U.S. Lender") agrees that, prior to the first date on which any payment is
due to it hereunder, it will deliver to the Borrowers and the Managing
Agent two duly completed copies of United States Internal Revenue Service
Form 1001 or 4224 or successor applicable form, as the case may be,
certifying in each case that such Non-U.S. Lender is entitled to receive
payments under this Agreement and the Notes payable to it, without
deduction or withholding of any United States federal income taxes. Each
Non-U.S. Lender that so delivers a Form 1001 or 4224 pursuant to the
preceding sentence further undertakes to deliver to each of the Borrowers
and the Managing Agent two further copies of Form 1001 or 4224 or successor
applicable form, or other manner of certification, as the case may be, on
or before the date that any such letter or form expires or becomes obsolete
or after the occurrence of any event requiring a change in the most recent
form previously delivered by it to the Borrowers and the Managing Agent,
and such extensions or renewals thereof as may reasonably be requested by
the Borrowers and the Managing Agent, certifying in the case of a Form 1001
or 4224 that such Non-U.S. Lender is entitled to receive payments under
this Agreement and the Notes without
-29-
deduction or withholding of any United States federal income taxes, unless
in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Non-U.S. Lender from duly
completing and delivering any such form with respect to it and such Non-
U.S. Lender advises the Borrowers that it is not capable of receiving
payments without any deduction or withholding of United States federal
income tax.
(S)5.13. Computations. All computations of interest with respect to
------------
Eurocurrency Loans shall be based on a 360-day year and paid for the actual
number of days elapsed. All other computations of interest, Letter of Credit
Fees, or other fees shall be based on a 365-day year and paid for the actual
number of days elapsed. Whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension; provided that any Interest Period for any
Eurocurrency Loan which ends on a day that is not a Eurocurrency Business Day
shall end on the next succeeding Eurocurrency Business Day unless the result of
such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding Eurocurrency Business Day. If any sum due from the Borrowers under
this Agreement or any order or judgment given or made in relation hereto has to
be converted from the currency in which the same is payable hereunder or under
such order or judgment into another currency for the purpose of (a) making or
filing a claim or proof against the Borrowers, (b) obtaining an order or
judgment in any court or other tribunal, or (c) or enforcing any order or
judgment given or made in relation hereto, the Borrowers shall indemnify and
hold harmless each of the Persons to whom such sum is due from and against any
loss suffered as a result of any discrepancy between the rate of exchange used
for such purpose to convert the sum in question from the first currency into
such other currency and the rate or rates of exchange at which such Person may
in the ordinary course of business purchase the first currency with such other
currency upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof.
(S)5.14. Additional Costs, Etc. If any present or future applicable law,
---------- ------ ---
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to the any Lender or any Agent by any central bank or other
fiscal, monetary or other authority (whether or not having the force of law),
shall:
(a) subject any Lender or any Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, the Total Commitment, the
Multicurrency Commitment, the Revolving Credit Commitment, the Loans (other
than taxes imposed by any jurisdiction
-30-
in which any Lender's or any Agent's head office is located and based upon
or measured by the income or profits of such Lender or such Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Lender of the principal or
of the interest on any Loans or any other amounts payable to any Lender or
any Agent under this Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Agreement) any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held
by, or deposits in or for the account of, or loans by, or commitments of,
an office of any Lender or any Agent or
(d) impose on any Lender or any Agent any other conditions or
requirements with respect to this Agreement, the other Loan Documents, the
Loans, the Total Commitment, the Multicurrency Commitment, the Revolving
Credit Commitment, or any class of loans or commitments of which any of the
Loans, the Multicurrency Commitment, the Revolving Credit Commitment, or
the Total Commitment forms a part, and the result of any of the foregoing
is
(i) to increase the cost to any Lender or any Agent of making,
funding, issuing, renewing, extending or maintaining the Loans, the
Multicurrency Commitment, the Revolving Credit Commitment, or the
Total Commitment;
(ii) to reduce the amount of principal, interest or other amount
payable to any Lender or any Agent hereunder on account of the Total
Commitment, the Multicurrency Commitment, the Revolving Credit
Commitment, or the Loans;
(iii) to require any Lender or any Agent to make any payment or to
forego any interest or other sum payable hereunder, the amount of
which payment or foregone interest or other sum is calculated by
reference to the gross amount of any sum receivable or deemed received
by the any Lender or any Agent from the Borrowers hereunder,
then, and in each such case, the Borrowers will, upon demand made by such Lender
or such Agent at any time and from time to time and as often as the occasion
therefor may arise, pay to such Lender or such Agent such additional amounts as
will be sufficient to compensate such Lender or such Agent for such additional
cost, reduction, payment or foregone interest or other sum (after such Lender or
such Agent shall have allocated the same fairly and equitably among all
customers of any class generally affected thereby). The provisions of this
(S)5.14 shall survive repayment of the Obligations and termination of this
Agreement.
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(S)5.15. Capital Adequacy. If any present or future applicable law,
------- --------
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) or the interpretation thereof by a court or
governmental authority with appropriate jurisdiction affects the amount of
capital required or expected to be maintained by any Lender or any Agent, or any
corporation controlling such Lender or such Agent, and such Lender or such Agent
determines that the amount of capital required to be maintained by it is
increased by or based upon such Lender's commitment to make, or maintenance of,
Loans hereunder, then such Lender or such Agent may notify the Borrowers of such
fact. To the extent that the costs of such increased capital requirements are
not reflected in the Base Rate, the Borrowers and such Lender or such Agent
shall thereafter attempt to negotiate in good faith, within thirty (30) days of
the day on which the Borrowers receive such notice, an adjustment payable
hereunder that will adequately compensate such Lender or such Agent in light of
these circumstances. If the Borrowers and such Lender or such Agent or any
corporation controlling such Lender or such Agent are unable to agree to such
adjustment within thirty (30) days of the date on which the Borrowers receive
such notice, then commencing on the date of such notice (but not earlier than
the effective date of any such increased capital requirement), the fees payable
hereunder shall increase by an amount that will, in such Lender's or such
Agent's reasonable determination, provide adequate compensation to such Lender
or such Agent or any corporation controlling such Lender or such Agent, such
amount to be considered prima facie correct and binding, absent manifest error.
Such Lender or such Agent shall allocate such cost increases among its customers
in good faith and on an equitable basis. The provisions of this (S)5.15 shall
survive repayment of the Obligations and termination of this Agreement.
(S)5.16. Eurocurrency Indemnity. The Borrowers agree to indemnify each
------------ ---------
Lender and each Agent and to hold them harmless from and against any loss, cost
or expenses (including loss of anticipated profits) that such Lender or such
Agent may sustain or incur as a consequence of default by the Borrowers in
making a borrowing or conversion or continuation after the Borrowers have given
(or are deemed to have given) notice pursuant to (S)2.3, (S)2.4, (S)4.3 or
(S)4.4 hereof, or the making of any payment of a Eurocurrency Loan or the making
of or any conversion of any such Eurocurrency Loan to a Base Rate Loan on a day
that is not the last day of the applicable Interest Period with respect thereto,
including interest or fees payable by the Lenders to lenders of funds obtained
by them in order to maintain any such Loans. The Lenders and the Agent shall
deliver to the Borrowers a certificate setting forth any amounts owing pursuant
to this (S)5.16, such amounts to be considered prima-facie correct and binding,
absent manifest error. The provisions of this (S)5.16 shall survive repayment of
the Obligations and termination of this Agreement.
(S)5.17. Illegality; Inability to Determine Eurocurrency Rate.
----------- --------- -- --------- ------------ ----
(a) Notwithstanding any other provision of this Agreement, if (i) the
introduction of, any change in, or any change in the interpretation of, any law
or regulation applicable to any Lender or any Agent shall make it unlawful, or
any central bank or other governmental authority having jurisdiction thereof
shall assert that it is unlawful, for such Lender or such Agent to perform its
obligations in respect of any Eurocurrency Loans, or (ii) if any Lender or any
Agent shall reasonably determine with respect to Eurocurrency Loans that (x) by
reason of
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circumstances affecting any Eurocurrency interbank market, adequate and
reasonable methods do not exist for ascertaining the Eurocurrency Rate which
would otherwise be applicable during any Interest Period, or (y) deposits of
Dollars or Optional Currencies, as applicable, in the relevant amount for the
relevant Interest Period are not available to the Lenders or the Agents in any
Eurocurrency interbank market, or (z) the Eurocurrency Rate does not or will not
accurately reflect the cost to such Lender or such Agent of obtaining or
maintaining the applicable Eurocurrency Loans during any Interest Period, then
the Managing Agent shall promptly give telephonic, telex or cable notice of such
determination to the Borrowers (which notice shall be conclusive and binding
upon the Borrowers).
(b) With respect to Revolving Credit Loans, upon such notification by
the Managing Agent given in accordance with (S)5.17(a) hereof, the obligation of
the Lenders to make Eurocurrency Loans shall be suspended until the Lenders
determine that such circumstances no longer exist, and the outstanding
Eurocurrency Loans shall continue to bear interest at the applicable rate based
on the Eurocurrency Rate until the end of the applicable Interest Period, and
thereafter shall be deemed converted to Base Rate Loans in equal principal
amounts.
(c) With respect to Multicurrency Loans requested to be made,
maintained, or converted while the circumstances described in (S)5.17(a) are
continuing, upon such notification by the Managing Agent given in accordance
with (S)5.17(a) hereof, the Managing Agent shall substitute a one-month Interest
Period for the Interest Period requested by the Foreign Borrowers, and shall
calculate interest on the principal amount of such Multicurrency Loan by
substituting for the Multicurrency Rate the rate per annum determined by the
Managing Agent in consultation with the Lenders to be that which fairly
expresses as a percentage per annum the cost to the Lenders (acting in good
faith in consideration of all relevant factors, including, but not limited to,
the minimization of such costs where feasible) of funding such principal amount
in the requested Optional Currency during such alternative Interest Period, as
certified by the Managing Agent to the Borrowers and the Banks upon
determination thereof. Upon receipt of notice of such alternative interest rate,
the Foreign Borrowers may refuse to accept such Multicurrency Loan. The
Borrowers shall, forthwith on demand, indemnify each Lender against any
liability in respect of funds contracted for or otherwise acquired which such
Lender incurs as a consequence of the Foreign Borrowers' refusal to borrow any
Multicurrency Loan pursuant to the provisions of this (S)5.17(c). Subject to the
terms and conditions of the previous sentence, the Borrowers may request that
such Multicurrency Loan be denominated in Dollars.
(S)5.18. Concerning Joint and Several Liability of the Borrowers.
---------- ----- --- ------- --------- -- --- ---------
(a) Each of the Domestic Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as
a co-debtor, joint and several liability with all of the other Borrowers,
with respect to the payment and performance of all of the Obligations of
both the Domestic Borrowers and the Foreign Borrowers (including, without
limitation, any such Obligations arising under this (S)5.18), it being the
intention of the parties hereto that all of the Obligations of both the
Domestic Borrowers and the Foreign Borrowers shall be the joint and several
-33-
Obligations of each of the Domestic Borrowers without preferences or distinction
among them.
(b) To the fullest extent permitted by applicable law, each of the
Foreign Borrowers, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as surety but also as co-debtor, joint and several
liability with all of the other Foreign Borrowers, with respect to the payment
and performance of all of the Obligations of the Foreign Borrowers (including
without limitation any such Obligations arising under this (S)5.18), it being
the intention of the parties hereto that all of the Obligations of the Foreign
Borrowers shall be the joint and several Obligations of each of the Foreign
Borrowers without preference or distinction among them.
(c) Each of the Domestic Borrowers is accepting joint and several
liability for the Obligations of all of the Borrowers hereunder and under the
other Loan Documents in consideration of the financial accommodations to be
provided by the Agents and the Lenders under this Agreement, for the mutual
benefit, directly and indirectly, of each of the Borrowers and in consideration
of the undertakings of each other Domestic Borrower to accept joint and several
liability for the Obligations of both the Domestic Borrowers and the Foreign
Borrowers. Each of the Foreign Borrowers, to the fullest extent permitted by
applicable law, is accepting joint and several liability for the Obligations of
the Foreign Borrowers hereunder and under the other Loan Documents in
consideration of the financial accommodation to be provided by the Agents and
the Lenders under this Agreement, for the mutual benefit, directly or
indirectly, of each of the Foreign Borrowers and in consideration of the
undertakings of each other Foreign Borrower to accept the joint and several
liability for the Obligations of the Foreign Borrowers.
(d) If and to the extent that any of the Domestic Borrowers shall fail
to make any payment with respect to any of the Obligations as and when due or to
perform any of such Obligations in accordance with the terms thereof, then in
each such event the other Domestic Borrowers will make such payment with respect
to, or perform, such Obligation. If and to the extent that any of the Foreign
Borrowers shall fail to make any payment with respect to any of the Obligations
as and when due or perform any of such Obligations in accordance with the terms
thereof, then in each such event the other Foreign Borrowers and the Domestic
Borrowers, to the fullest extent permitted by applicable law, will make such
payment with respect to, or perform, such Obligations.
(e) The Obligations of each of the Domestic Borrowers under the
provisions of this (S)5.18 constitute full recourse Obligations of each of such
Borrowers enforceable to the fullest extent permitted by applicable law against
each such Borrower to the full extent of its properties and assets, irrespective
of the validity, regularity or enforceability of this Agreement or any other
circumstance whatsoever. The Obligations of each of the Foreign Borrowers under
the provisions of this (S)5.18
-34-
constitute full recourse Obligations of each of such Borrowers enforceable
against each such Borrower to the fullest extent permitted by applicable law to
the full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement or any other circumstance
whatsoever.
(f) Except for such notices to the Borrowers expressly required by this
Agreement, each of the Borrowers, to the fullest extent permitted by applicable
law, hereby waives notice of acceptance of its joint and several liability,
notice of any Loans made under this Agreement, notice of any action at any time
taken or omitted by the Agents or the Lenders under or in respect of any of the
Obligations, and, generally, to the extent permitted by applicable law, all
demands, notices and other formalities of every kind in connection with this
Agreement. Except as otherwise expressly provided in this Agreement, each of the
Borrowers, to the fullest extent permitted by applicable law, hereby assents to,
and waives notice of, or any defense in respect of, any extension or
postponement of the time for the payment of any of the Obligations, the
acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
the Agents or the Lenders at any time or times in respect of any default by any
of the Borrowers in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement, any and all other indulgences
whatsoever by the Agents or the Lenders in respect of any of the Obligations,
and the taking, addition, substitution or release, in whole or in part, at any
time or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any of the Borrowers. Without
limiting the generality of the foregoing, each of the Borrowers assents to any
other action or delay in acting or failure to act on the part of the Agents or
the Lenders with respect to the failure by any of the Borrowers to comply with
any of its respective Obligations, including, without limitation, any failure by
any of the Agents or the Lenders strictly or diligently to assert any right or
to pursue any remedy or to comply fully with applicable laws or regulations
thereunder, which might, but for the provisions of this (S)5.18, afford grounds
for terminating, discharging or relieving any of the Borrowers, in whole or in
part, from any of its Obligations under this (S)5.18, it being the intention of
each of the Borrowers that, so long as any of the Obligations hereunder remain
unsatisfied, the Obligations of such Borrower under this (S)5.18 shall not be
discharged except by performance and then only to the extent of such
performance. The Obligations of each of the Borrowers under this (S)5.18 shall
not be diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect to
any of the Borrowers, the Agents or the Lenders. The joint and several liability
of the Borrowers set forth in this (S)5.18 shall continue in full force and
effect notwithstanding any absorption, merger, amalgamation, consolidation or
any other change whatsoever in the name, membership, constitution or place of
formation of any of the Borrowers, the Agents or the Lenders.
-35-
(g) The provisions of this (S)5.18 are made for the benefit of the
Agents and the Lenders and their successors and assigns, and may be
enforced, to the fullest extent permitted by applicable law, in good faith
by them from time to time against any or all of the Borrowers as often as
occasion therefor may arise and without requirement on the part of the
Agents or the Lenders first to marshal any claims or to exercise any rights
against any other Borrower or to exhaust any remedies available against any
other Borrower or to resort to any other source or means of obtaining
payment of any of the obligations hereunder or to elect any other remedy.
The provisions of this (S)5.18 shall remain in effect until all of the
Obligations shall have been paid in full or otherwise fully satisfied and
the obligations of the Lenders to make Loans and of the Managing Agent to
issue, extend, or renew Letters of Credit hereunder shall have terminated.
If at any time, any payment, or any part thereof, made in respect of any of
the Obligations, is rescinded or must otherwise be restored or returned by
the Agents or the Lenders upon the insolvency, bankruptcy or reorganization
of any of the Borrowers, or otherwise, the provisions of this (S)5.18 will
forthwith be reinstated in effect, as though such payment had not been
made.
(h) To the extent any Borrower makes a payment hereunder in excess of
the aggregate amount of the benefit received by such Borrower in respect of
the extensions of credit under this Agreement, then such Borrower, after
the final and irrevocable payment in full in cash of all the Obligations of
the Domestic Borrowers and the Foreign Borrowers hereunder and the
termination of all Commitments and Letters of Credit hereunder, shall be
entitled to recover from other Borrowers such excess payment pro rata and
the right to such recovery shall be deemed to be an asset and property of
such Borrower so funding.
(S)5.19. Representations and Warranties upon Loan Request. Each request
--------------- --- ---------- ---- ---- -------
for Loans or for the issuance, extension or renewal of a Letter of Credit
hereunder shall constitute a representation by the Borrowers that the conditions
set forth in (S)(S)10 and 11 hereof, as the case may be, have been satisfied on
the date of such request and will continue to be satisfied on the Drawdown Date
of such Loan or the date of issuance, extension or renewal of the Letter of
Credit. Each of the representations and warranties made by or on behalf of the
Borrowers to the Agents and the Lenders in this Agreement or any other Loan
Document or any statement, instrument, document, or certificate delivered in
connection therewith shall be true and correct in all material respects when
made and shall, for all purposes of this Agreement, be deemed to be repeated on
and as of the date of the submission of any Loan Request or request for a Letter
of Credit and on and as of the Drawdown Date of such Loan or the date of
issuance of such Letter of Credit (except to the extent of changes resulting
from transactions contemplated or permitted by this Agreement and the other Loan
Documents, and changes occurring in the ordinary course of business or disclosed
in the financial statements and other information delivered to the Lenders
pursuant to (S)7.4 hereof that singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties expressly
relate to an earlier date).
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(S)5.20. New Borrowers. Any newly-created or acquired Subsidiaries of the
--- ---------
Parent (other than those which have annual gross revenues of less than
$2,500,000 and which by mutual agreement of the Lenders and the Borrowers are
designated as Excluded Subsidiaries) shall become Borrowers hereunder by signing
a Note, entering into an amendment to this Agreement with the other parties
hereto providing that such Subsidiary shall become a Borrower hereunder, and
providing such other documentation (including opinions of counsel) as the Agents
and the Lenders may reasonably request. In such event, the Managing Agent is
hereby authorized by the parties to amend Schedule 1 hereto to include such
Subsidiary as a Borrower hereunder. The Borrowers hereby agree to pledge all of
the stock of their Domestic Subsidiaries (other than Excluded Subsidiaries) to
the Managing Agent for the benefit of the Lenders pursuant to the terms of the
Pledge Agreement. Upon the earning by any Excluded Subsidiary of annual gross
revenues of $2,500,000 or more, such Excluded Subsidiary shall become a Borrower
hereunder.
(S)5.21. Up Front Fee. The Borrowers agree to pay to the Managing Agent for
-- ----- ---
the respective accounts of the Lenders on the Effective Date a fee in the amount
of $242,750, $38,750 of which shall be payable to each of First Interstate and
ABN; $37,500 of which shall be payable to each of BAI, NatWest, and BNY; $23,750
of which shall be payable to Union; $17,000 of which shall be payable to
Paribas; and $12,000 of which shall be payable to BOC.
(S)6. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers represents and
--------------- --- ----------
warrants to the Lenders and the Agents as follows:
(S)6.1. Corporate Authority.
--------- ---------
(a) Incorporation; Good Standing. Each of the Borrowers (i) is a
-------------- ---- --------
corporation duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of incorporation, (ii) has all
requisite corporate power to own its property and conduct its business as
now conducted and as presently contemplated, and (iii) is in good standing
as a foreign corporation and is duly authorized to do business in each
jurisdiction in which its property or business as presently conducted or
contemplated makes such qualification necessary, except where a failure to
be so qualified would not have a material adverse effect on the business,
assets or financial condition of such Borrower.
(b) Authorization. The execution, delivery and performance of the
-------------
Loan Documents and the transactions contemplated hereby and thereby (i) are
within the corporate authority of each Borrower, (ii) have been duly
authorized by all necessary corporate proceedings, (iii) do not conflict
with or result in any material breach or contravention of any provision of
law, statute, rule or regulation to which any Borrower is subject or any
judgment, order, writ, injunction, license or permit applicable to any
Borrower so as to materially adversely affect the assets, business or any
activity of such Borrower, (iv) do not conflict with any provision of the
corporate charter or bylaws of any Borrower or any agreement or other
instrument binding upon any
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Borrower, and (v) will not create a lien on any properties of any Borrower
other than pursuant to the Loan Documents.
(c) Enforceability. The execution, delivery and performance of the
--------------
Loan Documents will result in valid and legally binding obligations of each
Borrower, enforceable against each of them in accordance with the
respective terms and provisions hereof and thereof, except as limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating
to or affecting generally the enforcement of creditors' rights and except
to the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which
any proceeding therefor may be brought.
(S)6.2. Governmental Approvals. The execution, delivery and performance by
------------ ---------
each Borrower of the Loan Documents and the transactions contemplated hereby and
thereby do not require any approval or consent of, or filing with, any
governmental agency or authority other than those already obtained and which are
in full force and effect.
(S)6.3. Title to Properties; Leases. Each of the Borrowers owns all of its
----- -- ----------- ------
respective assets reflected in the consolidated balance sheet of the Borrowers
as at the Balance Sheet Date or acquired since that date (except property and
assets sold or otherwise disposed of in the ordinary course of business since
that date), subject to no mortgages, capitalized leases, conditional sales
agreements, title retention agreements, liens or other encumbrances except those
permitted by (S)8.2 hereof.
(S)6.4. Financial Statements; Solvency.
--------- ----------- --------
(a) There has been furnished to each of the Lenders a consolidated
balance sheet of the Borrowers dated the Balance Sheet Date, and a
consolidated statement of operations for the fiscal year then ended,
certified by the Borrowers' independent certified public accountants. There
has also been furnished to each of the Lenders a consolidated unaudited
balance sheet of the Borrowers dated September 30, 1995. Such balance
sheets and statements of operations have been prepared in accordance with
GAAP and fairly present the financial condition of the Borrowers as at the
close of business on the date thereof and the results of operations for the
period then ended. There are no contingent liabilities of the Borrowers as
of such dates involving material amounts, known to the officers of the
Borrowers not disclosed in said financial statements and the related notes
thereto. Since the Balance Sheet Date, the Borrowers have not incurred any
liabilities other than in the ordinary course of business or as permitted
by (S)8.1 hereof.
(b) The Borrowers (both before and after giving effect to the
transactions contemplated by this Agreement) are solvent, have assets
having a fair value in excess of the amount required to pay their probable
liabilities on their existing debts as they become absolute and matured,
and have, and will have at the time of any borrowing hereunder, access to
adequate capital for the conduct of their business and the ability to
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pay their debts from time to time incurred in connection therewith as such
debts mature.
(S)6.5. No Material Changes, Etc. Since the Balance Sheet Date, there have
-- -------- -------- ----
occurred no material adverse changes in the financial condition or business of
the Borrowers as shown on or reflected in the consolidated balance sheet of the
Borrowers as at the Balance Sheet Date, or the consolidated statement of
operations for the fiscal year then ended, other than changes in the ordinary
course of business or as described in the 10-Q of the Parent filed with the
Securities and Exchange Commission on November 13, 1995 which have not had any
material adverse effect either individually or in the aggregate on the business
or financial condition of the Borrowers. Since the Balance Sheet Date, there
has not been any Distribution by the Borrowers except as permitted by (S)8.6
hereof.
(S)6.6. Franchises, Patents, Copyrights, Etc. Each of the Borrowers
----------- -------- ----------- ----
possesses all franchises, patents, copyrights, trademarks, trade names, licenses
and permits (including, but not limited to, environmental permits), and rights
in respect of the foregoing, adequate for the conduct of its business
substantially as now conducted without known conflict with any rights of others,
except as would not have a material adverse effect on the business, operations,
or financial condition of any Borrower.
(S)6.7. Litigation. There are no actions, suits, proceedings or
----------
investigations of any kind pending or threatened against any Borrower before any
court, tribunal or administrative agency or board which, if adversely
determined, might, either in any case or in the aggregate, materially adversely
affect the properties or business of such Borrower, or materially impair the
right of such Borrower to carry on business substantially as now conducted, or
result in any liability in excess of $5,000,000 not adequately covered by
insurance or for which adequate reserves are not maintained on the consolidated
balance sheets of the Borrowers, or which question the validity of any of the
Loan Documents, or any action taken or to be taken pursuant hereto or thereto.
(S)6.8. No Materially Adverse Contracts, Etc. No Borrower is subject to any
-- ---------- ------- ---------- ----
charter, corporate or other legal restriction, or any judgment, decree, order,
rule or regulation which in the judgment of such Borrower's officers has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of such Borrower. No Borrower is a party to any
contract or agreement which in the judgment of such Borrower's officers has or
is expected to have any materially adverse effect on the business of such
Borrower, except as otherwise reflected in adequate reserves.
(S)6.9. Compliance With Other Instruments, Laws, Etc. None of the Borrowers
---------- ---- ----- ------------ ----- ----
is violating any provision of its charter documents or bylaws or any agreement
or instrument to which it is or may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, or any statute, license,
rule or regulation, in a manner which could result in the imposition of
substantial penalties or materially and adversely affect the financial
condition, properties or business of such Borrower.
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(S)6.10. Tax Status. Each of the Borrowers has made or filed all federal
--- ------
and state income and all other tax returns, reports and declarations required by
any jurisdiction to which it is subject (unless and only to the extent that (a)
such Borrower has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes, and (b) the failure to so file would
not have a material adverse effect on the financial condition, properties, or
business of such Borrower); and have paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith; and have set aside on its books provisions reasonably adequate for
the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction
(S)6.11. No Event of Default. No Default or Event of Default has occurred
-- ----- -- -------
and is continuing as of the date of this Agreement.
(S)6.12. Holding Company and Investment Company Acts. None of the Borrowers
------- ------- --- ---------- ------- -----
is a "holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company", as such terms are defined in the Public
Utility Holding Company Act of 1935; nor are any of them a "registered
investment company", or an "affiliated company" or a "principal underwriter" of
a "registered investment company", as such terms are defined in the Investment
Company Act of 1940, as amended.
(S)6.13. Absence of Financing Statements, Etc. Except as contemplated by
------- -- --------- ----------- ----
(S)8.2 of this Agreement, there is no financing statement, security agreement,
chattel mortgage, real estate mortgage or other document filed or recorded with
any filing records, registry, or other public office, which purports to cover,
affect or give notice of any present or possible future lien on, or security
interest in, any assets or property of the Borrowers or rights thereunder.
(S)6.14. Certain Transactions. Except as set forth in Schedule 6.14, none
------- ------------
of the officers, directors, or employees of any Borrower is presently a party to
any transaction with such Borrower (other than for services as employees,
officers and directors or for services described in the Parent's proxy
statement), including, without limitation, any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Borrowers any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.
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(S)6.15. Employee Benefit Plans.
-------- ------- -----
(a) In General. Each Employee Benefit Plan has been maintained and
-- -------
operated in compliance in all material respects with the provisions of
ERISA and, to the extent applicable, the Code, including but not limited to
the provisions thereunder respecting prohibited transactions. None of the
Borrowers has any underfunded pension plans.
(b) Terminability of Welfare Plans. Under each Employee Benefit Plan
------------- -- ------- -----
which is an employee welfare benefit plan within the meaning of (S)3(1) or
(S)3(2)(B) of ERISA, no benefits are due unless the event giving rise to
the benefit entitlement occurs prior to plan termination (except as
required by Title I, part 6 of ERISA.) Each Borrower or any ERISA
Affiliate, as appropriate, may terminate each such Plan at any time (or at
any time subsequent to the expiration of any applicable bargaining
agreement) in the discretion of such Borrower or any ERISA Affiliate
without liability to any Person by reason of such termination.
(c) Guaranteed Pension Plans. Except as set forth on Schedule 6.15,
---------- ------- -----
none of the Borrowers is a sponsor of, or contributor to, a Guaranteed
Pension Plan.
(d) Multiemployer Plans. None of the Borrowers nor any ERISA Affiliate
------------- -----
has incurred any material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal from
such Multiemployer Plan under (S)4201 of ERISA or as a result of a sale of
assets described in (S)4204 of ERISA. None of the Borrowers nor any ERISA
Affiliate has been notified that any Multiemployer Plan is in
reorganization or is insolvent under and within the meaning of (S)4241 or
(S)4245 of ERISA or that any Multiemployer Plan intends to terminate or has
been terminated under (S)4041A of ERISA.
(S)6.16. Use of Proceeds. The proceeds of the Revolving Credit Loans shall
--- -- --------
be used solely by the Domestic Borrowers for working capital and acquisitions
permitted hereunder. The Letters of Credit may be used by the Domestic Borrowers
to support their trade and bonding requirements, to back their financial
obligations, to purchase inventory and to support guaranties of the Foreign
Borrowers permitted under (S)8.1(m) not to exceed $5,000,000 or the Dollar
Equivalent thereof. The proceeds of the Multicurrency Loans shall be used solely
by the Foreign Borrowers for working capital and acquisitions permitted
hereunder. No proceeds of the Loans shall be used in any way that will violate
Regulations 0, T, U or X of the Board of Governors of the Federal Reserve
System.
(S)6.17. Environmental Compliance. With respect to any matters which would
------------- ----------
be deemed to be material pursuant to the regulations of the Securities and
Exchange Commission, except as set forth in Schedule 6.17:
(a) None of the Borrowers nor any operator of their properties is in
violation, or alleged violation, of any judgment, decree, order, law,
license, rule or
-41-
regulation pertaining to environmental matters, including without
limitation, those arising under Environmental Laws, which violation would
have a material adverse effect on the environment or the business, assets
or financial condition of such Borrower.
(b) None of the Borrowers has received written notice from any third
party including, without limitation: any federal, state or local
governmental authority, (i) that any one of them has been identified by the
United States Environmental Protection Agency ("EPA") as a potentially
responsible party under CERCLA with respect to a site listed on the
National Priorities List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (ii) that any
Hazardous Substances which any one of them has generated, transported or
disposed of has been found at any site at which a federal, state or local
agency or other third party has conducted or has ordered that any Borrower
conduct a remedial investigation, removal or other response action pursuant
to any Environmental Law; or (iii) that it is or shall be a named party to
any claim, action, cause of action, complaint, legal or administrative
proceeding arising out of any third party's incurrence of costs, expenses,
losses or damages of any kind whatsoever in connection with the release of
Hazardous Substances.
(c) To the best of the Borrowers' knowledge after reasonable inquiry,
(i) No portion of any Borrower's Real Properties has been used for the
handling, processing, storage or disposal of Hazardous Substances except in
material compliance with applicable Environmental Laws; and no underground
tank or other underground storage receptacle for Hazardous Substances is
located on such Real Property except such tanks as are in material
compliance with all Environmental Laws; (ii) in the course of any
activities conducted by the Borrowers or operators of their Real Property,
no Hazardous Substances have been generated or are being used on such Real
Properties except in material compliance with applicable Environmental
Laws; (iii) there have been no unpermitted Releases or threatened Releases
of Hazardous Substances on, upon, into or from the properties of the
Borrowers, which Releases would have a material adverse effect on the value
of such Real Properties or adjacent properties or the environment; (iv)
there have been no Releases on, upon, from or into any real property in the
vicinity of the Real Properties of the Borrowers which, through soil or
groundwater contamination, may have come to be located on, and which would
have a material adverse effect on the value of, any Real Properties of the
Borrowers; and (v) in addition, any Hazardous Substances that have been
generated on the Real Properties of the Borrowers have been transported
offsite and have been treated or disposed of only by treatment or disposal
facilities maintaining valid permits as required under applicable
Environmental Laws, which transporters and facilities have been and are, to
the best of the Borrowers' knowledge, operating in material compliance with
such permits and applicable Environmental Laws.
(d) None of the Real Properties of the Borrowers are or shall be
subject to any applicable environmental clean up responsibility law or
environmental restrictive
-42-
transfer law or regulation by virtue of the transactions set forth
herein and contemplated hereby.
(S)6.18. Perfection of Security Interests. The Collateral and the Managing
---------- -- -------- ---------
Agent's rights with respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses. The Domestic Borrowers are the owners of
the Collateral free from any lien, security interest, encumbrance and any other
claim or demand, other than liens in favor of the Managing Agent for the benefit
of the Lenders to secure the Obligations and for the benefit of FNBB to secure
the FNBB Obligations. The Security Documents are effective to create in favor of
the Managing Agent, for the benefit of the Lenders, a legal, valid and
enforceable first priority security interest in the Collateral. The certificates
for the shares of such Collateral have been delivered to the Managing Agent.
(S)6.19. True Copies of Charter and Other Documents. The Borrowers have
---- ------ -- ------- --- ----- ---------
furnished each of the Lenders with copies, in each case true and complete as of
the Effective Date, of (a) all charter and other incorporation documents
(together with any amendments thereto) and (b) by-laws (together with any
amendments thereto).
(S)6.20. Subsidiaries. Schedule 1 sets forth a complete and accurate list
------------
of the Subsidiaries, including the name of each Subsidiary and its jurisdiction
of incorporation, together with the number of authorized and outstanding shares
of each Subsidiary. Each such Subsidiary is wholly owned, directly or
indirectly, by the Parent. Except as described in Schedule 1 hereto, the Parent
has good and marketable title to all of the shares it purports to own of the
stock of each Subsidiary, free and clear in each case of any lien. All such
shares have been duly issued and are fully paid and non-assessable and, other
than those of the Excluded Subsidiaries and the Foreign Subsidiaries, have been
pledged and delivered to the Managing Agent for the benefit of the Lenders.
(S)7. AFFIRMATIVE COVENANTS OF THE BORROWERS. The Borrowers covenant
----------- --------- -- --- ---------
and agree that, so long as any Loan, any Letter of Credit or any Note is
outstanding or any Lender has any obligation to make Loans or the Managing Agent
has any obligation to issue, extend, renew or honor any Letters of Credit
hereunder:
(S)7.1. Punctual Payment. The Borrowers will duly and punctually pay or
-------- -------
cause to be paid the principal and interest on the Loans, and all fees and other
amounts provided for in this Agreement and the other Loan Documents, all in
accordance with the terms of this Agreement and such other Loan Documents.
(S)7.2. Maintenance of Office. The Domestic Borrowers will maintain their
----------- -- ------
chief executive offices at ▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other place in the United States of America as the
Domestic Borrowers shall designate upon 30 days prior written notice to the
Managing Agent.
(S)7.3. Records and Accounts. The Borrowers will keep true and accurate
------- --- --------
records and books of account in which full, true and correct entries will be
made in accordance with GAAP
-43-
and with the requirements of all regulatory authorities and maintain adequate
accounts and reserves for all taxes (including income taxes), depreciation,
depletion, obsolescence and amortization of their properties, all other
contingencies, and all other proper reserves in accordance with GAAP or as
required by applicable regulatory authorities.
(S)7.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrowers
--------- ---------- ------------ --- -----------
will deliver to each of the Lenders:
(a) as soon as practicable, but, in any event not later than 90 days
after the end of each fiscal year of the Borrowers, the consolidated
balance sheet of the Borrowers as at the end of such year, statements of
cash flows, and the related consolidated statement of operations, each
setting forth in comparative form the amounts for the previous fiscal year,
all such consolidated statements to be in reasonable detail, prepared in
accordance with GAAP, and certified without qualification by KPMG Peat
Marwick, L.L.P. or by other independent certified public accountants
satisfactory to the Managing Agent (the "Accountants");
(b) as soon as practicable, but in any event not later than (i) 45
days after the end of each of the first three fiscal quarters of each
fiscal year of the Borrowers, and (ii) 90 days after the end of the last
fiscal quarter of each fiscal year, copies of the unaudited consolidated
and consolidating balance sheet and statement of operations of the
Borrowers as at the end of such quarter, subject to year end audit
adjustments, and consolidated statement of cash flows, all in reasonable
detail and prepared in accordance with GAAP, together with a certification
by the principal financial or accounting officer of the Parent ("CFO") that
such financial statements have been prepared in accordance with GAAP, are
complete and correct in all material respects, and fairly present the
financial condition of the Borrowers as at the close of business on the
date thereof and the results of operations for the period then ended,
subject to normal year-end audit adjustments;
(c) simultaneously with the delivery of the financial statements
referred to in (a) and (b) above, (i) a statement in the form of Exhibit C
hereto (the "Compliance Certificate") certified by the CFO that the
Borrowers are in compliance with the covenants contained in (S)(S)7, 8, and
9 hereof as of the end of the applicable period and setting forth in
reasonable detail computations evidencing such compliance, provided that if
the Borrowers shall at the time of issuance of such certificate or at any
other time obtain knowledge of any Default or Event of Default, the
Borrowers shall include in such certificate or otherwise deliver forthwith
to the Lenders a certificate specifying the nature and period of existence
thereof and what action the Borrowers propose to take with respect thereto;
(ii) a backlog report in the form of Exhibit D hereto; and (iii) additional
consolidating financial information in the form of Exhibit E hereto;
-44-
(d) promptly with the filing or mailing thereof, copies of all forms
8-K, 10-K, and 10-Q filed with the Securities and Exchange Commission or
sent to the stockholders of the Parent; and
(e) from time to time such other financial data and information,
including without limitation pro forma financial projections as any Agent
or any Lender may reasonably request.
The Borrowers hereby authorize any Agent or any Lender to disclose any
information obtained pursuant to this Agreement to all appropriate governmental
regulatory authorities where required by law; provided, however, that such Agent
or such Lender shall, to the extent allowable under law, notify the Borrowers at
the time any such disclosure is made (except in the case of disclosures made in
the course of bank regulatory reviews); and provided further that this
authorization shall not be deemed to be a waiver of any rights to object to the
disclosure by any Agent or any Lender of any such information which the
Borrowers have or may have under the federal Right to Financial Privacy Act of
1978, as in effect from time to time.
(S)7.5. Corporate Existence and Conduct of Business. Subject to the
--------- --------- --- ------- -- --------
provisions of (S)8.4 hereof, the Borrowers will do or cause to be done all
things necessary to preserve and keep in full force and effect their corporate
existence, corporate rights and franchises; effect and maintain their foreign
qualifications, licensing, domestication or authorization, except as otherwise
determined by their authorized officers or Boards of Directors in the exercise
of their reasonable judgment; use their best efforts to comply with all
Applicable Laws; and shall not become obligated under any contract or binding
arrangement which, at the time it was entered into would materially adversely
impair the financial condition of the Borrowers, on a consolidated basis. The
Borrowers will continue to engage primarily in the businesses now conducted by
them and in related businesses.
(S)7.6. Maintenance of Properties. The Borrowers will cause all of their
----------- -- ----------
properties used or useful in the conduct of their business to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrowers may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this section shall prevent any Borrower from taking any
action different from that described in this (S)7.6 if, in the judgment of such
Borrower, such action is desirable in the conduct of its business and which does
not in the aggregate materially adversely affect the business of the Borrowers
on a consolidated basis.
(S)7.7. Insurance. The Borrowers will maintain with financially sound and
---------
reputable insurance companies, funds or underwriters satisfactory to the Lenders
the kinds of insurance usually carried by reasonable and prudent companies
conducting businesses similar to that of the Borrowers, covering the risks and
in the relative proportionate amounts usually carried by such companies
(including, to the extent it is commercially available to the Borrowers at a
-45-
reasonable cost, environmental impairment insurance), but in no event less than
the amounts and coverages set forth in Schedule 7.7 hereto.
(S)7.8. Taxes. Each Borrower will duly pay and discharge, or cause to be
-----
paid and discharged, before the same shall become overdue, all taxes,
assessments and other governmental charges (other than taxes, assessments and
other governmental charges imposed by foreign jurisdictions which in the
aggregate are not material to the business or assets of each Borrower on an
individual basis or of the Borrowers on a consolidated basis) imposed upon it
and its Real Properties, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials, or
supplies, which if unpaid might by law become a lien or charge upon any of its
property; provided, however, that any such tax, assessment, charge, levy or
claim need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if the appropriate
Borrower shall have set aside on its books adequate reserves with respect
thereto; and provided, further, that such Borrower will pay all such taxes,
assessments, charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any lien which may have attached as security therefor.
(S)7.9. Inspection of Properties, Books, and Contracts. The Borrowers shall
---------- -- ---------- ----- --- ---------
permit any Agent or any Lender or any of their designated representatives, to
visit and inspect any of the properties of the Borrowers to examine the books of
account of the Borrowers (and to make copies thereof and extracts therefrom),
and to discuss the affairs, finances and accounts of the Borrowers with, and to
be advised as to the same by, their officers, all at such reasonable times
during normal working hours and intervals as any Agent or any Lender may
reasonably request.
(S)7.10. Compliance with Laws, Contracts, Licenses and Permits. Each of
---------- ---- ---- --------- -------- --- -------
the Borrowers will comply in all material respects with (i) the provisions of
its charter documents and by-laws and all agreements and instruments by which it
or any of its properties may be bound; and (ii) all material applicable laws and
regulations (including Environmental Laws), and material decrees, orders and
judgments ("Applicable Laws"), except where noncompliance with such agreements,
instruments or Applicable Laws would not have a material adverse effect in the
aggregate on the financial condition, properties or business of such Borrower.
If at any time while any Note or any Loan is outstanding or the Lenders have any
obligation to make Loans or the Managing Agent has any obligation to issue,
extend, or renew Letters of Credit hereunder, any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
government shall become necessary or required in order that any Borrower may
fulfill any of its obligations hereunder, such Borrower will immediately take or
cause to be taken all reasonable steps within the power of such Borrower to
obtain such authorization, consent, approval, permit or license and furnish the
Agents and the Lenders with evidence thereof.
(S)7.11. Further Assurances. The Borrowers will cooperate with the Agents
------- ----------
and the Lenders and execute such further instruments and documents as any Agent
or any Lender shall
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reasonably request to carry out to the satisfaction of the Agents and the
Lenders the transactions contemplated by this Agreement.
(S)7.12. Notice of Potential Claims or Litigation. The Borrowers shall
------ -- --------- ------ -- ----------
deliver to the Agents and the Lenders, within 30 days of receipt thereof,
written notice of any pending action, claim, complaint, or any other notice of
dispute or potential litigation (including without limitation any alleged
violation of any Environmental Law), wherein the potential liability is (i)
unspecified and which could reasonably be expected to result in a liability in
excess of $1,000,000 or (ii) specified and in excess of $5,000,000, together
with a copy of each such notice received by any Borrower.
(S)7.13. Environmental Indemnification. The Borrowers covenant and agree
------------- ---------------
that they will indemnify and hold the Agents and the Lenders harmless from and
against any and all claims, expense, damage, loss or liability incurred by the
Agents or the Lenders (including all costs of legal representation incurred by
the Agents or the Lenders) relating to (a) any Release or threatened Release of
Hazardous Substances on the Real Property; (b) any violation of any
Environmental Laws with respect to conditions at the Real Property or the
operations conducted thereon; or (c) the investigation or remediation of offsite
locations at which any Borrower or its predecessors are alleged to have directly
or indirectly disposed of Hazardous Substances. It is expressly acknowledged
by the Borrowers that this covenant of indemnification shall survive any
foreclosure or any modification, release or discharge of any or all of the Loan
Documents or the payment of the Loans and the Notes and shall inure to the
benefit of the Agents, the Lenders and their successors and assigns, but shall
not apply to any Release or offsite disposal of Hazardous Materials which was
caused by the gross negligence or willful misconduct of the Agents or the
Lenders or to any violations of Environmental Laws first commencing after
foreclosure (other than with respect to the continuance of operations at the
Real Properties in substantial conformance with practices in effect at the time
of such foreclosure). The provisions of this (S)7.13 shall survive repayment of
the Obligations and termination of this Agreement.
(S)7.14. Notice of Certain Events Concerning Insurance and Environmental
------ -- ------- ------ ---------- --------- --- -------------
Claims.
------
(a) The Borrowers will provide the Agents and the Lenders with written
notice as to any cancellation or material change in any insurance of any
Borrower within ten (10) Business Days after the Borrowers' receipt of any
notice (whether formal or informal) of such cancellation or change by any
of its insurers.
(b) The Borrowers will promptly notify the Agents and the Lenders in
writing of any of the following events:
(i) upon the Borrowers' obtaining knowledge of any violation of
any Environmental Law regarding the Real Property or the Borrowers'
operations which violation could have a material adverse effect on the
Borrowers' consolidated operations; (ii) upon the Borrowers' obtaining
knowledge of any potential or known Release, or threat of Release, of any
Hazardous Substance at, from, or into
-47-
the Real Property which could reasonably be expected to result in a
liability in excess of $5,000,000; (iii) upon the Borrowers' receipt of any
notice of violation of any Environmental Laws or of any Release or
threatened Release of Hazardous Substances, including a notice or claim of
liability or potential responsibility from any third party (including
without limitation any federal, state or local governmental officials)
representing a claim which could reasonably be expected to result in
liability of at least $100,000; or (iv) any setoff, claims (including, with
respect to the Real Property, environmental claims), withholdings or other
defenses to which any of the Collateral, or the Managing Agent's rights
with respect to the Collateral, are subject.
(S)7.15. Notice of Default. The Borrowers will promptly notify the Agents
------ -- -------
and the Lenders in writing of the occurrence of any Default or Event of Default.
If any Person shall give any notice or take any other action in respect of a
claimed default (whether or not constituting an Event of Default) under this
Agreement or any other note, evidence of indebtedness, indenture or other
obligation evidencing indebtedness in excess of $100,000 as to which any
Borrower is a party or obligor, whether as principal or surety, the Borrowers
shall forthwith give written notice thereof to the Agents and the Lenders,
describing the notice of action and the nature of the claimed default.
(S)7.16. Ownership of Borrowers. Subject to the provisions of (S)8.4
--------- -- ---------
hereof, the Parent shall at all times own, either directly or indirectly through
one or more Subsidiaries which are Borrowers, 100% of the issued and outstanding
shares of each other Borrower.
(S)8. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. The Borrowers agree
------- -------- --------- -- --- ---------
that, so long as any Note or Letter of Credit is outstanding or any Lender has
any obligation to make Loans or the Managing Agent has any obligation to issue,
extend, renew or honor Letters of Credit hereunder:
(S)8.1. Restrictions on Indebtedness. The Borrowers will not and, in the
------------ -- ------------
case of paragraph (n) below, will not permit any of their subsidiaries to,
create, incur, assume, guarantee or be or remain liable, contingently or
otherwise, with respect to any Indebtedness other than:
(a) Indebtedness to the Agents and the Lenders arising under this
Agreement or the other Loan Documents;
(b) Additional existing Indebtedness as listed on Schedule 8.1(b), in
the amounts and on the terms and conditions in effect as of the date
hereof;
(c) Current liabilities of the Borrowers incurred in the ordinary
course of business not incurred through (i) the borrowing of money, or (ii)
the obtaining of credit except for credit on an open account basis
customarily extended and in fact extended in connection with normal
purchases of goods and services;
-48-
(d) Indebtedness in respect of taxes, assessments, governmental charges or
levies and claims for labor, materials and supplies to the extent that payment
therefor shall not at the time be required to be made in accordance with the
provisions of (S)7.8 and Indebtedness secured by liens of carriers,
warehousemen, mechanics and materialmen permitted by (S)8.2(e);
(e) Indebtedness in respect of judgments or awards which have been in force
for less than the applicable period for taking an appeal, so long as execution
is not levied thereunder or in respect of which the Borrowers shall at the time
in good faith be prosecuting an appeal or proceedings for review and in respect
of which a stay of execution shall have been obtained pending such appeal or
review and in respect of which the Borrowers have maintained reserves in an
amount satisfactory to the Majority Lenders;
(f) Incurrence by any Borrower of guaranty, suretyship or indemnification
obligations in connection with such Borrower's performance of services for its
respective customers in the ordinary course of its business;
(g) Purchase money Indebtedness of the Borrowers secured by Liens permitted
by (S)8.2(h) hereof in an aggregate amount not to exceed $20,000,000 at any one
time;
(h) Indebtedness of the Parent with respect to the Subordinated Debt,
subject to (S)8.8 hereof;
(i) Unsecured Indebtedness of Smogless not to exceed $5,000,000 Dollar
Equivalent (a) under its Italian credit facility and (b) to Banco Commerciale,
for performance and bid bonds and letters of credit;
(j) Unsecured Indebtedness of Smogless owing to the Parent pursuant to the
Smogless Note;
(k) Unsecured Indebtedness of Permutit Pty. Ltd. in an aggregate amount not
to exceed $1,500,000 Dollar Equivalent owing to National Australia Bank and New
Zealand National Bank;
(l) the FNBB Obligations;
(m) Indebtedness of the Foreign Borrowers owing to foreign affiliates of
the Managing Agent for reimbursement obligations in respect of guaranties issued
by such affiliates and backed by a Letter of Credit issued hereunder, in an
aggregate principal amount not to exceed $5,000,000 or the Dollar Equivalent
thereof;
-49-
(n) With respect to any Excluded Subsidiary, any Indebtedness which is
non-recourse to the Borrowers (except that the capital stock of such
Subsidiary (other than USF TWO, Inc.) may be pledged by a Borrower to
secure such Indebtedness of such Subsidiary);
(o) Indebtedness of the Parent in an aggregate amount not to exceed
$10,000,000 with respect to the guaranty by the Parent of the obligations
owing from Treated Water Outsourcing, a Nalco/U.S. Filter Joint Venture to
Bank of America Illinois; and
(p) Existing Indebtedness (other than lines of credit provided by a
bank or other financial institution) of any Subsidiary acquired after the
date hereof originally incurred by such acquired Subsidiary in connection
with the lease or acquisition of property or fixed assets used in the
business of such acquired Subsidiary; or with respect to industrial finance
bonds issued to finance the purchase of such property or assets, provided
that if such Indebtedness is unsecured it shall have an interest rate below
the lowest rate then available to the Borrowers hereunder or shall have
material call premiums or other material penalties for prepayment; and
existing Indebtedness of any Subsidiary acquired after the date hereof with
respect to obligations under capitalized leases or sale and leaseback
transactions; provided that the aggregate amount of all such Indebtedness
described in this subsection (p) shall not exceed $20,000,000;
(S)8.2. Restrictions on Liens. None of the Borrowers will create or incur
------------ -- -----
or suffer to be created or incurred or to exist any lien, encumbrance, mortgage,
pledge, charge, restriction or other security interest of any kind upon any of
its property or assets of any character whether now owned or hereafter acquired,
or upon the income or profits therefrom; or transfer any of such property or
assets or the income or profits therefrom for the purpose of subjecting the same
to the payment of Indebtedness or performance of any other obligation in
priority to payment of its general creditors; or acquire, or agree or have an
option to acquire, any property or assets upon conditional sale or other title
retention or purchase money security agreement, device or arrangement; or suffer
to exist for a period of more than 30 days after the same shall have been
incurred any Indebtedness or claim or demand against it which if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or sell, assign, pledge or otherwise
transfer any accounts, contract rights, general intangibles or chattel paper,
with or without recourse, except the following (the "Permitted Liens"):
(a) Liens arising under the Security Documents in favor of the
Managing Agent for the benefit of the Lenders as security for the
Obligations, and for the benefit of FNBB and its branch offices to secure
the FNBB Obligations;
-50-
(b) Liens to secure taxes, assessments and other government charges or
claims for labor, material or supplies in respect of obligations not overdue;
(c) Deposits or pledges made in connection with, or to secure payment of,
workmen's compensation, unemployment insurance, old age pensions or other social
security obligations;
(d) Liens in respect of judgments or awards, the Indebtedness with respect
to which is permitted by (S)8.1(e);
(e) Liens of carriers, warehousemen, mechanics and materialmen, and other
like liens, in existence less than 120 days from the date of creation thereof in
respect of obligations not overdue;
(f) Encumbrances consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's liens under leases
to which any Borrower is a party, and other minor liens or encumbrances none of
which in the opinion of such Borrower interferes materially with the use of the
property affected in the ordinary conduct of the business of such Borrower which
defects do not individually or in the aggregate have a material adverse effect
on the business of such Borrower individually or of the Borrowers on a
consolidated basis;
(g) Existing liens set forth in Schedule 8.1(b);
(h) Liens securing purchase money obligations permitted by (S)8.1(g) hereof
provided that any such Lien shall not encumber any property other than the
property so acquired and shall not exceed the fair market value thereof;
(i) Cash collateral in an amount not to exceed $5,000,000 in favor of Anjou
International Company in connection with the acquisition by the Parent of the
outstanding shares of Polymetrics, Inc.;
(j) Liens on the shares of stock of the Excluded Subsidiaries securing
Indebtedness permitted by (S)8.1(n) hereof; and
(k) Previously existing Liens granted by acquired Subsidiaries with respect
to asset financings (mortgages, capitalized leases, etc.) or industrial revenue
bonds permitted under (S)8.1(p) on the terms and conditions in effect as of the
date of the acquisition, and the replacement, extension or renewal of any such
Lien encumbering no more than the property or assets encumbered by such Lien,
provided that in each such case such Liens shall encumber only the property or
assets so financed and shall not have been incurred in contemplation of such
acquisition;
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(S)8.3. Restrictions on Investments. None of the Borrowers will make or
------------ -- -----------
permit to exist or to remain outstanding any Investment except the following:
(a) Marketable direct or guaranteed obligations of the United States
of America which mature within one year from the date of purchase;
(b) Certificates of deposit, time deposits or repurchase agreements
which are fully insured or are issued by commercial banks organized under
the laws of the United States of America or any state thereof and having a
combined capital, surplus, and undivided profits of not less than
$100,000,000;
(c) Commercial paper issued by a corporation organized and existing
under the laws of the United States of America or any state thereof which
at the time of purchase have been rated not less than "P-1" by ▇▇▇▇▇'▇
Investors Services, Inc., or not less than "A-1" by Standard and Poor's;
(d) Investments existing on the date hereof by any Borrower in any
other Borrower;
(e) Additional Investments by the Parent in new Borrowers permitted
under (S)8.4;
(f) Investments (including Investments existing on the date hereof) in
USF TWO, Inc. in an aggregate amount not to exceed $6,000,000; and
(g) Investments (including Investments existing on the date hereof) in
the Excluded Subsidiaries (other than USF TWO, Inc.) in an aggregate amount
not to exceed $15,000,000.
(S)8.4. Mergers, Consolidations, Sales. None of the Borrowers shall be a
-------- --------------- -----
party to any merger, consolidation or exchange of stock, or purchase or
otherwise acquire all or substantially all of the assets or stock of any class
of, or any partnership or joint venture interest in, any other Person except as
otherwise provided in this (S)8.4, or sell, transfer, convey or lease any assets
or group of assets (except (i) sales of equipment in the ordinary course of
business or (ii) other sales of assets by the Borrowers not to exceed an
aggregate book value of $15,000,000) or sell or assign, with or without
recourse, any receivables. The Borrowers may purchase or otherwise acquire all
or substantially all of the assets or stock of, or joint venture interest in, or
(in the case of any Borrower other than the Parent) may merge with any Person
provided that (a) the Agents and the Lenders shall have been provided with a
Compliance Certificate demonstrating that the Borrowers are in current
compliance with and, after giving effect to the proposed transaction (including
any borrowings made or to be made in connection therewith), will continue to be
in compliance with, all of the covenants in (S)9 hereof as of the date of
consummation of the transaction; (b) the proposed transaction will not otherwise
create a Default or an Event of Default hereunder; (c) the business to be
acquired involves the
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Borrowers' existing lines of business or a related line of business; (d)(i) all
of the assets to be acquired shall be placed in an existing or newly created
Subsidiary of the Parent which is a Borrower and, in the case of a U.S.
acquisition, 100% of the stock of which has been or will be pledged to the
Managing Agent for the benefit of the Lenders, or (ii) in the case of a stock
acquisition, the acquired company shall become, or shall be merged with a
Borrower that is a wholly-owned Subsidiary of the Parent and, in the case of a
U.S. stock acquisition, the acquired stock shall be pledged to the Managing
Agent for the benefit of the Lenders; (e) in the case of a merger, the surviving
entity shall be a Borrower; (f) a copy of the purchase agreement, together with
all financial statements received by the Borrowers for any Subsidiary to be
acquired or created shall have been furnished to the Agents and the Lenders; (g)
the aggregate cash consideration (or the Dollar Equivalent thereof) to be paid
in connection with any one such transaction (including the amount of all
Indebtedness assumed in connection therewith) does not exceed $20,000,000; and
(h) the aggregate cash consideration (or the Dollar Equivalent thereof) to be
paid in any consecutive twelve-month period in connection with all such
transactions (including the amount of all Indebtedness assumed) does not exceed
$50,000,000. The Domestic Borrowers (other than the Parent) may merge,
consolidate or combine with and into one another, and the Foreign Borrowers may
merge, consolidate, or combine with and into one another. The Excluded
Subsidiaries may merge with any Borrower other than the Parent, provided that
the surviving entity is a Borrower (the stock of which has been pledged to the
Managing Agent pursuant for the benefit of the Lenders in the case of a merger
involving a Domestic Borrower or an Excluded Subsidiary organized within the
United States) and no Default or Event of Default exists or would exist after
giving effect to such merger.
(S)8.5. Sale and Leaseback. None of the Borrowers will enter into any
---- --- ---------
arrangement, directly or indirectly, whereby any Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property which any Borrower intends to use for substantially the
same purpose as the property being sold or transferred.
(S)8.6. Restricted Distributions and Redemptions. None of the Borrowers
---------- ------------- --- -----------
will declare or pay any Distributions (other than Distributions payable solely
in common stock, and cash dividends on the preferred shares of the Parent
outstanding as of the date hereof) provided that each of the Borrowers that is a
wholly-owned Subsidiary of the Parent may pay Distributions to its shareholder
so long as no Default or Event of Default exists or would be created by the
making of such Distribution. In addition, the Borrowers shall not redeem,
convert, retire or otherwise acquire shares of any class of their capital stock
provided, however, the Parent may make all post-closing adjustments in the
number of shares exchanged for the stock of another Person permitted under
(S)8.4. The Borrowers shall not effect or permit any change in or amendment to
any document or instrument pertaining to the terms of the capital stock of the
Domestic Borrowers which is pledged to the Managing Agent without prior written
notice to the Managing Agent, and will deliver any and all shares of capital
stock of such Domestic Borrowers to the Managing Agent to be held as Collateral.
The Foreign Borrowers shall not effect or permit any increase in the amount of
their stated capital. Nothing
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in this (S)8.6 shall prevent the conversion of the existing preferred shares of
the Parent outstanding as of the Effective Date to common stock of the Parent.
(S)8.7. Employee Benefit Plans. None of the Borrowers nor any ERISA
-------- ------- -----
Affiliate will:
(a) engage in any "prohibited transaction" within the meaning of
(S)406 of ERISA or (S)4975 of the Code which could result in a material
liability for any Borrower; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in (S)302 of ERISA, whether or
not such deficiency is or may be waived or otherwise permit any pension
plan to be underfunded; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of any
Borrower pursuant to (S)302(f) or (S)4068 of ERISA; or
(d) permit or take any action which would result in the aggregate
benefit liabilities (within the meaning of (S)4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit liabilities and
assets of any such Plan with assets in excess of benefit liabilities.
The Borrowers will (i) promptly upon filing the same with the Department of
Labor or Internal Revenue Service, furnish to the Agents and the Lenders a copy
of the most recent actuarial statement required to be submitted under (S)103(d)
of ERISA and Annual Report, Form 5500, with all required attachments, in respect
of each Guaranteed Pension Plan and (ii) promptly upon receipt or dispatch,
furnish to the Agent and the Lenders any notice, report or demand sent or
received in respect of a Guaranteed Pension Plan under (S)(S)302, 4041, 4042,
4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan,
under (S)(S)4041A, 4202, 4219, or 4245 of ERISA.
(S)8.8. Subordinated Debt; Smogless Note. The Borrowers will not (a)
------------ ----- -------- ----
amend, supplement or otherwise modify the terms of the Subordinated Debt without
thirty (30) days prior written notice to the Agents and the Lenders of such
change, and will not make any change which, in the reasonable opinion of the
Majority Lenders, would be in any way adverse to the Agents and the Lenders
without the prior written consent of the Majority Lenders, such consent not to
be unreasonably withheld; (b) make any payment of principal or other amounts
owing with respect thereto (other than interest) or prepay, redeem or repurchase
any of the Subordinated Debt, except that the Parent may (i) repay the principal
of the Subordinated Debt on or after (x) October 15, 2000 in the case of the
Subordinated Debt owing under the Subordinated Indenture, and (y) September 18,
2005 in the case of the Subordinated Debt owing under the Second Subordinated
Indenture; and (ii) after complying with the provisions
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of (S)5.8(d) hereof, prepay all or any portion of the Subordinated Debt with the
proceeds of an equity offering or a substitute debt offering subordinated to the
Obligations and the FNBB Obligations on terms and conditions satisfactory to the
Lenders, the form and substance of which shall have previously been consented to
by the Majority Lenders in writing; and (c) except as permitted under the terms
thereof, pay any interest on the Subordinated Debt. Notwithstanding anything
herein to the contrary, in no case may the Borrowers make any payment of
principal, interest, or other amounts owing with respect to the Subordinated
Debt if a Default or an Event of Default exists or would be created by the
making of such payment. The Parent shall not assign, pledge, or transfer the
Smogless Note to any Person.
(S)8.9. Negative Pledges. The Borrowers will not grant any negative pledges
-------- -------
on their assets to any Person other than the Lenders.
(S)9. FINANCIAL COVENANTS.
--------- ---------
The Borrowers agree that, so long as any Loan, the Notes, or any Letter of
Credit is outstanding or any Lender has any obligation to make Loans or the
Managing Agent has any obligation to issue, extend, renew or honor any Letters
of Credit hereunder:
(S)9.1. Current Ratio. The ratio of Consolidated Current Assets to
------- -----
Consolidated Current Liabilities shall not at any time be less than 1.50:1.
(S)9.2. Leverage Ratio. As of the end of any fiscal quarter commencing with
-------- -----
the fiscal quarter ending December 31, 1995, the ratio of (a) Funded Debt to (b)
EBITDA for the four fiscal quarters ending on such date (the "Leverage Ratio")
(with respect to the fiscal quarters set forth in Exhibit H hereto, calculated
in accordance with such Exhibit) shall not at any time exceed the ratio set
forth below:
Period Ratio
------ -----
Effective Date through 3/31/96 4.00:1
4/1/96 through 3/31/97 3.75:1
Thereafter 3.00:1
(S)9.3. Interest Coverage Ratio. As of the end of any quarter commencing
-------- -------- -----
with the fiscal quarter ending December 31, 1995 the ratio of (a) EBIT for the
four quarters ending on that date to (b) Consolidated Total Interest Expense for
such period shall not be less than the stated ratio for the periods set forth
below:
Period Ratio
------ -----
Effective Date through 3/31/96 2.50:1
Thereafter 3.00:1
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(S)9.4. Profitable Operations. Consolidated Net Income shall not be less
---------- ----------
than $0 for any fiscal quarter.
(S)9.5. Debt Service. As at the end of any fiscal quarter commencing with
---- -------
the fiscal quarter ending December 31, 1995 the ratio of (a) EBITDA minus
Capital Expenditures and cash taxes for the four fiscal quarters ended on such
date to (b) Consolidated Total Interest Expense plus Preferred Dividends and the
current maturity of long-term debt for such period shall not be less than the
stated ratio for the periods set forth below:
Period Ratio
------ -----
Effective Date through 3/31/96 1.50:1
Thereafter 2.50:1
(S)10. CLOSING CONDITIONS.
------- ----------
Upon the Effective Date, all of the obligations of the Borrowers under or
in respect of the Original Credit Agreement shall be evidenced solely by the
terms of this Agreement, the Notes and the other Loan Documents. The Lenders'
obligations to make the Loans and the Managing Agent's obligations with respect
to the issuance of the Letters of Credit provided for in this Agreement and
otherwise to be bound by the terms provided for in this Agreement shall be
subject to the satisfaction, prior to the Effective Date, of each of the
following conditions:
(S)10.1. Representations and Warranties. The representations and
--------------- --- ----------
warranties contained in (S)6 hereof and otherwise made by the Borrowers in
writing in connection with the transactions contemplated by this Agreement shall
have been correct as of the date on which made and shall also be correct at and
as of the date of the first Loan with the same effect as if made at and as of
such time, except to the extent that the facts upon which such representations
and warranties are based may in the ordinary course be changed by the
transactions permitted or contemplated hereby.
(S)10.2. Performance; No Default. The Borrowers shall have performed and
----------- -- -------
complied with all terms and conditions herein required to be performed or
complied with by them prior to or at the time of the first Loan, and at the time
of the first Loan, as certified by the chief financial officer of the Borrower,
there shall exist no Default or Event of Default or condition which would, with
either or both the giving of notice or the lapse of time, result in a Default or
Event of Default upon consummation of the first Loan.
(S)10.3. Corporate Action. All corporate action necessary for the valid
--------- ------
execution, delivery and performance by the Borrowers of the Loan Documents shall
have been duly and effectively taken, and evidence thereof satisfactory to the
Lenders shall have been provided to each of the Lenders.
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(S)10.4. Loan Documents, Etc. Each of the Loan Documents shall have been
---- --------- ---
duly and properly authorized, executed and delivered by the respective parties
thereto and shall be in full force and effect in a form satisfactory to the
Lenders.
(S)10.5. Certified Copies of Charter Documents. The Managing Agent shall
--------- ------ -- ------- ---------
have received from each of the Borrowers a copy, certified by a duly authorized
officer of such Person to be true and complete on the Effective Date, of each of
(a) its charter or other incorporation documents as in effect on such date of
certification, and (b) its by-laws as in effect on such date. With respect to
the Borrowers that were parties to the Original Credit Agreement, such
requirement may be satisfied by delivery to the Managing Agent of a certificate
of such officer stating that there have been no changes to such charter
documents and by-laws since March 31, 1995.
(S)10.6. Incumbency Certificate. Each of the Lenders shall have received
---------- -----------
an incumbency certificate, dated as of the Effective Date, signed by duly
authorized officers giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign the Loan Documents on behalf of
each Borrower; (b) to make Loan requests; and (c) to give notices and to take
other action on such Borrower's behalf under the Loan Documents.
(S)10.7. Validity of Liens. The Security Documents shall be effective to
-------- -- -----
create in favor of the Managing Agent a first priority legal, valid and
enforceable security interest in and lien upon the Collateral, subject only to
the Permitted Liens. All filings, recordings, deliveries of instruments
(including delivery of all stock pledged) and other actions necessary or
desirable in the opinion of the Managing Agent to protect and preserve such
security interests shall have been duly effected. The Lenders shall have
received evidence thereof in form and substance satisfactory to the Lenders.
(S)10.8. Payment of Fees and Interest. The Borrowers shall have paid (a) to
------- -- ---- --- --------
FNBB and First Interstate all interest, fees and other amounts which are due
pursuant to the Original Credit Agreement, and (b) all fees required to be paid
to the Agents and the Lenders on the Effective Date.
(S)10.9. Financial Statements. The Borrowers shall have delivered to each
--------- ----------
of the Lenders audited consolidated financial statements for the year ended the
Balance Sheet Date and unaudited consolidated financial statements for the
period ended on September 30, 1995 which shall fairly represent the business and
financial condition of the Borrowers on a consolidated basis in accordance with
GAAP, together with a Compliance Certificate demonstrating that the Borrowers
are in compliance with the provisions of (S)9 hereof as of the Closing Date.
(S)10.10. Opinions of Counsel. Each of the Lenders shall have received a
-------- -- -------
favorable opinion from General Counsel of the Parent regarding each of the
Domestic Borrowers, and from local counsel to Smogless and Societe des
Ceramiques Techniques, S.A. (and to any other Foreign Borrower which has in
excess of $20,000,000, or the Dollar Equivalent thereof, in
-57-
annual gross revenues) dated the Effective Date in form and substance
satisfactory to the Lenders.
(S)10.11. Lien Searches. The Managing Agent shall have received the results
---- --------
of lien searches demonstrating that there are no liens on the assets of the
Borrowers other than Permitted Liens.
(S)10.12. Environmental Reports. The Borrowers shall have delivered to
------------- -------
the Managing Agent (a) the results of the most recent groundwater analysis
conducted as the U.S. Filter Recovery Services, Inc. facility in Roseville,
Minnesota, (b) the work plan for the remediation being conducted at the Illinois
Water Treatment, Inc. facility in Rockford, Illinois, and (c) the work plan for
the remediation being conducted in connection with the closure of the U.S.
Filter/Marlboro facility in Marlboro, New Jersey, all such information to be in
form and substance satisfactory to the Managing Agent.
(S)11. CONDITIONS OF ALL LOANS.
---------- -- --- -----
The obligation of Lenders to make the first Loan and any Loan subsequent to
the first Loan and the obligation of the Managing Agent to issue, extend or
renew any Letter of Credit are subject to the following conditions precedent:
(S)11.1. Representations True. Each of the representations and warranties
--------------- ----
of the Borrowers contained in this Agreement or in any document or instrument
delivered pursuant to or in connection with this Agreement shall be true as of
the date as of which they were made and shall also be true at and as of the time
of the making of the Loan or the issuance, extension or renewal of Letter of
Credit with the same effect as if made at and as of that time (except to the
extent of changes resulting from transactions contemplated or permitted by this
Agreement and changes occurring in the ordinary course of business or disclosed
in the financial statements and other information delivered to the Lenders
pursuant to (S)7.4 hereof which singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date).
(S)11.2. Performance; No Default or Event of Default. The Borrowers shall
----------- -- ------- -- ----- -- -------
have performed and complied with all terms and conditions herein required to be
performed or complied with by them prior to or at the time of the Loan or the
issuance, extension or renewal of any Letter of Credit, and at the time of the
Loan or the issuance, extension or renewal of Letter of Credit, there shall
exist no Default or Event of Default or condition which would result in a
Default or Event of Default upon consummation of the Loan or the issuance,
extension or renewal of Letter of Credit.
(S)11.3. No Legal Impediment. No change shall have occurred in any law or
-- ----- ----------
regulations thereunder or interpretations thereof which in the reasonable
opinion of the Lenders would make it illegal for the Lenders to make Loans
hereunder or for the Managing Agent to issue, extended or renew a Letter of
Credit.
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(S)11.4. Governmental Regulation. The Lenders shall have received such
------------ ----------
statements in substance and form reasonably satisfactory to the Lenders as they
shall require for the purpose of compliance with any applicable regulations of
the Comptroller of the Currency or the Board of Governors of the Federal Reserve
System.
(S)11.5. Proceedings and Documents. All proceedings in connection with
----------- --- ---------
the transactions contemplated by this Agreement and all documents incident
thereto shall be satisfactory in form and substance to the Agents and the
Lenders, and the Lenders and the Agents shall have received all information and
such counterpart originals or certified or other copies of such documents as the
Lenders and the Agents may reasonably request.
(S)12. EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF COMMITMENTS;
------ -- ------- ------------ ----------- -- -----------
REMEDIES.
--------
(S)12.1 Events of Default and Acceleration. If any of the following events
----------------------------------
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice and/or lapse of time, "Defaults") shall
occur:
(a) if the Borrowers shall fail to pay any principal of the Loans when
the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment;
(b) if the Borrowers shall fail to pay any interest, Commitment Fees,
Letter of Credit Fees, or any other fees within five (5) Business Days
after the same shall become due and payable whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment;
(c) if the Borrowers shall fail to comply with the covenants contained
in (S)(S)7.l, 7.2, 7.3, 7.4, 7.5, 7.6, 7,7, 7.8, 7.10, 7.12, 7.14, 7.15,
7.16, 8, or 9 hereof;
(d) if the Borrowers shall fail to perform any term, covenant or
agreement herein contained or contained in any of the other Loan Documents
(other than those specified in subsections (a), (b), and (c) above) within
thirty (30) days after written notice of such failure has been given to
Borrowers by the Managing Agent;
(e) if any representation or warranty contained in this Agreement or
in any document or instrument delivered pursuant to or in connection with
this Agreement shall prove to have been false in any material respect upon
the date when made or repeated;
(f) if any Borrower shall (i) fail to pay at maturity, or within any
applicable period of grace, any obligation for borrowed money or (ii) fail
to observe or perform any material term, covenant or agreement contained in
any agreement by which it is bound evidencing or securing borrowed money in
an amount in excess of $2,000,000 for such period of time as would, or
would have permitted (assuming the giving of
-59-
appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof;
(g) if any Borrower makes an assignment for the benefit of creditors,
or admits in writing its inability to pay or generally fails to pay its
debts as they mature or become due or petitions or applies for the
appointment of a trustee or other custodian, liquidator or receiver of such
Borrower or of any substantial part of the assets of such Borrower or
commences any case or other proceeding relating to such Borrower under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or takes any action to authorize or in furtherance of
any of the foregoing, or if any such petition or application is filed or
any such case or other proceeding is commenced against such Borrower and
such Borrower indicates its approval thereof, consent thereto or
acquiescence therein;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any Borrower bankrupt or
insolvent, or approving a petition in any such case or other proceeding, or
a decree or order for relief is entered in respect of such Borrower in an
involuntary case under Federal bankruptcy laws as now or hereafter
constituted, and such decree or order remains in effect for more than 30
days, whether or not consecutive;
(i) if there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final
judgment against any Borrower which, with other outstanding final
judgments, undischarged against the Borrower and any Subsidiary exceeds in
the aggregate $2,000,000 after taking into account any insurance coverage;
(j) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Majority Lenders shall have determined in
their reasonable discretion that such event reasonably could be expected to
result in liability of any Borrower to the PBGC or the Plan in an aggregate
amount exceeding $500,000 and such event in the circumstances occurring
reasonably could constitute grounds for the termination of such Plan by the
PBGC or for the appointment by the appropriate United States District Court
of a trustee to administer such Plan; or a trustee shall have been
appointed by the United States District Court to administer such Plan; or
the PBGC shall have instituted proceedings to terminate such Plan;
(k) if any of the Loan Documents shall be canceled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof or
with the express prior written agreement, consent or approval of the
Lenders, or any action at law, or suit in equity or other legal proceeding
to cancel, revoke or rescind any of the Loan Documents shall be commenced
by or on behalf of any Borrower, or any of its stockholders, or any court
or any other governmental or regulatory authority or agency
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of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of
the Loan Documents is illegal, invalid or unenforceable in accordance with
the terms thereof, or any of the Borrowers shall deny or contest its
obligations pursuant to (S)5.18 hereof;
(l) if any event of default shall have occurred and is continuing
under the FNBB Obligations; or
(m) if a Change of Control shall have occurred;
then, the Managing Agent may, and upon the request of the Majority Lenders
shall, by notice in writing to the Borrowers declare all amounts owing with
respect to this Agreement, the Notes, and the other Loan Documents, and all
Reimbursement Obligations to be, and they shall thereupon forthwith mature and
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrowers; provided, that in the event of any Event of Default specified in
(S)(S)12(g) or 12(h) hereof, all such amounts shall become immediately due and
payable automatically and without any requirement of notice from the Managing
Agent.
(S)12.2. Termination of Commitments. If any Event of Default pursuant to
----------- -- -----------
(S)(S)12.1(g) or 12.1(h) hereof shall occur, any unused portion of the Total
Commitment hereunder shall forthwith terminate and the Lenders and the Managing
Agent shall be relieved of all obligations to make Loans to or to issue, extend
or renew Letters of Credit for the account of the Borrowers; or if any other
Event of Default shall occur, the Majority Banks may by notice to the Borrower
terminate the unused portion of the Total Commitment hereunder, and, upon such
notice being given, such unused portion of the Total Commitment hereunder shall
terminate immediately and the Lenders and the Managing Agent shall be relieved
of all further obligations to make Loans to or to issue, extend or renew Letters
of Credit for the account of the Borrowers hereunder. No termination of any
portion of the Total Commitment hereunder shall relieve the Borrowers of any of
their existing Obligations to the Lenders or the Agents hereunder or elsewhere.
(S)12.3. Remedies. Upon demand by the Managing Agent after the occurrence
--------
of any Event of Default, the Borrowers shall immediately provide to the Managing
Agent cash in an amount equal to the aggregate Maximum Drawing Amount of all
Letters of Credit outstanding to be held by the Managing Agent as collateral
security for the Obligations. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Managing Agent
shall have accelerated the maturity of the Loans pursuant to the foregoing, each
of the Lenders, if owed any amount with respect to the Loans may, with the
consent of the Majority Lenders, proceed to protect and enforce its rights by
suit in equity, action at law and/or other appropriate proceeding, whether for
the specific performance of any covenant or agreement contained in this
Agreement or any instrument pursuant to which the Obligations to the Lenders and
the Agents hereunder are evidenced, including as permitted by applicable law the
obtaining of the ex parte appointment of a receiver, and, if such amount shall
have become
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due, by declaration or otherwise, proceed to enforce the payment thereof or any
other legal or equitable right of such Lender. No remedy herein conferred upon
the Agents, the Lenders or the holder of the Notes is intended to be exclusive
of any other remedy and each and every remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute or any other provision of law.
(S)13. COLLATERAL SECURITY. The Obligations shall be secured by a perfected
---------- --------
security interest (having, with respect to each category of Collateral, the
respective rights and priorities set forth herein and the Security Documents) in
all of the Collateral, whether now owned or hereafter acquired, pursuant to the
terms of the Security Documents.
(S)14. SETOFF. Regardless of the adequacy of any collateral, during the
------
continuance of an Event of Default, any deposits or other sums credited by or
due from the Lenders to the Borrowers and any securities or other property of
the Borrowers in the possession of the Lenders may, with the consent of the
Managing Agent, be applied to or set off against the payment of the Obligations
hereunder and under any Note and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrowers to the Lenders and the Agents. Each of the
Lenders agrees with each other Lender that (i) if an amount to be set off is to
be applied to Indebtedness of the Borrowers to such Lender, other than
Indebtedness evidenced by the Notes held by such Lender or constituting
Reimbursement Obligations owed to such Lender, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by all such
Notes held by such Lender or constituting Reimbursement Obligations owed to such
Lender, and (ii) if such Lender shall receive from the Borrowers, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by, or constituting
Reimbursement Obligations owed to, such Lender by proceedings against the
Borrowers at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall retain
and apply to the payment of the Note or Notes held by, or Reimbursement
Obligations owed to, such Lender any amount in excess of its ratable portion of
the payments received by all of the Lenders with respect to the Notes held by,
and Reimbursement Obligations owed to, all of the Lenders, such Lender will make
such disposition and arrangements with the other Lenders with respect to such
excess, either by way of distribution, pro tanto assignment of claims,
subrogation or otherwise as shall result in each Lender receiving in respect of
the Notes held by it or Reimbursement Obligations owed it, its proportionate
payment as contemplated by this Agreement; provided that if all or any part of
such excess payment is thereafter recovered from such Lender, such disposition
and arrangements shall be rescinded and the amount restored to the extent of
such recovery, but without interest.
(S)15. EXPENSES. Whether or not the transactions contemplated herein shall
--------
be consummated, the Borrowers hereby promise to reimburse the Managing Agent for
all reasonable out-of-pocket fees and expenses, including, without limitation,
attorneys' fees and disbursements, incurred or expended in connection with the
preparation, syndication or interpretation of this Agreement, the Notes, the
Letters of Credit or any other Loan Document or any amendment hereof or thereof,
and to reimburse the Lenders for reasonable legal fees
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and disbursements incurred in connection with the enforcement of any Obligations
or the satisfaction of any indebtedness of the Borrowers hereunder or
thereunder, or in connection with any litigation, proceeding or dispute
hereunder in any way related to the credit hereunder, including without
limitation the so-called "work-out" thereof after the occurrence of a Default or
Event of Default. The Borrowers will pay any taxes (including any interest and
penalties in respect thereof), other than the federal and state income taxes of
the Agents and the Lenders, payable on or with respect to the transactions
contemplated by this Agreement (the Borrowers hereby agreeing to indemnify the
Agents and the Lenders with respect thereto). The Borrowers further promise to
reimburse the Agents and the Lenders for all such fees and disbursements
incurred or expended in connection with the enforcement of any Obligations or
the satisfaction of any indebtedness of the Borrowers hereunder or thereunder,
or in connection with any litigation, proceeding or dispute in any way related
to the credit hereunder. The covenants of this (S)15 shall survive payment or
satisfaction of amounts owing with respect to the Loan Documents.
(S)16. THE AGENTS.
--- ------
(S)16.1. Authorization. Each Agent is authorized to take such action on
-------------
behalf of each of the Lenders and to exercise all such powers as are set forth
hereunder and under any of the other Loan Documents and any related documents
delegated to such Agent, together with such powers as are reasonably incident
thereto, provided that no duties or responsibilities not expressly assumed
herein or therein shall be implied to have been assumed by such Agent. The
relationship between each of the Agents and the Lenders is and shall be that of
agent and principal only, and nothing contained in this Agreement or any of the
other Loan Documents shall be construed to constitute such Agent as a trustee
for any Lenders.
(S)16.2. Employees and Agents. Each Agent may exercise its powers and
--------- --- ------
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Agreement and the other Loan Documents. Each Agent
may utilize the services of such Persons as such Agent in its sole discretion
may reasonably determine, and all reasonable fees and expenses of any such
Persons shall be paid by the Borrower.
(S)16.3. No Liability. None of the Agents nor any of their shareholders,
-- ---------
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that such Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
(S)16.4. No Representations. None of the Agents shall be responsible for
-- ---------------
the execution or validity or enforceability of this Agreement, the Notes, the
Letters of Credit, any of the other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral security for the Notes, or
for the value of any such collateral security or for the
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validity, enforceability or collectability of any such amounts owing with
respect to the Notes, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of the
Borrowers, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or in
any instrument at any time constituting, or intended to constitute, collateral
security for the Notes or to inspect any of the properties, books or records of
the Borrowers. None of the Agents shall be bound to ascertain whether any
notice, consent, waiver or request delivered to it by the Borrowers or any
holder of any of the Notes shall have been duly authorized or is true, accurate
and complete. None of the Agents has made, nor does it now make, any
representations or warranties, express or implied, nor does it assume any
liability to the Lenders, with respect to the credit worthiness or financial
conditions of the Borrowers. Each Lender acknowledges that it has, independently
and without reliance upon any Agent or any other Lender, and based upon such
information and documents as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement.
(S)16.5. Payments.
--------
(a) A payment by the Borrowers to the Managing Agent hereunder or any
of the other Loan Documents for the account of any Lender shall constitute
a payment to such Lender. The Managing Agent agrees promptly to distribute
to each Lender such Lender's pro rata share of payments received by the
Managing Agent for the account of the Lenders except as otherwise expressly
provided herein or in any of the other Loan Documents.
(b) If in the opinion of the Managing Agent the distribution of any
amount received by it in such capacity hereunder, under the Notes or under
any of the other Loan Documents might involve it in liability, it may
refrain from making distribution until its right to make distribution shall
have been adjudicated by a court of competent jurisdiction, provided that
interest shall accrue on such amount at a rate not less than the then
effective Federal Funds Effective Rate until such distribution has been
made, and the recipients of such distribution shall each be entitled to
receive their ratable share of such interest accrued to the time of such
distribution. If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Managing Agent is to be repaid, each
Person to whom any such distribution shall have been made shall either
repay to the Managing Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Lender that fails (i) to
make available to the Managing Agent its pro rata share of any Loan or to
purchase any Letter of Credit Participation or (ii) to comply with the
provisions of (S)14 with respect to making dispositions and arrangements
with the other Lenders, where such Lender's share of
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any payment received, whether by setoff or otherwise, is in excess of its
pro rata share of such payments due and payable to all of the Lenders, in
each case as, when and to the full extent required by the provisions of
this Agreement, shall be deemed delinquent (a "Delinquent Lender") and
shall be deemed a Delinquent Lender until such time as such delinquency is
satisfied. A Delinquent Lender shall be deemed to have assigned any and all
payments due to it from the Borrowers, whether on account of outstanding
Loans, unpaid Reimbursement Obligations, interest, fees or otherwise, to
the remaining nondelinquent Lenders for application to, and reduction of,
their respective pro rata shares of all outstanding Loans and unpaid
Reimbursement Obligations. The Delinquent Lender hereby authorizes the
Managing Agent to distribute such payments to the nondelinquent Lenders in
proportion to their respective pro rata shares of all outstanding Loans and
unpaid Reimbursement Obligations. A Delinquent Lender shall be deemed to
have satisfied in full a delinquency when and if, as a result of
application of the assigned payments to all outstanding Loans and unpaid
Reimbursement Obligations of the nondelinquent Lenders, the Lenders'
respective pro rata shares of all outstanding Loans and unpaid
Reimbursement Obligations have returned to those in effect immediately
prior to such delinquency and without giving effect to the nonpayment
causing such delinquency.
(S)16.6. Holders of Notes. The Managing Agent may deem and treat the payee
------- -- -----
of any Note or the purchaser of any Letter of Credit Participation as the
absolute owner or purchaser thereof for all purposes hereof until it shall have
been furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
(S)16.7. Indemnity. The Lenders ratably agree hereby to indemnify and hold
---------
harmless each Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which such Agent has not been reimbursed by the Borrowers as
required by (S)15), and liabilities of every nature and character arising out
of or related to this Agreement, the Notes, or any of the other Loan Documents
or the transactions contemplated or evidenced hereby or thereby, or such Agent's
actions taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by such Agent's willful misconduct or gross negligence.
The covenants of this (S)16.7 shall survive payment or satisfaction of amounts
owing with respect to the Loan Documents.
(S)16.8. Agents as Lenders. In its individual capacity, each Agent shall
------ -- -------
have the same obligations and the same rights, powers and privileges in respect
to its Commitment and the Loans made by it, and as the holder of any of the
Notes and as the purchaser of any Letter of Credit Participations, as it would
have were it not also an Agent.
(S)16.9. Resignation. Any Agent may resign at any time by giving sixty (60)
-----------
days prior written notice thereof to the Lenders and the Borrowers. Upon any
such resignation, the Majority Lenders shall have the right to appoint a
successor Agent from among the Lenders. Unless a Default or Event of Default
shall have occurred and be continuing, such successor Agent shall be reasonably
acceptable to the Borrowers. If no successor Agent shall have been
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so appointed by the Majority Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a financial institution having a rating of not
less than A or its equivalent by Standard & Poor's Corporation. Upon the
acceptance of any appointment as an Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation, the provisions of this Agreement and the other
Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
(S)16.10. Certain Intercreditor Provisions. Notwithstanding anything
------- ------------- ----------
contained herein or in any other Loan Documents to the contrary, the Lenders
agree with FNBB individually that, so long as the FNBB Obligations are
outstanding or FNBB or its affiliates, successors or assigns have any obligation
to extend credit to the Borrowers thereunder (a) the FNBB Obligations shall be
secured by the Collateral, and such security interest shall be pari passu with
the security interest in the Collateral granted to the Managing Agent for the
benefit of the Lenders; and (b) with respect to matters involving the Collateral
which require action on the part of the Majority Lenders, for purposes of (S)12
hereof and for all purposes while an Event of Default is continuing the term
"Majority Lenders" shall mean the lending institutions holding at least fifty-
one percent (51%) of the sum of (i) the outstanding principal amount of the
Loans plus (ii) the Maximum Drawing Amount of the Letters of Credit plus (iii)
---- ----
the outstanding amount of the FNBB Obligations (calculating all amounts
denominated in Optional Currencies at their Dollar Equivalent), or, if no
principal amounts and no Letters of Credit are outstanding, the financial
institutions whose aggregate commitment to lend to the Borrowers constitutes
fifty-one percent (51%) of the sum of the Total Commitment plus the amount which
----
FNBB and its affiliates are committed to lend to the Borrowers under the FNBB
Credit Agreement. FNBB agrees that it will not increase the rate of interest or
the fees payable under the FNBB Credit Agreement, or amend any of the financial
covenants contained therein, without the prior written consent of the Lenders,
provided that FNBB may increase such interest rates or fees and/or amend such
covenants so as to be substantially similar to the relevant rates, fees, and
covenants contained herein.
(S)17. INDEMNIFICATION. The Borrowers agree to indemnify and hold harmless
---------------
the Agents and the Lenders and their affiliates, as well as their respective
shareholders, directors, agents, officers, subsidiaries and affiliates, from and
against all damages, losses, settlement payments, obligations, liabilities,
claims, actions or causes of action, whether statutorily created or under the
common law, and reasonable costs and expenses incurred, suffered, sustained or
required to be paid by an indemnified party by reason of or resulting from the
transactions contemplated hereby, except any of the foregoing which result from
the gross negligence or willful misconduct of any indemnified party. In any
investigation, proceeding or litigation, or the preparation therefor, the Agents
and the Lenders shall be entitled to select their own counsel and, in addition
to the foregoing indemnity, the Borrowers agree to pay promptly the reasonable
fees and expenses of such counsel. In the event of the commencement
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of any such proceeding or litigation, the Borrowers shall be entitled to
participate in such proceeding or litigation with counsel of their choice at
their expense, and, unless exigent circumstances exist which would preclude such
a meeting, the party claiming indemnification and the Borrowers shall meet to
discuss the anticipated fees of legal counsel expected to arise in the course of
such proceeding or litigation. The covenants of this (S)17 shall survive
payment or satisfaction of payment of amounts owing with respect to any Note or
any other Loan Document.
(S)18. SURVIVAL OF COVENANTS. ETC. All covenants, agreements,
-------- -- --------- ---
representations and warranties made herein, in the other Loan Documents or in
any documents or other papers delivered by or on behalf of the Borrowers
pursuant hereto shall be deemed to have been relied upon by the Agents and the
Lenders, notwithstanding any investigation heretofore or hereafter made by any
of them, and shall survive the making by the Lenders of the Loans as herein
contemplated, and shall continue in full force and effect so long as any amount
due under this Agreement, any Loan Document, or any Note remains outstanding and
unpaid or the Lenders have any obligation to make any Loans or the Managing
Agent has any obligation to issue, extend, or renew Letters of Credit hereunder.
All statements contained in any certificate or other paper delivered to the
Agents or the Lenders at any time by or on behalf of the Borrowers pursuant
hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrowers hereunder.
(S)19. ASSIGNMENT AND PARTICIPATION.
---------- --- -------------
(S)19.1. Conditions to Assignment by Lenders. Except as provided herein,
---------- -- ---------- -- -------
each Lender may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); provided that (i)
except in the case of an assignment by a Lender to its affiliate, the Managing
Agent shall have given its prior written consent to such assignment, such
consent not to be unreasonably withheld, (ii) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Lender's rights and
obligations under this Agreement, (iii) each assignment shall be in an amount
that is a whole multiple of $5,000,000 (or an amount constituting all of such
Lender's Commitment), and (iv) the parties to such assignment shall execute and
deliver to the Managing Agent, for recording in the Register (as hereinafter
defined), an Assignment and Acceptance, substantially in the form of Exhibit I
hereto (an "Assignment and Acceptance"), together with any Notes subject to such
assignment and an assignment fee in the amount of $2,500 payable by the
assigning Lender to the Managing Agent. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five (5)
Business Days after the execution thereof; (i) the assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder, and (ii) the assigning
Lender shall, to the extent provided in such assignment and be released from its
obligations under this Agreement.
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(S)19.2. Certain Representations and Warranties; Limitations; Covenants. By
------- --------------- --- ----------- ------------ ---------
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Lender makes no representation or
warranty, express or implied, and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or
the attachment, perfection or priority of any security interest or
mortgage,
(b) the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrowers or any other Person primarily or secondarily liable in respect of
any of the Obligations, or the performance or observance by the Borrowers
or any other Person primarily or secondarily liable in respect of any of
the Obligations or any of their obligations under this Agreement or any of
the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
referred to in (S)7.4 hereof and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the
assigning Lender, the Agents or any other Lender and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes each Agent to take such
action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to such Agent by
the terms hereof or thereof; together with such powers as are reasonably
incidental thereto;
(g) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Lender;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
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(i) such assignee acknowledges that it has made arrangements with the
assigning Lender satisfactory to such assignee with respect to its pro rata
share of Letter of Credit Fees in respect of outstanding Letters of Credit,
accrued interest, and Commitment Fees.
(S)19.3. Register. The Managing Agent shall maintain a copy of each
--------
Assignment and Acceptance delivered to it and a register or similar list (the
"Register") for the recordation of the names and addresses of the Lenders and
the Commitment Percentage of, and principal amount of the Loans owing to and
Letter of Credit Participations purchased by, the Lenders from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Agents and the Lenders may treat each Person whose name
is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers and
the Lenders at any reasonable time and from time to time upon reasonable prior
notice.
(S)19.4. New Notes. Upon its receipt of an Assignment and Acceptance
---------
executed by the parties to such assignment, together with each Note subject to
such assignment, the Managing Agent shall (i) record the information contained
therein in the Register, and (ii) give prompt notice thereof to the Borrowers
and the Lenders (other than the assigning Lenders). Within five (5) Business
Days after receipt of such notice, the Borrowers, at their own expense, shall
execute and deliver to the Managing Agent, in exchange for each surrendered
Note, a new Note to the order of such Eligible Assignee in an amount equal to
the amount assumed by such Eligible Assignee pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained some portion of its
obligations hereunder, a new Note to the order of the assigning Lender in an
amount equal to the amount retained by it hereunder. Such new Notes shall
provide that they are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such in Assignment and
Acceptance and shall otherwise be substantially the form of the assigned Notes.
Within five (5) days of issuance of any new Notes pursuant to this (S)19.4, the
Borrowers shall deliver an opinion of counsel, addressed to the Lenders and the
Agents, relating to the due authorization, execution and delivery of such new
Notes and the legality, validity and binding effect thereof; in form and
substance satisfactory to the Lenders. The surrendered Notes shall be canceled
and returned to the Borrowers.
(S)19.5. Participations. Each Lender may sell participations to one or more
--------------
banks or other entities in all or a portion of such Lender's rights and
obligations under this Agreement and the other Loan Documents; provided that (i)
each such participation shall be in an amount of not less than $5,000,000, (ii)
any such sale or participation shall not affect the rights and duties of the
selling Lender hereunder to the Borrowers, and (iii) the only rights granted to
the participant pursuant to such participation arrangements with respect to
waivers, amendments or modifications of the Loan Documents shall be the rights
to approve waivers, amendments or modifications that would reduce the principal
of or the interest rate on any Loans, extend the term or increase the amount of
the Commitment of such Lender as it relates to such participant, reduce the
amount of any Commitment Fees or Letter of Credit Fees to which such participant
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is entitled, or extend any regularly scheduled payment date for principal or
interest, and the right to approve releases of Collateral having a value in
excess of $2,000,000.
(S)19.6. Disclosure. The Borrowers agree that in addition to disclosures
----------
made in accordance with standard and customary banking practices any Lender may
disclose information obtained by such Lender pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (i) to treat in confidence such information unless such
information becomes public knowledge other than as a result of any Agent's, any
Lender's or any actual or potential assignee's or participant's breach of its
obligation of confidentiality set forth herein, (ii) not to disclose such
information to a third party, except as required by law or legal process or by a
regulatory authority and (iii) not to make use of such information for purposes
of transactions unrelated to such contemplated assignment or participation.
(S)19.7. Assignee or Participant Affiliated with the Borrowers. If any
-------- -- ----------- ---------- ---- --- ---------
assignee Lender is an Affiliate of the Borrowers, then any such assignee Lender
shall have no right to vote as a Lender hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Managing Agent pursuant to (S)16.1 or
(S)16.2, and the determination of the Majority Lenders shall for all purposes of
this Agreement and the other Loan Documents be made without regard to such
assignee Lender's interest in any of the Loans. If any Lender sells a
participating interest in any of the Loans or Reimbursement Obligations to a
participant, and such participant is a Borrower or an Affiliate of a Borrower,
such transferor Lender shall promptly notify the Managing Agent of the sale of
such participation. A transferor Lender shall have no right to vote as a Lender
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the Managing
Agent pursuant to (S)16.1 or (S)16.2 to the extent that such participation is
beneficially owned by a Borrower or any Affiliate of a Borrower, and the
determination of the Majority Lenders shall for all purposes of this Agreement
and the other Loan Documents be made without regard to the interest of such
transferor Lender in the Loans to the extent of such participation.
(S)19.8. Miscellaneous Assignment Provisions. Any assigning Lender shall
------------- ---------- ----------
retain its rights to be indemnified pursuant to (S)17 with respect to any claims
or actions arising prior to the date of such assignment. If any assignee Lender
is not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrowers and the Agents certification as to its exemption from deduction or
withholding of any United States federal income taxes. Anything contained in
this (S)19 to the contrary notwithstanding, any Lender may at any time pledge
all or any portion of its interest and rights under this Agreement (including
all or any portion of its Notes) to any of the twelve Federal Reserve Banks
organized under (S)4 of the Federal Reserve Act, 12 U.S.C. (S)341. No such
pledge or the enforcement thereof shall release the pledgor Lender from its
obligations
-70-
hereunder or under any of the other Loan Documents or shall confer voting rights
thereunder to such Federal Reserve Bank.
(S)19.9. Assignment by Borrowers. The Borrowers shall not assign or
---------- -- ---------
transfer any of their rights or obligations under any of the Loan Documents
without the prior written consent of each of the Lenders.
(S)20. PARTIES IN INTEREST. All the terms of this Agreement and the other
------- -- --------
Loan Documents shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto and
thereto; provided, that the Borrowers shall not assign or transfer their rights
hereunder without the prior written consent of each of the Lenders.
(S)21. NOTICES, ETC. Except as otherwise expressly provided in this
------- ---
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the other Loan Documents shall be in writing and
shall be delivered in hand, mailed by first-class mail, postage prepaid, or sent
by telegraph, telex or telecopier and confirmed by letter, addressed as follows:
(a) if to the Borrowers, at: ▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (telephone: (▇▇▇) ▇▇▇-▇▇▇▇; telecopy (619) 341-
9368);
(b) if to the Managing Agent, at: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇. ▇▇▇▇▇▇, Managing Director
(telephone: (▇▇▇) ▇▇▇-▇▇▇▇; telecopy: 617/434-2160);
(c) if to the Nassau Branch, at Bank of Boston, Nassau Operations, MA
DED 74-02-02D, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇ (telephone: (▇▇▇) ▇▇▇-▇▇▇▇; telecopy: (▇▇▇) ▇▇▇-▇▇▇▇);
(d) if to the Co-Agents (i) to First Interstate at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(telephone: 714/▇▇▇-▇▇▇▇; telecopy: 714/253-4288); and (ii) to ABN at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇ ▇▇▇▇▇▇▇ (telephone (▇▇▇) ▇▇▇-▇▇▇▇; telecopy (▇▇▇) ▇▇▇-▇▇▇▇);
(e) if to any Lender at such Lender's address set forth in Schedule 2
hereto, or such other address for notice as such Lender shall have last
furnished in writing to the Person giving the notice;
or at such other address for notice as shall last have been furnished in
writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (a) if delivered by hand to a responsible officer
of the party to which it
-71-
is directed, at the time of the receipt thereof by such officer, (b) if sent by
registered or certified first-class mail, postage prepaid, five (5) Business
Days after the posting thereof; and (c) if sent by telex, telecopy, or cable, at
the time of the dispatch thereof; if in normal business hours in the country of
receipt, or otherwise at the opening of business on the following Business Day.
Any such notice given by or to the Parent shall be deemed to be notice given by
or to the Borrowers, but notice to any Borrower other than the Parent shall not
be deemed to be notice to all Borrowers unless the Parent shall also have
received such notice.
(S)22. MISCELLANEOUS. The rights and remedies herein expressed are
-------------
cumulative and not exclusive of any other rights which the Agents or the Lenders
would otherwise have. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof. This
Agreement and any amendment hereof may be executed in several counterparts and
by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, but all of which together shall constitute one
instrument. In proving this Agreement it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
enforcement is sought.
(S)23. ENTIRE AGREEMENT, ETC. This Agreement, together with the other Loan
------ --------- ---
Documents and any other documents executed in connection herewith or therewith,
express the entire understanding of the parties with respect to the transactions
contemplated hereby. On and after the Effective Date, this Agreement shall
supersede the Original Credit Agreement. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated orally or in writing,
except as provided in (S)27.
(S)24. WAIVER OF JURY TRIAL. Each of the Borrowers hereby waives its right
------ -- ---- -----
to a jury trial with respect to any action or claim arising out of any dispute
in connection with this Agreement, the Notes or any of the other Loan Documents,
any rights or obligations hereunder or thereunder or the performance of such
rights and obligations. Except as prohibited by law, each of the Borrowers
hereby waives any right it may have to claim or recover in any litigation
referred to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages. Each of the Borrowers
(a) certifies that no representative, agent or attorney of the Agents or the
Lenders has represented, expressly or otherwise, that the Agents and the
Lenders would not, in the event of litigation, seek to enforce the
foregoing waivers and (b) acknowledges that the Agents and the Lenders have
been induced to enter into this Agreement and the other Loan Documents to
which they are parties because of; among other things, the Borrowers'
waivers and certifications contained herein.
(S)25. SEVERABILITY. The provisions of this Agreement are severable and if
------------
any one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof; in such
jurisdiction, and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
-72-
(S)26. GOVERNING LAW. THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS
--------- ---
ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL BE
DEEMED TO BE DOCUMENTS UNDER SEAL AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH (EXCLUDING THE
LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE BORROWERS CONSENTS
TO THE JURISDICTION OF ANY OF THE FEDERAL OR STATE COURTS LOCATED IN THE
COMMONWEALTH OF MASSACHUSETTS IN CONNECTION WITH ANY SUIT TO ENFORCE THE RIGHTS
OF THE AGENTS AND THE LENDERS UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS.
(S)27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
-------- ---------- ------- ---
Any consent or approval required or permitted by this Agreement to be given
by the Lenders may be given, and any term of this Agreement, the other Loan
Documents or any other instrument related hereto or mentioned herein may be
amended, and the performance or observance by the Borrowers of any terms of this
Agreement, the other Loan Documents or such other instrument or the continuance
of any Default or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the written consent of the Borrowers and the written consent of the
Majority Lenders. Notwithstanding the foregoing, the terms of (S)12, (S)5.18,
and (S)19.9 hereof; the rate of interest on the Notes, the term of the Notes,
the amount of any Reimbursement Obligations, the amount of the Commitments of
the Lenders, the Total Commitment, the amount or date of any scheduled payment,
and the amount of Commitment Fees or Letter of Credit Fees hereunder may not be
changed without the written consent of the Borrowers and the written consent of
each of the Lenders affected thereby; the definition of Majority Lenders and the
provisions of this (S)27 may not be amended, and no collateral having a value in
excess of $2,000,000 may be released, without the written consent of all of the
Lenders; and the amount of any Letter of Credit Fees payable for the Managing
Agent's account and (S)16 may not be amended without the written consent of the
Managing Agent. No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of dealing or delay or
omission on the part of any Agent or any Lender in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto. No notice to or
demand upon the Borrowers shall entitle the Borrowers to other or further notice
or demand in similar or other circumstances.
-73-
IN WITNESS WHEREOF, the Borrowers have caused this Agreement to be signed
under seal by their duly authorized officers as of the day and year first above
written.
[corporate seal]
UNITED STATES FILTER CONTINENTAL PENFIELD
CORPORATION CORPORATION
By: By:
-------------------- -------------------
Title: Title:
CONTINENTAL WATER CONDITIONING NORTHWEST CONTINENTAL
COMPANY OF THE BAY AREA SYSTEMS, INC.
By: By:
-------------------- -------------------
Title: Title:
By:
--------------------
Title:
ILLINOIS WATER TREATMENT, INC. IP HOLDING COMPANY
By: By:
-------------------- -------------------
Title: Title:
POLYMETRICS, INC. U.S. FILTER/ARROWHEAD, INC.
By: By:
-------------------- -------------------
Title: Title:
U.S. FILTER/CANADA, INC. U.S. FILTER/IONPURE, INC.
By: By:
-------------------- -------------------
Title: Title:
U.S. FILTER LATIN AMERICA, INC. U.S. FILTER/PERMUTIT, INC.
By: By:
-------------------- -------------------
Title: Title:
-▇▇-
▇.▇. ▇▇▇▇▇▇/▇▇▇▇▇▇ ▇▇▇▇, INC. U.S. FILTER RECOVERY
SERVICES,
INC.
By:__________________
Title:
By:__________________
Title:
U.S. FILTER, INC. WARRENDALE, PA. U.S. FILTER/WHITTIER, INC.
By:__________________
Title: By:__________________
Title:
USF EUROPE A.E.I.E.
By:__________________
Title:
-75-
IONPURE FOREIGN SALES USF LIMITED
CORP.
By:__________________ By:__________________
Title: Title:
IONPURE TECHNOLOGIES THE PERMUTIT COMPANY PTY
LIMITED LTD.
By:__________________ By:__________________
Title: Title:
PERMUTIT NEW ZEALAND LIMITED SANILO S.A.
By:__________________
Title: By:__________________
Title:
SOCIETE DES CERAMIQUES USF FRANCE S.A.R.L.
TECHNIQUES
By:__________________
By:__________________ Title:
Title:
USF SMOGLESS S.p.A. USF SPAIN S.A.
By:__________________ By:__________________
Title: Title:
IONPURE TECHNOLOGIES B.V. IONPURE TECHNOLOGIES
AKTIEBRAV AB
By:__________________ By:__________________
Title: Title:
IONPURE TECHNOLOGIES GmbH SERAL REINSTWASSERSYSTEME
WASSERAUFBEREITUNGSSYSTEME GmbH
By:__________________
By:__________________ Title:
Title:
-76-
▇▇▇▇▇ ▇▇▇▇▇ ALHAUSER GmbH U.S. FILTER de MEXICO, S.A.
de C.V.
By:__________________ By:__________________
Title: Title:
U.S. FILTER CUERNAVACA SERVICIOS FILTERMEX, S.A. de
S.A. de C.V. C.V.
By:__________________ By:__________________
Title: Title:
U.S. FILTER TRATAMENTO E U.S. FILTER de ARGENTINA
RECUPERACAO de RESIDOUS LTDA.
By:__________________ By:__________________
Title: Title:
U.S. FILTER SISTAMAS de VENEZUELA, S.A.
By:___________________
Title:
EXHIBIT A
FORM OF
AMENDED AND RESTATED PROMISSORY NOTE
------------------------------------
[$_____] as of November 30, 1995
FOR VALUE RECEIVED, the undersigned (each of which is referred to herein as
a "Borrower" and collectively as the "Borrowers"), hereby absolutely and
unconditionally promises to pay to the order of [INSERT PAYEE LENDER] (the
"Lender") at the Head Office of the Managing Agent on November 30, 1999:
(a) the principal amount of [_______] DOLLARS [($______)] or, if less,
the aggregate unpaid principal amount of Loans made by the Lender to the
Borrower pursuant to the Amended and Restated Multicurrency Revolving Credit
Agreement, dated as of November 30, 1995, as amended, modified, supplemented or
restated from time to time (the "Credit Agreement"), among United States Filter
Corporation (the "Parent"), certain Subsidiaries of the Parent, the Lenders (as
defined therein), The First National Bank of Boston ("FNBB") as Managing Agent
and First Interstate Bank of California and ABN Amro Bank N.V.;
(b) interest on the principal balance hereof from time to time
outstanding at the times and at the rates provided in the Credit Agreement; and
(c) all fees and other Obligations due to the Lender.
This Note evidences borrowings under, is subject to the terms and
conditions of, has been issued by the Borrowers in accordance with the terms of
the Credit Agreement, and is a Note referred to therein. The Lender and any
holder hereof are entitled to the benefits and subject to the conditions of the
Credit Agreement and may enforce the agreements of the Borrowers contained
therein, and any holder thereof may exercise the respective remedies provided
for thereby or otherwise available in respect thereof, all in accordance with
the respective terms thereof. This Note is secured by the Security Documents
described in the Credit Agreement. All capitalized terms used in this Note and
not otherwise defined herein shall have the same meanings herein as in the
Credit Agreement.
[for FNBB and First Interstate This Note constitutes the amendment and
restatement in its entirety of the amended and restated promissory note of the
Borrowers to the Lender dated as of March 31, 1995[, which amended and restated
the promissory note of certain Borrowers to FNBB dated as of December 1, 1993,
which amended and restated the promissory note of certain Borrowers to FNBB
dated as of September 30, 1993].]
The Lender shall, and is hereby irrevocably authorized by the Borrowers to,
make or cause to be made, at or about the time of the Drawdown Date of any Loan
or at the time of
-2-
receipt of any payment of principal hereunder, an appropriate notation on the
record attached hereto and made a part hereof reflecting the making of such Loan
or (as the case may be) the receipt of such payment. The outstanding amount of
the Loans set forth on such record shall be prima facie evidence of the
----- -----
principal amount owing and unpaid to the Lender, but the failure to record, or
any error in so recording, any such amount on such record shall not limit,
increase or otherwise effect the obligations of the Borrowers to make payments
of principal or interest with respect to this Note when due.
The Borrowers have the right in certain circumstances and the obligation in
certain other circumstances to repay or prepay the whole or part of the
principal of this Note on the terms and conditions specified in the Credit
Agreement.
If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note 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.
The Borrowers and every endorser and guarantor of this Note or the
obligation represented hereby waive presentment, demand, notice, protest and all
other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, assent to any extension or
postponement of the 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 shall be deemed to take effect as a sealed instrument under the
laws of the Commonwealth of Massachusetts and for all purposes shall be
construed in accordance with such laws.
-3-
IN WITNESS WHEREOF, the Borrowers have caused this Note to be signed under
seal by their duly authorized officers as of the day and year first above
written.
[corporate seal]
UNITED STATES FILTER CONTINENTAL PENFIELD
CORPORATION CORPORATION
By: By:
-------------------------- -------------------------
Title: Title:
CONTINENTAL WATER CONDITIONING NORTHWEST CONTINENTAL
COMPANY OF THE BAY AREA SYSTEMS, INC.
By: By:
-------------------------- -------------------------
Title: Title:
By:
--------------------------
Title:
ILLINOIS WATER TREATMENT, INC. IP HOLDING COMPANY
By: By:
-------------------------- -------------------------
Title: Title:
POLYMETRICS, INC. U.S. FILTER/ARROWHEAD, INC.
By: By:
-------------------------- -------------------------
Title: Title:
U.S. FILTER/CANADA, INC. U.S. FILTER/IONPURE, INC.
By: By:
-------------------------- -------------------------
Title: Title:
U.S. FILTER LATIN AMERICA, INC. U.S. FILTER/PERMUTIT, INC.
By: By:
-------------------------- -------------------------
Title: Title:
-4-
U.S. FILTER/PUERTO RICO, INC. U.S. FILTER RECOVERY
SERVICES, INC.
By:__________________ By: _________________
Title: Title:
U.S. FILTER, INC. WARRENDALE, PA. U.S. FILTER/WHITTIER, INC.
By:__________________ By: ________________
Title: Title:
USF EUROPE A.E.I.E.
By:__________________
Title:
-5-
IONPURE FOREIGN SALES USF LIMITED
CORP.
By:__________________ By:__________________
Title: Title:
IONPURE TECHNOLOGIES THE PERMUTIT COMPANY PTY LTD.
LIMITED
By:__________________ By:__________________
Title: Title:
PERMUTIT NEW ZEALAND LIMITED SANILO S.A.
By:_________________ By: _________________
Title: Title:
SOCIETE DES CERAMIQUES TECHNIQUES USF FRANCE S.A.R.L.
By:__________________ By:___________________
Title: Title:
USF SMOGLESS S.p.A. USF SPAIN S.A.
By:__________________ By:__________________
Title: Title:
IONPURE TECHNOLOGIES B.V. IONPURE AB AKTIEBOLAG
By:__________________ By:__________________
Title: Title:
IONPURE TECHNOLOGIES GmbH SERAL
WASSERAUFBEREITUNGSSYSTEME REINSTWASSERSYSTEME GmbH
By:__________________ By:__________________
Title: Title:
-6-
▇▇▇▇▇ ▇▇▇▇▇ ALHAUSER GmbH U.S. FILTER de MEXICO, S.A.
de C.V.
By: By:
---------------------------- -------------------------
Title: Title:
U.S. FILTER CUERNAVACA SERVICIOS FILTERMEX, S.A. de
S.A. de C.V. C.V.
By: By:
---------------------------- -------------------------
Title: Title:
U.S. FILTER TRATAMENTO E RECUPERACAO de U.S. FILTER de ARGENTINA
RESIDOUS LTDA.
By: By:
---------------------------- -------------------------
Title: Title:
U.S. FILTER SISTEMAS de VENEZUELA, S.A.
By:
----------------------------
Title:
-7-
HOME WATERBEHANDELING B.V. ▇▇▇▇▇▇▇▇ B.V.
By:__________________ By:__________________
Title: Title:
EXHIBIT K
SECOND AMENDED AND RESTATED
PLEDGE AGREEMENT
This SECOND AMENDED AND RESTATED PLEDGE AGREEMENT (this "Agreement") made
as of this 30th day of November, 1995, by UNITED STATES FILTER CORPORATION (the
"Parent"), CONTINENTAL PENFIELD CORPORATION, CONTINENTAL WATER CONDITIONING
COMPANY OF THE BAY AREA, ILLINOIS WATER TREATMENT, INC., IP HOLDING COMPANY,
NORTHWEST CONTINENTAL SYSTEMS, INC., POLYMETRICS, INC., U.S. FILTER/ARROWHEAD,
INC., U.S. FILTER/IONPURE, INC., U.S. FILTER LATIN AMERICA, INC., U.S. FILTER
PERMUTIT, INC., U.S. FILTER/ PUERTO RICO, INC., U.S. FILTER RECOVERY SERVICES,
INC., U.S. FILTER, INC. WARRENDALE, PA, and U.S. FILTER/WHITTIER, INC.
(collectively with the Parent, the "Pledgors"), with THE FIRST NATIONAL BANK OF
BOSTON, as Managing Agent (the "Pledgee"), pursuant to (i) the Amended and
Restated Multicurrency Revolving Credit Agreement (as amended and in effect from
time to time, the "Multicurrency Agreement") dated as of November 30, 1995 by
and among the Pledgors, certain Subsidiaries of the Parent (together with the
Parent, the "Borrowers"), the Pledgee and the Lenders (as defined therein) and
(ii) the Revolving Credit Agreement (as amended and in effect from time to time,
the "FNBB Agreement" and together with the Multicurrency Agreement, the "Credit
Agreements") dated as of November 30, 1995 by and among the Borrowers and the
Pledgee in its individual capacity. Capitalized terms used herein without
definition which are defined in the Multicurrency Agreement shall have the same
meanings herein as therein.
This Agreement constitutes an amendment and restatement in its entirety of
the Amended and Restated Security and Pledge Agreement dated as of December 1,
1993 by and among certain of the Pledgors and the Pledgee, which amended and
restated that certain Security and Pledge Agreement dated as of September 30,
1993 by and among certain of the Pledgors and the Pledgee.
(S)1. Pledge of Stock. Each of the Pledgors hereby pledges, assigns, grants
a security interest in, and delivers to the Pledgee, the respective shares of
the capital stock of the Subsidiaries of such Pledgor organized under the laws
of any state or territory of the United States (the "U.S. Subsidiaries"),
including, but not limited to, the shares described on Exhibit A hereto, to be
------- -
held by the Pledgee subject to the terms and conditions hereinafter set forth;
the certificates for which shares, accompanied by stock powers or other
appropriate instruments of assignment thereof duly executed in blank by each of
the Pledgors, have been delivered to the Pledgee.
In case any Pledgor shall at any time own or acquire any other or
additional shares of any U.S. Subsidiaries of such Pledgor (whether such U.S.
Subsidiary is owned on the date hereof or thereafter acquired) or any securities
-2-
exchangeable for or convertible into shares of such capital stock of any class,
by purchase, stock dividend, distribution of capital or otherwise, such Pledgor
shall forthwith deliver to and pledge such shares or other securities to the
Pledgee under this Agreement, together with stock powers or other appropriate
instruments of assignment thereof duly executed in blank by such Pledgor.
(S)2. Definitions. The term "Stock" as used herein includes all the
-----------
shares of stock of any of the U.S. Subsidiaries of the Pledgors at the time
pledged with the Pledgee hereunder or pursuant to any pledge agreement
supplemental hereto.
The term "Obligations" as used herein means collectively all Obligations as
defined in each of the Credit Agreements.
The term "Collateral" as used herein means the Stock and all income
therefrom, increases therein and proceeds thereof; other than income, increases
or proceeds received by any Pledgor pursuant to (S)6 hereof.
(S)3. Security for Obligations. This Agreement and the pledge of the
------------------------
Collateral hereunder is made with the Pledgee as security for the Obligations.
(S)4. Liquidation, Recapitalization Etc. Any sums paid upon or with
---------------------------------
respect to any of the Stock, upon the liquidation or dissolution of any issuer
thereof shall be paid over to the Pledgee to be held by it as security for the
Obligations; and in case any distribution of capital shall be made on or in
respect of any of the Stock or any property shall be distributed upon or with
respect to any of the Stock pursuant to the recapitalization or reclassification
of the capital of the issuer thereof or pursuant to the reorganization thereof;
the property so distributed shall be delivered to the Pledgee to be held by it
as security for the Obligations. All sums of money and property, paid or
distributed in respect of the Stock upon such a liquidation, dissolution,
recapitalization or reclassification which are received by the Pledgors shall,
until paid or delivered to the Pledgee, be held in trust for the Pledgee as
security for the Obligations.
(S)5. Warranty of Title. Except as expressly provided in the Credit
-----------------
Agreements, each of the Pledgors warrants that it has good and marketable title
to the Stock described in (S)1 hereof; subject to no pledges, liens, security
interests, charges, options, restrictions or other encumbrances except the
security interest created by this Agreement, and that it has power, authority
and legal right to pledge all of such Stock pursuant to this Agreement. Each of
the Pledgors covenants that it will defend the Pledgee's rights and security
interest in such Stock against the claims and demands of all persons whomsoever;
and each of the Pledgors covenants that it will have the like title to and right
to pledge the Collateral and will likewise defend the Pledgee's rights and
security interest therein.
-3-
(S)6. Dividends, Voting, Etc., Prior to Maturity. Subject to the provisions
of the Credit Agreements and, so long as no Event of Default is continuing, the
Pledgors shall be entitled to receive all dividends paid in respect of the
Stock, to vote the Stock, and to give consents, waivers and ratifications in
respect of the Stock and to take all other actions with respect to the Stock
(including, without limitation, all actions with respect to the fiscal and other
management of the U.S. Subsidiaries) provided that no vote shall be cast, or
consent, waiver or ratification given or action taken which would be
inconsistent with or violate any provisions of the Credit Agreements, any other
Loan Document or this Agreement. All such rights of the Pledgors to receive
dividends shall cease in case an Event of Default shall have occurred and be
continuing under the terms of either Credit Agreement. All such rights of the
Pledgors to vote and give consents, waivers and ratifications with respect to
the Stock shall, at Pledgee's option, as evidenced by Pledgee's notifying
Pledgors of such election, cease in case an Event of Default shall have occurred
and be continuing under the terms of either Credit Agreement.
(S)7. Remedies. If an Event of Default shall have occurred and be
continuing, the Pledgee shall thereafter have the following rights and remedies
(to the extent permitted by applicable law) in addition to the rights and
remedies of a secured party under the Uniform Commercial Code, all such rights
and remedies being cumulative, not exclusive, and enforceable alternatively,
successively or concurrently, at such time or times as the Pledgee deems
expedient:
(a) if the Pledgee so elects and gives notice of such election to the
Pledgors, the Pledgee may vote any or all shares of the Stock (whether or
not the same shall have been transferred into its name or the name of its
nominee or nominees) and give all consents, waivers and ratifications in
respect of the Stock and otherwise act with respect thereto as though it
were the outright owner thereof (each Pledgor hereby irrevocably
constituting and appointing the Pledgee the proxy and attorney-in-fact of
such Pledgor, with full power of substitution, to do so);
(b) the Pledgee may demand, ▇▇▇ for, collect or make any compromise or
settlement the Pledgee reasonably deems suitable in respect of any
Collateral held by it hereunder;
(c) the Pledgee may sell, resell, assign and deliver, or otherwise
dispose of any or all of the Collateral, for cash and/or credit and upon
such terms at such place or places and at such time or times and to such
persons, firms, companies or corporations as the Pledgee reasonably thinks
expedient, all without demand for performance by the Pledgors or any notice
or advertisement whatsoever except that, unless the Collateral threatens to
decline speedily in value, the Pledgee shall give to the Pledgors at least
five (5) days prior written notice of the time and place of
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any public sale of Collateral or of the time after which any private sale
or any other intended disposition is to be made; and
(d) the Pledgee may cause all or any part of the Stock held by it to
be transferred into its name or the name of its nominee or nominees, if it
has not already done so.
The Pledgee may enforce its rights hereunder subject only to the giving of
notice as provided herein and in the Credit Agreements. The Pledgee may buy any
part or all of the Collateral at any public sale and if any part or all of the
Collateral is of a type customarily sold in a recognized market or is of the
type which is the subject of widely-distributed standard price quotations, the
Pledgee may buy at private sale and may make payments thereof by any means. The
Pledgee may apply the proceeds received from any sale or other disposition to
the reasonable expenses of retaking, holding, preparing for sale, selling and
the like, to reasonable attorneys' fees, and all legal expenses, travel and
other expenses which may be incurred by the Pledgee in attempting to collect the
Obligations or to enforce this Agreement or in the prosecution or defense of any
action or proceeding related to the subject matter of this Agreement; and then
to the Obligations in the order set forth in (S)12 hereof, and any surplus shall
be paid to the Pledgors. The Pledgors shall pay any and all documentary and
stock transfer stamp duties and all other duties, imposts, taxes, and similar
expenses or charges payable in connection with the preparation, execution or
stamping of this Agreement, and any other pledge document executed by the
Pledgors in connection herewith, the pledging of Stock hereunder, the exercise
or enforcement or attempted exercise or enforcement of any power or remedy of
the Pledgee hereunder, or the sale or other disposition of any Stock or other
Collateral hereunder.
The Pledgors recognize that the Pledgee may be unable to effect a public
sale of the Stock by reason of certain prohibitions contained in the Securities
Act of 1933, as amended, but may be compelled to resort to one or more private
sales thereof to a restricted group of purchasers. The Pledgors agree that any
such private sales may be at prices and other terms less favorable to the seller
than if sold at public sales and that such private sales shall not by reason
thereof be deemed not to have been made in a commercially reasonable manner. The
Pledgee shall be under no obligation to delay a sale of any of the Stock for the
period of time necessary to permit the issuer of such securities to register
such securities for public sale under the Securities Act of 1933, as amended,
even if the issuer would agree to do so.
(S)8. Marshalling. The Pledgee shall not be required to marshal any present
-----------
or future security for (including but not limited to this Agreement and the
Collateral pledged hereunder), or guaranties of, the Obligations or any of them,
or to resort to such security or guaranties in any particular order; and all of
its rights hereunder and in respect of such security and guaranties shall be
cumulative and in addition to all other rights, however existing or arising. To
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the extent that it lawfully may, each of the Pledgors hereby agrees that it will
not invoke any law relating to the marshalling of collateral which might cause
delay in or impede the enforcement of the rights of the Pledgee under this
Agreement or under any other instrument evidencing any of the Obligations or
under which any of the Obligations is outstanding or by which any of the
Obligations is secured or guaranteed, and to the extent that they lawfully may
the Pledgors hereby irrevocably waive the benefits of all such laws.
(S)9. Pledgors' Obligations Not Affected. The obligations of the Pledgors
-------- ----------- --- --------
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any Pledgor; (b) any
exercise or nonexercise, or any waiver, by the Pledgee of any right, remedy,
power or privilege under or in respect of any of the Obligations or any security
thereof (including this Agreement); (c) any amendment to or modification of
either of the Credit Agreements or any of the Obligations (except to the extent
that the same expressly modifies or amends this Agreement); (d) any amendment to
or modification of any instrument (other than this Agreement) securing any of
the Obligations; or (e) the taking of additional security for, or any guaranty
of, any of the Obligations or the release or discharge or termination of any
security or guaranty for any of the Obligations; whether or not the Pledgors
shall have notice or knowledge of any of the foregoing.
(S)10. Transfer Etc. by Pledgors. Without the prior written consent of the
-------- --- -- --------
Pledgee, or except as permitted by the Credit Agreements, the Pledgors will not
sell, assign, transfer or otherwise dispose of', grant any option with respect
to, or pledge or grant any security interest in or otherwise encumber any of the
Collateral or any interest therein, except for the pledge thereof provided for
in this Agreement.
(S)1l. Further Assurances. The Pledgors will do all such acts, and will
------- ----------
furnish to the Pledgee all such financing statements, certificates, legal
opinions and other documents and will obtain all such governmental consents and
corporate approvals and will do or cause to be done all such other things as the
Pledgee may reasonably request from time to time in order to give full effect to
this Agreement, and fully to secure the rights of the Pledgee hereunder. Each
Pledgor, the shares of which corporation have been pledged to the Pledgee
hereunder, agrees to cooperate fully and in good faith in carrying out the
provisions of (S)(S)4, 6 and 7 hereof.
(S)12. Pro-Rata Security. All amounts owing with respect to the Obligations
-------- --------
shall be equally and ratably secured by, and proportionately entitled to the
benefits of, the Collateral, provided that the costs, fees and expenses of the
--------
Pledgee in enforcing its rights hereunder shall constitute a first claim on all
the Collateral and be entitled to priority over all other Obligations in respect
of all distributions of any proceeds from any portion of the Collateral.
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(S)13. Pledgee's Exoneration. Under no circumstances shall the Pledgee be
---------------------
deemed to assume any responsibility for or obligation or duty with respect to
any part or all of the Collateral of any nature or kind, other than the physical
custody thereof, or any matter or proceedings arising out of or relating
thereto, other than to exercise reasonable care in the physical custody of the
Collateral. The Pledgee shall not be required to take any action of any kind to
collect, preserve or protect its or the Pledgors' rights in the Collateral or
against other parties thereto, other than to exercise reasonable care in the
physical custody of the Collateral. The Pledgee's prior recourse to any part or
all of the Collateral shall not constitute a condition of any demand, suit or
proceeding for payment or collection of the Obligations.
(S)14. No Waiver, Etc. No act, failure or delay by the Pledgee shall
--------------
constitute a waiver of the rights and remedies of the Pledgee. No single or
partial waiver by the Pledgee of any default or right or remedy which it may
have shall operate as a waiver of any other default, right or remedy or of the
same default, right or remedy on a future occasion. The Pledgors hereby waive
presentment, notice of dishonor and protest of all instruments, included in or
evidencing any of the Obligations or the Collateral, and any and all other
notices and demands whatsoever (except as expressly provided herein).
(S)15. Notice, Etc. All notices, requests and other communications
-----------
hereunder shall be made in accordance with the provisions of (S)21 of the
Multicurrency Agreement.
(S)16. Termination. Upon payment and performance in full of the Obligations
-----------
by the Pledgors and termination of (a) the Lenders' obligations to make Loans to
the Borrowers and of the Pledgor to issue, extend, renew or honor Letters of
Credit under the Multicurrency Agreement, and (b) the Bank's obligation to make
Loans and otherwise to extend credit to the Borrowers under the FNBB Agreement,
this Agreement shall terminate and the Pledgors shall be entitled to the return
of such Collateral in the possession or control of the Pledgee as has not
theretofore been disposed of pursuant to the provisions hereof, together with
any moneys and other property at the time held by the Pledgee hereunder.
(S)17. Pledgors' Holdings. The Pledgors represent and warrant to the
------------------
Pledgee that, except as set forth on Exhibit A hereto, the Stock constitutes one
---------
hundred percent (100%) of the issued and outstanding shares of every class of
the capital stock of the U.S. Subsidiaries of the Pledgors. The Pledgors
covenant that, except as set forth on Exhibit A hereto, they shall at all times
---------
own one hundred percent (100%) of every class of the capital stock of the U.S.
Subsidiaries of the Pledgors.
(S)18. Miscellaneous Provisions. Neither this Agreement nor any term
------------------------
hereof may be changed, waived, discharged or terminated except by a written
instrument expressly referring to this Agreement and to the provisions so
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modified or limited, and executed by the party to be charged. This Agreement and
all obligations of the Pledgors shall be binding upon the successors and assigns
of the Pledgors, and shall, together with the rights and remedies of the Pledgee
hereunder, inure to the benefit of the Pledgee, its successors and assigns. This
Agreement and the obligations of the Pledgors hereunder shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts and
this Agreement shall be deemed to be a document under seal. The descriptive
section headings have been inserted for convenience of reference only and do not
define or limit the provisions hereof. If any term of this Agreement shall be
held to be invalid, illegal or unenforceable, the validity of all other terms
hereof shall be in no way affected thereby, and this Agreement shall be
construed and be enforceable as if such invalid, illegal or unenforceable term
had not been included herein. The Pledgors acknowledge receipt of a copy of this
Agreement. Terms used herein without definition which are defined in the Uniform
Commercial Code have such defined meanings herein, unless the context otherwise
indicates or requires.
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IN WITNESS WHEREOF, the Pledgors and the Pledgee have caused this Agreement
to be duly executed under seal as of the date first above written.
UNITED STATES FILTER CORPORATION
By: _______________________
Title: _____________________
CONTINENTAL PENFIELD CORPORATION
By: _______________________
Title: _____________________
CONTINENTAL WATER CONDITIONING
COMPANY OF THE BAY AREA
By: _______________________
Title: _____________________
By: _______________________
Title: _____________________
ILLINOIS WATER TREATMENT, INC.
By: _______________________
Title: _____________________
IP HOLDING COMPANY
By: _______________________
Title: _____________________
NORTHWEST CONTINENTAL SYSTEMS, INC.
By: _______________________
Title: _____________________
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POLYMETRICS, INC.
By: _______________________
Title: _____________________
U.S. FILTER/ARROWHEAD, INC.
By: _______________________
Title: _____________________
U.S. FILTER/IONPURE, INC.
By: ________________________
Title: _____________________
U.S. FILTER LATIN AMERICA, INC.
By: ________________________
Title: _____________________
U.S. FILTER/PERMUTIT, INC.
By: ________________________
Title: _____________________
U.S. FILTER/PUERTO RICO, INC.
By: ________________________
Title: _____________________
U.S. FILTER RECOVERY SERVICES, INC.
By: ________________________
Title: _____________________
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U.S. FILTER, INC. WARRENDALE, PA
By: ________________________
Title: _____________________
U.S. FILTER/WHITTIER, INC.
By: ________________________
Title: _____________________
THE FIRST NATIONAL BANK OF BOSTON, as
Managing Agent
By: ________________________
Title: _____________________