EXECUTION COPY
CREDIT AGREEMENT
Dated as of December 16, 1999
among
HUTTIG BUILDING PRODUCTS, INC.
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS
and
BANK ONE, NA,
as Agent
BANC ONE CAPITAL MARKETS, INC.,
as Lead Arranger and Sole Bookrunner
SIDLEY & AUSTIN
Bank One Plaza
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I: DEFINITIONS 1
1.1 CERTAIN DEFINED TERMS 1
1.2 REFERENCES 24
1.3 SUPPLEMENTAL DISCLOSURE 24
ARTICLE II: THE REVOLVING LOAN FACILITY 25
2.1 REVOLVING LOANS 25
2.2 SWING LINE LOANS 26
2.3 RATE OPTIONS FOR ALL ADVANCES; MAXIMUM INTEREST PERIODS 27
2.4 OPTIONAL PAYMENTS; MANDATORY PREPAYMENTS 27
(A) OPTIONAL PAYMENTS 27
(B) MANDATORY PREPAYMENTS 28
(C) PREPAYMENTS AND HEDGING ARRANGEMENTS 29
2.5 REDUCTION OF REVOLVING LOAN COMMITMENTS 29
2.6 METHOD OF BORROWING 29
2.7 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR ADVANCES 29
2.8 MINIMUM AMOUNT OF EACH ADVANCE 30
2.9 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR
CONVERSION AND CONTINUATION OF ADVANCES 30
(A) RIGHT TO CONVERT 30
(B) AUTOMATIC CONVERSION AND CONTINUATION 30
(C) NO CONVERSION POST-DEFAULT OR POST-UNMATURED DEFAULT 30
(D) BORROWING/ELECTION NOTICE 30
2.10 DEFAULT RATE 31
2.11 METHOD OF PAYMENT 31
2.12 EVIDENCE OF DEBT 31
2.13 TELEPHONIC NOTICES 32
2.14 PROMISE TO PAY; INTEREST AND COMMITMENT FEES; INTEREST
PAYMENT DATES; INTEREST AND FEE BASIS; LOAN AND CONTROL
ACCOUNTS 32
(A) PROMISE TO PAY 32
(B) INTEREST PAYMENT DATES 32
(C) COMMITMENT FEES AND AGENT'S FEES 33
(D) INTEREST AND FEE BASIS; APPLICABLE FLOATING
RATE MARGINS, APPLICABLE EURODOLLAR MARGINS;
APPLICABLE COMMITMENT FEE PERCENTAGE AND APPLICABLE L/C
FEE PERCENTAGE 33
2.15 NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS
AND AGGREGATE REVOLVING LOAN COMMITMENT REDUCTIONS 34
2.16 LENDING INSTALLATIONS 35
2.17 NON-RECEIPT OF FUNDS BY THE AGENT 35
2.18 TERMINATION DATE 35
2.19 REPLACEMENT OF CERTAIN LENDERS 35
ARTICLE III: THE LETTER OF CREDIT FACILITY 36
3.1 OBLIGATION TO ISSUE LETTERS OF CREDIT 36
3.3 TYPES AND AMOUNTS 36
3.4 CONDITIONS. 37
3.5 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT 37
3.6 LETTER OF CREDIT PARTICIPATION 38
3.7 REIMBURSEMENT OBLIGATION 38
3.8 LETTER OF CREDIT FEES 39
3.9 ISSUING BANK REPORTING REQUIREMENTS. 39
3.10 INDEMNIFICATION; EXONERATION 39
3.11 CASH COLLATERAL 40
ARTICLE IV: YIELD PROTECTION; TAXES 41
4.1. YIELD PROTECTION. 41
4.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. 42
4.3. AVAILABILITY OF TYPES OF ADVANCES. 42
4.4. FUNDING INDEMNIFICATION. 42
4.5. TAXES. 43
4.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. 45
ARTICLE V: CONDITIONS PRECEDENT 45
5.1 INITIAL ADVANCES AND LETTERS OF CREDIT 45
5.2 EACH ADVANCE AND LETTER OF CREDIT 47
ARTICLE VI: REPRESENTATIONS AND WARRANTIES 46
6.1 ORGANIZATION; CORPORATE POWERS 48
6.2 AUTHORITY 48
6.3 NO CONFLICT; GOVERNMENTAL CONSENTS 49
6.4 FINANCIAL STATEMENTS 50
6.5 NO MATERIAL ADVERSE CHANGE 50
6.6 TAXES 50
(A) TAX EXAMINATIONS 50
(B) PAYMENT OF TAXES 51
6.7 LITIGATION; LOSS CONTINGENCIES AND VIOLATIONS 51
6.8 SUBSIDIARIES 51
6.9 ERISA 52
6.10 ACCURACY OF INFORMATION 54
6.11 SECURITIES ACTIVITIES 54
6.12 MATERIAL AGREEMENTS 54
6.13 COMPLIANCE WITH LAWS 54
6.14 ASSETS AND PROPERTIES 54
6.15 STATUTORY INDEBTEDNESS RESTRICTIONS 54
6.16 INSURANCE 55
6.17 LABOR MATTERS 55
6.18 SPIN-OFF AND RUGBY TRANSACTIONS 55
6.19 ENVIRONMENTAL MATTERS 55
6.20 SOLVENCY 56
6.21 YEAR 2000 ISSUES 56
6.22 BENEFITS 56
ARTICLE VII : COVENANTS 57
7.1 REPORTING 57
(A) FINANCIAL REPORTING 57
(B) NOTICE OF DEFAULT AND ADVERSE DEVELOPMENTS 58
(C) LAWSUITS 59
(D) ERISA NOTICES 59
(E) LABOR MATTERS 61
(F) OTHER INDEBTEDNESS 61
(G) OTHER REPORTS 61
(H) ENVIRONMENTAL NOTICES 62
(I) OTHER INFORMATION 62
7.2 AFFIRMATIVE COVENANTS 62
(A) CORPORATE EXISTENCE, ETC. 62
(B) CORPORATE POWERS; CONDUCT OF BUSINESS 62
(C) COMPLIANCE WITH LAWS, ETC. 62
(D) PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION 63
(E) INSURANCE 63
(F) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS 63
(G) ERISA COMPLIANCE 64
(H) MAINTENANCE OF PROPERTY 64
(I) ENVIRONMENTAL COMPLIANCE 64
(J) USE OF PROCEEDS 64
(K) ADDITION OF GUARANTORS 64
(L) YEAR 2000 ISSUES 64
7.3 NEGATIVE COVENANTS 65
(A) INDEBTEDNESS 65
(B) SALES OF ASSETS 66
(C) LIENS 66
(D) INVESTMENTS 68
(E) CONTINGENT OBLIGATIONS 69
(F) RESTRICTED PAYMENTS 69
(G) CONDUCT OF BUSINESS; NEW SUBSIDIARIES; ACQUISITIONS 70
(H) TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES 71
(I) RESTRICTION ON FUNDAMENTAL CHANGES 71
(J) MARGIN REGULATIONS 71
(K) ERISA 71
(L) CORPORATE DOCUMENTS 72
(M) FISCAL YEAR 72
(N) SUBSIDIARY COVENANTS 72
(O) HEDGING OBLIGATIONS 72
(P) ISSUANCE OF DISQUALIFIED STOCK. 73
(Q) OTHER INDEBTEDNESS 73
(R) INTERCOMPANY LOANS 74
7.4 FINANCIAL COVENANTS 74
(A) MAXIMUM LEVERAGE RATIO 74
(B) MINIMUM CONSOLIDATED NET WORTH 74
(C) INTEREST EXPENSE COVERAGE RATIO 74
ARTICLE VIII: DEFAULTS 75
8.1 DEFAULTS 75
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS
AND REMEDIES 78
9.1 TERMINATION OF REVOLVING LOAN COMMITMENTS; ACCELERATION 78
9.2 DEFAULTING LENDER 78
9.3 AMENDMENTS 79
9.4 PRESERVATION OF RIGHTS 80
ARTICLE X: GENERAL PROVISIONS 81
10.1 SURVIVAL OF REPRESENTATIONS 81
10.2 GOVERNMENTAL REGULATION 81
10.3 PERFORMANCE OF OBLIGATIONS 81
10.4 HEADINGS 82
10.5 ENTIRE AGREEMENT 82
10.6 SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT 82
10.7 EXPENSES; INDEMNIFICATION 82
(A) EXPENSES 82
(B) INDEMNITY 82
(C) WAIVER OF CERTAIN CLAIMS; SETTLEMENT OF CLAIMS 83
(D) SURVIVAL OF AGREEMENTS 84
10.8 NUMBERS OF DOCUMENTS 84
10.9 ACCOUNTING 84
10.10 SEVERABILITY OF PROVISIONS 84
10.11 NONLIABILITY OF LENDERS 84
10.12 GOVERNING LAW 84
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL 85
(A) EXCLUSIVE JURISDICTION 85
(B) OTHER JURISDICTIONS 85
(C) VENUE 85
(D) WAIVER OF JURY TRIAL 86
10.14 SUBORDINATION OF INTERCOMPANY INDEBTEDNESS 86
10.15 LENDER'S NOT UTILIZING PLAN ASSETS. 87
ARTICLE XI: THE AGENT 87
11.1 APPOINTMENT; NATURE OF RELATIONSHIP 87
11.2 POWERS 88
11.3 GENERAL IMMUNITY 88
11.4 NO RESPONSIBILITY FOR LOANS, CREDITWORTHINESS, RECITALS, ETC. 88
11.5 ACTION ON INSTRUCTIONS OF LENDERS 88
11.6 EMPLOYMENT OF AGENTS AND COUNSEL 89
11.7 RELIANCE ON DOCUMENTS; COUNSEL 89
11.8 THE AGENT'S REIMBURSEMENT AND INDEMNIFICATION 89
11.9 RIGHTS AS A LENDER 89
11.10 LENDER CREDIT DECISION 90
11.11 SUCCESSOR AGENT 90
ARTICLE XII: SETOFF; RATABLE PAYMENTS 90
12.1 SETOFF 90
12.2 RATABLE PAYMENTS 90
12.3 APPLICATION OF PAYMENTS 91
12.4 RELATIONS AMONG LENDERS 92
12.5 REPRESENTATIONS AND COVENANTS AMONG LENDERS. 92
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 92
13.1 SUCCESSORS AND ASSIGNS 92
13.2 PARTICIPATIONS 93
(A) PERMITTED PARTICIPANTS; EFFECT 93
(B) VOTING RIGHTS 93
(C) BENEFIT OF SETOFF 94
13.3 ASSIGNMENTS 94
(A) PERMITTED ASSIGNMENTS 94
(B) EFFECT; EFFECTIVE DATE 94
(C) THE REGISTER 95
13.4 CONFIDENTIALITY 95
13.5 DISSEMINATION OF INFORMATION 96
ARTICLE XIV: NOTICES 96
14.1 GIVING NOTICE 96
14.2 CHANGE OF ADDRESS 96
ARTICLE XV: COUNTERPARTS 96
EXHIBITS AND SCHEDULES
EXHIBITS
EXHIBIT A -- Revolving Loan Commitments
(Definitions)
EXHIBIT B -- Form of Borrowing/Election Notice
(Section 2.2 and Section 2.7 and Section 2.9)
EXHIBIT C -- Form of Request for Letter of Credit
(Section 3.4)
EXHIBIT D -- Form of Assignment and Acceptance Agreement
(Sections 2.19 and 13.3)
EXHIBIT E -- Form of Borrower's Counsel's Opinion
(Section 5.1)
EXHIBIT F -- List of Closing Documents
(Section 5.1)
EXHIBIT G -- Form of Officer's Certificate
(Sections 5.2 and 7.1(A)(iii))
EXHIBIT H -- Form of Compliance Certificate
(Sections 5.2 and 7.1(A)(iii))
EXHIBIT I -- Form of Guaranty
(Definitions)
SCHEDULES
Schedule 1.1.1 -- Permitted Existing Indebtedness (Definitions)
Schedule 1.1.2 -- Permitted Existing Investments (Definitions)
Schedule 1.1.3 -- Permitted Existing Liens (Definitions)
Schedule 1.1.4 -- Permitted Existing Contingent Obligations (Definitions)
Schedule 3.2 -- Transitional Letters of Credit (Section 3.2)
Schedule 5.1 -- Terminated Indebtedness (Section 5.1)
Schedule 6.3 -- Conflicts; Governmental Consents (Section 6.3)
Schedule 6.4 -- Pro Forma Financial Statements (Section 6.4(A))
Schedule 6.7 -- Litigation; Loss Contingencies (Section 6.7)
Schedule 6.8 -- Subsidiaries (Section 6.8)
Schedule 6.9 -- ERISA (Section 6.9)
Schedule 6.18 -- Spin-Off Transactions and Rugby Acquisition Conditions
(Section 6.18)
Schedule 6.19 -- Environmental Matters (Section 6.19)
CREDIT AGREEMENT
This Credit Agreement dated as of December 16, 1999 is entered into among
HUTTIG BUILDING PRODUCTS, INC., a Delaware corporation, the institutions from
time to time parties hereto as Lenders, whether by execution of this Agreement
or an Assignment Agreement pursuant to SECTION 13.3, and BANK ONE, NA, having
its principal office in Chicago, Illinois, in its capacity as contractual
representative for itself and the other Lenders.
The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
1.1 CERTAIN DEFINED TERMS. In addition to the terms defined above, the
following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined.
As used in this Agreement:
"ACCOUNTING CHANGE" is defined in SECTION 10.9 hereof.
"ACQUISITION" means any transaction, or any series of transactions with
respect to Persons that are Affiliates, consummated on or after the date of this
Agreement, by which the Borrower or any of its Subsidiaries (i) acquires any
going business or all or substantially all of the assets of any firm,
corporation or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
of voting power) of the outstanding Equity Interests of another Person.
"ADVANCE" means a borrowing hereunder consisting of the aggregate amount
of the several Loans made by the Lenders to the Borrower of the same Type and,
in the case of Eurodollar Rate Advances, for the same Interest Period.
"AFFECTED LENDER" is defined in SECTION 2.19 hereof.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of greater than ten percent (10%) or more of any class of voting
securities (or other voting interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
Capital Stock, by contract or otherwise.
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"AGENT" means Bank One in its capacity as contractual representative for
itself and the Lenders pursuant to ARTICLE XI hereof and any successor Agent
appointed pursuant to ARTICLE XI hereof.
"AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate of the Revolving
Loan Commitments of all the Lenders, as may be reduced from time to time
pursuant to the terms hereof. The initial Aggregate Revolving Loan Commitment is
One Hundred Twenty-Five Million and 00/100 Dollars ($125,000,000.00); PROVIDED,
that the Aggregate Revolving Loan Commitment shall be reduced pro rata among the
Lenders to Ninety-Three Million and 00/100 Dollars ($93,000,000) if the Rugby
Acquisition shall not have been completed on or before March 31, 2000.
"AGREEMENT" means this Credit Agreement, as it may be amended, restated or
otherwise modified and in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles as in effect in the United States from time to time, applied in a
manner consistent with that used in preparing the financial statements of the
Borrower referred to in SECTION 6.4(B) hereof, PROVIDED, HOWEVER, except as
provided in SECTION 10.9, that with respect to the calculation of financial
ratios and other financial tests required by this Agreement, "Agreement
Accounting Principles" means generally accepted accounting principles as in
effect in the United States as of the date of this Agreement, applied in a
manner consistent with that used in preparing the financial statements of Huttig
Sash & Door Company referred to in SECTION 6.4(A) hereof.
"ALTERNATE BASE RATE" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Corporate Base Rate for such day and
(ii) the sum of (a) the Federal Funds Effective Rate for such day and (b)
one-half of one percent (0.5%) per annum; provided, however, that for the period
from December 1, 1999 through January 31, 2000, "Alternate Base Rate" means, for
any day, a fluctuating rate of interest per annum equal to the highest of (i)
the Corporate Base Rate for such day, (ii) the sum of (a) the Federal Funds
Effective Rate for such day and (b) one-half of one percent (0.5%) per annum and
(iii) the sum of the Federal Reserve Board Open Market Committee target Federal
Funds Rate for such day plus one and one-half percent (1.5%) per annum plus the
Applicable Eurodollar Margin.
"APPLICABLE COMMITMENT FEE PERCENTAGE" means, as at any date of
determination, the rate per annum then applicable in the determination of the
amount payable under SECTION 2.14(C)(I) hereof determined in accordance with the
provisions of SECTION 2.14(D)(II) hereof.
"APPLICABLE EURODOLLAR MARGINS" means, as at any date of determination,
the rate per annum then applicable to Eurodollar Rate Loans, determined in
accordance with the provisions of SECTION 2.14(D)(II) hereof.
"APPLICABLE FLOATING RATE MARGINS" means, as at any date of determination,
the rate per annum then applicable to Floating Rate Loans, determined in
accordance with the provisions of SECTION 2.14(D)(II) hereof.
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"APPLICABLE L/C FEE PERCENTAGE" means, as at any date of determination,
the rate per annum then applicable in the determination of the amount payable
under SECTION 3.8(I) hereof determined in accordance with the provisions of
SECTION 2.14(D)(II) hereof.
"ARRANGER" means Banc One Capital Markets, Inc., in its capacity as the
lead arranger and sole bookrunner for the loan transaction evidenced by this
Agreement.
"ASSIGNMENT AGREEMENT" means an assignment and acceptance agreement
entered into in connection with an assignment pursuant to SECTION 13.3 hereof in
substantially the form of EXHIBIT D.
"ASSET SALE" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a sale-leaseback transaction, and including the sale or
other transfer of any of the Equity Interests of any Subsidiary of such Person)
other than (i) the sale of Inventory in the ordinary course of business and (ii)
the sale or other disposition of any obsolete manufacturing Equipment disposed
of in the ordinary course of business.
"AUTHORIZED OFFICER" means any of the President, any Vice President, Chief
Financial Officer, Treasurer, Controller, any Assistant Treasurer or any
Assistant Controller of the Borrower, acting singly.
"BANK BOOK" is defined in SECTION 5.1 hereof.
"BANK ONE" means Bank One, NA, having its principal office in Chicago,
Illinois, in its individual capacity, and its successors.
"BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35) of
ERISA (other than a Multiemployer Plan) in respect of which the Borrower or any
other member of the Controlled Group is, or within the immediately preceding six
(6) years was, an "employer" as defined in Section 3(5) of ERISA.
"BORROWER" means Huttig Building Products, Inc., a Delaware corporation,
together with its successors and assigns, including a debtor-in-possession on
behalf of the Borrower.
"BORROWING DATE" means a date on which an Advance or Swing Line Loan is
made hereunder.
"BORROWING/ELECTION NOTICE" is defined in SECTION 2.7 hereof.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing interest at the Eurodollar Rate, a day (other than a
Saturday or Sunday) on which banks are open for business in Chicago, Illinois
and on which dealings in Dollars are carried on
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in the London interbank market and (ii) for all other purposes a day (other than
a Saturday or Sunday) on which banks are open for business in Chicago, Illinois.
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
Capitalized Leases and Permitted Purchase Money Indebtedness) by the Borrower
and its Subsidiaries during that period that, in conformity with Agreement
Accounting Principles, are required to be included in or reflected by the
property, plant, Equipment or similar fixed asset accounts reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"CAPITALIZED LEASE" of a Person means any lease of property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies, the long-term
indebtedness of which institution at the time of acquisition is rated A- (or
better) by Standard & Poor's Ratings Group or A3 (or better) by Moody's
Investors Services, Inc., and which certificates of deposit and time deposits
are fully protected against currency fluctuations for any such deposits with a
term of more than ninety (90) days); (iii) shares of money market, mutual or
similar funds having assets in excess of $100,000,000 and the investments of
which are limited to (x) investment grade securities (i.e., securities rated at
least Baa by ▇▇▇▇▇'▇ Investors Service, Inc. or at least BBB by Standard &
Poor's Ratings Group) and (y) commercial paper of United States and foreign
banks and bank holding companies and their subsidiaries and United States and
foreign finance, commercial industrial or utility companies which, at the time
of acquisition, are rated A-1 (or better) by Standard & Poor's Ratings Group or
P-1 (or better) by ▇▇▇▇▇'▇ Investors Services, Inc. (all such institutions being
"Qualified Institutions"); and (iv) commercial paper of Qualified Institutions;
PROVIDED that the maturities of such Cash Equivalents shall not exceed 365 days
from the date of acquisition thereof.
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"CHANGE" is defined in SECTION 4.2 hereof.
"CHANGE OF CONTROL" means an event or series of events by which:
(i) any "person" or "group" (within the meaning of Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934) other than Rugby PLC
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of twenty
percent (20%) or more of the voting power of the then outstanding Capital
Stock of the Borrower entitled to vote generally in the election of the
directors of the Borrower;
(ii) Rugby PLC becomes the "beneficial owner" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934), directly or indirectly,
of greater than thirty-three percent (33%) of the voting power of the then
outstanding Capital Stock of the Borrower entitled to vote generally in
the election of the directors of the Borrower;
(iii) during any period of 12 consecutive calendar months, the board
of directors of the Borrower shall cease to have as a majority of its
members individuals who either:
(a) were directors of the Borrower on the first day of such
period, or
(b) were elected or nominated for election to the board of
directors of the Borrower at the recommendation of or other approval
by at least a majority of the directors then still in office at the
time of such election or nomination who were directors of the
Borrower on the first day of such period, or whose election or
nomination for election was so approved;
(iv) other than as a result of a transaction permitted under the
terms of this Agreement, the Borrower shall cease to own, of record and
beneficially, with sole voting and dispositive power, (a) 100% of the
outstanding shares of Capital Stock of each of the Guarantors or (b) shall
cease to have the power, directly or indirectly, to elect all of the
members of the board of directors of each of the Guarantors;
(v) the Borrower consolidates with or merges into another
corporation or conveys, transfers or leases all or substantially all of
its property to any Person, or any corporation consolidates with or merges
into the Borrower, in either event pursuant to a transaction in which the
outstanding Capital Stock of the Borrower is reclassified or changed into
or exchanged for cash, securities or other property; or
(vi) any "Change of Control" (or similar term) under (and as defined
in) the Note Purchase Agreement or the Senior Notes shall have occurred.
"CLOSING DATE" means the date of this Agreement.
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"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"COMMISSION" means the Securities and Exchange Commission of the United
States of America and any Person succeeding to the functions thereof.
"CONSOLIDATED ASSETS" means the total assets of the Borrower and its
Subsidiaries on a consolidated basis.
"CONSOLIDATED NET WORTH" means, as of any date of determination, the
consolidated total stockholders' equity (including capital stock, additional
paid-in capital and retained earnings) of the Borrower and its consolidated
Subsidiaries determined in accordance with Agreement Accounting Principles.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBS"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.
"CONTINGENT OBLIGATION", as applied to any Person, means any Contractual
Obligation, contingent or otherwise, of that Person with respect to any
Indebtedness of another or other obligation or liability of another, including,
without limitation, any such Indebtedness, obligation or liability of another
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable, including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase, repurchase, or otherwise
acquire such Indebtedness, obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make payment other than for value received. The amount of any Contingent
Obligation shall be computed at the amount which, in light of all the facts and
circumstances existing at the time, represent the amount which can be reasonably
be expected to become an actual or matured liability.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision of
any equity or debt securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument, in any case in writing, to which that
Person is a party or by which it or any of its properties is bound, or to which
it or any of its properties is subject.
"CONTROLLED GROUP" means the group consisting of (i) any corporation which
is a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower; (ii) a partnership or other trade
or business (whether or not incorporated) which is under common control (within
the meaning of Section 414(c) of the
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Code) with the Borrower; and (iii) a member of the same affiliated service group
(within the meaning of Section 414(m) of the Code) as the Borrower, any
corporation described in CLAUSE (I) above or any partnership or trade or
business described in CLAUSE (II) above.
"CONTROLLED SUBSIDIARY" of any Person means a Subsidiary of such Person
(i) 90% or more of the total Equity Interests or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more wholly-owned Subsidiaries of such Person and (ii)
of which such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies, whether through the ownership
of voting securities, by agreement or otherwise.
"CORPORATE BASE RATE" means the corporate base rate or prime rate of
interest announced by Bank One from time to time, changing when and as said
corporate base rate or prime rate changes.
"CRANE" means Crane Co., a Delaware corporation and prior to the Spin-Off
the owner of all of the outstanding Capital Stock of the Borrower.
"CRANE PAYMENT" means the Restricted Payment made by the Borrower to Crane
in connection with the consummation of the Spin-Off in an amount not to exceed
$68,000,000.
"CURE LOAN" is defined in SECTION 9.2(III) hereof.
"CUSTOMARY PERMITTED LIENS" means:
(i) Liens (other than Environmental Liens and Liens in favor of the
IRS or the PBGC or any Plan) with respect to the payment of taxes,
assessments or governmental charges in all cases which are not yet due or
(if foreclosure, distraint, sale or other similar proceedings shall not
have been commenced or any such proceeding after being commenced is
stayed) which are being contested in good faith by appropriate proceedings
properly instituted and diligently conducted and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with Agreement Accounting Principles;
(ii) statutory Liens of landlords and Liens of suppliers, mechanics,
carriers, materialmen, warehousemen, service providers or workmen and
other similar Liens imposed by law created in the ordinary course of
business for amounts not yet due or which are being contested in good
faith by appropriate proceedings properly instituted and diligently
conducted and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with Agreement Accounting
Principles;
(iii) Liens (other than Environmental Liens and Liens in favor of
the IRS or the PBGC or any Plan) incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance or other types of social security benefits or to secure the
performance of bids, tenders, sales, contracts (other than
- 7 -
for the repayment of borrowed money), surety, appeal and performance bonds;
PROVIDED that (A) all such Liens do not in the aggregate materially detract
from the value of the Borrower's or its Subsidiary's assets or property
taken as a whole or materially impair the use thereof in the operation of
the businesses taken as a whole, and (B) all Liens securing bonds to stay
judgments or in connection with appeals do not secure at any time an
aggregate amount exceeding $5,000,000;
(iv) Liens arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar charges or encumbrances on the use
of real property which do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
(v) Liens of attachment or judgment with respect to judgments, writs
or warrants of attachment, or similar process against the Borrower or any
of its Subsidiaries which do not constitute a Default under SECTION 8.1(H)
hereof; and
(vi) any interest or title of the lessor in the property subject to
any operating lease entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business.
"DEFAULT" means an event described in ARTICLE VIII hereof.
"DISCLOSED LITIGATION" is defined in SECTION 6.7 hereof.
"DISQUALIFIED STOCK" means any preferred stock and any Capital Stock that,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or prior
to the date that is 91 days after the Revolving Loan Termination Date.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"DOLLAR" and "$" means dollars in the lawful currency of the United
States.
"EBIT" means, for any period, on a consolidated basis for the Borrower and
its Subsidiaries, the sum of the amounts for such period, without duplication,
of (i) Net Income, PLUS (ii) Interest Expense to the extent deducted in
computing Net Income, PLUS (iii) charges against income for foreign, federal,
state and local taxes to the extent deducted in computing Net Income, PLUS (iv)
other non-cash charges classified as long-term deferrals in accordance with
Agreement Accounting Principles to the extent deducted in computing Net Income,
PLUS (v) other extraordinary non-cash charges to the extent deducted in
computing Net Income, MINUS (vi) other extraordinary non-cash credits to the
extent added in computing Net Income, PLUS (vii) nonrecurring after-tax losses
(or MINUS nonrecurring after-tax gains).
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"EBITDA" means, for any period, on a consolidated basis for the Borrower
and its Subsidiaries, the sum of the amounts for such period, without
duplication, of (i) EBIT, plus (ii) depreciation expense to the extent deducted
in computing Net Income, PLUS (iii) amortization expense, including, without
limitation, amortization of goodwill and other intangible assets to the extent
deducted in computing Net Income, PLUS (iv) other non-cash charges classified as
long-term deferrals in accordance with Agreement Accounting Principles to the
extent deducted in computing Net Income, PLUS (v) other extraordinary non-cash
charges to the extent deducted in computing Net Income, MINUS (vi) other
extraordinary non-cash credits to the extent added in computing Net Income, PLUS
(vii) nonrecurring after-tax losses (or MINUS nonrecurring after-tax gains).
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law derived from or relating to foreign, federal, state and
local laws or regulations relating to or addressing pollution or protection of
the environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601 eT Seq., the Occupational Safety and Health Act of 1970,
29 U.S.C. ss. 651 eT Seq., and the Resource Conservation and Recovery Act of
1976, 42 U.S.C. ss. 6901 eT Seq., in each case including any amendments thereto,
any successor statutes, and any regulations or guidance promulgated thereunder,
and any state or local equivalent thereof.
"ENVIRONMENTAL LIEN" means a lien in favor of any Governmental Authority
for (a) any liability under Environmental, Health or Safety Requirements of Law,
or (b) damages arising from, or costs incurred by such Governmental Authority in
response to, a Release or threatened Release of a Contaminant into the
environment.
"ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement of
law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."
"EQUIPMENT" means all of the Borrower's and its Subsidiaries' present and
future (i) equipment, including, without limitation, machinery, manufacturing,
distribution, selling, data processing and office equipment, assembly systems,
tools, molds, dies, fixtures, appliances, furniture, furnishings, vehicles,
vessels, aircraft, aircraft engines, and trade fixtures, (ii) other tangible
personal property (other than the Borrower's or Subsidiary's Inventory), and
(iii) any and all accessions, parts and appurtenances attached to any of the
foregoing or used in connection therewith, and any substitutions therefor and
replacements, products and proceeds thereof.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar Rate Loan for
the relevant Interest Period, the applicable British Bankers' Association
Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters
Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, and having a maturity equal to such Interest
Period, as adjusted for Reserves ; provided that, if the Reuters Screen FRBD
rate is not available for any reason, the applicable Eurodollar Base Rate for
the relevant Interest Period shall instead be the applicable London interbank
offered rate for deposits in U.S. dollars appearing on Dow ▇▇▇▇▇ Markets
(Telerate) Page 3750 as of 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period, and having a maturity equal to such
Interest Period, as adjusted for Reserves.
"EURODOLLAR RATE" means, with respect to a Eurodollar Rate Loan for the
relevant Interest Period, the Eurodollar Base Rate applicable to such Interest
Period PLUS the then Applicable Eurodollar Margin. The Eurodollar Rate shall be
rounded to the next higher multiple of 1/16 of 1% if the rate is not such a
multiple.
"EURODOLLAR RATE ADVANCE" means an Advance which bears interest at the
Eurodollar Rate.
"EURODOLLAR RATE LOAN" means a Loan, or portion thereof, which bears
interest at the Eurodollar Rate.
"EXCLUDED ASSET SALES" means those Asset Sales permitted pursuant to
CLAUSES (I), (ii), (III) and (IV) of SECTION 7.3(B).
"EXCLUDED TAXES" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
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"FLOATING RATE" means, for any day for any Loan, a rate per annum equal to
the Alternate Base Rate for such day, changing when and as the Alternate Base
Rate changes, plus the then Applicable Floating Rate Margin.
"FLOATING RATE ADVANCE" means an Advance which bears interest at the
Floating Rate.
"FLOATING RATE LOAN" means a Loan, or portion thereof, which bears
interest at the Floating Rate.
"FORM 10" means the Form 10 General Form for the Registration of
Securities, as amended by Amendment ▇▇. ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇ and
Amendment No. 4 thereto filed by the Borrower (File No. 1-15313) with the
Commission in connection with the Spin-Off, together with all exhibits and
appendices thereto.
"GOVERNMENTAL ACTS" is defined in SECTION 3.10(A) hereof.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative authority or
functions of or pertaining to government, including any authority or other
quasi-governmental entity established to perform any of such functions.
"GROSS NEGLIGENCE" means recklessness, or actions taken or omitted with
conscious indifference to or the complete disregard of consequences or rights of
others affected. Gross Negligence does not mean the absence of ordinary care or
diligence, or an inadvertent act or inadvertent failure to act. If the term
"gross negligence" is used with respect to the Agent or any Lender or any
indemnitee in any of the other Loan Documents, it shall have the meaning set
forth herein.
"GUARANTORS" means (i) all of the Borrower's Subsidiaries as of the
Closing Date; (ii) any New Subsidiaries which have satisfied the provisions of
SECTION 7.2(K) hereof; and (iii) any other Subsidiaries which become Guarantors
as a result of the provisions of SECTION 7.2(K), and, in each case, their
respective successors and assigns.
"GUARANTY" means that certain Guaranty dated as of the Closing Date,
executed by the Guarantors in favor of the Agent, for the ratable benefit of the
Lenders, in substantially the form of EXHIBIT I hereto, as it may be amended,
modified, supplemented and/or restated (including to add new Guarantors), and as
in effect from time to time.
"HEDGING ARRANGEMENTS" is defined in the definition of Hedging Obligations
below.
"HEDGING AGREEMENTS" is defined in SECTION 7.3(O) hereof.
"HEDGING OBLIGATIONS" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions
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therefor), under (i) any and all agreements, devices or arrangements designed to
protect at least one of the parties thereto from the fluctuations of interest
rates, commodity prices, exchange rates or forward rates applicable to such
party's assets, liabilities or exchange transactions, including, but not limited
to, dollar-denominated or cross-currency interest rate exchange agreements,
forward currency exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options, puts and warrants or
any similar derivative transactions ("HEDGING ARRANGEMENTS"), and (ii) any and
all cancellations, buy backs, reversals, terminations or assignments of any of
the foregoing.
"HOLDERS OF OBLIGATIONS" means the holders of the Obligations from time to
time and shall include their respective successors, transferees and assigns.
"INCENTIVE ARRANGEMENTS" means any employment agreements and other
incentive and bonus plans and similar arrangements made in connection with the
retention of executives, officers or employees of the Borrower and its
Subsidiaries.
"INDEBTEDNESS" of any Person means, without duplication, such Person's (a)
obligations for borrowed money, (b) obligations representing the deferred
purchase price of property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), (c) obligations, whether or not assumed, secured by Liens or payable out
of the proceeds or production from property or assets now or hereafter owned or
acquired by such Person, (d) obligations which are evidenced by notes,
acceptances or other instruments, (e) Capitalized Lease Obligations, (f)
Contingent Obligations, (g) obligations with respect to letters of credit, (h)
Hedging Obligations, (i) Off-Balance Sheet Liabilities, and (j) Disqualified
Stock. The amount of Indebtedness of any Person at any date shall be without
duplication (i) the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability of any such Contingent
Obligations at such date and (ii) in the case of Indebtedness of others secured
by a Lien to which the property or assets owned or held by such Person is
subject, the lesser of the fair market value at such date of any asset subject
to a Lien securing the Indebtedness of others and the amount of the Indebtedness
secured.
"INDEMNIFIED MATTERS" is defined in SECTION 10.7(B) hereof.
"INDEMNITEES" is defined in SECTION 10.7(B) hereof.
"INITIAL FUNDING DATE" means the date on which the initial Revolving Loans
are advanced hereunder.
"INSOLVENCY EVENT" is defined in SECTION 10.14 hereof.
"INTERCOMPANY INDEBTEDNESS" is defined in SECTION 10.14 hereof.
"INTEREST EXPENSE" means, for any period, the total interest expense of
the Borrower and its consolidated Subsidiaries, whether paid or accrued
(including, without duplication, the interest component of Capitalized Leases,
the interest component (or discount and other fees and
- 12 -
charges in securitization transactions) of Off-Balance Sheet Liabilities, net
payments (if any) pursuant to Hedging Arrangements relating to interest rate
protection, and commitment and letter of credit fees), all as determined in
conformity with Agreement Accounting Principles.
"INTEREST EXPENSE COVERAGE RATIO" is defined in SECTION 7.4(C) hereof.
"INTEREST PERIOD" means, with respect to a Eurodollar Rate Loan, a period
of one (1), two (2), three (3) or six (6) months commencing on a Business Day
selected by the Borrower on which a Eurodollar Rate Advance is made to Borrower
pursuant to this Agreement; provided, HOWEVER, notwithstanding anything in this
Agreement to the contrary for the period from the Initial Funding Date to the
earlier of (y) the date that is 90 days after the Initial Funding Date and (z)
the date upon which the Agent confirms that the loan syndication process has
been complete (the "SYNDICATION PERIOD"), "Interest Period" means, with respect
to a Eurodollar Rate Advance, a period of seven (7) days. Other than during the
Syndication Period, such Interest Period shall end on (but exclude) the day
which corresponds numerically to such date one, two, three or six months
thereafter; PROVIDED, HOWEVER, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, PROVIDED, HOWEVER, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"INVENTORY" shall mean any and all goods, including, without limitation,
goods in transit, wheresoever located, whether now owned or hereafter acquired
by the Borrower or any of its Subsidiaries, which are held for sale or lease,
furnished under any contract of service or held as raw materials, work in
process or supplies, and all materials used or consumed in the business of
Borrower or any of its Subsidiaries, and shall include all right, title and
interest of the Borrower or any of its Subsidiaries in any property the sale or
other disposition of which has given rise to Receivables and which has been
returned to or repossessed or stopped in transit by the Borrower or any of its
Subsidiaries.
"INVESTMENT" means, with respect to any Person, (i) any purchase or other
acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person, (ii) any purchase by that Person
of all or substantially all of the assets of a business conducted by another
Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.
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"ISSUING BANK" means Bank One in its separate capacity as an issuer of
Letters of Credit pursuant to SECTION 3.1.
"L/C DOCUMENTS" is defined in SECTION 3.4 hereof.
"L/C DRAFT" means a draft drawn on the Issuing Bank pursuant to a Letter
of Credit.
"L/C INTEREST" shall have the meaning ascribed to such term in SECTION 3.6
hereof.
"L/C OBLIGATIONS" means, without duplication, an amount equal to the sum
of (i) the aggregate of the amount then available for drawing under each of the
Letters of Credit, (ii) the face amount of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the Issuing Bank, (iii) the aggregate outstanding amount of all Reimbursement
Obligations at such time and (iv) the aggregate face amount of all Letters of
Credit requested by the Borrower but not yet issued (unless the request for an
unissued Letter of Credit has been denied).
"LENDERS" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"LENDING INSTALLATION" means, with respect to a Lender or the Agent, any
office, branch, subsidiary or affiliate of such Lender or the Agent.
"LETTER OF CREDIT" means the letters of credit to be (a) issued by the
Issuing Bank pursuant to SECTION 3.1 hereof or (b) deemed issued by the Issuing
Bank pursuant to SECTION 3.2 hereof.
"LEVERAGE RATIO" is defined in SECTION 7.4(A) hereof.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
"LOAN(S)" means, with respect to a Lender, such Lender's portion of any
Advance made pursuant to SECTION 2.1 hereof, as applicable, and in the case of
the Swing Line Bank, any Swing Line Loan made pursuant to SECTION 2.2 hereof,
and collectively, all Revolving Loans and Swing Line Loans, whether made or
continued as or converted to Floating Rate Loans or Eurodollar Rate Loans.
"LOAN ACCOUNT" is defined in SECTION 2.12(A) hereof.
"LOAN DOCUMENTS" means this Agreement, the Guaranty, the L/C Documents,
any promissory notes issued to any Lender under SECTION 2.12, and all other
documents, instruments and agreements (other than any Hedging Agreement)
executed in connection therewith or
- 14 -
contemplated thereby, as the same may be amended, restated or otherwise modified
and in effect from time to time.
"LOAN PARTIES" is defined in SECTION 5.1 hereof.
"MARGIN STOCK" shall have the meaning ascribed to such term in Regulation
U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower, or the Borrower and its Subsidiaries,
taken as a whole, (b) the ability of the Borrower or any of its Subsidiaries to
perform their respective obligations under the Loan Documents in any material
respect, or (c) the ability of the Lenders or the Agent to enforce in any
material respect the Obligations.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by either the Borrower or any member of the Controlled
Group.
"NET CASH PROCEEDS" means, with respect to any Asset Sale by any Person,
(a) cash or Cash Equivalents (freely convertible into Dollars) received by such
Person or any Subsidiary of such Person from such Asset Sale (including cash or
Cash Equivalents received as consideration for the assumption or incurrence of
liabilities incurred in connection with or in anticipation of such Asset Sale),
after (i) provision for all income or other taxes measured by or resulting from
such Asset Sale, (ii) payment of all brokerage commissions and other fees and
expenses related to such Asset Sale, (iii) repayment of Indebtedness secured by
a Lien on any asset disposed of in such Asset Sale or which is or may be
required (by the express terms of the instrument governing such Indebtedness or
by applicable law) to be repaid in connection with such Asset Sale (including
payments made to obtain or avoid the need for the consent of any holder of such
Indebtedness), and (iv) deduction of appropriate amounts to be provided by such
Person or a Subsidiary of such Person as a reserve, in accordance with Agreement
Accounting Principles, against any liabilities associated with the assets sold
or disposed of in such Asset Sale and retained by such Person or a Subsidiary of
such Person after such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated with
the assets sold or disposed of in such Asset Sale; and (b) cash or Cash
Equivalent payments in respect of any other consideration received by such
Person or any Subsidiary of such Person from such Asset Sale upon receipt of
such cash payments by such Person or such Subsidiary.
"NET INCOME" means, for any period, the net earnings (or loss) after taxes
of the Borrower and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with Agreement
Accounting Principles.
"NEW SUBSIDIARY" is defined in SECTION 7.3(G).
"NON-ERISA COMMITMENTS" means
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(i) each pension, medical, dental, life, accident insurance,
disability, group insurance, sick leave, profit sharing, deferred
compensation, bonus, stock option, stock purchase, retirement, savings,
severance, stock ownership, performance, incentive, hospitalization or
other insurance, or other welfare, benefit or fringe benefit plan, policy,
trust, understanding or arrangement of any kind; and
(ii) each employee collective bargaining agreement and each
agreement, understanding or arrangement of any kind, with or for the
benefit of any present or prior officer, director, employee or consultant
(including, without limitation, each employment, compensation, deferred
compensation, severance or consulting agreement or arrangement and any
agreement or arrangement associated with a change in ownership of the
Borrower or any member of the Controlled Group);
to which the Borrower or any member of the Controlled Group is a party or with
respect to which the Borrower or any member of the Controlled Group is or will
be required to make any payment other than any Plans.
"NON PRO RATA LOAN" is defined in SECTION 9.2 hereof.
"NON-U.S. LENDER" is defined in SECTION 4.5(IV) hereof.
"NOTE PURCHASE AGREEMENT" means any agreement entered into by the Borrower
with respect to the Borrower's issuance of not more than $75,000,000 Senior
Notes (the "SENIOR NOTES") on substantially the terms set forth in the draft
Note Purchase Agreement (draft dated December 14, 1999, document reference
CH01/12037808.6), delivered to the Agent on December 15, 1999, and otherwise as
reasonably acceptable to the Agent and the Required Lenders, as such Note
Purchase Agreement may be amended, modified or supplemented from time to time in
a manner that is not materially adverse to the interests of the Lenders.
"NOTICE OF ASSIGNMENT" is defined in SECTION 13.3(B) hereof.
"OBLIGATIONS" means all Loans, L/C Obligations, advances, debts,
liabilities, obligations, covenants and duties owing by the Borrower or any of
its Subsidiaries to the Agent, any Lender, the Swing Line Bank, the Arranger,
any Affiliate of the Agent or any Lender, the Issuing Bank or any Indemnitee, of
any kind or nature, present or future, arising under this Agreement, the L/C
Documents or any other Loan Document, whether or not evidenced by any note,
guaranty or other instrument, whether or not for the payment of money, whether
arising by reason of an extension of credit, loan, guaranty, indemnification, or
in any other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired. The term includes, without limitation,
all interest, charges, expenses, fees, attorneys' fees and disbursements,
paralegals' fees (in each case whether or not allowed), and any other sum
chargeable to the Borrower or any of its Subsidiaries under this Agreement or
any other Loan Document.
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"OFF-BALANCE SHEET LIABILITIES" of a Person means (a) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to Receivables or notes receivable sold by such Person or any of its
Subsidiaries (calculated to include the unrecovered investment of purchasers or
transferees of Receivables or notes receivable or any other obligation of the
Borrower or such transferor to purchasers/transferees of interests in
Receivables or notes receivables or the agent for such purchasers/transferees),
(b) any liability under any sale and leaseback transactions which do not create
a liability on the consolidated balance sheet of such Person, (c) any liability
under any financing lease or so-called "synthetic" lease transaction, or (d) any
obligations arising with respect to any other transaction which is the
functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheets of such Person and its
Subsidiaries.
"OTHER TAXES" is defined in SECTION 4.5 hereof.
"PARTICIPANTS" is defined in SECTION 13.2(A) hereof.
"PAYMENT DATE" means the last Business Day of each March, June, September
and December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERMITTED ACQUISITION" is defined in SECTION 7.3(G) hereof.
"PERMITTED EXISTING CONTINGENT OBLIGATIONS" means the Contingent
Obligations of the Borrower and its Subsidiaries identified as such on SCHEDULE
1.1.4 to this Agreement.
"PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the Borrower
and its Subsidiaries identified as such on SCHEDULE 1.1.1 to this Agreement.
"PERMITTED EXISTING INVESTMENTS" means the Investments of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.2 to this Agreement.
"PERMITTED EXISTING LIENS" means the Liens on assets of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.3 to this Agreement.
"PERMITTED PURCHASE MONEY INDEBTEDNESS" is defined in SECTION 7.3(A) (VII)
hereof.
"PERMITTED REFINANCING INDEBTEDNESS" means any replacement, renewal,
refinancing or extension of any Indebtedness permitted by this Agreement that
(i) does not exceed the aggregate principal amount (plus accrued interest and
any applicable premium and associated fees and expenses) of the Indebtedness
being replaced, renewed, refinanced or extended, (ii) does not have a Weighted
Average Life to Maturity at the time of such replacement, renewal, refinancing
or extension that is less than the Weighted Average Life to Maturity of the
Indebtedness being replaced, renewed, refinanced or extended, (iii) does not
rank at the time of such replacement, renewal, refinancing or extension senior
to the Indebtedness being replaced, renewed, refinanced
- 17 -
or extended, and (iv) does not contain terms (including, without limitation,
terms relating to security, amortization, interest rate, premiums, fees,
covenants, subordination, event of default and remedies) materially less
favorable to the Borrower or to the Lenders than those applicable to the
Indebtedness being replaced, renewed, refinanced or extended.
"PERSON" means any individual, corporation, firm, enterprise, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company or other entity of any kind, or any
government or political subdivision or any agency, department or instrumentality
thereof.
"PLAN" means an employee benefit plan defined in Section 3(3) of ERISA in
respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"PRO RATA SHARE" means, with respect to any Lender, the percentage
obtained by dividing (A) such Lender's Revolving Loan Commitment at such time
(in each case, as adjusted from time to time in accordance with the provisions
of this Agreement) by (B) the Aggregate Revolving Loan Commitment at such time;
PROVIDED, HOWEVER, if all of the Revolving Loan Commitments are terminated
pursuant to the terms of this Agreement, then "Pro Rata Share" means the
percentage obtained by dividing (x) the sum of (A) such Lender's Revolving
Loans, PLUS (B) such Lender's share of the obligations to purchase
participations in Swing Line Loans and Letters of Credit, by (y) the sum of (A)
the aggregate outstanding amount of Revolving Loans, PLUS (B) the aggregate
outstanding amount of all Swing Line Loans and Letters of Credit.
"PURCHASERS" is defined in SECTION 13.3(A) hereof.
"RECEIVABLE(S)" means and includes all of the Borrower's and its
Subsidiaries' presently existing and hereafter arising or acquired accounts,
accounts receivable, and all present and future rights of the Borrower and its
Subsidiaries to payment for goods sold or leased or for services rendered
(except those evidenced by instruments or chattel paper), whether or not they
have been earned by performance, and all rights in any merchandise or goods
which any of the same may represent, and all rights, title, security and
guaranties with respect to each of the foregoing, including, without limitation,
any right of stoppage in transit.
"REGISTER" is defined in SECTION 13.3(C) hereof.
"REGULATION T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks, non-banks
- 18 -
and non-broker lenders for the purpose of purchasing or carrying Margin Stock
applicable to member banks of the Federal Reserve System.
"REGULATION X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"REIMBURSEMENT OBLIGATION" is defined in SECTION 3.7 hereof.
"RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Contaminants through or in the
air, soil, surface water or groundwater.
"RENTALS" of a Person means the aggregate fixed amounts payable by such
Person under any lease of real or personal property but does not include any
amounts payable under Capitalized Leases of such Person.
"REPLACEMENT LENDER" is defined in SECTION 2.19 hereof.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days after
such event occurs, PROVIDED, HOWEVER, that a failure to meet the minimum funding
standards of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of any such waiver of the notice requirement in
accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the aggregate,
are at least fifty-one percent (51%); PROVIDED, HOWEVER, that, if any of the
Lenders shall have failed to fund its Pro Rata Share of any Revolving Loan
requested by the Borrower, (ii) any Revolving Loan required to be made in
connection with reimbursement for any L/C Obligations or (iii) any Swing Line
Loan as requested by the Agent, which such Lenders are obligated to fund under
the terms of this Agreement and any such failure has not been cured, then for so
long as such failure continues, "REQUIRED LENDERS" means Lenders (excluding all
Lenders whose failure to fund their respective Pro Rata Shares of such Revolving
Loans or Swing Line Loans has not been so cured) whose Pro Rata Shares represent
at least fifty-one percent (51%) of the aggregate Pro Rata Shares of such
Lenders; PROVIDED FURTHER, HOWEVER, that, if the Revolving Loan Commitments have
been terminated pursuant to the terms of this Agreement, "REQUIRED LENDERS"
means Lenders (without regard to such Lenders' performance of their respective
obligations hereunder) whose aggregate ratable shares (stated as a percentage)
of the aggregate outstanding principal balance of all Loans and L/C Obligations
are at least fifty-one percent (51%).
- 19 -
"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws or
other organizational or governing documents of such Person, and any law, rule or
regulation, or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject including,
without limitation, the Securities Act of 1933, the Securities Exchange Act of
1934, Regulations T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or permit or environmental, labor,
employment, occupational safety or health law, rule or regulation, including
Environmental, Health or Safety Requirements of Law.
"RESERVES" shall mean the maximum reserve requirement, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) with
respect to "Eurocurrency liabilities" or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined or category of extensions of credit or other
assets which includes loans by a non-United States office of any Lender to
United States residents.
"RESTRICTED PAYMENT" means:
(i) any dividend or other distribution, direct or indirect, on
account of any Equity Interests of the Borrower now or hereafter
outstanding, except a dividend payable solely in the Borrower's Capital
Stock (other than Disqualified Stock) or in options, warrants or other
rights to purchase such Capital Stock;
(ii) any redemption, retirement, purchase or other acquisition for
value, direct or indirect, of any Equity Interests of the Borrower or any
of its Subsidiaries now or hereafter outstanding, other than in exchange
for, or out of the proceeds of, the substantially concurrent sale (other
than to a Subsidiary of the Borrower) of other Equity Interests of the
Borrower (other than Disqualified Stock);
(iii) any redemption, purchase, retirement, defeasance, prepayment
or other acquisition for value, direct or indirect, of any Indebtedness
other than the Obligations;
(iv) any payment of a claim for the rescission of the purchase or
sale of, or for material damages arising from the purchase or sale of, any
Indebtedness (other than the Obligations) or any Equity Interests of the
Borrower, or any of its Subsidiaries, or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such
claim for damages or rescission; and
(v) any payment or prepayment (whether consisting of principal,
interest, premium or otherwise) with respect to any Indebtedness
subordinated to the Obligations, except such as is expressly permitted
pursuant to the subordination terms contained therein or in the applicable
subordination agreement with respect thereto.
- 20 -
"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the amount
by which the Aggregate Revolving Loan Commitment at such time exceeds the
Revolving Credit Obligations outstanding at such time; PROVIDED, HOWEVER, prior
to the closing of the Rugby Transactions in accordance with the terms hereof,
Revolving Credit Availability shall be reduced by $32,000,000.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of
(i) the outstanding principal amount of the Revolving Loans at such time, PLUS
(ii) the outstanding principal amount of the Swing Line Loans at such time, PLUS
(iii) the outstanding L/C Obligations at such time.
"REVOLVING LOAN" is defined in SECTION 2.1 hereof.
"REVOLVING LOAN COMMITMENT" means, for each Lender, the obligation of such
Lender to make Revolving Loans and to purchase participations in Letters of
Credit and to participate in Swing Line Loans not exceeding the amount set forth
on EXHIBIT A to this Agreement opposite its name thereon under the heading
"Revolving Loan Commitment" or in the assignment and acceptance by which it
became a Lender, as such amount may be modified from time to time pursuant to
the terms of this Agreement or to give effect to any applicable assignment and
acceptance.
"REVOLVING LOAN TERMINATION DATE" means December 16, 2004.
"RISK-BASED CAPITAL GUIDELINES" is defined in SECTION 4.2 hereof.
"RUGBY ACQUISITION" means the acquisition by the Borrower of all of the
issued and outstanding Capital Stock of Rugby USA under and pursuant to the
terms of the Share Exchange Agreement.
"RUGBY PAYMENT" means the Restricted Payment made by Rugby USA to Rugby
PLC in connection with the consummation of the Rugby Acquisition in an amount
not to exceed $32,000,000.
"RUGBY PLC" means The Rugby Group PLC, a company registered in England and
Wales under company number 206971, together with its successors.
"RUGBY TRANSACTIONS" means the series of transactions contemplated by and
described in the Share Exchange Agreement, including but not limited to the
Rugby Payment and the Rugby Acquisition.
"RUGBY USA" means Rugby USA, Inc., a corporation organized under the laws
of the State of Georgia which prior to the Rugby Acquisition is a wholly-owned
Subsidiary of Rugby PLC and which after the Rugby Acquisition is a wholly-owned
Subsidiary of the Borrower.
"SENIOR NOTES" is defined in the definition of Note Purchase Agreement
above.
- 21 -
"SHARE EXCHANGE AGREEMENT" means that certain Share Exchange Agreement
dated as of October 19, 1999 among Rugby PLC, Crane and the Borrower, as such
agreement is in effect as of the date hereof, without taking into account any
amendments, modifications or supplements thereto except such as are acceptable
to the Agent and the Required Lenders
"SOLVENT" means, when used with respect to any Person, that at the time of
determination:
(i) the fair value of its assets (both at fair valuation and at
present fair saleable value) is equal to or in excess of the total amount
of its liabilities, including, without limitation, contingent liabilities;
and
(ii) it is then able and expects to be able to pay its debts as they
mature; and
(iii) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
With respect to contingent liabilities (such as litigation, guarantees and
pension plan liabilities), such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represent the amount which can be reasonably be expected to become an actual or
matured liability.
"SPIN-OFF" means the dividend by Crane to its stockholders in a tax free
transactions of all of the outstanding capital stock of the Borrower such that
the Borrower will become a separate publicly-held corporation owned directly
(prior to the consummation of the Rugby Acquisition) by the stockholders of
Crane to whom such dividend is made, in connection with which there shall have
been obtained a letter ruling from the IRS substantially to the effect that the
Spin-Off will be treated as a tax-free distribution by Crane under Section 355
of the Code (the "TAX RULING").
"SPIN-OFF TRANSACTIONS" means the series of transactions contemplated by
and described in the Form 10, including but not limited to the Crane Payment and
the Spin-Off.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
means a Subsidiary of the Borrower.
"SWING LINE BANK" means Bank One pursuant to the terms hereof.
- 22 -
"SWING LINE COMMITMENT" means the commitment of the Swing Line Bank, in
its discretion, to make Swing Line Loans up to a maximum principal amount of
$5,000,000 at any one time outstanding.
"SWING LINE LOAN" means a Loan made available to the Borrower by the Swing
Line Bank pursuant to SECTION 2.2 hereof.
"SYNDICATION PERIOD" shall have the meaning set forth in the definition of
"Interest Period" above.
"TAX RULING" is defined in the definition of Spin-Off above.
"TAXES" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.
"TERMINATION DATE" means the earlier of (a) the Revolving Loan Termination
Date, and (b) the date of termination in whole of the Aggregate Revolving Loan
Commitment pursuant to SECTION 2.5 hereof or the Revolving Loan Commitments
pursuant to SECTION 9.1 hereof.
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA with respect to such plan or a reduction or cessation of
operations which results in the termination of employment of twenty percent
(20%) of the participants of a Benefit Plan who are employees of the Borrower or
any member of the Controlled Group; (iii) the imposition of an obligation under
Section 4041 of ERISA to provide affected parties written notice of intent to
terminate a Benefit Plan in a distress termination described in Section 4041(c)
of ERISA; (iv) the institution by the PBGC of proceedings to terminate a Benefit
Plan; (v) any event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Benefit Plan; or (vi) the partial or complete withdrawal of the
Borrower or any member of the Controlled Group from a Multiemployer Plan.
"TRANSACTION DOCUMENTS" means the Loan Documents and the documents
executed and delivered by the Borrower or any of its Subsidiaries in connection
with the Spin-Off, the Rugby Transactions or the Senior Notes, including,
without limitation, the Share Exchange Agreement, the Form 10, the Senior Notes
and the Note Purchase Agreement.
"TRANSACTIONS" means the Spin-Off Transactions, the Rugby Transactions and
the financing transactions evidenced by the Loan Documents, and, if applicable,
the Note Purchase Agreement.
"TRANSFEREE" is defined in SECTION 13.5 hereof.
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"TYPE" means, with respect to any Loan, its nature as a Floating Rate Loan
or a Eurodollar Rate Loan.
"UNMATURED DEFAULT" means an event which, but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"WEIGHTED AVERAGE LIFE TO MATURITY" means when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"YEAR 2000 ISSUES" means, with respect to any Person, anticipated costs,
problems and uncertainties associated with the inability of certain computer
applications and imbedded systems to effectively handle data, including dates,
prior to, on and after January 1, 2000, as it affects the business, operations,
and financial condition of such Person, and such Person's customers, suppliers
and vendors.
"YEAR 2000 PROGRAM" is defined in SECTION 6.21.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. Any accounting terms used in this
Agreement which are not specifically defined herein shall have the meanings
customarily given them in accordance with generally accepted accounting
principles in existence as of the date hereof.
1.2 REFERENCES. Any references to Subsidiaries of the Borrower shall not
in any way be construed as consent by the Agent or any Lender to the
establishment, maintenance or acquisition of any Subsidiary, except as may
otherwise be permitted hereunder.
1.3 SUPPLEMENTAL DISCLOSURE. At any time at the request of the Agent and
at such additional times as the Borrower determines, the Borrower shall
supplement each schedule or representation herein or in the other Loan Documents
with respect to any matter hereafter arising which, if existing or occurring at
the date of this Agreement, would have been required to be set forth or
described in such schedule or as an exception to such representation or which is
necessary to correct any information in such schedule or representation which
has been rendered inaccurate thereby. Unless any such supplement to such
schedule or representation discloses the existence or occurrence of events,
facts or circumstances which are not prohibited by the terms of this Agreement
or any other Loan Documents, such supplement to such schedule or representation
shall not be deemed an amendment thereof unless expressly consented to in
writing by Agent and the Required Lenders, and no such amendments, except as the
same may be consented to in a writing which expressly includes a waiver, shall
be or be deemed a waiver by the Agent or any Lender of any Default disclosed
therein. Any items disclosed in any such
- 24 -
supplemental disclosures shall be included in the calculation of any limits,
baskets or similar restrictions contained in this Agreement or any of the other
Loan Documents.
ARTICLE II: THE REVOLVING LOAN FACILITY
2.1 REVOLVING LOANS. (a) Upon the satisfaction of the conditions precedent
set forth in SECTIONS 5.1 and 5.2, as applicable, from and including the Initial
Funding Date and prior to the Termination Date, each Lender severally and not
jointly agrees, on the terms and conditions set forth in this Agreement, to make
revolving loans to the Borrower from time to time, in Dollars, in an amount not
to exceed such Lender's Pro Rata Share of Revolving Credit Availability at such
time (each individually, a "REVOLVING LOAN" and, collectively, the "REVOLVING
LOANS"); PROVIDED, HOWEVER, at no time shall the Revolving Credit Obligations
exceed the Aggregate Revolving Loan Commitment; PROVIDED, FURTHER, prior to the
closing of the Rugby Transactions in accordance with the terms of this
Agreement, at no time shall the Revolving Credit Obligations exceed an amount
equal to the Aggregate Revolving Loan Commitment MINUS $32,000,000; PROVIDED,
FURTHER, that the Aggregate Revolving Loan Commitment shall be reduced pro rata
among the Lenders to Ninety-Three Million and 00/100 Dollars ($93,000,000) if
the Rugby Acquisition shall not have been completed on or before March 31, 2000.
Subject to the terms of this Agreement, the Borrower may borrow, repay and
reborrow Revolving Loans at any time prior to the Termination Date. The
Revolving Loans made on the Initial Funding Date or on or before the third (3rd)
Business Day thereafter shall initially be Floating Rate Loans and thereafter
may be continued as Floating Rate Loans or converted into Eurodollar Rate Loans
in the manner provided in SECTION 2.9 and subject to the other conditions and
limitations therein set forth and set forth in this ARTICLE II and set forth in
the definition of Interest Period. Revolving Loans made after the third (3rd)
Business Day after the Initial Funding Date shall be, at the option of the
Borrower, selected in accordance with SECTION 2.9, either Floating Rate Loans or
Eurodollar Rate Loans. On the Termination Date, the Borrower shall repay in full
the outstanding principal balance of the Revolving Loans. Each Advance under
this SECTION 2.1 shall consist of Revolving Loans made by each Lender ratably in
proportion to such Lender's respective Pro Rata Share.
(b) BORROWING/ELECTION NOTICE. The Borrower shall deliver to the Agent a
Borrowing/Election Notice, signed by it, in accordance with the terms of SECTION
2.7. The Agent shall promptly notify each Lender of such request.
(c) MAKING OF REVOLVING LOANS. Promptly after receipt of the
Borrowing/Election Notice under SECTION 2.7 in respect of Revolving Loans, the
Agent shall notify each Lender by telex or telecopy, or other similar form of
transmission, of the requested Revolving Loan. Each Lender shall make available
its Revolving Loan in accordance with the terms of SECTION 2.6. The Agent will
promptly make the funds so received from the Lenders available to the Borrower
at the Agent's office in Chicago, Illinois on the applicable Borrowing Date and
shall disburse such proceeds in accordance with the Borrower's disbursement
instructions set forth in such Borrowing/Election Notice. The failure of any
Lender to deposit the amount described above with the Agent on the applicable
Borrowing Date shall not relieve any other Lender of its obligations hereunder
to make its Revolving Loan on such Borrowing Date.
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2.2 SWING LINE LOANS. (A) AMOUNT OF SWING LINE LOANS. Upon the
satisfaction of the conditions precedent set forth in SECTION 5.1 and 5.2, as
applicable, from and including the Initial Funding Date and prior to the
Termination Date, the Swing Line Bank may, in its discretion, on the terms and
conditions set forth in this Agreement, make swing line loans to the Borrower
from time to time, in Dollars, in an amount not to exceed the Swing Line
Commitment (each, individually, a "SWING LINE LOAN" and collectively, the "SWING
LINE Loans"); PROVIDED, HOWEVER, at no time shall the Revolving Credit
Obligations exceed the Aggregate Revolving Loan Commitment; PROVIDED, FURTHER,
prior to the closing of the Rugby Transactions in accordance with the terms of
this Agreement, at no time shall the Revolving Credit Obligations exceed an
amount equal to the Aggregate Revolving Loan Commitment MINUS $32,000,000;
PROVIDED, FURTHER, that the Aggregate Revolving Loan Commitment shall be reduced
PRO RATA among the Lenders to Ninety-Three Million and 00/100 Dollars
($93,000,000) if the Rugby Acquisition shall not have been completed on or
before March 31, 2000; and PROVIDED, FURTHER, that at no time shall the sum of
(a) the outstanding amount of the Swing Line Loans, PLUS (b) the outstanding
amount of Revolving Loans made by the Swing Line Bank pursuant to SECTION 2.1,
exceed the Swing Line Bank's Revolving Loan Commitment at such time. Subject to
the terms of this Agreement, the Borrower may borrow, repay and reborrow Swing
Line Loans at any time prior to the Termination Date.
(B) BORROWING/ELECTION NOTICE FOR SWING LINE LOANS. The Borrower shall
deliver to the Agent and the Swing Line Bank a Borrowing/Election Notice, signed
by it, not later than 11:00 a.m.(Chicago time) on the Borrowing Date of each
Swing Line Loan, specifying (i) the applicable Borrowing Date (which date shall
be a Business Day and which may be the same date as the date the
Borrowing/Election Notice is given), and (ii) the aggregate amount of the
requested Swing Line Loan which shall be an amount not less than $500,000 and
increments of $100,000 in excess thereof. The Swing Line Loans shall at all
times be Floating Rate Loans.
(C) MAKING OF SWING LINE LOANS. Promptly after receipt of the
Borrowing/Election Notice under SECTION 2.2(B) in respect of Swing Line Loans,
the Swing Line Bank may, in its sole discretion make available its Swing Line
Loan, in funds immediately available in Chicago to the Agent at its address
specified pursuant to ARTICLE XIV. The Agent will promptly make the funds so
received from the Swing Line Bank available to the Borrower on the Borrowing
Date at the Agent's aforesaid address.
(D) REPAYMENT OF SWING LINE LOANS. Each Swing Line Loan shall be paid in
full by the Borrower on or before the seventh (7th) day after the Borrowing Date
for such Swing Line Loan. The Borrower may at any time pay, without penalty or
premium, all outstanding Swing Line Loans or, in a minimum amount of $500,000
and increments of $100,000 in excess thereof, any portion of the outstanding
Swing Line Loans, upon notice to the Agent and the Swing Line Bank. In addition,
the Agent (i) may at any time in its sole discretion with respect to any
outstanding Swing Line Loan, or (ii) shall on the seventh (7th) day after the
Borrowing Date of any Swing Line Loan, on notice to each Lender (which notice
shall be deemed a Borrowing/Election Notice of the Borrower) require each Lender
(including the Swing Line Bank) to make a Revolving Loan in the amount of such
Lender's Pro Rata Share of such Swing Line Loan, for the purpose of
- 26 -
repaying such Swing Line Loan. Not later than 2:00 p.m. (Chicago time) on the
date of any notice received pursuant to this SECTION 2.2(D), each Lender shall
make available its required Revolving Loan or Revolving Loans, in funds
immediately available in Chicago to the Agent at its address specified pursuant
to ARTICLE XIV. Revolving Loans made pursuant to this SECTION 2.2(D) shall
initially be Floating Rate Loans and thereafter may be continued as Floating
Rate Loans or converted into Eurodollar Rate Loans in the manner provided in
SECTION 2.9 and subject to the other conditions and limitations therein set
forth and set forth in this ARTICLE II. Unless a Lender shall have notified the
Swing Line Bank, prior to its making any Swing Line Loan, that any applicable
condition precedent set forth in SECTIONS 5.1 and 5.2, as applicable, had not
then been satisfied, such Lender's obligation to make Revolving Loans pursuant
to this SECTION 2.2(D) to repay Swing Line Loans shall be unconditional,
continuing, irrevocable and absolute and shall not be affected by any
circumstances, including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against the Agent,
the Swing Line Bank or any other Person, (b) the occurrence or continuance of a
Default or Unmatured Default, (c) any adverse change in the condition (financial
or otherwise) of the Borrower or (d) any other circumstances, happening or event
whatsoever. In the event that any Lender fails to make payment to the Agent of
any amount due under this SECTION 2.2(D), the Agent shall be entitled to
receive, retain and apply against such obligation the principal and interest
otherwise payable to such Lender hereunder until the Agent receives such payment
from such Lender or such obligation is otherwise fully satisfied. In addition to
the foregoing, if for any reason any Lender fails to make payment to the Agent
of any amount due under this SECTION 2.2(D), such Lender shall be deemed, at the
option of the Agent, to have unconditionally and irrevocably purchased from the
Swing Line Bank, without recourse or warranty, an undivided interest and
participation in the applicable Swing Line Loan in the amount of such Revolving
Loan, and such interest and participation may be recovered from such Lender
together with interest thereon at the Federal Funds Effective Rate for each day
during the period commencing on the date of demand and ending on the date such
amount is received. On the Termination Date, the Borrower shall repay in full
the outstanding principal balance of the Swing Line Loans.
2.3 RATE OPTIONS FOR ALL ADVANCES; MAXIMUM INTEREST PERIODS. The Swing
Line Loans shall be Floating Rate Loans at all times. The Revolving Loans may be
Floating Rate Advances or Eurodollar Rate Advances, or a combination thereof,
selected by the Borrower in accordance with SECTION 2.7; PROVIDED, HOWEVER,
notwithstanding anything herein to the contrary, the Borrower may not select
Interest Periods for Eurodollar Rate Advances made during the Syndication Period
which exceed seven (7) days and the Interest Periods with respect to all such
Eurodollar Rate Advances made during the Syndication Period shall be required to
expire on the same date. The Borrower may select, in accordance with SECTION
2.9, rate options and Interest Periods applicable to the Revolving Loans;
PROVIDED that there shall be no more than six (6) Interest Periods in effect
with respect to all of the Loans at any time.
2.4 OPTIONAL PAYMENTS; MANDATORY PREPAYMENTS.
(A) OPTIONAL PAYMENTS. The Borrower may from time to time and at any time
upon at least one (1) Business Day's prior written notice repay or prepay,
without penalty or premium all or any part of outstanding Floating Rate Advances
in an aggregate minimum amount of
- 27 -
$1,000,000 and in integral multiples of
$1,000,000 in excess thereof. Eurodollar Rate Advances may be voluntarily repaid
or prepaid prior to the last day of the applicable Interest Period, subject to
the indemnification provisions contained in SECTION 4.4, PROVIDED, that the
Borrower may not so prepay Eurodollar Rate Advances unless it shall have
provided at least three (3) Business Days' prior written notice to the Agent of
such prepayment and PROVIDED, FURTHER, that optional prepayments of Eurodollar
Rate Advances made pursuant to SECTION 2.1 shall be for the entire amount of the
outstanding Eurodollar Rate Advance.
(B) MANDATORY PREPAYMENTS.
(i) ASSET SALE PREPAYMENTS AND COMMITMENT REDUCTIONS. Upon the
consummation of any Asset Sale by the Borrower or any Subsidiary of the
Borrower, within five (5) Business Days after the Borrower's or any of its
Subsidiaries' (i) receipt of any Net Cash Proceeds from any such Asset Sale, or
(ii) conversion to cash or Cash Equivalents of non-cash proceeds (whether
principal or interest and including securities, release of escrow arrangements
or lease payments) received from any such Asset Sale, the Borrower shall make a
mandatory prepayment of the Obligations in an amount equal to the lesser of (a)
one hundred percent (100%) of such Net Cash Proceeds or such proceeds converted
from non-cash to cash or Cash Equivalents and (b) the outstanding amount of the
Revolving Credit Obligations at such time. Upon the consummation of any Asset
Sale, other than the Excluded Asset Sales, by the Borrower or any Subsidiary of
the Borrower, the Aggregate Revolving Loan Commitment shall be automatically and
permanently reduced (unless otherwise consented by the Required Lenders) in
whole, or in part ratably among the Lenders, in an aggregate amount equal to one
hundred percent (100%) of the Net Cash Proceeds received plus such proceeds
converted from non-cash to cash or Cash Equivalents.
(ii) GENERAL MANDATORY PREPAYMENTS OF REVOLVING LOANS. In addition to
repayments under SECTION 2.4(B)(I), if at any time and for any reason the
Revolving Credit Obligations are greater than the Aggregate Revolving Loan
Commitment, the Borrower shall immediately make a mandatory prepayment of the
Obligations in an amount equal to such excess. In addition, if at any time prior
to the closing of the Rugby Transactions in accordance with the terms of this
Agreement and for any reason the Revolving Credit Obligations are greater than
an amount equal to the Aggregate Revolving Loan Commitment MINUS $32,000,000,
the Borrower shall immediately make a mandatory prepayment of the Obligations in
an amount equal to such excess. In addition, if the L/C Obligations outstanding
at any time are greater than the Aggregate Revolving Loan Commitment at such
time MINUS the sum of the outstanding principal amount of the Revolving Loans at
such time and the outstanding principal amount of the Swing Line Loans at such
time, the Borrower shall either prepay the Obligations in an amount equal to
such excess or deposit cash collateral with the Agent in an amount in Dollars
equal to such excess.
(iii) GENERAL PROVISIONS APPLICABLE TO PREPAYMENTS. Nothing in this
SECTION 2.4(B) shall be construed to constitute the Lenders' consent to any
transaction referred to in CLAUSE (I) above which is not expressly permitted by
the terms of this Agreement. Each mandatory prepayment required by CLAUSES (I)
and (II) of this SECTION 2.4(B) shall be referred to herein as a "Designated
Prepayment." Designated Prepayments shall be allocated and applied to the
Obligations as follows: (a) to repay Revolving Loans and (b) following the
payment in full of the Revolving
- 28 -
Loans, the amount of each Designated Prepayment shall be applied first to
interest on the Reimbursement Obligations, then to principal on the
Reimbursement Obligations, then to fees on account of Letters of Credit and
then, to the extent any L/C Obligations are contingent, deposited with the Agent
as cash collateral in respect of such L/C Obligations. On the date any
Designated Prepayment is received by the Agent, such prepayment shall be applied
first to Floating Rate Loans and to any Eurodollar Rate Loans maturing on such
date and then to subsequently maturing Eurodollar Rate Loans in order of
maturity.
(C) PREPAYMENTS AND HEDGING ARRANGEMENTS. No prepayment of any Loan shall
affect the Borrower's or any Guarantor's existing or future obligation to may
payments under any Hedging Agreement.
2.5 REDUCTION OF REVOLVING LOAN COMMITMENTS. In addition to the reductions
required pursuant to SECTION 2.4(B)(I), the Borrower may permanently reduce the
Aggregate Revolving Loan Commitment in whole, or in part ratably among the
Lenders, in an aggregate minimum amount of $5,000,000 and integral multiples of
$5,000,000 in excess of that amount (unless the Aggregate Revolving Loan
Commitment is reduced in whole), upon at least three (3)Business Day's prior
written notice to the Agent, which notice shall specify the amount of any such
reduction; PROVIDED, HOWEVER, that the amount of the Aggregate Revolving Loan
Commitment may not be reduced below the aggregate principal amount of the
outstanding Revolving Credit Obligations. All accrued commitment fees shall be
payable on the effective date of any termination of the obligations of the
Lenders to make Loans hereunder or any reduction of the Aggregate Revolving Loan
Commitment on the amount so reduced.
2.6 METHOD OF BORROWING. Not later than 2:00 p.m. (Chicago time) on each
Borrowing Date, each Lender shall make available its Revolving Loan, in
immediately available funds, to the Agent at its address specified pursuant to
ARTICLE XIV. The Agent will promptly make the funds so received from the Lenders
available to the Borrower at the Agent's aforesaid address.
2.7 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR ADVANCES. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Rate Advance, the Interest Period applicable to each Advance from time to time.
The Borrower shall give the Agent irrevocable notice in substantially the form
of EXHIBIT B hereto (a "BORROWING/ELECTION NOTICE") not later than 10:00 a.m.
(Chicago time) (a) on or before the Borrowing Date of each Floating Rate Advance
and (b) three (3) Business Days before the Borrowing Date for each Eurodollar
Rate Advance specifying: (i) the Borrowing Date (which shall be a Business Day)
of such Advance; (ii) the aggregate amount of such Advance; (iii) the Type of
Advance selected; and (iv) in the case of each Eurodollar Rate Advance, the
Interest Period applicable thereto. The Borrower shall select Interest Periods
so that, to the best of the Borrower's knowledge, it will not be necessary to
prepay all or any portion of any Eurodollar Rate Advance prior to the last day
of the applicable Interest Period in order to make mandatory prepayments as
required pursuant to the terms hereof. Each Floating Rate Advance and all
Obligations other than Loans shall bear interest from and including the date of
the making of such Advance, in the case of Loans, and the date such Obligation
is due and owing in the case of such other Obligations, to (but not including)
the date of repayment thereof at the Floating Rate, changing when and as such
Floating Rate changes.
- 29 -
Changes in the rate of interest on that portion of the Loans maintained as
Floating Rate Loans will take effect simultaneously with each change in the
Alternate Base Rate. Each Eurodollar Rate Advance shall bear interest from and
including the first day of the Interest Period applicable thereto to (but not
including) the last day of such Interest Period at the interest rate determined
as applicable to such Eurodollar Rate Advance, changing when and as the
Applicable Eurodollar Margin changes. Changes in the rate of interest on that
portion of the Loans maintained as Eurodollar Rate Advances will take effect
simultaneously with each change in the Applicable Eurodollar Margin.
2.8 MINIMUM AMOUNT OF EACH ADVANCE. Each Floating Rate Advance (other than
an Advance to repay Swing Line Loans or a Reimbursement Obligation) shall be in
the minimum amount of $1,000,000 (and in multiples of $1,000,000 if in excess
thereof); PROVIDED, HOWEVER, that any Floating Rate Advance may be in the amount
of the unused Aggregate Revolving Loan Commitment. Each Eurodollar Rate Advance
shall be in the minimum amount of $5,000,000 (and in multiples of $1,000,000 if
in excess thereof).
2.9 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR CONVERSION AND
CONTINUATION OF ADVANCES.
(A) RIGHT TO CONVERT. The Borrower may elect from time to time, subject to
the provisions of SECTION 2.3 and this SECTION 2.9, to convert all or any part
of a Loan of any Type into any other Type or Types of Loans; PROVIDED that any
conversion of any Eurodollar Rate Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto.
(B) AUTOMATIC CONVERSION AND CONTINUATION. Floating Rate Loans shall
continue as Floating Rate Loans unless and until such Floating Rate Loans are
converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall continue as
Eurodollar Rate Loans until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have given the
Agent a Borrowing/Election Notice in accordance with SECTION 2.9(D) requesting
that, at the end of such Interest Period, such Eurodollar Rate Loans continue as
a Eurodollar Rate Loan.
(C) NO CONVERSION POST-DEFAULT OR POST-UNMATURED DEFAULT. Notwithstanding
anything to the contrary contained in SECTION 2.9(A) or SECTION 2.9(B), no Loan
may be converted into or continued as a Eurodollar Rate Loan (except with the
consent of the Required Lenders) when any Default or Unmatured Default has
occurred and is continuing.
(D) BORROWING/ELECTION NOTICE. The Borrower shall give the Agent
irrevocable notice (a "BORROWING/ELECTION NOTICE") of each conversion of a
Floating Rate Loan into a Eurodollar Rate Loan or continuation of a Eurodollar
Rate Loan not later than 10:00 a.m. (Chicago time) three (3) Business Days prior
to the date of the requested conversion or continuation, specifying: (1) the
requested date (which shall be a Business Day) of such conversion or
continuation; (2) the amount and Type of the Loan to be converted or continued;
and (3) the amount of Eurodollar Rate Loan(s) into which such Loan is to be
converted or continued, and the duration of the Interest Period applicable
thereto.
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2.10 DEFAULT RATE. After the occurrence and during the continuance of a
Default, at the option of the Agent or at the direction of the Required Lenders,
(a) the interest rate(s) applicable to the Obligations (whether Floating Rate
Advances, Swing Line Loans or Eurodollar Rate Advances) shall be equal to the
Floating Rate, changing as and when the Floating Rate changes PLUS two percent
(2.00%) per annum for all Loans and other Obligations and (b) the fees payable
under SECTION 3.8 with respect to Letters of Credit shall be equal to the
Applicable L/C Fee Percentage PLUS two percent (2.00%) per annum.
2.11 METHOD OF PAYMENT. All payments of principal, interest, fees,
commissions and L/C Obligations hereunder shall be made, without setoff,
deduction or counterclaim, in immediately available funds to the Agent at the
Agent's address specified pursuant to ARTICLE XIV, or at any other Lending
Installation of the Agent specified in writing by the Agent to the Borrower, by
2:00 p.m. (Chicago time) on the date when due and shall be made ratably among
the Lenders (unless such amount is not to be shared ratably in accordance with
the terms hereof). Each payment delivered to the Agent for the account of any
Lender shall be delivered promptly by the Agent to such Lender in the same type
of funds which the Agent received at its address specified pursuant to ARTICLE
XIV or at any Lending Installation specified in a notice received by the Agent
from such Lender. The Borrower authorizes the Agent to charge the account of the
Borrower maintained with Bank One for each payment of principal, interest, fees,
commissions and L/C Obligations as it becomes due hereunder. Each reference to
the Agent in this SECTION 2.11 shall also be deemed to refer, and shall apply
equally, to the Issuing Bank, in the case of payments required to be made by the
Borrower to the Issuing Bank pursuant to ARTICLE III.
2.12 EVIDENCE OF DEBT.
(a) Each Lender shall maintain in accordance with its usual practice an
account or accounts (a "LOAN ACCOUNT") evidencing the indebtedness of the
Borrower to such Lender owing to such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.
(b) The Register maintained by the Agent pursuant to SECTION 13.3(C) shall
include a control account, and a subsidiary account for each Lender, in which
accounts (taken together) shall be recorded (i) the date and the amount of each
Loan made hereunder, the Type thereof and the Interest Period, if any,
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder, (iii)
the effective date and amount of each Assignment Agreement delivered to and
accepted by it and the parties thereto pursuant to SECTION 13.3, (iv) the amount
of any sum received by the Agent hereunder for the account of the Lenders and
each Lender's share thereof, and (v) all other appropriate debits and credits as
provided in this Agreement, including, without limitation, all fees, charges,
expenses and interest.
(c) The entries made in the Loan Account, the Register and the other
accounts maintained pursuant to SUBSECTIONS (A) or (B) of this Section shall be
conclusive and binding for all purposes, absent manifest error, unless the
Borrower objects to information contained in the
- 31 -
Loan Accounts, the Register or the other accounts within thirty (30) days of the
Borrower's receipt of such information; PROVIDED that the failure of any Lender
or the Agent to maintain such accounts or any error therein shall not in any
manner affect the obligation of the Borrower to repay the Loans in accordance
with the terms of this Agreement.
(d) Any Lender may request that the Revolving Loans made by it each be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note for such Loans payable to
the order of such Lender and in a form approved by the Agent and consistent with
the terms of this Agreement. Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to SECTION 13.3) be represented by one or more promissory notes in such
form payable to the order of the payee named therein.
2.13 TELEPHONIC NOTICES. The Borrower authorizes the Lenders and the Agent
to extend, convert or continue Advances, effect selections of Types of Advances
and to transfer funds based on telephonic notices made by any person or persons
the Agent or any Lender in good faith believes to be acting on behalf of the
Borrower. The Borrower agrees to deliver promptly to the Agent a written
confirmation, signed by an Authorized Officer, if such confirmation is requested
by the Agent or any Lender, of each telephonic notice. If the written
confirmation differs in any material respect from the action taken by the Agent
and the Lenders, the records of the Agent and the Lenders shall govern absent
manifest error. In case of disagreement concerning such notices, if the Agent
has recorded telephonic Borrowing/Election Notices, such recordings will be made
available to the Borrower upon the Borrower's request therefor.
2.14 PROMISE TO PAY; INTEREST AND COMMITMENT FEES; INTEREST PAYMENT DATES;
INTEREST AND FEE BASIS; LOAN AND CONTROL ACCOUNTS.
(A) PROMISE TO PAY. The Borrower unconditionally promises to pay when due
the principal amount of each Loan and all other Obligations incurred by it, and
to pay all unpaid interest accrued thereon, in accordance with the terms of this
Agreement and the other Loan Documents.
(B) INTEREST PAYMENT DATES. Interest accrued on each Floating Rate Loan
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof and at maturity (whether by acceleration or
otherwise). Interest accrued on each Eurodollar Rate Loan shall be payable on
the last day of its applicable Interest Period, on any date on which the
Eurodollar Rate Loan is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Eurodollar Rate Loan having an Interest
Period longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest accrued on the
principal balance of all other Obligations shall be payable in arrears (i) on
the last day of each calendar quarter, commencing on the first such day
following the incurrence of such Obligation, (ii) upon repayment thereof in full
or in part, and (iii) if not theretofore paid in full, at the time such other
Obligation becomes due and payable (whether by acceleration or otherwise).
- 32 -
(C) COMMITMENT FEES AND AGENT'S FEES. (i) The Borrower shall pay to the
Agent, for the account of the Lenders in accordance with their Pro Rata Shares,
from and after the Closing Date until the date on which the Aggregate Revolving
Loan Commitment shall be terminated in whole, a Commitment fee accruing at the
rate of the then Applicable Commitment Fee Percentage, on the amount by which
(A) the Aggregate Revolving Loan Commitment in effect from time to time exceeds
(B) the Revolving Credit Obligations (excluding the outstanding principal amount
of the Swing Line Loans) in effect from time to time. All such Commitment fees
payable under this CLAUSE (C) shall be payable quarterly in arrears on each
Payment Date occurring after the Closing Date (with the first such payment being
calculated for the period from the Closing Date and ending on December 31,
1999), on the date of any reduction of the Aggregate Revolving Loan Commitment
for the amount so reduced and, in addition, on the date on which the Aggregate
Revolving Loan Commitment shall be terminated in whole.
(ii) The Borrower agrees to pay to the Agent for the sole account of the
Agent and the Arranger (unless otherwise agreed between the Agent and the
Arranger and any Lender) the fees set forth in the letter agreement among the
Agent, the Arranger and the Borrower dated November 9, 1999, payable at the
times and in the amounts set forth therein.
(D) INTEREST AND FEE BASIS; APPLICABLE FLOATING RATE MARGINS, APPLICABLE
EURODOLLAR MARGINS; APPLICABLE COMMITMENT FEE PERCENTAGE AND APPLICABLE L/C FEE
PERCENTAGE.
(i) Interest and fees shall be calculated for actual days elapsed on the
basis of a 360-day year for actual days elapsed. Interest shall be payable for
the day an Obligation is incurred but not for the day of any payment on the
amount paid if payment is received prior to 2:00 p.m.(Chicago time) at the place
of payment. If any payment of principal of or interest on a Loan or any payment
of any other Obligations shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and, in the case
of a principal payment, such extension of time shall be included in computing
interest, fees and commissions in connection with such payment.
(ii) The Applicable Floating Rate Margins, Applicable Eurodollar Margins,
Applicable Commitment Fee Percentage and Applicable L/C Fee Percentage shall be
determined from time to time by reference to the table set forth below, on the
basis of the then applicable Leverage Ratio as described in this SECTION
2.14(D)(II):
APPLICABLE MARGINS APPLICABLE FEES
LEVERAGE RATIO
APPLICABLE APPLICABLE APPLICABLE APPLICABLE
EURODOLLAR FLOATING L/C FEE COMMITMENT FEE
MARGIN RATE MARGIN PERCENTAGE PERCENTAGE
------------------------------------------------------------
--------------------------------------------------------------------------------
LEVEL I
_1.0 to 1.00 0.75% 0.00% 0.75% 0.20%
--------------------------------------------------------------------------------
LEVEL II
_1.0 to 1.00 and 0.875% 0.00% 0.875% 0.225%
--------------------------------------------------------------------------------
- 33 -
_1.5 to 1.00
--------------------------------------------------------------------------------
LEVEL III
_1.5 to 1.00 and 1.00% 0.00% 1.00% 0.25%
_2.0 to 1.00
-------------------------------------------------------------------------------
LEVEL IV
_2.0 to 1.00 and 1.25% 0.25% 1.25% 0.275%
_2.5 to 1.00
-------------------------------------------------------------------------------
LEVEL V 1.50% 0.50% 1.50% 0.30%
_2.5 to 1.00
-------------------------------------------------------------------------------
For purposes of this SECTION 2.14(D)(II), the Leverage Ratio shall be calculated
as provided in SECTION 7.4(A). Upon receipt of the financial statements
delivered pursuant to SECTION 7.1(A)(I) (other than such financials for the last
quarter of each fiscal year) and SECTION 7.1(A)(II), as applicable, and upon
consummation of the Rugby Acquisition and each other Permitted Acquisition, the
Applicable Floating Rate Margins, Applicable Eurodollar Margins, Applicable
Commitment Fee Percentage and Applicable L/C Fee Percentage shall be adjusted,
such adjustment being effective five (5) Business Days following the Agent's
receipt of such financial statements and the compliance certificate required to
be delivered in connection therewith pursuant to SECTION 7.1(A)(III), or the
Agent's receipt of an Authorized Officer's certificate pursuant to SECTION
7.3(F), as applicable; PROVIDED, that if the Borrower shall not have timely
delivered its financial statements in accordance with SECTION 7.1(A)(I) or (II),
or such Authorized Officer's certificate, as applicable, then commencing on the
date upon which such financial statements or certificate should have been
delivered and continuing until such financial statements or certificate, as
applicable, are actually delivered, it shall be assumed for purposes of
determining the Applicable Floating Rate Margins, Applicable Eurodollar Margins,
Applicable Commitment Fee Percentage and Applicable L/C Fee Percentage that the
Leverage Ratio was greater than 2.5 to 1.0 and Level V pricing shall be
applicable.
(iii) Notwithstanding anything herein to the contrary, from the Closing
Date to but not including the fifth Business Day following receipt of the
Borrower's financial statements delivered pursuant to SECTION 7.1(A)(I) for the
fiscal quarter ending June 30, 2000, the Applicable Floating Rate Margins,
Applicable Eurodollar Margins, Applicable Commitment Fee Percentage and
Applicable L/C Fee Percentage shall be set at the greater of (a) Level III and
(b) the Level determined in accordance with clause (ii) above.
2.15 NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND AGGREGATE
REVOLVING LOAN COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent
will notify each Lender of the contents of each Aggregate Revolving Loan
Commitment reduction notice, Borrowing/Election Notice, and repayment notice
received by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Rate Loan promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
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2.16 LENDING INSTALLATIONS. Each Lender may book its Loans or Letters of
Credit at any Lending Installation selected by such Lender and may change its
Lending Installation from time to time. All terms of this Agreement shall apply
to any such Lending Installation. Each Lender may, by written or facsimile
notice to the Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments and/or
payments of L/C Obligations are to be made.
2.17 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (ii) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.
2.18 TERMINATION DATE. This Agreement shall be effective until the
Termination Date. Notwithstanding the termination of this Agreement, until all
of the Obligations (other than contingent indemnity obligations) shall have been
fully and indefeasibly paid and satisfied in cash, all financing arrangements
among the Borrower and the Lenders shall have been terminated (including under
Hedging Agreements or other agreements with respect to Hedging Obligations) and
all of the Letters of Credit shall have expired, been canceled or terminated,
all of the rights and remedies under this Agreement and the other Loan Documents
shall survive.
2.19 REPLACEMENT OF CERTAIN LENDERS. In the event a Lender ("AFFECTED
LENDER") shall have: (i) failed to fund its Pro Rata Share of any Advance
requested by the Borrower, or to fund a Revolving Loan in order to repay Swing
Line Loans or Reimbursement Obligations, which such Lender is obligated to fund
under the terms of this Agreement and which failure has not been cured, (ii)
requested compensation from the Borrower under SECTIONS 4.1, 4.2 or 4.5 to
recover Taxes, Other Taxes or other additional costs incurred by such Lender
which are not being incurred by any other Lender, (iii) delivered a notice
pursuant to SECTION 4.3 claiming that such Lender is unable to extend Eurodollar
Rate Loans to the Borrower for reasons not generally applicable to the other
Lenders or (iv) has invoked SECTION 10.2, then, in any such case, the Borrower
or the Agent may make written demand on such Affected Lender (with a copy to the
Agent in the case of a demand by the Borrower and a copy to the Borrower in the
case of a demand by the Agent) for the Affected Lender to assign, and such
Affected Lender shall use commercially reasonable efforts to assign pursuant to
one or more duly executed Assignment Agreements five (5) Business Days after the
date of such demand, to one or more financial institutions that comply with the
provisions of SECTION 13.3 which the Borrower or the Agent, as the case may be,
shall have engaged for such purpose ("REPLACEMENT LENDER"), all of such
- 35 -
Affected Lender's rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, its Revolving Loan Commitment, all
Loans owing to it, all of its participation interests in existing Letters of
Credit, and its obligation to participate in additional Letters of Credit and
Swing Line Loans hereunder) in accordance with SECTION 13.3. The Agent agrees,
upon the occurrence of such events with respect to an Affected Lender and upon
the written request of the Borrower, to use its reasonable efforts to obtain the
commitments from one or more financial institutions to act as a Replacement
Lender. The Agent is authorized to execute one or more of such assignment
agreements as attorney-in-fact for any Affected Lender failing to execute and
deliver the same within five (5) Business Days after the date of such demand.
Further, with respect to such assignment the Affected Lender shall have
concurrently received, in cash, all amounts due and owing to the Affected Lender
hereunder or under any other Loan Document, including, without limitation, the
aggregate outstanding principal amount of the Loans owed to such Lender,
together with accrued interest thereon through the date of such assignment,
amounts payable under SECTIONS 4.1, 4.2 and 4.5 with respect to such Affected
Lender and compensation payable under SECTION 2.14(C) in the event of any
replacement of any Affected Lender under CLAUSE (II) or CLAUSE (III) of this
SECTION 2.19; PROVIDED that upon such Affected Lender's replacement, such
Affected Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of SECTIONS 4.1, 4.2, 4.4, 4.5 and 10.7, as well as to
any fees accrued for its account hereunder and not yet paid, and shall continue
to be obligated under SECTION 11.8. Upon the replacement of any Affected Lender
pursuant to this SECTION 2.19, the provisions of SECTION 9.2 shall continue to
apply with respect to Loans which are then outstanding with respect to which the
Affected Lender failed to fund its Pro Rata Share and which failure has not been
cured.
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 OBLIGATION TO ISSUE LETTERS OF CREDIT. Subject to the terms and
conditions of this Agreement and in reliance upon the representations,
warranties and covenants of the Borrower herein set forth, the Issuing Bank
hereby agrees to issue for the account of the Borrower through the Issuing
Bank's branches as it and the Borrower may jointly agree, one or more Letters of
Credit denominated in Dollars in accordance with this ARTICLE III, from time to
time during the period, commencing on the Initial Funding Date and ending on the
fifth Business Day prior to the Revolving Loan Termination Date.
3.2 TRANSITIONAL PROVISION. SCHEDULE 3.2 contains a schedule of certain
letters of credit issued for the account of the Borrower prior to the Closing
Date. Subject to the satisfaction of the conditions contained in SECTIONS 5.1
and 5.2, from and after the Closing Date such letters of credit shall be deemed
to be Letters of Credit issued pursuant to this ARTICLE III.
3.3 TYPES AND AMOUNTS. The Issuing Bank shall not have any obligation to
and the Issuing Bank shall not:
(i) issue (or amend) any Letter of Credit if on the date of issuance
(or amendment), before or after giving effect to the Letter of Credit
requested
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hereunder, (a) the Revolving Credit Obligations at such time would exceed
the Aggregate Revolving Loan Commitment at such time, or (b) the aggregate
outstanding amount of the L/C Obligations would exceed $10,000,000; or
(ii) issue (or amend) any Letter of Credit which has an expiration
date later than the date which is the earlier of (a) one (1) year after
the date of issuance thereof or (b) five (5) Business Days immediately
preceding the Revolving Loan Termination Date; PROVIDED that any Letter of
Credit with a one-year tenor may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the
date referred to in CLAUSE (B) above).
3.4 CONDITIONS. In addition to being subject to the satisfaction of the
conditions contained in SECTIONS 5.1 and 5.2, the obligation of the Issuing Bank
to issue any Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) the Borrower shall have delivered to the Issuing Bank at such
times and in such manner as the Issuing Bank may reasonably prescribe, a
request for issuance of such Letter of Credit in substantially the form of
EXHIBIT C hereto, duly executed applications for such Letter of Credit,
and such other documents, instructions and agreements as may be required
pursuant to the terms thereof (all such applications, documents,
instructions, and agreements being referred to herein as the "L/C
DOCUMENTS"), and the proposed Letter of Credit shall be reasonably
satisfactory to the Issuing Bank and the Borrower as to form and content;
and
(ii) as of the date of issuance no order, judgment or decree of any
court, arbitrator or Governmental Authority shall purport by its terms to
enjoin or restrain the Issuing Bank from issuing such Letter of Credit and
no law, rule or regulation applicable to the Issuing Bank and no request
or directive (whether or not having the force of law) from a Governmental
Authority with jurisdiction over the Issuing Bank shall prohibit or
request that the Issuing Bank refrain from the issuance of Letters of
Credit generally or the issuance of that Letter of Credit.
3.5 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. (a) Subject to the terms
and conditions of this ARTICLE III and provided that the applicable conditions
set forth in SECTIONS 5.1 and 5.2 hereof have been satisfied, the Issuing Bank
shall, on the requested date, issue a Letter of Credit on behalf of the Borrower
in accordance with the Issuing Bank's usual and customary business practices
and, in this connection, the Issuing Bank may assume that the applicable
conditions set forth in SECTION 5.2 hereof have been satisfied unless it shall
have received notice to the contrary from the Agent or a Lender or has knowledge
that the applicable conditions have not been met.
(b) The Issuing Bank shall give the Agent written or telex notice, or
telephonic notice confirmed promptly thereafter in writing, of the issuance of a
Letter of Credit, PROVIDED, HOWEVER, that the failure to provide such notice
shall not result in any liability on the part of the Issuing Bank.
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(c) The Issuing Bank shall not extend (including as a result of any
evergreen provision) or amend any Letter of Credit unless the requirements of
this SECTION 3.5 are met as though a new Letter of Credit was being requested
and issued.
3.6 LETTER OF CREDIT PARTICIPATION. On the date of this Agreement, with
respect to the Letters of Credit identified on SCHEDULE 3.2, and immediately
upon the issuance of each Letter of Credit hereunder, each Lender with a Pro
Rata Share shall be deemed to have automatically, irrevocably and
unconditionally purchased and received from the Issuing Bank an undivided
interest and participation in and to such Letter of Credit, the obligations of
the Borrower in respect thereof, and the liability of the Issuing Bank
thereunder (collectively, an "L/C INTEREST") in an amount equal to the amount
available for drawing under such Letter of Credit multiplied by such Lender's
Pro Rata Share. The Issuing Bank will notify each Lender promptly upon
presentation to it of an L/C Draft or upon any other draw under a Letter of
Credit. On or before the Business Day on which the Issuing Bank makes payment of
each such L/C Draft or, in the case of any other draw on a Letter of Credit, on
demand by the Agent or the Issuing Bank, in either case, to the extent the
Borrower fails to reimburse the Issuing Bank on such date in an amount equal to
such payment or draw, each Lender shall make payment to the Agent, for the
account of the Issuing Bank, in immediately available funds in an amount equal
to such Lender's Pro Rata Share of the amount of such payment or draw. The
obligation of each Lender to reimburse the Issuing Bank under this SECTION 3.6
shall be unconditional, continuing, irrevocable and absolute, unless the
applicable Letter of Credit shall have been issued or amended in contravention
of the provisions of SECTION 3.3. In the event that any Lender fails to make
payment to the Agent of any amount due under this SECTION 3.6, the Agent shall
be entitled to receive, retain and apply against such obligation the principal
and interest otherwise payable to such Lender hereunder until the Agent receives
such payment from such Lender or such obligation is otherwise fully satisfied;
PROVIDED, HOWEVER, that nothing contained in this sentence shall relieve such
Lender of its obligation to reimburse the Issuing Bank for such amount in
accordance with this SECTION 3.6.
3.7 REIMBURSEMENT OBLIGATION. The Borrower agrees unconditionally,
irrevocably and absolutely to pay immediately to the Agent, for the account of
the Lenders, the amount of each advance drawn under or pursuant to a Letter of
Credit or an L/C Draft related thereto (such obligation of the Borrower to
reimburse the Agent for an advance made under a Letter of Credit or L/C Draft
being hereinafter referred to as a "REIMBURSEMENT OBLIGATION" with respect to
such Letter of Credit or L/C Draft), each such reimbursement to be made by the
Borrower no later than the Business Day on which the Issuing Bank makes payment
of each such L/C Draft or, in the case of any other draw on a Letter of Credit,
the date specified in the demand of the Issuing Bank. If the Borrower at any
time fails to repay a Reimbursement Obligation pursuant to this SECTION 3.7, the
Borrower shall be deemed to have elected to borrow Revolving Loans from the
Lenders, as of the date of the advance giving rise to the Reimbursement
Obligation, equal in amount to the amount of the unpaid Reimbursement
Obligation. Such Revolving Loans shall be made as of the date of the payment
giving rise to such Reimbursement Obligation, automatically, without notice and
without any requirement to satisfy the conditions precedent otherwise applicable
to an Advance of Revolving Loans. Such Revolving Loans shall constitute a
Floating
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Rate Advance, the proceeds of which Advance shall be used to repay such
Reimbursement Obligation. If, for any reason, the Borrower fails to repay a
Reimbursement Obligation on the day such Reimbursement Obligation arises and,
for any reason, the Lenders are unable to make or have no obligation to make
Revolving Loans, then such Reimbursement Obligation shall bear interest from and
after such day, until paid in full, at the interest rate applicable to a
Floating Rate Advance.
3.8 LETTER OF CREDIT FEES. The Borrower agrees to pay:
(i) quarterly, in arrears, to the Agent for the ratable benefit of
the Lenders, except as set forth in SECTION 9.2, a letter of credit fee at
a rate per annum equal to the Applicable L/C Fee Percentage on the average
daily outstanding face amount available for drawing under all standby
Letters of Credit;
(ii) quarterly, in arrears, to the Issuing Bank, a letter of credit
fronting fee at a rate per annum equal to 0.125% on the average daily
outstanding face amount available for drawing under all Letters of Credit
issued by the Issuing Bank; and
(iii) to the Issuing Bank, all customary fees and other issuance,
amendment, cancellation, document examination, negotiation, transfer and
presentment expenses and related charges in connection with the issuance,
amendment, cancellation, presentation of L/C Drafts, negotiation, transfer
and the like customarily charged by the Issuing Bank with respect to
standby and commercial Letters of Credit, including, without limitation,
standard commissions with respect to commercial Letters of Credit, payable
at the time of invoice of such amounts.
3.9 ISSUING BANK REPORTING REQUIREMENTS. Upon the request of any Lender,
the Issuing Bank shall furnish to such Lender copies of any Letter of Credit and
any application for or reimbursement agreement with respect to a Letter of
Credit to which the Issuing Bank is party.
3.10 INDEMNIFICATION; EXONERATION. (A) In addition to amounts payable as
elsewhere provided in this ARTICLE III, the Borrower hereby agrees to protect,
indemnify, pay and save harmless the Agent, the Issuing Bank and each Lender
from and against any and all liabilities and costs which the Agent, the Issuing
Bank or such Lender may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit other than, in the case of
the Issuing Bank, as a result of its Gross Negligence or willful misconduct, as
determined by the final judgment of a court of competent jurisdiction, or (ii)
the failure of the Issuing Bank to honor a drawing under a Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future DE JURE or DE FACTO Governmental Authority (all such acts or omissions
herein called "GOVERNMENTAL ACTS").
(B) As among the Borrower, the Lenders, the Agent and the Issuing Bank,
the Borrower assumes all risks of the acts and omissions of, or misuse of such
Letter of Credit by, the beneficiary of any Letters of Credit. In furtherance
and not in limitation of the foregoing, subject to the provisions of the Letter
of Credit applications and Letter of Credit reimbursement
- 39 -
agreements executed by the Borrower at the time of request for any Letter of
Credit, neither the Agent, the Issuing Bank nor any Lender shall be responsible
(in the absence of Gross Negligence or willful misconduct in connection
therewith, as determined by the final judgment of a court of competent
jurisdiction): (i) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of the Letters of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (ii) for the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign a Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason; (iii) for failure of the
beneficiary of a Letter of Credit to comply duly with conditions required in
order to draw upon such Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex, or other similar form of teletransmission or otherwise;
(v) for errors in interpretation of technical trade terms; (vi) for any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of a Letter of Credit of the proceeds of any
drawing under such Letter of Credit; and (viii) for any consequences arising
from causes beyond the control of the Agent, the Issuing Bank and the Lenders,
including, without limitation, any Governmental Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing Bank's rights or powers
under this SECTION 3.10.
(C) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Bank under or in connection with the Letters of Credit or any related
certificates shall not, in the absence of Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, put the Issuing Bank, the Agent or any Lender under any resulting
liability to the Borrower or relieve the Borrower of any of its obligations
hereunder to any such Person.
(D) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this SECTION 3.10 shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of this
Agreement.
(E) Nothing in the ARTICLE III shall relieve the Issuing Bank from its
obligations under applicable law with respect to Letters of Credit.
3.11 CASH COLLATERAL. Notwithstanding anything to the contrary herein or
in any application for a Letter of Credit, after the occurrence and during the
continuance of a Default, the Borrower shall, upon the Agent's demand, deliver
to the Agent for the benefit of the Lenders and the Issuing Bank, cash, or other
collateral of a type satisfactory to the Required Lenders, having a value, as
determined by such Lenders, equal to the aggregate outstanding L/C Obligations.
In addition, if the Revolving Credit Availability is at any time less than the
amount of contingent L/C Obligations outstanding at any time, the Borrower shall
deposit cash collateral with the Agent in an amount equal to the amount by which
such L/C Obligations exceed such Revolving Credit Availability. Any such
collateral shall be held by the Agent in a separate
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account appropriately designated as a cash collateral account in relation to
this Agreement and the Letters of Credit and retained by the Agent for the
benefit of the Lenders and the Issuing Bank as collateral security for the
Borrower's obligations in respect of this Agreement and each of the Letters of
Credit and L/C Drafts. Such amounts shall be applied to reimburse the Issuing
Bank for drawings or payments under or pursuant to Letters of Credit or L/C
Drafts, or if no such reimbursement is required, to payment of such of the other
Obligations as the Agent shall determine. If no Default shall be continuing,
amounts remaining in any cash collateral account established pursuant to this
SECTION 3.11 which are not to be applied to reimburse the Issuing Bank for
amounts actually paid or to be paid by the Issuing Bank in respect of a Letter
of Credit or L/C Draft, shall be returned to the Borrower (after deduction of
the Agent's expenses incurred in connection with such cash collateral account).
ARTICLE IV: YIELD PROTECTION; TAXES
4.1. YIELD PROTECTION. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(i)subjects any Lender or any applicable Lending Installation to any Taxes, or
changes the basis of taxation of payments (other than with respect
to Excluded Taxes) to any Lender in respect of its Loans or L/C
Interests, or
(ii)imposes or increases or deems applicable any reserve, assessment, insurance
charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any
Lender or any applicable Lending Installation (other than reserves
and assessments taken into account in determining the interest rate
applicable to Eurodollar Rate Advances), or
(iii)imposesany other condition the result of which is to increase the cost to
any Lender or any applicable Lending Installation, as determined by
such Lender in accordance with its customary lending practices with
respect to loan arrangements of a similar types as that contemplated
by this Agreement (as such practices are modified from time to time
by such Lender, in its sole discretion), of making, funding or
maintaining its Loans or L/C Interests or reduces any amount
receivable by any Lender or any applicable Lending Installation in
connection with its Loans or L/C Interests, or requires any Lender
or any applicable Lending Installation to make any payment
calculated by reference to the amount of Loans or L/C Interests held
or interest received by it, by an amount deemed material by such
Lender,
- 41 -
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Loans, L/C
Interests or Revolving Loan Commitment or to reduce the return received by such
Lender or applicable Lending Installation in connection with such Loans, L/C
Interests or Revolving Loan Commitment, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender such additional amount or amounts as
will compensate such Lender for such increased cost or reduction in amount
received.
4.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines, in
accordance with its customary lending practices with respect to loan
arrangements of a similar types as that contemplated by this Agreement (as such
practices are modified from time to time by such Lender, in its sole
discretion), the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or any corporation controlling
such Lender is increased as a result of a Change, then, within 15 days of demand
by such Lender, the Borrower shall pay such Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender determines is attributable to this
Agreement, its Loans, L/C Interests or its Revolving Loan Commitment hereunder
(after taking into account such Lender's policies as to capital adequacy).
"CHANGE" means (i) any change after the date of this Agreement in the Risk-Based
Capital Guidelines or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "RISK-BASED CAPITAL GUIDELINES" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
4.3. AVAILABILITY OF TYPES OF ADVANCES. If any Lender determines that
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Rate Advances are
not available or (ii) the interest rate applicable to Eurodollar Rate Advances
does not accurately reflect the cost of making or maintaining Eurodollar Rate
Advances, then the Agent shall suspend the availability of Eurodollar Rate
Advances and require any affected Eurodollar Rate Advances to be repaid or
converted to Floating Rate Advances, subject to the payment of any funding
indemnification amounts required by SECTION 4.4.
4.4. FUNDING INDEMNIFICATION. If any payment of a Eurodollar Rate Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar Rate
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without
- 42 -
limitation, any loss or cost in liquidating or employing deposits acquired to
fund or maintain such Eurodollar Rate Advance. In connection with any assignment
by any Lender of any portion of the Loans made pursuant to SECTION 13.3 and made
during the Syndication Period, and if Eurodollar Rate Advances are outstanding,
the Borrower shall be deemed to have repaid all outstanding Eurodollar Rate
Advances as of the effective date of such assignment and reborrowed such amount
as a Floating Rate Advance and/or Eurodollar Rate Advance (chosen in accordance
with the provisions of SECTION 2.3) and the indemnification provisions under
this SECTION 4.4 shall apply.
4.5. TAXES. (i) All payments by the Borrower to or for the account of any
Lender or the Agent hereunder or under any of the other Loan Documents shall be
made free and clear of and without deduction for any and all Taxes. If the
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder to any Lender, Issuing Bank or the Agent, (a) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this SECTION 4.5) such Lender, Issuing Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (b) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any
promissory note issued hereunder or from the execution or delivery of, or
otherwise with respect to, this Agreement or any promissory note issued
hereunder ("OTHER TAXES").
(iii) The Borrower hereby agrees to indemnify the Agent and each Lender
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed on amounts payable under this SECTION 4.5) paid by
the Agent or such Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. Payments due under this
indemnification shall be made within 30 days of the date the Agent or such
Lender makes demand therefor pursuant to SECTION 4.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "NON-U.S. LENDER") agrees that it
will, not less than ten (10) Business Days after the date of this Agreement, (i)
deliver to each of the Borrower and the Agent two duly completed copies of
United States Internal Revenue Service Form 1001 (or, if delivered after
December 31, 1999, IRS Form W-8BEN) or 4224 (or, if delivered after December 31,
1999, IRS Form W-8ECI), or, in either case, an applicable successor form,
certifying in either case that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes, and (ii) deliver to each of the Borrower and the Agent a United
States Internal Revenue Form W-8 or W-9, as the case may be, and certify that it
is entitled to an exemption from United States backup withholding tax. Each
Non-U.S. Lender further undertakes to deliver to each of the Borrower and the
Agent (x) renewals or additional
- 43 -
copies of such form (or any successor form) on or before the date that such form
expires or becomes obsolete, and (y) after the occurrence of any event requiring
a change in the most recent forms so delivered by it, such additional forms or
amendments thereto as may be reasonably requested by the Borrower or the Agent.
All forms or amendments described in the preceding sentence shall certify that
such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, unless 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
Lender from duly completing and delivering any such form or amendment with
respect to it and such Lender advises the Borrower and the Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to CLAUSE (IV), above (unless
such failure is due to a change in treaty, law or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this SECTION 4.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under CLAUSE (IV), above, the Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any promissory
note issued hereunder pursuant to the law of any relevant jurisdiction or any
treaty shall deliver to the Borrower (with a copy to the Agent), at the time or
times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed to notify
the Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by the Agent as
tax, withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Lenders under
this SECTION 4.5(VII) shall survive the payment of the Obligations, the
termination of the Letters of Credit and termination of this Agreement.
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4.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Rate Loans to reduce any liability of the Borrower to
such Lender under SECTIONS 4.1, 4.2 and 4.5 or to avoid the unavailability of
Eurodollar Rate Advances under SECTION 4.3, so long as such designation is not,
in the judgment of such Lender, disadvantageous to such Lender. Each Lender
shall deliver a written statement of such Lender to the Borrower (with a copy to
the Agent) as to the amount due, if any, under SECTION 4.1, 4.2, 4.4 or 4.5.
Such written statement shall set forth in reasonable detail the calculations
upon which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Rate Loan
shall be calculated as though each Lender funded its Eurodollar Rate Loan
through the purchase of a deposit of the type and maturity corresponding to the
deposit used as a reference in determining the Eurodollar Rate applicable to
such Loan, whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the written statement of any Lender shall be
payable on demand after receipt by the Borrower of such written statement. The
obligations of the Borrower under SECTIONS 4.1, 4.2, 4.4 and 4.5 shall survive
payment of the Obligations, termination of the Letters of Credit and termination
of this Agreement.
ARTICLE V: CONDITIONS PRECEDENT
5.1 INITIAL ADVANCES AND LETTERS OF CREDIT. The Lenders shall not be
required to make the initial Loans or issue any Letters of Credit unless the
Borrower has furnished to the Agent each of the following, with sufficient
copies for the Lenders, all in form and substance satisfactory to the Agent and
the Lenders:
(1) Copies of the Certificate of Incorporation of the Borrower and
each of the Guarantors (collectively, the "LOAN PARTIES"), together with
all amendments and a certificate of good standing, both certified by the
appropriate governmental officer in its jurisdiction of incorporation;
(2) Copies, certified by the Secretary or Assistant Secretary of
each of the Loan Parties, of its By-Laws and of its Board of Directors'
resolutions (and resolutions of other bodies, if any are deemed necessary
by counsel for any Lender) authorizing the execution of the Loan Documents
entered into by it;
(3) An incumbency certificate, executed by the Secretary or
Assistant Secretary of each of the Loan Parties, which shall identify by
name and title and bear the signature of the officers of the Loan Parties
authorized to sign the Loan Documents and of the Borrower authorized to
make borrowings hereunder, upon which certificate the Lenders shall be
entitled to rely until informed of any change in writing by the Borrower;
(4) A certificate, in form and substance satisfactory to the Agent,
signed by the Chief Financial Officer of the Borrower, stating that on the
Initial Funding Date all the
- 45 -
representations in this Agreement are true and correct and no Default or
Unmatured Default has occurred and is continuing;
(5) The written opinion of the Borrower's counsel, addressed to the
Agent and the Lenders, in substantially the form attached hereto as
EXHIBIT E and containing assumptions and qualifications acceptable to the
Agent and the Lenders;
(6) Evidence reasonably satisfactory to the Agent that the Borrower
and each of its Subsidiaries (a) has made a full and complete assessment
of the Year 2000 Issues; (b) has a realistic and achievable program from
remediating the Year 2000 Issues, including a timetable and budget of
anticipated costs; and (c) has source of funds as required in such budget;
(7) Evidence satisfactory to the Agent that (i) all conditions
precedent to the consummation of the Spin-Off have been satisfied, (ii)
the Spin-Off Transactions have been approved by all necessary corporate
action of Crane's and the Borrower's Board of Directors and, if required,
shareholders, and the terms of the Spin-Off Transactions have not been
amended, waived or modified in any material respect from those set forth
in the Form 10 without the approval of the Agent and the Required Lenders
(such approval not to be unreasonably withheld); (iii) the Tax Ruling has
been obtained; and (iv) other than the initial funding hereunder for
purposes of making the Crane Payment, the Spin-Off Transactions have been
consummated in accordance with the terms of the Form 10;
(8) Evidence satisfactory to the Agent that there exists no
injunction or temporary restraining order which, in the judgment of the
Agent, would prohibit the making of the Loans or the consummation of the
Spin-Off Transactions and the other transactions contemplated by the
Transaction Documents or any litigation seeking such an injunction or
restraining order;
(9) Written money transfer instructions reasonably requested by the
Agent, addressed to the Agent and signed by an Authorized Officer;
(10) Copies of the PRO FORMA opening consolidated financial
statements of the Borrower and its Subsidiaries, after giving effect to
the Spin-Off Transactions (and if closing simultaneously therewith, the
Rugby Transactions), which financial statements shall demonstrate, in the
reasonable judgement of the Agent, together with all other information
then available to the Agent, the ability of the Borrower and its
Subsidiaries to repay their debts and satisfy their respective other
obligations as and when due, and to comply with the financial covenants
set forth in SECTION 7.4 hereof, and such PRO FORMA financial statements
shall not have changed in any material respect from the PRO FORMA
financial statements contained in the Borrower's Confidential Information
Memorandum dated November, 1999 (the "BANK BOOK");
(11) Evidence satisfactory to the Agent of the payment of all
principal, interest, fees and premiums, if any, on all loans outstanding
under all outstanding funded debt and
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credit facilities of the Borrower and each of its Subsidiaries (other than
Permitted Existing Indebtedness) and the termination of the applicable
agreements, including, without limitation, the Borrower's and its
Subsidiaries' Indebtedness identified on SCHEDULE 5.1 attached hereto;
(12) Opinions of value, solvency and other appropriate factual
information and advice in form and substance reasonably satisfactory to it
and from the Chief Financial Officer of the Borrower supporting the
conclusions that after giving effect to the Spin-Off Transactions and the
Rugby Transactions and the initial borrowing hereunder, the Borrower and
its Subsidiaries on a consolidated basis are Solvent and will be Solvent
subsequent to incurring the indebtedness contemplated under the
Transaction Documents, will be able to pay its debts and liabilities as
they become due and will not be left with unreasonably small working
capital for general corporate purposes;
(13) Evidence satisfactory to the Agent that the Borrower has paid
to the Agent and the Arranger the fees agreed to in the fee letter dated
November 9, 1999, among the Agent, the Arranger and the Borrower;
(14) Evidence satisfactory to the Agent that the Borrower has met
the other conditions set forth in the term sheet included in the Bank Book
under Tab 4 thereof; and
(15) Such other documents as the Agent or any Lender or its counsel
may have reasonably requested, including, without limitation, all of the
documents reflected on the List of Closing Documents attached as EXHIBIT H
to this Agreement.
5.2 EACH ADVANCE AND LETTER OF CREDIT. The Lenders shall not be
required to make any Advance, or issue any Letter of Credit, unless on the
applicable Borrowing Date, or in the case of a Letter of Credit, the date
on which the Letter of Credit is to be issued:
(i) There exists no Default or Unmatured Default;
(ii) The representations and warranties contained in ARTICLE VI are
true and correct as of such Borrowing Date except for changes in the
Schedules to this Agreement reflecting transactions permitted by or not in
violation of this Agreement; and
(iii) The Revolving Credit Obligations do not, and after making such
proposed Advance or issuing such Letter of Credit would not, exceed the
Aggregate Revolving Loan Commitment; PROVIDED, FURTHER, if such Advance or
Letter of Credit is made or issued prior to the closing of the Rugby
Transactions in accordance with the terms of this Agreement, the Revolving
Credit Obligations do not, and after making such proposed Advance or
issuing such Letter of Credit would not, exceed an amount equal to the
Aggregate Revolving Loan Commitment MINUS $32,000,000.
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Each Borrowing/Election Notice with respect to each such Advance and the
letter of credit application with respect to each Letter of Credit shall
constitute a representation and warranty by the Borrower that the conditions
contained in SECTIONS 5.2(I) and (II) have been satisfied. Any Lender may
require a duly completed officer's certificate in substantially the form of
EXHIBIT G hereto and/or a duly completed compliance certificate in substantially
the form of EXHIBIT H hereto as a condition to making an Advance.
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this Agreement
and to make the Loans and the other financial accommodations to the Borrower and
to issue the Letters of Credit described herein, the Borrower represents and
warrants as follows to each Lender and the Agent as of the Closing Date, giving
effect to the consummation of the transactions contemplated by the Transaction
Documents on the Closing Date, and thereafter on each date as required by
SECTION 5.2:
6.1 ORGANIZATION; CORPORATE POWERS. The Borrower and each of its
Subsidiaries (i) is a corporation, limited liability company, partnership or
other commercial entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) is duly qualified
to do business as a foreign entity and is in good standing under the laws of
each jurisdiction in which failure to be so qualified and in good standing could
not reasonably be expected to have a Material Adverse Effect, and (iii) has all
requisite power and authority to own, operate and encumber its property and to
conduct its business as presently conducted and as proposed to be conducted.
6.2 AUTHORITY.
(A) The Borrower and each of its Subsidiaries has the requisite power and
authority to execute, deliver and perform each of the Transaction Documents
which are to be executed by it in connection with the Transactions or which have
been executed by it as required by this Agreement and the other Loan Documents
and (ii) to file the Transaction Documents which must be filed by it in
connection with the Transactions or which have been filed by it as required by
this Agreement, the other Loan Documents or otherwise with any Governmental
Authority. .
(B) The execution, delivery, performance and filing, as the case may be,
of each of the Transaction Documents which must be executed or filed by the
Borrower or any of its Subsidiaries in connection with the Transactions or which
have been executed or filed as required by this Agreement, the other Loan
Documents or otherwise and to which the Borrower or any of its Subsidiaries is
party, and the consummation of the transactions contemplated thereby, have been
duly approved by the respective boards of directors and, if necessary, the
shareholders of the Borrower and its Subsidiaries, and such approvals have not
been rescinded. No other action or proceedings on the part of the Borrower or
its Subsidiaries are necessary to consummate such Transactions.
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(C) Each of the Transaction Documents to which the Borrower or any of its
Subsidiaries is a party has been duly executed, delivered or filed, as the case
may be, by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms (except as enforceability
may be limited by bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally), is in full force and effect and no
material term or condition thereof has been amended, modified or waived from the
terms and conditions contained in the Transaction Documents delivered to the
Agent pursuant to SECTION 5.1 without the prior written consent of the Required
Lenders, and the Borrower and its Subsidiaries have, and, to the best of the
Borrower's and its Subsidiaries' knowledge, all other parties thereto have,
performed and complied with all the terms, provisions, agreements and conditions
set forth therein and required to be performed or complied with by such parties
on or before the Initial Funding Date, and no unmatured default, default or
breach of any covenant by any such party exists thereunder.
6.3 NO CONFLICT; GOVERNMENTAL CONSENTS. The execution, delivery and
performance of each of the Loan Documents and other Transaction Documents to
which the Borrower or any of its Subsidiaries is a party do not and will not (i)
conflict with the certificate or articles of incorporation or by-laws of the
Borrower or any such Subsidiary, (ii) with respect to the Transaction Documents
other than the Loan Documents, constitute a tortious interference with any
Contractual Obligation of any Person or conflict with, result in a breach of or
constitute (with or without notice or lapse of time or both) a default under any
Requirement of Law (including, without limitation, any Environmental Property
Transfer Act) or Contractual Obligation of the Borrower or any such Subsidiary,
or require termination of any Contractual Obligation, except such interference,
breach, default or termination which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, (iii) with respect to
the Loan Documents, constitute a tortious interference with any Contractual
Obligation of any Person or conflict with, result in a breach of or constitute
(with or without notice or lapse of time or both) a default under any
Requirement of Law (including, without limitation, any Environmental Property
Transfer Act) or Contractual Obligation of the Borrower or any such Subsidiary,
or require termination of any Contractual Obligation, (iv) result in or require
the creation or imposition of any Lien whatsoever upon any of the property or
assets of the Borrower or any such Subsidiary, other than Liens permitted or
created by the Loan Documents, or (v) require any approval of the Borrower's or
any such Subsidiary's Board of Directors or shareholders except such as have
been obtained. Except as set forth on SCHEDULE 6.3 to this Agreement, the
execution, delivery and performance of each of the Transaction Documents to
which the Borrower or any of its Subsidiaries is a party do not and will not
require any registration with, consent or approval of, or notice to, or other
action to, with or by any Governmental Authority, including under any
Environmental Property Transfer Act, except filings, consents or notices which
have been made, obtained or given, or which, if not made, obtained or given,
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
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6.4 FINANCIAL STATEMENTS.
(A) The PRO FORMA balance sheet, income statements and statements of cash
flow of the Borrower and its Subsidiaries, copies of which are attached hereto
as SCHEDULE 6.4 to this Agreement, present on a PRO FORMA basis the financial
condition of the Borrower and such Subsidiaries as of such date, and reflect on
a PRO FORMA basis those liabilities reflected in the notes thereto and resulting
from consummation of the Spin-Off Transactions, and, if closing simultaneously
therewith, the Rugby Transactions, and the other transactions contemplated by
this Agreement, and the payment or accrual of all transaction costs payable on
the Initial Funding Date with respect to any of the foregoing and demonstrate
that, after giving effect to such transactions, the Borrower and its
Subsidiaries can repay their debt and satisfy their other obligations as and
when due, and can comply with the requirements of this Agreement. The
projections and assumptions expressed in the PRO FORMA financials referenced in
this SECTION 6.4(A) were prepared in good faith and represent management's
opinion based on the information available to the Borrower at the time so
furnished and, since the preparation thereof, there has occurred no material
adverse change in the business, financial condition, operations, or prospects of
the Borrower or any of its Subsidiaries, or the Borrower and its Subsidiaries
taken as a whole.
(B) Complete and accurate copies of the audited financial statements and
the audit report related thereto of the Huttig Sash & Door Company (now known as
Huttig Building Products, Inc.) and its Subsidiaries as at December 31, 1998 and
of Rugby USA and its Subsidiaries as at December 31, 1998 and unaudited
financial statements of the Huttig Sash & Door Company and its Subsidiaries as
at September 30, 1999 and of Rugby USA and its Subsidiaries as at September 30,
1999 have been delivered to the Agent.
6.5 NO MATERIAL ADVERSE CHANGE. Since December 31, 1998 (determined by
reference to the financial statements of Huttig Sash & Door Company and, if
applicable, Rugby USA and its Subsidiaries), there has occurred no change in the
business, properties, condition (financial or otherwise), performance, results
of operations or prospects of the Borrower, or the Borrower and its Subsidiaries
taken as a whole or any other event which has had or could reasonably be
expected to have a Material Adverse Effect.
6.6 TAXES.
(A) TAX EXAMINATIONS. All deficiencies which have been asserted against
the Borrower or any of the Borrower's Subsidiaries as a result of any federal,
state, local or foreign tax examination for each taxable year in respect of
which an examination has been conducted have been fully paid or finally settled
or are being contested in good faith, and no issue has been raised by any taxing
authority in any such examination which, by application of similar principles,
reasonably can be expected to result in assertion by such taxing authority of a
material deficiency for any other year not so examined which has not been
reserved for in the Borrower's consolidated financial statements to the extent,
if any, required by Agreement Accounting Principles. Except as permitted
pursuant to SECTION 7.2(D), neither the Borrower nor any of the Borrower's
Subsidiaries anticipates any material tax liability with respect to the years
which have not been closed pursuant to applicable law.
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(B) PAYMENT OF TAXES. All tax returns and reports of the Borrower and its
Subsidiaries required to be filed have been timely filed, and all taxes,
assessments, fees and other governmental charges thereupon and upon their
respective property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid except those items which
are being contested in good faith and have been reserved for in accordance with
Agreement Accounting Principles. The Borrower has no knowledge of any proposed
tax assessment against the Borrower or any of its Subsidiaries that will have or
could reasonably be expected to have a Material Adverse Effect.
6.7 LITIGATION; LOSS CONTINGENCIES AND VIOLATIONS. Except as set forth in
SCHEDULE 6.7 (the "DISCLOSED LITIGATION"), there is no action, suit, proceeding,
arbitration or, to the Borrower's knowledge, investigation before or by any
Governmental Authority or private arbitrator pending or, to the Borrower's
knowledge, threatened against the Borrower, any of its Subsidiaries or any
property of any of them. Neither any of the Disclosed Litigation nor any action,
suit, proceeding, arbitration or investigation which has commenced since the
Closing Date (or the most recent update of the Disclosed Litigation) (i)
challenges the validity or the enforceability of any material provision of the
Transaction Documents or (ii) has or could reasonably be expected to have a
Material Adverse Effect. There is no material loss contingency within the
meaning of Agreement Accounting Principles which has not been reflected in the
consolidated financial statements of the Borrower prepared and delivered
pursuant to SECTION 7.1(A) for the fiscal period during which such material loss
contingency was incurred. Neither the Borrower nor any of its Subsidiaries is
(A) in violation of any applicable Requirements of Law which violation will have
or could reasonably be expected to have a Material Adverse Effect, or (B)
subject to or in default with respect to any final judgment, writ, injunction,
restraining order or order of any nature, decree, rule or regulation of any
court or Governmental Authority which will have or could reasonably be expected
to have a Material Adverse Effect.
6.8 SUBSIDIARIES. SCHEDULE 6.8 to this Agreement (i) contains a
description of the corporate structure of the Borrower, its Subsidiaries and any
other Person in which the Borrower or any of its Subsidiaries holds an Equity
Interest; and (ii) accurately sets forth (A) the correct legal name, the
jurisdiction of incorporation and the jurisdictions in which each of the
Borrower and the direct and indirect Subsidiaries of the Borrower are qualified
to transact business as a foreign corporation, (B) the authorized, issued and
outstanding shares of each class of Capital Stock of the Borrower and each of
its Subsidiaries and the owners of such shares (both as of the Initial Funding
Date and on a fully-diluted basis), and (C) a summary of the direct and indirect
partnership, joint venture, or other Equity Interests, if any, of the Borrower
and each Subsidiary of the Borrower in any Person that is not a corporation.
Upon the consummation of the Rugby Acquisition and after the formation or
acquisition of any New Subsidiary permitted under SECTION 7.3(G), if requested
by the Agent, the Borrower shall provide a supplement to SCHEDULE 6.8 to this
Agreement. Except as disclosed on SCHEDULE 6.8, none of the issued and
outstanding Capital Stock of the Borrower or any of the Borrower's Subsidiaries
is subject to any vesting, redemption, or repurchase agreement, and there are no
warrants or options outstanding with respect to such Capital Stock. The
outstanding Capital Stock of the Borrower and each of the Borrower's
Subsidiaries is duly authorized, validly issued, fully paid and nonassessable
and is not Margin Stock. All of the Borrower's Subsidiaries are organized under
the laws of any state of
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the United States and have substantially all of their operations conducted
within the United States.
6.9 ERISA. (A) Set forth in SCHEDULE 6.9(A) is a true and complete list of
each Plan that, as of the date of this Agreement, is or was an "employee pension
benefit plan" (as such term is defined in Section 3(2) of ERISA). Set forth in
SCHEDULE 6.9(A) is a true and complete list of each Plan that, as of the date of
this Agreement, is or was an "employee welfare benefit plan" (as such term is
defined in Section 3(1) of ERISA).
(B) Set forth in SCHEDULE 6.9(B) is a true and complete list of each
Non-ERISA Commitment adopted by the Borrower or any of its Subsidiaries and in
effect as of the date of this Agreement. SCHEDULE 6.9(B) also includes a true
and complete list of each Non-ERISA Commitment which as of the date of this
Agreement the Borrower or any of its Subsidiaries intends to adopt. The Borrower
has delivered to the Agent correct and complete copies in existence as of the
date of this Agreement of (i) all written Non-ERISA Commitments and all
Non-ERISA Commitments intended to be written when adopted and (ii) all insurance
and annuity policies and contracts and other funding arrangements and other
documents relevant to any Non-ERISA Commitment. SCHEDULE 6.9(B) contains a true
and complete description, as of the date of this Agreement, of all oral
Non-ERISA Commitments. The Borrower has not adopted any Non-ERISA Commitment
other than in the form of documents provided by the Borrower to the Agent.
(C) The Borrower has delivered to the Agent with respect to each Plan
correct and complete copies, where applicable, of (i) all plan documents and
amendments thereto, trust agreements and amendments thereto and insurance and
annuity contracts and policies, (ii) the current summary plan description, (iii)
the Annual Reports (IRS Form 5500 series) and accompanying schedules, as filed,
for the most recently completed three plan years for which such reports have
been filed, (iv) the financial statements for the most recently completed three
plan years for which such statements have been prepared, (v) the actuarial
reports for the most recently begun three plan years for which such reports
exist, (vi) the most recent determination letter issued by the IRS and the
application submitted with respect to such letter, (vii) PBGC Form 1 for the
most recently begun plan year and (viii) all correspondence with the IRS, DOL
and PBGC concerning any controversy.
(D) Except as disclosed on SCHEDULE 6.9(D), no Benefit Plan has incurred
any material accumulated funding deficiency (as defined in Sections 302(a)(2) of
ERISA and 412(a) of the Code) whether or not waived. Neither the Borrower nor
any member of the Controlled Group has incurred any material liability to the
PBGC which remains outstanding other than the payment of premiums, and there are
no premium payments which have become due which are unpaid. With respect to each
Benefit Plan, Schedule B to the most recent annual report filed with the IRS
with respect to such plan is complete and accurate. Since the date of each such
Schedule B, there has been no material adverse change in the funding status or
financial condition of the Benefit Plan relating to such Schedule B. As of the
last day of the most recent prior plan year, the market value of assets under
each Benefit Plan, other than any Multiemployer Plan, was not by a material
amount less than the present value of benefit liabilities thereunder (determined
in
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accordance with the actuarial valuation assumptions described therein). Neither
the Borrower nor any member of the Controlled Group has (i) failed to make a
required contribution or payment to a Multiemployer Plan of a material amount or
(ii) incurred a material complete or partial withdrawal under Section 4203 or
Section 4205 of ERISA from a Multiemployer Plan. Neither the Borrower nor any
member of the Controlled Group has failed to make an installment or any other
payment of a material amount required under Section 412 of the Code on or before
the due date for such installment or other payment. Neither the Borrower nor any
member of the Controlled Group is required to provide security of a material
amount to a Benefit Plan pursuant to Section 401(a)(29) of the Code due to a
plan amendment that results in an increase in current liability for the plan
year. Neither the Borrower nor any of its Subsidiaries maintains or contributes
to any employee welfare benefit plan within the meaning of Section 3(1) of ERISA
or any other arrangement which provides benefits to one or more employees,
officers, directors, or consultants after termination of employment other than
as required by Section 601 of ERISA and other than any such plan or arrangement
with respect to which the Borrower and its Subsidiaries do not have any
liability of a material amount. Each Plan which is intended to be qualified
under Section 401(a) of the Code as currently in effect is so qualified, and
each trust related to any such Plan is exempt from federal income tax under
Section 501(a) of the Code as currently in effect. With respect to each Plan,
the Borrower and all Subsidiaries and all fiduciaries are in compliance in all
material respects with the responsibilities, obligations and duties imposed on
them by ERISA and the Code. Each Plan and Non-ERISA Commitment complies in all
material respects in form, and has been administered in all material respects in
accordance with its terms and, in accordance with all laws and regulations,
including but not limited to ERISA and the Code. There is no material action,
suit or claim pending or threatened with respect to any Plan other than routine
claims for benefits. There have been no and there is no prohibited transaction
described in Sections 406 of ERISA or 4975 of the Code with respect to any Plan
for which a statutory or administrative exemption does not exist which could
reasonably be expected to subject the Borrower to material liability. Neither
the Borrower nor any member of the Controlled Group has taken or failed to take
any action which would constitute or result in a Termination Event, which action
or inaction could reasonably be expected to subject the Borrower or any of its
Subsidiaries to material liability. Neither the Borrower nor any Subsidiary is
subject to any material liability under, or has any potential material liability
under, Section 4063, 4064, 4069, 4204 or 4212(c) of ERISA and no other member of
the Controlled Group is subject to any material liability under, or has any
potential material liability under, Section 4063, 4064, 4069, 4204 or 4212(c) of
ERISA. Neither the Borrower nor any of its Subsidiaries has, by reason of the
Transactions, any obligation to make any payment to any current or former
employee, director, officer or consultant pursuant to any Plan or Non-ERISA
Commitment or any obligation to make any such payment at a time earlier than
when it would be otherwise payable. For purposes of this SECTION 6.9(D),
"material" means any amount, noncompliance or basis for liability which could
reasonably be likely to subject the Borrower or any of its Subsidiaries to
liability, individually or in the aggregate, (i) of any amount (to the extent
the representations set forth in this SECTION 6.9(D), other than the
representation set forth in the fourth sentence of this SECTION 6.9(D), are made
as of the Closing Date) or, (ii) of an amount in excess of $5,000,000 (to the
extent the representations set forth in this SECTION 6.9(D) are made as of any
date after the Closing Date or the representation set forth in the fourth
sentence of this SECTION 6.9(D) is made as of any date).
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6.10 ACCURACY OF INFORMATION. The information, exhibits and reports
furnished by or on behalf of the Borrower and any of its Subsidiaries to the
Agent or to any Lender in connection with the negotiation of, or compliance
with, the Loan Documents, the representations and warranties of the Borrower and
its Subsidiaries contained in the Loan Documents, and all certificates and
documents delivered to the Agent and the Lenders pursuant to the terms thereof,
including, without limitation the Bank Book, the Share Exchange Agreement and
the Form 10, taken as a whole, do not contain as of the date furnished any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading.
6.11 SECURITIES ACTIVITIES. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
6.12 MATERIAL AGREEMENTS. Neither the Borrower nor any Subsidiary is a
party to any Contractual Obligation or subject to any charter or other corporate
or similar restriction which individually or in the aggregate will have or could
reasonably be expected to have a Material Adverse Effect. Neither the Borrower
nor any of its Subsidiaries has received notice or has knowledge that (i) it is
in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation
applicable to it, or (ii) any condition exists which, with the giving of notice
or the lapse of time or both, would constitute a default with respect to any
such Contractual Obligation, in each case, except where such default or
defaults, if any, individually or in the aggregate will not have or could not
reasonably be expected to have a Material Adverse Effect.
6.13 COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their respective
businesses, in each case where the failure to so comply individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
6.14 ASSETS AND PROPERTIES. The Borrower and each of its Subsidiaries has
good and marketable title to all of its assets and properties (tangible and
intangible, real or personal) owned by it or a valid leasehold interest in all
of its leased assets (except insofar as marketability may be limited by any laws
or regulations of any Governmental Authority affecting such assets), and all
such assets and property are free and clear of all Liens, except Liens permitted
under SECTION 7.3(C). Substantially all of the assets and properties owned by,
leased to or used by the Borrower and/or each such Subsidiary of the Borrower
are in adequate operating condition and repair, ordinary wear and tear excepted.
Neither this Agreement nor any other Transaction Document, nor any transaction
contemplated under any such agreement, will affect any right, title or interest
of the Borrower or such Subsidiary in and to any of such assets in a manner that
has or could reasonably be expected to have a Material Adverse Effect.
6.15 STATUTORY INDEBTEDNESS RESTRICTIONS. Neither the Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or the
Investment Company Act of 1940, or
- 54 -
any other federal or state statute or regulation which limits its ability to
incur indebtedness or its ability to consummate the transactions contemplated
hereby.
6.16 INSURANCE. The insurance policies and programs in effect with respect
to the respective properties, assets, liabilities and business reflect coverage
that is reasonably consistent with prudent industry practice.
6.17 LABOR MATTERS. No attempt to organize the employees of the Borrower,
and no labor disputes, strikes or walkouts affecting the operations of the
Borrower or any of its Subsidiaries, is pending, or, to the Borrower's
knowledge, threatened, planned or contemplated, which has or could reasonably be
expected to have a Material Adverse Effect.
6.18 SPIN-OFF AND RUGBY TRANSACTIONS.
(a) SPIN-OFF TRANSACTIONS. Except as set forth in SCHEDULE 6.18 to this
Agreement, (i) all conditions precedent to, and all consents necessary to
permit, the consummation of the Spin-Off Transactions have been satisfied, (ii)
the Spin-Off Transactions have been approved by all necessary corporate action
of Crane's and the Borrower's Board of Directors and, if required, shareholders,
and the terms of the Spin-Off Transactions have not been amended, waived or
modified in any material respect from those set forth in the Form 10 without the
approval of the Agent and the Required Lenders (such approval not to be
unreasonably withheld); (iii) the Tax Ruling has been obtained; and (iv) other
than the initial funding hereunder for purposes of making the Crane Payment, the
Spin-Off Transactions have been consummated in accordance with the terms of the
Form 10.
(b) RUGBY TRANSACTIONS. On and after the date of any Loans to be made or
Letters of Credit to be issued in connection with the Rugby Transactions, except
as set forth in SCHEDULE 6.18 to this Agreement, (i) all conditions precedent
to, and all consents necessary to permit, the consummation of the Rugby
Transactions have been satisfied, (ii) the Rugby Transactions have been approved
by all necessary corporate action of Crane's and the Borrower's Board of
Directors and, if required, shareholders, and the terms of the Spin-Off
Transactions have not been amended, waived or modified in any material respect
from those set forth in the Share Exchange Agreement without the approval of the
Agent and the Required Lenders (such approval not to be unreasonably withheld);
(iii) the Tax Ruling has been obtained; and (iv) other than the initial funding
hereunder in connection therewith for purposes of making the Rugby Payment, the
Rugby Transactions have been consummated in accordance with the terms of the
Share Exchange Agreement.
6.19 ENVIRONMENTAL MATTERS. (A) Except as disclosed on SCHEDULE 6.19 to
this Agreement
(i) the operations of the Borrower and its Subsidiaries comply in
all material respects with Environmental, Health or Safety Requirements of
Law;
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(ii) the Borrower and its Subsidiaries have all material permits,
licenses or other authorizations required under Environmental, Health or
Safety Requirements of Law and are in material compliance with such
permits;
(iii) neither the Borrower, any of its Subsidiaries nor any of their
respective present property or operations, or, to the Borrower's or any of
its Subsidiaries' knowledge, any of their respective past property or
operations, are subject to or the subject of, any investigation known to
the Borrower or any of its Subsidiaries, any judicial or administrative
proceeding, order, judgment, decree, settlement or other agreement
respecting: (A) any material violation of Environmental, Health or Safety
Requirements of Law; (B) any material remedial action; or (C) any material
claims or liabilities arising from the Release or threatened Release of a
Contaminant into the environment;
(iv) there is not now, nor to the Borrower's or any of its
Subsidiaries' knowledge has there ever been, on or in the property of the
Borrower or any of its Subsidiaries any landfill, waste pile, underground
storage tanks, aboveground storage tanks, surface impoundment or hazardous
waste storage facility of any kind, any polychlorinated biphenyls (PCBs)
used in hydraulic oils, electric transformers or other equipment, or any
asbestos containing material that would result in material remediation
costs or material penalties to the Borrower or any of its Subsidiaries;
and
(v) neither the Borrower nor any of its Subsidiaries has any
material Contingent Obligation in connection with any Release or
threatened Release of a Contaminant into the environment.
(B) For purposes of this SECTION 6.19 "material" means any noncompliance
or basis for liability which could reasonably be likely to subject the Borrower
or any of its Subsidiaries to liability, individually or in the aggregate, in
excess of $5,000,000.
6.20 SOLVENCY. After giving effect to (i) (a) the Loans to be made on the
Initial Funding Date and the Crane Payment, (b) the Loans to be made on the date
of the closing of the Rugby Transactions and the Rugby Payment, or (c) such
other date as Loans requested hereunder are made, (ii) the other transactions
contemplated by this Agreement and the other Transaction Documents, including
consummation of the Spin-Off Transactions and, if applicable, Rugby
Transactions, and (iii) the payment and accrual of all transaction costs with
respect to the foregoing, the Borrower is, and the Borrower and its Subsidiaries
taken as a whole are, Solvent.
6.21 YEAR 2000 ISSUES. Each of the Borrower and its Subsidiaries has made
a full and complete assessment of the Year 2000 Issues and has a realistic and
achievable program for remediating the Year 2000 Issues on a timely basis (the
"YEAR 2000 PROGRAM"). Based on such assessment and on the Year 2000 Program, the
Borrower does not reasonably anticipate any Material Adverse Effect as a result
of Year 2000 Issues.
6.22. BENEFITS. Each of the Borrower and its Subsidiaries will benefit
from the financing arrangement established by this Agreement. The Agent and the
Lenders have stated
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and the Borrower acknowledges that, but for the agreement by each of the
Guarantors to execute and deliver the Guaranty, the Agent and the Lenders would
not have made available the credit facilities established hereby on the terms
set forth herein.
ARTICLE VII : COVENANTS
The Borrower covenants and agrees that so long as any Revolving Loan
Commitments are outstanding and thereafter until all of the Obligations (other
than contingent indemnity obligations) shall have been fully and indefeasibly
paid and satisfied in cash, all financing arrangements among the Borrower and
the Lenders shall have been terminated (including under Hedging Agreements or
other agreements with respect to Hedging Obligations) and all of the Letters of
Credit shall have expired, been canceled or terminated, unless the Required
Lenders shall otherwise give prior written consent:
7.1 REPORTING. The Borrower shall:
(A) FINANCIAL REPORTING. Furnish to the Agent (with sufficient copies for
each of the Lenders):
(i) QUARTERLY REPORTS. As soon as practicable, and in any event
within forty-five (45) days after the end of each fiscal quarter, the
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such period and the related consolidated and
consolidating statements of income and cash flows of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the beginning
of the then current fiscal year to the end of such fiscal quarter,
certified by the Chief Financial Officer of the Borrower on behalf of the
Borrower as fairly presenting the consolidated and consolidating financial
position of the Borrower and its Subsidiaries as at the dates indicated
and the results of their operations and cash flows for the periods
indicated in accordance with Agreement Accounting Principles, subject to
normal year-end audit adjustments, together with a comparison of the
statements of income and cash flows to the budget.
(ii) ANNUAL REPORTS. As soon as practicable, and in any event within
ninety (90) days after the end of each fiscal year, (a) the consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such
fiscal year and the related consolidated statements of income,
stockholders' equity and cash flows of the Borrower and its Subsidiaries
for such fiscal year, and in comparative form the corresponding figures
for the previous fiscal year along with consolidating schedules in form
and substance sufficient to calculate the financial covenants set forth in
SECTION 7.4, (b) a schedule from the Borrower setting forth for each item
in CLAUSE (A) hereof, the corresponding figures from the consolidated
financial budget for the current fiscal year delivered pursuant to SECTION
7.1(A)(IV), and (c) an audit report on the items listed in CLAUSE (A)
hereof (other than the consolidating schedules) of independent certified
public accountants of recognized national standing, which audit report
shall be unqualified and shall state that
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such financial statements fairly present the consolidated and
consolidating financial position of the Borrower and its Subsidiaries as
at the dates indicated and the results of their operations and cash flows
for the periods indicated in conformity with Agreement Accounting
Principles and that the examination by such accountants in connection with
such consolidated and consolidating financial statements has been made in
accordance with generally accepted auditing standards. The deliveries made
pursuant to this CLAUSE (II) shall be accompanied by a certificate of such
accountants that, in the course of their examination necessary for their
certification of the foregoing, they have obtained no knowledge of any
Default or Unmatured Default, or if, in the opinion of such accountants,
any Default or Unmatured Default shall exist, stating the nature and
status thereof. In addition, the Borrower shall deliver to the Agent,
promptly upon any receipt thereof, copies of any management letter
prepared by the above-referenced accountants.
(iii) OFFICER'S CERTIFICATE. Together with each delivery of any
financial statement (a) pursuant to CLAUSES (I) and (II) of this SECTION
7.1(A), an Officer's Certificate of the Borrower, substantially in the
form of EXHIBIT G attached hereto and made a part hereof, stating that (x)
the representations and warranties of the Borrower contained in ARTICLE VI
hereof shall have been true and correct at all times during the period
covered by such financial statements and as of the date of such Officer's
Certificate and (y) as of the date of such Officer's Certificate no
Default or Unmatured Default exists, or if any Default or Unmatured
Default exists, stating the nature and status thereof and (b) pursuant to
CLAUSES (I) and (II) of this SECTION 7.1(A), a compliance certificate,
substantially in the form of EXHIBIT H attached hereto and made a part
hereof, signed by the Borrower's Chief Financial Officer, setting forth
calculations for the period which demonstrate compliance, when applicable,
with the provisions of SECTIONS 2.4(B), 7.3(A) through (R) and SECTION
7.4, and which (x) calculate the Leverage Ratio for purposes of
determining the then Applicable Floating Rate Margin, Applicable
Eurodollar Margin, Applicable Commitment Fee Percentage and Applicable L/C
Fee Percentage and (y) set forth the Borrower's determination of such then
Applicable Floating Rate Margin, Applicable Eurodollar Margin, Applicable
Commitment Fee Percentage and Applicable L/C Fee Percentage (which
determination shall be subject to review and approval by the Agent).
(iv) BUDGETS; BUSINESS PLANS; FINANCIAL PROJECTIONS. As soon as
practicable and in any event not later than thirty (30) days prior to the
beginning of each fiscal year commencing with the fiscal year beginning)
January 1, 2001, a copy of the plan and forecast (including a projected
balance sheet, income statement and a statement of cash flow) of the
Borrower and its Subsidiaries for the upcoming three (3) fiscal years
prepared in such detail as shall be reasonably satisfactory to the Agent.
(B) NOTICE OF DEFAULT AND ADVERSE DEVELOPMENTS. Promptly upon any of the
chief executive officer, chief operating officer, Chief Financial Officer,
treasurer or controller of the Borrower obtaining knowledge (i) of any condition
or event which constitutes a Default or Unmatured Default, or becoming aware
that any Lender or Agent has given any written notice with respect to a claimed
Default or Unmatured Default under this Agreement, (ii) that any Person has
given any written notice to the Borrower or any Subsidiary of the Borrower or
taken
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any other action with respect to a claimed default or event or condition of the
type referred to in SECTION 8.1(E), or (iii) that any other development,
financial or otherwise (including, without limitation, developments with respect
to Year 2000 Issues), which could reasonably be expected to have a Material
Adverse Effect has occurred specifying (a) the nature and period of existence of
any such claimed default, Default, Unmatured Default, condition or event, (b)
the notice given or action taken by such Person in connection therewith, and (c)
what action the Borrower has taken, is taking and proposes to take with respect
thereto. Notwithstanding the foregoing, in no event shall the Agent be deemed to
have knowledge of any such default, Default, Unmatured Default, condition or
event until the Agent shall have received written notice thereof from the
Borrower.
(C) LAWSUITS. (i) Promptly upon the Borrower obtaining knowledge of the
institution of, or written threat of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Borrower or any of its
Subsidiaries or any property of the Borrower or any of its Subsidiaries not
previously disclosed pursuant to SECTION 6.7, which action, suit, proceeding,
governmental investigation or arbitration exposes, or in the case of multiple
actions, suits, proceedings, governmental investigations or arbitrations arising
out of the same general allegations or circumstances which expose, in the
Borrower's reasonable judgment, the Borrower or any of its Subsidiaries to
liability in an amount aggregating $5,000,000 or more, give written notice
thereof to the Agent and the Lenders and provide such other information as may
be reasonably available to enable each Lender and the Agent and its counsel to
evaluate such matters; (ii) promptly upon the Borrower or any of its
Subsidiaries obtaining knowledge of any material adverse developments with
respect to any of the Disclosed Litigation, give written notice thereof to the
Agent and the Lenders and provide such other information as may be reasonably
available to enable each Lender and the Agent and its counsel to evaluate such
matters, and (iii) in addition to the requirements set forth in CLAUSES (I) and
(II) of this SECTION 7.1(C), upon request of the Agent or the Required Lenders,
promptly give written notice of the status of any Disclosed Litigation or any
action, suit, proceeding, governmental investigation or arbitration covered by a
report delivered pursuant to CLAUSE (I) above and provide such other information
as may be reasonably available to it that would not jeopardize any
attorney-client privilege by disclosure to the Lenders to enable each Lender and
the Agent and its counsel to evaluate such matters.
(D) ERISA NOTICES. Deliver or cause to be delivered to the Agent and the
Lenders, at the Borrower's expense, the following information and notices as
soon as reasonably possible, and in any event:
(i) (a) within ten (10) Business Days after the Borrower obtains
knowledge that a Termination Event has occurred, a written statement of
the Chief Financial Officer of the Borrower describing such Termination
Event and the action, if any, which the Borrower has taken, is taking or
proposes to take with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto and (b) within ten
(10) Business Days after any member of the Controlled Group obtains
knowledge that a Termination Event has occurred which could reasonably be
expected to subject the Borrower to liability individually or in the
aggregate in excess of $5,000,000, a written
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statement of the Chief Financial Officer of the Borrower describing such
Termination Event and the action, if any, which the member of the
Controlled Group has taken, is taking or proposes to take with respect
thereto, and when known, any action taken or threatened by the IRS, DOL or
PBGC with respect thereto;
(ii) within ten (10) Business Days after the Borrower or any of its
Subsidiaries obtains knowledge that a prohibited transaction (as defined
in Sections 406 of ERISA or Section 4975 of the Code) has occurred with
respect to any Plan, or that the IRS or DOL or any other Governmental
Authority is investigating, or otherwise reviewing whether any such
prohibited transaction might have occurred, a statement of the Chief
Financial Officer of the Borrower describing such transaction and the
action which the Borrower or such Subsidiary has taken, is taking or
proposes to take with respect thereto;
(iii) within ten (10) Business Days after the material increase in
the benefits of any existing Plan or the establishment of any new Plan or
the commencement of, or obligation to commence, contributions to any Plan
or Multiemployer Plan to which the Borrower or any member of the
Controlled Group was not previously contributing, notification of such
increase, establishment, commencement or obligation to commence and the
amount of such contributions;
(iv) within ten (10) Business Days after the Borrower or any of its
Subsidiaries receives notice of any unfavorable determination letter from
or of any investigation or review by the IRS regarding the qualification
of a Plan under Section 401(a) of the Code, a copy of such letter;
(v) within ten (10) Business Days after the establishment of any
foreign employee benefit plan or the commencement of, or obligation to
commence, contributions to any foreign employee benefit plan to which the
Borrower or any Subsidiary was not previously contributing, notification
of such establishment, commencement or obligation to commence and the
amount of such contributions;
(vi) within ten (10) Business Days after request by the Agent or any
Lender therefor, a copy of the most recent annual report (from 5500
series), including Schedule B thereto, as filed with the DOL, IRS or PBGC,
a copy of such annual report;
(vii) within ten (10) Business Days after request by the Agent or
any Lender therefor, each actuarial report received by the Borrower or any
member of the Controlled Group with respect to any Benefit Plan or
Multiemployer Plan and each annual report for any Multiemployer Plan, a
copy of such report;
(viii) within ten (10) Business Days after the filing of any funding
waiver request with the IRS, a copy of such funding waiver request and
thereafter all communications received by the Borrower or a member of the
Controlled Group with respect to such request within ten (10) Business
Days such communication is received;
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(ix) within ten (10) Business Days after receipt by the Borrower or
any member of the Controlled Group of any notice of the PBGC's intention
to terminate a Benefit Plan or to have a trustee appointed to administer a
Benefit Plan, a copy of such notice;
(x) within ten (10) Business Days after receipt by the Borrower or
any member of the Controlled Group of a notice from a Multiemployer Plan
regarding the imposition of withdrawal liability, a copy of such notice;
(xi) within ten (10) Business Days after the Borrower or any member
of the Controlled Group fails to make an installment or any other payment
required under Section 412 of the Code on or before the due date for such
installment or payment, a notification of such failure; and
(xii) within ten (10) Business Days after the Borrower or any member
of the Controlled Group knows or has reason to know that (a) a
Multiemployer Plan has been terminated, (b) the administrator or plan
sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan,
or (c) the PBGC has instituted or will institute proceedings under Section
4042 of ERISA to terminate a Multiemployer Plan, a notice describing such
matter.
For purposes of this SECTION 7.1(D), the Borrower, any of its Subsidiaries and
any member of the Controlled Group shall be deemed to know all facts known by
the administrator of any Plan of which the Borrower or any member of the
Controlled Group or any such Subsidiary is the plan sponsor.
(E) LABOR MATTERS. Notify the Agent and the Lenders in writing, promptly
upon the Borrower's learning thereof, of (i) any material labor dispute to which
the Borrower or any of its Subsidiaries may become a party, including, without
limitation, any strikes, lockouts or other disputes relating to such Persons'
plants and other facilities and (ii) any Worker Adjustment and Retraining
Notification Act liability incurred with respect to the closing of any plant or
other facility of the Borrower or any of its Subsidiaries.
(F) OTHER INDEBTEDNESS. Deliver to the Agent (i) a copy of each regular
report, notice or communication regarding potential or actual defaults
(including any accompanying officer's certificate) delivered by or on behalf of
the Borrower to the holders of funded Indebtedness, including the Senior Notes,
pursuant to the terms of the agreements governing such Indebtedness, such
delivery to be made at the same time and by the same means as such notice or
other communication is delivered to such holders, and (ii) a copy of each notice
or other communication received by the Borrower from the holders of funded
Indebtedness pursuant to the terms of such Indebtedness, such delivery to be
made promptly after such notice or other communication is received by the
Borrower.
(G) OTHER REPORTS. Deliver or cause to be delivered to the Agent and the
Lenders copies of all financial statements, reports and notices, if any, sent or
made available generally by the Borrower to its securities holders or filed with
the Commission by the Borrower, all press
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releases made available generally by the Borrower or any of the Borrower's
Subsidiaries to the public concerning material developments in the business of
the Borrower or any such Subsidiary and all notifications received from the
Commission by the Borrower or its Subsidiaries pursuant to the Securities
Exchange Act of 1934 and the rules promulgated thereunder. The Borrower shall
include the Agent and the Lenders on its standard distribution lists for all
press releases made available generally by the Borrower or any of the Borrower's
Subsidiaries to the public concerning material developments in the business of
the Borrower or any such Subsidiary.
(H) ENVIRONMENTAL NOTICES. As soon as possible and in any event within ten
(10) days after receipt by the Borrower, deliver to the Agent and the Lenders a
copy of (i) any notice or claim to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of the Release by the
Borrower, any of its Subsidiaries, or any other Person of any Contaminant into
the environment, and (ii) any notice alleging any violation of any
Environmental, Health or Safety Requirements of Law by the Borrower or any of
its Subsidiaries if, in either case, such notice or claim relates to an event
which could reasonably be expected to subject the Borrower and each of its
Subsidiaries to liability individually or in the aggregate in excess of
$5,000,000.
(I) OTHER INFORMATION. Promptly upon receiving a request therefor from the
Agent, prepare and deliver to the Agent and the Lenders such other information
with respect to the Borrower, any of its Subsidiaries, or their respective
businesses and assets, including, without limitation, schedules identifying and
describing any Asset Sale (and the use of the Net Cash Proceeds thereof), as
from time to time may be reasonably requested by the Agent.
7.2 AFFIRMATIVE COVENANTS.
(A) CORPORATE EXISTENCE, ETC. Except as permitted pursuant to SECTION
7.3(I), the Borrower shall, and shall cause each of its Subsidiaries to, at all
times maintain its existence and preserve and keep, or cause to be preserved and
kept, in full force and effect its rights and franchises material to its
businesses.
(B) CORPORATE POWERS; CONDUCT OF BUSINESS. The Borrower shall, and shall
cause each of its Subsidiaries to, qualify and remain qualified to do business
in each jurisdiction in which the nature of its business requires it to be so
qualified and where the failure to be so qualified will have or could reasonably
be expected to have a Material Adverse Effect. The Borrower will, and will cause
each Subsidiary to, carry on and conduct its business in substantially the same
manner and in fields of enterprise substantially similar, related or incidental
to the businesses or activities engaged in by the Borrower and its Subsidiaries
on the Closing Date.
(C) COMPLIANCE WITH LAWS, ETC. The Borrower shall, and shall cause its
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, properties, assets or
operations of such Person, and (b) obtain as needed all permits necessary for
its operations and maintain such permits in good standing unless failure to
comply or obtain such permits could not reasonably be expected to have a
Material Adverse Effect.
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(D) PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. The Borrower shall
pay, and cause each of its Subsidiaries to pay, (i) all taxes, assessments and
other governmental charges imposed upon it or on any of its properties or assets
or in respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, and (ii) all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or may become a Lien (other
than a Lien permitted by SECTION 7.3(C)) upon any of the Borrower's or such
Subsidiary's property or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; PROVIDED, HOWEVER, that no such taxes,
assessments and governmental charges referred to in CLAUSE (I) above or claims
referred to in CLAUSE (II) above (and interest, penalties or fines relating
thereto) need be paid if being contested in good faith by appropriate
proceedings diligently instituted and conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with Agreement
Accounting Principles shall have been made therefor.
(E) INSURANCE. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full force
and effect, insurance policies and programs as reflect coverage that is
reasonably consistent with prudent industry practice. In the event the Borrower
or any of its Subsidiaries at any time or times hereafter shall fail to obtain
or maintain any of the policies or insurance required herein or to pay any
premium in whole or in part relating thereto, then the Agent, without waiving or
releasing any obligations or resulting Default hereunder, may at any time or
times thereafter (but shall be under no obligation to do so) obtain and maintain
such policies of insurance and pay such premiums and take any other action with
respect thereto which the Agent deems advisable. All sums so disbursed by the
Agent shall constitute part of the Obligations, payable as provided in this
Agreement.
(F) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The Borrower
shall permit and cause each of the Borrower's Subsidiaries to permit, any
authorized representative(s) designated by either the Agent or any Lender to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine, audit, check and make copies of their respective
financial and accounting records, books, journals, orders, receipts and any
correspondence and other data relating to their respective businesses or the
transactions contemplated hereby (including, without limitation, in connection
with environmental compliance, hazard or liability), and to discuss their
affairs, finances and accounts with their officers and independent certified
public accountants (and such accountants are hereby authorized to disclose to
the Agent any and all financial statements and other supporting financial
documents with respect to the business, financial conditions and other affairs
of the Borrower and its Subsidiaries), all upon reasonable notice and at such
reasonable times during normal business hours, as often as may be reasonably
requested. The Borrower shall keep and maintain, and cause each of the
Borrower's Subsidiaries to keep and maintain, in all material respects, proper
books of record and account in which entries in conformity with Agreement
Accounting Principles shall be made of all dealings and transactions in relation
to their respective businesses and activities. If a Default has occurred and is
continuing, the Borrower, upon the Agent's request, shall turn over copies of
any such records to the Agent or its representatives.
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(G) ERISA COMPLIANCE. The Borrower shall, and shall cause each of the
Borrower's Subsidiaries to, establish, maintain and operate all Plans and
Non-ERISA Commitments to comply in all material respects with the provisions of
ERISA, the Code, all other applicable laws, and the regulations and
interpretations thereunder and the respective requirements of the governing
documents for such Plans and Non-ERISA Commitments.
(H) MAINTENANCE OF PROPERTY. The Borrower shall cause all property used or
useful in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower 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 7.2(H) shall prevent the
Borrower from discontinuing the operation or maintenance of any of such property
if such discontinuance is, in the judgment of the Borrower, desirable in the
conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Agent or the Lenders.
(I) ENVIRONMENTAL COMPLIANCE. The Borrower and its Subsidiaries shall
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance will not have or is not reasonably likely to subject the
Borrower or any of its Subsidiaries to liability, individually or in the
aggregate, in excess of $5,000,000.
(J) USE OF PROCEEDS. The Borrower shall use the proceeds of the Loans to
consummate the Transactions and to provide funds for the additional working
capital needs and other general corporate purposes of the Borrower and its
Subsidiaries.
(K) ADDITION OF GUARANTORS. The Borrower shall cause each Subsidiary
(including Subsidiaries existing as of the date hereof and any New Subsidiaries)
to deliver to the Agent an executed supplement to the Guaranty to become a
Guarantor under the Guaranty in the form attached to EXHIBIT I attached hereto
and appropriate corporate resolutions, opinions and other documentation in form
and substance reasonably satisfactory to the Agent, such supplement and other
documentation to be delivered to the Agent (i) on the date of the creation,
acquisition of capitalization of a New Subsidiary, and (ii) as promptly as
possible but in any event within thirty (30) days of determination that a
Subsidiary needs to be added as a Guarantor.
(L) YEAR 2000 ISSUES. The Borrower shall, and shall cause each of its
Subsidiaries to, take all actions reasonably necessary to successfully implement
the Year 2000 Program and to assure that the Year 2000 Issues will not have a
Material Adverse Effect. The Borrower shall provide the Agent and each of the
Lenders a copy of the Borrower's and its Subsidiaries' Year 2000 Program,
including updates and progress reports upon request.
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7.3 NEGATIVE COVENANTS.
(A) INDEBTEDNESS. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:
(i) the Obligations;
(ii) Permitted Existing Indebtedness and Permitted Refinancing
Indebtedness with respect thereto;
(iii) Indebtedness in respect of obligations secured by Customary
Permitted Liens;
(iv) Indebtedness constituting Contingent Obligations permitted by
SECTION 7.3(E);
(v) Indebtedness arising from loans (a) from any Subsidiary to the
Borrower or any wholly-owned Subsidiary or (b) from the Borrower to any
wholly-owned Subsidiary; provided, that if the Borrower or any Guarantor
is the obligor on such Indebtedness, such Indebtedness shall be expressly
subordinate to the payment in full in cash of the Obligations on terms
satisfactory to the Agent;
(vi) Indebtedness in respect of Hedging Obligations permitted under
SECTION 7.3(O);
(vii) secured or unsecured purchase money Indebtedness (including
Capitalized Leases) incurred by the Borrower or any of its Subsidiaries
after the Closing Date to finance the acquisition of fixed assets, if (1)
at the time of such incurrence, no Default or Unmatured Default has
occurred and is continuing or would result from such incurrence, (2) such
Indebtedness has a scheduled maturity and is not due on demand, (3) such
Indebtedness does not exceed the lower of the fair market value or the
cost of the applicable fixed assets on the date acquired, (4) such
Indebtedness does not exceed $5,000,000 in the aggregate principal amount
outstanding at any time, and (5) any Lien securing such Indebtedness is
permitted under SECTION 7.3(C) (such Indebtedness being referred to herein
as "PERMITTED PURCHASE MONEY INDEBTEDNESS");
(viii) Indebtedness with respect to surety, appeal and performance
bonds obtained by the Borrower or any of its Subsidiaries in the ordinary
course of business;
(ix) Indebtedness evidenced by the Senior Notes together with any
Permitted Refinancing Indebtedness with respect thereto;
(x) other Indebtedness (other than working capital financing)
existing at a New Subsidiary at the time of the Permitted Acquisition
thereof (but not incurred in connection or in anticipation of such
Permitted Acquisition) the outstanding principal balance of which (when
combined with any Permitted Purchase Money Indebtedness
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incurred or assumed in connection therewith) does not exceed ten percent
(10%)of the book value of the assets acquired as a result of such
Permitted Acquisition; and
(xi) unsecured Indebtedness in addition to that set forth in CLAUSES
(I) through (X), if, after giving effect thereto, the aggregate
outstanding principal amount of Indebtedness pursuant to this CLAUSE (XI)
does not exceed $500,000 at any time.
(B) SALES OF ASSETS. Neither the Borrower nor any of its Subsidiaries
shall sell, assign, transfer, lease, convey or otherwise dispose of any
property, whether now owned or hereafter acquired, or any income or profits
therefrom, or enter into any agreement to do so, except:
(i) sales of Inventory in the ordinary course of business;
(ii) the disposition in the ordinary course of business of Equipment
that is obsolete, excess or no longer useful in the Borrower's or its
Subsidiaries' businesses;
(iii) the sale, transfer, lease or other disposition of assets
having a fair market value of not greater than $5,000,000 in the aggregate
in connection with the consolidation or closure by the Borrower and its
Subsidiaries of branch locations;
(iv) the sale of assets for consideration after the Closing Date not
greater than $10,000,000 in the aggregate in respect of which the Borrower
shall commit to and, within six months, in the case of a sale of
Equipment, or twelve months, in the case of a sale of real property, of
the receipt of the Net Cash Proceeds of such sale, use such Net Cash
Proceeds to acquire assets of a like nature to those sold in such sale in
replacement thereof; and
(v) sales, assignments, transfers, leases, conveyances or other
dispositions of other assets if such transaction (a) is for consideration
consisting at least ninety percent (90%) of cash, (b) is for not less than
fair market value, and (c) when combined with all such other transactions
(each such transaction being valued at book value) (i) during the
immediately preceding twelve-month period, represents the disposition of
not greater than ten percent (10%) of the Borrower's Consolidated Assets
at the end of the fiscal year immediately preceding that in which such
transaction is proposed to be entered into, and (ii) during the period
from the Closing Date to the date of such proposed transaction, represents
the disposition of not greater than twenty percent (20%) of the Borrower's
Consolidated Assets at the end of the fiscal year immediately preceding
that in which such transaction is proposed to be entered into.
(C) LIENS. Neither the Borrower nor any of its Subsidiaries shall directly
or indirectly create, incur, assume or permit to exist any Lien on or with
respect to any of their respective property or assets except:
(i) Liens, if any, created by the Loan Documents or otherwise
securing the Obligations and Hedging Obligations under Hedging Agreements,
which Liens have been
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extended for the equal and ratable benefit of the holders of the Senior
Notes to secure the Indebtedness of the Borrower under the Note Purchase
Agreement and the Senior Notes and which Liens are governed by a
collateral sharing agreement, intercreditor agreement or collateral trust
agreement executed with the holders of the Senior Notes or with respect
to the Indebtedness evidenced by the Senior Notes on terms and
conditions reasonably acceptable to the Agent and which Liens, pursuant
to the terms of the Note Purchase Agreement, shall be automatically
released without any action on the part of any holder of the Senior Notes,
if the Lien thereon in favor of the Agent to secure the Obligations and
Hedging Obligations shall be released;
(ii) Permitted Existing Liens;
(iii) Customary Permitted Liens;
(iv) purchase money Liens (including the interest of a lessor under
a Capitalized Lease and Liens to which any property is subject at the time
of the Borrower's acquisition thereof) securing Permitted Purchase Money
Indebtedness; PROVIDED that such Liens shall not apply to any property of
the Borrower or its Subsidiaries other than that purchased or subject to
such Capitalized Lease;
(v) Liens with respect to property acquired by the Borrower or any
of its Subsidiaries after the Closing Date (and not created in
contemplation of such acquisition) pursuant to a Permitted Acquisition,
provided that such Liens shall extend only to the property so acquired,
shall not secure any working capital financing of the business acquired
and shall secure Indebtedness permitted pursuant to the terms of SECTION
7.3(A); and
(vi) other Liens securing Indebtedness (other than subordinated
Indebtedness) permitted pursuant to SECTION 7.3(A) and in an aggregate
amount not to exceed $5,000,000.
In addition, neither the Borrower nor any of its Subsidiaries shall become a
party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit the creation of a Lien on any of its properties or
other assets in favor of the Agent for the benefit of itself and the Holders of
Obligations, as collateral for the Obligations and Hedging Obligations under
Hedging Agreements; PROVIDED that any agreement, note, indenture or other
instrument in connection with Permitted Purchase Money Indebtedness (including
Capitalized Leases) may prohibit the creation of a Lien in favor of the Agent
for the benefit of itself and the Holders of Obligations on the items of
property obtained with the proceeds of such Permitted Purchase Money
Indebtedness; PROVIDED, FURTHER that the Note Purchase Agreement in connection
with the Senior Notes may prohibit the creation of a Lien in favor of the Agent
for the benefit of itself and the Holders of Obligations, as collateral for the
Obligations and Hedging Obligations under Hedging Agreements unless the holders
of the Senior
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Notes shall be provided with an equal and ratable Lien, which Lien shall be
governed by a collateral sharing agreement, intercreditor agreement or
collateral trust agreement executed with the holders of the Senior Notes or with
respect to the Indebtedness evidenced by the Senior Notes on terms and
conditions reasonably acceptable to the holders of the Senior Notes and which
Liens, pursuant to the terms of the Note Purchase Agreement, shall be
automatically released without any action on the part of any holder of the
Senior Notes, if the Lien thereon in favor of the Agent to secure the
Obligations and Hedging Obligations shall be released.
(D) INVESTMENTS. Except to the extent permitted pursuant to PARAGRAPH (G)
below, neither the Borrower nor any of its Subsidiaries shall directly or
indirectly make or own any Investment except:
(i) Investments in cash and Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater than
the amount thereof on the Closing Date;
(iii) Investments in trade receivables or received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(iv) Investments consisting of deposit accounts maintained by the
Borrower and its Subsidiaries in the ordinary course of business in
connection with its cash management system;
(v) Investments consisting of non-cash consideration from a sale,
assignment, transfer, lease, conveyance or other disposition of property
permitted by SECTION 7.3(B);
(vi) Investments consisting of (a) intercompany loans from any
Subsidiary of the Borrower to the Borrower or any other Subsidiary
permitted by SECTION 7.3(A) and (b) intercompany loans from the Borrower
to its Subsidiaries permitted under SECTION 7.3(A);
(vii) Investments constituting Permitted Acquisitions;
(viii) Investments constituting Indebtedness permitted by SECTION
7.3(A) or Contingent Obligations permitted by SECTION 7.3(E) or Restricted
Payments permitted by SECTION 7.3(F); and
(ix) Investments in addition to those permitted elsewhere in this
SECTION 7.3(D) in an amount not to exceed $1,000,000;
PROVIDED, HOWEVER, that the Investments described in CLAUSE (VII) above shall
not be permitted to be made at a time when either a Default or an Unmatured
Default shall have occurred and be continuing or would result therefrom.
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(E) CONTINGENT OBLIGATIONS. Neither the Borrower nor any of its
Subsidiaries shall directly or indirectly create or become or be liable with
respect to any Contingent Obligation, except: (i) recourse obligations resulting
from endorsement of negotiable instruments for collection in the ordinary course
of business; (ii) Permitted Existing Contingent Obligations; (iii) obligations,
warranties, and indemnities, not relating to Indebtedness of any Person, which
have been or are undertaken or made in the ordinary course of business and not
for the benefit of or in favor of an Affiliate of the Borrower or such
Subsidiary; (iv) Contingent Obligations with respect to surety, appeal and
performance bonds obtained by the Borrower or any Subsidiary in the ordinary
course of business, (v) Contingent Obligations of the Subsidiaries of the
Borrower under the Guaranty to which they are a party, (vi) Contingent
Obligations of Subsidiaries which are Guarantors under the Guaranty consisting
of the guaranty of the Indebtedness evidenced by the Senior Notes and the Note
Purchase Agreement, (vii) guarantees of Indebtedness permitted by SECTION
7.3(A), provided that to the extent such Indebtedness is subordinated to the
Obligations, each such guarantee shall be subordinated to the Obligations on
terms reasonably acceptable to the Agent, and (viii) additional Contingent
Obligations which do not exceed $10,000,000 in the aggregate at any time.
(F) RESTRICTED PAYMENTS. The Borrower shall not declare or make any
Restricted Payment, except:
(i) Restricted Payments made in connection with the defeasance,
redemption or repurchase of any Indebtedness with the Net Cash Proceeds of
Permitted Refinancing Indebtedness;
(ii) Restricted Payments consisting of the Crane Payment and, so
long as the Rugby Acquisition has been consummated in accordance with the
terms hereof, the Rugby Payment, provided the aggregate amount of such
Restricted Payments shall not exceed $100,000,000;
(iii) Restricted Payments of any Subsidiary of the Borrower to the
Borrower or to a Guarantor; and
(iv) other Restricted Payments provided that prior to the
declaration or payment of such Restricted Payment, the Borrower shall
deliver to the Agent a certificate from one of the Authorized Officers,
demonstrating to the satisfaction of the Agent that after giving effect to
such Restricted Payment and the incurrence of any Indebtedness permitted
by SECTION 7.3(A) in connection therewith, on a PRO FORMA basis, as if the
Restricted Payment and such incurrence of Indebtedness had occurred on the
first day of the twelve-month period ending on the last day of the
Borrower's most recently completed fiscal quarter, the Borrower would have
been in compliance with the financial covenants in SECTION 7.4 and not
otherwise in Default; PROVIDED, HOWEVER, that in no event shall any
Restricted Payments be declared or made if either a Default or an
Unmatured Default shall have occurred and be continuing at the date of
declaration or payment thereof or would result therefrom.
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(G) CONDUCT OF BUSINESS; NEW SUBSIDIARIES; ACQUISITIONS. Neither the
Borrower nor any of its Subsidiaries shall engage in any business other than the
businesses engaged in by the Borrower and its Subsidiaries and, if applicable,
Rugby USA and its Subsidiaries, on the date hereof and any business or
activities which are substantially similar, related or incidental thereto. The
Borrower may create, acquire in a Permitted Acquisition or capitalize any
Subsidiary incorporated under the laws of any state of the United States and
substantially all of the operations of which are conducted within the United
States ("NEW SUBSIDIARY") after the date hereof if (i) no Default or Unmatured
Default shall have occurred and be continuing or would result therefrom; (ii)
after such creation, acquisition or capitalization, all of the representations
and warranties contained herein shall be true and correct; and (iii) after such
creation, acquisition or capitalization the Borrower shall be in compliance with
the terms of SECTION 7.2(K).
The Borrower shall not make any Acquisitions, other than (y) the
Rugby Acquisition; provided that all conditions precedent to the consummation of
the Rugby Acquisition under the Share Exchange Agreement, the Rugby Acquisition
has been approved by all necessary corporate action of Rugby PLC's and the
Borrower's Board of Directors and, if required, shareholders, and the terms of
the Share Exchange Agreement have not been amended, waived or modified in any
material respect from those in effect as of the date hereof without the approval
of the Agent (such approval not to be unreasonably withheld); and (z)
Acquisitions meeting the following requirements or otherwise approved by the
Required Lenders (each such Acquisition constituting a "PERMITTED ACQUISITION"):
(i) no Default or Unmatured Default shall have occurred and be
continuing or would result from such Acquisition (including the Rugby
Acquisition) or the incurrence of any Indebtedness in connection
therewith;
(ii) the purchase is consummated pursuant to a negotiated
acquisition agreement on a non-hostile basis pursuant to an acquisition
agreement approved by the board of directors or other applicable governing
body of the Seller prior to the commencement thereof which acquisition
agreement and related documents are reasonably satisfactory to the Agent
(including, without limitation, in respect of representations, indemnities
and opinions) and results of due diligence are reasonably satisfactory to
the Agent;
(iii) without the prior written consent of the Required Lenders, the cash
purchase price (including, without limitation or duplication, cash,
Restricted Payments and Indebtedness assumed (net of any cash
acquired))(the "PURCHASE PRICE") shall not exceed $50,000,000 for any
single Acquisition transaction or series of Acquisition transactions with
respect to Persons that are Affiliates;
(iv) the businesses being acquired shall be substantially similar,
related or incidental to the businesses or activities engaged in by the
Borrower and its Subsidiaries on the Closing Date; and
(v) prior to each such Acquisition, the Borrower shall deliver to
the Agent a certificate from one of the Authorized Officers, demonstrating
to the satisfaction of the Agent that after giving effect to such
Acquisition and the incurrence of any Indebtedness
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permitted by SECTION 7.3(A) in connection therewith, on a PRO FORMA basis
using historical audited and reviewed unaudited financial statements
obtained from the seller, broken down by fiscal quarter in the Borrower's
reasonable judgment, as if the Acquisition and such incurrence of
Indebtedness had occurred on the first day of the twelve-month period
ending on the last day of the Borrower's most recently completed fiscal
quarter, the Borrower would have been in compliance with the financial
covenants in SECTION 7.4 and not otherwise in Default.
(H) TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. Except for the
transactions set forth on SCHEDULE 7.3(H) or in connection with the Company's
and its Subsidiaries' Incentive Arrangements in an amount not to exceed
$10,000,000, neither the Borrower nor any of its Subsidiaries shall directly or
indirectly enter into or permit to exist any transaction (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with Crane, Rugby PLC, any holder or holders of five
percent (5%) or more of the Equity Interests of the Borrower, or with any
Affiliate of the Borrower which is not its Subsidiary, on terms that are less
favorable to the Borrower or any of its Subsidiaries, as applicable, than those
that might be obtained in an arm's length transaction at the time from Persons
who are not such a holder or Affiliate, except for Restricted Payments permitted
by SECTION 7.3(F) and Investments permitted by SECTION 7.3(D).
(I) RESTRICTION ON FUNDAMENTAL CHANGES. Neither the Borrower nor any of
its Subsidiaries shall enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution), or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of the Borrower's or any such
Subsidiary's business or property, whether now or hereafter acquired, except (i)
transactions permitted under SECTIONS 7.3(B) or 7.3(G), and (ii) a Subsidiary of
the Borrower may be merged into, liquidated into or consolidated with the
Borrower (in which case the Borrower shall be the surviving corporation) or any
wholly-owned Subsidiary of the Borrower, provided if a Guarantor is merged into,
liquidated into or consolidated with another Subsidiary of the Borrower, the
surviving Subsidiary shall also be or shall become a Guarantor.
(J) MARGIN REGULATIONS. Neither the Borrower nor any of its Subsidiaries,
shall use all or any portion of the proceeds of any credit extended under this
Agreement to purchase or carry Margin Stock.
(K) ERISA. The Borrower shall not
(i) engage, or permit any of its Subsidiaries to engage, in any
prohibited transaction described in Sections 406 of ERISA or 4975 of the
Code for which a statutory or class exemption is not available or a
private exemption has not been previously obtained from the DOL;
(ii) permit to exist any accumulated funding deficiency (as defined
in Sections 302 of ERISA and 412 of the Code), with respect to any Benefit
Plan, whether or not waived;
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(iii) fail, or permit any Controlled Group member to fail, to pay
timely required contributions or annual installments due with respect to
any waived funding deficiency to any Benefit Plan;
(iv) terminate, or permit any Controlled Group member to terminate,
any Benefit Plan which would result in liability of the Borrower or any
Controlled Group member under Title IV of ERISA;
(v) fail to make any contribution or payment to any Multiemployer
Plan which the Borrower or any Controlled Group member may be required to
make under any agreement relating to such Multiemployer Plan, or any law
pertaining thereto;
(vi) fail, or permit any Controlled Group member to fail, to pay any
required installment or any other payment required under Section 412 of
the Code on or before the due date for such installment or other payment;
or
(vii) amend, or permit any Controlled Group member to amend, a Plan
resulting in an increase in current liability for the plan year such that
the Borrower or any Controlled Group member is required to provide
security to such Plan under Section 401(a)(29) of the Code,
except where such transactions, events, circumstances, or failures are not,
individually or in the aggregate, reasonably expected to result in liability
individually or in the aggregate in excess of $5,000,000 or have a Material
Adverse Effect.
(L) CORPORATE DOCUMENTS. Neither the Borrower nor any of its Subsidiaries
shall amend, modify or otherwise change any of the terms or provisions in any of
their respective constituent documents as in effect on the date hereof in any
manner adverse to the interests of the Lenders, without the prior written
consent of the Required Lenders.
(M) FISCAL YEAR. Neither the Borrower nor any of its consolidated
Subsidiaries shall change its fiscal year for accounting or tax purposes from a
twelve-month period ending December 31 of each year.
(N) SUBSIDIARY COVENANTS. The Borrower will not, and will not permit any
Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to pay
dividends or make any other distribution on its stock, or make any other
Restricted Payment, pay any Indebtedness or other Obligation owed to the
Borrower or any other Subsidiary, make loans or advances or other Investments in
the Borrower or any other Subsidiary, to sell, transfer or otherwise convey any
of its property to the Borrower or any other Subsidiary or merge, consolidate
with or liquidate into the Borrower or any other Subsidiary.
(O) HEDGING OBLIGATIONS. The Borrower shall not and shall not permit any
of its Subsidiaries to enter into any Hedging Arrangements other than Hedging
Arrangements entered
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into by the Borrower or its Subsidiaries with Lenders pursuant to which the
Borrower or such Subsidiary has hedged its or its Subsidiaries reasonably
estimated interest rate, foreign currency or commodity exposure and which are of
a non-speculative nature. Such permitted Hedging Arrangements entered into by
the Borrower and any Lender or any affiliate of any Lender are sometimes
referred to herein as "HEDGING AGREEMENTS."
(P) ISSUANCE OF DISQUALIFIED STOCK. From and after the Closing Date,
neither the Borrower, nor any of its Subsidiaries shall issue any Disqualified
Stock. All issued and outstanding Disqualified Stock shall be treated as
Indebtedness for borrowed money for all purposes of this Agreement (and as
funded Indebtedness for purposes of SECTION 7.1(F)), and the amount of such
deemed Indebtedness shall be the aggregate amount of the liquidation preference
of such Disqualified Stock.
(Q) OTHER INDEBTEDNESS. The Borrower shall not amend, modify or
supplement, or permit any Subsidiary to amend, modify or supplement (or consent
to any amendment, modification or supplement of), any document, agreement or
instrument evidencing any Indebtedness that is subordinated to the Obligations
(or any replacements, substitutions or renewals thereof) where such amendment,
modification or supplement provides for the following or which has any of the
following effects:
(i) increases the overall principal amount of any such Indebtedness
or increases the amount of any single scheduled installment of principal
or interest;
(ii) shortens or accelerates the date upon which any installment of
principal or interest becomes due or adds any additional mandatory
redemption provisions;
(iii) shortens the final maturity date of such Indebtedness or
otherwise accelerates the amortization schedule with respect to such
Indebtedness;
(iv) increases the rate of interest accruing on such Indebtedness;
(v) provides for the payment of additional fees or increases
existing fees;
(vi) amends or modifies any financial or negative covenant (or
covenant which prohibits or restricts the Borrower or a Subsidiary of the
Borrower from taking certain actions) in a manner which is more onerous or
more restrictive in any material respect to the Borrower (or any
Subsidiary of the Borrower) or which is otherwise adverse to the Borrower
and/or the Lenders or, in the case of adding covenants, which places
material additional restrictions on the Borrower (or a Subsidiary of the
Borrower) or which requires the Borrower or any such Subsidiary to comply
with more restrictive financial ratios or which requires the Borrower to
better its financial performance from that set forth in the existing
financial covenants;
(vii) amends, modifies or adds any affirmative covenant in a manner
which, when taken as a whole, is adverse to the Borrower and/or the
Lenders; or
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(viii) amends, modifies or supplements the subordination provisions
thereof.
(R) INTERCOMPANY LOANS. Neither the Borrower nor any of its Subsidiaries
shall make any loans to any other Subsidiary of the Borrower except to the
extent any such loans shall be evidenced by either demand promissory notes or
promissory notes which provide that (i) a Default under this Agreement shall
constitute a default under such promissory note entitling such Person to
accelerate the payment thereof, and (ii) if any acceleration of the Obligations
under this Agreement shall occur, the obligations under such promissory note
shall immediately become due and payable without any election or action on the
part of such Person.
7.4 FINANCIAL COVENANTS. The Borrower shall comply with the following:
(A) MAXIMUM LEVERAGE RATIO. The Borrower shall not permit the ratio (the
"LEVERAGE RATIO") of (i) the sum of (a) all Indebtedness (other than Hedging
Obligations) of the Borrower and its Subsidiaries to (ii) EBITDA at any time to
be greater than 3.00 to 1.00. The Leverage Ratio shall be calculated, in each
case, determined as of the last day of each fiscal quarter based upon (a) for
Indebtedness, Indebtedness as of the last day of each such fiscal quarter; and
(b) for EBITDA, the actual amount for the four-quarter period ending on such
day, calculated, with respect to Permitted Acquisitions, on a PRO FORMA basis
using unadjusted historical audited and reviewed unaudited financial statements
obtained from the seller (with the EBITDA component thereof broken down by
fiscal quarter in the Borrower's reasonable judgment).
(B) MINIMUM CONSOLIDATED NET WORTH. The Borrower shall not permit its
Consolidated Net Worth at any time to be less than the sum of (a) [$__________]1
PLUS (b) fifty percent (50%) of Net Income (if positive) earned in each fiscal
quarter calculated beginning with the fiscal quarter ending March 31, 2000, PLUS
(c) one-hundred percent (100%) of any positive adjustment to stockholders'
equity resulting from any transaction involving any capital contribution to the
Borrower or the issuance by the Borrower or any Subsidiary of any Capital Stock
to the extent such capital contribution or any other cash or other property
received by the Borrower or such Subsidiary from such issuance is used by the
Borrower or any Subsidiary to pay all or any part of the purchase price of any
Permitted Acquisition.
(C) INTEREST EXPENSE COVERAGE RATIO. The Borrower shall maintain a ratio
(the "INTEREST EXPENSE COVERAGE RATIO") for any applicable period of (i) the sum
of (a) EBIT for such period PLUS (b) Rentals paid during such period to (ii) the
sum of (a) Interest Expense for such period PLUS (b) Rentals paid during such
period of at least:
(i) 1.75 to 1.00 for each fiscal quarter for the period commencing
with the fiscal quarter ending March 31, 2000 through the fiscal quarter
ending December 31, 2000; and
(ii) 2.00 to 1.00 for each fiscal quarter thereafter.
-----------------------
1N.B.: This amount will equal 85% of consolidated net worth at closing.
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The Interest Expense Coverage Ratio shall be calculated as of the last day of
each fiscal quarter for the four-quarter period ending on such day, in each such
case calculated, with respect to Permitted Acquisitions, on a PRO FORMA basis
using unadjusted historical audited and reviewed unaudited financial statements
obtained from the seller (with the EBIT and Rentals components thereof broken
down by fiscal quarter in the Borrower's reasonable judgment).
ARTICLE VIII: DEFAULTS
8.1 DEFAULTS. Each of the following occurrences shall constitute a Default
under this Agreement:
(A) FAILURE TO MAKE PAYMENTS WHEN DUE. The Borrower shall (i) fail to pay
when due any of the Obligations consisting of principal with respect to the
Loans or (ii) shall fail to pay within three (3) Business Days of the date when
due any of the other Obligations under this Agreement or the other Loan
Documents.
(B) BREACH OF CERTAIN COVENANTS. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower or there shall otherwise be a breach of any covenant under:
(i) SECTIONS 7.1 or 7.2 and such failure or breach shall continue
unremedied for fifteen days; or
(ii) SECTIONS 7.3 or 7.4.
(C) BREACH OF REPRESENTATION OR WARRANTY. Any representation or warranty
made or deemed made by the Borrower to the Agent or any Lender herein or by the
Borrower or any of its Subsidiaries in any of the other Loan Documents or in any
statement or certificate at any time given by any such Person pursuant to any of
the Loan Documents shall be false or misleading in any material respect on the
date as of which made (or deemed made).
(D) OTHER DEFAULTS. The Borrower shall default in the performance of or
compliance with any term contained in this Agreement (other than as covered by
PARAGRAPHS (A) or (B) of this SECTION 8.1), or the Borrower or any of its
Subsidiaries shall default in the performance of or compliance with any term
contained in any of the other Loan Documents, and such default shall continue
for thirty (30) days after the occurrence thereof.
(E) DEFAULT AS TO OTHER INDEBTEDNESS. The Borrower or any of its
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect
to any Indebtedness (other than (i) Indebtedness hereunder and (ii) the
intercompany Indebtedness owed to Rugby USA by Rugby Building Products, Inc. in
the aggregate principal amount of up to $123,622,000, so long as any default in
respect thereof shall have been waived or cured on or before the thirtieth
(30th) day after the Closing Date, but including, without limitation,
Disqualified Stock), beyond any period of grace
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provided with respect thereto, which individually or together with other such
Indebtedness as to which any such failure exists has an aggregate outstanding
principal amount equal to or greater than $5,000,000; or any breach, default or
event of default shall occur, or any other condition shall exist under any
instrument, agreement or indenture pertaining to any such Indebtedness having
such aggregate outstanding principal amount, beyond any period of grace, if any,
provided with respect thereto, if the effect thereof is to cause an
acceleration, mandatory redemption, a requirement that the Borrower offer to
purchase such Indebtedness or other required repurchase of such Indebtedness, or
permit the holder(s) of such Indebtedness to accelerate the maturity of any such
Indebtedness or require a redemption or other repurchase of such Indebtedness;
or any such Indebtedness shall be otherwise declared to be due and payable (by
acceleration or otherwise) or required to be prepaid, redeemed or otherwise
repurchased by the Borrower or any of its Subsidiaries (other than by a
regularly scheduled required prepayment) prior to the stated maturity thereof.
(F) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) An involuntary case shall be commenced against the Borrower or
any of the Borrower's Subsidiaries and the petition shall not be
dismissed, stayed, bonded or discharged within sixty (60) days after
commencement of the case; or a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of the Borrower or any
of the Borrower's Subsidiaries in an involuntary case, under any
applicable bankruptcy, insolvency or other similar law now or hereinafter
in effect; or any other similar relief shall be granted under any
applicable federal, state, local or foreign law.
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over the
Borrower or any of the Borrower's Subsidiaries or over all or a
substantial part of the property of the Borrower or any of the Borrower's
Subsidiaries shall be entered; or an interim receiver, trustee or other
custodian of the Borrower or any of the Borrower's Subsidiaries or of all
or a substantial part of the property of the Borrower or any of the
Borrower's Subsidiaries shall be appointed or a warrant of attachment,
execution or similar process against any substantial part of the property
of the Borrower or any of the Borrower's Subsidiaries shall be issued and
any such event shall not be stayed, dismissed, bonded or discharged within
sixty (60) days after entry, appointment or issuance.
(G) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. The Borrower or
any of the Borrower's Subsidiaries shall (i) commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (ii) consent to the entry of an order for relief in an involuntary case,
or to the conversion of an involuntary case to a voluntary case, under any such
law, (iii) consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property, (iv)
make any assignment for the benefit of creditors, (v) take any corporate action
to authorize any of the foregoing or (vi) is generally not paying, or admits in
writing its inability to pay, its debts as they become due.
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(H) JUDGMENTS AND ATTACHMENTS. Any money judgment(s) (other than a money
judgment covered by insurance as to which the insurance company has not
disclaimed or reserved the right to disclaim coverage), writ or warrant of
attachment, or similar process against the Borrower or any of its Subsidiaries
or any of their respective assets involving in any single case or in the
aggregate an amount in excess of $5,000,000 is or are entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or
in any event later than fifteen (15) days prior to the date of any proposed sale
thereunder.
(I) DISSOLUTION. Any order, judgment or decree shall be entered against
the Borrower decreeing its involuntary dissolution or split up and such order
shall remain undischarged and unstayed for a period in excess of sixty (60)
days; or the Borrower shall otherwise dissolve or cease to exist except as
specifically permitted by this Agreement.
(J) LOAN DOCUMENTS. At any time, for any reason, any Loan Document as a
whole that materially affects the ability of the Agent, or any of the Lenders to
enforce the Obligations ceases to be in full force and effect or the Borrower or
any of the Borrower's Subsidiaries party thereto seeks to repudiate its
obligations under any Loan Document.
(K) TERMINATION EVENT. Any Termination Event occurs which the Required
Lenders believe is reasonably likely to subject either the Borrower or any
Controlled Group member to liability individually or in the aggregate in excess
of $2,000,000.
(L) WAIVER OF MINIMUM FUNDING STANDARD. If the plan administrator of any
Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and any Lender believes the
substantial business hardship upon which the application for the waiver is based
could reasonably be expected to subject either the Borrower or any Controlled
Group member to liability individually or in the aggregate in excess of
$2,000,000.
(M) CHANGE OF CONTROL. A Change of Control shall occur.
(N) HEDGING AGREEMENTS. Nonpayment by the Borrower of any obligation under
any Hedging Agreement or the breach by the Borrower of any term, provision or
condition contained in any such Hedging Agreement.
(O) ENVIRONMENTAL MATTERS. The Borrower or any of its Subsidiaries shall
be the subject of any proceeding or investigation pertaining to (i) the Release
by the Borrower or any of its Subsidiaries of any Contaminant into the
environment, (ii) the liability of the Borrower or any of its Subsidiaries
arising from the Release by any other Person of any Contaminant into the
environment, or (iii) any violation of any Environmental, Health or Safety
Requirements of Law which by the Borrower or any of its Subsidiaries, which, in
any case, has or is reasonably likely to subject either the Borrower or its
Subsidiaries to liability individually or in the aggregate in excess of
$5,000,000.
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(P) GUARANTOR REVOCATION. Any guarantor of the Obligations shall terminate
or revoke any of its obligations under the applicable guarantee agreement or
breach any of the material terms of such guarantee agreement.
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with SECTION 9.3.
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES
9.1 TERMINATION OF REVOLVING LOAN COMMITMENTS; ACCELERATION. If any
Default described in SECTION 8.1(F) or 8.1(G) occurs with respect to the
Borrower, the obligations of the Lenders to make Loans hereunder and the
obligation of the Issuing Bank to issue Letters of Credit hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of the Agent or any Lender.
If any other Default occurs, the Required Lenders may terminate or suspend the
obligations of the Lenders to make Loans hereunder and the obligation of the
Issuing Bank to issue Letters of Credit hereunder, or declare the Obligations to
be due and payable, or both, whereupon the Obligations shall become immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which the Borrower expressly waives.
9.2 DEFAULTING LENDER. In the event that any Lender fails to fund its Pro
Rata Share of any Advance requested or deemed requested by the Borrower (or an
Advance to repay Swing Line Loans to the Swing Line Bank or Reimbursement
Obligations to the Issuing Bank), which such Lender is obligated to fund under
the terms of this Agreement (the funded portion of such Advance being
hereinafter referred to as a "NON PRO RATA LOAN"), until the earlier of such
Lender's cure of such failure and the termination of the Revolving Loan
Commitments, the proceeds of all amounts thereafter repaid to the Agent by the
Borrower and otherwise required to be applied to such Lender's share of all
other Obligations pursuant to the terms of this Agreement shall be advanced to
the Borrower by the Agent on behalf of such Lender to cure, in full or in part,
such failure by such Lender, but shall nevertheless be deemed to have been paid
to such Lender in satisfaction of such other Obligations. Notwithstanding
anything in this Agreement to the contrary:
(i) the foregoing provisions of this SECTION 9.2 shall apply only
with respect to the proceeds of payments of Obligations and shall not
affect the conversion or continuation of Loans pursuant to SECTION 2.9;
(ii) any such Lender shall be deemed to have cured its failure to
fund its Pro Rata Share, of any Advance at such time as an amount equal to
such Lender's original Pro Rata Share of the requested principal portion
of such Advance is fully funded to the Borrower, whether made by such
Lender itself or by operation of the terms of this SECTION 9.2, and
whether or not the Non Pro Rata Loan with respect thereto has been repaid,
converted or continued;
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(iii) amounts advanced to the Borrower to cure, in full or in part,
any such Lender's failure to fund its Pro Rata Share of any Advance ("CURE
LOANS") shall bear interest at the rate applicable to Floating Rate Loans
in effect from time to time, and for all other purposes of this Agreement
shall be treated as if they were Floating Rate Loans;
(iv) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to its
desired application, all repayments of principal which, in accordance with
the other terms of this Agreement, would be applied to the outstanding
Floating Rate Loans shall be applied FIRST, ratably to all Floating Rate
Loans constituting Non Pro Rata Loans, SECOND, ratably to Floating Rate
Loans other than those constituting Non Pro Rata Loans or Cure Loans and,
THIRD, ratably to Floating Rate Loans constituting Cure Loans;
(v) for so long as and until the earlier of any such Lender's cure
of the failure to fund its Pro Rata Share of any Advance and the
termination of the Revolving Loan Commitments, the term "Required Lenders"
for purposes of this Agreement shall mean Lenders (excluding all Lenders
whose failure to fund their respective Pro Rata Share of such Advance have
not been so cured) whose Pro Rata Shares represent at least fifty-one
percent (51%) of the aggregate Pro Rata Shares of such Lenders; and
(vi) for so long as and until any such Lender's failure to fund its
Pro Rata Share of any Advance is cured in accordance with SECTION 9.2(II),
(A) such Lender shall not be entitled to any Commitment fees with respect
to its Revolving Loan Commitment and (B) such Lender shall not be entitled
to any letter of credit fees, which Commitment fees and letter of credit
fees shall accrue in favor of the Lenders which have funded their
respective Pro Rata Share of such requested Advance, shall be allocated
among such performing Lenders ratably based upon their relative Revolving
Loan Commitments, and shall be calculated based upon the average amount by
which the aggregate Revolving Loan Commitments of such performing Lenders
exceeds the sum of (I) the outstanding principal amount of the Loans owing
to such performing Lenders, plus (II) the outstanding Reimbursement
Obligations owing to such performing Lenders, PLUS (III) the aggregate
participation interests of such performing Lenders arising pursuant to
SECTION 3.6 with respect to undrawn and outstanding Letters of Credit.
9.3 AMENDMENTS. Subject to the provisions of this ARTICLE IX, the Required
Lenders (or the Agent with the consent in writing of the Required Lenders) and
the Borrower may enter into agreements supplemental hereto for the purpose of
adding or modifying any provisions to the Loan Documents or changing in any
manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; PROVIDED, HOWEVER, that no such supplemental agreement shall,
without the consent of each Lender affected thereby:
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(i) Postpone or extend the Revolving Loan Termination Date or any
other date fixed for any payment of principal of, or interest on, the
Loans, the Reimbursement Obligations or any fees or other amounts payable
to such Lender (other than any modifications of the provisions relating to
amounts, timing or application of prepayments of the Loans and other
Obligations, which modifications shall require the approval only of the
Required Lenders)
(ii) Reduce the principal amount of any Loans or L/C Obligations, or
reduce the rate or extend the time of payment of interest or fees thereon
(other than a waiver of the application of the default rate of interest
pursuant to SECTION 2.10 hereof); PROVIDED, that any change in the
definition of Leverage Ratio or any of the components thereof or the
method of calculation thereof solely for the purpose of calculating
compliance with the financial covenants set forth in SECTION 7.4 shall be
permitted with the consent of the Agent and the Required Lenders.
(iii) Reduce the percentage specified in the definition of Required
Lenders or any other percentage of Lenders specified to be the applicable
percentage in this Agreement to act on specified matters or amend the
definitions of "Required Lenders" or "Pro Rata Share".
(iv) Increase the amount of the Revolving Loan Commitment of such
Lender hereunder or increase such Lender's Pro Rata Share.
(v) Permit the Borrower to assign its rights under this Agreement.
(vi) Other than pursuant to a transaction permitted by the terms of
this Agreement, release any guarantor from its obligations under the
Guaranty.
(vii) Amend this SECTION 9.3.
No amendment of any provision of this Agreement relating to (a) the Agent shall
be effective without the written consent of the Agent, (b) Swing Line Loans
shall be effective without the written consent of the Swing Line Bank and (c)
the Issuing Bank shall be effective without the written consent of the Issuing
Bank. The Agent may waive payment of the fee required under SECTION 13.3(B)
without obtaining the consent of any of the Lenders.
9.4 PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan or the issuance of a Letter of Credit notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan or issuance of such Letter of Credit shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid
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unless in writing signed by the requisite number of Lenders required pursuant to
SECTION 9.3, and then only to the extent in such writing specifically set forth.
All remedies contained in the Loan Documents or by law afforded shall be
cumulative and all shall be available to the Agent and the Lenders until all of
the Obligations (other than contingent indemnity obligations) shall have been
fully and indefeasibly paid and satisfied in cash, all financing arrangements
among the Borrower and the Lenders shall have been terminated (including under
Hedging Agreements or other agreements with respect to Hedging Obligations) and
all of the Letters of Credit shall have expired, been canceled or terminated.
ARTICLE X: GENERAL PROVISIONS
10.1 SURVIVAL OF REPRESENTATIONS. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of this
Agreement and the making of the Loans herein contemplated.
10.2 GOVERNMENTAL REGULATION. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 PERFORMANCE OF OBLIGATIONS. The Borrower agrees that the Agent may,
but shall have no obligation to (i) at any time, pay or discharge taxes, liens,
security interests or other encumbrances levied or placed on or threatened
against the collateral, if any, and (ii), after the occurrence and during the
continuance of a Default, to make any other payment or perform any act required
of the Borrower under any Loan Document or take any other action which the Agent
in its discretion deems necessary or desirable to protect or preserve the
collateral, if any. The Agent shall use its reasonable efforts to give the
Borrower notice of any action taken under this SECTION 10.3 prior to the taking
of such action or promptly thereafter provided the failure to give such notice
shall not affect the Borrower's obligations in respect thereof. The Borrower
agrees to pay the Agent, upon demand, the principal amount of all funds advanced
by the Agent under this SECTION 10.3, together with interest thereon at the rate
from time to time applicable to Floating Rate Loans from the date of such
advance until the outstanding principal balance thereof is paid in full. If the
Borrower fails to make payment in respect of any such advance under this SECTION
10.3 within one (1) Business Day after the date the Borrower receives written
demand therefor from the Agent, the Agent shall promptly notify each Lender and
each Lender agrees that it shall thereupon make available to the Agent, in
Dollars in immediately available funds, the amount equal to such Lender's Pro
Rata Share of such advance. If such funds are not made available to the Agent by
such Lender within one (1) Business Day after the Agent's demand therefor, the
Agent will be entitled to recover any such amount from such Lender together with
interest thereon at the Federal Funds Effective Rate for each day during the
period commencing on the date of such demand and ending on the date such amount
is received. The failure of any Lender to make available to the Agent its Pro
Rata Share of any such unreimbursed advance under this SECTION 10.3 shall
neither relieve any other Lender of its obligation hereunder to make available
to the Agent such other Lender's Pro Rata Share of such advance on the date such
payment is to be made nor increase the obligation of any other Lender to make
such payment to the Agent. All
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outstanding principal of, and interest on, advances made under this SECTION 10.3
shall constitute Obligations subject to the terms of this Agreement until paid
in full by the Borrower.
10.4 HEADINGS. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
10.5 ENTIRE AGREEMENT. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agent and the Lenders and supersede all
prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof.
10.6 SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.
10.7 EXPENSES; INDEMNIFICATION.
(A) EXPENSES. The Borrower shall reimburse the Agent and the Arranger for
any reasonable costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' and paralegals' fees and time charges of attorneys and
paralegals for the Agent, which attorneys and paralegals may be employees of the
Agent) paid or incurred by the Agent or the Arranger in connection with the
preparation, negotiation, execution, delivery, syndication, review, amendment,
modification, and administration of the Loan Documents. The Borrower also agrees
to reimburse the Agent and the Arranger and the Lenders for any costs, internal
charges and out-of-pocket expenses (including attorneys' and paralegals' fees
and time charges of attorneys and paralegals for the Agent and the Arranger and
the Lenders, which attorneys and paralegals may be employees of the Agent or the
Arranger or the Lenders) paid or incurred by the Agent or the Arranger or any
Lender in connection with the collection of the Obligations and enforcement of
the Loan Documents. In addition to expenses set forth above, the Borrower agrees
to reimburse the Agent, promptly after the Agent's request therefor, for each
audit, or other business analysis performed by or for the benefit of the Lenders
in connection with this Agreement or the other Loan Documents in an amount equal
to the Agent's then customary charges for each person employed to perform such
audit or analysis, plus all costs and expenses (including without limitation,
travel expenses) incurred by the Agent in the performance of such audit or
analysis. Agent shall provide the Borrower with a detailed statement of all
reimbursements requested under this SECTION 10.7(A).
(B) INDEMNITY. The Borrower further agrees to defend, protect, indemnify,
and hold harmless the Agent, the Arranger and each and all of the Lenders and
each of their respective Affiliates, and each of such Agent's, Arranger's,
Lender's, or Affiliate's respective officers,
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directors, trustees, employees, attorneys and agents (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth in ARTICLE V) (collectively, the
"INDEMNITEES") from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses of any
kind or nature whatsoever (including, without limitation, the fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees in any manner relating to or arising out of:
(i) this Agreement, the other Loan Documents or any of the
Transaction Documents, or any act, event or transaction related or
attendant thereto or to the Transactions, the making of the Loans, and the
issuance of and participation in Letters of Credit hereunder, the
management of such Loans or Letters of Credit, the use or intended use of
the proceeds of the Loans or Letters of Credit hereunder, or any of the
other transactions contemplated by the Transaction Documents; or
(ii) any liabilities, obligations, responsibilities, losses,
damages, personal injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or wanton
injury, damage or threat to the environment, natural resources or public
health or welfare, costs and expenses (including, without limitation,
attorney, expert and consulting fees and costs of investigation,
feasibility or remedial action studies), fines, penalties and monetary
sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future relating to violation of any
Environmental, Health or Safety Requirements of Law arising from or in
connection with the past, present or future operations of the Borrower,
its Subsidiaries or any of their respective predecessors in interest, or,
the past, present or future environmental, health or safety condition of
any respective property of the Borrower or its Subsidiaries, the presence
of asbestos-containing materials at any respective property of the
Borrower or its Subsidiaries or the Release or threatened Release of any
Contaminant into the environment (collectively, the "INDEMNIFIED
MATTERS");
PROVIDED, HOWEVER, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters caused by or resulting from the
willful misconduct or Gross Negligence of such Indemnitee with respect to the
Loan Documents, as determined by the final non-appealed judgment of a court of
competent jurisdiction. If the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable because it is violative
of any law or public policy, the Borrower shall contribute the maximum portion
which it is permitted to pay and satisfy under applicable law, to the payment
and satisfaction of all Indemnified Matters incurred by the Indemnitees.
(C) WAIVER OF CERTAIN CLAIMS; SETTLEMENT OF CLAIMS. The Borrower further
agrees to assert no claim against any of the Indemnitees on any theory of
liability seeking consequential, special, indirect, exemplary or punitive
damages. No settlement shall be entered into by the Borrower or any of its
Subsidiaries with respect to any claim, litigation, arbitration or other
proceeding relating to or arising out of the transactions evidenced by this
Agreement, the other
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Loan Documents or in connection with the Transactions (whether or not the Agent
or any Lender or any Indemnitee is a party thereto) unless such settlement
releases all Indemnitees from any and all liability with respect thereto.
(D) SURVIVAL OF AGREEMENTS. The obligations and agreements of the Borrower
under this SECTION 10.7 shall survive the termination of this Agreement.
10.8 NUMBERS OF DOCUMENTS. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.
10.9 ACCOUNTING. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with Agreement Accounting Principles. If
any changes in generally accepted accounting principles are hereafter required
or permitted and are adopted by the Borrower or any of its Subsidiaries with the
agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, tests, restrictions or standards herein or in the related definitions
or terms used therein ("ACCOUNTING CHANGES"), the parties hereto agree, at the
Borrower's request, to enter into negotiations, in good faith, in order to amend
such provisions in a credit neutral manner so as to reflect equitably such
changes with the desired result that the criteria for evaluating the Borrower's
and its Subsidiaries' financial condition shall be the same after such changes
as if such changes had not been made; PROVIDED, HOWEVER, until such provisions
are amended in a manner reasonably satisfactory to the Agent and the Required
Lenders, no Accounting Change shall be given effect in such calculations and all
financial statements and reports required to be delivered hereunder shall be
prepared in accordance with Agreement Accounting Principles without taking into
account such Accounting Changes. In the event such amendment is entered into,
all references in this Agreement to Agreement Accounting Principles shall mean
generally accepted accounting principles as of the date of such amendment.
10.10 SEVERABILITY OF PROVISIONS. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
10.11 NONLIABILITY OF LENDERS. The relationship between the Borrower and
the Lenders and the Agent shall be solely that of borrower and lender. Neither
the Agent nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations.
10.12 GOVERNING LAW. THE AGENT ACCEPTS THIS AGREEMENT, ON BEHALF OF ITSELF
AND THE LENDERS, AT CHICAGO, ILLINOIS BY
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ACKNOWLEDGING AND AGREEING TO IT THERE. ANY DISPUTE BETWEEN THE BORROWER AND THE
AGENT, ANY LENDER OR ANY OTHER HOLDER OF OBLIGATIONS ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
WITH THE INTERNAL LAWS (INCLUDING 735 ILCS 105/5-1 ET SEQ. BUT OTHERWISE WITHOUT
REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS.
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF
THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY
BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO WAIVES IN ALL
DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE AGENT, ANY LENDER OR
ANY OTHER HOLDER OF OBLIGATIONS SHALL HAVE THE RIGHT TO PROCEED AGAINST THE
BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1)
OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2) IN ORDER TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE BORROWER
AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING
BROUGHT BY SUCH PERSON (1) TO REALIZE ON ANY SECURITY FOR THE OBLIGATIONS OR (2)
TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON, BUT SHALL
ONLY BE PERMITTED TO BRING ANY SUCH PERMISSIVE COUNTERCLAIM IN A PROCEEDING
BROUGHT PURSUANT TO CLAUSE (A). THE BORROWER WAIVES ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A
PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
(C) VENUE. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING
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WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH
ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(E) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENT TO EACH OTHER PARTY
HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF
SECTION 10.7 AND THIS SECTION 10.13, WITH ITS COUNSEL.
10.14 SUBORDINATION OF INTERCOMPANY INDEBTEDNESS. The Borrower agrees that
any and all claims of the Borrower against any of its Subsidiaries that is a
Guarantor with respect to any "Intercompany Indebtedness" (as hereinafter
defined), any endorser, obligor or any other guarantor of all or any part of the
Obligations, or against any of its properties shall be subordinate and subject
in right of payment to the prior payment, in full and in cash, of all
Obligations and Hedging Obligations under Hedging Agreements; PROVIDED that, and
not in contravention of the foregoing, so long as no Default has occurred and is
continuing the Borrower may make loans to and receive payments in the ordinary
course with respect to such Intercompany Indebtedness from each such Guarantor
to the extent permitted by the terms of this Agreement and the other Loan
Documents. Notwithstanding any right of the Borrower to ask, demand, ▇▇▇ for,
take or receive any payment from any Guarantor, all rights, liens and security
interests of the Borrower, whether now or hereafter arising and howsoever
existing, in any assets of any Guarantor shall be and are subordinated to the
rights of the holders of the Obligations and the Agent, if any, in those assets.
The Borrower shall have no right to possession of any such asset or to foreclose
upon any such asset, whether by judicial action or otherwise, unless and until
all of the Obligations (other than contingent indemnity obligations) and the
Hedging Obligations under Hedging Agreements shall have been fully paid and
satisfied (in cash) and all financing arrangements pursuant to any Loan Document
or Hedging Agreement among the Borrower and the holders of the Obligations (or
any affiliate thereof) have been terminated. If all or any part of the assets of
any Guarantor, or the proceeds thereof, are subject to any distribution,
division or application to the creditors of such Guarantor, whether partial or
complete, voluntary or involuntary, and whether by reason of liquidation,
bankruptcy, arrangement, receivership,
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assignment for the benefit of creditors or any other action or proceeding, or if
the business of any such Guarantor is dissolved or if substantially all of the
assets of any such Guarantor are sold, then, and in any such event (such events
being herein referred to as an "INSOLVENCY EVENT"), any payment or distribution
of any kind or character, either in cash, securities or other property, which
shall be payable or deliverable upon or with respect to any indebtedness of any
Guarantor to the Borrower ("INTERCOMPANY INDEBTEDNESS") shall be paid or
delivered directly to the Agent for application on any of the Obligations and
Hedging Obligations under the Hedging Agreements, due or to become due, until
such Obligations and Hedging Obligations (other than contingent indemnity
obligations) shall have first been fully paid and satisfied (in cash). Should
any payment, distribution, security or instrument or proceeds thereof be
received by the Borrower upon or with respect to the Intercompany Indebtedness
after an Insolvency Event prior to the satisfaction of all of the Obligations
(other than contingent indemnity obligations) and Hedging Obligations under
Hedging Agreements and the termination of all financing arrangements pursuant to
any Loan Document and or Hedging Agreement among the Borrower and the holders of
Obligations (and their affiliates), the Borrower shall receive and hold the same
in trust, as trustee, for the benefit of the holders of the Obligations and such
Hedging Obligations and shall forthwith deliver the same to the Agent, for the
benefit of such Persons, in precisely the form received (except for the
endorsement or assignment of the Borrower where necessary), for application to
any of the Obligations and such Hedging Obligations, due or not due, and, until
so delivered, the same shall be held in trust by the Borrower as the property of
the holders of the Obligations and such Hedging Obligations. If the Borrower
fails to make any such endorsement or assignment to the Agent, the Agent or any
of its officers or employees are irrevocably authorized to make the same. The
Borrower agrees that until the Obligations (other than the contingent indemnity
obligations) and such Hedging Obligations have been paid in full (in cash) and
satisfied and all financing arrangements pursuant to any Loan Document or
Hedging Agreement among the Borrower and the holders of the Obligations (and
their affiliates) have been terminated, the Borrower will not assign or transfer
to any Person (other than the Agent) any claim the Borrower has or may have
against any Guarantor.
10.15 LENDER'S NOT UTILIZING PLAN ASSETS. None of the consideration used
by any of the Lenders to make its Loans constitute for any purpose of ERISA or
Section 4975 of the Code assets of any "plan" as defined in Section 3(3) of
ERISA or Section 4975 of the Code and the rights and interests of each of the
Lenders in and under the Loan Documents shall not constitute such "plan assets"
under ERISA.
ARTICLE XI: THE AGENT
11.1 APPOINTMENT; NATURE OF RELATIONSHIP. Bank One, NA, having its
principal office in Chicago, Illinois is appointed by the Lenders as the Agent
hereunder and under each other Loan Document, and each of the Lenders
irrevocably authorizes the Agent to act as the contractual representative of
such Lender with the rights and duties expressly set forth herein and in the
other Loan Documents. The Agent agrees to act as such contractual representative
upon the express conditions contained in this ARTICLE XI. Notwithstanding the
use of the defined term "Agent," it is expressly understood and agreed that the
Agent shall not have any fiduciary responsibilities to
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any Holder of Obligations by reason of this Agreement and that the Agent is
merely acting as the representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Agent (i) does not
assume any fiduciary duties to any of the Holders of Obligations, (ii) is a
"representative" of the Holders of Obligations within the meaning of Section
9-105 of the Uniform Commercial Code and (iii) is acting as an independent
contractor, the rights and duties of which are limited to those expressly set
forth in this Agreement and the other Loan Documents. Each of the Lenders, for
itself and on behalf of its affiliates as Holders of Obligations, agrees to
assert no claim against the Agent on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each Holder of
Obligations waives.
11.2 POWERS. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties or fiduciary duties to the Lenders, or any
obligation to the Lenders to take any action hereunder or under any of the other
Loan Documents except any action specifically provided by the Loan Documents
required to be taken by the Agent.
11.3 GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is found in a final judgment by a court of
competent jurisdiction to have arisen from the Gross Negligence or willful
misconduct of such Person.
11.4 NO RESPONSIBILITY FOR LOANS, CREDITWORTHINESS, RECITALS, ETC. Neither
the Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (i) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction of any condition specified in ARTICLE V, except receipt of items
required to be delivered solely to the Agent; (iv) the existence or possible
existence of any Default or (v) the validity, effectiveness or genuineness of
any Loan Document or any other instrument or writing furnished in connection
therewith. The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or in any of the other Loan
Documents, for the perfection or priority of the Liens on collateral, if any, or
for the execution, effectiveness, genuineness, validity, legality,
enforceability, collectibility, or sufficiency of this Agreement or any of the
other Loan Documents or the transactions contemplated thereby, or for the
financial condition of any guarantor of any or all of the Obligations, the
Borrower or any of its Subsidiaries.
11.5 ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders (or all of the Lenders in the event that and to the extent that
this Agreement expressly requires such), and such instructions and any action
taken or failure to act pursuant thereto shall be binding on all of the Lenders
and on all
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owners of Loans and on all Holders of Obligations. The Agent shall be
fully justified in failing or refusing to take any action hereunder and under
any other Loan Document unless it shall first be indemnified to its satisfaction
by the Lenders pro rata against any and all liability, cost and expense that it
may incur by reason of taking or continuing to take any such action.
11.6 EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of its
duties as the Agent hereunder and under any other Loan Document by or through
employees, agents, and attorney-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
11.7 RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to rely
upon any notice, consent, certificate, affidavit, letter, telegram, statement,
paper or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Agent, which counsel may be
employees of the Agent.
11.8 THE AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective Pro
Rata Shares (i) for any amounts not reimbursed by the Borrower for which the
Agent is entitled to reimbursement by the Borrower under the Loan Documents,
(ii) for any other expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent any of the foregoing is found in a final
non- appealable judgment by a court of competent jurisdiction to have arisen
solely from the Gross Negligence or willful misconduct of the Agent.
11.9 RIGHTS AS A LENDER. With respect to its Revolving Loan Commitment,
Loans made by it, and Letters of Credit issued by it, the Agent shall have the
same rights and powers hereunder and under any other Loan Document as any Lender
or the Issuing Bank and may exercise the same as though it were not the Agent,
and the term "Lender" or "Lenders" or "Issuing Bank"shall, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent may
accept deposits from, lend money to, and generally engage in any kind of trust,
debt, equity or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which such Person is not prohibited hereby from engaging with
any other Person.
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11.10 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger 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 and the other Loan Documents.
11.11 SUCCESSOR AGENT. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint, on behalf of the Borrower and
the Lenders, a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty days after the retiring Agent's giving notice of resignation, then
the retiring Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding anything herein to the contrary, so long as no
Default has occurred and is continuing, each such successor Agent shall be
subject to approval by the Borrower, which approval shall not be unreasonably
withheld. Such successor Agent shall be a commercial bank having capital and
retained earnings of at least $500,000,000. Upon the acceptance of any
appointment as the 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 and under the other Loan
Documents. After any retiring Agent's resignation hereunder as Agent, the
provisions of this ARTICLE XI 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
the Agent hereunder and under the other Loan Documents.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 SETOFF. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if any Default occurs and is continuing, any
indebtedness from any Lender to the Borrower (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.
12.2 RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
SECTIONS 4.1, 4.2 or 4.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to the obligations owing to them. In case any such
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payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.
12.3 APPLICATION OF PAYMENTS. Subject to the provisions of SECTION 9.2,
the Agent shall, unless otherwise specified at the direction of the Required
Lenders which direction shall be consistent with the last sentence of this
SECTION 12.3, apply all payments and prepayments in respect of any Obligations
received after the occurrence and during the continuance of a Default or
Unmatured Default in the following order:
(A) first, to pay interest on and then principal of any portion of
the Loans which the Agent may have advanced on behalf of any Lender for
which the Agent has not then been reimbursed by such Lender or the
Borrower;
(B) second, to pay interest on and then principal of any advance
made under SECTION 10.3 for which the Agent has not then been paid by the
Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Agent;
(D) fourth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders and the issuer(s) of
Letters of Credit;
(E) fifth, to pay interest due in respect of Swing Line Loans;
(F) sixth, to pay interest due in respect of Loans (other than Swing
Line Loans) and L/C Obligations;
(G) seventh, to the ratable payment or prepayment of principal
outstanding on Swing Line Loans;
(H) eighth, to the ratable payment or prepayment of principal
outstanding on Loans (other than Swing Line Loans), Reimbursement
Obligations and Hedging Obligations under Hedging Agreements in such order
as the Agent may determine in its sole discretion;
(I) ninth, to provide required cash collateral, if required pursuant
to SECTION 3.11 and
(J) tenth, to the ratable payment of all other Obligations.
Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Borrower, all principal payments in respect
of Loans (other than Swing Line Loans) shall be applied to the outstanding
Revolving Loans first, to repay outstanding Floating Rate Loans, and THEN to
repay outstanding Eurodollar Rate Loans with those Eurodollar Rate Loans which
have earlier expiring Interest Periods being repaid prior to those which have
later
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expiring Interest Periods. The order of priority set forth in this SECTION 12.3
and the related provisions of this Agreement are set forth solely to determine
the rights and priorities of the Agent, the Lenders, the Swing Line Bank and the
issuer(s) of Letters of Credit as among themselves. The order of priority set
forth in CLAUSES (D) through (J) of this SECTION 12.3 may at any time and from
time to time be changed by the Required Lenders without necessity of notice to
or consent of or approval by the Borrower, or any other Person; PROVIDED, that
the order of priority of payments in respect of Swing Line Loans may be changed
only with the prior written consent of the Swing Line Bank. The order of
priority set forth in CLAUSES (A) through (C) of this SECTION 12.3 may be
changed only with the prior written consent of the Agent.
12.4 RELATIONS AMONG LENDERS.
(A) Except with respect to the exercise of set-off rights of any Lender in
accordance with SECTION 12.1, the proceeds of which are applied in accordance
with this Agreement, and except as set forth in the following sentence, each
Lender agrees that it will not take any action, nor institute any actions or
proceedings, against the Borrower or any other obligor hereunder or with respect
to any Loan Document, without the prior written consent of the Required Lenders
or, as may be provided in this Agreement or the other Loan Documents, at the
direction of the Agent.
(B) The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein in
case of the Agent) authorized to act for, any other Lender. The Agent shall have
the exclusive right on behalf of the Lenders to enforce on the payment of the
principal of and interest on any Loan after the date such principal or interest
has become due and payable pursuant to the terms of this Agreement.
12.5 REPRESENTATIONS AND COVENANTS AMONG LENDERS. Each Lender represents
and covenants for the benefit of all other Lenders and the Agent that such
Lender is not satisfying and shall not satisfy any of its obligations pursuant
to this Agreement with any assets considered for any purposes of ERISA or
Section 4975 of the Code to be assets of or on behalf of any "plan" as defined
in section 3(3) of ERISA or section 4975 of the Code, regardless of whether
subject to ERISA or Section 4975 of the Code.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents without the consent of all of the Lenders, and any such
assignment in violation of this SECTION 13.1(I) shall be null and void, and (ii)
any assignment by any Lender must be made in compliance with SECTION 13.3
hereof. Notwithstanding CLAUSE (II) of this SECTION 13.1 or SECTION 13.3, (i)
any Lender may at any time, without the consent of the Borrower or the Agent,
assign all or any portion of its rights under this Agreement to a Federal
Reserve Bank and (ii) any Lender which is a fund or commingled investment
vehicle that invests in commercial loans in the ordinary course of its business
may at any time, without the consent
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of the Borrower or the Agent, pledge or assign all or any part of its rights
under this Agreement to a trustee or other representative of holders of
obligations owed or securities issued by such Lender as collateral to secure
such obligations or securities; PROVIDED, HOWEVER, that no such assignment or
pledge shall release the transferor Lender from its obligations hereunder. The
Agent may treat each Lender as the owner of the Loans made by such Lender
hereunder for all purposes hereof unless and until such Lender complies with
SECTION 13.3 hereof in the case of an assignment thereof or, in the case of any
other transfer, a written notice of the transfer is filed with the Agent. Any
assignee or transferee of a Loan, Revolving Loan Commitment, L/C Interest or any
other interest of a lender under the Loan Documents agrees by acceptance thereof
to be bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the owner of any Loan, shall be conclusive
and binding on any subsequent owner, transferee or assignee of such Loan.
13.2 PARTICIPATIONS.
(A) PERMITTED PARTICIPANTS; EFFECT. Subject to the terms set forth in this
SECTION 13.2, any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("PARTICIPANTS") participating interests in any Loan owing to such
Lender, any Revolving Loan Commitment of such Lender, any L/C Interest of such
Lender or any other interest of such Lender under the Loan Documents on a pro
rata or non-pro rata basis. Notice of such participation to the Borrower and the
Agent shall be required prior to any participation becoming effective with
respect to a Participant which is not a Lender or an Affiliate thereof. Upon
receiving said notice, the Agent shall record the participation in the Register
it maintains. Moreover, notwithstanding such recordation, such participation
shall not be considered an assignment under SECTION 13.3 of this Agreement and
such Participant shall not be considered a Lender. In the event of any such sale
by a Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the owner of all Loans made by it for
all purposes under the Loan Documents, all amounts payable by the Borrower under
this Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents except that, for purposes of ARTICLE IV
hereof, the Participants shall be entitled to the same rights as if they were
Lenders.
(B) VOTING RIGHTS. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Loan, Letter of Credit or Revolving Loan Commitment
in which such Participant has an interest which forgives principal, interest or
fees or reduces the interest rate or fees payable pursuant to the terms of this
Agreement with respect to any such Loan or Revolving Loan Commitment, postpones
any date fixed for any regularly-scheduled payment (but not prepayments) of
principal of, or interest or fees on, any such Loan or Revolving Loan
Commitment, or releases all or substantially all of the collateral, if any,
securing any such Loan or Letter of Credit.
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(C) BENEFIT OF SETOFF. The Borrower agrees that each Participant shall be
deemed to have the right of setoff provided in SECTION 12.1 hereof in respect to
its participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, PROVIDED that each Lender shall retain the
right of setoff provided in SECTION 12.1 hereof with respect to the amount of
participating interests sold to each Participant except to the extent such
Participant exercises its right of setoff. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff provided in
SECTION 12.1 hereof, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with SECTION 12.2 as if each Participant were a Lender.
13.3 ASSIGNMENTS.
(A) PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("PURCHASERS") all or a portion of its rights and
obligations under this Agreement (including, without limitation, its Revolving
Loan Commitment, all Loans owing to it, all of its participation interests in
existing Letters of Credit, and its obligation to participate in additional
Letters of Credit hereunder) in accordance with the provisions of this SECTION
13.3. Each assignment shall be of a constant, and not a varying, ratable
percentage of all of the assigning Lender's rights and obligations under this
Agreement. Such assignment shall be substantially in the form of EXHIBIT D
hereto and shall not be permitted hereunder unless such assignment is either for
all of such Lender's rights and obligations under the Loan Documents or, without
the prior written consent of the Agent, involves loans and commitments in an
aggregate amount of at least $5,000,000 (which minimum amount shall not apply to
any assignment between Lenders, or to an Affiliate of any Lender). The consent
of the Agent, and, prior to the occurrence of a Default, and only with respect
to any assignment other than to another Lender, the Borrower (which consent, in
each such case, shall not be unreasonably withheld), shall be required prior to
an assignment becoming effective with respect to a Purchaser which is not a
Lender or an Affiliate of such Lender; PROVIDED, no consent of the Borrower
shall be required in connection with any assignment by the Agent consummated
after consultation with the Borrower during the Syndication Period.
(B) EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Agent of a notice of
assignment, substantially in the form attached as APPENDIX I to EXHIBIT D hereto
(a "NOTICE OF ASSIGNMENT"), together with any consent required by SECTION
13.3(A) hereof, (ii) payment of a $3,500 fee by the assignee or the assignor (as
agreed) to the Agent for processing such assignment, and (iii) the completion of
the recording requirements in SECTION 13.3(C), such assignment shall become
effective on the later of such date when the requirements in CLAUSE (I), (II)
and (III) are met or the effective date specified in such Notice of Assignment.
The Notice of Assignment shall contain a representation by the Purchaser to the
effect that none of the consideration used to make the purchase of the Revolving
Loan Commitment, Loans and L/C Obligations under the applicable assignment
agreement constitute for any purpose of ERISA or Section 4975 of the Code assets
of any "plan" as defined in Section 3(3) of ERISA or Section 4975 of the Code
and that the rights and interests of the Purchaser in and under the Loan
Documents will not constitute such "plan
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assets". On and after the effective date of such assignment, such Purchaser, if
not already a Lender, shall for all purposes be a Lender party to this Agreement
and any other Loan Documents executed by the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to the same extent
as if it were an original party hereto, and no further consent or action by the
Borrower, the Lenders or the Agent shall be required to release the transferor
Lender with respect to the percentage of the Aggregate Revolving Loan
Commitment, Loans and Letter of Credit and Swing Line Loan participations
assigned to such Purchaser. Upon the consummation of any assignment to a
Purchaser pursuant to this SECTION 13.3(B), the transferor Lender, the Agent and
the Borrower shall make appropriate arrangements so that, to the extent notes
have been issued to evidence any of the transferred Loans, replacement notes are
issued to such transferor Lender and new notes or, as appropriate, replacement
notes, are issued to such Purchaser, in each case in principal amounts
reflecting their Revolving Loan Commitment, as adjusted pursuant to such
assignment.
(C) THE REGISTER. Notwithstanding anything to the contrary in this
Agreement, the Borrower hereby designates the Agent, and the Agent, hereby
accepts such designation, to serve as the Borrower's contractual representative
solely for purposes of this SECTION 13.3(C). In this connection, the Agent shall
maintain at its address referred to in SECTION 14.1 a copy of each assignment
delivered to and accepted by it pursuant to this SECTION 13.3 and a register
(the "REGISTER") for the recordation of the names and addresses of the Lenders
and the Revolving Loan Commitment of and principal amount of the Loans owing to,
each Lender from time to time and whether such Lender is an original Lender or
the assignee of another Lender pursuant to an assignment under this SECTION
13.3. The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower and each of its Subsidiaries,
the Agent 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 Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
13.4 CONFIDENTIALITY. Subject to SECTION 13.5, the Agent and the Lenders
and their respective representatives shall hold all nonpublic information
obtained pursuant to the requirements of this Agreement and identified as such
by the Borrower in accordance with such Person's customary procedures for
handling confidential information of this nature and in accordance with safe and
sound commercial lending or investment practices and in any event may make
disclosure reasonably required by a prospective Transferee in connection with
the contemplated participation or assignment, or as required or requested by any
Governmental Authority or any securities exchange or similar self-regulatory
organization or representative thereof, or pursuant to a regulatory examination
or legal process (including, without limitation, any action or proceeding to
enforce the Loan Documents against the Borrower or any Guarantor), or to any
direct or indirect contractual counterparty in swap agreements or such
contractual counterparty's professional advisor, and shall require any such
Transferee to agree (and require any of its Transferees to agree) to comply with
this SECTION 13.4. In no event shall the Agent or any Lender be obligated or
required to return any materials furnished by the Borrower; PROVIDED, HOWEVER,
each prospective Transferee shall be required to agree that if it does not
become a
- 95 -
participant or assignee it shall return all materials furnished to it by or on
behalf of the Borrower in connection with this Agreement.
13.5 DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any
prospective Transferee any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries; PROVIDED that prior to any such
disclosure, such prospective Transferee shall agree to preserve in accordance
with SECTION 13.4 the confidentiality of any confidential information described
therein.
ARTICLE XIV: NOTICES
14.1 GIVING NOTICE. Except as otherwise permitted by SECTION 2.13 with
respect to Borrowing/Election Notices, all notices and other communications
provided to any party hereto under this Agreement or any other Loan Documents
shall be in writing or by telex or by facsimile and addressed or delivered to
such party at its address set forth below its signature hereto or at such other
address as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid, shall be deemed
given three (3) Business Days after mailed; any notice, if transmitted by telex
or facsimile, shall be deemed given when transmitted (answerback confirmed in
the case of telexes); or, any notice, if transmitted by courier, one (1)
Business Day after deposit with a reputable overnight carrier services, with all
charges paid.
14.2 CHANGE OF ADDRESS. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XV: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Agent and the Lenders
and each party has notified the Agent by telex or telephone, that it has taken
such action.
[Remainder of This Page Intentionally Blank]
- 96 -
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the date first above written.
HUTTIG BUILDING PRODUCTS, INC., as the Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President - Administration and
Chief Financial Officer
Address:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
BANK ONE, NA, as Agent, the Issuing Lender, the
Swing Line Bank and as a Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address:
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail: ▇▇▇▇▇▇_▇▇▇▇▇@▇▇.▇▇▇▇▇.▇▇▇
THE CHASE MANHATTAN BANK, as a Lender
By: /s/ ▇▇▇▇ ▇. Aria
---------------------------------------------
Name: ▇▇▇▇ ▇. Aria
Title: Vice President
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: 203/▇▇▇-▇▇▇▇
Fax: 203/▇▇▇-▇▇▇▇
E-Mail: ▇▇▇▇.▇▇▇▇@▇▇▇▇▇.▇▇▇
COMERICA BANK, as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇
Title: Vice President
Address:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇
Phone: 313/▇▇▇-▇▇▇▇
Fax: 313/▇▇▇-▇▇▇▇
E-Mail: ▇▇▇▇▇▇▇_▇_▇'▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
MERCANTILE BANK NATIONAL ASSOCIATION, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ (▇▇-▇)
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: 314/▇▇▇-▇▇▇▇
Fax: 314/▇▇▇-▇▇▇▇
E-Mail: ▇▇▇▇▇▇.▇.▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
FIRST UNION NATIONAL BANK, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: 704/▇▇▇-▇▇▇▇
Fax: 704/▇▇▇-▇▇▇▇
E-Mail: ▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇▇.▇▇▇
THE BANK OF NEW YORK, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Phone: 212/▇▇▇-▇▇▇▇
Fax: 212/▇▇▇-▇▇▇▇
E-Mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
THE DAI-ICHI KANGYO BANK, LTD., as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
Address:
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Phone: 212/▇▇▇-▇▇▇▇
Fax: 312/▇▇▇-▇▇▇▇
E-Mail: ▇▇▇▇▇▇@▇▇▇.▇▇▇
EXHIBIT A
TO
CREDIT AGREEMENT
REVOLVING LOAN COMMITMENTS
-----------------------------------------------------------------------------
LENDER REVOLVING LOAN COMMITMENT
-----------------------------------------------------------------------------
Bank One, NA $30,000,000
-----------------------------------------------------------------------------
The Chase Manhattan Bank $20,000,000
-----------------------------------------------------------------------------
Comerica Bank $20,000,000
-----------------------------------------------------------------------------
Mercantile Bank National $15,000,000
Association
-----------------------------------------------------------------------------
First Union National Association $15,000,000
-----------------------------------------------------------------------------
The Bank of New York $15,000,000
-----------------------------------------------------------------------------
The Dai-Ichi Kangyo Bank, Ltd. $10,000,000
-----------------------------------------------------------------------------
TOTAL $125,000,000
-------------------------------------------------------------------------------
EXHIBIT B
TO
CREDIT AGREEMENT
FORM OF BORROWING/ELECTION NOTICE
TO: Bank One, NA (having its principal office in Chicago, Illinois), as
contractual representative (the "AGENT") under that certain Credit
Agreement dated as of December 16, 1999 (the "CREDIT AGREEMENT") by and
among Huttig Building Products, Inc. (the "BORROWER"), the financial
institutions from time to time parties thereto and the Agent (such Credit
Agreement, as the same may be amended, restated, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT")
The Borrower hereby gives to the Agent a Borrowing/Election Notice
pursuant to [SECTION 2.7] [SECTION 2.9] of the Credit Agreement, and Borrower
hereby requests to borrow on , (the "BORROWING DATE"):
-------- -- ----
(a) from the Lenders with Revolving Loan Commitments on a pro rata
basis an aggregate principal amount of $ in Revolving Loans
as a ---------
Floating Rate Advance
---
Eurodollar Rate Advance
---
o Applicable Interest Period of month(s).
-----
(b) from the Swing Line Bank a Swing Line Loan in the principal
amount of $ as a Floating Rate Advance.
-----------
The undersigned hereby certifies, in its corporate capacity, to the
Agents and the Lenders that (i) the representations and warranties of the
undersigned contained in ARTICLE VI of the Credit Agreement are and shall be
true and correct in all material respects on and as of the date hereof and on
and as of the Borrowing Date; (ii) no Default or Unmatured Default has occurred
and is continuing on the date hereof or on the Borrowing Date or will result
from the making of the proposed Loans; and (iii) the conditions set forth in
SECTION 5.2 of the Credit Agreement have been satisfied.
Unless otherwise defined herein, terms defined in the Credit Agreement
shall have the same meanings in this Borrowing/Election Notice.
Dated: , HUTTIG BUILDING PRODUCTS, INC.
-------- -- ----
By:
---------------------------
Its:
---------------------------
EXHIBIT C
TO
CREDIT AGREEMENT
FORM OF REQUEST FOR LETTER OF CREDIT
TO: Bank One, NA, as Issuing Bank under that certain Credit Agreement dated as
of December 16, 1999 (the "CREDIT AGREEMENT") by and among Huttig Building
Products, Inc. (the "BORROWER"), the financial institutions from time to
time parties thereto and Bank One, NA (having its principal office in
Chicago, Illinois), as contractual representative (the "AGENT") (such
Credit Agreement, as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "CREDIT Agreement")
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
Pursuant to SECTION 3.4 of the Credit Agreement, the Borrower hereby gives
to the Issuing Bank a request for issuance of a Letter of Credit on behalf of
Borrower for the benefit of 1, in the amount of $ , with an
---------- -----------
effective date of , (the "Effective Date") and an expiry
-------- ------- ----
date of , . [Insert instructions and /or conditions].
------------------ -- ----
The undersigned hereby certifies, in its corporate capacity, that (i) the
representations and warranties of the undersigned contained in Article VI of the
Credit Agreement are and shall be true and correct in all material respects on
and as of the date hereof and on and as of the Effective Date; (ii) no Default
or Unmatured Default has occurred and is continuing on the date hereof or on the
Effective Date or will result from the issuance of the proposed Letter of
Credit; and (iii) the conditions set forth in SECTIONS 3.4 and 5.2 of the Credit
Agreement have been satisfied.
Unless otherwise defined herein, terms defined in the Credit Agreement
shall have the same meanings in this Request for Letter of Credit.
Dated: ,
--------------- -- ----
HUTTIG BUILDING PRODUCTS, INC.
By:
----------------------------
Its:
----------------------------
------------------------
1 Insert name of beneficiary
EXHIBIT D
TO
CREDIT AGREEMENT
FORM OF ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "ASSIGNMENT AGREEMENT") between
----------------
(the "ASSIGNOR") and (the "ASSIGNEE") is dated as of ,
------------ ---------
. The parties hereto agree as follows:
----
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement (which,
as it may be amended, modified, supplemented, restated, renewed or extended from
time to time is herein called (the "CREDIT AGREEMENT") described in Item 1 of
Schedule 1 attached hereto ("SCHEDULE 1"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the
Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement such that after giving effect to such assignment the Assignee shall
have purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of Schedule 1 of all outstanding rights and obligations
under the Credit Agreement relating to the facilities listed in Item 3 of
Schedule 1 and the other Loan Documents. The aggregate Commitment (or Loans, if
the applicable Commitment has been terminated) purchased by the Assignee
hereunder is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"EFFECTIVE Date") shall be the later of the date specified in Section 13.3(B) of
the Credit Agreement and the date specified in Item 5 of Schedule 1 or two
Business Days (or such shorter period agreed to by the Agent) after a Notice of
Assignment substantially in the form of Exhibit I attached hereto has been
delivered to the Agent. Such Notice of Assignment must include any consents
required to be delivered to the Agent by SECTION 13.3(A) of the Credit
Agreement. In no event will the Effective Date occur if the payments required to
be made by the Assignee to the Assignor on the Effective Date under Sections 4
and 5 hereof are not made on the proposed Effective Date. The Assignor will
notify the Assignee of the proposed Effective Date no later than the Business
Day prior to the proposed Effective Date. As of the Effective Date, (i) the
Assignee shall have the rights and obligations of a Lender under the Loan
Documents with respect to the rights and obligations assigned to the Assignee
hereunder and (ii) the Assignor shall relinquish its rights and be released from
its corresponding obligations under the Loan Documents with respect to the
rights and obligations assigned to the Assignee hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Agent all payments of principal, interest
and fees with respect to the interest assigned hereby. The Assignee shall
advance funds directly to the Agent with respect to all Loans and reimbursement
payments made on or after the Effective Date with respect to the interest
assigned hereby. [In consideration for the sale and assignment of Loans
hereunder, (i) the Assignee shall pay the Assignor, on the Effective Date, an
amount equal to the principal amount of the portion of all Floating Rate Loans
assigned to the Assignee hereunder and (ii) with respect to each Eurodollar Rate
Loan made by the Assignor and assigned to the Assignee hereunder which is
outstanding on the Effective Date, (a) on the last day of the Interest Period
therefor or (b) on such earlier date agreed to by the Assignor and the Assignee
or (c) on the date on which any such Eurodollar Rate Loan either becomes due (by
acceleration or otherwise) or is prepaid (the date as described in the foregoing
clauses (a), (b) or (c) being hereinafter referred to as the "PAYMENT DATE"),
the Assignee shall pay the Assignor an amount equal to the principal amount of
the portion of such Eurodollar Rate Loan assigned to the Assignee which is
outstanding on the Payment Date. If the Assignor and the Assignee agree that the
Payment Date for such Eurodollar Rate Loan shall be the Effective Date, they
shall agree to the interest rate applicable to the portion of such Loan assigned
hereunder for the period from the Effective Date to the end of the existing
Interest Period applicable to such Eurodollar Rate Loan (the "AGREED INTEREST
RATE") and any interest received by the Assignee in excess of the Agreed
Interest Rate shall be remitted to the Assignor. In the event interest for the
period from the Effective Date to but not including the Payment Date is not paid
by the Borrower with respect to any Eurodollar Rate Loan sold by the Assignor to
the Assignee hereunder, the Assignee shall pay to the Assignor interest for such
period on the portion of such Eurodollar Rate Loan sold by the Assignor to the
Assignee hereunder at the applicable rate provided by the Credit Agreement. In
the event a prepayment of any Eurodollar Rate Loan which is existing on the
Payment Date and assigned by the Assignor to the Assignee hereunder occurs after
the Payment Date but before the end of the Interest Period applicable to such
Eurodollar Rate Loan, the Assignee shall remit to the Assignor the excess of the
prepayment penalty paid with respect to the portion of such Eurodollar Rate Loan
assigned to the Assignee hereunder over the amount which would have been paid if
such prepayment penalty was calculated based on the Agreed Interest Rate. The
Assignee will also promptly remit to the Assignor (i) any principal payments
received from the Agent with respect to Eurodollar Rate Loans prior to the
Payment Date and (ii) any amounts of interest on Loans and fees received from
the Agent which relate to the portion of the Loans assigned to the Assignee
hereunder for periods prior to the Effective Date, in the case of Floating Rate
Loans, or the Payment Date, in the case of Eurodollar Rate Loans, and not
previously paid by the Assignee to the Assignor.]2 In the event that either
party hereto receives any payment to which the other party hereto is entitled
under this Assignment Agreement, then the party receiving such amount shall
promptly remit it to the other party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. [The Assignee shall pay to the Assignor a fee
on each day on which a payment of interest or commitment fees is made under the
Credit Agreement with respect to the amounts assigned to the Assignee hereunder
(other than a payment of interest or commitment fees for the period prior to the
Effective Date or, in the case of Eurodollar Rate Loans, the Payment Date, which
the Assignee is obligated to deliver to the
-----------------------
2 Each Assignor may insert its standard payment provisions in lieu of the
payment terms included in this Exhibit.
Assignor pursuant to Section 4 hereof). The amount of such fee shall be the
difference between (i) the interest or fee, as applicable, paid with respect to
the amounts assigned to the Assignee hereunder and (ii) the interest or fee, as
applicable, which would have been paid with respect to the amounts assigned to
the Assignee hereunder if each interest rate was of 1% less than the interest
--
rate paid by the Borrower or if the commitment fee was of 1% less than the
---
commitment fee paid by the Borrower, as applicable. In addition,]3 [t]he
Assignee agrees to pay % of the recordation fee required to be paid to the
--
Agent pursuant to SECTION 13.3(B) of the Credit Agreement in connection with
this Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. The
Assignor represents and warrants that it has the power and authority and legal
right to execute and deliver this Assignment Agreement and to perform its
obligations hereunder. The execution and delivery by the Assignor of this
Assignment Agreement and the performance by it of its obligations hereunder have
been duly authorized by proper proceedings. It is understood and agreed that the
assignment and assumption hereunder are made without recourse to the Assignor
and that the Assignor makes no other representation or warranty of any kind to
the Assignee. Neither the Assignor nor any of its officers, directors,
employees, agents or attorneys shall be responsible for (i) the due execution,
legality, validity, enforceability, genuineness, sufficiency or collectability
of any Loan Document, including without limitation, documents granting the
Assignor and the other Lenders a security interest in assets of the Borrower or
any guarantor, (ii) any representation, warranty or statement made in or in
connection with any of the Loan Documents, (iii) the financial condition or
creditworthiness of the Borrower or any guarantor, (iv) the performance of or
compliance with any of the terms or provisions of any of the Loan Documents, (v)
inspecting any of the property, books or records of the Borrower, (vi) the
validity, enforceability, perfection, priority, condition, value or sufficiency
of any collateral securing or purporting to secure the Loans or (vii) any
mistake, error of judgment, or action taken or omitted to be taken in connection
with the Loans or the Loan Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee represents and warrants that it
has the power and authority and legal right to execute and deliver this
Assignment Agreement and to perform its obligations hereunder. The execution and
delivery by the Assignee of this Assignment Agreement and the performance by it
of its obligations hereunder have been duly authorized by proper proceedings.
The Assignee (i) confirms that it has received a copy of the Credit Agreement,
together with copies of the financial statements requested by the Assignee and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment Agreement, (ii)
agrees that it will, independently and without reliance upon the Agent, the
Assignor or any other Lender and based on such documents and information at it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, (iii) appoints and
authorizes the Agent to take such action as its contractual representative on
its behalf and to exercise such powers under the Loan Documents as are delegated
to the Agent by the terms
----------------------
3 The Assignor and Assignee may delete the bracketed language if not
applicable.
thereof, together with such powers as are reasonably incidental thereto, (iv)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender, (v) agrees that its payment instructions and notice
instructions are as set forth in the attachment to Schedule 1, (vi) confirms
that none of the funds, monies, assets or other consideration being used to make
the purchase and assumption hereunder are "plan assets" as defined under ERISA
and that its rights, benefits and interests in and under the Loan Documents will
not be "plan assets" under ERISA, [and (viii) attaches the forms prescribed by
the Internal Revenue Service of the United States certifying that the Assignee
is entitled to receive payments under the Loan Documents without deduction or
withholding of any United States federal income taxes].4
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor harmless
against any and all losses, costs and expenses (including, without limitation,
reasonable attorneys' fees) and liabilities incurred by the Assignor in
connection with or arising in any manner from the Assignee's non-performance of
the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall have the
right pursuant to SECTION 13.3(A) of the Credit Agreement to assign the rights
which are assigned to the Assignee hereunder to any entity or person, provided
that (i) any such subsequent assignment does not violate any of the terms and
conditions of the Loan Documents or any law, rule, regulation, order, writ,
judgment, injunction or decree and that any consent required under the terms of
the Loan Documents has been obtained and (ii) unless the prior written consent
of the Assignor is obtained, the Assignee is not thereby released from its
obligations to the Assignor hereunder, if any remain unsatisfied, including,
without limitation, its obligations under SECTIONS 4, 5 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the Aggregate
Revolving Loan Commitment occurs between the date of this Assignment Agreement
and the Effective Date, the percentage interest specified in Item 3 of Schedule
1 shall remain the same, but the dollar amount purchased shall be recalculated
based on the reduced Aggregate Revolving Loan Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice of
Assignment embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by the internal
laws (including, without limitation, 735 ILCS Section 105/5-1 et seq, but
otherwise without regard to the conflict of laws provisions) of the State of
Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement in the
manner set forth in the Credit Agreement. For the purpose hereof, the addresses
of the parties hereto (until notice of a change is delivered) shall be the
address set forth in the attachment to Schedule 1.
----------------------
4 To be inserted if the Assignee is not incorporated under the laws of the
United States, or a state thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By:
Title:
[NAME OF ASSIGNEE]
By:
Title:
EXHIBIT I
to Assignment Agreement
NOTICE
OF ASSIGNMENT
,
----------- ----
To: HUTTIG BUILDING PRODUCTS, INC.8
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
BANK ONE, NA (having its principal office in Chicago, Illinois),
AS AGENT
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Credit Agreement (the "Credit Agreement") described in
Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings attributed to
them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered to
[the Borrower and] the Agent pursuant to SECTION 13.3(B) of the Credit
Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of , (the "Assignment"), pursuant to which, among
-------- --
other things, the Assignor has sold, assigned, delegated and transferred to the
Assignee, and the Assignee has purchased, accepted and assumed from the Assignor
the percentage interest specified in Item 3 of Schedule 1 of all outstandings,
rights and obligations under the Credit Agreement relating to the facilities
listed in Item 3 of Schedule 1. The Effective Date of the Assignment shall be
the later of the date specified in Section 13.3(B) of the Credit Agreement and
the date specified in Item 5 of Schedule 1
----------------------
8 To be included only if consent must be obtained from the Borrower pursuant to
SECTION 13.3(A) of the Credit Agreement.
or two Business Days (or such shorter period as agreed to by the Agent) after
this Notice of Assignment and any consents and fees required by SECTION 13.3 (A)
AND (B) of the Credit Agreement have been delivered to the Agent, provided that
the Effective Date shall not occur if any condition precedent agreed to by the
Assignor and the Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to the Borrower and the Agent
notice of the assignment and delegation referred to herein. The Assignor will
confer with the Agent before the date specified in Item 5 of Schedule 1 to
determine if the Assignment Agreement will become effective on such date
pursuant to Section 3 hereof, and will confer with the Agent to determine the
Effective Date pursuant to Section 3 hereof if it occurs thereafter. The
Assignor shall notify the Agent if the Assignment Agreement does not become
effective on any proposed Effective Date as a result of the failure to satisfy
the conditions precedent agreed to by the Assignor and the Assignee. At the
request of the Agent, the Assignor will give the Agent written confirmation of
the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or before the
Effective Date the processing fee of $3,500 required by SECTION 13.3 (B) of the
Credit Agreement.
6. If notes are outstanding on the Effective Date, the Assignor and the
Assignee request and direct that the Agent prepare and cause the Borrower to
execute and deliver new notes or, as appropriate, replacements notes, to the
Assignor and the Assignee. The Assignor and the Assignee, as applicable, each
agree to deliver to the Agent the original note received by it from the Borrower
upon its receipt of a new note in the appropriate amount.
7. The Assignee advises the Agent that notice and payment instructions are
set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase pursuant
to the Assignment are "plan assets" as defined under ERISA and that its rights,
benefits, and interests in and under the Loan Documents will not be "plan
assets" under ERISA.
9. The Assignee authorizes the Agent to act as its contractual
representative under the Loan Documents in accordance with the terms thereof.
The Assignee acknowledges that the Agent has no duty to supply information with
respect to the Borrower or the Loan Documents to the Assignee until the Assignee
becomes a party to the Credit Agreement.9
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: By:
----------------------------
Title: Title:
----------------------------
ACKNOWLEDGED [AND CONSENTED ACKNOWLEDGED [AND CONSENTED
TO] BY BANK ONE, NA, AS AGENT TO] BY HUTTIG BUILDING PRODUCTS, INC.
By: By:
---------------------------
Title: Title:
---------------------------
[Attach photocopy of Schedule 1 to Assignment]
----------------------
9 May be eliminated if Assignee is a party to the Credit Agreement prior to the
Effective Date.
EXHIBIT E
TO
CREDIT AGREEMENT
FORM OF BORROWER'S COUNSEL'S OPINION
Attached
To the Persons Listed on Annex 1 hereto
Re: HUTTIG BUILDING PRODUCTS, INC.
------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Huttig Building Products, Inc., a
Delaware corporation (the "Company), and each of the Subsidiaries listed on
Annex 2 hereto (the " Subsidiaries"), and together with the Company, the
"Obligors", and individually, an "Obligor"), in connection with (i) the
execution and delivery by the Company of the Credit Agreement dated as of
December 16, 1999 (the "Credit Agreement") between the Company, Bank One, NA, as
Agent (the "Agent") and the Institutions parties thereto as Lenders (the
"Lenders"), (ii) the execution and delivery by each Subsidiary of a Guaranty,
dated as of December 16, 1999 (collectively, the "Guaranties"), and (iii) the
execution and delivery by the Company of (a) a Revolving Loan Note in favor of
First Union National Bank dated December 16, 1999 in the principal amount of
Twenty Million Dollars ($20,000,000), (b) a Revolving Loan Note in favor of The
Dai-Ichi Kangyo Bank, Ltd. dated December 16, 1999 in the principal amount of
Ten Million Dollars ($10,000,000), (c) a Revolving Loan Note in favor of The
Bank of New York dated December 16, 1999 in the principal amount of Fifteen
Million Dollars ($15,000,000) and (d) a Revolving Loan Note in favor of
Mercantile Bank National Association dated December 16, 1999 in the principal
amount of Fifteen Million Dollars ($15,000,000) (the "Notes"). We are delivering
this opinion letter to you at the Company's request pursuant to Section 5.1(5)
of the Credit Agreement. This opinion letter has been prepared and should be
understood in accordance with the Legal Opinion Principles of the ABA Committee
on Legal Opinions (1998). Capitalized terms used in this opinion that are not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.
The following documents are referred to collectively in this opinion
letter as the "Financing Documents":
1. the Credit Agreement;
2. the Notes; and
3. the Guaranties.
In connection with rendering the opinions set forth below, we have
examined the Financing Documents, the Company's and each Subsidiary's
certificate or articles of incorporation and bylaws (the "Organizational
Documents"), and we have made such other
investigation as we have deemed appropriate. We have also examined and relied as
to matters of fact on certificates of public officials and, as to certain
matters of fact which are material to our opinion, we have also examined and
relied upon a certificate of an officer of the Company and each Subsidiary (each
a "Fact Certificate" and collectively the "Fact Certificates"). A copy of each
Fact Certificate is attached to this opinion letter.
We have also made the assumptions that are customary in opinion letters of
this kind as expressed in the Legal Opinion Principles of the ABA Committee on
Legal Opinions (1998), including the assumptions that each document submitted to
us is accurate and complete, that each such document that is an original is
authentic, that each such document that is a copy conforms to an authentic
original, that each document has been executed and delivered by the duly
authorized representative of each party thereto (other than the Company and
Rugby Building Products, Inc. ("Rugby")), that all signatures on each such
document are genuine, and that no material changes in the facts certified in any
of the Fact Certificates have occurred or will occur after the date of the Fact
Certificate.
The opinions expressed in this opinion letter are limited to the laws of
the Commonwealth of Pennsylvania, federal laws of the United States of America,
and, with respect to the opinion in numbered paragraphs 1, 3 and 4 below, the
General Corporation Law of the State of Delaware. We are not opining on, and we
assume no responsibility with respect to, the applicability to or effect on any
of the matters covered herein of the laws of any other jurisdiction. We note
that the Financing Documents provide that they are to be governed by and
construed in accordance with the laws of the State of Illinois. Our opinion is
given, however, as if the Financing Documents were governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without regard to
its conflict of interest provisions. References in this opinion letter to our
knowledge mean a conscious awareness of facts by lawyers currently with this
Firm who have given substantive attention to legal representation of the Company
or the Subsidiary, as applicable, in matters relating directly to the Financing
Documents.
Based on the foregoing and such other inquiry as to fact and law as we
have deemed necessary, and subject to the foregoing and the additional
qualifications and other matters set forth below, it is our opinion that:
1. Each of the Company and each Subsidiary is a corporation duly
incorporated, validly existing in good standing under the laws of the state of
its incorporation. Each of the Borrower and Rugby has all requisite corporate
power and authority to own and operate its properties, to carry on its business
as now conducted and as currently proposed, to our knowledge, to be conducted,
and, in the case of the Company, to enter into and perform the Credit Agreement
and the Notes, and, in the case of Rugby, to execute, deliver and perform its
Guaranty.
2. Each of the Company and each Subsidiary is duly qualified and in good
standing as a foreign corporation authorized to do business in each jurisdiction
where the nature of its business or the character of its properties makes such
qualification necessary, except where failure to be so qualified would not have
a Material Adverse Effect.
3. The execution and delivery of, and performance of its respective
obligations under, each of the Financing Documents has been duly authorized by
proper corporate action on the part of the Company and Rugby, as applicable,
each of the Financing Documents has been duly executed and delivered by an
authorized officer of the Company and Rugby, as applicable, and constitutes the
legal, valid and binding obligations of the Company and Rugby, as applicable,
enforceable in accordance with their terms, except to the extent that
enforcement thereof may be limited by applicable bankruptcy, insolvency,
fraudulent transaction, reorganization, receivership, moratorium or similar laws
of general application relating to or affecting the rights and remedies of
creditors or by equitable principles, regardless of whether enforcement is
sought in a proceeding in equity or at law and the effect of judicial discretion
on the availability of remedies and realization of benefits under and
enforceability of the Financing Documents in all respects as written, including
but not limited to the recovery of attorneys' fees and the granting of specific
performance or injunctive or other relief. With respect to Rugby's Guaranty, we
note that guaranties are subject to particularly close scrutiny and strict
construction, may be revocable at any time as to loans not yet made and not be
enforceable as to any obligations other than those specifically contemplated by
the Agent and the Lenders, the Company and the Subsidiaries to be incurred
pursuant to the Credit Agreement.
4. The execution and delivery by the Company and each Subsidiary of, and
the performance by the Company and each Subsidiary of its respective obligations
under, the Financing Documents to which it is a party do not require any
approval by or filing with any governmental authority under any statute, rule,
or regulation of the Commonwealth of Pennsylvania or, with respect to the
Company and Rugby, the General Corporation Law of the State of Delaware, or the
United States of America.
5. The execution, delivery and performance of the Credit Agreement and
the Notes by the Company and the execution, delivery and performance of the
Guaranties by the Subsidiaries do not result in any breach or violation of any
of the provisions of, or constitute a default under, require the consent of any
Person under, or result in the creation or imposition of any Lien on the
property of the Company or any Subsidiary pursuant to, the provisions of (i) the
certificate or articles of incorporation or bylaws of the Company or any
Subsidiary (or require any approval of the shareholders of the Company or
Rugby), (ii) any loan agreement or evidence of Indebtedness identified on any
Fact Certificate to which the Company or any Subsidiary is a party, or other
material agreement identified on any Fact Certificate to which the Company or
any Subsidiary is a party or by which any of them or their property is bound or
may be affected, (iii) any law, or
regulation applicable to the Company or any Subsidiary, or (iv) to our knowledge
any order, writ, injunction or decree of any court or Governmental Authority
applicable to the Company or any Subsidiary identified on any Fact Certificate.
This opinion is being furnished to you and your respective successors and
assigns, (the "Addressees") in connection with the closing of the transactions
contemplated by the Financing Documents and for no other purpose and may not be
used by, disclosed to or relied upon by any other person or by the Addressees
for any other purpose without our specific prior written consent except that
each of the Addressees may furnish copies thereof to its independent auditors
and lawyers, to any state, federal or national authority having regulatory
jurisdiction over it, pursuant to any order or legal process of any court or
governmental agency and in connection with any legal action to which it may
become a party arising out of the Financing Documents.
The foregoing opinions are rendered as of the date of this letter. We
assume no obligation to update or supplement any of our opinions to reflect any
changes of law or fact that may occur.
Yours truly,
ANNEX 1
Addressees
Bank One, NA, as Agent and as a Lender
The Chase Manhattan Bank, as a Lender
Comerica Bank, as a Lender
Mercantile Bank National Association, as a Lender
First Union National Bank, as a Lender
The Bank of New York, as a Lender
The Dai-Ichi Kangyo Bank, Ltd., as a Lender
ANNEX 2
Subsidiaries
Rugby USA, Inc., a Georgia corporation
Rugby Building Products, Inc., a Delaware corporation
CIPCO Inc., an Illinois corporation
Rondel's Inc., a Washington corporation
FORM OF FACT CERTIFICATE
------------------------
This Certificate is delivered by HUTTIG BUILDING PRODUCTS, INC.
("Company") to ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP ("K&L") in connection with an opinion
to be rendered by K&L in connection with the Credit Agreement dated as of
December 16, 1999 among the Company , the Institutions from time to time Parties
thereto as Lenders and Bank One, NA, as Agent (the "Credit Agreement"). Defined
terms as used herein shall have the meanings given such terms in the Credit
Agreement.
The undersigned acknowledges that K&L will rely on this Certificate
in rendering its opinion.
1. To the undersigned's knowledge, except as described on
Schedule 1 attached hereto and made a part hereof, there are
no orders, writs, injunctions or decrees of any court or
Governmental Authority applicable to the Company.
2. Schedule 2 attached hereto and made a part hereof identifies
all loan agreements or evidence of Indebtedness to which the
Company is a party, and all other material agreements or
instruments to which the Company is a party or by which it or
any of its property is bound or may be affected.
3. Schedule 3 attached hereto and made a part hereof identifies
all locations where the Company and its subsidiaries as
qualified to do business as a foreign corporation.
Witness the due execution hereof on December , 1999
--
HUTTIG BUILDING PRODUCTS, INC.
---------------------------
FORM OF FACT CERTIFICATE
------------------------
This Certificate is delivered by RUGBY BUILDING PRODUCTS, INC.
("Company") to ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP ("K&L") in connection with an opinion
to be rendered by K&L in connection with the Credit Agreement dated as of
December 16, 1999 among the Company, the Institutions from time to time Parties
thereto as Lenders and Bank One, NA, as Agent and various lenders party thereto
(the "Credit Agreement"). Defined terms as used herein shall have the meanings
given such terms in the Credit Agreement.
The undersigned acknowledges that K&L will rely on this Certificate
in rendering its opinion.
1. To the undersigned's knowledge, except as described on
Schedule 1 attached hereto and made a part hereof, there are
no orders, writs, injunctions or decrees of any court or
Governmental Authority applicable to the Company.
2. Schedule 2 attached hereto and made a part hereof identifies
all loan agreements or evidence of Indebtedness to which the
Company or Rugby USA, Inc. is a party, and all other material
agreements or instruments to which the Company or Rugby USA,
Inc. is a party or by which it or any of its property is bound
or may be affected.
3. Schedule 3 attached hereto and made a part hereof identifies
all locations where the Company and Rugby USA, Inc. are
qualified to do business as a foreign corporation.
4. Neither the Company or Rugby USA, Inc. Is engaged nor proposes
t engage in the business of investing, reinvesting owning,
holding or trading securities, and does not own or propose to
acquire investment securities having a value exceeding 40% of
the Company's or Rugby USA, Inc. Total assets (exclusive of
government securities and cash items) on an unconsolidated
basis.
Witness the due execution hereof on December , 1999
--
RUGBY BUILDING PRODUCTS, INC.
---------------------------
To the Persons Listed on Annex 1 hereto
Re: HUTTIG BUILDING PRODUCTS, INC.
Ladies and Gentlemen:
We have acted as special Missouri counsel to Huttig Building Products,
Inc., a Delaware corporation (the "Company"), and each of the Subsidiaries
listed on Annex 2 hereto (the "Subsidiaries"), and together with the Company,
the "Obligors", and individually, an "Obligor"), in connection with (i) the
execution and delivery by the Company of the Credit Agreement dated as of
December 16, 1999 (the "Credit Agreement") between the Company, Bank One, NA, as
Agent (the "Agent") and the Institutions parties thereto as Lenders (the
"Lenders"), (ii) the execution and delivery by each Subsidiary of a Guaranty,
dated as of December 16, 1999 (collectively, the "Guaranties"), and (iii) the
execution and delivery by the Company of (a) a Revolving Loan Note in favor of
First Union National Bank dated December 16, 1999 in the principal amount of
Twenty Million Dollars ($20,000,000), (b) a Revolving Loan Note in favor of The
Dai-Ichi Kangyo Bank, Ltd. dated December 16, 1999 in the principal amount of
Ten Million Dollars ($10,000,000), (c) a Revolving Loan Note in favor of The
Bank of New York dated December 16, 1999 in the principal amount of Fifteen
Million Dollars ($15,000,000) and (d) a Revolving Loan Note in favor of
Mercantile Bank National Association dated December 16, 1999, in the principal
amount of Fifteen Million Dollars ($15,000,000) (the "Notes"). We are delivering
this opinion letter to you at the Company's request pursuant to the Credit
Agreement. Capitalized terms used in this opinion that are not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
The following documents are referred to collectively in this opinion
letter as the "Financing Documents":
1. the Credit Agreement;
2. the Notes; and
3. the Guaranties.
In connection with rendering the opinions set forth below, we have
examined drafts of the Financing Documents, and we have made such other
investigation as we have deemed appropriate.
In rendering the following opinions, we have further assumed, without
independent investigation but with your permission, that: (a) all parties to the
Financing Documents are duly organized, validly existing and in good standing
under the laws of their respective jurisdictions of organization and have full
right, power, and authority to enter into the Financing Documents; (b) the
execution and delivery of
the Financing Documents have been duly authorized by all necessary action and
proceedings on the part of all parties thereto; (c) the Financing Documents have
been duly executed and delivered by all parties thereto; (d) the Financing
Documents constitute the legal, valid and binding obligations of each of the
parties thereto, enforceable against such parties in accordance with its terms
under the laws of the State of Illinois; and (e) all parties to the Financing
Documents have obtained any and all consents, permits and approvals required by
or from any and all governmental and regulatory agencies, bodies and authorities
in connection with the transactions contemplated thereby, to the extent
necessary for the legality, validity, binding effect or enforceability of the
Financing Documents.
The opinions expressed in this opinion letter are limited to the laws of
the State of Missouri in effect as of the date hereof. We are not opining on,
and we assume no responsibility with respect to, the applicability to or effect
on any of the matters covered herein of the laws of any other jurisdiction. We
note that the Financing Documents provide that they are to be governed by and
construed in accordance with the laws of the State of Illinois.
Based on the foregoing and such other inquiry as to fact and law as we
have deemed necessary, and subject to the foregoing and the additional
qualifications and other matters set forth below, it is our opinion that: 1. If
the Financing Documents were governed by the laws of the State of Missouri (as
opposed to the laws of the State of Illinois as set forth in the Financing
Documents), the Financing Documents would constitute the legal, valid and
binding obligation of the Obligors and would be enforceable against the Obligors
in accordance with their respective terms, (a) except as such enforceability may
be limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance,
fraudulent transfer, redemption, moratorium, reorganization or similar laws
affecting the enforcement of creditors' rights generally, including, without
limitation, (A) the United States Bankruptcy Code of 1978, as amended, and thus
comprehends, among others, matters of turn-over, automatic stay, avoiding
powers, fraudulent transfer, preference, discharge, conversion of a non-recourse
obligation into a recourse claim, limitations on ipso facto and anti-assignment
clauses and the coverage of pre-petition security agreements and other liens
with respect to property acquired after a petition is filed, (B) all other
Federal, state and foreign bankruptcy, insolvency, reorganization, receivership,
moratorium, arrangement and assignment for the benefit of creditors laws that
affect the rights and remedies of creditors generally, (C) state and foreign
fraudulent transfer and conveyance laws and (D) judicially developed doctrines
relevant to any of the foregoing laws, such as substantive consolidation of
entities and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law), including,
without limitation, principles (A) governing the availability of specific
performance, injunctive relief or other equitable remedies, which generally
place the award of such remedies, subject to certain guidelines, in the
discretion of the court to which application for such relief is made, (B)
affording equitable defenses (e.g., waiver, laches and estoppel) against a party
seeking enforcement, (C) requiring good faith and fair dealing in the
performance and enforcement of a contract by the party seeking its enforcement,
(D) requiring reasonableness in the performance and enforcement of an agreement
by the party seeking enforcement of the contract, (E) requiring consideration of
the materiality of a breach and the consequences of the breach to the party
seeking enforcement, (F) requiring consideration of the impracticability or
impossibility of performance at the time of attempted enforcement and (G)
affording defenses based upon the unconscionability of the enforcing party's
conduct after the parties have entered into the contract and (b) subject to the
fact that certain covenants, provisions, rights and remedies contained in the
Financing Documents may be rendered ineffective or limited by applicable laws or
judicial decisions governing such provisions, but such laws and judicial
decisions do not in and of themselves, in our opinion, make the Financing
Documents inadequate for the practical realization of the benefits and security
intended to be provided by the Financing Documents. 2. We believe that a
Missouri court, or a Federal court sitting in Missouri, would honor the choice
of Illinois law to govern the Financing Documents, thereby giving effect to the
choice of law terms contained in the Financing Documents providing that the
Financing Documents will be governed by the laws of the State of Illinois. Our
opinion is based upon our belief that such court would apply the standard
followed by the courts in ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 333 Mo. 59, 62 S.W.2d 732 (1933),
Merchants' & Manufacturers' Securities Co. ▇. ▇▇▇▇▇▇▇, 69 F.2d 940 (8th Cir.
1934), cert. denied, ▇▇▇ ▇.▇. ▇▇▇ (1934); and ▇▇▇▇▇▇ ▇. Aetna Life Insurance
Co., 359 F. Supp. 271 (W.D. Mo. 1973), which provide that generally the choice
of law made by parties to a contract will be honored if the chosen jurisdiction
bears a reasonable relationship to the transaction. We have also specifically
assumed that (a) (i) the issuance of the Notes pursuant to the Financing
Documents will take place in the State of Illinois; and (ii) the Notes are
initially payable in the State of Illinois; (b) that a court would determine,
based on such facts, that the choice of law bears a reasonable relationship to
the transaction(s) contemplated by the Financing Documents; (c) the parties have
acted in good faith in selecting the choice of law and not for the purpose of
evading the law of a jurisdiction which might otherwise be deemed the real situs
of the contract; and (d) the agreement as to the choice of law does not
contravene the public policy of Missouri or of the forum.
The opinion set forth above is subject to the qualification and limitation
that we are members of the bar of the State of Missouri and our examination of
laws relevant to matters herein is consequently limited to the laws of Missouri
in effect as of the date hereof. Accordingly, we express no opinion as to
matters governed by federal law or the laws of any other state or jurisdiction.
This opinion is being furnished to you and your respective successors and
assigns, (the "Addressees") in connection with the closing of the transactions
contemplated by the Financing Documents and for no other purpose and may not be
used by, disclosed to or relied upon by any other person or by the Addressees
for any other purpose without our specific prior written consent except that
each of the Addressees may furnish copies thereof to its independent auditors
and lawyers, to any state, federal or national authority having regulatory
jurisdiction over it, pursuant to any order or legal process of any court or
governmental agency and in connection with any legal action to which it may
become a party arising out of the Financing Documents.
The foregoing opinions are rendered as of the date of this letter. We
assume no obligation to update or supplement any of our opinions to reflect any
changes of law or fact that may occur.
Very truly yours,
ANNEX 1
ADDRESSEES
Bank One, NA, as Agent and as a Lender
The Chase Manhattan Bank, as a Lender
Comerica Bank, as a Lender
Mercantile Bank National Association, as Lender
First Union National Bank, as a Lender
The Bank of New York, as a Lender
The Dai-Ichi Kangyo Bank, Ltd., as a Lender
ANNEX 2
SUBSIDIARIES
Rugby USA, Inc., a Georgia corporation
Rugby Building Products, Inc., a Delaware corporation
CIPCO Inc., an Illinois corporation
Rondel's Inc., a Washington corporation
EXHIBIT F
TO
CREDIT AGREEMENT
LIST OF CLOSING DOCUMENTS
Attached
$125,000,000
CREDIT FACILITY
TO
HUTTIG BUILDING PRODUCTS, INC.
LIST OF CLOSING DOCUMENTS1
A. LOAN DOCUMENTS
o Credit Agreement (the "CREDIT AGREEMENT") by and among Huttig Building
Products, Inc., a Delaware corporation (the "BORROWER"), the institutions from
time to time parties thereto as Lenders (the "LENDERS"), Bank One, NA (having
its principal office in Chicago, Illinois), in its capacity as Agent for itself
and the other Lenders (the "AGENT"), and Banc One Capital Markets, Inc. as lead
arranger and sole bookrunner (the "ARRANGER"), evidencing a $125,000,000
revolving credit facility.
EXHIBITS
EXHIBIT A -- Revolving Loan Commitments (Definitions)
EXHIBIT B -- Form of Borrowing/Election Notice
(Sections 2.2, 2.7 and 2.9)
EXHIBIT C -- Form of Request for Letter of Credit (Section 3.4)
EXHIBIT D -- Form of Assignment and Acceptance Agreement
(Sections 2.19 and 13.3)
EXHIBIT E -- FORM OF BORROWER'S COUNSELS' OPINION (Section 5.1)
EXHIBIT F -- List of Closing Documents (Section 5.1)
EXHIBIT G -- Form of Officer's Certificate (Sections 5.2 and
7.1(A)(iii))
EXHIBIT H -- Form of Compliance Certificate (Sections 5.2 and
7.1(A)(iii))
EXHIBIT I -- Form of Guaranty (Definitions)
SCHEDULES
SCHEDULE 1.1.1 -- PERMITTED EXISTING INDEBTEDNESS (DEFINITIONS)
SCHEDULE 1.1.2 -- PERMITTED EXISTING INVESTMENTS (DEFINITIONS)
SCHEDULE 1.1.3 -- PERMITTED EXISTING LIENS (DEFINITIONS)
SCHEDULE 1.1.4 -- PERMITTED EXISTING CONTINGENT OBLIGATIONS (DEFINITIONS)
SCHEDULE 3.2 -- TRANSITIONAL LETTERS OF CREDIT (SECTION 3.2)
--------------
1 Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Credit Agreement. BOLD/ITALICIZED documents shall
be prepared and/or provided by the Borrower and/or Borrower's Counsel
SCHEDULE 5.1 -- TERMINATED INDEBTEDNESS (SECTION 5.1)
SCHEDULE 6.3 -- CONFLICTS; GOVERNMENTAL CONSENTS (SECTION 6.3)
SCHEDULE 6.4 -- PRO FORMA FINANCIAL STATEMENTS (SECTION 6.4(A))
SCHEDULE 6.7 -- LITIGATION; LOSS CONTINGENCIES (SECTION 6.7)
SCHEDULE 6.8 -- SUBSIDIARIES (SECTION 6.8)
SCHEDULE 6.9 -- ERISA (SECTION 6.9)
SCHEDULE 6.18 -- SPIN-OFF TRANSACTIONS AND RUGBY ACQUISITION CONDITIONS
(SECTION 6.18)
SCHEDULE 6.19 -- ENVIRONMENTAL MATTERS (SECTION 6.19)
o Guaranty executed by each Subsidiary of the Borrower listed on APPENDIX A
attached hereto in favor of the Agent.
B. CORPORATE DOCUMENTS
o CERTIFICATE OF THE SECRETARY OF THE BORROWER CERTIFYING (I) RESOLUTIONS OF
THE BOARD OF DIRECTORS OF THE BORROWER (A) APPROVING THE ACQUISITION (THE "RUGBY
ACQUISITION") OF CERTAIN ASSETS AND LIABILITIES OF RUGBY USA, INC., A GEORGIA
CORPORATION ("RUGBY USA") AND (B) AUTHORIZING THE EXECUTION, DELIVERY AND
PERFORMANCE OF EACH DOCUMENT TO WHICH IT IS A PARTY, (II) THAT THERE HAVE BEEN
NO CHANGES IN THE CERTIFICATE OF INCORPORATION OF THE BORROWER SINCE THE DATE OF
THE MOST RECENT CERTIFICATION THEREOF BY THE SECRETARY OF STATE OF DELAWARE (AN
ORIGINAL OF WHICH IS ATTACHED THERETO), (III) THE NAMES AND TRUE SIGNATURES OF
THE INCUMBENT OFFICERS OF THE BORROWER AUTHORIZED TO SIGN THE DOCUMENTS TO WHICH
IT IS A PARTY AND AUTHORIZED TO REQUEST BORROWINGS UNDER THE CREDIT AGREEMENTS,
AND (IV) THE BY-LAWS (ATTACHED THERETO) OF THE BORROWER AS IN EFFECT ON THE DATE
OF SUCH CERTIFICATION.
o CERTIFICATE OF INCORPORATION OF THE BORROWER CERTIFIED BY THE SECRETARY OF
STATE OF DELAWARE.
o GOOD STANDING CERTIFICATE FOR THE BORROWER FROM THE OFFICE OF THE
SECRETARY OF STATE OF DELAWARE.
o CERTIFICATE OF THE SECRETARY OF EACH SUBSIDIARY LISTED ON APPENDIX A
ATTACHED HERETO, CERTIFYING (I) RESOLUTIONS OF THE BOARD OF DIRECTORS OF EACH
SUCH SUBSIDIARY APPROVING AND AUTHORIZING THE EXECUTION, DELIVERY AND
PERFORMANCE OF EACH DOCUMENT TO WHICH IT IS A PARTY, (II) THAT THERE HAVE BEEN
NO CHANGES IN THE CERTIFICATE OF INCORPORATION OF ANY SUCH SUBSIDIARY SINCE THE
DATE OF THE MOST RECENT CERTIFICATION THEREOF BY THE APPROPRIATE GOVERNMENTAL
AUTHORITY, AS INDICATED ON APPENDIX A ATTACHED HERETO, (ORIGINALS OF WHICH ARE
ATTACHED THERETO), (III) THE NAMES AND TRUE SIGNATURES OF THE INCUMBENT OFFICERS
OF EACH SUCH SUBSIDIARY AUTHORIZED TO SIGN THE DOCUMENTS TO WHICH IT IS A PARTY,
AND (IV) THE BY-LAWS (ATTACHED THERETO) OF EACH SUCH SUBSIDIARY AS IN EFFECT ON
THE DATE OF SUCH CERTIFICATION.
o CERTIFICATES OF INCORPORATION OF EACH SUBSIDIARY IDENTIFIED ON APPENDIX A
ATTACHED HERETO, CERTIFIED BY THE SECRETARY OF STATE OF ITS RESPECTIVE
JURISDICTION OF INCORPORATION.
o GOOD STANDING CERTIFICATES FOR EACH SUBSIDIARY FROM THE OFFICES OF THE
APPROPRIATE SECRETARY OF STATE OF ITS RESPECTIVE JURISDICTION OF INCORPORATION,
AS INDICATED ON APPENDIX A AND ATTACHED HERETO.
C. SPIN-OFF DOCUMENTATION
o FORM 10 GENERAL FORM FOR THE REGISTRATION OF SECURITIES, AS AMENDED, FILED
BY THE BORROWER (FILE NO. 1-15313) WITH THE SECURITIES AND EXCHANGE COMMISSION
IN CONNECTION WITH THE SPIN-OFF, TOGETHER WITH ALL EXHIBITS AND SCHEDULES
THERETO.
D. ACQUISITION DOCUMENTATION
o SHARE EXCHANGE AGREEMENT, AS IN EFFECT ON OCTOBER 19, 1999, TOGETHER WITH
ALL SCHEDULES AND EXHIBITS AND ANY AMENDMENTS THERETO.
o COPIES OF ALL CONSENTS REQUIRED PURSUANT TO SECTIONS 3.6 AND 4.6 OF THE
SHARE EXCHANGE AGREEMENT.
o THE REGISTRATION RIGHTS AGREEMENT, AS IN EFFECT ON DECEMBER 16, 1999,
TOGETHER WITH ALL SCHEDULES AND EXHIBITS AND ANY AMENDMENTS THERETO.
o THE TRANSITION SERVICES AGREEMENT, AS IN EFFECT ON DECEMBER 16, 1999,
TOGETHER WITH ALL SCHEDULES AND EXHIBITS AND ANY AMENDMENTS THERETO.
o EVIDENCE SATISFACTORY TO THE ADMINISTRATIVE AGENT OF U.S. GOVERNMENTAL
APPROVAL OF THE RUGBY ACQUISITION UNDER THE ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED.
E. PAYOFF DOCUMENTATION
o PAYOFF LETTERS TO THE AGENT EVIDENCING THE PAYMENT OF ALL PRINCIPAL AND
INTEREST ON ANY LOANS OUTSTANDING UNDER ALL OUTSTANDING DEBT AND CREDIT
FACILITIES OF THE BORROWER AND EACH OF ITS SUBSIDIARIES IDENTIFIED ON SCHEDULE
5.1 TO THE CREDIT AGREEMENT.
F. OPINIONS
o OPINION OF SPECIAL COUNSEL FOR THE BORROWER AND THE SUBSIDIARIES WITH
RESPECT TO THE CREDIT AGREEMENT
▇. ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ , LLP
B. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
G. CLOSING CERTIFICATES AND MISCELLANEOUS
o OFFICER'S NO-DEFAULT CERTIFICATE FROM THE CHIEF FINANCIAL OFFICER OF THE
BORROWER.
o CLOSING CERTIFICATE ADDRESSING CERTAIN CLOSING CONDITIONS SET FORTH IN
SECTION 5.1 OF THE CREDIT AGREEMENT, EXECUTED BY AN AUTHORIZED OFFICER OF THE
BORROWER.
o FUNDS FLOW MEMORANDUM AND DISBURSEMENT DIRECTION LETTER EXECUTED BY THE
BORROWER AND ADDRESSED TO THE AGENT AND THE LENDERS.
o NOTICE OF BORROWING. (See Exhibit B to Credit Agreement)
o Financial Condition Certificate delivered by the Borrower's chief
financial officer with appropriate supporting information attached, including,
without limitation, (A) PRO FORMA OPENING FINANCIAL STATEMENTS; AND (B)
BORROWER'S PROJECTIONS FOR THE SIX (6) YEARS FOLLOWING CLOSING.
o AUDITED FINANCIAL STATEMENTS OF THE BORROWER.
o AUDITED FINANCIAL STATEMENTS OF RUGBY USA.
o PRO FORMA OPENING CONSOLIDATED FINANCIAL STATEMENT OF THE BORROWER AND ITS
SUBSIDIARIES.
o Summary of Environmental Issues AND ENVIRONMENTAL INVESTIGATION REPORTS.
o AGENT FOR SERVICE OF PROCESS LETTER.
o Revolving Notes executed by the Borrower in favor of First Union National
Bank, The Dai-Ichi Kangyo Bank, Ltd. and The Bank of New York (collectively, the
"REQUESTING REVOLVING LENDERS") in the aggregate principal amount of each
Requesting Revolving Lender's respective Revolving Loan Commitment under the
Credit Agreement.
H. POST-CLOSING ITEMS
o NOTE PURCHASE AGREEMENT BETWEEN THE BORROWER AND CERTAIN PURCHASERS OF THE
SENIOR NOTES.
o SENIOR NOTES IN THE AGGREGATE PRINCIPAL AMOUNT OF UP TO $75,000,000 ISSUED
BY THE BORROWER PURSUANT TO THE NOTE PURCHASE AGREEMENT.
APPENDIX A
SUBSIDIARIES OF HUTTIG
SUBSIDIARY NAME STATE OF INCORPORATION
----------------------------------------------------------------
Rondel's Inc. Washington
CIPCO Inc. Illinois
Rugby USA, Inc. Georgia
Rugby Building Products, Inc. Delaware
EXHIBIT G
TO
CREDIT AGREEMENT
FORM OF OFFICER'S CERTIFICATE
OFFICER'S CERTIFICATE
I, the undersigned, hereby certify that I am the of
------------------
Huttig Building Products, Inc., a corporation duly organized and existing under
the laws of the State of Delaware (the "Borrower"). Capitalized terms used
herein and not otherwise defined herein are as defined in that certain Credit
Agreement dated as of December 16, 1999, among the Borrower, the financial
institutions from time to time parties thereto and Bank One, NA (having its
principal office in Chicago, Illinois), as contractual representative (as
amended, restated, supplemented or modified from time to time, the "Credit
Agreement").
I further certify that, pursuant to [SECTION 5.2] [SECTION 7.1(A)] of the
Credit Agreement, as of the date hereof:
1. No Default or Unmatured Default exists [other than the following
(describe the nature of the Default or Unmatured Default and the status
thereof)].
2. The representations and warranties of the Borrower contained in ARTICLE
VI of the Credit Agreement are true and correct in all material respects.
IN WITNESS WHEREOF, I hereby subscribe my name on behalf of the Borrower
on this day of , .
---- ----------- ----
----------------------------
[Insert Name of Officer]
EXHIBIT H
TO
CREDIT AGREEMENT
FORM OF COMPLIANCE CERTIFICATE
COMPLIANCE CERTIFICATE
Pursuant to [SECTION 5.2] [SECTION 7.1(A)(III)] of the Credit Agreement
(as amended, modified, restated or supplemented from time to time, the "Credit
Agreement"), dated as of December 16, 1999 among Huttig Building Products, Inc.
(the "Borrower"), the financial institutions parties thereto (the "Lenders"),
Bank One, NA (having its principal office in Chicago, Illinois), individually
and as agent (the "Agent") on behalf of the Lenders, and Banc One Capital
Markets, Inc., as (the "Lead Arranger and Sole Book Runner") on behalf of the
Lenders, the Borrower, through its , hereby delivers
---------------------------
to the Agent[, together with the financial statements being delivered to the
Agent pursuant to SECTION 7.1(A) of the Credit Agreement,] this Compliance
Certificate (the "Certificate") [for the accounting period from ,
-------------
19 /20 to , 20 (the "Accounting Period")]. Capitalized terms
-- -- ----------- --
used herein shall have the meanings set forth in the Credit Agreement.
Subsection references herein relate to subsections of the Credit Agreement.
THE UNDERSIGNED, SOLELY IN HIS OR HER CAPACITY AS AN OFFICER OF THE BORROWER
(AND NOT INDIVIDUALLY) HEREBY CERTIFIES THAT:
1. I am the duly elected of the Borrower;
----------------
2. I have made, or have caused to be made under my supervision, a detailed
review of the terms of the Credit Agreement and of the transactions and
conditions of the Borrower and its Subsidiaries during the Accounting Period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose the existence of
any condition or event which constitutes a Default or Unmatured Default during
or at the end of the Accounting Period covered by the attached financial
statements or as of the date of this Certificate [except as set forth below];
and
4. Schedule I attached hereto sets forth financial data and computations
evidencing the Borrower's compliance with certain covenants of the Credit
Agreement, all of which data and computations are true, complete and correct.
The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this day of , 20 .
--- -------- --
SCHEDULE I
to COMPLIANCE CERTIFICATE
I. SECTION 2.14: PRICING CALCULATIONS
LEVERAGE RATIO (SECTION 2.14(D))
1. All Indebtedness (other than Hedging Obligations)
(as defined) of the Borrower and its Subsidiaries $
-------------
2. EBITDA (EBIT (as defined below) + depreciation
+ amortization + other non-cash charges
classified as long-term deferrals + other
extraordinary non-cash charges other
extraordinary non-cash credits + any non-
recurring after-tax losses - any non-
recurring after-tax gains $
-------------
3. "Leverage Ratio"
(Ratio of (1) to (2)) TO 1.0
----
II. SECTION 7.4: FINANCIAL COVENANTS
A. MAXIMUM LEVERAGE RATIO (SECTION 7.4(A))
1. "Leverage Ratio" (See SECTION I.3 ABOVE)
(Maximum Ratio: 3.00 to 1.00 for each
four fiscal quarter period) TO 1.0
---
B. MINIMUM CONSOLIDATED NET WORTH (SECTION 7.4(B))
1. Consolidated Net Worth of Company
and its Subsidiaries as of the last day
of the fiscal quarter ending
on , $
----------- ---- -------------
2. $ PLUS fifty percent (50%) of
-----------
Net Income (if positive) earned in each
fiscal quarter calculated beginning with
the fiscal quarter ending March 31, 2000
PLUS 100% of any positive adjustment to
stockholders' equity resulting from any
transaction involving any capital
contribution to the Borrower or the
issuance by the Borrower or any Subsidiary
of Capital Stock to the extent such capital
contribution or any other cash or other
property received by the Borrower or such
Subsidiary from such issuance is used by
the Borrower or any
Subsidiary to pay all or part of the
purchase price of any Permitted
Acquisition $
-------------
3. State whether (1) is less than (2) YES/NO
------
C. MINIMUM INTEREST EXPENSE COVERAGE RATIO (SECTION 7.4(C))
1. EBIT (Net Income + Interest
Expense + taxes + other non-cash
charges classified as long-term
deferrals + other extraordinary
non-cash credits - other
extraordinary non-cash credits + any
non-recurring after-tax losses - any
non-recurring after-tax gains for the
period from to $
------- -------- -------------
2. Rentals for the period from $
to -------------
--------- ------------
3. Interest Expense for the period
from to $
-------- ---------- -------------
4. "Interest Expense Coverage Ratio"
(Ratio of (1) PLUS (2) to (3)) TO 1.0
----
(Minimum Ratio: 1.75 to 1.00 for each
four fiscal quarter period through
the quarter ending December 31, 2000,
and 2.00 to 1.00 for each four fiscal
quarter period thereafter)
III. OTHER MISCELLANEOUS PROVISIONS
A. INDEBTEDNESS (Section 7.3(A))
1. Aggregate Permitted Purchase Money Indebtedness $
(Maximum: $5,000,000) ---------------
2. Maximum additional unsecured Indebtedness not
otherwise permitted under Sections 7.3(A)(i)
to (x) $
(Maximum: $500,000) ---------------
B. ASSET SALES (Section 7.3(B))
1. 10% of Consolidated Assets at the end of the
immediately preceding fiscal year $
---------------
2. Aggregate amount of all assets sold during
the immediately preceding 12 month period $
---------------
3. 20% of Consolidated Assets at the end of
the immediately preceding fiscal year $
---------------
4. Aggregate amount of all assets sold since
the Closing Date $
---------------
C. INVESTMENTS (Section 7.3(D))
1. Maximum additional Investments not otherwise
permitted under Sections 7.3(D)(i) to (viii) $
(Maximum: $1,000,000) ---------------
D. CONTINGENT OBLIGATIONS (Section 7.3(E))
1. Maximum additional Contingent Obligations
not otherwise permitted under Sections
7.3(E)(i) to (viii) $
(Maximum: $10,000,000) ---------------
E. RESTRICTED PAYMENTS (Section 7.3(F))
1. State whether any Restricted Payments have
occurred during the Accounting Period. YES/NO
2. If the answer to (a) is yes, set forth on
Schedule A hereto a description of the
Restricted Payments and a calculation of the
covenant compliance.
F. PERMITTED ACQUISITIONS (Section 7.3(G))
1. State whether any Permitted Acquisition has
occurred during the Accounting period. YES/NO
2. If the answer to (a) is yes, set forth on
Schedule A hereto a description of such
Permitted Acquisition(s) and the calculations
necessary to show compliance with the
requirements of Section 7.3(G).
The Borrower hereby certifies, through its ,
-----------------
that the information set forth above is accurate as of
, , to the best of such officer's knowledge, after
------------- ---
after diligent inquiry, and that the financial statements delivered
herewith present fairly the financial position of the Borrower and
its Subsidiaries at the dates indicated and the results of their
operations and changes in their financial position for the periods
indicated in conformity with Agreement Accounting Principles,
consistently applied.
Dated: ,
------------ ----
HUTTIG BUILDING PRODUCTS, INC.
By:
---------------------------
Name:
Title:
EXHIBIT I
TO
CREDIT AGREEMENT
FORM OF GUARANTY
[Attached].
FORM OF GUARANTY
THIS GUARANTY (this "GUARANTY") is made as of the day of December,
----
1999, by and among Rondel's Inc., a Washington corporation; CIPCO Inc., an
Illinois corporation; Rugby USA, Inc., a Georgia corporation; and Rugby Building
Products, Inc., a Delaware corporation (collectively, the "INITIAL GUARANTORS"
and along with any additional Subsidiaries of he Company, which become parties
to this Guaranty by executing an Addendum hereto in the form attached as Annex
I, the "GUARANTORS") in favor of the Agent, for the ratable benefit of the
Holders of Obligations, under (and as defined in) the Credit Agreement referred
to below;
WITNESSETH:
WHEREAS, HUTTIG BUILDING PRODUCTS, INC., a Delaware corporation (the
"BORROWER"), the institutions from time to time parties hereto as Lenders, BANK
ONE, NA, a national banking association having its principal office in Chicago,
Illinois, in its capacity as contractual representative (the "AGENT") for itself
and the other Lenders, and BANC ONE CAPITAL MARKETS, INC., as Lead Arranger and
Sole Bookrunner (the "ARRANGER") have entered into a certain Credit Agreement
dated as of December 13, 1999 (as the same may be amended, modified,
supplemented and/or restated, and as in effect from time to time, the "CREDIT
AGREEMENT"), providing, subject to the terms and conditions thereof, for
extensions of credit and other financial accommodations to be made by the
Lenders to the Borrower;
WHEREAS, it is a condition precedent to the initial extensions of credit
by the Lenders under the Credit Agreement that each of the Guarantors
(constituting all of the Subsidiaries of the Borrower required to execute this
Guaranty pursuant to SECTION 7.2(K) of the Credit Agreement) execute and deliver
this Guaranty, whereby each of the Guarantors shall guarantee the payment when
due of all "Obligations" (as defined in the Credit Agreement), principal,
interest, letter of credit reimbursement obligations and other amounts that
shall be at any time payable by the Borrower under the Credit Agreement and the
other Loan Documents; and
WHEREAS, in consideration of the direct and indirect financial and other
support that the Borrower has provided, and such direct and indirect financial
and other support as the Borrower may in the future provide, to the Guarantors,
and in order to induce the Lenders and the Agent to enter into the Credit
Agreement, each of the Guarantors is willing to guarantee the obligations of the
Borrower under the Credit Agreement and the obligations of the Borrower or any
of its Subsidiaries under any of the other Loan Documents;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION l. DEFINITIONS. Terms defined in the Credit Agreement and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein.
SECTION 2. REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the
Guarantors represents and warrants (which representations and warranties shall
be deemed to have been renewed at the time of the making, conversion or
continuation of any Loan or issuance of any Letter of Credit) that:
(a) It is a corporation, limited liability company, partnership or
other commercial entity duly incorporated or formed, validly existing and in
good standing under the laws of its jurisdiction of incorporation or formation
and has all requisite authority to conduct its business as a foreign Person in
each jurisdiction in which its business is conducted, except where the failure
to have such requisite authority would not have a Material Adverse Effect.
(b) It has the power and authority and legal right to execute and
deliver this Guaranty and to perform its obligations hereunder. The execution
and delivery by it of this Guaranty and the performance by it of its obligations
hereunder have been duly authorized by proper proceedings, and this Guaranty
constitutes a legal, valid and binding obligation of such Guarantor, enforceable
against such Guarantor in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally.
(c) Neither the execution and delivery by it of this Guaranty, nor
the consummation by it of the transactions herein contemplated, nor compliance
by it with the terms and provisions hereof, will violate any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on it or
its certificate or articles of incorporation or by-laws, limited liability
company or partnership agreement (as applicable) or the provisions of any
indenture, instrument or material agreement to which it is a party or is
subject, or by which it, or its property, is bound, or conflict with or
constitute a default thereunder, or result in the creation or imposition of any
Lien in, of or on its property pursuant to the terms of any such indenture,
instrument or material agreement. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any Governmental Authority, is required to authorize, or is
required in connection with the execution, delivery and performance by it of, or
the legality, validity, binding effect or enforceability against it of, this
Guaranty.
In addition to the foregoing, each of the Guarantors covenants that,
so long as any Lender has any Revolving Loan Commitment outstanding under the
Credit Agreement or any amount payable under the Credit Agreement or any other
Obligations shall remain unpaid, it will, and, if necessary, will enable the
Borrower to, fully comply with those covenants and agreements of the Borrower
applicable to such Guarantor set forth in the Credit Agreement.
SECTION 3. THE GUARANTY. Each of the Guarantors hereby unconditionally
guarantees, jointly with the other Guarantors and severally, the full and
punctual payment when due (whether at stated maturity, upon acceleration or
otherwise) of the Obligations, including, without
limitation, (i) the principal of and interest on each Advance made to the
Borrower pursuant to the Credit Agreement, (ii) any Reimbursement Obligations of
the Borrower and (iii) all other amounts payable by the Borrower or any of its
Subsidiaries under the Credit Agreement and the other Loan Documents (all of the
foregoing being referred to collectively as the "GUARANTEED OBLIGATIONS"). Upon
failure by the Borrower or any of their respective Affiliates, as applicable, to
pay punctually any such amount, each of the Guarantors agrees that it shall
forthwith on demand pay such amount at the place and in the manner specified in
the Credit Agreement or the relevant Loan Document, as the case may be. Each of
the Guarantors hereby agrees that this Guaranty is an absolute, irrevocable and
unconditional guaranty of payment and is not a guaranty of collection.
SECTION 4. GUARANTY UNCONDITIONAL. The obligations of each of the
Guarantors hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, indulgence, compromise, waiver or
release of or with respect to the Guaranteed Obligations or any part
thereof or any agreement relating thereto, or with respect to any
obligation of any other guarantor of any of the Guaranteed Obligations,
whether (in any such case) by operation of law or otherwise, or any
failure or omission to enforce any right, power or remedy with respect to
the Guaranteed Obligations or any part thereof or any agreement relating
thereto, or with respect to any obligation of any other guarantor of any
of the Guaranteed Obligations;
(ii) any modification or amendment of or supplement to the Credit
Agreement or any other Loan Document, including, without limitation, any
such amendment which may increase the amount of the Obligations guaranteed
hereby;
(iii) any release, surrender, compromise, settlement, waiver,
subordination or modification, with or without consideration, of any
collateral securing the Guaranteed Obligations or any part thereof, any
other guaranties with respect to the Guaranteed Obligations or any part
thereof, or any other obligation of any person or entity with respect to
the Guaranteed Obligations or any part thereof, or any nonperfection or
invalidity of any direct or indirect security for the Guaranteed
Obligations;
(iv) any change in the corporate, partnership or other existence,
structure or ownership of the Borrower or any other guarantor of any of
the Guaranteed Obligations, or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting the Borrower or any other guarantor
of the Guaranteed Obligations, or any of their respective assets or any
resulting release or discharge of any obligation of the Borrower or any
other guarantor of any of the Guaranteed Obligations;
(v) the existence of any claim, setoff or other rights which the
Guarantors may have at any time against the Borrower, any other guarantor
of any of the Guaranteed Obligations, the Agent, any Holder of Obligations
or any other Person, whether in connection herewith or in connection with
any unrelated transactions, PROVIDED that
nothing herein shall prevent the assertion of any such claim by separate
suit or compulsory counterclaim;
(vi) the enforceability or validity of the Guaranteed Obligations or any
part thereof or the genuineness, enforceability or validity of any
agreement relating thereto or with respect to any collateral securing the
Guaranteed Obligations or any part thereof, or any other invalidity or
unenforceability relating to or against the Borrower or any other
guarantor of any of the Guaranteed Obligations, for any reason related to
the Credit Agreement, any other Loan Document, or any provision of
applicable law or regulation purporting to prohibit the payment by the
Borrower or any other guarantor of the Guaranteed Obligations, of any of
the Guaranteed Obligations;
(vii) the failure of the Agent to take any steps to perfect and maintain
any security interest in, or to preserve any rights to, any security or
collateral for the Guaranteed Obligations, if any;
(viii) the election by, or on behalf of, any one or more of the Holders of
Obligations, in any proceeding instituted under Chapter 11 of Title 11 of
the United States Code (11 U.S.C. 101 et seq.) (the "Bankruptcy Code"), of
the application of Section 1111(b)(2) of the Bankruptcy Code;
(ix) any borrowing or grant of a security interest by the Borrower, as
debtor-in-possession, under Section 364 of the Bankruptcy Code;
(x) the disallowance, under Section 502 of the Bankruptcy Code, of all or
any portion of the claims of any of the Holders of Obligations or the
Agent for repayment of all or any part of the Guaranteed Obligations;
(xi) the failure of any other Guarantor to sign or become party to this
Guaranty or any amendment, change, or reaffirmation hereof; or
(xii) any other act or omission to act or delay of any kind by the
Borrower, any other guarantor of the Guaranteed Obligations, the Agent,
any Holder of Obligations or any other Person or any other circumstance
whatsoever which might, but for the provisions of this SECTION 4,
constitute a legal or equitable discharge of any Guarantor's obligations
hereunder.
SECTION 5. DISCHARGE ONLY UPON PAYMENT IN FULL: REINSTATEMENT IN CERTAIN
CIRCUMSTANCES. Each of the Guarantors' obligations hereunder shall remain in
full force and effect until all Guaranteed Obligations shall have been paid in
full in cash and the Revolving Loan Commitments and all Letters of Credit issued
under the Credit Agreement shall have terminated or expired. If at any time any
payment of the principal of or interest on any Advance, any Reimbursement
Obligation or any other amount payable by the Borrower or any other party under
the Credit Agreement, or any other Loan Document is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of the Borrower or
otherwise, each of the Guarantors' obligations hereunder with respect to such
payment shall be reinstated as though such payment had been due but not made at
such time.
SECTION 6. GENERAL WAIVERS. Each of the Guarantors irrevocably waives
acceptance hereof, presentment, demand or action on delinquency, protest, the
benefit of any statutes of limitations and, to the fullest extent permitted by
law, any notice not provided for herein, as well as any requirement that at any
time any action be taken by any Person against the Borrower, any other guarantor
of the Guaranteed Obligations, or any other Person.
SECTION 7. SUBORDINATION OF SUBROGATION. Until the Guaranteed Obligations
have been indefeasibly paid in full in cash, the Guarantors (i) shall have no
right of subrogation with respect to such Guaranteed Obligations and (ii) waive
any right to enforce any remedy which the Holders of Obligations, Issuing Banks
or the Agent now have or may hereafter have against the Borrower, any endorser
or any guarantor of all or any part of the Guaranteed Obligations or any other
Person, and the Guarantors waive any benefit of, and any right to participate
in, any security or collateral given to the Holders of Obligations, the Issuing
Banks and the Agent to secure the payment or performance of all or any part of
the Guaranteed Obligations or any other liability of the Borrower to the Holders
of Obligations or Issuing Banks. Should any Guarantor have the right,
notwithstanding the foregoing, to exercise its subrogation rights, each
Guarantor hereby expressly and irrevocably (A) subordinates any and all rights
at law or in equity to subrogation, reimbursement, exoneration, contribution,
indemnification or set off that the Guarantor may have to the indefeasible
payment in full in cash of the Guaranteed Obligations and (B) waives any and all
defenses available to a surety, guarantor or accommodation co-obligor until the
Guaranteed Obligations are indefeasibly paid in full in cash. Each Guarantor
acknowledges and agrees that this subordination is intended to benefit the Agent
and the Holders of Obligations and shall not limit or otherwise affect such
Guarantor's liability hereunder or the enforceability of this Guaranty, and that
the Agent, the Holders of Obligations and their respective successors and
assigns are intended third party beneficiaries of the waivers and agreements set
forth in this SECTION 7.
SECTION 8. CONTRIBUTION WITH RESPECT TO GUARANTEED OBLIGATIONS.
(a) To the extent that any Guarantor shall make a payment under this
Guaranty (a "Guarantor Payment") which, taking into account all other Guarantor
Payments then previously or concurrently made by any other Guarantor, exceeds
the amount which otherwise would have been paid by or attributable to such
Guarantor if each Guarantor had paid the aggregate Guaranteed Obligations
satisfied by such Guarantor Payment in the same proportion as such Guarantor's
"Allocable Amount" (as defined below) (as determined immediately prior to such
Guarantor Payment) bore to the aggregate Allocable Amounts of each of the
Guarantors as determined immediately prior to the making of such Guarantor
Payment, THEN, following indefeasible payment in full in cash of the Guaranteed
Obligations and termination of the Credit Agreement, such Guarantor shall be
entitled to receive contribution and indemnification payments from, and be
reimbursed by, each other Guarantor for the amount of such excess, PRO RATA
based upon their respective Allocable Amounts in effect immediately prior to
such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Guarantor shall be equal to the maximum amount of the claim which could then be
recovered from such Guarantor under this Guaranty without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.
(c) This SECTION 8 is intended only to define the relative rights of
the Guarantors, and nothing set forth in this SECTION 8 is intended to or shall
impair the obligations of the Guarantors, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Guaranty.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of the Guarantor to which
such contribution and indemnification is owing.
(e) The rights of the indemnifying Guarantors against other
Guarantors under this SECTION 8 shall be exercisable upon the full and
indefeasible payment of the Guaranteed Obligations in cash and the termination
of the Credit Agreement.
SECTION 9. STAY OF ACCELERATION. If acceleration of the time for payment
of any amount payable by the Borrower under the Credit Agreement or any other
Loan Document is stayed upon the insolvency, bankruptcy or reorganization of the
Borrower, all such amounts otherwise subject to acceleration under the terms of
the Credit Agreement or any other Loan Document shall nonetheless be payable by
each of the Guarantors hereunder forthwith on demand by the Agent.
SECTION 10. NOTICES. All notices, requests and other communications to any
party hereunder shall be given in the manner prescribed in ARTICLE XIV of the
Credit Agreement with respect to the Agent at its notice address therein and
with respect to any Guarantor at the address set forth below or such other
address or telecopy number as such party may hereafter specify for such purpose
by notice to the Agent in accordance with the provisions of such ARTICLE XIV.
Notice Address for Guarantors:
c/o Huttig Building Products, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Building
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 11. NO WAIVERS. No failure or delay by the Agent or any Holder of
Obligations in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies provided in this Guaranty, the Credit
Agreement and the other Loan Documents shall be cumulative and not exclusive of
any rights or remedies provided by law.
SECTION 12. SUCCESSORS AND ASSIGNS. This Guaranty is for the benefit of
the Agent and the Holders of Obligations and their respective successors and
permitted assigns, PROVIDED, that no Guarantor shall have any right to assign
its rights or obligations hereunder without the consent of all of the Lenders,
and any such assignment in violation of this SECTION 12 shall be null and void;
and in the event of an assignment of any amounts payable under the Credit
Agreement or the other Loan Documents in accordance with the respective terms
thereof, the rights hereunder, to the extent applicable to the indebtedness so
assigned, may be transferred with such indebtedness. This Guaranty shall be
binding upon each of the Guarantors and their respective successors and assigns.
SECTION 13. CHANGES IN WRITING. Other than in connection with the addition
of additional Subsidiaries, which become parties hereto by executing an Addendum
hereto in the form attached as Annex I, neither this Guaranty nor any provision
hereof may be changed, waived, discharged or terminated orally, but only in
writing signed by each of the Guarantors and the Agent with the consent of the
Required Lenders under the Credit Agreement (or all of the Lenders if required
pursuant to the terms of SECTION 9.3 of the Credit Agreement).
SECTION 14. GOVERNING LAW. ANY DISPUTE BETWEEN ANY GUARANTOR AND THE AGENT
OR ANY LENDER, OR ANY OTHER HOLDER OF OBLIGATIONS ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH, THIS GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1
ET SEQ., BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF
THE STATE OF ILLINOIS.
SECTION 15. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF
THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY
BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO WAIVES IN ALL
DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. EACH OF THE GUARANTORS AGREES THAT THE AGENT, ANY
LENDER OR ANY HOLDER OF OBLIGATIONS SHALL HAVE THE RIGHT TO PROCEED AGAINST SUCH
GUARANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO
(1) OBTAIN PERSONAL JURISDICTION OVER SUCH GUARANTOR OR (2) ENFORCE A JUDGMENT
OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. EACH OF THE GUARANTORS
AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING
BROUGHT BY SUCH PERSON TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
SUCH PERSON. EACH OF THE GUARANTORS WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED
IN THIS SUBSECTION (B).
(C) SERVICE OF PROCESS. EACH OF THE GUARANTORS WAIVES PERSONAL SERVICE OF
ANY PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY
WRITS, PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY THE MAILING
THEREOF BY THE AGENT OR THE HOLDERS OF OBLIGATIONS BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO THE GUARANTORS IN CARE OF THE BORROWER AT THE ADDRESS
PROVIDED FOR NOTICES TO THE BORROWER UNDER THE CREDIT AGREEMENT. NOTHING HEREIN
SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF THE AGENT OR THE HOLDERS OF
OBLIGATIONS TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW. EACH OF THE GUARANTORS IRREVOCABLY WAIVES ANY
OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
GUARANTY OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS GUARANTY WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(E) WAIVER OF BOND. EACH OF THE GUARANTORS WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL PROCESS
OR PROCEEDING TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
SUCH PARTY, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER,
PRELIMINARY OR PERMANENT INJUNCTION, THIS GUARANTY OR ANY OTHER LOAN DOCUMENT.
(F) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY
HERETO THAT IT HAS DISCUSSED THIS GUARANTY AND, SPECIFICALLY, THE PROVISIONS OF
THIS SECTION 15, WITH ITS COUNSEL.
SECTION 16. NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Guaranty. In the event an
ambiguity or question of intent or interpretation arises, this Guaranty shall be
construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Guaranty.
SECTION 17. TAXES, EXPENSES OF ENFORCEMENT, ETC. Subject to the exceptions
in the Credit Agreement, (A) (i) any and all payments by any of the Guarantors
hereunder (whether in respect of principal, interest, fees or otherwise) shall
be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings or any
interest, penalties and liabilities with respect thereto including those arising
after the date hereof as a result of the adoption of or any change in any law,
treaty, rule, regulation, guideline or determination of a Governmental Authority
or any change in the interpretation or application thereof by a Governmental
Authority but excluding, in the case of each Lender and the Agent, such taxes
(including income taxes, franchise taxes and branch profit taxes) as are imposed
on or measured by such Lender's or the Agent's, as the case may be, net income
by the United States of America or any Governmental Authority of the
jurisdiction under the laws of which such Lender or the Agent, as the case may
be, is organized (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings, and liabilities which the Agent or a Lender determines to
be applicable to this Guaranty, the other Loan Documents, the
Revolving Loan Commitments, the Loans or the Letters of Credit being hereinafter
referred to as "TAXES"). If any Guarantor shall be required by law to deduct or
withhold any Taxes from or in respect of any sum payable hereunder to any Holder
of Obligations, (i) the sum payable shall be increased as may be necessary so
that after making all required deductions or withholdings (including deductions
applicable to additional sums payable under this SECTION 17(A)) such Lender or
Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions or withholdings been made, (ii) the applicable
Guarantor shall make such deductions or withholdings, and (iii) the applicable
Guarantor shall pay the full amount deducted or withheld to the relevant
taxation authority or other authority in accordance with applicable law. If a
withholding tax of the United States of America or any other Governmental
Authority shall be or become applicable (y) after the date of this Guaranty, to
such payments by the applicable Guarantor made to the Lending Installation or
any other office that a Lender may claim as its Lending Installation, or (z)
after such Lender's selection and designation of any other Lending Installation,
to such payments made to such other Lending Installation, such Lender shall use
reasonable efforts to make, fund and maintain the affected Loans through another
Lending Installation of such Lender in another jurisdiction so as to reduce the
applicable Guarantor's liability hereunder, if the making, funding or
maintenance of such Loans through such other Lending Installation of such Lender
does not, in the judgment of such Lender, otherwise adversely affect such Loans,
or obligations under the Revolving Loan Commitments of such Lender.
(ii) In addition, each of the Guarantors agrees to pay any present
or future stamp or documentary taxes or any other excise or property
taxes, charges, or similar levies which arise from any payment made
hereunder, or from the execution, delivery or registration of, or
otherwise with respect to, this Guaranty, the other Loan Documents, the
Revolving Loan Commitments, the Loans or the Letters of Credit
(hereinafter referred to as "OTHER TAXES").
(iii) Subject to the exceptions in the Credit Agreement, each of the
Guarantors indemnifies each Lender and the Agent for the full amount of
Taxes and Other Taxes (including, without limitation, any Taxes or Other
Taxes imposed by any Governmental Authority on amounts payable under this
SECTION 17(A)) paid by such Lender or the Agent (as the case may be) and
any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be
made within thirty (30) days after the date such Lender or the Agent (as
the case may be) makes written demand therefor. If the Taxes or Other
Taxes with respect to which any Guarantor has made either a direct payment
to the taxation or other authority or an indemnification payment hereunder
are subsequently refunded to any Lender, such Lender will return to the
applicable Guarantor an amount equal to the lesser of the indemnification
payment or the refunded amount. A certificate as to any additional amount
payable to any Lender or the Agent under this SECTION 17(A) submitted to
the applicable Guarantor and the Agent (if a Lender is so submitting) by
such Lender or the Agent shall show in reasonable detail the amount
payable and the calculations used to determine such amount and shall,
absent manifest error, be deemed presumptively correct. With respect to
such deduction or
withholding for or on account of any Taxes and to confirm that all such
Taxes have been paid to the appropriate Governmental Authorities, the
applicable Guarantor or Guarantors shall promptly (and in any event not
later than thirty (30) days after receipt) furnish to each Lender and the
Agent such certificates, receipts and other documents as may be required
(in the reasonable judgment of such Lender or the Agent) to establish any
tax credit to which such Lender or the Agent may be entitled.
(iv) Within thirty (30) days after the date of any payment of Taxes
or Other Taxes by any Guarantor, the applicable Guarantor shall furnish to
the Agent the original or a certified copy of a receipt evidencing payment
thereof.
(v) Without prejudice to the survival of any other agreement of the
Guarantors hereunder, the agreements and obligations of the Guarantors
contained in this SECTION 17(A) shall survive the payment in full of all
Guaranteed Obligations and the termination of this Guaranty.
(vi) Each Lender (including any Replacement Lender or Purchaser)
that is not created or organized under the laws of the United States of
America or a political subdivision thereof (each a "NON-U.S. LENDER")
shall deliver to the Borrower and the Agent on or before the Closing Date,
or, if later, the date on which such Lender becomes a Lender pursuant to
SECTION 13.3 of the Credit Agreement (and from time to time thereafter
upon the request of the Borrower or the Agent, but only for so long as
such Non-U.S. Lender is legally entitled to do so), either (1)(x) two (2)
duly completed copies of either (A) IRS Form W-8BEN (or, if delivered on
or before December 31, 1999, IRS Form 1001), or (B) IRS Form W-8ECI (or,
if delivered on or before December 31, 1999, IRS Form 4224), or in either
case an applicable successor form, and (y) for periods prior to January 1,
2000, a duly completed copy of IRS Form W-8 or W-9 or applicable successor
form; or (2) in the case of a Non-U.S. Lender that is not legally entitled
to deliver either form listed in CLAUSE (VI)(1)(X), (x) a certificate of a
duly authorized officer of such Non-U.S. Lender to the effect that such
Non-U.S. Lender is not (A) a "bank" within the meaning of Section
881(c)(3)(A) of the Code, (B) a "10 percent shareholder" of any Guarantor
within the meaning of Section 881(c)(3)(B) of the Code, or (C) a
controlled foreign corporation receiving interest from a related person
within the meaning of Section 881(c)(3)(C) of the Code (such certificate,
an "EXEMPTION CERTIFICATE") and (y) two (2) duly completed copies of IRS
Form W-8BEN or applicable successor form. Each such Lender further agrees
to deliver to the Borrower and the Agent from time to time a true and
accurate certificate executed in duplicate by a duly authorized officer of
such Lender in a form satisfactory to the Borrower and the Agent, before
or promptly upon the occurrence of any event requiring a change in the
most recent certificate previously delivered by it to the Borrower and the
Agent pursuant to this SECTION 17(A). Further, each Lender which delivers
a form or certificate pursuant to this CLAUSE (vi) covenants and agrees to
deliver to the Borrower and the Agent within fifteen (15) days prior to
the expiration of such form, for so long as this Guaranty is still in
effect, another such certificate and/or two (2) accurate and complete
original newly-signed copies of the
applicable form (or any successor form or forms required under the Code or
the applicable regulations promulgated thereunder).
Each Lender shall promptly furnish to the Borrower and the Agent
such additional documents as may be reasonably required by any Guarantor
or the Agent to establish any exemption from or reduction of any Taxes or
Other Taxes required to be deducted or withheld and which may be obtained
without undue expense to such Lender. Notwithstanding any other provision
of this SECTION 17(A), no Guarantor shall be obligated to gross up any
payments to any Lender pursuant to SECTION 17(A)(I), or to indemnify any
Lender pursuant to SECTION 17(A)(III), in respect of United States federal
withholding taxes to the extent imposed as a result of (x) the failure of
such Lender to deliver to the Borrower the form or forms and/or an
Exemption Certificate, as applicable to such Lender, pursuant to SECTION
17(A)(VI), (y) such form or forms and/or Exemption Certificate not
establishing a complete exemption from U.S. federal withholding tax or the
information or certifications made therein by the Lender being untrue or
inaccurate on the date delivered in any material respect, or (z) the
Lender designating a successor Lending Installation at which it maintains
its Loans which has the effect of causing such Lender to become obligated
for tax payments in excess of those in effect immediately prior to such
designation; provided, HOWEVER, that the applicable Guarantor shall be
obligated to gross up any payments to any such Lender pursuant to SECTION
17(A)(I), and to indemnify any such Lender pursuant to SECTION 17(A)(III),
in respect of United States federal withholding taxes if (x) any such
failure to deliver a form or forms or an Exemption Certificate or the
failure of such form or forms or exemption certificate to establish a
complete exemption from U.S. federal withholding tax or inaccuracy or
untruth contained therein resulted from a change in any applicable
statute, treaty, regulation or other applicable law or any interpretation
of any of the foregoing occurring after the date hereof, which change
rendered such Lender no longer legally entitled to deliver such form or
forms or Exemption Certificate or otherwise ineligible for a complete
exemption from U.S. federal withholding tax, or rendered the information
or the certifications made in such form or forms or Exemption Certificate
untrue or inaccurate in any material respect, (y) the redesignation of the
Lender's Lending Installation was made at the request of the Borrower or
(z) the obligation to gross up payments to any such Lender pursuant to
SECTION 17(A)(I), or to indemnify any such Lender pursuant to SECTION
17(A)(III), is with respect to a Purchaser that becomes a Purchaser as a
result of an assignment made at the request of the Borrower.
(vii) Upon the request, and at the expense of the Borrower, each
Lender to which any Guarantor is required to pay any additional amount
pursuant to this SECTION 17(A), shall reasonably afford the applicable
Guarantor the opportunity to contest, and shall reasonably cooperate with
the applicable Guarantor in contesting, the imposition of any Tax giving
rise to such payment; PROVIDED, that (i) such Lender shall not be required
to afford the applicable Guarantor the opportunity to so contest unless
the applicable Guarantor shall have confirmed in writing to such Lender
its obligation to pay such amounts pursuant to this Guaranty; and (ii) the
Borrower shall reimburse such Lender for its reasonable attorneys' and
accountants' fees and disbursements incurred in so
cooperating with the applicable Guarantor in contesting the imposition of
such Tax; PROVIDED, HOWEVER, that notwithstanding the foregoing, no Lender
shall be required to afford any Guarantor the opportunity to contest, or
cooperate with the applicable Guarantor in contesting, the imposition of
any Taxes, if such Lender in good faith determines that to do so would
have an adverse effect on it.
(B) EXPENSES OF ENFORCEMENT, ETC. Subject to the terms of the Credit
Agreement, after the occurrence of a Default under the Credit Agreement, the
Lenders shall have the right at any time to direct the Agent to commence
enforcement proceedings with respect to the Guaranteed Obligations. The
Guarantors agree to reimburse the Agent and the Holders of Obligations for any
reasonable costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' fees and time charges of attorneys for the Agent and the
Holders of Obligations, which attorneys may be employees of the Agent or the
Holders of Obligations) paid or incurred by the Agent or any Holders of
Obligation in connection with the collection and enforcement of amounts due
under the Loan Documents, including without limitation this Guaranty. The Agent
agrees to distribute payments received from any of the Guarantors hereunder to
the Holders of Obligations on a pro rata basis for application in accordance
with the terms of the Credit Agreement.
SECTION 18. SETOFF. At any time after all or any part of the Guaranteed
Obligations have become due and payable (by acceleration or otherwise), each
Holder of Obligations and the Agent may, without notice to any Guarantor and
regardless of the acceptance of any security or collateral for the payment
hereof, appropriate and apply toward the payment of all or any part of the
Guaranteed Obligations then due (i) any indebtedness due or to become due from
such Holder of Obligations or the Agent to any Guarantor, and (ii) any moneys,
credits or other property belonging to any Guarantor, at any time held by or
coming into the possession of such Holder of Obligations or the Agent or any of
their respective affiliates.
SECTION 19. FINANCIAL INFORMATION. Each Guarantor hereby assumes
responsibility for keeping itself informed of the financial condition of the
Borrower and any and all endorsers and/or other Guarantors of all or any part of
the Guaranteed Obligations, and of all other circumstances bearing upon the risk
of nonpayment of the Guaranteed Obligations, or any part thereof, that diligent
inquiry would reveal, and each Guarantor hereby agrees that none of the Holders
of Obligations or the Agent shall have any duty to advise such Guarantor of
information known to any of them regarding such condition or any such
circumstances. In the event any Holder of Obligations or the Agent, in its sole
discretion, undertakes at any time or from time to time to provide any such
information to a Guarantor, such Holder of Obligations or such Agent shall be
under no obligation (i) to undertake any investigation not a part of its regular
business routine, (ii) to disclose any information which such Holder of
Obligations or such Agent, pursuant to accepted or reasonable commercial finance
or banking practices, wishes to maintain confidential or (iii) to make any other
or future disclosures of such information or any other information to such
Guarantor.
SECTION 20. SEVERABILITY. Wherever possible, each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision
of this Guaranty shall be prohibited by or invalid under such law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining provisions
of this Guaranty.
SECTION 21. MERGER. This Guaranty represents the final agreement of each
of the Guarantors with respect to the matters contained herein and may not be
contradicted by evidence of prior or contemporaneous agreements, or subsequent
oral agreements, between the Guarantor and any Holder of Obligations or the
Agent.
SECTION 22. HEADINGS. Section headings in this Guaranty are for
convenience of reference only and shall not govern the interpretation of any
provision of this Guaranty.
IN WITNESS WHEREOF, each of the Guarantors has caused this Guaranty to be
duly executed by its authorized officer as of the day and year first above
written.
RONDEL'S INC.
By:
-------------------------------
Its:
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CIPCO INC.
By:
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Its:
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RUGBY USA, INC.
By:
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Its:
-------------------------------
RUGBY BUILDING PRODUCTS, INC.
By:
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Its:
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ANNEX I TO GUARANTY
Reference is hereby made to the Guaranty (the "Guaranty") made as of the
13th day of December, 1999 by Rondel's Inc., a Washington corporation, CIPCO
Inc., an Illinois corporation, Rugby USA, Inc., a Georgia corporation, and Rugby
Building Products, Inc., a Delaware corporation (collectively, the "Initial
Guarantors" and along with any other Subsidiaries, which have become parties
thereto and together with the undersigned, the "Guarantors") in favor of the
Agent, for the ratable benefit of the Holders of Obligations, under the Credit
Agreement. Capitalized terms used herein and not defined herein shall have the
meanings given to them in the Guaranty. By its execution below, the undersigned
[NAME OF NEW GUARANTOR], a [corporation] [partnership] [limited liability
company], agrees to become, and does hereby become, a Guarantor under the
Guaranty and agrees to be bound by such Guaranty as if originally a party
thereto. By its execution below, the undersigned represents and warrants as to
itself that all of the representations and warranties contained in SECTION 2 of
the Guaranty are true and correct in all respects as of the date hereof.
IN WITNESS WHEREOF, [NAME OF NEW GUARANTOR], a [corporation] [partnership]
[limited liability company] has executed and delivered this Annex I counterpart
to the Guaranty as of this day of , .
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[NAME OF NEW GUARANTOR]
By:
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Title:
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