EXHIBIT 10.1
------------
AMENDED AND RESTATED
REVOLVING CREDIT AND
REIMBURSEMENT AGREEMENT
by and among
REXEL, INC. as Borrower,
NATIONSBANK OF FLORIDA, NATIONAL ASSOCIATION,
CREDIT LYONNAIS NEW YORK BRANCH,
CREDIT LYONNAIS CAYMAN ISLAND BRANCH and
SOCIETE GENERALE, NEW YORK BRANCH
as Lenders,
and
NATIONSBANK OF FLORIDA, NATIONAL ASSOCIATION, as Agent
and
CREDIT LYONNAIS NEW YORK BRANCH and
SOCIETE GENERALE, NEW YORK BRANCH,
as Co-Agents
August 8, 1995
TABLE OF CONTENTS
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Page
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ARTICLE I
Definitions and Terms
1.01 Definitions................................................... 3
1.02 Accounting Terms.............................................. 16
ARTICLE II
Revolving Credit Facility
2.01 Commitment.................................................... 17
2.02 Amounts....................................................... 17
2.03 Interest Periods.............................................. 17
2.04 Advances...................................................... 17
2.05 Payment of Interest........................................... 19
2.06 Payment of Principal.......................................... 20
2.07 Borrower's Account............................................ 20
2.08 Notes......................................................... 20
2.09 Pro Rata Payments............................................. 21
2.10 Reduction in Commitment....................................... 21
2.11 Increase and Decrease in Amounts.............................. 21
2.12 Conversions and Elections of Subsequent Interest Periods...... 21
2.13 Unused Fees................................................... 22
2.14 Deficiency Advances........................................... 23
ii
TABLE OF CONTENTS (continued)
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2.15 Adjustments by Agent.......................................... 23
2.16 Use of Proceeds............................................... 23
2.17 Swing Line.................................................... 24
ARTICLE III
Letters of Credit
3.01 Letters of Credit............................................. 26
3.02 Reimbursement................................................. 26
3.03 Letter of Credit Fee.......................................... 28
3.04 Administrative Fees and Reserves.............................. 29
ARTICLE IV
Yield Protection and Illegality
4.01 Increased Costs............................................... 30
4.02 Illegality.................................................... 31
4.03 Compensation.................................................. 31
ARTICLE V
Conditions to Continue Making Loans and Issuing Letters of Credit
5.01 Conditions of Further Advance and Issuance of
Letters of Credit............................................. 33
5.02 Conditions of Advances........................................ 34
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TABLE OF CONTENTS (continued)
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ARTICLE VI
Guaranties
6.01 Further Assurances............................................ 35
ARTICLE VII
Representations and Warranties
7.01 Representations and Warranties as to Borrower and Subsidiary.. 36
7.02 Representations and Warranties of Borrower.................... 37
ARTICLE VIII
Affirmative Covenants
8.01 Financial Reports, Etc........................................ 41
8.02 Maintain Properties........................................... 42
8.03 Existence, Qualification, Etc................................. 42
8.04 Regulations and Taxes......................................... 43
8.05 Insurance..................................................... 43
8.06 True Books.................................................... 43
8.07 Pay Indebtedness to Lenders and Perform Other Covenants....... 43
8.08 Right of Inspection........................................... 43
8.09 Observe All Laws.............................................. 43
8.10 Covenants Extending to Subsidiaries........................... 43
8.11 Officer's Knowledge of Default................................ 43
8.12 Suits or Other Proceedings.................................... 43
8.13 Environmental Reports......................................... 43
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TABLE OF CONTENTS (continued)
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8.14 Notice of Discharge of Hazardous Material or Environmental
Complaint.... ................................................ 44
8.15 Further Assurances............................................ 44
8.16 ERISA Requirement............................................. 44
8.17 Authorization of Shares....................................... 45
8.18 Repurchase of Securities...................................... 45
8.19 Subordination of Indebtedness................................. 45
8.20 Use of Proceeds............................................... 45
8.21 New Subsidiaries.............................................. 45
ARTICLE IX
Negative Covenants
9.01 Liens, Etc.................................................... 46
9.02 Indebtedness for Money Borrowed............................... 47
9.03 Lease Obligations............................................. 47
9.04 Mergers, Etc.................................................. 47
9.05 Contingent Obligations........................................ 48
9.06 Investments................................................... 48
9.07 Sale of Assets................................................ 49
9.08 Sale and Leaseback............................................ 49
9.09 ERISA......................................................... 49
9.10 Sale of Subsidiary Interests.................................. 50
9.11 Prepayments of Long-Term Debt................................. 50
9.12 Indebtedness for Money Borrowed/Shareholders' Equity.......... 50
9.13 Consolidated Shareholders' Equity............................. 50
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TABLE OF CONTENTS (continued)
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9.14 Acquisitions.................................................. 50
9.15 Consolidated Interest Coverage Ratio.......................... 51
9.16 Senior Note Agreement......................................... 51
9.17 Fixed Charge Coverage Ratio................................... 51
9.18 Trading Asset Ratio........................................... 51
9.19 Fiscal Year................................................... 51
9.20 Rate Hedging Obligation....................................... 51
ARTICLE X
Events of Default and Acceleration
10.01 Events of Default............................................. 52
10.02 Agent to Act.................................................. 54
10.03 Cumulative Rights............................................. 54
10.04 No Waiver..................................................... 54
10.05 Allocation of Proceeds........................................ 54
ARTICLE XI
The Agent
11.01 Appointment................................................... 56
11.02 Attorneys-in-Fact............................................. 56
11.03 Limitation on Liability....................................... 56
11.04 Reliance...................................................... 56
11.05 Notice of Default............................................. 57
11.06 No Representations............................................ 57
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TABLE OF CONTENTS (continued)
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11.07 Indemnification............................................... 57
11.08 Lender........................................................ 58
11.09 Resignation................................................... 58
11.10 Sharing of Payments, Etc...................................... 58
11.11 Fees.......................................................... 59
ARTICLE XII
Miscellaneous
12.01 Assignments and Participations................................ 60
12.02 Notices....................................................... 62
12.03 Setoff........................................................ 62
12.04 Survival...................................................... 63
12.05 Expenses...................................................... 63
12.06 Amendments.................................................... 63
12.07 Counterparts.................................................. 64
12.08 Waivers by Borrower........................................... 64
12.09 Termination................................................... 64
12.10 Governing Law................................................. 65
12.11 Representation and Warranty of the Lenders.................... 65
12.12 Agreement Controls............................................ 65
12.13 Confidentiality............................................... 65
12.14 Indemnification............................................... 65
EXHIBIT A Applicable Commitment Percentages........................ 70
EXHIBIT B Form of Assignment and Acceptance........................ 71
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TABLE OF CONTENTS (continued)
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EXHIBIT C Notice of Appointment (or Revocation)
of Authorized Officer.................................... 74
EXHIBIT D Application and Agreement for Letter of Credit........... 75
EXHIBIT E Borrowing Notice (Loan).................................. 76
EXHIBIT F Form of Guaranty and Suretyship Agreement................ 78
EXHIBIT G Form of Note............................................. 85
EXHIBIT H Opinion of Counsel for Borrower and Subsidiaries......... 88
EXHIBIT I Form of Compliance Certificate........................... 89
EXHIBIT J Guarantors and NonGuarantors............................. 92
EXHIBIT K Existing Liens, Indebtedness, Guaranties
and Investments.......................................... 93
AMENDED AND RESTATED
REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT
THIS AMENDED AND RESTATED REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT,
dated as of August 8, 1995 (the "Agreement"), is made by and among:
REXEL, INC. (formerly ▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.), a corporation organized and
existing under the laws of the State of New York and having its principal place
of business located in Coral Gables, Florida (the "Borrower"); and
NATIONSBANK OF FLORIDA, NATIONAL ASSOCIATION ("NATIONSBANK"), CREDIT
LYONNAIS NEW YORK BRANCH ("Credit Lyonnais"), CREDIT LYONNAIS CAYMAN ISLAND
BRANCH, SOCIETE GENERALE, NEW YORK BRANCH and each other lender which may
hereafter execute and deliver an instrument of assignment with respect to this
Agreement pursuant to Section 12.01 (hereinafter NationsBank and such other
lenders may be referred to individually as a "Lender" or collectively as the
"Lenders"); and
NATIONSBANK OF FLORIDA, NATIONAL ASSOCIATION, a national banking
association organized and existing under the laws of the United States of
America and having its principal place of business in Tampa, Florida, in its
capacity as agent for the Lenders (in such capacity, the "Agent"), and CREDIT
LYONNAIS, NEW YORK BRANCH and SOCIETE GENERALE, NEW YORK BRANCH, each a branch
licensed under the banking law of the State of New York of a banking
corporation organized under the laws of France and having its principal place
of business in New York, New York, as Co-Agents (the "Co-Agents").
W I T N E S S E T H:
WHEREAS, NationsBank and Credit Lyonnais have heretofore made available
revolving loans to and issued letters of credit for the Borrower pursuant to a
Revolving Credit and Reimbursement Agreement dated as of December 17, 1993 as
amended to the date hereof (the "Original Agreement") which loans are evidenced
by Notes dated March 30, 1995 (the "Prior Notes"); and
WHEREAS, the Borrower has requested that the Lenders amend and restate the
Original Agreement in its entirety in order to make available to it revolving
loans and letters of credit in an aggregate amount of up to $100,000,000, the
proceeds of which loans shall be used to (i) repay certain existing
indebtedness or redeem shares of its capital stock, (ii) fund a portion of
acquisitions, and (iii) provide funds for working capital and the general
corporate purposes of the Borrower; and
WHEREAS, the Lenders are willing to provide the revolving loans and
letters of credit to the Borrower upon the terms and conditions set forth
herein;
2
NOW, THEREFORE, the Borrower, the Lenders, the Agent and the Co-Agents
hereby agree that the Original Agreement shall be and hereby is amended in its
entirety as follows:
3
ARTICLE I
Definitions and Terms
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1.01 Definitions. For the purposes of this Agreement, in addition to the
definitions set forth above, the following terms shall have the respective
meanings set forth below:
"Accounts" shall mean and include all invoices, contracts, contract
rights, "general intangibles" (as defined in Article 9 of the Uniform
Commercial Code as presently in effect in the State of Florida), claims,
instruments, chattel paper, leases, agreements and accounts, whether now
existing or hereafter arising, evidencing or representing indebtedness due or
to become due to Borrower or any of its Subsidiaries on account of goods sold
or leased, or services rendered or to be rendered, by Borrower or any of its
Subsidiaries;
"Accounts Payable" means as at the date of determination thereof the total
of all accounts payable for goods and services purchased by the Borrower and
its Subsidiaries excluding any amounts payable with respect to Indebtedness for
Money Borrowed determined in accordance with Generally Accepted Accounting
Principles applied on a Consistent Basis;
"Advance" means a borrowing of new funds under (i) the Revolving Credit
Facility consisting of the aggregate principal amount of a Floating Rate Loan
or Fixed Rate Loan, as the case may be and (ii) the Swing Line consisting of
Floating Rate Loans;
"Applicable Base Rate" means:
(i) for any Fixed CD Loan, in respect of the Interest Period
specified by the Authorized Officer in the Borrowing Notice for such
Fixed CD Loan, the per annum rate of interest (expressed as a
percentage and rounded upwards if necessary to the nearest 1/100 of
1%) (which shall be the same for each day of such Interest Period)
determined in good faith by the Agent in accordance with the usual
procedures for its customers generally (which determination shall be
conclusive absent manifest error) to be the rate per annum at which
NationsBank can in its reasonable judgment obtain funds in the United
States secondary certificate of deposit market at approximately 10:00
A.M. Charlotte, North Carolina time on the first day of such Interest
Period in an amount approximately equal to the principal amount of,
and for a period comparable to the Interest Period for, such Fixed CD
Loan and maturing at the end of such Interest Period, and
(ii) for any Floating CD Loan, the per annum rate of interest
(expressed as a percentage and rounded upwards if necessary to the
nearest 1/100 of 1%) determined in good faith by the Agent in
accordance with the usual procedures for its customers generally
(which determination shall be conclusive absent manifest error) to be
the average of the secondary market bid rates at approximately 10:00
A.M. Charlotte, North Carolina time on each day of at least two
dealers of recognized standing in negotiable certificates of deposit
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for the purchase at face value of negotiable certificates of deposit
of major money center banks for delivery on such day in an amount
approximately equal to the principal amount of such Floating CD Loan
for a period of 90 days, and
(iii) for any LIBOR Loan, in respect of the Interest Period
specified by the Authorized Officer in the Borrowing Notice for such
LIBOR Loan, the per annum interest rate equal to the per annum rate
determined by the Agent on the basis of the offered rates for
deposits in dollars for a period of time corresponding to such
Interest Period (and commencing on the first day of such Interest
Period), which appear on the Dow ▇▇▇▇▇ Telerate Page 3750, as of
11:00 a.m. (London time) two (2) LIBOR Business Days before the first
day of such Interest Period (provided that, if at least two such
offered rates appear on such Dow ▇▇▇▇▇ Telerate Page (or such other
page as may replace the Dow ▇▇▇▇▇ Telerate Page 3750 on that service
for the purpose of displaying London interbank offered rates of major
banks), the rate in respect of such Interest Period will be the
arithmetic mean of such offered rates);
"Applicable Commitment Percentage" means, for each Lender, with respect to
the Obligations hereunder (each a type of "credit exposure"), including its
Participations and its obligations hereunder to NationsBank to acquire
Participations, a fraction (expressed as a percentage), the numerator of which
shall be the then amount of such Lender's Revolving Credit Commitment and the
denominator of which shall be the Total Revolving Credit Commitment, which
Applicable Commitment Percentage for each Lender as of the Closing Date is as
set forth in Exhibit A attached hereto and incorporated herein by this
reference; provided that the Applicable Commitment Percentage of each Lender
shall be increased or decreased to reflect any assignments to or by such Lender
effected in accordance with Section 12.01 hereof;
"Applicable Margin" means, in the case of a LIBOR Loan, Floating CD, Fixed
CD Loan or Money Market Loan 0.55% per annum (the "Interest Addition") and, in
the case of the Unused Fee required to be paid pursuant to Section 2.13, 0.175%
per annum (the "Unused Fee"); provided, however, in the event that as at the
end of any fiscal quarter of the Borrower ending on or after June 30, 1995
(each such date, a "Determination Date"), the ratio of Consolidated EBIT to
Consolidated Interest Expense (the "EBIT Ratio") for the four fiscal quarters
then ended is greater than 2.50 to 1.00 and the ratio of Indebtedness for Money
Borrowed of the Borrower and its Subsidiaries to Consolidated Shareholders'
Equity (the "Indebtedness Ratio") is less than 1.50 to 1.00, then effective on
the fifth Business Day (an "Addition Adjustment Date") following the date of
delivery (the "Delivery Date") of the Compliance Certificate setting forth the
computations, in each case to but not including the next succeeding Addition
Adjustment Date, the Interest Addition and the Unused Fee shall mean the
percent per annum set forth in the applicable column below as to which both the
EBIT Ratio and the Indebtedness Ratio determined as of the Determination Date
are within the ranges that correspond to such column:
5
EBIT Ratio is:
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Greater than 3.00 to Greater than 2.50 to
Greater than 3.50 to 1.00 but equal to or 1.00 but equal to or
1.00 less than 3.50 to 1.00 less than 3.00 to 1.00
----------------------- ------------------------ ----------------------
Interest Unused Interest Unused Interest Unused
Indebtedness Ratio is: Addition Fee Addition Fee Addition Fee
-------------------------------- -------- ------ -------- ------ -------- ------
Less than .67 to 1.00 0.45% 0.15% 0.55% 0.175% 0.65% 0.20%
Less than 1.00 to 1.00 but equal
to or greater than .67 to 1.00 0.525% 0.175% 0.60% 0.175% 0.65% 0.20%
Less than 1.22 to 1.00 but equal
to or greater than 1.00 to 1.00 0.60% 0.175% 0.65% 0.20% 0.70% 0.225%
Less than 1.50 to 1.00 but equal
to or greater than 1.22 to 1.00 0.65% 0.20% 0.65% 0.20% 0.75% 0.225%
Equal to 1.50 to 1.00 0.75% 0.225% 0.75% 0.225% 0.85% 0.25%
Prior to the delivery of such Compliance Certificate, the Borrower may
deliver to the Agent a certificate of an Authorized Officer (a "Preliminary
Certificate") certifying as to the level of such Ratios as of the most recent
Determination Date, and the Applicable Margin shall be determined as provided
above based on such Preliminary Certificate treating the date of delivery
thereof as a Delivery Date until delivery of such Compliance Certificate;
provided that (A) the accuracy of and basis for computations contained in each
Preliminary Certificate shall be subject to verification by the Agent and (B)
the Applicable Margin shall be readjusted retroactively to the preceding
Addition Adjustment Date in the event that the Compliance Certificate
subsequently delivered in connection therewith shall demonstrate that any
previous adjustment to the Applicable Margin based on such Preliminary
Certificate is not supported by the computations contained in such Compliance
Certificate;
"Applicable Reserve Requirement" means, for any CD Loan or LIBOR Loan with
respect thereto, the average maximum rate at which reserves (including, without
limitation, any marginal, supplemental or emergency reserves) are required to
be maintained with respect thereto under Regulation D by any of the Lenders
that are member banks of the Federal Reserve System on the first day of the
Interest Period for such Loan against (i) non-personal Dollar time deposits in
an amount of $100,000 or more in the case of any CD Loan or (ii) with respect
to Dollar funding in the London interbank market in the case of any LIBOR Loan.
Without limiting the effect of the foregoing, the Applicable Reserve
Requirement shall reflect any other reserves required to be maintained by such
member banks by reason of any change in regulations against (i) any category of
liabilities which includes deposits by reference to which the Applicable Base
Rate is to be determined or (ii) any category of extensions of credit or other
assets which include CD Loans or LIBOR Loans;
"Application and LC Agreement" means the Application and Agreement for
Letters of Credit in the form attached hereto as Exhibit D, as the same may be
amended, modified or supplemented from time to time; provided, however, (i)
that to the extent that this Agreement and such Application and LC Agreement
shall be in conflict, this Agreement shall control, and (ii) notwithstanding
6
the execution and delivery thereof on or after the date hereof, any provisions
thereof (including, without limitation, paragraphs 8 and 9) purporting to grant
a security interest or require delivery of collateral or specifying "Events of
Default" or rights or remedies exercisable upon the occurrence thereof, shall
be deemed superseded so long as this Agreement is in effect;
"Assessment Rate" means the rate per annum (rounded upward to the nearest
1/100 of 1%) determined in good faith by the Agent in accordance with its usual
procedures for its customers generally (which determination shall be conclusive
absent manifest error) to be the current net assessment rate per annum payable
by NationsBank to the Federal Deposit Insurance Corporation (or any successor)
on such day of determination for insurance on Dollar time deposits of
NationsBank in the United States. The CD Rate shall be adjusted automatically
as of the effective date of each change in the Assessment Rate;
"Assignment and Acceptance" shall mean an Assignment and Acceptance in the
form of Exhibit B (with blanks appropriately filled in) delivered to the Agent
in connection with an assignment of a Lender's interest under this Agreement
pursuant to Section 12.01;
"Authorized Officer" means any of the Chairman, President, Senior Vice
Presidents or Vice Presidents of the Borrower or, with respect to financial
matters, the Treasurer or Chief Financial Officer of the Borrower or any other
person expressly designated by the Borrower as an Authorized Officer for
purposes of this Agreement, as set forth from time to time in a certificate in
the form attached hereto as Exhibit C;
"Board" means the Board of Governors of the Federal Reserve System (or any
successor body);
"Borrower's Account" means a demand deposit account with the Agent, or any
successor account with the Agent, which may be maintained at one or more
offices of the Agent, or an agent for the Agent;
"Borrowing Notice" means the telephonic or telefacsimile request of an
Authorized Officer to obtain an Advance or to elect a subsequent Interest
Period for or convert a Loan or Loans of any type hereunder, as the obtaining
of such Advance, such election or conversion of such Loan or Loans shall be
otherwise permitted herein. Any Borrowing Notice shall be binding on and
irrevocable by the Borrower, and shall be confirmed in writing in the case of a
telephonic request promptly by an Authorized Officer in the form attached
hereto as Exhibit E;
"Business Day" means any day which is not a Saturday, Sunday or a day on
which banks are required to be open for business in the States of North
Carolina, Florida and New York;
"CD Loan" means all of the Loans for which the rate of interest is
determined by reference to the CD Rate;
7
"CD Rate" means, for any CD Loan, the rate of interest per annum
determined pursuant to the following formula:
Applicable Base Rate
--------------------
CD Rate = 1-Applicable + Assessment + Applicable
Reserve Requirement Rate Margin
"Capital Expenditures" means for any period the sum of (i) the gross
amount of additions to property, plant and equipment (which are classified as
such in accordance with Generally Accepted Accounting Principles and at the
time have a useful life in excess of one year) of the Borrower and its
Subsidiaries during such period plus (ii) with respect to any Capital Lease
entered into by the Borrower or any Subsidiary during such period, the
capitalized amount thereof determined in accordance with Generally Accepted
Accounting Principles;
"Capital Leases" means all leases of any Person which have been or should
be capitalized in accordance with Generally Accepted Accounting Principles as
in effect from time to time;
"Closing Date" means the date as of which this Agreement is executed by
the Borrower, the Lenders, the Agent and the Co-Agents and on which the
conditions set forth in Section 5.01 hereof have been satisfied;
"Commercial Letter of Credit" means a documentary letter of credit issued
by NationsBank pursuant to the terms hereof for the account of the Borrower
pursuant to Article III; provided that the expiry date of a Commercial Letter
of Credit (i) shall not be later than 12 months subsequent to the date of
issuance thereof and (ii) shall not provide for payment subsequent to the fifth
Business Day preceding the Revolving Credit Termination Date;
"Compliance Certificate" means that certificate of an Authorized Officer
required to be furnished by Borrower pursuant to Section 8.01(a)(ii) and
8.01(b)(ii) hereof in the form of Exhibit I attached hereto;
"Consistent Basis" in reference to the application of Generally Accepted
Accounting Principles means the accounting principles observed in the period
referred to are comparable in all material respects to those applied in the
preparation of the audited financial statements of the Borrower referred to in
Section 7.02(b)(i) hereof; provided, however, that to the extent there shall be
a change in Generally Accepted Accounting Principles the Borrower shall not
reflect such change in the Compliance Certificate delivered following such
change until the Agent shall consent thereto, such consent to be deemed given
if the Agent shall not so advise the Borrower to the contrary within forty-five
(45) days following receipt of such Compliance Certificate;
"Consolidated EBIT" means, with respect to the Borrower and its
Subsidiaries for the four fiscal quarters immediately preceding the date of
computation thereof, the sum of, without duplication, (i) Consolidated Net
Income for such period, plus (ii) Consolidated Interest Expense during such
period, (iii) plus taxes on income during such period, all determined on a
consolidated basis in accordance with Generally Accepted Accounting Principles
applied on a consistent basis;
8
"Consolidated Fixed Charge Coverage Ratio" means, with respect to the
Borrower and its Subsidiaries as of the end of any fiscal quarter, the ratio of
(A) the sum of Consolidated Net Income, plus taxes on income, plus Consolidated
Interest Expense, plus depreciation and amortization minus Capital Expenditures
for the four fiscal quarters then ended divided by (B) the sum of (i)
Consolidated Interest Expense, plus dividends and distributions of the Borrower
only (other than of stock or rights, options or warrants to acquire stock) for
such four fiscal quarters, plus (ii) current maturities of Indebtedness for
Money Borrowed having a maturity in excess of one year (excluding the amount of
the Outstandings), plus (iii) (to the extent not included in (ii)) current
maturities of Capitalized Leases;
"Consolidated Interest Coverage Ratio" means with respect to Borrower and
its Subsidiaries as of the end of any fiscal quarter the ratio of (i)
Consolidated Net Income plus Consolidated Interest Expense plus taxes on income
for the four fiscal quarters then ended to (ii) Consolidated Interest Expense
for such four fiscal quarters;
"Consolidated Interest Expense" means, with respect to any period of
computation thereof, the gross interest expense of the Borrower and its
Subsidiaries, including without limitation (but without duplication) (i) the
amortization of debt discounts, (ii) the amortization of all fees (including,
without limitation, fees payable in respect of a Swap Agreement) payable in
connection with the incurrence of Indebtedness to the extent included in
interest expense and (iii) the portion of any liabilities incurred in
connection with Capital Leases allocable to interest expense, all determined on
a consolidated basis in accordance with Generally Accepted Accounting
Principles applied on a consistent basis;
"Consolidated Net Income" means, for any period, the net income (or
deficit) of the Borrower and its Subsidiaries for such period (taken as a
cumulative whole), after deducting all operating expenses, provisions for taxes
and reserves (including reserves for deferred income taxes) and all other
proper deductions, all determined in accordance with Generally Accepted
Accounting Principles on a consolidated basis after eliminating all
intercompany transactions and after deducting portions of income properly
attributable to minority interests, if any, in the stock and surplus of
Subsidiaries, but excluding (i) gains on the sale, conversion or other
disposition of capital assets (however, gains on sales or other disposition of
equipment either worn out, obsolete or no longer useful in the business of the
Borrower and its Subsidiaries made in the ordinary course of business shall not
be excluded nor shall gains on the sale of capital assets previously used in
discontinued or restructured operations (as to which a net loss has been taken)
be excluded, to the extent that such gains exceed the values for such capital
assets used in determining such net losses from such discontinued or
restructured operations and to the extent that such gains are taken within
twelve months of the date on which such net losses are taken), (ii) gains on
the acquisition, retirement, sale or other disposition of capital stock and
other securities of the Borrower and its Subsidiaries, (iii) gains on the
collection of proceeds of life insurance policies, (iv) any write-up of any
asset and (v) any other gain or credit of an extraordinary nature as determined
in accordance with Generally Accepted Accounting Principles applied on a
consistent basis;
9
"Consolidated Shareholders' Equity" means at any time as of which the
amount thereof is to be determined, the sum of the following in respect of the
Borrower and its Subsidiaries (determined on a consolidated basis in accordance
with Generally Accepted Accounting Principles and excluding any upward
adjustment after the Closing Date due to revaluation of assets): (i) the amount
of issued and outstanding share capital, plus (ii) the amount of additional
paid-in capital and retained earnings (or, in the case of a deficit, minus the
amount of such deficit);
"Consolidated Subordinated Indebtedness" means all Indebtedness for Money
Borrowed of Borrower and Subsidiaries determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles which is (i)
outstanding under the Indenture or (ii) subordinated in right of payment to the
Obligations;
"Contingent Obligation" of any Person means any obligation of such Person
guaranteeing or in effect guaranteeing any Indebtedness, dividend or other
obligation of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including obligations of such Person however incurred:
(1) to purchase such Indebtedness or other obligation or any
property or assets constituting security therefor;
(2) to advance or supply funds in any manner (i) for the purchase or
payment of such Indebtedness or other obligation, or (ii) to maintain a
minimum working capital, net worth or other balance sheet condition or any
income statement condition of the primary obligor;
(3) to grant or convey any lien, security interest, pledge, charge
or other encumbrance on any property or assets of such Person to secure
payment of such Indebtedness or other obligation;
(4) to lease property or to purchase securities or other property or
services primarily for the purpose of assuring the owner or holder of such
Indebtedness or obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(5) otherwise to assure the owner of the Indebtedness or such
obligation of the primary obligor against loss in respect thereof;
"Default" means any event or condition which, with the giving or receipt
of notice or lapse of time or both, would constitute an Event of Default
hereunder;
"Dollars" and the symbol "$" means dollars constituting legal tender for
the payment of public and private debts in the United States of America;
"Environmental Laws" means, collectively, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Superfund
10
Amendments and Reauthorization Act of 1986, the Resource Conservation and
Recovery Act, the Toxic Substances Control Act, as amended, the Clean Air Act,
as amended, the Clean Water Act, as amended, any other "Superfund" or
"Superlien" law or any other federal, or applicable state or local statute,
law, ordinance, code, rule, regulation, order or decree regulating, relating
to, or imposing liability or standards of conduct concerning, any hazardous,
toxic or dangerous waste, substance or material, as now or at any time
hereafter in effect;
"ERISA" means, at any date, the Employee Retirement Income Security Act of
1974 and the regulations thereunder, all as the same shall be in effect at such
date;
"Event of Default" means any of the occurrences set forth as such in
Section 10.01 hereof;
"Federal Funds Effective Rate" for any day, as used herein, means the rate
per annum (rounded upward if necessary to the nearest 1/100 of 1%) announced by
the Federal Reserve Bank of New York (or any successor) on such day as being
the weighted average of the rates on overnight Federal funds transactions
arranged by Federal funds brokers on the previous trading day, as computed and
announced by such Federal Reserve Bank (or any successor) in substantially the
same manner as such Federal Reserve Bank computes and announces the weighted
average it refers to as the "Federal Funds Effective Rate" as of the date of
this Agreement; provided, if such Federal Reserve Bank (or its successor) does
not announce such rate on any day, the "Federal Funds Effective Rate" for such
day shall be the Federal Funds Effective Rate for the last day on which such
rate was announced;
"Fiscal Year" means the 12 month period of the Borrower ending on December
31 of each calendar year and commencing on January 1 of each calendar year;
"Fixed CD Loan" means a CD Loan for which the Borrower elects an Interest
Period of 30, 60, 90 or 180 days pursuant to Section 2.04 hereof;
"Fixed Rate Loan" means a Loan which is either a Fixed CD Loan or a LIBOR
Loan;
"Floating CD Loan" means a CD Loan other than a Fixed CD Loan;
"Floating Rate" means (i) in the case of a Reference Loan the Reference
Rate, (ii) in the case of a Floating CD Loan the CD Rate for such Floating CD
Loan and (iii) in the case of a Money Market Loan the Money Market Rate;
"Floating Rate Loan" means a Loan which is either a Reference Loan, a
Floating CD Loan or a Money Market Loan;
"Generally Accepted Accounting Principles" means those principles of
accounting set forth in pronouncements of the Financial Accounting Standards
Board, the American Institute of Certified Public Accountants or which have
other substantial authoritative support and are applicable in the circumstances
as of the date of a report, as such principles are from time to time
supplemented and amended;
11
"Guarantors" means all Subsidiaries of the Borrower other than the Non
Guarantors;
"Guaranty" means the unconditional Guaranty and Suretyship Agreement in
favor of the Lenders in the form attached hereto as Exhibit F delivered to the
Agent pursuant to Article V hereof or pursuant to Section 8.21 hereof pursuant
to which the Guarantors guarantee the payment and performance of all
obligations to the Lenders as more specifically set forth in such Guaranty;
"Hazardous Material" means and includes any hazardous, toxic or dangerous
waste, substance or material, the generation, handling, storage, disposal,
treatment or emission of which is subject to any Environmental Law in effect on
any date;
"Indebtedness" means with respect to any Person, without duplication, (i)
all Indebtedness for Money Borrowed and all indebtedness of such Person for the
acquisition of property, other than purchases of property in the ordinary
course of business so long as payment therefor is due within one year, and (ii)
guaranties by such Person of Indebtedness referred to in clause (i) above of
any other Person;
"Indebtedness for Money Borrowed" means, for any Person, without
duplication, (i) all indebtedness of such Person for money borrowed which is
evidenced by bonds, debentures, notes or other similar instruments, (ii) all
Capital Leases and (iii) all payment obligations under Rate Hedging Obligations
(the amount of which obligations shall be the aggregate net loss position, if
any, on all such Rate Hedging Obligations, taken as a whole); provided,
however, the term "Indebtedness for Money Borrowed" shall specifically exclude
payroll indebtedness and trade indebtedness incurred in the ordinary course of
business provided such trade indebtedness has a maturity of less than one year;
"Indenture" means the Indenture dated as of August 1, 1989 between the
Borrower and Manufacturers Hanover Trust Company, as Trustee, with respect to
$50,000,000 Convertible Subordinated Debentures due 2014;
"Interest Period" for each Fixed Rate Loan means a period commencing on
the date such Fixed Rate Loan is made or converted and each subsequent period
commencing on the last day of the immediately preceding Interest Period for
such Fixed Rate Loan, and ending, at the Borrower's option, (A) for any Fixed
CD Loan on the date 30, 60, 90 or 180 days thereafter as notified to the Agent
by the Authorized Officer two (2) Business Days prior to the beginning of such
Interest Period and (B) for any LIBOR Loan, on the date seven days or one, two,
three or six months or one year thereafter as notified to the Agent by the
Authorized Officer three (3) LIBOR Business Days prior to the beginning of such
Interest Period; provided, that,
(i) if the Authorized Officer fails to notify the Agent of the
length of an Interest Period for any Fixed CD Loan two (2) Business
Days or for any LIBOR Loan three (3) LIBOR Business Days, as the case
may be, prior to the first day of such Interest Period, the Revolving
Loan for which such Interest Period was to be determined shall be
deemed to be a Reference Loan as of the first day thereof for an
Interest Period ending on the following Business Day; and
12
(ii) if an Interest Period for a Fixed Rate Loan would end on a
day which is not a Business Day or a LIBOR Business Day, as the case
may be, such Interest Period shall be extended to the next Business
Day or LIBOR Business Day (unless in the case of any LIBOR Loan, such
extension would cause the applicable Interest Period to end in the
succeeding calendar month, in which case such Interest Period shall
end on the next preceding LIBOR Business Day);
"Inventory" means and includes any and all goods, merchandise and other
personal property, including, without limitation, goods in transit, wheresoever
located and whether now owned or hereafter acquired by the Borrower or its
Subsidiaries which is or may at any time be held for sale or lease, furnished
under any contract of service or held as raw materials, work-in-process, or
supplies or materials used or consumed in the Borrower's or its Subsidiaries'
businesses;
"LC Account Agreement" means the LC Account Agreement dated as of the date
hereof between the Borrower and the Agent, as amended or modified from time to
time;
"Lending Office" means, as to each Lender, the Lending Office of such
Lender designated on the signature pages hereof or in an Assignment and
Acceptance or such other office of such Lender (or of an affiliate of such
Lender) as such Lender may from time to time specify to the Authorized Officer
and the Agent as the office by which its Loans are to be made and maintained;
"Letter of Credit" or "Letters of Credit" means a Commercial Letter(s) of
Credit or Standby Letter(s) of Credit issued by NationsBank for the account of
the Borrower as described in Article III hereof;
"Letter of Credit Facility" means the facility described in Article III
hereof providing for the issuance by NationsBank for the account of the
Borrower of Letters of Credit in an aggregate stated amount at any time
outstanding not exceeding $10,000,000;
"LIBOR Business Day" means a Business Day on which the relevant
international financial markets are open for the transaction of the business
contemplated by this Agreement in London, England and New York, New York;
"LIBOR Loan" means all of the Loans for which the rate of interest is
determined by reference to the LIBOR Rate;
"LIBOR Rate" means, for the Interest Period for any LIBOR Loan, the rate
of interest per annum determined pursuant to the following formula:
Applicable Base Rate
--------------------
LIBOR Rate = 1-Applicable Reserve Requirement + Applicable Margin
13
"Lien" means any interest in property securing any obligation owed to, or
a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the lien or security interest arising from a mortgage, encumbrance,
pledge, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes (but excluding rights of setoff,
retention or withholding, combination of accounts, counterclaim or other
similar right). For the purposes of this Agreement, the Borrower and its
Subsidiaries shall be deemed to be the owners of any property which it or they
have acquired or hold subject to a conditional sale agreement, lease intended
as a security interest, or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for security
purposes;
"Loan" or "Loans" means any of the Fixed Rate Loans or Floating Rate
Loans, as the context may require, made pursuant to Sections 2.01 and 2.17
hereof;
"Loan Documents" means this Agreement, the Notes, the Guaranty, the LC
Account Agreement, the Application and LC Agreement and the Subordination
Agreement as the same may be amended, modified or supplemented from the time to
time;
"Material Adverse Effect" has the meaning assigned in Section 7.01;
"Money Market Loan" means a Loan which bears interest at the Money Market
Rate;
"Money Market Rate" means the sum of (i) the rate of interest announced
daily by the Agent to be its money market rate, plus (ii) the Applicable
Margin;
"Non-Guarantor" means those United States entities and foreign entities
listed as such on Exhibit J attached hereto and by this reference made a part
hereof and any other Subsidiary of Borrower who has total assets having a book
value of less than $1,000,000 provided that the aggregate of the book value of
all assets of Non-Guarantors shall not exceed $5,000,000;
"Notes" mean, collectively, the promissory notes of the Borrower executed
and delivered to the Lenders as provided in Section 2.08 hereof in
substantially the form attached hereto as Exhibit G, with appropriate
insertions as to amounts, dates and names of Lenders which Notes shall be
delivered to evidence the Revolving Loans provided for herein;
"Obligations" means the obligations, liabilities and Indebtedness of the
Borrower and its Subsidiaries with respect to (i) the principal and interest on
the Loans as evidenced by the Notes, (ii) the Reimbursement Obligations, (iii)
all liabilities of Borrower to any Lender which arise under a Swap Agreement,
and (iv) the payment and performance of all other obligations, liabilities and
Indebtedness of the Borrower and its Subsidiaries to the Lenders or the Agent
hereunder under any one or more of the other Loan Documents to which the
Borrower is a party or with respect to the Loans;
"Outstandings" means the principal amount of Revolving Loans outstanding
plus the Swing Line Outstandings plus the Reimbursement Obligations plus the
Outstanding Letters of Credit;
14
"Outstanding Letters of Credit" means the amount at any date of
computation available to be drawn under Letters of Credit;
"Participation" means, with respect to any Lender (other than
NationsBank), the extension of credit represented by the participation of such
Lender hereunder in the liability of NationsBank in respect of a Swing Line
Loan made or Letters of Credit issued by NationsBank in accordance with the
terms hereof;
"Person" means an individual, partnership, corporation, trust, limited
liability company, unincorporated organization, association, joint venture or a
government or agency or political subdivision thereof;
"Principal Office" means the principal office of the Agent at ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Agency Services or such other office and address as the Agent may from time to
time designate;
"Rate Hedging Obligations" means any and all obligations of the Borrower,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all agreements, devices
or arrangements designed to protect, and entered into for the primary purpose
of protecting, at least one of the parties thereto from the fluctuations of
interest rates, 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, warrants and
those commonly known as interest rate "swap" agreements; and (b) any and all
cancellations, buybacks, reversals, terminations or assignments of any of the
foregoing;
"Reference Loan" means a Loan which bears interest at the Reference Rate;
"Reference Rate" with respect to any day means the greater of (i) the
Federal Funds Effective Rate in effect on such day plus one-half of one percent
(1/2%) or (ii) the rate of interest per annum announced publicly by the Agent
as its prime rate in effect on such day (such prime rate is not necessarily the
lowest or best rate offered by NationsBank to its customers). Any change in
the Reference Rate shall be effective as of the day of such change;
"Regulation D" means Regulation D of the Board as the same may be amended
or supplemented from time to time;
"Reimbursement Obligation" shall mean at any time, the obligation of the
Borrower with respect to any Letter of Credit to reimburse NationsBank and the
Lenders to the extent of their respective Participations (including by the
receipt by NationsBank of proceeds of Loans pursuant to Section 2.04(c)) for
amounts theretofore paid by NationsBank pursuant to a drawing under such Letter
of Credit;
15
"Required Lenders" means, as of any date, Lenders on such date having
Credit Exposures (as defined below) aggregating at least 75% of the aggregate
Credit Exposures of all the Lenders on such date. For purposes of the
preceding sentence, the amount of the "Credit Exposure" of each Lender shall be
equal to the aggregate principal amount of the Revolving Loans owing to such
Lender plus the aggregate unutilized amounts of such Lender's Revolving Credit
Commitment plus the amount of such Lender's Applicable Commitment Percentage of
the aggregate undrawn face amount of the outstanding Letters of Credit and of
the Reimbursement Obligations; provided that, if any Lender shall have failed
to pay to NationsBank its Applicable Commitment Percentage of any Swing Line
Loan or drawing under any Letter of Credit resulting in an outstanding
Reimbursement Obligation, such Lender's Credit Exposure attributable to Swing
Line Loans, Letters of Credit, Reimbursement Obligations and the Letter of
Credit Commitment shall be deemed to be held by NationsBank for purposes of
this definition;
"Revolving Credit Commitment" means with respect to each Lender, the
obligation of such Lender to make Loans to the Borrower up to an aggregate
principal amount at any one time outstanding equal to the amount set forth in
Exhibit A as reduced in accordance with Section 2.10;
"Revolving Credit Facility" means the facility described in Article II
hereof providing for Loans to the Borrower by the Lenders in the aggregate
principal amount of the Total Revolving Credit Commitment less the aggregate
amount of outstanding Swing Line Loans and Outstanding Letters of Credit;
"Revolving Credit Termination Date" means (i) August 1, 2000 or (ii) such
earlier date of termination of Lenders' obligations pursuant to Section 10.01
upon the occurrence of an Event of Default, or (iii) such date as the Borrower
may voluntarily permanently terminate the Revolving Credit Facility by payment
in full of all Obligations (including the discharge of all Obligations of
NationsBank and the Lenders with respect to Letters of Credit and
Participations);
"Revolving Loan" means Loans made by the Lenders to the Borrower pursuant
to Section 2.01 hereof;
"Rexel" means Rexel, S.A., a corporation created under the laws of the
Republic of France, and a substantial stockholder of the Borrower;
"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 on an orderly basis) is in excess of the
total amount of its liabilities, including, without limitation,
Contingent Obligations; 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;
16
"Standby Letter of Credit" means a letter of credit issued by NationsBank
pursuant to Article III for the account of Borrower in favor of a Person
advancing credit or securing an obligation on behalf of Borrower;
"Subordination Agreement" means the Blanket Subordination Agreement of
even date herewith by and among the Agent and certain Subsidiaries, as the same
may be amended, modified or supplemented from time to time;
"Subsidiary" means any corporation in which at the time more than 50% of
its outstanding capital stock ordinarily entitled to vote for the election of
directors is owned directly or indirectly by the Borrower and/or by one or more
of the Borrower's Subsidiaries;
"Swap Agreement means one or more agreements with respect to Indebtedness
evidenced by the Notes between the Borrower and one or more Lenders, on terms
mutually acceptable to Borrower and such Lender or Lenders, which agreements
create Rate Hedging Obligations;
"Swing Line" means the revolving line of credit established by NationsBank
in favor of the Borrower pursuant to Section 2.17;
"Swing Line Loans" means Loans made by NationsBank to Borrower pursuant to
Section 2.17;
"Swing Line Outstandings" means, as of any date of determination, the
aggregate principal amount of all Swing Line Loans then outstanding;
"Swing Line Rate" means either the Reference Rate, the Floating CD Rate or
the Money Market Rate minus for any such rate the Applicable Margin for Unused
Fees as designated by the Borrower as provided in Section 2.17(i), any change
in the Reference Rate, CD Rate for a Floating CD Loan or Money Market Rate to
be effective as of the date of any such change;
"Total Letter of Credit Commitment" means an amount not to exceed
$10,000,000;
"Total Revolving Credit Commitment" means an amount equal to $100,000,000,
as reduced in accordance with Section 2.10 and Section 2.11;
"Trading Asset Ratio" means the ratio of (a) the sum of Accounts and
Inventory minus Accounts Payable of Borrower and its Subsidiaries to (b)
Indebtedness for Money Borrowed of the Borrower and its Subsidiaries.
1.02 Accounting Terms. All accounting terms not specifically defined
herein shall have the meanings assigned to such terms and shall be interpreted
in accordance with Generally Accepted Accounting Principles applied on a
Consistent Basis.
17
ARTICLE II
Revolving Credit Facility
-------------------------
2.01 Commitment. Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make Advances to the Borrower from time to time
from the Closing Date until the Revolving Credit Termination Date on a pro rata
basis as to the total borrowing requested by the Borrower on any day determined
by its Applicable Commitment Percentage up to but not exceeding the Revolving
Credit Commitment of such Lender, provided, however, that the Lenders will not
be required and shall have no obligation to make any Advance (i) so long as a
Default or an Event of Default has occurred and is continuing or (ii) if the
Agent has accelerated the maturity of the Notes as a result of an Event of
Default, or (iii) if any other term or condition set forth in Sections 5.01 or
5.02 hereof, as the case may be, to the extent applicable, has not been
satisfied or waived; provided further, however, that immediately after giving
effect to each Advance, the principal amount of outstanding Revolving Loans
plus the amount of all Swing Line Outstandings, Outstanding Letters of Credit
and Reimbursement Obligations shall not exceed the Total Revolving Credit
Commitment. Within such limits, the Borrower may borrow, repay and reborrow
hereunder, on a Business Day in the case of a Reference Loan or Fixed CD Loan,
and on a LIBOR Business Day in the case of a LIBOR Loan, from time to time from
the Closing Date until, but (as to borrowings and reborrowings) not including,
the Revolving Credit Termination Date; provided, however, that (x) no Fixed CD
Loan shall be made less than thirty (30) days before the Revolving Credit
Termination Date and no LIBOR Loan shall be made less than seven (7) days
before the Revolving Credit Termination Date and (y) each Fixed Rate Loan may,
subject to the provisions of Section 2.06, be repaid only on the last day of
the Interest Period with respect thereto. The Borrower agrees that if at any
time the Outstandings shall exceed the Total Revolving Credit Commitment, the
Borrower shall immediately reduce the outstanding principal amount of the Loans
such that, as a result of such reduction, the Total Revolving Credit Commitment
shall equal or exceed the Outstandings.
2.02 Amounts. Each Revolving Loan hereunder and conversions under Section
2.12 shall be in an amount of at least $3,000,000, and in integral multiples of
$250,000 in excess thereof except as provided in Section 2.04(c) and Section
2.17.
2.03 Interest Periods. Each Revolving Loan shall be, at the option of the
Borrower specified in the Borrowing Notice furnished to the Agent pursuant to
subsection 2.04 hereof, either a Reference Loan or a Fixed Rate Loan, which
shall in each case be made or maintained by each Lender at its applicable
Lending Office. Reference Loans and Fixed Rate Loans may be outstanding at the
same time, provided, however, there shall not be outstanding at any one time
Loans having more than ten (10) different Interest Periods; provided that all
Reference Loans shall be treated as having a single Interest Period.
2.04 Advances.
(a) The Authorized Officer shall give the Agent (i) at least two (2)
Business Days' irrevocable telephonic notice of each Advance that will be a
Fixed CD Loan (whether representing an additional borrowing hereunder or the
conversion of borrowings hereunder from Reference Loans or other Fixed Rate
18
Loans to Fixed CD Loans) prior to 10:30 A.M. Charlotte, North Carolina time;
(ii) at least three (3) LIBOR Business Days' irrevocable telefacsimile or
telephonic notice of each Advance that will be a LIBOR Loan (whether
representing an additional borrowing hereunder or the conversion of borrowing
hereunder from Reference Loans or other Fixed Rate Loans to LIBOR Loans) prior
to 10:30 A.M., Charlotte, North Carolina time; and (iii) irrevocable
telefacsimile or telephonic notice of each Reference Loan representing an
additional borrowing hereunder prior to 10:30 A.M. Charlotte, North Carolina
time on the day of such proposed Reference Loan. Each such Borrowing Notice,
which shall be effective upon receipt by the Agent, shall specify the amount of
the borrowing, the type (Reference, Fixed CD or LIBOR) of Revolving Loan, the
date of borrowing and, if a Fixed Rate Loan the Interest Period to be used in
the computation of interest. The Authorized Officer shall provide the Agent
written confirmation of each such telephonic notice in the form attached hereto
as Exhibit F with appropriate insertions but failure to provide such
confirmation shall not affect the validity of such telephonic notice. Notice
of receipt of such Borrowing Notice shall be provided by the Agent to each
Lender by telefacsimile with reasonable promptness, but not later than 12:00
noon, Charlotte, North Carolina time on the same day as Agent's receipt of such
notice. Failure to give notice of a conversion to a Lender shall not
constitute a Default.
(b) Not later than 1:00 P.M., Charlotte, North Carolina time on the
date specified for each borrowing under this Article II, each Lender shall,
pursuant to the terms and subject to the conditions of this Agreement, make the
amount of the Advance or Advances to be made by it on such day available to the
Agent, by depositing or transferring the proceeds thereof in immediately
available funds at the Principal Office. The amount so received by the Agent
shall, subject to the terms and conditions of this Agreement, be made available
to the Borrower by the Agent by 1:00 P.M., Charlotte, North Carolina time by
depositing the proceeds thereof in immediately available funds, in the
Borrower's Account.
(c) If a drawing is presented under any Letter of Credit in
accordance with the terms hereof prior to the Revolving Credit Termination Date
and the Borrower shall not have reimbursed NationsBank for the amount thereof
in accordance with Section 3.04(a), then to the extent of the availability
under the Swing Line, the amount of such drawing or payment paid by NationsBank
shall be declared an Advance under the Swing Line on the date such payment is
made by NationsBank. If a drawing is presented under any Letter of Credit in
accordance with the terms thereof and to the extent that an Advance under the
Swing Line as provided in the preceding sentence (an "Unreimbursed Drawing")
shall not be available for the amount of such draw or payment, then notice of
such drawing or payment shall be provided promptly by NationsBank to the Agent
and the Agent shall provide notice to each Lender by telephone or
telefacsimile. If such notice to the Lenders of a drawing under any Letter of
Credit is given by the Agent at or before 12:00 noon Charlotte, North Carolina
time on any Business Day, the Borrower shall be deemed to have requested, and
each Lender shall, pursuant to the terms and subject to the conditions of this
Agreement, make an Advance that is a Reference Loan in the amount of such
Lender's Applicable Commitment Percentage of such Unreimbursed Drawing and
shall pay such amount to the Agent for the account of NationsBank at the
Principal Office in Dollars and in immediately available funds before 2:30 P.M.
Charlotte, North Carolina time on the same Business Day. If such notice to the
Lenders is given by the Agent after 12:00 noon Charlotte, North Carolina time
19
on any Business Day, the Borrower shall be deemed to have requested, and each
Lender shall, pursuant to the terms and subject to the conditions of this
Agreement, make an Advance that is a Reference Loan in the amount of such
Lender's Applicable Commitment Percentage of such Unreimbursed Drawing and
shall pay such amount to the Agent for the account of NationsBank at the
Principal Office in Dollars and in immediately available funds before 12:00
noon Charlotte, North Carolina time on the next following Business Day. Such
Reference Loan shall be deemed made for a period ending on the following
Business Day, which shall be extended automatically to the next succeeding
Business Day unless and until the Borrower converts such Reference Loan in
accordance with the terms of Section 2.12 hereof. Upon receipt by the Agent of
proceeds of such Advance, the Reimbursement Obligation represented by such
drawing shall be deemed satisfied.
2.05 Payment of Interest.
(a) The Borrower shall pay interest to the Agent at the Principal
Office for the account of each Lender on the outstanding and unpaid principal
amount of each Revolving Loan made by such Lender for the period commencing on
the date of such Revolving Loan until such Revolving Loan shall be due at the
then applicable Reference Rate for Reference Loans, CD Rate for Fixed CD Loans
or LIBOR Rate for LIBOR Loans, as designated by the Authorized Officer pursuant
to Section 2.04 hereof or as otherwise provided herein; provided, however, (i)
that if any amount shall not be paid when due (at maturity, by acceleration or
otherwise), such amount shall bear interest thereafter the case of a Fixed Rate
Loan, until the end of the Interest Period with respect to such Fixed Rate
Loan, at a rate of two percent (2%) above such Fixed Rate and (ii) thereafter,
and with respect to Reference Loans, at a rate of interest per annum which
shall be two percent (2%) above the Reference or the maximum rate permitted by
applicable law, whichever is lower, from the date such amount was due and
payable until the date such amount is paid in full.
(b) Interest on each Loan shall be computed on the basis of a year
of 360 days and calculated for the actual number of days elapsed. Interest on
each (a) Reference Loan and Swing Line Loan shall be paid in arrears on the
last Business Day of each December, March, June or September, and (b) Fixed
Rate Loan shall be paid on the last day of the applicable Interest Period for
each Fixed Rate Loan and if such Interest Period extends for more than three
months or 90 days, respectively at intervals of three months or 90 days, as
appropriate, after the first day of such Interest Period. Interest shall be
paid upon payment in full of the principal amount of all Loans and termination
of commitments to make Advances. Payments of interest with respect to each
Fixed Rate Loan pursuant to the preceding sentence shall consist of accrued and
unpaid interest on the applicable Fixed Rate Loan from and including the first
day of the Interest Period applicable to such Fixed Rate Loan (or, in the case
of the payment of interest on the last day of an Interest Period of six months
or one year for a LIBOR Loan or 180 days for a Fixed CD Loan, from and
including the date of prior payment of interest on such Loan during such
Interest Period) to but excluding the date of payment. Payments of interest
with respect to each Reference Loan and Swing Line Loan pursuant to the second
sentence of this subsection (b) shall consist of accrued and unpaid interest on
the applicable Reference Rate or Floating Rate in the case of a Swing Line Loan
from and including the first day such Reference Loan or Swing Line Loan is
20
outstanding to but excluding either the date of payment or conversion of such
Loan. The Agent shall endeavor to send the Borrower written notice of all
interest payments not later than the Business Day immediately prior to the
payment date therefor; provided, any failure of the Agent to send such notice
shall not affect the Borrower's obligations with respect to payment of interest
hereunder.
(c) Promptly after the determination of any interest rate provided
for herein or any change therein, the Agent shall give notice thereof to the
Borrower.
2.06 Payment of Principal.
(a) The principal amount of each Revolving Loan and Swing Line Loan
shall be due and payable in full on the Revolving Credit Termination Date. The
duration of the initial Interest Period for each Fixed Rate Loan shall be as
specified in the Borrowing Notice. The Borrower shall have the option from
time to time to elect the duration of subsequent Interest Periods and to
convert the Revolving Loans in accordance with Section 2.12 hereof. If the
Agent does not receive a notice of election of duration of an Interest Period
or to convert by the time prescribed by Section 2.12 hereof, such Fixed Rate
Loan shall automatically convert to a Reference Loan.
(b) The Borrower shall have the right, upon telephonic notice by
10:30 A.M., Charlotte, North Carolina time on the date of any payment, from
time to time to prepay all or any portion of the Loans without penalty other
than as provided in Section 4.03. Prepayments of Loans, other than Swing Line
Loans and other than those required under Section 4.03, shall be in minimum
denominations of $3,000,000 and in integral multiples of $250,000 in excess
thereof. Each payment of principal (including any prepayment) and payment of
interest shall be made to the Agent at the Principal Office, for the account of
each Lender's applicable Lending Office, in Dollars and in immediately
available funds before 2:00 P.M. Charlotte, North Carolina time on the date
such payment is due. Dollar payments received by the Agent after 2:00 P.M.,
Charlotte, North Carolina time on any day shall be deemed received on the next
succeeding Business Day. The Agent may, but shall not be obligated to, debit
the amount of any such payment which is not made by such time to the Borrower's
Account or any ordinary deposit account of the Borrower with the Agent.
(c) In the event that any payment hereunder or under the Notes
becomes due and payable on a day other than a Business Day, then such due date
shall be extended to the next succeeding Business Day; provided that interest
shall continue to accrue during the period of any such extension.
2.07 Borrower's Account. The Agent shall render to the Borrower each
quarter a Loan ledger statement and a copy of the statement of the Borrower's
Account.
2.08 Notes. Loans made by each Lender shall be evidenced by, and be
repayable with interest in accordance with the terms of, a promissory note
payable to the order of such Lender in the amount of its Applicable Commitment
Percentage of the Total Revolving Credit Commitment, which Note shall be dated
the Closing Date or such later date pursuant to an Assignment and Acceptance
21
and shall be duly completed, executed and delivered by the Borrower.
NationsBank and Credit Lyonnais shall surrender the Prior Notes to Borrower
promptly following the Closing Date. At the request of Credit Lyonnais, the
Borrower will cause to be executed and delivered to each of its New York Branch
and its Cayman Island Branch, a note in the amount of the Applicable Commitment
Percentage of Credit Lyonnais; provided that such notes shall provide that the
aggregate outstanding principal amount payable under both such notes shall not
exceed the Applicable Commitment Percentage of Credit Lyonnais. Credit
Lyonnais agrees that all dealings hereunder by the Agent shall be with the New
York Branch and that all payments required hereunder, notices of request for
advances and other notices shall be made or given to Credit Lyonnais New York
Branch on behalf of Credit Lyonnais.
2.09 Pro Rata Payments. Except as otherwise provided herein, (a) each
payment on account of the principal of and interest on the Revolving Loans and
fees (other than any underwriting or structuring fee and the Agent's fees
payable under Section 11.11 hereof, which shall be retained by NationsBank or
the Agent, as the case may be) described in this Agreement shall be made to the
Agent for the account of the Lenders pro rata based on their Applicable
Commitment Percentages, (b) all payments to be made by the Borrower for the
account of each of the Lenders on account of principal, interest and fees,
shall be made without set-off or counterclaim, and (e) the Agent will promptly
distribute payments received to the Lenders.
2.10 Reduction in Commitment. The Borrower shall have the right from time
to time (but not more frequently than twice during each quarterly period), upon
not less than ten (10) Business Days' written notice to the Agent to reduce the
Total Revolving Credit Commitment. The Agent shall give each Lender, within
one (1) Business Day, telephonic notice (confirmed in writing) or telefacsimile
notice of such reduction. Each such optional reduction shall be in the
aggregate amount of $10,000,000 or such greater amount which is in an integral
multiple of $1,000,000, and shall permanently reduce the Revolving Credit
Commitment of the Lenders pro rata. No such reduction shall result in the
payment of any Fixed Rate Loan other than on the last day of the Interest
Period of such Loan. Each reduction of the Total Revolving Credit Commitment
shall be accompanied by prepayment of the Notes to the extent that the
Outstandings exceed the Total Revolving Credit Commitment, after giving effect
to such reduction, together with accrued and unpaid interest on the amounts
prepaid. Any prepayment pursuant to this Section 2.10 shall be applied first
to prepayment of Floating Rate Loans, next to the prepayment of Swing Line
Loans and next to the prepayment of Fixed Rate Loans.
2.11 Increase and Decrease in Amounts. The amount of the Total Revolving
Credit Commitment which shall be available to the Borrower shall be reduced by
the stated amount of all Swing Line Outstandings, Outstanding Letters of Credit
and outstanding Reimbursement Obligations.
2.12 Conversions and Elections of Subsequent Interest Periods. Provided
that no Default or Event of Default shall have occurred and be continuing and
subject to the limitations set forth below and in Sections 4.01(c) and 4.02
hereof, the Borrower may:
22
(a) on two (2) Business Days' notice to the Agent on or before 10:30
A.M. Charlotte, North Carolina time:
(i) elect a subsequent Interest Period for all or a portion of
Fixed CD Loans to begin on the last day of the Interest Period for
such Fixed CD Loans;
(ii) convert all or a portion of Floating Rate Loans to Fixed CD
Loans on any date; and
(iii) convert all or a portion of LIBOR Loans to Fixed CD
Loans on the last day of the Interest Period for such LIBOR Loans.
(b) on three (3) LIBOR Business Days' notice to the Agent on or
before 10:30 A.M. Charlotte, North Carolina time:
(i) elect a subsequent Interest Period for all or a portion of
LIBOR Loans to begin on the last day of the Interest Period for such
LIBOR Loans;
(ii) convert all or a portion of Fixed CD Loans to LIBOR Loans
on the last day of the Interest Period for such Fixed CD Loans; and
(iii) convert all or a portion of Floating Rate Loans to
LIBOR Loans on any date.
Notice of any such elections or conversions shall specify the effective
date of such election or conversion and the Interest Period to be applicable to
the Revolving Loan as continued or converted. Each election and conversion
pursuant to this Section 2.12 shall be subject to the limitations on Fixed CD
Loans and LIBOR Loans set forth in the definition of "Interest Period" herein
and in Sections 2.01, 2.02, 2.03 and 2.04 hereof. All such continuations or
conversions of Revolving Loans shall be effected pro rata based on the
Applicable Commitment Percentages of the Lenders.
2.13 Unused Fees.
(a) For the period beginning on the Closing Date and ending on the
Revolving Credit Termination Date (or such earlier date on which the Revolving
Credit Facility has terminated), the Borrower agrees to pay to the Agent, for
the pro rata benefit of the Lenders based on their Applicable Commitment
Percentages, an unused fee for such period at the Applicable Margin for Unused
Fees on the sum of the daily amount by which the average daily amount of the
Total Revolving Credit Commitment exceeds the sum of average daily (a)
outstanding Revolving Loans and (b) Outstanding Letters of Credit. The Swing
Line Outstandings shall not be outstanding Loans for purposes of determining
such fee. Such payments of fees provided for in this Section 2.13 shall be due
in arrears on the last Business Day of each December, March, June and September
beginning September 30, 1995 to and on the Revolving Credit Termination Date
(or such earlier date on which the Revolving Credit Facility has terminated).
Notwithstanding the foregoing, if all of the conditions precedent to lending
23
specified in Article V hereof have been fulfilled or waived, then so long as
any Lender fails to make available any portion of its Revolving Credit
Commitment when requested, such Lender shall not be entitled to receive payment
of its pro rata share of such fee until such Lender shall make available such
portion. Fees shall be computed on the basis of a year of 360 days and
calculated for the actual number of days elapsed.
(b) In addition to the fees otherwise expressly provided for herein,
the Borrower agrees to pay to NationsBank, the Lenders and the Agent, as the
case may be, such other fees in connection with the Loans and the Letters of
Credit as the Borrower shall be or become committed to pay pursuant to any
other document to which Borrower is a signatory.
2.14 Deficiency Advances. No Lender shall be responsible for any default
of any other Lender in respect to such other Lender's obligation to make any
Loan hereunder nor shall the Revolving Commitment of any Lender hereunder be
increased as a result of such default of any other Lender. Without limiting
the generality of the foregoing, in the event any Lender shall fail to advance
funds to the Borrower as herein provided, the Agent may in its discretion, but
shall not be obligated to, advance under the Note in its favor as a Lender all
or any portion of such amount (the "deficiency advance") and shall thereafter
be entitled to payments of principal of and interest on such deficiency advance
in the same manner and at the same interest rate or rates to which such other
Lender would have been entitled had it made such advance under its Note;
provided that, upon payment to the Agent from such other Lender of the entire
outstanding amount of such deficiency advance, together with interest thereon,
from the most recent date or dates interest was paid to the Agent by the
Borrower on each Revolving Loan comprising the deficiency advance at the
interest rate per annum for overnight borrowing by the Agent from the Federal
Reserve Bank then such payment shall be credited against the Note of the Agent
in full payment of such deficiency advance and the Borrower shall be deemed to
have borrowed the amount of such deficiency advance from such other Lender as
of the most recent date or dates, as the case may be, upon which any payments
of interest were made by the Borrower thereon.
2.15 Adjustments by Agent. Notwithstanding the construction of "pro rata"
to mean based on the Applicable Commitment Percentages and any provisions
contained herein for the advancement of funds or distribution of payments on a
pro rata basis, the Agent may, in its discretion, but shall not be obligated
to, adjust downward or upward (but not in excess of any applicable Revolving
Credit Commitment) the principal amount of any Revolving Loan to be made by any
Lender to the nearest amount which is evenly divisible by $100, and make
appropriate related adjustment in the distribution of payments of principal and
interest on the Loans.
2.16 Use of Proceeds. The proceeds of the Loans made pursuant to the
Revolving Credit Facility and Swing Line hereunder shall be used by the
Borrower to (i) redeem the 7% Convertible Subordinated Debentures issued under
the Indenture and, subject to compliance at all times with Section 9.13 hereof,
acquire shares of capital stock of Borrower, (ii) fund acquisitions, (iii) fund
working capital and (iv) fund other general corporate purposes of the Borrower.
The Borrower agrees that no portion of the proceeds of any Loan shall be
advanced to or used directly for the benefit of any Non-Guarantor.
24
2.17 Swing Line. Notwithstanding any other provision of this Agreement to
the contrary, in order to administer the Revolving Credit Facility in an
efficient manner and to minimize the transfer of funds between the Agent and
the Lenders, NationsBank shall make available Swing Line Loans to the Borrower
prior to the Revolving Credit Termination Date. NationsBank shall not make any
Swing Line Loan pursuant hereto (i) if the Borrower is not in compliance with
all the conditions to the making of Revolving Loans set forth in this
Agreement, (ii) if after giving effect to such Swing Line Loan, the Swing Line
Outstandings exceed $15,000,000, or (iii) if after giving effect to such Swing
Line Loan, the Outstandings exceeds the Total Revolving Credit Commitment.
Loans made pursuant to this Section 2.17 shall be limited to Loans bearing
interest at a Floating Rate.
(i) the Borrower may borrow, repay and reborrow under this
Section 2.17. Borrowings under the Swing Line may be made in amounts
of $50,000, with a minimum outstanding amount at all times of
$100,000, upon telephonic (confirmed in writing) or telefacsimile
request by an authorized officer of the Borrower made to NationsBank
not later than 12:00 noon Charlotte, North Carolina time on the
Business Day of the requested borrowing. Swing Line Loans shall bear
interest, at the election of the Borrower as designated to
NationsBank, at either the Reference Rate in the case of a Reference
Loan or the CD Rate in the case of a Floating CD Loan or the Money
Market Rate in the case of a Money Market Loan. If the Borrower
fails to designate the interest rate for a Swing Line Loan, then such
Swing Line Loan shall bear interest at the Reference Rate. Each
repayment of a Swing Line Loan shall be in integral multiples of
$50,000 with a minimum outstanding amount of $100,000.
(ii) If the Borrower instructs NationsBank to debit its demand
deposit account in an amount of any payment with respect to a Swing
Line Loan, or NationsBank otherwise receives repayment after 2:00
P.M. Charlotte, North Carolina time, on a Business Day, such payment
shall be deemed received on the next Business Day.
(iii) The Borrower and each Lender which is or may become a
party hereto acknowledge that all Swing Line Loans are to be made
solely by NationsBank to the Borrower but that such Lender shall
share the risk of loss with respect to such Advances in an amount
equal to such Lender's Applicable Commitment Percentage of such Swing
Line Loan. Upon demand made by NationsBank each Lender (including
NationsBank) shall, according to its Lender's Applicable Commitment
Percentage of such Swing Line Loan, promptly provide to NationsBank
its purchase price therefor in an amount equal to its Participation
therein, in which case such Swing Line Loan shall be deemed from and
after such date a Reference Loan made in accordance with this
Agreement. The obligation of each Lender to so provide its purchase
price to NationsBank shall be absolute and unconditional and shall
not be affected by the occurrence of an Event of Default or any other
occurrence or event.
25
(iv) The Borrower at its option may request an Advance as a
Revolving Loan pursuant to Section 2.01 in an amount sufficient to
repay any or all Swing Line Loans on any date and the Agent shall
upon the receipt of such Advance, provide to NationsBank the amount
necessary to repay such Swing Line Loan or Loans (which NationsBank
shall then apply to such repayment) and credit any balance of the
Revolving Loan in immediately available funds to the Borrower's
Account. The proceeds of such Advances shall be paid to NationsBank
for application to the Swing Line Outstandings and the Lenders shall
then be deemed to have made Revolving Loans in the amount of such
Advances. The obligation of NationsBank to fund the Swing Line shall
cease upon the earlier of (i) the occurrence of a Default, or (ii)
the Revolving Credit Termination Date; provided that when a Default
is no longer continuing NationsBank shall be obligated to provide
Swing Line Loans.
26
ARTICLE III
Letters of Credit
-----------------
3.01 Letters of Credit. NationsBank agrees, subject to the terms and
conditions of this Agreement, upon request of the Borrower to issue from time
to time for the account of the Borrower Letters of Credit upon delivery to
NationsBank of an Application and LC Agreement; provided, that the undrawn face
amount of all Letters of Credit outstanding plus all outstanding Reimbursement
Obligations hereunder shall not exceed the Total Letter of Credit Commitment.
No Letter of Credit shall be issued by NationsBank with an expiry date or
payment date occurring subsequent to the fifth Business Day preceding the
Revolving Credit Termination Date (without giving effect to the proviso
thereof) and no Letter of Credit shall have an expiry date occurring more than
twelve (12) months after the date of its issuance. NationsBank shall not be
required to issue any Letter of Credit if the aggregate amount of the
Outstandings and the face amount of any requested Letter of Credit exceeds the
Total Revolving Credit Commitment.
3.02 Reimbursement.
(a) The Borrower hereby unconditionally agrees immediately to pay to
NationsBank on demand at ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, 15th Floor, NC1-001-15-04,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Agency Services all amounts
required to pay all drafts drawn under the Letters of Credit and any and all
out of pocket expenses of every kind incurred by NationsBank in connection with
the Letters of Credit and in any event and without demand to place in the
possession of NationsBank (which shall include Advances under the Revolving
Credit Facility if permitted by Section 2.04(c) hereof) sufficient funds to pay
all debts and liabilities arising under any Letter of Credit. The Borrower's
obligations to pay NationsBank under this Section 3.02(a), and the right of
NationsBank to receive the same, shall be absolute and unconditional and shall
not be affected by any circumstance whatsoever. NationsBank may charge the
Borrower's Account or any other account the Borrower may have with it for any
and all amounts NationsBank pays under a Letter of Credit plus commissions,
charges and expenses as from time to time agreed to by NationsBank and the
Borrower; provided that to the extent permitted by Section 2.04(c), amounts
shall be paid pursuant to Advances under the Swing Line and/or the Revolving
Credit Facility. The Borrower agrees that NationsBank may, in its sole
discretion, accept or pay, as complying with the terms of any Letter of Credit,
any drafts or other documents otherwise in order which may be signed or issued
by an administrator, executor, trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, liquidator, receiver, attorney in fact
or other legal representative of a party who is authorized under such Letter of
Credit to draw or issue any drafts or other documents. The Borrower agrees to
pay NationsBank interest on any amounts not paid when due hereunder at the
lesser of the Reference Rate plus two percent (2%), or the maximum rate
permitted by law.
(b) In accordance with the provisions of Section 2.04(c) hereof,
NationsBank shall notify the Agent (and shall also notify the Borrower) of any
drawing under any Letter of Credit issued for the account of the Borrower as
promptly as practicable following the receipt by NationsBank of such drawing or
payment.
27
(c) Each Lender (other than NationsBank) shall automatically acquire
on the date of issuance thereof a Participation in the liability of NationsBank
in respect of such Letter of Credit in an amount equal to such Lender's
Applicable Commitment Percentage of such liability, and to the extent that the
Borrower is obligated to pay NationsBank under Section 3.02(a), each Lender
(other than NationsBank) thereby shall absolutely, unconditionally and
irrevocably assume, and shall be unconditionally obligated to pay to
NationsBank as hereinafter described, its Applicable Commitment Percentage of
the liability of NationsBank under such Letter of Credit. If a Reimbursement
Obligation shall be outstanding, upon demand from NationsBank or the Agent,
each Lender shall pay to NationsBank in the manner provided in Section 2.04(c)
its Applicable Commitment Percentage of such Reimbursement Obligation. If any
Lender is obligated to pay but does not pay amounts to the Agent for the
account of NationsBank in full upon such request as required by this Section
3.02(c), such Lender shall, on demand, pay to the Agent for the account of
NationsBank interest on the unpaid amount for each day during the period
commencing on the date of notice given to such Lender pursuant to Section
2.04(c) until such Lender pays such amount to the Agent for the account of
NationsBank in full at the interest rate per annum for overnight borrowing by
NationsBank from the Federal Reserve Bank.
(d) Promptly following the end of each calendar quarter, NationsBank
shall deliver to the Agent, and the Agent shall deliver to each Lender, a
notice describing the aggregate undrawn amount of all Letters of Credit
outstanding at the end of such quarter. Upon the request of any Lender from
time to time, NationsBank shall deliver to the Agent, and the Agent shall
deliver to such Lender, any other information reasonably requested by such
Lender with respect to each Letter of Credit then outstanding.
(e) The issuance by NationsBank of each Letter of Credit shall, in
addition to the conditions precedent set forth in Section 5.01 hereof, be
subject to the conditions that such Letter of Credit be in such form, contain
such terms and support such transactions or obligations as shall be reasonably
satisfactory to NationsBank consistent with the then current practices and
procedures of NationsBank with respect to similar letters of credit. All
Letters of Credit shall be issued pursuant to and subject to the Uniform
Customs and Practice for Documentary Credits, 1993 revision, International
Chamber of Commerce Publication No. 500 and all subsequent amendments and
revisions thereto. The Borrower shall have executed and delivered such other
instruments and agreements relating to such Letter of Credit as NationsBank
shall have reasonably requested consistent with such practices and procedures.
(f) Without duplication of Section 11.07 hereof, the Borrower hereby
indemnifies and holds harmless NationsBank and each other Lender and the Agent
from and against any and all claims and damages, losses, liabilities, costs or
out-of-pocket expenses which NationsBank, such other Lender or the Agent may
reasonably incur (or which may be claimed against NationsBank, such other
Lender or the Agent by any Person other than any party hereto) by reason of or
in connection with the issuance or transfer of or payment or failure to pay
under such Letter of Credit; provided that the Borrower shall not be required
to indemnify NationsBank, any other Lender or the Agent for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the
extent, (i) caused by the willful misconduct or gross negligence of the party
to be indemnified, (ii) caused by the failure of NationsBank to pay under
28
any Letter of Credit after the presentation to it of a request strictly
complying with the terms and conditions of such Letter of Credit, unless such
payment is prohibited by any law, regulation, court order or decree, or (iii)
paid or payable by any Lender under Sections 2.14 or 11.10 hereof.
(g) Without limitation or prejudice to any right or remedy available
to Borrower by contract or law, the obligation of Borrower to immediately
reimburse Agent for drawings made under Letters of Credit shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under all circumstances whatsoever,
including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of the Letter of
Credit, the obligation supported by the Letter of Credit or any other
agreement or instrument relating thereto (collectively, the "Related
Documents");
(ii) the existence of any claim, setoff, defense or other rights
which Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), Agent, Lenders or
any other Person, whether in connection with the Loan Documents, the
Related Documents or any unrelated transaction;
(iii) any breach of contract or other dispute between
Borrower and any beneficiary or any transferee of a Letter of Credit
(or any persons or entities for whom such beneficiary or any such
transferee may be acting), Agent, Lenders or any other Person or
entity;
(iv) any draft, statement or any other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever; or
(v) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing;
provided, however, that nothing contained herein shall be deemed to release
NationsBank or any other Lender or the Agent of any liability for actual loss
arising as a result of its gross negligence or willful misconduct.
3.03 Letter of Credit Fee. For the period beginning on the Closing Date
and ending on the Revolving Credit Termination Date, the Borrower agrees to pay
to the Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, a fee equal to the Applicable Margin for the Interest
Addition times the stated amount of each Letter of Credit from the date of
issuance of such Letter of Credit. In addition, the Borrower shall pay to
NationsBank a fee equal to one-eighth percent (1/8%) per annum of the face
amount of each Letter of Credit. Such payment of fees provided for in the this
Section 3.03 shall be due quarterly in arrears on the last Business Day of each
March, June, September and December.
29
3.04 Administrative Fees and Reserves. The Borrower shall pay to
NationsBank administrative and other fees, if any, in connection with the
Letters of Credit in such amounts and at such times as NationsBank and the
Borrower shall agree from time to time. In addition, the Borrower shall
reimburse NationsBank for all costs or reduction in yield occurring by reason
of the issuance by NationsBank of the Letters of Credit.
30
ARTICLE IV
Yield Protection and Illegality
-------------------------------
4.01 Increased Costs.
(a) If after the date of this Agreement, due to either (i) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements) in or in the interpretation of any law or
regulation or (ii) the adoption of any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
other than, in each case, any introduction, change or adoption in respect of
net income, franchise or similar taxes, there shall be any increase in the cost
to any Lender of agreeing to make or making, funding or maintaining any Fixed
Rate Loan, then the Borrower shall from time to time, within 30 days after
demand by the Agent, pay to the Agent additional amounts sufficient to
compensate such Lender for such increased cost. A certificate documenting the
amount of such increased cost and indicating a reasonable basis therefor,
submitted to the Borrower by the Agent shall be conclusive and binding for all
purposes, absent manifest error.
(b) If after the date of this Agreement, either (i) the introduction
of or any change in or in the interpretation of any law or regulation or (ii)
the adoption of any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by any
Lender or any corporation controlling any Lender and the Agent determines that
the amount of such capital is increased by or based upon the existence of the
commitments to lend hereunder and other commitments of this type, then, within
30 days after demand by the Agent, the Borrower shall pay to the Agent, from
time to time as specified by the Agent, additional amounts sufficient to
compensate such Lender in the light of such circumstances, to the extent that
the Agent reasonably determines such increase in capital to be allocable to the
existence of the commitments to lend hereunder. A certificate documenting such
amounts and indicating a reasonable basis therefor submitted to the Borrower by
the Agent shall be conclusive and binding for all purposes, absent manifest
error.
(c) If any Lender requests compensation from the Borrower under this
Section 4.01, the Borrower may, by notice to such Lender (with a copy to the
Agent), suspend the obligation of such Lender to make additional Advances of
the type with respect to which such compensation is requested until either (A)
the matter giving rise to such request ceases to be in effect or (B) such
Lender gives notice to the Borrower that it will no longer require the Borrower
to pay additional costs arising from such matter; provided that the Borrower
shall reimburse the Agent for its administrative expenses incurred by virtue of
all such suspensions. In the case of any such suspension, all Fixed Rate Loans
that would otherwise be required to be made by such Lender but for such
suspension shall instead be a Floating Rate Loan.
(d) Each Lender will notify the Borrower of any matter that will
entitle such Lender to compensation under paragraph (a) or (b) of this Section
4.01 as promptly as practicable, but in any event within 120 days, after such
Lender obtains actual knowledge thereof; provided, however, that if any Lender
fails to give such notice within 120 days after it obtains actual knowledge of
31
such matter, such Lender shall with respect to compensation payable pursuant to
this Section 4.01 in respect of any costs resulting from such matter, only be
entitled to payment under this Section 4.01 for costs incurred from and after
the date 120 days prior to the date that such Lender does give such notice; and
provided, further, that each Lender will designate a different lending office
for the Advances of such Lender affected by the matters requiring compensation,
and take other measures in its sole discretion, if such designation or other
measures will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole opinion of such Lender, result in a material cost to,
or be otherwise disadvantageous to, such Lender.
(e) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof agrees that it will deliver to the
Borrower and the Agent (i) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, as the case may
be, or other manner or certification, establishing that payment of interest
hereunder are either not subject to or totally exempt from United States
Federal withholding tax and (ii) an Internal Revenue Service For W-8 or W-9 or
successor applicable form. Each such Lender also agrees to deliver to the
Borrower and the Agent two further copies of the said Form 1001 or 4224 and
Form W-8 or W-9, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower, and
such extensions or renewals thereof as the same may reasonably be requested by
the Borrower or the Agent, unless, in any such case, an event (including,
without limitation, any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which
renders all such forms inapplicable or which prevent such Lender from duly
completing and delivering any such form with respect to it and such Lender so
advises each of the Borrower and the Agent. Such Lender shall certify (i) in
the case of a Form 1001 or 4224, that it is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes and (ii) in the case of a Form W-8 or W-9, that it is entitled to
an exemption from United States backup withholding tax.
4.02 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender to honor its obligation to
make or maintain LIBOR Loans hereunder, then such Lender shall promptly notify
the Borrower thereof (with a copy to the Agent) and such Lender's obligation to
make or continue LIBOR Loans, or convert Floating Rate Loans or Fixed CD Loans
into LIBOR Loans, shall be suspended until such time as such Lender may again
make and maintain LIBOR Loans, and such Lender's outstanding LIBOR Loans shall
be converted into Floating Rate Loans or Fixed CD Loans in accordance with
Section 2.12 hereof.
4.03 Compensation. The Borrower shall promptly pay to each Lender, upon
the request of such Lender, such amount or amounts as shall be sufficient (in
the reasonable determination of Lender) to compensate it for any loss, cost or
expense incurred by it as a result of:
32
(a) any payment, prepayment (including prepayments pursuant to
Section 2.10) or conversion of a Fixed CD Loan or LIBOR Loan on a date other
than the last day of the Interest Period for such Fixed CD Loan or LIBOR Loan,
including, without limitation, any conversion required pursuant to Section
4.02; or
(b) any failure by the Borrower to borrow a Fixed CD Loan or LIBOR
Loan on the date for such borrowing specified in the relevant Borrowing Notice
under Section 2.04 hereof;
such compensation to include, without limitation, an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount so paid, prepaid or converted or not borrowed for the period
from the date of such payment, prepayment or conversion or failure to borrow to
the last day of the then current Interest Period for such Loan (or, in the case
of a failure to borrow, the Interest Period for such Loan which would have
commenced on the date scheduled for such borrowing) at the applicable rate of
interest for such Fixed CD Loan or LIBOR Loan provided for herein, minus the
Applicable Margin for such Loan, over (ii) the Applicable Base Rate (as
reasonably determined by the Agent) for Dollar deposits of amounts comparable
to such principal amount and maturities comparable to such period. A
determination of a Lender as to the amounts payable pursuant to this Section
4.03 shall be conclusive, provided that such determinations are made on a
reasonable basis. The Lender requesting compensation under this Section 4.03
shall furnish to the Authorized Officer calculations in reasonable detail
setting forth such Lender's determination of the amount of such compensation.
Notwithstanding anything to the contrary herein, a Lender shall not be entitled
to compensation pursuant to Section 4.01(a) and (b) and Section 4.02 unless
such Lender has requested such compensation from other borrowers.
33
ARTICLE V
Conditions to Continue Making Loans and Issuing
Letters of Credit
----------------------------------------------
5.01 Conditions of Further Advance and Issuance of Letters of Credit. The
obligation of the Lenders to make further Advances and of NationsBank to issue
the Letters of Credit is subject to the conditions precedent that the Agent
shall have received, on the Closing Date in form and substance satisfactory to
the Agent and Lenders, the following:
(a) executed originals of each of this Agreement and the Notes and
the other Loan Documents, together with all schedules and exhibits thereto in
form and substance satisfactory to the Agent and the Lenders;
(b) favorable written opinion of counsel to the Borrower dated the
Closing Date, addressed to the Agent and the Lenders and satisfactory to ▇▇▇▇▇
▇▇▇▇▇ Mulliss & ▇▇▇▇▇, L.L.P., special counsel to the Agent, substantially in
the form of Exhibit H attached hereto;
(c) resolutions of the board of directors (or of the appropriate
committee thereof) of the Borrower certified by its secretary or assistant
secretary as of the Closing Date, appointing the initial Authorized Officers
and approving and adopting the Loan Documents to be executed by the Borrower at
the Closing, and authorizing the execution and delivery thereof; specimen
signatures of officers of the Borrower executing the Loan Documents, certified
by the Secretary or Assistant Secretary of the Borrower;
(d) the charter documents of the Borrower certified as of the
Closing Date by the Secretary or Assistant Secretary of the Borrower as true
and correct;
(e) the Bylaws of the Borrower certified as of the Closing Date as
true and correct by the secretary or assistant secretary of the Borrower;
(f) certificates issued as of a recent date by the Secretary of
State of the state of the incorporation of the Borrower as to the corporate
good standing of the Borrower therein;
(g) appropriate certificates of qualification to do business and of
corporate good standing issued as of a recent date by the Secretary of State of
each jurisdiction in which the failure to be qualified to do business would
materially adversely affect the business, operations or conditions, financial
or otherwise, of the Borrower;
(h) with respect to each Subsidiary, if any, executing a Guaranty,
each of the opinions, certificates and documents described in subsections (b)
through (f) above;
(i) notice of appointment of the initial Authorized Officers;
34
(j) all fees payable by the Borrower on the Closing Date to the
Agent and the Lenders; and
(k) such other documents, instruments, certificates and opinions as
the Agent or any Lender may reasonably request on or prior to the Closing Date
in connection with the consummation of the transactions contemplated hereby.
5.02 Conditions of Advances. The obligations of the Lenders to make any
Advance (other than pursuant to Section 2.04(c) or 2.17(iii)) and NationsBank
to issue Letters of Credit hereunder on or subsequent to the Closing Date are
subject to the satisfaction of the following conditions:
(a) the Agent shall have received a notice of such borrowing or
request if required by Sections 2.04, 2.12 or 2.17 hereof;
(b) the representations and warranties of the Borrower set forth in
Article VII hereof and in each of the other Loan Documents shall be true and
correct in all material respects on and as of the date of such Advance or
issuance of such Letters of Credit, as the case may be, with the same effect as
though such representations and warranties had been made on and as of such
date;
(c) there shall have been no material adverse change in the
financial condition of the Borrower and its Subsidiaries, taken as a whole,
since the date of those financial statements most recently delivered to the
Agent and the Lenders pursuant to Section 8.01 hereof;
(d) in the case of the issuance of a Letter of Credit, the Borrower
shall deliver to NationsBank notice of request for issuance of a Letter of
Credit;
(e) at the time of each such Advance or issuance of each Letter of
Credit, as the case may be, no Default or Event of Default specified in Article
X hereof shall have occurred and be continuing.
35
ARTICLE VI
Guaranties
----------
6.01 Further Assurances. At the request of the Agent, the Borrower will
cause each Guarantor to execute, alone or with the Agent, any certificate,
instrument, statement or document which the Agent reasonably deems necessary to
create, continue or preserve the Guaranty by such Guarantor.
36
ARTICLE VII
Representations and Warranties
------------------------------
7.01 Representations and Warranties as to Borrower and Subsidiary. The
Borrower represents and warrants (which representations and warranties shall
survive the delivery of the documents mentioned herein and the making of
Loans), that:
(a) Organization and Authority.
(i) It and each Subsidiary is a corporation duly organized and
validly existing under the laws of the jurisdiction of its
incorporation;
(ii) it and each Subsidiary has the corporate power and
authority to own its properties and assets and to carry on its
business as now being conducted and is qualified to do business in
every jurisdiction in which failure so to qualify would have a
material adverse effect on the financial condition, business or
operations of the Borrower and the Subsidiaries considered as a whole
or the ability of the Borrower or any Subsidiary to perform its
obligations under any of the Loan Documents to which it is a party (a
"Material Adverse Effect");
(iii) it has the corporate power and authority to execute
and perform this Agreement, to borrow hereunder, and to execute,
deliver and perform each of the other Loan Documents to which it is
or is to be a party;
(iv) each Guarantor has the corporate power and authority to
execute, deliver and perform the Guaranty and Subordination Agreement
to which it is or is to be a party; and
(v) each of the Loan Documents to which the Borrower or any
Guarantor is a party is the valid and binding obligation of the
Borrower or such Guarantor, as the case may be, enforceable against
the Borrower or such Guarantor, as the case may be, in accordance
with its terms, subject to the effect of any applicable bankruptcy,
moratorium, insolvency, reorganization or other similar law affecting
the enforceability of creditors' rights generally and to the effect
of general principles of equity which may limit the availability of
equitable remedies (whether in a proceeding at law or in equity);
(b) Loan Documents. The execution, delivery and performance by the
Borrower and each Guarantor of each of the Loan Documents to which it is a
party:
(i) have been duly authorized by all requisite corporate action
(including any required shareholder approval) of the Borrower or
Guarantor, as the case may be, required for the lawful execution,
delivery and performance thereof;
37
(ii) do not violate any provisions of (1) applicable law, (2)
any order of any court or other agency of government binding on the
Borrower or any Guarantor or their properties, (3) the charter
documents or by-laws of the Borrower or any Guarantor or (4) any
provisions of any indenture, agreement or other instrument to which
the Borrower or any Guarantor is a party, or by which the properties
or assets of the Borrower or any Guarantor are bound, which would
have a Material Adverse Effect;
(iii) will not, result in a breach of or constitute an event
of default, or an event which, with notice or lapse of time, or both,
would constitute an event of default, under any indenture, agreement
or other instrument to which the Borrower or its Subsidiary is a
party which breach or event of default would have a Material Adverse
Effect; and
(iv) will not result in the creation or imposition of any Lien,
charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Borrower or any Subsidiary (other than
pursuant to the Loan Documents).
(c) Solvency. The Borrower and each of its Subsidiaries are Solvent
after giving effect to the transactions contemplated by this Agreement and the
other Loan Documents.
7.02 Representations and Warranties of Borrower. The Borrower represents
and warrants that:
(a) Subsidiaries and Stockholders. As of the Closing Date, it has
no Subsidiaries other than those Persons listed as Subsidiaries in Exhibit J
hereto; as of the Closing Date it does not own any equity interest in any
Person other than the Persons listed in Exhibit J hereto;
(b) Financial Condition.
(i) As at the Closing Date, the Borrower has heretofore
furnished to each Lender an audited unqualified consolidated balance
sheet of the Borrower and its Subsidiaries as at December 31, 1994
and the notes thereto and the related consolidated statements of
income, cash flow and changes in stockholders' equity for the Fiscal
Year then ended as examined and certified by Coopers & ▇▇▇▇▇▇▇ and
unaudited consolidated balance sheets and related consolidated
statements of income, without notes, for and as of the end of the
first fiscal quarter of the year beginning January 1, 1995. Except
as set forth therein, such consolidated financial statements
(including the notes thereto) present fairly the consolidated
financial condition of the Borrower and the Subsidiaries as of the
end of such Fiscal Year and first fiscal quarter and consolidated
results of their operations and the changes in their stockholders'
equity for the Fiscal Year and quarter then ended, all in conformity
with Generally Accepted Accounting Principles applied on a consistent
basis subject, in the case of unaudited consolidated financial
statements, to year-end adjustments and the absence or reduced scope
38
of footnote disclosure. Except as disclosed therein or otherwise
described or referred to in Exhibit K, neither the Borrower nor any
Subsidiary has, as of the date hereof, any known and material direct
liability;
(ii) since March 31, 1995 through the Closing Date, there has
been no material adverse change in the condition, financial or
otherwise, of the Borrower and its Subsidiaries or in the businesses,
properties and operations of the Borrower and its Subsidiaries, in
each case, considered as a whole, nor have such businesses or
properties, taken as a whole, been materially adversely affected as a
result of any fire, explosion, earthquake, accident, strike, lockout,
combination of workers, flood, embargo or act of God;
(c) Title to Properties. The Borrower and its Subsidiaries have
title to all their respective real and personal properties (except to the
extent not material to the financial condition of the Borrower and the
Subsidiaries taken as a whole) subject to no Liens, except for (i) Liens
included in the notes to the financial statements referred to in Section
7.02(b) or otherwise described in Exhibit K attached hereto, and (ii) Liens
permitted under Section 9.01 hereof;
(d) Taxes. The Borrower and its Subsidiaries have filed or caused
to be filed all federal, state and local tax returns which are required to be
filed by them and except for taxes and assessments being contested in good
faith and against which adequate reserves to the extent required in accordance
with Generally Accepted Accounting Principles have been established, have paid
or caused to be paid all taxes as shown on said returns or on any assessment
received by them, to the extent that such taxes have become due, except where
the failure to file or pay would not have a Material Adverse Effect;
(e) Other Agreements. As of the Closing Date, neither the Borrower
nor any Subsidiary is a party to any judgment, order, decree or any agreement
or instrument or subject to restrictions which could reasonably be expected to
have a Material Adverse Effect;
(f) Litigation. Except as set forth in Schedule 7.02(f) hereto,
there is no action, suit or proceeding at law or in equity or by or before any
governmental instrumentality or agency or arbitral body pending, or, to the
best knowledge of the Borrower, threatened by or against the Borrower or any
Subsidiary which is reasonably likely to be determined adversely to the
Borrower or such Subsidiary and which, if so determined, would have a Material
Adverse Effect;
(g) Margin Stock. Neither the Borrower nor any Subsidiary is
engaged principally in, or has as one of its important activities, the business
of extending credit for the purpose of purchasing or carrying any "margin
stock" as such term is defined in Regulation U, as amended (12 C.F.R. Part
221), of the Board. The proceeds of the borrowings made pursuant to Section
2.01 hereof will be used by the Borrower only for the purposes set forth in
Section 2.16 hereof. Except as provided in Section 2.16, none of such proceeds
will be used by the Borrower, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or
39
carry margin stock or for any other purpose which would constitute any of the
Loans under this Agreement a "purpose credit" within the meaning of said
Regulation U or Regulation X (12 C.F.R. Part 224) of the Board. Neither the
Borrower nor any agent authorized to act and so acting in its behalf (other
than the Agent and the Lenders) has taken or will take any action which would
cause this Agreement or any of the documents or instruments delivered pursuant
hereto to violate any regulation of the Board or to violate the Securities
Exchange Act of 1934 or any state securities laws, in each case, as in effect
on the date hereof;
(h) Investment Company. Neither the Borrower nor any Subsidiary is
an "investment company," or a company controlled by an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended (15
U.S.C. Section 80a-1, et seq.);
(i) Patents, Etc. The Borrower and its Subsidiaries own or have the
right to use, under valid license agreements or otherwise, all material
patents, licenses, franchises, trademarks, trademark rights, tradenames,
tradename rights, copyrights, trade secrets and know how necessary to the
conduct of their businesses as now conducted, without known conflict with any
patent, license, franchise, trademark trade secrets or confidential commercial
or proprietary information, tradename, copyright or other proprietary rights of
any other Person, except where the failure so to own or have the right to use
or such conflict would not have a Material Adverse Effect;
(j) No Untrue Statement. The representations and warranties of the
Borrower set forth in this Agreement and any other Loan Document do not contain
any misrepresentation or untrue statement of material fact or omit to state a
material fact necessary, in light of the circumstance under which it was made,
in order to make any such representation or warranty not misleading in any
material respect;
(k) No Consents, Etc. As of the Closing Date, neither the
respective businesses or properties of the Borrower or any Subsidiary, nor any
relationship between the Borrower or any Subsidiary and any other Person, nor
any circumstance in connection with the execution, delivery and performance of
the Loan Documents and the transactions contemplated hereby and thereby is such
as to require a consent, approval or authorization of, or filing, registration
or qualification with, any governmental or other authority or any other Person
on the part of the Borrower or any Subsidiary as a condition to the execution,
delivery and performance of, or consummation of the transactions contemplated
by, this Agreement or the other Loan Documents or if so, such consent,
approval, authorization, filing, registration or qualification has been
obtained or effected, as the case may be, or will be obtained or effected in
the ordinary course, or where the failure to obtain or effect the same could
not reasonably be expected to have a Material Adverse Effect;
(l) ERISA. All Plans (as defined in Section 3(3) of ERISA)
maintained by the Borrower and each Guarantor are in compliance in all material
respects with the applicable provisions of ERISA and the Internal Revenue Code
of 1986, as amended (the "Code"), and the regulations thereunder, and no
Reportable Event has occurred and is continuing with respect to any Plan
maintained by the Borrower or any Subsidiary, except where non-compliance or
40
such occurrence would not subject the Borrower and its Subsidiaries to
liability in excess of $2,000,000.
(m) No Default. As of the date hereof, there does not exist any
Default or Event of Default hereunder; and
(n) Hazardous Materials. Neither the Borrower nor any Subsidiary
nor, to the best of Borrower's knowledge, any previous owner or operator of any
real property currently owned or operated by the Borrower or any Subsidiary
(collectively, the "Property"), has generated, stored, or disposed of any
Hazardous Material on any portion of the Property, or transferred any Hazardous
Material from the Property to any other location, giving rise to any liability
of the Borrower or any Subsidiary which would have a Material Adverse Effect.
The Borrower and each Subsidiary is in compliance with all applicable
Environmental Laws, except for any such noncompliance that would not have a
Material Adverse Effect, and neither Borrower nor any Subsidiary has been
notified of any action, suit, proceeding or investigation which calls into
question compliance by the Borrower or any Subsidiary with any Environmental
Laws or which seeks to suspend, revoke or terminate any license, permit or
approval necessary for the generation, handling, storage, treatment or disposal
of any Hazardous Material, which would have a Material Adverse Effect.
41
ARTICLE VIII
Affirmative Covenants
----------------------
Until the principal and interest of the Loans have been paid in full, all
fees due and payable by the Borrower hereunder have been paid in full, no
Letters of Credit or Reimbursement Obligations are outstanding and the Total
Revolving Credit Commitment has been terminated in accordance with the terms
hereof, unless the Required Lenders shall otherwise consent in writing,
Borrower will and, to the extent required by Section 8.10 below, will cause
each Subsidiary to:
8.01 Financial Reports, Etc.
(a) as soon as practical and in any event within 97 days after the
end of each Fiscal Year of the Borrower, deliver or cause to be delivered to
the Agent and each Lender (i) consolidated balance sheets of the Borrower and
its Subsidiaries, and the notes thereto, and the related consolidated
statements of income, cash flow and changes in stockholders' equity and the
respective notes thereto for such Fiscal Year, setting forth in each case
comparative financial statements for the preceding Fiscal Year, all prepared in
accordance with Generally Accepted Accounting Principles applied on a
consistent basis (except as disclosed therein) and accompanied by, with respect
to the consolidated financial statements, opinions of Coopers & ▇▇▇▇▇▇▇, KPMG
Peat Marwick, Deloitte & Touche, Ernst & Young, Price Waterhouse or ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Co., or any successor firm thereto, or other independent certified
public accountants of recognized national standing selected by the Borrower and
reasonably acceptable to the Required Lenders, which is unqualified as to the
scope of the audit performed and as to the "going concern" status of the
Borrower, provided that delivery of a copy of Borrower's Form 10-K as filed
with the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (i); and (ii) a certificate of an Authorized
Officer demonstrating compliance with Sections 9.12, 9.13, 9.14, 9.15, 9.17 and
9.18 of this Agreement, which certificate shall be in the form attached as
Exhibit I;
(b) as soon as practical and in any event within 52 days after the
end of each quarterly period (except the last reporting period of the Fiscal
Year), deliver to the Agent and each Lender (i) consolidated balance sheets of
the Borrower and its Subsidiaries, as of the end of such reporting period and
the related consolidated statements of income, and changes in cash flow for the
period from the beginning of the Fiscal Year through the end of such reporting
period, certified by an Authorized Officer as presenting fairly in all material
respects the financial position of the Borrower and its Subsidiaries as of the
end of such reporting period and the results of their operations and the
changes in their cash flow for such reporting period, in conformity with the
standards and subject to the limitations set forth in Section 7.02(b)(i) with
respect to unaudited financial statements, subject to changes in Generally
Accepted Accounting Principles provided that delivery of a copy of Borrower's
Form 10-Q for such quarterly period as filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this clause (i) and
(ii) a certificate of an Authorized Officer containing computations for such
quarter similar to that required pursuant to Section 8.01(a)(ii);
42
(c) together with each delivery of the financial statements required
by Section 8.01(a) hereof, deliver to the Agent and each Lender a letter from
the Borrower's accountants specified in Section 8.01(a) hereof stating that in
performing the examination necessary to render an opinion on the financial
statements delivered therewith, they obtained no knowledge of any Default or
Event of Default by the Borrower in the fulfillment of the terms and provisions
of this Agreement insofar as they relate to financial matters (which at the
date of such statement remains uncured) or if the accountants have obtained
knowledge of such Default or Event of Default, a statement specifying the
nature and period of existence thereof;
(d) promptly upon their becoming available to the Borrower, the
Borrower shall deliver to the Agent, and each Lender, a copy of (i) all regular
or special reports or effective registration statements which the Borrower or
any Subsidiary shall publicly file with the Securities and Exchange Commission
(or any successor thereto) or any securities exchange (in each case, excluding
exhibits) and (ii) all reports, proxy statements, financial statements and
other information distributed by the Borrower to its stockholders, bondholders
or the financial community in general, and (iii) any material reports submitted
to the Borrower or any of its subsidiaries by independent accountants in
connection with any annual, interim or special audit of the Borrower or any of
its Subsidiaries; and
(e) promptly, from time to time, deliver or cause to be delivered to
each Lender such other information regarding Borrower's and each Subsidiary's
operations, business affairs and financial condition as such Lender may
reasonably request. The Agent and the Lenders are hereby authorized to deliver
a copy of any such financial information delivered hereunder to the Lenders or
the Agent to any regulatory authority having jurisdiction over any of the
Lenders pursuant to any written request therefor, and, subject to Section
12.13, to any other Person who shall acquire or consider the acquisition of a
participation interest in any Revolving Loan or the Letters of Credit permitted
by this Agreement.
8.02 Maintain Properties. Maintain all properties and other personal
property necessary to its operations in good working order and condition and
make all needed repairs, replacements and renewals as are necessary to conduct
its business in accordance with customary business practices, except, in each
case, to the extent that the failure to do so would not have a Material Adverse
Effect; provided that the foregoing shall not prevent any action or transaction
permitted by Section 9.04, 9.07 or 9.10;
8.03 Existence, Qualification, Etc. Do or cause to be done all things
necessary to preserve and keep in full force and effect its existence and all
material rights and franchises, trade names, trademarks and permits and
maintain its license or qualification to do business as a foreign corporation
and good standing in each jurisdiction in which its ownership or lease of
property or the nature of its business makes such license or qualification
necessary, except, in case other than existence, to the extent that the failure
to do so would not have a Material Adverse Effect; provided that the foregoing
shall not prevent any action or transaction permitted by Section 9.04, 9.07 or
9.10;
43
8.04 Regulations and Taxes. Pay when due all taxes, assessments,
governmental charges, which, if unpaid, would become a lien against any of its
properties except those being contested in good faith and against which
adequate reserves have been established in accordance with Generally Accepted
Accounting Principles and except those which would not have a Material Adverse
Effect;
8.05 Insurance. Maintain with insurers recognized as adequate by prudent
business persons insurance with respect to its properties and business and
against such liabilities, casualties and contingencies of such types and in
such amounts as is customary in the case of corporations engaged in the same or
a similar business of comparable size.
8.06 True Books. Keep true books of record and account in accordance with
Generally Accepted Accounting Principles.
8.07 Pay Indebtedness to Lenders and Perform Other Covenants. (a) Make
full and timely payment of the principal of and interest on the Notes and all
other Obligations when due, whether now existing or hereafter arising; and (b)
duly perform all covenants contained in the Loan Documents to which it is a
party.
8.08 Right of Inspection. Permit any duly authorized agent designated by
any Lender, at the Lender's expense, to visit and inspect any of the
properties, corporate books and financial reports of Borrower, and to discuss
its affairs, finances and accounts with its principal officers and independent
certified public accountants, all at such reasonable times, at reasonable
intervals and with reasonable prior notice.
8.09 Observe All Laws. Conform to and duly observe in all material
respects all regulations and other valid requirements of any regulatory
authority with respect to the conduct of its business, except where the failure
to do so would not have a Material Adverse Effect.
8.10 Covenants Extending to Subsidiaries. Cause each of its Subsidiaries
to do with respect to itself, its business and its assets, each of the things
required of Borrower in Sections 8.02 through 8.09, inclusive (other than
8.07(a)).
8.11 Officer's Knowledge of Default. Upon the chief executive, financial
or accounting officer of Borrower obtaining knowledge of any Default or Event
of Default hereunder promptly notify the Agent of the nature thereof, the
period of existence thereof, and what action Borrower proposes to take with
respect thereto.
8.12 Suits or Other Proceedings. Upon the chief executive, financial or
accounting officer of Borrower obtaining knowledge of any litigation or
proceedings instituted against Borrower or its Subsidiaries, which is
reasonably likely to result in a judgment or liability that will have a
Material Adverse Effect, promptly deliver to the Agent written notice thereof
stating the nature and status thereof.
8.13 Environmental Reports. Promptly provide to Agent true, accurate and
complete copies of any and all documents, including reports, submissions,
44
notices, orders, directives, findings and correspondence made by Borrower or
any Subsidiary to the United States Environmental Protection Agency ("EPA"), or
to any other federal, state or local authority pursuant to any federal, state
or local law, code or ordinance and all rules and regulations promulgated
thereunder which require informational submissions concerning environmental
matters, but only to the extent, in each case, in connection with a matter that
is reasonably likely to result in a Material Adverse Effect.
8.14 Notice of Discharge of Hazardous Material or Environmental Complaint.
Give to Agent immediate written notice of any complaint, order, directive,
claim, citation or notice by any governmental authority to Borrower or any
Subsidiary with respect to (i) air emissions, (ii) spills, releases or
discharges to soils or improvements located thereon, surface water, groundwater
or the sewer, septic system or waste treatment, storage or disposal systems
servicing the Property, (iii) noise emissions, (iv) solid or liquid waste
disposal, or (v) the use, generation, storage, transportation or disposal of
Hazardous Material, but only to the extent, in each case, in connection with a
matter that is reasonably likely to result in a Material Adverse Effect. Such
notices shall include, among other information, the name of the party who filed
the claim, the nature of the claim and the actual or potential amount of the
claim. Borrower shall promptly comply with its obligations under law with
regard to such matters. However, Borrower shall not be obligated to give such
notice to Agent in connection with any event or condition which occurs legally
in accordance with and pursuant to the terms and conditions of a valid
governmental permit, license, certificate or approval therefor.
8.15 Further Assurances. At its cost and expense, upon request of the
Agent, duly execute and deliver or cause to be duly executed and delivered, to
the Agent such further instruments, documents, certificates, and do and cause
to be done such further acts that may be reasonably necessary in the opinion of
the Agent to carry out more effectively the provisions and purposes of this
Agreement and the other Loan Documents to which the Borrower is a party.
8.16 ERISA Requirement. Comply in all material respects with all
requirements of ERISA applicable to it and furnish to the Agent as soon as
possible and in any event (i) within thirty (30) days after Borrower or duly
appointed administrator of a employee benefit plan knows or has reason to know
that any reportable event with respect to any employee benefit plan has
occurred, written statement of an Authorized Officer describing in reasonable
detail such reportable event and any action which the Borrower proposes to take
with respect thereto, together with a copy of the notice of such reportable
event given to the Pension Benefit Guaranty Corporation ("PBGC") or a statement
that said notice will be filed with the annual report of the United States
Department of Labor with respect to such plan if such filing has been
authorized promptly after receipt thereof, a copy of any notice that the
Borrower or any Subsidiary may receive from the PBGC relating to the intention
of the PBGC to terminate any employee benefit plan or plans or to appoint a
trustee to administer any such plan, and (iii) within 10 days after a filing
with the PBGC pursuant to Section 412(n) of the Code of a notice of failure to
make a required installment or other payment with respect to a plan, a
certificate of an Authorized Officer setting forth details as to such failure
and the action that the Borrower or its Subsidiary proposes to take with
respect thereto, together with a copy of such notice given to the PBGC.
45
8.17 Authorization of Shares. As long as any Securities (as defined in
the Indenture) remain outstanding, the Borrower will at all times, to the
extent necessary to comply with Section 8.18, (i) reserve a sufficient number
of authorized, but not outstanding, shares of common stock to make payment for
all such Securities then outstanding (valued as set forth in Section 14.01 of
the Indenture as if a Risk Event (as therein defined) had then occurred and all
holders of such Securities had elected to have such Securities repurchased as
provided in the Indenture), and (ii) cause such reserved shares to meet all the
requirements set forth in Article 14 of the Indenture for shares to be given as
payment for such Securities.
8.18 Repurchase of Securities. In the event that a Risk Event (as defined
in the Indenture) occurs and holders of any of the Securities (as defined in
the Indenture) require the Borrower to repurchase such Securities, the Borrower
agrees that it will make payment for such Securities only in shares of common
stock of the Borrower in the manner provided in the Indenture to the extent
that payment in cash would cause the Borrower to be in violation of any
provision of this Agreement.
8.19 Subordination of Indebtedness. Cause all present and future
Indebtedness of Borrower to any Subsidiary to be subordinate in all respects to
the Obligations upon the terms set forth in the Subordination Agreement or
other terms reasonably acceptable to the Agent and the Lenders.
8.20 Use of Proceeds. Use the proceeds of the Loans solely for the
purposes set forth in Section 2.16 hereof.
8.21 New Subsidiaries. Promptly following the formation of any Subsidiary
or the acquisition of any Subsidiary permitted by the terms of this Agreement,
provided such Subsidiary is not a Non-Guarantor, (i) give notice of the
formation of such Subsidiary and (ii) cause to be delivered to the Agent for
the benefit of the Lenders a guarantee agreement of such Subsidiary, duly
executed by such Subsidiary substantially in the form of the Guaranty; together
with evidence of the due authorization, execution, delivery and enforceability
thereof comparable to that required to be delivered under Section 5.01 with
respect to the Guarantors. In the event the aggregate book value of assets of
all Non-Guarantors shall at any time exceed $5,000,000, the Borrower shall
promptly cause a number of Non-Guarantors to become Guarantors so that the book
value of assets of Non-Guarantors is less than $5,000,000.
46
ARTICLE IX
Negative Covenants
------------------
Until the principal and interest of the Loans have been paid in full, all
fees due and payable by the Borrower hereunder have been paid in full, no
Letters of Credit or Reimbursement Obligations are outstanding and the Total
Revolving Credit Commitment has been terminated in accordance with the terms
hereof, unless the Required Lenders shall otherwise consent in writing, the
Borrower will not, nor will it permit any Subsidiary to:
9.01 Liens, Etc. Create or suffer to exist any Lien upon or with respect
to any of its properties and those of its Subsidiaries, whether now owned or
hereafter acquired, or assign any right to receive income, in each case to
secure or provide for the payment of any Indebtedness of any Person, other
than:
(i) Liens for taxes or assessments and similar charges either
(A) not delinquent or (B) being contested in good faith by
appropriate proceedings and as to which it shall have set aside on
its books adequate reserves in accordance with Generally Accepted
Accounting Principles;
(ii) Liens (A) which exist on property at the time of
acquisition or on the property of any Person at the time such Person
becomes a Subsidiary, (B) which are purchase money Liens to secure
the purchase price of property or to secure Indebtedness incurred
solely for the purpose of financing the acquisition of property or
(C) which are extensions, renewals or replacements of any of the
foregoing; provided that no such excepted Liens shall extend to or
cover any property other than the particular property (or proceeds or
products thereof) being acquired or previously subject to the Liens;
(iii) Liens incurred or pledges and deposits in connection
with worker's compensation, unemployment insurance, old-age pensions
and other social security or retirement benefits or securing the
performance of bids, tenders, leases, contracts (other than for the
repayment of borrowed money), statutory obligations, surety and
appeal bonds and other obligations of like nature, incurred in the
ordinary course of business;
(iv) non-consensual Liens imposed by law, such as landlords',
mechanics', carriers', warehousemen's, materialmen's, employee's and
vendors' liens, incurred in the ordinary course of business;
(v) Liens of any Subsidiary in favor of the Borrower or any
Subsidiary;
(vi) existing Liens included in the notes to the financial
statements referred to in Section 7.02(b) or as disclosed on Exhibit
K attached hereto and any extensions, renewals or replacements of any
such Liens in transactions in which the Indebtedness secured by such
47
Liens is not increased in any manner, provided that such Lien does
not extend to property (other than proceeds and products thereof) not
previously subject to any such Liens;
(vii) Liens created pursuant to the Loan Documents; and
(viii) other Liens securing Indebtedness the outstanding
principal amount of which does not exceed $2,000,000 at any time.
9.02 Indebtedness for Money Borrowed. Create, incur, assume or suffer to
exist any Indebtedness for Money Borrowed other than (i) the Loans and other
Indebtedness to the Lenders under the Loan Documents, (ii) other Indebtedness
of the Borrower and its Subsidiaries as disclosed on Exhibit L attached hereto,
and any extensions, renewals or refinancings of such Indebtedness, so long as
the unpaid principal amount of such Indebtedness is not increased in any manner
except as permitted in Section 9.16, (iii) Indebtedness subordinated (pursuant
to terms reasonably satisfactory to the Required Lenders), to payment of the
Obligations, (iv) Indebtedness (subordinated as required by Section 8.19) owing
by the Borrower to any Subsidiary and Indebtedness owing by any Subsidiary to
the Borrower or any other Subsidiary, (v) Indebtedness for Money Borrowed
permitted by Sections 9.05 or 9.20, and (vi) Indebtedness for Money Borrowed
not otherwise covered by clauses (i) through (v) above, provided that the
aggregate outstanding principal amount of all Indebtedness for Money Borrowed
of the Borrower and its Subsidiaries permitted under this clause (vi) shall in
no event exceed $20,000,000 in outstanding principal amount at any time.
9.03 Lease Obligations. At any time during any Fiscal Year, create any
obligations for the payment of rental for any property under leases or
agreements to lease (excluding those constituting Indebtedness) having a term
of one year or more ("Leases"), and/or increase the amount payable under any
Lease which was in existence at any time during the prior Fiscal Year, which
causes the aggregate rental obligations (including net lease items) of the
Borrower and its Subsidiaries on a consolidated basis, under all Leases payable
during such Fiscal Year to be more than one and one-half percent (1 1/2%) of
consolidated net sales of the Borrower and its Subsidiaries as disclosed in the
financial statements most recently delivered to the Agent pursuant to Section
8.01(a).
9.04 Mergers, Etc. Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to, or acquire all or substantially all of the
assets of, any Person, except that (i) any Subsidiary may merge or consolidate
with or into, or transfer assets to, or acquire assets of, any other
Subsidiary, (ii) any Subsidiary may merge into or transfer assets to the
Borrower, (iii) the Borrower or any Subsidiary may effect an acquisition of
assets (by means of asset purchase, stock purchase, merger, consolidation or
otherwise) which is not prohibited by Section 9.14, (iv) any transaction that
is permitted under Section 9.07 is permitted hereunder, and (v) the Borrower
may merge into or with a Subsidiary for the sole purpose of changing the
Borrower's state of incorporation to another one of the States of the United
States.
48
9.05 Contingent Obligations. Guarantee, endorse, or become surety for the
obligations (including, without limitation, Contingent Obligations) of any
other Person, whether by agreement to purchase the Indebtedness of any other
Person or agreement for the furnishing of funds to any other Person, directly
or indirectly, through the purchase of goods, supplies or services for the
purpose of discharging the Indebtedness of any other Person, or otherwise
(collectively, for purposes of this Section 9.05 "guarantees"), except (i) the
Contingent Obligations and other transactions contemplated by the Loan
Documents, (ii) the Borrower and its Subsidiaries may endorse negotiable
instruments for deposit in the normal course of business, and may in the normal
course of business guarantee obligations of customers which are incurred to
finance the acquisition of goods from the Borrower or its Subsidiaries up to
$5,000,000 in the aggregate at any time, (iii) any Subsidiary may guarantee
obligations of the Borrower or any Subsidiary and the Borrower may guarantee
obligations of any Subsidiary as are consistent with this Agreement, (iv) the
existing guarantees of the Borrower and its Subsidiaries listed in each case on
Exhibit K annexed hereto, and any renewals, extensions or replacements thereof
which do not involve any increase in the principal amount of the obligation
being guaranteed, (v) indemnifications of directors, officers and employees as
permitted by applicable law and of other Persons with respect to obligations or
liabilities of the Borrower or any Subsidiary and (vi) guarantees of loans or
advances of any Person if such loans or advances would be permitted to be made
by the Borrower or any Subsidiary under Section 9.06.
9.06 Investments. Purchase or hold beneficially any stock, other
securities of, or evidences of indebtedness of, or make loans or advances to,
any other Person, except for (i) full faith and credit obligations of the
United States Government or obligations guaranteed by the United States
Government maturing within one year, (ii) obligations of any Lender, or dollar
denominated time certificates of deposit issued by any commercial bank
organized and existing under the laws of the United States of America or any
state thereof, which bank is a member of the Federal Reserve System and has a
combined capital and surplus of not less than $100,000,000, (iii) commercial
paper having a maturity of not more than one year from the date of such
investment and rated at least A-l by Standard and Poor's Rating Group, a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc. or P-1 by ▇▇▇▇▇'▇ Investors Services, Inc., (iv)
the Subsidiaries or corporations which (immediately upon such events) will be
Subsidiaries, (v) extensions of credit to, and notes and other evidences of
indebtedness received from, customers or others in the ordinary course of
business, (vi) securities or assets constituting the acquisition of, or the
acquisition of all or substantially all of the assets of any Person if the
acquisition is not prohibited by Section 9.14, (vii) investments as disclosed
on Exhibit L hereto, (viii) loans or advances to the Borrower to the extent not
otherwise prohibited in this Agreement, (ix) stock, obligations or securities
received in settlement of debts (created in the ordinary course of business)
owing to the Borrower or any Subsidiary, (x) travel, relocation, sales
commission and other like advances or loans to officers and employees incurred
in the ordinary course of business, (xi) stock, obligations or securities of
another Person received in connection with the disposition of assets
(including, without limitation, securities) by the Borrower or any Subsidiary
not prohibited by Section 9.07, (xii) other stock, obligations, securities,
evidences of indebtedness, loans or advances in an aggregate amount not in
excess of $5,000,000, (xiii) stock, obligations or securities of a corporation
acquired in anticipation of such corporation's becoming a Subsidiary if after
giving effect to such acquisition, the aggregate purchase price for such stock,
49
obligations or securities of other than a Subsidiary owned by the Borrower and
its Subsidiaries shall not exceed $5,000,000 at any time and such stock,
obligations or securities shall not be owned by the Borrower or any Subsidiary
for more than 180 days following the acquisition thereof unless at or prior to
the end of such 180-day period such corporation becomes a Subsidiary, (xiv) in
the case of Subsidiaries that are incorporated outside the United States,
substantially equivalent foreign currency denominated investments, (xv) stock,
other securities or evidences of indebtedness held by, or loans or advances
made by any other Person that becomes a Subsidiary, existing on the date such
Person becomes a Subsidiary, the aggregate value of such investments not to
exceed $5,000,000, (xvi) securities or evidence of Indebtedness of any
counterparty to the Borrower or any Subsidiary represented by agreements,
devices or arrangements constituting Rate Hedging Obligations not prohibited
under Section 9.20, (xvii) other investments received in respect of any of the
foregoing, (xviii) tax exempt obligations of any state of the United States of
America or any political subdivision or public instrumentality thereof which
are payable in Dollars and are rated in one of the two highest rating
categories by Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors Services, Inc.
and which have a weighted average life of not more than 90 days, and (xix)
securities of any open-end investment company registered under the Investment
Company Act of 1940, as amended, which invests primarily in obligations meeting
the requirements set forth in the clause (xviii).
9.07 Sale of Assets. Sell, lease, transfer or otherwise dispose of all or
a substantial part of its properties or assets except (i) for sales, leases,
transfers or other dispositions by Subsidiaries to the Borrower or any other
Subsidiary, (ii) for sales, leases, transfers or other dispositions which are
specifically permitted by Section 9.04 or not prohibited by Section 9.10, (iii)
for sales, leases, transfers or other dispositions by non-Material Subsidiaries
which are not prohibited by Section 9.10, and (iv) for sales of merchandise or
other property in the ordinary course of business.
9.08 Sale and Leaseback. Enter into any arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any property,
whether real or personal, and used or useful in its business, whether now owned
or hereafter acquired, if it or any of its Subsidiaries, at the time of such
sale or disposition, intends to lease or otherwise acquire the right to use or
possess (except by purchase) such property or like property for a substantially
similar purpose, unless such transaction is in compliance with Sections 9.02 or
9.03.
9.09 ERISA. Permit any employee benefit plan maintained by the Borrower
or a Subsidiary to engage in a "prohibited transaction" within the meaning of
Section 4.06 of ERISA or Section 4975 of the Code, except in those cases for
which there is a statutory or administrative exemption available; permit to
exist with respect to any employee benefit plan maintained by the Borrower or a
Guarantor any accumulated funding deficiency within the meaning of Section 412
of the Code, or incur any liability to the PBGC other than for required
insurance premiums; permit to exist any withdrawal liability within the meaning
of Section 4201 of ERISA; in the case of any of the foregoing if the result
would be the incurrence of a tax or creation of a liability of the Borrower or
any Subsidiary which would exceed $2,000,000.
50
9.10 Sale of Subsidiary Interests. Sell or otherwise dispose of any
shares of stock of any Subsidiary whose revenues for the preceding Fiscal Year
constituted 10% or more of the Borrower's consolidated revenues for such year
or whose assets as of the end of the previous fiscal quarter constituted at
least 10% of the Borrower's consolidated assets as of such time (a "Material
Subsidiary"), or permit any Material Subsidiary to sell or otherwise dispose of
its stock, except to the Borrower or a Subsidiary. Upon the disposition of any
Subsidiary which is not a Material Subsidiary, at the request and expense of
the Borrower, the Guaranty of such Subsidiary shall be terminated, provided
that there shall be no indebtedness outstanding from such Subsidiary to the
Borrower or any other Subsidiaries at the time of such disposition.
9.11 Prepayments of Long-Term Debt. Repurchase, prepay, retire or redeem,
other than as mandatorily required by the terms of legally binding agreements
existing at the Closing Date or entered into after the Closing Date in
accordance with Section 9.02 hereof, any Indebtedness for Money Borrowed of the
Borrower or any Subsidiary which by its terms matures more than one year from
the date of such prepayment; except (i) with respect to Indebtedness owed to
any Lender, (ii) Indebtedness owed to the Borrower or any Subsidiary, (iii)
Consolidated Subordinated Indebtedness (A) to the extent permitted under
Section 9.02, or (B) to the extent replaced with Indebtedness having a maturity
date no earlier than, repayment schedule reducing the principal amount no more
quickly than, and interest rate less than the Indebtedness prepaid and
covenants and conditions no more restrictive than those contained in Articles
VIII, IX or X of this Agreement, (iv) any Indebtedness constituting Rate
Hedging Obligations, (v) Indebtedness to the extent replaced with Indebtedness
permitted by clause (iii)(B) above, (vi) redemption of the 7% Convertible
Subordinated Debentures, issued under the Indenture, and (vii) other
Indebtedness in an aggregate principal amount not to exceed $5,000,000 during
any Fiscal Year.
9.12 Indebtedness for Money Borrowed/Shareholders' Equity. Permit at any
time the ratio of Indebtedness for Money Borrowed of the Borrower and its
Subsidiaries to Consolidated Shareholders' Equity to exceed 1.50 to 1.00 during
any Fiscal Year thereafter.
9.13 Consolidated Shareholders' Equity. Permit Consolidated Shareholders'
Equity to be less than $120,000,000 at any time from the Closing Date and prior
to December 31, 1995, such amount to be increased (i) as at December 31, 1995
and as at the end of each fiscal quarter thereafter by 50% of Consolidated Net
Income (but shall not be reduced by any loss) for such fiscal quarter, and (ii)
85% of the net proceeds to the Borrower from the sale to any Person of an
equity interest in the Borrower.
9.14 Acquisitions. At any time during any year commencing on the day
following the Closing Date or anniversary date thereof, acquire any Person or
all or substantially all of the assets of any Person if the aggregate of such
purchase price for such acquisition and such purchase prices for all previous
acquisitions during such year exceeds an amount equal to thirty percent (30%)
of Consolidated Shareholders' Equity before giving effect to such acquisition.
The Borrower hereby agrees to give notice to the Agent not later than thirty
(30) days after any acquisition the purchase price of which exceeds
$10,000,000. For purposes of the foregoing provisions of this Section 9.14,
"Purchase price" shall not include (i) any payment which, at the time of
51
creation of the obligation to make the payment, was contingent upon future
economic performance of the acquired Person or the acquiror or (ii) any payment
in the form of shares of capital stock of the Borrower which, together with all
previous such payments in the form of shares of capital stock during the
particular year, does not exceed thirty percent (30%) of Consolidated
Shareholders' Equity.
9.15 Consolidated Interest Coverage Ratio. Permit at any time for any
period of four consecutive fiscal quarters the Consolidated Interest Coverage
Ratio to be less than 2.50 to 1.00.
9.16 Senior Note Agreement. Amend, restate or otherwise modify any term
or provision of the Note Agreement between the Borrower and the Prudential
Insurance Company of America, dated as of April 2, 1991, as amended through
Amendment No. 7 thereto pursuant to which the Borrower issued its Senior Notes,
in a manner which would result in covenants more restrictive than those
contained in this Agreement or a maturity date earlier than that presently
existing therein, provided that this provision shall not restrict a waiver of
any provision of such Note Agreement or transaction permitted under Section
9.11; provided, further, the Borrower may incur up to an additional $30,000,000
of Indebtedness as provided under the Prudential Insurance Company of America
Term Sheet for Private Shelf Facility dated June 27, 1995 so long as after
giving effect to the issuance of such Indebtedness no Default or Event of
Default exist hereunder.
9.17 Fixed Charge Coverage Ratio. Permit at any time during each of the
periods set forth below the Consolidated Fixed Charge Coverage Ratio to be less
than that set forth below opposite such period:
Consolidated Fixed
Period Charge Coverage Ratio
------ ---------------------
Closing Date through
December 31, 1996 1.30 to 1.00
And Thereafter 1.40 to 1.00
9.18 Trading Asset Ratio. Permit at any time the Trading Asset Ratio to
be less than 1.25 to 1.00.
9.19 Fiscal Year. Change its Fiscal Year.
9.20 Rate Hedging Obligations. Incur any Rate Hedging Obligations or
enter into any agreements, arrangements, devices or instruments relating to
Rate Hedging Obligations, except (A) in regard to (i) Indebtedness evidenced by
the Loans, the aggregate amount of such outstanding Rate Hedging Obligation in
no event to exceed $70,000,000 in the aggregate, provided, however, that the
expiration or maturity date of such Rate Hedging Obligation or agreement or
arrangement relating thereto, may exceed the Revolving Credit Termination Date
and (ii) other existing Indebtedness, all such Rate Hedging Obligations to be
unsecured (except to the extent permitted under Section 9.01(viii)) and to be
at rates, in form and with counterparties consented to by the Agent, which
consent shall not be unreasonably withheld, and (B) Rate Hedging Obligations,
the payment obligations under which (calculated as provided in clause (iii) of
the definition of "Indebtedness") do not exceed $2,000,000 in the aggregate.
52
ARTICLE X
Events of Default and Acceleration
----------------------------------
10.01 Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur, that is to say:
(a) if default shall be made in the due and punctual payment of the
principal of any Loan or Reimbursement Obligation, when and as the same shall
be due and payable, at maturity, by acceleration or otherwise; or
(b) if default shall be made in the due and punctual payment of any
amount of interest on any Loan, any Reimbursement Obligation or any fees
payable under this Agreement on the date on which the same shall be due and
payable and such Default shall continue for more than five (5) Business Days;
or
(c) if default shall be made in the performance or observance of any
covenant set forth in Section 8.11 or Article IX (other than Sections 9.03,
9.05, 9.06, 9.08 and 9.09) hereof; or
(d) if a default shall be made in the performance or observance by
the Borrower of any covenant or agreement contained in this Agreement or the
other Loan Documents (other than as described in clauses (a), (b) or (c) above
and Section 8.07(a)) and such default shall continue for 30 or more days after
the earlier of the Borrower becoming aware of such default and receipt of
notice of such default by the Borrower from the Agent, or if any Loan Document
ceases to be in full force and effect (other than by reason of any action by
the Agent or any Lender), or if without the written consent of the Lenders,
this Agreement or any other Loan Document shall be disaffirmed or shall
terminate, be terminable or be terminated or become void or unenforceable for
any reason whatsoever (in each case other than in accordance with its terms in
the absence of default or by reason of any action by the Agent or any Lender);
or
(e) if a default shall occur, which is not waived, (i) in the
payment of any principal, interest or premium with respect to any Indebtedness
(other than the Obligations) of the Borrower or any Subsidiary when the same
becomes due and payable and after the applicable grace period, if any,
specified in the instrument relating to such Indebtedness or (ii) in the
performance or observance of any term or covenant contained in any agreement or
instrument under or pursuant to which any such Indebtedness may have been
issued, created, assumed, guaranteed or secured by the Borrower or any
Subsidiary, and such default shall continue for more than the period of grace,
if any, therein specified, if the effect of such default is to accelerate or
permit the holder of any such Indebtedness to accelerate the maturity thereof,
provided that in any of the foregoing circumstances the aggregate unpaid
Indebtedness shall exceed $2,000,000; or
(f) if any representation or warranty in any certificate, report or
statement at any time furnished to the Agent or any Lender by the Borrower
pursuant to this Agreement shall be false in any material respect when given;
or
53
(g) if the Borrower or any Material Subsidiary shall be unable to
pay its debts generally as they become due; file a petition to take advantage
of any insolvency statute; make a general assignment for the benefit of its
creditors; commence a proceeding for the appointment of a receiver, trustee,
liquidator or conservator of itself or of the whole or any substantial part of
its property; file a petition or answer seeking reorganization or arrangement
or similar relief under the federal bankruptcy laws or any other applicable law
or statute of the United States of America or any state or similar law of any
other country; or
(h) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee, liquidator or
conservator of the Borrower or any Material Subsidiary or of the whole or any
substantial part of its properties, or approve a petition filed against the
Borrower or any Material Subsidiary seeking reorganization or arrangement or
similar relief under the federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state or similar law of any
other country, or if, under the provisions of any other law for the relief or
aid of debtors, a court of competent jurisdiction shall assume custody or
control of the Borrower or any Material Subsidiary or of the whole or any
substantial part of its properties; or if there is commenced against the
Borrower or any Material Subsidiary any proceeding or petition seeking
reorganization, arrangement or similar relief under the federal bankruptcy laws
or any other applicable law or statute of the United States of America or any
state which proceeding or petition remains unstayed and undismissed for a
period of 90 consecutive days; or if the Borrower or any Material Subsidiary
takes any action to indicate its consent to or approval of any such proceeding
or petition; or
(i) if any judgment where the amount not covered by insurance (or
the amount as to which the insurer properly denies liability) is in excess of
$500,000 is rendered against the Borrower or any Subsidiary, and such judgment
remains unpaid, unstayed and undismissed for a period of ninety (90)
consecutive days; or
(j) if a Reportable Event with respect to any employee benefit plan
shall have occurred with respect to which the Borrower or any Subsidiary may
incur a liability in excess of $2,000,000 and which continues unremedied for
ten (10) days after notice of such Reportable Event pursuant to Section 4043(a)
of ERISA or, in the absence of such notice, for thirty (30) days after an
Executive Officer shall learn of the same; or
(k) if Rexel shall cease to own, directly or indirectly, at least
one-third (33 1/3%) of the voting stock of the Borrower after exercise of all
convertible securities and stock options;
then, and in any such event and at any time thereafter, if such Event of
Default or any other Event of Default shall then be continuing,
(A) either or both of the following actions may be taken: (i)
the Agent, with the consent of the Required Lenders, may, and at the
direction of the Required Lenders shall, declare any obligation of
the Lenders to make further Loans or issue Letters of Credit
terminated, whereupon the obligation of each Lender to make further
Loans or issue Letters of Credit hereunder shall terminate
54
immediately, and (ii) the Agent shall, at the direction of the
Required Lenders, declare by notice to the Borrower any or all of the
Obligations to be immediately due and payable, and the same,
including all interest accrued thereon and all other obligations of
the Borrower to the Lenders, shall forthwith become immediately due
and payable without presentment, demand, protest, further notice or
other formality of any kind, all of which are hereby expressly
waived, anything contained herein or in any instrument evidencing the
Obligations to the contrary notwithstanding; provided, however, that
notwithstanding the above, if there shall occur an Event of Default
under clause (g) or (h) above, then the obligation of the Lenders to
lend or issue Letters of Credit hereunder shall automatically
terminate and any and all of the Obligations shall be immediately due
and payable without the necessity of any action by the Agent or the
Required Lenders or notice to the Agent or the Lenders; and
(B) Borrower shall, upon demand of Agent, deposit cash with the
Agent in an amount equal to the amount of any Letters of Credit
remaining undrawn, as collateral security for the repayment of any
future drawings under such Letters of Credit, and Borrower shall
forthwith deposit and pay such amounts and such amounts shall be held
by the Agent for the benefit of the Lenders pursuant to the terms of
the LC Account Agreement.
10.02 Agent to Act. In case any one or more Events of Default shall
occur and be continuing the Agent may, and at the direction of the Required
Lenders shall, proceed to protect and enforce their rights or remedies either
by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or
in any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.
10.03 Cumulative Rights. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or
remedies contained herein or in any other Loan Document, and every such right
or remedy shall be cumulative and shall be in addition to every other such
right or remedy contained herein and therein or now or hereafter existing at
law or in equity or by statute, or otherwise.
10.04 No Waiver. No course of dealing between the Borrower and any
Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies hereunder shall operate as a waiver
of any rights or remedies hereunder and no single or partial exercise of any
rights or remedies hereunder shall operate as a waiver or preclude the exercise
of any other rights or remedies hereunder or of the same right or remedy on a
future occasion.
10.05 Allocation of Proceeds. If an Event of Default has occurred and
is continuing, and the maturity of the Notes has been accelerated pursuant to
Article X hereof, all payments received by the Agent hereunder in respect of
55
any principal of or interest on the Obligations or any other amounts payable by
the Borrower hereunder shall be applied by the Agent in the following order:
(i) amounts due to the Lenders or any of them pursuant to
Sections 2.13, 2.17, 3.05, 12.05 and 12.14 hereof;
(ii) amounts due to the Agent pursuant to Section 3.04 and
Section 11.11 hereof;
(iii) payments of interest, to be applied in accordance with
Section 2.09 hereof;
(iv) payments of principal, to be applied in accordance with
Section 2.09 hereof;
(v) payment of cash amounts to the Agent for deposit to the
Borrower's Account pursuant to Section 10.01(B) hereof; and
(vi) payments of all other amounts due under this Agreement, if
any, to be applied in accordance with each Lender's pro rata share of
all principal due to the Lenders.
56
ARTICLE XI
The Agent
---------
11.01 Appointment. Each Lender (including NationsBank in its capacity
as maker of Swing Line Loans and as issuer of the Letters of Credit) hereby
irrevocably designates and appoints NationsBank as the Agent of the Lenders
under this Agreement, and each of the Lenders hereby irrevocably authorizes
NationsBank as the Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers as are expressly delegated to the Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. The Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any of the
Lenders, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Agent.
11.02 Attorneys-in-Fact. The Agent may execute any of its duties
under this Agreement by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Agent shall not be responsible to the Lenders for the gross negligence or
willful misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
11.03 Limitation on Liability. Neither the Agent nor any of its
officers, directors, employees, agents or attorneys-in-fact shall be liable to
the Lenders for any action lawfully taken or omitted to be taken by it or them
under or in connection with this Agreement except for its or their own gross
negligence or willful misconduct. Neither the Agent nor any of its affiliates
shall be responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower, any of its
Subsidiaries, or any officer thereof contained in this Agreement or in any of
the other Loan Documents, or in any certificate, report, statement or other
document referred to or provided for in or received by the Agent under or in
connection with this Agreement or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any of the
other Loan Documents, or for any failure of the Borrower to perform its
obligations thereunder. The Agent shall not be under any obligation to any of
the Lenders to ascertain or to inquire as to the observance or performance of
any of the terms, covenants or conditions of this Agreement or any of the other
Loan Documents on the part of the Borrower or to inspect the properties, books
or records of the Borrower or its Subsidiaries.
11.04 Reliance. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice, consent
certificate, affidavit, letter, cablegram, telegram, telecopy or telex message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
57
selected by the Agent. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes unless an Assignment and Acceptance shall
have been filed with and accepted by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement unless
it shall first receive advice or concurrence of the Lenders or the Required
Lenders as provided in this Agreement or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all present and future
holders of the Notes.
11.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender, the Borrower or
any of the Subsidiaries referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Agent receives such a notice, the Agent shall promptly give
notice thereof to the Lenders and the Borrower (to the extent such notice was
not received from Borrower). The Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the
Required Lenders; provided that, unless and until the Agent shall have received
such directions, the Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Event of
Default as it shall deem advisable in the best interests of the Lenders.
11.06 No Representations. Each Lender expressly acknowledges that
neither the Agent nor any of its affiliates has made any representations or
warranties to it and that no act by the Agent hereafter taken, including any
review of the affairs of the Borrower or any of its Subsidiaries, shall be
deemed to constitute any representation or warranty by the Agent to any Lender.
Each Lender represents to the Agent that it has, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the financial condition, creditworthiness, affairs, status
and nature of the Borrower and its Subsidiaries and made its own decision to
enter into this Agreement. Each Lender also represents that it will,
independently and, without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and to make such investigation
as it deems necessary to inform itself as to the status and affairs, financial
or otherwise, of the Borrower and its Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Borrower or any of its Subsidiaries
which may come into the possession of the Agent or any of its affiliates.
11.07 Indemnification. The Lenders agree to indemnify the Agent in
its capacity as such (to the extent not reimbursed by the Borrower or any of
its Subsidiaries and without limiting any obligations of the Borrower or any of
its Subsidiaries so to do), ratably according to the respective principal
amount of the Notes held by them (or, if no Notes are outstanding, ratably in
accordance with their respective Applicable Commitment Percentages as then in
58
effect) from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may at any time (including without limitation
at any time following the payment of the Notes) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement or any other document contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by the Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful
misconduct. The agreements in this subsection shall survive the payment of the
Obligations and the termination of this Agreement.
11.08 Lender. The Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower
and its Subsidiaries as though it were not the Agent hereunder. With respect
to its Loans made or renewed by it and any Note issued to it, the Agent shall
have the same rights and powers under this Agreement as any Lender and may
exercise the same as though it were not the Agent, and the terms "Lender" and
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity.
11.09 Resignation. If the Agent shall resign as Agent under this
Agreement, then the Required Lenders may appoint a successor Agent for the
Lenders, which shall be a Lender or a commercial bank organized under the laws
of the United States or any state thereof, having a combined surplus and
capital of not less than $500,000,000, whereupon such successor Agent shall
succeed to the rights, powers and duties of the former Agent and the
obligations of the former Agent shall be terminated and canceled, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement; provided, however, that the former Agent's
resignation shall not become effective until such successor Agent has been
appointed; provided, further, if the Required Lenders cannot agree as to a
successor Agent within ninety (90) days after such resignation, the Agent shall
appoint a successor Agent meeting the qualifications set forth above and the
parties hereto agree to execute whatever documents are necessary to effect such
action under this Agreement or any other document executed pursuant to this
Agreement; provided, however, in such event all provisions of this Agreement
and the Loan Documents, shall remain in full force and effect. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
XI shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement.
11.10 Sharing of Payments, Etc. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff, counterclaim or
otherwise, obtain payment with respect to its Obligations (other than any
payment pursuant to Section 2.17 or Article IV) which results in its receiving
more than its pro rata share of the aggregate payments with respect to all of
the Obligations (other than any payment pursuant to Section 2.17 or Article
IV), then (A) such Lender shall be deemed to have simultaneously purchased from
the other Lenders a share in their Obligations so that the amount of the
Obligations held by each of the Lenders shall be pro rata and (B) such other
adjustments shall be made from time to time as shall be equitable to insure
that the Lenders share such payments ratably; provided, however, that for
59
purposes of this Section 11.10 the term "pro rata" shall be determined with
respect to both the Revolving Credit Commitment of each Lender and to the Total
Revolving Credit Commitments after subtraction in each case of amounts, if any,
by which any such Lender has not funded its share of the outstanding Loans and
Reimbursement Obligations. If all or any portion of any such excess payment is
thereafter recovered from the Lender which received the same, the purchase
provided in this Section 11.10 shall be rescinded to the extent of such
recovery, without interest. The Borrower expressly consents to the foregoing
arrangements and agrees that each Lender so purchasing a portion of the other
Lenders' Obligations may exercise all rights of payment (including, without
limitation, all rights of set-off, banker's lien or counterclaim) with respect
to such portion as fully as if such Lender were the direct holder of such
portion.
11.11 Fees. The Borrower agrees to pay to the Agent, for its
individual account, an annual Agent's fee in such amount as shall be agreed to
from time to time, such fee to be paid annually in advance.
60
ARTICLE XII
Miscellaneous
-------------
12.01 Assignments and Participations.
(a) At any time after the Closing Date each Lender may, with the
prior consent of the Agent and the Borrower, which consent shall not be
unreasonably withheld, assign to one or more banks or financial institutions
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of the Note payable to its order);
provided, that (i) each such assignment shall be of a constant, and not a
varying, percentage of all of the assigning Lender's rights and obligations
(including Loans and Participations) under this Agreement, (ii) the assigning
Lender and the assignee and the Agent shall have executed and delivered to the
Borrower an Assignment and Acceptance and the Borrower hereby agrees to execute
replacement Notes to give effect to the assignment if the Borrower shall have
consented to such assignment, (iii) the minimum Revolving Credit Commitment
which shall be assigned is $10,000,000 (together with which the assigning
Lender's applicable portion of Participations and the Letter of Credit
Commitment shall also be assigned) and (iv) such assignee shall have an office
located in the United States, provided, that an assignment by NationsBank shall
not include any portion of the Swing Line or the obligation to issue Letters of
Credit. Upon such execution, delivery, approval and acceptance, from and after
the effective date specified in each Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder or under such Note have been assigned or negotiated to it
pursuant to such Assignment and Acceptance have the rights and obligations of a
Lender hereunder and a holder of such Note and (y) the assignor thereunder
shall, to the extent that rights and obligations hereunder or under such Note
have been assigned or negotiated by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement, provided that the assignor shall not be relieved from any
liability arising prior to the effectiveness of the assumption thereof by the
assignee. No assignee shall have the right to further assign its rights and
obligations pursuant to this Section 12.01. Any Lender who makes an assignment
shall pay to the Agent a one-time administrative fee of $5,000.00 which fee
shall not be reimbursed by Borrower.
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) the assignment
made under such Assignment and Acceptance is made under such Assignment and
Acceptance without recourse; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or any Subsidiary or the performance or observance by
the Borrower or any Subsidiary of any of its obligations under any Loan
Document or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements delivered pursuant to Section 7.02(b)
and such other Loan Documents and other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
61
without reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement, the Note and the other Loan Documents as are delegated to the Agent
by the terms hereof and thereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender and a holder of such
Note.
(c) The Agent shall maintain at its address referred to herein a
copy of each Assignment and Acceptance delivered to and accepted by it.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, the Agent shall give prompt notice thereof to Borrower.
(e) Each Lender may sell participations to one or more banks or
other financial institutions as to all or a portion of its rights under this
Agreement; provided, that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) such Lender
shall remain the holder of any Note issued to it for the purpose of this
Agreement, (iv) such participations shall be in a minimum amount of $5,000,000
and shall include an allocable portion of such Lender's Participation, and (v)
Borrower, the Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and with regard to any and all payments to be
made under this Agreement; provided, that the participation agreement between a
Lender and its participants may provide that such Lender will obtain the
approval of such participant prior to such Lender's agreeing to any amendment
or waiver of any provisions of this Agreement which would (A) extend the
maturity of the Note, (B) reduce the interest rate hereunder, or (C) increase
the Revolving Credit Commitment of the Lender granting the participation other
than as permitted by Section 2.11, and (vi) the sale of any such participations
which require Borrower to file a registration statement with the United States
Securities and Exchange Commission or under the securities regulations or laws
of any state shall not be permitted.
(f) No Lender may assign any rights under this Agreement or the
Notes or sell participations therein except in accordance with this Section
12.01.
(g) No assignee Lender shall be entitled to receive any greater
payment under Article IV than the assignor Lender would have been entitled to
receive in respect of the rights assigned.
(h) Any Lender may assign all or part of its rights and obligations
under this Agreement to any bank under common control or ownership with such
Lender or to the Board without the consent of the Borrower or the Agent
subject, however, to all the other provisions of Section 12.01(a).
62
12.02 Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the address set forth below or such
other address as such party shall specify to the other parties in writing (or,
in the case of telephonic notice or notice by telecopy, telegram or telex
(where the receipt of such message is verified by return) expressly provided
for hereunder, when received at such telephone, telecopy or telex number as may
from time to time be specified in written or verbal notice to the other parties
hereto or otherwise received), or if sent prepaid by certified or registered
mail return receipt requested on the third Business Day after the day on which
mailed, addressed to such party at said address:
(a) if to the Borrower:
REXEL, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
(b) if to the Agent:
NationsBank of Florida, National Association
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, 15th Floor
NC1-001-15-04
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
(c) if to NationsBank in its capacity as issuer of the Letters of
Credit:
NationsBank of Florida, National Association
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, 15th Floor
NC1-001-15-04
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
(d) if to the Lenders:
At the addresses set forth on the signature pages hereof and on the signature
page of each Assignment and Acceptance.
12.03 Setoff. The Borrower agrees that all of Borrower's deposits or
deposit accounts, of any kind, or any of Borrower's interest in any deposits or
deposit accounts thereof, now or hereafter pledged, mortgaged, transferred or
assigned to the Agent or any Lender or otherwise in the possession or control
of the Agent or any Lender (other than for safekeeping or as a fiduciary) for
any purpose for the account or benefit of the Borrower and including any
balance of any deposit account or of any credit of the Borrower with the Agent
or any Lender, whether now existing or hereafter established, shall be subject
to the right of setoff of the Agent and any Lender at any time or times during
the continuance of an Event of Default and Borrower authorizes the Agent and
63
any Lender with or, to the extent permitted by applicable law, without prior
notice, to apply such balances or any part thereof to such of the Obligations
of the Borrower to the Agent or such Lender then past due and in such amounts
as they may elect, and whether or not the collateral or the responsibility of
other Persons primarily, secondarily or otherwise liable may be deemed
adequate. For the purposes of this paragraph, all remittances and property
shall be deemed to be in the possession of the Agent or such Lender as soon as
the same may be put in transit to it by mail or carrier or by other bailee.
12.04 Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the expiration of the Letters of Credit and the execution and delivery to the
Lenders of this Agreement and the Notes and shall continue in full force and
effect so long as any of Obligations remain outstanding or a Lender has any
commitment hereunder. Whenever in this Agreement, any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
permitted assigns of such party and all covenants, provisions and agreements by
or on behalf of the Borrower which are contained in this Agreement and the
Notes shall inure to the benefit of the successors and permitted assigns of the
Lenders or any of them.
12.05 Expenses. The Borrower agrees (a) to pay or reimburse the Agent
for all its reasonable and customary out-of-pocket costs and expenses
(including travel and copy expenses) incurred in connection with the
preparation, negotiation and execution of this Agreement or any of the other
Loan Documents, and the consummation of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable and customary fees
and disbursements of counsel to the Agent, (b) to pay on demand all reasonable
out-of-pocket costs and expenses in connection with any modification, waiver or
amendment of this Agreement, the Notes and the other Loan Documents, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Agent with respect thereto, and all reasonable costs and expenses, if
any (including, without limitation, reasonable counsel fees and expenses), in
connection with the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Agreement, the Notes and the other Loan
Documents. In addition, the Borrower shall pay any and all stamp and
documentary taxes payable or determined to be payable in connection with the
execution and delivery of this Agreement, the Notes and the other Loan
Documents, and agrees to save the Agent and each Lender harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes.
12.06 Amendments. No amendment, modification or waiver of any
provision of this Agreement or any of the Loan Documents and no consent by the
Lenders to any departure therefrom by the Borrower shall be effective unless
such amendment, modification or waiver shall be in writing and signed by the
Agent and the Required Lenders, and the same shall then be effective only for
the period and on the conditions and for the specific instances and purposes
specified in such writing; provided, however, that, no such amendment,
modification or waiver
(i) which changes, extends or waives any provision of Section
11.10 or this Section 12.06, the amount of or the due date of any
scheduled installment of or the rate of interest payable on any
Obligation, changes the definition of Required Lenders, which
64
increases or extends the Revolving Credit Commitment of any Lender or
which increases or extends the Letter of Credit Facility or which
waives any condition to the making of any Loan shall be effective
unless in writing and signed by each of the Lenders; provided,
however, the Required Lenders may in their sole discretion waive any
Default or Event of Default (other than any Event of Default under
Section 10.01(a)); or
(ii) which releases any Subsidiary from its Guaranty (other than
in accordance with the terms of the Loan Documents) shall be
effective unless with the written consent of each of the Lenders; or
(iii) which affects the rights, privileges, immunities or
indemnities of the Agent, shall be effective unless in writing and
signed by the Agent.
Notwithstanding any provision of the other Loan Documents to the contrary,
as between the Agent and the Lenders, execution by the Agent shall not be
deemed conclusive evidence that the Agent has obtained the written consent of
the Required Lenders. No notice to or demand on the Borrower in any case shall
entitle the Borrower to any other or further notice or demand in similar or
other circumstances, except as otherwise expressly provided herein.
12.07 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
12.08 Waivers by Borrower. In any litigation in any court with
respect to, in connection with, or arising out of this Agreement, the Loans,
any of the Notes, any of the other Loan Documents, the Obligations, or any
instrument or document delivered pursuant to this Agreement or the validity,
protection, interpretation, collection or enforcement thereof, or any other
claim or dispute howsoever arising between the Borrower and the Lenders or the
Agent, the Borrower and each Lender and the Agent hereby waive trial by jury in
connection with any such litigation.
12.09 Termination. The termination of this Agreement shall not affect
any rights of the Borrower, the Lenders or the Agent or any obligation of the
Borrower, the Lenders or the Agent, arising prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Obligations arising prior to or after such termination have been
irrevocably paid in full. However, after the Revolving Credit Termination
Date, (i) no additional fees shall be payable under Section 2.13 hereof and
(ii) if no Letters of Credit remain outstanding no additional fees shall be
payable under Section 3.03 hereof. If after receipt of any payment of all or
any part of the Obligations, any Lender is for any reason compelled to
surrender such payment to any Person because such payment is determined to be
void or voidable as a preference, impermissible setoff, a diversion of trust
funds or for any other reason, this Agreement shall continue in full force and
the Borrower shall be liable to, and shall indemnify and hold such Lender
65
harmless for, the amount of such payment surrendered until such Lender shall
have been finally and irrevocably paid in full. The provisions of the
foregoing sentence shall be and remain effective notwithstanding any contrary
action which may have been taken by the Lenders in reliance upon such payment,
and any such contrary action so taken shall be without prejudice to the
Lenders' rights under this Agreement and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.
12.10 Governing Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
FLORIDA, WITHOUT REFERENCE TO THE CHOICE OF LAW DOCTRINE OF SUCH STATE.
12.11 Representation and Warranty of the Lenders. Each Lender hereby
represents that no part of any funds used by such Lender to fund any Loan or
other extension of credit to the Borrower made by it constitutes or will
constitute assets allocated to any "separate account" maintained by such
Lender. As used herein, the term "separate account" shall have the meaning
assigned to such term in Section 3 of ERISA. Each Lender hereby represents to
the Borrower, the Agent and the other Lenders that the Notes are being acquired
by such Lender as a result of making loans in the ordinary course of its
commercial banking business and are not being acquired with a view to or for
sale in connection with any distribution of the Notes, nor with any present
intention of distributing or selling the Notes (or any interest therein);
provided, however, that, subject to any contrary requirements of law,
disposition of the property of each Lender shall at all times be and remain
within the control of such Lender.
12.12 Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any term of this
Agreement, the terms and provisions of this Agreement shall control.
12.13 Confidentiality. The Agent and the Lenders agree (on behalf of
themselves and each of their respective affiliates, directors, officers,
employees and representatives) to use reasonable precautions to keep
confidential, in accordance with safe and sound banking practices, any non-
public information supplied to it by the Borrower or any of its Subsidiaries
pursuant to this Agreement, provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for the Agent or such Lender,
(iii) to bank examiners, auditors, regulators, accountants or appraisers, (iv)
to any assignee or participant (or prospective assignee or participant) so long
as such assignee or participant (or prospective assignee or participant) agrees
(in a written instrument furnished to and for the benefit of the Borrower) to
the provisions of this Section 12.13, (v) to any other Person in the course of
the enforcement of the Agent's or any Lender's rights or remedies hereunder or
under any other Loan Documents or (vi) to any other financial institution
creditor of the Borrower (and counsel to and other representatives of such
creditor) at any time during the continuance of an Event of Default.
12.14 Indemnification. In consideration of the execution and delivery
of this Agreement by the Agent and each Lender and the extension of the
Revolving Credit Commitments and Swing Line, the Borrower hereby indemnifies,
exonerates and holds the Agent and each Lender and each of their respective
66
officers, directors, employees and agents (collectively, the "Indemnified
Parties") free and harmless from and against any and all actions, causes of
action, suits, losses, liabilities and damages, and reasonable out of pocket
expenses incurred in connection with any claim or litigation by any Person
(other than a party to this Agreement) (irrespective of whether any such
Indemnified Party is a party to the action for which indemnification hereunder
is sought), including reasonable attorneys' fees and disbursements
(collectively, the "Indemnified Liabilities"), incurred by the Indemnified
Parties or any of them as a result of, or arising out of, or relating to (a)
any transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of any Loan or supported by any Letter of Credit;
or (b) the entering into and performance of this Agreement and any other Loan
Document by any of the Indemnified Parties, and if and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law;
provided, however, that the Borrower shall have no obligation hereunder with
respect to Indemnified Liabilities resulting from the willful misconduct or
gross negligence of the Agent or any Lender or the breach by the Agent or any
Lender of this Agreement or applicable law, orders or regulations.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
made, executed and delivered by their duly authorized officers as of the day
and year first above written.
WITNESS: REXEL, INC.
------------------------------- By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------- Title: Treasurer
67
NATIONSBANK OF FLORIDA, NATIONAL
ASSOCIATION, as Agent for the Lenders
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
NATIONSBANK OF FLORIDA, NATIONAL
ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Lending Office:
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
NationsBank N.A. (Carolinas)
ABA# 063 100277
Reference: Rexel
Attention:
68
CREDIT LYONNAIS, NEW YORK BRANCH
individually and as Co-Agent
By:
----------------------------
Title: First Vice President
Lending Office:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Credit Lyonnais, New York Branch
New York, NY
A/C #: 01-88179-2145-00
Reference: REXEL, INC.
Attention: Loan Servicing
CREDIT LYONNAIS, CAYMAN ISLAND BRANCH,
as Lender
By:
----------------------------
Title: Authorized Signator
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇
A/C #: 01-88179-2145-00
Reference: REXEL, INC.
Attention: Loan Servicing
69
SOCIETE GENERALE, NEW YORK BRANCH
By:
----------------------------
Title: Vice President
Lending Office: New York
Wire Transfer Instructions:
Societe Generale, New York Branch
ABA #: ▇▇▇-▇▇▇▇-▇▇▇
Reference: Rexel, Inc. -
A/C no. 9032029
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
70
EXHIBIT A
Applicable Commitment Percentages
---------------------------------
Applicable
Commitment Commitment
Lender Amount Percentage
------ ----------- ----------
NationsBank of Florida, $ 36,000,000 36%
National Association
Credit Lyonnais 34,000,000 34
Societe Generale 30,000,000 30
------------ ----
$100,000,000 100%
71
EXHIBIT B
Form of Assignment and Acceptance
---------------------------------
DATED -------------, 19--
Reference is made to the Amended and Restated Revolving Credit and
Reimbursement Agreement dated as of August 8, 1995 (the "Agreement") among
REXEL, Inc., a New York corporation ("Borrower"), the Lenders (as defined in
the Agreement) and NationsBank of Florida, National Association, as Agent for
the Lenders ("Agent"). Unless otherwise defined herein, terms defined in the
Agreement are used herein with the same meanings.
------------- (the "Assignor") and ------------- (the "Assignee") agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, WITHOUT
RECOURSE, and the Assignee hereby purchases and assumes from the Assignor, a
_____% interest in and to all of the Assignor's rights and obligations under
the Agreement as of the Effective Date (as defined below), including, without
limitation, such percentage interest in the Loan owing to, and Participations
held by, the Assignor on the Effective Date, and the Note held by the Assignor.
2. The Assignor (i) represents and warrants that, as of the date hereof,
the aggregate outstanding principal amount of the Loan owing to it (without
giving effect to assignments thereof which have not yet become effective) is
$------------ and the aggregate principal amount of Letters of Credit in which
it is deemed to have a Participation under the Agreement is $-------------;
(ii) 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; (iii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement or any of the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Agreement or any of the Loan Documents or any other
instrument or document furnished pursuant thereto; (iv) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of Borrower or the performance or observance by Borrower of any of
its obligations under the Agreement or any of the Loan Documents or any other
instrument or document furnished pursuant thereto and (v) attaches the Note
referred to in paragraph 1 above and requests that the Agent exchange such Note
for new Note(s) as follows: A Note, dated -------------, 19-- in the principal
amount of $-------------, payable to the order of the Assignor, and a Note,
dated -------------, 19-- in the principal amount of $------------- payable to
the order of the Assignee.
3. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 7.02(b) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor, or any other Lender and based on
72
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
the Agreement; (iii) appoints and authorizes the Agent to take such actions on
its behalf and to exercise such powers under the Loan Documents as are
delegated to the Agent by the terms 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 Agreement are
required to be performed by the Lender and hereby makes the representations and
warranties set forth in Section 12.11 of the Agreement; and (v) specifies as
its address for notices the office set forth beneath its name on the signature
pages hereof.
4. The effective date for this Assignment and Acceptance shall be
------------- (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for acceptance and
recording by the Agent.
5. Upon such acceptance and recording, as of the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the Loan Documents and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.
6. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments under the Agreement and Notes in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest, commitment fees and letter of credit fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Agreement and the Notes for
periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by and construed in
accordance with, the laws of the State of Florida.
8. The Borrower is an intended beneficiary of clause (iv) of Section 3
hereof and clause (i) of Section 5 hereof and may enforce such provisions
against any Assignee.
[NAME OF ASSIGNOR]
By:
---------------------------------
Name:
Title:
73
Notice Address: -------------------
------------------------------------
------------------------------------
After the Effective Date Outstanding
Revolving Loans: $-----------------
[NAME OF ASSIGNEE]
By:
---------------------------------
Name:
Title:
Notice Address: -------------------
------------------------------------
------------------------------------
After the Effective Date Outstanding
Revolving Loans: $-----------------
Accepted this day of ---------, 19--
NATIONSBANK OF FLORIDA, NATIONAL
ASSOCIATION
By:
---------------------------------
Name:
Title:
Consented to:
REXEL, INC.
By:
--------------------------------
Name:
Title:
74
EXHIBIT C
Notice of Appointment (or Revocation) of Authorized Officer
-----------------------------------------------------------
Reference is hereby made to the Amended and Restated Revolving Credit and
Reimbursement Agreement, dated as of August 8, 1995 (the "Agreement") among
NATIONSBANK OF FLORIDA, NATIONAL ASSOCIATION, as Agent for certain Lenders
signatory thereto, such Lenders, and REXEL, INC. (the "Borrower"). Capitalized
terms used but not defined herein shall have the respective meanings therefor
set forth in the Agreement.
The Borrower hereby nominates, constitutes and appoints each individual
named below as an Authorized Officer under the Loan Documents, and hereby
represents and warrants that (i) set forth opposite each such individual's name
is a true and correct statement of such individual's corporate office (to which
such individual has been duly elected or appointed), a genuine specimen
signature of such individual, and (ii) each such individual has been duly
authorized by the Borrower to act as Authorized Officer thereunder:
Name Corporate Office Specimen Signature
------------------
------------------
The Borrower hereby revokes (effective upon receipt hereof by the Agent) the
prior appointment of ------------------------ as an Authorized Officer.
This the ---- day of ---------------, 19--.
REXEL, INC.
By:
---------------------------------
Title:
-------------------------------
75
EXHIBIT D
Application and Agreement for Letter of Credit
----------------------------------------------
See attached.
76
EXHIBIT E
Borrowing Notice (Loan)
-----------------------
To: Nationsbank of Florida,
National Association, as Agent
NationsBank ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Reference is hereby made to the Amended and Restated Revolving Credit and
Reimbursement Agreement, dated as of August 8, 1995, (the "Agreement") among
NATIONSBANK OF FLORIDA, NATIONAL ASSOCIATION, as Agent for certain Lenders
signatory thereto, such Lenders and REXEL, INC. Capitalized terms used but not
defined herein shall have the respective meanings therefor set forth in the
Agreement.
The Borrower through its Authorized Officer hereby confirms its prior
notice of borrowing given to the Agent by telephone on -------------, 19-- to
the effect that Loans of the type and amount set forth below be made on the
date indicated by deposit of such amount to the Borrower's Account:
Type of Loan
(check one) Interest Period1 Aggregate Amount2 Date of Loan3
Reference Loan -----
Fixed CD Loan ------
LIBOR Loan ---------
------------------
[FN]
1 For any Fixed CD Loan 30, 60, 90 or 180 days and for any LIBOR Loan, seven
days, one, two, three or six months or one year.
2 (i) If a Reference Loan, in an amount equal to $3,000,000 or any integral
multiple of $250,000 in excess thereof, (ii) if a Fixed CD Loan or LIBOR
Loan, in a minimum amount of $3,000,000 or integral multiples of $250,000
in excess thereof.
3 At least two (2) Business Days after date of telephonic or telefacsimile
notice if a Fixed CD Loan and three (3) LIBOR Business Days if a LIBOR
Loan; may be same Business Day in the case of Reference Loans.
77
The Borrower hereby certifies that:
1. No Default or Event of Default exists either now or after giving
effect to the borrowing described herein; and
2. All the representations and warranties set forth in the Agreement
(other than those expressly stated to refer to a particular date) are true and
correct in all material respects as of the date hereof.
3. There has been no material adverse change in the financial condition
of the Borrower and its Subsidiaries taken as a whole since the date of those
financial statements most recently delivered to the Agent and the Lenders
pursuant to Section 8.01 hereof.
This the ---- day of -------------, 19 --.
REXEL, INC.
By:
-------------------------------
Authorized Officer
78
EXHIBIT F
Form of
Guaranty and Suretyship Agreement
---------------------------------
This is a Continuing and Unconditional Guaranty dated as of -------------
("Guaranty") made by each of the undersigned (each, a "Guarantor" and
collectively, the "Guarantors").
Each Guarantor is a subsidiary of REXEL, Inc. ("Borrower"), a New York
corporation which is the Borrower under an Amended and Restated Revolving
Credit and Reimbursement Agreement dated as of August 8, 1995 ("Loan
Agreement") by and among the Borrower, NationsBank of Florida, National
Association ("NationsBank"), as agent (the "Agent") for each of the Lenders now
or hereafter party thereto (the "Lenders"), NationsBank as a Lender and any
other Lenders as provided for therein. As used in this Guaranty, the term
"Lenders" means NationsBank, in its capacity as a Lender and not as Agent, each
Lender party to the Loan Agreement and each other financial or investment
institution that hereafter becomes a "Lender" as provided for in the Loan
Agreement.
Under the terms and subject to the conditions set forth in the Loan
Agreement, the Lenders have agreed to make certain loans and advances to the
Borrower and NationsBank has agreed to issue certain Letters of Credit for the
account of the Borrower. Terms specifically defined in the Loan Agreement and
not defined herein shall have the same definition when used in this Guaranty.
FOR VALUE RECEIVED, and to induce the Lenders to make loans and advances
to, and to issue Letters of Credit for the account of, the Borrower, each
Guarantor hereby becomes surety for and irrevocably and unconditionally
guarantees for the benefit of the Agent and the Lenders (collectively, the
"Secured Parties") the payment when due, whether by acceleration or otherwise
(including amounts which, but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code (or any successor statute), would become
due), of any and all Liabilities (as hereinafter defined) of Borrower to the
Secured Parties.
1. The term "Liability" or "Liabilities" as used herein shall mean the
obligations of Borrower to the Secured Parties evidenced the Notes made by the
Borrower payable to the Secured Parties under the Loan Agreement, all
obligations of the Borrower to reimburse NationsBank with respect to all
Letters of Credit created and issued for the account of the Borrower under the
Loan Agreement and all other debts and obligations of the Borrower owing to the
Secured Parties under the Loan Agreement or any Loan Documents to which the
Borrower is a party and all other indebtedness, obligations and liabilities of
the Borrower under written financing arrangements stated by the Guarantors and
the Secured Parties to be guaranteed hereby, together with all extensions or
renewals thereof and all sums payable under or by virtue thereof including,
without limitation, all amounts of principal and interest and all reasonable
expenses (including reasonable attorneys' fees and costs of collection as
specified therein) incurred in the collection thereof or the enforcement of
rights thereunder; provided, however, that the liability of any Guarantor with
respect to the Liabilities shall not exceed at any time the Maximum Amount (as
79
hereinafter defined) for such Guarantor less the amounts, if any, collected by
or on behalf of the Secured Parties from such Guarantor pursuant to any other
Loan Documents executed by such Guarantor. The "Maximum Amount" with respect
to any Guarantor means 95% of (a) the fair salable value of the assets of such
Guarantor (including the fair salable value of the amounts received or
receivable by such Guarantor pursuant to the terms of Section 8 hereof) as of
the date hereof minus (b) the total liabilities of such Guarantor (including
contingent liabilities, but excluding liabilities of such Guarantor under this
Guaranty and the other Loan Documents executed by such Guarantor) as of the
date hereof; provided, however, that if the calculation of the Maximum Amount
with respect to any Guarantor in the manner provided above as of any relevant
date after the date hereof as required of such Guarantor pursuant to this
Guaranty would result in a greater positive number, then the Maximum Amount
shall be deemed to be such greater positive number.
The term Liabilities as used herein shall include all Liabilities of any
successor entity or entities of the Borrower to the Lenders.
2. This is a guaranty of payment and not merely of collection. In the
event of any default by the Borrower in payment or otherwise on any of the
Liabilities, the Guarantors will pay, jointly and severally, all or any portion
of the Liabilities due or thereafter becoming due, whether by acceleration or
otherwise, without offset of any kind whatsoever, without any Secured Party
first being required to make demand upon the Borrower or pursue any of its
rights against the original obligor, or against any other Person, including
other guarantors (whether or not party to this Guaranty), and without being
required to liquidate or to realize on any collateral security. In any right
of action accruing to any Secured Party, such Secured Party may elect to
proceed against (a) any Guarantor together with the Borrower; (b) any Guarantor
and the Borrower individually; (c) any Guarantor only without having first
commenced any action against the Borrower.
3. The Guarantors waive, to the extent permitted by applicable law, (i)
notice of acceptance of this Guaranty and notice of any Liability to which it
may apply, (ii) presentment, demand for payment, protest, notice of dishonor or
notice of nonpayment of any Liabilities and any suit or the taking of other
action by any Secured Party against, and any other notice, any party liable
thereon (including the Guarantors), (iii) any disability of the Borrower or
defense (other than the defense of payment) available to the Borrower,
including absence or cessation of the Borrower's liability for any reason
whatsoever, (iv) any defense or circumstances which might otherwise constitute
a legal or equitable discharge of a guarantor or surety, and (v) all rights
under any state or federal statute dealing with or affecting the rights of
creditors.
4. Any Secured Party may at any time and from time to time (subject to
obtaining any necessary consent of Persons other than the Guarantors) without
notice to the Guarantors (except as required by law), without incurring
responsibility to the Guarantors, without impairing, releasing or otherwise
affecting the obligations of the Guarantors in whole or in part and without the
endorsement or execution by any Guarantor of any additional consent, waiver or
guaranty: (a) change the manner, place or terms of payment, and change or
extend the time of or renew or alter, any Liability or installment thereof, or
80
any security therefor, and may loan additional monies or extend additional
credit to Borrower, with or without security, thereby creating new Liabilities
the payment of which shall be guaranteed hereunder, and the guaranty herein
made shall apply to the Liabilities as so changed, extended, renewed, increased
or otherwise altered; (b) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property at any time
pledged or mortgaged to secure the Liabilities and any offset there against;
(c) exercise or refrain from exercising any rights against Borrower or others
(including the Guarantors) or act or refrain from acting in any other manner;
(d) settle or compromise any Liability or any security therefor and may
subordinate the payment of all or any part thereof to the payment of any
Liability (whether or not due) of Borrower to creditors of Borrower other than
the Secured Parties and the Guarantors; (e) apply any sums from any sources to
any Liability without regard to any Liabilities remaining unpaid; and (f) may
compromise or settle with or release and discharge from Liability any Guarantor
hereunder or any other guarantor of any Liabilities, or any other Person liable
to such Secured Party for all or any portion of the obligations of the
Borrower.
5. No invalidity, irregularity or unenforceability of all or any part of
the Liabilities or of any security therefor or the Loan Agreement or other Loan
Documents shall affect, impair or be a defense to this Guaranty, and this
Guaranty is a primary and absolute obligation of the Guarantors.
6. This Guaranty is a continuing one and all Liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. This Guaranty shall continue in full
force and effect until such time as all Liabilities have been paid in full and
no Lender shall be under any further obligation under the Loan Agreement to
lend or to advance funds to or to issue Letters of Credit on behalf of the
Borrower constituting Liabilities.
7. All notices provided to be given to the Secured Parties herein shall
be given in the manner in which and to the place at which notices are given to
the Agent under the Loan Agreement. All notices to any Guarantor shall be given
in the manner in which notices are given to the Borrower in the Loan Agreement
to such Guarantor in care of the Borrower at its address for notices pursuant
to the Loan Agreement.
8. Upon the occurrence and during the continuance of an Event of Default
under the Loan Agreement, any and all rights and claims of the Guarantors
against Borrower or any of its property shall be subordinate and subject in
right of payment to the prior payment in full of all Liabilities. Each
Guarantor, at the request of any Secured Party, shall execute such further
documents in favor of such Secured Party to further evidence and support the
purpose of this Section 8.
9. The Guarantors will upon demand pay, jointly and severally, to each
Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents,
which it may reasonably incur in connection with enforcement of this Guaranty
or the failure by any Guarantor to perform or observe any of the provisions
hereof. Each Guarantor agrees to indemnify and hold harmless each Secured
81
Party from and against any and all claims, demands, losses, judgments and
liabilities (including liabilities for penalties) of whatsoever kind or nature,
incurred in connection with any claim or litigation by any Person (other than a
party to the Loan Agreement) growing out of or resulting from this Guaranty or
the exercise by any Secured Party of any right or remedy granted to it
hereunder or under the other Loan Documents or the Loan Agreement in the
absence of gross negligence or willful misconduct on the part of such Secured
Party and in the absence of a breach by such Party of its obligations under the
Loan Agreement or applicable law, orders or regulations. If and to the extent
that the obligations of any Guarantor under this Section 9 are unenforceable
for any reason, such Guarantor hereby agrees to make the maximum contribution
to the payment and satisfaction of such obligations which is permissible under
applicable law.
10. No delay on the part of the Secured Parties in exercising any of
their options, powers or rights, or partial or single exercise thereof, shall
constitute waiver thereof. Failure by any Secured Party to insist upon strict
performance hereof shall not constitute a relinquishment of its right to demand
strict performance at another time. Receipt by any Secured Party of payment by
any Person on any Liability, with knowledge of a default on any Liability or of
a breach of this Guaranty, or both, shall not be construed as a waiver of the
default or breach. No waiver of any of their rights hereunder, and no
modification or amendment of this Guaranty, shall be deemed to be made by the
Secured Parties unless the same shall be in writing, duly signed by the Agent
(which execution by the Agent shall be conclusive evidence that the Agent has
received consent thereto of the Required Lenders), and each such waiver, if
any, shall apply only with respect to the specific instance involved, and shall
in no way impair the rights of the secured Parties or the obligations of the
Guarantors to the Secured Parties in any other respect at any other time;
provided, that no such amendment, waiver or consent shall (i) deprive any
Secured Party of the benefits generally of this Guaranty without the written
consent of such Secured Party, or (ii) alter the provisions of this Section 10
without the written consent of all of the Secured Parties.
11. This Guaranty shall continue to be effective, or be reinstated, as
the case may be, if at any time payment of any Liabilities is rescinded or must
otherwise be returned by any Secured Party upon the bankruptcy or insolvency of
the Borrower or by order of any court or administrative body having
jurisdiction, as if such payment had not been made and notwithstanding the
termination of this Guaranty pursuant to Section 6.
12. In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence of an
Event of Default (as defined in the Loan Agreement), each Guarantor agrees that
each Secured Party shall have a right of set-off for all the liabilities of
such Guarantor against all deposits or deposit accounts, of any kind, or any
interest in any deposits or deposit accounts thereof, now or hereafter pledged,
mortgaged, transferred or assigned to such Secured Party or otherwise in the
possession or control of such Secured Party (other than for safekeeping as a
fiduciary) for any purpose for the account or benefit of such Guarantor and
including any balance of any deposit account or of any credit of such Guarantor
with such Secured Party, whether now existing or hereafter established, hereby
authorizing each Secured Party at any time or times with or, to the extent
permitted by applicable law, without prior notice to apply such balances or any
part thereof to such of the liabilities of such Guarantor to such Secured Party
82
then past due and in such amounts as they may elect, and whether or not the
collateral or the responsibility of other Persons primarily, secondarily or
otherwise liable may be deemed adequate. For the purposes of this paragraph,
all remittances and property shall be deemed to be in the possession of such
Secured Party as soon as the same may be put in transit to it by mail or
carrier or by other bailee.
13. Each Guarantor affirms to the Secured Parties that each of the
representations and warranties contained in the Loan Agreement and made by the
Borrower with respect to such Guarantor is true and correct.
14. This Guaranty is freely assignable and transferable by the Secured
Parties to any permitted assignee and transferee of any Liability under Section
12.01 of the Loan Agreement; however, no duties and obligations of any
Guarantor may be delegated or transferred by such Guarantor without the written
consent of all Secured Parties. Anyone executing this Guaranty shall be bound
by the terms hereof without regard to execution by anyone else and this
Guaranty may be executed in separate counterparts by any one or more of the
Guarantors, each of which shall be deemed an original Guaranty. This Guaranty
is binding upon each Guarantor and its successors and assigns, and shall inure
to the benefit of each Secured Party, its successors, endorsees and assigns.
15. All remedies hereunder are cumulative and are not exclusive of any
other rights and remedies of the Secured Parties provided by law or under the
Loan Agreement, the other Loan Documents or other applicable agreements or
instruments.
16. This Guaranty shall be construed in accordance with the laws of the
State of Florida. 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
applicable 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. To the extent permitted by
applicable law, the Guarantors hereby waive any provision of law that renders
any provision hereof prohibited or unenforceable in any respect. Each Guarantor
hereby submits to the jurisdiction and venue of the state and Federal courts of
Florida, for the purposes of resolving disputes hereunder or under any of the
other Loan Documents to which it is a party or for the purpose of collection.
17. The Guarantors shall not have any right of subrogation, reimbursement
or indemnity whatsoever, nor any right of recourse to any security for the
Liabilities. No Guarantor also shall be deemed a "creditor" of Borrower with
respect to the Liabilities, as said term "creditor" is defined in the
Bankruptcy Code (for any successor statute).
18. The obligations of each Guarantor under this Guaranty shall be joint
and several with the obligations of each other person that guarantees all or
any part of the Liabilities, including without limitation each of the other
Guarantors referred to in the Loan Agreement.
19. UNDERSIGNED HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION
BROUGHT ON THIS GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A
83
PARTY OR ON ANY MATTER ARISING IN CONNECTION HEREWITH OR THEREWITH.
20. In the event that any term of this Guaranty or of any other Loan
Document (other than the Loan Agreement) conflicts with any term of the Loan
Agreement, then the term of the Loan Agreement shall control.
84
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
GUARANTORS:
SOUTHERN ELECTRIC SUPPLY COMPANY, INC.
▇▇▇▇▇▇▇ GROUP, INC.
CALCON ELECTRIC SUPPLY, INC.
ENGINEERED APPAREL CONCEPTS, INC.
▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇, INC.
▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇, INC.
WITNESS: By:
----------------------------------
Name:
--------------------------------
Authorized Officer or Signatory
-------------------------------------
85
EXHIBIT G
Form of Note
-------------
-----------------1 [-----------------,----]2
-----------------, 1995
FOR VALUE RECEIVED, REXEL, INC., a New York corporation having its
principal place of business located in Coral Gables, Florida (the "Borrower"),
hereby promises to pay to the order of -----------------3 (the "Lender"), in
its individual capacity, at the office of NationsBank of Florida, National
Association, as agent for the Lender (the "Agent"), located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Agency Services
(or at such other place or places as the Agent may designate) at the times set
forth in the Amended and Restated Revolving Credit and Reimbursement Agreement
dated as of the date hereof among the Borrower, NationsBank of Florida,
National Association the financial institutions parties thereto (collectively,
the "Lenders") and the Agent (the "Agreement" -- all capitalized terms not
otherwise defined herein shall have the respective meanings set forth in the
Agreement), in lawful money of the United States of America, in immediately
available funds, the principal amount of [------------------------]4 DOLLARS
($----------------) or, if less than such principal amount, the aggregate unpaid
principal amount of all Revolving Loans made by the Lender to the Borrower
pursuant to the Agreement on the Revolving Credit Termination Date or such
earlier date as may be required pursuant to the terms of the Agreement, and to
pay interest from the date hereof on the unpaid principal amount hereof, in
like money, at said office, on the dates and at the rates provided in Article
II of the Agreement.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and
interest, all costs of collection, including reasonable attorneys' fees, and
interest thereon at the rates set in the Agreement.
------------------
[FN]
1 Insert Lender's Pro Rata Share of Total Revolving Commitment in arabic
numerals.
2. Insert name of city of Lender's Principal Office.
3. Insert name of Lender in capital letters.
4. Insert Lender's Pro Rata Share of Total Revolving Credit Commitment in
words.
86
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby
waive to the full extent permitted by law the benefits of all provisions of law
for stay or delay of execution or sale of property or other satisfaction of
judgment against any of them on account of liability hereon until judgment be
obtained and execution issues against any other of them and returned satisfied
or until it can be shown that the maker or any other party hereto had no
property available for the satisfaction of the debt evidenced by this
instrument, or until any other proceedings can be had against any of them, also
their right, if any, to require the holder hereof to hold as security for this
Note any collateral deposited by any of said Persons as security. Protest,
notice of protest, notice of dishonor, diligence or any other formality are
hereby waived by all parties bound hereon.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
87
IN WITNESS WHEREOF, the Borrower has caused this Note to be made, executed
and delivered by its duly authorized officer as of the date and year first
above written, all pursuant to authority duly granted.
WITNESS: REXEL, INC.
---------------------------------- By:
----------------------------------
Title:
-------------------------------
----------------------------------
88
EXHIBIT H
Opinion of Counsel for Borrower and Subsidiaries
------------------------------------------------
See attached.
89
EXHIBIT I
Form of Compliance Certificate
------------------------------
NationsBank of Florida,
National Association, as Agent
▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Banking
I, ------------------------, (Title) ------------------------ of Rexel
Inc., a New York corporation (the "Borrower"), acting pursuant to Section 8.01
of the Amended and Restated Revolving Credit and Reimbursement Agreement dated
as of August 8, 1995 among the Borrower, NationsBank of Florida, National
Association, as Agent, and the Lenders named therein (the "Agreement"), hereby
certify to the best of my knowledge to you as of ----------------- [insert
Determination Date] as follows:
1. Calculations:
A. Compliance with Section 9.12: Indebtedness for Money Borrowed to
Consolidated Shareholders' Equity
1. Indebtedness for Money Borrowed $-------------
2. Consolidated Shareholders' Equity $-------------
3. Ratio of A.1. to A.2 ----- to 1.00
See Section 9.12 for required ratios.
B. Compliance with Section 9.13: Consolidated Shareholders' Equity
1. Issued and outstanding share capital $-------------
2. Additional Paid-in Capital $-------------
3. Retained Earnings $-------------
4. Sum of ▇.▇., B.2. and B.3. $-------------
See Section 9.13 for required ratios.
C. Compliance with Section 9.14: Acquisitions
1. Total Cost of Acquisitions during $-------------
the period
Required that Cost of Acquisitions not
exceed 30% of Consolidated
Shareholders' Equity.
90
D. Compliance with Section 9.15: Interest Coverage Ratio
1. Consolidated EBIT $-------------
2. Consolidated Interest Expense $-------------
3. Ratio of D.1. and D.2. ----- to 1.00
See Section 9.15 for required ratios.
E. Compliance with Section 9.17: Fixed Charge Coverage Ratio
1. Consolidated Net Income $-------------
2. State and Federal Income Taxes $-------------
3. Consolidated Interest Expense $-------------
4. Depreciation and amortization $-------------
5. Sum of E.1. through E.4. $-------------
6. Consolidated Interest Expense $-------------
7. Current Maturities of Indebtedness $-------------
8. Current Maturities of Capitalized Leases $-------------
9. Sum of E.6. through E.8. $-------------
10. Ratio of E.5. to E.9. ----- to 1.00
See Section 9.17 for required ratios.
F. Compliance with Section 9.18: Trading Asset Ratio
1. Accounts $-------------
2. Inventory $-------------
3. Sum of F.1. and F.2. $-------------
4. Accounts Payable $-------------
5. F.3. minus F.4. $-------------
6. Indebtedness for Money Borrowed $-------------
7. Ratio of F.5. to F.6. ----- to 1.00
See Section 9.18 for required ratios.
2. No Default
A. The Borrower and the Guarantors have kept, observed, performed
and fulfilled each and every agreement binding on each of them contained
in the Loan Documents.
B. Since ------------ (the date of the last similar certification),
(a) the Borrower and the Guarantors have not defaulted in the keeping,
observance, performance or fulfillment of any of the Loan Documents; and
(b) no Default or Event of Default specified in Article X has occurred.
91
C. If a Default or Event of Default has occurred since ------------
(the date of the last similar certification), the Borrower proposes to
take the following action with respect to such Default or Event of
Default: -----------------------------------------------------------------
--------------------------------------------------------------------------
-------------------------------------------------------------------------.
(Note, if no Default or Event of Default has occurred, insert "Not
Applicable").
All terms if not specifically defined herein shall have the meaning set
forth in the Agreement. The Determination Date is the date of the last
required financial statements submitted to the Lenders in accordance with
Section 8.01 of the Agreement.
IN WITNESS WHEREOF, I have executed this Certificate this ------------ day
of ------------, 19--.
------------------------------------ ---------------------------------
Authorized Officer Date
92
EXHIBIT J
Guarantors and NonGuarantors
----------------------------
Guarantors
----------
Southern Electric Supply Company, Inc.
▇▇▇▇▇▇▇ Group, Inc.
Calcon Electric Supply, Inc.
Engineered Apparel Concepts, Inc.
▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇, Inc.
▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇, Inc.
Non-Guarantors
---------------
C.E.S. Industries, Inc.
Consolidated Electric Supply, Inc.
Seaco Electrical Supplies, Inc.
Elgee Electric Supply Co., Inc.
▇▇▇▇▇ Consolidated Industries, Inc.
▇▇▇▇▇▇▇▇ Electric Supply Co., Inc.
Sacks Electrical Supply Co., Inc.
▇▇▇▇▇▇▇ & ▇▇▇▇▇ of Alabama, Inc.
Consolidated Electric Supply, Ltd. (Bahamas)
▇▇▇▇▇▇ Lighting Company
Spindletop Electrical Distributing Co., Inc.
▇▇▇▇▇▇▇▇▇ Electric Company
▇▇▇▇▇▇▇ Electric Company
▇▇▇▇▇ Service Corporation
W&G Export Corporation
93
EXHIBIT K
Existing Liens, Indebtedness, Guaranties and Investments
--------------------------------------------------------
I. DEBT/LIENS/GUARANTEES
A. Rexel, Inc. and subsidiaries (other than those subsidiaries referred
to in I.B.)
--------------------------------------------------------------------
1. Indebtedness (the term "Indebtedness" is used herein as defined
in the Agreement).
Sundry other indebtedness, including capital leases and finance
agreements related to computer, office and vehicular equipment
incurred in the ordinary course of business (including, in this
instance, renewals, extensions and replacements of such debt) -
not exceeding $5,000,000
Amounts due former shareholders of acquired companies pursuant
to acquisition agreements
7% Convertible Subordinated Debentures of Rexel, Inc. due August
2014 - $50,000,000
$42,860,000 of Indebtedness to Prudential Life Insurance Company
of America due March 15, 2001
2. Liens (the term "Liens" is used herein as defined in the
Agreement)
Liens securing the sundry other debts referred to under I.A.1.
above
3. Guarantees (The term "guarantees" is used herein as defined in
the Agreement)
Those guarantees by Rexel, Inc. and subsidiaries of such debt of
their customers provided in the ordinary course of business as
is necessary to induce leasing companies to provide lease
financing to facilitate the purchase by such customers of
equipment, goods and/or services provided by Rexel, Inc. and
subsidiaries, such amount so guaranteed not to exceed $5,000,000
at any point in time
The Tax Sharing Agreement and Distribution Agreement with
Worldtex, Inc., and the Purchase Agreement, Investment
Agreement, Registration Rights Agreement and other agreements
referred to in the ▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. Proxy Statement dated
September 2, 1992
Sundry other guarantees which are not material
94
II. INVESTMENTS
A. Rexel, Inc. and subsidiaries
----------------------------
Employee Loans and Advances -- $1,500,000
Mima-Pegasus -- $60,000
Stock and Debentures of ▇▇▇▇▇▇ Corp. -- $21,000
Mortgage -- ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ -- $120,000
CES Long Term Notes Receivable -- $700,000
Montrose Textile Machine Co. Inc. -- $1,000,000 note
Delta Computec Inc. -- 1,000,000 shares of common stock, $475,000
principal amount debenture and a note receivable of $37,500.
Sundry other investments which are not material
EXHIBIT 10.2
REXEL, INC.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
This Amendment No. 7 dated as of August 8, 1995 to the Note Agreement
dated as of April 2, 1991 between The Prudential Insurance Company of America
("Prudential") and Rexel, Inc. (formerly, ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.) (as amended the
"Note Agreement"). Capitalized terms used herein without definition have the
meanings ascribed to such terms in the Note Agreement.
R E C I T A L S
WHEREAS, the Company authorized and issued $50,000,000 aggregate
principal amount of its 9.78% senior promissory notes due March 15, 2001
pursuant to the Note Agreement;
WHEREAS, concurrently herewith the Company is entering into a Private
Shelf Agreement dated as of August 8,1995 with Prudential (the "Shelf
Agreement") that contains terms and conditions substantially different from
those contained in the Note Agreement;
WHEREAS, the Company and Prudential wish to substantially conform the
terms and conditions of the Note Agreement to the terms and conditions of the
Shelf Agreement;
NOW THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Paragraphs 4A, 4B, 4C, 4D and 4E of the Note Agreement are
hereby amended and restated in their entirety as follows:
"4A. REQUIRED PREPAYMENTS. Until the Notes shall be paid in
full, the Company shall apply to the prepayment of the Notes, without
premium, $7,140,000 on March 15, in each of the years 1995 through
1996 and 1999 through 2001 and $7,160,000 on March 15, 1998; and such
principal amounts, together with interest thereon to the prepayment
dates shall become due and payable on such dates.
4B. OPTIONAL PREPAYMENTS. The Notes shall be subject to
prepayment in whole at any time or in part from time to time (in a
minimum amount of $1,000,000 and in increments of $100,000 in excess
thereof) at the option of the Company, at 100% of the principal
amount so prepaid plus interest thereon to but excluding the
prepayment date and the Yield-Maintenance Amount, if any, with
respect to each such Note. Any partial prepayment pursuant to this
2
paragraph 4B shall be applied in satisfaction of required payments of
principal in inverse order of their scheduled due dates.
4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the
holder of each Note to be prepaid pursuant to paragraph 4B
irrevocable written notice of such prepayment not less than 10
Business Days prior to the prepayment date, specifying such
prepayment date, the aggregate principal amount of the Notes to be
prepaid on such date, the principal amount of the Notes held by such
holder to be prepaid on that date and that such prepayment is to be
made pursuant to paragraph 4B. Notice of prepayment having been
given as aforesaid, the principal amount of the Notes specified in
such notice, together with interest thereon to the prepayment date
and together with the Yield-Maintenance Amount, if any, herein
provided, shall become due and payable on such prepayment date. The
Company shall, on or before the day on which it gives written notice
of any prepayment pursuant to paragraph 4B, give telephonic notice of
the principal amount of the Notes to be prepaid and the prepayment
date to each Significant Holder which shall have designated a
recipient for such notices in the Purchaser Schedule attached hereto
or by notice in writing to the Company.
4D. APPLICATION OF PREPAYMENTS. In the case of each
prepayment of less than the entire unpaid principal amount of all
outstanding Notes pursuant to paragraphs 4A or 4B, the principal
amount to be prepaid shall be applied pro rata to all outstanding
Notes (including, for the purpose of this paragraph 4D only, all
Notes prepaid or otherwise retired or purchased or otherwise acquired
by the Company or any of its Subsidiaries or Affiliates other than by
prepayment pursuant to paragraph 4A or 4B) according to the
respective unpaid principal amounts thereof.
4E. RETIREMENT OF NOTES. The Company shall not, and shall not
permit any of its Subsidiaries or Affiliates to, prepay or otherwise
retire in whole or in part prior to their stated final maturity
(other than by prepayment pursuant to paragraphs 4A or 4B or upon
acceleration of such final maturity pursuant to paragraph 7A), or
purchase or otherwise acquire, directly or indirectly, Notes held by
any holder unless the Company or such Subsidiary or Affiliate shall
have offered to prepay or otherwise retire or purchase or otherwise
acquire, as the case may be, the same proportion of the aggregate
principal amount of Notes held by each other holder of Notes at the
time outstanding upon the same terms and conditions. Any Notes so
prepaid or otherwise retired or purchased or otherwise acquired by
the Company or any of its Subsidiaries or Affiliates shall not be
deemed to be outstanding for any purpose under this Agreement, except
as provided in paragraph 4D."
2. Paragraphs 5, 6 and 7 of the Note Agreement are hereby amended
and restated in its entirety as follows:
3
"5. AFFIRMATIVE COVENANTS. So long as any Note is outstanding
and unpaid, the Company covenants as follows:
5A(1). FINANCIAL STATEMENTS; NOTICE OF DEFAULTS. The Company
covenants that it will deliver to each Significant Holder of any
Notes in triplicate:
(i) as soon as practicable and in any event within 60 days
after the end of each quarterly period (other than the last
quarterly period) in each fiscal year, consolidating and
consolidated statements of income, and cash flows and a
consolidated statement of shareholders' equity of the Company
and its Subsidiaries for the period from the beginning of the
current fiscal year to the end of such quarterly period, and a
consolidating and consolidated balance sheet of the Company and
its Subsidiaries as at the end of such quarterly period, setting
forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year, all in
reasonable detail and certified by an authorized financial
officer of the Company, subject to changes resulting from year-
end adjustments; provided, however, that delivery pursuant to
clause (iii) below of copies of the Quarterly Report on Form 10-
Q of the Company for such quarterly period filed with the
Securities and Exchange Commission shall be deemed to satisfy
the requirements of this clause (i) with respect to consolidated
statements;
(ii) as soon as practicable and in any event within 97 days
after the end of each fiscal year, consolidating and
consolidated statements of income and cash flows and a
consolidated statement of shareholders' equity of the Company
and its Subsidiaries for such year, and a consolidating and
consolidated balance sheet of the Company and its Subsidiaries
as at the end of such year, setting forth in each case in
comparative form corresponding consolidated figures from the
preceding annual audit, all in reasonable detail and
satisfactory in form to the Required Holder(s) and, as to the
consolidated statements, reported on by independent public
accountants of recognized national standing selected by the
Company whose report shall be without limitation as to scope of
the audit and satisfactory in substance to the Required
Holder(s) and, as to the consolidating statements, certified by
an authorized financial officer of the Company; provided,
however, that delivery pursuant to clause (iii) below of copies
of the Annual Report on Form 10-K of the Company for such fiscal
year filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this clause (ii) with
respect to consolidated statements;
(iii) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as
it shall send to its public stockholders and copies of all
registration statements (without exhibits) and all reports which
4
it files with the Securities and Exchange Commission (or any
governmental body or agency succeeding to the functions of the
Securities and Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each other
report submitted to the Company or any Subsidiary by independent
accountants in connection with any annual, interim or special
audit made by them of the books of the Company or any
Subsidiary; and
(v) with reasonable promptness, such other financial data
as such Significant Holder may reasonably request.
Together with each delivery of financial statements required by
clauses (i) and (ii) above, the Company will deliver to each
Significant Holder an Officer's Certificate demonstrating (with
computations in reasonable detail) compliance by the Company and
its Subsidiaries with the provisions of paragraphs 6A(1), 6A(2),
6A(3), 6A(4), 6A(5), 6B(1), 6B(2), 6B(3), 6B(4)and 6B(5) and
stating that there exists no Event of Default or Default, or, if
any Event of Default or Default exists, specifying the nature
and period of existence thereof and what action the Company
proposes to take with respect thereto. Together with each
delivery of financial statements required by clause (ii) above,
the Company will deliver to each holder of any Notes a
certificate of such accountants stating that, in making the
audit necessary for their report on such financial statements,
they have obtained no knowledge of any Event of Default or
Default, or, if they have obtained knowledge of any Event of
Default or Default, specifying the nature and period of
existence thereof. Such accountants, however, shall not be
liable to anyone by reason of their failure to obtain knowledge
of any Event of Default or Default which would not be disclosed
in the course of an audit conducted in accordance with generally
accepted auditing standards.
5A(2) SPECIAL INFORMATION. The Company also covenants that
within five Business Days of any Responsible Officer obtaining
knowledge of:
(a) Default or Event of Default; or
(b) any (A) Environmental Liabilities which individually
or in the aggregate has a reasonable possibility of having a
Materially Adverse Effect on the Company and its Subsidiaries
taken as a whole, (b) pending, threatened or anticipated
Environmental Proceedings, which if decided adversely has a
reasonable possibility of having a Materially Adverse Effect on
the Company and its Subsidiaries taken as a whole, (C)
Environmental Notices, (D) Environmental Judgments and Orders,
or (E) Environmental Releases at, on, in, under or in any way
affecting any real property, owned, leased or otherwise used or
5
occupied by the Company or any Subsidiary which has a Material
Adverse Effect on the Company and its Subsidiaries taken as a
whole;
the Company will deliver to each Significant Holder an Officer's
Certificate specifying the nature and period of existence thereof and
what action the Company or the Subsidiary has taken, is taking or
proposes to take with respect thereto.
5B. INFORMATION REQUIRED BY RULE 144A. The Company covenants
that it will, upon the request of the holder of any Note, provide
such holder, and any qualified institutional buyer designated by such
holder, such financial and other information as such holder may
reasonably determine to be necessary in order to permit compliance
with the information requirements of Rule 144A under the Securities
Act in connection with the resale of Notes, except at such times as
the Company is subject to and in compliance with the reporting
requirements of section 13 or 15(d) of the Exchange Act. For the
purpose of this paragraph 5B, the term "QUALIFIED INSTITUTIONAL
BUYER" shall have the meaning specified in Rule 144A under the
Securities Act.
5C. INSPECTION OF PROPERTY. The Company covenants that it
will permit any Person designated by any Significant Holder in
writing, at such Significant Holder's expense, to visit and inspect
any of the properties of the Company and its Material Subsidiaries,
to examine the corporate books and financial records of the Company
and its Material Subsidiaries and make copies thereof or extracts
therefrom and to discuss the affairs, finances and accounts of any of
such corporations with the principal officers of the Company and its
independent public accountants, in each case as shall be relevant to
the performance by the Company of this Agreement on the financial
condition of the Company and its Subsidiaries, all at such reasonable
times and as often as such Significant Holder may reasonably request.
5D. COVENANT TO SECURE NOTES EQUALLY. The Company covenants
that, if it or any Material Subsidiary shall create or assume any
Lien upon any of its property or assets, whether now owned or
hereafter acquired, other than Liens permitted by the provisions of
paragraph 6B(1) (unless prior written consent to the creation or
assumption thereof shall have been obtained pursuant to paragraph
11C), it will make or cause to be made effective provision whereby
the Notes will be secured by such Lien equally and ratably with any
and all other Debt thereby secured so long as any such other Debt
shall be so secured.
5E. SUBSIDIARY GUARANTIES. The Company covenants that it will
cause each Subsidiary which is required to guarantee all or any
portion of any obligation under the Bank Agreement or any other Debt
of the Company (collectively, "Other Debt") to execute and deliver to
each holder of the Notes (i) a Guaranty Agreement of such Subsidiary
together with evidence of due authorization, execution, delivery and
6
enforceability of such agreement in form and substance reasonably
satisfactory to the Required Holders and (ii) an agreement, in form
and substance satisfactory to the Required Holders, under which the
holders of such Other Debt agree to be bound to the terms of the
Intercreditor Agreement. The Company agrees to make the deliveries
required by this paragraph 5E not later than the date on which the
guaranties of such Other Debt become effective.
5F. MAINTENANCE OF INSURANCE. The Company covenants that it
and each Subsidiary will maintain, with financially sound and
responsible insurers, insurance with respect to its properties and
business against such casualties and contingencies (including, but
not limited to, public liability, larceny, embezzlement or other
criminal misappropriation) and in such amounts as is customary in the
case of similarly situated corporations engaged in the same or
similar business.
5G. MAINTENANCE OF CORPORATE EXISTENCE; COMPLIANCE WITH LAW;
PRESERVATION OF PROPERTY. The Company covenants that it and each
Subsidiary will (i) except as allowed under paragraph 6B(5), do or
cause to be done all things necessary to preserve, renew and keep in
full force and effect the corporate existence of the Company and its
Material Subsidiaries, and to the extent with the Company's or such
Subsidiary's control, rights, licenses, permits and franchises
material to the business of the Company and its Subsidiaries taken as
a whole, (ii) comply in all material respects with all laws and
regulations applicable to it and its Subsidiaries, including, without
limitation, laws and regulations relating to equal opportunity and
employee safety, the failure to comply with which could reasonably be
expected to have a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole, (iii) at all times maintain, preserve
and protect all material intellectual property of the Company and its
Subsidiaries and (iv) preserve all the remainder of its business and
keep same in good repair, working order and condition (except for
normal wear and tear and obsolete property replaced in the ordinary
course of business).
5H. COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS. The Company
will, and will cause each of its Subsidiaries to, comply in a timely
fashion with, or operate pursuant to valid waivers of the provisions
of, all Environmental Requirements including, without limitation, the
emission of wastewater, effluent, solid and hazardous waste and air
pollution, and laying down general environmental conditions together
with any other applicable requirements for conducting, on a timely
basis, periodic tests and monitoring for contamination of ground
water, surface water, air and land and for biological toxicity of the
aforesaid, and diligently comply with the regulations (except to the
extent such regulations are waived by appropriate governmental
authorities) of the Environmental Protection Agency or other
Environmental Authority, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect on the
7
Company and its Subsidiaries taken as a whole. The Company shall not
be deemed to have breached or violated this paragraph 5H if the
Company or any Subsidiary is challenging in good faith by appropriate
proceedings diligently pursued the application of enforcement of such
Environmental Requirements for which adequate reserves have been
established in accordance with generally accepted accounting
principles.
5I. PAYMENT OF TAXES AND CLAIMS. The Company will, and will
cause each Subsidiary to, pay all taxes, assessments and other
governmental charges imposed upon it or its properties or assets or
in respect of any of its franchises, business, income or profits
before any penalty or interest accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials
and supplies) for sums which might, if unpaid, become a Lien upon any
of its properties or assets (other than Liens permitted pursuant to
paragraph 6B(1)); provided that no such charge or claim need be paid
if being contested in good faith by appropriate proceedings promptly
initiated and diligently conducted and if such reserves or other
appropriate provisions, if any, as shall be required by generally
accepted accounting principles shall have been made therefor.
6. NEGATIVE COVENANTS
6A. FINANCIAL RATIOS. The Company covenants that it will not
permit:
6A(1). CURRENT RATIO. The ratio of Consolidated Current
Assets to Consolidated Current Liabilities to be less than 1.25 to
1.0 at any time.
6A(2). INTEREST COVERAGE RATIO. The Interest Coverage Ratio
as at the last day of any fiscal quarter of the Company to be less
than 2.50 to 1.0.
6A(3). FIXED CHARGE COVERAGE RATIO. The Fixed Charge
Coverage Ratio calculated as of the last day of any fiscal quarter of
the Company ending in any of the periods specified in the table below
to be less than the ratio set forth in such table opposite such
period.
Period Ratio
------ -----
June 30, 1995 through and
including December 31, 1995 1.10 to 1.00
January 1, 1997 and thereafter 1.40 to 1.00
6A(4). CONSOLIDATED DEBT RATIO. The ratio of Consolidated
Debt to Consolidated Net Worth to exceed 1.50 to 1.00 at any time.
8
6A(5). PRIORITY DEBT RATIO. Priority Debt to exceed 20% of
Consolidated Net Worth at any time.
6B. LIENS, DEBT AND OTHER RESTRICTIONS. The Company covenants
that it will not and will not permit any Subsidiary to:
6B(1). LIENS. Create, assume or suffer to exist any Lien
upon any of its property or assets, whether now owned or hereafter
acquired or upon any income or profits therefrom (in all cases,
whether or not provision is made for the equal and ratable securing
of Notes in accordance with the provisions of paragraph 5D hereof),
except:
(i) Liens for taxes, assessments or governmental charges
or levies the payment of which is not at the time required by
paragraph 5I;
(ii) statutory liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen incurred in the ordinary
course of business for sums not yet due or the payment of which
is not at the time required by paragraph 5I;
(iii) Liens (other than any Lien imposed by ERISA) incurred
or deposits made in the ordinary course of business (a) in
connection with workers' compensation, unemployment insurance
and other types of social security, or (b) to secure (or to
obtain letters of credit that secure) the performance of
tenders, statutory obligations, surety and appeal bonds, bids,
leases (other than Capital Leases), performance bonds, purchase,
construction or sales contracts and other similar obligations,
in each case not incurred or made in connection with the
borrowing of money, the obtaining of advances or credit or the
payment of the deferred purchase price of property, and which do
not in the aggregate materially detract from the value of the
property or assets, or materially impair the use thereof in the
operation of the business, of the Company and its Subsidiaries,
taken as a whole;
(iv) Liens on property or assets of the Company or any of
its Subsidiaries securing Debt owing to the Company or to any
of its wholly-owned Subsidiaries;
(v) Liens that constitute rights of set-off of a customary
nature or bankers' Liens with respect to amounts on deposit in
accounts maintained with lenders party to the Bank Agreement
that are to be shared pursuant to the Sharing Agreement or such
Liens in favor of any other financial institution which (a)
shall not at any time extend credit to the Company or any
Subsidiary, or (b) does not maintain accounts (for the deposit
of cash or otherwise) for the benefit of the Company or any
Subsidiary, or (c) shall have delivered to each holder of a Note
9
a sharing agreement in the form of Exhibit M hereto, or (d)
shall have waived its rights to such Liens in a writing
satisfactory to the Required Holders; and
(vi) other Liens not otherwise permitted by clauses (i)
through (v) above, provided that after giving effect thereto,
Priority Debt shall not exceed 20% of Consolidated Net Worth.
6B(2). INVESTMENTS. Make a permit to remain outstanding any
Investment except the Company or any Subsidiary may:
(i) make or permit to remain outstanding Investments
issued or guaranteed by the government of the United States
of America or any agency thereof so long as the obligation or
guarantee shall have the full faith and credit of the United
States of America;
(ii) make or permit to remain outstanding commercial paper
of issuers incorporated under the laws of the United States or
any state thereof and rated A-1 or better by Standard & Poor's
Corporation ("S&P") or P-1 or better by ▇▇▇▇▇'▇ Investors
Service, Inc.;
(iii) make or permit to remain outstanding Investments in
(a) tax exempt obligations of any state of the United States of
America or any political subdivision or public instrumentality
thereof which are payable in United States dollars and rated in
one of the two highest rating categories by S&P or Moody's and
(b) securities of any open-end investment company registered
under the Investment Company Act of 1940, as amended, which
invests primarily in obligations meeting the requirements of
clause (a) above;
(iv) make or permit to remain outstanding Investments in
one or more Subsidiaries or any Person that concurrently with
such Investment becomes a Subsidiary;
(v) make or permit to remain outstanding Investments
received in settlement of obligations (created in the ordinary
course of business) owing to the Company or any Subsidiary;
(vi) make or permit to remain outstanding other
Investments; provided that, after giving effect to such
Investment, (a) no Default or Event of Default shall occur and
be continuing and (b) the aggregate amount of all Investments
(valued at the lower of cost or book value) made pursuant to
this clause (vi) does not exceed 10% of Consolidated Net Worth
and the aggregate amount of Investments made pursuant to this
clause (vi) other than Investments in the same line of business
in which the Company and its Subsidiaries engage on the date of
this Agreement) does not exceed $5,000,000.
10
6B(3). RESTRICTED PAYMENTS. The Company will not, and will
not permit any of its Subsidiaries to declare, make or incur any
liability to make any Restricted Payment unless immediately after
giving effect to such action:
(i) the aggregate amount of Restricted Payments of the
Company and its Subsidiaries declared or made during the period
commencing on the date of this Agreement and ending on the date
such Restricted Payment is declared or made, inclusive (such
period, the "Determination Period"), would not exceed the sum
of:
(A) $26,000,000; plus
(B) 50% of Consolidated Net Income for the
Determination Period (or minus 100% of Consolidated Net Income
for any fiscal year included in the Determination Period if
Consolidated Net Income for any such fiscal year is a loss);
plus
(C) 15% of the aggregate amount of cash proceeds
received by the Company and its Subsidiaries during such period
from the sale of all capital stock (net of all costs and out of
pocket expenses in connection therewith including, without
limitation, underwriting and brokerage fees and expenses); and
(ii) no Default or Event of Default would exist.
Notwithstanding the foregoing restrictions, the repurchase of the
Company's common stock and/or the Subordinated Debentures prior to
March 31, 1996 for an aggregate purchase price not to exceed the
Permitted Amount shall not constitute a Restricted Payment
hereunder.
6B(4). LEASE RENTALS. Directly or indirectly become or
remain liable as lessor or guarantor or other surety with respect to
any Operating Lease unless, at the end of then current fiscal
quarter the aggregate of all Net Rental Payments under such
Operating Leases and all other Operating Leases for the period of
four consecutive fiscal quarters then ended (taken as a cumulative
whole) shall not exceed 1.25% of Consolidated Gross Revenues for
such period.
6B(5). MERGER AND SALE OF ASSETS. Consolidate with or merge
into any other Person, or permit any other Person to consolidate
with or merge into it or sell, lease, abandon or otherwise dispose
of any of its assets, except that:
(i) any Subsidiary may consolidate with or merge into the
Company if the Company shall be surviving a corporation and if,
immediately after giving effect to such transaction, no
condition or event shall exist which constitutes an Event of
Default or Default;
11
(ii) any Subsidiary may consolidate with or merge into any
other Subsidiary if, immediately after giving effect to such
transaction, no condition or event shall exist which
constitutes an Event of Default or Default;
(iii) any Subsidiary may sell, lease or otherwise dispose
of all or substantially all its assets to the Company or to a
Subsidiary;
(iv) the Company or any Subsidiary may sell, lease,
abandon or otherwise dispose of any of its assets (including
the disposition by the Company or a Subsidiary of an equity
interest in a Subsidiary and the disposition by any Subsidiary
of any equity interest in itself to other than the Company or
another Subsidiary) if immediately after giving effect to such
proposed disposition, the assets so disposed of (whether or
not leased back) by the Company and its Subsidiaries during
the twelve months preceding the date of such disposition (a)
shall not have an aggregate net book value (determined as to
particular assetsas of the respective dates of disposition of
such assets), in excess of 10% of consolidated assets
determined as of the end of the most recently completed fiscal
quarter of the Company and (b) shall not have produced Operating
Profit during the prior 12 months prior to such disposition in
excess of 10% of Operating Profit at the end of the most
recently completed 12 months.
(v) any corporation may merge into the Company or any
Subsidiary if (a) the Company or such Subsidiary is the
corporation surviving such merger and (b) at the time of and
immediately after giving effect to such merger, no Default or
Event of Default shall exist; and
(vi) the Company or any Subsidiary may consolidate with or
merge into any other corporation if (a) the surviving
corporation is a corporation organized and existing under the
laws of the United States of America or a state thereof or the
District of Columbia, with a majority of its assets located and
a majority of its business conducted within the continental
United States, (b) in the case of a merger or consolidation of
the Company, such corporation expressly assumes, by an agreement
reasonably satisfactory in substance and form to the Required
Holder(s) which agreement may require the delivery in connection
with such assumption of such opinions of counsel as such
Required Holder(s) may reasonably request), the obligations of
the Company under this Agreement and under the Notes, and (c)
immediately after giving effect to such transaction no Event of
Default or Default shall exist.
6B(6). RESTRICTIONS ON SUBSIDIARIES. Except as permitted
under paragraph 6(B) (5)(iv), permit any Subsidiary to: (i) issue
stock or other equity interests in such Subsidiary or rights,
options, convertible securities or warrants convertible into or
12
exercisable for such stock or other equity interests, except to the
Company or another of the Company's Subsidiaries, (ii) sell, assign,
pledge or otherwise dispose of any shares of stock or other equity
interests in such Subsidiary or rights, options, convertible
securities or warrants convertible into or exercisable for such
stock or other equity interests except to the Company or another
of its Subsidiaries, or (iii) enter into any contract or agreement
(including any provisions in its corporate charter or articles or
certificate of incorporation) that imposes restrictions on its
ability to pay dividends, except in connection with the transaction
in which such Subsidiary becomes a Subsidiary.
6B(7). CERTAIN CONTRACTS. Enter in or be a party to:
(i) any contract providing for the making of loans,
advances or capital contributions to any Person other than a
Subsidiary, or for the purchase of any property from any
Person other than a Subsidiary, in each case in order primarily
to enable such Person to maintain working capital, net worth or
any other balance sheet condition or to pay debts, dividends or
expenses; or
(ii) any contract to rent or lease (as lessee) any real or
personal property (other than Capital Leases permitted under
paragraph 6B(1), if such contract (or any related document)
provides that the obligation to make payments thereunder (other
than to a Subsidiary) is absolute and unconditional without
regard to the availability to the lessee of the leased property
under conditions not customarily found in commercial leases than
in general use in the relevant geographic region or requires
that the lessee purchase or otherwise acquire securities or
obligations of the lessor; or
(iii) any contract for the sale or use of materials,
supplies or other property, or the rendering of services, if
such contract (or any related document) requires that payment
for such materials, supplies or other property, or the use
thereof, or payment for such services, shall be subordinated
to any indebtedness (of the purchaser or user of such materials,
supplies or other property to the Person entitled to the benefit
of such services) owed or to be owed to any Person entitled to
the benefit of such services) owed or to be owed to any Person
and such contract or contracts, taken as whole, is or are
material to the Company and its Subsidiaries, taken as a whole.
6B(8). TRANSACTIONS WITH AFFILIATES. Engage in any
transaction or transactions material to the Company and its
Subsidiaries, taken as a whole (including, without limitation, the
purchase, sale or exchange of assets or the rendering of any
service), with any Affiliate of the Company, except in the ordinary
course of and pursuant to the reasonable requirements of the
Company's or such Subsidiary's business and upon fair and reasonable
13
terms that are no less favorable to the Company or such Subsidiary,
as the case may be, than those which might be obtained in an arm's
length transaction at the time from Persons which are not such an
Affiliate; provided that the foregoing restrictions shall not apply
to any transactions between the Company and a wholly-owned
Subsidiary or between two wholly-owned Subsidiaries or to employee
or director compensation transactions.
6B(9). ERISA. The Company will not nor permit any Subsidiary
to:
(i) terminate or withdraw from any Plan resulting in the
incurrence of any liability to the Pension Benefit Guaranty
Corporation;
(ii) engage in or permit any Person to engage in any
prohibited transaction (as defined in Section 4975 of the Code)
involving any Plan (other than a Multiemployer Plan) which would
subject the Company or any Subsidiary to any tax, penalty or
other liability;
(iii) incur or suffer to exist any accumulated funding
deficiency (as defined in section 302 of ERISA and section 412
of the Code), whether or not waived, involving any Plan (other
than a Multiemployer Plan); or
(iv) allow or suffer to exist any risk or condition which
presents a risk of incurring a liability to the Pension Benefit
Guaranty Corporation, if the aggregate tax, penalty or other
liability of the Company and its Subsidiaries that would result
from any of the foregoing would exceed $2,000,000 in the
aggregate.
6B(10). ENVIRONMENTAL MATTERS. The Company will not, and will
not permit any Third Party to, use, produce, manufacture, process,
generate, store, dispose of, manage at, or ship or transport to or
from any real property, owned, leased, occupied or used by the
Company or any Subsidiary any Hazardous Materials except for
Hazardous Materials used, produced, released or managed in the
ordinary course of business in compliance with all applicable
Environmental Requirements except where the failure to do so would
not have a reasonable possibility of having Material Adverse Effect
on the Company and its Subsidiaries, taken as a whole.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur
and be continuing for any reason whatsoever (and whether such
occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or otherwise):
(i) the Company defaults in the payment of any principal
of, or Yield-Maintenance Amount payable with respect to, any
14
Note when the same shall become due, either by the terms
thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest
on any Note for more than 5 Business Days after the date due;
or
(iii) the Company or any Subsidiary defaults (whether as
primary obligor or as guarantor or other surety) in any payment
of principal of or interest on any other obligation for money
borrowed (or any Capitalized Lease Obligation, any obligation
under a conditional sale or other title retention agreement,
any obligation issued or assumed as full or partial payment for
property whether or not secured by a purchase money mortgage or
any obligation under notes payable or drafts accepted
representing extensions of credit) beyond any period of grace
provided with respect thereto, or the Company or any Subsidiary
fails to perform or observe any other agreement, term or
condition contained in any agreement under which any such
obligation is created (or if any other event thereunder or under
any such agreement shall occur and be continuing beyond any
period of grace provided with respect thereto) and the effect of
such failure or other event is to cause, or to permit the holder
or holders of such obligation (or a trustee on behalf of such
holder or holders) to cause, such obligation to become due (or
to be repurchased by the Company or any Subsidiary) prior to any
stated maturity, provided that the aggregate amount of all
obligations as to which such a payment default shall occur and
be continuing or such a failure or other event causing or
permitting acceleration (or resale to the Company or any
Subsidiary) shall occur and be continuing exceeds $500,000; or
(iv) any representation or warranty made by the Company
herein or by the Company or any of its officers in any writing
furnished in connection with or pursuant to this Agreement shall
be false in any material respect on the date as of which made;
or
(v) the Company fails to perform or observe any agreement
contained in paragraph 6; or
(vi) the Company fails to perform or observe any other
agreement, term or condition contained herein and such failure
shall not be remedied within 30 days after any Responsible
Officer obtains actual knowledge thereof; or
(vii) the Company or any Material Subsidiary makes an
assignment for the benefit of creditors or is generally not
paying its debts as such debts become due; or
15
(viii) any decree or order for relief in respect of the
Company or any Material Subsidiary is entered under any
bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law,
whether now or hereafter in effect (herein called the
"BANKRUPTCY LAW"), of any jurisdiction; or
(ix) the Company or any Material Subsidiary petitions or
applies to any tribunal for, or consents to, the appointment of,
or taking possession by, a trustee, receiver, custodian,
liquidator or similar official of the Company or any Material
Subsidiary, or of any substantial part of the assets of the
Company or any Material Subsidiary, or commences a voluntary
case under the Bankruptcy Law of the United States or any
proceedings (other than proceedings for the voluntary
liquidation and dissolution of a Material Subsidiary) relating
to the Company or any Material Subsidiary under the Bankruptcy
Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Material
Subsidiary and the Company or such Material Subsidiary by any
act indicates its approval thereof, consent thereto or
acquiescence therein, or an order, judgment or decree is entered
appointing any such trustee, receiver, custodian, liquidator or
similar official, or approving the petition in any such
proceedings, and such order, judgment or decree remains unstayed
and in effect for more than 90 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of the
Company and such order, judgment or decree remains unstayed and
in effect for more than 90 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a
split-up of the Company or such Subsidiary which requires the
divestiture of assets representing a substantial part, or the
divestiture of the stock of a Subsidiary whose assets represent
a substantial part, of the consolidated assets of the Company
and its Subsidiaries (determined in accordance with generally
accepted accounting principles) or which requires the
divestiture of assets, or stock of a Subsidiary, which shall
have contributed a substantial part of the Consolidated Net
Income of the Company and its Subsidiaries (determined in
accordance with generally accepted accounting principles) for
any of the three fiscal years then most recently ended, and such
order, judgment or decree remains unstayed and in effect for
more than 90 days; or
16
(xiii) one or more final judgments in an aggregate amount in
excess of $1,000,000 is rendered against the Company or any
Material Subsidiary and, within 90 days after entry thereof, any
such judgment is not discharged or execution thereof stayed
pending appeal, or within 60 days after the expiration of any
such stay, such judgment is not discharged; or
(xiv) the Company or any ERISA Affiliate, in its capacity as
an employer under a Multiemployer Plan, makes a complete or
partial withdrawal from such Multiemployer Plan resulting in the
incurrence by such withdrawing employer of a withdrawal
liability in an amount exceeding $2,000,000; or
(xv) the Company or any Guarantor shall disavow or attempt
to terminate any Guaranty Agreement or any Guaranty Agreement
shall cease to be in full force and effect;
then (a) if such event is an Event of Default specified in clause (i)
or (ii) of this paragraph 7A, any Significant Holder may at its
option during the continuance of such Event of Default, by notice in
writing to the Company, declare all of the Notes held by such holder
to be, and all of the Notes held by such holder shall thereupon be
and become, immediately due and payable at par (but without Yield-
Maintenance Amount, if any) together with interest accrued thereon,
without presentment, demand, protest or notice of any kind, all of
which are hereby waived by the Company, (b) if such event is an Event
of Default specified in clause (viii), (ix) or (x) of this paragraph
7A with respect to the Company, all of the Notes at the time
outstanding shall automatically become immediately due and payable
together with interest accrued thereon and together with the Yield-
Maintenance Amount, if any, with respect to each Note, without
presentment, demand, protest or notice of any kind, all of which are
hereby waived by the Company, and (c) with respect to any event
constituting an Event of Default, the Required Holder(s) of the Notes
may at its or their option during the continuance of such Event of
Default, by notice in writing to the Company, declare all of the
Notes to be, and all of the Notes shall thereupon be and become,
immediately due and payable together with interest accrued thereon
and together with the Yield-Maintenance Amount, if any, with respect
to each Note, without presentment, demand, protest or notice of any
kind, all of which are hereby waived by the Company.
7B. RESCISSION OF ACCELERATION. At any time after any or all
of the Notes shall have been declared immediately due and payable
pursuant to paragraph 7A, the Required Holder(s) may, by notice in
writing to the Company, rescind and annul such declaration and its
consequences if (i) the Company shall have paid all overdue interest
on the Notes, the principal of and Yield-Maintenance Amount, if any,
payable with respect to any Notes which have become due otherwise
17
than by reason of such declaration, and interest on such overdue
interest and overdue principal and Yield-Maintenance Amount at the
rate specified in the Notes, (ii) the Company shall not have paid any
amounts which have become due solely by reason of such declaration,
(iii) all Events of Default and Defaults, other than non-payment of
amounts which have become due solely by reason of such declaration,
shall have been cured or waived pursuant to paragraph 11C, and (iv)
no judgment or decree shall have been entered for the payment of any
amounts due pursuant to the Notes or this Agreement. No such
rescission or annulment shall extend to or affect any subsequent
Event of Default or Default or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note
shall be declared immediately due and payable pursuant to paragraph
7A or any such declaration shall be rescinded and annulled pursuant
to paragraph 7B, the Company shall forthwith give written notice
thereof to the holder of each Note at the time outstanding.
7D. OTHER REMEDIES. If any Event of Default or Default shall
occur and be continuing, the holder of any Note may proceed to
protect and enforce its rights under this Agreement and such Note by
exercising such remedies as are available to such holder in respect
thereof under applicable law, either by suit in equity or by action
at law, or both, whether for specific performance of any covenant or
other agreement contained in this Agreement or in aid of the exercise
of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of
any other remedy, and each and every such remedy shall be cumulative
and shall be in addition to every other remedy conferred herein or
now or hereafter existing at law or in equity or by statute or
otherwise."
3. Paragraphs 10 and 11 of the Note Agreement are hereby amended
and restated in their entirety as follows:
"10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this
Agreement, the terms defined in paragraphs 10A and 10B (or within the
text of any other paragraph) shall have the respective meanings
specified therein and all accounting matters shall be subject to
determination as provided in paragraph 10C.
10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any Note,
the principal of such Note that is to be prepaid pursuant to
paragraph 4B or is declared to be immediately due and payable
pursuant to paragraph 7A, as the context requires.
18
"DISCOUNTED VALUE" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount
factor (as converted to reflect the periodic basis on which
interest on such Note is payable, if payable other than on a
semi-annual basis) equal to the Reinvestment Yield with respect
to such Called Principal.
"REINVESTMENT YIELD" shall mean, with respect to the
Called Principal of any Note, the yield to maturity implied by
(i) the yields reported, as of 10:00 A.M. (New York City local
time) on the Business Day next preceding the Settlement Date
with respect to such Called Principal, on the display designated
as "Page 678" on the Telerate Service (or such other display as
may replace page 678 on the Telerate Service) for actively
traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such
Settlement Date, or if such yields shall not be reported as of
such time or the yields reported as of such time shall not be
ascertainable, (ii) the Treasury Constant Maturity Series yields
reported, for the latest day for which such yields shall have
been so reported as of the Business Day next preceding the
Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield shall be determined, if
necessary, by (a) converting U.S. Treasury ▇▇▇▇ quotations to
bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between yields reported
for various maturities.
"REMAINING AVERAGE LIFE" shall mean, with respect to the
Called Principal of any Note, the number of years (calculated to
the nearest one-twelfth year) obtained by dividing (i) such
Called Principal into (ii) the sum of the products obtained by
multiplying (a) each Remaining Scheduled Payment of such Called
Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will
elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect
to the Called Principal of any Note, all payments of such Called
Principal and interest thereon that would be due on or after the
Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its
scheduled due date.
19
"SETTLEMENT DATE" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal
is to be prepaid pursuant to paragraph 4B or is declared to be
immediately due and payable pursuant to paragraph 7A, as the
context requires.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to
any Note, an amount equal to the excess, if any, of the
Discounted Value of the Called Principal of such Note over the
sum of (i) such Called Principal plus (ii) interest accrued
thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance
Amount shall in no event be less than zero.
10B. OTHER TERMS.
"AFFILIATE" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common
control with, the Company, except a Subsidiary. A Person shall
be deemed to control a corporation if such Person possesses,
directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation,
whether through the ownership of voting securities, by contract
or otherwise.
"ATTRIBUTABLE DEBT" shall mean the sum, for each
Receivables Financing of such Person, of the aggregate then
outstanding face amount of all Receivables of such Person which
shall have been the subject of such Receivables Financing (or,
if the actual funds received by such Person in connection with
such Receivables Financing is less than such then outstanding
face amount of Receivables, the amount of such funds so received
less any amount collected by the transfer of the Receivables as
proceeds of the Receivables) of such Person, whether or not such
Person shall have any liability or other obligation in respect
of the collectibility of such Receivables plus any other
liability of such Person incurred in connection with such
Receivables Financing which is in addition to amounts due by
such Person based on the collectibility of the Receivables which
are the subject of such Receivables Financing.
"BANK AGREEMENT"
"BANKRUPTCY LAW" shall have the meaning specified in
clause (viii) of paragraph 7A.
"BUSINESS DAY" shall mean any day other than (i) a
Saturday or a Sunday, (ii) a day on which commercial banks in
New York City are required or authorized to be closed.
20
"CAPITAL EXPENDITURES" shall mean, with reference to any
period, the sum of (i) the gross amount of additions to
property, plant and equipment (which are classified as such in
accordance with generally accepted accounting principles and at
the time have a useful life in excess of one year) of the
Company and its Subsidiaries during such period, plus (ii) with
respect to any Capital Lease entered into by the Company or any
Subsidiaries during such period, the capitalized amount thereof
determined in accordance with generally accepted accounting
principles.
"CAPITAL LEASE" shall mean any lease the rental
obligations under which constitute Capitalized Lease
Obligations.
"CAPITALIZED LEASE OBLIGATION" shall mean any rental
obligation which, under generally accepted accounting
principles, is or will be required to be capitalized on the
books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expenses)
in accordance with such principles.
"CASH EQUIVALENTS" shall mean any Investment of the types
permitted under clauses (i) through (iii) of paragraph 6B(2).
"CERCLA" shall mean the Comprehensive Environmental
Response Compensation and Liability Act.
"CERCLIS" shall mean the Comprehensive Environmental
Response Compensation and Liability Inventory System established
pursuant to CERCLA.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"CONSOLIDATED CURRENT ASSETS" shall mean, at any time,
the aggregate amount of all current assets of the Company and
its Subsidiaries as determined in accordance with generally
accepted accounting principles on a consolidated basis after
eliminating all intercompany transactions but excluding cash and
Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" shall mean, as at any
date of determination thereof, the aggregate amount of all
current liabilities of the Company and its Subsidiaries, as
determined in accordance with generally accepted accounting
principles on a consolidated basis after eliminating all
intercompany transactions but excluding all Debt that would be
classified as a current liability in accordance with generally
accepted accounting principles.
21
"CONSOLIDATED DEBT" shall mean, as at any date of
determination thereof, the total of all Debt of the Company and
its Subsidiaries outstanding on such date, determined in
accordance with generally accepted accounting principles on a
consolidated basis after eliminating all intercompany
transactions.
"CONSOLIDATED GROSS REVENUES" shall mean, with reference
to any period, the gross consolidated revenues of the Company
and its Subsidiaries for such period (taken as a cumulative
whole), all determined in accordance with generally accepted
accounting principles, after eliminating all intercompany
transactions.
"CONSOLIDATED INTEREST EXPENSE" shall mean, with respect
to any period, the total consolidated interest expense
(including imputed interest in respect of Capitalized Lease
Obligations) of the Company and its Subsidiaries for such period
determined in accordance with generally accepted accounting
principles on a consolidated basis after eliminating all
intercompany transactions.
"CONSOLIDATED NET INCOME" shall mean, with reference to
any period, the net income (or deficit) of the Company and its
Subsidiaries for such period (taken as a cumulative whole),
after deducting all operating expenses, provisions for all taxes
and reserves (including reserves for deferred income taxes) and
all other proper deductions, all determined in accordance with
generally accepted accounting principles on a consolidated basis
after eliminating all intercompany transactions and after
deducting portions of income properly attributable to minority
interests, if any, in the stock and surplus of Subsidiaries,
provided that there shall be excluded (i) any aggregate net gain
(but not any aggregate net loss) during such period arising from
the sale, exchange or other disposition of capital assets (such
term to include all fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities), (ii) the income
(or deficit) of any Person accrued prior to the date it becomes
a Subsidiary or is merged into a consolidated with the Company
or any of its Subsidiaries, (iii) the income (or deficit) of any
Person (other than a Subsidiary) in which the Company or a
Subsidiary has an ownership interest, except to the extent that
any such income has been actually received by the Company or
such Subsidiary in the form of cash dividends or similar cash
distribution, (iv) the undistributed earnings of any Subsidiary
to the extent that the declaration or payment of cash dividends
or similar cash distribution by such Subsidiary is not at the
time permitted by the terms of its charter or any agreement,
instrument, judgment, decree, order, laws, statute, rule or
governmental regulation applicable to such Subsidiary, (v) any
write-up of any asset, (vi) any gain arising from the
acquisition of any securities of the Company or any of its
22
Subsidiaries, (vii) any net income or gain (but not any net
loss) during such period from any change in accounting, from any
discontinued operations or the disposition thereof, from any
extraordinary events or from any prior period adjustments,
(viii) any deferred credit representing the excess of equity in
any Subsidiary at the date of acquisition thereof over the cost
of the investment in such Subsidiary, (ix) any restoration to
income of any contingency reserve, except to the extent that
provision for such reserve was made out of income accrued during
such period, and (x) any net gain from the collection of the
proceeds of life insurance policies.
"CONSOLIDATED NET WORTH" means, at any time
(a) the sum of (i) the par value (or value stated on the
books of the corporation) of the capital stock (but excluding
treasury stock and capital stock subscribed and unissued) of the
Company and its Subsidiaries at such time plus (ii) the amount
of the paid-in capital and retained earnings of the Company and
its Subsidiaries at such time, in each case, as such amounts
would be shown on a consolidated balance sheet of the Company
and its Subsidiaries as of such time prepared in accordance with
generally accepted accounting principles, minus
(b) to the extent included in clause (a), all amounts
properly attributable to minority interests, if any, in the
stock and surplus of Subsidiaries, minus
(c) any increase in the amount of Consolidated Net Worth
attributable to a write-up in the book value of any asset on the
books of the Company resulting from a revaluation thereof
subsequent to December 31, 1994, minus
(d) the amounts, if any, at which any shares of capital
stock of the Company or any Subsidiary appear as an asset on the
balance sheet from which Consolidated Net Worth is determined
for the purposes of this definition, minus
(e) any net gain attributed to cumulative translation
adjustments, any income or gain from any change in accounting
principles, any extraordinary items or from any prior period
adjustments.
"CURRENT MATURITIES OF FUNDED DEBT" means, at any time
and with respect to any item of Funded Debt, the portion of such
Funded Debt outstanding at such time which by the terms of such
Funded Debt or the terms of any instrument or agreement relating
thereto is due on demand or within one year from such time
(whether by sinking fund, other required prepayment or final
payment at maturity) and is not directly or indirectly
renewable, extendible or refundable at the option of the obligor
23
under an agreement of firm commitment in effect at such time to
a date one year or more from such time.
"DEBT" means, with respect to any Person, without
duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable
arising in the ordinary course of business but including,
without limitation, all liabilities created or arising under any
conditional sale or other title retention agreement with respect
to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person (whether
or not it has assumed or otherwise become liable for such
liabilities); and
(e) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (a) through
(d) hereof.
Debt of any person shall include all obligations of such Person
of the character described in clauses (a) through (e) to the
extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be
extinguished under GAAP.
"DISTRIBUTION" means, in respect of any corporation,
association or other business or other business entity:
(a) dividends or other distributions or payments on
capital stock or other equity interest of such corporation,
association or other business entity (except distributions in
such stock or other equity interest); and
(b) the redemption or acquisition of such stock or other
equity interests or of warrants, rights or other options to
purchase such stock or other equity interests (except when
solely in exchange for such stock or other equity interests)
unless made, contemporaneously, from the net proceeds of a sale
of such other equity interests.
"ENVIRONMENTAL AUTHORITY" shall mean any foreign,
federal, state, local or regional government that exercises any
form of jurisdiction or authority under any Environmental
Requirement.
"ENVIRONMENTAL JUDGMENTS AND ORDERS" shall mean all
judgments, decrees or orders arising from or in any way
24
associated with any Environmental Requirements, whether or not
entered upon consent or written agreements with an Environmental
Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated
in a judgment, degree or order.
"ENVIRONMENTAL LIABILITIES" shall mean any liabilities,
whether accrued or contingent, arising from or relating in any
way to any Environmental Requirements.
"ENVIRONMENTAL NOTICES" shall mean any written
communication from any Environmental Authority stating possible
or alleged noncompliance with or possible or alleged liability
under any Environmental Requirement, including without
limitation any complaints, citations, demands or requests from
any Environmental Authority for correction of any purported
violation of any Environmental Requirements or any investigation
concerning any purported violation of any Environmental
Requirements. Environmental Notices also shall mean (i) any
written communication from any other Person threatening
litigation or administrative proceedings against or involving
the Company relating to alleged violation of any Environmental
Requirements and (ii) any complaint, petition or similar
documents filed by any other Person commencing litigation or
administrative proceedings against or involving the Company
relating to alleged violations of Environmental Requirements.
"ENVIRONMENTAL PROCEEDINGS" shall mean any judicial or
administrative proceedings arising from or in any way associated
with any Environmental Requirement.
"ENVIRONMENTAL RELEASES" shall mean releases (as defined
in CERCLA or under any applicable state or local environmental
laws or regulations) of Hazardous Materials. Environmental
Releases does not include releases for which no remediation or
reporting is required by applicable Environmental Requirements
and which do not present a danger or health, safety or the
environment.
"ENVIRONMENTAL REQUIREMENTS" shall mean any applicable
local, state or federal law, rule, regulation, permit, order,
decision, determination or requirement relating in any way to
Hazardous Materials or to health, safety or the environment.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"ERISA AFFILIATE" shall mean any corporation which is a
member of the same controlled group of corporations as the
Company within the meaning of section 414(b) of the Code, or any
25
trade or business which is under common control with the Company
within the meaning of section 414(c) of the Code.
"EVENT OF DEFAULT" shall mean any of the events specified
in paragraph 7A, provided that there has been satisfied any
requirement in connection with such event for the giving of
notice, or the lapse of time, or the happening of any further
condition, event or act, and "DEFAULT" shall mean any of such
events, whether or not any such requirement has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.
"FIXED CHARGE COVERAGE RATIO" shall mean, with respect to
the Company and its Subsidiaries, as of the end of any fiscal
quarter, the ratio of (A) the sum of (i) Consolidated Net
Income, plus taxes imposed on or measured by income, plus
Consolidated Interest Expense, plus depreciation and
amortization minus Capital Expenditures, all for the four fiscal
quarters then ended to (B) the sum of (i) Consolidated Interest
Expense, plus Distributions of the Company (except to the extent
any Distribution does not constitute a Restricted Payment under
paragraph 6B(3), all for such four fiscal quarters, plus (ii)
Current Maturities of Funded Debt (other than Capitalized Lease
Obligations).
"FUNDED DEBT" means, with respect to any Person, all Debt
of the Company and its Subsidiaries which by its terms or by the
terms of any instrument or agreement relating thereto matures,
or which is otherwise payable or unpaid, one year or more from,
or is directly or indirectly renewable or extendible at the
option of the obligor in respect thereof to a date one year or
more (including, without limitation, an option of such obligor
under a revolving credit or similar agreement obligating the
lender or lenders to extend credit over a period of one year or
more) from, the date of the creation thereof, determined in
accordance with generally accepted accounting principles on a
consolidated basis after eliminating all intercompany
transactions, provided that Funded Debt shall include, as at any
date of determination, Current Maturities of Funded Debt.
"GUARANTOR" means, each Subsidiary of the Company listed
on Exhibit J hereto and, thereafter, each other Subsidiary which
is required to execute and deliver a Guaranty Agreement pursuant
to paragraph 5E hereof.
"GUARANTY" means, with respect to any Person, any
obligation (except the endorsement in the ordinary course of
business of negotiable instrument for deposit or collection) of
such Person guaranteeing or in effect guaranteeing any
26
indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including
(without limitation) obligations incurred through an agreement,
contingent or otherwise, by such Person.
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or
payment of such indebtedness or obligation, or (ii) to maintain
any working capital or other balance sheet condition or any
income statement condition of any other Person or otherwise to
advance or make available funds for the purchase or payment of
such indebtedness or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of any other Person to
make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of
the obligor under any Guaranty, the indebtedness or other
obligations that are the subject of such Guaranty shall be
assumed to be direct obligations of such obligor.
"GUARANTY AGREEMENT" means a guaranty agreement in the
form attached hereto as Exhibit F as such agreement may be
amended, restated, modified or supplemented from time to time.
"HAZARDOUS MATERIALS" shall mean (a) hazardous waste as
defined in the Resource Conservation and Recovery Act of 1976,
or in any applicable federal, state or local law or regulation,
(b) hazardous substances, as defined in CERCLA, or in any
applicable state or local law or regulation, (c) gasoline or any
other petroleum product or by-product, (d) toxic substances, as
defined in the Toxic Substances Control Act of 1976, or in any
applicable federal, state or local law or regulation or (e)
insecticides, fungicides, or rodenticides, as defined in the
Federal Insecticide, Fungicide, and Rodenticide Act of 1975, or
in any applicable federal, state or local law or regulation, as
each such Act, statute or regulation may be amended from time to
time.
"INCLUDING" shall mean, unless the context clearly
requires otherwise, "including without limitation".
27
"INTEREST COVERAGE RATIO" shall mean with respect to the
Company and its Subsidiaries as of the end of any fiscal quarter
the ratio of (i) Consolidated Net Income plus all Consolidated
Interest Expense plus taxes imposed on or measured by income for
the four fiscal quarters than ended, to (ii) Consolidated
Interest Expense for such four fiscal quarters.
"INTERCREDITOR AGREEMENT" shall mean an agreement in the
form of Exhibit N hereto among the lenders party to the Bank
Agreement, Prudential and the holders of Notes issued from time
to time hereunder, as such agreement shall be amended,
supplemented, modified or restated from time to time.
"INVESTMENT" shall mean, as applied to any Person, any
direct or indirect purchase or other acquisition by such Person
of stock or other securities of any Person, or any direct or
indirect loan or advance or capital contribution to any Person
(but not including travel, relocation, sales commission and
other like advances and loans to officers and employees incurred
in the ordinary course of business) or any Guaranty (other than
a Guaranty of Debt).
"LIEN" shall mean any mortgage, pledge, security
interest, encumbrance, lien (statutory or otherwise) or charge
of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction) or any other type of
preferential arrangement for the purpose, or having the effect,
of protecting a creditor against loss or securing the payment or
performance of an obligation.
"MATERIAL ADVERSE EFFECT" shall mean, (i) with respect to
any Person, a material adverse effect upon such Person's
business, assets, liabilities, financial condition, results of
operations or business prospects, (ii) with respect to a group
of Persons "taken as a whole," a material adverse effect upon
such Persons' business, assets, liabilities, financial
condition, results of operations or business prospects taken as
a whole on, where appropriate, a consolidated basis in
accordance with generally accepted accounting principles, and
(iii) with respect to this agreement, any contract or any other
obligation, a material adverse effect, as to any party thereto,
upon the binding nature, validity or enforceability thereof or
ability to perform hereunder or thereunder.
"MATERIAL SUBSIDIARY" shall mean each Subsidiary of the
Company listed on Exhibit J hereto and any other Subsidiary of
the Company which has total assets with a book value of
$1,000,000 or more.
28
"MULTIEMPLOYER PLAN" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section
4001(a)(3) of ERISA.
"NET RENTAL PAYMENTS" shall mean, with respect to any
period, the aggregate amount of the payments for rent or
additional rent (including all repairs, alterations,
construction, demolition and the like) under an Operating Lease
made by lessee at any time during such period; provided that
there shall be deducted from the rental paid under any Operating
Lease with respect to any property for any period, the aggregate
rentals received under any sublease of such property for such
period.
"NOTES" shall have the meaning specified in paragraph 1.
"OFFICER'S CERTIFICATE" shall mean a certificate signed
in the name of the Company by an Authorized Officer of the
Company.
"OPERATING PROFIT" shall mean, for any period,
Consolidated Net Income for such period plus all amounts
deducted in calculating Consolidated Net Income in respect of
(i) Consolidated Interest Expense on Consolidated Debt, (ii)
taxes imposed on or measured by income or excess profit, and
(ii) all charges for depreciation of fixed assets and
amortization of intangibles, all determined in accordance with
generally accepted accounting principles, provided that any of
the aforesaid expenses, taxes or charges paid, accrued or
deducted by any Person acquired by the Company or any of its
Subsidiaries through purchase, merger or consolidation or
otherwise, or paid or accrued by any Person which is a successor
to the company or any of its Subsidiaries by consolidation or
merger or as a transferee of its assets, shall be included in
Operating Profit only to the extent taken into account in
determining the net income of such Person included in
Consolidated Net Income for such period.
"OPERATING LEASE" shall mean any lease of property
(whether real, personal or mixed), other than office equipment,
rolling stock and data processing equipment, which is not a
Capital Lease, other than any such lease under which the Company
or one of its Subsidiaries is the lessor or having an original
term of less than one year.
"PERMITTED AMOUNT" shall mean on the date of any purchase
(and before giving effect thereto) by the Company of common
stock or Subordinated Debentures, $52,000,000 minus the
aggregate principal amount of Subordinated Debentures
outstanding on such date.
29
"PERSON" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department
or agency thereof.
"PLAN" shall mean any employee pension benefit plan (as
such term is defined in section 3 of ERISA) which is or has been
established or maintained, or to which contributions are or have
been made, by the Company or any ERISA Affiliate.
"PREFERRED STOCK" means, in respect of any corporation,
shares of the capital stock of such corporation that are
entitled to preference or priority over other shares of the
capital stock of such corporation in respect of the payment of
dividends or distribution of assets upon liquidation.
"PRIORITY DEBT" shall mean, as at any date of
determination thereof, the sum (without duplication) of the
aggregate principal amount of (i) all Debt of Subsidiaries
(excluding any Debt of Subsidiaries owing to the Company or
another Subsidiary or any Debt comprised of a Guaranty of any
Subsidiary to the extent that the Company shall have complied
with paragraph 5E) plus (ii) all Debt of the Company (including,
without limitation Debt of the Company owing to any Subsidiary)
secured by Liens other than Liens permitted by clauses (i)
through (v) of paragraph 6B(1) plus (iii) all Preferred Stock of
Subsidiaries owned by any Person other than the Company or a
wholly-owned Subsidiary plus (iv) all Attributable Debt.
"PURCHASER" means the Persons named on the Purchaser
Schedule attached hereto.
"PRUDENTIAL" shall mean The Prudential Insurance Company
of America.
"RECEIVABLES FINANCING" shall mean a transaction pursuant
to which funds are advanced to either Company and/or any of its
Subsidiaries in exchange for which the Company and/or any of its
Subsidiaries shall pledge, sell or otherwise transfer any or all
of its notes or accounts receivables to secure, in whole or in
part, the repayment of such funds.
"REQUIRED HOLDER(S)" shall mean the holder or holders of
at least 66 2/3% of the aggregate principal amount of the Notes,
from time to time outstanding.
"RESTRICTED PAYMENT" means any Distribution in respect of
the Company or any Subsidiary (other than on account of capital
stock or other equity interests of a Subsidiary owned legally
30
and beneficially by the Company or another Subsidiary)
including, without limitation, any Distribution resulting in the
acquisition by the Company of securities which would constitute
treasury stock. For purposes of this Agreement, the amount of
any Restricted Payment made in property shall be the greater of
(x) the fair market value of such property (as determined in
good faith by the board of directors (or equivalent governing
body) of the Person making such Restricted Payment) and (y) the
net book value thereof on the books of such Person, in each case
determined as of the date on which such Restricted Payment is
made.
"RESPONSIBLE OFFICER" shall mean the chief executive
officer, chief operating officer, chief financial officer or
chief accounting officer of the Company, general counsel of the
Company or treasurer of the Company.
"SECURITIES ACT" shall mean the Securities Act of 1933,
as amended.
"SHARING AGREEMENT" shall mean an agreement substantially
in the form of Exhibit M hereto by and among the lenders party
to the Bank Agreement, Prudential and the holders of Notes from
time to time issued under this Agreement as such agreement may
be amended, restated, modified or supplemented from time to
time.
"SIGNIFICANT HOLDER" shall mean (i) Prudential (at all
times during the Issuance Period whether or not Prudential or
any Prudential Affiliate shall hold (or be committed under this
Agreement to purchase) any Note or (ii) any other holder of at
least 10% of the aggregate principal amount of the Notes from
time to time outstanding.
"SUBORDINATED DEBENTURES" shall mean the Company's 7%
Convertible Subordinated Debentures due 2014.
"SUBSIDIARY" shall mean any corporation at least a
majority of the total combined voting power of all classes of
Voting Stock of which shall, at the time as of which any
determination is being made, be owned by the Company either
directly or through Subsidiaries.
"THIRD PARTY" shall mean all lessees, sublessees,
licenses and other users of any real property owned, lease or
otherwise used or occupied by the company or any Subsidiary.
"TRANSFEREE" shall mean any direct or indirect transferee
of all or any part of any Note purchased by any Purchaser under
this Agreement.
31
"VOTING STOCK" shall mean, with respect to any
corporation, any shares of stock of such corporation whose
holders are entitled under ordinary circumstances to vote for
the election of directors of such corporation (irrespective of
whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of
any contingency).
10C. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All
references in this Agreement to "generally accepted accounting
principles" shall be deemed to refer to generally accepted accounting
principles in effect in the United States at the time of application
thereof. Unless otherwise specified herein, all accounting terms
used herein shall be interpreted, all determinations with respect to
accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial
matters required to be furnished hereunder shall be prepared, in
accordance with generally accepted accounting principles applied on a
basis consistent with the most recent audited financial statements
delivered pursuant to clause (ii) of paragraph 5A(1).
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that, so long as any
Purchaser shall hold any Note, it will make payments of principal of,
interest on, and any Yield-Maintenance Amount payable with respect
to, such Note, which comply with the terms of this Agreement, by wire
transfer of immediately available funds for credit (not later than
12:00 noon, New York City local time, on the date due) to (i) the
account or accounts of such Purchaser specified in the Purchaser
Schedule attached hereto or (ii) such other account or accounts in
the United States as such Purchaser may from time to time designate
in writing, notwithstanding any contrary provision herein or in any
Note with respect to the place of payment. Each Purchaser agrees
that, before disposing of any Note, it will make a notation thereon
(or on a schedule attached thereto) of all principal payments
previously made thereon and of the date to which interest thereon has
been paid. The Company agrees to afford the benefits of this
paragraph 11A to any Transferee which shall have made the same
agreement as the Purchasers have made in this paragraph 11A.
11B. EXPENSES. The Company agrees, whether or not the
transactions contemplated hereby shall be consummated, to pay, and
save Prudential, each Purchaser and any Transferee harmless against
liability for the payment of, all out-of-pocket expenses arising in
connection with such transactions, including (i) all document
production and duplication charges and the fees and expenses of one
special counsel engaged by the Purchasers or any Transferee in
connection with this Agreement, the transactions contemplated hereby
and any subsequent proposed modification of, or proposed consent
under, this Agreement, whether or not such proposed modification
shall be effected or proposed consent granted, and (ii) the
32
costs and expenses, including attorneys' fees, incurred by any
Purchaser or any Transferee in enforcing (or determining whether or
how to enforce) any rights under this Agreement or the Notes or in
responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement or the
transactions contemplated hereby or by reason of any Purchaser's or
any Transferee's having acquired any Note, including without
limitation costs and expenses incurred in any bankruptcy case. The
obligations of the Company under this paragraph 11B shall survive the
transfer of any Note or portion thereof or interest therein by any
Purchaser or any Transferee and the payment of any Note.
11C. CONSENT TO AMENDMENTS. This Agreement and the Notes may
be amended, and the Company may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, if the
Company shall obtain the written consent to such amendment, action or
omission to act, of the Required Holder(s) except that, (i) the Notes
may not be amended nor may the provisions thereof waived to change
the maturity thereof, to change or affect the principal thereof, or
to change or affect the rate or time of payment of interest on or any
Yield-Maintenance Amount payable with respect to the Notes, or (ii)
change or affect the provisions of paragraph 7A or this paragraph 11C
insofar as such provisions relate to proportions of the principal
amount of the Notes, or the rights of any individual holder of Notes,
required with respect to any declaration of Notes to be due and
payable or with respect to any consent, amendment, waiver, without
the written consent of the holder or holders of all Notes at the time
outstanding. Each holder of any Note at the time or thereafter
outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been marked to
indicate such consent, but any Notes issued thereafter may bear a
notation referring to any such consent. No course of dealing between
the Company and the holder of any Note nor any delay in exercising
any rights hereunder or under any Note shall operate as a waiver of
any rights of any holder of such Note. As used herein and in the
Notes, the term "THIS AGREEMENT" and references thereto shall mean
this Agreement as it may from time to time be amended or
supplemented.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST
NOTES. The Notes are issuable as registered notes without coupons in
denominations of at least $1,000,000, except as may be necessary to
reflect any principal amount not evenly divisible by $1,000,000. The
Company shall keep at its principal office a register in which the
Company shall provide for the registration of Notes and of transfers
of Notes. Upon surrender for registration of transfer of any Note at
the principal office of the Company, the Company shall, at its
expense, execute and deliver one or more new Notes of like tenor and
33
of a like aggregate principal amount, registered in the name of such
transferee or transferees. At the option of the holder of any Note,
such Note may be exchanged for other Notes of like tenor and of any
authorized denominations, of a like aggregate principal amount, upon
surrender of the Note to be exchanged at the principal office of the
Company. Whenever any Notes are so surrendered for exchange, the
Company shall, at its expense, execute and deliver the Notes which
the holder making the exchange is entitled to receive. Each
installment of principal payable on each installment date upon each
new Note issued upon any such transfer or exchange shall be in the
same proportion to the unpaid principal amount of such new Note as
the installment of principal payable on such date on the Note
surrendered for registration of transfer or exchange bore to the
unpaid principal amount of such Note. No reference need be made in
any such new Note to any installment or installments of principal
previously due and paid upon the Note surrendered for registration of
transfer or exchange. Every Note surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a
written instrument of transfer duly executed, by the holder of such
Note or such holder's attorney duly authorized in writing. Any Note
or Notes issued in exchange for any Note or upon transfer thereof
shall carry the rights to unpaid interest and interest to accrue
which were carried by the Note so exchanged or transferred, so that
neither gain nor loss of interest shall result from any such transfer
or exchange. Upon receipt of written notice from the holder of any
Note of the loss, theft, destruction or mutilation of such Note and,
in the case of any such loss, theft or destruction, upon receipt of
such holder's unsecured indemnity agreement if such holder is a
"Qualified Institutional Buyer" (as defined in Rule 144A promulgated
under the Securities Act), or if not, upon receipt of a security bond
reasonably acceptable to the Company, or in the case of any such
mutilation upon surrender and cancellation of such Note, the Company
will make and deliver a new Note, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due
presentment for registration of transfer, the Company may treat the
Person in whose name any Note is registered as the owner and holder
of such Note for the purpose of receiving payment of principal of and
interest on, and any Yield-Maintenance Amount payable with respect
to, such Note and for all other purposes whatsoever, whether or not
such Note shall be overdue, and the Company shall not be affected by
notice to the contrary. Subject to the preceding sentence, the
holder of any Note may from time to time grant participations in all
or any part of such Note to any Person on such terms and conditions
as may be determined by such holder in its sole and absolute
discretion.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT. All representations and warranties contained herein or
made in writing by or on behalf of the Company in connection herewith
shall survive the execution and delivery of this Agreement and the
Notes, the transfer by any Purchaser of any Note or portion thereof
or interest therein and the payment of any Note, and may be relied
upon by any Transferee, regardless of any investigation made at any
time by or on behalf of any Purchaser or any Transferee. Subject to
the preceding sentence, this Agreement and the Notes embody the
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entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersede all prior
agreements and understandings relating to such subject matter.
11G. SUCCESSORS AND ASSIGNS. All covenants and other
agreements in this Agreement contained by or on behalf of any of the
parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto (including, without
limitation, any Transferee) whether so expressed or not.
11H. INDEPENDENCE OF COVENANTS. All covenants hereunder shall
be given independent effect so that if a particular action or
condition is prohibited by any one of such covenants, the fact that
it would be permitted by an exception to, or otherwise be in
compliance within the limitations of, another covenant shall not
avoid the occurrence of a Default or Event of Default if such action
is taken or such condition exists.
11I. NOTICES. All written communications provided for
hereunder shall be sent by first class mail or nationwide overnight
delivery service (with charges prepaid) and (i) if to any Purchaser,
addressed as specified for such communications in or the Purchaser
Schedule attached hereto or such other address as any such Purchaser
shall have specified to the Company in writing, (ii) if to any other
holder of any Note, addressed to it at such address as it shall have
specified in writing to the Company or, if any such holder shall not
have so specified an address, then addressed to such holder in care
of the last holder of such Note which shall have so specified an
address to the Company and (iii) if to the Company, addressed to it
at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
provided, however, that any such communication to the Company may
also, at the option of the Person sending such communication, be
delivered by any other means either to the Company at its address
specified above or to any officer of the Company.
11J. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment
of principal of or interest on, or Yield-Maintenance Amount payable
with respect to, any Note that is due on a date other than a Business
Day shall be made on the next succeeding Business Day. If the date
for any payment is extended to the next succeeding Business Day by
reason of the preceding sentence, the period of such extension shall
be included in the computation of the interest payable on such
Business Day.
11K. CONFIDENTIAL INFORMATION. For the purposes of this
paragraph 11K "Confidential Information" means information delivered
to a holder of a Note by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that is non-public or which the
Company or any Subsidiary deems proprietary in nature,
35
provided, that in no event shall "Confidential Information" include
information that (a) was publicly known or otherwise known by such
holder prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by such holder, (c)
otherwise becomes known by such holder other than through disclosure
by the Company or any Subsidiary or (d) constitutes financial
statements delivered to such holder under paragraph 5A that are
otherwise publicly available. Each holder of a Note agrees to use
its best efforts to maintain the confidentiality of such Confidential
Information, provided that such holder may deliver or disclose
Confidential Information (i) to its directors, officers, employees,
agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment
represented by Notes), (ii) to its financial advisors and other
professional advisors (to the extent such disclosure reasonably
relates to the administration or the investment represented by the
Notes or such advisors agree in writing to be bound to the terms of
this paragraph 11K), (iii) to any other holder of any Note, (iv) to
any Person to which such holder sells or offers to sell such Note or
any part thereof or any participation therein (if such Person has
agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this paragraph 11K, (v)
to any Person from which such holder offers to purchase any security
of the Company (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the
provisions of this paragraph 11K), (vi) to any federal or state
regulatory authority having jurisdiction over such holder, (vii) to
the National Association of Insurance Commissioners, (viii) to
effect compliance with any law, rule, regulation or order, (ix) in
response to any subpoena or other legal process applicable to such
holder, or (x) to the extent appropriate in the enforcement or for
the protection of the rights and remedies under its Notes and this
Agreement. Each holder of a Note, by its acceptance of a Note, will
be deemed to have agreed to be bound by and to be entitled to the
benefits of this paragraph 11K.
11L. SEVERABILITY Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
11M. DESCRIPTIVE HEADINGS. The descriptive headings of the
several paragraphs of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.
11N. SATISFACTION REQUIREMENT. If any agreement, certificate
or other writing, or any action taken or to be taken, is by the terms
of this Agreement required to be satisfactory to any Purchaser, to
any holder of Notes or to the Required Holder(s), the determination
of such satisfaction shall be made by such Purchaser, such holder
36
or the Required Holder(s), as the case may be, in the sole and
exclusive judgment (exercised in good faith) of the Person or Persons
making such determination.
11O. GOVERNING LAW. IN ACCORDANCE WITH THE PROVISIONS OF
SECTION5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THIS AGREEMENT
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF
THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAW OF THE STATE OF
NEW YORK.
11P. SEVERALTY OF OBLIGATIONS. The sales of Notes to the
Purchasers are to be several sales, and the obligations of the
Purchasers under this Agreement are several obligations. No failure
by any Purchaser to perform its obligations under this Agreement
shall relieve any other Purchaser or the Company of any of its
obligations hereunder, and no Purchaser shall be responsible for the
obligations of, or any action taken or omitted by, any other such
Person hereunder.
11Q. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all
of which together shall constitute one instrument."
4. The Purchaser Schedule attached to the Note Agreement as
Schedule I is hereby replaced with Schedule I attached hereto.
5. Exhibits F, H, I, J, and K to the Note Agreement are hereby
replaced with Exhibits F, H, I, J and K attached hereto and the Note Agreement
is hereby amended by adding new Exhibits M and N in the forms attached hereto.
5. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective upon the last to occur of (i) execution and delivery of this
Amendment by the parties hereto and (ii) satisfaction or waiver by Prudential
of the conditions set forth in paragraph 3B of the Shelf Agreement.
6. Except as expressly hereby, all provisions of the Note Agreement
shall remain in full force and effect and none of the amendments set forth
herein shall be deemed to be an amendment, waiver or modification to any other
terms or provisions of this Note Agreement.
7. This Amendment may be executed in one or more counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their duly authorized officers as of the date above written.
REXEL, INC.
By:
--------------------------------
Name:
Title:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
--------------------------------
Vice President