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CREDIT AGREEMENT
AMONG
ARMOR HOLDINGS, INC.,
BORROWER,
FIRST UNION NATIONAL BANK,
SUNTRUST BANK, NORTH FLORIDA, N.A. AND
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
NATIONSBANK, N.A.
AS DOCUMENTATION AGENT
AND
CANADIAN IMPERIAL BANK OF COMMERCE,
AS ADMINISTRATIVE AGENT
DATED AS OF FEBRUARY 12, 1999
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.......................................................1
1.1 Defined Terms..................................................1
1.2 Other Definitional Provisions.................................20
SECTION 2. AMOUNT AND TERMS OF 364-DAY REVOLVING CREDIT COMMITMENTS.........20
2.1 364-Day Revolving Credit Commitments..........................20
2.2 364-Day Revolving Credit Notes................................21
2.3 Procedure for 364-Day Revolving Credit Borrowing..............21
2.4 Commitment Fee................................................22
2.5 Termination or Reduction of 364-Day Revolving Credit
Commitments...................................................22
2.6 Conversion to Term Loans......................................22
SECTION 3. AMOUNT AND TERMS OF FIVE YEAR REVOLVING CREDIT COMMITMENTS.......23
3.1 Five Year Revolving Credit Commitments........................23
3.2 Five Year Revolving Credit Notes..............................23
3.3 Procedure for Five Year Revolving Credit Borrowing............24
3.4 Commitment Fee................................................24
3.5 Termination or Reduction of Five Year Revolving Credit
Commitments...................................................24
SECTION 4. SWING LINE LOANS.................................................25
4.1 Swing Line Commitment.........................................25
4.2 Swing Line Note...............................................25
4.3 Refunded Swing Line Loans.....................................26
SECTION 5. LETTERS OF CREDIT...............................................27
5.1 L/C Commitment................................................27
5.2 Procedure for Issuance of Letters of Credit...................27
5.3 Fees, Commissions and Other Charges...........................28
5.4 L/C Participations............................................28
5.5 Reimbursement Obligations of the Borrower.....................29
5.6 Obligations Absolute..........................................30
5.7 Letter of Credit Payments.....................................30
5.8 Application...................................................30
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SECTION 6. GENERAL PROVISIONS APPLICABLE TO LOANS...........................30
6.1 Interest Rates and Payment Dates...............................30
6.2 Conversion and Continuation Options............................31
6.3 Minimum Amounts and Maximum Number of Tranches.................32
6.4 Optional Prepayments...........................................32
6.5 Mandatory Prepayments..........................................32
6.6 Computation of Interest and Fees...............................34
6.7 Inability to Determine Interest Rate...........................34
6.8 Pro Rata Treatment and Payments................................35
6.9 Illegality.....................................................36
6.10 Requirements of Law...........................................36
6.11 Taxes.........................................................37
6.12 Indemnity.....................................................39
6.13 Lending Offices; Change of Lending Office.....................39
SECTION 7. REPRESENTATIONS AND WARRANTIES...................................39
7.1 Financial Condition............................................39
7.2 No Change......................................................40
7.3 Existence; Compliance with Law.................................41
7.4 Power; Authorization; Enforceable Obligations..................41
7.5 No Legal Bar...................................................41
7.6 No Material Litigation.........................................41
7.7 No Default.....................................................41
7.8 Ownership of Property; Liens...................................42
7.9 Intellectual Property..........................................42
7.10 No Burdensome Restrictions....................................42
7.11 Taxes.........................................................42
7.12 Federal Regulations...........................................42
7.13 ERISA.........................................................42
7.14 Investment Company Act; Other Regulations.....................43
7.15 Subsidiaries..................................................43
7.16 Security Documents............................................43
7.17 Accuracy and Completeness of Information......................44
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7.18 Labor Relations...............................................44
7.19 Insurance.....................................................44
7.20 Solvency......................................................44
7.21 Purpose of Loans..............................................45
7.22 Environmental Matters.........................................45
7.23 Regulation H..................................................46
7.24 Year 2000 Compliance..........................................46
SECTION 8. CONDITIONS PRECEDENT.............................................46
8.1 Conditions to Initial Loans....................................46
8.2 Conditions to Each Loan........................................50
SECTION 9. AFFIRMATIVE COVENANTS............................................50
9.1 Financial Statements...........................................50
9.2 Certificates; Other Information................................51
9.3 Payment of Obligations.........................................52
9.4 Conduct of Business and Maintenance of Existence...............52
9.5 Maintenance of Property; Insurance.............................52
9.6 Inspection of Property; Books and Records; Discussions.........52
9.7 Notices........................................................53
9.8 Environmental Laws.............................................54
9.11 Additional Collateral; Additional Guarantors..................54
SECTION 10. NEGATIVE COVENANTS..............................................54
10.1 Financial Condition Covenants.................................55
10.2 Limitation on Indebtedness....................................55
10.3 Limitation on Liens...........................................56
10.4 Limitation on Guarantee Obligations...........................57
10.5 Limitation on Fundamental Changes.............................58
10.6 Limitation on Sale of Assets..................................58
10.7 Limitation on Changes to Cash Management Practices............59
10.8 Limitation on Dividends.......................................59
10.9 Limitation on Capital Expenditures............................60
10.10 Limitation on Investments, Loans and Advances................60
10.11 Limitation on Optional Payments and Modifications of
Debt Instruments and Acquisition Documents...................61
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10.12 Limitation on Transactions with Affiliates...................61
10.13 Limitation on Sales and Leasebacks...........................61
10.14 Limitation on Changes in Fiscal Year.........................61
10.15 Limitation on Negative Pledge Clauses........................61
10.16 Limitation on Lines of Business..............................61
10.17 Governing Documents..........................................61
10.18 Limitation on Subsidiary Formation...........................62
10.19 Limitation on Securities Issuances...........................62
SECTION 11. EVENTS OF DEFAULT...............................................62
SECTION 12. THE ADMINISTRATIVE AGENT........................................65
12.1 Appointment...................................................65
12.2 Delegation of Duties..........................................65
12.3 Exculpatory Provisions........................................65
12.4 Reliance by Administrative Agent..............................66
12.5 Notice of Default.............................................66
12.6 Non-Reliance on Administrative Agent and Other Lenders........66
12.7 Indemnification...............................................67
12.8 Administrative Agent in Its Individual Capacity...............67
12.9 Successor Administrative Agent................................68
SECTION 13. MISCELLANEOUS...................................................68
13.1 Amendments and Waivers........................................68
13.2 Notices.......................................................69
13.3 No Waiver; Cumulative Remedies................................70
13.4 Survival of Representations and Warranties....................70
13.5 Payment of Expenses and Taxes.................................70
13.6 Successors and Assigns; Participations and Assignments........71
13.7 Adjustments; Set-off..........................................73
13.8 Counterparts..................................................74
13.9 Severability..................................................74
13.10 Integration..................................................74
13.11 GOVERNING LAW................................................74
13.12 Submission To Jurisdiction; Waivers..........................74
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13.13 Acknowledgments..............................................75
13.14 WAIVERS OF JURY TRIAL........................................75
13.15 Confidentiality..............................................75
13.16 Usury Savings Clause.........................................75
SCHEDULES
Schedule I Lenders, Commitments, and Applicable Lending Offices
Schedule 2.6 Scheduled Term Loan Repayments
Schedule 7.3 Existence; Compliance with Laws
Schedule 7.4 Consents and Filings
Schedule 7.6 Material Litigation
Schedule 7.15 Subsidiaries
Schedule 7.19 Insurance
Schedule 7.22 Environmental Matters
Schedule 10.2 Indebtedness
Schedule 10.3 Liens
Schedule 10.4 Guarantee Obligations
Schedule 10.10 Loans to Officers
EXHIBITS
Exhibit A-1 Form of 364-Day Revolving Credit Note
Exhibit A-2 Form of Term Note
Exhibit A-3 Form of Five Year Revolving Credit Note
Exhibit A-4 Form of Swing Line Note
Exhibit B-1 Form of Borrower Pledge Agreement
Exhibit B-2 Form of Charge over Shares
Exhibit C Form of Subsidiaries Guarantee
Exhibit D Form of Subsidiaries Pledge Agreement
Exhibit E Form of Certificate re: Non-Bank Status
Exhibit F Form of Notice of Borrowing
Exhibit G-1 Form of Legal Opinion of ▇▇▇▇ ▇▇▇▇▇▇▇, P.C.
Exhibit G-2 Form of Legal Opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇
[Borrower UK Counsel]
Exhibit H Form of Assignment and Acceptance
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of February 12, 1999, among ARMOR HOLDINGS,
INC., a Delaware corporation (the "Borrower"), First Union National Bank,
SunTrust Bank, North Florida, N.A., and the other lenders from time to time
parties to this Agreement (the "Lenders"), NATIONSBANK, N.A., a national banking
association, as documentation agent (in such capacity, the "Documentation
Agent") and CANADIAN IMPERIAL BANK OF COMMERCE, a Canadian banking corporation,
as administrative agent for the Lenders hereunder.
RECITALS
The Borrower has requested that the Lenders make available to the
Borrower revolving credit loans in an aggregate principal amount at any one time
outstanding not to exceed $60,000,000, the proceeds of which would be used to
refinance certain indebtedness, to finance certain acquisitions and capital
expenditures, to finance the payment of fees and expenses in connection with the
foregoing, and for other general corporate purposes of the Borrower. The Lenders
are willing to make such credit available to the Borrower, but only on the
terms, and subject to the conditions, set forth in this Agreement.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Acquired Business": any Person, or any assets constituting a business
unit of any Person, acquired (whether by purchase of Capital Stock, purchase
of assets, merger or otherwise) by the Borrower or any Subsidiary of the
Borrower (a) within one year prior to the Closing Date, or (b) after the
Closing Date so long as such acquisition was permitted hereunder.
"Administrative Agent": CIBC, together with its affiliates, as the
Administrative Agent for the Lenders under this Agreement and the other Loan
Documents.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, "control" of a Person (including, with its correlative meanings,
"controlled by" and "under common control with") means the power, directly
or indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors of such Person or (b)
direct or cause
the direction of the management and policies of such Person, whether by
contract or otherwise.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Aggregate Outstanding Five Year Extensions of Credit": as to any
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Five Year Revolving Credit Loans made by such Lender
then outstanding, (b) such Lender's Five Year Revolving Credit Commitment
Percentage of the L/C Obligations then outstanding and (c) such Lender's
Five Year Revolving Credit Commitment Percentage of all Swing Line Loans
then outstanding.
"Applicable Commitment Fee Rate": with respect to any of the 364-Day
Revolving Credit Commitments or the Five Year Commitments, at any time the
ratio of Consolidated Total Debt to Consolidated EBITDA, as most recently
determined pursuant to Section 9.2(b), is within any of the ranges set forth
below, the rate per annum set forth under the relevant column heading
opposite the applicable range below:
364-Day Five Year
Revolving Credit Revolving Credit
Ratio Commitments Commitments
--------------------- ---------------- ----------------
Greater than or equal 0.450% 0.450%
to 2.50 to 1
Less than 2.50 to 1 0.375% 0.375%
Each change to the Applicable Commitment Fee Rate shall be effective on
the earlier of the date on which the financial statements to be delivered
pursuant to Section 9.2(b) are required to be delivered and the date on
which such financial statements are delivered, provided that if the Borrower
fails to deliver such financial statements by the date on which they are
required to be delivered, the Applicable Commitment Fee Rate shall be
determined as if the ratio of Consolidated Total Debt to Consolidated EBITDA
were greater than or equal to 2.50 to 1 until such financial statements are
delivered.
"Applicable Lending Office": for each Lender and for each Type of Loan,
the lending office of such Lender designated for such Type of Loan on
Schedule I hereto (or any other lending office from time to time notified to
the Administrative Agent by such Lender ) as the office at which its Loans
of such Type are to be made and maintained.
"Applicable Margin": for any Loan of any Type at any time the ratio of
Consolidated Total Debt to Consolidated EBITDA, as most recently determined
pursuant to Section 9.2(b), is within any of the ranges set forth below, the
rate per annum set forth under the relevant column heading opposite the
applicable range below:
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Eurodollar
Ratio Base Rate Loans Loans
------------------------ --------------- ----------
Greater than or equal to 0.375% 1.625%
2.50 to 1
Less than 2.50 to 1 0.125% 1.375%
Each change to the Applicable Margin shall be effective on the earlier
of the date on which the financial statements to be delivered pursuant to
Section 9.2(b) are required to be delivered and the date on which such
financial statements are delivered, provided that if the Borrower fails to
deliver such financial statements by the date on which they are required to
be delivered, the Applicable Margin shall be determined as if the ratio of
Consolidated Total Debt to Consolidated EBITDA were greater than or equal to
2.50 to 1 until such financial statements are delivered.
"Application": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.
"Arrangers": collectively, CIBC ▇▇▇▇▇▇▇▇▇▇▇ and NationsBank.
"Assignee": as defined in Section 13.6(c).
"Assignment and Acceptance": as defined in Section 13.6(c).
"Available 364-Day Commitment": as to any Lender at any time, an amount
equal to the excess, if any, of (a) the amount of such Lender's 364-Day
Revolving Credit Commitment at such time over (b) the aggregate unpaid
principal amount of all 364-Day Revolving Credit Loans made by such Lender
then outstanding.
"Available Five Year Commitment": as to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such Lender's Five
Year Revolving Credit Commitment at such time over (b) the Aggregate
Outstanding Five Year Extensions of Credit of such Lender at such time;
provided, however, that solely for purposes of calculating Available Five
Year Commitment for purposes of Section 3.4, the amount of such Lender's
Five Year Revolving Credit Commitment Percentage of all Swing Line Loans
included in the Aggregate Outstanding Five Year Extensions of Credit by such
Lender shall be deemed to be zero.
"Base Rate": for any day, the rate per annum equal to the greater of
(a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate"
shall mean the rate of interest publicly announced by CIBC in New York, New
York from time to time as its base rate (the base rate not being intended to
be the lowest rate of interest charged by CIBC in connection with extensions
of credit to debtors).
"Base Rate Loans": Loans the rate of interest applicable to which is
based upon the Base Rate.
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"Borrower": as defined in the heading to this Agreement.
"Borrower Pledge Agreement": the Pledge Agreement to be executed and
delivered by the Borrower, substantially in the form of Exhibit B-1, as the
same may be amended, supplemented or otherwise modified from time to time.
"Borrower Security Documents": the collective reference to the Borrower
Pledge Agreement and the Charge over Shares.
"Borrowing Date": any Business Day specified in a notice pursuant to
Section 2.3, 3.3 or 4.1 as a date on which the Borrower requests the Lenders
to make Loans hereunder, and the Conversion Date, if any.
"Business": as defined in Section 7.22.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close, and, if such day relates to a borrowing of, a payment or prepayment
of principal of or interest on, or a Conversion of or into, or an Interest
Period for, a Eurodollar Loan or a notice by the Borrower with respect to
any such borrowing, payment, prepayment, Conversion or Interest Period,
which is also a day on which dealings in Dollar deposits are carried out in
the London interbank market.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and
all similar ownership interests in a Person (other than a corporation) and
any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of 90 days or less
from the date of acquisition issued or fully guaranteed or insured by the
United States Government or any agency thereof, (b) certificates of deposit
and eurodollar time deposits with maturities of 90 days or less from the
date of acquisition and overnight bank deposits of any Lender or of any
commercial bank having capital and surplus in excess of $500,000,000, (c)
repurchase obligations of any Lender or of any commercial bank satisfying
the requirements of clause (b) of this definition, having a term of not more
than seven days with respect to securities issued or fully guaranteed or
insured by the United States Government, (d) commercial paper of a domestic
issuer rated at least A-1 or the equivalent thereof by Standard and Poor's
Ratings Group ("S&P") or P-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors
Service, Inc. ("Moody's") and in either case maturing within 90 days after
the day of acquisition, (e) securities with maturities of 90 days or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision
or taxing authority of any such state, commonwealth or territory or by any
foreign government, the securities of which state, commonwealth, territory,
political subdivision, taxing authority or foreign government (as the case
may be) are rated at least A by S&P or a by Moody's, (f) securities with
maturities of 90 days or less from the date of acquisition backed by standby
letters of credit issued by any Lender or any commercial bank satisfying the
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requirements of clause (b) of this definition or (g) shares of money market
mutual or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
"Certificate Re Non-Bank Status": as defined in Section 6.11(b)(i)(B).
"Charge over Shares": the equitable mortgage to be made by the
Borrower, substantially in the form of Exhibit B-2, as the same may be
amended, supplemented or otherwise modified from time to time.
"CIBC": Canadian Imperial Bank of Commerce.
"CIBC ▇▇▇▇▇▇▇▇▇▇▇": CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.
"Closing Date": the date on which the conditions precedent set forth in
Section 8.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all property and interests in property of the Loan
Parties, now owned or hereinafter acquired, upon which a Lien is purported
to be created by any Security Document.
"Commitments": the collective reference to the 364-Day Revolving Credit
Commitments, the Five Year Revolving Credit Commitments and the Swing Line
Commitment.
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"Consolidated Capital Expenditures": for any period, each expenditure
made by or committed to be made by the Borrower or any Subsidiary during
such period that, in conformity with GAAP, shall be classified as a capital
expenditure, regardless of the source of financing.
"Consolidated Capitalization": at any time, the sum of (a) Consolidated
Total Indebtedness as of such time, and (b) all amounts which would be
included under shareholders' equity on a consolidated balance sheet of the
Borrower and its Subsidiaries as of such time prepared in accordance with
GAAP.
"Consolidated Current Assets": at a particular date, all amounts which
would, in conformity with GAAP, be included under current assets on a
consolidated balance sheet of the Borrower and its Subsidiaries as at such
date; provided, however, that such amounts shall not include (a) any amounts
for any Indebtedness owing by an Affiliate of the Borrower, unless such
Indebtedness arose in connection with the sale of goods or other property in
the ordinary course of business and would otherwise constitute current
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assets in conformity with GAAP, (b) any shares of stock issued by an
Affiliate of the Borrower, or (c) the cash surrender value of any life
insurance policy.
"Consolidated Current Liabilities": at a particular date, all amounts
which would, in conformity with GAAP, be included under current liabilities
on a consolidated balance sheet of the Borrower and its Subsidiaries as at
such date.
"Consolidated EBITDA": for any period, the sum, without duplication,
for such period of (a) Consolidated Net Income for such period, (b) the sum
of provisions for such period for income taxes, interest expense, and
depreciation and amortization expense used in determining such Consolidated
Net Income, (c) amounts deducted in such period in respect of non-cash
expenses in accordance with GAAP, (d) non-capitalized transaction costs
deducted in such period in connection with the Refinancing and any Permitted
Acquisitions and the financings relating thereto, (e) the amount of any
aggregate net loss during such period arising from the sale, exchange or
other disposition of capital assets, and (f) non-cash expenses deducted in
such period in connection with any earn-out agreements, stock appreciation
rights, "phantom" stock plans, employment agreements, non-competition
agreements, subscription and stockholders agreements and other incentive and
bonus plans and similar arrangements made in connection with acquisitions of
persons or businesses by the Borrower or its Subsidiaries or the retention
of executives, officers or employees by the Borrower or its Subsidiaries
(including, without limitation, non-compete payments to employees and former
owners); provided, however, that:
(i) Consolidated EBITDA for (A) the Rolling Period ended on or
about September 30, 1998 shall be calculated as the Consolidated EBITDA
for the fiscal quarter of the Borrower ended September 30, 1998
multiplied by 4, (B) the Rolling Period ended on or about December 31,
1998 shall be calculated as the Consolidated EBITDA for the fiscal
quarters of the Borrower ended on or about September 30, 1998 and
December 31, 1998 multiplied by 2, and (C) the Rolling Period ended on
or about March 31, 1999 shall be calculated as the Consolidated EBITDA
for the fiscal quarters of the Borrower ended on or about September 30,
1998, December 31, 1998 and March 31, 1999 multiplied by 4/3; and
(ii) if, during any Rolling Period for which Consolidated EBITDA
is to be calculated, any Acquired Business was acquired by the Borrower
or any of its Subsidiaries, then Consolidated EBITDA shall be increased
by an amount equal to the sum of (A) the Consolidated EBITDA of such
Acquired Business (calculated without giving effect to the proviso to
this definition as if such Acquired Business were the Borrower) for the
four consecutive fiscal quarters of such Acquired Business most
recently ended, and (B) any adjustments certified to the Administrative
Agent by the chief financial officer of the Borrower that would, in the
reasonable determination of the Borrower, satisfy the requirements of
Rule 11-02(a) of Regulation S-X of the Securities Act of 1933, as
amended, as if included in a registration statement filed with the
Securities and Exchange
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Commission; provided, that, with respect to each such calculation
made prior to one year following the date of acquisition of such
Acquired Business by the Borrower or a Subsidiary thereof, the amount
set forth in this clause (ii) will be calculated by multiplying the
result obtained in subclauses (A), (B) and (C) of this clause (ii) by a
fraction, the numerator of which is the result of 365 minus the number
of days elapsed since the date of such acquisition of such Acquired
Business to the end of such Rolling Period and the denominator of which
is 365.
"Consolidated Fixed Charges": for any period, the sum of, without
duplication, (i) the amounts deducted for the cash portion of Consolidated
Interest Expense in determining Consolidated Net Income for such period,
(ii) the amount of scheduled payments of principal of Indebtedness during
such period plus the non-interest portion of payments under Financing Leases
during such period, (iii) the amount of cash income taxes paid during such
period and (iv) Consolidated Capital Expenditures made during such period.
"Consolidated Interest Expense": for any period, the amount which, in
conformity with GAAP, would be set forth opposite the caption "interest
expense" or any like caption (including without limitation, imputed interest
included in payments under Financing Leases) on a consolidated income
statement of the Borrower and the Subsidiaries for such period excluding the
amortization of any original issue discount.
"Consolidated Lease Expense": for any period, the aggregate amount of
fixed or contingent rentals payable by the Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP, for such period
with respect to leases of real and personal property.
"Consolidated Net Income": for any period, the consolidated net income
(or deficit) of the Borrower and the Subsidiaries for such period (taken as
a cumulative whole), determined in accordance with GAAP; provided that there
shall be excluded (a) the income (or deficit) of any Person accrued prior to
the date it becomes a Subsidiary or is merged into or consolidated with the
Borrower or any Subsidiary, (b) the income (or deficit) of any Person (other
than a Subsidiary) in which the Borrower or any Subsidiary has an ownership
interest, except to the extent that any such income has been actually
received by the Borrower or such Subsidiary in the form of dividends or
similar distributions, (c) the undistributed earnings of any Subsidiary to
the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms
of any Contractual Obligation or Requirement of Law applicable to such
Subsidiary, (d) 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, (e) 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), (f) any write-up of any
asset, (g) any net gain from the collection of the proceeds of life
insurance policies, (h) any gain arising from the acquisition of any
securities, or the extinguishment, under
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GAAP, of any Indebtedness, of the Borrower or any Subsidiary, (i) in
the case of a successor to the Borrower by consolidation or merger or as a
transferee of its assets, any earnings of the successor corporation prior to
such consolidation, merger or transfer of assets, and (j) any deferred
credit representing the excess of equity in any Subsidiary at the date of
acquisition over the cost of the investment in such Subsidiary.
"Consolidated Net Worth": at a particular date, all amounts that would
be included under "shareholders' equity" on a consolidated balance sheet of
the Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP as at such date.
"Consolidated Senior Indebtedness": as of any time, Consolidated Total
Indebtedness minus all amounts which would be included on a consolidated
balance sheet of the Borrower and its Subsidiaries as of such time prepared
in conformity with GAAP in respect of Indebtedness the payment of principal
and interest on which is stated to be subordinated to any other
Indebtedness.
"Consolidated Total Indebtedness": at any time, the sum of the
aggregate outstanding principal amount of all Indebtedness of the Borrower
and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP and all Guarantee Obligations permitted under Section 10.4(f) at such
time (calculated using the amount the applicable Loan Party would have to
pay in respect of such Guaranty Obligations if the market value of the
common stock of the Borrower was zero).
"Continue", "Continuation" and "Continued" shall refer to the
continuation of a Eurodollar Loan from one Interest Period to the next
Interest Period.
"Continuing 364-Day Lender": as defined in Section 2.6(b).
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Convert", Conversion" and "Converted" shall refer to a conversion of
Base Rate Loans into Eurodollar Loans or of Eurodollar Loans into Base Rate
Loans, which may be accompanied by the transfer by a Lender (at its sole
discretion) of a Loan from one Applicable Lending Office to another.
"Conversion Date": as defined in Section 2.6(a)
"Credit Exposure": as to any Lender at any time, the sum of (a) its
Revolving Credit Commitments (or, if the Revolving Credit Commitments shall
have expired or been terminated, the aggregate unpaid principal amount of
its Revolving Credit Loans) and (b) the unpaid principal amount of its Term
Loan, if any.
"Credit Exposure Percentage": as to any Lender at any time, the
fraction (expressed as a percentage), the numerator of which is the Credit
Exposure of such
-8-
Lender at such time and the denominator of which is the aggregate
Credit Exposures of all of the Lenders at such time.
"Default": any of the events specified in Section 11, whether or not
any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Subsidiary": any Subsidiary of the Borrower other than a
Foreign Subsidiary.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of
Law (including common law) regulating or imposing liability or standards of
conduct concerning protection of the environment, as now or may at any time
hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed
as a decimal fraction) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of the Federal
Reserve System or other Governmental Authority having jurisdiction with
respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of such Board) maintained by a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the
corresponding rate appearing at page 3750 of the Dow ▇▇▇▇▇ Telerate Service
at or about 11:00 a.m., London time, two Business Days prior to the
beginning of such Interest Period, or if such rate no longer so appears, the
rate per annum at which CIBC is offered Dollar deposits at or about 10:00
a.m., local time, two Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations in respect of its Eurodollar Loans are then
being conducted for delivery on the first day of such Interest Period for
the number of days comprised therein and in an amount comparable to the
amount of its Eurodollar Loan to be outstanding during such Interest Period.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
-9-
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
-----------------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 11; provided
that any requirement for the giving of notice, the lapse of time, or both,
or any other condition, has been satisfied.
"Excess Cash Flow": as to the Borrower for each fiscal year:
(a) Consolidated EBITDA of the Borrower for such fiscal year;
plus (b) the decrease (if any) in the amount of the excess of
Consolidated Current Assets (excluding cash and cash equivalents) over
Consolidated Current Liabilities at the end of such fiscal year compared to
the amount of the excess of Consolidated Current Assets (excluding cash and
cash equivalents) over Consolidated Current Liabilities at the end of the
immediately preceding fiscal year of the Borrower;
minus (c) the sum of (i) the amount of all regularly scheduled payments
of principal of the Term Loan actually made during such fiscal year and the
amount of any voluntary prepayment of principal of the Term Loans made
during such fiscal year, (ii) the amount of all interest payments actually
made in cash during such fiscal year by the Borrower and its consolidated
Subsidiaries, (iii) Consolidated Lease Expense of the Borrower for such
fiscal year, (iv) the amount of capital expenditures actually made during
such fiscal year to the extent permitted by Section 10.9, (v) cash income
taxes paid during such fiscal year, (vi) cash derived from internal
operations used during such fiscal year for Permitted Acquisitions and not
derived, directly or indirectly from drawings under the Loans, and (vii) the
increase (if any) in the amount of the excess of Consolidated Current Assets
(excluding cash and cash equivalents) over Consolidated Current Liabilities
at the end of such fiscal year compared to the amount of the excess of
Consolidated Current Assets (excluding cash and cash equivalents) over
Consolidated Current Liabilities at the end of the immediately preceding
fiscal year of the Borrower.
"Existing Creditors": ▇▇▇▇▇▇▇ Bank, N.A.
"Existing Financing Documents": all credit agreements, indentures,
notes, guarantees and other financing documents, in each case as amended to
the extent permitted hereunder, evidencing or governing the Indebtedness
listed on part A of Schedule 10.2.
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions
-10-
received by the Administrative Agent from three federal funds brokers
of recognized standing selected by it.
"Fee Letter": that certain Fee Letter, dated December 9, 1998, among
CIBC, CIBC ▇▇▇▇▇▇▇▇▇▇▇, NationsBank and the Borrower, as amended,
supplemented or otherwise modified from time to time.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"Five Year Revolving Credit Commitment": as to any Lender, the
obligation of such Lender to make Five Year Revolving Credit Loans to the
Borrower pursuant to Section 3.1 and/or to make or participate in Swing Line
Loans to the Borrower pursuant to Section 4.1 or 4.3, as applicable, and/or
to issue or participate in Letters of Credit issued on behalf of the
Borrower hereunder in an aggregate principal and/or face amount at any one
time outstanding not to exceed the amount set forth opposite such Lender's
name on Schedule I under the caption "Five Year Revolving Credit Facility"
or in an Assignment and Acceptance, as such amount may be reduced from time
to time in accordance with the provisions of this Agreement.
"Five Year Revolving Credit Commitment Percentage": as to any Lender at
any time, the percentage which such Lender's Five Year Revolving Credit
Commitment then constitutes of the aggregate Five Year Revolving Credit
Commitments of all Lenders (or, at any time after the Five Year Revolving
Credit Commitments shall have expired or terminated, the percentage which
the aggregate principal amount of such Lender's Five Year Revolving Credit
Loans then outstanding constitutes of the aggregate principal amount of the
Five Year Revolving Credit Loans of all of the Lenders then outstanding).
"Five Year Revolving Credit Commitment Period": the period from and
including the date hereof to but not including the Five Year Termination
Date or such earlier date on which the Five Year Revolving Credit
Commitments shall terminate as provided herein.
"Five Year Revolving Credit Loans": as defined in Section 3.1.
"Five Year Revolving Credit Note": as defined in Section 3.2.
"Five Year Termination Date": February 12, 2004.
"Foreign Subsidiary": any Subsidiary that is organized under the laws
of a jurisdiction other than the United States of America, any State thereof
or the District of Columbia.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
-11-
"Governing Documents": as to any Person, its articles or certificate of
incorporation and by-laws, its partnership agreement, its certificate of
formation and operating agreement, and/or the other organizational or
governing documents of such Person.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of business.
The terms "Guarantee" and "Guaranteed" used as a verb shall have a
correlative meaning. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount equal
to the stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for which
such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in
good faith.
"Guarantor": any Person delivering a Guarantee pursuant to this
Agreement.
"Hedge Agreements": any interest rate swap, cap or collar agreements,
interest rate future or option contract, currency swap agreements, currency
future or option contracts and other similar agreements.
"Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money (whether by loan or the
issuance and sale of debt securities) or for the deferred purchase price of
property or services (other
-12-
than current trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) all obligations of such Person under Financing
Leases, (d) all obligations of such Person in respect of letters of credit,
acceptances or similar instruments issued or created for the account of such
Person, (e) all liabilities secured by any Lien on any property owned by
such Person, to the extent of the fair market value of such property, even
though such Person has not assumed or otherwise become liable for the
payment thereof, and (f) all net obligations, liabilities or indebtedness of
such Person under any Hedge Agreements.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each March, June, September and December, (b) as to any Eurodollar Loan
having an Interest Period of three months or less, the last day of such
Interest Period, and (c) as to any Eurodollar Loan having an Interest Period
longer than three months (i) each day which is three months, or a whole
multiple thereof, after the first day of such Interest Period, and (ii) the
last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or
Conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in its notice of borrowing or notice of Conversion, as
the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
364-Day Termination Date or Five Year Termination Date or beyond the
date
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final payment is due on the Term Loans shall end on the 364-Day
Termination Date or the Five Year Termination Date or such date of
final payment, as the case may be;
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month; and
(4) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"Issuing Lender": CIBC, in its capacity as issuer of any Letter of
Credit and/or NationsBank, in its capacity as issuer of any Letter of
Credit.
"L/C Commitment": $5,000,000.
"L/C Fee Payment Date": the last Business Day of each March, June,
September and December.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
aggregate then undrawn amount of the then outstanding Letters of Credit and
(b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed.
"L/C Participants": the collective reference to all the Lenders other
than the Issuing Lender.
"Letters of Credit": as defined in Section 5.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any Financing Lease having substantially the same economic effect as any
of the foregoing), and the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction in respect of
any of the foregoing.
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Notes, the Subsidiaries
Guarantee, the Applications and the Security Documents.
"Loan Parties": the Borrower and each Subsidiary of the Borrower which
is a party to a Loan Document.
-14-
"▇▇▇▇ Acquisition": the acquisition of the assets of the Law
Enforcement Division of ▇▇▇▇ Security International, Inc. pursuant to the
Asset Purchase Agreement, dated as of April 2, 1998.
"▇▇▇▇ Acquisition Documents": with respect to the ▇▇▇▇ Acquisition, the
stock purchase agreement, asset purchase agreement, agreement and plan of
merger, or similar agreement regarding the ▇▇▇▇ Acquisition, and all other
agreements, instruments and documents delivered in connection with the
consummation thereof (including, without limitation, any equity financing
documents related thereto).
"Material Adverse Effect": a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this or any of the other Loan Documents or the rights or
remedies of the Administrative Agent or the Lenders hereunder or thereunder.
"Material Environmental Amount": an amount payable by the Borrower
and/or its Subsidiaries in excess of $1,000,000 for remedial costs,
compliance costs, compensatory damages, punitive damages, fines, penalties
or any combination thereof.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NationsBank": NationsBank, N.A.
"Net Proceeds": (i) the aggregate cash consideration received by the
Borrower or a Subsidiary in connection with any transaction referred to in
Section 6.5(c) less (ii) the expenses (including out-of-pocket expenses)
incurred by the Borrower or such Subsidiary in connection with such
transaction (including, without limitation, reasonable legal fees and
expenses, and, in the case of any issuance of debt or equity securities,
underwriters' commissions and fees) and the amount of any federal and state
taxes incurred in connection with such transaction, in each case as
certified by a Responsible Officer to the Administrative Agent at the time
of such transaction.
"Non-Excluded Taxes": as defined in Section 6.11.
"Notes": the collective reference to the Revolving Credit Notes, the
Term Notes and the Swing Line Note.
"Obligations": the unpaid principal amount of, and interest (including,
without limitation, interest accruing after the maturity of the Loans and
interest accruing after the
-15-
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed
in such proceeding) on the Loans, and all other obligations and liabilities
of the Loan Parties to the Administrative Agent and the Lenders, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, or out of or in
connection with this Agreement, the Notes, the Guarantees, the Security
Documents and any other Loan Documents and any other document made,
delivered or given in connection therewith or herewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent or to the Lenders that are required to
be paid by a Loan Party pursuant to the terms of the Loan Documents) or
otherwise.
"Participant": as defined in Section 13.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Permitted Acquisition": an acquisition of (a) at least 85% of the
common stock or other ownership interests of a Person, whether by way of
stock purchase, merger, consolidation, tender offer or otherwise (or any
combination of the foregoing), or (b) the assets of a Person, or of a
business unit, division or subdivision of a Person, in each case having some
material application to the manufacturing, development, distribution,
marketing and sale of law enforcement products and security, investigative,
risk management and similar business services and lines of business related
thereto; provided that (i) for the most recent Rolling Period preceding such
Permitted Acquisition, the ratio of (A) the Consolidated Total Indebtedness
of the Borrower as of the last day of such period to (B) Consolidated EBITDA
of the Borrower for such period (calculated on a pro-forma basis as if such
Permitted Acquisition had been consummated as of the first day of such
Rolling Period, and based on, with respect to the Person or business unit to
be acquired in such acquisition, the financial statements of such Person or
business unit provided to the Borrower so long as (x) not more than six
months and 15 days shall have elapsed from the date of such financial
statements to the date of the execution of a definitive acquisition
agreement for such acquisition and so long as the consummation of such
acquisition occurs within a reasonable time following the date of such
execution, (y) the Borrower uses its good faith efforts to obtain updated
financial statements of such Person or business unit if more than three
months have elapsed from the date of such financial statements, and (z) to
the extent any such updated financial statements do not disclose a material
adverse change in the business, operations, property, liabilities, or
financial condition of such Person or business unit) is less than 1.75 to 1,
(ii) no later than five Business Days prior to the consummation of such
acquisition, the Administrative Agent shall have received a certificate of a
Responsible Officer with detailed calculations establishing to the
reasonable satisfaction of the Administrative Agent that the foregoing
requirement has been satisfied, (iii) each Loan Party shall have granted a
security interest and executed Guarantees in favor of the Administrative
Agent in accordance with Section 9.9, and (iv) except for acquisitions for
an aggregate consideration of less than
-16-
$5,000,000, if the financial statements described in clause (i) of this
proviso were not audited, and no audit was performed on the financial
condition of the Person or business unit prior to the consummation of such
acquisitions, the definitive acquisition document shall require the seller
to provide such an audit within 75 days following such consummation, and
shall contain reasonable provisions for reserves against any purchase price
adjustment resulting from such audit.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pledge Agreements": collectively the Borrower Pledge Agreement, the
Subsidiaries Pledge Agreement and the Charge over Shares.
"Properties": as defined in Section 7.22.
"Refinancing": the refinancing of the credit facilities under the
Existing Financing Documents with the Loans and Commitments hereunder,
including, without limitation, the transactions described in Section 8.1(c)
hereof.
"Register": as defined in Section 13.6(d).
"Reimbursement Obligation": the obligation of the Borrower to reimburse
the Issuing Bank pursuant to Section 5.5(a) for amounts drawn under a Letter
of Credit.
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of
ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under Sections .13, .14, .16, .18, .19 or .20 of PBGC Reg. ss. 4043.
"Required Lenders": at any time, Lenders the Credit Exposure of which
aggregate at least a majority of the aggregate Credit Exposure of all the
Lenders.
"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or Governing Documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
-17-
"Responsible Officer": the chief executive officer and the president,
any vice president, the secretary, a treasurer or controller of the Borrower
or, with respect to financial matters, the chief financial officer, vice
president of finance, treasurer or controller of the Borrower.
"Revolving Credit Commitments": collectively, the 364-Day Revolving
Credit Commitments and the Five Year Revolving Credit Commitments.
"Revolving Credit Loans": collectively, the 364-Day Revolving Credit
Loans and the Five Year Revolving Credit Loans.
"Revolving Credit Notes": collectively, the 364-Day Revolving Credit
Notes and the Five Year Revolving Credit Notes.
"Rolling Period": any period of four consecutive fiscal quarters of the
Borrower, provided, however, that (i) for purposes of calculating
Consolidated EBITDA, the Rolling Periods ended on or about September 30,
1998, December 31, 1998 and March 31, 1999 shall consist of the one, two and
three consecutive fiscal quarters of the Borrower ended on or about such
date, respectively and (ii) changes in any amount calculated based on
Rolling Periods shall occur as of the date financial statements for the last
fiscal quarter of such Rolling Period are, or are required to be, delivered
pursuant to Section 9.1.
"Security Documents": the collective reference to the Pledge
Agreements, and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any asset or assets of any Person to
secure any of the Obligations or to secure any guarantee of any such
Obligations.
"Single Employer Plan": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"Subsidiaries Guarantee" or "Guarantee": the Guarantee to be executed
and delivered by each Domestic Subsidiary, substantially in the form of
Exhibit C, as the same may be amended, supplemented or otherwise modified
from time to time.
"Subsidiaries Pledge Agreement": the Pledge Agreement to be executed
and delivered by each Domestic Subsidiary of the Borrower having any
Domestic Subsidiary, substantially in the form of Exhibit D, as the same may
be amended, supplemented or otherwise modified from time to time.
"Subsidiaries Security Documents": the collective reference to the
Subsidiaries Pledge Agreement.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other
-18-
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"Subsidiary Guarantor": any Subsidiary party to the Subsidiaries
Guarantee as a guarantor.
"Swing Line Commitment": $5,000,000.
"Swing Line Lender": NationsBank, in its capacity as lender of Swing
Line Loans hereunder.
"Swing Line Loans": as defined in Section 4.1.
"Swing Line Note": as defined in Section 4.2.
"Term Loan": as defined in Section 2.6(a).
"Term Loan Commitment": as to any Lender, its obligation to make a Term
Loan to the Borrower pursuant to Section 2.6 in the amount determined as set
forth in Section 2.6(b).
"Term Loan Percentage": as to any Lender, the percentage equal to the
quotient of the original outstanding principal amount as of the Conversion
Date of such Lender's Term Loan divided by the aggregate original
outstanding principal amount as of the Conversion Date of all of the Term
Loans.
"Term Note": as defined in Section 2.6(d).
"364-Day Revolving Credit Commitment": as to any Lender, the obligation
of such Lender to make 364-Day Revolving Credit Loans to the Borrower
pursuant to Section 2.1 in an aggregate principal amount at any one time
outstanding not to exceed the amount set forth opposite such Lender's name
on Schedule I under the caption "364-Day Revolving Credit Facility" or in an
Assignment and Acceptance, as such amount may be reduced from time to time
in accordance with the provisions of this Agreement.
"364-Day Revolving Credit Commitment Percentage": as to any Lender at
any time, the percentage which such Lender's 364-Day Revolving Credit
Commitment then constitutes of the aggregate 364-Day Revolving Credit
Commitments of all Lenders (or, at any time after the 364-Day Revolving
Credit Commitments shall have expired or terminated, the percentage which
the aggregate principal amount of such Lender's 364-Day Revolving Credit
Loans then outstanding constitutes of the aggregate principal amount of the
364-Day Revolving Credit Loans then outstanding to all of the Lenders).
-19-
"364-Day Revolving Credit Commitment Period": the period from and
including the date hereof to but not including the 364-Day Termination Date
or such earlier date on which the 364-Day Revolving Credit Commitments shall
terminate as provided herein.
"364-Day Revolving Credit Loans": as defined in Section 2.1.
"364-Day Revolving Credit Note": as defined in Section 2.2.
"364-Day Termination Date": February 10, 2000.
"Tranche": the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date
and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
"Transferee": as defined in Section 13.6(f).
"Type": as to any Loan, its nature as a Base Rate Loan or a Eurodollar
Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrower and its Subsidiaries not defined in Section 1.1 and accounting terms
partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF 364-DAY REVOLVING CREDIT COMMITMENTS
2.1 364-Day Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
("364-Day Revolving Credit Loans") to the Borrower from time to time during the
364-Day Revolving Credit Commitment Period in an aggregate principal amount at
any one time outstanding not to exceed the amount of such Lender's 364-Day
Revolving Credit Commitment then in effect.
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During the 364-Day Revolving Credit Commitment Period the Borrower may use the
364-Day Revolving Credit Commitments by borrowing, prepaying the 364-Day
Revolving Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof.
(b) The 364-Day Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) Base Rate Loans, or (iii) a combination thereof, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.3 and 6.2, provided that no 364-Day Revolving Credit
Loan shall be made as a Eurodollar Loan after the day that is one month prior to
the 364-Day Termination Date.
2.2 364-Day Revolving Credit Notes. The 364-Day Revolving Credit Loans
made by each Lender shall be evidenced by a promissory note of the Borrower,
substantially in the form of Exhibit A-1 with appropriate insertions as to
payee, date and principal amount (a "364-Day Revolving Credit Note"), payable to
the order of such Lender and evidencing the obligation of the Borrower to pay a
principal amount equal to the lesser of (a) the amount of the 364-Day Revolving
Credit Commitment of such Lender and (b) the aggregate unpaid principal amount
of all 364-Day Revolving Credit Loans made by such Lender. Each Lender is hereby
authorized to record the date, Type and amount of each 364-Day Revolving Credit
Loan made or Converted by such Lender, the date and amount of each payment or
prepayment of principal thereof, and, in the case of Eurodollar Loans, the
Interest Period with respect thereto, on the schedule annexed to and
constituting a part of its 364-Day Revolving Credit Note, and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded. Each 364-Day Revolving Credit Note shall (x) be dated
the Closing Date, (y) be stated to mature on the 364-Day Termination Date and
(z) bear interest on the unpaid principal amount thereof from time to time
outstanding at the applicable interest rate per annum determined as provided in
Section 6.1. Interest on each 364-Day Revolving Credit Note shall be payable on
the dates specified in Section 6.1(d).
2.3 Procedure for 364-Day Revolving Credit Borrowing. The Borrower may
borrow under the 364-Day Revolving Credit Commitments during the 364-Day
Revolving Credit Commitment Period on any Business Day in an aggregate principal
amount not exceeding the aggregate Available 364-Day Commitments then in effect,
provided that the Borrower shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to 12:00
noon, New York City time, (a) three Business Days prior to the requested
Borrowing Date, if all or any part of the requested Revolving Credit Loans are
to be initially Eurodollar Loans, or (b) on the requested Borrowing Date,
otherwise), specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, Base
Rate Loans or a combination thereof and (iv) if the borrowing is to be entirely
or partly of Eurodollar Loans, the amount of such Type of Loan and the lengths
of the initial Interest Periods therefor. Each borrowing under the 364-Day
Revolving Credit Commitments shall be in an amount equal to (x) in the case of
Base Rate Loans, $500,000 or a whole multiple of $100,000 in excess thereof (or,
if the then Available 364-Day Commitments are less than $500,000, such lesser
amount) and (y) in the case of Eurodollar Loans, $1,000,000 or a whole multiple
of $100,000 in excess thereof. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Lender thereof.
Each Lender will make the amount of its pro rata share of each borrowing
available to the Administrative
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Agent for the account of the Borrower at the office of the Administrative Agent
specified in Section 13.2 prior to 2:00 p.m., New York City time, on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the Borrower
by the Administrative Agent crediting the account of the Borrower on the books
of such office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
2.4 Commitment Fee. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee for the period from and
including the first day of the 364-Day Revolving Credit Commitment Period to the
364-Day Termination Date or such earlier date as the 364-Day Revolving Credit
Commitments shall terminate as provided herein, computed at a rate of per annum
equal to the Applicable Commitment Fee Rate on the average daily amount of the
Available 364-Day Commitment of such Lender during the period for which payment
is made, payable quarterly in arrears on the last day of each March, June,
September and December and on the 364-Day Termination Date or such earlier date
as the 364-Day Revolving Credit Commitments shall terminate as provided herein,
commencing on the first of such dates to occur after the date hereof.
2.5 Termination or Reduction of 364-Day Revolving Credit Commitments.
The Borrower shall have the right, upon not less than five Business Days' notice
to the Administrative Agent, to terminate the 364-Day Revolving Credit
Commitments or, from time to time, to reduce the amount of the 364-Day Revolving
Credit Commitments. Any such reduction shall be in an amount equal to $100,000
or a whole multiple thereof and shall reduce permanently the 364-Day Revolving
Credit Commitments then in effect.
2.6 Conversion to Term Loans. (a) The Borrower may request, in a notice
given as herein provided to the Administrative Agent and each of the Lenders not
less than 30 days and not more than 90 days prior to the 364-Day Termination
Date, that all or a portion of the 364-Day Revolving Credit Loans of each Lender
outstanding on the 364-Day Termination Date be converted into a term loan (each,
a "Term Loan") of such Lender in a like amount on and as of such date (the date
of any such conversion, the "Conversion Date"). Each such notice of conversion
shall specify the amount of each 364-Day Revolving Credit Loan to be converted
into a Term Loan.
(b) If timely notice of the Borrower is received by the Administrative
Agent and the Lenders pursuant to clause (a) of this Section 2.6, each Lender
having a 364-Day Revolving Credit Commitment (the "Continuing 364-Day Lenders")
severally agrees to make a Term Loan to the Borrower on the Conversion Date in
an amount not to exceed the amount of the outstanding 364-Day Revolving Credit
Loans of such Continuing 364-Day Lender.
(c) The Term Loans may from time to time be (a) Eurodollar Loans, (b)
Base Rate Loans or (c) a combination thereof, as determined by the Borrower and
notified to the Administrative Agent in accordance with Sections 6.2.
(d) The Term Loan of each Continuing 364-Day Lender shall be evidenced
by a promissory note of the Borrower, substantially in the form of Exhibit A-2
with appropriate insertions as to payee, date and principal amount (a "Term
Note"), payable to the order of such
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Lender and representing the obligation of the Borrower to pay the amount of the
Term Loan made by such Lender. Each Lender is hereby authorized to record the
date, Type and amount of its Term Loan and the date and amount of each payment
or prepayment of principal thereof and each Conversion of all or a portion
thereof to another Type and, and in the case of Eurodollar Loans, the Interest
Period with respect thereto, on the schedule annexed to and constituting a part
of its Term Note, and any such recordation shall constitute prima facie evidence
of the accuracy of the information so recorded; provided, that the failure of
such Lender to make any such recordation shall not impair or otherwise affect
the validity or enforceability of its Term Note. Each Term Note shall (a) be
dated the Conversion Date, (b) be stated to mature in installments in amounts
equal to such Lender's Term Loan Percentage of the amounts, and payable on the
dates, set forth on Schedule 2.6, and (c) bear interest for the period from the
date thereof on the unpaid principal amount thereof at the applicable interest
rates per annum specified in Section 6.1. Interest on the Term Notes shall be
payable on the dates specified in Section 6.1(d).
SECTION 3. AMOUNT AND TERMS OF FIVE YEAR REVOLVING CREDIT COMMITMENTS
3.1 Five Year Revolving Credit Commitments. (a) Subject to the terms
and conditions hereof, each Lender severally agrees to make revolving credit
loans ("Five Year Revolving Credit Loans") to the Borrower from time to time
during the Five Year Revolving Credit Commitment Period in an aggregate
principal amount at any one time outstanding which, when added to such Lender's
Five Year Revolving Credit Commitment Percentage of the then outstanding L/C
Obligation and Swing Line Loans, does not exceed the amount of such Lender's
Five Year Revolving Credit Commitment then in effect, provided that no such Five
Year Revolving Credit Loan shall be made if, after giving effect thereto, the
aggregate Available Five Year Commitments would be less than zero. During the
Five Year Revolving Credit Commitment Period the Borrower may use the Five Year
Revolving Credit Commitments by borrowing, prepaying the Five Year Revolving
Credit Loans in whole or in part, and reborrowing, all in accordance with the
terms and conditions hereof.
(b) The Five Year Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) Base Rate Loans, or (iii) a combination thereof, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 3.3 and 6.2, provided that no Five Year Revolving
Credit Loan shall be made as a Eurodollar Loan after the day that is one month
prior to the Five Year Termination Date.
3.2 Five Year Revolving Credit Notes. The Five Year Revolving Credit
Loans made by each Lender shall be evidenced by a promissory note of the
Borrower, substantially in the form of Exhibit A-3 with appropriate insertions
as to payee, date and principal amount (a "Five Year Revolving Credit Note"),
payable to the order of such Lender and evidencing the obligation of the
Borrower to pay a principal amount equal to the lesser of (a) the amount of the
Five Year Five Year Revolving Credit Commitment of such Lender and (b) the
aggregate unpaid principal amount of all Five Year Revolving Credit Loans made
by such Lender. Each Lender is hereby authorized to record the date, Type and
amount of each Five Year Revolving Credit Loan made or Converted by such Lender,
the date and amount of each payment or prepayment of principal thereof, and, in
the case of Eurodollar Loans, the Interest
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Period with respect thereto, on the schedule annexed to and constituting a part
of its Five Year Revolving Credit Note, and any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded.
Each Five Year Revolving Credit Note shall (x) be dated the Closing Date, (y) be
stated to mature on the Five Year Termination Date and (z) bear interest on the
unpaid principal amount thereof from time to time outstanding at the applicable
interest rate per annum determined as provided in Section 6.1. Interest on each
Five Year Revolving Credit Note shall be payable on the dates specified in
Section 6.1(d).
3.3 Procedure for Five Year Revolving Credit Borrowing. The Borrower
may borrow under the Five Year Revolving Credit Commitments during the Five Year
Revolving Credit Commitment Period on any Business Day in an aggregate principal
amount not exceeding the aggregate Available Five Year Commitments then in
effect, provided that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 12:00 noon, New York City time, (a) three Business Days prior to the
requested Borrowing Date, if all, or any part of, the requested Five Year
Revolving Credit Loans are to be initially Eurodollar Loans, or (b) on the
requested Borrowing Date, otherwise), specifying (i) the amount to be borrowed,
(ii) the requested Borrowing Date, (iii) whether the borrowing is to be of
Eurodollar Loans, Base Rate Loans or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans, the respective
amounts of each such Type of Loan and the respective lengths of the initial
Interest Periods therefor. Each borrowing under the Five Year Revolving Credit
Commitments shall be in an amount equal to (x) in the case of Base Rate Loans,
$500,000 or a whole multiple of $100,000 in excess thereof (or, if the then
Available Five Year Commitments are less than $500,000, such lesser amount) and
(y) in the case of Eurodollar Loans, $1,000,000 or a whole multiple of $100,000
in excess thereof. Upon receipt of any such notice from the Borrower, the
Administrative Agent shall promptly notify each Lender thereof. Each Lender will
make the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrower at the office of the
Administrative Agent specified in Section 13.2 prior to 2:00 p.m., New York City
time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent crediting the account of
the Borrower on the books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.
3.4 Commitment Fee. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee for the period from and
including the first day of the Five Year Revolving Credit Commitment Period to
the Five Year Termination Date, computed at a rate per annum equal to the
Applicable Commitment Fee Rate on the average daily amount of the Available Five
Year Commitment of such Lender during the period for which payment is made,
payable quarterly in arrears on the last day of each March, June, September and
December and on the Five Year Termination Date or such earlier date as the Five
Year Revolving Credit Commitments shall terminate as provided herein, commencing
on the first of such dates to occur after the date hereof.
3.5 Termination or Reduction of Five Year Revolving Credit Commitments.
The Borrower shall have the right, upon not less than five Business Days' notice
to the
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Administrative Agent, to terminate the Five Year Revolving Credit Commitments
or, from time to time, to reduce the amount of the Five Year Revolving Credit
Commitments, provided that no such termination or reduction shall be permitted
if, after giving effect thereto and to any prepayments of the Five Year
Revolving Credit Loans made on the effective date thereof, the Aggregate
Outstanding Five Year Extensions of Credit would exceed the Five Year Revolving
Credit Commitments then in effect. Any such reduction shall be in an amount
equal to $100,000 or a whole multiple thereof and shall reduce permanently the
Five Year Revolving Credit Commitments then in effect.
SECTION 4. SWING LINE LOANS
4.1 Swing Line Commitment. Subject to the terms and conditions hereof,
the Swing Line Lender agrees to make swing line loans (individually, a "Swing
Line Loan"; collectively, the "Swing Line Loans") to the Borrower from time to
time during the Five Year Revolving Credit Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed the Swing Line
Commitment; provided that no such Swing Line Loan shall be made if, after giving
effect thereto, the aggregate Available Five Year Commitments would be less than
zero. Amounts borrowed by the Borrower under this Section 4.1 may be repaid and,
through but excluding the Revolving Credit Termination Date, reborrowed. All
Swing Line Loans shall be made as Base Rate Loans and shall not be entitled to
be converted into Eurodollar Loans. The Borrower shall give the Swing Line
Lender irrevocable notice (which notice must be received by the Swing Line
Lender prior to 3:00 p.m., New York City time) on the requested Borrowing Date
specifying the amount of each requested Swing Line Loan, which shall be in an
aggregate minimum amount of $50,000 or whole multiple of $50,000 in excess
thereof. The proceeds of each Swing Line Loan will be made available by the
Swing Line Lender to the Borrower by crediting the account of the Borrower at
the Swing Line Lender with such proceeds. The proceeds of Swing Line Loans may
be used solely for the working capital purposes of the Borrower in the ordinary
course of business.
4.2 Swing Line Note. The Swing Line Loans shall be evidenced by a
promissory note of the Borrower substantially in the form of Exhibit A-4, with
appropriate insertions (the "Swing Line Note"), payable to the order of the
Swing Line Lender and representing the obligation of the Borrower to pay the
aggregate unpaid principal amount of the Swing Line Loans, with interest thereon
as prescribed in Section 6.1. The Swing Line Lender is hereby authorized to
record the Borrowing Date, the amount of each Swing Line Loan and the date and
amount of each payment or prepayment of principal thereof, on the schedule
annexed to and constituting a part of the Swing Line Note and, in the absence of
manifest error, any such recordation shall constitute prima facie evidence of
the accuracy of the information so recorded, provided that the failure of the
Swing Line Lender to make such recordation (or any error in such recordation)
shall not affect the obligations of the Borrower hereunder or under such Note.
The Swing Line Note shall (a) be dated the Closing Date, (b) be stated to mature
on the Five Year Revolving Credit Termination Date and (c) bear interest for the
period from the date thereof on the unpaid principal amount thereof from time to
time outstanding at the applicable interest rate per annum determined as
provided in, and payable as specified in, Section 6.1.
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4.3 Refunded Swing Line Loans. (a) The Swing Line Lender at any time in
its sole and absolute discretion may on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf) request each
Lender having a Five Year Revolving Credit Commitment, including the Swing Line
Lender, to make a Five Year Revolving Credit Loan in an amount equal to such
Lender's Five Year Revolving Credit Commitment Percentage of the amount of the
Swing Line Loans (the "Refunded Swing Line Loans") outstanding on the date such
notice is given. Unless any of the events described in paragraph (f) of Section
11 shall have occurred (in which event the procedures of clause (b) of this
Section 4.3 shall apply), each Lender shall make the proceeds of its Five Year
Revolving Credit Loan available to the Swing Line Lender for the account of the
Swing Line Lender at the Base Rate Lending Office of the Swing Line Lender prior
to 12:00 noon (New York City time) in funds immediately available on the
Business Day next succeeding the date such notice is given. The proceeds of such
Five Year Revolving Credit Loans shall be immediately applied to repay the
Refunded Swing Line Loans.
(b) If prior to the making of a Five Year Revolving Credit Loan
pursuant to paragraph (a) of this Section 4.3 one of the events described in
paragraph (f) of Section 11 shall have occurred, each Lender having a Five Year
Revolving Credit Commitment will, on the date such Revolving Credit Loan was to
have been made, purchase an undivided participating interest in the Refunded
Swing Line Loan in an amount equal to its Five Year Revolving Credit Commitment
Percentage of such Refunded Swing Line Loan. Each Lender will immediately
transfer to the Swing Line Lender, in immediately available funds, the amount of
its participation and upon receipt thereof the Swing Line Lender will deliver to
such Lender a Swing Line Loan participation certificate, in a form specified by
the Swing Line Lender, dated the date of receipt of such funds and in such
amount.
(c) Whenever, at any time after the Swing Line Lender has received from
any Lender such Lender's participating interest in a Refunded Swing Line Loan,
the Swing Line Lender receives any payment on account thereof, the Swing Line
Lender will distribute to such Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participating interest was outstanding and
funded) in like funds as received; provided, however, that in the event that
such payment received by the Swing Line Lender is required to be returned, such
Lender will return to the Swing Line Lender any portion thereof previously
distributed by the Swing Line Lender to it in like funds as such payment is
required to be returned by the Swing Line Lender.
(d) Each Lender's obligation to make the Five Year Revolving Credit
Loans referred to in Section 4.3(a) and to purchase participating interests
pursuant to Section 4.3(c) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the Swing Line Lender, the Borrower, or any other Person for any reason
whatsoever, (ii) such requested Five Year Revolving Credit Loan being in an
amount less than the minimum amount specified in Section 3.3, (iii) the
occurrence or continuance of an Event of Default, (iv) any failure to satisfy
any condition precedent to extensions of credit set forth in Section 8, (v) any
adverse change in the condition (financial or otherwise) of the Borrower or any
other Loan Party, (vi) any breach of this Agreement by the Borrower, any other
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Loan Party or any other Lender, or (vii) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
SECTION 5. LETTERS OF CREDIT
5.1 L/C Commitment (a) Subject to the terms and conditions hereof, the
Issuing Lender, in reliance on the agreements of the other Lenders set forth in
Section 5.4(a), agrees to issue letters of credit ("Letters of Credit") for the
account of the Borrower on any Business Day during the Five Year Revolving
Credit Commitment Period in such form as may be approved from time to time by
the Issuing Lender; provided that the Issuing Lender shall have no obligation to
issue any Letter of Credit if, after giving effect to such issuance, (1) the L/C
Obligations would exceed the L/C Commitment or (2) the aggregate Available Five
Year Commitments would be less than zero.
(b) Each Letter of Credit shall:
(1) be denominated in Dollars and shall be a standby letter of
credit issued to support obligations of the Borrower and/or the
Subsidiaries, contingent or otherwise, (A) in respect of insurance
obligations, (B) to ▇▇▇▇▇▇▇'▇ compensation board or similar Governmental
Authority for ▇▇▇▇▇▇▇'▇ compensation liabilities of the Borrower and/or the
Subsidiaries, (C) in respect of performance bonds or to otherwise support
performance by the Borrower and/or the Subsidiaries under contracts and (D)
for such other purposes as may be approved by the Issuing Lender and the
Administrative Agent (such consent not to be unreasonably withheld), and
(2) expire no later than the earlier of (i) five (5) Business Days
prior to the Five Year Termination Date and (ii) 364 days from the date of
issuance (subject to renewal).
(c) Each Letter of Credit shall be subject to the Uniform Customs and,
to the extent not inconsistent therewith, the laws of the State of New York.
(d) The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
5.2 Procedure for Issuance of Letters of Credit. The Borrower may from
time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the reasonable satisfaction of the Issuing
Lender, and such other certificates, documents and other papers and information
as the Issuing Lender may reasonably request. Upon receipt of any Application,
the Issuing Lender will process such Application and the certificates, documents
and other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing Lender be required
to issue any Letter of Credit earlier than three Business Days after its receipt
of the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such
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Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof and the
Issuing Lender shall notify the Administrative Agent of the issuance of such
Letter of Credit and the Administrative Agent will in turn provide notice to
each L/C Participant indicating the amount of such Letter of Credit to be
allocated to such L/C Participant. If NationsBank shall issue any Letter of
Credit in its capacity as Issuing Lender, then a copy of the Application and
Letter of Credit shall be sent to the Administrative Agent.
5.3 Fees, Commissions and Other Charges. (a) The Borrower shall pay to
the Administrative Agent, for the account of the Issuing Lender and the L/C
Participants, a letter of credit commission with respect to each Letter of
Credit, computed for the period from the date of such payment to the date upon
which the next such payment is due hereunder at a rate equal to the Applicable
Margin for Five Year Revolving Credit Loan Eurodollar Loans then in effect plus
one-quarter of one percent (0.25%), calculated on the basis of the actual days
elapsed over a 360 day year, of the aggregate amount available to be drawn under
such Letter of Credit on the date on which such fee is calculated. One-quarter
of one percent (0.25%) of such fee shall be payable to the Issuing Lender, and
the remainder of such fee shall be payable to the L/C Participants and the
Issuing Lender to be shared ratably among them in accordance with their
respective Five Year Revolving Credit Commitment Percentages. Such commissions
shall be payable in arrears on each L/C Fee Payment Date to occur after the
issuance of each Letter of Credit and shall be nonrefundable.
(b) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit.
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the L/C Participants all fees and
commissions received by the Administrative Agent for their respective accounts
pursuant to this subsection.
5.4 L/C Participations. (a) The Issuing Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk, an undivided interest equal to such L/C
Participant's Five Year Revolving Credit Commitment Percentage in the Issuing
Lender's obligations and rights under each Letter of Credit issued hereunder and
the amount of each draft paid by the Issuing Lender thereunder. Each L/C
Participant unconditionally and irrevocably agrees with the Issuing Lender that,
if a draft is paid under any Letter of Credit for which the Issuing Lender is
not reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's Five Year Revolving Credit Commitment Percentage of the
amount of such draft, or any part thereof, which is not so reimbursed.
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(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 5.4(a) in respect of any unreimbursed portion
of any payment made by the Issuing Lender under any Letter of Credit is paid to
the Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand an amount
equal to the product of (1) such amount, times (2) the daily average Federal
funds rate, as quoted by the Issuing Lender, during the period from and
including the date such payment is required (or, if such demand for payment from
such L/C Participant is made after 3:00 p.m. New York City time on such date,
the next Business Day) to the date on which such payment is immediately
available to the Issuing Lender, times (3) a fraction the numerator of which is
the number of days that elapse during such period and the denominator of which
is 360. If any such amount required to be paid by any L/C Participant pursuant
to Section 5.4(a) is not in fact made available to the Issuing Lender by such
L/C Participant within three Business Days after the date such payment is due,
the Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to Base Rate Loans hereunder. A certificate of the
Issuing Lender submitted to any L/C Participant with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with Section 5.4(a), the Issuing Lender
receives any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the Issuing
Lender will distribute to such L/C Participant its pro rata share thereof;
provided, however, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
5.5 Reimbursement Obligations of the Borrower. (a) The Borrower agrees
to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Lender or, if later, on each date on
which such draft is paid by the Issuing Lender for the amount of (1) such draft
so paid and (2) any taxes and any reasonable fees, charges or other costs or
expenses incurred by the Issuing Lender at its address for notices specified
herein in lawful money of the United States of America and in immediately
available funds.
(b) Interest shall be payable on any and all amounts remaining unpaid
by the Borrower under this Section from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in full
at the rate which would be payable on any outstanding Base Rate Loans which were
then overdue.
(c) Each drawing under any Letter of Credit shall constitute a request
by the Borrower to the Administrative Agent for a borrowing pursuant to Section
4.3 of Base Rate Loans in the amount of such drawing. The Borrowing Date with
respect to such borrowing shall be the date of such drawing.
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5.6 Obligations Absolute. (a) The Borrower's obligations under this
Section 5 shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender or any beneficiary of a
Letter of Credit.
(b) The Borrower also agrees with the Issuing Lender that the Issuing
Lender shall not be responsible for, and the Borrower's Reimbursement
Obligations under Section 5.5(a) shall not be affected by, among other things,
(1) the validity or genuineness of documents or of any endorsements thereon,
even though such documents shall in fact prove to be invalid, fraudulent or
forged, or (2) any dispute between or among the Borrower and any beneficiary of
any Letter of Credit or any other party to which such Letter of Credit may be
transferred or (3) any claims whatsoever of the Borrower against any beneficiary
of such Letter of Credit or any such transferee.
(c) The Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Lender's gross negligence or willful
misconduct.
(d) The Borrower agrees that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the Borrower and shall not
result in any liability of the Issuing Lender to the Borrower.
5.7 Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
5.8 Application. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 5, the provisions of this Section 5 shall apply.
SECTION 6. GENERAL PROVISIONS APPLICABLE TO LOANS
6.1 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin.
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(c) If all or a portion of (i) any principal of any Loan, (ii) any
interest payable thereon, (iii) any commitment fee or (iv) any other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal of the Loans and any such overdue
interest, commitment fee or other amount shall bear interest at a rate per annum
which is (x) in the case of principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus 2%
or (y) in the case of any such overdue interest, commitment fee or other amount,
the rate described in paragraph (b) of this Section plus 2%, in each case from
the date of such non-payment until such overdue principal, interest, commitment
fee or other amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this Section shall
be payable from time to time on demand.
6.2 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to Convert Eurodollar Loans to Base Rate Loans, by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such Conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to Convert Base Rate Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election, shall specify the length of the initial Interest Period
or Interest Periods therefor. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Lender thereof. All or any part of outstanding
Eurodollar Loans and Base Rate Loans may be Converted as provided herein,
provided that (i) no Loan may be Converted into a Eurodollar Loan when any Event
of Default has occurred and is continuing and the Administrative Agent has or
the Required Lenders have determined that such a Conversion is not appropriate,
(ii) any such Conversion may only be made if, after giving effect thereto,
Section 6.3 shall not have been contravened, and (iii) no Loan may be converted
into a Eurodollar Loan after the date that is one month prior to the 364-Day
Termination Date, the Five Year Termination Date (in the case of Conversions of
Revolving Credit Loans) or the date of the final installment of principal (in
the case of Conversions of Term Loans).
(b) Any Eurodollar Loans may be Continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
notice to the Administrative Agent, in accordance with the applicable provisions
of the term "Interest Period" set forth in Section 1.1, of the length of the
next Interest Period to be applicable to such Loans, provided that no Eurodollar
Loan may be Continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Required Lenders have
determined that such a Continuation is not appropriate, (ii) if, after giving
effect thereto, Section 6.3 would be contravened or (iii) after the date that is
one month or prior to, respectively, the 364-Day Termination Date or the Five
Year Termination Date (in the case of Continuations of Revolving Credit Loans)
or the date of the final installment of principal (in the case of Continuations
of Term Loans) and provided, further, that if the Borrower shall fail to give
such notice or if such Continuation is not permitted such Loans shall be
automatically converted to Base Rate Loans on the last day of such then expiring
Interest Period.
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6.3 Minimum Amounts and Maximum Number of Tranches. All borrowings,
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Eurodollar Loans comprising each Tranche shall be equal to $1,000,000 or
a whole multiple of $100,000 in excess thereof. In no event shall there be more
than seven (7) Tranches outstanding at any time.
6.4 Optional Prepayments. The Borrower may on the last day of any
Interest Period with respect thereto, in the case of Eurodollar Loans or, or at
any time and from time to time, in the case of Base Rate Loans, prepay the
Loans, in whole or in part, without premium or penalty, upon at least four (4)
Business Days' irrevocable notice to the Administrative Agent, specifying the
date and amount of prepayment and whether the prepayment is of Eurodollar Loans,
Base Rate Loans or a combination thereof, and, if of a combination thereof, the
amount allocable to each. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Lender thereof. If any such notice is given,
the amount specified in such notice shall be due and payable on the date
specified therein, together with any amounts payable pursuant to Section 6.12
and, in the case of prepayments of the Term Loans only, accrued interest to such
date on the amount prepaid. Partial prepayments of the Term Loans pursuant to
this Section shall be applied pro rata to installments of principal of the Term
Loans. Amounts prepaid on account of the Term Loans may not be reborrowed.
Partial prepayments pursuant to this Section shall be in an aggregate principal
amount of $100,000 or a whole multiple thereof.
6.5 Mandatory Prepayments. (a) Subject to Section 6.12, if on any date
the aggregate outstanding principal amount of the 364-Day Revolving Credit Loans
exceeds the 364-Day Revolving Credit Commitments, the Borrower shall immediately
prepay the 364-Day Revolving Credit Loans in an amount equal to the amount of
such excess.
(b) Subject to Section 6.12, if on any date the Aggregate Outstanding
Five Year Extensions of Credit of all the Lenders exceed the Five Year Revolving
Credit Commitments, the Borrower shall immediately prepay the Five Year
Revolving Credit Loans and cash collateralize or replace the Letters of Credit
in an amount equal to the amount of such excess.
(c) Unless the Required Lenders otherwise agree, the Borrower shall
prepay the Loans and reduce the Commitments in an amount equal to (i) 100% of
the Net Proceeds of any sale or issuance of debt securities by the Borrower or
any Subsidiary, whether in a public offering, a private placement or otherwise
(other than Indebtedness permitted under Section 10.2, and it being understood
that "earn-out" arrangements entered into in connection with Permitted
Acquisitions shall not be deemed to be debt securities for purposes of this
Section 6.5(c)), and (ii) subject to clause (f) of this Section 6.5, 100% of the
Net Proceeds of any sale, lease, assignment, exchange or other disposition for
cash of any asset or group of assets (including, without limitation, insurance
proceeds paid as a result of any destruction, casualty or taking of any property
of the Borrower or any Subsidiary), not made in the ordinary course of business,
by the Borrower or any Subsidiary of the Borrower, in any such case no later
than three Business Days following receipt by the Borrower or such Subsidiary of
such proceeds, together with accrued interest to such date on the amount
prepaid; provided that (A) no such prepayment
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shall be required pursuant to subclause (ii) of this Section 6.5(c) unless the
aggregate amount of such Net Proceeds received by the Borrower and its
Subsidiaries and not previously applied to prepayment of the Term Loans and the
reduction of the Commitments pursuant to Section 6.5(c)(ii) is at least
$500,000, and (B) no such prepayment shall be required pursuant to this Section
6.5(c) to the extent that the aggregate amount of such Net Proceeds does not
exceed $5,000,000 or the ratio of (1) Consolidated Total Indebtedness of the
Borrower as of the last day of the Rolling Period most recently ended prior to
the date of receipt of such Net Proceeds and for which the Borrower shall have
been required to provide financial statements pursuant to Section 9.1 to (2)
Consolidated EBITDA of the Borrower for such period (calculated on a pro forma
basis, as if the event giving rise to the receipt of such Net Proceeds had
occurred as of the first day of such Rolling Period) would be less than 1.75 to
1. Amounts prepaid pursuant to this Section 6.5(c) shall be applied first, prior
to the Conversion Date, to the reduction of the 364-Day Revolving Credit
Commitments and the prepayment of the 364-Day Revolving Credit Loans, and from
and after the Conversion Date, to installments of principal of the Term Loans
until paid in full, and second to the reduction of the Five Year Revolving
Credit Commitments and the prepayment of the Five Year Revolving Credit Loans
and/or cash collateralize or replace the Letters of Credit. Prepayments of
installments of Term Loans shall be applied pro rata to installments of
principal of the Term Loans until paid in full and such amounts so prepaid may
not be reborrowed. Nothing in this Section 6.5(c) shall be construed to derogate
any restriction or limitation contained in any Loan Document imposed on any
transaction of the types described in this Section 6.5(c), including without
limitation the restrictions set forth in Sections 10.2, 10.5 and 10.6 hereof.
(d) On or before the earlier of the date on which the financial
statements referred to in Section 9.1(a) are required to be delivered in respect
of a fiscal year of the Borrower, beginning with the fiscal year ending December
31, 2000, and the date on which such financial statements are actually
delivered, the Borrower shall prepay the Term Loans in the amount of 75% of
Excess Cash Flow for the fiscal year covered by such financial statements,
together with accrued interest to such date on the amount prepaid; provided that
no such prepayment shall be required pursuant to this Section 6.5(d) if the
ratio of (1) Consolidated Total Indebtedness of the Borrower as of the last day
of the Rolling Period most recently ended immediately prior to the date the
Excess Cash Flow is calculated as provided herein to (2) Consolidated EBITDA of
the Borrower for such period is less than 1.75 to 1. Amounts prepaid pursuant to
this Section 6.5(d) shall be applied pro rata to installments of principal of
the Term Loans until paid in full and such amounts so prepaid may not be
reborrowed.
(e) Unless the Required Lenders otherwise agree, the Borrower shall
prepay the Term Loans in an amount equal to 50% of the Net Proceeds of any sale
or issuance of any equity securities by the Borrower or any Subsidiary, whether
in a public offering, a private placement or otherwise, other than amounts
received upon exercise of stock options issued pursuant to a stock option plan
permitted under this Agreement, and other than any Net Proceeds from any sale or
issuance of equity securities received prior to the Conversion Date; provided
that no such prepayment shall be required pursuant to this Section 6.5(e) unless
the aggregate amount of such Net Proceeds received by the Borrower and its
Subsidiaries and not previously applied to prepayment of the Term Loans pursuant
to this Section 6.5(e) is at least $500,000 or such Net Proceeds result from the
issuance of equity securities in connection with a Permitted
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Acquisition; provided, that no prepayment under this Section 6.5(e) shall be
required if the ratio of (1) Consolidated Total Indebtedness of the Borrower as
of the last day of the Rolling Period most recently ended immediately prior to
the date of receipt of such Net Proceeds to (2) Consolidated EBITDA of the
Borrower for such period is less than 1.75 to 1. Prepayments of installments of
Term Loans shall be applied pro rata to installments of principal of the Term
Loans until paid in full and such amounts so prepaid may not be reborrowed.
Nothing in this Section 6.5(e) shall be construed to derogate any restriction or
limitation contained in any Loan Document imposed on any transaction of the
types described in this Section 6.5(e), including without limitation the
restrictions set forth in Sections 10.5 and 10.6 hereof.
(f) Net Proceeds received by the Borrower or any Subsidiary as proceeds
of any sale, lease, assignment, exchange or other disposition for cash of any
asset or group of assets (including, without limitation, insurance proceeds paid
as a result of any destruction, casualty or taking of any property of the
Borrower or any Subsidiary), not made in the ordinary course of business, by the
Borrower or any Subsidiary of the Borrower need not be applied as set forth in
Section 6.5(c) to the extent that such Net Proceeds are applied to (i) the
replacement, repair or rebuilding of the property which was the subject of such
sale, lease, assignment, exchange or other disposition or such destruction,
casualty or taking, in each case within 180 days after the receipt of such Net
Proceeds, or (ii) Permitted Acquisitions within 180 days after the receipt of
such Net Proceeds; provided, in each case, that if the aggregate amount of such
Net Proceeds received by the Borrower and its Subsidiaries is at least
$1,000,000, the Administrative Agent may require that such Net Proceeds be
deposited in a special collateral account, subject to the sole dominion and
control of the Administrative Agent and in a manner reasonably satisfactory to
the Administrative Agent, as additional Collateral for the Obligations and the
Guarantees, until such time as it is to be applied as permitted under this
Section 6.5(f).
6.6 Computation of Interest and Fees. (a) Whenever it is calculated on
the basis of the Prime Rate, interest shall be calculated on the basis of a 365-
(or 366-, as the case may be) day year for the actual days elapsed; and,
otherwise, commitment fees and interest shall be calculated on the basis of a
360-day year for the actual days elapsed. The Administrative Agent shall as soon
as practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Base Rate or the Eurocurrency Reserve Requirements, shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 6.1(a) or (c).
6.7 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:
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(a) the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means
do not exist for ascertaining the Eurodollar Rate for such Interest Period,
or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders in writing and determined
in good faith) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the Lenders as soon as practicable thereafter. If such notice
is given (x) any Eurodollar Loans, requested to be made on the first day of
such Interest Period shall be made as Base Rate Loans, (y) any Loans that were
to have been Converted on the first day of such Interest Period to Eurodollar
Loan, shall be Converted to or Continue as Base Rate Loans and (z) any
outstanding Eurodollar Loan shall be Converted, on the first day of such
Interest Period, to Base Rate Loans. Until such notice has been withdrawn by
the Administrative Agent, no further Eurodollar Loans shall be made or
Continued as such, nor shall the Borrower have the right to Convert Loans to
Eurodollar Loans.
6.8 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower
from the Lenders hereunder, each payment by the Borrower on account of any
commitment fee hereunder and any reduction of the Term Loan Commitments or the
Revolving Credit Commitments of the Lenders shall be made pro rata according to
the respective Term Loan Commitment Percentages or Revolving Credit Commitment
Percentages, as applicable, of the Lenders. Each payment (including each
prepayment) by the Borrower on account of principal of and interest on the Term
Loans or the Revolving Credit Loans shall be made pro rata according to the
respective outstanding principal amounts of the Term Loans or the Revolving
Credit Loans, as applicable, then held by the Lenders. All payments (including
prepayments) to be made by the Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set-off or
counterclaim and shall be made prior to 2:00 p.m., New York City time, on the
due date thereof to the Administrative Agent, for the account of the Lenders, at
the Administrative Agent's office specified in Section 13.2, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a Eurodollar Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such payment into another calendar month in which event such payment shall be
made on the immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute
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its 364-Day Revolving Credit Commitment Percentage, Five Year Revolving Credit
Commitment Percentage or Term Loan Percentage, as applicable, of such borrowing
available to the Administrative Agent, the Administrative Agent may assume that
such Lender is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent submitted to
any Lender with respect to any amounts owing under this Section shall be
conclusive in the absence of manifest error. If such Lender's 364-Day Revolving
Credit Commitment Percentage, Five Year Credit Commitment Percentage or Term
Loan Percentage, as applicable, of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days of such Borrowing
Date, the Administrative Agent shall also be entitled to recover such amount
with interest thereon at the rate per annum applicable to Base Rate Loans
hereunder, on demand, from the Borrower.
6.9 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, Continue Eurodollar Loans as such and
Convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
Converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such Conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 6.12.
6.10 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Note or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by Section 6.11 and changes in the
rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
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and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, Converting
into, Continuing or maintaining Eurodollar Loans or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Borrower
shall promptly pay such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduced amount receivable.
(b) If any Lender shall have in good faith made the determination that
the adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or compliance by such
Lender or any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof shall have the effect
of reducing the rate of return on such Lender's or such corporation's capital as
a consequence of its obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, the Borrower shall promptly pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower (with a copy to
the Administrative Agent) of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
agreements in this Section shall survive the termination of this Agreement and
the payment of the Loans and all other amounts payable hereunder.
6.11 Taxes. (a) All payments made by the Borrower under this Agreement
and any Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent or any Lender
as a result of a present or former connection between the Administrative Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under any Note,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such Lender fails to
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comply with the requirements of clause (b) of this Section. Whenever any
Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The agreements in this Section shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) (A) if such Lender is a "bank" within the meaning of Section
881(c)(3)(A) of the Code, deliver to the Borrower and the
Administrative Agent (x) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor applicable
form, as the case may be, and (y) an Internal Revenue Service Form W-8
or W-9, or successor applicable form, as the case may be, or (B) if
such Lender is not a "bank" within the meaning of Section 881(c)(3)(A)
of the Code and cannot deliver either Internal Revenue Service Form
1001 or 4224, deliver (x) a certificate substantially in the form of
Exhibit E (a "Certificate Re Non-Bank Status") and (y) two completed
and signed copies of Internal Revenue Service Form W-8 or successor
applicable form;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the most recent
form previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower
or the Administrative 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 would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the
Administrative 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, (ii) in the
case of a Certificate Re Non-Bank Status, that it is not a "bank" as such term
is defined in Section 881(c)(3)(A) of the Code, and (iii) in the case of a Form
W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a Participant
pursuant to Section 13.6 shall, upon the effectiveness of the related transfer,
be required to provide all of
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the forms and statements required pursuant to this Section, provided that in the
case of a Participant such Participant shall furnish all such required forms and
statements to the Lender from which the related participation shall have been
purchased.
6.12 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, Conversion into or Continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, Converted or Continued, for the period from the date of such
prepayment or of such failure to borrow, Convert or Continue to the last day of
such Interest Period (or, in the case of a failure to borrow, Convert or
Continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
6.13 Lending Offices; Change of Lending Office. (a) Loans of each Type
made by any Lender shall be made and maintained at such Lender's Applicable
Lending Office for Loans of such Type.
(b) Each Lender agrees that if it makes any demand for payment under
Section 6.10 or 6.11(a), or if any adoption or change of the type described in
Section 6.9 shall occur with respect to it, it will use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as such efforts would not be disadvantageous to it, as determined in its
sole discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrower to make payments
under Section 6.10 or 6.11(a), or would eliminate or reduce the effect of any
adoption or change described in Section 6.9.
SECTION 7. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans, the Borrower hereby represents and warrants to
the Administrative Agent and each Lender that:
7.1 Financial Condition. (a) The consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at December 27, 1997 and the
related consolidated statements of income and of cash flows for the fiscal year
ended on such date, reported on by
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Deloitte & Touche, LLP, copies of which have heretofore been furnished to each
Lender, are complete and correct in all material respects and present fairly the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the fiscal year then ended. The unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at December 31, 1998 and the related unaudited consolidated statements of income
and of cash flows for the twelve-month period ended on such date, certified by a
Responsible Officer, copies of which have heretofore been furnished to each
Lender, are complete and correct in all material respects and present fairly the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the twelve-month period then ended
(subject to normal year-end audit adjustments and the absence of footnotes). All
such financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by such accountants or Responsible Officer,
as the case may be, and as disclosed therein). Except as set forth on Schedule
7.1, neither the Borrower nor any of its consolidated Subsidiaries had, at the
date of the most recent balance sheet referred to above, any material Guarantee
Obligation, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including, without limitation, any
interest rate or foreign currency swap or exchange transaction or other
financial derivative, which is not reflected in the foregoing statements or in
the notes thereto. During the period from December 31, 1998 to and including the
date hereof there has been no sale, transfer or other disposition by the
Borrower or any of its consolidated Subsidiaries of any material part of its
business or property, other than sales in the ordinary course of business,
permitted sales of inventory and sales of obsolete or worn out goods or
equipment and no purchase or other acquisition of any business or property
(including any Capital Stock of any other Person) material in relation to the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries at December 31, 1998.
(b) The operating forecast of the Borrower and its consolidated
Subsidiaries, copies of which have heretofore been furnished to the Lenders,
have been prepared in good faith under the direction of a Responsible Officer of
the Borrower, and in accordance with GAAP except that such forecast and
projections do not include footnotes and other disclosures which may be required
pursuant to GAAP. The Borrower has no reason to believe that as of the date of
delivery such operating forecast was materially incorrect or misleading in any
material respect, or omitted to state any material fact which would render them
misleading in any material respect. The parties hereto acknowledge that all such
forecasts and projections are based on various facts and assumptions which the
Borrower believes are reasonable, but there can be no assurance that such facts
or assumptions will materialize as anticipated, and the actual results may vary
materially from such forecasts and projections.
7.2 No Change. (a) Since December 31, 1998 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, and (b) during the period from December 31, 1998 to and
including the date of this Agreement no dividends or other distributions have
been declared, paid or made upon the Capital Stock of the Borrower nor has any
of the Capital Stock of the Borrower been redeemed, retired, purchased or
otherwise acquired for value by the Borrower or any of its Subsidiaries.
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7.3 Existence; Compliance with Law. Except as set forth in Schedule
7.3, each of the Borrower and its Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate power and authority, and the legal right, to
own and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification and (d) is in compliance with all
Requirements of Law, except to the extent that, in each such case, the failure
to comply therewith could not reasonably be expected to, in the aggregate, have
a Material Adverse Effect.
7.4 Power; Authorization; Enforceable Obligations. The Borrower has the
corporate power and authority, and the legal right, to execute, deliver and
perform the Loan Documents to which it is a party and to borrow hereunder and
has taken all necessary corporate action to authorize the borrowings on the
terms and conditions of this Agreement and any Notes and to authorize the
execution, delivery and performance of the Loan Documents to which it is a
party. Except as set forth in Schedule 7.4, no consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the Refinancing,
the borrowings hereunder or with the execution, delivery, performance, validity
or enforceability of the Loan Documents to which the Borrower is a party. This
Agreement has been, and each other Loan Document to which it is a party will be,
duly executed and delivered on behalf of the Borrower. This Agreement
constitutes, and each other Loan Document to which it is a party when executed
and delivered will constitute, a legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
7.5 No Legal Bar. The execution, delivery and performance of the Loan
Documents to which the Borrower is a party, the borrowings hereunder and the use
of the proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of the Borrower or of any of its Subsidiaries and will not result in,
or require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation (other than Liens created by the Security Documents in
favor of the Administrative Agent).
7.6 No Material Litigation. Except as set forth on Schedule 7.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of its or their respective properties or revenues (a) with respect to any of the
Loan Documents or any of the transactions contemplated hereby or thereby, or (b)
which could reasonably be expected to have a Material Adverse Effect.
7.7 No Default. Neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably
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be expected to have a Material Adverse Effect. No Default or Event of Default
has occurred and is continuing.
7.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by Section 10.3.
7.9 Intellectual Property. The Borrower and each of its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted except for those the failure to own or license which could not have a
Material Adverse Effect (the "Intellectual Property"). No claim has been
asserted and is pending by any Person challenging or questioning the use of any
such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower know of any valid basis for any
such claim. The use of such Intellectual Property by the Borrower and its
Subsidiaries does not to the knowledge of the Borrower infringe on the rights of
any Person, except for such claims and infringements that, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
7.10 No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation of the Borrower or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.
7.11 Taxes. Each of the Borrower and its Subsidiaries has filed or
caused to be filed all tax returns which, to the knowledge of the Borrower, are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be, except where the
failure to file such return or pay such tax or other fee or charge could not
reasonably be expected to have a Material Adverse Effect); no tax Lien has been
filed, and, to the knowledge of the Borrower, no claim is being asserted, with
respect to any such tax, fee or other charge.
7.12 Federal Regulations. No part of the proceeds of any Loans will be
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect, or for any purpose which violates, or which would be inconsistent
with, the provisions of the regulations of such Board of Governors. If requested
by any Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in
said Regulation U, as the case may be.
7.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or
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deemed made with respect to any Plan, and each Plan has complied in all material
respects with the applicable provisions of ERISA and the Code relating to the
foregoing. No termination of a Single Employer Plan has occurred, and no Lien in
favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan, and neither the
Borrower nor any Commonly Controlled Entity would become subject to any
liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent. The
present value (determined using actuarial and other assumptions which are
reasonable in respect of the benefits provided and the employees participating)
of the liability of the Borrower and each Commonly Controlled Entity for post
retirement benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(1) of ERISA) does
not, in the aggregate, exceed the assets under all such Plans allocable to such
benefits by an amount in excess of $500,000.
7.14 Investment Company Act; Other Regulations. The Borrower is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
7.15 Subsidiaries. Schedule 7.15 sets forth the name of each direct or
indirect Subsidiary of the Borrower, its form of organization, its jurisdiction
of organization, the total number of issued and outstanding shares or other
interests of Capital Stock thereof, the classes and number of issued and
outstanding shares or other interests of Capital Stock of each such class, the
name of each holder of Capital Stock thereof and the number of shares or other
interests of such Capital Stock held by each such holder and the percentage of
all outstanding shares or other interests of such class of Capital Stock held by
such holders.
7.16 Security Documents. (a) The provisions of each Security Document
are effective to create in favor of the Administrative Agent for the ratable
benefit of the Lenders a legal, valid and enforceable security interest in all
right, title and interest of the Loan Party thereto in the "Collateral"
described therein.
(b) When certificates representing the Pledged Stock (as defined in the
Pledge Agreements) are delivered to the Administrative Agent, together with
stock powers endorsed in blank by a duly authorized officer of the pledgors
thereof, the Pledge Agreements shall constitute a fully perfected first Lien on,
and security interest in, all right, title and interest of the pledgors parties
thereto in the "Collateral" described therein, assuming continued and
uninterrupted possession by the Administrative Agent of such Pledged Stock.
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7.17 Accuracy and Completeness of Information. (a) All factual
information, reports and other papers and data with respect to the Loan Parties
(other than projections) furnished, and all factual statements and
representations made, to the Administrative Agent or the Lenders by a Loan
Party, or on behalf of a Loan Party, were, at the time the same were so
furnished or made, when taken together with all such other factual information,
reports and other papers and data previously so furnished and all such other
factual statements and representations previously so made, complete and correct
in all material respects, to the extent necessary to give the Administrative
Agent and the Lenders true and accurate knowledge of the subject matter thereof
in all material respects, and did not, as of the date so furnished or made,
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements contained therein not misleading
in light of the circumstances in which the same were made.
(b) All forecasts with respect to the Loan Parties furnished by or on
behalf of a Loan Party to the Administrative Agent or the Lenders were prepared
and presented in good faith by or on behalf of such Loan Party. The parties
hereto acknowledge that all such forecasts are based on various facts and
assumptions which the Borrower believes are reasonable, but there can be no
assurance that such facts or assumptions will materialize as anticipated, and
the actual results may vary materially from such forecasts. No fact is known to
a Loan Party which materially and adversely affects or in the future is
reasonably likely (so far as such Loan Party can reasonably foresee) to have a
Material Adverse Effect which has not been set forth in the financial statements
referred to in Section 7.1 or in such information, reports, papers and data or
otherwise disclosed in writing to the Administrative Agent or the Lenders prior
to the Closing Date.
7.18 Labor Relations. No Loan Party is engaged in any unfair labor
practice which could reasonably be expected to have a Material Adverse Effect.
There is (a) no unfair labor practice compliant pending or, to the best
knowledge of each Loan Party and each of the Subsidiaries, threatened against a
Loan Party before the National Labor Relations Board which could reasonably be
expected to have a Material Adverse Effect and no grievance or arbitration
proceeding arising out of or under a collective bargaining agreement is so
pending or threatened; (b) no strike, labor dispute, slowdown or stoppage
pending or, to the best knowledge of each Loan Party, threatened against a Loan
Party; and (c) no petition for union representation has been filed with respect
to the employees of a Loan Party and, to the best of the Borrower's knowledge,
no union organizing activities are taking place with respect to any thereof.
7.19 Insurance. Each Loan Party has, with respect to its properties and
business, insurance covering the risks, in the amounts, with the deductible or
other retention amounts, and with the carriers, listed on Schedule 7.19, which
insurance meets the requirements of Section 8.5 hereof as of the date hereof and
the Closing Date.
7.20 Solvency. On the Closing Date, after giving effect to the
consummation of the Refinancing and to the incurrence of all indebtedness and
obligations being incurred on or prior to such date in connection herewith and
therewith, (i) the amount of the "present fair saleable value" of the assets of
the Borrower and of the Borrower and its Subsidiaries, taken as a whole, will,
as of such date, exceed the amount of all "liabilities of the Borrower and of
the
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Borrower and its Subsidiaries, taken as a whole, contingent or otherwise",
as of such date, as such quoted terms are determined in accordance with
applicable federal and state laws governing determinations of the insolvency of
debtors, (ii) the present fair saleable value of the assets of the Borrower and
of the Borrower and its Subsidiaries, taken as a whole, will, as of such date,
be greater than the amount that will be required to pay the liabilities of the
Borrower and of the Borrower and its Subsidiaries, taken as a whole, on their
respective debts as such debts become absolute and matured, (iii) neither the
Borrower nor the Borrower and its Subsidiaries, taken as a whole, will have, as
of such date, an unreasonably small amount of capital with which to conduct
their respective businesses, and (iv) each of the Borrower and the Borrower and
its Subsidiaries, taken as a whole, will be able to pay their respective debts
as they mature. For purposes of this Section 7.20, "debt" means "liability on a
claim", "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured, and (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
7.21 Purpose of Loans. The proceeds of the Loans shall be used by the
Borrower for the general corporate purposes of the Borrower and its
Subsidiaries.
7.22 Environmental Matters. Except as set forth on Schedule 7.22:
(a) The facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "Properties") do not contain, and have
not previously contained, any Materials of Environmental Concern in amounts or
concentrations which (i) constitute or constituted a violation of, or (ii) could
give rise to liability under, any Environmental Law except in either case
insofar as such violation or liability, or any aggregation thereof, is not
reasonably likely to result in the payment of a Material Environmental Amount.
(b) The Properties and all operations at the Properties are in
compliance, and have in the last 3 years been in compliance, in all material
respects with all applicable Environmental Laws, and there is no contamination
at, under or about the Properties or violation of any Environmental Law with
respect to the Properties or the business operated by the Borrower or any of its
Subsidiaries (the "Business") which could materially interfere with the
continued operation of the Properties or materially impair the fair saleable
value thereof.
(c) Neither the Borrower nor any of its Subsidiaries has received any
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental Laws
with regard to any of the Properties or the Business, nor does the Borrower have
knowledge or reason to believe that any such notice will be received or is being
threatened except insofar as such notice or threatened notice, or any
aggregation thereof, does not involve a matter or matters that is or are
reasonably likely to result in the payment of a Material Environmental Amount.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
which could give rise to liability under, any Environmental Law, nor have any
Materials of Environmental
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Concern been generated, treated, stored or disposed of at, on or under any of
the Properties in violation of, or in a manner that could give rise to liability
under, any applicable Environmental Law except insofar as any such violation or
liability referred to in this paragraph, or any aggregation thereof, is not
reasonably likely to result in the payment of a Material Environmental Amount.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be named as
a party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business except insofar
as such proceeding, action, decree, order or other requirement, or any
aggregation thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of the Borrower or any Subsidiary in connection with the
Properties or otherwise in connection with the Business, in violation of or in
amounts or in a manner that could give rise to liability under Environmental
Laws except insofar as any such violation or liability referred to in this
paragraph, or any aggregation thereof, is not reasonably likely to result in the
payment of a Material Environmental Amount.
7.23 Regulation H. None of the real property of the Borrower or any of
its Subsidiaries is located in an area that has been identified by the Secretary
of Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968.
7.24 Year 2000 Compliance. The Borrower and its Subsidiaries have
reviewed the areas within their business and operations which could reasonably
be expected to be adversely affected by, and have developed or are developing a
program intended to address on a timely basis, the "Year 2000 Problem" (that is,
the risk that computer applications used by the Borrower and/or its Subsidiaries
may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date on or after December 31, 1999),
and have made related appropriate inquiry of material suppliers and vendors.
Based on such review and program, the Borrower believes that the "Year 2000
Problem" is not likely to result in a Material Adverse Effect.
SECTION 8. CONDITIONS PRECEDENT
8.1 Conditions to Initial Loans. The agreement of each Lender to make
the initial Loan requested to be made by it is subject to the satisfaction,
immediately prior to or concurrently with the making of such Loan on the Closing
Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received:
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(i) this Agreement, executed and delivered by a duly authorized
officer of the Borrower, with a counterpart for each Lender,
(ii) for the account of each Lender having a 364-Day Revolving
Credit Commitment, a 364-Day Revolving Credit Loan Note of the Borrower
conforming to the requirements hereof and executed by a duly authorized
officer of the Borrower,
(iii) for the account of each Lender having a Five Year Revolving
Credit Commitment, a Five Year Revolving Credit Note of the Borrower
conforming to the requirements hereof and executed by a duly authorized
officer of the Borrower,
(iv) each of the Pledge Agreements, each executed and delivered by
a duly authorized officer of each party thereto, with a counterpart or
a conformed copy for each Lender, and
(v) the Subsidiaries Guarantee, executed and delivered by a duly
authorized officer of each party thereto, with a counterpart or a
conformed copy for each Lender,
(b) Related Agreements. The Administrative Agent shall have received,
with a copy for each Lender, true and correct copies, certified as to
authenticity by the Borrower, of such documents or instruments as may be
reasonably requested by the Administrative Agent, including, without limitation,
a copy of any debt instrument, security agreement or other material contract to
which the Borrower, or its Subsidiaries may be a party.
(c) Concurrent Transactions. All amounts owing to the Existing
Creditors under the Existing Financing Documents shall have been, or shall be
concurrently with the making of the initial Loans, repaid in full, and any Liens
created pursuant to the Existing Financing Documents shall have been or shall be
concurrently with the making of the initial Loans, released, and the Existing
Financing Documents shall terminate and be of no further force and effect upon
such repayment; in each case pursuant to such payout letters, Lien releases,
termination statements, mortgage satisfactions and other documents as the
Administrative Agent may require, each of which shall be in form and substance
reasonably satisfactory to the Administrative Agent.
(d) Borrowing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the Borrower and
of each of the other Loan Parties, dated the Closing Date, substantially in the
form of Exhibit F, with appropriate insertions and attachments, reasonably
satisfactory in form and substance to the Administrative Agent, executed by the
President or any Vice President and the Secretary or any Assistant Secretary of
the Borrower or such other Loan Party, as the case may be.
(e) Corporate Proceedings of the Borrower. The Administrative Agent
shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance reasonably satisfactory to the Administrative
Agent, of the Board of Directors of the
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Borrower authorizing (i) the execution, delivery and performance of this
Agreement and the other Loan Documents to which it is a party, (ii) the
borrowings contemplated hereunder, (iii) the granting by it of the Liens created
pursuant to the Borrower Security Documents, and (iv) the Refinancing, certified
by the Secretary or an Assistant Secretary of the Borrower as of the Closing
Date, which certificate shall be in form and substance reasonably satisfactory
to the Administrative Agent and shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded.
(f) Borrower Incumbency Certificate. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of the
Borrower, dated the Closing Date, as to the incumbency and signature of the
officers of the Borrower executing any Loan Document reasonably satisfactory in
form and substance to the Administrative Agent, executed by the President or any
Vice President and the Secretary or any Assistant Secretary of the Borrower.
(g) Corporate Proceedings of Subsidiaries. The Administrative Agent
shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance reasonably satisfactory to the Administrative
Agent, of the Board of Directors of each Subsidiary of the Company which is a
party to a Loan Document authorizing the execution, delivery and performance of
the Loan Documents to which it is a party and certified by the Secretary or an
Assistant Secretary of each such Subsidiary as of the Closing Date, which
certificate shall be in form and substance reasonably satisfactory to the
Administrative Agent and shall state that the resolutions thereby certified have
not been amended, modified, revoked or rescinded.
(h) Subsidiary Incumbency Certificates. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of each
Subsidiary of the Borrower which is a Loan Party, dated the Closing Date, as to
the incumbency and signature of the officers of such Subsidiaries executing any
Loan Document, reasonably satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of each such Subsidiary.
(i) Corporate Documents. The Administrative Agent shall have received,
with a counterpart for each Lender, true and complete copies of the certificate
of incorporation and by-laws of each Loan Party, certified as of the Closing
Date as complete and correct copies thereof by the Secretary or an Assistant
Secretary of the such Loan Party.
(j) Good Standing Certificates. The Administrative Agent shall have
received, with a copy for each Lender, certificates dated as of a recent date
from the Secretary of State or other appropriate authority, evidencing the good
standing of each Loan Party (i) in the jurisdiction of its organization and (ii)
in each other jurisdiction where its ownership, lease or operation of property
or the conduct of its business requires it to qualify as a foreign Person
except, as to this subclause (ii), where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect.
(k) Consents, Licenses and Approvals. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of a
Responsible Officer of the
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Borrower (i) attaching copies of all consents, authorizations and filings
referred to in Section 7.4, and (ii) stating that such consents, licenses and
filings are in full force and effect, and each such consent, authorization and
filing shall be in form and substance reasonably satisfactory to the
Administrative Agent.
(l) Fees. The Administrative Agent and Documentation Agent shall have
received the fees to be received on the Closing Date referred to in the Fee
Letter.
(m) Legal Opinions. The Administrative Agent shall have received, with
a counterpart for each Lender, the following executed legal opinions:
(i) the executed legal opinion of ▇▇▇▇ ▇▇▇▇▇▇▇, P.C., counsel to
the Borrower and the other Loan Parties, substantially in the form of
Exhibit G-1; and
(ii) the executed legal opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇,
English counsel to the Borrower and the other Loan Parties matters,
substantially in the form of Exhibit G-2.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(n) Pledged Stock; Stock Powers. The Administrative Agent shall have
received the certificates representing the shares pledged pursuant to each of
the Pledge Agreements, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the pledgor
thereof. Each Issuer referred to in each Pledge Agreement shall have delivered
an acknowledgment of and consent to such Pledge Agreement, executed by a duly
authorized officer of such Issuer, in substantially the form appended to such
Pledge Agreement.
(o) Actions to Perfect Liens. The Administrative Agent shall have
received evidence in form and substance satisfactory to it that all filings,
recordings, registrations and other actions, including, without limitation, the
filing of duly executed financing statements on form UCC-1, necessary or, in the
opinion of the Administrative Agent, desirable to perfect the Liens created by
the Security Documents shall have been completed.
(p) Lien Searches. The Administrative Agent shall have received the
results of a recent search by a Person reasonably satisfactory to the
Administrative Agent, of the Uniform Commercial Code, judgment and tax lien
filings which may have been filed with respect to personal property of the
Borrower, and the results of such search shall be reasonably satisfactory to the
Administrative Agent.
(q) Insurance. The Administrative Agent shall have received evidence in
form and substance reasonably satisfactory to it that all of the requirements of
Section 9.5 hereof shall have been satisfied.
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8.2 Conditions to Each Loan. The agreement of each Lender to make any
Loan requested to be made by it on any date (including, without limitation, its
initial Loan) is subject to the satisfaction of the following conditions
precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Borrower and the other Loan Parties in or pursuant to
the Loan Documents shall be true and correct in all material respects on and
as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the Loans requested to
be made on such date.
(c) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents
shall be reasonably satisfactory in form and substance to the Administrative
Agent, and the Administrative Agent shall have received such other documents
and legal opinions in respect of any aspect or consequence of the
transactions contemplated hereby or thereby as it shall reasonably request.
Each borrowing by the Borrower thereunder shall constitute a representation and
warranty by the Borrower as of the date thereof that the conditions contained
in this Section 8.2 have been satisfied.
SECTION 9. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any of the Commitments
remain in effect or any amount is owing to any Lender or the Administrative
Agent hereunder or under any other Loan Document, the Borrower shall and (except
in the case of delivery of financial information, reports and notices) shall
cause each of its Subsidiaries to:
9.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days (or, if
later, the latest date by which the Borrower shall be required to file its
annual report on Form 10-K, but in no event later than 115 days) after the
end of each fiscal year of the Borrower, a copy of the consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of
such year and the related consolidated statements of income and retained
earnings and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without a
"going concern" or like qualification or exception, or qualification arising
out of the scope of the audit, by PricewaterhouseCoopers LLP or other
independent certified public accountants of nationally recognized standing;
and
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(b) as soon as available, but in any event not later than 45 days (or,
if later, the latest date by which the Borrower shall be required to file
its quarterly report on Form 10-Q, but in no event later than 50 days) after
the end of each of the first three quarterly periods of each fiscal year of
the Borrower, the unaudited consolidated balance sheet of the Borrower and
its consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and retained earnings and of
cash flows of the Borrower and its consolidated Subsidiaries for such
quarter and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit adjustments, provided
that, so long as the common stock of the Borrower is registered pursuant to
the Securities Exchange Act of 1934, as amended, quarterly financial
statements in compliance with the requirements of quarterly report on Form
10-Q shall be deemed to satisfy the requirements of this Section 9.1(b));
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein and with respect to unaudited financial statements, as to
the absence of footnotes and as to ordinary year-end audit adjustments).
9.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements referred
to in Section 9.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making
the examination necessary therefor no knowledge was obtained of any Default
or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred
to in Sections 9.1(a) and (b), a certificate of a Responsible Officer (i)
stating that, to the best of such Officer's knowledge, the Borrower during
such period has observed or performed all of its material covenants and
other agreements, and satisfied every material condition, contained in this
Agreement and the other Loan Documents to be observed, performed or
satisfied by it, and that such Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and (ii)
showing in reasonable detail the calculations supporting such Officer's
certification of the Borrower's compliance with the requirements of Section
10.1(a) through 10.1(c);
(c) not later than the last Business Day of each fiscal year of the
Borrower, a copy of the projections by the Borrower of the operating budget
of the Borrower and its Subsidiaries for the succeeding fiscal year, such
projections to be accompanied by a certificate of a Responsible Officer to
the effect that such projections have been prepared on the basis of sound
financial planning practice and that such Officer has no reason to believe
they are incorrect or misleading in any material respect. The parties hereto
acknowledge that all such projections are based on various facts and
assumptions which the Borrower believes are reasonable, but there can be no
assurance that such facts or
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assumptions will materialize as anticipated, and the actual results may
vary materially from such projections;
(d) within five days after the same are sent, copies of all financial
statements and reports which the Borrower sends to its stockholders, and
within five days after the same are filed, copies of all financial
statements and reports which the Borrower may make to, or file with, the
Securities and Exchange Commission or any successor or analogous
Governmental Authority;
(e) during the month of January in each calendar year, a report of a
reputable insurance broker with respect to the insurance maintained by the
Borrower and its Subsidiaries in accordance with Section 9.5 of this
Agreement and such supplemental reports as the Administrative Agent may from
time to time reasonably request; and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
9.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be.
9.4 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as otherwise permitted
pursuant to Section 10.5; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
9.5 Maintenance of Property; Insurance. Keep all property useful and
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but including
in any event public liability, product liability and business interruption) as
are usually insured against in the same general area by companies engaged in the
same or a similar business, which insurance shall name the Administrative Agent
as lender loss payee, in the case of property or casualty insurance, and as an
additional insured, in the case of liability insurance; and furnish to each
Lender, upon written request, full information as to the insurance carried.
9.6 Inspection of Property; Books and Records; Discussions. Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect, upon reasonable notice, any
of its properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired and to
discuss the
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business, operations, properties and financial and other condition
of the Borrower and its Subsidiaries with officers and employees of the Borrower
and its Subsidiaries and with its independent certified public accountants.
9.7 Notices. Promptly give notice to the Administrative Agent and each
Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Borrower
or any of its Subsidiaries and any Governmental Authority, which in either
case, if not cured or if adversely determined, as the case may be, could
have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount involved is $1,000,000 or more and not
covered by insurance or in which injunctive or similar relief is sought;
(d) the acquisition by any Loan Party of any interest in any Subsidiary
(or any Person which is anticipated to become a Subsidiary) that is not
subject to a perfected Lien in favor of the Administrative Agent pursuant to
the Security Documents;
(e) the occurrence of any transaction or occurrence referred to in
Sections 6.5(c), (e) or (f) and the receipt of any Net Proceeds or any
insurance proceeds as a result thereof (whether or not such Net Proceeds or
proceeds are then required to be applied to the repayment of Loans and
reduction of Revolving Credit Commitments as specified in Sections 6.5(c),
(e) or (f));
(f) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from,
or the termination, Reorganization or Insolvency of, any Multiemployer Plan
or (ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan; and
(g) any development or event which has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
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9.8 Environmental Laws. (a) Comply with, and ensure compliance by all
tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply in all material respects with and maintain, and ensure that
all tenants and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws except to the extent that
failure to do so could not be reasonably expected to have a Material Adverse
Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not be
reasonably expected to have a Material Adverse Effect.
9.9 Additional Collateral; Additional Guarantors. In the event that the
Borrower is permitted to acquire or form any additional Subsidiary, such
Subsidiary shall execute a guarantee, or a supplement to the Subsidiaries
Guarantee (except if such Subsidiary is a Foreign Subsidiary and a Responsible
Officer shall have certified to the Administrative Agent and the Lenders that
the execution or such a guarantee or supplement by such Foreign Subsidiary would
materially and adversely affect the tax position of such Subsidiary and of the
Borrower), and the Borrower and/or any Subsidiary which is a holder of any
Capital Stock of such Subsidiary shall execute such pledge agreements or
supplements to the Pledge Agreements, each in form and substance satisfactory to
the Administrative Agent, and shall take such other action as shall be necessary
or advisable (including, without limitation, the execution of financing
statements on form UCC-1) in order to effect and perfect the pledge in favor of
the Administrative Agent for the benefit of the Lenders of not less than (a) 65%
of the outstanding Capital Stock of such Subsidiary, if such Subsidiary is a
Foreign Subsidiary and a Responsible Officer shall have certified to the
Administrative Agent and the Lenders that the pledge of greater than 66-2/3% of
the Capital Stock of such Foreign Subsidiary would materially and adversely
affect the tax position of such Subsidiary and of the Borrower, or (b) all of
the Capital Stock of such Subsidiary, otherwise. Such Subsidiary shall thereupon
become a Guarantor for all purposes under the Loan Documents. The Administrative
Agent shall be entitled to receive legal opinions of one or more counsel to the
Borrower and such Subsidiary addressing such matters as the Administrative Agent
or its counsel may reasonably request, including, without limitation, the
enforceability of the guaranty and the security agreement to which such
Subsidiary becomes a party and the pledge of the Capital Stock of such
Subsidiary, and the creation, validity and perfection of the Liens so granted by
such Subsidiary and the Borrower and/or other Subsidiaries to the Administrative
Agent for the benefit of the Lenders.
SECTION 10. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any of the Commitments
remain in effect or any amount is owing to any Lender or the Administrative
Agent hereunder or under any other Loan Document, the Borrower shall not, and
(except with respect to Section 10.1) shall not permit any of its Subsidiaries
to, directly or indirectly:
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10.1 Financial Condition Covenants.
(a) Interest Coverage. Permit, for any Rolling Period ending during the
term of this Agreement, the ratio of (i) Consolidated EBITDA for such period to
(ii) Consolidated Interest Expense for such period to be less than 3.00 to 1.
(b) Fixed Charge Coverage. Permit, for any Rolling Period ended during
the term of this Agreement, the ratio of (i) Consolidated EBITDA for such period
to (ii) Consolidated Fixed Charges for such period to be less than 1.25 to 1.
(c) Total Debt to EBITDA. Permit, for any Rolling Period ended during
the term of this Agreement, the ratio of (i) the Consolidated Total Indebtedness
as of the last day of such period to (ii) Consolidated EBITDA for such period to
be greater than 3.00 to 1.
(d) Senior Indebtedness to Capitalization. Permit, at any time, the
ratio of Consolidated Senior Indebtedness as of such time to Consolidated
Capitalization as of such time to be greater than 0.45 to 1.
(e) Maintenance of Net Worth. Permit, as of the end of any fiscal
quarter of the Borrower during the term of this Agreement, Consolidated Net
Worth at the end of such period to be less than the sum of $52,000,000 plus (i)
50% of the positive aggregate Consolidated Net Income for each fiscal quarter
during the period beginning with the fiscal quarter ending on or about March 31,
1999, and ending as of the end of the fiscal quarter for which Consolidated Net
Worth is being measured, and (ii) 70% of the Net Proceeds of all sales or
issuances of equity securities of the Borrower or any Subsidiary, whether in a
public offering, a private placement or otherwise, other than amounts received
upon exercise of stock options issued pursuant to a stock option plan permitted
under this Agreement, completed during such period.
10.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement;
(b) Indebtedness of the Borrower to any Subsidiary Guarantor and of any
Subsidiary Guarantor to the Borrower or any other Subsidiary Guarantor;
(c) Indebtedness of the Borrower and any of its Subsidiaries incurred
to finance the acquisition of fixed or capital assets (whether pursuant to a
loan, a Financing Lease or otherwise) in an aggregate principal amount not
exceeding as to the Borrower and its Subsidiaries $5,000,000 at any time
outstanding;
(d) short-term Indebtedness of Foreign Subsidiaries incurred for
working capital purposes in an aggregate principal amount, together with the
aggregate amount of all investments made pursuant to Section 10.10(h), not
exceeding as to such Foreign Subsidiaries $6,000,000, at any time
outstanding;
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(e) Indebtedness outstanding on the date hereof and listed on Schedule
10.2 and any refinancings, refundings, renewals or extensions thereof;
(f) Indebtedness of a corporation which becomes a Subsidiary after the
date hereof, provided that (i) such Indebtedness existed at the time such
corporation became a Subsidiary and was not created in anticipation thereof
and (ii) immediately after giving effect to the acquisition of such
corporation by the Borrower no Default or Event of Default shall have
occurred and be continuing;
(g) additional unsecured Indebtedness of the Borrower not exceeding
$1,000,000 in aggregate principal amount at any one time outstanding;
(h) other Indebtedness of the Borrower or any Subsidiary incurred with
the prior written consent of the Administrative Agent which shall not be
unreasonably withheld and subordinated to the Indebtedness hereunder on
terms reasonably satisfactory to the Required Lenders;
(i) Indebtedness of the Borrower or any Subsidiary under any Hedge
Agreements; and
(j) without duplication, Indebtedness consisting of Investments
permitted under Section 10.10.
10.3 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP (or, in the case
of Foreign Subsidiaries, generally accepted accounting principles in effect
from time to time in their respective jurisdictions of incorporation);
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 60 days or which are being contested in
good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
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(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or such Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule 10.3,
securing Indebtedness permitted by Section 10.2(e), provided that no such
Lien is spread to cover any additional property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower and its Subsidiaries
permitted by Section 10.2(c) incurred to finance the acquisition of fixed or
capital assets, provided that (i) such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets, (ii)
such Liens do not at any time encumber any property other than the property
financed by such Indebtedness, (iii) the amount of Indebtedness secured
thereby is not increased and (iv) the principal amount of Indebtedness
secured by any such Lien shall at no time exceed 90% of the original
purchase price of such property of such property at the time it was
acquired;
(h) Liens on assets of any Foreign Subsidiary securing Indebtedness of
such Foreign Subsidiary permitted by Sections 10.2(d);
(i) Liens on the property or assets of a corporation which becomes a
Subsidiary after the date hereof securing Indebtedness permitted by Section
10.2(f), provided that (i) such Liens existed at the time such corporation
became a Subsidiary and were not created in anticipation thereof, (ii) any
such Lien is not spread to cover any property or assets of such corporation
after the time such corporation becomes a Subsidiary, and (iii) the amount
of Indebtedness secured thereby is not increased;
(j) Liens (not otherwise permitted hereunder) which secure obligations
not exceeding (as to the Borrower and all Subsidiaries) $250,000 in
aggregate amount at any time outstanding; and
(k) Liens created pursuant to the Security Documents.
10.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and listed on
Schedule 10.4;
(b) Guarantee Obligations incurred after the date hereof in an
aggregate amount not to exceed (i) $1,000,000 at any one time outstanding
for the Borrower and its Domestic Subsidiaries and (ii) $1,000,000 at any
one time outstanding for the Borrower's Foreign Subsidiaries;
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(c) guarantees made in the ordinary course of its business by the
Borrower of Indebtedness permitted by Section 10.2(c);
(d) Guarantee Obligations in respect of the undrawn portion of the face
amount of letters of credit issued for the account of the Borrower or any
Subsidiary in an aggregate amount not to exceed $1,000,000 at any one time
outstanding for the Borrower and its Subsidiaries;
(e) the Subsidiaries Guarantee; and
(f) Guarantee Obligations consisting of obligations of any Loan Party
to pay, reimburse, repurchase or otherwise hold harmless any Person against
any decrease in the market value of the common stock of the Borrower,
provided that for the most recent Rolling Period preceding the incurrence of
any such Guaranty Obligations, the ratio of (A) the Consolidated Total
Indebtedness of the Borrower as of the last day of such period to (B)
Consolidated EBITDA of the Borrower for such period (calculated on a
pro-forma basis as if such Guaranty Obligations had been incurred as of the
first day of such Rolling Period and for the purposes of calculating
Consolidated Total Indebtedness the amount of such Guaranty Obligations
shall be equal to the amount the applicable Loan Party would be required to
pay in respect of such Guaranty Obligations if the market value of the
common stock of the Borrower was zero but in no event exceed any maximum
liability that may be incurred in respect of such Guaranty Obligations
pursuant to and in accordance with the terms of the instruments creating
such Guaranty Obligations) is less than 1.75 to 1.
10.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting business
not otherwise permitted under Section 10.16, except:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any one or more wholly owned
Subsidiaries of the Borrower (provided that the wholly owned Subsidiary or
Subsidiaries shall be the continuing or surviving corporation);
(b) any wholly owned Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or any other wholly owned Subsidiary of the
Borrower; and
(c) in connection with Permitted Acquisitions.
10.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other
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than the Borrower or any wholly owned Subsidiary, except, provided that in each
case the Net Proceeds of each such transaction are applied to the prepayment of
the Loans to the extent provided in Section 6.5(c):
(a) the sale or other disposition of obsolete or worn out property in
the ordinary course of business;
(b) the sale or other disposition of any property in the ordinary
course of business, provided that (other than inventory) the aggregate book
value of all assets so sold or disposed of in any period of twelve
consecutive months shall not exceed 10% of the sum of consolidated total
assets of the Borrower and its Subsidiaries as at the beginning of such
twelve-month period and the Net Proceeds of issuances of equity issuances of
the Borrower during such twelve-month period;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise
or collection thereof;
(e) as permitted by Section 10.5(b);
(f) sales of up to 15% of the book value of the net equity investment
of the Borrower in any Foreign Subsidiary during the term of this Agreement;
and
(g) sales during any fiscal year of the Borrower of assets to which
were attributable to not more than 10% of the Consolidated EBITDA of the
Borrower during the most recently ended previous fiscal year (calculated on
a pro forma basis as if all acquisitions and dispositions during such
previous fiscal year had occurred at the beginning of such previous fiscal
year).
10.7 Limitation on Changes to Cash Management Practices. Change the
cash management practices of the Borrower and the Subsidiaries from their
practices on the Closing Date in any manner which would have a Material Adverse
Effect.
10.8 Limitation on Dividends. Declare or pay any dividend (other than
dividends payable solely in common stock of the Borrower) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of Capital Stock of the Borrower or any warrants or
options to purchase any such Stock, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Borrower or any Subsidiary
(such declarations, payments, setting apart, purchases, redemptions,
defeasances, retirements, acquisitions and distributions being herein called
"Restricted Payments"), except that the Borrower may repurchase Capital Stock of
the Borrower pursuant to its stock repurchase program for an aggregate
consideration not in excess of up to $10,000,000.
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10.9 Limitation on Capital Expenditures. Make or commit to make (by way
of the acquisition of securities of a Person or otherwise) any expenditure in
respect of the purchase or other acquisition of fixed or capital assets
(excluding any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations) except for
expenditures in connection with the Permitted Acquisitions and expenditures in
the ordinary course of business not exceeding $5,000,000, in the aggregate for
the Borrower and its Subsidiaries, during any fiscal year, provided that the
Borrower may carry forward up to one-half of such amount for any fiscal year to
the immediately succeeding fiscal year if such amount is not utilized.
10.10 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) in connection with Permitted Acquisitions;
(d) loans to officers of the Borrower listed on Schedule 10.10 in
aggregate principal amounts outstanding not to exceed the respective amounts
set forth for such officers on said Schedule;
(e) loans and advances to employees of the Borrower or its Subsidiaries
for travel, entertainment and relocation expenses in the ordinary course of
business in an aggregate amount for the Borrower and its Subsidiaries not to
exceed $250,000 at any one time outstanding;
(f) investments by the Borrower in Subsidiary Guarantors and
investments by such Subsidiary Guarantors in the Borrower and in other
Subsidiary Guarantors;
(g) loans by the Borrower to its employees in connection with
management incentive plans in an aggregate amount not to exceed $500,000;
(h) investments in Foreign Subsidiaries in an aggregate amount,
together with the aggregate principal amount of all Indebtedness outstanding
pursuant to Section 10.2(d), not exceeding $6,000,000 at any time
outstanding;
(i) venture investments for purposes of technological development
related to the lines of business described in Section 10.16 in an aggregate
amount not to exceed at any time 5% of the book value of the equity of the
Borrower at such time;
(j) open-market purchases of publicly traded securities made for the
ultimate purpose of consummating a Permitted Acquisition in an aggregate
amount not to exceed
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at any time prior to the consummation of such Permitted Acquisition 5%
of the book value of the equity of the Borrower at such time; and
(k) Investments consisting of Indebtedness permitted under Section
10.2.
10.11 Limitation on Optional Payments and Modifications of Debt
Instruments and Acquisition Documents. (a) Make any optional payment or
prepayment on or redemption or purchase of any Indebtedness (other than the
Loans), (b) amend, modify or change, or consent or agree to any amendment,
modification or change to any of the terms of any such Indebtedness (other than
any such amendment, modification or change which would extend the maturity or
reduce the amount of any payment of principal thereof or which would reduce the
rate or extend the date for payment of interest thereon); or (c) amend, modify
or change, or consent or agree to any amendment, modification or change to any
of the terms of the ▇▇▇▇ Acquisition Documents.
10.12 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property, the rendering of any service, or the payment of any
management fees or management compensation, with any Affiliate unless such
transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary
course of the Borrower's or such Subsidiary's business and (c) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person which is not an Affiliate.
10.13 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower or such Subsidiary.
10.14 Limitation on Changes in Fiscal Year. Permit the fiscal year of
the Borrower to end on a day other than December 31.
10.15 Limitation on Negative Pledge Clauses. Enter into with any Person
any agreement, other than (a) this Agreement, and (b) any industrial revenue
bonds, purchase money mortgages or Financing Leases permitted by this Agreement
(in which cases, any prohibition or limitation shall only be effective against
the assets financed thereby), which prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired.
10.16 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for businesses having some material
application to the manufacture, development, distribution, marketing and sale of
law enforcement products and security, investigative, risk management and
similar business services, and lines of business related thereto.
10.17 Governing Documents. Amend its certificate of incorporation
(except to increase the number of authorized shares of common stock),
partnership agreement or other
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Governing Documents, without the prior written consent of the Required Lenders,
which shall not be unreasonably withheld or delayed.
10.18 Limitation on Subsidiary Formation. Form any Subsidiaries unless,
immediately upon the formation of such Subsidiary, all requirements of Section
9.9 shall have been satisfied.
10.19 Limitation on Securities Issuances. (A) Permit any Domestic
Subsidiary to issue any shares of Capital Stock that are not "certificated
securities" (as defined in ss. 8-102 of the Uniform Commercial Code as in effect
in the State of New York on the date hereof) and are not pledged to the
Administrative Agent pursuant to a Pledge Agreement or (B) issue or permit any
Subsidiary to issue any shares of preferred stock.
SECTION 11. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan when due
in accordance with the terms thereof or hereof; or the Borrower shall fail
to pay any interest on any Loan, or any other amount payable hereunder or
under the other Loan Documents or the Fee Letter, within five days after any
such interest or other amount becomes due in accordance with the terms
thereof or hereof; or
(b) Any representation or warranty made or deemed made by the Borrower
or any other Loan Party herein or in any other Loan Document or which is
contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or
any such other Loan Document shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 10, or
Section 5 of any Pledge Agreement; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other material agreement contained in this
Agreement or any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Section), and such default shall continue unremedied
for a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest of any Indebtedness (other than the
Loans) or in the payment of any Guarantee Obligation, beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee Obligation was created,
if the aggregate amount of the Indebtedness and/or Guarantee Obligations in
respect of which such default or defaults shall have occurred is at least
$1,000,000; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or Guarantee
Obligation or contained in any
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instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit the holder or holders
of such Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or Administrative Agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to become due prior to its stated maturity or
such Guarantee Obligation to become payable; or
(f) (i) The Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Borrower or any of its Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any of its Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above which
(A) results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the Borrower or
any of its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry
of an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the entry
thereof; or (iv) the Borrower or any of its Subsidiaries shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Borrower or any of its Subsidiaries shall generally not,
or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a withdrawal
from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi)
any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i)
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through (vi) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $1,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof; or
(i) (i) Any of the Security Documents shall cease, for any reason, to
be in full force and effect, or the Borrower or any other Loan Party which
is a party to any of the Security Documents shall so assert or (ii) the Lien
created by any of the Security Documents shall cease to be enforceable and
of the same effect and priority purported to be created thereby; or
(j) The Subsidiaries Guarantee shall cease, for any reason, to be in
full force and effect or any Subsidiary Guarantor shall so assert; or
(k) (i) Any Person or "group" (within the meaning of Section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended) other than the
existing executive officers and directors of the Borrower as of the Closing
Date and their Affiliates (A) shall have acquired beneficial ownership of
25% or more of any outstanding class of Capital Stock having ordinary voting
power in the election of directors of the Borrower or (B) shall obtain the
power (whether or not exercised) to elect a majority of the Borrower's
directors or (ii) the Board of Directors of the Borrower shall not consist
of a majority of Continuing Directors; "Continuing Directors" shall mean the
directors of the Borrower on the Closing Date and each other director, if
such other director's nomination for election to the Board of Directors of
the Borrower is recommended by a majority of the then Continuing Directors;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions
may be taken: (i) with the consent of the Required Lenders, the Administrative
Agent may, or upon the request of the Required Lenders, the Administrative
Agent shall, by notice to the Borrower declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement (including, without limitation,
all amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit have presented the documents required thereunder)
to be due and payable forthwith, whereupon the same shall immediately become
due and payable. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
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With respect to all Letters of Credit with respect to which presentment
for honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, the Borrower shall at such time deposit in a cash
collateral account opened by the Administrative Agent an amount equal to the
aggregate then undrawn and unexpired amount of such Letters of Credit. The
Borrower hereby grants to the Administrative Agent, for the benefit of the
Issuing Lender and the L/C Participants, a security interest in such cash
collateral to secure all obligations of the Borrower under this Agreement and
the other Loan Documents. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to
repay other obligations of the Borrower hereunder and under the Notes. After all
such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the Notes shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower. The Borrower shall execute and deliver to the Administrative Agent,
for the account of the Issuing Lender and the L/C Participants, such further
documents and instruments as the Administrative Agent may reasonably request to
evidence the creation and perfection of the within security interest in such
cash collateral account.
SECTION 12. THE ADMINISTRATIVE AGENT
12.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
12.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
Administrative Agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
12.3 Exculpatory Provisions. Neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other
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document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or any other Loan Document or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or any other Loan Document or for any failure of the Borrower
to perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower.
12.4 Reliance by Agent. The Administrative 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, telex or teletype message, statement, order or other
document or conversation reasonably 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 or any other Loan Party), independent accountants and other
experts selected by the Administrative Agent. The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate 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 Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents 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 future holders of the Loans.
12.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower 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 Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative 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
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
12.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Administrative Agent
hereinafter taken, including any review of the affairs of the Borrower or any
other Loan Party, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent
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that it has, independently and without reliance upon the Administrative 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 business,
operations, property, financial and other condition and creditworthiness of the
Borrower and the other Loan Parties and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Administrative 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 the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or under the other Loan Documents, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower or any other Loan Party which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
12.7 Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Credit Exposure Percentages in effect on the date on which
indemnification is sought, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Administrative 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 solely from the
Administrative Agent's gross negligence or willful misconduct. If the
Administrative Agent shall receive reimbursement from the Borrower for amounts
paid by any Lender pursuant to this Section 12.7, the Administrative Agent will
distribute to such Lender its pro rata share of such reimbursement; provided,
however, that in the event that any such reimbursement received by the
Administrative Agent shall be required to be returned by the Administrative
Agent, such Lender shall return to the Administrative Agent the portion thereof
previously distributed by the Administrative Agent to it. The agreements in this
Section shall survive the payment of the Loans and all other amounts payable
hereunder.
12.8 Agent in Its Individual Capacity. The Administrative Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower and the other Loan Parties as though the
Administrative Agent were not the Administrative Agent hereunder and under the
other Loan Documents. With respect to the Loans made by it, the Administrative
Agent shall have the same rights and powers under this
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Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
12.9 Successor Agent. The Administrative Agent may resign as
Administrative Agent upon 10 days' notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor Administrative Agent for the Lenders, which
successor Administrative Agent shall be approved by the Borrower, whereupon such
successor Administrative Agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent" shall mean such
successor Administrative Agent effective upon such appointment and approval, and
the former Administrative Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the part
of such former Administrative Agent or any of the parties to this Agreement or
any holders of the Loans. After any retiring Administrative Agent's resignation
as Administrative Agent, the provisions of this Section 12 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
SECTION 13. MISCELLANEOUS
13.1 Amendments and Waivers. Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 13.1. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrower
written amendments, supplements or modifications hereto and to the other Loan
Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Borrower hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders or the Administrative Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) reduce the amount or extend the scheduled date of
maturity of any Loan or of any installment thereof, or reduce the stated rate of
any interest or fee payable hereunder or extend the scheduled date of any
payment thereof or increase the aggregate amount or extend the expiration date
of any Lender's Commitments, in each case without the consent of each Lender
affected thereby, or (ii) amend, modify or waive any provision of this Section
13.1 or reduce the percentage specified in the definition of Required Lenders,
or consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement and the other Loan Documents or release all
or substantially all of the Collateral or release all or substantially all of
the Guarantors from their obligations under the Guarantee, in each case without
the written consent of each of the Lenders directly affected thereby, or (iii)
amend, modify or waive any provision of Section 12 without the written consent
of the then Administrative Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Borrower, the Lenders,
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the Administrative Agent and all future holders of the Loans. In the case of any
waiver, the Borrower, the Lenders and the Administrative Agent shall be restored
to their former positions and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
13.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by certified mail, three days after
being deposited in the mails, postage prepaid and return receipt requested, or
(c) in the case of delivery by facsimile transmission, when sent and receipt has
been electronically confirmed, addressed as follows in the case of the Borrower
and the Administrative Agent, and as set forth in Schedule I in the case of the
other parties hereto, or to such other address as may be hereafter notified by
the respective parties hereto:
The Borrower: Armor Holdings, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ ▇▇▇▇▇▇▇, P.C.
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: Canadian Imperial Bank of Commerce
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Section 2.3, 2.5, 2.6, 3.3, 3.5, 4.1, 6.2, 6.4 or
6.8(b) shall not be effective until received.
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13.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
13.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
13.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all its out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent, (b) to pay or reimburse
each Lender and the Administrative Agent for all its costs and expenses incurred
in connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel (including
the allocated fees and expenses of in-house counsel) to each Lender and of
counsel to the Administrative Agent, (c) to pay, indemnify, and hold each Lender
and the Administrative Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, (excluding income and withholding
taxes, branch profits taxes, franchise taxes or similar taxes imposed on any
Lender as a result of any present or former connection between such Lender, and
the relevant taxing jurisdiction, other than any such connection arising solely
from such Lender having enforced this Agreement) which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents, the Refinancing or the use of the proceeds
of the Loans in connection with the Refinancing and any such other documents,
including, without limitation, any of the foregoing relating to the violation
of, noncompliance with or liability under, any Environmental Law applicable to
the operations of the Borrower, any of its Subsidiaries, or any of the
Properties (all the foregoing in this clause (d), collectively, the "indemnified
liabilities"), provided, that the Borrower shall have no obligation hereunder to
the Administrative Agent or any Lender with respect to indemnified liabilities
arising from (i) the gross negligence or willful misconduct of the
Administrative Agent or any such Lender or (ii)
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legal proceedings commenced against the Administrative Agent or any such Lender
by any security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such.
The agreements in this Section shall survive repayment of the Loans and all
other amounts payable hereunder.
13.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
owing to such Lender, any Commitment of such Lender or any other interest of
such Lender hereunder and under the other Loan Documents. In the event of any
such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan for
all purposes under this Agreement and the other Loan Documents, and the Borrower
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. The Borrower agrees that if amounts
outstanding under this Agreement are due or unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall, to the maximum extent permitted by applicable law, be
deemed to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 13.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 6.10, 6.11, and 6.12 with respect to its participation
in the Commitments and the Loans outstanding from time to time as if it was a
Lender; provided that, in the case of Section 6.11, such Participant shall have
complied with the requirements of said Section and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time to
time assign to any Lender or any affiliate thereof or, with the consent of the
Administrative Agent, the Issuing Lender and, so long as no Default or Event of
Default has occurred and is continuing, the Borrower (which in each case shall
not be unreasonably withheld), to an additional bank or financial institution
(an "Assignee") all or any part of its rights and obligations under this
Agreement and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit H, with appropriate completions (an
"Assignment and
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Acceptance"), executed by such Assignee, such assigning Lender (and, in the case
of an Assignee that is not then a Lender or an affiliate thereof, by the
Administrative Agent, the Issuing Lender and, so long as no Default or Event of
Default has occurred and is continuing, the Borrower) and delivered to the
Administrative Agent for its acceptance and recording in the Register, provided
that, in the case of any such assignment to an additional bank or financial
institution, the sum of the aggregate principal amount of the Loans, the
aggregate amount of the unused Commitments being assigned, the aggregate amount
of L/C Obligations and, if such assignment is of less than all of the rights and
obligations of the assigning Lender, the sum of the aggregate principal amount
of the Loans and the aggregate amount of the unused Commitments remaining with
the assigning Lender are each not less than $5,000,000 (or such lesser amount as
may be agreed to by the Administrative Agent and, so long as no Default or Event
of Default has occurred and is continuing, the Borrower). Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with Commitments as set
forth therein, and (y) the assigning Lender thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this paragraph (c) and paragraph (e) of this
Section, the consent of the Borrower shall not be required, and, unless
requested by the Assignee and/or the assigning Lender, new Notes shall not be
required to be executed and delivered by the Borrower, for any assignment which
occurs at any time when any of the events described in Section 11(f) shall have
occurred and be continuing.
(d) The Administrative Agent, on behalf of the Borrower, shall maintain
at the address of the Administrative Agent referred to in Section 13.2 a copy of
each Assignment and Acceptance delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amounts of the Loans owing to, each Lender from
time to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent and the Lenders may
(and, in the case of any Loan or other obligation hereunder not evidenced by a
Note, shall) treat each Person whose name is recorded in the Register as the
owner of a Loan or other obligation hereunder as the owner thereof for all
purposes of this Agreement and the other Loan Documents, notwithstanding any
notice to the contrary. Any assignment of any Loan or other obligation hereunder
not evidenced by a Note shall be effective only upon appropriate entries with
respect thereto being made in the Register. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Administrative Agent, the Issuing
Lender and, if applicable, the Borrower) together with payment by the Assignor
or the Assignee to the Administrative Agent of a registration and processing fee
of $3,500, the Administrative Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto
-72-
record the information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any Participant
or Assignee (each, a "Transferee") and any prospective Transferee, subject to
the provisions of Section 13.15, any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates which has been
delivered to such Lender by or on behalf of the Borrower pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Borrower in connection with such Lender's credit evaluation of the Borrower and
its Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
13.7 Adjustments; Set-off. (a) If any Lender (a "benefited Lender")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 11(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Loans, or interest thereon, such benefited Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefited Lender to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender's Loan may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set-off and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
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13.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
facsimile transmission of signature pages hereto), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent.
13.9 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.
13.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Borrower, the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
13.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
13.12 Submission To Jurisdiction; Waivers. Each party hereto hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the
State of New York located in New York county, the courts of the United
States of America for the Southern District of New York, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action
or proceeding was brought in an inconvenient court and agrees not to plead
or claim the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to the Borrower at
its address set forth in Section 13.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to
▇▇▇ in any other jurisdiction; and
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(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
13.13 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection
with this Agreement or any of the other Loan Documents, and the relationship
between the Borrower and the other Loan Parties, on one hand, and
Administrative Agent and Lenders, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Borrower and the Lenders.
13.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
13.15 Confidentiality. Each Lender agrees to keep confidential all
non-public information provided to it by the Borrower pursuant to this Agreement
that is designated by the Borrower in writing as confidential; provided that
nothing herein shall prevent any Lender from disclosing any such information (i)
to the Administrative Agent or any other Lender, (ii) to any Transferee which
receives such information having been made aware of the confidential nature
thereof and agrees in writing to be bound by the terms of this section 13.15,
(iii) to its employees, directors, Administrative Agents, attorneys, accountants
and other professional advisors, (iv) upon the request or demand of any examiner
or other Governmental Authority having jurisdiction over such Lender, (v) in
response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (vi) which has been
publicly disclosed other than in breach of this Agreement, or (vii) in
connection with the exercise of any remedy hereunder.
13.16 Usury Savings Clause. Anything in this Agreement or the Notes to
the contrary notwithstanding, the obligation of the Borrower to make payments of
interest shall be subject to the limitation that payments of interest shall not
be required to be made to the extent that a Lender's receipt thereof would not
be permissible under the law or laws applicable to it limiting rates of interest
which may be charged or collected by it. Any such amount of interest which is
not paid as a result of the limitation referred to in the preceding sentence
shall be carried forward and paid by the Borrower to such Lender on the earliest
date or dates on which any interest is payable under this Agreement and on which
the receipt thereof is permissible
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under the laws applicable to such Lender limiting rates of interest which may be
charged or collected by such Lender. Such payment shall be made as additional
interest for the month preceding such interest payment date. Such deferred
payments shall not bear interest.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
ARMOR HOLDINGS, INC.
By:
--------------------------------------
Name
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By:
--------------------------------------
Name
Title:
NATIONSBANK, N.A.,
as Documentation Agent and as a Lender
By:
--------------------------------------
Name
Title:
CIBC, INC.,
By:
--------------------------------------
Name
Title:
FIRST UNION NATIONAL BANK
By:
--------------------------------------
Name
Title:
SUNTRUST BANK, NORTH FLORIDA, N.A.
By:
--------------------------------------
Name: C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: First Vice President
CIBC, INC.,
By:
--------------------------------------
Name
Title:
EXHIBIT E
CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of February
12, 1999, among Armor Holdings, Inc., the lenders parties thereto, NationsBank
N.A., as Documentation Agent, and Canadian Imperial Bank of Commerce, as
Administrative Agent (as amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"). Pursuant to the provisions of
Section 6.11(b)(i)(B) of the Credit Agreement, the undersigned hereby certifies
that it is not a "bank" as such term is defined in Section 881(c)(3)(A) of the
Internal Revenue Code of 1986, as amended.
[NAME OF LENDER]
By:
--------------------------------------
Title:
Date: ,
--------------------- ----
Schedule I
LENDERS, COMMITMENTS, AND APPLICABLE LENDING OFFICES
------------------------------------------------------------------------------------------------------------------------
364-Day Revolving Five-Year Revolving
Lender and Lending Offices Credit Commitments Credit Commitment Total Commitment
------------------------------------------------------------------------------------------------------------------------
CIBC, Inc. $5,833,333.00 $11,666,667.00 $17,500,000.00
Applicable Lending Offices:
LIBOR Loans:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Base Rate Loans:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
NationsBank, N.A. $5,833,333.00 $11,666,667.00 $17,500,000.00
Applicable Lending Offices:
LIBOR Loans:
▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Base Rate Loans:
▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------------
S1-1
------------------------------------------------------------------------------------------------------------------------
364-Day Revolving Five-Year Revolving
Lender and Lending Offices Credit Commitments Credit Commitment Total Commitment
------------------------------------------------------------------------------------------------------------------------
First Union National Bank $4,166,667.00 $8,333,333.00 $12,500,000.00
Applicable Lending Offices:
LIBOR Loans:
FL 0011
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Base Rate Loans:
FL 0011
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
SunTrust Bank $4,166,667.00 $8,333,333.00 $12,500,000.00
Applicable Lending Offices:
LIBOR Loans:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Base Rate Loans:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------------
Totals $20,000,000.00 $40,000,000.00 $60,000,000.00
------------------------------------------------------------------------------------------------------------------------
Schedule 2.6
SCHEDULED TERM LOAN REPAYMENTS
The Term Loans (if any) shall be repaid in 16 quarterly installments of
principal, payable on the last day of each March, June, September and December,
commencing June 30, 2000 in amounts equal to the percentages set forth below
opposite such installment below of the aggregate principal amount of the Term
Loans outstanding on the Conversion Date (as the same may be reduced in
accordance with the Agreement):
Installment Date Percentage
---------------- ----------
June 30, 2000 6.25%
September 30, 2000 6.25%
December 31, 2000 6.25%
March 31, 2001 6.25%
June 30, 2001 6.25%
September 30, 2001 6.25%
December 31, 2001 6.25%
March 31, 2002 6.25%
June 30, 2002 6.25%
September 30, 2002 6.25%
December 31, 2002 6.25%
March 31, 2003 6.25%
June 30, 2003 6.25%
September 30, 2003 6.25%
December 31, 2003 6.25%
March 31, 2004 6.25%
S2.6-1
Schedule 7.15
SUBSIDIARIES
DOMESTIC SUBSIDIARIES:
Jurisdiction
Name Address of Formation Ownership
---- ------- ------------ ---------
FOREIGN SUBSIDIARIES:
Jurisdiction
Name Address of Formation Ownership
---- ------- ------------ ---------
S7.15-1
Schedule 7.16
FILINGS
S7.16-1
Schedule 7.19
INSURANCE
S7.19-1
Schedule 7.22
ENVIRONMENTAL MATTERS
S7.22-1
Schedule 10.2
INDEBTEDNESS
S10.2-1
Schedule 10.3
LIENS
S10.3-1
Schedule 10.4
GUARANTEE OBLIGATIONS
S10.4-1