Exhibit 4.20
CREDIT AGREEMENT
Dated as of July 31, 1998
among
NS GROUP, INC.,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent,
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . 1
1.01 Certain Defined Terms. . . . . . 1
1.02 Other Interpretive Provisions. . 19
1.03 Accounting Principles. . . . . 20
ARTICLE II
THE CREDITS. . . . . . . . . . . . . . . . . . 20
2.01 Amounts and Terms of Commitments 20
2.02 Loan Accounts. . . . . . . . . . 20
2.03 Procedure for Borrowing. . . . . . 21
2.04 Conversion and Continuation Elections. 22
2.05 Voluntary Termination or Reduction of
Commitments. . . . . . 23
2.06 Optional Prepayments . . . . . . . . . 23
2.07 Mandatory Prepayments of Loans;
Mandatory Commitment Reductions;
Asset Dispositions . . . . . . . . . . . 24
2.08 Repayment. . . . . . . . . . . .. . . . . 24
2.09 Interest . . . . . . . . . . . .. . . . . 24
2.10 Fees . . . . . . . . . . . . . .. . . . . 25
(a) Closing Fee . . . . . . . .. . . . . 25
(b) Agency Fee. . . . . . . . .. . . . . 26
(c) Commitment Fees . . . . . .. . . . . 26
2.11 Computation of Fees and Interest . .. . . 27
2.12 Payments by the Company. . . . . . . .. . 27
2.13 Letter of Credit Fees. . . . . . . . . . 28
2.14 Letter of Credit Issuance Request. . . .. 28
2.15 Issuance of Letters of Credit. . . . . . 29
2.16 Disbursements. . . . . . . . . . .. . . . 29
2.17 Reimbursement. . . . . . . . . . .. . . . 30
2.18 Deemed Disbursements . . . . . . . . . .. 30
2.19 Nature of Reimbursement Obligations. . . 31
2.20 Payments by the Banks to the Agent . .. . 31
2.21 Sharing of Payments, Etc.. . . .. . . . . 32
2.22 Security and Guaranty. . . . . . . . . . 33
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY . . 33
3.01 Taxes. .. . . . . . . . . . .. . . . . . 33
3.02 Illegality .. . . . . . .. . . . . . . . 34
3.03 Increased Costs and Reduction of Return. 35
3.04 Funding Losses .. . . . . . . . . . . . . 36
3.05 Inability to Determine Rates. . . . . . . 36
3.06 Reserves on Offshore Rate Loans. . . . 37
3.07 Certificates of Banks. .. . . . . . . . . 37
3.08 Substitution of Banks. . .. . . . . . . . 37
3.09 Survival . . . . . . . . . . . . . . . . 37
ARTICLE IV
CONDITIONS PRECEDENT . . . . . . . . . . . . . . 37
4.01 Conditions of Initial Loans and
Letters of Credit. . . . . . . 37
(a) Credit Agreement and Notes.. . . . . 37
(b) Resolutions; Incumbency. . . . . . . 38
(c) Organization Documents; Good
Standing . . . . . . . . . . 38
(d) Legal Opinions.. . . . . . . . . . . 38
(e) Payment of Fees . .. . . . . . . . . 38
(f) Collateral Documents. .. . . . . . . 38
(g) Insurance Policies. .. . . . . . . . 39
(h) Environmental Review.. . . . . . . . 39
(i) Certificate .. . . . . . . . . . . . 39
(j) Certain Senior Indebtedness .. . . . 40
(k) Financial Projections .. . . . . . . 40
(l) Other Documents . .. . . . . . . . . 40
4.02 Conditions to All Borrowings . . . . . . 40
(a) Notice of Borrowing or
Conversion/Continuation . . . . . . 40
(b) Continuation of Representations
and Warranties . . . . . . 40
(c) No Existing Default . . . .. . . . . 40
(d) No Future Advance Notice. .. . . . . 40
ARTICLE V
REPRESENTATIONS AND WARRANTIES . . . . . . . . . 41
5.01 Corporate Existence and Power. . . . . . 41
5.02 Corporate Authorization
No Contravention. .. . . . . . 41
5.03 Governmental Authorization . . . . . . . 41
5.04 Binding Effect . . . . . . . . . . . . . 42
5.05 Litigation . . . . . . . . . . . . . 42
5.06 No Default . . . . . . . . . . . . . . . 42
5.07 ERISA Compliance . . . . . . . . . . . . 42
5.08 Use of Proceeds; Margin Regulations. . . 43
5.09 Title to Properties. . . . . . . . . . . 43
5.10 Taxes. . . . . . . . . . . . . . . . . . 43
5.11 Financial Condition. . . . . . . . . . . 43
5.12 Environmental Matters. . . . . . . . . . 44
5.13 Collateral Documents . . . . . . . . . . 45
5.14 Regulated Entities . . . . . . . . . . . 45
5.15 No Burdensome Restrictions . . . . . . . 45
5.16 Copyrights, Patents, Trademarks and
Licenses, et . . . 45
5.17 Subsidiaries . . . . . . . . . . . . . . 45
5.18 Insurance. . . . . . . . . . . . . . . . 46
5.19 Solvency . . . . . . . . . . . . . . . 46
5.20 Full Disclosure. . . . . . . . . . . . . 46
ARTICLE VI
AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . 46
6.01 Financial Statements . . . . . . . . . . 46
6.02 Certificates; Other Information. . . . . 47
6.03 Notices. . . . . . . . . . . . . . . . 48
6.04 Preservation of Corporate Existence, Et 49
6.05 Maintenance of Property. . . . . . . . . 49
6.06 Insurance. . . . . . . . . . . . . . . . 50
6.07 Payment of Obligations . . . . . . . . . 50
6.08 Compliance with Laws . . . . . . . . . . 50
6.09 Compliance with ERISA. . . . . . . . . . 50
6.10 Inspection of Property and Books
and Records . . . .. . . . . 51
6.11 Environmental Laws . . . . . . . . . . . 51
6.12 Use of Proceeds. . . . . . . . . . . . . 51
6.13 Further Assurances . . . . . . . . . . . 51
ARTICLE VII
NEGATIVE COVENANTS . . . . . . . . . . . . . . . 52
7.01 Limitation on Liens. . . . . . . . . . . 52
7.02 Disposition of Assets. . . . . . . . . . 54
7.03 Consolidations and Mergers . . . . . . . 54
7.04 Loans and Investments. . . . . . . . . . 55
7.05 Limitation on Indebtedness . . . . . . . 56
7.06 Transactions with Affiliates . . . . . . 56
7.07 Use of Proceeds. . . . . . . . . . . . . 56
7.08 Contingent Obligations . . . . . . . . . 56
7.09 Joint Ventures . . . . . . . . . . . . . 57
7.10 Lease Obligations. . . . . . . . . . . . 57
7.11 Restricted Payments. . . . . . . . . . . 57
7.12 ERISA. . . . . . . . . . . . . . . . . 57
7.13 Capital Expenditures . . . . . . . . . . 57
7.14 Debt to Cash Flow Ratio. . . . . . . . . 58
7.15 Interest Coverage Ratio. . . . . . 58
7.16 Working Capital Ratio. . . 58
7.17 Minimum Adjusted Net Worth ... . . . . . 58
7.18 Change in Business . . . . . . . . . . . 58
7.19 Accounting Changes . . . . . . . . . . . 58
ARTICLE VIII
EVENTS OF DEFAULT. . . . . . . . . . . . . . . . 58
8.01 Event of Default . . . . . . . . . . . . 58
(a) Non-Payment . . . . . . . . . . . . 58
(b) Representation or Warranty. . . . . 58
(c) Specific Defaults . . . . . . . . . 59
(d) Other Defaults. . . . . . . . . . . 59
(e) Cross-Default . . . . . . . . . . . 59
(f) Insolvency; Voluntary Proceedings . 59
(g) Involuntary Proceedings . . . . . 60
(h) ERISA . . . . . . . . . . . . . . . 60
(i) Monetary Judgments. . . . . . . . . 60
(j) Non-Monetary Judgments. . . . . . . . 60
(k) Change of Control . . . . . . . . . . 60
(l) Loss of Licenses. . . . . . . . . . . 60
(m) Adverse Change. . . . . . . . . . . . 61
(n) Guarantor Defaults. . . . . . . . . . 61
(o) Collateral. . . . . . . . . . . . . . 61
8.02 Remedies . . . . . . . . . . . . . . . . 61
8.03 Rights Not Exclusive . . . . . . . . . .. 62
8.04 Certain Financial Covenant Defaults. . . 62
ARTICLE IX
THE AGENT. . . . . . . . . . . . . . . . . . . . 62
9.01 Appointment and Authorization; "Agent" . 62
9.02 Delegation of Duties . . . . . . . . . . 63
9.03 Liability of Agent . . . . . . .. . . . . 63
9.04 Reliance by Agent. . . . . . . . . .. . . 63
9.05 Notice of Default. . . . . . . .. . . . . 64
9.06 Credit Decision. . . . . . . . .. . . . . 64
9.07 Indemnification of Agent . . . .. . . . . 65
9.08 Agent in Individual Capacity . . . . .. . 65
9.09 Successor Agent. . . . . . . . .. . . . . 65
9.10 Withholding Tax. . . . . . . . . . . . 66
9.11 Collateral Matters . . . . . . . . . .. . 67
ARTICLE X
MISCELLANEOUS. . . . . . . . . . . . . . . . . . 68
10.01 Amendments and Waivers . . . . . . . . . 68
10.02 Notices. . . . . . . . . . . . . . . . . 69
10.03 No Waiver; Cumulative Remedies . .. . . . 70
10.04 Costs and Expenses .. . . . . . . . . . . 70
10.05 Company Indemnification.. . . . . . . . . 70
10.06 Marshalling; Payments Set Aside. .. . . . 72
10.07 Successors and Assigns. . . . . . . . . . 72
10.08 Assignments, Participations, et.. . . . . 72
10.09 Confidentiality. .. . . . . . . . . . . . 74
10.10 Set-off. . . .. . . . . . . . . . . . . . 74
10.11 Automatic Debits of Fees. . . . . . . . . 74
10.12 Notification of Addresses,
Lending Offices, Et . . . . . . . . . . . 75
10.13 Counterparts. . . . . . . . . . . . . . . 75
10.14 Severability . . . . . . . . . . . . . . 75
10.15 No Third Parties Benefited .. . . . . . . 75
10.16 Governing Law and Jurisdiction . . . . . 75
10.17 Waiver of Jury Trial .. . . . . . . . . . 76
10.18 Entire Agreement . .. . . . . . . . . . . 76
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of July 31,
1998 , among NS GROUP, INC., a Kentucky corporation (the
"Company"), the several financial institutions from time to
time party to this Agreement (collectively, the "Banks";
individually, a "Bank"), and Bank of America National Trust
and Savings Association, as agent for the Banks.
WHEREAS, the Banks have agreed to make available to
the Company a secured revolving credit facility upon the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual
agreements, provisions and covenants contained herein, the
parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms have
the following meanings:
"Accounts Receivable" means any right of the
Company and its Subsidiaries to payment for goods sold or
leased or services rendered in the ordinary course of
business, minus any bad debt or similar reserves, as
determined on a consolidated basis in accordance with GAAP.
"Acquisition" means any transaction or series of
related transactions for the purpose of or resulting,
directly or indirectly, in (a) the acquisition of all or
substantially all of the assets of a Person, or of any
business or division of a Person, (b) the acquisition of in
excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise
causing any Person to become a Subsidiary, or (c) a merger
or consolidation or any other combination with another
Person (other than a Person that is a Subsidiary) provided
that the Company or the Subsidiary is the surviving entity.
"Adjusted Net Worth" means the consolidated
shareholders' equity of the Company and its Subsidiaries
(which shall exclude any amount at which shares of the
capital stock of the Company appear as treasury stock) as
determined on a consolidated basis in accordance with GAAP.
"Affiliate" means, as to any Person, any other
Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such
Person. A Person shall be deemed to control another Person
if the controlling Person possesses, directly or indirectly,
the power to direct or cause the direction of the
management and policies of the other Person, whether through
the ownership of voting securities, membership interests, by
contract, or otherwise.
"Agent" means BofA in its capacity as agent for
the Banks hereunder, and any successor agent arising under
Section 9.09.
"Agent-Related Persons" means BofA and any
successor agent arising under Section 9.09, together with
their respective Affiliates and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Agent's Payment Office" means the address for
payments set forth on Schedule 10.02 or such other address
as the Agent may from time to time specify.
"Agreement" means this Credit Agreement.
"Applicable Margin" means the percentage per
annum specified below opposite the Pricing Ratio (which
shall be calculated as of the end of the immediately
preceding fiscal quarter for the four fiscal quarters ended
on such date):
If the Pricing Applicable Margin Applicable
Ratio is with respect to Margin with
Base Rate Loans respect to
Offshore Rate
Loans
greater than or
equal to 2.50 0.25% 0.875%
greater than or
equal to 2.00 and
less than 2.50 0.125% 0.75%
greater than or
equal to 1.50 and
less than 2.00 0.00% 0.625%
greater than or
equal to 1.00 and
less than 1.50 0.00% 0.50%
less than 1.00 0.00% 0.375%
The Applicable Margin shall be determined as of the end of
each fiscal quarter and shall be effective on the date that
falls 45 days after the end of such fiscal quarter.
"Assignee" has the meaning specified in
subsection 10.08(a).
"Attorney Costs" means and includes all fees and
disbursements of any law firm or other external counsel, the
allocated cost of internal legal services and all
disbursements of internal counsel.
"Bank" has the meaning specified in the
introductory clause hereto.
"Bankruptcy Code" means the Federal Bankruptcy
Reform Act of 1978 (11 U.S.C. 101, et seq.).
"Base Rate" means, for any day, the higher of:
(a) 0.50% per annum above the latest Federal Funds Rate; and
(b) the rate of interest in effect for such day as publicly
announced from time to time by BofA in San Francisco,
California, as its "reference rate." (The "reference rate"
is a rate set by BofA based upon various factors including
BofA's costs and desired return, general economic conditions
and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below
such announced rate.) Any change in the reference rate
announced by BofA shall take effect at the opening of
business on the day specified in the public announcement of
such change.
"Base Rate Loan" means a Loan that bears
interest based on the Base Rate.
"BofA" means Bank of America National Trust and
Savings Association, a national banking association.
"Borrowing" means a borrowing hereunder
consisting of Loans of the same Type made to the Company on
the same day by the Banks under Article II, and, other than
in the case of Base Rate Loans, having the same Interest
Period.
"Borrowing Date" means any date on which a
Borrowing occurs under Section 2.03.
"Business Day" means any day other than a
Saturday, Sunday or other day on which commercial banks in
Cincinnati, New York City or San Francisco are
authorized or required by law to close and, if the
applicable Business Day relates to any Offshore Rate Loan,
means such a day on which dealings are carried on in the
applicable offshore dollar interbank market.
"Capital Adequacy Regulation" means any
guideline, request or directive of any central bank or other
Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Capital Expenditures" means, for any period and
with respect to any Person,the aggregate of all expenditures
by such Person and its Subsidiaries for the acquisition or
leasing of fixed or capital assets or additions to equipment
(including replacements, capitalized repairs and
improvements during such period) which should be capitalized
under GAAP on a consolidated balance sheet of such Person
and its Subsidiaries, less net proceeds from sales of fixed
or capital assets received by such Person or any of its
Subsidiaries during such period. For the purpose of this
definition, the purchase price of equipment which is
purchased simultaneously with the trade-in of existing
equipment owned by such Person or any of its Subsidiaries or
with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of such
purchase price less the credit granted by the seller of such
equipment for such equipment being trade in at such time, or
the amount of such proceeds, as the case may be.
"Capital Lease" means any leasing or
similar arrangement which, in accordance with GAAP, is
classified as a capital lease.
"Cash Equivalents" means:
(a) securities issued or fully guaranteed or
insured by the United States Government or any agency
thereof and backed by the full faith and credit of the
United States;
(b) certificates of deposit, time deposits,
Eurodollar time deposits, repurchase agreements, reverse
repurchase agreements, or bankers' acceptances, issued by
the Agent, or by any U.S. commercial bank or any branch or
agency of a non-U.S. bank licensed to conduct business in
the U.S. having combined capital and surplus of not less
than $100,000,000 whose short term securities are rated at
least A-2 by Standard & Poor's Corporation or P-2 by ▇▇▇▇▇'▇
Investors Service, Inc.;
(c) commercial paper of an issuer rated at least
A-2 by Standard & Poor's Corporation or P-2 by ▇▇▇▇▇'▇
Investor Service Inc.;
(d) debt instruments rated better than CCC+ by
Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investor Service
Inc.
"CERCLA" has the meaning specified in the
definition of "Environmental Laws."
"Change of Control" means the acquisition by any
Person or "group" (as defined in Section 13(d)(3) of the
Exchange Act) of more than 50% of the Voting Stock of the
Company, including any acquisition by merger or
consolidation.
"Closing Date" means the date on which all
conditions precedent set forth in Section 4.01 are satisfied
or waived by all Banks (or, in the case of subsection
4.01(e), waived by the Person entitled to receive such
payment).
"Code" means the Internal Revenue Code of 1986,
and regulations promulgated thereunder.
"Collateral" means all property and interests in
property and proceeds thereof now owned or hereafter
acquired by the Company in or upon which a Lien now or
hereafter exists in favor of the Banks, or the Agent on
behalf of the Banks, whether under this Agreement or under
any other documents executed by any such Person and
delivered to the Agent or the Banks.
"Collateral Documents" means, collectively, (i)
the Security Agreement, the Guaranty and all other security
agreements, mortgages, deeds of trust, patent and trademark
assignments, lease assignments, guarantees and other similar
agreements between the Company (or, in the case of the
Guaranty, the Guarantors) and the Banks or the Agents for
the benefit of the Banks now or hereafter delivered to the
Banks or the Agent pursuant to or in connection with the
transactions contemplated hereby, and all financing
statements (or comparable documents now or hereafter filed
in accordance with the Uniform Commercial Code or comparable
law) against the Company as debtor in favor of the Banks or
the Agent for the benefit of the Banks as secured party, and
(ii) any amendments, supplements, modifications, renewals,
replacements, consolidations, substitutions and extensions
of any of the foregoing.
"Commitment", as to each Bank, has the meaning
specified in Section 2.01.
"Compliance Certificate" means a certificate
substantially in the form of Exhibit C.
"Consolidated Debt" means, as of any date of
determination, all Indebtedness for borrowed money of the
Company and its Subsidiaries determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Interest Expense" means, for
any period, gross consolidated interest expense for the
period (including all commissions, discounts, fees and other
charges in connection with standby letters of credit and
similar instruments) for the Company and its Subsidiaries,
plus (a) the portion of the up front costs and expenses
for Rate Contracts (to the extent not included in gross
interest expense) fairly allocated to such Rate Contracts as
expenses for such period, less (b) interest income for that
period and Rate Contracts payments received, all as
determined in accordance with GAAP.
"Consolidated Rental Expense" means, for any
period, total expense of the Company and its Subsidiaries on
a consolidated basis in accordance with GAAP with respect to
all operating leases.
"Contingent Obligation" means, as to any Person,
any direct or indirect liability of that Person, whether or
not contingent, with or without recourse, (a) with respect
to any Indebtedness, lease, dividend, letter of credit or
other obligation (the "primary obligations") of another
Person (the "primary obligor"), including any obligation of
that Person (i) to purchase, repurchase or otherwise acquire
such primary obligations or any security therefor, (ii) to
advance or provide funds for the payment or discharge of any
such primary obligation, or to maintain working capital or
equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet
item, level of income or financial condition 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 holder of any such primary
obligation against loss in respect thereof (each, a
"Guaranty Obligation"); (b) with respect to any Surety
Instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of
drawings or payments; or (c) to purchase any materials,
supplies or other property from, or to obtain the services
of, another Person if the relevant contract or other related
document or obligation requires that payment for such
materials, supplies or other property, or for such services,
shall be made regardless of whether delivery of such
materials, supplies or other property is ever made or
tendered, or such services are ever performed or tendered.
The amount of any Contingent Obligation shall, in the case
of Guaranty Obligations, be deemed equal to the stated or
determinable amount of the primary obligation in respect of
which such Guaranty Obligation is made or, if not stated or
if indeterminable, the maximum reasonably anticipated
liability in respect thereof, and in the case of other
Contingent Obligations, shall be equal to the maximum
reasonably anticipated liability in respect thereof.
"Contractual Obligation" means, as to any
Person, any provision of any security issued by such Person
or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument, document or
agreement to which such Person is a party or by which it or
any of its property is bound.
"Conversion/Continuation Date" means any date on
which, under Section 2.04, the Company (a) converts Loans of
one Type to another Type, or (b) continues as Loans of the
same Type, but with a new Interest Period, Loans having
Interest Periods expiring on such date.
"Core Cash Balances" means, for any period,
Total Cash Balances of the Company and its Subsidiaries at
the end of such period, minus Funded Debt of the Company and
its Subsidiaries at the end of such period, as determined on
a consolidated basis in accordance with GAAP, provided that
Core Cash Balances shall not be less than zero.
"Current Liabilities" means, for any period, all
current liabilities of the Company and its Subsidiaries at
the end of such period as determined on a consolidated basis
in accordance with GAAP.
"Default" means any event or circumstance which,
with the giving of notice, the lapse of time, or both, would
(if not cured or otherwise remedied during such time)
constitute an Event of Default.
"Disbursement" has the meaning specified in
Section 2.19.
"Disposition" means (i) the sale, lease,
conveyance or other disposition of property, other than
sales or other dispositions expressly permitted under
subsection 7.02(a), 7.02(b) or 7.02(e) and (ii) the sale or
transfer by the Company or any Subsidiary of the Company of
any equity securities issued by any Subsidiary of the
Company and held by such transferor Person other than a sale
permitted under subsection 7.02(e).
"Dollars", "dollars" and "$" each mean lawful
money of the United States.
"EBITDA" means, for any period, for the Company
and its Subsidiaries on a consolidated basis, determined in
accordance with GAAP, the sum of (a) net income (or net
loss) for such period plus (b) all amounts treated as
expenses for interest to the extent included in the
determination of such net income (or loss), plus (c) all
accrued taxes on or measured by income to the extent
included in the determination of such net income (or loss)
plus (d) all amounts treated as expenses for depreciation
and the amortization of intangibles of any kind to the
extent included in the determination of such net income (or
loss), provided, however, that net income (or loss) shall be
computed for these purposes without giving effect to
extraordinary losses or extraordinary gains.
"Eligible Assignee" means (a) a commercial bank
organized under the laws of the United States, or any state
thereof, and having a combined capital and surplus of
at least $100,000,000; (b) a commercial bank organized
under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the
"OECD"), or a political subdivision of any such country, and
having a combined capital and surplus of at least
$100,000,000, provided that such bank is acting through a
branch or agency located in the United States; and (c) a
Person that is primarily engaged in the business of
commercial banking and that is(i) a Subsidiary of a Bank,
(ii) a Subsidiary of a Person of which a Bank is a
Subsidiary, or (iii) a Person of which a Bank is a
Subsidiary.
"Environmental Claims" means all claims, however
asserted, by any Governmental Authority or other Person
alleging potential liability or responsibility for violation
of any Environmental Law, or for release or injury to the
environment or threat to public health, personal injury
(including sickness, disease or death), property damage,
natural resources damage, or otherwise alleging liability or
responsibility for damages (punitive or otherwise), cleanup,
removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type
of relief, resulting from or based upon the presence,
placement, discharge, emission or release (including
intentional and unintentional, negligent and non-negligent,
sudden or non-sudden, accidental or non-accidental,
placement, spills, leaks, discharges, emissions or releases)
of any Hazardous Material.
"Environmental Laws" means all federal, state or
local laws, statutes, common law duties, rules, regulations,
ordinances and codes, together with all administrative
orders, directed duties, requests, licenses, authorizations
and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health,
safety and land use matters; including the Comprehensive
Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), the Clean Air Act, the Federal Water
Pollution Control Act of 1972, the Solid Waste Disposal Act,
the Federal Resource Conservation and Recovery Act, the
Toxic Substances Control Act, and the Emergency Planning and
Community Right-to-Know Act.
"ERISA" means the Employee Retirement Income
Security Act of 1974, and regulations promulgated
thereunder.
"ERISA Affiliate" means any trade or business
(whether or not incorporated) under common control with the
Company within the meaning of Section 414(b) or (c)
of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with
respect to a Pension Plan; (b) a withdrawal by the Company
or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of
ERISA) or a cessation of operations which is treated as such
a withdrawal under Section 4062(e) of ERISA; (c) a complete
or partial withdrawal by the Company or any ERISA Affiliate
from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a
notice of intent to terminate, the treatment of a Plan
amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event
or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f)
the imposition of any liability under Title IV of ERISA,
other than PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Company or any ERISA
Affiliate.
"Estimated Remediation Costs" means all costs
associated with performing work to remediate contamination
of real property or groundwater, including engineering and
other professional fees and expenses, costs to remove,
transport and dispose of contaminated soil, costs to "cap"
or otherwise contain contaminated soil, and costs to pump
and treat water and monitor water quality.
"Eurodollar Reserve Percentage" has the meaning
specified in the definition of "Offshore Rate".
"Event of Default" means any of the events or
circumstances specified in Section 8.01.
"Event of Loss" means, with respect to any
property, any of the following:
(a) any uninsured loss, destruction or damage of such
property which could reasonably result in a Material Adverse
Effect; (b) any pending or threatened institution of any
proceedings for the condemnation or seizure of such property
or for the exercise of any right of eminent domain which
could reasonably result in a Material Adverse Effect; or (c)
any actual condemnation, seizure or taking, by exercise of
the power of eminent domain or otherwise, of such property,
or confiscation of such property or the requisition of the
use of such property which could reasonably result in a
Material Adverse Effect.
"Exchange Act" means the Securities Exchange Act
of 1934, and regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance
Corporation, and any Governmental Authority succeeding to
any of its principal functions.
"Federal Funds Rate" means, for any day, the
rate set forth in the weekly statistical release designated
as H.15(519), or any successor publication, published by
the Federal Reserve Bank of New York (including any such
successor, "H.15(519)") on the preceding Business Day
opposite the caption "Federal Funds (Effective)"; or,
if for any relevant day such rate is not so published on any
such preceding Business Day, the rate for such day will be
the arithmetic mean as determined by the Agent of the rates
for the last transaction in overnight Federal funds arranged
prior to 9:00 a.m. (New York City time) on that day by each
of three leading brokers of Federal funds transactions in
New York City selected by the Agent.
"FRB" means the Board of Governors of the
Federal Reserve System, and any Governmental Authority
succeeding to any of its principal functions.
"Funded Debt" of any Person means, without
duplication, (i) all obligations of such Person for or with
respect to (including, without limitation, all fees,
prepayment premiums actually payable, if any, costs or
unpaid accrued interest) borrowed money or for the deferred
purchase price of property or services (other than property
or services purchased on ordinary trade terms therefor)
which purchase price is payable over a period in excess of
six months (in the event such purchase price exceeds $2.5
million) or one year (in the event such purchase price is
equal to or less than $2.5 million) or is evidenced by a
note, invoice or similar written instrument with a
maturity in excess of six months (in the event such purchase
price exceeds $2.5 million) or one year (in the event such
purchase price is equal to or less than $2.5 million), (ii)
all obligations of such Person created or arising under any
conditional sale or other title retention agreements with
respect to any property acquired by such Person and all
obligations created or arising under such agreement even
though the rights and remedies of the seller or lender
thereunder are limited to repossession or sale of such
property in the event of default; and (iii) all obligations
of such Person under Capital Leases. "Funded Debt" with
respect to the applicable period shall include all such
obligations due and owing by any Person at the end of such
period.
"Further Taxes" means any and all present or future
taxes, levies, assessments, imposts, duties, deductions,
fees, withholdings or similar charges (including, without
limitation, net income taxes and franchise taxes), and all
liabilities with respect thereto, imposed by any
jurisdiction on account of amounts payable or paid pursuant
to Section 3.01.
"GAAP" means generally accepted accounting
principles set forth from time to time in the opinions and
pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of
the date of determination.
"Governmental Authority" means any nation or
government, any state or other political subdivision
thereof, any central bank (or similar monetary or regulatory
authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any
corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the
foregoing.
"Guarantor" means Newport Steel Corporation, a
Kentucky corporation, Koppel Steel Corporation, a
Pennsylvania corporation, Erlanger Tubular Corporation,
an Oklahoma corporation, or Imperial Adhesives, Inc., an
Ohio corporation (collectively, the "Guarantors").
"Guaranty" means a guaranty, of even date
herewith, executed by the Guarantors for the benefit of the
Agent, as the same may hereafter be amended, restated,
supplemented or otherwise modified from time to time.
"Guaranty Obligation" has the meaning specified
in the definition of "Contingent Obligation."
"Hazardous Materials" means all those substances
that are regulated by, or which may form the basis of
liability under, any Environmental Law, including any
substance identified under any Environmental Law as a
pollutant, contaminant, hazardous waste, hazardous
constituent, special waste, hazardous substance,
hazardous material, or toxic substance, or petroleum or
petroleum derived substance or waste.
"Indebtedness" of any Person means, without
duplication, (a) all indebtedness for borrowed money; (b)
all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than
trade payables entered into in the ordinary course of
business on ordinary terms); (c) all non-contingent
reimbursement or payment obligations with respect to Surety
Instruments; (d) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of
property, assets or businesses; (e) all indebtedness created
or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either
case with respect to property acquired by the Person (even
though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to
repossession or sale of such property); (f) all obligations
with respect to capital leases; (g) all indebtedness
referred to in clauses (a) through (f) above secured by (or
for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien
upon or in property (including accounts and contracts
rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such
Indebtedness; and (h) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred
to in clauses (a) through (g) above. For all purposes of
this Agreement, the Indebtedness of any Person shall include
all recourse Indebtedness of any partnership or joint
venture in which such Person is a general partner or a
joint venturer.
"Indemnified Liabilities" has the meaning
specified in Section 10.05.
"Indemnified Person" has the meaning specified
in Section 10.05.
"Independent Auditor" has the meaning specified
in subsection 6.01(a).
"Insolvency Proceeding" means, with respect to
any Person, (a) any case, action or proceeding with respect
to such Person before any court or other Governmental
Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general
assignment for the benefit of creditors, composition,
marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any
substantial portion of its creditors; undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy
Code.
"Interest Payment Date" means, as to any Loan
other than a Base Rate Loan, the last day of each Interest
Period applicable to such Loan and, as to any Base Rate
Loan, the last Business Day of each calendar quarter and
each date such Loan is converted into another Type of Loan,
provided, however, that if any Interest Period for an
Offshore Rate Loan exceeds three months, the date that
falls three months after the beginning of such Interest
Period and after each Interest Payment Date thereafter is
also an Interest Payment Date.
"Interest Period" means as to any Offshore Rate
Loan, the period commencing on the Borrowing Date of such
Loan or on the Conversion/Continuation Date on which the
Loan is converted into or continued as an Offshore Rate
Loan, and ending on the date one, two, three or six months
thereafter as selected by the Company in its Notice of
Borrowing or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would
otherwise end on a day that is not a Business Day, that
Interest Period shall be extended to the following
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 preceding
Business Day;
(ii) any Interest Period pertaining
to an Offshore Rate 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 the calendar month at the end of such
Interest Period; and
(iii) no Interest Period for any
Loan shall extend beyond the Termination Date.
"IRS" means the Internal Revenue Service, and
any Governmental Authority succeeding to any of its
principal functions under the Code.
"Issuance Request" means a request and
certificate duly executed by the chief financial or
appropriate Responsible Officer of the Company, such request
and certificate to be substantially in the form of Exhibit
G.
"Joint Venture" means a single-purpose
corporation, partnership, limited liability company, joint
venture or other similar legal arrangement (whether created
by contract or conducted through a separate legal entity)
now or hereafter formed by the Company or any of its
Subsidiaries with another Person in order to conduct a
common venture or enterprise with such Person.
"Lending Office" means, as to any Bank, the
office or offices of such Bank specified as its "Lending
Office" or "Domestic Lending Office" or "Offshore Lending
Office", as the case may be, on Schedule 10.02, or such
other office or offices as the Bank may from time to time
notify the Company and the Agent.
"Letter of Credit" has the meaning specified in
Section 2.14.
"Letter of Credit Outstandings" means, on any
date, an amount equal to the sum of (a) the then aggregate
Stated Amount of all applicable Letters of Credit, plus
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations with respect to such Letters of
Credit.
"Lien" means any security interest, mortgage,
deed of trust, pledge, hypothecation, assignment, charge or
deposit arrangement, encumbrance, lien (statutory or other)
or preferential arrangement of any kind or nature whatsoever
in respect of any property (including those created by,
arising under or evidenced by any conditional sale or other
title retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the
same economic effect as any of the foregoing, or the filing
of any financing statement naming the owner of the asset to
which such lien relates as debtor, under the Uniform
Commercial Code or any comparable law) and any contingent or
other agreement to provide any of the foregoing, but not
including the interest of a lessor under an operating lease.
"Loan" means an extension of credit by a Bank to
the Company under Article II, and may be a Base Rate Loan or
an Offshore Rate Loan (each, a "Type" of Loan).
"Loan Documents" means this Agreement, the
Notes, the Collateral Documents, and all other documents
delivered to the Agent or any Bank in connection with the
transactions contemplated by this Agreement.
"Loan Year" means the twelve-month period
beginning on the Closing Date, and each twelve-month period
beginning on an anniversary date thereof, as applicable.
"Majority Banks" means at any time Banks then
holding in excess of 60% of the then aggregate unpaid
principal amount of the Loans, or, if no such principal
amount is then outstanding, Banks then having in excess of
60% of the Commitments.
"Margin Stock" means "margin stock" as such term
is defined in Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means a material
adverse change in, or a material adverse effect upon, the
operations, business, properties, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries
taken as a whole.
"Material Subsidiary" means, at any time, any
Subsidiary having at such time either (i) total (gross)
revenues for the preceding four fiscal quarter period in
excess of $25,000,000 or (ii) total assets, as of the last
day of the preceding fiscal quarter, having a net book value
in excess of $25,000,000, in each case, based upon the
Company's most recent annual or quarterly financial
statements delivered to the Agent under Section 6.01.
"Multiemployer Plan" means a "multiemployer
plan", within the meaning of Section 4001(a)(3) of ERISA, to
which the Company or any ERISA Affiliate makes, is making,
or is obligated to make contributions or, during the
preceding three calendar years, has made, or been obligated
to make, contributions.
"Net Issuance Proceeds" means, as to any
issuance of debt or equity by any Person, cash proceeds and
non-cash proceeds received or receivable by such Person
in connection therewith, net of reasonable out-of-pocket
costs and expenses paid or incurred in connection therewith
in favor of any Person not an Affiliate of such Person, such
costs and expenses not to exceed 5% of the gross proceeds of
such issuance.
"Net Proceeds" means, as to any Disposition by a
Person, proceeds in cash, checks or other cash equivalent
financial instruments as and when received by such Person,
net of: (a) the direct costs relating to such Disposition,
(b) sale, use or other transaction taxes paid or payable by
such Person as a direct result thereof, and (c) amounts
required to be applied to repay principal, interest and
prepayment premiums and penalties on Indebtedness secured by
a Lien on the asset which is the subject of such
Disposition. "Net Proceeds" shall also include proceeds
paid on account of any Event of Loss, net of (i) all money
actually applied to repair or reconstruct the damaged
property or property affected by the condemnation or taking,
(ii) all of the costs and expenses reasonably incurred in
connection with the collection of such proceeds, award or
other payments, and (iii) any amounts retained by or paid
to parties having superior rights to such proceeds, awards
or other payments.
"Non-Use Fee Rate" means the rate defined in
Section 2.10.
"Note" means a promissory note executed by the
Company in favor of a Bank pursuant to subsection 2.02(b),
in substantially the form of Exhibit F.
"Notice of Borrowing" means a notice in
substantially the form of Exhibit A.
"Notice of Conversion/Continuation" means a
notice in substantially the form of Exhibit B.
"Obligations" means all advances, debts,
liabilities, obligations, covenants and duties arising under
any Loan Document owing by the Company to any Bank, the
Agent, or any Indemnified Person, whether direct or
indirect (including those acquired by assignment), absolute
or contingent, due or to become due, now existing or
hereafter arising.
"Offshore Rate" means, for any Interest Period,
with respect to Offshore Rate Loans comprising part of the
same Borrowing, the rate of interest per annum (rounded
upward to the next 1/16th of 1%) determined by the Agent as
follows:
Offshore Rate equals IBOR divided by (1.00 minus
Eurodollar Reserve Percentage)
Where,
"Eurodollar Reserve Percentage" means for any
day for any Interest Period the maximum reserve percentage
(expressed as a decimal, rounded upward to the next
1/100th of 1%) in effect on such day (whether or not
applicable to any Bank) under regulations issued from time
to time by the FRB for determining the maximum reserve
requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency
liabilities"); and
"IBOR" means the rate of interest per annum
determined by the Agent as the rate at which dollar deposits
in the approximate amount of BofA's Offshore Rate Loan for
such Interest Period would be offered by BofA's Grand
Cayman Branch, Grand Cayman B.W.I. (or such other office as
may be designated for such purpose by BofA), to major
banks in the offshore dollar interbank market at their
request at approximately 11:00 a.m. (New York City time) two
Business Days prior to the commencement of such Interest
Period.
The Offshore Rate shall be adjusted
automatically as to all Offshore Rate Loans then outstanding
as of the effective date of any change in the Eurodollar
Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears
interest based on the Offshore Rate.
"Organization Documents" means, for any
corporation, the certificate or articles of incorporation,
the bylaws, any certificate of determination or instrument
relating to the rights of preferred shareholders of such
corporation, any shareholder rights agreement, and all
applicable resolutions of the board of directors (or any
committee thereof) of such corporation.
"Other Taxes" means any present or future stamp,
court or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any
payment made hereunder or from the execution, delivery,
performance, enforcement or registration of, or otherwise
with respect to, this Agreement or any other Loan
Documents.
"Participant" has the meaning specified in
subsection 10.08(d).
"PBGC" means the Pension Benefit Guaranty
Corporation, or any Governmental Authority succeeding to any
of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined
in Section 3(2) of ERISA)subject to Title IV of ERISA which
the Company sponsors, maintains, or to which it makes, is
making, or is obligated to make contributions, or in the
case of a multiple employer plan (as described in Section
4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years.
"Permitted Liens" has the meaning specified in
Section 7.01.
"Person" means an individual, partnership,
corporation, limited liability company, business trust,
joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as
defined in Section 3(3) of ERISA) which the Company sponsors
or maintains or to which the Company makes, is making, or is
obligated to make contributions and includes any Pension
Plan.
"Pricing Ratio" means, with respect to the
applicable period of four consecutive fiscal quarters for
the Company and its Subsidiaries as determined on a
consolidated basis in accordance with GAAP, the ratio
of (a) Funded Debt at the end of such period, minus Core
Cash Balances at the end of such period, to (b) EBITDA
for that period.
"Pro Rata Share" means, as to any Bank at any
time, the percentage equivalent (expressed as a decimal,
rounded to the ninth decimal place) at such time of such
Bank's Commitment divided by the combined Commitments
of all Banks.
"Rate Contracts" means swap agreements (as such
term is defined in Section 101 of the Bankruptcy Code), cap
agreements and any other agreements or arrangements designed
to provide protection against fluctuations in interest or
currency exchange rates.
"Reimbursement Obligation" has the meaning
specified in Section 2.17.
"Replacement Bank" has the meaning specified in
Section 3.08.
"Reportable Event" means, any of the events set
forth in Section 4043(b) of ERISA or the regulations
thereunder, other than any such event for which the 30-day
notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Requirement of Law" means, as to any Person,
any law (statutory or common), treaty, rule or regulation or
determination of an arbitrator or of a Governmental
Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any
of its property is subject.
"Responsible Officer" means the chief executive
officer, the president or the chief financial officer of the
Company, or any other officer having substantially the same
authority and responsibility; or, with respect to compliance
with financial covenants, the chief financial officer or the
treasurer of the Company, or any other officer having
substantially the same authority and responsibility.
"SEC" means the Securities and Exchange
Commission, or any Governmental Authority succeeding to any
of its principal functions.
"Security Agreement" means the Security
Agreement, of even date herewith, between the Company and
the Agent.
"Senior Indebtedness" means, for any period, the
Obligations and all Indebtedness owed to any Person at the
end of such period.
"Solvent" means, as to any Person at any time,
that (a) the fair value of the property of such Person is
greater than the amount of such Person's liabilities
(including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities
evaluated for purposes of Section 101(31) of the Bankruptcy
Code and, in the alternative, for purposes of the Illinois
Uniform Fraudulent Transfer Act; (b) the present fair
saleable value of the property of such Person is not less
than the amount that will be required to pay the probable
liability of such Person on its debts as they become
absolute and matured; (c) such Person is able to realize
upon its property and pay its debts and other liabilities
(including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of
business; (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a
transaction, for which such Person's property would
constitute unreasonably small capital.
"Stated Amount" of any Letter of Credit means,
from time to time and at any time, the total amount then
available to be drawn under such Letter of Credit.
"Stated Expiry Date" means, with respect to any Letter of
Credit, the relevant expiry date for such Letter of Credit
in accordance with Section 2.14.
"Subsidiary" of a Person means any corporation,
association, partnership, limited liability company, joint
venture or other business entity of which more than
50% of the voting stock, membership interests or other
equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly
by the Person, or one or more of the Subsidiaries of the
Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a
"Subsidiary" refer to a Subsidiary of the Company.
"Surety Instruments" means all letters of credit
(including standby and commercial), banker's acceptances,
bank guaranties, shipside bonds, surety bonds and similar
instruments.
"Taxes" means any and all present or future
taxes, levies, assessments, imposts, duties, deductions,
fees, withholdings or similar charges, and all liabilities
with respect thereto, excluding, in the case of each
Bank and the Agent, respectively, taxes imposed on or
measured by its net income by the jurisdiction (or any
political subdivision thereof) under the laws of which such
Bank or the Agent, as the case may be, is organized or
maintains a lending office.
"Termination Date" means the earlier to occur
of:
(a) July 31, 2003; and
(b) the date on which the Commitments
terminate in accordance with the provisions of this
Agreement.
"Total Cash Balances" means, for any period, all
cash and Cash Equivalents of the Company and its
Subsidiaries at the end of such period as determined on a
consolidated basis in accordance with GAAP.
"Type" has the meaning specified in the
definition of "Loan."
"UCC" means the Uniform Commercial Code as in
effect in the State of Illinois.
"Unfunded Pension Liability" means the excess of
a Plan's benefit liabilities under Section 4001(a)(16) of
ERISA, over the current value of that Plan's assets,
determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code
for the applicable plan year.
"United States" and "U.S." each means the United
States of America.
"Voting Stock" means the shares of capital stock
or other securities of the Company entitled to vote
generally in the election of directors of the Company.
"Wholly-Owned Subsidiary" means any corporation
in which (other than directors' qualifying shares required
by law) 100% of the capital stock of each class
having ordinary voting power, and 100% of the capital
stock of every other class, in each case, at the time as of
which any determination is being made, is owned,
beneficially and of record, by the Company, or by one
or more of the other Wholly-Owned Subsidiaries, or both.
1.02 Other Interpretive Provisions.
(a) The meanings of defined terms are equally
applicable to the singular and plural forms of the defined
terms.
(b) The words "hereof", "herein", "hereunder"
and similar words refer to this Agreement as a whole and not
to any particular provision of this Agreement; and
subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any
and all instruments, documents, agreements, certificates,
indentures, notices and other writings, however evidenced.
(ii) The term "including" is not limiting
and means "including without limitation."
(iii) In the computation of periods of
time from a specified date to a later specified date, the
word "from" means "from and including"; the words "to" and
"until" each mean "to but excluding", and the word
"through" means "to and including."
(iv) The term "property" includes any
kind of property or asset, real, personal or mixed, tangible
or intangible.
(d) Unless otherwise expressly provided
herein, (i) references to agreements (including this
Agreement) and other contractual instruments shall be deemed
to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan
Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
(e) The captions and headings of this
Agreement are for convenience of reference only and shall
not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents
may use several different limitations, tests or measurements
to regulate the same or similar matters. All such
limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms. Unless
otherwise expressly provided, any reference to any action of
the Agent or the Banks by way of consent, approval or waiver
shall be deemed modified by the phrase "in its/their sole
discretion."
(g) This Agreement and the other Loan
Documents are the result of negotiations among and have been
reviewed by counsel to the Agent, the Company and the
other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Banks
or the Agent merely because of the Agent's or Banks'
involvement in their preparation.
1.03 Accounting Principles.
(a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein
shall be construed, and all financial computations required
under this Agreement shall be made, in accordance with GAAP,
consistently applied.
(b) References herein to "fiscal year" and
"fiscal quarter" refer to such fiscal periods of the
Company.
ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitments. Each Bank
severally agrees, on the terms and conditions set forth
herein, to (i) make loans to the Company (each such loan, a
"Loan") from time to time on any Business Day during the
period from the Closing Date to the Termination Date, and
(ii) purchase from the Agent a participation in the Letters
of Credit and make Disbursements in accordance with this
Article II, in an aggregate amount not to exceed at any time
outstanding, the amount set forth on Schedule 2.01 (such
amount as the same may be reduced under Section 2.05 or as a
result of one or more assignments under Section 10.08, the
Bank's "Commitment"); provided, however, that, after giving
effect to any Borrowing of Loans or issuance of any Letter
of Credit, the aggregate principal amount of all outstanding
Loans plus the then aggregate amount of all Letter of Credit
Outstandings shall not at any time exceed the combined
Commitments; provided, however, that the Agent shall not be
required to issue any Letter of Credit if, after giving
effect thereto, the Letter of Credit Outstandings would
exceed $30,000,000. Within the limits of each Bank's
Commitment, and subject to the other terms and conditions
hereof, the Company may borrow under this Section 2.01,
prepay under Section 2.06 and reborrow under this Section
2.01. Subject to the terms hereof, the Company may from
time to time request the issuance of Letters of Credit,
allow Letters of Credit to expire undrawn or, if drawn upon,
repay Reimbursement Obligations relative thereto and request
the issuance of new Letters of Credit.
2.02 Loan Accounts.
(a) The Loans made by each Bank shall be
evidenced by one or more loan accounts or records maintained
by such Bank in the ordinary course of business. The loan
accounts or records maintained by the Agent and each Bank
shall be conclusive absent manifest error of the amount of
the Loans made by the Banks to the Company and the
interest and payments thereon. Any failure so to record or
any error in doing so shall not, however, limit or otherwise
affect the obligation of the Company hereunder to pay any
amount owing with respect to the Loans.
(b) Upon the request of any Bank made through
the Agent, the Loans made by such Bank may be evidenced by
one or more Notes, instead of or in addition to loan
accounts. Each such Bank shall endorse on the schedules
annexed to its Note(s) the date, amount and maturity of each
Loan made by it and the amount of each payment of principal
made by the Company with respect thereto. Each such Bank is
irrevocably authorized by the Company to endorse its Note(s)
and each Bank's record shall be conclusive absent
manifest error; provided, however, that the failure of a
Bank to make, or an error in making, a notation thereon with
respect to any Loan shall not limit or otherwise affect the
obligations of the Company hereunder or under any such Note
to such Bank.
2.03 Procedure for Borrowing.
(a) Each Borrowing shall be made upon the
Company's irrevocable written notice delivered to the Agent
in the form of a Notice of Borrowing (which notice must be
received by the Agent prior to 9:00 a.m. (Chicago time) (i)
three Business Days prior to the requested Borrowing Date,
in the case of Offshore Rate Loans; and (ii) one Business
Day prior to the requested Borrowing Date, in the case of
Base Rate Loans, specifying:
(A) the amount of the Borrowing,
which shall be in an aggregate minimum amount of $500,000 or
any multiple of $100,000 in excess thereof;
(B) the requested Borrowing Date,
which shall be a Business Day;
(C) the Type of Loans comprising
the Borrowing; and
(D) the duration of the Interest
Period applicable to such Loans included in such notice. If
the Notice of Borrowing fails to specify the duration of the
Interest Period for any Borrowing comprised of Offshore Rate
Loans, such Interest Period shall be three months.
provided, however, that with respect to the Borrowing to be
made on the Closing Date, the Notice of Borrowing shall be
delivered to the Agent not later than 12:00 p.m. (Chicago
time) on the Closing Date and such Borrowing will consist of
Base Rate Loans only.
(b) The Agent will promptly notify each Bank
of its receipt of any Notice of Borrowing and of the amount
of such Bank's Pro Rata Share of that Borrowing.
(c) Each Bank will make the amount of its Pro
Rata Share of each Borrowing available to the Agent for the
account of the Company at the Agent's Payment Office by
11:00 a.m. (Chicago time) on the Borrowing Date requested by
the Company in funds immediately available to the Agent.
The proceeds of all such Loans will then be made available
to the Company by the Agent by wire transfer in accordance
with written instructions provided to the Agent by the
Company of like funds as received by the Agent.
(d) After giving effect to any Borrowing,
unless the Agent shall otherwise consent, there may not be
more than six different Interest Periods in effect.
2.04 Conversion and Continuation Elections.
(a) The Company may, upon irrevocable written
notice to the Agent in accordance with subsection 2.04(b):
(i) elect, as of any Business Day, in
the case of Base Rate Loans, or as of the last day of the
applicable Interest Period, in the case of any other Type of
Loans, to convert any such Loans (or any part thereof
in an amount not less than $500,000, or that is in an
integral multiple of $100,000 in excess thereof) into Loans
of any other Type; or
(ii) elect, as of the last day of the
applicable Interest Period, to continue any Loans having
Interest Periods expiring on such day (or any part thereof
in an amount not less than $500,000, or that is in an
integral multiple of $100,000 in excess thereof);
provided, that if at any time the aggregate amount of
Offshore Rate Loans in respect of any Borrowing is reduced,
by payment, prepayment, or conversion of part thereof to be
less than $500,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after
such date the right of the Company to continue such Loans
as, and convert such Loans into, Offshore Rate Loans shall
terminate.
(b) The Company shall deliver a Notice of
Conversion/Continuation to be received by the Agent not
later than 9:00 a.m. (Chicago time) at least (i) two
Business Days in advance of the Conversion/Continuation
Date, if the Loans are to be converted into or continued as
Offshore Rate Loans; and (ii) one Business Day in advance of
the Conversion/Continuation Date, if the Loans are to be
converted into Base Rate Loans, specifying:
(A) the proposed
Conversion/Continuation Date;
(B) the aggregate amount of Loans
to be converted or continued;
(C) the Type of Loans resulting
from the proposed conversion or continuation; and
(D) other than in the case of
conversions into Base Rate Loans, the duration of the
requested Interest Period.
(c) If upon the expiration of any Interest
Period applicable to Offshore Rate Loans, the Company has
failed to select timely a new Interest Period to be
applicable to such Offshore Rate Loans, or if any Default or
Event of Default then exists, the Company shall be deemed to
have elected to convert such Offshore Rate Loans into Base
Rate Loans effective as of the expiration date of such
Interest Period.
(d) The Agent will promptly notify each Bank
of its receipt of a Notice of Conversion/Continuation, or,
if no timely notice is provided by the Company, the Agent
will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations
shall be made ratably according to the respective
outstanding principal amounts of the Loans with respect to
which the notice was given held by each Bank.
(e) Unless the Majority Banks otherwise
consent, during the existence of a Default or Event of
Default, the Company may not elect to have a Loan converted
into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or
continuation of Loans, unless the Agent shall otherwise
consent, there may not be more than six different Interest
Periods in effect.
2.05 Voluntary Termination or Reduction of
Commitments. The Company may, upon not less than five
Business Days' prior notice to the Agent, terminate the
Commitments, or permanently reduce the Commitments by an
aggregate minimum amount of $10,000,000 or any multiple of
$1,000,000 in excess thereof; unless, after giving effect
thereto and to any prepayments of Loans made on the
effective date thereof, the then-outstanding principal
amount of the Loans plus the aggregate amount of all Letter
of Credit Outstandings would exceed the amount of the
combined Commitments then in effect. Once reduced in
accordance with this Section, the Commitments may not be
increased. Any reduction of the Commitments shall be
applied to each Bank according to its Pro Rata Share. All
accrued commitment fees to, but not including the effective
date of any reduction or termination of Commitments, shall
be paid on the effective date of such reduction or
termination.
2.06 Optional Prepayments. Subject to Section 3.04,
the Company may, at any time or from time to time, on any
Business Day, ratably prepay Loans in whole or in part,
in minimum amounts of $500,000 or any multiple of $100,000
in excess thereof. The Agent will promptly notify each Bank
of such Bank's Pro Rata Share of such prepayment.
2.07 Mandatory Prepayments of Loans; Mandatory
Commitment Reductions; Asset Dispositions.
(a) If the Company or any Subsidiary shall at
any time or from time to time make or agree to make a
Disposition, or shall suffer an Event of Loss, then (i) the
Company shall promptly notify the Agent of such proposed
Disposition or Event of Loss (including the amount of the
estimated Net Proceeds to be received by the Company or
such Subsidiary in respect thereof) and (ii) promptly upon,
and in no event later than 30 days after, receipt by the
Company or the Subsidiary of the Net Proceeds of such
Disposition or Event of Loss, the Company shall prepay Loans
in an aggregate amount equal to the amount of such Net
Proceeds.
(b) General. Any prepayments pursuant to this
Section 2.07 shall be applied first to any Base Rate Loans
then outstanding and then to Offshore Rate Loans with the
shortest Interest Periods remaining; provided, however, that
if the amount of Base Rate Loans then outstanding is not
sufficient to satisfy the entire prepayment requirement, the
Company may, at its option, place any amounts which it would
otherwise be required to use to prepay Offshore Rate Loans
on a day other than the last day of the Interest Period
therefor in an interest-bearing account pledged to the Agent
for the benefit of the Banks until the end of such Interest
Period at which time such pledged amounts will be applied to
prepay such Offshore Rate Loans. The Company shall pay,
together with each prepayment under this Section 2.07,
accrued interest on the amount prepaid and any amounts
required pursuant to Section 3.04.
(c) Reduction of Commitment. Upon the making
of any mandatory prepayment under this Section 2.07, the
Commitment of each Bank shall automatically be reduced by an
amount equal to such Bank's ratable share of the aggregate
of principal repaid, effective as of the earlier of the date
that such prepayment is made or the date by which such
prepayment is due and payable hereunder. All accrued
commitment fees to, but not including the effective date of
any reduction or termination of Commitments, shall be paid
on the effective date of such reduction or termination.
2.08 Repayment. The Company shall repay to the
Banks on the Termination Date the aggregate principal amount
of Loans outstanding on such date.
2.09 Interest.
(a) Each Loan shall bear interest on the
outstanding principal amount thereof from the applicable
Borrowing Date at a rate per annum equal to the Offshore
Rate or the Base Rate, as the case may be (and subject to
the Company's right to convert to other Types of Loans under
Section 2.04), plus the Applicable Margin. Each
Reimbursement Obligation shall bear interest from the date
such Reimbursement Obligation is to be paid pursuant to
Section 2.16 at a rate per annum equal to the Base Rate plus
the Applicable Margin.
(b) Interest on each Loan shall be paid in
arrears on each Interest Payment Date. Interest shall also
be paid on the date of any prepayment of Loans under Section
2.06 or 2.07 for the portion of the Loans so prepaid and
upon payment (including prepayment) in full thereof and,
during the existence of any Event of Default, interest shall
be paid on demand of the Agent at the request or with the
consent of the Majority Banks. Interest accrued on the
principal amount of each Reimbursement Obligation after the
date such amount is due and payable (whether pursuant to
Section 2.16 or otherwise) shall be payable upon demand.
(c) Notwithstanding subsection (a) of this
Section, while any Event of Default exists or after
acceleration, the Company shall pay interest (after as well
as before entry of judgment thereon to the extent permitted
by law) on the principal amount of all outstanding
Obligations, at a rate per annum which is determined by
adding 3% per annum to the Applicable Margin then in effect
for such Loans and, in the case of Obligations not subject
to an Applicable Margin, at a rate per annum equal to the
Base Rate plus 3%; provided, however, that, on and after the
expiration of any Interest Period applicable to any Offshore
Rate Loan outstanding on the date of occurrence of such
Event of Default or acceleration, the principal amount of
such Loan shall, during the continuation of such Event of
Default or after acceleration, bear interest at a rate per
annum equal to the Base Rate plus 3%.
(d) Notwithstanding subsection (a) of this
Section, if any amount of principal of or interest on any
Loan or Reimbursement Obligation, or any other amount
payable hereunder or under any other Loan Document is not
paid in full when due (whether at stated maturity, by
acceleration, demand or otherwise), the Company agrees
to pay interest on such unpaid principal or other amount,
from the date such amount becomes due until the date such
amount is paid in full, and after as well as before any
entry of judgment thereon to the extent permitted by law,
payable on demand, at a fluctuating rate per annum equal to
the Base Rate plus 3%.
(e) Anything herein to the contrary
notwithstanding, the obligations of the Company to any Bank
hereunder shall be subject to the limitation that payments
of interest shall not be required for any period for which
interest is computed hereunder, to the extent (but only to
the extent) that contracting for or receiving such payment
by such Bank would be contrary to the provisions of any law
applicable to such Bank limiting the highest rate of
interest that may be lawfully contracted for, charged or
received by such Bank, and in such event the Company shall
pay such Bank interest at the highest rate permitted by
applicable law.
2.10 Fees.
(a) Closing Fee. On the Closing Date, the
Company shall pay to the Agent for the account of each Bank
a closing fee in the amount of $10,000.
(b) Agency Fee. The Company shall pay an
annual agency fee to the Agent for the Agent's own account
in the amount of $10,000 in the event that any one or
more financial institutions other than BofA becomes a "Bank"
for purposes of this Agreement as of the Closing Date or
pursuant to Section 10.08. Such agency fee shall be
due and payable on the date the first such other financial
institution becomes a "Bank" for purposes of this Agreement
and on each anniversary date thereof while there remains one
or more "Banks" other than BofA through the Termination
Date.
(c) Commitment Fees. The Company shall pay to
the Agent for the account of each Bank a commitment fee
equal to the Non-Use Fee Rate multiplied by the average
daily unused portion of such Bank's Commitment, computed on
a quarterly basis in arrears on the last Business Day of
each calendar quarter based upon the daily utilization for
that quarter as calculated by the Agent. For purposes of
calculating the "unused portion" of each Bank's Commitment
pursuant to this Section 2.10, Letter of Credit Outstandings
shall be included as a usage of the Commitment. The
"Non-Use Fee Rate" means the percentage per annum specified
below opposite the Pricing Ratio (which shall be calculated
as of the end of the immediately preceding fiscal quarter
for the four fiscal quarters ended on such date):
If the Pricing
Ratio is Non-Use Fee Rate
greater than or
equal to 2.50 0.25%
greater than or
equal to 2.00 and
less than 2.50 0.225%
greater than or
equal to 1.50 and
less than 2.00 0.20%
greater than or
equal to 1.00 and
less than 1.50 0.175%
less than 1.00 0.15%
The Non-Use Fee Rate shall be determined as of the end of
each fiscal quarter and shall be effective on the date that
falls 45 days after the end of such fiscal quarter. Such
commitment fee shall accrue from the Closing Date to the
Termination Date and shall be due and payable quarterly in
arrears on the last Business Day of each March, June,
September and December commencing on September 30, 1998,
through the Termination Date (each a "Quarterly Payment
Date"), with the final payment to be made on the
Termination Date; provided that, in connection with any
reduction or termination of Commitments under Section 2.05
or Section 2.07, the accrued commitment fee calculated
for the period ending on such date shall also be paid on the
date of such reduction or termination, with the following
quarterly payment being calculated on the basis of the
period from such reduction or termination date to such
quarterly payment date. The commitment fees provided in
this subsection shall accrue at all times after the
above-mentioned commencement date, including at any time
during which one or more conditions in Article IV are not
met.
2.11 Computation of Fees and Interest.
(a) All computations of interest for Base Rate
Loans when the Base Rate is determined by BofA's "reference
rate" shall be made on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed. All
other computations of fees and interest shall be made on the
basis of a 360-day year and actual days elapsed (which
results in more interest being paid than if computed on the
basis of a 365-day year). Interest and fees shall accrue
during each period during which interest or such fees are
computed from the first day thereof to the last day thereof.
(b) Each determination of an interest rate by
the Agent shall be conclusive and binding on the Company and
the Banks in the absence of manifest error. The Agent will,
at the request of the Company or any Bank, deliver to the
Company or the Bank, as the case may be, a statement showing
the quotations used by the Agent in determining any interest
rate and the resulting interest rate.
2.12 Payments by the Company.
(a) All payments to be made by the Company
shall be made without set-off, recoupment or counterclaim.
Except as otherwise expressly provided herein, all
payments by the Company shall be made to the Agent for the
account of the Banks at the Agent's Payment Office, and
shall be made in dollars and in immediately available funds,
no later than 12:00 p.m. (Chicago time) on the date
specified herein. The Agent will promptly distribute to
each Bank its Pro Rata Share (or other applicable share as
expressly provided herein) of such payment in like funds as
received. Any payment received by the Agent later than
12:00 p.m. (Chicago time) shall be deemed to have been
received on the following Business Day and any applicable
interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the
definition of "Interest Period" herein, whenever any payment
is due on a day other than a Business Day, such payment
shall be made on the following Business Day, and such
extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
(c) Unless the Agent receives notice from the
Company prior to the date on which any payment is due to the
Banks that the Company will not make such payment in
full as and when required, the Agent may assume that the
Company has made such payment in full to the Agent on such
date in immediately available funds and the Agent may (but
shall not be so required), in reliance upon such assumption,
distribute to each Bank on such due date an amount equal to
the amount then due such Bank. If and to the extent the
Company has not made such payment in full to the Agent, each
Bank shall repay to the Agent on demand such amount
distributed to such Bank, together with interest thereon at
the Federal Funds Rate for each day from the date such
amount is distributed to such Bank until the date repaid.
2.13 Letter of Credit Fees. The Company agrees to
pay to the Agent for the account of each Bank,
(a) with respect to each Letter of Credit a
credit fee equal to the Applicable Margin for Loans which
are Offshore Rate Loans per annum, on or prior to the
date which is two days after the Company's receipt of an
invoice from the Agent for the period ending on each
Quarterly Payment Date following the issuance date for such
Letter of Credit, during the period from the later of
(w) the Closing Date,
(x) the issuance date of such Letter of
Credit, and
(y) the next preceding Quarterly Payment
Date
to (but, in the case of the Stated Expiry Date thereof,
including) the earliest of
(A) such Quarterly Payment Date,
(B) the Disbursement Date of such Letter
of Credit, and
(C) the Stated Expiry Date of such
Letter of Credit; and
(b) for the account of the Agent, upon demand
from time to time, all customary fees and administrative
expenses of the Agent as set forth in the Agent's published
schedule of such fees and expenses then in effect which are
charged or incurred from time to time in connection with the
issuance, maintenance, modification (if any), negotiation
and administration of each Letter of Credit.
2.14 Letter of Credit Issuance Request. By
delivering an Issuance Request to the Agent at or before
10:00 a.m., Chicago time, on any Business Day, the Company
may request, prior to the Termination Date, on not less than
two Business Days' notice (or such lesser number of Business
Days' notice as the Agent may consent to in its sole
discretion), that Agent issue, on any such Business Day on
or after the Closing Date (if such date is prior to the
Termination Date), an irrevocable letter of credit in such
form as may be requested by the Company and reasonably
approved by the Company (a "Letter of Credit"), solely as
required by the Company in the ordinary course of business.
The Company shall deliver each Issuance Request to the Agent
by either (1) delivering or telecopying to the Agent an
Issuance Request or (2) giving telephonic notice thereof to
the Agent, in each case at or before 10:00 a.m., Chicago
time, and, in the case of any such telephonic notice,
promptly confirming such notice by delivering or telecopying
an Issuance Request therefor, signed by a Responsible
Officer of the Company, to the Agent, on any Business Day.
Each Letter of Credit shall by its terms:
(i) be issued in a Stated Amount which, when
added to the then aggregate amount of Letter of Credit
Outstandings, would not exceed $30,000,000; and
(ii) be stated to expire on a date no later
than the earlier of
(A) 30 days prior to the Termination
Date, and
(B) the first anniversary of the date of
issuance of such Letter of Credit.
2.15 Issuance of Letters of Credit.
(a) Subject to the terms and conditions of this
Agreement (including Article IV), the Agent shall issue a
Letter of Credit in accordance with the Issuance Request
made therefor. Prior to the issuance of any Letter of
Credit, the Company shall have properly completed all of the
Agent's required standard letter of credit documentation.
If the Company so requests in its Issuance Request, the
Agent will deliver to the beneficiary under such Letter of
Credit the original of any Letter of Credit which it issues
hereunder. If the Company does not so request, the Agent
will make available to the beneficiary thereunder the
original of any Letter of Credit which it issues hereunder.
(b) Immediately upon the issuance of each Letter of
Credit, each Bank shall be deemed to, and hereby agrees to,
have irrevocably purchased from the Agent a participation
in such Letter of Credit and agreed to make Disbursements in
connection therewith in an amount equal to such Bank's Pro
Rata Share of the maximum amount which is or at any time
may become available to be drawn thereunder.
2.16 Disbursements.
(a) The Agent will notify the Company promptly of
each demand or presentment for payment under any Letter of
Credit issued by the Agent, together with notice of the
date (the "Disbursement Date") on which such payment shall
be made. Subject to the terms and provisions of such Letter
of Credit and this Agreement, the Agent shall make such
payment to the beneficiary (or its designee) of such Letter
of Credit (a "Disbursement"). Prior to 10:00 a.m., Chicago
time, on the first Business Day following the Disbursement
Date, the Company will reimburse the Agent and the Banks for
all amounts which the Agent and the Banks have disbursed
under such Letter of Credit, together with interest thereon,
prior to an Event of Default, at a rate per annum equal to
the Base Rate plus the Applicable Margin, from time to time
in effect for the period from the Disbursement Date to the
date of such reimbursement.
(b) The Agent shall notify the Borrower of any
Disbursement under a Letter of Credit as promptly as
practicable after such Disbursement is made, and the
Borrower shall, immediately after receipt of such notice, to
the extent that the Borrower is permitted to borrow Loans
under the terms of this Agreement, (A) in the case of a
Borrowing of Loans in an aggregate amount less than
$100,000, be deemed to have submitted a Notice of Borrowing
for Loans, and (B) in the case of a Borrowing of Loans in an
amount equal to or greater than $100,000 submit a Notice of
Borrowing for Loans, in amounts necessary to repay the
amounts which were so disbursed.
2.17 Reimbursement. The Company's obligation (the
"Reimbursement Obligation") under Section 2.16 to reimburse
the Agent with respect to any Disbursement (including
interest thereon) shall be absolute and unconditional under
any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Company may
have or have had against the Agent, any Bank or the
beneficiary of such Letter of Credit, including any defense
based upon the occurrence of any Event of Default, any
draft, demand, certificate or other document proving to be
in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged, the failure of any Disbursement to
conform to the terms of the applicable Letter of Credit or
any non-application or misapplication by the beneficiary
under such Letter of Credit of the proceeds of such
Disbursement, or the legality, validity, form, regularity or
enforceability of such Letter of Credit; provided that
nothing herein shall adversely affect the right of the
Company, after paying in full its Reimbursement Obligation
hereunder to commence any proceeding against the Agent for
any wrongful Disbursement made by the Agent under a Letter
of Credit as a result of acts or omissions constituting
gross negligence or willful misconduct on the part of the
Agent.
2.18 Deemed Disbursements. Upon the occurrence and
during the continuance of an Event of Default, then:
(a) automatically in the case of an Event of
Default described in subsections 8.01(a) or 8.01(f), an
amount equal to that portion of the Letter of Credit
Outstandings attributable to the then aggregate amount which
is undrawn and available under all outstanding Letters of
Credit shall, without demand upon or notice to the Company,
be deemed to have been paid or disbursed by the Agent
(notwithstanding that such amount may not in fact have been
so paid or disbursed); provided that the interest rate
specified in subsection 2.09(d) shall not apply to any
Letter of Credit if and to the extent that the Company shall
have deposited cash in the amount of such deemed
Disbursement, together with interest accrued thereon, with
the Agent to be held as collateral security for the
Obligations in connection with any Letter of Credit with
respect to which a Disbursement shall have been deemed to
have occurred; and
(b) upon notification by the Agent to the
Company of its obligations under this Section 2.18, the
Company shall be immediately obligated to reimburse the
Agent for the amount deemed to have been so paid or
disbursed by the Agent.
Any amounts so payable by the Company pursuant to this
Section 2.18 shall be deposited in cash with the Agent and
held as collateral security for the Obligations in
connection with any Letter of Credit and shall be invested
by the Agent in Cash Equivalents the interest on which
shall be applied to pay such Obligations then due and
unpaid. At such time when the Event of Default shall have
been cured or waived, the Agent shall return to the Company
all amounts then on deposit with the Agent pursuant to this
Section 2.18 (including any income from investments in Cash
Equivalents), net of any amounts applied to the payment of
any Reimbursement Obligations. Any Disbursement deemed to
have occurred pursuant to this Section 2.18 shall not
constitute a "Reimbursement Obligation" as defined in
Section 2.17.
2.19 Nature of Reimbursement Obligations. The
Company shall assume all risks of the acts, omissions or
misuse of each Letter of Credit by the beneficiary thereof.
The Agent (except to the extent of its own gross negligence
or willful misconduct) shall not be responsible for:
(a) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any Letter of Credit issued
by it or any document submitted by any party in connection
with the application for an issuance of such Letter of
Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or
forged;
(b) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any Instrument transferring
or assigning or purporting to transfer or assign any Letter
of Credit or the rights or benefits thereunder or proceeds
thereof in whole or in part, which may prove to be invalid
or ineffective for any reason;
(c) failure of the beneficiary under any Letter of
Credit to comply fully with conditions required in order to
demand payment under such Letter of Credit;
(d) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise; or
(e) any loss or delay in the transmission or
otherwise of any document or draft required in order to make
a Disbursement under any such Letter of Credit.
None of the foregoing shall affect, impair, limit or prevent
the vesting of any of the rights or powers granted to the
Agent or any Agent hereunder (including pursuant to Section
9.05). In furtherance and extension, and not in limitation
or derogation, of any of the foregoing, any action taken or
omitted to be taken by the Agent in good faith and without
gross negligence shall be binding upon the Company and shall
not put the Agent under any resulting liability to the
Company.
2.20 Payments by the Banks to the Agent.
(a) Unless the Agent receives notice from a
Bank on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date or any Disbursement, at
least one Business Day prior to the Borrowing Date or
Disbursement Date, as applicable, that such Bank will not
make available as and when required hereunder to the Agent
the amount of that Bank's Pro Rata Share of the Borrowing or
the Disbursement, as applicable, the Agent may assume that
each Bank has made such amount available to the Agent in
immediately available funds on the Borrowing Date or the
Disbursement Date, as applicable, and the Agent may (but
shall not be so required), in reliance upon such assumption,
make available to the Company or the beneficiary (or its
designee) of the Letter of Credit, as applicable, on such
date a corresponding amount. If and to the extent any Bank
shall not have made its full amount available to the Agent
in immediately available funds and the Agent in such
circumstances has made available to the Company or the
beneficiary (or its designee) of the Letter of Credit, as
applicable, such amount, that Bank shall on the Business
Day following such Borrowing Date or such Disbursement Date,
as applicable, make such amount available to the Agent,
together with interest at the Federal Funds Rate for each
day during such period. A notice of the Agent submitted to
any Bank with respect to amounts owing under this subsection
(a) shall be conclusive, absent manifest error. If such
amount is so made available with respect to a Borrowing,
such payment to the Agent shall constitute such Bank's Loan
on the date of Borrowing for all purposes of this Agreement.
If such amount is not made available to the Agent on the
Business Day following the Borrowing Date, the Agent will
notify the Company of such failure to fund and, upon demand
by the Agent with respect to a Borrowing, the Company shall
pay such amount to the Agent for the Agent's account,
together with interest thereon for each day elapsed since
the date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Loans comprising
such Borrowing.
(b) The failure of any Bank to make any Loan
on any Borrowing Date or to make available to the Agent the
amount of that Bank's Pro Rata Share of any Disbursement on
the Disbursement Date shall not relieve any other Bank of
any obligation hereunder to make a Loan on such Borrowing
Date or to make available to the Agent the amount of that
Bank's Pro Rata Share of any Disbursement on the
Disbursement Date, but no Bank shall be responsible for the
failure of any other Bank to make the Loan to be made
by such other Bank on any Borrowing Date or to make
available to the Agent the amount of that Bank's Pro Rata
Share of any Disbursement on the Disbursement Date.
2.21 Sharing of Payments, Etc. If, other than as
expressly provided elsewhere herein, any Bank shall obtain
on account of the Obligations in its favor any payment
(whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its ratable
share (or other share contemplated hereunder), such Bank
shall immediately (a) notify the Agent of such fact, and (b)
purchase from the other Banks such participations in the
Obligations in their favor as shall be necessary to cause
such purchasing Bank to share the excess payment pro rata
with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from
the purchasing Bank, such purchase shall to that extent be
rescinded and each other Bank shall repay to the purchasing
Bank the purchase price paid therefor, together with an
amount equal to such paying Bank's ratable share (according
to the proportion of (i) the amount of such paying Bank's
required repayment to (ii) the total amount so recovered
from the purchasing Bank) of any interest or other amount
paid or payable by the purchasing Bank in respect of the
total amount so recovered. The Company agrees that any
Bank so purchasing a participation from another Bank may, to
the fullest extent permitted by law, exercise all its rights
of payment (including the right of set-off, but subject to
Section 10.10) with respect to such participation as fully
as if such Bank were the direct creditor of the Company in
the amount of such participation. The Agent will keep
records (which shall be conclusive and binding in the
absence of manifest error) of participations purchased
under this Section and will in each case notify the Banks
following any such purchases or repayments.
2.22 Security and Guaranty.
(a) All obligations of the Company under this
Agreement, the Notes and all other Loan Documents shall be
secured in accordance with the Collateral Documents.
(b) All obligations of the Company under this
Agreement, each of the Notes and all other Loan Documents
shall be unconditionally guaranteed by the Guarantors
pursuant to the Guaranty; provided, however, that upon the
sale or other disposition of the capital stock or assets of
Imperial Adhesives, Inc. pursuant to Section 7.02(e), then,
in the absence of a Default or an Event of Default, the
Agent shall release Imperial Adhesives, Inc. from its
obligations under the Guaranty.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a) Any and all payments by the Company to
each Bank or the Agent under this Agreement and any other
Loan Document shall be made free and clear of, and without
deduction or withholding for, any Taxes. In addition, the
Company shall pay all Other Taxes.
(b) If the Company shall be required by law to
deduct or withhold any Taxes, Other Taxes or Further Taxes
from or in respect of any sum payable hereunder to
any Bank or the Agent, then:
(i) the sum payable shall be increased as
necessary so that, after making all required deductions and
withholdings (including deductions and withholdings
applicable to additional sums payable under this Section),
such Bank or the Agent, as the case may be, receives and
retains an amount equal to the sum it would have received
and retained had no such deductions or withholdings been
made;
(ii) the Company shall make such
deductions and withholdings;
(iii) the Company shall pay the full
amount deducted or withheld to the relevant taxing authority
or other authority in accordance with applicable law; and
(iv) the Company shall also pay to each
Bank or the Agent for the account of such Bank, at the time
interest is paid, Further Taxes in the amount that the
respective Bank specifies as necessary to preserve the
after-tax yield the Bank would have received if such Taxes,
Other Taxes or further Taxes had not been imposed.
(c) The Company agrees to indemnify and hold
harmless each Bank and the Agent for the full amount of i)
Taxes, ii) Other Taxes, and iii) Further Taxes in the
amount that the respective Bank specifies as necessary to
preserve the after-tax yield the Bank would have received if
such Taxes, Other Taxes or Further Taxes had not been
imposed, and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes, Other Taxes or
Further Taxes were correctly or legally asserted. Payment
under this indemnification shall be made within 30 days
after the date the Bank or the Agent makes written demand
therefor.
(d) Within 30 days after the date of any
payment by the Company of Taxes, Other Taxes or Further
Taxes, the Company shall furnish to each Bank or the
Agent the original or a certified copy of a receipt
evidencing payment thereof, or other evidence of
payment satisfactory to such Bank or the Agent.
(e) If the Company is required to pay any
amount to any Bank or the Agent pursuant to subsection (b)
or (c) of this Section, then such Bank shall use reasonable
efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Company which
may thereafter accrue, if such change in the sole judgment
of such Bank is not otherwise disadvantageous to such Bank.
3.02 Illegality.
(a) If any Bank determines that the
introduction of any Requirement of Law, or any change in any
Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental
Authority has asserted that it is unlawful, for any Bank or
its applicable Lending Office to make Offshore Rate Loans,
then, on notice thereof by the Bank to the Company through
the Agent, any obligation of that Bank to make Offshore Rate
Loans shall be suspended until the Bank notifies the Agent
and the Company that the circumstances giving rise to such
determination no longer exist.
(b) If a Bank determines that it is unlawful
to maintain any Offshore Rate Loan, the Company shall, upon
its receipt of notice of such fact and demand from such
Bank (with a copy to the Agent), prepay in full such
Offshore Rate Loans of that Bank then outstanding, together
with interest accrued thereon and amounts required under
Section 3.04, either on the last day of the Interest Period
thereof, if the Bank may lawfully continue to maintain such
Offshore Rate Loans to such day, or immediately, if the Bank
may not lawfully continue to maintain such Offshore Rate
Loan. If the Company is required to so prepay any Offshore
Rate Loan, then concurrently with such prepayment, the
Company shall borrow from the affected Bank, in the amount
of such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or
maintain Offshore Rate Loans has been so terminated or
suspended, the Company may elect, by giving notice to the
Bank through the Agent that all Loans which would otherwise
be made by the Bank as Offshore Rate Loans shall be instead
Base Rate Loans.
(d) Before giving any notice to the Agent
under this Section, the affected Bank shall designate a
different Lending Office with respect to its Offshore Rate
Loans if such designation will avoid the need for giving
such notice or making such demand and will not, in the
judgment of the Bank, be illegal or otherwise
disadvantageous to the Bank.
3.03 Increased Costs and Reduction of Return.
(a) If any Bank determines that, due to either
(i) the introduction of or any change (other than any change
by way of imposition of or increase in reserve requirements
included in the calculation of the Offshore Rate or in the
interpretation of any law or regulation or (ii) the
compliance by that Bank with any guideline or request from
any central bank or other Governmental Authority (whether or
not having the force of law), there shall be any increase in
the cost to such Bank of agreeing to make or making, funding
or maintaining any Offshore Rate Loans, then the Company
shall be liable for, and shall from time to time, upon
demand (with a copy of such demand to be sent to the Agent),
pay to the Agent for the account of such Bank, additional
amounts as are sufficient to compensate such Bank for such
increased costs.
(b) If any Bank shall have determined that (i)
the introduction of any Capital Adequacy Regulation, (ii)
any change in any Capital Adequacy Regulation, (iii)
any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance by the Bank (or
its Lending Office) or any corporation controlling the Bank
with any Capital Adequacy Regulation, affects or would
affect the amount of capital required or expected to be
maintained by the Bank or any corporation controlling the
Bank and (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy and
such Bank's desired return on capital) determines that the
amount of such capital is increased as a consequence of its
Commitments, loans, credits or obligations under this
Agreement, then, upon demand of such Bank to the Company
through the Agent, the Company shall pay to the Bank, from
time to time as specified by the Bank, additional amounts
sufficient to compensate the Bank for such increase.
3.04 Funding Losses. The Company shall reimburse
each Bank and hold each Bank harmless from any loss or
expense which the Bank may sustain or incur as a consequence
of:
(a) the failure of the Company to make on a
timely basis any payment of principal of any Offshore Rate
Loan;
(b) the failure of the Company to borrow,
continue or convert a Loan after the Company has given (or
is deemed to have given) a Notice of Borrowing or a Notice
of Conversion/ Continuation;
(c) the failure of the Company to make any
prepayment in accordance with any notice delivered under
Section 2.06;
(d) the prepayment (including pursuant to
Section 2.07) or other payment (including after acceleration
thereof) of an Offshore Rate Loan on a day that is not the
last day of the relevant Interest Period; or
(e) the automatic conversion under Section
2.04 of any Offshore Rate Loan to a Base Rate Loan on a day
that is not the last day of the relevant Interest Period;
including any such loss or expense arising from the
liquidation or reemployment of funds obtained by it to
maintain its Offshore Rate Loans or from fees payable to
terminate the deposits from which such funds were obtained.
For purposes of calculating amounts payable by the Company
to the Banks under this Section and under subsection
3.03(a), each Offshore Rate Loan made by a Bank (and each
related reserve, special deposit or similar requirement)
shall be conclusively deemed to have been funded at the IBOR
used in determining the Offshore Rate for such Offshore Rate
Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for
a comparable period, whether or not such Offshore Rate Loan
is in fact so funded.
3.05 Inability to Determine Rates. If the Agent
determines that for any reason adequate and reasonable means
do not exist for determining the Offshore Rate for any
requested Interest Period with respect to a proposed
Offshore Rate Loan, or that the Offshore Rate applicable
pursuant to subsection 2.09(a) for any requested Interest
Period with respect to a proposed Offshore Rate Loan does
not adequately and fairly reflect the cost to the
Banks of funding such Loan, the Agent will promptly so
notify the Company and each Bank. Thereafter, the
obligation of the Banks to make or maintain Offshore Rate
Loans hereunder shall be suspended until the Agent revokes
such notice in writing. Upon receipt of such notice, the
Company may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the
Company does not revoke such Notice, the Banks shall make,
convert or continue the Loans, as proposed by the Company,
in the amount specified in the applicable notice submitted
by the Company, but such Loans shall be made, converted or
continued as Base Rate Loans instead of Offshore Rate Loans.
3.06 Reserves on Offshore Rate Loans. The Company
shall pay to each Bank, as long as such Bank shall be
required under regulations of the FRB to maintain reserves
with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as
"Eurocurrency liabilities"), additional costs on the unpaid
principal amount of each Offshore Rate Loan equal to the
actual costs of such reserves allocated to such Loan by the
Bank (as determined by the Bank in good faith, which
determination shall be conclusive), payable on each date on
which interest is payable on such Loan, provided the
Company shall have received at least 15 days' prior written
notice (with a copy to the Agent) of such additional
interest from the Bank. If a Bank fails to give notice 15
days prior to the relevant Interest Payment Date, such
additional interest shall be payable 15 days from receipt
of such notice.
3.07 Certificates of Banks. Any Bank claiming
reimbursement or compensation under this Article III shall
deliver to the Company (with a copy to the Agent) a
certificate setting forth in reasonable detail the amount
payable to the Bank hereunder and such certificate shall be
conclusive and binding on the Company in the absence of
manifest error.
3.08 Substitution of Banks. Upon the receipt by the
Company from any Bank (an "Affected Bank") of a claim for
compensation under Section 3.03, the Company may: (i)
request the Affected Bank to use its best efforts to obtain
a replacement bank or financial institution satisfactory to
the Company and to the Agent (a "Replacement Bank") to
acquire and assume all or a ratable part of all of such
Affected Bank's Loans and Commitment, (ii) request one more
of the other Banks to acquire and assume all or part of such
Affected Bank's Loans and Commitment; or (iii) designate a
Replacement Bank. Any such designation of a Replacement
Bank under clause (i) or (iii) shall be subject to the prior
written consent of the Agent (which consent shall not be
unreasonably withheld).
3.09 Survival. The agreements and obligations of the
Company in this Article III shall survive the payment of all
other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions of Initial Loans and Letters of
Credit. The obligation of each Bank to make its initial
Loan hereunder and of the Agent to issue the initial Letter
of Credit is subject to the condition that the Agent shall
have received on or before the Closing Date all of the
following, in form and substance satisfactory to the
Agent and each Bank, and in sufficient copies for each Bank:
(a) Credit Agreement and Notes. This
Agreement and the Notes executed by each party thereto;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the
board of directors of the Company and each Guarantor
authorizing the transactions contemplated hereby,
certified as of the Closing Date by the Secretary or
an Assistant Secretary of such Person; and (ii) A
certificate of the Secretary or Assistant Secretary of the
Company and each Guarantor certifying the names and
true signatures of the officers of the Company or such
Guarantor authorized to execute, deliver and perform, as
applicable, this Agreement, and all other Loan Documents to
be delivered by it hereunder;
(c) Organization Documents; Good Standing.
Each of the following documents:
(i) the articles or certificate of
incorporation and the bylaws of the Company and each
Guarantor as in effect on the Closing Date, certified by the
Secretary or Assistant Secretary of such Person as of
the Closing Date; and
(ii) a good standing and tax good
standing certificate for the Company and each Guarantor from
the Secretary of State (or similar, applicable Governmental
Authority) of its state of incorporation and each state
where the Company or such Guarantor is qualified to do
business as a foreign corporation as of a recent date,
together with a bring-down certificate by facsimile, dated
the Closing Date;
(d) Legal Opinions. An opinion of ▇▇▇▇▇ ▇▇▇▇,
LLP, counsel to the Company and addressed to the Agent and
the Banks, substantially in the form of Exhibit D;
(e) Payment of Fees. Evidence of payment by
the Company of all accrued and unpaid fees, costs and
expenses to the extent then due and payable on the Closing
Date, together with Attorney Costs of the Agent to the
extent invoiced prior to or on the Closing Date, plus such
additional amounts of Attorney Costs as shall constitute the
Agent's reasonable estimate of Attorney Costs incurred or to
be incurred by it through the closing proceedings (provided
that such estimate shall not thereafter preclude final
settling of accounts between the Company and the Agent);
including any such costs, fees and expenses arising under or
referenced in Sections 2.10 and 10.04;
(f) Collateral Documents. The Collateral
Documents, executed by the Company and the Guarantors, as
applicable, in appropriate form for filing, where necessary,
together with
(i) acknowledgment copies of all UCC-l
financing statements filed, registered or recorded to
perfect the security interests of the Agent for the benefit
of the Banks, or other evidence satisfactory to the Agent
that there has been filed, registered or recorded all
financing statements and other filings, registrations and
recordings necessary and advisable to perfect the Liens of
the Agent for the benefit of the Banks in accordance with
applicable law;
(ii) written advice relating to such Lien
and judgment searches as the Agent shall have requested, and
such termination statements or other documents as may be
necessary to confirm that the Collateral is subject to no
other Liens in favor of any Persons (other than Permitted
Liens);
(iii) evidence that all other actions
necessary or, in the opinion of the Agent or the Banks,
desirable to perfect and protect the first priority security
interest created by the Collateral Documents have been
taken;
(iv) funds sufficient to pay any filing
or recording tax or fee in connection with any and all UCC-1
financing statements;
(v) evidence that all other actions
necessary or, in the opinion of the Agent or the Banks,
desirable to perfect and protect the first priority Lien
created by the Collateral Documents, and to enhance the
Agent's ability to preserve and protect its interests in
and access to the Collateral, have been taken.
(g) Insurance Policies. Standard lenders'
payable endorsements with respect to the insurance policies
or other instruments or documents evidencing insurance
coverage on the properties of the Company in accordance with
Section 6.06;
(h) Environmental Review. An environmental
site assessment with respect to any real property owned,
leased or otherwise used by the Company and its
Subsidiaries, dated as of a recent date prior to the Closing
Date, prepared by a qualified firm acceptable to the Agent
and the Banks, stating, among other things, that such real
property is free from Hazardous Materials and that
operations conducted thereon are in compliance with all
Environmental Laws and showing any Estimated Remediation
Costs;
(i) Certificate. A certificate signed by a
Responsible Officer, dated as of the Closing Date, stating
that:
(i) the representations and warranties
contained in Article V are true and correct on and as of
such date, as though made on and as of such date;
(ii) no Default or Event of Default
exists or would result from the initial Borrowing; and
(iii) there has occurred since March 31,
1998, no event or circumstance that has resulted or could
reasonably be expected to result in a Material Adverse
Effect;
(j) Certain Senior Indebtedness. Copies of
all documents, instruments and agreements evidencing or
otherwise pertaining to Senior Indebtedness owed to any
Person other than the Banks, which shall be acceptable to
the Agent and its counsel as to form and substance;
(k) Financial Projections. Copies of
financial projections for the Company and its Subsidiaries
for the current fiscal year through the Termination Date,
which shall be acceptable to the Agent as to form and
substance;
(l) Other Documents. Such other approvals,
opinions, documents or materials as the Agent or any Bank
may request.
4.02 Conditions to All Borrowings. The obligation of
each Bank to make any Loan to be made by it (including its
initial Loan) or to continue or convert any Loan under
Section 2.04 is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date or
Conversion/Continuation Date:
(a) Notice of Borrowing or
Conversion/Continuation. The Agent shall have received
(with, in the case of the initial Loan only, a copy for each
Bank) a Notice of Borrowing or a Notice of
Conversion/Continuation, as applicable;
(b) Continuation of Representations and
Warranties. The representations and warranties in Article V
shall be true and correct on and as of such Borrowing Date
or Conversion/Continuation Date with the same effect as if
made on and as of such Borrowing Date or
Conversion/Continuation Date except to the extent
such representations and warranties expressly refer to an
earlier date, in which case they shall be true and correct
as of such earlier date;
(c) No Existing Default. No Default or Event
of Default shall exist or shall result from such Borrowing
or continuation or conversion; and
(d) No Future Advance Notice. Neither the
Agent nor any Bank shall have received from the Company any
notice that any Collateral Document will no longer secure
on a first priority basis future advances, future Loans or
future Letter of Credit Obligations to be made or extended
under this Agreement.
Each Notice of Borrowing and Notice of
Conversion/Continuation submitted by the Company
hereunder shall constitute a representation and warranty by
the Company hereunder, as of the date of each such notice
and as of each Borrowing Date or Conversion/Continuation
Date, as applicable, that the conditions in this Section
4.02 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and
each Bank that:
5.01 Corporate Existence and Power. The Company and
each of its Subsidiaries:
(a) is a corporation duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation;
(b) has the power and authority and all
governmental licenses, authorizations, consents and
approvals to own its assets, carry on its business and to
execute, deliver, and perform its obligations under the Loan
Documents;
(c) is duly qualified as a foreign corporation
and is licensed 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 or license; and
(d) is in compliance with all Requirements of
Law; except to the extent that the failure to do so could
not reasonably be expected to have a Material Adverse
Effect.
5.02 Corporate Authorization; No Contravention. The
execution, delivery and performance by the Company and its
Subsidiaries of this Agreement and each other Loan
Document to which such Person is party, have been duly
authorized by all necessary corporate action, and do not and
will not:
(a) contravene the terms of any of that
Person's Organization Documents;
(b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any
document evidencing any Contractual Obligation to which such
Person is a party or any order, injunction, writ or decree
of any Governmental Authority to which such Person or its
property is subject; or
(c) violate any Requirement of Law.
5.03 Governmental Authorization. No approval,
consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority
(except for filings in connection with the Liens granted to
the Agent under the Collateral Documents) is necessary or
required in connection with the execution, delivery or
performance by, or enforcement against, the Company or any
of its Subsidiaries of the Agreement or any other Loan
Document.
5.04 Binding Effect. This Agreement and each other
Loan Document to which the Company or any of its
Subsidiaries is a party constitute the legal, valid and
binding obligations of the Company and any of its
Subsidiaries to the extent it is a party thereto,
enforceable against such Person in accordance with their
respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting
the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
5.05 Litigation. Except as specifically disclosed in
Schedule 5.05, there are no actions, suits, proceedings,
claims or disputes pending, or to the best knowledge of the
Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against
the Company, or its Subsidiaries or any of their respective
properties which:
(a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the
transactions contemplated hereby or thereby; or
(b) if determined adversely to the Company or
its Subsidiaries, would reasonably be expected to have a
Material Adverse Effect. No injunction, writ, temporary
restraining order or any order of any nature has been issued
by any court or other Governmental Authority purporting to
enjoin or restrain the execution, delivery or performance of
this Agreement or any other Loan Document, or directing that
the transactions provided for herein or therein not be
consummated as herein or therein provided.
5.06 No Default. No Default or Event of Default
exists or would result from the incurring of any Obligations
by the Company or from the grant or perfection of the Liens
of the Agent and the Banks on the Collateral. As of the
Closing Date, neither the Company nor any Subsidiary is in
default under or with respect to any Contractual Obligation
in any respect which, individually or together with all such
defaults, could reasonably be expected to have a Material
Adverse Effect, or that would, if such default had occurred
after the Closing Date, create an Event of Default under
subsection 8.01(e).
5.07 ERISA Compliance. Except as specifically
disclosed in Schedule 5.07:
(a) Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code
and other federal or state law. Each Plan which is intended
to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS and to the best
knowledge of the Company, nothing has occurred which would
cause the loss of such qualification. The Company and each
ERISA Affiliate has made all required contributions to any
Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made
with respect to any Plan.
(b) There are no pending or, to the best
knowledge of Company, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with
respect to any Plan which has resulted or could reasonably
be expected to result in a Material Adverse Effect. There
has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan
which has resulted or could reasonably be expected to result
in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is
reasonably expected to occur; (ii) no Pension Plan has any
Unfunded Pension Liability; (iii) neither the Company nor
any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to
any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iv) neither the Company nor
any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with
the giving of notice under Section 4219 of ERISA, would
result in such liability) under Section 4201 or 4243 of
ERISA with respect to a Multiemployer Plan; and (v) neither
the Company nor any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c)
of ERISA.
5.08 Use of Proceeds; Margin Regulations. The
proceeds of the Loans and the Letters of Credit are to be
used solely for the purposes set forth in and permitted by
Section 6.12 and Section 7.07. Neither the Company nor any
Subsidiary is generally engaged in the business of
purchasing or selling Margin Stock or extending credit for
the purpose of purchasing or carrying Margin Stock.
5.09 Title to Properties. The Company and each
Subsidiary have good record and marketable title in fee
simple to, or valid leasehold interests in, all real
property necessary or used in the ordinary conduct of their
respective businesses, except for such defects in title
as could not, individually or in the aggregate, have a
Material Adverse Effect. As of the Closing Date, the
property of the Company and its Subsidiaries is subject to
no Liens, other than Permitted Liens.
5.10 Taxes. The Company and its Subsidiaries have
filed all Federal and other material tax returns and reports
required to be filed, and have paid all Federal and other
material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except those
which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax
assessment against the Company or any Subsidiary that would,
if made, have a Material Adverse Effect.
5.11 Financial Condition.
(a) The audited consolidated financial
statements of the Company and its Subsidiaries dated
September 30, 1997, and the related consolidated statements
of income or operations, shareholders' equity and cash flows
for the fiscal year ended on that date:
(i) were prepared in accordance with
GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein;
(ii) fairly present the financial
condition of the Company and its Subsidiaries as of the date
thereof and results of operations for the period covered
thereby; and
(iii) except as specifically disclosed in
Schedule 5.11, show all material indebtedness and other
liabilities, direct or contingent, of the Company and
its consolidated Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and
Contingent Obligations.
(b) Since September 30, 1997, there has been
no Material Adverse Effect.
5.12 Environmental Matters.
(a) Except as specifically disclosed in
Schedule 5.12, the on-going operations of the Company and
each of its Subsidiaries comply in all respects with all
Environmental Laws, except such non-compliance which would
not (if enforced in accordance with applicable law) result
in liability in excess of $1,000,000 in the aggregate.
(b) Except as specifically disclosed in
Schedule 5.12, the Company and each of its Subsidiaries have
obtained all licenses, permits, authorizations and
registrations required under any Environmental Law
("Environmental Permits") and necessary for their respective
ordinary course operations, all such Environmental Permits
are in good standing, and the Company and each of its
Subsidiaries are in compliance with all material terms and
conditions of such Environmental Permits.
(c) Except as specifically disclosed in
Schedule 5.12, none of the Company, any of its Subsidiaries
or any of their respective present property or operations,
is subject to any outstanding written order from or
agreement with any Governmental Authority, nor subject to
any judicial or docketed administrative proceeding,
respecting any Environmental Law, Environmental Claim or
Hazardous Material.
(d) Except as specifically disclosed in
Schedule 5.12, there are no Hazardous Materials or other
conditions or circumstances existing with respect to any
property of the Company or any Subsidiary, or arising from
operations prior to the Closing Date, of the Company or any
of its Subsidiaries that would reasonably be expected to
give rise to Environmental Claims with a potential liability
of the Company and its Subsidiaries in excess of $1,000,000
in the aggregate for any such condition, circumstance or
property. In addition, (i) neither the Company nor any
Subsidiary has any underground storage tanks (x) that are
not properly registered or permitted under applicable
Environmental Laws, or (y) that are leaking or disposing of
Hazardous Materials off-site, and (ii) the Company and
its Subsidiaries have notified all of their employees of the
existence, if any, of any health hazard arising from the
conditions of their employment and have met all notification
requirements under Title III of CERCLA and all other
Environmental Laws.
5.13 Collateral Documents.
(a) The provisions of each of the Collateral
Documents are effective to create in favor of the Agent for
the benefit of the Banks, a legal, valid and enforceable
first priority security interest in all right, title and
interest of the Company in the collateral described
therein; and financing statements have been filed in the
offices in all of the jurisdictions listed in the schedule
to the Security Agreement.
(b) All representations and warranties of the
Company and any of its Subsidiaries party thereto contained
in the Collateral Documents are true and correct.
5.14 Regulated Entities. None of the Company, any
Person controlling the Company, or any Subsidiary, is an
"Investment Company" within the meaning of the Investment
Company Act of 1940. The Company is not subject to
regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act,
any state public utilities code, or any other Federal or
state statute or regulation limiting its ability to incur
Indebtedness.
5.15 No Burdensome Restrictions. Neither the Company
nor any Subsidiary is a party to or bound by any Contractual
Obligation, or subject to any restriction in any
Organization Document, or any Requirement of Law, which
could reasonably be expected to have a Material Adverse
Effect.
5.16 Copyrights, Patents, Trademarks and Licenses,
etc. The Company or its Subsidiaries own or are licensed or
otherwise have the right to use all of the patents,
trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other rights that
are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of
any other Person. To the best knowledge of the Company,
no slogan or other advertising device, product, process,
method, substance, part or other material now employed, or
now contemplated to be employed, by the Company or any
Subsidiary infringes upon any rights held by any other
Person. Except as specifically disclosed in Schedule 5.05,
no claim or litigation regarding any of the foregoing is
pending or threatened, and no patent, invention, device,
application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the
knowledge of the Company, proposed, which, in either case,
could reasonably be expected to have a Material Adverse
Effect.
5.17 Subsidiaries. As of the Closing Date, the
Company has no Subsidiaries other than those specifically
disclosed in part (a) of Schedule 5.17 hereto and has no
equity investments in any other corporation or entity other
than those specifically disclosed in part (b) of Schedule
5.17.
5.18 Insurance. The properties of the Company and
its Subsidiaries are insured with financially sound and
reputable insurance companies not Affiliates of the Company,
in such amounts, with such deductibles and covering such
risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in
localities where the Company or such Subsidiary operates.
5.19 Solvency. The Company and each of its Material
Subsidiaries are Solvent.
5.20 Full Disclosure. None of the representations or
warranties made by the Company or any Subsidiary in the Loan
Documents as of the date such representations and warranties
are made or deemed made, and none of the statements
contained in any exhibit, report, statement or certificate
furnished by or on behalf of the Company or any Subsidiary
in connection with the Loan Documents (including the
offering and disclosure materials delivered by or on behalf
of the Company to the Banks prior to the Closing Date),
contains any untrue statement of a material fact or omits
any material fact required to be stated therein or necessary
to make the statements made therein, in light of the
circumstances under which they are made, not misleading as
of the time when made or delivered.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment
hereunder, or any Loan or other Obligation shall remain
unpaid or unsatisfied, unless the Majority Banks waive
compliance in writing:
6.01 Financial Statements. The Company shall deliver
to the Agent, in form and detail satisfactory to the Agent
and the Majority Banks, with sufficient copies for each
Bank:
(a) as soon as available, but not later than
120 days after the end of each fiscal year, a copy of the
audited consolidated and consolidating balance sheet of the
Company and its Subsidiaries as at the end of such year and
the related consolidated and consolidating statements of
income or operations, shareholders' equity and cash flows
for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, and
accompanied by the opinion of a nationally-recognized
independent public accounting firm ("Independent Auditor")
which report shall state that such consolidated
financial statements present fairly the financial position
for the periods indicated in conformity with GAAP applied on
a basis consistent with prior years. Such opinion shall
not be qualified or limited because of a restricted or
limited examination by the Independent Auditor of any
material portion of the Company's or any Subsidiary's
records and shall be delivered to the Agent pursuant to a
reliance agreement between the Agent and Banks and
such Independent Auditor in form and substance satisfactory
to the Agent;
(b) as soon as available, but not later than
45 days after the end of each fiscal year, a copy of an
unaudited consolidating balance sheet of the Company and its
Subsidiaries as at the end of such year and the related
consolidating statement of income, shareholders' equity and
cash flows for such year, certified by a Responsible Officer
as having been developed and used in connection with the
preparation of the financial statements referred to in
subsection 6.01(a);
(c) as soon as available, but not later than
45 days after the end of each of the first three fiscal
quarters of each fiscal year, a copy of the unaudited
consolidated balance sheet of the Company and its
Subsidiaries as of the end of such quarter and the related
consolidated statements of income, shareholders' equity and
cash flows for the period commencing on the first day and
ending on the last day of such quarter, and certified by a
Responsible Officer as fairly presenting, in accordance with
GAAP (subject to ordinary, good faith year-end audit
adjustments), the financial position and the results of
operations of the Company and the Subsidiaries;
(d) as soon as available, but not later than
60 days after the end of each fiscal year , a copy of the
annual budget for the Company and its Subsidiaries for the
next fiscal year, certified by an appropriate Responsible
Officer.
6.02 Certificates; Other Information. The Company
shall furnish to the Agent, with sufficient copies for each
Bank:
(a) concurrently with the delivery of the
financial statements referred to in subsection 6.01(a), a
certificate of the Independent Auditor 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 subsections 6.01(a) and
(c), a Compliance Certificate executed by a Responsible
Officer;
(c) promptly, copies of all financial
statements and reports that the Company sends to its
shareholders, and copies of all financial statements and
regular, periodical or special reports (including Forms 10K,
10Q and 8K) that the Company or any Subsidiary may make to,
or file with, the SEC; and
(d) promptly, such additional information
regarding the business, financial or corporate affairs of
the Company or any Subsidiary as the Agent, at the request
of any Bank, may from time to time reasonably request.
6.03 Notices. The Company shall promptly notify the
Agent and each Bank:
(a) of the occurrence of any Default or Event
of Default, and of the occurrence or existence of any event
or circumstance that foreseeably will become a Default
or Event of Default;
(b) of (i) any breach or non-performance of,
or any default under, any Contractual Obligation of the
Company or any of its Subsidiaries which could result in a
Material Adverse Effect; and (ii) any dispute, litigation,
investigation, proceeding or suspension which may exist at
any time between the Company or any of its Subsidiaries
and any Governmental Authority which could result in a
Material Adverse Effect;
(c) of the commencement of, or any material
development in, any litigation or proceeding affecting the
Company or any Subsidiary (i) in which the amount of
damages claimed is $10,000,000 (or its equivalent in another
currency or currencies) or more, (ii) in which injunctive or
similar relief is sought and which, if adversely determined,
would reasonably be expected to have a Material Adverse
Effect, or (iii) in which the relief sought is an injunction
or other stay of the performance of this Agreement or any
Loan Document;
(d) upon, but in no event later than 10 days
after, becoming aware of (i) any and all enforcement,
cleanup, removal or other governmental or regulatory actions
instituted, completed or threatened against the Company or
any Subsidiary or any of their respective properties
pursuant to any applicable Environmental Laws which could
reasonably result in a Material Adverse Effect, (ii) all
other Environmental Claims which could reasonably result in
a Material Adverse Effect, and (iii) any environmental or
similar condition on any real property adjoining or in the
vicinity of the property of the Company or any Subsidiary
that could reasonably be anticipated to cause such property
or any part thereof to be subject to any restrictions on the
ownership, occupancy, transferability or use of such
property under any Environmental Laws which could reasonably
result in a Material Adverse Effect;
(e) of any other litigation or proceeding
affecting the Company or any of its Subsidiaries which the
Company would be required to report to the SEC pursuant to
the Exchange Act, within four days after reporting the same
to the SEC;
(f) of the occurrence of any of the following
events affecting the Company or any ERISA Affiliate (but in
no event more than 10 days after such event), and deliver
to the Agent and each Bank a copy of any notice with respect
to such event that is filed with a Governmental Authority
and any notice delivered by a Governmental Authority to the
Company or any ERISA Affiliate with respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded
Pension Liability of any Pension Plan;
(iii) the adoption of, or the commencement
of contributions to, any Plan subject to Section 412 of the
Code by the Company or any ERISA Affiliate; or
(iv) the adoption of any amendment to a
Plan subject to Section 412 of the Code, if such amendment
results in a material increase in contributions or
Unfunded Pension Liability.
(g) of any material change in accounting
policies or financial reporting practices by the Company or
any of its consolidated Subsidiaries;
Each notice under this Section shall be
accompanied by a written statement by a Responsible Officer
setting forth details of the occurrence referred to therein,
and stating what action the Company or any affected
Subsidiary proposes to take with respect thereto and at what
time. Each notice under subsection 6.03(a) shall describe
with particularity any and all clauses or provisions of this
Agreement or other Loan Document that have been (or
foreseeably will be) breached or violated.
6.04 Preservation of Corporate Existence, Etc. The
Company shall, and shall cause each Subsidiary to:
(a) preserve and maintain in full force and
effect its corporate existence and good standing under the
laws of its state or jurisdiction of incorporation;
(b) preserve and maintain in full force and
effect all governmental rights, privileges, qualifications,
permits, licenses and franchises necessary or desirable in
the normal conduct of its business except in connection with
transactions permitted by Section 7.03 and sales of assets
permitted by Section 7.02;
(c) use reasonable efforts, in the ordinary
course of business, to preserve its business organization
and goodwill; and
(d) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
6.05 Maintenance of Property. The Company shall
maintain, and shall cause each Subsidiary to maintain, and
preserve all its property which is used or useful in its
business in good working order and condition, ordinary wear
and tear excepted and make all necessary repairs thereto and
renewals and replacements thereof except where the failure
to do so could not reasonably be expected to have a Material
Adverse Effect, except as permitted by Section 7.02. The
Company and each Subsidiary shall use the standard of care
typical in the industry in the operation and maintenance of
its facilities.
6.06 Insurance. In addition to insurance
requirements set forth in the Collateral Documents, the
Company shall maintain, and shall cause each of its
Subsidiaries to maintain, with financially sound and
reputable independent insurers, insurance with respect to
its properties and business against loss or damage of the
kinds customarily insured against by Persons engaged in the
same or similar business, of such types and in such amounts
as are customarily carried under similar circumstances by
such other Persons; including workers' compensation
insurance, public liability and property and casualty
insurance which amount shall not be reduced by the Company
in the absence of 30 days' prior notice to the Agent.
All property and casualty insurance maintained by the
Company covering the Collateral shall name the Agent as loss
payee and all liability insurance shall name the Agent as
additional insured, in each case for the benefit of the
Banks, as their interests may appear. Upon request of the
Agent or any Bank, the Company shall furnish the Agent, with
sufficient copies for each Bank, at reasonable intervals
(but not more than once per calendar year) a certificate of
a Responsible Officer of the Company (and, if requested by
the Agent, any insurance broker of the Company) setting
forth the nature and extent of all insurance maintained by
the Company and its Subsidiaries in accordance with this
Section or any Collateral Documents (and which, in the case
of a certificate of a broker, were placed through such
broker).
6.07 Payment of Obligations. The Company shall, and
shall cause each Subsidiary to, pay and discharge as the
same shall become due and payable, all their respective
obligations and liabilities, including:
(a) all tax liabilities, assessments and
governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Company or such
Subsidiary; and
(b) all lawful claims which, if unpaid, would
by law become a Lien upon its property except those
obligations not yet delinquent or otherwise being contested
in good faith and properly reserved for in accordance with
GAAP.
6.08 Compliance with Laws. The Company shall comply,
and shall cause each Subsidiary to comply, in all material
respects with all Requirements of Law of any Governmental
Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except
such as may be contested in good faith or as to which a
bona fide dispute may exist.
6.09 Compliance with ERISA. The Company shall, and
shall cause each of its ERISA Affiliates to: (a) maintain
each Plan in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal
or state law; (b) cause each Plan which is qualified under
Section 401(a) of the Code to maintain such qualification;
and (c) make all required contributions to any Plan subject
to Section 412 of the Code.
6.10 Inspection of Property and Books and Records.
The Company shall maintain and shall cause each Subsidiary
to maintain proper books of record and account, in which
full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial
transactions and matters involving the assets and business
of the Company and such Subsidiary. The Company shall
permit, and shall cause each Subsidiary to permit,
representatives and independent contractors of the Agent or
any Bank to visit and inspect any of their respective
properties, to examine their respective corporate, financial
and operating records, and make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances
and accounts with their respective directors, officers, and
independent public accountants, all at the expense of the
Company and at such reasonable times during normal
business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Company; provided,
however, when an Event of Default exists the Agent or any
Bank may do any of the foregoing at the expense of the
Company at any time during normal business hours and without
advance notice. The Company's payment and reimbursement
obligations under this Section 6.10 with respect to
inspections shall be limited to $2,000 in any fiscal year
provided no Default or Event of Default occurs or is
continuing during such fiscal year.
6.11 Environmental Laws.
(a) The Company shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain
its property in compliance with all Environmental Laws.
(b) Upon the written request of the Agent or
any Bank, the Company shall submit and cause each of its
Subsidiaries to submit, to the Agent with sufficient copies
for each Bank, at the Company's sole cost and expense, at
reasonable intervals, a report providing an update of the
status of any environmental, health or safety compliance,
hazard or liability issue identified in any notice or report
required pursuant to subsection 6.03(d), that could,
individually or in the aggregate, result in liability in
excess of $1,000,000.
6.12 Use of Proceeds. The Company shall use the
Letters of Credit and the proceeds of the Loans solely as
follows: (i) to pay off certain Indebtedness; (ii) to
finance Acquisitions but only to the extent such
Acquisitions are permitted by Section 7.04(d); and
(iii) for working capital and other general corporate
purposes not in contravention of any Requirement of Law or
of any Loan Document.
6.13 Further Assurances.
(a) The Company shall ensure that all written
information, exhibits and reports furnished to the Agent or
the Banks do not and will not contain any untrue statement
of a material fact and do not and will not omit to state any
material fact or any fact necessary to make the statements
contained therein not misleading in light of the
circumstances in which made, and will promptly disclose to
the Agent and the Banks and correct any defect or error that
may be discovered therein or in any Loan Document or in the
execution, acknowledgement or recordation thereof.
(b) Promptly upon request by the Agent or the
Majority Banks, the Company shall (and shall cause any of
its Subsidiaries to) do, execute, acknowledge, deliver,
record, re-record, file, re-file, register and re-register,
any and all such further acts, deeds, conveyances, security
agreements, mortgages, assignments, estoppel certificates,
financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates,
assurances and other instruments the Agent or such Banks, as
the case may be, may reasonably require from time to time in
order (i) to carry out more effectively the purposes of this
Agreement or any other Loan Document, (ii) to subject to the
Liens created by any of the Collateral Documents any of the
properties, rights or interests covered by any of the
Collateral Documents, (iii) to perfect and maintain the
validity, effectiveness and priority of any of the
Collateral Documents and the Liens intended to be created
thereby, and (iv) to better assure, convey, grant, assign,
transfer, preserve, protect and confirm to the Agent and
Banks the rights granted or now or hereafter intended to be
granted to the Banks under any Loan Document or under any
other document executed in connection therewith.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment
hereunder, or any Loan or other Obligation shall remain
unpaid or unsatisfied, unless the Majority Banks waive
compliance in writing:
7.01 Limitation on Liens. The Company shall not, and
shall not suffer or permit any Subsidiary to, directly or
indirectly, make, create, incur, assume or suffer to exist
any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the
following ("Permitted Liens"):
(a) any Lien (other than a Lien on the
Collateral) existing on property of the Company or any
Subsidiary on the Closing Date and set forth in Schedule
7.01 securing Indebtedness outstanding on such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or
other governmental charges which are not delinquent or
remain payable without penalty, or to the extent that
non-payment thereof is permitted by Section 6.07, provided
that no notice of lien has been filed or recorded under the
Code;
(d) carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other similar
Liens arising in the ordinary course of business which are
not delinquent or remain payable without penalty or which
are being contested in good faith and by appropriate
proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by
ERISA and other than on the Collateral) consisting of
pledges or deposits required in the ordinary course of
business in connection with workers' compensation,
unemployment insurance and other social security
legislation;
(f) Liens (other than Liens on the Collateral)
on the property of the Company or its Subsidiary securing
(i) the non-delinquent performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, (ii) contingent obligations on surety and
appeal bonds, and (iii) other non-delinquent obligations of
a like nature; in each case, incurred in the ordinary course
of business, provided all such Liens in the aggregate would
not (even if enforced) cause a Material Adverse Effect;
(g) Liens (other than Liens on the Collateral)
consisting of judgment or judicial attachment liens,
provided that the enforcement of such Liens is effectively
stayed and all such liens in the aggregate at any time
outstanding for the Company and its Subsidiaries do not
exceed $20,000,000;
(h) 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 interfere with
the ordinary conduct of the businesses of the Company and
its Subsidiaries;
(i) Liens on assets of corporations which
become Subsidiaries after the date of this Agreement,
provided, however, that such Liens existed at the time the
respective corporations became Subsidiaries and were not
created in anticipation thereof;
(j) purchase money security interests on any
property acquired or held by the Company or its Subsidiaries
in the ordinary course of business, securing Indebtedness
incurred or assumed for the purpose of financing all or any
part of the cost of acquiring such property; provided that
(i) any such Lien attaches to such property concurrently
with or within 20 days after the acquisition thereof, (ii)
such Lien attaches solely to the property so acquired in
such transaction, (iii) the principal amount of the debt
secured thereby does not exceed 100% of the cost of such
property, and (iv) the principal amount of the Indebtedness
secured by any and all such purchase money security
interests shall not at any time exceed $25,000,000;
(k) Liens securing obligations in respect of
capital leases on assets subject to such leases, provided
that such capital leases are otherwise permitted hereunder;
(l) Liens arising solely by virtue of any
statutory or common law provision relating to banker's
liens, rights of set-off or similar rights and remedies as
to deposit accounts or other funds maintained with a
creditor depository institution; provided that (i) such
deposit account is not a dedicated cash collateral account
and is not subject to restrictions against access by the
Company in excess of those set forth by regulations
promulgated by the FRB, and (ii) such deposit account is not
intended by the Company or any Subsidiary to provide
collateral to the depository institution;
(m) in addition to Liens permitted under
subsections (b) through (l) above, Liens (other than Liens
on the Collateral) given to secure Indebtedness of the
Company provided that the aggregate principal amount of such
Indebtedness shall not at any time exceed, together with the
Senior Indebtedness but not including in such calculation
the Obligations, $125,000,000.
7.02 Disposition of Assets. The Company shall not,
and shall not suffer or permit any Subsidiary to, directly
or indirectly, sell, assign, lease, convey, transfer or
otherwise dispose of (whether in one or a series of
transactions) any property (including accounts and
notes receivable, with or without recourse) or enter into
any agreement to do any of the foregoing, except:
(a) dispositions of inventory, or used,
worn-out or surplus equipment, all in the ordinary course of
business;
(b) the sale of equipment to the extent that
such equipment is exchanged for credit against the purchase
price of similar replacement equipment, or the proceeds of
such sale are reasonably promptly applied to the purchase
price of such replacement equipment;
(c) dispositions of inventory or equipment by
the Company or any Subsidiary to the Company or any
Subsidiary pursuant to reasonable business requirements;
(d) dispositions not otherwise permitted
hereunder which are made for fair market value; provided,
that (i) at the time of any disposition, no Event of Default
shall exist or shall result from such disposition, (ii) 50%
of the aggregate sales price from such disposition shall be
paid in cash, and (iii) the aggregate value of all assets so
sold by the Company and its Subsidiaries, together, shall
not exceed in any fiscal year $5,000,000; and
(e) the sale or other disposition of the
capital stock or substantially all of the assets of Imperial
Adhesives, Inc., which is a Subsidiary of the Company.
7.03 Consolidations and Mergers. The Company shall
not, and shall not suffer or permit any Subsidiary to,
merge, consolidate with or into, or convey, transfer, lease
or otherwise dispose of (whether in one transaction or in a
series of transactions substantially all of its assets
(whether now owned or hereafter acquired) to or in favor of
any Person, except:
(a) any Subsidiary may merge with the Company,
provided that the Company shall be the continuing or
surviving corporation, or with any one or more Subsidiaries,
provided that if any transaction shall be between a
Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned
Subsidiary shall be the continuing or surviving corporation;
(b) any Subsidiary may sell all or
substantially all of its assets (upon voluntary liquidation
or otherwise), to the Company or another Wholly-Owned
Subsidiary;
(c) any sale or other disposition permitted
under Section 7.02; and
(d) any Acquisition or Investment permitted
under Section 7.04.
7.04 Loans and Investments. The Company shall not
purchase or acquire, or suffer or permit any Subsidiary to
purchase or acquire, or make any commitment therefor, any
capital stock, equity interest, or any obligations or other
securities of, or any interest in, any Person, or make or
commit to make any Acquisitions, or make or commit to make
any advance, loan, extension of credit or capital
contribution to or any other investment in, any Person
including any Affiliate of the Company (together,
"Investments"), except for:
(a) Investments held by the Company or
Subsidiary in the form of Cash Equivalents or short term
marketable securities;
(b) extensions of credit in the nature of
accounts receivable or notes receivable arising from the
sale or lease of goods or services in the ordinary course of
business;
(c) extensions of credit by the Company to any
of its Wholly-Owned Subsidiaries or by any of its
Wholly-Owned Subsidiaries to the Company or another of its
Wholly-Owned Subsidiaries;
(d) Investments incurred in order to
consummate Acquisitions otherwise permitted herein, provided
that (i) the Person or business so acquired (the "Acquiree")
is primarily engaged in similar or related lines of business
as those lines of business carried on by the Company and its
Subsidiaries, (ii) after the consummation of the Acquisition
the Company and its Subsidiaries continue to comply with the
financial covenants set forth in Sections 7.14 through 7.17,
(iii) such Acquisitions are undertaken in accordance with
all applicable Requirements of Law; and (iv) the prior,
effective written consent or approval to such Acquisition of
the board of directors or equivalent governing body of the
Acquiree is obtained.
7.05 Limitation on Indebtedness. The Company shall
not, and shall not suffer or permit any Subsidiary to,
create, incur, assume, suffer to exist, or otherwise become
or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this
Agreement;
(b) Indebtedness consisting of Contingent
Obligations permitted pursuant to Section 7.08;
(c) Indebtedness existing on the Closing Date
and set forth in Schedule 7.05 and any renewals and
refinancings thereof;
(d) the Senior Indebtedness and any renewals
and refinancings thereof; and
(e) additional Indebtedness, provided that at
the time of incurrence thereof and after giving effect
thereto and to the application of the proceeds thereof, the
Company shall be in compliance with the financial covenant
set forth in Section 7.15.
7.06 Transactions with Affiliates. The Company shall
not, and shall not suffer or permit any Subsidiary to, enter
into any transaction with any Affiliate of the Company
(other than the Company or any Wholly-Owned Subsidiary),
except upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would obtain in a
comparable arm's-length transaction with a Person not an
Affiliate of the Company or such Subsidiary.
7.07 Use of Proceeds. The Company shall not, and
shall not suffer or permit any Subsidiary to, use any
portion of the Loan proceeds, directly or indirectly, (i) to
purchase or carry Margin Stock except in accordance with
Regulations G, T, U and X of the FRB, (ii) to repay or
otherwise refinance indebtedness of the Company or others
incurred to purchase or carry Margin Stock except in
accordance with Regulations G, T, U and X of the FRB, or
(iii) to extend credit for the purpose of purchasing or
carrying any Margin Stock except in accordance with
Regulations G, T, U and X of the FRB.
7.08 Contingent Obligations. The Company shall not,
and shall not suffer or permit any Subsidiary to, create,
incur, assume or suffer to exist any Contingent Obligations
except:
(a) endorsements for collection or deposit in
the ordinary course of business;
(b) Contingent Obligations of the Company and
its Subsidiaries existing as of the Closing Date and listed
in Schedule 7.08;
(c) Contingent Obligations with respect to
Surety Instruments incurred in the ordinary course of
business and not exceeding at any time $1,000,000 in the
aggregate in respect of the Company and its Subsidiaries
together; and
(d) Contingent Obligations related to
Indebtedness incurred by the Company or any Subsidiary
pursuant to Section 7.05.
7.09 Joint Ventures. The Company shall not, and
shall not suffer or permit any Subsidiary to enter into any
Joint Venture, other than in the ordinary course of business
or otherwise in connection with an Investment permitted
under Section 7.04.
7.10 Lease Obligations. The Company shall not, and
shall not suffer or permit any Subsidiary to, create or
suffer to exist any obligations for the payment of rent for
any property under lease or agreement to lease, except for:
(a) leases of the Company and of Subsidiaries
in existence on the Closing Date and any renewal, extension
or refinancing thereof;
(b) operating leases entered into by the
Company or any Subsidiary after the Closing Date in the
ordinary course of business;
(c) leases entered into by the Company or any
Subsidiary after the Closing Date pursuant to sale-leaseback
transactions permitted under subsection 7.02(d);
(d) Capital Leases other than those permitted
under clauses (a) and (c) of this Section, entered into by
the Company or any Subsidiary after the Closing Date to
finance the acquisition of equipment; provided that the
aggregate annual rental payments for all such capital leases
shall not exceed in any fiscal year $2,500,000.
7.11 Restricted Payments. The Company shall not
declare or make any dividend payment or other distribution
of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of its
capital stock, or purchase, redeem or otherwise acquire for
value any shares of its capital stock or any warrants,
rights or options to acquire such shares, now or hereafter
outstanding, unless at the time thereof and after giving
effect thereto the Company shall be in compliance with the
financial covenant set forth in Section 7.17.
7.12 ERISA. The Company shall not, and shall not
suffer or permit any of its ERISA Affiliates to: (a) engage
in a prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has
resulted or could reasonably expected to result in liability
of the Company in an aggregate amount in excess of
$1,000,000 ; or (b) engage in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.
7.13 Capital Expenditures. The Company and its
Subsidiaries shall not make or commit to make Capital
Expenditures in an amount greater than (a) $100 million in
the aggregate during the first three Loan Years, (b) $25
million in the aggregate during the fourth Loan Year, and
(c) $25 million in the aggregate during the fifth Loan Year
plus the difference between (i) $25 million, minus (ii) the
amount of Capital Expenditures made or committed by the
Company and its Subsidiaries in the aggregate during the
fourth Loan Year.
7.14 Debt to Cash Flow Ratio. The Company shall not,
as of the last day of any fiscal quarter, permit its ratio
of (i) Funded Debt minus Core Cash Balances, to (ii)
EBITDA for the four fiscal quarters ending on such date, to
exceed 2.5 to 1.0.
7.15 Interest Coverage Ratio. The Company shall not,
as of the last day of any fiscal quarter, permit its ratio
of (i) EBITDA, to (ii) Consolidated Net Interest Expense,
for the four fiscal quarters ending on such date, to be less
than 2.5 to 1.0.
7.16 Working Capital Ratio. The Company shall not,
as of the last day of any fiscal quarter, permit its ratio
of (i) Total Cash Balances plus Accounts Receivable, to (ii)
the aggregate outstanding principal balance of Revolving
Loans plus the aggregate amount of Letter of Credit
Outstandings, to be less than 1.25 to 1.0.
7.17 Minimum Adjusted Net Worth. The Company shall
not, as of the last day of any fiscal quarter, permit its
Adjusted Net Worth to be less than the sum of (i) $200
million, plus (ii) an amount equal to 50% of the net income
of the Company and its Subsidiaries as determined on a
consolidated basis in accordance with GAAP for the four
fiscal quarters ending on such date.
7.18 Change in Business. The Company shall not, and
shall not suffer or permit any Subsidiary to, engage in any
material line of business substantially different from those
lines of business carried on by the Company and its
Subsidiaries on the date hereof.
7.19 Accounting Changes. The Company shall not, and
shall not suffer or permit any Subsidiary to, make any
significant change in accounting treatment or reporting
practices, except as required by GAAP, or change the fiscal
year of the Company or of any Subsidiary.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Event of Default. Any of the following shall
constitute an "Event of Default":
(a) Non-Payment. The Company fails to make,
(i) when and as required to be made herein, payments of any
amount of principal of any Loan or any Reimbursement
Obligation, or (ii) within five (5) days after the same
becomes due, payment of any interest, fee or any other
amount payable hereunder or under any other Loan Document;
or
(b) Representation or Warranty. Any
representation or warranty by the Company or any Subsidiary
made or deemed made herein, in any other Loan Document,
or which is contained in any certificate, document or
financial or other statement by the Company, any Subsidiary,
or any Responsible Officer,furnished at any time under this
Agreement, or in or under any other Loan Document, is
incorrect in any material respect on or as of the date made
or deemed made; or
(c) Specific Defaults. The Company fails to
perform or observe any term, covenant or agreement contained
in any of Section 6.01,6.02, 6.03 or 6.09 or in Article
VII (other than Sections 7.04, 7.06 and 7.08); or
(d) Other Defaults. The Company or any
Subsidiary party thereto fails to perform or observe any
other term or covenant contained in this Agreement or any
other Loan Document, and such default shall continue
unremedied for a period of 30 days after the earlier of (i)
the date upon which a Responsible Officer knew or reasonably
should have known of such failure or (ii)] the date upon
which written notice thereof is given to the Company by the
Agent or any Bank; or
(e) Cross-Default. The Company or any
Subsidiary (A) fails to make any payment in respect of the
Senior Indebtedness, or any Indebtedness or Contingent
Obligation (including undrawn committed or available amounts
and including amounts owing to all creditors under any
combined or syndicated credit arrangement) which
individually or in the aggregate exceeds $10,000,000 when
due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise), and such failure
continues after the applicable grace or notice period, if
any, specified in the relevant document on the date of
such failure; or (B) fails to perform or observe any other
condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating
to the Senior Indebtedness or any such other Indebtedness or
Contingent Obligation which individually or in the aggregate
exceeds $10,000,000, and such failure continues after the
applicable grace or notice period, if any, specified in the
relevant document on the date of such failure if the effect
of such failure, event or condition is to cause, or to
permit the holder or holders of the Senior Indebtedness or
such other Indebtedness or beneficiary or beneficiaries of
the Senior Indebtedness or such other Indebtedness (or a
trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause the Senior
Indebtedness or such other Indebtedness to be declared to be
due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral
in respect thereof to be demanded;
(f) Insolvency; Voluntary Proceedings. The
Company or any Subsidiary (i) ceases or fails to be solvent,
or generally fails to pay, or admits in writing its
inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity
or otherwise; (ii) voluntarily ceases to conduct its
business in the ordinary course other than in connection
with a sale permitted by Section 7.02; (iii) commences any
Insolvency Proceeding with respect to itself; or (iv) takes
any action to effectuate or authorize any of the foregoing;
or
(g) Involuntary Proceedings. (i) Any
involuntary Insolvency Proceeding is commenced or filed
against the Company or any Subsidiary, or any writ,
judgment, warrant of attachment, execution or similar
process, is issued or levied against a substantial part of
the Company's or any Subsidiary's properties, and any such
proceeding or petition shall not be dismissed, or such writ,
judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded
within 60 days after commencement, filing or levy; (ii) the
Company or any Subsidiary admits the material allegations of
a petition against it in any Insolvency Proceeding, or an
order for relief (or similar order under non-U.S. law)
is ordered in any Insolvency Proceeding; or (iii) the
Company or any Subsidiary acquiesces in the appointment of a
receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of
its property or business; or
(h) ERISA. (i) An ERISA Event shall occur
with respect to a Pension Plan or Multiemployer Plan which
has resulted or could reasonably be expected to result
in liability of the Company under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate
amount in excess of $1,000,000; or (ii) the aggregate amount
of Unfunded Pension Liability among all Pension Plans at any
time exceeds $1,000,000; or (iii) the Company or any ERISA
Affiliate shall fail to pay when due, after the expiration
of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of
ERISA under a Multiemployer Plan in an aggregate amount in
excess of $1,000,000 ; or
(i) Monetary Judgments. One or more
non-interlocutory judgments, non-interlocutory orders,
decrees or arbitration awards is entered against the Company
or any Subsidiary involving in the aggregate a liability (to
the extent not covered by independent third-party insurance
as to which the insurer does not dispute coverage) as to any
single or related series of transactions, incidents or
conditions, of $1,000,000 or more, and the same
shall remain unvacated and unstayed pending appeal for a
period of 10 days after the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary
judgment, order or decree is entered against the Company or
any Subsidiary which does or would reasonably be
expected to have a Material Adverse Effect, and there shall
be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(k) Change of Control. There occurs any
Change of Control; or
(l) Loss of Licenses. Any Governmental
Authority revokes or fails to renew any material license,
permit or franchise of the Company or any Subsidiary, or the
Company or any Subsidiary for any reason loses any material
license, permit or franchise, or the Company or any
Subsidiary suffers the imposition of any restraining order,
escrow, suspension or impound of funds in connection with
any proceeding (judicial or administrative) with respect to
any material license, permit or franchise the effect of
which could reasonably result in a Material Adverse Effect;
or
(m) Adverse Change. There occurs a Material
Adverse Effect; or
(n) Guarantor Defaults. The Guarantors fail
in any material respect to perform or observe any term,
covenant or agreement in the Guaranty; or the Guaranty is
for any reason partially (including with respect to future
advances) or wholly revoked or invalidated, or otherwise
ceases to be in full force and effect, or the Guarantors or
any other Person contests in any manner the validity or
enforceability thereof or denies that it has any
further liability or obligation thereunder; or any event
described at subsections (f) or (g) of this Section occurs
with respect to either Guarantor; or
(o) Collateral.
(i) any provision of any Collateral
Document shall for any reason cease to be valid and binding
on or enforceable against the Company or any Subsidiary
party thereto or the Company or any Subsidiary shall so
state in writing or bring an action to limit its obligations
or liabilities thereunder; or
(ii) any Collateral Document shall for
any reason (other than pursuant to the terms thereof) cease
to create a valid security interest in the Collateral
purported to be covered thereby or such security interest
shall for any reason cease to be a perfected and first
priority security interest subject only to Permitted Liens.
8.02 Remedies. If any Event of Default occurs, the
Agent shall, at the request of, or may, with the consent of,
the Majority Banks,
(a) declare the commitment of each Bank to
make Loans to be terminated, whereupon such commitments
shall be terminated;
(b) declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon,
and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and
payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived
by the Company;
(c) terminate any Letter of Credit that may be
terminated in accordance with its terms;
(d) direct the Company to pay (and the Company
agrees that upon receipt of such notice, or upon the
occurrence of any Event of Default specified in paragraph
(f) or (g) of Section 8.01 above, it will pay) to the Agent
such additional amount of cash, to be held as security by
the Agent for the account of the Banks, as is equal to the
aggregate Stated Amount of all Letters of Credit then
outstanding; and
(e) exercise on behalf of itself and the Banks
all rights and remedies available to it and the Banks under
the Loan Documents or applicable law; provided, however,
that upon the occurrence of any event specified in
subsection (f) or (g) of Section 8.01 (in the case of clause
(i) of subsection (g) upon the expiration of the 60-day
period mentioned therein), the obligation of each Bank to
make Loans shall automatically terminate and the unpaid
principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become
due and payable without further act of the Agent or any
Bank.
8.03 Rights Not Exclusive. The rights provided for
in this Agreement and the other Loan Documents are
cumulative and are not exclusive of any other rights,
powers, privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement now
existing or hereafter arising.
8.04 Certain Financial Covenant Defaults. In the
event that, after taking into account any extraordinary
charge to earnings taken or to be taken as of the end of
any fiscal period of the Company (a "Charge"), and if solely
by virtue of such Charge, there would exist an Event of
Default due to the breach of any of Sections 7.14 through
7.17 of such fiscal period end date, such Event of Default
shall be deemed to arise upon the earlier of (a) the date
after such fiscal period end date on which the Company
announces publicly it will take, is taking or has taken such
Charge (including an announcement in the form of a
statement in a report filed with the SEC) or, if such
announcement is made prior to such fiscal period end date,
the date that is such fiscal period end date, and (b) the
date the Company delivers to the Agent its audited annual or
unaudited quarterly financial statements in respect of such
fiscal period reflecting such Charge as taken.
ARTICLE IX
THE AGENT
9.01 Appointment and Authorization; "Agent". Each
Bank hereby irrevocably (subject to Section 9.09) appoints,
designates and authorizes the Agent to take such action
on its behalf under the provisions of this Agreement and
each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the
terms of this Agreement or any other Loan Document, together
with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained
elsewhere in this Agreement or in any other Loan Document,
the Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with
any Bank, 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 Agent. Without limiting the
generality of the foregoing sentence, the use of the term
"agent" in this Agreement with reference to the Agent is not
intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a
matter of market custom, and is intended to create or
reflect only an administrative relationship between
independent contracting parties.
9.02 Delegation of Duties. The Agent may execute any
of its duties under this Agreement or any other Loan
Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.
The Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects
with reasonable care.
9.03 Liability of Agent. None of the Agent-Related
Persons shall (i) be liable for any action taken or omitted
to be taken by any of them under or in connection with this
Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to
any of the Banks for any recital, statement, representation
or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained
in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document,
or for the value of or title to any Collateral, or the
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or
for any failure of the Company or any other party to any
Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any
obligation to any Bank 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 Company or any of the Company's Subsidiaries
or Affiliates.
9.04 Reliance by Agent.
(a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement
or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by
the proper Person or Persons, and upon advice and statements
of legal counsel (including counsel to the Company),
independent accountants and other experts selected by the
Agent. The 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 Majority Banks as it deems
appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Banks against any and
all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other
Loan Document in accordance with a request or consent of the
Majority Banks and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of
the Banks.
(b) For purposes of determining compliance
with the conditions specified in Section 4.01, each Bank
that has executed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with,
each document or other matter either sent by the Agent to
such Bank for consent, approval, acceptance or satisfaction,
or required thereunder to be consented to or approved by or
acceptable or satisfactory to the Bank.
9.05 Notice of Default. The Agent shall not be
deemed to have knowledge or notice of the occurrence of any
Default or Event of Default, except with respect to defaults
in the payment of principal, interest and fees required to
be paid to the Agent for the account of the Banks, unless
the Agent shall have received written notice from a Bank or
the Company referring to this Agreement, describing such
Default or Event of Default and stating that such notice is
a "notice of default". The Agent will notify the Banks of
its receipt of any such notice. The Agent shall take such
action with respect to such Default or Event of Default as
may be requested by the Majority Banks in accordance with
Article VIII; provided, however, that unless and until the
Agent has received any such request, the 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 or in the best interest
of the Banks.
9.06 Credit Decision. Each Bank acknowledges that
none of the Agent-Related Persons has made any
representation or warranty to it, and that no act by the
Agent hereinafter taken, including any review of the affairs
of the Company and its Subsidiaries, shall be deemed to
constitute any representation or warranty by any
Agent-Related Person to any Bank. Each Bank represents to
the Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents
and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and
creditworthiness of the Company and its Subsidiaries, the
value of and title to any Collateral, and all applicable
bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter
into this Agreement and to extend credit to the Company
hereunder. Each Bank also represents that it will,
independently and without reliance upon any Agent-Related
Person 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 investigations as it deems
necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and
creditworthiness of the Company. Except for notices,
reports and other documents expressly herein required to be
furnished to the Banks by the Agent, the Agent shall not
have any duty or responsibility to provide any Bank with any
credit or other information concerning the business,
prospects, operations, property, financial and other
condition or creditworthiness of the Company which may come
into the possession of any of the Agent-Related Persons.
9.07 Indemnification of Agent. Whether or not the
transactions contemplated hereby are consummated, the Banks
shall indemnify upon demand the Agent-Related Persons
(to the extent not reimbursed by or on behalf of the Company
and without limiting the obligation of the Company to do
so), pro rata, from and against any and all Indemnified
Liabilities; provided, however, that no Bank shall be liable
for the payment to the Agent-Related Persons of any portion
of such Indemnified Liabilities resulting solely from such
Person's gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank shall reimburse the
Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred
by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings
or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to
herein, to the extent that the Agent is not reimbursed for
such expenses by or on behalf of the Company. The
undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of
the Agent.
9.08 Agent in Individual Capacity. BofA and its
Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business
with the Company and its Subsidiaries and Affiliates as
though BofA were not the Agent hereunder and without notice
to or consent of the Banks. The Banks acknowledge that,
pursuant to such activities, BofA or its Affiliates may
receive information regarding the Company or its Affiliates
(including information that may be subject to
confidentiality obligations in favor of the Company or such
Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With
respect to its Loans and the other Obligations, BofA shall
have the same rights and powers under this Agreement
as any other Bank and may exercise the same as though it
were not the Agent, and the terms "Bank" and "Banks" include
BofA in its individual capacity.
9.09 Successor Agent. The Agent may, and at the
request of the Majority Banks shall, resign as Agent upon 30
days' notice to the Banks. If the Agent resigns under this
Agreement, the Majority Banks shall appoint from among the
Banks a successor agent for the Banks; provided, however,
that in the absence of a Default or an Event of Default, the
Majority Banks shall obtain the consent of the Company to
such appointment, which consent shall not be unreasonably
withheld. If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent
may appoint, after consulting with the Banks and the
Company, a successor agent from among the Banks; provided,
however, that in the absence of a Default or an Event of
Default, the Agent shall obtain the consent of the Company
to such appointment, which consent shall not be unreasonably
withheld. Upon the acceptance of its appointment as
successor agent hereunder, such successor agent shall
succeed to all the rights, powers and duties of the retiring
Agent and the term "Agent" shall mean such successor agent
and the retiring Agent's appointment, powers and duties as
Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this
Article IX and Sections 10.04 and 10.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement. If no successor
agent has accepted appointment as Agent by the date which is
30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless
thereupon become effective and the Banks shall perform all
of the duties of the Agent hereunder until such time, if
any, as the Majority Banks appoint a successor agent as
provided for above.
9.10 Withholding Tax.
(a) If any Bank is a "foreign corporation,
partnership or trust" within the meaning of the Code and
such Bank claims exemption from, or a reduction of, U.S.
withholding tax under Sections 1441 or 1442 of the Code,
such Bank agrees with and in favor of the Agent, to deliver
to the Agent:
(i) if such Bank claims an exemption
from, or a reduction of, withholding tax under a United
States tax treaty, two properly completed and executed
copies of IRS Form 1001 before the payment of any
interest in the first calendar year and before the payment
of any interest in each third succeeding calendar year
during which interest may be paid under this Agreement;
(ii) if such Bank claims that interest
paid under this Agreement is exempt from United States
withholding tax because it is effectively connected with a
United States trade or business of such Bank, two
properly completed and executed copies of IRS Form 4224
before the payment of any interest is due in the first
taxable year of such Bank and in each succeeding taxable
year of such Bank during which interest may be paid under
this Agreement; and
(iii) such other form or forms as may be
required under the Code or other laws of the United States
as a condition to exemption from, or reduction of, United
States withholding tax.
Such Bank agrees to promptly notify the Agent of
any change in circumstances which would modify or render
invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or
reduction of, withholding tax under a United States tax
treaty by providing IRS Form 1001 and such Bank sells,
assigns,grants a participation in, or otherwise transfers
all or part of the Obligations of the Company to such Bank,
such Bank agrees to notify the Agent of the percentage
amount in which it is no longer the beneficial owner of
Obligations of the Company to such Bank. To the extent
of such percentage amount, the Agent will treat such Bank's
IRS Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United
States withholding tax by filing IRS Form 4224 with the
Agent sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations of the
Company to such Bank, such Bank agrees to undertake sole
responsibility for complying with the withholding tax
requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in
the applicable withholding tax, the Agent may withhold from
any interest payment to such Bank an amount equivalent to
the applicable withholding tax after taking into account
such reduction. However, if the forms or other
documentation required by subsection (a) of this Section are
not delivered to the Agent, then the Agent may withhold from
any interest payment to such Bank not providing such forms
or other documentation an amount equivalent to the
applicable withholding tax imposed by Sections 1441 and 1442
of the Code, without reduction.
(e) If the IRS or any other Governmental
Authority of the United States or other jurisdiction asserts
a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Bank (because the
appropriate form was not delivered or was not properly
executed, or because such Bank failed to notify the Agent of
a change in circumstances which rendered the exemption from,
or reduction of, withholding tax ineffective, or for any
other reason) such Bank shall indemnify the Agent fully for
all amounts paid, directly or indirectly, by the Agent as
tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the
amounts payable to the Agent under this Section, together
with all costs and expenses (including Attorney Costs).
The obligation of the Banks under this subsection shall
survive the payment of all Obligations and the resignation
or replacement of the Agent.
9.11 Collateral Matters.
(a) The Agent is authorized on behalf of all
the Banks, without the necessity of any notice to or further
consent from the Banks, from time to time to take any action
with respect to any Collateral or the Collateral Documents
which may be necessary to perfect and maintain perfected the
security interest in and Liens upon the Collateral granted
pursuant to the Collateral Documents.
(b) The Banks irrevocably authorize the Agent,
at its option and in its discretion, to release any Lien
granted to or held by the Agent upon any Collateral (i)
upon termination of the Commitments and payment in full of
all Loans and all other Obligations known to the Agent and
payable under this Agreement or any other Loan Document;
(ii) constituting property sold or to be sold or disposed of
as part of or in connection with any disposition permitted
hereunder; (iii) constituting property in which the Company
or any Subsidiary owned no interest at the time the Lien
was granted or at any time thereafter; (iv) constituting
property leased to the Company or any Subsidiary under a
lease which has expired or been terminated in a transaction
permitted under this Agreement or is about to expire and
which has not been, and is not intended by the Company or
such Subsidiary to be, renewed or extended; (v) consisting
of an instrument evidencing Indebtedness or other debt
instrument, if the indebtedness evidenced thereby has
been paid in full; or (vi) if approved, authorized or
ratified in writing by the Majority Banks or all the Banks,
as the case may be, as provided in subsection 10.01(f).
Upon request by the Agent at any time, the Banks will
confirm in writing the Agent's authority to release
particular types or items of Collateral pursuant to this
subsection 9.11(b), provided that the absence of any such
confirmation for whatever reason shall not affect the
Agent's rights under this Section 9.11.
(c) Each Bank agrees with and in favor of each
other (which agreement shall not be for the benefit of the
Company or any Subsidiary) that the Company's obligation
to such Bank under this Agreement and the other Loan
Documents is not and shall not be secured by any real
property collateral now or hereafter acquired by such Bank.
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers. No amendment or waiver
of any provision of this Agreement or any other Loan
Document, and no consent with respect to any departure by
the Company or any applicable Subsidiary therefrom, shall be
effective unless the same shall be in writing and signed by
the Majority Banks (or by the Agent at the written request
of the Majority Banks) and the Company and acknowledged by
the Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and
signed by all the Banks and the Company and acknowledged by
the Agent, do any of the following:
(a) increase or extend the Commitment of any
Bank (or reinstate any Commitment terminated pursuant to
Section 8.02);
(b) postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Banks
(or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of
interest specified herein on any Loan or Reimbursement
Obligation, or (subject to clause (ii) below) any fees or
other amounts payable hereunder or under any other Loan
Document;
(d) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Loans
which is required for the Banks or any of them to take any
action hereunder; or
(e) amend this Section, or Section 2.14, or
any provision herein providing for consent or other action
by all Banks; or
(f) discharge any Guarantor, or release any
portion of the Collateral having a book value in excess of
$1,000,000 except as otherwise may be provided in the
Collateral Document or except where the consent of the
Majority Banks only is specifically provided for; and,
provided further, that no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition
to the Majority Banks or all the Banks, as the case may be,
affect the rights or duties of the Agent under this
Agreement or any other Loan Document.
10.02 Notices.
(a) All notices, requests, consents,
approvals, waivers and other communications shall be in
writing (including, unless the context expressly otherwise
provides, by facsimile transmission, provided that any
matter transmitted by the Company by facsimile (i) shall be
immediately confirmed by a telephone call to the recipient
at the number specified on Schedule 10.02, and (ii) shall be
followed promptly by delivery of a hard copy original
thereof) and mailed, faxed or delivered, to the address or
facsimile number specified for notices on Schedule 10.02;
or, as directed to the Company or the Agent, to such other
address as shall be designated by such party in a written
notice to the other parties, and as directed to any other
party, at such other address as shall be designated
by such party in a written notice to the Company and the
Agent.
(b) All such notices, requests and
communications shall, when transmitted by overnight
delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible
form by facsimile machine, respectively, or if mailed,
upon the third Business Day after the date deposited into
the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Articles II or IX to the Agent shall not
be effective until actually received by the Agent.
(c) Any agreement of the Agent and the Banks
herein to receive certain notices by telephone or facsimile
is solely for the convenience and at the request of the
Company. The Agent and the Banks shall be entitled to rely
on the authority of any Person purporting to be a Person
authorized by the Company to give such notice and the Agent
and the Banks shall not have any liability to the Company or
other Person on account of any action taken or not taken by
the Agent or the Banks in reliance upon such telephonic or
facsimile notice. The obligation of the Company to repay
the Loans and the Letter of Credit Outstandings shall not be
affected in any way or to any extent by any failure by the
Agent and the Banks to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Agent
and the Banks of a confirmation which is at variance with
the terms understood by the Agent and the Banks to be
contained in the telephonic or facsimile notice.
10.03 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the
Agent or any Bank, any right, remedy, power or privilege
hereunder, 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.
10.04 Costs and Expenses. The Company shall:
(a) whether or not the transactions
contemplated hereby are consummated, pay or reimburse BofA
(including in its capacity as Agent) within five Business
Days after demand (subject to subsection 4.01(e)) for all
costs and expenses incurred by BofA (including in its
capacity as Agent) in connection with the development,
preparation, delivery, administration and execution of, and
any amendment, supplement, waiver or modification to (in
each case, whether or not consummated), this Agreement,
any Loan Document and any other documents prepared in
connection herewith or therewith, and the consummation of
the transactions contemplated hereby and thereby, including
reasonable Attorney Costs incurred by BofA (including in its
capacity as Agent) with respect thereto; and
(b) pay or reimburse the Agent and each Bank
within five Business Days after demand (subject to
subsection 4.01(e)) for all costs and expenses (including
Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or any other Loan
Document during the existence of an Event of Default or
after acceleration of the Loans (including in connection
with any "workout" or restructuring regarding the Loans and
the Letters of Credit, and including in any Insolvency
Proceeding or appellate proceeding); and
(c) pay or reimburse BofA (including in its
capacity as Agent) within five Business Days after demand
(subject to subsection 4.01(e)) for all reasonable appraisal
(including the allocated cost of internal appraisal
services), audit, environmental inspection and review
(including the allocated cost of such internal services),
search and filing costs, fees and expenses, incurred or
sustained by BofA (including in its capacity as Agent) in
connection with the matters referred to under subsections
(a) and (b) of this Section.
10.05 Company Indemnification.
(a) Whether or not the transactions
contemplated hereby are consummated, the Company shall
indemnify, defend and hold the Agent-Related Persons, and
each Bank and each of its respective officers, directors,
employees, counsel, agents and attorneys-in-fact
(each, an "Indemnified Person") harmless from and against
any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges,
expenses and disbursements (including Attorney Costs) of any
kind or nature whatsoever which may at any time (including
at any time following repayment of the Loans and the other
Obligations and the termination, resignation or replacement
of the Agent or replacement of any Bank) be imposed on,
incurred by or asserted against any such Person in any way
relating to or arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any
such Person under or in connection with any of the
foregoing, including with respect to any investigation,
litigation or proceeding (including any Insolvency
Proceeding or appellate proceeding) related to or arising
out of this Agreement or the Obligations or the use of the
proceeds thereof, whether or not any Indemnified Person is a
party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Company shall
have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities resulting solely from the
gross negligence or willful misconduct of such Indemnified
Person. The agreements in this Section shall survive payment
of all of the Obligations.
(b) (i) The Company shall indemnify, defend
and hold harmless each Indemnified Person, from and against
any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges,
expenses or disbursements (including Attorney Costs and the
allocated cost of internal environmental audit or review
services), which may be incurred by or asserted against
such Indemnified Person in connection with or arising
out of any pending or threatened investigation, litigation
or proceeding, or any action taken by any Person, with
respect to any Environmental Claim arising out of or related
to any property owned, leased or used by the Company or its
Subsidiaries. No action taken by legal counsel chosen by
the Agent or any Bank in defending against any such
investigation,litigation or proceeding or requested
remedial, removal or response action shall vitiate or any
way impair the Company's obligation and duty hereunder to
indemnify and hold harmless the Agent and each Bank.
(ii) In no event shall any site visit,
observation, or testing by the Agent or any Bank (or any
contractee of the Agent or any Bank) be deemed a
representation or warranty that Hazardous Materials are or
are not present in, on, or under, the site, or that there
has been or shall be compliance with any Environmental Law.
Neither the Company nor any other Person is entitled to rely
on any site visit, observation, or testing by the Agent or
any Bank. Neither the Agent nor any Bank owes any duty of
care to protect the Company or any other Person against, or
to inform the Company or any other party of, any Hazardous
Materials or any other adverse condition affecting any site
or property. Neither the Agent nor any Bank shall be
obligated to disclose to the Company or any other Person any
report or findings made as a result of, or in connection
with, any site visit, observation, or testing by the Agent
or any Bank.
(c) The obligations in this Section shall
survive payment of all of the Obligations. At the election
of any Indemnified Person, the Company shall defend such
Indemnified Person using legal counsel satisfactory to such
Indemnified Person in such Person's sole discretion, at the
sole cost and expense of the Company. All amounts owing
under this Section shall be paid within 30 days after
demand.
10.06 Marshalling; Payments Set Aside. Neither the
Agent nor the Banks shall be under any obligation to
▇▇▇▇▇▇▇▇ any assets in favor of the Company or any other
Person or against or in payment of any or all of the
Obligations. To the extent that the Company makes a payment
to the Agent or the Banks, or the Agent or the Banks
exercise their right of set-off, and such payment or the
proceeds of such set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including
pursuant to any settlement entered into by the Agent or such
Bank in its discretion) to be repaid to a trustee, receiver
or any other party, in connection with any Insolvency
Proceeding or otherwise, then (a) to the extent of such
recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made
or such set-off had not occurred, and (b) each Bank
severally agrees to pay to the Agent upon demand its pro
rata share of any amount so recovered from or repaid by the
Agent.
10.07 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and
assigns, except that the Company may not assign or transfer
any of its rights or obligations under this Agreement
without the prior written consent of the Agent and each
Bank.
10.08 Assignments, Participations, etc.
(a) Any Bank may, with the written consent of
the Agent and, in the absence of a Default or an Event of
Default, the Company, which consent shall not be
unreasonably withheld, at any time assign and delegate to
one or more Eligible Assignees (provided that no written
consent of the Agent or the Company shall be required in
connection with any assignment and delegation by a Bank to
an Eligible Assignee that is an Affiliate of such Bank)
(each an "Assignee") all, or any ratable part of all, of the
Loans, the Commitments and the other rights and obligations
of such Bank hereunder, in a minimum amount of $1,000,000;
provided, however, that the Company and the Agent may
continue to deal solely and directly with such Bank in
connection with he interest so assigned to an Assignee until
(A) written notice of such assignment, together with payment
instructions, addresses and related information with respect
to the Assignee, shall have been given to the Company and
the Agent by such Bank and the Assignee; (B) such Bank and
its Assignee shall have delivered to the Company and the
Agent an Assignment and Assumption in the form of Exhibit E
("Assignment and Assumption") together with any Note or
Notes subject to such assignment and (C) the assignor Bank
or Assignee has paid to the Agent a processing fee in the
amount of 1% of the amount so assigned by such Bank to the
Assignee.
(b) From and after the date that the Agent
notifies the assignor Bank that it has received and provided
its consent with respect to an executed Assignment and
Assumption and payment of the above-referenced processing
fee, (i) the Assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and
Assumption, shall have the rights and obligations of a Bank
under the Loan Documents, and (ii) the assignor Bank shall,
to the extent that rights and obligations hereunder and
under the other Loan Documents have been assigned by it
pursuant to such Assignment and Assumption, relinquish its
rights and be released from its obligations under the Loan
Documents.
(c) Within five Business Days after its
receipt of notice by the Agent that it has received an
executed Assignment and Assumption and payment of the
processing fee, the Company shall execute and deliver to the
Agent, new Notes evidencing such Assignee's assigned Loans
and Commitment and, if the assignor Bank has retained a
portion of its Loans and its Commitment, replacement Notes
in the principal amount of the Loans retained by the
assignor Bank (such Notes to be in exchange for, but not in
payment of, the Notes held by such Bank). Immediately upon
each Assignee's making its processing fee payment under
the Assignment and Assumption, this Agreement shall be
deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom.
The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Bank pro tanto.
(d) Any Bank may at any time sell to one or
more commercial banks or other Persons not Affiliates of the
Company (a "Participant") participating interests in any
Loans, the Commitment of that Bank and the other interests
of that Bank (the "originating Bank") hereunder and under
the other Loan Documents; provided, however, that (i) the
originating Bank's obligations under this Agreement shall
remain unchanged, (ii) the originating Bank shall remain
solely responsible for the performance of such obligations,
(iii) the Company and the Agent shall continue to deal
solely and directly with the originating Bank in connection
with the originating Bank's rights and obligations under
this Agreement and the other Loan Documents, and (iv) no
Bank shall transfer or grant any participating interest
under which the Participant has rights to approve any
amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, except to the extent
such amendment, consent or waiver would require unanimous
consent of the Banks as described in the first proviso to
Section 10.01. In the case of any such participation, the
Participant shall not have any rights under this Agreement,
or any of the other Loan Documents, and all amounts payable
by the Company hereunder shall be determined as if such Bank
had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off 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 Bank
under this Agreement.
(e) Notwithstanding any other provision in
this Agreement, any Bank may at any time create a security
interest in, or pledge, all or any portion of its rights
under and interest in this Agreement and the Note held by it
in favor of any Federal Reserve Bank in accordance with
Regulation A of the FRB or U.S. Treasury Regulation 31 CFR
203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under
applicable law.
10.09 Confidentiality. Each Bank agrees to take and
to cause its Affiliates to take normal and reasonable
precautions and exercise due care to maintain the
confidentiality of all information identified as
"confidential" or "secret" by the Company and provided to
it by the Company or any Subsidiary, or by the Agent on the
Company's or such Subsidiary's behalf, under this Agreement
or any other Loan Document, and neither it nor any of its
Affiliates shall use any such information other than in
connection with or in enforcement of this Agreement and the
other Loan Documents or in connection with other business
now or hereafter existing or contemplated with the Company
or any Subsidiary; except to the extent such information (i)
was or becomes generally available to the public other than
as a result of disclosure by the Bank, or (ii) was or
becomes available on a non-confidential basis from a
source other than the Company, provided that such source is
not bound by a confidentiality agreement with the Company
known to the Bank; provided, however, that any Bank may
disclose such information (A) at the request or pursuant to
any requirement of any Governmental Authority to which the
Bank is subject or in connection with an examination of
such Bank by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in
accordance with the provisions of any applicable Requirement
of Law; (D) to the extent reasonably required in connection
with any litigation or proceeding to which the Agent, any
Bank or their respective Affiliates may be party; (E) to the
extent reasonably required in connection with the exercise
of any remedy hereunder or under any other Loan Document;
(F) to such Bank's independent auditors and other
professional advisors; (G) with the Company's consent (in
the absence of a Default or an Event of Default), to any
Participant or Assignee, actual or potential, provided that
such Person agrees in writing to keep such information
confidential to the same extent required of the Banks
hereunder; (H) as to any Bank or its Affiliate, as expressly
permitted under the terms of any other document or agreement
regarding confidentiality to which the Company or any
Subsidiary is party or is deemed party with such Bank or
such Affiliate; and (I) to its Affiliates.
10.10 Set-off. In addition to any rights and remedies
of the Banks provided by law, if an Event of Default exists
or the Loans have been accelerated, each Bank is authorized
at any time and from time to time, without prior notice to
the Company, any such notice being waived by the Company to
the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other
indebtedness at any time owing by, such Bank to or for the
credit or the account of the Company against any and all
Obligations owing to such Bank, now or hereafter existing,
irrespective of whether or not the Agent or such Bank shall
have made demand under this Agreement or any Loan Document
and although such Obligations may be contingent or
unmatured. Each Bank agrees promptly to notify the Company
and the Agent after any such set-off and application made by
such Bank; provided, however, that the failure to give
such notice shall not affect the validity of such set-off
and application.
10.11 Automatic Debits of Fees. With respect to any
commitment fee, agency fee, or other fee, or any other cost
or expense (including Attorney Costs) due and payable to
the Agent or BofA under the Loan Documents, the Company
hereby irrevocably authorizes BofA to debit any deposit
account of the Company with BofA in an amount such that the
aggregate amount debited from all such deposit accounts does
not exceed such fee or other cost or expense. If there are
insufficient funds in such deposit accounts to cover the
amount of the fee or other cost or expense then due, such
debits will be reversed (in whole or in part, in BofA's sole
discretion) and such amount not debited shall be deemed to
be unpaid. No such debit under this Section shall be deemed
a set-off.
10.12 Notification of Addresses, Lending Offices, Etc.
Each Bank shall notify the Agent in writing of any changes
in the address to which notices to the Bank should be
directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it
hereunder and of such other administrative information as
the Agent shall reasonably request.
10.13 Counterparts. This Agreement may be executed in
any number of separate counterparts, each of which, when so
executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute
but one and the same instrument.
10.14 Severability. The illegality or
unenforceability of any provision of this Agreement or any
instrument or agreement required hereunder shall not in any
way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or
agreement required hereunder.
10.15 No Third Parties Benefited. This Agreement is
made and entered into for the sole protection and legal
benefit of the Company, the Banks, the Agent and the Agent-
Related Persons, and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of
action or claim in connection with, this Agreement or any of
the other Loan Documents.
10.16 Governing Law and Jurisdiction. (a) THIS
AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS;
PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS OR OF THE
UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE
COMPANY, THE AGENT AND THE BANKS CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION
OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT AND THE
BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE
TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. THE COMPANY, THE AGENT AND THE BANKS EACH
WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
ILLINOIS LAW.
10.17 Waiver of Jury Trial. THE COMPANY, THE BANKS
AND THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL
BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF
ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. THE COMPANY, THE BANKS AND THE AGENT EACH
AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED
BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY
OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
10.18 Entire Agreement. This Agreement, together with
the other Loan Documents, embodies the entire agreement and
understanding among the Company, the Banks and the Agent,
and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating
to the subject matter hereof and thereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered in Chicago,
Illinois by their proper and duly authorized officers as
of the day and year first above written.
NS GROUP, INC.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Agent
By: /s/▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as a Bank
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
Bank Commitment Pro Rata Shares
Bank of America National Trust
and Savings Association
$50,000,000 100%
SCHEDULE 10.02
OFFSHORE AND DOMESTIC LENDING OFFICES
ADDRESSES FOR NOTICES
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
Bank of America National Trust
and Savings Association
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Agent's Payment Office:
Bank of America National Trust
and Savings Association
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
Domestic and Offshore Lending Office:
Bank of America National Trust
and Savings Association
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Notices (other than Borrowing notices and Notices of
Conversion/Continuation):
Bank of America National Trust
and Savings Association
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