AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of February 1, 2000
among
FINISHMASTER, INC.,
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS
and
BANK ONE, INDIANA, N.A.
as Agent
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TABLE OF CONTENTS
Section Page
ARTICLE I: DEFINITIONS
1.1 Certain Defined Terms............................................1
1.2 References......................................................27
ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES
2.1. Term Loans......................................................27
2.2 Revolving Loans.................................................28
2.3 Swing Line Loans................................................29
2.4 Rate Options for All Advances...................................31
2.5 Optional Payments; Mandatory Prepayments........................31
2.6 Reduction of Commitments........................................33
2.7 Method of Borrowing.............................................33
2.8 Method of Selecting Types and Interest Periods for Advances.....34
2.9 Minimum Amount of Each Advance..................................34
2.10 Method of Selecting Types and Interest Periods for
Conversion and Continuation of Advances.....................34
2.11 Default Rate...................................................35
2.12 Method of Payment..............................................35
2.13 Notes..........................................................35
2.14 Telephonic Notices.............................................35
2.15 Promise to Pay; Interest and Commitment Fees;
Interest Payment Dates; Interest and
Fee Basis; Taxes; Loan and Control Accounts.................36
2.16 Notification of Advances, Interest Rates, Prepayments
and Aggregate Revolving
Loan Commitment Reductions..................................42
2.17 Lending Installations..........................................42
2.18 Non-Receipt of Funds by the Agent..............................42
2.19 Termination Date...............................................43
2.20 Replacement of Certain Lenders.................................43
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 Obligation to Issue.............................................44
3.2 [Intentionally Omitted]..........................................44
3.3 Types and Amounts...............................................44
3.4 Conditions......................................................44
3.5 Procedure for Issuance of Letters of Credit.....................45
3.6 Letter of Credit Participation..................................45
3.7 Reimbursement Obligation........................................46
3.8 Letter of Credit Fees...........................................46
3.9 Issuing Bank Reporting Requirements.............................46
3.10 Indemnification; Exoneration...................................47
3.11 Cash Collateral................................................48
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Section Page
ARTICLE IV: CHANGE IN CIRCUMSTANCES
4.1 Yield Protection................................................48
4.2 Changes in Capital Adequacy Regulations.........................49
4.3 Availability of Types of Advances...............................50
4.4 Funding Indemnification.........................................50
4.5 Lender Statements; Survival of Indemnity........................50
ARTICLE V: CONDITIONS PRECEDENT
5.1 Initial Advances and Letters of Credit..........................50
5.2 Each Advance and Letter of Credit...............................52
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
6.1 Organization; Corporate Powers..................................52
6.2 Authority.......................................................52
6.3 No Conflict; Governmental Consents..............................53
6.4 Financial Statements............................................53
6.5 No Material Adverse Change......................................54
6.6 Taxes...........................................................54
6.7 Litigation; Loss Contingencies and Violations...................54
6.8 Subsidiaries....................................................55
6.9 ERISA...........................................................55
6.10 Accuracy of Information........................................56
6.11 Securities Activities..........................................56
6.12 Material Agreements............................................56
6.13 Compliance with Laws...........................................56
6.14 Assets and Properties..........................................56
6.15 Statutory Indebtedness Restrictions............................57
6.16 Insurance......................................................57
6.17 Labor Matters..................................................57
6.18 Environmental Matters..........................................57
6.19 Solvency.......................................................58
ARTICLE VII : COVENANTS
7.1 Reporting.......................................................58
7.2 Affirmative Covenants...........................................63
7.3 Negative Covenants..............................................66
7.4 Financial Covenants.............................................74
ARTICLE VIII: DEFAULTS
8.1 Defaults........................................................76
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES
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Section Page
9.1 Termination of Commitments; Acceleration........................79
9.2 Defaulting Lender...............................................79
9.3 Amendments......................................................81
9.4 Preservation of Rights..........................................82
ARTICLE X: GENERAL PROVISIONS
10.1 Survival of Representations....................................82
10.2 Governmental Regulation........................................82
10.3 Performance of Obligations.....................................82
10.4 Headings.......................................................83
10.5 Entire Agreement...............................................83
10.6 Several Obligations; Benefits of this Agreement................83
10.7 Expenses; Indemnification......................................83
10.8 Numbers of Documents...........................................85
10.9 Accounting.....................................................85
10.10 Severability of Provisions....................................85
10.11 Nonliability of Lenders.......................................86
10.12 GOVERNING LAW.................................................86
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.......86
ARTICLE XI: THE AGENT
11.1 Appointment; Nature of Relationship............................87
11.2 Powers.........................................................88
11.3 General Immunity...............................................88
11.4 No Responsibility for Loans, Creditworthiness, Recitals, Etc...88
11.5 Action on Instructions of Lenders..............................88
11.6 Employment of Agents and Counsel...............................88
11.7 Reliance on Documents; Counsel.................................89
11.8 The Agent's Reimbursement and Indemnification..................89
11.9 Rights as a Lender.............................................89
11.10 Lender Credit Decision........................................89
11.11 Successor Agent...............................................89
11.12 Collateral Documents..........................................90
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 Setoff.........................................................91
12.2 Ratable Payments...............................................91
12.3 Application of Payments........................................91
12.4 Relations Among Lenders........................................92
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 Successors and Assigns.........................................93
13.2 Participations.................................................93
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Section Page
13.3 Assignments....................................................94
13.4 Confidentiality................................................95
13.5 Dissemination of Information...................................95
ARTICLE XIV: NOTICES
14.1 Giving Notice..................................................96
14.2 Change of Address..............................................96
ARTICLE XV: COUNTERPARTS
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EXHIBITS AND SCHEDULES
Exhibits
EXHIBIT A -- Commitments
(Definitions)
EXHIBIT B-1 -- Form of Revolving Note
(Definitions)
EXHIBIT B-2 -- Form of Swing Line Note
(Definitions)
EXHIBIT B-3 -- Form of Term Note
(Definitions)
EXHIBIT B-4 -- Form of Acquisition Facility Note
(Definitions)
EXHIBIT C -- Form of Borrowing Notice (Section 2.8)
EXHIBIT C-1 -- Form of Borrowing Base Certificate
(Sections 5.1 and 7.1(A)(iv))
EXHIBIT D -- Form of Request for Letter of Credit (Section 3.4)
EXHIBIT E -- Form of Assignment and Acceptance Agreement
(Sections 2.20 and 13.3)
EXHIBIT F -- Form of Borrower's Counsel's Opinion
(Section 5.1)
EXHIBIT G -- List of Closing Documents
(Section 5.1)
EXHIBIT H -- Form of Officer's Certificate
(Sections 5.2 and 7.1(A)(iii))
EXHIBIT I -- Form of Compliance Certificate
(Sections 5.2 and 7.1(A)(iii))
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Schedules
Schedule 1.1.1 -- Permitted Existing Indebtedness (Definitions)
Schedule 1.1.2 -- Permitted Existing Investments (Definitions)
Schedule 1.1.3 -- Permitted Existing Liens (Definitions)
Schedule 6.3 -- Conflicts; Governmental Consents (Section 6.3)
Schedule 6.6 -- Taxes (Section 6.6(A))
Schedule 6.7 -- Litigation; Loss Contingencies (Section 6.7)
Schedule 6.8 -- Subsidiaries (Section 6.8)
Schedule 6.9 -- ERISA (Section 6.9)
Schedule 6.18 -- Environmental Matters (Section 6.18)
Schedule 7.3(F) -- Restricted Payments
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AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement dated as of February 1, 2000
is entered into among FinishMaster, Inc., an Indiana corporation, the
institutions from time to time parties hereto as Lenders, whether by execution
of this Agreement or an Assignment Agreement pursuant to Section 13.3, and Bank
One, Indiana, N.A., in its capacity as contractual representative for itself and
the other Lenders. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
1.1 Certain Defined Terms. In addition to the terms defined above, the
following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined.
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage of voting power) of the
outstanding equity interests of another Person.
"Acquisition Facility Availability" means, at any particular time, the
amount by which (a) the Aggregate Acquisition Facility Commitment at such time
exceeds (b) the outstanding principal amount of the Acquisition Facility Loans
at such time.
"Acquisition Facility Commitment" means, for each Lender, the
obligation of such Lender to make Acquisition Facility Loans not exceeding the
amount set forth on Exhibit A to this Agreement opposite its name thereon under
the heading "Acquisition Facility Commitment" or the signature page of the
assignment and acceptance by which it became a Lender, as such amount may be
modified from time to time pursuant to the terms of this Agreement or to give
effect to any applicable assignment and acceptance.
"Acquisition Facility Loan" is defined in Section 2.2A hereof.
"Acquisition Facility Loan Termination Date" means February 1, 2002.
"Acquisition Facility Note" means a promissory note, in substantially
the form of Exhibit B-4 hereto, duly executed by the Borrower and payable to the
order of a Lender in the amount of
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its Acquisition Facility Commitment, including any amendment, restatement,
modification, renewal or replacement of such Acquisition Facility Note.
"Acquisition Loan Pro Rata Share" shall mean, at any particular time
and with respect to any Lender, the percentage obtained by dividing (A) such
Lender's Acquisition Facility Commitment (or the outstanding principal balance
of such Lender's Acquisition Facility Loans if the Acquisition Facility
Commitments have been terminated pursuant to the terms of this Agreement) by (B)
the Aggregate Acquisition Facility Commitment (or the outstanding principal
balance of the Acquisition Facility Loans if the Acquisition Facility
Commitments have been terminated pursuant to the terms of this Agreement).
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by the Lenders to the Borrower of the same Type
and, in the case of Eurodollar Rate Advances, for the same Interest Period.
"Affected Lender" is defined in Section 2.20 hereof.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of greater than ten percent (10%) or more of any class of voting
securities (or other voting interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
Capital Stock, by contract or otherwise.
"Agent" means Bank One, Indiana, N.A. in its capacity as contractual
representative for itself and the Lenders pursuant to Article XI hereof and any
successor Agent appointed pursuant to Article XI hereof.
"Aggregate Acquisition Facility Commitment" means the aggregate of the
Acquisition Facility Commitments of all the Lenders, as reduced from time to
time pursuant to the terms hereof. The initial Aggregate Acquisition Facility
Commitment is Seven Million Five Hundred Thousand and 00/100 Dollars
($7,500,000).
"Aggregate Revolving Loan Commitment" means the aggregate of the
Revolving Loan Commitments of all the Lenders, as reduced from time to time
pursuant to the terms hereof. The initial Aggregate Revolving Loan Commitment is
Sixty Million and 00/100 Dollars ($60,000,000.00).
"Aggregate Term Loan Commitment" means the aggregate of the Term Loan
Commitments of all the Lenders. The Aggregate Term Loan Commitment is Forty
Million and 00/100 Dollars ($40,000,000.00).
"Agreement" means this Amended and Restated Credit Agreement, as it may
be further amended, restated, supplemented or otherwise modified and in effect
from time to time.
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"Agreement Accounting Principles" means generally accepted accounting
principles as in effect as of the date of this Agreement, applied in a manner
consistent with that used in preparing the financial statements referred to in
Section 6.4(B)(1) hereof; provided, however, that all pro forma financial
statements reflecting Acquisitions shall be prepared in accordance with the
requirements established by the Commission for acquisition accounting for
reporting acquisitions by public companies (whether or not such Acquisitions are
required to be publicly reported).
"Alternate Base Rate" means, for any day, a fluctuating rate of
interest per annum equal to the higher of (i) the Prime Rate for such day and
(ii) the sum of (a) the Federal Funds Effective Rate for such day and (b)
one-half of one percent (0.5%) per annum.
"Applicable Commitment Fee Percentage" means, as at any date of
determination, the rate per annum then applicable in the determination of the
amount payable under Section 2.15(C)(i) hereof determined in accordance with the
provisions of Section 2.15(D)(ii) hereof.
"Applicable Eurodollar Margin" means, as at any date of determination,
(a) with respect to all Loans other than Acquisition Facility Loans, the rate
per annum then applicable to Eurodollar Rate Loans determined in accordance with
the provisions of Section 2.15(D)(ii) hereof and (b) with respect to Acquisition
Facility Loans, three percent (3%) per annum.
"Applicable Floating Rate Margin" means, as at any date of
determination, (a) with respect to all Loans other than Acquisition Facility
Loans, the rate per annum then applicable to Floating Rate Loans, determined in
accordance with the provisions of Section 2.15(D)(ii) hereof and (b) with
respect to Acquisition Facility Loans, one percent (1%) per annum.
"Applicable L/C Fee Percentage" means, as at any date of determination,
a rate per annum equal to the Applicable Eurodollar Margin for Revolving Loans
in effect on such date.
"Arranger"means Banc One Capital Markets, Inc. (formerly known as First
Chicago Capital Markets, Inc.), in its capacity as the arranger for the loan
transactions evidenced by this Agreement.
"Assignment Agreement" shall mean an assignment and acceptance
agreement entered into in connection with an assignment pursuant to Section 13.3
hereof in substantially the form of Exhibit E.
"Asset Sale" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a sale-leaseback transaction and including the sale or
other transfer of any of the Equity Interests of any Subsidiary of such Person).
"Authorized Officer" means any of the Chairman, President, Chief
Financial Officer, Treasurer or Assistant Secretary of the Borrower, acting
singly.
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"Bank One" means Bank One, Indiana, N.A. (formerly known as NBD Bank,
N.A.), together with its successors.
"Benefit Plan" means a defined benefit plan as defined in Section 3(35)
of ERISA (other than a Multiemployer Plan) in respect of which the Borrower or
any other member of the Controlled Group is, or within the immediately preceding
six (6) years was, an "employer" as defined in Section 3(5) of ERISA.
"Borrower" means FinishMaster, Inc., an Indiana corporation, together
with its successors and assigns, including a debtor-in-possession on behalf of
the Borrower.
"Borrower Security Agreement" means that certain Security Agreement
dated as of November 19, 1997 executed by the Borrower in favor of the Agent for
the benefit of the Holders of Secured Obligations, as amended, restated,
supplemented or otherwise modified from time to time.
"Borrowing Base" means, as of any date of calculation, an amount, as
set forth on the most current Borrowing Base Certificate delivered to the Agent,
equal to: (i) eighty percent (80%) of the Gross Amount of Eligible Receivables;
plus (ii) sixty-five percent (65%) of the Gross Amount of Eligible Inventory
minus a reserve equal to three months' rent with respect to any Inventory
located on premises leased by the Borrower from a landlord that has not executed
a landlord lien waiver acceptable to the Agent to the extent such Inventory is
located in a state which the Agent has determined has a statutory landlord's
lien; plus (iii) at all times between the Closing Date and April 30, 2001,
$7,500,000; plus (iv) at all times between December 1, 2001 (and each year
thereafter) and April 30, 2002 (and each year thereafter), $5,000,000.
"Borrowing Base Certificate" means a certificate, in substantially the
form of Exhibit C-1 attached hereto and made a part hereof, setting forth the
Borrowing Base and the component calculations thereof.
"Borrowing Date" means a date on which an Advance or Swing Line Loan is
made hereunder.
"Borrowing Notice" is defined in Section 2.8 hereof.
"Business Activity Report" means (A) a Notice of Business Activities
Report from the State of Minnesota, Department of Revenue or (B) any similar
report required by any other State relating to the ability of the Borrower to
enforce its accounts receivable claims against account debtors located in any
such state.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing interest at the Eurodollar Rate, a day (other than a
Saturday or Sunday) on which banks are open for business in Indianapolis,
Indiana and Chicago, Illinois and on which dealings in Dollars are carried on in
the London interbank market and (ii) for all other purposes a day (other
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than a Saturday or Sunday) on which banks are open for business in Indianapolis,
Indiana and Chicago, Illinois.
"Capital Expenditures" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
Capitalized Leases and Permitted Purchase Money Indebtedness) by the Borrower
and its Subsidiaries during that period that, in conformity with Agreement
Accounting Principles, are required to be included in or reflected by the
property, plant, equipment or similar fixed asset accounts reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries, exclusive of
Permitted Acquisitions.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Capitalized Lease" of a Person means any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"Cash Equivalents" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected against
currency fluctuations for any such deposits with a term of more than ninety (90)
days); (iii) shares of money market, mutual or similar funds having assets in
excess of $100,000,000 and the investments of which are limited to investment
grade securities (i.e., securities rated at least Baa by ▇▇▇▇▇'▇ Investors
Service, Inc. or at least BBB by Standard & Poor's Ratings Group); and (iv)
commercial paper of United States and foreign banks and bank holding companies
and their subsidiaries and United States and foreign finance, commercial
industrial or utility companies which, at the time of acquisition, are rated A-1
(or better) by Standard & Poor's Ratings Group, or P-1 (or better) by ▇▇▇▇▇'▇
Investors Service, Inc.; provided that the maturities of such Cash Equivalents
shall not exceed 365 days.
"Change" is defined in Section 4.2 hereof.
"Change of Control" means an event or series of events by which:
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(a) LDI ceases to own and control directly or indirectly, 51%
or more of the combined voting power of the Borrower's Capital Stock
ordinarily having the right to vote at an election of directors; or
(b) during any period of twelve (12) consecutive calendar
months, individuals: (i) who were directors of the Borrower on the
first day of such period, or (ii) whose election or nomination for
election to the board of directors of the Borrower was recommended or
approved by at least a majority of the directors then still in office
who were directors of the Borrower on the first day of such period, or
whose election or nomination for election was so approved, shall cease
to constitute a majority of the board of directors of the Borrower; or
(c) the Borrower consolidates with or merges into another
corporation or conveys, transfers or leases all or substantially all of
its property to any Person, or any corporation consolidates with or
merges into the Borrower, in either event pursuant to a transaction in
which the outstanding Capital Stock of the Borrower is reclassified or
changed into or exchanged for cash, securities or other property.
"Closing Date" means February 1, 2000.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral" means all property and interests in property now owned or
hereafter acquired by the Borrower or any of its Subsidiaries in or upon which a
security interest, lien or mortgage is granted to the Agent, for the benefit of
the Holders of Secured Obligations, or to the Agent, for the benefit of the
Lenders, whether under the Security Agreements, the Pledge Agreements, the
Intellectual Property Agreements, under any of the other Collateral Documents or
under any of the other Loan Documents.
"Collateral Documents" means all agreements, instruments and documents
executed in connection with this Agreement, including, without limitation, the
Security Agreements, the Pledge Agreements, the Intellectual Property
Agreements, the Guarantees and all other security agreements, loan agreements,
notes, guarantees, pledges, powers of attorney, consents, assignments,
contracts, fee letters, notices, leases, financing statements and all other
written matter whether heretofore (including in connection with the execution of
the Original Credit Agreement), now, or hereafter (including pursuant to Section
7.2(L) hereof) executed by or on behalf of the Borrower or any of its
Subsidiaries and delivered to the Agent or any of the Lenders, together with all
agreements and documents referred to therein or contemplated thereby.
"Commission" means the Securities and Exchange Commission and any
Person succeeding to the functions thereof.
"Commitment" means, for each Lender, collectively, such Lender's
Revolving Loan Commitment, Acquisition Facility Commitment and Term Loan
Commitment.
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"Consolidated Assets" means the total assets of the Borrower and its
Subsidiaries on a consolidated basis determined in accordance with Agreement
Accounting Principles.
"Consolidated Net Worth" means, at a particular date, all amounts which
would be included under shareholders' equity for any Person and its consolidated
Subsidiaries determined in accordance with Agreement Accounting Principles.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBs"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.
"Contingent Obligation", as applied to any Person, means any
Contractual Obligation, contingent or otherwise, of that Person with respect to
any Indebtedness of another or other obligation or liability of another,
including, without limitation, any such Indebtedness, obligation or liability of
another directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), co-made or discounted
or sold with recourse by that Person, or in respect of which that Person is
otherwise directly or indirectly liable, including Contractual Obligations
(contingent or otherwise) arising through any agreement to purchase, repurchase,
or otherwise acquire such Indebtedness, obligation or liability or any security
therefor, or to provide funds for the payment or discharge thereof (whether in
the form of loans, advances, stock purchases, capital contributions or
otherwise), or to maintain solvency, assets, level of income, or other financial
condition, or to make payment other than for value received.
"Contractual Obligation", as applied to any Person, means any provision
of any equity or debt securities issued by that Person or any indenture,
mortgage, deed of trust, security agreement, pledge agreement, guaranty,
contract, undertaking, agreement or instrument, in any case in writing, to which
that Person is a party or by which it or any of its properties is bound, or to
which it or any of its properties is subject.
"Controlled Group" means the group consisting of (i) any corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower; (ii) a partnership or
other trade or business (whether or not incorporated) which is under common
control (within the meaning of Section 414(c) of the Code) with the Borrower;
and (iii) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Code) as the Borrower, any corporation described in clause
(i) above or any partnership or trade or business described in clause (ii)
above.
"Controlled Subsidiary" of any Person means a Subsidiary of such Person
(i) 90% or more of the total Equity Interests or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more wholly-owned Subsidiaries of such Person and (ii)
of which such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies, whether through the ownership
of voting securities, by agreement or otherwise.
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"Conversion/Continuation Notice" is defined in Section 2.10(D) hereof.
"Cure Loan" is defined in Section 9.2(iii) hereof.
"Customary Permitted Liens" means:
(i) Liens (other than Environmental Liens and Liens in favor
of the IRS or the PBGC) with respect to the payment of taxes,
assessments or governmental charges in all cases which are not yet due
or (if foreclosure, distraint, sale or other similar proceedings shall
not have been commenced) which are being contested in good faith by
appropriate proceedings properly instituted and diligently conducted
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with Agreement Accounting
Principles;
(ii) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
similar Liens imposed by law created in the ordinary course of business
for amounts not yet due or which are being contested in good faith by
appropriate proceedings properly instituted and diligently conducted
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with Agreement Accounting
Principles;
(iii) Liens (other than Environmental Liens and Liens in favor
of the IRS or the PBGC) incurred or deposits made in the ordinary
course of business in connection with worker's compensation,
unemployment insurance or other types of social security benefits or to
secure the performance of bids, tenders, sales, contracts (other than
for the repayment of borrowed money), surety, appeal and performance
bonds; provided that (A) all such Liens do not in the aggregate
materially detract from the value of the Borrower's or such
Subsidiary's assets or property taken as a whole or materially impair
the use thereof in the operation of the businesses taken as a whole,
and (B) all Liens securing bonds to stay judgments or in connection
with appeals do not secure at any time an aggregate amount exceeding
$1,000,000;
(iv) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of real property which do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of the Borrower or
any of its Subsidiaries;
(v) Liens of attachment or judgment with respect to judgments,
writs or warrants of attachment, or similar process against the
Borrower or any of its Subsidiaries which do not constitute a Default
under Section 8.1(H) hereof; and
(vi) any interest or title of the lessor in the property
subject to any operating lease entered into by the Borrower or any of
its Subsidiaries in the ordinary course of business.
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"Default" means an event described in Article VIII hereof.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"Dollar" and "$" means dollars in the lawful currency of the United
States.
"EBITDA" means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of the amounts for such period, without
duplication, of (i) Net Income, plus (ii) Interest Expense, plus (iii) charges
against income for foreign, federal, state and local taxes to the extent
deducted in computing Net Income, plus (iv) depreciation expense to the extent
deducted in computing Net Income, plus (v) amortization expense, including,
without limitation, amortization of goodwill and other intangible assets and
Transaction Costs to the extent deducted in computing Net Income, plus (vi)
other non-cash charges classified as long-term deferrals in accordance with
Agreement Accounting Principles to the extent deducted in computing Net Income,
plus (vii) other extraordinary non-cash charges to the extent deducted in
computing Net Income.
"Eligible Inventory" means Inventory of the Borrower which is held, by
the Borrower or any party contractually obligated to store or handle the
inventory, for sale or lease in the ordinary course of business or furnished
under any contract of service by the Borrower which continues to meet standards
of eligibility from time to time established in accordance with this Agreement.
Standards of eligibility will be established by the Agent in its reasonable
credit judgment and may be revised from time to time by the Agent in its
reasonable credit judgment (which credit judgment shall be exercised in a manner
that is not arbitrary or capricious and shall be exercised in a manner not
inconsistent with the manner in which the initial ineligibility standards were
determined). In general, without limiting the foregoing, the following inventory
is not Eligible Inventory: (i) Inventory which is obsolete, not in good
condition, not either currently usable or currently saleable in the ordinary
course of the Borrower's business or does not meet all material standards
imposed by any governmental authority having regulatory authority over such item
of Inventory, its use or its sale; (ii) Inventory consisting of packaging
material, supplies, raw material or work in process; (iii) Inventory which (a)
is consigned to a third party for sale or (b) is on consignment from a third
party to the Borrower for sale; (iv) Inventory which consists of goods in
transit which has been sold to a dealer or distributor of the Borrower and is in
the process of being delivered to that dealer or distributor; (v) Inventory
which is subject to a Lien in favor of any Person other than the Agent other
than Customary Permitted Liens or Permitted Existing Liens; (vi) Inventory with
respect to which the Agent does not have a first and valid fully- perfected
security interest; (vii) Inventory which is not located either (a) on the
Borrower's owned premises in the United States listed on Schedule 2 to the
Borrower Security Agreement or (b) in other owned or leased premises, warehouses
or with bailees in the United States listed on Schedule 2 to the Borrower
Security Agreement or permitted to be established under the Borrower Security
Agreement; (viii) Inventory which is evidenced by a Receivable; and (ix)
Inventory which is not in full conformity with the representations and
warranties made by the Borrower to the Agent with respect thereto whether
contained in this Agreement or the Borrower Security Agreement.
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"Eligible Receivables" means accounts receivable created by the
Borrower in the ordinary course of its business arising out of the sale of goods
or rendition of services by the Borrower, which receivables are and at all times
shall continue to meet standards of eligibility from time to time established in
accordance with this Agreement. Standards of eligibility will be established by
the Agent in its reasonable credit judgment and may be revised from time to time
by the Agent in its reasonable credit judgment (which credit judgment shall be
exercised in a manner that is not arbitrary or capricious and shall be exercised
in a manner not inconsistent with the manner in which the initial ineligibility
standards were determined). In general, without limiting the foregoing, the
following receivables are not Eligible Receivables:
(i) receivables which remain unpaid ninety (90) days after the date of
the original applicable invoice or sixty (60) days after the due date, whichever
is earlier, except those receivables subject to dated terms extended by Borrower
in an aggregate amount not to exceed $5,000,000 as of the date of determination
will be treated as eligible (subject to the other eligibility criteria) to the
extent such receivables are not unpaid more than ninety (90) days after the due
date and the due date is not more than one hundred eighty (180) days after the
date of the original applicable invoice.
(ii) receivables with respect to which the account debtor is a
director, officer, employee, Subsidiary or Affiliate of the Borrower;
(iii) receivables with respect to which the account debtor is any
federal governmental authority, the United States of America, or, in each case,
any department, agency or instrumentality thereof, unless with respect to any
such receivable, the Borrower has complied to the Agent's satisfaction with the
provisions of the Federal Assignment of Claims Act or other applicable statutes,
including, without limitation, executing and delivering to Agent all statements
of assignment and/or notification which are in form and substance acceptable to
Agent and which are deemed necessary by Agent to effectuate the assignment to
the Agent of such receivables.
(iv) receivables not denominated in U.S. Dollars or Canadian Dollars;
(v) receivables with respect to which the account debtor is (a) not a
resident of the United States unless the account debtor has supplied the
Borrower with an irrevocable letter of credit issued by a financial institution
satisfactory to the Agent sufficient to cover such receivable in form and
substance satisfactory to the Agent;
(vi) receivables with respect to which the account debtor has (a)
asserted a counterclaim, (b) a right of setoff, or (c) a receivable owing from
the Borrower but only to the extent of such counterclaim, setoff, rebate or
receivable;
(vii) receivables with respect to which the Agent does not have a first
and valid fully perfected and enforceable security interest for which notice has
been provided to the Borrower subject only to Customary Permitted Liens and
Permitted Existing Liens;
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(viii) receivables with respect to which the account debtor is the
subject of bankruptcy or a similar insolvency proceeding or has made an
assignment for the benefit of creditors or whose assets have been conveyed to a
receiver, trustee or assignee for the benefit of creditors;
(xi) receivables with respect to which the account debtor's obligation
to pay the receivable is conditional upon the account debtor's approval or is
otherwise subject to any contractual repurchase obligation or return right, as
with sales made on a ▇▇▇▇-and-hold, guaranteed sale, sale-and-return, sale on
approval (except with respect to receivables in connection with which Account
Debtors are entitled to return Inventory on the basis of the quality of such
Inventory) or consignment basis;
(x) receivables with respect to which the account debtor is located in
Minnesota (or any other jurisdiction which adopts a statute or other requirement
with respect to which any Person that obtains business from within such
jurisdiction or is otherwise subject to such jurisdiction's tax law requiring
such Person to file a Business Activity Report or make any other required
filings in a timely manner in order to enforce its claims in such jurisdiction's
courts or arising under such jurisdiction's laws); provided, however, such
receivables shall nonetheless be eligible if the Borrower has filed a Business
Activity Report (or other applicable report or filing) with the applicable state
office by the time required or is qualified to do business in such jurisdiction
and, at the time the receivable was created, was qualified to do business in
such jurisdiction or had on file with the applicable state office a current
Business Activity Report (or other applicable report or filing);
(xi) receivables with respect to which the account debtor's obligation
does not constitute its legal, valid and binding obligation, enforceable against
it in accordance with its terms;
(xii) receivables with respect to which the Borrower has not yet
shipped the applicable goods, performed the applicable service or issued the
applicable invoice;
(xiii) any receivable which is not in conformity with the
representations and warranties made by the Borrower to the Agent with respect
thereto whether contained in this Agreement or the Borrower Security Agreement;
(xiv) receivables in connection with which the Borrower or any other
party to such Receivable is in default in the performance or observance of any
of the terms thereof in any material respect; and
(xv) receivables for which the prospect of payment or performance by
the account debtor is or will be impaired as determined by the Agent in the
exercise of its reasonable credit judgment (which credit judgment shall not be
exercised in a manner that is arbitrary or capricious and shall be exercised in
a manner not inconsistent with the manner in which the initial ineligibility
standards were determined).
"Environmental, Health or Safety Requirements of Law" means all
Requirements of Law derived from or relating to federal, state and local laws or
regulations relating to or
-11-
addressing pollution or protection of the environment, or protection of worker
health or safety, including, but not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act, 42 ▇.▇.▇.▇▇. 9601 et seq., the
Occupational Safety and Health Act of 1970, 29 U.S.C.ss.651 et seq., and the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. ss. 6901 et seq., in
each case including any amendments thereto, any successor statutes, and any
regulations or guidance promulgated thereunder, and any state or local
equivalent thereof.
"Environmental Lien" means a lien in favor of any Governmental
Authority for (a) any liability under Environmental, Health or Safety
Requirements of Law, or (b) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"Environmental Property Transfer Act" means any applicable requirement
of law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"Eurodollar Base Rate" means, with respect to a Eurodollar Rate Loan
for any specified Interest Period, either (i) the rate of interest per annum
equal to the rate for deposits in U.S. Dollars in the approximate amount of the
pro rata share of Bank One of such Eurodollar Rate Loan with a maturity
approximately equal to such Interest Period which appears on Telerate Page 3750,
or, if there is more than one such rate, the average of such rates rounded to
the nearest 1/100 of 1%, as of 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period or (ii) if no such rate of interest
appears on Telerate Page 3750 for any specified Interest Period, the rate at
which deposits in U.S. Dollars are offered by Bank One to first-class banks in
the London interbank market at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, in the approximate
amount of the pro rata share of Bank One of such Eurodollar Rate Loan and having
a maturity approximately equal to such Interest Period. The term "Telerate Page
3750" means the display designated as "Page 3750" on the Associated Press-Dow
▇▇▇▇▇ Telerate Service (or such other page as may replace Page 3750 on the
Associated Press-Dow ▇▇▇▇▇ Telerate Service or such other service as may be
nominated by the British Bankers' Association as the information vendor for the
purpose of displaying British Bankers' Association interest rate settlement
rates for U.S. Dollars). Any Eurodollar Base Rate determined on the basis of the
rate displayed on Telerate Page 3750 in accordance with the foregoing provisions
of this subparagraph shall be subject to corrections, if any, made in such rate
-12-
and displayed by the Associated Press-Dow ▇▇▇▇▇ Telerate Service within one hour
of the time when such rate is first displayed by such service.
"Eurodollar Rate" means, with respect to a Eurodollar Rate Loan for the
relevant Interest Period, the Eurodollar Base Rate applicable to such Interest
Period plus the then Applicable Eurodollar Margin. The Eurodollar Rate shall be
rounded to the next higher multiple of 1/100 of 1% if the rate is not such a
multiple.
"Eurodollar Rate Advance" means an Advance which bears interest at the
Eurodollar Rate.
"Eurodollar Rate Loan" means a Loan, or portion thereof, which bears
interest at the Eurodollar Rate.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Financing" means, with respect to any Person, the issuance or sale by
such Person of any Equity Interests of such Person or any Indebtedness
consisting of debt securities of such Person.
"Fixed Charge Coverage Ratio" is defined in Section 7.4(A) hereof.
"Floating Rate" means, for any day for any Loan, a rate per annum equal
to the Alternate Base Rate for such day, changing when and as the Alternate Base
Rate changes, plus the then Applicable Floating Rate Margin.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan, or portion thereof, which bears
interest at the Floating Rate.
"Governmental Acts" is defined in Section 3.10(A) hereof.
"Governmental Authority" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
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"Gross Amount of Eligible Inventory" means Eligible Inventory valued at
cost determined on a first-in-first-out basis (determined in accordance with
Agreement Accounting Principles, consistently applied) minus such reserves as
the Agent elects to establish in accordance with its reasonable credit judgment
(which credit judgment shall be exercised in a manner that is not arbitrary or
capricious and shall be exercised in a manner not inconsistent with the manner
in which the initial ineligibility standards were determined).
"Gross Amount of Eligible Receivables" means the outstanding face
amount of Eligible Receivables, determined in accordance with Agreement
Accounting Principles, consistently applied, less (i) all finance charges, late
fees and other fees that are unearned, (ii) the value of any accrual which has
been recorded by the Borrower with respect to downward price adjustments and
(iii) and such other reserves as the Agent elects to establish in accordance
with its reasonable credit judgment (which credit judgment shall be exercised in
a manner that is not arbitrary or capricious and shall be exercised in a manner
not inconsistent with the manner in which the initial ineligibility standards
were determined).
"Gross Negligence" means recklessness, or actions taken or omitted with
conscious indifference to or the complete disregard of consequences. Gross
Negligence does not mean the absence of ordinary care or diligence, or an
inadvertent act or inadvertent failure to act. If the term "gross negligence" is
used with respect to the Agent, the Arranger or any Lender or any indemnitee in
any of the other Loan Documents, it shall have the meaning set forth herein.
"Guarantors" means (i) all of the Borrower's Subsidiaries as of the
Closing Date and (ii) any other new Subsidiaries which have satisfied the
provisions of Section 7.2(L) hereof, in each case, together with their
respective successors and assigns.
"Guaranty" means any guaranty whether heretofore (including in
connection with the execution of the Original Credit Agreement), now, or
hereafter (including pursuant to Section 7.2(L) hereof) executed by a Guarantor
in favor of the Agent for the ratable benefit of the Holders of Secured
Obligations, in each case, as amended, restated or otherwise modified from time
to time.
"Hedging Obligations" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
-14-
"High Yield Note Agreement" means the Indenture between the Borrower
and a trustee acting on behalf of the note purchasers pursuant to which the
Borrower may plan to issue notes in the original principal amount of up to
$100,000,000.
"Holders of Secured Obligations" shall mean the holders of the Secured
Obligations from time to time, including, without limitation, (i) each Lender in
respect of its Loans, (ii) each Issuing Bank in respect of Reimbursement
Obligations, (iii) the Agents, the Lenders, the Swing Line Bank and the Issuing
Banks in respect of all other present and future obligations and liabilities of
the Borrower or any of its Subsidiaries of every type and description arising
under or in connection with this Agreement or any other Loan Document, (iii)
each Indemnitee in respect of the obligations and liabilities of the Borrower to
such Person hereunder, (iv) each Lender (or affiliate thereof), in respect of
all Hedging Obligations of the Borrower or any of its Subsidiaries to such
Lender (or such affiliate) as exchange party or counterparty under any Hedging
Agreement, and (v) their respective successors, transferees and assigns.
"Indebtedness" of any Person means, without duplication, such Person's
(a) obligations for borrowed money, (b) obligations representing the deferred
purchase price of property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), (c) obligations, whether or not assumed, secured by Liens or payable out
of the proceeds or production from property or assets now or hereafter owned or
acquired by such Person, (d) obligations which are evidenced by notes,
acceptances or other instruments, (e) Capitalized Lease Obligations, (f)
Contingent Obligations, (g) obligations with respect to letters of credit and
(h) Hedging Obligations. The amount of Indebtedness of any Person at any date
shall be without duplication (i) the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability of any
such Contingent Obligations at such date and (ii) in the case of Indebtedness of
others secured by a Lien to which the property or assets owned or held by such
Person is subject, the lesser of the fair market value at such date of any asset
subject to a Lien securing the Indebtedness of others and the amount of the
Indebtedness secured.
"Indemnified Matters" is defined in Section 10.7(B) hereof.
"Indemnitees" is defined in Section 10.7(B) hereof.
"Intellectual Property Agreement" means any patent security agreement,
trademark security agreement or copyright security agreement whether heretofore
(including in connection with the execution of the Original Credit Agreement),
now, or hereafter (including pursuant to Section 7.2(L) hereof) executed by the
Borrower and its Subsidiaries in favor of the Agent for the benefit of the
Holders of Secured Obligations, in each case, as amended, restated or otherwise
modified from time to time.
"Interest Expense" means, for any period, the total interest expense of
the Borrower and its consolidated Subsidiaries, whether paid or accrued
(including the interest component of Capitalized Leases, commitment and letter
of credit fees) as reflected on the income statement of
-15-
the Borrower and its consolidated Subsidiaries, all as determined in conformity
with Agreement Accounting Principles.
"Interest Period" means, with respect to a Eurodollar Rate Loan, a
period of one (1), two (2), three (3) or six (6) months commencing on a Business
Day selected by the Borrower pursuant to this Agreement. Such Interest Period
shall end on (but exclude) the day which corresponds numerically to such date
one, two, three or six months thereafter; provided, however, that if there is no
such numerically corresponding day in such next, second, third or sixth
succeeding month, such Interest Period shall end on the last Business Day of
such next, second, third or sixth succeeding month, as the case may be. If an
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day; provided,
however, that if said next succeeding Business Day falls in a new calendar
month, such Interest Period shall end on the immediately preceding Business Day.
"Interest Rate Agreements" is defined in Section 7.3(P) hereof.
"Inventory" shall mean any and all goods, including, without
limitation, goods in transit, wheresoever located, whether now owned or
hereafter acquired by the Borrower, which are held for sale or lease, furnished
under any contract of service or held as raw materials, work in process or
supplies, and all materials used or consumed in the business of Borrower, and
shall include all right, title and interest of the Borrower in any property the
sale or other disposition of which has given rise to receivables and which has
been returned to or repossessed or stopped in transit by the Borrower.
"Investment" means, with respect to any Person, (i) any purchase or
other acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person, (ii) any purchase by that Person
of all or substantially all of the assets of a business conducted by another
Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to
the functions thereof.
"Issuing Banks" means(i) Bank One and (ii) any Lender which, at the
Borrower's request, agrees, in each such Lender's sole discretion, to become an
Issuing Bank for the purpose of issuing Letters of Credit, and their respective
successors and assigns, in each case in such Lender's separate capacity as an
issuer of Letters of Credit pursuant to Section 3.1. The designation of any
Lender as an Issuing Bank after the date hereof shall be subject to the prior
written consent of the Agent.
"L/C Draft" means a draft drawn on an Issuing Bank pursuant to a Letter
of Credit.
-16-
"L/C Interest" shall have the meaning ascribed to such term in Section
3.6 hereof.
"L/C Obligations" means, without duplication, an amount equal to the
sum of (i) the aggregate of the amount then available for drawing under each of
the Letters of Credit, (ii) the face amount of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the applicable Issuing Bank, (iii) the aggregate outstanding amount of all
Reimbursement Obligations at such time and (iv) the aggregate face amount of all
Letters of Credit requested by the Borrower but not yet issued (unless the
request for an unissued Letter of Credit has been denied).
"LDI" means LDI, Ltd., an Indiana limited partnership.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent,
any office, branch, subsidiary or affiliate of such Lender or the Agent.
"Letter of Credit" means the letters of credit to be issued by the
Issuing Banks pursuant to Section 3.1 hereof.
"Leverage Ratio" is defined in Section 7.4(B) hereof.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan(s)" means, with respect to a Lender, such Lender's portion of any
Advance made pursuant to Section 2.1, Section 2.2 or Section 2.2A hereof, as
applicable, and in the case of the Swing Line Bank, any Swing Line Loan made
pursuant to Section 2.3 hereof, and collectively all Term Loans, Revolving
Loans, Acquisition Facility Loans and Swing Line Loans, whether made or
continued as or converted to Floating Rate Loans or Eurodollar Rate Loans.
"Loan Account" is defined in Section 2.15(F) hereof.
"Loan Documents" means this Agreement, the Notes and all other
documents, instruments and agreements executed in connection therewith or
contemplated thereby, as the same may be amended, restated or otherwise modified
and in effect from time to time.
"Margin Stock" shall have the meaning ascribed to such term in
Regulation U.
"Material Adverse Effect" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower, or the Borrower and its Subsidiaries,
taken as a whole, (b) the ability of the Borrower
-17-
or any of its Subsidiaries to perform their respective obligations under the
Loan Documents in any material respect, or (c) the ability of the Lenders or the
Agent to enforce in any material respect the Obligations.
"Multiemployer Plan" means a "Multiemployer Plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by either the Borrower or any member of the Controlled
Group.
"Net Cash Proceeds" means, with respect to any Asset Sale or any
Financing by any Person, (a) cash (freely convertible into Dollars) received by
such Person or any Subsidiary of such Person from such Asset Sale (including
cash received as consideration for the assumption or incurrence of liabilities
incurred in connection with or in anticipation of such Asset Sale) or such
Financing, after (i) provision for all income or other taxes measured by or
resulting from such Asset Sale, (ii) payment of all brokerage commissions and
other fees and expenses related to such Asset Sale or such Financing, and (iii)
all amounts used to repay Indebtedness secured by a Lien on any asset disposed
of in such Asset Sale or which is or may be required (by the express terms of
the instrument governing such Indebtedness) to be repaid in connection with such
Asset Sale (including payments made to obtain or avoid the need for the consent
of any holder of such Indebtedness); and (b) cash payments in respect of any
other consideration received by such Person or any Subsidiary of such Person
from such Asset Sale upon receipt of such cash payments by such Person or such
Subsidiary.
"Net Income" means, for any period, the net earnings (or loss) after
taxes of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with
Agreement Accounting Principles.
"New Subsidiary" is defined in Section 7.3(G)(ii) hereof.
"Non Pro Rata Loan" is defined in Section 9.2 hereof.
"Notes" means the Revolving Notes, Swing Line Notes, Acquisition
Facility Notes and Term Notes.
"Notice of Assignment" is defined in Section 13.3(B) hereof.
"Obligations" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to the Agent, the
Arranger, any Lender, the Swing Line Bank, any Issuing Bank, any Affiliate of
the Agent, the Arranger or any Lender, or any Indemnitee, of any kind or nature,
present or future, arising under this Agreement, the Notes or any other Loan
Document, whether or not evidenced by any note, guaranty or other instrument,
whether or not for the payment of money, whether arising by reason of an
extension of credit, loan, guaranty, indemnification, or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limitation, all interest, charges,
expenses, fees,
-18-
attorneys' fees and disbursements, paralegals' fees (in each case whether or not
allowed), and any other sum chargeable to the Borrower under this Agreement or
any other Loan Document.
"Original Credit Agreement" means the Credit Agreement dated as of
November 19, 1997 among the Borrower, the financial institutions parties thereto
as lenders and the Agent, as amended by Amendment No. 1 thereto dated as of
December 10, 1997, Amendment No. 2 thereto dated as of March 27, 1998, Amendment
No. 3 thereto dated as of October 30, 1998 and Amendment No. 4 thereto dated as
of September 22, 1999.
"Other Taxes" is defined in Section 2.15(E)(ii) hereof.
"Participants" is defined in Section 13.2(A) hereof.
"Payment Date" means the last Business Day of each calendar quarter.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Acquisition" is defined in Section 7.3(G) hereof.
"Permitted Existing Indebtedness" means the Indebtedness of the
Borrower and its Subsidiaries identified as such on Schedule 1.1.1 to this
Agreement.
"Permitted Existing Investments" means the Investments of the Borrower
and its Subsidiaries identified as such on Schedule 1.1.2 to this Agreement.
"Permitted Existing Liens" means the Liens on assets of the Borrower
and its Subsidiaries identified as such on Schedule 1.1.3 to this Agreement.
"Permitted Purchase Money Indebtedness" is defined in Section
7.3(A)(vii) hereof.
"Permitted Refinancing Indebtedness" means any replacement, renewal,
refinancing or extension of any Indebtedness permitted by this Agreement that
(i) does not exceed the aggregate principal amount (plus accrued interest and
any applicable premium and associated fees and expenses) of the Indebtedness
being replaced, renewed, refinanced or extended, (ii) does not have a Weighted
Average Life to Maturity at the time of such replacement, renewal, refinancing
or extension that is less than the Weighted Average Life to Maturity of the
Indebtedness being replaced, renewed, refinanced or extended, (iii) does not
rank at the time of such replacement, renewal, refinancing or extension senior
to the Indebtedness being replaced, renewed, refinanced or extended, and (iv)
does not contain terms (including, without limitation, terms relating to
security, amortization, interest rate, premiums, fees, covenants, event of
default and remedies) materially less favorable to the Borrower or to the
Lenders than those applicable to the Indebtedness being replaced, renewed,
refinanced or extended.
"Person" means any individual, corporation, firm, enterprise,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, limited liability
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company or other entity of any kind, or any government or political subdivision
or any agency, department or instrumentality thereof.
"Plan" means an employee benefit plan defined in Section 3(3) of ERISA
in respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"Pledge Agreement" means any pledge agreement whether heretofore
(including in connection with the execution of the Original Credit Agreement),
now, or hereafter (including pursuant to Section 7.2(L) hereof) executed by the
Borrower or any Subsidiary of the Borrower with respect to the Capital Stock of
any other Subsidiary of the Borrower or such Subsidiary in favor of the Agent
for the benefit of the Holders of Secured Obligations, in each case, as amended,
restated or otherwise modified from time to time (including to add additional
pledged Capital Stock of additional Subsidiaries).
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Pro Rata Share" means:
(i) with respect to all payments, computations and
determinations relating to the Term Loan Commitment or Term Loan of any
Lender, the Term Loan Pro Rata Share;
(ii) with respect to all payments, computations and
determinations relating to the Revolving Loan Commitment or the
Revolving Loans of any Lender or such Lender's interest in Letters of
Credit or Swing Line Loans (including, without limitation,
determinations of the commitment fee under Section 2.15(C)(i)), the
Revolving Loan Pro Rata Share;
(iii) with respect to all payments, computations and
determinations relating to the Acquisition Facility Commitment or the
Acquisition Facility Loan of any Lender (including, without limitation,
determinations of the commitment fee under Section 2.15(C)(ii) and
(iii)), the Acquisition Loan Pro Rata Share; and
(iv) for all other purposes, with respect to each Lender, the
percentage obtained by dividing (A) the sum of such Lender's Term Loan,
Acquisition Facility Commitment and Revolving Loan Commitment at such
time (in each case, as adjusted from time to time in accordance with
the provisions of this Agreement) by (B) the sum of the aggregate
amount of all of the Term Loans, the Aggregate Acquisition Facility
Commitment and the Aggregate Revolving Loan Commitment at such time;
provided, however, if all of the Commitments are terminated pursuant to
the terms of this Agreement, then "Pro Rata Share" means the percentage
obtained by dividing (x) the sum of such Lender's Term Loan,
Acquisition Facility Loans, Revolving Loans, L/C Obligations, and, in
the case of
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the Swing Line Bank, Swing Lines Loans, by (y) the aggregate amount of
all Term Loans, Acquisition Facility Loans, Revolving Loans, L/C
Obligations and Swing Line Loans.
"Purchasers" is defined in Section 13.3(A) hereof.
"Rate Option" means the Eurodollar Rate or the Floating Rate.
"Purchasers" is defined in Section 13.3(A) hereof.
"Rate Option" means the Eurodollar Rate or the Floating Rate.
"Refinishers Warehouse" means Refinishers Warehouse, Inc., a Michigan
corporation.
"Register" is defined in Section 13.3(C) hereof.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying Margin
Stock applicable to member banks of the Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"Reimbursement Obligation" is defined in Section 3.7 hereof.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including the movement of Contaminants
through or in the air, soil, surface water or groundwater.
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any lease of real or personal property but does not include any
amounts payable under Capitalized Leases of such Person.
"Replacement Lender" is defined in Section 2.20 hereof.
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"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days after
such event occurs, provided, however, that a failure to meet the minimum funding
standards of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"Required Lenders" means Lenders whose Pro Rata Shares, in the
aggregate, are greater than fifty percent (50%); provided, however, that, if any
of the Lenders shall have failed to fund its Acquisition Loan Pro Rata Share of
any Acquisition Facility Loan requested by the Borrower or its Revolving Loan
Pro Rata Share of any Revolving Loan requested by the Borrower or of any Swing
Line Loan as requested by the Agent, which such Lenders are obligated to fund
under the terms of this Agreement and any such failure has not been cured, then
for so long as such failure continues, "Required Lenders" means Lenders
(excluding all Lenders whose failure to fund their applicable Pro Rata Shares of
such Acquisition Facility Loans, Revolving Loans or Swing Line Loans has not
been so cured) whose Pro Rata Shares represent greater than fifty percent (50%)
of the aggregate Pro Rata Shares of such Lenders; provided further, however,
that, if the Commitments have been terminated pursuant to the terms of this
Agreement, "Required Lenders" means Lenders (without regard to such Lenders'
performance of their respective obligations hereunder) whose aggregate ratable
shares (stated as a percentage) of the aggregate outstanding principal balance
of all Loans and L/C Obligations are greater than fifty percent (50%).
"Requirements of Law" means, as to any Person, the charter and by-laws
or other organizational or governing documents of such Person, and any law, rule
or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, the Securities Act of 1933, the Securities
Exchange Act of 1934, Regulations T, U and X, ERISA, the Fair Labor Standards
Act, the Worker Adjustment and Retraining Notification Act, Americans with
Disabilities Act of 1990, and any certificate of occupancy, zoning ordinance,
building, environmental or land use requirement or permit or environmental,
labor, employment, occupational safety or health law, rule or regulation,
including Environmental, Health or Safety Requirements of Law.
"Reserves" shall mean the maximum reserve requirement, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) with
respect to "Eurocurrency liabilities" or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined or category of extensions of credit or other
assets which includes loans by a non-United States office of any Lender to
United States residents.
"Restricted Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any Equity Interests of the Borrower now or
hereafter outstanding, except a dividend payable solely in the Borrower's
Capital Stock (other than Disqualified Stock) or in options,
-22-
warrants or other rights to purchase such Capital Stock, (ii) any redemption,
retirement, purchase or other acquisition for value, direct or indirect, of any
Equity Interests of the Borrower or any of its Subsidiaries now or hereafter
outstanding, (iii) any redemption, purchase, retirement, defeasance, prepayment
or other acquisition for value, direct or indirect, of any Indebtedness other
than the Obligations, (iv) any payment of a claim for the rescission of the
purchase or sale of, or for material damages arising from the purchase or sale
of, any Indebtedness (other than the Obligations) or any Equity Interests of the
Borrower or any of the Borrower's Subsidiaries, or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission and (v) any payment of any management fee or similar
consulting fee to any Affiliate of the Borrower.
"Revolving Credit Availability" means, at any particular time, the
amount by which (a) the lesser of (i) the Aggregate Revolving Loan Commitment at
such time or (ii) the Borrowing Base at such time exceeds (b) the Revolving
Credit Obligations at such time.
"Revolving Credit Obligations" means, at any particular time, the sum
of (i) the outstanding principal amount of the Revolving Loans at such time,
plus (ii) the outstanding principal amount of the Swing Line Loans at such time,
plus (iii) the L/C Obligations at such time.
"Revolving Loan" is defined in Section 2.2 hereof.
"Revolving Loan Commitment" means, for each Lender, the obligation of
such Lender to make Revolving Loans and to purchase participations in Letters of
Credit and Swing Line Loans not exceeding the amount set forth on Exhibit A to
this Agreement opposite its name thereon under the heading "Revolving Loan
Commitment" or the signature page of the assignment and acceptance by which it
became a Lender, as such amount may be modified from time to time pursuant to
the terms of this Agreement or to give effect to any applicable assignment and
acceptance.
"Revolving Loan Pro Rata Share" shall mean, at any particular time and
with respect to any Lender, the percentage obtained by dividing (A) such
Lender's Revolving Loan Commitment (or the outstanding principal balance of such
Lender's Revolving Loans, Swing Line Loans (if any) and all L/C Obligations in
which such Lender has an interest, if the Revolving Loan Commitments have been
terminated pursuant to the terms of this Agreement) by (B) the Aggregate
Revolving Loan Commitment (or the aggregate outstanding principal balance of the
Revolving Loans, Swing Line Loans and all L/C Obligations, if the Revolving Loan
Commitments have been terminated pursuant to the terms of this Agreement).
"Revolving Loan Termination Date" means November 19, 2003.
"Revolving Note" means a promissory note, in substantially the form of
Exhibit B-1 hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Revolving Loan Commitment, including any amendment,
restatement, modification, renewal or replacement of such Revolving Note.
-23-
"Risk-Based Capital Guidelines" is defined in Section 4.2 hereof.
"Secured Obligations" means, collectively, (i) the Obligations and (ii)
all Hedging Obligations owing under Interest Rate Agreements to any Lender or
any affiliate of any Lender.
"Security Agreement" means (i) the Borrower Security Agreement or (ii)
any other security agreement whether heretofore (including in connection with
the execution of the Original Credit Agreement), now, or hereafter (including
pursuant to Section 7.2(L) hereof) executed by each of the Borrower's
Subsidiaries in favor of the Agent for the benefit of the Holders of Secured
Obligations, in each case, as amended, restated or otherwise modified from time
to time.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Solvent" shall mean, when used with respect to any Person, that at the
time of determination:
(i) the fair value of its assets (both at fair valuation and
at present fair saleable value) is equal to or in excess of the total
amount of its liabilities, including, without limitation, contingent
liabilities; and
(ii) it is then able and expects to be able to pay its debts
as they mature; and
(iii) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
With respect to contingent liabilities (such as litigation, guarantees and
pension plan liabilities), such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represent the amount which can be reasonably be expected to become an actual or
matured liability.
"Specified Acquisitions" means the two Acquisitions consummated prior
to the Closing Date which have been disclosed to the Agent and which, subject to
the satisfaction of the requirements set forth in Section 7.3(G) as applicable
to such Specified Acquisitions, shall be financed with the proceeds of
Acquisition Loans.
"Subordinated Noteholder" means, collectively, LDI, the ▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇ Trust, the ▇▇▇▇▇▇ ▇. ▇▇▇▇ Trust and any subsequent assignees or transferees
of any of them, as holders of the Senior Subordinated Notes.
"Subordinated Notes" means (i) those notes in the original principal
amount of $30,000,000 dated as of November 19, 1997 issued to the Subordinated
Noteholder and subject to the terms of the Subordination Agreement or (ii) those
certain notes which may be issued pursuant to the High Yield Note Agreement.
-24-
"Subordination Agreement" means that certain Agreement dated as of
November 19, 1997 (as amended, restated, supplemented or otherwise modified from
time to time) between the Subordinated Noteholder and the Agent on behalf of the
Lenders with respect to the Subordinated Notes.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Swing Line Bank" means Bank One or any other Lender as a successor
Swing Line Bank.
"Swing Line Commitment" means the obligation of the Swing Line Bank to
make Swing Line Loans up to a maximum principal amount of $5,000,000 at any one
time outstanding.
"Swing Line Loan" means a Loan made available to the Borrower by the
Swing Line Bank pursuant to Section 2.3 hereof.
"Swing Line Note" means a promissory note, in substantially the form of
Exhibit B-2 hereto, duly executed by the Borrower and payable to the order of
the Swing Line Bank in the amount of its Swing Line Commitment, including any
amendment, restatement, modification, renewal or replacement of such Swing Line
Note.
"Taxes" is defined in Section 2.15(E)(i) hereof.
"Termination Date" means the earlier of (a) the Revolving Loan
Termination Date, and (b) the date of termination of the Aggregate Revolving
Loan Commitment pursuant to Section 2.6 hereof or the Commitments pursuant to
Section 9.1 hereof.
"Termination Event" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Borrower or any member of the Controlled Group; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to
-25-
administer, any Benefit Plan; or (vi) the partial or complete withdrawal of the
Borrower or any member of the Controlled Group from a Multiemployer Plan.
"Term Loan" is defined in Section 2.1(A) hereof.
"Term Loan Commitment" means, for each Lender, the obligation of such
Lender to make its Term Loan pursuant to the terms and conditions of the
Original Credit Agreement (which obligation is reevidenced by this Agreement),
and which shall not exceed the principal amount set forth on Exhibit A to this
Agreement opposite its name thereon under the heading "Term Loan Commitment", as
such amount may be modified from time to time pursuant to the terms hereof.
"Term Loan Pro Rata Share" shall mean, at any particular time and with
respect to any Lender, the percentage obtained by dividing (A) the outstanding
principal balance of such Lender's Term Loan by (B) the aggregate outstanding
principal balance of all Term Loans.
"Term Loan Termination Date" means November 19, 2003.
"Term Note" means a promissory note, in substantially the form of
Exhibit B-3 hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Term Loan Commitment, including any amendment,
restatement, modification, renewal or replacement of such Term Note.
"▇▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇▇ PBE, Inc., a Delaware corporation.
"Transaction Costs" means the fees, costs and expenses payable by the
Borrower in connection with the execution, delivery and performance of the Loan
Documents.
"Transferee" is defined in Section 13.5 hereof.
"Type" means, with respect to any Loan, its nature as a Floating Rate
Loan or a Eurodollar Rate Loan.
"Unfunded Liabilities" means (i) in the case of Single Employer Plans,
the amount (if any) by which the present value of all vested nonforfeitable
benefits under all Single Employer Plans exceeds the fair market value of all
such Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plans, and (ii) in the case of Multiemployer
Plans, the withdrawal liability that would be incurred by the Controlled Group
if all members of the Controlled Group completely withdrew from all
Multiemployer Plans.
"Unmatured Default" means an event which, but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Weighted Average Life to Maturity" means when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying
-26-
(a) the amount of each then remaining installment, sinking fund, serial maturity
or other required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment,
by (ii) the then outstanding principal amount of such Indebtedness.
"Working Capital" means, as at any date of determination, the excess,
if any, of (i) the Borrower's consolidated current assets, except cash and Cash
Equivalents, over (ii) the Borrower's consolidated current liabilities, except
current maturities of long-term debt and Revolving Credit Obligations as of such
date and all accrued interest as of such date.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Any accounting terms used in
this Agreement which are not specifically defined herein shall have the meanings
customarily given them in accordance with generally accepted accounting
principles in existence as of the date hereof.
1.2 References. The existence throughout the Agreement of references to
the Borrower's Subsidiaries is for a matter of convenience only. Any references
to Subsidiaries of the Borrower set forth herein shall not in any way be
construed as consent by the Agent or any Lender to the establishment,
maintenance or acquisition of any Subsidiary, except as may otherwise be
permitted hereunder.
1.3 Amendment and Restatement of Original Credit Agreement. The
Borrower, the Lenders, the Agent, the Swing Line Bank and the Issuing Banks
agree that, upon (i) the execution and delivery of this Agreement by each of the
parties hereto and (ii) satisfaction (or waiver by the Agent in its sole
discretion) of the conditions precedent set forth in Section 5.1, the terms and
provisions of the Original Credit Agreement shall be and hereby are amended,
superseded and restated in their entirety by the terms and provisions of this
Agreement. This Agreement is not intended to and shall not constitute a novation
of the Original Credit Agreement or the indebtedness created thereunder,
including, without limitation, the "Obligations" or the "Hedging Obligations"
under and as defined therein. All outstanding "Loans" and "Letters of Credit"
(under and as defined in the Original Credit Agreement) shall continue as Loans
and Letters of Credit under (and shall be governed by the terms of) this
Agreement. The commitments of each Lender that is a party to the Original Credit
Agreement shall, on the Closing Date, automatically be deemed amended and the
only Commitments shall be those hereunder.
ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES
2.1. Term Loans. (A) Amount of Term Loans. Subject to the terms and
conditions set forth in the Original Credit Agreement, each Lender party thereto
on November 19, 1997 severally and not jointly made a term loan, in Dollars, to
the Borrower in an aggregate amount equal to such Lender's Term Loan Commitment
(each individually, a "Term Loan" and, collectively, the "Term Loans"). All Term
Loans were made by such Lenders on November 19, 1997 simultaneously and
proportionately to their respective Term Loan Pro Rata Shares and such
-27-
Term Loans are reevidenced by this facility notwithstanding the amendment and
restatement of the Original Credit Agreement.
(B) Repayment of the Term Loans. (i) The unpaid principal balance of
the Term Loans shall be repaid in sixteen (16) consecutive quarterly
installments, payable on the last Business Day of each fiscal quarter of the
Borrower, commencing on March 31, 2000 and continuing thereafter until the Term
Loan Termination Date, and the Term Loans shall be permanently reduced by the
amount of each installment on the date payment thereof is made hereunder. The
installments shall be in the aggregate amounts set forth below:
Installment Date Installment Amount
March 31, 2000 $1,500,000
June 30, 2000 $1,500,000
September 30, 2000 $1,500,000
December 31, 2000 $1,500,000
March 31, 2001 $2,250,000
June 30, 2001 $2,250,000
September 30, 2001 $2,250,000
December 31, 2001 $2,250,000
March 31, 2002 $2,500,000
June 30, 2002 $2,500,000
September 30, 2002 $2,500,000
December 31, 2002 $2,500,000
March 31, 2003 $2,750,000
June 30, 2003 $2,750,000
September 30, 2003 $2,750,000
November 19, 2003 $2,750,000
Notwithstanding the foregoing, the final installment shall be in the amount of
the then outstanding principal balance of the Term Loans. In addition, the then
outstanding principal balance of the Term Loans, if any, shall be due and
payable on the Termination Date. No installment of any Term Loan shall be
reborrowed once repaid.
(ii) In addition to the scheduled payments on the Term Loans, the
Borrower (a) may make the voluntary prepayments described in Section 2.5(A) for
credit against the scheduled payments on the Term Loans pursuant to Section
2.5(A) and (b) shall make the mandatory prepayments prescribed in Section 2.5(B)
for credit against the scheduled payments on the Term Loans pursuant to Section
2.5(B).
2.2 Revolving Loans. Upon the satisfaction of the conditions precedent
set forth in Sections 5.1 and 5.2, from and including the date of this Agreement
and prior to the Termination
-28-
Date, each Lender severally and not jointly agrees, on the terms and conditions
set forth in this Agreement, to make revolving loans to the Borrower from time
to time, in Dollars, in an amount not to exceed such Lender's Revolving Loan Pro
Rata Share of Revolving Credit Availability at such time (each individually, a
"Revolving Loan" and, collectively, the "Revolving Loans"); provided, however,
at no time shall the Revolving Credit Obligations exceed the Aggregate Revolving
Loan Commitment or the Borrowing Base. Subject to the terms of this Agreement,
the Borrower may borrow, repay and reborrow Revolving Loans at any time prior to
the Termination Date. On the Termination Date, the Borrower shall repay in full
the outstanding principal balance of the Revolving Loans. Each Advance under
this Section 2.2 shall consist of Revolving Loans made by each Lender ratably in
proportion to such Lender's respective Revolving Loan Pro Rata Share.
2.2A Acquisition Facility Loans. Upon the satisfaction of the
conditions precedent set forth in Sections 5.1 and 5.2, from and including the
date of this Agreement and prior to the Termination Date, each Lender having an
Acquisition Facility Loan Commitment severally and not jointly agrees, on the
terms and conditions set forth in this Agreement, to make revolving loans to the
Borrower from time to time, in Dollars, in an amount not to exceed such Lender's
Acquisition Facility Pro Rata Share of Acquisition Facility Availability at such
time (each individually, an "Acquisition Facility Loan" and, collectively, the
"Acquisition Facility Loans"); provided, however, at no time shall the
outstanding principal balance of the Acquisition Facility Loans exceed the
Acquisition Facility Availability. Subject to the terms of this Agreement
(including, without limitation, the restrictions on use of proceeds of the
Acquisition Facility Loans as set forth in Section 7.2(J)), the Borrower may
borrow, repay and reborrow Acquisition Facility Loans at any time prior to the
Acquisition Facility Loan Termination Date. The Acquisition Facility Loans (if
any) made on the Closing Date shall initially be Floating Rate Loans and
thereafter may be continued as Floating Rate Loans or converted into Eurodollar
Rate Loans in the manner provided in Section 2.10 and subject to the other
conditions and limitations therein set forth and set forth in this Article II.
On the Acquisition Facility Loan Termination Date, the Borrower shall repay in
full the outstanding principal balance of the Acquisition Facility Loans. Each
Advance under this Section 2.2A shall consist of Acquisition Facility Loans made
by each Lender ratably in proportion to such Lender's respective Acquisition
Facility Pro Rata Share.
2.3 Swing Line Loans. (A) Amount of Swing Line Loans. Upon the
satisfaction of the conditions precedent set forth in Section 5.1 and 5.2, from
and including the date of this Agreement and prior to the Termination Date, the
Swing Line Bank agrees, on the terms and conditions set forth in this Agreement,
to make swing line loans to the Borrower from time to time, in Dollars, in an
amount not to exceed the Swing Line Commitment (each, individually, a "Swing
Line Loan" and collectively, the "Swing Line Loans"); provided, however, at no
time shall the Revolving Credit Obligations exceed the Aggregate Revolving Loan
Commitment or the Borrowing Base. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow Swing Line Loans at any time prior to
the Termination Date.
(B) Borrowing Notice. The Borrower shall deliver to the Agent and the
Swing Line Bank a Borrowing Notice, signed by it, not later than 1:00 p.m.
(Indianapolis time) on the Borrowing Date of each Swing Line Loan, specifying
(i) the applicable Borrowing Date (which
-29-
shall be a Business Day), and (ii) the aggregate amount of the requested Swing
Line Loan which shall be an amount not less than $100,000. The Swing Line Loans
shall at all times be Floating Rate Loans.
(C) Making of Swing Line Loans. Promptly after receipt of the Borrowing
Notice under Section 2.3(B) in respect of Swing Line Loans, the Agent shall
notify each Swing Line Bank by telex or telecopy, or other similar form of
transmission, of the requested Swing Line Loan. Not later than 3:00 p.m.
(Indianapolis time) on the applicable Borrowing Date, the Swing Line Bank shall
make available its Swing Line Loan, in funds immediately available in
Indianapolis to the Agent at its address specified pursuant to Article XIV. The
Agent will promptly make the funds so received from the Swing Line Bank
available to the Borrower at the Agent's aforesaid address.
(D) Repayment of Swing Line Loans. The Swing Line Loans shall be
evidenced by the Swing Line Note, and each Swing Line Loan shall be paid in full
by the Borrower on or before the fifth Business Day after the Borrowing Date for
such Swing Line Loan. The Borrower may at any time pay, without penalty or
premium, all outstanding Swing Line Loans or, in a minimum amount and increments
of $100,000, any portion of the outstanding Swing Line Loans, upon notice to the
Agent and the Swing Line Bank. In addition, the Agent (i) may at any time in its
sole discretion with respect to any outstanding Swing Line Loan, or (ii) shall
on the fifth Business Day after the Borrowing Date of any Swing Line Loan,
require each Lender (including the Swing Line Bank) to make a Revolving Loan in
the amount of such Lender's Revolving Loan Pro Rata Share of such Swing Line
Loan, for the purpose of repaying such Swing Line Loan. Not later than 2:00 p.m.
(Indianapolis time) on the date of any notice received pursuant to this Section
2.3(D), each Lender shall make available its required Revolving Loan or
Revolving Loans, in funds immediately available in Indianapolis to the Agent at
its address specified pursuant to Article XIV. Revolving Loans made pursuant to
this Section 2.3(D) shall initially be Floating Rate Loans and thereafter may be
continued as Floating Rate Loans or converted into Eurodollar Rate Loans in the
manner provided in Section 2.10 and subject to the other conditions and
limitations therein set forth and set forth in this Article II. Unless a Lender
shall have notified the Swing Line Bank, prior to its making any Swing Line
Loan, that any applicable condition precedent set forth in Sections 5.1 and 5.2
had not then been satisfied, such Lender's obligation to make Revolving Loans
pursuant to this Section 2.3(D) to repay Swing Line Loans shall be
unconditional, continuing, irrevocable and absolute and shall not be affected by
any circumstances, including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against the Agent,
the Swing Line Bank or any other Person, (b) the occurrence of continuance of a
Default or Unmatured Default, (c) any adverse change in the condition (financial
or otherwise) of the Borrower, or (d) any other circumstances, happening or
event whatsoever. In the event that any Lender fails to make payment to the
Agent of any amount due under this Section 2.3(D), the Agent shall be entitled
to receive, retain and apply against such obligation the principal and interest
otherwise payable to such Lender hereunder until the Agent receives such payment
from such Lender or such obligation is otherwise fully satisfied. In addition to
the foregoing, if for any reason any Lender fails to make payment to the Agent
of any amount due under this Section 2.3(D), such Lender shall be deemed, at the
option of the Agent, to have unconditionally and irrevocably purchased from the
Swing Line Bank, without recourse or warranty, an undivided interest and
participation in the applicable
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Swing Line Loan in the amount of such Revolving Loan, and such interest and
participation may be recovered from such Lender together with interest thereon
at the Federal Funds Effective Rate for each day during the period commencing on
the date of demand and ending on the date such amount is received. On the
Termination Date, the Borrower shall repay in full the outstanding principal
balance of the Swing Line Loans.
2.4 Rate Options for All Advances. The Revolving Loans, Acquisition
Facility Loans and Term Loans may be Floating Rate Advances or Eurodollar Rate
Advances, or a combination thereof, selected by the Borrower in accordance with
Section 2.10. The Borrower may select, in accordance with Section 2.10, Rate
Options and Interest Periods applicable to portions of the Revolving Loans, the
Acquisition Facility Loans and the Term Loans; provided that there shall be no
more than eight (8) Interest Periods in effect with respect to all of the Loans
at any time. The Swing Line Loans shall at all times be Floating Rate Loans.
2.5 Optional Payments; Mandatory Prepayments.
(A) Optional Payments. The Borrower may from time to time repay or
prepay, without penalty or premium all or any part of outstanding Floating Rate
Advances; provided, that the Borrower may not so prepay Floating Rate Advances
consisting of Term Loans unless it shall have provided at least one Business
Day's written notice to the Agent of such prepayment. Eurodollar Rate Advances
may be voluntarily repaid or prepaid prior to the last day of the applicable
Interest Period, subject to the indemnification provisions contained in Section
4.4, provided, that the Borrower may not so prepay Eurodollar Rate Advances
unless it shall have provided at least three Business Days' written notice to
the Agent of such prepayment. Unless the aggregate outstanding principal balance
of the Term Loans is to be prepaid in full, voluntary prepayments of the Term
Loans shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $1,000,000 in excess of that amount, and shall be applied to each
of the then remaining installments payable thereunder, on a ratable basis based
upon the respective amounts of such installments.
(B) Mandatory Prepayments.
(i) Mandatory Prepayments of Term Loans.
(a) Upon the consummation of any Asset Sale or any Financing
by the Borrower or any Subsidiary of the Borrower, other than those
Asset Sales permitted pursuant to Section 7.3(B)(i) except to the
extent that the Net Cash Proceeds of such Asset Sale, when combined
with the Net Cash Proceeds of all such Asset Sales during the
immediately preceding twelve-month period, do not exceed $1,000,000,
and except as provided in the second sentence of this Section
2.5(B)(i)(a), within three (3) Business Days after the Borrower's or
any of its Subsidiaries' (i) receipt of any Net Cash Proceeds from any
such Asset Sale or Financing, or (ii) conversion to cash or Cash
Equivalents of non-cash proceeds (whether principal or interest and
including securities, release of escrow arrangements or lease payments)
received from any Asset Sale, the Borrower shall make a mandatory
prepayment of the Obligations in an amount equal to one hundred percent
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(100%) of such Net Cash Proceeds or such proceeds converted from
non-cash to cash or Cash Equivalents. Net Cash Proceeds of Asset Sales
of capital assets with respect to which the Borrower shall have given
the Agent written notice of its intention to replace such capital
assets within nine months following such Asset Sale shall not be
subject to the provisions of the first sentence of this Section
2.5(B)(i)(a) unless and to the extent that such applicable period shall
have expired without such replacement having been made.
(b) Nothing in this Section 2.5(B)(i) shall be construed to
constitute the Lenders' consent to any transaction referred to in
clause (a) above which is not expressly permitted by the terms of this
Agreement.
(c) Each mandatory prepayment required by clause (a) of this
Section 2.5(B) shall be referred to herein as a "Designated
Prepayment." Designated Prepayments shall be allocated and applied to
the Obligations as follows:
(I) the amount of each Designated Prepayment (other
than a Designated Prepayment attributable to the issuance of
Subordinated Notes pursuant to the High Yield Note Agreement)
shall be applied to each of the then remaining installments
payable under the Term Loans in the inverse order of maturity;
(II) the amount of each Designated Prepayment
attributable to the issuance of Subordinated Notes pursuant to
the High Yield Note Agreement shall be applied as follows:
first, to each of the then remaining installments payable
under the Term Loans in the inverse order of maturity; second,
at the Borrower's option, up to $5,000,000 may be applied to
reduce the outstanding balance of the Revolving Credit
Obligations (without reducing the Aggregate Revolving Loan
Commitment); third to reduce the outstanding balance of the
Acquisition Facility Loans; and fourth, to repay in full the
Subordinated Notes issued to the Subordinated Noteholder as of
November 19, 1997; and
(III) following the payment in full of the Term
Loans, the amount of each Designated Prepayment shall be
applied to repay Revolving Loans (but shall reduce Revolving
Loan Commitments only at the option of the Lenders with
Revolving Loan Pro Rata Shares greater than fifty percent
(50%)) and following the payment in full of the Revolving
Loans, to repay Acquisition Facility Loans (but shall reduce
Acquisition Facility Commitments only at the option of Lenders
with Acquisition Facility Pro Rata Shares greater than fifty
percent (50%)) and following the payment in full of the
Acquisition Facility Loans, the amount of each Designated
Prepayment shall be applied first to interest on the
Reimbursement Obligations, then to principal on the
Reimbursement Obligations, then to fees on account of Letters
of Credit and then, to the extent any L/C Obligations are
contingent, deposited with the Agent as cash collateral in
respect of such L/C Obligations.
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(d) On the date any Designated Prepayment is received by the
Agent, such prepayment shall be applied first to Floating Rate Loans
and to any Eurodollar Rate Loans maturing on such date and then to
subsequently maturing Eurodollar Rate Loans in order of maturity.
(ii) Mandatory Prepayments of Revolving and Acquisition Facility Loans.
In addition to repayments under Section 2.5(B)(i)(c)(II), if at any time and for
any reason (a) the Revolving Credit Obligations are greater than the lesser of
(i) the Aggregate Revolving Loan Commitment or (ii) the Borrowing Base, or (b)
the outstanding principal balance of the Acquisition Facility Loans is greater
than the Aggregate Acquisition Facility Commitment, the Borrower shall
immediately make a mandatory prepayment of the Obligations in an amount equal to
such excess. In addition, if Revolving Credit Availability is at any time less
than the amount of contingent L/C Obligations outstanding at any time, the
Borrower shall deposit cash collateral with the Agent in an amount equal to the
amount by which such L/C Obligations exceed such Revolving Credit Availability.
(iii) Subject to the preceding provisions of this Section 2.5(B), all
of the mandatory prepayments made under this Section 2.5(B) shall be applied
first to Floating Rate Loans and to any Eurodollar Rate Loans maturing on such
date and then to subsequently maturing Eurodollar Rate Loans in order of
maturity.
2.6 Reduction of Commitments. (a) The Borrower may permanently reduce
the Aggregate Revolving Loan Commitment in whole, or in part ratably among the
Lenders, in an aggregate minimum amount of $1,000,000 with respect to each such
Commitment and integral multiples of $100,000 in excess of that amount with
respect to each such Commitment (unless the Aggregate Revolving Loan Commitment
is reduced in whole), upon at least one Business Day's written notice to the
Agent, which notice shall specify the amount of any such reduction; provided,
however, that the amount of the Aggregate Revolving Loan Commitment may not be
reduced below the aggregate principal amount of the outstanding Revolving Credit
Obligations.
(b) The Borrower may permanently reduce the Aggregate Acquisition
Facility Commitment in whole, or in part ratably among the Lenders, in an
aggregate minimum amount of $1,000,000 with respect to each such Commitment and
integral multiples of $100,000 in excess of that amount with respect to each
such Commitment (unless the Aggregate Acquisition Facility Commitment is reduced
in whole), upon at least three (3) Business Days' written notice to the Agent,
which notice shall specify the amount of any such reduction; provided, however,
that the amount of the Aggregate Acquisition Facility Commitment may not be
reduced below the aggregate principal amount of the outstanding principal amount
of the Acquisition Facility Loans.
(c) All accrued commitment fees shall be payable on the effective date
of any termination of the obligations of the Lenders to make Loans hereunder.
2.7 Method of Borrowing. Not later than 2:00 p.m. (Indianapolis time)
on each Borrowing Date, each Lender shall make available its Revolving Loan,
Acquisition Facility Loan or Term Loan, in funds immediately available in
Indianapolis to the Agent at its address specified
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pursuant to Article XIV. The Agent will promptly make the funds so received from
the Lenders available to the Borrower at the Agent's aforesaid address.
2.8 Method of Selecting Types and Interest Periods for Advances. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Rate Advance, the Interest Period applicable to each Advance from time to time.
The Borrower shall give the Agent irrevocable notice in substantially the form
of Exhibit C hereto (a "Borrowing Notice") not later than 10:00 a.m.
(Indianapolis time) (a) on the Borrowing Date of each Floating Rate Advance and
(b) three Business Days before the Borrowing Date for each Eurodollar Rate
Advance, specifying: (i) the Borrowing Date (which shall be a Business Day) of
such Advance; (ii) the aggregate amount of such Advance; (iii) the Type of
Advance selected; and (iv) in the case of each Eurodollar Rate Advance, the
Interest Period applicable thereto. The Borrower shall select Interest Periods
so that, to the best of the Borrower's knowledge, it will not be necessary to
prepay all or any portion of any Eurodollar Rate Advance prior to the last day
of the applicable Interest Period in order to make mandatory prepayments as
required pursuant to the terms hereof. Each Floating Rate Advance and all
Obligations other than Loans shall bear interest from and including the date of
the making of such Advance to (but not including) the date of repayment thereof
at the Floating Rate, changing when and as such Floating Rate changes. Changes
in the rate of interest on that portion of any Advance maintained as a Floating
Rate Loan will take effect simultaneously with each change in the Alternate Base
Rate. Each Eurodollar Rate Advance shall bear interest from and including the
first day of the Interest Period applicable thereto to (but not including) the
last day of such Interest Period at the interest rate determined as applicable
to such Eurodollar Rate Advance.
2.9 Minimum Amount of Each Advance. Each Advance (other than an Advance
to repay Swing Line Loans or a Reimbursement Obligation) shall be in the minimum
amount of $1,000,000 (and in multiples of $100,000 if in excess thereof);
provided, however, that any Floating Rate Advance may be in the amount of the
unused Aggregate Revolving Loan Commitment or the unused Aggregate Acquisition
Facility Commitment.
2.10 Method of Selecting Types and Interest Periods for Conversion and
Continuation of Advances.
(A) Right to Convert. The Borrower may elect from time to time, subject
to the provisions of Section 2.4 and this Section 2.10, to convert all or any
part of a Loan of any Type into any other Type or Types of Loans; provided that
any conversion of any Eurodollar Rate Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto.
(B) Automatic Conversion and Continuation. Floating Rate Loans shall
continue as Floating Rate Loans unless and until such Floating Rate Loans are
converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall continue as
Eurodollar Rate Loans until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have given the
Agent notice in accordance with Section 2.10(D) requesting that, at the end of
such Interest Period, such Eurodollar Rate Loans continue as a Eurodollar Rate
Loan.
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(C) No Conversion Post-Default or Post-Unmatured Default.
Notwithstanding anything to the contrary contained in Section 2.10(A) or Section
2.10(B), no Loan may be converted into or continued as a Eurodollar Rate Loan
(except with the consent of the Required Lenders) when any Default or Unmatured
Default has occurred and is continuing.
(D) Conversion/Continuation Notice. The Borrower shall give the Agent
irrevocable notice (a "Conversion/Continuation Notice") of each conversion of a
Floating Rate Loan into a Eurodollar Rate Loan or continuation of a Eurodollar
Rate Loan not later than 10:00 a.m. (Indianapolis time) three Business Days
prior to the date of the requested conversion or continuation, specifying: (1)
the requested date (which shall be a Business Day) of such conversion or
continuation; (2) the amount and Type of the Loan to be converted or continued;
and (3) the amount of Eurodollar Rate Loan(s) into which such Loan is to be
converted or continued and the duration of the Interest Period applicable
thereto.
2.11 Default Rate. After the occurrence and during the continuance of a
Default, at the option of the Agent or at the direction of the Required Lenders,
the interest rate(s) applicable to the Obligations and the fees payable under
Section 3.8 with respect to Letters of Credit shall be increased by two percent
(2.0%) per annum above the Floating Rate or Eurodollar Rate, as applicable;
provided, that solely with respect to Acquisition Facility Loans, the fees
payable under Section 2.15(C)(ii) and (iii) and the fees payable pursuant to the
fee letter dated December 14, 1999 described in Section 2.15(C)(iv), the
interest rate(s) applicable to such obligations and fees shall be increased by
three percent (3.0%) per annum above the Floating Rate or the Eurodollar Rate,
as applicable.
2.12 Method of Payment. All payments of principal, interest, and fees
hereunder shall be made, without setoff, deduction or counterclaim, in
immediately available funds to the Agent at the Agent's address specified
pursuant to Article XIV, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Borrower, by 2:00 p.m. (Indianapolis
time) on the date when due and shall be made ratably among the Lenders (unless
such amount is not to be shared ratably in accordance with the terms hereof).
Each payment delivered to the Agent for the account of any Lender shall be
delivered promptly by the Agent to such Lender in the same type of funds which
the Agent received at its address specified pursuant to Article XIV or at any
Lending Installation specified in a notice received by the Agent from such
Lender. The Borrower authorizes the Agent to charge the account of the Borrower
maintained with Bank One for each payment of principal, interest and fees as it
becomes due hereunder. Bank One will notify the Borrower of any such charges.
2.13 Notes. Each Lender is authorized to record the principal amount of
each of its Loans and each repayment with respect to its Loans on the schedule
attached to its respective Notes; provided, however, that the failure to so
record shall not affect the Borrower's obligations under any such Note.
2.14 Telephonic Notices. The Borrower authorizes the Lenders and the
Agent to extend Advances, issue Letters of Credit, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any person or
persons the Agent or any Lender in good faith
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believes to be acting on behalf of the Borrower. The Borrower agrees to deliver
promptly to the Agent a written confirmation, signed by an Authorized Officer,
if such confirmation is requested by the Agent or any Lender, of each telephonic
notice. If the written confirmation differs in any material respect from the
action taken by the Agent and the Lenders, (i) the telephonic notice shall
govern absent manifest error and (ii) the Agent or the Lender, as applicable,
shall promptly notify the Authorized Officer who provided such confirmation of
such difference.
2.15 Promise to Pay; Interest and Commitment Fees; Interest Payment
Dates; Interest and Fee Basis; Taxes; Loan and Control Accounts.
(A) Promise to Pay. The Borrower unconditionally promises to pay when
due the principal amount of each Loan and all other Obligations incurred by it,
and to pay all unpaid interest accrued thereon, in accordance with the terms of
this Agreement and the Notes.
(B) Interest Payment Dates. Interest accrued on each Floating Rate Loan
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof, and at maturity (whether by acceleration or
otherwise). Interest accrued on each Eurodollar Rate Loan shall be payable on
the last day of its applicable Interest Period, on any date on which the
Eurodollar Rate Loan is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Eurodollar Rate Loan having an Interest
Period longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest accrued on the
principal balance of all other Obligations shall be payable in arrears (i) on
the last day of each calendar month, commencing on the first such day following
the incurrence of such Obligation, (ii) upon repayment thereof in full or in
part, and (iii) if not theretofore paid in full, at the time such other
Obligation becomes due and payable (whether by acceleration or otherwise).
(C) Commitment Fees. (i) The Borrower shall pay to the Agent, for the
account of the Lenders as provided hereinbelow, from and after the Closing Date
until the date on which the Aggregate Revolving Loan Commitment shall be
terminated in whole, a commitment fee accruing at the rate of the then
Applicable Commitment Fee Percentage, on the amount by which (x) the Aggregate
Revolving Loan Commitment exceeds (y) the Revolving Credit Obligations from time
to time. All such commitment fees payable under this clause (C)(i) shall be
payable quarterly in arrears on the last day of each fiscal quarter of the
Borrower occurring after the Closing Date (with the first such payment being
calculated for the period from the Closing Date and ending on March 31, 2000),
and, in addition, on the date on which the Aggregate Revolving Loan Commitment
shall be terminated in whole. The Agent shall pay to each Lender a portion of
such commitment fee based on the amount by which such Lender's Revolving Loan
Commitment exceeds the Revolving Credit Obligations (excluding, in the case of
all Lenders other than the Swing Line Bank, the outstanding Swing Line Loans).
(ii) The Borrower shall pay to the Agent, for the account of the
Lenders as provided hereinbelow, from and after the Closing Date until the date
on which the Aggregate Acquisition Facility Commitment shall be terminated in
whole, a commitment fee accruing at the rate of one- half of one percent (0.50%)
per annum on the amount by which (x) the Aggregate Acquisition Facility
Commitment exceeds (y) the outstanding principal balance of the Acquisition
Facility
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Loans from time to time. All such commitment fees payable under this clause
(C)(ii) shall be payable quarterly in arrears on the last day of each fiscal
quarter of the Borrower occurring after the Closing Date (with the first such
payment being calculated for the period from the Closing Date and ending on
March 31, 2000), and, in addition, on the earlier of (1) the date on which the
Aggregate Acquisition Facility Commitment shall be terminated in whole and (2)
the Acquisition Facility Loan Termination Date. The Agent shall pay to each
Lender a portion of such commitment fee based on such Lender's Acquisition
Facility Pro Rata Share.
(iii) On the Closing Date, the Borrower shall pay to the Agent, for the
account of each Lender in accordance with its Acquisition Facility Pro Rata
Share, a fee equal to one percent (1%) of the Aggregate Acquisition Facility
Commitment.
(iv) The Borrower agrees to pay to the Agent for the sole account of
the Agent and the Arranger (unless otherwise agreed between the Agent and the
Arranger and any Lender) the fees set forth in the letter agreements among the
Agent, the Arranger and the Borrower dated October 8, 1997 and December 14,
1999, payable at the times and in the amounts set forth therein.
(D) Interest and Fee Basis; Applicable Floating Rate Margin, Applicable
Eurodollar Margin and Applicable Commitment Fee Percentage.
(i) Interest on all Obligations and all fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be payable
for the day an Obligation is incurred but not for the day of any payment on the
amount paid if payment is received prior to 2:00 p.m. (Indianapolis time) at the
place of payment. If any payment of principal of or interest on a Loan or any
payment of any other Obligations shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
(ii) The Applicable Floating Rate Margin and Applicable Eurodollar
Margin for all Loans other than Acquisition Facility Loans and the Applicable
Commitment Fee Percentage shall be determined from time to time by reference to
the table set forth below, on the basis of the then applicable Leverage Ratio as
described in this Section 2.15(D)(ii):
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Applicable Applicable Applicable
Eurodollar Floating Rate Commitment
Leverage Ratio Margin Margin Fee Percentage
Greater than or
equal to 4.0 to 1.0 2.25% 0.75% 0.50%
Greater than or
equal to 3.5 to 1.0
and less than
4.0 to 1.0 2.00% 0.50% 0.375%
Greater than or
equal to 3.0 to 1.0
and less than
3.5 to 1.0 1.75% 0.25% 0.25%
Greater than or
equal to 2.5 to 1.0
and less than
3.0 to 1.0 1.50% 0.00% 0.25%
Greater than or
equal to 2.0 to 1.0
and less than
2.5 to 1.0 1.25% 0.00% 0.25%
Less than 2.0 to 1.0 1.00% 0.00% 0.20%
For purposes of this Section 2.15(D)(ii), the Leverage Ratio shall be determined
as of the last day of each fiscal quarter based upon (a) for Indebtedness for
borrowed money, Indebtedness for borrowed money as of the last day of each such
fiscal quarter; and (b) for EBITDA, the actual amount for the four-quarter
period ending on such day, calculated, with respect to Permitted Acquisitions,
on a pro forma basis using historical financial statements obtained from the
seller (with EBITDA adjusted solely to add back (i) identifiable expenses which
will be reduced or eliminated subsequent to the applicable Permitted Acquisition
(including, but not limited to, the effect of margin improvements) and (ii)
transaction expenses arising from or in connection with the applicable Permitted
Acquisition), broken down by fiscal quarter in the Borrower's reasonable
judgment. Upon receipt of the financial statements delivered pursuant to
Sections 7.1(A)(i) and (ii), as applicable, the Applicable Floating Rate Margin,
Applicable Eurodollar Margin and Applicable Commitment Fee Percentage shall be
adjusted, such adjustment being effective on the first Business Day of the
fiscal quarter following the Agent's receipt of such financial statements and
the compliance certificate required to be delivered in connection therewith
pursuant to Section 7.1(A)(iii); provided, that if the Borrower shall not have
timely delivered its financial statements in accordance with Section 7.1(A)(i)
or (ii), as applicable, then commencing on the
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date upon which such financial statements should have been delivered and
continuing until such financial statements are actually delivered, it shall be
assumed for purposes of determining the Applicable Floating Rate Margin,
Applicable Eurodollar Margin and Applicable Commitment Fee Percentage that the
Leverage Ratio was greater than or equal to 4.5 to 1.0.
(E) Taxes.
(i) Any and all payments by the Borrower hereunder shall be
made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings or
any liabilities with respect thereto including those arising after the
date hereof as a result of the adoption of or any change in any law,
treaty, rule, regulation, guideline or determination of a Governmental
Authority or any change in the interpretation or application thereof by
a Governmental Authority but excluding, in the case of each Lender and
the Agent, such taxes (including income taxes, franchise taxes and
branch profit taxes) as are imposed on or measured by such Lender's or
Agent's, as the case may be, income by the United States of America or
any Governmental Authority of the jurisdiction under the laws of which
such Lender or Agent, as the case may be, is organized or maintains a
Lending Installation (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings, and liabilities which the Agent or a
Lender determines to be applicable to this Agreement, the other Loan
Documents, the Term Loan Commitments, the Revolving Loan Commitments,
the Loans or the Letters of Credit being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder or under the other Loan
Documents to any Lender or the Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable
under this Section 2.15(E)) such Lender or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such
deductions, and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance
with applicable law. If a withholding tax of the United States of
America or any other Governmental Authority shall be or become
applicable (y) after the date of this Agreement, to such payments by
the Borrower made to the Lending Installation or any other office that
a Lender may claim as its Lending Installation, or (z) after such
Lender's selection and designation of any other Lending Installation,
to such payments made to such other Lending Installation, such Lender
shall use reasonable efforts to make, fund and maintain its Loans
through another Lending Installation of such Lender in another
jurisdiction so as to reduce the Borrower's liability hereunder, if the
making, funding or maintenance of such Loans through such other Lending
Installation of such Lender does not, in the judgment of such Lender,
otherwise adversely affect such Loans, or obligations under the
Commitments or such Lender.
(ii) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges, or similar levies which arise from any payment made
hereunder, from the issuance of Letters of Credit hereunder, or from
the execution, delivery or registration of, or otherwise with respect
to, this
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Agreement, the other Loan Documents, the Commitments, the Term Loan
Commitments, the Loans or the Letters of Credit (hereinafter referred
to as "Other Taxes").
(iii) The Borrower indemnifies each Lender and the Agent for
the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any Governmental
Authority on amounts payable under this Section 2.15(E)) paid by such
Lender or the Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within thirty (30)
days after the date such Lender or the Agent (as the case may be) makes
written demand therefor. A certificate as to any additional amount
payable to any Lender or the Agent under this Section 2.15(E) submitted
to the Borrower and the Agent (if a Lender is so submitting) by such
Lender or the Agent shall show in reasonable detail the amount payable
and the calculations used to determine such amount and shall, absent
manifest error, be final, conclusive and binding upon all parties
hereto. With respect to such deduction or withholding for or on account
of any Taxes and to confirm that all such Taxes have been paid to the
appropriate Governmental Authorities, the Borrower shall promptly (and
in any event not later than thirty (30) days after receipt) furnish to
each Lender and the Agent such certificates, receipts and other
documents as may be required (in the judgment of such Lender or the
Agent) to establish any tax credit to which such Lender or the Agent
may be entitled.
(iv) Within thirty (30) days after the date of any payment of
Taxes or Other Taxes by the Borrower, the Borrower shall furnish to the
Agent the original or a certified copy of a receipt evidencing payment
thereof.
(v) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.15(E) shall survive the payment in
full of principal and interest hereunder, the termination of the
Letters of Credit and the termination of this Agreement.
(vi) Without limiting the obligations of the Borrower under
this Section 2.15(E), each Lender that is not created or organized
under the laws of the United States of America or a political
subdivision thereof shall deliver to the Borrower and the Agent on or
before the Closing Date, or, if later, the date on which such Lender
becomes a Lender pursuant to Section 13.3, a true and accurate
certificate executed in duplicate by a duly authorized officer of such
Lender, in a form satisfactory to the Borrower and the Agent, to the
effect that such Lender is capable under the provisions of an
applicable tax treaty concluded by the United States of America (in
which case the certificate shall be accompanied by two executed copies
of Form 1001 of the IRS) or under Section 1442 of the Code (in which
case the certificate shall be accompanied by two copies of Form 4224 of
the IRS, or, if such Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, two completed and signed copies of
IRS Form W-8 or W-9 or the applicable successor form) of receiving
payments of interest hereunder without deduction or withholding of
United States federal income tax. Each such Lender further agrees to
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deliver to the Borrower and the Agent from time to time a true and
accurate certificate executed in duplicate by a duly authorized officer
of such Lender substantially in a form satisfactory to the Borrower and
the Agent, before or promptly upon the occurrence of any event
requiring a change in the most recent certificate previously delivered
by it to the Borrower and the Agent pursuant to this Section
2.15(E)(vi). Further, each Lender which delivers a certificate
accompanied by Form 1001 of the IRS covenants and agrees to deliver to
the Borrower and the Agent within fifteen (15) days prior to January 1,
2001, and every third (3rd) anniversary of such date thereafter on
which this Agreement is still in effect, another such certificate and
two accurate and complete original signed copies of Form 1001 (or any
successor form or forms required under the Code or the applicable
regulations promulgated thereunder), and each Lender that delivers a
Form W-8 or W-9 as prescribed above or a certificate accompanied by
Form 4224 of the IRS covenants and agrees to deliver to the Borrower
and the Agent within fifteen (15) days prior to the beginning of each
subsequent taxable year of such Lender during which this Agreement is
still in effect, another such Form W-8 or W-9 or another such
certificate and two accurate and complete original signed copies of IRS
Form 4224 (or any successor form or forms required under the Code or
the applicable regulations promulgated thereunder). Each such
certificate shall certify as to one of the following:
(a) that such Lender is capable of receiving payments
of interest hereunder without deduction or withholding of
United States of America federal income tax;
(b) that such Lender is not capable of receiving
payments of interest hereunder without deduction or
withholding of United States of America federal income tax as
specified therein but is capable of recovering the full amount
of any such deduction or withholding from a source other than
the Borrower and will not seek any such recovery from the
Borrower; or
(c) that, as a result of the adoption of or any
change in any law, treaty, rule, regulation, guideline or
determination of a Governmental Authority or any change in the
interpretation or application thereof by a Governmental
Authority after the date such Lender became a party hereto,
such Lender is not capable of receiving payments of interest
hereunder without deduction or withholding of United States of
America federal income tax as specified therein and that it is
not capable of recovering the full amount of the same from a
source other than the Borrower.
Each Lender shall promptly furnish to the Borrower and the Agent such
additional documents as may be reasonably required by the Borrower or
the Agent to establish any exemption from or reduction of any Taxes or
Other Taxes required to be deducted or withheld and which may be
obtained without undue expense to such Lender.
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(F) Loan Account. Each Lender shall maintain in accordance with its
usual practice an account or accounts (a "Loan Account") evidencing the
Obligations of the Borrower to such Lender owing to such Lender from time to
time, including the amount of principal and interest payable and paid to such
Lender from time to time hereunder and under the Notes.
(G) Entries Binding. The entries made in the Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest error,
unless the Borrower objects to information contained in the Register and each
Loan Account within thirty (30) days of the Borrower's receipt of such
information.
2.16 Notification of Advances, Interest Rates, Prepayments and
Aggregate Revolving Loan Commitment Reductions. Promptly after receipt thereof,
the Agent will notify each Lender of the contents of each Aggregate Revolving
Loan Commitment reduction notice, Aggregate Acquisition Facility Commitment
reduction notice, Borrowing Notice, Continuation/Conversion Notice, and
repayment notice received by it hereunder. The Agent will notify each Lender of
the interest rate applicable to each Eurodollar Rate Loan promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.
2.17 Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or
facsimile notice to the Agent and the Borrower, designate a Lending Installation
through which Loans will be made by it and for whose account Loan payments are
to be made.
2.18 Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (ii) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.
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2.19 Termination Date. This Agreement shall be effective until the
Termination Date. Notwithstanding the termination of this Agreement on the
Termination Date, until all of the Obligations (other than contingent indemnity
obligations) shall have been fully and indefeasibly paid and satisfied, all
financing arrangements among the Borrower and the Lenders shall have been
terminated (other than under Interest Rate Agreements or other agreements with
respect to Hedging Obligations) and all of the Letters of Credit shall have
expired, been canceled or terminated, all of the rights and remedies under this
Agreement and the other Loan Documents shall survive.
2.20 Replacement of Certain Lenders. In the event a Lender ("Affected
Lender") shall have: (i) failed to fund its applicable Pro Rata Share of any
Advance requested by the Borrower, or to fund a Revolving Loan in order to repay
Swing Line Loans pursuant to Section 2.3(D) or in respect of L/C Obligations,
which such Lender is obligated to fund under the terms of this Agreement and
which failure has not been cured, (ii) requested compensation from the Borrower
under Sections 2.15(E), 4.1 or 4.2 to recover Taxes, Other Taxes or other
additional costs incurred by such Lender which are not being incurred generally
by the other Lenders, (iii) delivered a notice pursuant to Section 4.3 claiming
that such Lender is unable to extend Eurodollar Rate Loans to the Borrower for
reasons not generally applicable to the other Lenders or (iv) has invoked
Section 10.2, then, in any such case, the Borrower or the Agent may make written
demand on such Affected Lender (with a copy to the Agent in the case of a demand
by the Borrower and a copy to the Borrower in the case of a demand by the Agent)
for the Affected Lender to assign, and such Affected Lender shall use its best
efforts to assign pursuant to one or more duly executed Assignment Agreements
five (5) Business Days after the date of such demand, to one or more financial
institutions that comply with the provisions of Section 13.3(A) which the
Borrower or the Agent, as the case may be, shall have engaged for such purpose
("Replacement Lender"), all of such Affected Lender's rights and obligations
under this Agreement and the other Loan Documents (including, without
limitation, its Revolving Loan Commitment, Acquisition Facility Commitment all
Loans owing to it, all of its participation interests in existing Letters of
Credit and Swing Line Loans, and its obligation to participate in additional
Letters of Credit and Swing Line Loans hereunder) in accordance with Section
13.3. The Agent agrees, upon the occurrence of such events with respect to an
Affected Lender and upon the written request of the Borrower, to use its
reasonable efforts to obtain the commitments from one or more financial
institutions to act as a Replacement Lender. The Agent is authorized to execute
one or more of such assignment agreements as attorney-in-fact for any Affected
Lender failing to execute and deliver the same within five (5) Business Days
after the date of such demand. Further, with respect to such assignment the
Affected Lender shall have concurrently received, in cash, all amounts due and
owing to the Affected Lender hereunder or under any other Loan Document,
including, without limitation, the aggregate outstanding principal amount of the
Loans owed to such Lender, together with accrued interest thereon through the
date of such assignment, amounts payable under Sections 2.15(E), 4.1, and 4.2
with respect to such Affected Lender and compensation payable under Section
2.15(C) in the event of any replacement of any Affected Lender under clause (ii)
or clause (iii) of this Section 2.20; provided that upon such Affected Lender's
replacement, such Affected Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.15(E), 4.1, 4.2, 4.4, and
10.7, as well as to any fees accrued for its account hereunder and not yet paid,
and shall continue to be obligated
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under Section 11.8. Upon the replacement of any Affected Lender pursuant to this
Section 2.20, the provisions of Section 9.2 shall continue to apply with respect
to Borrowings which are then outstanding with respect to which the Affected
Lender failed to fund its applicable Pro Rata Share and which failure has not
been cured.
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 Obligation to Issue. Subject to the terms and conditions of this
Agreement and in reliance upon the representations, warranties and covenants of
the Borrower herein set forth, each Issuing Bank hereby agrees to issue for the
account of the Borrower through such Issuing Bank's branches as it and the
Borrower may jointly agree, one or more Letters of Credit denominated in Dollars
in accordance with this Article III, from time to time during the period,
commencing on the date hereof and ending on the Business Day prior to the
Termination Date.
3.2 [Intentionally Omitted].
3.3 Types and Amounts. No Issuing Bank shall have any obligation to and
no Issuing Bank shall:
(i) issue any Letter of Credit if on the date of issuance,
before or after giving effect to the Letter of Credit requested
hereunder, (a) the Revolving Credit Obligations at such time would
exceed the Aggregate Revolving Loan Commitment or the Borrowing Base at
such time, or (b) the aggregate outstanding amount of the L/C
Obligations would exceed $10,000,000; or
(ii) issue any Letter of Credit which has an expiration date
later than the date which is the earlier of one (1) year after the date
of issuance thereof or five (5) Business Days immediately preceding the
Termination Date.
3.4 Conditions. In addition to being subject to the satisfaction of the
conditions contained in Sections 5.1 and 5.2, the obligation of an Issuing Bank
to issue any Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) the Borrower shall have delivered to the applicable
Issuing Bank at such times and in such manner as such Issuing Bank may
reasonably prescribe, a request for issuance of such Letter of Credit
in substantially the form of Exhibit D hereto, duly executed
applications for such Letter of Credit, and such other documents,
instructions and agreements as may be required pursuant to the terms
thereof, and the proposed Letter of Credit shall be reasonably
satisfactory to such Issuing Bank as to form and content; and
(ii) as of the date of issuance no order, judgment or decree
of any court, arbitrator or Governmental Authority shall purport by its
terms to enjoin or restrain the applicable Issuing Bank from issuing
such Letter of Credit and no law,
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rule or regulation applicable to such Issuing Bank and no request or
directive (whether or not having the force of law) from a Governmental
Authority with jurisdiction over such Issuing Bank shall prohibit or
request that such Issuing Bank refrain from the issuance of Letters of
Credit generally or the issuance of that Letter of Credit.
3.5 Procedure for Issuance of Letters of Credit. (a) Subject to the
terms and conditions of this Article III and provided that the applicable
conditions set forth in Sections 5.1 and 5.2 hereof have been satisfied, the
applicable Issuing Bank shall, on the requested date, issue a Letter of Credit
on behalf of the Borrower in accordance with such Issuing Bank's usual and
customary business practices and, in this connection, such Issuing Bank may
assume that the applicable conditions set forth in Section 5.2 hereof have been
satisfied unless it shall have received notice to the contrary from the Agent or
a Lender or has knowledge that the applicable conditions have not been met.
(b) The applicable Issuing Bank shall give the Agent written or telex
notice, or telephonic notice confirmed promptly thereafter in writing, of the
issuance of a Letter of Credit, provided, however, that the failure to provide
such notice shall not result in any liability on the part of such Issuing Bank.
(c) No Issuing Bank shall extend or amend any Letter of Credit unless
the requirements of this Section 3.5 are met as though a new Letter of Credit
was being requested and issued.
3.6 Letter of Credit Participation. Immediately upon the issuance of
each Letter of Credit hereunder, each Lender with a Revolving Loan Pro Rata
Share shall be deemed to have automatically, irrevocably and unconditionally
purchased and received from the applicable Issuing Bank an undivided interest
and participation in and to such Letter of Credit, the obligations of the
Borrower in respect thereof, and the liability of such Issuing Bank thereunder
(collectively, an "L/C Interest") in an amount equal to the amount available for
drawing under such Letter of Credit multiplied by such Lender's Revolving Loan
Pro Rata Share. Each Issuing Bank will notify each Lender promptly upon
presentation to it of an L/C Draft or upon any other draw under a Letter of
Credit. On or before the Business Day on which an Issuing Bank makes payment of
each such L/C Draft or, in the case of any other draw on a Letter of Credit, on
demand by the Agent, each Lender shall make payment to the Agent, for the
account of the applicable Issuing Bank, in immediately available funds in an
amount equal to such Lender's Revolving Loan Pro Rata Share of the amount of
such payment or draw. The obligation of each Lender to reimburse the Issuing
Banks under this Section 3.6 shall be unconditional, continuing, irrevocable and
absolute. In the event that any Lender fails to make payment to the Agent of any
amount due under this Section 3.6, the Agent shall be entitled to receive,
retain and apply against such obligation the principal and interest otherwise
payable to such Lender hereunder until the Agent receives such payment from such
Lender or such obligation is otherwise fully satisfied; provided, however, that
nothing contained in this sentence shall relieve such Lender of its obligation
to reimburse the applicable Issuing Bank for such amount in accordance with this
Section 3.6.
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3.7 Reimbursement Obligation. The Borrower agrees unconditionally,
irrevocably and absolutely to pay immediately to the Agent, for the account of
the Lenders, the amount of each advance which may be drawn under or pursuant to
a Letter of Credit or an L/C Draft related thereto (such obligation of the
Borrower to reimburse the Agent for an advance made under a Letter of Credit or
L/C Draft being hereinafter referred to as a "Reimbursement Obligation" with
respect to such Letter of Credit or L/C Draft). If the Borrower at any time
fails to repay a Reimbursement Obligation pursuant to this Section 3.7, the
Borrower shall be deemed to have elected to borrow Revolving Loans from the
Lenders, as of the date of the advance giving rise to the Reimbursement
Obligation, equal in amount to the amount of the unpaid Reimbursement
Obligation. Such Revolving Loans shall be made as of the date of the payment
giving rise to such Reimbursement Obligation, automatically, without notice and
without any requirement to satisfy the conditions precedent otherwise applicable
to an Advance of Revolving Loans. Such Revolving Loans shall constitute a
Floating Rate Advance, the proceeds of which Advance shall be used to repay such
Reimbursement Obligation. If, for any reason, the Borrower fails to repay a
Reimbursement Obligation on the day such Reimbursement Obligation arises and,
for any reason, the Lenders are unable to make or have no obligation to make
Revolving Loans, then such Reimbursement Obligation shall bear interest from and
after such day, until paid in full, at the interest rate applicable to a
Floating Rate Advance.
3.8 Letter of Credit Fees. The Borrower agrees to pay (i) quarterly, in
arrears, to the Agent for the ratable benefit of the Lenders, except as set
forth in Section 9.2, a letter of credit fee at a rate per annum equal to the
Applicable L/C Fee Percentage on the average daily outstanding face amount
available for drawing under all Letters of Credit, (ii) quarterly, in arrears,
to the Agent for the sole account of each Issuing Bank, a letter of credit
fronting fee of one- quarter of one percent (0.25%) per annum on the average
daily outstanding face amount available for drawing under all Letters of Credit
issued by such Issuing Bank, and (iii) to the Agent for the benefit of each
Issuing Bank, all customary fees and other issuance, amendment, document
examination, negotiation and presentment expenses and related charges in
connection with the issuance, amendment, presentation of L/C Drafts, and the
like customarily charged by such Issuing Banks with respect to standby and
commercial Letters of Credit, including, without limitation, standard
commissions with respect to commercial Letters of Credit, payable at the time of
invoice of such amounts.
3.9 Issuing Bank Reporting Requirements. In addition to the notices
required by Section 3.5(C), each Issuing Bank shall, no later than the tenth
Business Day following the last day of each month, provide to the Agent, upon
the Agent's request, schedules, in form and substance reasonably satisfactory to
the Agent, showing the date of issue, account party, amount, expiration date and
the reference number of each Letter of Credit issued by it outstanding at any
time during such month and the aggregate amount payable by the Borrower during
such month. In addition, upon the request of the Agent, each Issuing Bank shall
furnish to the Agent copies of any Letter of Credit and any application for or
reimbursement agreement with respect to a Letter of Credit to which the Issuing
Bank is party and such other documentation as may reasonably be requested by the
Agent. Upon the request of any Lender, the Agent will provide to such Lender
information concerning such Letters of Credit.
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3.10 Indemnification; Exoneration. (A) In addition to amounts payable
as elsewhere provided in this Article III, the Borrower hereby agrees to
protect, indemnify, pay and save harmless the Agent, each Issuing Bank and each
Lender from and against any and all liabilities and costs which the Agent, such
Issuing Bank or such Lender may incur or be subject to as a consequence, direct
or indirect, of (i) the issuance of any Letter of Credit other than, in the case
of the applicable Issuing Bank, as a result of its Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, or (ii) the failure of the applicable Issuing Bank to honor a
drawing under a Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto Governmental
Authority (all such acts or omissions herein called "Governmental Acts").
(B) As among the Borrower, the Lenders, the Agent and the Issuing
Banks, the Borrower assumes all risks of the acts and omissions of, or misuse of
such Letter of Credit by, the beneficiary of any Letters of Credit. In
furtherance and not in limitation of the foregoing, subject to the provisions of
the Letter of Credit applications and Letter of Credit reimbursement agreements
executed by the Borrower at the time of request for any Letter of Credit,
neither the Agent, any Issuing Bank nor any Lender shall be responsible (in the
absence of Gross Negligence or willful misconduct in connection therewith, as
determined by the final judgment of a court of competent jurisdiction): (i) for
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of the Letters of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of a
Letter of Credit to comply duly with conditions required in order to draw upon
such Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex, or
other similar form of teletransmission or otherwise; (v) for errors in
interpretation of technical trade terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of a Letter of Credit of the proceeds of any
drawing under such Letter of Credit; and (viii) for any consequences arising
from causes beyond the control of the Agent, the Issuing Banks and the Lenders,
including, without limitation, any Governmental Acts. None of the above shall
affect, impair, or prevent the vesting of any Issuing Bank's rights or powers
under this Section 3.10.
(C) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by any Issuing
Bank under or in connection with the Letters of Credit or any related
certificates shall not, in the absence of Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, put the applicable Issuing Bank, the Agent or any Lender under any
resulting liability to the Borrower or relieve the Borrower of any of its
obligations hereunder to any such Person.
(D) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 3.10 shall survive the
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payment in full of principal and interest hereunder, the termination of the
Letters of Credit and the termination of this Agreement.
3.11 Cash Collateral. Notwithstanding anything to the contrary herein
or in any application for a Letter of Credit, after the occurrence and during
the continuance of Default, the Borrower shall, upon the Agent's demand, deliver
to the Agent for the benefit of the Lenders and the Issuing Banks, cash, or
other collateral of a type satisfactory to the Required Lenders, having a value,
as determined by such Lenders, equal to the aggregate outstanding L/C
Obligations. In addition, if the Revolving Credit Availability is at any time
less than the amount of contingent L/C Obligations outstanding at any time, the
Borrower shall deposit cash collateral with the Agent in an amount equal to the
amount by which such L/C Obligations exceed such Revolving Credit Availability.
Any such collateral shall be held by the Agent in a separate account
appropriately designated as a cash collateral account in relation to this
Agreement and the Letters of Credit and retained by the Agent for the benefit of
the Lenders and the Issuing Banks as collateral security for the Borrower's
obligations in respect of this Agreement and each of the Letters of Credit and
L/C Drafts. Such amounts shall be applied to reimburse the Issuing Banks for
drawings or payments under or pursuant to Letters of Credit or L/C Drafts, or if
no such reimbursement is required, to payment of such of the other Obligations
as the Agent shall determine. If no Default shall be continuing, amounts
remaining in any cash collateral account established pursuant to this Section
3.11 which are not to be applied to reimburse an Issuing Bank for amounts
actually paid or to be paid by such Issuing Bank in respect of a Letter of
Credit or L/C Draft, shall be returned to the Borrower (after deduction of the
Agent's expenses incurred in connection with such cash collateral account).
ARTICLE IV: CHANGE IN CIRCUMSTANCES
4.1 Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) adopted after the date of this Agreement and having
general applicability to all banks within the jurisdiction in which such Lender
operates (excluding, for the avoidance of doubt, the effect of and phasing in of
capital requirements or other regulations or guidelines passed prior to the date
of this Agreement), or any interpretation or application thereof by any
Governmental Authority charged with the interpretation or application thereof,
or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation
to any tax, duty, charge or withholding on or from payments due from
the Borrower (excluding federal taxation of the overall net income of
any Lender or applicable Lending Installation), or changes the basis of
taxation of payments to any Lender in respect of its Loans, its L/C
Interests, the Letters of Credit or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in determining the
interest rate
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applicable to Eurodollar Rate Loans) with respect to its Loans, L/C
Interests or the Letters of Credit, or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation
of making, funding or maintaining the Loans, the L/C Interests or the
Letters of Credit or reduces any amount received by any Lender or any
applicable Lending Installation in connection with Loans or Letters of
Credit, or requires any Lender or any applicable Lending Installation
to make any payment calculated by reference to the amount of Loans or
L/C Interests held or interest received by it or by reference to the
Letters of Credit, by an amount deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender of
making, renewing or maintaining its Loans, L/C Interests or Letters of Credit or
to reduce any amount received under this Agreement, then, within 15 days after
receipt by the Borrower of written demand by such Lender pursuant to Section
4.5, the Borrower shall pay such Lender that portion of such increased expense
incurred or reduction in an amount received which such Lender determines is
attributable to making, funding and maintaining its Loans, L/C Interests,
Letters of Credit and its Revolving Loan Commitment.
4.2 Changes in Capital Adequacy Regulations. If a Lender determines (i)
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a "Change" (as defined below), and (ii) such
increase in capital will result in an increase in the cost to such Lender of
maintaining its Loans, L/C Interests, the Letters of Credit or its obligation to
make Loans hereunder, then, within 15 days after receipt by the Borrower of
written demand by such Lender pursuant to Section 4.5, the Borrower shall pay
such Lender the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender determines is
attributable to this Agreement, its Loans, its L/C Interests, the Letters of
Credit or its obligation to make Loans hereunder (after taking into account such
Lender's policies as to capital adequacy). "Change" means (i) any change after
the date of this Agreement in the "Risk- Based Capital Guidelines" (as defined
below) excluding, for the avoidance of doubt, the effect of any phasing in of
such Risk-Based Capital Guidelines or any other capital requirements passed
prior to the date hereof, or (ii) any adoption of or change in any other law,
governmental or quasi- governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement and having general applicability to all banks and
financial institutions within the jurisdiction in which such Lender operates
which affects the amount of capital required or expected to be maintained by any
Lender or any Lending Installation or any corporation controlling any Lender.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
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4.3 Availability of Types of Advances. If (i) any Lender determines
that maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, or (ii) the Required Lenders determine that (x)
deposits of a type and maturity appropriate to match fund Eurodollar Rate
Advances are not available or (y) the interest rate applicable to a Type of
Advance does not accurately reflect the cost of making or maintaining such an
Advance, then the Agent shall suspend the availability of the affected Type of
Advance and, in the case of any occurrence set forth in clause (i) require any
Advances of the affected Type to be repaid.
4.4 Funding Indemnification. If any payment of a Eurodollar Rate
Advance occurs on a date which is not the last day of the applicable Interest
Period, whether because of acceleration, prepayment, conversion or otherwise, or
a Eurodollar Rate Advance is not made on the date specified by the Borrower for
any reason other than default by the Lenders, the Borrower indemnifies each
Lender for any loss or cost incurred by it resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain the Eurodollar Rate Advance.
4.5 Lender Statements; Survival of Indemnity. If reasonably possible,
each Lender shall designate an alternate Lending Installation with respect to
its Eurodollar Rate Loans to reduce any liability of the Borrower to such Lender
under Sections 4.1 and 4.2 or to avoid the unavailability of a Type of Advance
under Section 4.3, so long as such designation is not disadvantageous to such
Lender. Each Lender requiring compensation pursuant to Section 2.15(E) or to
this Article IV shall use its reasonable efforts to notify the Borrower and the
Agent in writing of any Change, law, policy, rule, guideline or directive giving
rise to such demand for compensation not later than thirty (30) days following
the date upon which the responsible account officer of such Lender knows or
should have known of such Change, law, policy, rule, guideline or directive. Any
demand for compensation pursuant to this Article IV shall be in writing and
shall state the amount due, if any, under Section 4.1, 4.2 or 4.4 and shall set
forth in reasonable detail the calculations upon which such Lender determined
such amount. Such written demand shall be rebuttably presumed correct for all
purposes. Determination of amounts payable under such Sections in connection
with a Eurodollar Rate Loan shall be calculated as though each Lender funded its
Eurodollar Rate Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. The
obligations of the Borrower under Sections 4.1, 4.2 and 4.4 shall survive
payment of the Obligations and termination of this Agreement.
ARTICLE V: CONDITIONS PRECEDENT
5.1 Initial Advances and Letters of Credit. The Lenders shall not be
required to make the initial Loans or issue any Letters of Credit unless the
Borrower has furnished to the Agent each of the following, with sufficient
copies for the Lenders, all in form and substance satisfactory to the Agent, the
Arranger and the Lenders:
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(1) Copies of a certificate of good standing shall have been
ordered for the Borrower, Refinishers Warehouse and ▇▇▇▇▇▇▇▇, certified
by the appropriate governmental officer in its jurisdiction of
incorporation;
(2) Copies, certified by the Secretary or Assistant Secretary
of the Borrower, Refinishers Warehouse and ▇▇▇▇▇▇▇▇, of its respective
Articles of Incorporation (together with all amendments thereto),
By-Laws and, for the Borrower and Refinishers Warehouse, of its Board
of Directors' resolutions (and resolutions of other bodies, if any are
deemed necessary by counsel for any Lender) authorizing the execution
of the Loan Documents;
(3) An incumbency certificate, executed by the Secretary or
Assistant Secretary of each of the Borrower, Refinishers Warehouse and
▇▇▇▇▇▇▇▇, which shall identify by name and title and bear the signature
of the officers of the Borrower, Refinishers Warehouse and ▇▇▇▇▇▇▇▇
authorized to sign the Loan Documents and to make borrowings hereunder,
upon which certificate the Agent and the Lenders shall be entitled to
rely until informed of any change in writing by the Borrower;
(4) A certificate, in form and substance satisfactory to the
Agent, signed by the chief financial officer of the Borrower, stating
that on Closing Date no Default or Unmatured Default has occurred and
is continuing;
(5) A written opinion of the Borrower's counsel, addressed to
the Agent and the Lenders, addressing the issues identified in Exhibit
F hereto containing assumptions and qualifications acceptable to the
Agent and the Lenders;
(6) Notes payable to the order of each of the applicable
Lenders (amended and restated where appropriate);
(7) Evidence satisfactory to the Agent that there has been no
material adverse change in the Borrower's business, financial
condition, operation or prospects, as of the Borrower's consolidated
financial statements dated December 31, 1998;
(8) Evidence satisfactory to the Agent that there exists no
injunction or temporary restraining order which, in the judgment of the
Agent, would prohibit the making of the Loans or any litigation seeking
such an injunction or restraining order;
(9) Written money transfer instructions reasonably requested
by the Agent, addressed to the Agent and signed by an Authorized
Officer;
(10) Evidence satisfactory to the Agent that the Borrower has
paid to the Agent and the Arranger the fees agreed to in the fee letter
dated December 14, 1999 among the Agent, the Arranger and the Borrower
and the fees due on the Closing Date which the Agent, the Arranger and
the Borrower have agreed to herein; and
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(11) Such other documents as the Agent or any Lender or its
counsel may have reasonably requested, including, without limitation
all of the documents reflected on the List of Closing Documents
attached as Exhibit G to this Agreement.
5.2 Each Advance and Letter of Credit. The Lenders shall not be
required to make any Advance or issue any Letter of Credit, unless on the
applicable Borrowing Date, or in the case of a Letter of Credit, the date on
which the Letter of Credit is to be issued:
(i) There exists no Default or Unmatured Default; and
(ii) The representations and warranties contained in Article
VI are true and correct as of such Borrowing Date except for changes in
the Schedules to this Agreement reflecting transactions permitted by
this Agreement.
Each Borrowing Notice with respect to each such Advance and the letter
of credit application with respect to a Letter of Credit shall constitute a
representation and warranty by the Borrower that the conditions contained in
Sections 5.2(i) and (ii) have been satisfied. Any Lender may require a duly
completed officer's certificate in substantially the form of Exhibit H hereto
and/or a duly completed compliance certificate in substantially the form of
Exhibit I hereto as a condition to making an Advance.
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this
Agreement and to make the Loans and the other financial accommodations to the
Borrower and to issue the Letters of Credit described herein, the Borrower
represents and warrants as follows to each Lender and the Agent as of the
Closing Date, and thereafter on each date as required by Section 5.2:
6.1 Organization; Corporate Powers. The Borrower and each of its
Subsidiaries (i) is a corporation duly organized, validly existing and in
existence under the laws of the jurisdiction of its organization, (ii) is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which failure to be so qualified and in good
standing could not reasonably be expected to have a Material Adverse Effect, and
(iii) has all requisite corporate power and authority to own, operate and
encumber its property and to conduct its business as presently conducted and as
proposed to be conducted.
6.2 Authority.
(A) The Borrower and each of its Subsidiaries has the requisite
corporate power and authority to execute, deliver and perform each of the Loan
Documents.
(B) The execution, delivery and performance of each of the Loan
Documents which have been executed as required by this Agreement or otherwise on
or prior to the Closing Date and to which the Borrower or any of its
Subsidiaries is party, and the consummation of the transactions contemplated
thereby, have been duly approved by the respective boards of directors and, if
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necessary, the shareholders of the Borrower and its Subsidiaries, and such
approvals have not been rescinded. No other corporate action or proceedings on
the part of the Borrower or its Subsidiaries are necessary to consummate such
transactions.
(C) Each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party has been duly executed, delivered or filed, as the case
may be, by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms (except as enforceability
may be limited by bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally), is in full force and effect and no
material term or condition thereof has been amended, modified or waived from the
terms and conditions contained in the Loan Documents delivered to the Agent
pursuant to Section 5.1 without the prior written consent of the Required
Lenders, and the Borrower and its Subsidiaries have, and, to the best of the
Borrower's and its Subsidiaries' knowledge, all other parties thereto have,
performed and complied with all the terms, provisions, agreements and conditions
set forth therein and required to be performed or complied with by such parties
on or before the Closing Date, and no unmatured default, default or breach of
any covenant by any such party exists thereunder.
6.3 No Conflict; Governmental Consents. The execution, delivery and
performance of each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party do not and will not (i) conflict with the certificate or
articles of incorporation or by-laws of the Borrower or any such Subsidiary,
(ii) constitute a tortious interference with any Contractual Obligation of any
Person or conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under any Requirement of Law
(including, without limitation, any Environmental Property Transfer Act) or
Contractual Obligation of the Borrower or any such Subsidiary, or require
termination of any Contractual Obligation, except such interference, breach,
default or termination which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, (iii) result in or
require the creation or imposition of any Lien whatsoever upon any of the
property or assets of the Borrower or any such Subsidiary, other than Liens
permitted by the Loan Documents, or (iv) require any approval of the Borrower's
or any such Subsidiary's shareholders except such as have been obtained. Except
as set forth on Schedule 6.3 to this Agreement, the execution, delivery and
performance of each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by any
Governmental Authority, including under any Environmental Property Transfer Act,
except filings, consents or notices which have been made, obtained or given, or
which, if not made, obtained or given, individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect.
6.4 Financial Statements. Complete and accurate copies of the following
financial statements and the following related information have been delivered
to the Agent: (1) the balance sheet of the Borrower as at December 31, 1998, and
the related combined statements of income, changes in stockholders' equity and
cash flows of the Borrower for the fiscal year then ended, and the audit report
related thereto; and (2) the unaudited balance sheet of the Borrower for the
fiscal quarter ended September 30, 1999, and the related statements of
operations, changes in stockholder's equity and cash flows of the Borrower for
the fiscal quarter then ended.
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6.5 No Material Adverse Change. (A) Since December 31, 1998 up to the
Closing Date, there has occurred no material adverse change in the business,
financial condition, operations or prospects of the Borrower and its
Subsidiaries taken as a whole or any other event which has had or could
reasonably be expected to result in a Material Adverse Effect.
(B) Since the Closing Date, there has occurred no event which has had
or could reasonably be expected to result in a Material Adverse Effect.
6.6 Taxes.
(A) Tax Examinations. All deficiencies which have been asserted against
the Borrower or any of the Borrower's Subsidiaries as a result of any federal,
state, local or foreign tax examination for each taxable year in respect of
which an examination has been conducted have been fully paid or finally settled
or are being contested in good faith, and as of the Closing Date no issue has
been raised by any taxing authority in any such examination which, by
application of similar principles, reasonably can be expected to result in
assertion by such taxing authority of a material deficiency for any other year
not so examined which has not been reserved for in the Borrower's consolidated
financial statements to the extent, if any, required by Agreement Accounting
Principles. Except as permitted pursuant to Section 7.2(D), neither the Borrower
nor any of the Borrower's Subsidiaries anticipates any material tax liability
with respect to the years which have not been closed pursuant to applicable law.
(B) Payment of Taxes. Except as described on Schedule 6.6, all tax
returns and reports of the Borrower and its Subsidiaries required to be filed
have been timely filed, and all taxes, assessments, fees and other governmental
charges thereupon and upon their respective property, assets, income and
franchises which are shown in such returns or reports to be due and payable have
been paid except those items which are being contested in good faith and have
been reserved for in accordance with Agreement Accounting Principles. The
Borrower has no knowledge of any proposed tax assessment against the Borrower or
any of its Subsidiaries that will have or could reasonably be expected to have a
Material Adverse Effect.
6.7 Litigation; Loss Contingencies and Violations. Except as set forth
in Schedule 6.7 to this Agreement, which lists all pending litigation involving
individual claims against the Borrower or any of its Subsidiaries of more than
$500,000, there is no action, suit, proceeding, arbitration or (to the
Borrower's knowledge) investigation before or by any Governmental Authority or
private arbitrator pending or, to the Borrower's knowledge, threatened against
the Borrower or any of its Subsidiaries or any property of any of them which
will have or could reasonably be expected to have a Material Adverse Effect.
There is no material loss contingency within the meaning of Agreement Accounting
Principles which has not been reflected in the consolidated financial statements
of the Borrower prepared and delivered pursuant to Section 7.1(A) for the fiscal
period during which such material loss contingency was incurred. Neither the
Borrower nor any of its Subsidiaries is (A) in violation of any applicable
Requirements of Law which violation will have or could reasonably be expected to
have a Material Adverse Effect, or (B) subject to or in default with respect to
any final judgment, writ, injunction, restraining order or order of any
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nature, decree, rule or regulation of any court or Governmental Authority which
will have or could reasonably be expected to have a Material Adverse Effect.
6.8 Subsidiaries. Schedule 6.8 to this Agreement (i) contains a
description of the corporate structure of the Borrower, its Subsidiaries and any
other Person in which the Borrower or any of its Subsidiaries holds an Equity
Interest (both narratively and in chart form); and (ii) accurately sets forth
(A) the correct legal name, the jurisdiction of incorporation and the
jurisdictions in which each of the Borrower and the direct and indirect
Subsidiaries of the Borrower is qualified to transact business as a foreign
corporation, (B) the authorized, issued and outstanding shares of each class of
Capital Stock of the Borrower and each of its Subsidiaries and the owners of
such shares (both as of the Closing Date and on a fully-diluted basis), and (C)
a summary of the direct and indirect partnership, joint venture, or other Equity
Interests, if any, of the Borrower and each Subsidiary of the Borrower in any
Person that is not a corporation. Except as described on Schedule 6.8, none of
the issued and outstanding Capital Stock of the Borrower or any of its
Subsidiaries is subject to any vesting, redemption, or repurchase agreement, and
there are no warrants or options outstanding with respect to such Capital Stock.
The outstanding Capital Stock of the Borrower and each of the Borrower's
Subsidiaries is duly authorized, validly issued, fully paid and nonassessable
and is not Margin Stock.
6.9 ERISA. Except as disclosed on Schedule 6.9, no Benefit Plan has
incurred any accumulated funding deficiency (as defined in Sections 302(a)(2) of
ERISA and 412(a) of the Code) whether or not waived. Neither the Borrower nor
any member of the Controlled Group has incurred any liability to the PBGC which
remains outstanding other than the payment of premiums, and there are no premium
payments which have become due which are unpaid. Schedule B to the most recent
annual report filed with the IRS with respect to each Benefit Plan and furnished
to the lenders is complete and accurate. Since the date of each such Schedule B,
there has been no material adverse change in the funding status or financial
condition of the Benefit Plan relating to such Schedule B. Neither the Borrower
nor any member of the Controlled Group has (i) failed to make a required
contribution or payment to a Multiemployer Plan or (ii) made a complete or
partial withdrawal under Sections 4203 or 4205 of ERISA from a Multiemployer
Plan. Neither the Borrower nor any member of the Controlled Group has failed to
make a required installment or any other required payment under Section 412 of
the Code on or before the due date for such installment or other payment.
Neither the Borrower nor any member of the Controlled Group is required to
provide security to a Benefit Plan under Section 401(a)(29) of the Code due to a
Plan amendment that results in an increase in current liability for the plan
year. Neither the Borrower nor any of its Subsidiaries maintains or contributes
to any employee welfare benefit plan within the meaning of Section 3(1) of ERISA
which provides benefits to employees after termination of employment other than
as required by Section 601 of ERISA. To Borrower's knowledge, each Plan which is
intended to be qualified under Section 401(a) of the Code as currently in effect
is so qualified, and each trust related to any such Plan is exempt from federal
income tax under Section 501(a) of the Code as currently in effect. The Borrower
and all Subsidiaries are in compliance in all material respects with the
responsibilities, obligations and duties imposed on them by ERISA and the Code
with respect to all Plans. To Borrower's knowledge, neither the Borrower nor any
of its Subsidiaries nor any fiduciary of any Plan has engaged in a nonexempt
prohibited transaction described in Sections 406 of ERISA or 4975 of
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the Code which could reasonably be expected to subject the Borrower to liability
in excess of $1,000,000. To Borrower's knowledge, neither the Borrower nor any
member of the Controlled Group has taken or failed to take any action which
would constitute or result in a Termination Event, which action or inaction
could reasonably be expected to subject the Borrower to liability in excess of
$1,000,000. Neither the Borrower nor any Subsidiary is subject to any liability
under Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA and no other member of
the Controlled Group is subject to any liability under Sections 4063, 4064,
4069, 4204 or 4212(c) of ERISA which could reasonably be expected to subject the
Borrower to liability in excess of $1,000,000. Neither the Borrower nor any of
its Subsidiaries has, by reason of the transactions contemplated hereby, any
obligation to make any payment to any employee pursuant to any Plan or existing
contract or arrangement.
6.10 Accuracy of Information. The information, exhibits and reports
furnished by or on behalf of the Borrower and any of its Subsidiaries to the
Agent or to any Lender in connection with the negotiation of, or compliance
with, the Loan Documents, the representations and warranties of the Borrower and
its Subsidiaries contained in the Loan Documents, and all certificates and
documents delivered to the Agent and the Lenders pursuant to the terms thereof,
taken as a whole, do not contain as of the date furnished any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
6.11 Securities Activities. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
6.12 Material Agreements. Neither the Borrower nor any of its
Subsidiaries has received notice or has knowledge that (i) it is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any Contractual Obligation applicable to it, or (ii)
any condition exists which, with the giving of notice or the lapse of time or
both, would constitute a default with respect to any such Contractual
Obligation, in each case, except where such default or defaults, if any,
individually or in the aggregate will not have or could not reasonably be
expected to have a Material Adverse Effect.
6.13 Compliance with Laws. The Borrower and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their respective
businesses, in each case where the failure to so comply individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
6.14 Assets and Properties. The Borrower and each of its Subsidiaries
has good and marketable title to all of its material assets and properties
(tangible and intangible, real or personal) owned by it or a valid leasehold
interest in all of its material leased assets (except insofar as marketability
may be limited by any laws or regulations of any Governmental Authority
affecting such assets), and all such assets and property are free and clear of
all Liens, except Liens permitted under Section 7.3(C). Substantially all of the
assets and properties owned by, leased to or used by the Borrower and/or each
such Subsidiary of the Borrower are in adequate operating condition and repair,
ordinary wear and tear excepted. Neither this Agreement nor any other
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Loan Document, nor any transaction contemplated under any such agreement, will
affect any right, title or interest of the Borrower or such Subsidiary in and to
any of such assets in a manner that would have or could reasonably be expected
to have a Material Adverse Effect.
6.15 Statutory Indebtedness Restrictions. Neither the Borrower nor any
of its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or the
Investment Company Act of 1940, or any other federal or state statute or
regulation which limits its ability to incur indebtedness or its ability to
consummate the transactions contemplated hereby or in connection with any
Permitted Acquisition and the related transactions.
6.16 Insurance. The Borrower maintains insurance policies and programs
reasonably consistent with prudent industry practice.
6.17 Labor Matters.
As of the Closing Date, no attempt to organize the employees of the
Borrower, and no labor disputes, strikes or walkouts affecting the operations of
the Borrower or any of its Subsidiaries, is pending, or, to the Borrower's
knowledge, threatened, planned or contemplated.
6.18 Environmental Matters. (A) Except as disclosed on Schedule 6.18 to
this Agreement
(i) the operations of the Borrower and its Subsidiaries comply
in all material respects with Environmental, Health or Safety
Requirements of Law;
(ii) the Borrower and its Subsidiaries have all permits,
licenses or other authorizations required under Environmental, Health
or Safety Requirements of Law and are in material compliance with such
permits;
(iii) neither the Borrower, any of its Subsidiaries nor any of
their respective present property or operations, or, to the best of,
the Borrower's or any of its Subsidiaries' knowledge, any of their
respective past property or operations, are subject to or the subject
of, any investigation known to the Borrower or any of its Subsidiaries,
any judicial or administrative proceeding, order, judgment, decree,
settlement or other agreement respecting: (A) any material violation of
Environmental, Health or Safety Requirements of Law; (B) any remedial
action; or (C) any material claims or liabilities arising from the
Release or threatened Release of a Contaminant into the environment;
(iv) there is not now, nor to the best of the Borrower's or
any of its Subsidiaries' knowledge has there ever been on or in the
property of the Borrower or any of its Subsidiaries any landfill, waste
pile, underground storage tanks, aboveground storage tanks, surface
impoundment or hazardous waste storage facility of any kind, any
polychlorinated biphenyls (PCBs) used in hydraulic oils, electric
transformers or other
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equipment, or any asbestos containing material which in any such case
could reasonably be expected to result in material liability for the
Borrower or any of its Subsidiaries; and
(v) neither the Borrower nor any of its Subsidiaries has any
material Contingent Obligation in connection with any Release or
threatened Release of a Contaminant into the environment.
(B) For purposes of this Section 6.18 "material" means any
noncompliance or basis for liability which could reasonably be likely to subject
the Borrower to liability in excess of $1,000,000.
6.19 Solvency. After giving effect to the (i) Loans to be made on the
Closing Date or such other date as Loans requested hereunder are made and the
consummation of the other transactions contemplated by this Agreement and (ii)
the payment and accrual of all Transaction Costs with respect to the foregoing,
the Borrower and its Subsidiaries taken as a whole is Solvent. After giving
effect to (a) any Permitted Acquisition and (b) the payment and accrual of all
Transaction Costs with respect thereto, the Borrower and its Subsidiaries taken
as a whole is Solvent.
ARTICLE VII : COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than contingent indemnity obligations), unless the Required Lenders shall
otherwise give prior written consent:
7.1 Reporting. The Borrower shall:
(A) Financial Reporting. Furnish to the Lenders:
(i) Quarterly Reports. As soon as practicable, and in any
event within forty-five (45) days after the end of each fiscal quarter
in each fiscal year, the consolidated and consolidating balance sheet
of the Borrower and its Subsidiaries as at the end of such period and
the related consolidated and consolidating statements of income and
cash flows of the Borrower and its Subsidiaries for such fiscal quarter
and for the period from the beginning of the then current fiscal year
to the end of such fiscal quarter, certified by the chief financial
officer of the Borrower on behalf of the Borrower as fairly presenting
the consolidated and consolidating financial position of the Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and cash flows for the periods indicated in accordance with
Agreement Accounting Principles except for the omission of full
footnotes which may be required under Agreement Accounting Principles,
subject to normal year end adjustments, and a forecasted consolidated
and consolidating balance sheet and a consolidated statement of income
and cash flows of the Borrower for and as of the end of the next
succeeding fiscal quarter and a comparison of the statements of income
and cash flows to the most recent budget.
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(ii) Annual Reports. As soon as practicable, and in any event
within ninety (90) days after the end of each fiscal year, (a) the
consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such fiscal year and the related consolidated statements of
income, stockholders' equity and cash flows of the Borrower and its
Subsidiaries for such fiscal year, and in comparative form the
corresponding figures for the previous fiscal year along with
consolidating schedules in form and substance sufficient to calculate
the financial covenants set forth in Section 7.4, (b) a schedule from
the Borrower setting forth for each item in clause (a) hereof, the
corresponding figures from the consolidated financial budget for the
current fiscal year delivered pursuant to Section 7.1(A)(iv), and (c)
an audit report on the items listed in clause (a) hereof of independent
certified public accountants of recognized national standing, which
audit report shall be unqualified and shall state that such financial
statements fairly present the consolidated and consolidating financial
position of the Borrower and its Subsidiaries as at the dates indicated
and the results of their operations and cash flows for the periods
indicated in conformity with Agreement Accounting Principles and that
the examination by such accountants in connection with such
consolidated and consolidating financial statements has been made in
accordance with generally accepted auditing standards. The deliveries
made pursuant to this clause (ii) shall be accompanied by (x) any
management letter prepared by the above-referenced accountants, and (y)
a certificate of such accountants that, in the course of their
examination necessary for their certification of the foregoing, they
have obtained no knowledge of any Default or Unmatured Default, or if,
in the opinion of such accountants, any Default or Unmatured Default
shall exist, stating the nature and status thereof.
(iii) Officer's Certificate. Together with each delivery of
any financial statement (a) pursuant to clauses (i), and (ii) of this
Section 7.1(A), an Officer's Certificate of the Borrower, substantially
in the form of Exhibit H attached hereto and made a part hereof,
stating that no Default or Unmatured Default exists, or if any Default
or Unmatured Default exists, stating the nature and status thereof and
(b) pursuant to clauses (i) and (ii) of this Section 7.1(A), a
compliance certificate, substantially in the form of Exhibit I attached
hereto and made a part hereof, signed by the Borrower's Chief Financial
Officer or Treasurer, setting forth calculations for the period then
ended for Section 2.5(B), if applicable, which demonstrate compliance,
when applicable, with the provisions of Section 7.4, and which
calculate the Leverage Ratio for purposes of determining the then
Applicable Floating Rate Margin, Applicable Eurodollar Margin and
Applicable Commitment Fee Percentage.
(iv) As soon as practicable, and in any event within twenty
(20) days after the close of each calendar month, a Borrowing Base
Certificate, together with such supporting documents as the Agent deems
desirable, all certified as being true and correct by the Chief
Financial Officer or Treasurer of the Borrower. The Borrower may update
the Borrowing Base Certificate and supporting documents more frequently
than monthly and the most recently delivered Borrowing Base Certificate
shall be the applicable Borrowing Base Certificate for purposes of
determining the Borrowing Base at any time;
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(v) Budgets; Business Plans; Financial Projections. As soon as
practicable and in any event not later than thirty (30) days after the
beginning of each fiscal year, a copy of the plan and forecast
(including a projected balance sheet, income statement and a statement
of cash flow) of the Borrower and its Subsidiaries for the five (5)
fiscal years beginning with such fiscal year prepared in such detail as
shall be reasonably satisfactory to the Agent, and any updated budget
prepared by the Borrower.
(B) Notice of Default. Promptly upon any of the chief executive
officer, chief operating officer, chief financial officer, treasurer or
controller of the Borrower obtaining knowledge (i) of any condition or event
which constitutes a Default or Unmatured Default, or becoming aware that any
Lender or Agent has given any written notice with respect to a claimed Default
or Unmatured Default under this Agreement, or (ii) that any Person has given any
written notice to the Borrower or any Subsidiary of the Borrower or taken any
other action with respect to a claimed default or event or condition of the type
referred to in Section 8.1(E), deliver to the Agent and the Lenders an Officer's
Certificate specifying (a) the nature and period of existence of any such
claimed default, Default, Unmatured Default, condition or event, (b) the notice
given or action taken by such Person in connection therewith, and (c) what
action the Borrower has taken, is taking and proposes to take with respect
thereto.
(C) Lawsuits. (i) Promptly upon the Borrower obtaining knowledge of the
institution of, or written threat of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Borrower or any of its
Subsidiaries or any property of the Borrower or any of its Subsidiaries not
previously disclosed pursuant to Section 6.7, which action, suit, proceeding,
governmental investigation or arbitration exposes, or in the case of multiple
actions, suits, proceedings, governmental investigations or arbitrations arising
out of the same general allegations or circumstances which expose, in the
Borrower's reasonable judgment, the Borrower or any of its Subsidiaries to
liability in an amount aggregating $1,000,000 or more (exclusive of claims
covered by insurance policies of the Borrower or any of its Subsidiaries unless
the insurers of such claims have disclaimed coverage or reserved the right to
disclaim coverage on such claims and exclusive of claims covered by the
indemnity of a financially responsible indemnitor in favor of the Borrower or
any of its Subsidiaries unless the indemnitor has disclaimed or reserved the
right to disclaim coverage thereof), give written notice thereof to the Agent
and the Lenders and provide such other information as may be reasonably
available to enable each Lender and the Agent and its counsel to evaluate such
matters; and (ii) in addition to the requirements set forth in clause (i) of
this Section 7.1(C), upon request of the Agent or the Required Lenders, promptly
give written notice of the status of any action, suit, proceeding, governmental
investigation or arbitration covered by a report delivered pursuant to clause
(i) above and provide such other information as may be reasonably available to
it that would not violate any attorney-client privilege by disclosure to the
Lenders to enable each Lender and the Agent and its counsel to evaluate such
matters.
(D) ERISA Notices. Deliver or cause to be delivered to the Agent and
the Lenders, at the Borrower's expense, the following information and notices as
soon as reasonably possible, and in any event:
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(i) (a) within ten (10) Business Days after the Borrower
obtains knowledge that a Termination Event has occurred, a written
statement of the chief financial officer of the Borrower describing
such Termination Event and the action, if any, which the Borrower has
taken, is taking or proposes to take with respect thereto, and when
known, any action taken or threatened by the IRS, DOL or PBGC with
respect thereto and (b) within ten (10) Business Days after any member
of the Controlled Group obtains knowledge that a Termination Event has
occurred which could reasonably be expected to subject the Borrower to
liability in excess of $1,000,000, a written statement of the chief
financial officer of the Borrower describing such Termination Event and
the action, if any, which the member of the Controlled Group has taken,
is taking or proposes to take with respect thereto, and when known, any
action taken or threatened by the IRS, DOL or PBGC with respect
thereto;
(ii) within ten (10) Business Days after the Borrower or any
of its Subsidiaries obtains knowledge that a prohibited transaction
(defined in Sections 406 of ERISA and Section 4975 of the Code) has
occurred, a statement of the chief financial officer of the Borrower
describing such transaction and the action which the Borrower or such
Subsidiary has taken, is taking or proposes to take with respect
thereto;
(iii) within ten (10) Business Days after the material
increase in the benefits of any existing Plan or the establishment of
any new Benefit Plan or the commencement of, or obligation to commence,
contributions to any Benefit Plan or Multiemployer Plan to which the
Borrower or any member of the Controlled Group was not previously
contributing, notification of such increase, establishment,
commencement or obligation to commence and the amount of such
contributions;
(iv) within ten (10) Business Days after the Borrower or any
of its Subsidiaries receives notice of any unfavorable determination
letter from the IRS regarding the qualification of a Plan under Section
401(a) of the Code, copies of each such letter;
(v) within ten (10) Business Days after the establishment of
any foreign employee benefit plan or the commencement of, or obligation
to commence, contributions to any foreign employee benefit plan to
which the Borrower or any Subsidiary was not previously contributing,
notification of such establishment, commencement or obligation to
commence and the amount of such contributions;
(vi) upon the request of the Agent, within ten (10) Business
Days after the filing thereof with the DOL, IRS or PBGC, copies of each
annual report (form 5500 series), including Schedule B thereto, filed
with respect to each Benefit Plan;
(vii) upon the request of the Agent, within ten (10) Business
Days after receipt by the Borrower or any member of the Controlled
Group of each actuarial report for any Benefit Plan or Multiemployer
Plan and each annual report for any Multiemployer Plan, copies of each
such report;
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(viii) within ten (10) Business Days after the filing thereof
with the IRS, a copy of each funding waiver request filed with respect
to any Benefit Plan and all communications received by the Borrower or
a member of the Controlled Group with respect to such request;
(ix) within ten (10) Business Days after receipt by the
Borrower or any member of the Controlled Group of the PBGC's intention
to terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice;
(x) within ten (10) Business Days after receipt by the
Borrower or any member of the Controlled Group of a notice from a
Multiemployer Plan regarding the imposition of withdrawal liability,
copies of each such notice;
(xi) within ten (10) Business Days after the Borrower or any
member of the Controlled Group fails to make a required installment or
any other required payment under Section 412 of the Code on or before
the due date for such installment or payment, a notification of such
failure; and
(xii) within ten (10) Business Days after the Borrower or any
member of the Controlled Group knows or has reason to know that (a) a
Multiemployer Plan has been terminated, (b) the administrator or plan
sponsor of a Multiemployer Plan intends to terminate a Multiemployer
Plan, or (c) the PBGC has instituted or will institute proceedings
under Section 4042 of ERISA to terminate a Multiemployer Plan.
For the purposes of this Section 7.1(D), the Borrower, any of its Subsidiaries
and any member of the Controlled Group shall be deemed to know all facts known
by the Administrator of any Plan of which the Borrower, such Subsidiary or any
member of the Controlled Group is the plan sponsor.
(E) Labor Matters. Notify the Agent and the Lenders in writing,
promptly upon the Borrower's learning thereof, of (i) any material labor dispute
to which the Borrower or any of its Subsidiaries may become a party, including,
without limitation, any strikes, lockouts or other disputes relating to such
Persons' plants and other facilities and (ii) any material Worker Adjustment and
Retraining Notification Act liability incurred with respect to the closing of
any plant or other facility of the Borrower or any of its Subsidiaries.
(F) Other Indebtedness. Deliver to the Agent (i) a copy of each regular
report, notice or communication regarding potential or actual defaults
(including any accompanying officer's certificate) delivered by or on behalf of
the Borrower to the holders of funded Indebtedness pursuant to the terms of the
agreements governing such Indebtedness, such delivery to be made at the same
time and by the same means as such notice or other communication is delivered to
such holders, and (ii) a copy of each notice or other communication received by
the Borrower from the holders of funded Indebtedness pursuant to the terms of
such Indebtedness, such delivery to be made promptly after such notice or other
communication is received by the Borrower.
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(G) Other Reports. Deliver or cause to be delivered to the Agent and
the Lenders copies of all financial statements, reports and notices, if any,
sent or made available generally by the Borrower to its securities holders or
filed with the Commission by the Borrower, all press releases made available
generally by the Borrower or any of the Borrower's Subsidiaries to the public
concerning material developments in the business of the Borrower or any such
Subsidiary and all notifications received from the Commission by the Borrower or
its Subsidiaries pursuant to the Securities Exchange Act of 1934 and the rules
promulgated thereunder.
(H) Environmental Notices. As soon as possible and in any event within
ten (10) days after receipt by the Borrower, a copy of (i) any notice or claim
to the effect that the Borrower or any of its Subsidiaries is or may be liable
to any Person as a result of the Release by the Borrower, any of its
Subsidiaries, or any other Person of any Contaminant into the environment, and
(ii) any notice alleging any violation of any Environmental, Health or Safety
Requirements of Law by the Borrower or any of its Subsidiaries if, in either
case, such notice or claim relates to an event which could reasonably be
expected to subject the Borrower to liability in excess of $250,000.
(I) Other Information. Promptly upon receiving a request therefor from
the Agent, prepare and deliver to the Agent and the Lenders such other
information with respect to the Borrower, any of its Subsidiaries, or the
Collateral, including, without limitation, schedules identifying and describing
the Collateral and any dispositions thereof or any Asset Sale or Financing (and
the use of the Net Cash Proceeds thereof), as from time to time may be
reasonably requested by the Agent.
7.2 Affirmative Covenants.
(A) Corporate Existence, Etc. The Borrower shall, and shall cause each
of its Subsidiaries to, at all times maintain its corporate existence and
preserve and keep, or cause to be preserved and kept, in full force and effect
its rights and franchises material to its businesses, except to the extent
permitted by Section 7.3(I).
(B) Corporate Powers; Conduct of Business. The Borrower shall, and
shall cause each of its Subsidiaries to, qualify and remain qualified to do
business in each jurisdiction in which the nature of its business requires it to
be so qualified and where the failure to be so qualified will have or could
reasonably be expected to have a Material Adverse Effect. The Borrower will, and
will cause each Subsidiary to, carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted.
(C) Compliance with Laws, Etc. The Borrower shall, and shall cause its
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, properties, assets or
operations of such Person, and (b) obtain as needed all Permits necessary for
its operations and maintain such Permits in good standing, unless failure to
comply or obtain could not reasonably be expected to have a Material Adverse
Effect.
(D) Payment of Taxes and Claims; Tax Consolidation. The Borrower shall
pay, and cause each of its Subsidiaries to pay, (i) all taxes, assessments and
other governmental charges
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imposed upon it or on any of its properties or assets or in respect of any of
its franchises, business, income or property before any penalty or interest
accrues thereon, and (ii) all claims (including, without limitation, claims for
labor, services, materials and supplies) for sums which have become due and
payable and which by law have or may become a Lien (other than a Lien permitted
by Section 7.3(C)) upon any of the Borrower's or such Subsidiary's property or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided, however, that no such taxes, assessments and
governmental charges referred to in clause (i) above or claims referred to in
clause (ii) above (and interest, penalties or fines relating thereto) need be
paid if being contested in good faith by appropriate proceedings diligently
instituted and conducted and if such reserve or other appropriate provision, if
any, as shall be required in conformity with Agreement Accounting Principles
shall have been made therefor.
(E) Insurance. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full force
and effect, the insurance policies and programs reasonably consistent with
prudent industry practice. The Borrowers shall deliver to the Agent insurance
certificates and endorsements (y) to all "All Risk" physical damage insurance
policies on all of the Borrowers' tangible real and personal property and assets
and business interruption insurance policies naming the Agent loss payee, and
(z) to all general liability and other liability policies naming the Agent an
additional insured. In the event the Borrower or any of its Subsidiaries at any
time or times hereafter shall fail to obtain or maintain any of the policies or
insurance required herein or to pay any premium in whole or in part relating
thereto, then the Agent, without waiving or releasing any obligations or
resulting Default hereunder, may at any time or times thereafter (but shall be
under no obligation to do so) obtain and maintain such policies of insurance and
pay such premiums and take any other action with respect thereto which the Agent
deems advisable. All sums so disbursed by the Agent shall constitute part of the
Obligations, payable as provided in this Agreement.
(F) Inspection of Property; Books and Records; Discussions. The
Borrower shall permit and cause each of the Borrower's Subsidiaries to permit,
any authorized representative(s) designated by the Agent to visit and inspect
any of the properties of the Borrower or any of its Subsidiaries, to examine,
audit, check and make copies of their respective financial and accounting
records, books, journals, orders, receipts and any correspondence and other data
relating to their respective businesses or the transactions contemplated hereby
(including, without limitation, in connection with environmental compliance,
hazard or liability), and to discuss their affairs, finances and accounts with
their officers and, with the consent of the Borrower (which will not be
unreasonably withheld) or after a Default after notice to the Borrower,
independent certified public accountants, all upon reasonable notice and at such
reasonable times during normal business hours, as often as may be reasonably
requested. The Borrower shall keep and maintain, and cause each of the
Borrower's Subsidiaries to keep and maintain, in all material respects, proper
books of record and account in which entries in conformity with Agreement
Accounting Principles shall be made of all dealings and transactions in relation
to their respective businesses and activities. If a Default has occurred and is
continuing, the Borrower, upon the Agent's request, shall turn over any such
records to the Agent or its representatives.
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(G) ERISA Compliance. The Borrower shall, and shall cause each of the
Borrower's Subsidiaries to, establish, maintain and operate all Plans to comply
in all material respects with the provisions of ERISA, the Code, all other
applicable laws, and the regulations and interpretations thereunder and the
respective requirements of the governing documents for such Plans.
(H) Maintenance of Property. The Borrower shall cause all property used
or useful in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section 7.2(H) shall prevent the
Borrower from discontinuing the operation or maintenance of any of such property
if such discontinuance is, in the judgment of the Borrower, desirable in the
conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Agent or the Lenders.
(I) Environmental Compliance. The Borrower and its Subsidiaries shall
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance will not have or is not reasonably likely to subject the
Borrower to liability in excess of $1,000,000.
(J) Use of Proceeds. The Borrower shall use the proceeds of the
Revolving Loans and the Term Loans to (i) repay existing Indebtedness, (ii)
provide funds for the additional working capital needs and other general
corporate purposes of the Borrower, (iii) provide funds for the payment of fees
and expenses incurred in connection with the negotiation and documentation of
this Agreement and the Loan Documents and (iv) to finance Permitted
Acquisitions. The Borrower shall use the proceeds of the Acquisition Facility
Loans solely to finance Permitted Acquisitions and to pay fees and expenses
incurred in connection with such Permitted Acquisitions. The Borrower will not,
nor will it permit any Subsidiary to, use any of the proceeds of the Loans to
purchase or carry any Margin Stock or to make any Acquisition, other than a
Permitted Acquisition pursuant to Section 7.3(G).
(K) Collateral Documents. Without in any way limiting the requirements
and covenants set forth in the Collateral Documents, if, subsequent to the
Closing Date, the Borrower or any Subsidiary shall acquire any intellectual
property, securities, instruments, chattel paper or other personal property
required to be delivered to the Agent as Collateral hereunder or under any of
the Collateral Documents, the Borrower shall promptly (and in any event within
five (5) Business Days) after any executive officer of the Borrower or any of
its Subsidiaries acquires knowledge of same notify the Agent of same. The
Borrower shall, and shall cause each of its Subsidiaries to, take such action at
its own expense as reasonably requested by the Agent to ensure that the Agent
has a first priority (subject to any applicable Lien permitted under Section
7.3(C)) perfected Lien to secure the Secured Obligations in (i) all owned
personal property of the Borrower and its Subsidiaries and (ii) all Capital
Stock of each of the Borrower's Subsidiaries; provided, however, that with
respect to the personal property and Capital Stock of any Subsidiary acquired
pursuant to a Permitted Acquisition, the Borrower shall, and shall cause such
Subsidiary to, take such action within thirty (30) days of the consummation of
the applicable Permitted Acquisition. The
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Borrower shall, and shall cause each of its Subsidiaries to, adhere to the
covenants set forth in the Collateral Documents, including, without limitation,
the covenants regarding the location of personal property as set forth in the
Security Agreements.
(L) Addition of Guarantors; Addition of Pledged Capital Stock and other
Collateral. The Borrower shall cause each Subsidiary that is a Subsidiary as of
the date of this Agreement or at any time thereafter, to deliver to the Agent an
executed Guaranty and appropriate corporate resolutions, opinions and other
documentation in form and substance reasonably satisfactory to the Agent, such
Guaranty and other documentation to be delivered to the Agent as promptly as
possible but in any event (1) on the date of the consummation of a Permitted
Acquisition involving such Subsidiary and (2) otherwise within thirty (30) days
of determination that a Subsidiary needs to be added as a Guarantor.
Simultaneously with any Subsidiary becoming a Guarantor, the Borrower shall (or,
if the Capital Stock of such Subsidiary is owned by another Subsidiary, shall
cause such other Subsidiary to) deliver to the Agent an executed supplement to
an existing Pledge Agreement or a new Pledge Agreement, together with
appropriate corporate resolutions, opinions, stock certificates, UCC filings or
amendments and other documentation, in each case in form and substance
reasonably satisfactory to the Agent and the Agent shall be reasonably satisfied
that the Agent has a first priority perfected pledge of all of the Capital Stock
of such Guarantor owned by the Borrower and its Subsidiaries. Simultaneously
with any Subsidiary becoming a Guarantor, the Borrower shall also cause such
Subsidiary to (i) execute and deliver a Security Agreement (and deliver the
other documents required thereby, including, without limitation, restricted
account agreements), if applicable, Intellectual Property Agreements and such
other Collateral Documents as the Agent or the Required Lenders may require its
or their sole and reasonable discretion; and (ii) deliver such other
documentation as the Agents may reasonably require in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, certified resolutions and other organizational and authorizing
documents of such Subsidiary, favorable opinions of counsel to such Subsidiary
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the documentation referred to above and the perfection of
the Agent's liens thereunder) and other items of the types required to be
delivered by the Borrower and its Subsidiaries pursuant to Section 5.1 as of the
Closing Date, all in form, content and scope reasonably satisfactory to the
Agent.
7.3 Negative Covenants.
(A) Indebtedness. Neither the Borrower nor any of its Subsidiaries
shall directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:
(i) the Obligations;
(ii) the Subordinated Notes and any Permitted Refinancing
Indebtedness, provided, however, that with respect to Subordinated
Notes issued pursuant to the High Yield Note Agreement, the amount
thereof may exceed the aggregate principal amount of the Subordinated
Notes issued to the Subordinated Noteholder as of November 19, 1997,
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but such Subordinated Notes issued pursuant to the High Yield Note
Agreement must (a) have a Weighted Average Life to Maturity that is
equal to or greater than the aggregate Weighted Average Life to
Maturity of the Subordinated Notes issued to the Subordinated Note as
of November 19, 1997 and (b) must contain terms, including, without
limitation, terms with respect to amount, maturity, amortization,
interest rate, premiums, fees, redemption, covenants, subordination
terms, events of default and remedies that are reasonably satisfactory
to the Required Lenders;
(iii) Permitted Existing Indebtedness;
(iv) Indebtedness in respect of obligations secured by
Customary Permitted Liens;
(v) Indebtedness constituting Contingent Obligations permitted
by Section 7.3(E);
(vi) Indebtedness arising from intercompany loans from any
Subsidiary to the Borrower or any wholly-owned Subsidiary;
(vii) secured or unsecured purchase money Indebtedness
(including Capitalized Leases) incurred by the Borrower or any of its
Subsidiaries after the Closing Date to finance the acquisition of fixed
assets, if (1) at the time of such incurrence, no Default or Unmatured
Default has occurred and is continuing or would result from such
incurrence, (2) such Indebtedness has a scheduled maturity and is not
due on demand, (3) such Indebtedness does not exceed the lower of the
fair market value or the cost of the applicable fixed assets on the
date acquired, (4) such Indebtedness does not exceed $2,500,000 in the
aggregate outstanding at any time, and (5) any Lien securing such
Indebtedness is permitted under Section 7.3(C) (such Indebtedness being
referred to herein as "Permitted Purchase Money Indebtedness");
(viii) Indebtedness with respect to surety, appeal and
performance bonds obtained by the Borrower or any of its Subsidiaries
in the ordinary course of business;
(ix) Indebtedness incurred subsequent to the Closing Date by
the Borrower or any of its Subsidiaries to the seller in any Permitted
Acquisition as part of the consideration therefor, provided that such
Indebtedness does not exceed $20,000,000 in the aggregate outstanding
at any time, is unsecured and is otherwise on terms acceptable to the
Agent; and
(x) Indebtedness in respect of Hedging Obligations permitted
under Section 7.3(P).
(B) Sales of Assets. Neither the Borrower nor any of its Subsidiaries
shall sell, assign, transfer, lease, convey or otherwise dispose of any
property, whether now owned or hereafter acquired, or any income or profits
therefrom, or enter into any agreement to do so, except:
(i) sales of Inventory in the ordinary course of business;
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(ii) the disposition in the ordinary course of business of
equipment that is obsolete, excess or no longer useful in the
Borrower's business;
(iii) sales, assignments, transfers, leases, conveyances or
other dispositions of other assets (excluding any sales of motor
vehicles) if such transaction (a) is for consideration consisting at
least eighty percent (80%) of cash, (b) is for not less than fair
market value, and (c) when combined with all such other transactions
(each such transaction being valued at book value) (i) during the
immediately preceding twelve-month period, represents the disposition
of not greater than five percent (5.0%) of the Borrower's Consolidated
Assets at the end of the fiscal year immediately preceding that in
which such transaction is proposed to be entered into, and (ii) during
the period from the Closing Date to the date of such proposed
transaction, represents the disposition of not greater than ten percent
(10.0%) of the Borrower's Consolidated Assets at the end of the fiscal
year immediately preceding that in which such transaction is proposed
to be entered into; and
(iv) the sale or other disposition of assets by any
consolidated Subsidiary to another consolidated Subsidiary or by any
consolidated Subsidiary to the Borrower.
(C) Liens. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or permit to exist any Lien on or
with respect to any of their respective property or assets except:
(i) Liens securing the Secured Obligations pursuant to the
Collateral Documents;
(ii) Permitted Existing Liens;
(iii) Customary Permitted Liens; and
(iv) purchase money Liens (including the interest of a lessor
under a Capitalized Lease and Liens to which any property is subject at
the time of the Borrower's acquisition thereof) securing Permitted
Purchase Money Indebtedness; provided that such Liens shall not apply
to any property of the Borrower or its Subsidiaries other than that
purchased or subject to such Capitalized Lease.
In addition, neither the Borrower nor any of its Subsidiaries shall become a
party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit the creation of a Lien on any of its properties or
other assets in favor of the Agent for the benefit of itself and the Lenders, as
collateral for the Obligations; provided that any agreement, note, indenture or
other instrument in connection with Permitted Purchase Money Indebtedness
(including Capitalized Leases) may prohibit the creation of a Lien in favor of
the Agent for the benefit of itself and the Lenders on the items of property
obtained with the proceeds of such Permitted Purchase Money Indebtedness.
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(D) Investments. Except to the extent permitted pursuant to paragraph
(G) below, neither the Borrower nor any of its Subsidiaries shall directly or
indirectly make or own any Investment except:
(i) Investments in Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater
than the amount thereof on the Closing Date;
(iii) Investments in trade receivables or received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business;
(iv) Investments consisting of deposit accounts maintained by
the Borrower;
(v) Investments consisting of non-cash consideration from a
sale, assignment, transfer, lease, conveyance or other disposition of
property permitted by Section 7.3(B);
(vi) Investments consisting of intercompany loans from any
Subsidiary to the Borrower or any other Subsidiary permitted by Section
7.3(A)(vi);
(vii) Investments constituting Permitted Acquisitions;
(viii) Investments in addition to those referred to elsewhere
in this Section 7.3(D) in an amount not to exceed $2,000,000 in the aggregate at
any time outstanding;
provided, however, that the Investments described in clause (viii) above shall
not be permitted if either a Default or an Unmatured Default shall have occurred
and be continuing on the date thereof or would result therefrom.
(E) Contingent Obligations. Neither the Borrower nor any of its
Subsidiaries shall directly or indirectly create or become or be liable with
respect to any Contingent Obligation, except: (i) recourse obligations resulting
from endorsement of negotiable instruments for collection in the ordinary course
of business; (ii) obligations, warranties, and indemnities, not relating to
Indebtedness of any Person, which have been or are undertaken or made in the
ordinary course of business and not for the benefit of or in favor of an
Affiliate of the Borrower or such Subsidiary; (iii) additional Contingent
Obligations which do not exceed $2,000,000 in the aggregate at any time; and
(iv) Contingent Obligations with respect to surety, appeal and performance bonds
obtained by the Borrower or any Subsidiary in the ordinary course of business.
(F) Restricted Payments. Neither the Borrower nor any of its
Subsidiaries shall declare or make any Restricted Payment except for payments
made to LDI to reimburse LDI for various
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services and other accommodations provided to the Borrower by LDI and as
permitted pursuant to Section 7.3(Q).
(G) Conduct of Business; Subsidiaries; Acquisitions. (i) Neither the
Borrower nor any of its Subsidiaries shall engage in any business other than the
businesses engaged in by the Borrower on the Closing Date and any business or
activities which are substantially similar, related or incidental thereto.
(ii) The Borrower shall not create, acquire or capitalize any
Subsidiary (a "New Subsidiary") after the date hereof pursuant to any
transaction unless such transaction is permitted by or not otherwise prohibited
by this Agreement and upon the creation or acquisition of each New Subsidiary,
the Borrower shall cause each New Subsidiary to promptly deliver to the Agent
the documents, instruments and agreements required pursuant to Section 7.2(L),
and all New Subsidiaries shall be Controlled Subsidiaries. After the formation
or acquisition of any New Subsidiary permitted hereunder, if requested by the
Agent, the Borrower shall provide a supplement to Schedule 6.8 to this
Agreement.
(iii) The Borrower shall not and shall not permit any of its
Subsidiaries to make any Acquisitions other than Acquisitions meeting all of the
following requirements (each such Acquisition constituting a "Permitted
Acquisition"):
(a) no Default or Unmatured Default shall have occurred and be
continuing or would result from such Acquisition or the incurrence of
any Indebtedness in connection therewith;
(b) the Acquisition shall be consummated on a non-hostile
basis pursuant to negotiated acquisition documents satisfactory to the
Agent with representations, indemnities and opinions satisfactory to
the Agent and results of due diligence satisfactory to the Agent and,
in the case of an Acquisition of Equity Interests of an entity, such
Acquisition shall be of not less than one hundred percent (100%) of the
Equity Interests of such entity (which Equity Interests shall be
pledged to the Agent pursuant to a Pledge Agreement);
(c) the businesses being acquired shall be substantially
similar to the businesses or activities engaged in by the Borrower on
the Closing Date;
(d) prior to each such Acquisition, the Borrower shall deliver
to the Agent and the Lenders a certificate from one of the Authorized
Officers, demonstrating to the satisfaction of the Agent that after
giving effect to such Acquisition and the incurrence or assumption of
any Indebtedness permitted by Section 7.3(A) in connection therewith,
on a pro forma basis using historical financial statements obtained
from the seller (with EBITDA adjusted solely to add back (i)
identifiable expenses which will be reduced or eliminated subsequent to
the applicable Permitted Acquisition (including, but not limited to,
the effect of margin improvements) and (ii) transaction expenses
arising from or in connection with the applicable Permitted
Acquisition), broken down by fiscal quarter in
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the Borrower's reasonable judgment, as if the Acquisition and such
incurrence or assumption of Indebtedness had occurred on the first day
of the twelve-month period ending on the last day of the Borrower's
most recently completed fiscal quarter, (1) the Borrower would have
been in compliance with the financial covenants in Section 7.4 and not
otherwise in Default and (2) the Leverage Ratio after taking into
account such Acquisition is lower than the Leverage Ratio excluding the
effect of such Acquisition; provided, however, that with respect to a
Specified Acquisition, the Borrower shall be permitted to deliver such
certificate prior to the occurrence of Indebtedness hereunder with
respect thereto;
(e) the aggregate purchase price (including assumed
liabilities) in connection with all such transactions from and after
the Closing Date shall not exceed $20,000,000 and not more than
$10,000,000 of such aggregate purchase price shall be payable at the
close of such Acquisitions in cash; provided, however, that the
$20,000,000 and $10,000,000 limitations prescribed in this Section
7.3(G)(iii)(e) shall be increased to $40,000,000 and $20,000,000,
respectively, after the Borrower has delivered financial statements in
accordance with Section 7.1(A) which indicate a Leverage Ratio of less
than 3.00 to 1.00 or, if the Borrower has issued Subordinated Notes
pursuant to the High Yield Note Agreement, a Leverage Ratio of 3.50 to
1.00; and
(f) (i) any Acquisition involving a purchase price (including
assumed liabilities) equal to or in excess of $2,000,000 shall be
subject to the prior approval of the Acquisition Facility Lenders with
more than fifty percent (50%) of the Aggregate Acquisition Facility
Commitment, which approval shall be granted or denied within ten (10)
days following the Acquisition Facility Lenders' receipt of sufficient
information as the Agent determines to be reasonably necessary to
assess the Borrower's ability to comply with clause (d) above and (ii)
any Acquisition involving a purchase price (including assumed
liabilities) of less than $2,000,000 shall be subject to the prior
approval of the Agent, which approval shall be granted or denied within
five (5) Business Days of the Agent's receipt of sufficient information
as the Agent determines to be reasonably necessary to assess the
Borrower's ability to comply with clause (d) above (but if such
Acquisition Facility Lenders or the Agent, as applicable, fail to
respond within such period, approval shall be deemed to have been
denied); provided, however, that in connection with a Specified
Acquisition, any prior approval required pursuant to this clause (f)
shall be waived, provided that the requirements in the preceding
clauses (a) through (g) shall have been satisfied with respect thereto.
(H) Transactions with Shareholders and Affiliates. Neither the Borrower
nor any of its Subsidiaries shall directly or indirectly enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with any holder or
holders of any of the Equity Interests of the Borrower, or with any Affiliate of
the Borrower which is not its Subsidiary, on terms that are less favorable to
the Borrower or any of its Subsidiaries, as applicable, than those that might be
obtained in an arm's length transaction at the time from Persons who are not
such a holder or Affiliate, except for Restricted Payments permitted by Section
7.3(F).
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(I) Restriction on Fundamental Changes. Neither the Borrower nor any of
its Subsidiaries shall enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution), or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of the Borrower's or any such
Subsidiary's business or property, whether now or hereafter acquired, except
transactions permitted under Sections 7.3(B) or 7.3(G), and except that a
consolidated Subsidiary may merge or consolidate with or into the Borrower or a
consolidated Subsidiary thereof.
(J) Sales and Leasebacks. Neither the Borrower nor any of its
Subsidiaries shall become liable, directly, by assumption or by Contingent
Obligation, with respect to any lease, whether an operating lease, a synthetic
lease or a Capitalized Lease, of any property (whether real or personal or
mixed) (i) which it or one of its Subsidiaries sold or transferred or is to sell
or transfer to any other Person, or (ii) which it or one of its Subsidiaries
intends to use for substantially the same purposes as any other property which
has been or is to be sold or transferred by it or one of its Subsidiaries to any
other Person in connection with such lease, unless in either case the sale
involved is not prohibited under Section 7.3(B) and the lease involved is not
prohibited under Section 7.3(A) and excluding any sale and leaseback
transactions involving motor vehicles.
(K) Margin Regulations. Neither the Borrower nor any of its
Subsidiaries, shall use all or any portion of the proceeds of any credit
extended under this Agreement to purchase or carry Margin Stock.
(L) ERISA. The Borrower shall not
(i) engage, or permit any of its Subsidiaries to engage, in
any prohibited transaction described in Sections 406 of ERISA or 4975
of the Code for which a statutory or class exemption is not available
or a private exemption has not been previously obtained from the DOL
which could reasonably be expected to result in liability to the
Borrower of $1,000,000 or more;
(ii) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Code) of $1,000,000 or
more, with respect to any Benefit Plan, whether or not waived;
(iii) fail, or permit any Controlled Group member to fail to
pay timely required contributions or annual installments due with
respect to any waived funding deficiency to any Benefit Plan which
failure could reasonably be expected to result in liability to the
Borrower of $1,000,000 or more;
(iv) terminate, or permit any Controlled Group member to
terminate, any Benefit Plan which would result in liability of the
Borrower or any Controlled Group member under Title IV of ERISA of
$1,000,000 or more;
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(v) fail to make any material contribution or payment to any
Multiemployer Plan which the Borrower or any Controlled Group member
may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto;
(vi) fail, or permit any Controlled Group member to fail, to
pay any required installment or any other material payment required
under Section 412 of the Code on or before the due date for such
installment or other payment; or
(vii) amend, or permit any Controlled Group member to amend, a
Plan resulting in a material increase in current liability for the plan
year such that the Borrower or any Controlled Group member is required
to provide security to such Plan under Section 401(a)(29) of the Code.
(M) Corporate Documents. Neither the Borrower nor any of its
Subsidiaries shall amend, modify or otherwise change any of the terms or
provisions in any of their respective Articles or Certificates of Incorporation
or By-Laws as in effect on the date hereof in any manner adverse to the
interests of the Lenders, without the prior written consent of the Required
Lenders.
(N) Fiscal Year. Neither the Borrower nor any of its consolidated
Subsidiaries shall change its fiscal year for accounting or tax purposes from a
period consisting of the 12-month period ending on the last day or the last
Friday before the last day of December of each year.
(O) Subsidiary Covenants. The Borrower will not, and will not permit
any Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to pay
dividends or make any other distribution on its stock, or make any other
Restricted Payment, pay any Indebtedness or other Obligation owed to the
Borrower or any other Subsidiary, make loans or advances or other Investments in
the Borrower or any other Subsidiary, or sell, transfer or otherwise convey any
of its property to the Borrower or any other Subsidiary.
(P) Hedging Obligations. The Borrower shall not and shall not permit
any of its Subsidiaries to enter into any interest rate, commodity or foreign
currency exchange, swap, collar, cap or similar agreements evidencing Hedging
Obligations, other than interest rate, foreign currency or commodity exchange,
swap, collar, cap or similar agreements entered into by the Borrower pursuant to
which the Borrower has hedged its actual interest rate, foreign currency or
commodity exposure. Such permitted hedging agreements entered into by the
Borrower and any Lender or any affiliate of any Lender to hedge floating
interest rate risk in an aggregate notional amount not to exceed at any time an
amount equal to the outstanding balance of the Term Loans at such time are
sometimes referred to herein as "Interest Rate Agreements."
(Q) Subordinated Notes. The Borrower shall not amend, supplement or
modify the terms of the Subordinated Notes or make any payment required as a
result of any amendment or change thereto without the prior written consent of
the Agent and the Required Lenders. Except as permitted in Section 2.5(B) hereof
and Section 3 of the Subordination Agreement as in effect on the date hereof,
the Borrower shall not redeem, purchase, prepay (by setoff or otherwise),
defease
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or repay any principal of, premium, if any, or other amount payable in respect
of the Subordinated Notes.
7.4 Financial Covenants. The Borrower shall comply with the following:
(A) Minimum Fixed Charge Coverage Ratio. The Borrower and its
consolidated Subsidiaries shall maintain a ratio ("Fixed Charge Coverage Ratio")
of (i) the sum of the amounts of (a) EBITDA minus (b) Capital Expenditures to
(ii) the sum of the amounts of (a) Interest Expense plus (b) scheduled
amortization payments of the principal portion of the Term Loans and scheduled
amortization payments of the principal portion of all other Indebtedness for
borrowed money of the Borrower made during such period plus (c) cash taxes paid
by the Borrower and its consolidated Subsidiaries during such period plus (d)
Restricted Payments paid during such period of at least:
(i) 1.05 to 1.00 for each fiscal quarter for the period
commencing with the fiscal quarter ending March 31, 2000 through the
fiscal quarter ending March 31, 2001; and
(ii) 1.10 to 1.00 for each fiscal quarter thereafter until the
Termination Date.
In each case, the Fixed Charge Coverage Ratio shall be determined as of the last
day of each fiscal quarter for the four fiscal quarter period ending on such
day, calculated, with respect to Permitted Acquisitions, on a pro forma basis
using historical financial statements obtained from the seller (with EBITDA
adjusted solely to add back (i) identifiable expenses which will be reduced or
eliminated subsequent to the applicable Permitted Acquisition (including, but
not limited to, the effect of margin improvements) and (ii) transaction expenses
arising from or in connection with the applicable Permitted Acquisition), broken
down by fiscal quarter in the Borrower's reasonable judgment.
(B) Maximum Leverage Ratio. The Borrower shall not permit the ratio
(the "Leverage Ratio") of (i) the sum of (a) Indebtedness for borrowed money and
(b) Capitalized Lease Obligations to (ii) EBITDA to be greater than the ratio
set forth below at the end of the fiscal quarter ending on the corresponding
date set forth below:
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Quarter Ending Ratio
March 31, 2000 4.40 to 1.00
June 30, 2000 4.40 to 1.00
September 30, 2000 4.25 to 1.00
December 31, 2000 4.25 to 1.00
March 31, 2001 4.00 to 1.00
June 30, 2001 3.50 to 1.00
September 30, 2001 3.50 to 1.00
December 31, 2001 3.50 to 1.00
March 31, 2002 3.50 to 1.00
June 30, 2002 3.25 to 1.00
September 30, 2002 3.25 to 1.00
December 31, 2002 3.25 to 1.00
March 31, 2003 3.25 to 1.00
June 30, 2003 3.00 to 1.00
September 30, 2003 3.00 to 1.00
and each quarter
thereafter
The Leverage Ratio shall be calculated, in each case, determined as of the last
day of each fiscal quarter based upon (a) for Indebtedness for borrowed money
and Capitalized Lease Obligations, Indebtedness for borrowed money and
Capitalized Lease Obligations as of the last day of each such fiscal quarter;
and (b) for EBITDA, the actual amount for the four-quarter period ending on such
day, calculated, with respect to Permitted Acquisitions, on a pro forma basis
using historical financial statements obtained from the seller (with EBITDA
adjusted solely to add back (i) identifiable expenses which will be reduced or
eliminated subsequent to the applicable Permitted Acquisition (including, but
not limited to, the effect of margin improvements) and (ii) transaction expenses
arising from or in connection with the applicable Permitted Acquisition), broken
down by fiscal quarter in the Borrower's reasonable judgment.
(C) Minimum Consolidated Net Worth. The Borrower shall not permit its
Consolidated Net Worth at any time to be less than the sum of (a) $27,500,000
plus (b) fifty percent (50%) of Net Income (if positive) calculated separately
for each fiscal quarter ending on or after March 31, 2000 plus (c) one hundred
percent (100%) of the net cash proceeds resulting from the issuance by the
Borrower of any Capital Stock, plus (d) the Consolidated Net Worth of any Person
whose Capital Stock is contributed to the capital of the Borrower.
(D) Interest Expense Coverage Ratio. The Borrower shall maintain a
ratio (the "Interest Expense Coverage Ratio") of (i) EBITDA to (ii) Interest
Expense during each four fiscal quarter period ending on the date described
below of at least:
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Quarter Ending Ratio
March 31, 2000 2.25 to 1.0
June 30, 2000 2.25 to 1.0
September 30, 2000 2.25 to 1.0
December 31, 2000 2.25 to 1.0
March 31, 2001 2.25 to 1.0
June 30, 2001 2.50 to 1.0
September 30, 2001 2.50 to 1.0
December 31, 2001 2.50 to 1.0
March 31, 2002 2.75 to 1.0
June 30, 2002 2.75 to 1.0
September 30, 2002 2.75 to 1.0
December 31, 2002 2.75 to 1.0
March 31, 2003 3.00 to 1.0
June 30, 2003 3.00 to 1.0
September 30, 2003
and each quarter
thereafter 3.00 to 1.0
In each case, the Interest Expense Coverage Ratio shall be determined as of the
last day of each fiscal quarter described above for the four fiscal quarter
period ending on such day, calculated, with respect to Permitted Acquisitions,
on a pro forma basis using historical financial statements obtained from the
seller (with EBITDA adjusted solely to add back (i) identifiable expenses which
will be reduced or eliminated subsequent to the applicable Permitted Acquisition
(including, but not limited to, the effect of margin improvements) and (ii)
transaction expenses arising from or in connection with the applicable Permitted
Acquisition), broken down by fiscal quarter in the Borrower's reasonable
judgment.
ARTICLE VIII: DEFAULTS
8.1 Defaults. Each of the following occurrences shall constitute a
Default under this Agreement:
(A) Failure to Make Payments When Due. The Borrower shall (i) fail to
pay when due any of the Obligations consisting of principal with respect to the
Loans or (ii) shall fail to pay within three (3) Business Days of the date when
due any of the other Obligations under this Agreement or the other Loan
Documents.
(B) Breach of Certain Covenants. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower under:
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(i) Section 7.1(C) through and including 7.1(I), 7.2(B) or
7.2(F) and such failure shall continue unremedied for ten (10) Business
Days;
(ii) Sections 7.1(A), 7.1(B), 7.2(A), 7.2(C), 7.2(D), 7.2(E)
and 7.2(G) through and including 7.2(L) and such failure shall continue
unremedied for five (5) Business Days; or
(iii) Section 7.3 or 7.4.
(C) Breach of Representation or Warranty. Any representation or
warranty made or deemed made by the Borrower to the Agent or any Lender herein
or by the Borrower or any of its Subsidiaries in any of the other Loan Documents
or in any statement or certificate at any time given by any such Person pursuant
to any of the Loan Documents shall be false or misleading in any material
respect on the date as of which made (or deemed made).
(D) Other Defaults. The Borrower shall default in the performance of or
compliance with any term contained in this Agreement (other than as covered by
paragraphs (A), (B) or (C) of this Section 8.1), or the Borrower or any of its
Subsidiaries shall default in the performance of or compliance with any term
contained in any of the other Loan Documents, and such default shall continue
for thirty (30) days after the occurrence thereof.
(E) Default as to Other Indebtedness. The Borrower or any of its
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect
to any Indebtedness the outstanding principal amount of which Indebtedness is in
excess of $2,500,000 ("Cross Default Indebtedness"), or any breach, default or
event of default shall occur, or any other condition shall exist under any
instrument, agreement or indenture pertaining to any such Cross Default
Indebtedness, if the effect thereof is to cause an acceleration, mandatory
redemption, a requirement that the Borrower offer to purchase such Cross Default
Indebtedness or other required repurchase of such Cross Default Indebtedness, or
permit the holder(s) of such Cross Default Indebtedness to accelerate the
maturity of any such Cross Default Indebtedness or require a redemption or other
repurchase of such Cross Default Indebtedness; or any such Cross Default
Indebtedness shall be otherwise declared to be due and payable (by acceleration
or otherwise) or required to be prepaid, redeemed or otherwise repurchased by
the Borrower or any of its Subsidiaries (other than by a regularly scheduled
required prepayment) prior to the stated maturity thereof.
(F) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case shall be commenced against the
Borrower or any of the Borrower's Subsidiaries and the petition shall
not be dismissed, stayed, bonded or discharged within sixty (60) days
after commencement of the case; or a court having jurisdiction in the
premises shall enter a decree or order for relief in respect of the
Borrower or any of the Borrower's Subsidiaries in an involuntary case,
under any applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect; or any other similar relief shall be granted
under any applicable federal, state, local or foreign law.
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(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over the
Borrower or any of the Borrower's Subsidiaries or over all or a
substantial part of the property of the Borrower or any of the
Borrower's Subsidiaries shall be entered; or an interim receiver,
trustee or other custodian of the Borrower or any of the Borrower's
Subsidiaries or of all or a substantial part of the property of the
Borrower or any of the Borrower's Subsidiaries shall be appointed or a
warrant of attachment, execution or similar process against any
substantial part of the property of the Borrower or any of the
Borrower's Subsidiaries shall be issued and any such event shall not be
stayed, dismissed, bonded or discharged within sixty (60) days after
entry, appointment or issuance.
(G) Voluntary Bankruptcy; Appointment of Receiver, Etc. The Borrower or
any of the Borrower's Subsidiaries shall (i) commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (ii) consent to the entry of an order for relief in an involuntary case,
or to the conversion of an involuntary case to a voluntary case, under any such
law, (iii) consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property, (iv)
make any assignment for the benefit of creditors or (v) take any corporate
action to authorize any of the foregoing.
(H) Judgments and Attachments. Any money judgment(s) (other than a
money judgment covered by insurance as to which the insurance company has not
disclaimed or reserved the right to disclaim coverage), writ or warrant of
attachment, or similar process against the Borrower or any of its Subsidiaries
or any of their respective assets involving in any single case or in the
aggregate an amount in excess of $2,500,000 is or are entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or
in any event later than fifteen (15) days prior to the date of any proposed sale
thereunder.
(I) Dissolution. Any order, judgment or decree shall be entered against
the Borrower decreeing its involuntary dissolution or split up and such order
shall remain undischarged and unstayed for a period in excess of sixty (60)
days; or the Borrower shall otherwise dissolve or cease to exist except as
specifically permitted by this Agreement.
(J) Loan Documents. At any time, for any reason, any Loan Document as a
whole that materially affects the ability of the Agent, or any of the Lenders to
enforce the Obligations ceases to be in full force and effect or the Borrower or
any of the Borrower's Subsidiaries party thereto seeks to repudiate its
obligations thereunder.
(K) Termination Event. Any Termination Event occurs which the Required
Lenders believe is reasonably likely to subject the Borrower to liability in
excess of $2,000,000.
(L) Waiver of Minimum Funding Standard. If the plan administrator of
any Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and any Lender believes the
substantial business hardship upon which
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the application for the waiver is based could reasonably be expected to subject
either the Borrower or any Controlled Group member to liability in excess of
$2,000,000.
(M) Change of Control. A Change of Control shall occur.
(N) Interest Rate Agreements. Nonpayment by the Borrower of any
obligation under any Interest Rate Agreement or the breach by the Borrower of
any term, provision or condition contained in any such Interest Rate Agreement
in either case which could reasonably be expected to result in liability in
excess of $2,500,000.
(O) Environmental Matters. The Borrower or any of its Subsidiaries
shall be the subject of any proceeding or investigation pertaining to (i) the
Release by the Borrower or any of its Subsidiaries of any Contaminant into the
environment, (ii) the liability of the Borrower or any of its Subsidiaries
arising from the Release by any other Person of any Contaminant into the
environment, or (iii) any violation of any Environmental, Health or Safety
Requirements of Law which by the Borrower or any of its Subsidiaries, which, in
any case, has or is reasonably likely to subject the Borrower to liability in
excess of $1,000,000.
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with Section 9.3.
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES
9.1 Termination of Commitments; Acceleration. If any Default described
in Section 8.1(F) or 8.1(G) occurs with respect to the Borrower, the obligations
of the Lenders to make Loans hereunder and the obligation of the Agent to issue
Letters of Credit hereunder shall automatically terminate and the Obligations
shall immediately become due and payable without any election or action on the
part of the Agent or any Lender. If any other Default occurs, the Required
Lenders may terminate or suspend the obligations of the Lenders to make Loans
hereunder and the obligation of the Issuing Banks to issue Letters of Credit
hereunder, or declare the Obligations to be due and payable, or both, whereupon
the Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower expressly
waives.
9.2 Defaulting Lender. In the event that any Lender fails to fund its
applicable Pro Rata Share of any Advance requested or deemed requested by the
Borrower (or requested by an Issuing Bank or the Swing Line Bank in connection
with the participation in Letters of Credit or Swing Line Loans), which such
Lender is obligated to fund under the terms of this Agreement (the funded
portion of such Advance being hereinafter referred to as a "Non Pro Rata Loan"),
until the earlier of such Lender's cure of such failure and the termination of
the Revolving Loan Commitments, the proceeds of all amounts thereafter repaid to
the Agent by the Borrower and otherwise required to be applied to such Lender's
share of all other Obligations pursuant to the terms of this Agreement shall be
advanced to the Borrower (or Issuing Bank or Swing Line Bank,
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as applicable) by the Agent on behalf of such Lender to cure, in full or in
part, such failure by such Lender, but shall nevertheless be deemed to have been
paid to such Lender in satisfaction of such other Obligations. Notwithstanding
anything in this Agreement to the contrary:
(i) the foregoing provisions of this Section 9.2 shall apply
only with respect to the proceeds of payments of Obligations and shall
not affect the conversion or continuation of Loans pursuant to Section
2.10;
(ii) any such Lender shall be deemed to have cured its failure
to fund its applicable Pro Rata Share of any Advance at such time as an
amount equal to such Lender's original applicable Pro Rata Share of the
requested principal portion of such Advance is fully funded to the
Borrower (or Issuing Bank or Swing Line Bank, as applicable), whether
made by such Lender itself or by operation of the terms of this Section
9.2, and whether or not the Non Pro Rata Loan with respect thereto has
been repaid, converted or continued;
(iii) amounts advanced to the Borrower to cure, in full or in
part, any such Lender's failure to fund its applicable Pro Rata Share
of any Advance ("Cure Loans") shall bear interest at the rate
applicable to Floating Rate Loans in effect from time to time, and for
all other purposes of this Agreement shall be treated as if they were
Floating Rate Loans;
(iv) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to
its desired application, all repayments of principal which, in
accordance with the other terms of this Agreement, would be applied to
the outstanding Floating Rate Loans shall be applied first, ratably to
all Floating Rate Loans constituting Non Pro Rata Loans, second,
ratably to Floating Rate Loans other than those constituting Non Pro
Rata Loans or Cure Loans and, third, ratably to Floating Rate Loans
constituting Cure Loans;
(v) for so long as and until the earlier of any such Lender's
cure of the failure to fund its applicable Pro Rata Share of any
Advance and the termination of the Revolving Loan Commitments, the term
"Required Lenders" for purposes of this Agreement shall mean Lenders
(excluding all Lenders whose failure to fund their respective Pro Rata
Shares of such Advance have not been so cured) whose applicable Pro
Rata Shares represent greater than fifty percent (50%) of the aggregate
Pro Rata Shares of such Lenders; and
(vi) for so long as and until any such Lender's failure to
fund its Revolving Loan Pro Rata Share and/or Acquisition Facility Pro
Rata Share of any Advance is cured in accordance with Section 9.2(ii),
(A) such Lender shall not be entitled to any commitment fees with
respect to its Revolving Loan Commitment and/or Acquisition Facility
Commitment and (B) such Lender shall not be entitled to any letter of
credit fees, which commitment fees and letter of credit fees shall
accrue in
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favor of the Lenders which have funded their respective applicable Pro
Rata Share of such requested Advance, shall be allocated among such
performing Lenders ratably based upon their relative Revolving Loan
Commitments and Acquisition Facility Commitments, and shall be
calculated based upon the average amount by which the aggregate
Revolving Loan Commitments of such performing Lenders exceeds the sum
of (I) the outstanding principal amount of the Loans owing to such
performing Lenders, plus (II) the outstanding Reimbursement Obligations
owing to such performing Lenders, plus (III) the aggregate
participation interests of such performing Lenders arising with respect
to undrawn and outstanding Letters of Credit and Swing Line Loans.
9.3 Amendments. Subject to the provisions of this Article IX, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of each Lender affected thereby:
(i) Postpone or extend the Revolving Loan Termination Date,
the Acquisition Facility Loan Termination Date or Term Loan Termination
Date or any other date fixed for any payment of principal of, or
interest on, the Loans, the Reimbursement Obligations or any fees or
other amounts payable to such Lender (except with respect to (a) any
modifications of the provisions relating to prepayments of Loans and
other Obligations (it being understood that modifications to or waivers
of any provisions relating to prepayments of the Acquisition Facility
Loans shall require the consent of Lenders whose Acquisition Facility
Pro Rata Shares are greater than 50%) and (b) a waiver of the
application of the default rate of interest pursuant to Section 2.11
hereof).
(ii) Reduce the principal amount of any Loans or L/C
Obligations, or reduce the rate or extend the time of payment of
interest or fees thereon.
(iii) Reduce the percentage specified in the definition of
Required Lenders or any other percentage of Lenders specified to be the
applicable percentage in this Agreement to act on specified matters.
(iv) Increase the amount of the Revolving Loan Commitment or
the Acquisition Facility Commitment of any Lender hereunder.
(v) Permit the Borrower to assign its rights under this
Agreement.
(vi) Release any Guarantor a significant portion of the
Collateral.
(vii) Amend this Section 9.3.
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No amendment of any provision of this Agreement relating to (a) the Agent shall
be effective without the written consent of the Agent, and (b) Swing Line Loans
shall be effective without the written consent of the Swing Line Bank. The Agent
may waive payment of the fee required under Section 13.3(B) without obtaining
the consent of any of the Lenders.
9.4 Preservation of Rights. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan or the issuance of a Letter of Credit notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan or issuance of such Letter of Credit shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 9.3, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE X: GENERAL PROVISIONS
10.1 Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.
10.2 Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 Performance of Obligations. The Borrower agrees that the Agent
may, but shall have no obligation, after the occurrence and during the
continuance of a Default, to make any other payment or perform any act required
of the Borrower under any Loan Document. The Agent shall use its reasonable
efforts to give the Borrower notice of any action taken under this Section 10.3
prior to the taking of such action or promptly thereafter provided the failure
to give such notice shall not affect the Borrower's obligations in respect
thereof. The Borrower agrees to pay the Agent, upon demand, the principal amount
of all funds advanced by the Agent under this Section 10.3, together with
interest thereon at the rate from time to time applicable to Revolving Loans
that are Floating Rate Loans from the date of such advance until the outstanding
principal balance thereof is paid in full. If the Borrower fails to make payment
in respect of any such advance under this Section 10.3 within one (1) Business
Day after the date the Borrower receives written demand therefor from the Agent,
the Agent shall promptly notify each Lender and each Lender agrees that it shall
thereupon make available to the Agent, in Dollars in immediately available
funds, the amount equal to such Lender's Pro Rata Share of such advance. If such
funds are not made available to the Agent by such Lender within one (1) Business
Day after the Agent's demand therefor, the Agent will be entitled to recover any
such amount from such Lender
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together with interest thereon at the Federal Funds Effective Rate for each day
during the period commencing on the date of such demand and ending on the date
such amount is received. The failure of any Lender to make available to the
Agent its Pro Rata Share of any such unreimbursed advance under this Section
10.3 shall neither relieve any other Lender of its obligation hereunder to make
available to the Agent such other Lender's Pro Rata Share of such advance on the
date such payment is to be made nor increase the obligation of any other Lender
to make such payment to the Agent. All outstanding principal of, and interest
on, advances made under this Section 10.3 shall constitute Obligations.
10.4 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
10.5 Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Agent and the Lenders and supersede
all prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof.
10.6 Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.
10.7 Expenses; Indemnification.
(A) Expenses. The Borrower shall reimburse the Agent and the Arranger
for any reasonable costs, charges for internal legal services and out-of-pocket
expenses (including attorneys' and paralegals' fees and time charges of
attorneys and paralegals for the Agent, which attorneys and paralegals may be
employees of the Agent) paid or incurred by the Agent or the Arranger in
connection with the preparation, negotiation, execution, delivery, syndication,
review, amendment, modification, and administration of the Loan Documents. The
Borrower also agrees to reimburse the Agent and the Arranger and the Lenders for
any costs, internal charges and out- of-pocket expenses (including attorneys'
and paralegals' fees and time charges of attorneys and paralegals for the Agent
and the Arranger and the Lenders, which attorneys and paralegals may be
employees of the Agent or the Arranger or the Lenders) paid or incurred by the
Agent or the Arranger or any Lender in connection with the collection of the
Obligations and enforcement of the Loan Documents. In addition to expenses set
forth above, the Borrower agrees to reimburse the Agent, promptly after the
Agent's request therefor, for each audit, or other business analysis performed
by or for the benefit of the Lenders in connection with this Agreement or the
other Loan Documents in an amount equal to the Agent's then customary charges
for each person employed to perform such audit or analysis up to an amount not
to exceed $10,000 per audit, plus all costs and expenses (including without
limitation, travel expenses) incurred by the Agent in the
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performance of such audit or analysis, provided, however, the Borrower shall be
obligated to reimburse the Agent for not more than two such audits between the
Closing Date and the first anniversary thereof and one such audit in any
twelve-month period thereafter if any such audit is conducted at a time when no
Default has occurred and is continuing, it being understood that the Borrower
shall be obligated to reimburse the Agent for any such audits conducted after a
Default has occurred and is continuing and to do so without application of the
$10,000 maximum prescribed above. Agent shall provide the Borrower with a
detailed statement of all reimbursements requested under this Section 10.7(A).
(B) Indemnity. The Borrower further agrees to defend, protect,
indemnify, and hold harmless the Agent, the Arranger and each and all of the
Lenders and each of their respective Affiliates, and each of such Agent's,
Arranger's, Lender's, or Affiliate's respective officers, directors, employees,
attorneys and agents (including, without limitation, those retained in
connection with the satisfaction or attempted satisfaction of any of the
conditions set forth in Article V) (collectively, the "Indemnitees") from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses of any kind or nature
whatsoever (including, without limitation, the fees and disbursements of counsel
for such Indemnitees in connection with any investigative, administrative or
judicial proceeding, whether or not such Indemnitees shall be designated a party
thereto), imposed on, incurred by, or asserted against such Indemnitees in any
manner relating to or arising out of:
(i) this Agreement, the other Loan Documents, or any act,
event or transaction related or attendant thereto or to the making of
the Loans, and the issuance of and participation in Letters of Credit
hereunder, the management of such Loans or Letters of Credit, the use
or intended use of the proceeds of the Loans or Letters of Credit
hereunder, or any of the other transactions contemplated by the Loan
Documents; or
(ii) any liabilities, obligations, responsibilities, losses,
damages, personal injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or wanton
injury, damage or threat to the environment, natural resources or
public health or welfare, costs and expenses (including, without
limitation, attorney, expert and consulting fees and costs of
investigation, feasibility or remedial action studies), fines,
penalties and monetary sanctions, interest, direct or indirect, known
or unknown, absolute or contingent, past, present or future relating to
violation of any Environmental, Health or Safety Requirements of Law
arising from or in connection with the past, present or future
operations of the Borrower, its Subsidiaries or any of their respective
predecessors in interest, or, the past, present or future
environmental, health or safety condition of any respective property of
the Borrower or its Subsidiaries, the presence of asbestos-containing
materials at any respective property of the Borrower or its
Subsidiaries or the Release or threatened Release of any Contaminant
into the environment (collectively, the "Indemnified Matters");
provided, however, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters caused solely by or resulting
solely from the willful misconduct or Gross Negligence of such Indemnitee or
breach of contract by such Indemnitee with respect to
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the Loan Documents, in each case, as determined by the final non-appealed
judgment of a court of competent jurisdiction. If the undertaking to indemnify,
pay and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, the Borrower shall
contribute the maximum portion which it is permitted to pay and satisfy under
applicable law, to the payment and satisfaction of all Indemnified Matters
incurred by the Indemnitees.
(C) Waiver of Certain Claims; Settlement of Claims. The Borrower
further agrees not to assert claims against any of the Indemnitees on any theory
of liability for consequential, special, indirect, exemplary or punitive damages
in excess of $1,000,000 in the aggregate with respect to all such claims against
any or all of such Indemnities. No settlement shall be entered into by the
Borrower or any if its Subsidiaries with respect to any claim, litigation,
arbitration or other proceeding relating to or arising out of the transactions
evidenced by this Agreement or the other Loan Documents (whether or not the
Agent or any Lender or any Indemnitee is a party thereto) unless such settlement
releases all Indemnitees from any and all liability with respect thereto.
(D) Survival of Agreements. The obligations and agreements of the
Borrower under this Section 10.7 shall survive the termination of this
Agreement.
10.8 Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
10.9 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles. If any changes in generally accepted accounting principles are
hereafter required or permitted and are adopted by the Borrower with the
agreement of its independent public accountants and such changes result in a
change in the method of calculation of any of the financial covenants,
restrictions or standards herein or in the related definitions or terms used
therein ("Accounting Changes"), the parties hereto agree to enter into
negotiations, in good faith, in order to amend such provisions in a credit
neutral manner so as to reflect equitably such Accounting Changes with the
desired result that the criteria for evaluating the Borrower's financial
condition shall be the same after such changes as if such changes had not been
made; provided, however, until such provisions are amended in a manner
reasonably satisfactory to the Agent and the Required Lenders, no Accounting
Change shall be given effect in such calculations and all financial statements
and reports required to be delivered hereunder shall be prepared in accordance
with Agreement Accounting Principles without taking into account such Accounting
Changes. In the event such amendment is entered into with respect to any
Accounting Changes, all references to this Agreement to Agreement Accounting
Principles shall mean generally accepted accounting principles as of the date of
such amendment.
10.10 Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that
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jurisdiction or the operation, enforceability, or validity of that provision in
any other jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.
10.11 Nonliability of Lenders. The relationship between the Borrower
and the Lenders and the Agent shall be solely that of borrower and lender.
Neither the Agent nor any Lender shall have any fiduciary responsibilities to
the Borrower. Neither the Agent nor any Lender undertakes any responsibility to
the Borrower to review or inform the Borrower of any matter in connection with
any phase of the Borrower's business or operations.
10.12 GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER AND THE AGENT OR
THE ARRANGER OR ANY LENDER ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF
INDIANA.
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF THE
PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, MAY BE RESOLVED EXCLUSIVELY BY
STATE OR FEDERAL COURTS LOCATED IN INDIANAPOLIS, INDIANA, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF INDIANAPOLIS, INDIANA. EACH OF THE PARTIES HERETO WAIVES IN
ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE AGENT, OR ANY
LENDER SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A
COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION
OVER THE BORROWER OR (2) REALIZE ON ANY SECURITY FOR THE OBLIGATIONS OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE
BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY
PROCEEDING BROUGHT BY SUCH PERSON TO REALIZE ON ANY SECURITY FOR THE OBLIGATIONS
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE
BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
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WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
(C) VENUE. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
ARTICLE XI: THE AGENT
11.1 Appointment; Nature of Relationship. Bank One is appointed by the
Lenders as the Agent hereunder and under each other Loan Document, and each of
the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
XI. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement and that the Agent is
merely acting as the representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Agent (i) does not
assume any fiduciary duties to any of the Lenders, (ii) is a "representative" of
the Lenders within the meaning of Section 9-105 of the Uniform Commercial Code
and (iii) is acting as an independent contractor, the rights and duties of which
are limited to those expressly set forth in this Agreement and the other Loan
Documents. Each of the Lenders agrees to assert no claim against the Agent on
any agency theory or any other theory of liability for breach of fiduciary duty,
all of which claims each Lender waives.
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11.2 Powers. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties or fiduciary duties to the Lenders, or
any obligation to the Lenders to take any action hereunder or under any of the
other Loan Documents except any action specifically provided by the Loan
Documents required to be taken by the Agent.
11.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is found in a final judgment by a court of
competent jurisdiction to have arisen solely from the Gross Negligence, willful
misconduct or breach of contract of such Person.
11.4 No Responsibility for Loans, Creditworthiness, Recitals, Etc.
Neither the Agent nor any of its directors, officers, agents or employees shall
be responsible for or have any duty to ascertain, inquire into, or verify (i)
any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction of any condition specified in Article V, except receipt of items
required to be delivered solely to the Agent; (iv) the existence or possible
existence of any Default or Unmatured Default or (v) the validity, effectiveness
or genuineness of any Loan Document, for the perfection or priority of the Liens
on any of the Collateral, or any other instrument or writing furnished in
connection therewith. The Agent shall not be responsible to any Lender for any
recitals, statements, representations or warranties herein or in any of the
other Loan Documents, or for the execution, effectiveness, genuineness,
validity, legality, enforceability, collectibility, or sufficiency of this
Agreement or any of the other Loan Documents or the transactions contemplated
thereby, or for the financial condition of any guarantor of any or all of the
Obligations, the Borrower or any of its Subsidiaries.
11.5 Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders of
Notes. The Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
11.6 Employment of Agents and Counsel. The Agent may execute any of its
duties as the Agent hereunder and under any other Loan Document by or through
employees, agents, and attorney-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
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counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
11.7 Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
11.8 The Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their respective
Revolving Loan Commitments (i) for any amounts, which are not unreasonable or
excessive, not reimbursed by the Borrower for which the Agent is entitled to
reimbursement by the Borrower under the Loan Documents, (ii) for any other
reasonable expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, or any reasonable costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Agent in any way relating to or arising
out of the Loan Documents or any other document delivered in connection
therewith or the transactions contemplated thereby, or the enforcement of any of
the terms thereof or of any such other documents, provided that no Lender shall
be liable for any of the foregoing to the extent any of the foregoing is found
in a final non-appealable judgment by a court of competent jurisdiction to have
arisen solely from the Gross Negligence or willful misconduct of the Agent.
11.9 Rights as a Lender. With respect to its Revolving Loan Commitment,
its Term Loan Commitment, its Acquisition Facility Commitment, Loans made by it
and the Notes issued to it, the Agent shall have the same rights and powers
hereunder and under any other Loan Document as any Lender and may exercise the
same as through it were not the Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Subsidiaries in which such Person is not prohibited
hereby from engaging with any other Person.
11.10 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
11.11 Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall
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have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty days
after the retiring Agent's giving notice of resignation, then the retiring Agent
may appoint, on behalf of the Borrower and the Lenders, a successor Agent.
Notwithstanding anything herein to the contrary, so long as no Default has
occurred and is continuing, each such successor Agent shall be subject to
approval by the Borrower, which approval shall not be unreasonably withheld.
Such successor Agent shall be a commercial bank having capital and retained
earnings of at least $500,000,000. Upon the acceptance of any appointment as the
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
XI shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder and under
the other Loan Documents.
11.12 Collateral Documents. (a) Each Lender authorizes the Agent to
enter into each of the Collateral Documents to which it is a party and to take
all action contemplated by such documents. Each Lender agrees that no Lender
shall have the right individually to seek to realize upon the security granted
by any Collateral Document, it being understood and agreed that such rights and
remedies may be exercised solely by the Agent for the benefit of the Holders of
Secured Obligations upon the terms of the Collateral Documents.
(b) In the event that any Collateral is hereafter pledged by
any Person as collateral security for the Obligations, the Agent is hereby
authorized to execute and deliver on behalf of the Holders of Secured
Obligations any Loan Documents necessary or appropriate to grant and perfect a
Lien on such Collateral in favor of the Agent on behalf of the Holders of
Secured Obligations.
(c) The Lenders hereby authorize the Agent, at its option and
in its discretion, to release any Lien granted to or held by the Agent upon any
Collateral or release any Guarantor from its obligations under a Guaranty (i)
upon termination of the Commitments and payment and satisfaction of all of the
Obligations at any time arising under or in respect of this Agreement or the
Loan Documents or the transactions contemplated hereby or thereby; (ii) as
permitted by, but only in accordance with, the terms of the applicable Loan
Document; or (iii) if approved, authorized or ratified in writing by the
Required Lenders, unless such release is required to be approved by all of the
Lenders hereunder. Upon request by the Agent at any time, the Lenders will
confirm in writing the Agent's authority to release particular types or items of
Collateral pursuant to this Section 11.12(c).
(d) Upon any sale and transfer of Collateral or of a
Subsidiary which is expressly permitted pursuant to the terms of any Loan
Document, or consented to in writing by the Required Lenders or all of the
Lenders, as applicable, and upon at least five Business Days' prior written
request by the Borrower, the Agent shall (and is hereby irrevocably authorized
by the Lenders to) execute such documents as may be necessary to evidence the
release of the Liens
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granted to the Agent for the benefit of the Lenders herein or pursuant hereto
upon the Collateral that was sold or transferred and release the applicable
Guarantor from its obligations under the applicable Guaranty; provided, however,
that (i) the Agent shall not be required to execute any such document on terms
which, in the Agent's opinion, would expose the Agent to liability or create any
obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
the Borrower or any Subsidiary in respect of) all interests retained by the
Borrower or any Subsidiary, including (without limitation) the proceeds of the
sale, all of which shall continue to constitute part of the Collateral.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if any Default occurs and is continuing, any
indebtedness from any Lender to the Borrower (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.
12.2 Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant to
Sections 4.1, 4.2 or 4.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to the obligations owing to them. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
12.3 Application of Payments. Subject to the provisions of Section 9.2,
the Agent shall, unless otherwise specified at the direction of the Required
Lenders which direction shall be consistent with the last sentence of this
Section 12.3, apply all payments and prepayments in respect of any Obligations
and all proceeds of Collateral in the following order:
(A) first, to pay interest on and then principal of any
portion of the Loans which the Agent may have advanced on behalf of any
Lender for which the Agent has not then been reimbursed by such Lender
or the Borrower;
(B) second, to pay interest on and then principal of any
advance made under Section 10.3 for which the Agent has not then been
paid by the Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Agent;
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(D) fourth, to pay Obligations in respect of any fees,
expenses, reimbursements or indemnities then due to the Lenders and the
issuer(s) of Letters of Credit;
(E) fifth, to pay interest due in respect of Swing Line Loans;
(F) sixth, to pay interest due in respect of Loans (other than
Swing Line Loans) and L/C Obligations;
(G) seventh, to the ratable payment or prepayment of principal
outstanding on Swing Line Loans;
(H) eighth, to the ratable payment or prepayment of principal
outstanding on Loans (other than Swing Line Loans), Reimbursement
Obligations and Hedging Obligations under Interest Rate Agreements in
such order as the Agent may determine in its sole discretion;
(I) ninth, to provide required cash collateral, if required
pursuant to Section 3.11 and
(J) tenth, to the ratable payment of all other Obligations.
Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Borrower, all principal payments in respect
of Loans (other than Swing Line Loans) shall be applied first, to repay
outstanding Floating Rate Loans, and then to repay outstanding Eurodollar Rate
Loans with those Eurodollar Rate Loans which have earlier expiring Interest
Periods being repaid or prepaid prior to those which have later expiring
Interest Periods. The order of priority set forth in this Section 12.3 and the
related provisions of this Agreement are set forth solely to determine the
rights and priorities of the Agent, the Lenders, the Swing Line Bank and the
issuer(s) of Letters of Credit as among themselves. The order of priority set
forth in clauses (D) through (J) of this Section 12.3 may at any time and from
time to time be changed by the Required Lenders without necessity of notice to
or consent of or approval by the Borrower, or any other Person; provided, that
the order of priority of payments in respect of Swing Line Loans may be changed
only with the prior written consent of the Swing Line Bank. The order of
priority set forth in clauses (A) through (C) of this Section 12.3 may be
changed only with the prior written consent of the Agent.
12.4 Relations Among Lenders.
(A) Except with respect to the exercise of set-off rights of any Lender
in accordance with Section 12.1, the proceeds of which are applied in accordance
with this Agreement, and except as set forth in the following sentence, each
Lender agrees that it will not take any action, nor institute any actions or
proceedings, against the Borrower or any other obligor hereunder or with respect
to any Loan Document, without the prior written consent of the Required Lenders
or, as may be provided in this Agreement or the other Loan Documents, at the
direction of the Agent.
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(B) The Lenders are not partners or co-venturers, and no Lender shall
be liable for the acts or omissions of, or (except as otherwise set forth herein
in case of the Agent) authorized to act for, any other Lender. The Agent shall
have the exclusive right on behalf of the Lenders to enforce on the payment of
the principal of and interest on any Loan after the date such principal or
interest has become due and payable pursuant to the terms of this Agreement.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 13.3 hereof. Notwithstanding clause (ii) of this Section 13.1, any
Lender may at any time, without the consent of the Borrower or the Agent, assign
all or any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank; provided, however, that no such assignment shall release the
transferor Lender from its obligations hereunder. The Agent may treat the payee
of any Note as the owner thereof for all purposes hereof unless and until such
payee complies with Section 13.3 hereof in the case of an assignment thereof or,
in the case of any other transfer, a written notice of the transfer is filed
with the Agent. Any assignee or transferee of a Note agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the holder of any Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
13.2 Participations.
(A) Permitted Participants; Effect. Subject to the terms set forth in
this Section 13.2, any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Acquisition Facility Loan Commitment
or Revolving Loan Commitment of such Lender, any L/C Interest of such Lender or
any other interest of such Lender under the Loan Documents on a pro rata or
non-pro rata basis. Notice of such participation to the Borrower and the Agent
shall be required prior to any participation becoming effective with respect to
a Participant which is not a Lender or an Affiliate thereof. In the event of any
such sale by a Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by the Borrower under
this Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents except that, for purposes of Article IV
hereof, the Participants shall be entitled to the same rights as if they were
Lenders.
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(B) Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Loan or Revolving Loan Commitment in which such
Participant has an interest which forgives principal, interest or fees or
reduces the interest rate or fees payable pursuant to the terms of this
Agreement with respect to any such Loan or Revolving Loan Commitment, postpones
any date fixed for any regularly-scheduled payment of principal of, or interest
or fees on, any such Loan or Revolving Loan Commitment, or releases a
significant portion of the Collateral, if any, securing any such Loan.
(C) Benefit of Setoff. The Borrower agrees that each Participant shall
be deemed to have the right of setoff provided in Section 12.1 hereof in respect
to its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents, provided that each Lender shall
retain the right of setoff provided in Section 12.1 hereof with respect to the
amount of participating interests sold to each Participant except to the extent
such Participant exercises its right of setoff. The Lenders agree to share with
each Participant, and each Participant, by exercising the right of setoff
provided in Section 12.1 hereof, agrees to share with each Lender, any amount
received pursuant to the exercise of its right of setoff, such amounts to be
shared in accordance with Section 12.2 as if each Participant were a Lender.
13.3 Assignments.
(A) Permitted Assignments. Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("Purchasers") all or a portion of its rights and
obligations under this Agreement (including, without limitation, its Acquisition
Facility Loan Commitment, Revolving Loan Commitment, all Loans owing to it, all
of its participation interests in existing Letters of Credit, and its obligation
to participate in additional Letters of Credit hereunder) in accordance with the
provisions of this Section 13.3. Each assignment shall be of a constant, and not
a varying, ratable percentage of all of the assigning Lender's rights and
obligations under this Agreement. Such assignment shall be substantially in the
form of Exhibit E hereto and shall not be permitted hereunder unless such
assignment is either for all of such Lender's rights and obligations under the
Loan Documents or, without the prior written consent of the Agent, involves
loans and commitments in an aggregate amount of at least $5,000,000 (which
minimum amount may be waived by the Required Lenders after the occurrence of a
Default or Unmatured Event of Default). The consent of the Agent and, prior to
the occurrence of a Default or Unmatured Default, the Borrower (which consent,
in each such case, shall not be unreasonably withheld), shall be required prior
to an assignment becoming effective with respect to a Purchaser which is not a
Lender or an Affiliate thereof.
(B) Effect; Effective Date. Upon (i) delivery to the Agent of a notice
of assignment, substantially in the form attached as Appendix I to Exhibit E
hereto (a "Notice of Assignment"), together with any consent required by Section
13.3.(A) hereof, and (ii), in the case of an assignment to a Purchaser which is
not a Lender or an Affiliate thereof, payment of a $3,500 fee to the Agent for
processing such assignment, such assignment shall become effective on the
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effective date specified in such Notice of Assignment. The Notice of Assignment
shall contain a representation by the Purchaser to the effect that none of the
consideration used to make the purchase of the Commitment, Loans and L/C
Obligations under the applicable assignment agreement are "plan assets" as
defined under ERISA and that the rights and interests of the Purchaser in and
under the Loan Documents will not be "plan assets" under ERISA. On and after the
effective date of such assignment, such Purchaser, if not already a Lender,
shall for all purposes be a Lender party to this Agreement and any other Loan
Documents executed by the Lenders and shall have all the rights and obligations
of a Lender under the Loan Documents, to the same extent as if it were an
original party hereto, and no further consent or action by the Borrower, the
Lenders or the Agent shall be required to release the transferor Lender with
respect to the percentage of the Aggregate Revolving Loan Commitment, Loans and
Letter of Credit participations assigned to such Purchaser. Upon the
consummation of any assignment to a Purchaser pursuant to this Section 13.3(B),
the transferor Lender, the Agent and the Borrower shall make appropriate
arrangements so that replacement Notes are issued to such transferor Lender and
new Notes or, as appropriate, replacement Notes, are issued to such Purchaser,
in each case in principal amounts reflecting their Revolving Loan Commitment and
their Term Loans, as adjusted pursuant to such assignment.
(C) The Register. The Agent shall maintain at its address referred to
in Section 14.1 a copy of each assignment delivered to and accepted by it
pursuant to this Section 13.3 and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Revolving Loan
Commitment of and principal amount of the Loans owing to, each Lender from time
to time and whether such Lender is an original Lender or the assignee of another
Lender pursuant to an assignment under this Section 13.3. The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower and each of its Subsidiaries, the Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
13.4 Confidentiality. Subject to Section 13.5, the Agent and the
Lenders shall hold all nonpublic information obtained pursuant to the
requirements of this Agreement and identified as such by the Borrower in
accordance with such Person's customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices and in any event may make disclosure reasonably required by a
prospective Transferee in connection with the contemplated participation or
assignment or as required or requested by any Governmental Authority or
representative thereof or pursuant to legal process and shall require any such
Transferee to agree (and require any of its Transferees to agree) to comply with
this Section 13.4. In no event shall the Agent or any Lender be obligated or
required to return any materials furnished by the Borrower; provided, however,
each prospective Transferee shall be required to agree that if it does not
become a participant or assignee it shall return all materials furnished to it
by or on behalf of the Borrower in connection with this Agreement.
13.5 Dissemination of Information. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by
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operation of law (each a "Transferee") and any prospective Transferee any and
all information in such Lender's possession concerning the Borrower and its
Subsidiaries; provided that prior to any such disclosure, such prospective
Transferee shall agree to preserve in accordance with Section 13.4 the
confidentiality of any confidential information described therein.
ARTICLE XIV: NOTICES
14.1 Giving Notice. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes).
14.2 Change of Address. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XV: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent and the Lenders and each party has notified the Agent by telex or
telephone, that it has taken such action.
[Remainder of This Page Intentionally Blank]
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above written.
FINISHMASTER, INC.,
as the Borrower
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
Address: ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Signature Page to
Amended and Restated Credit Agreement
BANK ONE, INDIANA, N.A.,
formerly known as NBD Bank, N.A.,
as Agent, as a Lender, as an Issuing
Bank and as the Swing Line Bank
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: First Vice President
Address: Bank ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Code ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Signature Page to
Amended and Restated Credit Agreement
BANK OF AMERICA, N.A.
formerly known as BANK OF AMERICA
NATIONAL TRUST AND SAVINGS
ASSOCIATION), as a Lender
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page to
Amended and Restated Credit Agreement
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as a Lender
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
Name:
Title:
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page to
Amended and Restated Credit Agreement
KEYBANK NATIONAL ASSOCIATION,
as a Lender
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇-▇▇-▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page to
Amended and Restated Credit Agreement
LASALLE BANK NATIONAL ASSOCIATION,
as a Lender
By:/s/ ▇▇▇▇▇▇▇ Picks
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page to
Amended and Restated Credit Agreement
THE NORTHERN TRUST COMPANY,
as a Lender
By:/s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name:
Title:
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page to
Amended and Restated Credit Agreement
PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name:
Title:
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page to
Amended and Restated Credit Agreement