Exhibit 9.(b)(2)
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AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of
November 23, 1998
among
ALLIANT TECHSYSTEMS INC.
The Lenders Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
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CHASE SECURITIES INC.
as Lead Arranger and Book Manager
BANK OF AMERICA NT&SA
as Syndication Agent
CREDIT LYONNAIS CHICAGO BRANCH
as Documentation Agent
and
BANK OF AMERICA NT&SA,
CREDIT LYONNAIS CHICAGO BRANCH,
THE BANK OF NEW YORK
as Co-Arrangers
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
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SECTION 1.01. Defined Terms......................................................... 1
SECTION 1.02. Classification of Loans and
Borrowings.......................................................... 23
SECTION 1.03. Terms Generally ...................................................... 23
SECTION 1.04. Accounting Terms; GAAP................................................ 24
ARTICLE II
The Credits
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SECTION 2.01. Loans and Borrowings.................................................. 24
SECTION 2.02. [Intentionally Omitted]............................................... 24
SECTION 2.03. Interest Elections.................................................... 24
SECTION 2.04. Repayment of Loans; Evidence of Debt.................................. 26
SECTION 2.05. Prepayment of Loans................................................... 27
SECTION 2.06. Fees.................................................................. 29
SECTION 2.07. Interest.............................................................. 29
SECTION 2.08. Alternate Rate of Interest............................................ 30
SECTION 2.09. Increased Costs....................................................... 31
SECTION 2.10. Break Funding Payments................................................ 32
SECTION 2.11. Withholding Tax Exemption; Other Taxes................................ 33
SECTION 2.12. Payments Generally; Pro Rata Treatment;
Sharing of Set-Offs................................................. 34
SECTION 2.13. Mitigation Obligations; Replacement
of Lenders.......................................................... 36
SECTION 2.14. Obligations Constitute Designated
Senior Indebtedness................................................. 37
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Corporate Existence and Power......................................... 37
SECTION 3.02. Corporate and Governmental
Authorization; No Contravention..................................... 38
SECTION 3.03. Binding Effect........................................................ 38
SECTION 3.04. Financial Information................................................. 38
SECTION 3.05. Litigation and ERISA.................................................. 39
SECTION 3.06. Compliance with ERISA................................................. 39
SECTION 3.07. Environmental Matters................................................. 40
SECTION 3.08. Taxes................................................................. 40
SECTION 3.09. Subsidiaries.......................................................... 40
SECTION 3.10. Not an Investment Company............................................. 40
SECTION 3.11. Full Disclosure....................................................... 41
SECTION 3.12 Compliance with Laws.................................................. 41
SECTION 3.13. Solvency.............................................................. 41
SECTION 3.14. Senior Indebtedness................................................... 42
SECTION 3.15. Year 2000............................................................. 42
ARTICLE IV
Conditions
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SECTION 4.01. Closing Date.......................................................... 43
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other
Information......................................................... 46
SECTION 5.02. Payment of Obligations................................................ 49
SECTION 5.03. Maintenance of Property; Insurance.................................... 51
SECTION 5.04. Conduct of Business and Maintenance
of Existence........................................................ 51
SECTION 5.05. Compliance with Laws.................................................. 52
SECTION 5.06. Inspection of Property, Books
and Records......................................................... 52
SECTION 5.07. Use of Proceeds and Letters of Credit 52
SECTION 5.08. Additional Subsidiaries............................................... 53
SECTION 5.09. Further Assurances.................................................... 53
SECTION 5.10. Maintenance of Collateral;
Alterations......................................................... 53
ARTICLE VI
Negative Covenants
SECTION 6.01. Limitation on Subsidiary Debt......................................... 54
SECTION 6.02. Negative Pledge....................................................... 55
SECTION 6.03. Consolidations; Mergers and Sales
of Assets........................................................... 58
SECTION 6.04. Investments in Subsidiaries........................................... 59
SECTION 6.05 Transactions with Affiliates.......................................... 60
SECTION 6.06. Constitutional Documents.............................................. 61
SECTION 6.07. Waivers and Amendments of Related
Documents........................................................... 61
SECTION 6.08. Restricted Payments................................................... 61
SECTION 6.09. Foreign Subsidiaries.................................................. 61
SECTION 6.10. Minimum Consolidated Net Worth........................................ 62
SECTION 6.11. Leverage Ratio........................................................ 62
SECTION 6.12. Interest Coverage..................................................... 62
SECTION 6.13. Outside Letters of Credit............................................. 62
SECTION 6.14. Designated Senior Debt................................................ 63
SECTION 6.15. Derivatives Obligations............................................... 64
SECTION 6.16. Additional Debt Incurrence............................................
64
ARTICLE VII
Events of Default............................................... 64
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ARTICLE VIII
The Administrative Agent............................................ 68
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ARTICLE IX
Miscellaneous
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SECTION 9.01. Notices............................................................... 71
SECTION 9.02. Waivers; Amendments................................................... 71
SECTION 9.03. Expenses; Indemnity; Damage Waiver.................................... 73
SECTION 9.04. Successors and Assigns................................................ 74
SECTION 9.05. Survival.............................................................. 78
SECTION 9.06. Counterparts; Integration;
Effectiveness....................................................... 78
SECTION 9.07. Severability.......................................................... 79
SECTION 9.08. Right of Setoff....................................................... 79
SECTION 9.09. Governing Law; Jurisdiction; Consent
to Service of Process............................................... 79
SECTION 9.10. WAIVER OF JURY TRIAL.................................................. 80
SECTION 9.11. Headings.............................................................. 81
SECTION 9.12. Confidentiality....................................................... 81
SECTION 9.13. Interest Rate Limitation.............................................. 81
SECTION 9.14. Information Concerning Foreign Persons................................ 82
SCHEDULES:
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Schedule 2.01 -- Loans
Schedule 5.03 -- Insurance
Schedule 5.10 -- Mortgaged Property
Schedule 6.02 -- Existing Liens
EXHIBITS:
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Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Perfection Certificate
Exhibit C -- Form of Pledge Agreement
Exhibit D -- Form of Security Agreement
Exhibit E -- Form of Subsidiary Guaranty Agreement
Exhibit F-1 -- Form of Opinion of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
Exhibit F-2 -- Form of Opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Exhibit F-3 -- Form of Opinion of Local Counsel to the Borrower
Exhibit G -- New Credit Agreement
Exhibit H -- Solvency Certificate
AMENDED AND RESTATED CREDIT AGREEMENT dated as of November
23, 1998, amending, restating and continuing the Credit Agreement
(the "Existing Credit Agreement") dated as of March 15, 1995, as
amended and restated as of November 14, 1996, among ALLIANT
TECHSYSTEMS INC., the LENDERS party hereto, and THE CHASE
MANHATTAN BANK, as Administrative Agent.
The parties wish, upon satisfaction of the conditions set forth in
Section 4.01 hereof, to amend and restate the Existing Credit Agreement as set
forth herein; provided that in no event shall such amendment and restatement be
deemed to extinguish or constitute a novation of the obligations under the
Existing Credit Agreement and the Existing Credit Agreement shall continue in
full force and effect as amended and restated as herein provided.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Abandoned Subsidiary" means any Subsidiary of any Loan Party (a) (i)
as to which a determination shall have been made in accordance with Section 5.04
to terminate its corporate existence and (ii) the fair market value of the
assets of which, prior to such termination, shall not exceed $5,000,000 or (b)
the assets of which consist solely of surplus, discontinued or worn-out
equipment or other assets (including leasehold interests) no longer used in the
on-going business of the Borrower and the Subsidiaries.
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Acquisition Documents" means the Hercules Purchase Agreement and all
agreements, documents and instruments executed and delivered pursuant thereto or
in
connection with the foregoing, each as amended from time to time in accordance
with the terms hereof and thereof.
"Acquired Indebtedness" means any Indebtedness (i) of any Subsidiary
existing at the time of acquisition of such Subsidiary or (ii) assumed by a
Subsidiary in connection with the acquisition of assets, or the business of
another Person, whether by purchase, merger, consolidation or otherwise, in each
case in clause (i) or (ii) above, which Indebtedness is not incurred by the
selling, transferring, merging or consolidating Person in contemplation of such
acquisition, purchase, merger, consolidation or other event.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its capacity
as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent, duly completed by each Lender
and submitted to the Administrative Agent (with a copy to the Borrower).
"Affiliate" means, with respect to any Person, (i) any Person that
directly, or indirectly through one or more intermediaries, controls such former
Person (a "Controlling Person") and (ii) any Person (other than a Subsidiary of
such former Person) which is controlled by or is under common control with a
Controlling Person; provided that, no officer or director of a Person, who is
not otherwise an Affiliate of such Person, will be considered an Affiliate of
such Person solely because of their position as an officer or director of such
Person. As used herein, the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. For purposes of Section 6.05, "Affiliate" shall include
any person that, by itself or as a member of a group of persons (in each case
within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934,
as amended), other than any employee
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benefit plan (including any stock ownership plan (including 401K plans,
restricted stock plans, employee stock purchase plans, performance sharing
planing and incentive plans)) maintained for the benefit of the employees of the
Borrower, owns 10% or more of the outstanding shares of common stock of the
Borrower (including any Affiliates of such person).
"Aggregate Net Investment in Unrestricted Subsidiaries" means, at any
date of determination, the excess of (x) all Investments (valued at the fair
market value of the consideration paid or given in respect of such Investments)
after the Closing Date by the Borrower or any Subsidiary in all Unrestricted
Subsidiaries (including all designations of a Subsidiary as an Unrestricted
Subsidiary, which shall be deemed to constitute an Investment in an amount equal
to the shareholders equity in such Subsidiary at the time of such designation)
over (y) the sum, without duplication, of (i) net proceeds of the disposition of
the Equity Interests and other Investments in Unrestricted Subsidiaries received
by the Borrower or any Subsidiary, plus (ii) principal payments and returns of
capital received on or in respect of Investments in Unrestricted Subsidiaries by
the Borrower or any Subsidiary, in each case since the Closing Date.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a
change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Rate" means, for any day, with respect to any Loan the
applicable rate per annum set forth below under the caption "ABR Spread" or
"Eurodollar Spread", as the case may be, based upon the Leverage Ratio as of the
most recent determination date; provided that until June 30, 1999, or, if later,
the date on which the financial statements with respect to the Borrower's fiscal
quarter ended March 31, 1999, have been delivered, the "Applicable Rate" shall
be the applicable rate per annum set forth below in Category 5:
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ABR Eurodollar
Leverage Ratio: Spread Spread
--------------- ------ ------
Category 1
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Less Than 1.5 0 1.25
Category 2
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Greater Than or equal to
1.5 but Less Than 2.0 0.25 1.50
Category 3
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Greater Than or equal to
2.0 but Less Than 2.5 0.50 1.75
Category 4
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Greater Than or equal to
2.5 but Less Than 3.0 0.75 2.00
Category 5
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Greater Than or equal to
3.0 but Less Than 3.5 1.00 2.25
Category 6
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Greater Than or equal to 3.5 1.25 2.50
For purposes of the foregoing, (i) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of the Borrower's fiscal year
based upon the Borrower's consolidated financial statements delivered pursuant
to Section 5.01(a) or (b) and (ii) each change in the Applicable Rate resulting
from a change in the Leverage Ratio shall be effective during the period
commencing on and including the third Business Day after the date of delivery to
the Administrative Agent of such consolidated financial statements indicating
such change and ending on the date immediately preceding the effective date of
the next such change; provided that the Leverage Ratio shall be deemed to be in
Category 6 (A) at any time that an Event of Default has occurred and is
continuing or (B) at the option of the Agent or at the request of the Required
Lenders if the Borrower fails to deliver the consolidated financial statements
required to be delivered by it pursuant to Section 5.01(a) or (b), during the
period from the expiration of the time for delivery thereof until such
consolidated financial statements are delivered.
At any time that the rating assigned to the Borrower's senior
unsecured, non-credit-enhanced long-term indebtedness for borrowed money by each
of S&P and ▇▇▇▇▇'▇ is lower than the respective rating assigned thereto by such
rating agency on September 30, 1998, each ABR Spread and Eurodollar Spread
specified on the chart above shall be increased by 0.25.
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the
4
Federal Deposit Insurance Corporation for insurance by such Corporation of time
deposits made in dollars at the offices of such member in the United States;
provided that if, as a result of any change in any law, rule or regulation, it
is no longer possible to determine the Assessment Rate as aforesaid, then the
Assessment Rate shall be such annual rate as shall be determined by the
Administrative Agent to be representative of the cost of such insurance to the
Lenders.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" means Alliant Techsystems Inc., a Delaware corporation and
its successors permitted under Section 5.04 or 6.03.
"Borrowing" means Loans of the same Type, converted or continued on
the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
5
"Capital Lease" means a lease that would be capitalized on a balance
sheet of the lessee prepared in accordance with GAAP.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.09(b), by any lending office of such Lender making or
maintaining Loans or by such Lender's holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Closing Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
"Consolidated EBITDA" means, for any fiscal period, Consolidated Net
Income for such period plus, to the extent deducted in determining Consolidated
Net Income for such period (i) the aggregate amount of Consolidated Interest
Charges, income tax expense, depreciation, amortization and other similar
non-cash charges and (ii) the net effect of the aggregate amount of charges (not
to exceed $20,000,000) attributable to early extinguishment of up to
$150,000,000 aggregate stated principal amount of Subordinated Notes (including
premium over par value plus unamortized debt issuance costs).
"Consolidated Interest Charges" means for any period the aggregate
interest charges incurred by the Borrower and its Consolidated Subsidiaries for
such period, whether expensed or capitalized, including (a) the portion of any
obligation under Capital Leases allocable to interest expense in accordance with
GAAP and (b) the portion of any debt discount (but not expenses of issuance)
that shall be amortized in such period.
6
"Consolidated Net Income" means for any period the consolidated net
income of the Borrower and its Consolidated Subsidiaries for such period.
"Consolidated Net Worth" means at any date the sum of consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries plus the
amount (if any) deducted in determining such consolidated stockholders' equity
as a result of the aggregate gross payments made by the Borrower to effect the
Stock Buyback.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower in
its consolidated financial statements if such statements were prepared as of
such date.
"Constitutional Documents" in relation to any corporate Person means
the Certificate of Incorporation and By-Laws or other constitutional documents
of such corporate Person.
"Default" means any event or condition that constitutes an Event of
Default or that upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Demil Assets" means, collectively, all the assets of the Borrower and
the Subsidiaries that are located in either the Ukraine or Belarus prior to the
Closing Date and are used or useful in the treatment, dismantling, and disposal
of non-nuclear and non-biological weapons and the components and by-products
thereof and any Investment made prior to the Closing Date of the Borrower or any
Subsidiary in any Joint Venture or other Person that has controlled or owned
such assets, and any recovery in respect of insurance proceeds or otherwise of,
or in respect of, any of the foregoing.
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect
7
to any of the foregoing transactions) or any combination of the foregoing
transactions.
"dollars" or "$" refers to lawful money of the United States of
America.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"Environmental Liabilities" means any and all liabilities of or
related to the Borrower and its Subsidiaries, whether vested or unvested,
contingent or fixed, actual or potential, known or unknown, which arise under or
relate to Environmental Laws.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"Equity Issuance" means any sale or issuance by the Borrower of its
capital stock other than (i) any Preference Stock to the extent of the Maturing
Amounts thereof, (ii) capital stock issued pursuant to employee stock options or
director stock options issued by the Borrower in the ordinary course of
business, or in connection with employee benefit plans (including stock
ownership plans (including 401K plans, restricted stock plans, employee stock
purchase plans, performance sharing plans and incentive plans)) and (iii)
capital stock issued as consideration for the acquisition of operating assets or
business operations of any Person (whether through an acquisition of stock or
assets).
8
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower and all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Internal Revenue Code.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Final Maturity Date" means the sixth anniversary of the Closing Date.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Financing Transactions" means the execution, delivery and performance
by each Loan Party of the Loan Documents to which it is to be a party, including
the execution as of the Closing Date of the New Credit Agreement, the borrowing
of loans thereunder on the Closing Date, the use of the proceeds thereof and the
issuance of letters of credit thereunder, and the payment of related fees and
expenses.
9
"Fiscal Year" means a fiscal year of the Borrower, and "Fiscal
Year"for any particular year means the fiscal year of the Borrower ended or
ending during the specified calendar year (for example, "Fiscal Year 1998" means
the fiscal year of the Borrower ending on March 31, 1998).
"Foreign Lender" means any Lender that is organized under the laws of
a jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Person" means (a) any government (a "Foreign Government")
other than the United States government or the government of any political
subdivision thereof, (b) any agency of a Foreign Government, (c) any form of
business enterprise organized under the laws of any country other than the
United States or its possessions or any political subdivision thereof or (d) any
form of business enterprise owned or controlled by any of the persons described
in clauses (a), (b) or (c).
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia. The Borrower will promptly notify the
Administrative Agent if any additional Foreign Subsidiaries are formed or
acquired after the Closing Date.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (a) to purchase or pay (or advance or supply funds for the purchase
or payment
10
of) such Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hercules Purchase Agreement" means the Purchase and Sale Agreement
dated as of October 28, 1994 between the Borrower and Hercules Incorporated,
including the exhibits and schedules thereto, as amended from time to time in
accordance with the terms hereof and thereof.
"Indebtedness" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with GAAP, (v) all Indebtedness of others secured by a
Lien on any asset of such Person, whether or not such Indebtedness is assumed by
such Person (to the extent of the lesser of the amount of such Indebtedness and
the book value of any assets subject to such Lien), (vi) all non-contingent
obligations (and, for purposes of Section 6.02 and the definitions of Material
Indebtedness and Material Financial Obligations, all contingent obligations) of
such Person to reimburse any bank or other Person in respect of amounts paid
under a letter of credit or similar instrument, (vii) to the extent of any
Maturing Amount thereof, any Preference Stock, and (viii) all Indebtedness of
others Guaranteed by such Person (to the extent of the lesser of the amount of
such Indebtedness Guaranteed or the amount of such Guarantee).
"Information Memorandum" means the Confidential Information Memorandum
dated October 1998 relating to the Borrower and the Transactions.
11
"Interest Election Request" means a request by the Borrower to convert
or continue a Borrowing in accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes of this definition only, the date of
a Borrowing shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Investment" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise, except,
in the case of the Borrower, for any investment to the extent made utilizing
common stock of the Borrower.
"Joint Venture" means at any time (i) any corporation of which not
less than 20% nor more than 50% of each class of capital stock having ordinary
voting power to elect the board of directors of such corporation or other
persons performing similar functions are at the time directly or indirectly
owned by the Borrower and (ii) any partnership, association or joint venture not
less than 20%
12
nor more than 50% of the Equity Interests of which are at the time directly or
indirectly owned by the Borrower, but excluding in any event any Subsidiary of
the Borrower.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto in accordance with Section 9.04 and
pursuant to an Assignment and Acceptance, other than any such Person that ceases
to be a party hereto pursuant to an Assignment and Acceptance.
"Leverage Ratio" means, as of any date, the ratio of (i) consolidated
Indebtedness of the Borrower and its Consolidated Subsidiaries on such date to
(ii) Consolidated EBITDA for the four consecutive fiscal quarters ending on or
most recently prior to such date.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the average (rounded upwards, if necessary, to the next 1/100
of %) of the respective rates per annum at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered to the
principal London offices of the Reference Lenders in immediately available funds
in the London interbank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period. If any
Reference Lender does not furnish a timely quotation, the Administrative Agent
shall determine the relevant rate on the basis of the quotation or quotations
furnished by the remaining Reference Lender or Reference Lenders. In the event
that no timely quotation is available from any of the Reference Lenders at such
time for any reason, then the "LIBO Rate" with respect to such Eurodollar
Borrowing for such Interest Period shall be the rate appearing on Page 3750 of
the Telerate Service (or on any successor or substitute page of such Service, or
any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or
13
encumbrance of any kind in respect of such asset. For the purposes of this
Agreement, a Loan Party or any Subsidiary of a Loan Party shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"Loan Documents" means this Agreement, the New Credit Agreement and
the Security Documents.
"Loan Parties" means the Borrower and the Subsidiary Loan Parties.
"Loans" means the loans assumed by the Lenders pursuant to this
Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and the Subsidiaries taken as a whole, (b) the ability of any Loan
Party to perform any of its obligations under any Loan Document or (c) the
rights of or benefits available to the Lenders under any Loan Document.
"Material Financial Obligations" means a principal or face amount of
Indebtedness and/or payment obligations in respect of Derivatives Obligations of
the Borrower and/or one or more of its Subsidiaries, arising in one or more
related or unrelated transactions, exceeding in the aggregate $10,000,000.
"Material Indebtedness" means Indebtedness (other than the
Indebtedness under the Loan Documents) of the Borrower and/or one or more of its
Subsidiaries, arising in one or more related or unrelated transactions, in an
aggregate principal or face amount exceeding $10,000,000.
"Material Plan" means a Plan or Plans having aggregate Unfunded
Liabilities in excess of $5,000,000.
"Maturing Amount" means, with respect to any Preference Stock, an
amount equal to the lesser of (i) the aggregate amount of cash proceeds received
by the issuer of such Preference Stock from or in respect of such Preference
Stock less any expenses reasonably incurred by such Person in respect of such
Preference Stock and (ii) the aggregate amount of Preference Stock thereby
issued that will or may
14
become due before the Final Maturity Date as a result of any scheduled maturity,
amortization or mandatory redemption or any right on the part of any holder
thereof to require any repayment or prepayment of any portion thereof.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations or any part thereof. Each Mortgage
shall be satisfactory in form and substance to the Administrative Agent.
"Mortgaged Property" means, initially, each parcel of real property
and the improvements thereto owned by a Loan Party and identified on Schedule
6.09, and includes each other parcel of real property and improvements thereto
with respect to which a Mortgage is granted pursuant to Section 5.08 or 5.09.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by the Borrower and the
Subsidiaries to third parties (other than Affiliates) in connection with such
event, (ii) in the case of a sale, transfer or other disposition of an asset
(including pursuant to a sale and leaseback transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made by the Borrower and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) or statutory or other obligations secured by or
subject to any Lien on such asset or otherwise subject to mandatory prepayment
(or other application of such
15
proceeds) as a result of such event, whether pursuant to any contractual
obligation, law, rule or regulation and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by the Borrower and the Subsidiaries, and
the amount of any reserves established by the Borrower and the Subsidiaries to
fund contingent liabilities reasonably estimated to be payable, in each case
during the year that such event occurred or the next succeeding year and that
are directly attributable to such event (as determined reasonably and in good
faith by the treasurer or chief financial officer of the Borrower).
"New Credit Agreement" means the Borrower's Credit Agreement dated as
of November 23, 1998.
"Obligations" has the meaning assigned to such term in the Security
Agreement.
"Original Closing Date" means March 15, 1995.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document (but excluding
in any event income taxes, taxes determined by reference to income, franchise
taxes, branch profits taxes, withholding taxes and other similar taxes).
"Parent" means, with respect to any Lender, any Person as to which
such Lender is a subsidiary.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Perfection Certificate" means a certificate in the form of Exhibit B
or any other form approved by the Administrative Agent.
"Permitted Lines of Business" means the business of
government-owned contractor-operated facilities management or research and
development for, or the development, manufacture, acquisition and distribution,
sale, treatment, dismantling and disposal of, and other businesses related to,
non-nuclear and non-biological weapons, defense, aerospace, navigation, control
and marine systems, and providing insurance or self-insurance coverage
16
for, or liability management or sales or marketing services and activities with
respect to, the foregoing (including that described in Part I, Item 1 of the
Borrower's Form 10-K for the Fiscal Year ended March 31, 1998).
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means at any time an employee pension benefit plan as defined
in Section 3(2) of ERISA (other than a Multiemployer Plan) which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees of
any Person which was at such time a member of the ERISA Group.
"Pledge Agreement" means the Pledge Agreement among the Borrower, the
Subsidiary Loan Parties and the Administrative Agent, substantially in the form
of Exhibit C.
"Preference Stock" means, with respect to any issuer, an Equity
Interest in such issuer which under the Constitutional Documents of such issuer
is entitled to a preference over any other Equity Interest in such issuer as to
payment of dividends and/or distributions upon the voluntary or involuntary
liquidation of such issuer.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including pursuant to a
sale and leaseback transaction) of any property or asset of the Borrower or
any Subsidiary (other than dispositions described in clauses (i)-(ix) of
Section 6.03(b)); provided that no sale, transfer, or other disposition made
in any fiscal year and subject to this paragraph (a) shall constitute
a "Prepayment Event" until the aggregate Net Proceeds from all such sales,
transfers and other dispositions not otherwise applied in accordance with
Section 2.05(b) in respect of Net Proceeds received in respect of sales,
transfers and other dispositions
17
during such fiscal year exceeds $5,000,000 (the amount of the first
prepayment after exceeding $5,000,000 being equal to the aggregate Net
Proceeds received from all such sales, transfers and dispositions during
such fiscal year) and thereafter in such fiscal year no such sale, transfer
or other disposition shall constitute a "Prepayment Event" until the
aggregate Net Proceeds therefrom not otherwise applied in accordance with
Section 2.05(b) in respect of Net Proceeds received in respect of sales,
transfers and other dispositions during such fiscal year exceeds $500,000
(the amount of each subsequent prepayment being equal to the aggregate of
such Net Proceeds not previously applied in accordance with Section 2.05(b)
in respect of Net Proceeds received in respect of sales, transfers and other
dispositions during such fiscal year); or
(b) any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any
property or assets, but only to the extent that an amount equal to the
amount of the Net Proceeds therefrom has not been applied to repair, restore
or replace such property or assets, or to acquire other property or assets
as contemplated in Section 2.05(b), within 270 days after such event; or
(c) the incurrence by the Borrower of any Indebtedness of the type
referred to in clauses (i) or (ii) of the definition of "Indebtedness" or to
the extent of any Maturing Amount thereof, the issuance by the Borrower of
any Preference Stock, other than
(i) Indebtedness under the Loan Documents,
(ii) up to $11,000,000 of Subordinated Indebtedness the proceeds
of which are applied to repay principal, interest or premium in
respect of the Subordinated Notes,
(iii) Indebtedness incurred or assumed for the purpose of
financing all or part of the costs (including purchase or
construction costs, design, engineering, transportation,
installation, testing and analogous costs, and all related
professional costs and expenses) of acquiring, constructing or
improving assets or services; provided that such Indebtedness is
incurred no later than 180 days
18
after such acquisition or completion of such construction or
improvement, and
(iv) Acquired Indebtedness.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Reference Lenders" means the principal London offices of The Chase
Manhattan Bank and any other Lenders agreed to by the Borrower and the
Administrative Agent.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders and lenders under the
New Credit Agreement, voting as a single class, representing at least 50.01% of
the sum of (a) the aggregate principal amount of outstanding Loans and (b) the
total Revolving Exposures (as defined in the New Credit Agreement), outstanding
Term Loans (as defined in the New Credit Agreement) and unused Commitments (as
defined in the New Credit Agreement).
"Responsible Officers" means the chief executive officer,
chief financial officer, president, treasurer, controller, secretary and any
executive or senior vice president of the Borrower.
"Restricted Payment" means (i) any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in the Borrower or any Subsidiary, or (ii) any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancelation or termination of any Equity Interests in the Borrower or any
Subsidiary or any option, warrant or other right to acquire any such Equity
Interests in the Borrower or any Subsidiary.
19
"Sale-Leaseback Transaction" means any arrangement with any Person
providing for the leasing by a Loan Party or any Subsidiary of a Loan Party of
any property that, or of any property similar to and used for substantially the
same purposes as any other property that, has been or is to be sold, assigned,
transferred or otherwise disposed of by a Loan Party or any of its Subsidiaries
to such Person with the intention of entering into such a lease.
"S&P" means Standard & Poor's.
"Security Agreement" means the Security Agreement among the Borrower,
the Subsidiary Loan Parties and the Administrative Agent, substantially in the
form of Exhibit D.
"Security Documents" means the Pledge Agreement, the Security
Agreement, the Mortgages and each other security agreement or other instrument
or document executed and delivered pursuant to Section 5.08 or 5.09 to secure
any of the Obligations.
"September 1998 10-Q" means the Borrower's report on Form 10-Q for the
period ended September 27, 1998, as filed with the Securities and Exchange
Commission.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject (a) with
respect to the Base CD Rate, for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months and
(b) with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
20
"Stock Buyback" means the repurchase by the Borrower of up to
3,000,000 shares of its common stock (such number to be adjusted to give effect
to stock splits, stock dividends and analogous events occurring after the
Closing Date) at an aggregate purchase price not in excess of $220,000,000 plus
the payment of related fees and expenses.
"Subordinated Indebtedness" means Indebtedness of the Borrower
subordinated to the payment of the Loans having terms no less favorable to the
Lenders (including subordination terms) than the Subordinated Notes, in an
aggregate principal amount not to exceed $250,000,000 incurred after the Closing
Date, provided that no scheduled principal amortization or payment date in
respect of such Indebtedness shall occur prior to the Final Maturity Date.
"Subordinated Notes" means, at any time, the remaining outstanding
subordinated notes, in an aggregate principal amount not to exceed $10,100,000,
issued pursuant to the Subordinated Note Indenture; and "Subordinated Note"
means any of the foregoing.
"Subordinated Note Indenture" means the Subordinated Note Indenture
dated as of March 1, 1995 between the Borrower and U.S. Bank National
Association (formerly First Bank National Association), as Trustee, with regard
to the issuance of $150,000,000 aggregate principal amount of subordinated notes
of the Borrower, substantially in the form delivered to the Lenders prior to the
date hereof, and as amended from time to time in accordance with the terms
thereof and hereof.
"Subsidiary Guaranty Agreement" means the Subsidiary Guaranty
Agreement among the Subsidiary Loan Parties and the Administrative Agent,
substantially in the form of Exhibit E.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general
21
partnership interests are, as of such date, owned, controlled or held, or (b)
that is, as of such date, otherwise controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"Subsidiary" means any subsidiary of the Borrower (other than an
Unrestricted Subsidiary).
"Subsidiary Loan Party" means any Subsidiary that is not a Foreign
Subsidiary.
"Temporary Cash Investment" means any Investment in (i) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial paper
rated at least A-1 by S&P and P-1 by Moody's, (iii) time deposits with,
including certificates of deposit issued by, any office located in the United
States of any bank or trust company which is organized under the laws of the
United States or any state thereof and has capital, surplus and undivided
profits aggregating at least $1,000,000,000, (iv) shares of any money market or
mutual fund not less than 90% of the assets of which are invested solely in
securities or obligations of the type described in clauses (i) through (iii)
above and not more than 10% of the assets of which are invested in securities or
other obligations rated at least A-2 by S&P and P-2 by Moody's, and (v)
repurchase agreements with respect to securities described in clause (i) above
entered into with an office of a bank or trust company meeting the criteria
specified in clause (iii) above, provided in each case that such Investment
matures within one year from the date of acquisition thereof by the Borrower or
a Subsidiary.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day) or, if such rate is not so reported
22
on such day or such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 a.m., New York City time,
on such day (or, if such day is not a Business Day, on the next preceding
Business Day) by the Administrative Agent from three negotiable certificate of
deposit dealers of recognized standing selected by it.
"Transactions" means the Stock Buyback and the Financing Transactions.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Unfunded Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all benefits under such
Plan exceeds (ii) the fair market value of all Plan assets allocable to such
benefits (excluding any accrued but unpaid contributions), all determined as of
the then most recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of a member of the ERISA Group to
the PBGC or any other Person under Title IV of ERISA.
"Unrestricted Subsidiary" means any subsidiary of the Borrower or any
other Person in which the Borrower or any Subsidiary shall have a direct or
indirect Investment so long as (i) the Borrower shall have notified the
Administrative Agent of its acquisition or creation of such subsidiary or such
other Investment and its ownership interest therein or of its designation of an
existing Subsidiary as an Unrestricted Subsidiary concurrently with such
acquisition, creation, designation or Investment and of the intended purposes of
such subsidiary or Investment, (ii) any such subsidiary (unless it is a foreign
subsidiary) shall have entered into a tax sharing agreement containing terms
which, in the reasonable judgment of the Administrative Agent, are customary in
similar circumstances to provide an appropriate allocation of tax liabilities
and benefits, (iii) except as permitted in the proviso below, none of the
Borrower and the Subsidiaries shall have any contingent liability in respect of
such subsidiary or Investment and (iv) any such subsidiary or Investment shall
23
be capitalized solely from the following sources: (A) any Investment by any
Person other than the Borrower and the Subsidiaries; (B) Indebtedness issued by
such subsidiary or any of its subsidiaries that is nonrecourse to the Borrower
and the Subsidiaries (except as otherwise permitted by the proviso below), or
proceeds thereof; and (C) Investments permitted to be made in Unrestricted
Subsidiaries pursuant to Section 6.04; provided that the Borrower may incur a
contingent liability or Indebtedness in a specified and limited amount in
respect of such a subsidiary or Investment if it would at the time of such
incurrence be permitted to make an additional Investment in such subsidiary or
Investment in the amount of such incurrence and the amount so incurred shall
thereafter constitute an Investment in such subsidiary or Investment in such
amount for purposes of calculating compliance with Section 6.04. Any subsidiary
of an Unrestricted Subsidiary is an Unrestricted Subsidiary.
"Wholly-Owned Consolidated Subsidiary" means, with respect to any
Person, any Consolidated Subsidiary of such Person all of the shares of capital
stock or other ownership interests of which (except directors qualifying shares)
are at the time directly or indirectly owned by such Person.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Type (e.g., a
"Eurodollar Loan"). Borrowings also may be classified and referred to by Type
(e.g., a "Eurodollar Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
mascu line, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to
24
any restrictions on such amendments, supplements or modifications set forth
herein), (b) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Loans and Borrowing. Subject to the terms and
conditions set forth herein, each Lender agrees on the Closing Date to assume a
term Loan hereunder in the principal amount set forth for such Lender on
Schedule 2.01. In connection with such assumption, the proceeds of the loans
made under the New Credit Agreement and the proceeds of payments made hereunder
by the Lenders in respect of any increase in their outstanding loans under this
Agreement will be applied on the Closing Date to repay
25
all the loans outstanding under this Agreement that will not continue after the
Closing Date and to make payments to lenders under this Agreement prior to
giving effect to the amendment and restatement hereof in respect of any decrease
in their portion of any loans continuing after the Closing Date as assumed Loans
under this Section 2.01. On the Closing Date, $35,000,000 in aggregate principal
amount of Loans are outstanding. Loans assumed and outstanding pursuant to this
Section 2.01 are not revolving in nature and amounts of such Loans repaid or
prepaid may not be reborrowed.
SECTION 2.02. [intentionally omitted]
SECTION 2.03. Interest Elections. (a) Each Loan outstanding on the
Closing Date shall be an ABR Loan. The Borrower may elect to convert a Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing. At the commencement of each Interest Period for any Eurodollar
Borrowing such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $10,000,000. Notwithstanding any other
provision of this Agreement, the Borrower shall not be entitled to elect to
convert or continue any Borrowing if the Interest Period requested with respect
thereto would end after the Final Maturity Date. Each Loan outstanding on the
Closing Date shall be an ABR Loan.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone (i) in the case of
a Borrowing to be converted to a Eurodollar Borrowing, not later than 12:00
noon, New York City time, three Business Days before the date of the proposed
Borrowing or (ii) in the case of a Borrowing to be converted to an ABR
Borrowing, not later than 11:30 a.m., New York City time, on the date of the
proposed conversion. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request in a form approved
by the Administrative Agent and signed by the Borrower.
26
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02 and paragraph
(f) of this Section:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the term
"Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid,
27
each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of
the Interest Period applicable thereto.
(f) A Borrowing may not be converted to or continued as a Eurodollar
Borrowing if after giving effect thereto (i) the Interest Period therefor would
commence before and end after a date on which any principal of the Loans is
scheduled to be repaid and (ii) the sum of the aggregate principal amount of
outstanding Eurodollar Borrowings with Interest Periods ending on or prior to
such scheduled repayment date plus the aggregate principal amount of outstanding
ABR Borrowings would be less than the aggregate principal amount of Loans
required to be repaid on such scheduled repayment date.
SECTION 2.04. Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Loan of such
Lender on the Final Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made and outstanding hereunder, the Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
28
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.05. Prepayment of Loans. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to the requirements of this Section.
(b) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of any
Prepayment Event, the Borrower shall, within three Business Days after such Net
Proceeds are received, prepay Borrowings and Borrowings (as defined in the New
Credit Agreement) in accordance with paragraph (c) of the Section 2.05 in an
aggregate amount equal to such Net Proceeds; provided that to the extent any
such repayment or reduction would otherwise require repayment or prepayment of
Eurodollar Loans or portions thereof prior to the last day of the related
Interest Period, such portion of such repayment or reduction shall, unless a
Default or Event of Default exists, be deferred to such last day; provided
further that, in the case of any event described in clause (a) or (b) of the
definition of the term Prepayment Event, if the Borrower shall deliver to the
Administrative Agent a certificate of a Financial Officer to the effect that the
Borrower and the Subsidiaries intend to apply an amount equal to the Net
Proceeds from such event, within 270 days after receipt of such Net Proceeds, to
acquire real property, equipment or other tangible assets to be used in the
business of the Borrower and the Subsidiaries, and certifying that no Default
has occurred and is continuing, then no prepayment shall be required pursuant to
this paragraph in respect of such event except to the extent an amount equal to
any Net Proceeds therefrom that have not been so applied by the end of such
270-day period, at which time a prepayment shall be required in an amount equal
to the Net Proceeds that have not been so applied.
29
(c) Prior to any optional or mandatory prepayment of Borrowings
hereunder and Borrowings (as defined in the New Credit Agreement) under the New
Credit Agreement, the Borrower shall select the Borrowing or Borrowings to be
prepaid and shall specify such selection in the notice of such prepayment
pursuant to paragraph (d) of this Section. In the event of any optional or
mandatory prepayment made at a time when any Term Borrowings (as defined in the
New Credit Agreement) remain outstanding under the New Credit Agreement, the
Borrower shall select Loans and Term Borrowings (as defined in the New Credit
Agreement) so that the aggregate amount of such prepayment is allocated among
Loans and Term Borrowings (as defined in the New Credit Agreement) pro rata
based on the aggregate principal amount of the outstanding Borrowings of each of
these. The lenders under the New Credit Agreement shall be third party
beneficiaries of the agreements contained in this paragraph (d).
(d) The Borrower shall notify the Administrative Agent of any
prepayment hereunder(i) in the case of prepayment of a Eurodollar Borrowing, not
later than 2:00 p.m., New York City time, three Business Days before the date of
prepayment or (ii) in the case of prepayment of an ABR Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date, the
principal amount of each Borrowing or portion thereof to be prepaid and, in the
case of a mandatory prepayment, a reasonably detailed calculation of the amount
of such prepayment. Promptly following receipt of any such notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $10,000,000, except as
necessary to apply fully the required amount of a mandatory prepayment. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.07.
SECTION 2.06. Fees. (a) The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent.
(b) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the
30
Administrative Agent. Fees paid shall not be refundable under any circumstances.
SECTION 2.07. Interest. (a) The Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to an ABR Borrowing as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued pursuant
to paragraph (c) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan, accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior
to the end of the current Interest Period therefor, accrued interest on such
Loan shall be payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
31
SECTION 2.08. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or maintaining
their Loans (or its Loan) included in such Borrowing for such Interest
Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, any Interest Election
Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective.
SECTION 2.09. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or to
reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or otherwise), in each case by an amount deemed
by such Lender to be material, then the Borrower will pay to such Lender such
additional amount or amounts as will compensate such
32
Lender for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), and by an amount deemed by such Lender to be material, then
from time to time the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender's holding company for any
such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 15 days after
receipt thereof.
(d) Each Lender will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
Closing Date, which will entitle such Lender to compensation pursuant to Section
2.09.
Notwithstanding the foregoing subsections (a) and (b) of this Section
2.09, the Borrower shall only be obligated to compensate any Lender for any
amount arising or accruing during (i) any time or period commencing not more
than (x) in the case of subsection (a), six months and (y) in the case of
subsection (b), three months, prior to the date on which such Lender notifies
the Administrative Agent and the Borrower that it proposes to demand such
compensation and identifies to the Administrative Agent and the Borrower the
statute, regulation or other basis upon which the claimed compensation is or
will be based and (ii) any time or period during which, because of the
retroactive application of such statute, regulation or other basis, such Lender
did not know that such amount would arise or accrue.
33
SECTION 2.10. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.05(d) and is revoked in accordance therewith), or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.13, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event. In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market increased
by Statutory Reserves at the same rate as utilized in computing such Adjusted
LIBO Rate. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 15
days after receipt thereof.
SECTION 2.11. Withholding Tax Exemption; Other Taxes. (a) At
least five Business Days prior to the first date on which interest or fees are
payable hereunder for the account of any Lender, each Lender that is not
incorporated or organized under the laws of the United States of America or a
state thereof agrees that it will deliver to each of the Borrower and the
Administrative Agent two duly and properly completed copies of (i) United States
Internal
34
Revenue Service Form 1001 or 4224 (or any successor form, in either case),
certifying in either case that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes or (ii) solely if such Lender is claiming exemption from United
States withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8, or any successor form
prescribed by the Internal Revenue Service, a certificate representing that such
Lender is not a bank for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code)
of the Borrower and is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Code) and such other
documentation as the Borrower may reasonably require to permit it to determine
that such Lender is entitled to the exemption. Each Lender which so delivers a
Form 1001 or 4224, or Form W-8 (or any successor form, in either case) further
undertakes to deliver to each of the Borrower and the Administrative Agent two
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent, in each case certifying
that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, unless an
event (including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender advises the Borrower and the Administrative Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.
(b) The Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and
each Lender, within 10 days after written demand therefor, for the full amount
of any Other Taxes paid by the Administrative Agent or such Lender on or
35
with respect to any payment by or on account of any obligation of the Borrower
hereunder or under any other Loan Document (including Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender, or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of the receipt, if any,
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
SECTION 2.12. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest or
fees or of amounts payable under Section 2.09, 2.10 or 2.11, or otherwise) prior
to the time expressly required hereunder or under such other Loan Document for
such payment (or, if no such time is expressly required, prior to 12:00 noon,
New York City time), on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ except that payments pursuant
to Sections 2.09, 2.10, 2.11 and 9.03 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any
36
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or resulting such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation. For
purposes of this
37
paragraph (c) references to "Lenders" shall include the lenders under the New
Credit Agreement, references to "Loans" shall include the loans under the New
Credit Agreement and the lenders under the New Credit Agreement shall be third
party beneficiaries of the agreements contained in this paragraph (c).
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.12(d) or 9.03(d), then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.13. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.09, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.11, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.09 or 2.11, as the case may be, in the
future and (ii) would not subject such
38
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender requests compensation under Section 2.09, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.11,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) if the
assignment is not to another Lender, the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.09 or payments required to be made pursuant to Section 2.11, such assignment
will result in a reduction in such compensation or payments. A Lender shall not
be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.
SECTION 2.14. Obligations Constitute Designated Senior Indebtedness.
The Obligations constitute "Designated Senior Indebtedness" under and as defined
in the Subordinated Note Indenture.
39
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Corporate Existence and Power. Each Loan Party is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted.
SECTION 3.02. Corporate and Governmental Authorization; No
Contravention. The execution and delivery by each Loan Party of each of the Loan
Documents to which it is a party and the performance by each such Loan Party of
its obligations thereunder are within the corporate power of such Loan Party,
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, agency or official
(except for any such action or filing that has been taken and is in full force
and effect) and do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the Constitutional Documents of any Loan
Party or of any material agreement, judgment, injunction, order, decree or other
material instrument binding upon such Loan Party or result in the creation or
imposition of any Lien on any asset of any Loan Party other than Liens created
pursuant to the Loan Documents.
SECTION 3.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower, and the other Loan Documents, when executed
and delivered as contemplated by this Agreement, will constitute valid and
binding obligations of each Loan Party that is a party thereto, in each case
enforceable in accordance with its terms.
SECTION 3.04. Financial Information. (a) The consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of March 31, 1998 and
the related consolidated statements of income and of cash flows for the Fiscal
Year then ended, reported on by Deloitte & Touche and set forth in the
Borrower's Form 10-K for Fiscal Year 1998, a copy of which has been delivered to
each of the
40
Lenders, fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such Fiscal Year.
(b) The unaudited consolidated balance sheets of the Borrower and its
Consolidated Subsidiaries as of September 27, 1998, and the related unaudited
consolidated statements of income and cash flow for the six months then ended,
set forth in the September 1998 10-Q, copies of which have been delivered to
each of the Lenders, fairly present, in conformity with GAAP applied on a basis
consistent with the financial statements referred to in Section 4.04(a), the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such six-month period (subject to normal year-end adjustments).
(c) Since March 31, 1998, there has been no material adverse change in
the business, financial position, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries considered as a whole.
SECTION 3.05. Litigation. Except as described in the September 1998
10-Q, there is no action, suit or proceeding pending against, or to the
knowledge of the Borrower threatened against or affecting, any Loan Party or any
of its Subsidiaries before any court or arbitrator or any governmental body,
agency or official in which there is a reasonable possibility of an adverse
decision which would materially adversely affect the business, consolidated
financial position or consolidated results of operations of the Borrower and its
Consolidated Subsidiaries, or which in any manner draws into question the
validity of any Loan Document.
SECTION 3.06. Compliance with ERISA. Each member of the ERISA Group
has fulfilled its obligations in all material aspects under the minimum funding
standards of ERISA and the Code with respect to each Plan and is in compliance
in all material respects with the presently applicable provisions of ERISA and
the Code with respect to each Plan. No member of the ERISA Group has (i) sought
a waiver of the minimum funding standard under Section 412 of the Code in
respect of any Plan, (ii) failed to make any contribution or payment to any Plan
or Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment
41
to any Plan or Benefit Arrangement, which in either event has resulted or could
reasonably be expected to result in the imposition of a Lien or the posting of a
bond or other security under ERISA or the Code or (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums or
similar items under Section 4007 of ERISA.
SECTION 3.07. Environmental Matters. In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Subsidiaries, in the course of which it identifies and evaluates associated
liabilities and costs (including any capital or operating expenditures required
for clean-up or closure of properties presently or previously owned, any capital
or operating expenditures required to achieve or maintain compliance with
environmental protection standards imposed by law or as a condition of any
license, permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction in the
level of or change in the nature of operations conducted thereat and any actual
or potential liabilities to third parties, including employees, and any related
costs and expenses). On the basis of this review, and as set forth in the
September 1998 10-Q, the Borrower anticipates that Environmental Laws are
unlikely to have a Material Adverse Effect.
SECTION 3.08. Taxes. The Borrower and each of its Subsidiaries have
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by any of them and have paid all taxes
due pursuant to such returns or pursuant to any assessment received by any of
them, except for any such taxes which are being contested in good faith and for
which adequate reserves have been made on the books of the Borrower and its
Subsidiaries in accordance with GAAP. The charges, accruals and reserves on the
books of the Borrower and its Subsidiaries in respect of income taxes are, in
the opinion of the Borrower, adequate in accordance with GAAP.
SECTION 3.09. Subsidiaries. Each corporate Subsidiary of each Loan
Party is a corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and has all corporate
powers and all material governmental licenses,
42
authorizations, consents and approvals required to carry on its business as now
conducted.
SECTION 3.10. Not an Investment Company. Neither Borrower nor any of
its Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
SECTION 3.11. Full Disclosure (a) As of the Closing Date, the
information contained in the Information Memorandum, the Borrower's Form 10-K
for the period ended March 31, 1998 and the September 1998 10-Q, taken together,
does not and will not contain any untrue statement of a material fact and does
not or will not omit to state a material fact necessary in order to make the
statements contained therein, in the light of the circumstances under which they
are made, not misleading. All information hereafter furnished in writing by any
Loan Party to any Agent or any Lender will be, taken as a whole and considered
together with all information previously so furnished, true and accurate in all
material respects on the date as of which such information is stated or
furnished.
(b) The Loan Parties have disclosed to each of the Lenders in writing
any and all facts which currently do or may have a Material Adverse Effect (to
the extent the Loan Parties can now reasonably foresee).
(c) Each of the representations and warranties of the Borrower made in
or pursuant to the Loan Documents other than this Agreement is true and correct.
(d) It is understood that the representations and warranties set forth
in clauses (a) and (b) above are limited to the extent that (i) any projections
or forecasts are represented to be based upon reasonable estimates believed by
the Loan Parties to be accurate, but are not warranted to be obtained and (ii)
no representation is made as to disclosure of matters of a general economic
nature or matters of public knowledge that generally affect any of the industry
segments included in the business of the Borrower and its Consolidated
Subsidiaries.
SECTION 3.12. Compliance with Laws. Each Loan Party and each of its
Subsidiaries is in compliance in all material respects with all applicable laws,
rules and regulations, and is not in violation of, or in default under, any term
or provision of any charter, bylaw,
43
mortgage, indenture, agreement, instrument, statute, rule, regulation, judgment,
decree, order, writ or injunction applicable to it, except for any such
violations, defaults or failures to comply which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
SECTION 3.13. Solvency. Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each loan made under the New Credit Agreement on the Closing Date and on each
date on which Delayed Draw Term Loans (as defined in the New Credit Agreement)
are made under the New Credit Agreement and after giving effect to the
application of the proceeds of such loans, (a) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
SECTION 3.14. Senior Indebtedness. The Obligations constitute
"Designated Senior Indebtedness" under and as defined in the Subordinated Note
Indenture.
SECTION 3.15. Year 2000. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (a) the computer systems
of the Borrower and its Subsidiaries and (b) equipment containing embedded
microchips (including systems and equipment supplied by others or with which the
Borrower's systems interface) and the testing of all such systems and equipment,
as so reprogrammed, will be completed by August 31, 1999, except with respect to
the failure to complete such reprogramming or testing of systems or equipment
that are not critical to the Borrower's business. The cost to the Borrower and
its Subsidiaries of such reprogramming and testing and of the reasonably
foreseeable consequences of year 2000 to the Borrower and its Subsidiaries
(including reprogramming
44
errors and the failure of others' systems or equipment) will not result in a
Default or a Material Adverse Effect. Except for such of the reprogramming
referred to in the preceding sentence as may be necessary, the computer and
management information systems of the Borrower and its Subsidiaries are and,
with ordinary course upgrading and maintenance, will continue for the term of
this Agreement to be, sufficient to permit the Borrower to conduct its
businesses without Material Adverse Effect.
ARTICLE IV
Conditions
SECTION 4.01. Closing Date. This Agreement shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received from
each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart
of this Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated the
Closing Date) of each of (i) ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel for
the Borrower, substantially in the form of Exhibit F-1, (ii) ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Vice President and General Counsel of the Borrower, substantially in
the form of Exhibit F-2, and (iii) local counsel in each jurisdiction where
a Mortgaged Property is located, substantially in the form of Exhibit F-3,
and, in the case of each such opinion required by this paragraph, covering
such other matters relating to the Loan Parties, the Loan Documents or the
Transactions as the Required Lenders shall reasonably request. The Borrower
hereby requests such counsel to deliver such opinions.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative
45
Agent or its counsel may reasonably request relating to the organization,
existence and good standing of each Loan Party, the authorization of the
Transactions and any other legal matters relating to the Loan Parties, the
Loan Documents or the Transactions, all in form and substance satisfactory
to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a certificate, dated
the Closing Date and signed by the President, a Vice President or a
Financial Officer of the Borrower, confirming compliance with the conditions
set forth in paragraphs (m) and (n) of this Section 4.01.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Closing Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses
(including fees, charges and disbursements of counsel) required to be
reimbursed or paid by any Loan Party hereunder or under any other Loan
Document.
(f) The Administrative Agent shall have received counterparts of the
Subsidiary Guaranty Agreement signed on behalf of each Subsidiary Loan Party
and counterparts of each of the Pledge Agreement and the Security Agreement
signed on behalf of the Borrower and each Subsidiary Loan Party that is a
party thereto, together with the following:
(i) stock certificates representing all the outstanding shares of
capital stock of each Subsidiary owned by or on behalf of any Loan
Party as of the Closing Date after giving effect to the Transactions
(except that stock certificates representing shares of common stock of
a Foreign Subsidiary may be limited to 65% of the outstanding shares
of common stock of such Foreign Subsidiary), promissory notes
evidencing all intercompany Indebtedness owed to any Loan Party by the
Borrower or any Subsidiary as of the Closing Date after giving effect
to the Transactions and stock powers and instruments of transfer,
endorsed in blank, with respect to such stock certificates and
promissory notes;
46
(ii) all documents and instruments, including Uniform Commercial
Code financing statements, required by law or reasonably requested by
the Administrative Agent to be filed, registered or recorded to
continue, create or perfect the Liens intended to be continued or
created under the Security Documents; and
(iii) a completed Perfection Certificate dated the Closing Date
and signed by an executive officer or Financial Officer of the
Borrower, together with all attachments contemplated thereby,
including, to the extent returns have been received, the results of a
search of the Uniform Commercial Code (or equivalent) filings made
with respect to the Loan Parties in the jurisdictions contemplated by
the Perfection Certificate and copies of the financing statements (or
similar documents) disclosed by such search and evidence reasonably
satisfactory to the Administrative Agent that the Liens indicated by
such financing statements (or similar documents) are permitted by
Section 6.02 or have been released.
(g) The Administrative Agent shall have received (i) counterparts of a
Mortgage with respect to each Mortgaged Property signed on behalf of the
record owner of such Mortgaged Property and (ii) a policy or policies of
title insurance issued by a nationally recognized title insurance company,
insuring the Lien of each such Mortgage as a valid first Lien on the
Mortgaged Property described therein, free of any other Liens except as
permitted by Section 6.02, together with such endorsements, coinsurance and
reinsurance as the Administrative Agent or the Required Lenders may
reasonably request.
(h) The Administrative Agent shall have received evidence that the
insurance required by Section 5.03 and the Security Documents is in effect.
(i) The Administrative Agent shall have received a certificate of the
chief financial officer of the Borrower, substantially in the form of
Exhibit H, with respect to the solvency of the Loan Parties after giving
effect to the Transactions on the Closing Date.
47
(j) All consents and approvals necessary or advisable to be obtained
from any Governmental Authority or other Person in connection with the
Transactions shall have been obtained, and all applicable waiting periods
and appeal periods shall have expired, in each case without the imposition
of any burdensome conditions.
(k) The New Credit Agreement shall have been executed in the form set
forth in Exhibit G. The Borrower shall have paid to the Lenders an aggregate
amount equal to all the principal of the Loans together with the interest
accrued thereon as of the Closing Date and all other obligations of the
Borrower accrued hereunder prior to the Closing Date (other than $35,000,000
aggregate principal amount of the Loans which will remain outstanding).
(l) The Lenders shall have received a pro forma consolidated balance
sheet of the Borrower as of September 27, 1998, reflecting all pro forma
adjustments as if the Transactions had been consummated on such date, and
such pro forma consolidated balance sheet shall be consistent in all
material respects with the forecasts and other information previously
provided to the Lenders.
(m) The representations and warranties of each Loan Party set forth in
the Loan Documents shall be true and correct on and as of the Closing Date.
(n) As of the Closing Date, no Default shall have occurred and be
continuing.
The Administrative Agent shall notify the Borrower and the Lenders of the
Closing Date, and such notice shall be conclusive and binding.
48
ARTICLE V
Affirmative Covenants
Until the principal of and interest on each Loan and all fees
payable hereunder shall have been paid in full, the Borrower covenants and
agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The Borrower
will furnish to the Administrative Agent and each Lender:
(a) as soon as available and in any event within 100 days
after the end of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of
the end of such fiscal year and the related consolidated statements of
income and of cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all
reported on in a manner acceptable to the Securities and Exchange
Commission by Deloitte & Touche or other independent public accountants
of nationally recognized standing;
(b) as soon as available and in any event within 50 days after
the end of each of the first three quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of income and of cash flows for such quarter
and for the portion of the Borrower's fiscal year ended at the end of
such quarter, setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of
the Borrower's previous fiscal year, all certified (subject to normal
year-end adjustments) as to fairness of presentation, GAAP and
consistency by the chief financial officer or the chief accounting
officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in subsections (a) and (b) of this Section, a
certificate of the treasurer, controller or chief
49
financial officer of the Borrower (i) setting forth in reasonable
detail such calculations as are required to establish whether the
Borrower was in compliance with the requirements of Sections 6.10
through 6.12, inclusive on the date of such financial statements, (ii)
stating whether, to the best of such person's knowledge after due
inquiry, there exists on the date of such certificate any Default and,
if any Default then exists, setting forth the details thereof and the
action that the Borrower is taking or proposes to take with respect
thereto and (iii) stating whether, since the date of the most recent
financial statements previously delivered pursuant to subsection (a)
or (b) of this Section, there has been a change in the generally
accepted accounting principles applied in preparing the financial
statements then being delivered from those applied in preparing the
most recent audited financial statements so delivered which is
material to the financial statements then being delivered;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
whether anything has come to their attention to cause them to believe
that any Default existed on the date of such statements and (ii)
confirming the calculations set forth in the officer's certificate
delivered simultaneously therewith pursuant to clause (c) above;
(e) within five Business Days after any Responsible Officer of
the Borrower obtains knowledge of any Default, if such Default is then
continuing, a certificate of the treasurer, controller or chief
financial officer of the Borrower setting forth the details thereof and
the action which the Borrower is taking or proposes to take with
respect thereto;
(f) promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports and
proxy statements so mailed;
50
(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower
shall have filed with the Securities and Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of the incurrence of complete or partial
withdrawal liability with respect to any Multiemployer Plan under Title
IV of ERISA or notice that any Multiemployer Plan is in reorganization,
is insolvent or has been terminated, a copy of such notice; (iii)
receives notice from the PBGC under Title IV of ERISA of its intent to
terminate, impose liability (other than for premiums under Section 4007
of ERISA) in respect of, or appoint a trustee to administer any Plan, a
copy of such notice; (iv) applies for a waiver of the minimum funding
standard under Section 412 of the Code, a copy of such application; (v)
gives notice of intent to terminate any Plan under Section 4041(c) of
ERISA, a copy of such notice and other information filed with the PBGC;
(vi) gives notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under ERISA or the
Internal Revenue Code, a certificate of the chief financial officer
or the chief accounting officer of the Borrower setting forth details
as to such occurrence and action, if any, which the Borrower
51
or applicable member of the ERISA Group is required or proposes to
take;
(i) as soon as reasonably practicable after any Responsible
Officer of the Borrower obtains knowledge of the commencement of, or of
a material threat of the commencement of, an action, suit or proceeding
against the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official in which there
is a reasonable likelihood of an adverse decision which would
materially and adversely affect the business, financial position,
results of operations or prospects of the Borrower and its Consolidated
Subsidiaries, in each case considered as a whole, or which in any
manner questions the validity of any Loan Document, a written report
informing the Lenders in reasonable detail of the nature of such
pending or threatened action, suit or proceeding and will provide such
additional information as may be reasonably requested by the
Administrative Agent at the request of any Lender; and
(j) except to the extent prohibited by applicable law, rule,
regulations or orders, from time to time such additional information
regarding the financial position or business of the Borrower and its
Subsidiaries as the Administrative Agent, at the request of any Lender,
may reasonably request.
SECTION 5.02. Payment of Obligations. Each Loan Party will pay
and discharge, and will cause each of its Subsidiaries to pay and discharge, at
or before maturity, all their respective obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings, and except where the failure to pay or
discharge such obligations and liabilities could not in the aggregate reasonably
be expected to have a Material Adverse Effect, and will maintain, and will cause
each Subsidiary to maintain, in accordance with GAAP, appropriate reserves for
the accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance. (a) Each
Loan Party will keep, and will cause each of its Subsidiaries to keep, all
property materially useful and
52
necessary in its business in good working order and condition, ordinary wear and
tear excepted.
(b) The Borrower will maintain, and will cause each of its
Subsidiaries to maintain, insurance in responsible companies in such amounts and
against such risks as is usually carried by owners of similar businesses and
properties in the same general areas in which the Borrower and its Subsidiaries
operate, provided that in any event the Borrower will maintain, and will cause
each of its Subsidiaries to maintain, (i) property and casualty insurance on all
real and personal property on an all risks basis (including the perils of flood
and quake), covering the repair or replacement cost of all such property and
consequential loss coverage for business interruption and extra expense (which
shall be limited to fixed continuing expenses and such other business
interruption expenses as are otherwise generally available to similar
businesses), covering such risks, for such amounts not less than those, and with
deductible and self-insurance amounts not greater than those, set forth in Part
I of Schedule 5.03, (ii) public liability insurance (including products
liability coverage) covering such risks, for such amounts not less than those,
and with deductible amounts not greater than those, set forth in Part II of
Schedule 5.03 and (iii) such other insurance coverage in such amounts and with
respect to such risks as the Required Lenders may reasonably request. All such
insurance shall be provided by insurers or reinsurers which (x) in the case of
United States insurers and reinsurers have an A.M. Best policyholders rating of
not less than A- with respect to primary insurance, and B+ with respect to
excess insurance, and (y) in the case of non-United States insurers or
reinsurers, the providers of at least 80% of such insurance have either an ISI
policyholders rating of not less than A, an A.M. Best policyholders rating of
not less than A-, or a surplus of not less than $500,000,000 with respect to
primary insurance, and an ISI policyholders rating of not less than BBB with
respect to excess insurance, or such other insurers as the Required Lenders may
approve in writing. Such insurers may include a Subsidiary of the Borrower;
provided that such Subsidiary need not satisfy the foregoing requirements if all
but $15,000,000 of the insurance provided by such Subsidiary is reinsured by one
or more reinsurers which satisfy such requirements.
(c) The Borrower will deliver to the Administrative Agent on behalf of
the Lenders, (i) on the
53
Closing Date, a certificate dated such date showing the amount of coverage as of
such date, (ii) upon request of any Lender through the Administrative Agent from
time to time full information as to the insurance carried, (iii) within five
days of receipt of notice from any insurer, a copy of any notice of cancelation
or material change in coverage from that existing on the Closing Date, (iv)
forthwith, notice of any cancelation or nonrenewal of coverage by the Borrower
or any Subsidiary, and (v) within five days of filing, full information as to
any claim for an amount in excess of $2,500,000 with respect to any property and
casualty insurance policy maintained by the Borrower or any Subsidiary. The
Administrative Agent shall be named as additional insured on all property and
casualty insurance policies and a loss payee on all property insurance policies.
Any proceeds from any such insurance policy in respect of any claim, or any
condemnation award or other compensation in respect of a condemnation (or any
transfer or disposition of property in lieu of condemnation) for which the
Borrower or any of its Subsidiaries receives a condemnation award or other
compensation shall be paid to the Borrower or the Subsidiary; provided that, (A)
the Borrower or the Subsidiary will use such proceeds, condemnation award or
other compensation in accordance with Section 2.05(b) or (B) if, at the time of
the receipt of such proceeds, condemnation award or other compensation, a
Default has occurred and is continuing, the aggregate amount of all such
proceeds, condemnation award or other compensation shall be paid to the
Administrative Agent and held as collateral for application in accordance with
the Security Documents.
SECTION 5.04. Conduct of Business and Maintenance of Existence. Each
Loan Party will continue, and will cause each Subsidiary to continue, to
engage in business of the same general type as now conducted by the Borrower
and its Subsidiaries, and will preserve, renew and keep in full force and
effect, and will cause each of its Subsidiaries to preserve, renew and keep
in full force and effect their respective corporate existence and, except for
any such rights, privileges and franchises the failure to preserve which
would not in the aggregate have a Material Adverse Effect, their respective
rights, privileges and franchises necessary or desirable in the normal
conduct of business; provided that nothing in this Section 5.04 shall
prohibit (i) the merger of a Subsidiary of the Borrower into the Borrower or
the merger or consolidation of the Borrower or any Subsidiary of the Borrower
with or into another Person
54
if the corporation surviving such consolidation or merger is, in the case of any
merger or consolidation involving the Borrower, the Borrower, and in the case of
any merger or consolidation involving any Subsidiary of the Borrower, a
Wholly-Owned Consolidated Subsidiary of the Borrower and if, in each case, after
giving effect thereto, no Default shall have occurred and be continuing or (ii)
the termination of the corporate existence of any Subsidiary of the Borrower or
the discontinuation of any line of business of the Borrower or any of its
Subsidiaries if the board of directors of the Borrower in good faith determines
that such termination is in the best interest of the Borrower and is not
materially disadvantageous to the Lenders; and provided further that the parties
agree that this Section 5.04 shall not prohibit the Borrower and its
Subsidiaries from engaging in the business of (or acquiring other businesses and
assets not otherwise prohibited by this Agreement if such businesses are engaged
in, or such assets are used to conduct the business of) any Permitted Lines of
Business.
SECTION 5.05. Compliance with Laws. Each Loan Party will comply, and
cause each of its Subsidiaries to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including Environmental Laws and ERISA and the rules
and regulations thereunder) the failure to comply with which would reasonably be
expected to have a Material Adverse Effect, except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings.
SECTION 5.06. Inspection of Property, Books and Records. Each
Loan Party will keep, and will cause each of its Subsidiaries to keep, proper
books of record and account in which full, true and correct entries shall be
made of all dealings and transactions in relation to its business and
activities; and, except to the extent prohibited by applicable law, rule,
regulations or orders, will permit, and will cause each of its Subsidiaries to
permit, representatives of any Lender at such Lender's expense to visit and
inspect any of their respective properties, to examine and make abstracts from
any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants, all at such reasonable times and as often as may
reasonably be desired.
55
SECTION 5.07. Use of Proceeds. The proceeds of the Loans will be used
only for the general corporate purposes, including to finance acquisitions and
to pay related fees and expenses. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations U and X. Not more
than 25% of the assets subject under the Loan Documents to any negative pledge
or restriction on deposition shall at any time consist of "margin stock" within
the meaning of such regulations.
SECTION 5.08. Additional Subsidiaries. If any additional Subsidiary is
formed or acquired after the Closing Date, the Borrower will notify the
Administrative Agent and the Lenders thereof and (a) if such Subsidiary is a
Subsidiary Loan Party, the Borrower will cause such Subsidiary to become a party
to the Subsidiary Guaranty Agreement and the Security Agreement within five
Business Days after such Subsidiary is formed or acquired and promptly take such
actions to create and perfect Liens on such Subsidiary's assets to secure the
Obligations as the Administrative Agent or the Required Lenders shall reasonably
request and (b) if any Equity Interest in or Indebtedness of such Subsidiary are
owned by or on behalf of any Loan Party, the Borrower will cause such Equity
Interests and promissory notes evidencing such Indebtedness to be pledged
pursuant to the Pledge Agreement within five Business Days after such Subsidiary
is formed or acquired (except that, if such Subsidiary is a Foreign Subsidiary,
shares of common stock of such Subsidiary to be pledged pursuant to the Pledge
Agreement may be limited to 65% of the outstanding shares of common stock of
such Subsidiary).
SECTION 5.09. Further Assurances. (a) The Borrower will, and
will cause each Subsidiary Loan Party to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, mortgages, deeds of trust and other documents), which may be required
under any applicable law, or which the Administrative Agent or the Required
Lenders may reasonably request, to effectuate the transactions contemplated by
the Loan Documents or to grant, preserve, protect or perfect the Liens created
or intended to be created by the Security Documents or the validity or priority
of any such Lien, all at the expense of the Loan Parties. The Borrower also
agrees to provide to the
56
Administrative Agent (i) from time to time upon request, evidence reasonably
satisfactory to the Administrative Agent as to the perfection and priority of
the Liens created or intended to be created by the Security Documents and (ii)
upon request, survey updates in connection with the Mortgaged Property; provided
that the Borrower shall not be required to provide such a survey update with
respect to a Mortgaged Property more than once in any 24-month period.
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by the Borrower or
any Subsidiary Loan Party after the Closing Date (other than assets constituting
Collateral under the Security Agreement that become subject to the Lien of the
Security Agreement upon acquisition thereof), the Borrower will notify the
Administrative Agent and the Lenders thereof, and, if requested by the
Administrative Agent or the Required Lenders, the Borrower will cause such
assets to be subjected to a Lien securing the Obligations and will take, and
cause the Subsidiary Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this Section, all at the
expense of the Loan Parties.
SECTION 5.10. Maintenance of Collateral; Alterations. No Loan Party
shall commit any waste of any Collateral, or, except in the ordinary course of
its business, make any material change in the use of any Collateral, provided
that any Loan Party may lease to any other Person all or any portion of any item
of Collateral that the Borrower has determined in good faith is not used or
useful in such Loan Party's operating business. Each Loan Party granting a
security interest in any Mortgaged Property represents and warrants that, to the
best of its knowledge: (i) such Mortgaged Property is served by all utilities
required or necessary for the current use thereof; (ii) all streets necessary to
serve such Mortgaged Property are completed and serviceable and have been
dedicated and accepted as such by the appropriate governmental entities; and
(iii) such Loan Party has access to such Mortgaged Property from public roads
sufficient to allow such Loan Party to conduct its business at such Mortgaged
Property in accordance with sound commercial and industrial practices. The Loan
Parties shall, at all times, maintain all Collateral that is materially useful
or necessary in their respective businesses, in good operating order, condition
57
and repair, ordinary wear and tear excepted, and in compliance with all
applicable laws, rules and regulations, (including Environmental Laws) the
failure to comply with which would have a material adverse effect on the value
or usefulness of such Collateral, except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings. Each Loan Party
shall (a) not, except in the ordinary course of business or as provided in the
proviso to the first sentence of this Section, alter the occupancy or use of all
or any part of any Mortgaged Property without the prior written consent of the
Required Lenders, which consent shall not be unreasonably withheld and (b) do
what is deemed commercially reasonable to maintain and preserve the value of the
Collateral.
ARTICLE VI
Negative Covenants
Until the principal of and interest on each Loan and all fees payable
hereunder have been paid in full, the Borrower covenants and agrees with the
Lenders that:
SECTION 6.01. Limitation on Subsidiary Debt. Except for any
Indebtedness to the Borrower or any Wholly-Owned Consolidated Subsidiary of the
Borrower, and except for Acquired Indebtedness, the Borrower will not permit any
of its Subsidiaries to incur or at any time be liable with respect to any
Indebtedness in an aggregate amount at any one time outstanding in excess of
$20,000,000.
SECTION 6.02. Negative Pledge. Neither the Borrower nor any of its
Subsidiaries will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens (i) existing on the Closing Date securing Indebtedness or
other obligations or liabilities outstanding on such date and identified or
referred to on Schedule 6.02 or (ii) disclosed in title insurance policies
delivered to the Administrative Agent prior to the Closing Date relating to
the Mortgaged Properties;
(b) any Lien existing on any asset of any Person at the time such
Person becomes a
58
Consolidated Subsidiary of such Loan Party and not created in contemplation
of such event;
(c) any Lien on any asset securing Indebtedness incurred or assumed
for the purpose of financing all or any part of the costs (including
purchase or construction costs, design, engineering, transportation,
installation, testing and analogous costs, and all related professional
costs and expenses) of acquiring, constructing or improving such asset;
provided that such Lien attaches to such asset concurrently with or within
180 days after the acquisition thereof;
(d) any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into such Loan Party or any of its
Consolidated Subsidiaries and not created in contemplation of such event;
(e) any Lien existing on any asset, or on any asset of any Person,
prior to the acquisition of such asset or such Person, as the case may be,
by such Loan Party or any of its Consolidated Subsidiaries and not created
in contemplation of such acquisition;
(f) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
and which are not overdue for a period of more than 30 days or which are
being contested in good faith by appropriate proceedings;
(g) Liens for taxes, assessments or other governmental charges not yet
overdue or which are being contested in good faith and by appropriate
proceedings;
(h) pledges or deposits in connection with workmen's compensation,
unemployment insurance and other social security legislation;
(i) deposits to secure the performance of bids, tenders, trade or
government contracts (other than for borrowed money), leases, licenses,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like
59
nature incurred in the ordinary course of business;
(j) easements, right-of-way, zoning and similar restrictions and other
encumbrances or title defects incurred, or leases or subleases granted to
others, in the ordinary course of business which do not in any material
respect interfere with or adversely affect the use or value of any Mortgaged
Property or the ordinary conduct of the business of the Borrower or such
Subsidiary and the matters listed in the policies of title insurance
referred to in Section 4.01(g)(ii);
(k) Liens on the property of the Borrower or any of its Subsidiaries
in favor of the Borrower or such Subsidiary, as the case may be;
(l) Liens created by the Loan Documents;
(m) Liens arising under documentary letters of credit; provided that
such Liens attach only to the assets purchased thereunder and documents
relating thereto;
(n) Liens arising in the ordinary course of its business which (i) do
not secure Indebtedness or Derivatives Obligations, (ii) do not secure any
obligation in an amount exceeding $500,000 and (iii) do not in the aggregate
materially detract from the value of its assets or materially impair the use
thereof in the operation of its business;
(o) any interest or title of a lessor in assets or property subject to
a Capital Lease of the Borrower or any Subsidiary; provided that the
aggregate capitalized value on the consolidated balance sheet of the
Borrower of all the Capital Leases at any time does not exceed $25,000,000;
(p) any Lien arising out of the refinancing, extension, renewal or
refunding of any Indebtedness or obligation secured by any Lien permitted by
any of the foregoing clauses of this Section; provided that such
Indebtedness or obligation is not increased and is not secured by any
additional assets;
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(q) Liens arising from filing Uniform Commercial Code or personal
property security financing statements (or substantially equivalent filings
outside the United States) regarding leases;
(r) Liens encumbering property or assets under construction (and
proceeds and products thereof) arising from progress or partial payments by
a customer of the Borrower or the Subsidiaries relating to such property or
assets;
(s) Liens not otherwise permitted by this Section 6.02 securing
obligations in an aggregate principal, stated or face amount at any date not
to exceed $10,000,000; and
(t) Liens on any proceeds (including insurance, condemnation and
eminent domain proceeds) or products of any collateral a Lien over which is
otherwise permitted by the foregoing clauses of this Section, and on general
intangibles relating to or embodied in such collateral.
SECTION 6.03. Consolidations, Mergers and Sales of Assets. (a) No Loan
Party will, and no Loan Party will permit any of its Subsidiaries to,
consolidate or merge with or into any other Person except as permitted in
accordance with Section 5.04.
(b) No Loan Party will, and will not permit any of its Subsidiaries
to, sell, transfer, lease or otherwise dispose of any asset, including any
Equity Interest owned by it, nor will any Loan Party permit any of it
Subsidiaries to issue any additional Equity Interest in such Subsidiary, except:
(i) sales of inventory in the ordinary course of business;
(ii) any disposition of surplus, discontinued or worn-out equipment or
other assets (including leasehold interests) no longer used in the on-going
business of the Borrower and the Subsidiaries (including any Abandoned
Subsidiaries and the assets thereof);
(iii) any disposition of cash or Temporary Cash Investments;
61
(iv) any sale or other disposition of readily marketable securities in
the ordinary course of business;
(v) any disposition of the Demil Assets;
(vi) any sale, transfer or other disposition not otherwise permitted
by this Section 6.03 (x) to the Borrower or any Wholly-Owned Consolidated
Subsidiary or (y) to any other Subsidiary or Joint Venture that would not be
prohibited by Section 6.04 if it were an Investment; provided that any such
sale, transfer or other disposition involving a Subsidiary or Joint Venture
that is not a Loan Party shall be made in compliance with Section 6.05;
(vii) the grant of any Lien permitted under Section 6.02;
(viii) sales, transfer and other dispositions of Equity Interests in
Subsidiaries which are solely engaged in the business of providing insurance
or self-insurance coverage for the businesses of the Borrower and the
Subsidiaries permitted by Section 5.04, or the issuance of Equity Interests
in such Subsidiaries to non-Affiliated third Persons in an aggregate value
(as determined by the Borrower in good faith) in case of issuance, or
aggregate book value in the case of sales, transfers or other dispositions,
not to exceed in the aggregate $10,000,000 for all such Subsidiaries;
(ix) any disposition of assets with a fair market value of $50,000 or
less;
(x) sales, transfers and dispositions to Joint Ventures of assets with
an aggregate fair market value in any fiscal year not in excess of
$5,000,000; and
(xi) sales, transfers and other dispositions of assets (other than
Equity Interests in a Subsidiary) that are not permitted by any other clause
of this Section; provided that the aggregate fair market value of all assets
sold, transferred or otherwise disposed of in reliance upon this clause (xi)
shall not exceed $10,000,000 during any fiscal year of the Borrower;
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provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clauses (iii), (vi) and (vii) above)
shall be made for fair value and for at least 80% cash consideration.
SECTION 6.04. Investments in Subsidiaries. Neither the Borrower nor
any Subsidiary will hold, make or acquire any Investment in any Person other
than:
(a) Investments in Persons that are, or as a result of such Investment
will become, Subsidiaries or Joint Ventures; provided that the aggregate
fair market value of all Investments by the Borrower and its Consolidated
Subsidiaries in, or in Persons that as a result of such Investment will
become, Joint Ventures and Subsidiaries of the Borrower that are not, or
will not as a result of such Investment become, Wholly-Owned Consolidated
Subsidiaries of the Borrower, shall at no time (when taken together with the
aggregate value of assets sold, transferred or otherwise disposed of to such
Subsidiary or Joint Venture pursuant to Section 6.03(b)(vi) and net of any
cash consideration received by the Borrower or a Wholly-Owned Consolidated
Subsidiary in respect of and at the time of or substantially
contemporaneously with any such sale, transfer or disposition or Investment)
exceed $25,000,000 (with the fair market value of each Investment being
measured at the time made and without giving effect to subsequent changes in
value);
(b) Investments acquired in the form of consideration received from
the sale of assets consummated in accordance with Section 6.03(b);
(c) Investments acquired as part of the settlement of litigation or
claims or in satisfaction of claims made pursuant to a reorganization,
bankruptcy or liquidation of a Person, or as a good faith settlement of Debt
owed by a Person to the Borrower or any of its Subsidiaries;
(d) Temporary Cash Investments; and
(e) Aggregate Net Investments in Unrestricted Subsidiaries in an
aggregate amount not to exceed $100,000.
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SECTION 6.05. Transactions with Affiliates. No Loan Party will, or
will permit any of its Subsidiaries to, directly or indirectly, pay any funds to
or for the account of, make any Investment in, lease, sell, transfer or
otherwise dispose of any assets, tangible or intangible, to, or participate in,
or effect any transaction in connection with any joint enterprise or other joint
arrangement with, any of their Affiliates; provided, however, that the foregoing
provisions of this Section shall not prohibit any Loan Party or any of its
Subsidiaries from (i) declaring or paying any lawful dividend (subject to
Section 6.08) so long as, after giving effect to any such declaration, no
Default shall have occurred and be continuing, (ii) making sales to or purchases
from any of their Affiliates and, in connection therewith, extending credit or
making payments, or making payments for services rendered by any of their
Affiliates, if such sales or purchases are made or such services are rendered in
the ordinary course of business and on terms and conditions at least as
favorable to such Loan Party or such Subsidiary as the terms and conditions
which would apply in a similar transaction with a Person not an Affiliate, (iii)
making payments of principal, interest and premium on any Indebtedness of such
Loan Party or such Subsidiary held by any of its Affiliates if the terms of such
Indebtedness are substantially as favorable to such Loan Party or such
Subsidiary as the terms which could have been obtained at the time of the
creation of such Indebtedness from a lender which was not an Affiliate, (iv)
performing its obligations pursuant to any Acquisition Document, (v)
consummating any disposition of assets to an Affiliate not prohibited by Section
6.03, (vi) participating in, making Investments in, or effecting any other
transaction with or in connection with, any Joint Venture or other joint
enterprise or joint arrangement that is an Affiliate (regardless of whether the
other party participating in such Joint Venture or other joint enterprise or
joint arrangement is an Affiliate) if such Loan Party or such Subsidiary
participates in the ordinary course of its business and on a basis no less
advantageous than the basis on which any other venturer participates (taking
into account the respective interests of such Loan Party or Subsidiary and such
other venturer or venturers) or (vii) to the extent approved by the board of
directors of such Loan Party or Subsidiary, making payments of money or
issuances of securities pursuant to employment agreements and arrangements and
employee benefit plans and making payments for services rendered by non-employee
directors of the Borrower and their Affiliates.
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SECTION 6.06. Constitutional Documents. No Loan Party will, or will
permit any Subsidiary to, amend its Constitutional Documents in any manner which
could adversely affect the rights of the Lenders under the Loan Documents or
their ability to enforce the same.
SECTION 6.07. Waivers and Amendments of Related Documents. The
Borrower shall not and shall not permit its Subsidiaries to, without the prior
written consent of the Required Lenders, modify or amend, or waive any provision
or condition contained in, any of the Acquisition Documents or the Subordinated
Note Indenture or the Subordinated Notes from the forms of each of the foregoing
heretofore delivered to the Lenders in any manner that could reasonably be
expected to be adverse to the Lenders.
SECTION 6.08. Restricted Payments. The Borrower will not declare or
make any Restricted Payment other than:
(i) any Restricted Payments made by Subsidiaries to the Borrower or a
Wholly-Owned Consolidated Subsidiary (or with respect to a Subsidiary other
than a Wholly-Owned Consolidated Subsidiary, Restricted Payments made
ratably with respect to each class of such Subsidiary's Equity Interests in
respect of which such Restricted Payment is being made);
(ii) any Restricted Payments required to be made by the Borrower
pursuant to the terms of employee benefit plans and stock options (including
stock ownership plans (including 401K plans, restricted stock plans,
employee stock purchase plans, performance sharing plans and incentive
plans)), in each case as in effect on September 30, 1998, and as modified
thereafter, provided that the aggregate amount of Restricted Payments
permitted by this clause (i) shall not exceed $25,000,000;
(iii) repurchases of common stock of the Borrower pursuant to the
Stock Buyback;
(iv) any Restricted Payment by the Borrower payable solely in
additional Equity Interests of the Borrower;
(v) any other Restricted Payments in addition to those permitted above
(and whether of the same or a different type, or in addition to amounts for
any type, provided above) made or declared after the Closing Date
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to the extent that immediately after giving effect thereto (x) no Default
shall have occurred and be continuing and (y) the aggregate amounts of all
such Restricted Payments made or declared pursuant to this clause (v) after
the Closing Date does not exceed $50,000,000.
SECTION 6.09. Foreign Subsidiaries. Notwithstanding any other
provision of this Agreement, the aggregate amount of Investments made in any
Foreign Subsidiary and of sales, transfers and other dispositions to any Foreign
Subsidiary under Section 6.03(b)(vi), in each case by the Borrower and its
Subsidiaries (other than the Foreign Subsidiaries) after the Closing Date in all
Foreign Subsidiaries shall not at any time exceed $10,000,000 (valued as
provided in Section 6.04(a) and determined without duplication).
SECTION 6.10. Minimum Consolidated Net Worth. Consolidated Net Worth
shall at no time be less than the sum of (i) $175,000,000 plus (ii) 50% of
cumulative Consolidated Net Income for each fiscal quarter beginning after
September 27, 1998 and ending on or prior to the relevant date of determination
hereof, but in each case in this clause (ii), only to the extent that
Consolidated Net Income for each such fiscal quarter or other period is positive
plus (iii) 50% of the increase in consolidated stockholders' equity of the
Borrower from any Equity Issuances by the Borrower after September 27, 1998.
SECTION 6.11. Leverage Ratio. As of the last day of each fiscal period
of the Borrower ending most closely to the dates set forth below, the Leverage
Ratio as of such day shall not exceed the ratio set forth below opposite such
date:
Date Ratio Date Ratio
December 31, 1998 3.75:1 March 31, 2002 3.00:1
March 31, 1999 3.75:1 June 30, 2002 3.00:1
June 30, 1999 3.50:1 September 30, 2002 3.00:1
September 30, 1999 3.50:1 December 31, 2002 3.00:1
December 31, 1999 3.25:1 March 31, 2003 3.00:1
March 31, 2000 3.25:1 June 30, 2003 3.00:1
June 30, 2000 3.00:1 September 30, 2003 3.00:1
September 30, 2000 3.00:1 December 31, 2003 3.00:1
December 31, 2000 3.00:1 March 31, 2004 3.00:1
March 31, 2001 3.00:1 June 30, 2004 3.00:1
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June 30, 2001 3.00:1 September 30, 2004 3.00:1
September 30, 2001 3.00:1
December 31, 2001 3.00:1
SECTION 6.12. Interest Coverage. As of the last day of each fiscal
quarter of the Borrower ending most nearly on the dates set forth below, the
ratio of aggregate Consolidated EBITDA to aggregate Consolidated Interest
Charges, in each case for the four consecutive fiscal quarters ending on such
day, shall not be less than 3.50:1.
SECTION 6.13. Outside Letters of Credit. Neither the Borrower nor any
of its Subsidiaries shall at any time have any letters of credit issued or
outstanding for its account other than (i) letters of credit under the New
Credit Agreement and (ii) other letters of credit issued to secure the
performance of the Borrower and its Subsidiaries under trade or government
contracts (other than for borrowed money); provided that (x) the aggregate
amount available for drawing and (without duplication) unpaid amount of all
reimbursement obligations under all such letters of credit at no time exceeds
$15,000,000, (y) neither the Borrower nor any of its Subsidiaries will create,
assume or suffer to exist any Lien on any of its assets with respect to their
obligations under such letters of credit, and (z) such letters of credit are
supported by letters of credit issued under the New Credit Agreement in stated
amount equal to the stated amount of such other letters of credit.
SECTION 6.14. Designated Senior Debt. Without the consent of the
Required Lenders, the Borrower shall not designate any Indebtedness, other than
Indebtedness under the Loan Documents, as "Designated Senior Debt", as such term
is defined in the Subordinated Note Indenture as in effect on the Closing Date,
or any comparable designation that confers upon the holders of such Indebtedness
(or any Person acting on their behalf) the right to initiate blockage periods
under the Subordinated Note Indenture (other than as a result of a payment
default), unless, prior to any such designation of such Indebtedness as
"Designated Senior Debt", the holders of such Indebtedness deliver a written
agreement to the Administrative Agent providing for the express benefit of the
Lenders that neither such holders nor any Person acting on their behalf will
initiate any such blockage period under the Subordinated Note Indenture without
the prior written consent of the Required Lenders.
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SECTION 6.15. Derivatives Obligations. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any Derivatives Obligations,
other than Derivatives Obligations entered into in the ordinary course of
business to hedge or mitigate risks to which the Borrower or any Subsidiary is
exposed in the conduct of its business or the management of its liabilities.
SECTION 6.16. Additional Debt Incurrence. No Indebtedness that
constituted a Prepayment Event when incurred (other than Indebtedness referred
to in clause (vii) of the definition of "Indebtedness") shall mature, or provide
for any amortization or other mandatory payment of principal, or other repayment
(in the absence of default) or right of redemption at the option of the holder
thereof, prior to the Final Maturity Date.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay (i) when due any principal of any
Loan when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise, or (ii)
within five Business Days after the same shall become due, any interest on
any Loan or any fee or any other amount (other than an amount referred to in
clause (i) of this paragraph (a)) payable under this Agreement or any other
Loan Document;
(b) any Loan Party shall fail to observe or perform any covenant
contained in Sections 5.01(e), 5.04 or 5.07 or in Article VI;
(c) any Loan Party shall fail to observe or perform any covenant or
agreement contained in any Loan Document (other than those covered by clause
(a) or (b) above) for 30 days after a Responsible Officer of such Loan Party
shall have become aware of such failure;
(d) any representation, warranty, certification or statement made or
deemed made by any Loan Party in
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any Loan Document or in any certificate, financial statement or other
document delivered pursuant thereto shall prove to have been incorrect in
any material respect when made (or deemed made);
(e) any Loan Party or any of its Subsidiaries shall fail to make any
payment in respect of any Material Financial Obligation when due or within
any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Indebtedness or enables (or,
with the giving of notice or lapse of time or both, would enable) the holder
of such Debt or any Person acting on such holder's behalf to accelerate the
maturity thereof;
(g) any Loan Party or any of its Subsidiaries (other than any
Abandoned Subsidiary) shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action to authorize
any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced against
a Loan Party or any Subsidiary of a Loan Party (other than an Abandoned
Subsidiary) seeking liquidation, reorganization or other relief with respect
to it or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against a Loan Party or any Subsidiary of a Loan
Party under the federal bankruptcy laws as now or hereafter in effect;
69
(i) a Loan Party or any of its Subsidiaries (other than an Abandoned
Subsidiary) shall admit its inability to pay its debts as and when they fall
due or becomes or is deemed to be unable to pay its debts or insolvent, or
convenes a meeting for the purpose of proposing, or otherwise proposes or
enters into, any composition or arrangement with its creditors or any group
or class thereof, or anything analogous to, or having a substantially
similar effect to, any of the events specified in this paragraph or in
paragraph (g) or (h) above occurs in any jurisdiction;
(j) any member of the ERISA Group shall fail to pay when due an amount
or amounts aggregating in excess of $1,000,000 which it shall have become
liable to pay under Title IV of ERISA; or notice of intent to terminate any
Plan which is then a Material Plan shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any combination of
the foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate, to impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed
to administer any Plan which is then a Material Plan; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Plan which is then a Material Plan must be terminated;
or there shall occur a complete or partial withdrawal from, or a default,
within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or
more Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation, that is, an obligation or
series of obligations payable within 12 months, in excess of $1,000,000;
(k) a judgment or order for the payment of money in excess of
$2,000,000 shall be rendered against the Borrower or any Subsidiary and such
judgment or order shall continue unsatisfied and unstayed for a period of 30
days;
(l) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended), other than any
employee stock ownership plan maintained for the benefit of the employees of
the Borrower and other than Hercules Incorporated as described in the proxy
statement dated
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July 3, 1996 regarding the annual meeting of stockholders of the Borrower,
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of 35%
or more of the outstanding shares of common stock of the Borrower; or,
during any period of 12 consecutive calendar months, individuals (i) who
were directors of the Borrower on the first day of such period or (ii) whose
nomination for election to the board of directors of the Borrower was
recommended or approved by a vote of at least a majority of the directors
then still in office who were directors of the Borrower on the first day of
such period, shall cease to constitute a majority of the board of directors
of the Borrower;
(m) any levy, seizure or attachment of or on any material portion of
the Collateral shall be made, or the loss, theft, substantial damage to or
destruction of a material portion of any Collateral shall occur, the value
of which not fully payable through insurance or compensated for pursuant to
a condemnation award shall equal or exceed $5,000,000 in the aggregate;
(n) any Lien created by any of the Security Documents shall at any
time fail to constitute a valid and (to the extent required by the Security
Documents) perfected Lien on any material portion of the Collateral
purported to be subject thereto, securing the obligations purported to be
secured thereby, with the priority required by the Loan Documents, or the
Borrower or any other Loan Party shall so assert in writing; or
(o) the Subsidiary Guaranty Agreement shall at any time cease to be a
valid and binding obligation of any Subsidiary Loan Party, or the Borrower
or any Subsidiary Loan Party shall so assert in writing;
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent at the request of
Lenders representing at least 50.01% of the sum of (a) the aggregate principal
amount of outstanding Loans and (b) the aggregate principal amount of
outstanding loans under the New Credit Agreement at such time, declare the Loans
then outstanding to be due and payable in whole (or in
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part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in clause (g) or (h)
of this Article, the principal of the Loans then outstanding, together with
accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly
72
contemplated by the Loan Documents that the Administrative Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02), and (c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
wilful misconduct. The Administrative Agent shall not be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken
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or not taken by it in accordance with the advice of any such counsel,
accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor the
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, with the consent of the
Borrower (which consent shall not unreasonably be withheld and may not be
withheld if an Event of Default is continuing, but which may in any event be
withheld (regardless of whether an Event of Default is continuing) if (a) such
proposed successor Administrative Agent fails to deliver evidence reasonably
satisfactory to the Borrower that such proposed successor Administrative Agent
is not a Foreign Person and (b) the Borrower in good faith concludes that the
appointment of such proposed successor Administrative Agent could result in a
violation of any law, rule guideline or regulation, or a violation of,
revocation of, failure to renew or modification of any, order, facility security
clearance or permit), to appoint a successor. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank, and which shall
not be a Foreign Person. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
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Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇, Attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent, to The Chase Manhattan Bank, Loan
and Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), with
a copy to The Chase Manhattan Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇,
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Attention of ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(c) if to any Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Loan Party or Loan Parties that are
parties thereto, in each case with the consent of the Required Lenders; provided
that no such agreement shall (i) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (ii) postpone the
scheduled date of payment of the principal amount of any Loan, or any interest
thereon, or any fees
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payable hereunder, or reduce the amount of, waive or excuse any such payment,
without the written consent of each Lender affected thereby, (iii) change
Section 2.12(b) or (c) in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender, (iv)
change any of the provisions of this Section or the definition of "Required
Lenders" or any other provision of any Loan Document specifying the number or
percentage of Lenders or lenders under the New Credit Agreement required to
waive, amend or modify any rights thereunder or make any determination or grant
any consent thereunder, without the written consent of each Lender and each
lender under the New Credit Agreement, (v) release all or substantially all of
the Subsidiary Loan Parties from their Guarantees under the Subsidiary Guaranty
Agreement (except as expressly provided in the Agreement), or limit their
liability in respect of such Guarantee, without the written consent of each
Lender, (vi) release all or substantially all of the Collateral from the Liens
of the Security Documents, without the written consent of each Lender or (vii)
adversely affect the rights, obligations or protections of lenders under the New
Credit Agreement without having a similar and ratable adverse affect on the
Loans, without the written consent of lenders under the New Credit Agreement
holding a majority of the total Revolving Exposure (as defined in the New Credit
Agreement), the outstanding Term Loans (as defined in the New Credit Agreement,
and the unused Commitments (as defined in the New Credit Agreement); provided
further that (A) no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent without the prior written consent
of the Administrative Agent and (B) any waiver, amendment or modification of
this Agreement that by its terms affects the rights or duties of the lenders
under the New Credit Agreement (but not the Lenders) may be effected by an
agreement or agreements in writing entered into by the Borrower and the
requisite percentage in interest of the Lenders or the lenders under the New
Credit Agreement, as the case may be.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication of the credit facilities provided for herein, the preparation
and administration of the Loan Documents or any amendments, modifications or
waivers of the provisions thereof (whether or not the
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transactions contemplated hereby or thereby shall be consummated) and (ii) all
out-of-pocket expenses incurred by the Administrative Agent or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender, in connection with the enforcement or
protection of its rights in connection with the Loan Documents, including its
rights under this Section, or in connection with the Loans made hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans.
(b) The Borrower shall indemnify the Administrative Agent and each
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an "Indemnitee") against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses, including
the fees, charges and disbursements of any counsel for any Indemnitee, incurred
by or asserted against any Indemnitee arising out of, in connection with, or as
a result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby, the performance by the parties to
the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or the use of the proceeds therefrom, (iii) any Environmental
Liability related in any way to the Borrower or any of its Subsidiaries, or (iv)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee or any officer, director, employee, affiliate, agent or controlling
person of such Indemnitee (or of an institution of which such Indemnitee is an
officer, director, employee, affiliate, agent or controlling person).
(c) To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative Agent under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent such
Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is
78
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent in its capacity
as such. For purposes hereof, a Lender's "pro rata share" shall be determined
based upon its share of the sum of the total Revolving Exposures (as defined in
the New Credit Agreement), outstanding Term Loans (as defined in the New Credit
Agreement), unused Commitments (as defined in the New Credit Agreement) and
Loans at the time.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void) and except that no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except in compliance with the remaining
paragraphs of this Section 9.04. Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
the Loans at the time owing to it); provided that (i) except in the case of an
assignment to a Lender or an Affiliate of a Lender, each of the Borrower and the
Administrative Agent
79
must give their prior written consent to such assignment (which consent shall
not be unreasonably withheld and, in the case of the Borrower, may not be
withheld if an Event of Default is continuing, but which may in any event be
withheld by the Borrower (regardless of whether an Event of Default is
continuing) if (x) such proposed assignee fails to deliver evidence reasonably
satisfactory to the Borrower that such assignee is not a Foreign Person and (y)
the Borrower in good faith concludes that such assignment could result in a
violation of any law, rule or regulation, or a violation of, revocation of,
failure to renew or modification of any order, facility security clearance or
permit), (ii)except in the case of an assignment to a Lender or an Affiliate of
a Lender or an assignment of the entire remaining amount of the assigning
Lender's Loans, the amount of the Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 unless each of the Borrower and the Administrative
Agent otherwise consent, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, except that this clause (iii) shall not be
construed to prohibit the assignment of a proportionate part of all the
assigning Lender's rights and obligations in respect of Loans, (iv)
simultaneously with each assignment of rights and obligations in respect of
Loans, the assigning Lender shall assign to the same assignee a proportionate
part of all such Lender's rights and obligations as a lender in respect of
Closing Date Term Loans (as defined in the New Credit Agreement) under the New
Credit Agreement, (v) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500, and (vi) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent and the Borrower an
Administrative Questionnaire; and provided further that any consent of the
Borrower otherwise required under this paragraph shall not be required if an
Event of Default has occurred and is continuing, but which may in any event be
withheld (regardless of whether an Event of Default is continuing) if (x) such
proposed assignee fails to deliver evidence reasonably satisfactory to the
Borrower that such assignee is not a Foreign Person and (y) the Borrower in
good faith concludes that such assignment could result in a violation of any
law, rule or regulation, or a violation of, revocation of, failure to
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renew or modification of any order, facility security clearance or permit.
Subject to acceptance and recording thereof pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and
Acceptance the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights
and obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment
and Acceptance, be released from its obliga tions under this Agreement (and,
in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease
to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.09, 2.10, 2.11 and 9.03). Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders and principal amount of
the Loans owing to each Lender pursuant to the terms hereof from time to time
(the "Register"). The entries in the Register shall be conclusive, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in
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the Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other
institutions (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of the Loans owing
to it); provided that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents (and shall not
grant such Participant any direct or indirect vote on or veto power with respect
to any of the foregoing) and shall contain an agreement by the Participant to be
bound by the provisions of Section 9.12; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in clause
(i), (ii), (iii), (v), (vi) or (vii) of the first proviso to Section 9.02(b)
that affects such Participant. Subject to paragraph (f) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.09, 2.10 and 2.11 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.09, 2.10 or 2.11 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent.
(g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to
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a Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid. The provisions of
Sections 2.09, 2.10, 2.11 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans or the termination of this
Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an
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executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) Pursuant to NYGOL Section.5-1401, this Agreement shall be construed
in accordance with and governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to any
Loan Document, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
New York
84
State or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or
any other Loan Document shall affect any right that the Administrative Agent or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against the Borrower or its properties in
the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
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Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender
on a nonconfidential basis from a source other than a Loan Party. For the
purposes of this Section, "Information" means all information received from any
Loan Party relating to any Loan Party or its business, operations, assets,
liabilities, financial condition or position or results of operations or
prospects other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Loan Party. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the
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"Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") which may
be contracted for, charged, taken, received or reserved by the Lender holding
such Loan in accordance with applicable law, the rate of interest payable in
respect of such Loan hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan but
were not payable as a result of the operation of this Section shall be cumulated
and the interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.
SECTION 9.14. Information Concerning Foreign Persons. Each Lender that
is or becomes a Foreign Person after the Closing Date, shall deliver to each of
the Borrower and the Administrative Agent promptly after becoming a Foreign
Person, written notice that such Lender is or has become a Foreign Person and
such other information concerning the ownership, jurisdiction of organization or
citizenship of such Lender or any Person directly or indirectly controlling such
Lender as the Borrower may reasonably request to comply with any applicable
laws, rules, regulations and orders (including any applicable laws, rules,
regulations and orders relating to national security). If, upon receipt of any
such notice, the Borrower in good faith concludes that, as a consequence of such
Lender's being or becoming a Foreign Person, there could result a violation of
any law, rule or regulation, or a violation of, revocation of, failure to renew
or modification of any order, facility security clearance or permit, the
Borrower shall have the right, with the assistance of the Administrative Agent,
to seek a substitute lender or lenders reasonably satisfactory to the
Administrative Agent and the Borrower (which may be one or more of the Lenders)
to purchase the Loans of such Lender, and the Borrower, the Administrative
Agent, such Lender and substitute lender or lenders shall execute and deliver an
appropriately completed Assignment and Acceptance pursuant to Section 9.04(b)
hereof to effect the assignment of rights
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to and assumption of obligations by such substitute lender or lenders.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
ALLIANT TECHSYSTEMS INC.,
by
-------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent,
by
-------------------------
Name:
Title:
[OTHER BANKS],
by
-------------------------
Name:
Title:
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