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Execution Copy
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CREDIT AGREEMENT
Dated as of January 20, 1998
among
XXXXXXX DENVER MACHINERY INC.,
THE LENDERS PARTY HERETO
and
THE FIRST NATIONAL BANK OF CHICAGO,
individually, as LC Issuer and as Agent for the Lenders
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TABLE OF CONTENTS
ARTICLE I: DEFINITIONS 1
ARTICLE II: THE CREDITS 16
2.1. Commitment; Dollar Equivalent Calculations 16
2.2. Repayments and Prepayments of Advances 17
2.3. Ratable Loans 18
2.4. Types of Advances 18
2.5. Facility Fee; Reductions in Aggregate Commitment 18
2.6. Minimum Amount of Each Advance; Maximum Interest Periods 18
2.7. Minimum Amounts for Optional Principal Payments 18
2.8. Method of Selecting New Advances 18
2.9. Conversion and Continuation of Outstanding Advances 19
2.10. Changes in Interest Rate, etc. 20
2.11. Rates Applicable After Default 20
2.12. Method of Payment 20
2.13. Notes; Telephonic Notices 21
2.14. Interest Payment Dates; Interest and Fee Basis 21
2.15. Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions 22
2.16. Lending Installations 22
2.17. Non-Receipt of Funds by the Agent 22
2.18. Withholding Tax Exemption 23
2.19. Facility LCs 23
2.20. Transitional Letter of Credit Provisions 28
2.21. Judgment Currency 28
2.22. Market Disruption 28
ARTICLE III: CHANGE IN CIRCUMSTANCES 29
3.1. Yield Protection 29
3.2. Changes in Capital Adequacy Regulations 29
3.3. Availability of Types of Advances 30
3.4. Funding Indemnification 30
3.5. Lender Statements; Survival of Indemnity 30
3.6. Replacement Lenders 31
ARTICLE IV: CONDITIONS PRECEDENT 31
4.1. Initial Credit Extension 31
4.2. Each Credit Extension 33
ARTICLE V: REPRESENTATIONS AND WARRANTIES 33
5.1. Corporate Existence and Standing 33
5.2. Authorization and Validity 34
5.3. No Conflict; Government Consent 34
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5.4. Financial Statements 34
5.5. Material Adverse Change 34
5.6. Taxes 34
5.7. Litigation and Contingent Obligations 35
5.8. Subsidiaries 35
5.9. ERISA 35
5.10. Accuracy of Information 35
5.11. Regulation U 35
5.12. Material Agreements 35
5.13. Compliance With Laws 35
5.14. Ownership of Property 36
5.15. Labor Matters 36
5.16. Investment Company Act 36
5.17. Public Utility Holding Company Act 36
ARTICLE VI: COVENANTS 36
6.1. Financial Reporting 36
6.2. Use of Proceeds 38
6.3. Notice of Default 38
6.4. Conduct of Business 38
6.5. Taxes 38
6.6. Insurance 39
6.7. Compliance with Laws 39
6.8. Maintenance of Property 39
6.9. Inspection 39
6.10. Subsidiaries 39
6.11. Dividends 40
6.12. Indebtedness 40
6.13. Merger 41
6.14. Sale of Assets 41
6.15. Investments and Acquisitions; Guaranty or Pledge Documentation
for New Subsidiaries 41
6.16. Contingent Obligations and Off Balance Sheet Liabilities 43
6.17. Liens 44
6.18. Rentals 46
6.19. Affiliates 46
6.20. Minimum Consolidated Interest Coverage Ratio 46
6.21. Maximum Consolidated Debt to Cash Flow Ratio 46
6.22. Minimum Consolidated Net Worth 46
6.23. Capital Expenditures 46
6.24. Pledge Agreements. 47
ARTICLE VII: DEFAULTS 47
ARTICLE VIII: ACCELERATION, DEFAULTING LENDERS, WAIVERS, AMENDMENTS AND REMEDIES 49
8.1. Remedies 49
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8.2. Defaulting Lender 50
8.3. Amendments 51
8.4. Preservation of Rights 52
ARTICLE IX: GENERAL PROVISIONS 53
9.1. Survival of Representations 53
9.2. Governmental Regulation 53
9.3. Taxes 53
9.4. Headings 53
9.5. Entire Agreement 53
9.6. Several Obligations; Benefits of this Agreement 53
9.7. Expenses; Indemnification 53
9.8. Numbers of Documents 54
9.9. Accounting 54
9.10. Severability of Provisions 54
9.11. Nonliability of Lenders 54
9.12. CHOICE OF LAW 55
9.13. CONSENT TO JURISDICTION 55
9.14. WAIVER OF JURY TRIAL 55
9.15. Confidentiality 55
ARTICLE X: THE AGENT 56
10.1. Appointment 56
10.2. Powers 56
10.3. General Immunity 56
10.4. No Responsibility for Loans, Recitals, etc. 56
10.5. Action on Instructions of Lenders 56
10.6. Employment of Agents and Counsel 57
10.7. Reliance on Documents; Counsel 57
10.8. Agent's Reimbursement and Indemnification 57
10.9. Rights as a Lender 57
10.10. Lender Credit Decision 57
10.11. Successor Agent 58
10.12. Agent's Fees 58
10.13. Execution of Guaranty Collateral Documents 58
10.14. Collateral and Guaranty Releases 59
ARTICLE XI: SETOFF; RATABLE PAYMENTS 59
11.1. Setoff 59
11.2. Ratable Payments 59
11.3. Relations Among Lenders 59
ARTICLE XII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATION 59
12.1. Successors and Assigns 59
12.2. Participation 60
12.2.1. Permitted Participants; Effect 60
12.2.2. Voting Rights 60
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12.2.3. Benefit of Setoff 60
12.3. Assignments 61
12.3.1. Permitted Assignments 61
12.3.2. Effect; Effective Date 61
12.3.3. Register 61
12.4. Dissemination of Information 62
12.5. Tax Treatment 62
ARTICLE XIII: NOTICES 62
13.1. Giving Notice 62
13.2. Change of Address 62
ARTICLE XIV: COUNTERPARTS 62
EXHIBIT "A": NOTE A-1
EXHIBIT "B": SUBSIDIARY GUARANTY B-1
EXHIBIT "C": FORM OF LEGAL OPINION C-1
EXHIBIT "D": COMPLIANCE CERTIFICATE D-1
EXHIBIT "E": LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION E-1
EXHIBIT "F": ASSIGNMENT AGREEMENT F-1
SCHEDULE "I": EUROCURRENCY PAYMENT OFFICES 2-1
SCHEDULE "1": SUBSIDIARIES AND OTHER INVESTMENTS 2-1
SCHEDULE "2": INDEBTEDNESS AND LIENS 2-1
SCHEDULE "3": EXISTING LCs 3-1
SCHEDULE "4": LITIGATION AND ENVIRONMENTAL MATTERS 3-2
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CREDIT AGREEMENT
This Agreement, dated as of January 20, 1998, is among Xxxxxxx Denver
Machinery Inc., the Lenders and The First National Bank of Chicago, as an LC
Issuer and as Agent for the Lenders. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which
the Borrower or any of its Subsidiaries (i) acquires any going business or
all or substantially all of the assets of any firm, corporation or division
thereof (other than the Borrower or any of its Subsidiaries), whether
through purchase of assets, a reorganization, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power
for the election of directors (other than securities having such power only
by reason of the happening of a contingency) or a majority (by percentage or
voting power) of the outstanding partnership interests of a partnership or
membership interests of a limited liability company (other than a Subsidiary
formed for the purpose of carrying forward a business theretofore operated by
the Borrower or any of its Subsidiaries).
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by the Lenders to the Borrower of the same
Type and, in the case of Eurocurrency Advances, in the same currency and for
the same Eurocurrency Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A
Person shall be deemed to control another Person if the controlling Person
owns 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of stock, by contract or
otherwise.
"Agent" means The First National Bank of Chicago in its capacity as
contractual representative for the Lenders pursuant to Article X, and not in
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its individual capacity as a Lender, and any successor Agent appointed
pursuant to Article X.
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"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof.
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"Aggregate Commitment Reduction Notice" is defined in Section 2.5.
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"Aggregate Outstanding LC Exposure" means, as of any day, the aggregate
of the Outstanding LC Exposure of all the Lenders.
"Aggregate Outstanding Credit Exposure" means, as of any day, the
aggregate of the Outstanding Credit Exposure of all the Lenders.
"Agreed Currencies" means (i) Dollars, (ii) so long as such currencies
remain Eligible Currencies, Pounds Sterling, French Francs, Deutsche Marks,
Canadian Dollars, Swiss Francs, Japanese Yen, Italian Lire and Dutch
Guilders; and (iii) any other Eligible Currency which the Borrower requests
the Agent to include as an Agreed Currency hereunder and which is acceptable
to one-hundred percent (100%) of the Lenders; provided that the Agent shall
promptly notify each Lender of each such request and each Lender shall be
deemed not to have agreed to each such request unless its written consent
thereto has been received by the Agent within five (5) Business Days from the
date of such notification by the Agent to such Lender.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect in the United States from time to time; provided,
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however, that if the Borrower notifies the Agent that the Borrower wishes to
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amend any covenant in Article VI to eliminate the effect of any change in
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generally accepted accounting principles on the operation of such covenant
(or if the Agent notifies the Borrower that the Required Lenders wish to
amend Article VI for such purpose), then the Borrower's compliance with such
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covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the
Borrower and the Required Lenders.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day and (ii) the
sum of Federal Funds Effective Rate for such day plus 1/2% per annum.
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"Applicable Facility Fee" means for any day, the percentage rate per
annum set forth below opposite the Consolidated Debt to Cash Flow Ratio in
effect on such day:
Consolidated Debt to Applicable
Cash Flow Ratio: Facility Fee:
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Less than But Greater
than
or Equal to
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1.0 -- .15%
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2.0 1.0 .175%
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3.0 2.0 .20%
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-- 3.0 .25%
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The Applicable Facility Fee shall initially be 0.175% per annum and shall be
adjusted (upward or downward) effective three Business Days after the Agent
has received (and such adjustment, if any, shall be based upon) the
Borrower's compliance certificate delivered with the Borrower's financial
statements pursuant to clauses (i) and (ii) of Section 6.1.
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"Applicable Margin" means, with respect to a Eurocurrency Advance for
any day, the percentage rate per annum set forth below opposite the
Consolidated Debt to Cash Flow Ratio in effect on such day:
Consolidated Debt to
Cash Flow Ratio: Applicable Margin:
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Less than But Greater Eurocurrency Loans
than
or Equal to
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1.0 -- .25%
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2.0 1.0 .325%
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3.0 2.0 .55%
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-- 3.0 .75%
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The Applicable Margin for new as well as outstanding Eurocurrency Advances
initially be 0.325% per annum and shall be adjusted (upward or downward)
effective three Business Days after the Agent has received (and such
adjustment, if any, shall be based upon) the Borrower's compliance
certificate delivered with the Borrower's financial statements pursuant to
clauses (i) and (ii) of Section 6.1.
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"Approximate Equivalent Amount" of any currency with respect to any
amount of Dollars shall mean the Equivalent Amount of such currency with
respect to such amount of Dollars at such date, rounded up to the nearest
amount of such currency as determined by the Agent from time to time.
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"Arranger" means First Chicago Capital Markets, Inc.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the President, the Chief Executive
Officer or the Chief Financial Officer of the Borrower, acting singly;
provided, that with respect to Borrowing Notices, Conversion/Continuation
Notices, requests for the issuance or modifications of Facility LCs,
commitment reduction notices and prepayment notices, the Treasurer of the
Borrower, acting singly, shall also be deemed an Authorized Officer.
"Available Aggregate Commitment" means, for any day, the Aggregate
Commitment then in effect minus the sum of (i) the aggregate principal amount
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of the outstanding Advances and (ii) the Aggregate Outstanding LC Exposure.
"Borrower" means Xxxxxxx Denver Machinery Inc., a Delaware corporation,
and its successors and permitted assigns.
"Borrower Credit Documents" means this Agreement, the Notes, any Pledge
Agreements executed by the Borrower and any and all Facility LC Application
Agreements.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
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"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurocurrency Advances, a day (other than a Saturday or Sunday)
on which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which
dealings in United States Dollars and the other Agreed Currencies are carried
on in the London interbank market and (ii) for all other purposes, a day
(other than a Saturday or Sunday) on which banks generally are open in
Chicago and New York for the conduct of substantially all of their commercial
lending activities.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
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"Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 30% or more of the outstanding shares of voting
stock of the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral Documents" means, collectively, each of the Pledge
Agreements, together with the documents, instruments and agreements executed
in connection therewith, including, without limitation, any collateral
sharing, intercreditor or collateral trust agreement executed with the Senior
Noteholders or with respect to the Indebtedness evidenced by the Senior
Notes.
"Commission" means the Securities and Exchange Commission, an agency of
the United States government, or its successor.
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans not exceeding the amount set forth opposite its signature below or
as set forth in any Notice of Assignment relating to any assignment that has
become effective pursuant to Section 12.3.2, as such amount may be modified
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from time to time pursuant to the terms hereof.
"Condemnation" is defined in Section 7.8.
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"Consolidated Capital Expenditures" means, for any period of four
consecutive fiscal quarters of the Borrower, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
that portion of Capital Leases which is capitalized on the consolidated
balance sheet of the Borrower and its Subsidiaries) by the Borrower and its
Subsidiaries during that period that, in conformity with Agreement Accounting
Principles, are required to be included in or reflected by the property,
plant or equipment or similar fixed asset accounts reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries.
"Consolidated Cash Flow" means, for any period of four consecutive
fiscal quarters of the Borrower, the sum, without duplication, of the amounts
for such period of (i) Consolidated Net Income, (ii) Consolidated Interest
Expense, (iii) charges against income for all domestic and foreign, federal,
state and local taxes, (iv) depreciation and amortization expense, (v) other
non-cash charges and expenses and (vi) any increases in the LIFO reserve;
minus any decreases in the LIFO reserve; all as determined on a consolidated
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basis for the Borrower and its Subsidiaries in conformity with Agreement
Accounting Principles.
"Consolidated Debt to Cash Flow Ratio" means, as of the last day of any
fiscal quarter of the Borrower, the ratio of (i) the aggregate amount of all
Consolidated Debt as of such day to (ii) Consolidated Cash Flow for the
period of four fiscal quarters ending on such date.
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"Consolidated Income Before Interest and Taxes" means, for any period
of four consecutive fiscal quarters of the Borrower, the sum, without
duplication, of the amounts for such period of (i) Consolidated Net Income,
(ii) Consolidated Interest Expense and (iii) charges against income for all
domestic and foreign federal, state and local taxes; all determined on a
consolidated basis for the Borrower and its Subsidiaries in accordance with
Agreement Accounting Principles.
"Consolidated Debt" means the aggregate amount of all Indebtedness
(other than Hedging Obligations) of the Borrower and its Subsidiaries as of a
referenced date.
"Consolidated Interest Coverage Ratio" means, for any period of four
consecutive fiscal quarters of the Borrower, the ratio of (i) Consolidated
Income Before Interest and Taxes for such period to (ii) Consolidated
Interest Expense for such period.
"Consolidated Interest Expense" means, for any period of four
consecutive fiscal quarters of the Borrower, total interest expense (whether
paid or accrued) of the Borrower and its Subsidiaries for such period
determined in accordance with Agreement Accounting Principles including,
without limitation, such interest expense as may be attributable to
Capitalized Leases, as well as all commissions, discounts and other fees and
charges owed with respect to Letters of Credit and net costs (net of any
revenues) under any interest rate swap, exchange or cap agreements.
"Consolidated Net Income" means, for any fiscal quarter of the
Borrower, the positive consolidated net income of the Borrower and its
Subsidiaries for such quarter determined in accordance with Agreement
Accounting Principles; provided, that there shall be excluded (i) the income
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(or loss) of any Affiliate of the Borrower or other Person (other than a
Subsidiary of the Borrower) in which any Person (other than the Borrower or
any of its Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to the Borrower, or
any of its Subsidiaries by such Affiliate or other Person during such period,
(ii) the income (or loss) of any Person accrued prior to the date it becomes
a Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries or that Person's assets are acquired by
the Borrower or any of its Subsidiaries and (iii) the income of any
Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary.
"Consolidated Net Worth" means, as of any date of determination, the
consolidated total stockholders' equity (including capital stock, additional
paid-in capital and retained earnings) of the Borrower and its Subsidiaries
determined in accordance with Agreement Accounting Principles.
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"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes
or is contingently liable upon, the obligation or liability of any other
Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any creditor of
such other Person against loss, including, without limitation, any contingent
reimbursement obligations of such Person with respect to any Letter of
Credit, as well as any comfort letter, operating agreement or take-or-pay
contract (but, in the case of each such Contingent Obligation, only to the
extent that a monetary value can reasonably be attributed thereto; it being
understood, for the avoidance of doubt, however, that with respect to any
Contingent Obligation which is either a guaranty of a monetary obligation of
another Person or a reimbursement obligation with respect to a Letter of
Credit, the amount of such Contingent Obligation shall be deemed equal to the
amount of such monetary obligation or Letter of Credit, as the case may be).
"Conversion/Continuation Notice" is defined in Section 2.9.
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"Controlled Group" means 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 or any of its Subsidiaries,
are treated as a single employer under Section 414 of the Code.
"Xxxxxx" means Xxxxxx Industries, Inc., an Ohio corporation.
"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest announced by First Chicago from time to time, changing
when and as said corporate base rate changes.
"Credit Documents" means, collectively, the Borrower Credit Documents,
the Collateral Documents and the Subsidiary Guaranties.
"Credit Extension" means either the making on an Advance or the
issuance of or amendment to a Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"Cure Loan" is defined in Section 8.2 hereof.
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"Default" means an event described in Article VII.
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"Dollar" and "$" means the lawful currency of the United States of
-
America.
"Dollar Amount" of any currency at any date shall mean (i) the amount
of such currency if such currency is Dollars or (ii) the Equivalent Amount of
Dollars if such currency is any currency other than Dollars, calculated on
the basis of the arithmetical mean of the buy and sell spot rates of exchange
of the Agent for such Currency on the London market at 11:00 a.m., London
time, two Business Days prior to the date on which such amount is to be
determined.
"Eligible Currency" means any currency other than Dollars that is
readily available, freely traded, in which deposits are customarily offered
to banks in the London interbank market, convertible into Dollars in the
international interbank market available to the Lenders in such market and as
to which an Equivalent Amount may be readily calculated. If, after the
designation by the Lenders of any currency as an Agreed Currency, currency
control or other exchange regulations are imposed in the country in which
such currency is issued with the result that different types of such currency
are introduced, such country's currency is, in the determination of the
Agent, (i) no longer readily available or freely traded or (ii) as to which,
in the determination of the Agent, an Equivalent Amount is not readily
calculable ((i) and (ii) a "Disqualifying Event"), then the Agent shall
promptly notify the Lenders and the Borrower, and such country's currency
shall no longer be an Agreed Currency until such time as the Disqualifying
Event(s) no longer exist, but in any event within five (5) Business Days of
receipt of such notice from the Agent, the Borrower shall repay all Loans in
such currency to which the Disqualifying Event applies or convert such Loans
into Loans in Dollars or another Agreed Currency, subject to the other terms
contained in Article II.
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"Equivalent Amount" of any Agreed Currency with respect to any amount
of Dollars at any date shall mean the equivalent in such Agreed Currency of
such amount of Dollars, calculated on the basis of the arithmetical mean of
the buy and sell spot rates of exchange of the Agent for such other Agreed
Currency at 11:00 a.m., London time, two Business Days prior to the date on
which such amount is to be determined.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurocurrency Advance" means an Advance which bears interest at a
Eurocurrency Rate.
"Eurocurrency Base Rate" means, with respect to a Eurocurrency Advance
for the relevant Eurocurrency Interest Period, the rate of interest per annum
determined by the Agent to be the rate at which deposits in the applicable
Agreed Currency are offered by First Chicago to first-class banks in the
London interbank market at approximately 11 a.m. (London time) two Business
Days prior to the first day of such Eurocurrency Interest Period, in the
approximate amount of First Chicago's relevant Eurocurrency Loan and having a
maturity approximately equal to such Eurocurrency Interest Period.
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"Eurocurrency Interest Period" means, with respect to a Eurocurrency
Advance, a period as Borrower may choose, of one, two, three or six months
commencing on a Business Day selected by the Borrower on which a Eurocurrency
Advance is made to Borrower pursuant to this Agreement. Such Eurocurrency
Interest Period shall end on (but exclude) the day which corresponds
numerically to such date one, two, three or six months thereafter, provided,
however, that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month, such Eurocurrency Interest Period
shall end on the last Business Day of such next, second, third or sixth
succeeding month. If a Eurocurrency Interest Period would otherwise end on a
day which is not a Business Day, such Eurocurrency Interest Period shall end
on the next succeeding Business Day, provided, however, that if said next
succeeding Business Day falls in a new calendar month, such Eurocurrency
Interest Period shall end on the immediately preceding Business Day.
"Eurocurrency Loan" means a Loan which bears interest at a Eurocurrency
Rate.
"Eurocurrency Payment Office" of the Agent shall mean, for each of the
Agreed Currencies, the office, branch or affiliate of the Agent, specified as
the "Eurocurrency Payment Office" for such Agreed Currency in Schedule I
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hereto or such other office, branch, affiliate or correspondent bank of the
Agent, as it may from time to time specify to the Borrower and each Lender as
its Eurocurrency Payment Office.
"Eurocurrency Rate" means, with respect to a Eurocurrency Advance for
the relevant Eurocurrency Interest Period, a rate per annum equal to the sum
of (i) the quotient of (a) the Eurocurrency Base Rate applicable to such
Eurocurrency Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Eurocurrency Interest
Period, plus (ii) the Applicable Margin. The Eurocurrency Rate shall be
rounded to the next higher multiple of 1/16 of 1% if the rate is not such a
multiple.
"Existing Credit Agreement" means that certain Credit Agreement dated
as of November 30, 1995 among the Borrower, the lenders named therein and
The First National Bank of Chicago, as agent for said lenders (as it may have
been amended, supplemented or otherwise modified from time to time) and
including any and all related guaranties and collateral documents.
"Existing Indebtedness" means any and all Indebtedness of the Borrower
and its Subsidiaries under the Existing Credit Agreement.
"Existing LCs" means each of the Letters of Credit issued under and
pursuant to the Existing Credit Agreement and which are described in
Schedule"3" hereto.
"Facility LC" means each Existing LC and each Letter of Credit issued
under Section 2.19(a).
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"Facility LC Application Agreement" means each and every application
agreement or other instrument or agreement requested by the LC Issuer
pursuant to Section 2.19(c).
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"Facility Termination Date" means January 20, 2003.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not
a Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations at approximately 10:00
a.m. (Chicago time) on such day on such transactions received by the Agent
from three Federal funds brokers of recognized standing selected by the Agent
in its sole discretion.
"First Chicago" means The First National Bank of Chicago in its
individual capacity, and its successors.
"Floating Rate" means, for any day, a rate per annum equal to the
Alternate Base Rate, changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"Foreign Subsidiary" is defined in Section 6.10.
------------
"Hedging Obligations" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of
the foregoing.
"Indebtedness" of a Person means, without duplication, such Person's
(i) obligations for borrowed money, (ii) obligations representing the
deferred purchase price of Property or services (other than accounts payable
arising in the ordinary course of such Person's business payable on
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terms customary in the trade), (iii) obligations, whether or not assumed,
secured by Liens or payable out of the proceeds or production from property
now or hereafter owned or acquired by such Person, (iv) obligations which are
evidenced by notes, acceptances, or other instruments, (v) Capitalized Lease
Obligations, (vi) Hedging Obligations, (vii) Contingent Obligations and
(viii) Off Balance Sheet Liabilities.
"Intellectual Property" means (i) any and all intangible personal
property consisting of intellectual property, whether or not registered with
any governmental entity, including, without limitation, franchises, licenses,
patents, technology and know-how, copyrights, trademarks, trade secrets,
service marks, logos and trade names and (ii) any and all contract rights
(including, without limitation, applications for governmental registrations,
license agreements, trust agreements and assignment agreements) creating,
evidencing or conveying an interest or right in or to any of the intellectual
property described in the preceding clause (i).
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit, deposit account (in the
nature of, or similar to, a bank account) or contribution of capital by such
Person to any other Person or any investment in, or purchase or other
acquisition of, the stock, partnership interests, notes, debentures or other
securities of any other Person made by such Person.
"LC Issuer" means (i) First Chicago in its capacity as LC Issuer
hereunder with respect to each Facility LC issued by First Chicago and (ii)
any Lender (other than First Chicago) reasonably acceptable to the Agent, in
such Lender's capacity as LC Issuer hereunder with respect to any and all
Facility LCs issued by such Lender in its sole discretion upon the Borrower's
request. All references contained in this Agreement and the other Credit
Documents to the "LC Issuer" shall be deemed to apply equally to each of the
institutions referred to in clauses (i) and (ii) of this definition in their
respective capacities as LC Issuer of any and all Facility LCs issued by each
such institution.
"LC Obligations" means, at any time, the sum, without duplication, of
(i) the aggregate amount available for drawing under all Facility LCs
outstanding at such time plus (ii) the aggregate unpaid amount at such time
of all Reimbursement Obligations in respect of previous drawings made under
Facility LCs.
"LC Payment Date" is defined in Section 2.19(e).
---------------
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and permitted assigns.
"Lending Installation" means, with respect to a Lender, the LC Issuer
or the Agent, any office, branch, subsidiary or affiliate of such Lender, the
LC Issuer or the Agent.
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"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way
liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind
or nature whatsoever (including, without limitation, the interest of a vendor
or lessor under any conditional sale, Capitalized Lease or other title
retention agreement).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Material Adverse Effect" means a material adverse effect on (a) the
business, Property, condition (financial or otherwise) or results of
operations of the Borrower and its Subsidiaries taken as a whole, (b) the
ability of either the Borrower or any Subsidiary to perform its respective
obligations under the Credit Documents to which it is a party or (c) the
validity or enforceability of any of the Credit Documents or any material
rights or remedies of the Agent, the LC Issuer or the Lenders thereunder.
"Material Foreign Subsidiary(ies)" means each Foreign Subsidiary of the
Borrower (other than Xxxxxxx Denver Oy, Oy Tamrotor Ab and Tamrotor
Kompressorit Oy) the total assets of which exceed, at any time, five percent
(5.0%) of the consolidated total assets of the Borrower and its consolidated
Subsidiaries; provided, however, in the event that one of more of such
Foreign Subsidiaries are owned through another Foreign Subsidiary, then the
Agent shall notify the Borrower whether the "Material Foreign Subsidiary"
shall be the holding company Foreign Subsidiary or such holding company's
Foreign Subsidiary or Subsidiaries, it being the intention of the parties
that the Agent and the Lenders shall be provided with the maximum collateral
protection without resulting in any undistributed earnings of any such
Foreign Subsidiary being deemed to have been repatriated under the provisions
of the Code.
"Material Indebtedness" means any Indebtedness, or group of different
Indebtedness, in an aggregate principal amount of at least $1,000,000.
"Maximum Eurocurrency Amount" means $50,000,000 or such other greater
amount as the Borrower may from time to time designate in writing to the
Agent provided such designated amount shall be agreed to by the Required
Lenders.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
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"Non Pro Rata Loan" is defined in Section 8.2 hereof.
-----------
"Note" means a promissory note, in substantially the form of Exhibit
"A" hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Commitment, including any amendment,
modification, renewal or replacement of such promissory note.
"Note Purchase Agreement" means that certain Note Purchase Agreement
dated as of September 26, 1996 with respect to the Borrower's $35,000,000
7.32% Senior Notes due September 26, 2006 (the "Senior Notes"), as such Note
Purchase Agreement may be amended in accordance with the terms of Section
-------
4.1(j) hereto.
------
"Notice of Assignment" is defined in Section 12.3.2.
--------------
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, all LC Obligations, all accrued and unpaid fees and
all expenses, reimbursements, indemnities and other obligations of the
Borrower to the Lenders or to any Lender, the LC Issuer, the Agent or any
indemnified party hereunder arising under the Credit Documents (whether or
not allowed as a claim in any insolvency proceeding of the Borrower).
"Obligor Subsidiary" means (i) a Subsidiary which is a party to a
Subsidiary Guaranty or (ii) a Material Foreign Subsidiary.
"Off Balance Sheet Liabilities" of a Person means (a) any repurchase
obligation or liability of such Person or any of its Subsidiaries with
respect to accounts or notes receivable sold by such Person or any of its
Subsidiaries, (b) any liability under any sale and leaseback transactions
which do not create a liability on the consolidated balance sheet of such
Person prepared in accordance with the Agreement Accounting Principles, (c)
any liability under any financing lease or so-called "synthetic" lease
transaction, or (d) any obligations arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the consolidated
balance sheets of such Person and its Subsidiaries, prepared in accordance
with Agreement Accounting Principles.
"Outstanding Credit Exposure" means, as to any Lender at any time, the
sum of (i) the aggregate principal amount of its Loans outstanding at such
time plus (ii) its Outstanding LC Exposure at such time.
"Outstanding LC Exposure" means, as to any Lender at any time, an
amount equal to its Percentage of the LC Obligations at such time.
"Participants" is defined in Section 12.2.1.
--------------
"Payment Date" means the last day of each March, June, September and
December, commencing March 31, 1998.
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"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Percentage" means, with respect to each Lender, the percentage that
such Lender's Commitment constitutes of the Aggregate Commitment.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or
other entity or organization, or any government or political subdivision or
any agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of
the Code as to which the Borrower or any member of the Controlled Group may
have any liability.
"Pledge Agreement" means a Pledge Agreement on terms and conditions
reasonably acceptable to the Agent duly executed and delivered by the
Borrower to and in favor of the Agent, the LC Issuer and the Lenders, as it
may from time to time be amended, supplemented or otherwise modified with
respect to sixty-five percent (65%) of the outstanding capital stock of each
of the Borrower's Material Foreign Subsidiaries.
"Prepayment Notice" is defined in Section 2.2(b).
--------------
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased or operated by such Person, including, without limitation,
Intellectual Property.
"Purchasers" is defined in Section 12.3.1.
--------------
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks for the purpose of purchasing or
carrying margin stocks applicable to member banks of the Federal Reserve
System.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.19 to reimburse
------------
the LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
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"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any lease of Property having an original term (including any
required renewals or any renewals at the option of the lessor or lessee) of
one year or more (but does not include any amounts payable under Capitalized
Leases of such Person).
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a
Plan, excluding, however, such events as to which the PBGC by regulation
waived the requirement of Section 4043(a) of ERISA that it be notified within
30 days of the occurrence of such event, provided, however, that a failure to
meet the minimum funding standard of Section 412 of the Code and of Section
302 of ERISA shall be a Reportable Event regardless of the issuance of any
such waiver of the notice requirement in accordance with either Section
4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means, as of the date of determination thereof,
Lenders in the aggregate having at least 51% of the Aggregate Commitment;
provided, however, that, if any of the Lenders shall have failed to fund its
-------- -------
Percentage of any Loan requested by the Borrower which such Lenders are
obligated to fund under the terms of this Agreement and any such failure has
not been cured, then for so long as such failure continues, "Required
Lenders" means Lenders (excluding all Lenders whose failure to fund their
respective Percentage of such Revolving Loans have not been so cured) in the
aggregate having at least 51% of the Aggregate Commitment of such Lenders;
provided, further, however, that, if the Aggregate Commitment has been
-------- ------- -------
terminated pursuant to the terms of this Agreement, "Required Lenders" means
Lenders (without regard to such Lenders' performance of their respective
obligations hereunder) in the aggregate holding at least 51% of the Aggregate
Outstanding Credit Exposure.
"Reserve Requirement" means, with respect to and during a Eurocurrency
Interest Period, the maximum aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves) which is imposed under
Regulation D on Eurocurrency liabilities. For purposes of this definition,
all Eurocurrency Loans shall be deemed to be "Eurocurrency liabilities" as
defined in Regulation D.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Senior Notes" is defined in the definition of Note Purchase Agreement
above.
"Senior Noteholders" means each of the holders of the Senior Notes.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
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"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one
or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, association, joint venture or similar
business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Subsidiary Guaranty" means a Guaranty, substantially in the form of
Exhibit "B" hereto, duly executed and delivered by a Subsidiary of the
Borrower to and in favor of the Agent, the LC Issuer and the Lenders, as it
may from time to time be amended, supplemented or otherwise modified.
"Substantial Portion" means, with respect to the Property of any Person
and its Subsidiaries, Property which (i) represents more than 10% of the
consolidated assets of such Person and its Subsidiaries as would be shown in
the consolidated financial statements of such Person and its Subsidiaries as
at the beginning of the twelve-month period ending with the month in which
such determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of such Person and
its Subsidiaries as reflected in the financial statements referred to in
clause (i) above.
"Transferee" is defined in Section 12.4.
------------
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or Eurocurrency Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans, but only to the extent that such excess represents a potential
liability of the Borrower or a member of the Controlled Group to the PBGC or
such Plan under Title IV of ERISA.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities (except securities required as directors'
qualifying shares) of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, association, joint
venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.
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The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II: THE CREDITS
2.1. Commitment; Dollar Equivalent Calculations. Upon the
------------------------------------------
satisfaction of the conditions precedent contained in Sections 4.1 and 4.2.
------------ ---
from and including the date of this Agreement and prior to the Facility
Termination Date, each Lender severally agrees, on the terms and conditions
set forth in this Agreement, to make Loans to the Borrower from time to time
in an Agreed Currency; provided, that upon giving effect to each such Loan,
the sum of (i) the aggregate outstanding principal Dollar Amount of all Loans
made by such Lender plus (ii) such Lender's Outstanding LC Exposure, shall
not exceed such Lender's Commitment; provided, further, however, that upon
-------- ------- -------
giving effect to each Advance, the aggregate outstanding principal Dollar
Amount of all Eurocurrency Advances and Facility LCs in currencies other than
Dollars shall not exceed the Maximum Eurocurrency Amount. For so long as the
aggregate outstanding amount of Advances and the Aggregate Outstanding LC
Exposure is less than 95% of the Aggregate Commitment, the Dollar Amount of
each Eurocurrency Advance and Facility LC in an Agreed Currency other than
Dollars for all purposes under this Agreement (other than Section 2.21) shall
------------
be the Dollar Amount thereof as of the date such Eurocurrency Advance was
made or Facility LC was issued. For so long as the aggregate outstanding
amount of Advances and Aggregate Outstanding LC Exposure is equal to or
greater than 95% of the Aggregate Commitment, the Agent shall determine the
Dollar Amount of all Eurocurrency Advances and Facility LCs in Agreed
Currencies other than Dollars as of the first Business Day in each week, and
the availability of Loans and Facility LCs under this Agreement shall be
determined on the basis of such Dollar Amount most recently determined.
Subject to the terms of this Agreement, the Borrower may borrow, repay and
reborrow at any time prior to the Facility Termination Date. The Commitments
to lend hereunder shall expire on the Facility Termination Date.
2.2. Repayments and Prepayments of Advances.
--------------------------------------
(a) Repayment at Maturity. Any outstanding Advances and all other
---------------------
unpaid Obligations shall be paid in full by the Borrower on the Facility
Termination Date.
(b) Optional Prepayments. Subject to Section 3.4 and the
-------------------- -----------
requirements of Section 2.7, the Borrower may (a) following notice given to
-----------
the Agent by the Borrower, by not later than 10:00 a.m. (Chicago time) one
Business Day prior to the date of the proposed prepayment, such notice
specifying the aggregate principal amount of and the proposed date of the
prepayment (the "Prepayment Notice"), and if such notice is given the
Borrower shall, prepay the outstanding principal amounts of the Floating Rate
Loans comprising part of the same Advance in whole or
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ratably in part without penalty or premium and (b) following notice given to
the Agent by the Borrower by not later than 10:00 a.m. (Chicago time) on, if
the Advance to be prepaid is a Eurocurrency Advance, the fifth Business Day
preceding the date of the proposed prepayment, such notice specifying the
Eurocurrency Advance to be prepaid and the proposed date of the prepayment,
and, if such notice is given, such Borrower shall, prepay the outstanding
principal amounts of the Eurocurrency Loans comprising a Eurocurrency Advance
in whole (and not in part) without penalty or premium, together with accrued
interest to the date of such prepayment on the principal amount prepaid.
(c) Mandatory Prepayments. If at any time, (a) the Dollar Amount of
---------------------
the Aggregate Outstanding Credit Exposure exceeds 105% of the Aggregate
Commitment or (b) the Dollar Amount of all Eurocurrency Loans in Agreed
Currencies other than Dollars exceeds 105% of the Maximum Eurocurrency Amount
(utilizing the exchange rates determined in accordance with Section 2.1), the
-----------
Borrower for the ratable benefit of the Lenders shall immediately prepay
Loans (to be applied to such Loans as the Borrower shall direct at the time
of such payment) in an aggregate amount such that after giving effect thereto
(y) the Dollar Amount of the Aggregate Outstanding Credit Exposure is less
than or equal to the Aggregate Commitments and (z) the Dollar Amount of all
Eurocurrency Loans and Facility LCs in Agreed Currencies other than Dollars
is less than or equal to the Maximum Eurocurrency Amount.
(d) Subject to the terms and conditions of this Agreement, any amount
paid or prepaid before the Facility Termination Date may be borrowed, repaid
and borrowed again prior to the Facility Termination Date.
2.3. Ratable Loans. Each Advance hereunder shall consist of Loans
-------------
made from the several Lenders ratably in proportion to their respective
Percentages.
2.4. Types of Advances. The Advances may be Floating Rate Advances or
-----------------
Eurocurrency Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9.
------------ ---
2.5. Facility Fee; Reductions in Aggregate Commitment. The Borrower
------------------------------------------------
agrees to pay to the Agent for the pro rata account of the Lenders according
to their Percentages (except as set forth in Section 8.2), a facility fee
-----------
accruing at the rate of the Applicable Facility Fee per annum based on the
Aggregate Commitment (without regards to usage thereof), from the date hereof
to and including the Facility Termination Date, payable on each Payment Date
hereafter and on the Facility Termination Date. The Borrower may permanently
reduce the Aggregate Commitment in whole, or in part ratably among the
Lenders in integral multiples of $1,000,000, upon at least three Business
Days' written notice to the Agent, which notice shall specify the amount of
any such reduction (the "Aggregate Commitment Reduction Notice"); provided,
--------
that the amount of the Aggregate Commitment may not be reduced below Dollar
Amount of the Aggregate Outstanding Credit Exposure. All accrued facility
fees shall be payable on the effective date of
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any termination of the Commitments of the Lenders and the obligation of the
Borrower to pay facility fees with respect to any Commitments shall terminate
on the date of any termination of the Commitments.
2.6. Minimum Amount of Each Advance; Maximum Interest Periods. Each
--------------------------------------------------------
Eurocurrency Advance shall be in the minimum amount of $1,000,000 or the
Approximate Equivalent Amount of any Agreed Currency other than Dollars (and
in multiples of $100,000 or the Approximate Equivalent Amount of any Agreed
Currency other than Dollars if in excess thereof), and each Floating Rate
Advance shall be in the minimum amount of $500,000 (and a multiple of
$100,000 if in excess thereof); provided, that any Floating Rate Advance may
--------
be in the amount of the Available Aggregate Commitment. In addition, the
Borrower shall select Eurocurrency Interest Periods under Sections 2.8 and
------------
2.9 so that no more than ten (10) Eurocurrency Interest Periods shall be
---
outstanding at any one time.
2.7. Minimum Amounts for Optional Principal Payments. Optional
-----------------------------------------------
prepayments of outstanding Floating Rate Advances made pursuant to Section
-------
2.2(b) shall be for the entire amount thereof or otherwise, in a minimum
------
amount of $500,000 (and a multiple of $100,000 if in excess thereof).
Optional prepayments of Eurocurrency Advances made pursuant to Section 2.2(b)
--------------
shall be for the entire amount of the outstanding Eurocurrency Advance.
2.8. Method of Selecting New Advances. The Borrower shall select the
--------------------------------
Type of Advance and, in the case of each Eurocurrency Advance, the
Eurocurrency Interest Period and Agreed Currency applicable to each Advance
from time to time. The Borrower shall give the Agent irrevocable notice (a
"Borrowing Notice") by telephone or telefax not later than 9:00 a.m. (Chicago
time) on the proposed Borrowing Date of each Floating Rate Advance and four
Business Days before the Borrowing Date for each Eurocurrency Advance,
specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurocurrency Advance, the Agreed Currency and
the Eurocurrency Interest Period applicable thereto.
Not later than (i) 1:00 p.m. (Chicago time) on each Borrowing Date with
respect to Floating Rate Advances and (ii) noon (Chicago time) on each
Borrowing Date for Eurocurrency Advances, each Lender shall make available
its Loan or Loans, in funds immediately available funds in the Agreed
Currency to the Agent at its address specified pursuant to Article XIII,
------------
unless the Agent has notified the Lenders that such Loan is to be made
available to the Borrower at the Agent's Eurocurrency Payment Office, in
which case each Lender shall make available its Loan or
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Loans, in funds immediately available to the Agent at its Eurocurrency
Payment Office, not later than 1:00 p.m. (local time in the city of the
Agent's Eurocurrency Payment Office) in the Agreed Currency designated by the
Agent. The Agent will make the funds so received from the Lenders available
to the Borrower at the Agent's aforesaid address.
2.9. Conversion and Continuation of Outstanding Advances. Floating
---------------------------------------------------
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurocurrency Advances. Each
Eurocurrency Advance shall continue as a Eurocurrency Advance of such Type
until the end of the then applicable Eurocurrency Interest Period therefor,
at which time such Eurocurrency Advance (other than Eurocurrency Advances in
Agreed Currencies other than Dollars) shall be automatically converted into
a Floating Rate Advance unless the Borrower shall have given the Agent a
Conversion/Continuation Notice in accordance with the terms of this Section
-------
2.9 requesting that, at the end of such Eurocurrency Interest Period, such
---
Eurocurrency Advance continue as a Eurocurrency Advance for the same or
another Eurocurrency Interest Period. Unless a Conversion/Continuation
Notice shall have timely been given in accordance with the terms of this
Section 2.9, Eurocurrency Advances in an Agreed Currency other than Dollars
-----------
shall automatically continue as Eurocurrency Advances in the same Agreed
Currency with an Eurocurrency Interest Period of one (1) month. Subject to
the terms of Section 2.6, the Borrower may elect from time to time to convert
-----------
all or any part of an Advance of any Type into any other Type or Types of
Advances; provided that any conversion of any Eurocurrency Advance shall be
made on, and only on, the last day of the Eurocurrency Interest Period
applicable thereto. The Borrower shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Floating Rate
Advance or continuation of a Eurocurrency Advance not later than 10:00 a.m.
(Chicago time) at least four Business Days prior to the date of the requested
conversion or continuation, specifying:
(i) the requested date which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such Advance is
to be converted or continued and, in the case of a conversion
into or continuation of a Eurocurrency Advance, the duration of
the Eurocurrency Interest Period applicable thereto.
Notwithstanding anything herein to the contrary, Eurocurrency Advances in an
Agreed Currency may be converted and/or continued as Eurocurrency Advances
only in the same Agreed Currency.
2.10. Changes in Interest Rate, etc. Each Floating Rate Advance shall
------------------------------
bear interest on the outstanding principal amount thereof, for each day from
and including the date such Advance
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is made or is converted from a Eurocurrency Advance into a Floating Rate
Advance pursuant to Section 2.9 to but excluding the date it becomes due or
-----------
is converted into a Eurocurrency Advance pursuant to Section 2.9 hereof, at a
-----------
rate per annum equal to the Floating Rate for such day. Changes in the rate
of interest on that portion of any Advance maintained as a Floating Rate
Advance will take effect simultaneously with each change in the Alternate
Base Rate. Each Eurocurrency Advance shall bear interest from and including
the first day of the Eurocurrency Interest Period applicable thereto to (but
not including) the last day of such Eurocurrency Interest Period at the
Eurocurrency Rate determined as applicable to such Eurocurrency Advance. No
Eurocurrency Interest Period may end after the Facility Termination Date.
2.11. Rates Applicable After Default. Notwithstanding anything to the
------------------------------
contrary contained in Section 2.8 or 2.9, during the continuance of a Default
----------- ---
or Unmatured Default the Required Lenders may, at their option, by notice to
the Borrower, declare that no Advance may be made as, converted into or
continued as a Eurocurrency Advance. During the continuance of any Default
under Section 7.2, the Required Lenders may, at their option, by notice to
-----------
the Borrower, declare that each Advance shall bear interest at a rate per
annum equal to the Floating Rate plus 2% per annum.
2.12. Method of Payment. All payments of the Obligations hereunder
-----------------
shall be made, without setoff, deduction, or counterclaim, to the Agent (i)
at the Agent's address specified pursuant to Article XIII in immediately
------------
available funds with respect to Advances or other Obligations denominated in
Dollars and (ii) at the Agent's Eurocurrency Payment Office in immediately
available funds with respect to any Advance or other Obligations denominated
in an Agreed Currency other than Dollars, or at any other Lending
Installation of the Agent specified in writing by the Agent to the Borrower,
by noon (local time) on the date when due and shall be applied ratably by the
Agent among the Lenders (unless such amount is not to be shared ratably in
accordance with the express terms hereof). Any payment received by the Agent
after such time shall be deemed to have been received on the next Business
Day. Each Advance shall be repaid or prepaid in the Agreed Currency in
which it was made in the amount borrowed and interest payable thereon shall
also be paid in such Agreed Currency. Each payment delivered to the Agent
for the account of any Lender shall be delivered promptly by the Agent to
such Lender in the same type of funds that the Agent received at its address
specified pursuant to Article XIII or at any Lending Installation specified
------------
in a notice received by the Agent from such Lender. The Agent is hereby
authorized to charge the account of the Borrower maintained with First
Chicago for each payment of principal, interest and fees as it becomes due
hereunder. Any payment by the Borrower to the Agent for account of the
Lenders in accordance with the terms hereof shall, to the extent of such
payment, discharge the Borrower's obligation to make such payment to the
Lenders. Each reference to the Agent in this Section 2.12 shall also be
------------
deemed to refer, and shall apply equally, to the LC Issuer, in the case of
payments required to be made by the Borrower to the LC Issuer pursuant to
Section 2.19. Notwithstanding the foregoing provisions of this Section, if,
------------
after the making of any Advance in any currency other than Dollars, currency
control or exchange regulations are imposed in the country which issues such
currency with the result that
21
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different types of such Agreed Currency (the "New Currency") are introduced
and the type of currency in which the Advance was made (the "Original
Currency") no longer exists or the Borrower is not able to make payment to
the Agent for the account of the Lenders in such Original Currency, then all
payments to be made by the Borrower hereunder or under the Notes in such
currency shall be made to the Agent in such amount and such type of the New
Currency or Dollars as shall be equivalent to the amount of such payment
otherwise due hereunder or under the Notes in the Original Currency, it being
the intention of the parties hereto that the Borrower take all risks of the
imposition of any such currency control or exchange regulations. In
addition, notwithstanding the foregoing provisions of this Section, if, after
the making of any Advance in any currency other than Dollars, the Borrower is
not able to make payment to the Agent for the account of the Lenders in the
type of currency in which such Advance was made because of the imposition of
any such currency control or exchange regulation, then such Advance shall
instead be repaid when due in Dollars in a principal amount equal to the
Dollar Amount (as of the date of repayment) of such Advance.
2.13. Notes; Telephonic Notices. Each Lender is hereby authorized to
-------------------------
record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note, provided, however, that the failure to so
record or any error in any such record shall not affect the Borrower's
obligations under such Note. The Borrower hereby authorizes the Lenders and
the Agent to extend, convert or continue Advances, effect selections of Types
of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be an
Authorized Officer of the Borrower. The Borrower agrees to deliver promptly
to the Agent a written confirmation, if such confirmation is requested by the
Agent or any Lender, of each telephonic notice signed by an Authorized
Officer. If the written confirmation differs in any material respect from
the action taken by the Agent and the Lenders, the records of the Agent and
the Lenders shall govern absent manifest error.
2.14. Interest Payment Dates; Interest and Fee Basis. Interest
----------------------------------------------
accrued on each Floating Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof, and at
maturity (whether due to acceleration or otherwise). Interest accrued on
that portion of the outstanding principal amount of any Floating Rate Advance
converted into a Eurocurrency Advance on a day other than a Payment Date
shall be payable on the date of conversion. Interest accrued on each
Eurocurrency Advance shall be payable on the last day of its applicable
Eurocurrency Interest Period, on any date on which the Eurocurrency Advance
is prepaid, whether by acceleration or otherwise, and at maturity. Interest
accrued on each Eurocurrency Advance having an Eurocurrency Interest Period
longer than three months shall also be payable on the last day of each
three-month interval during such Eurocurrency Interest Period. Interest and
fees shall be calculated for actual days elapsed on the basis of a 360-day
year. Interest shall be payable for the day an Advance is made but not for the
day of any payment on the amount paid if payment is received prior to noon
(local time) at the place of payment. If any payment of principal of or
interest on an Advance shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day
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and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
2.15. Notification of Advances, Interest Rates, Prepayments and
---------------------------------------------------------
Commitment Reductions. The Agent will promptly notify each Lender of the
---------------------
contents of each Aggregate Commitment Reduction Notice, Borrowing Notice,
Conversion/Continuation Notice, and Prepayment Notice received by it
hereunder. The Agent will notify each Lender of the interest rate applicable
to each Eurocurrency Advance promptly upon determination of such interest
rate and will give the Borrower and each Lender prompt notice of each change
in the Alternate Base Rate.
2.16. Lending Installations. Each Lender may book its Loans at any
---------------------
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to
any such Lending Installation and the Notes shall be deemed held by each
Lender for the benefit of such Lending Installation. Each Lender may, by
written or facsimile notice to the Agent and the Borrower, designate a
Lending Installation through which Loans will be made by it and for whose
account Loan payments are to be made.
2.17. Non-Receipt of Funds by the Agent. Unless the Borrower or a
---------------------------------
Lender, as the case may be, notifies the Agent prior to the date on which it
is scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of
principal, interest or fees to the Agent for the account of the Lenders, that
it does not intend to make such payment, the Agent may assume that such
payment has been made. The Agent may, but shall not be obligated to, make
the amount of such payment available to the intended recipient in reliance
upon such assumption. If such Lender or the Borrower, as the case may be,
has not in fact made such payment to the Agent, the recipient of such payment
shall, on demand by the Agent, repay to the Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to
(i) in the case of payment by a Lender, the Federal Funds Effective Rate for
such day or (ii) in the case of payment by the Borrower, the interest rate
applicable to the relevant Loan.
2.18. Withholding Tax Exemption. 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 otherwise
organized under the laws of the United States of America, or a state thereof
(a "Non-U.S. Lender"), agrees that it will deliver to each of the Borrower
and the Agent two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224, certifying in either case that such Non-U.S.
Lender is entitled to receive payments under this Agreement and the Notes
without deduction or withholding of any United States federal income taxes.
Each Non-U.S. Lender which so delivers a Form 1001 or 4224 further undertakes
to deliver to each of the Borrower and the Agent two additional copies of
such form (or a successor form) on or before the date that such form expires
(currently, three successive calendar years for
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Form 1001 and one calendar year for Form 4224) or becomes obsolete or after
the occurrence of any event requiring a change in the most recent forms so
delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by the Borrower or the Agent, in each
case certifying that such Non-U.S. Lender is entitled to receive payments
under this Agreement and the Notes 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 Non-U.S. Lender from duly
completing and delivering any such form with respect to it and such Non-U.S.
Lender advises the Borrower and the Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax. For any period during which a Non-U.S. Lender has failed to provide the
Borrower with an appropriate form pursuant to this Section 2.18, above
------------
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Lender shall not be entitled to
indemnification with respect to taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to taxes because of its
failure to deliver a form required under this Section 2.18, the Borrower
------------
shall take such steps as such Non-U.S. Lender shall reasonably request to
assist such Non-U.S. Lender to recover such taxes.
2.19. Facility LCs.
------------
(a) The LC Issuer hereby agrees, on the terms and conditions set
forth in this Agreement, to issue stand-by and commercial Facility LCs in
Dollars or an Agreed Currency for the account of the Borrower (each, a
"Facility LC") and to renew, extend, increase, decrease or otherwise modify
each Facility LC (each a "Modification"), from time to time from and
including the date of this Agreement and prior to the Facility Termination
Date upon the request of the Borrower; provided that immediately after each
such Facility LC is issued or Modified, (i) the aggregate Dollar Amount of
the outstanding LC Obligations shall not exceed $20,000,000, (ii) the
Aggregate Outstanding Credit Exposure shall not exceed the Aggregate
Commitment and (iii) the Dollar Amount of all Eurocurrency Loans and Facility
LCs in Agreed Currencies other than Dollars is less than or equal to the
Maximum Eurocurrency Amount; provided, further, that if the Borrower has
requested a Lender other than First Chicago to act as LC Issuer with respect
to the issuance or Modification of a particular Facility LC, such issuance or
Modification shall be made only in the sole discretion of such Lender. No
Facility LC shall have an expiry date later than the earlier of (i) the fifth
Business Day prior to the Facility Termination Date and (ii) the day which is
one year after the date of issuance (or the most recent Modification)
thereof.
(b) On the date hereof with respect to the Existing LCs and upon the
issuance or Modification by the LC Issuer of a Facility LC in accordance with
this Section 2.19, the LC Issuer
------------
24
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shall be deemed, without further action by any party hereto, to have sold to
each Lender, and each Lender shall be deemed, without further action by any
party hereto, to have purchased from the LC Issuer, a participation in such
Facility LC (and each Modification thereof) and the related LC Obligations in
proportion to its Percentage and as such, such participation shall institute
usage of each such Lenders' Commitment.
(c) Subject to subsection (a), the Borrower shall give the LC Issuer
notice prior to 10:00 a.m. (Chicago time) at least (i) three Business Days
for Dollar denominated Facility LCs and (ii) five Business Days for Facility
LCs denominated in any currency other than Dollars prior to the proposed date
of issuance or Modification of each Facility LC, specifying the beneficiary,
the Agreed Currency in which the Facility LC is to be denominated the
proposed date of issuance (or Modification) and the expiry date of such
Facility LC, and describing the proposed terms of such Facility LC and the
nature of the transactions proposed to be supported thereby. Upon receipt of
such notice, the LC Issuer shall promptly notify the Agent, and the Agent
shall promptly notify each Lender, of the contents thereof and of the amount
of such Lender's participation in such proposed Facility LC. The issuance or
Modification by the LC Issuer of any Facility LC shall, in addition to the
conditions precedent set forth in Article IV (the satisfaction of which the
----------
LC Issuer shall have no duty to ascertain), be subject to the conditions
precedent that such Facility LC shall be satisfactory to the LC Issuer and
that the Borrower shall have executed and delivered such application
agreement and/or such other instruments and agreements relating to such
Facility LC as the LC Issuer shall have reasonably requested (each, a
"Facility LC Application Agreement"). In the event of any conflict between
the terms of this Agreement and the terms of any Facility LC Application
Agreement, the terms of this Agreement shall control.
(d) The Borrower shall pay to the Agent, for the account of the
Lenders ratably in accordance with their respective Percentages (except as
provided in Section 8.2), a letter of credit fee equal to (i) a percentage
-----------
per anum equal to the Applicable Margin in effect from time to time on the
average daily aggregate amount available for drawings under all stand-by
Facility LCs outstanding during such quarter and (ii) a percentage per anum
equal to the Applicable Margin then in effect of the amount drawn under each
commercial Facility LC during such quarter. Each such fee under clause (i)
shall be payable in arrears on each Payment Date and on the Facility
Termination Date, and each such fee under clause (ii) shall be payable on the
date of the related drawing. The Borrower shall pay to the LC Issuer such
additional fees and expenses relating to issuance, Modification and payment
of Facility LCs in the amounts and at the times agreed between the Borrower
and the LC Issuer. The LC Issuer shall furnish to the Agent upon request its
calculations with respect to the amount of any fee payable under this
subsection (d).
(e) Upon receipt from the beneficiary of any Facility LC of any
demand for payment under such Facility LC, the LC Issuer shall notify the
Agent and the Agent shall promptly notify the Borrower and each other Lender
as to the amount to be paid by the LC Issuer as a result of such demand and
the proposed payment date (the "LC Payment Date"). The responsibility of the
LC Issuer to the Borrower and each Lender shall be only to determine that the
documents
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31
(including each demand for payment) delivered under each Facility LC in
connection with such presentment shall be in conformity in all material
respects with such Facility LC. The LC Issuer shall endeavor to exercise the
same care in the issuance and administration of the Facility LCs as it does
with respect to letters of credit in which no participations are granted, it
being understood that in the absence of any gross negligence or willful
misconduct by the LC Issuer, each Lender shall be unconditionally and
irrevocably liable without regard to the occurrence of any Default or any
condition precedent whatsoever, to reimburse the LC Issuer on demand for (i)
such Lender's Percentage of the amount of each payment made by the LC Issuer
under each Facility LC to the extent such amount is not reimbursed by the
Borrower pursuant to subsection (f) below plus (ii) interest on the foregoing
amount to be reimbursed by such Lender, for each day from the date of the LC
Issuer's demand for such reimbursement (or, if such demand is made after
11:00 a.m. (Chicago time) on such date, from the next succeeding Business
Day) to the date on which such Lender pays the amount to be reimbursed by it,
at a rate of interest per annum equal to the Federal Funds Effective Rate for
such day.
(f) The Borrower shall be irrevocably and unconditionally obligated
to reimburse the LC Issuer on or by the applicable LC Payment Date for any
amounts to be paid by the LC Issuer upon any drawing under any Facility LC,
without presentment, demand, protest or other formalities of any kind;
provided that neither the Borrower nor any Lender shall hereby be precluded
--------
from asserting any claim for direct (but not consequential) damages suffered
by the Borrower or such Lender to the extent, but only to the extent, caused
by (i) the willful misconduct or gross negligence of the LC Issuer in
determining whether a request presented under any Facility LC issued by it
complied with the terms of such Facility LC or (ii) the LC Issuer's failure
to pay under any Facility LC issued by it after the presentation to it of a
request strictly complying with the terms and conditions of such Facility LC.
All such amounts paid by the LC Issuer and remaining unpaid by the Borrower
after the applicable LC Payment Date shall bear interest, payable on demand,
for each day until paid at a rate per annum equal to the sum of 2% plus the
rate applicable to Floating Rate Advances for such day. The LC Issuer will
pay to each Lender ratably in accordance with its Percentage all amounts
received by it from the Borrower for application in payment, in whole or in
part, of the Reimbursement Obligation in respect of any Facility LC issued by
the LC Issuer, but only to the extent such Lender has made payment to the LC
Issuer in respect of such Facility LC pursuant to subsection (e). Subject to
the terms and conditions of this Agreement (including without limitation the
submission of a Borrowing Notice in compliance with Section 2.8 and the
-----------
satisfaction of the applicable conditions precedent set forth in Article IV),
the Borrower may request an Advance hereunder for the purpose of satisfying
any Reimbursement Obligation.
(g) If after the date hereof, the adoption of any applicable law,
rule or regulation, or any change in any applicable law, rule or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the LC Issuer or
any Lender with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency shall impose,
modify or deem applicable any tax, reserve,
26
32
special deposit or similar requirement against or with respect to or measured
by reference to Facility LCs issued or to be issued hereunder or
participation therein, and the result shall be to increase the cost to the LC
Issuer or any Lender of issuing or maintaining any Facility LC or any
participation therein, or reduce any amount receivable hereunder by the LC
Issuer or any Lender in respect of any Facility LC (which increase in cost,
or reduction in amount receivable, shall be the result of such Lender's or
the LC Issuer's reasonable allocation of the aggregate of such increases or
reductions resulting from such event), then, upon demand by the LC Issuer or
such Lender, the Borrower agrees to pay to the LC Issuer or such Lender, from
time to time as specified by the LC Issuer or such Lender, such additional
amounts as shall be sufficient to compensate the LC Issuer or such Lender for
such increased costs or reductions in amounts received by the LC Issuer or
such Lender. A certificate of the LC Issuer or such Lender submitted by the
LC Issuer or such Lender to the Borrower shall be conclusive as to the amount
thereof in the absence of manifest error.
(h) The Borrower's obligations under this Section 2.19 shall be
------------
absolute and unconditional under any and all circumstances and irrespective
of any set off, counterclaim or defense to payment which the Borrower may
have or have had against the LC Issuer, any Lender or any beneficiary of a
Facility LC. The Borrower further agrees with the LC Issuer and the Lenders
that the LC Issuer and the Lenders shall not be responsible for, and the
Borrower's Reimbursement Obligation in respect of any Facility LC shall not
be affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even if such documents should in fact prove
to be in any or all respects invalid, fraudulent or forged, or any dispute
between or among the Borrower, any of its Subsidiaries, the beneficiary of
any Facility LC or any financing institution or other party to whom any
Facility LC may be transferred or any claims or defenses whatsoever of the
Borrower or of any of its Subsidiaries against the beneficiary of any
Facility LC or any such transferee. Absent willful misconduct or gross
negligence, the LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Facility LC. The
Borrower agrees that any action taken or omitted by the LC Issuer or any
Lender under or in connection with each Facility LC and the related drafts
and documents, if done without gross negligence or willful misconduct, shall
be binding upon the Borrower and shall not put the LC Issuer or any Lender
under any liability to the Borrower. Nothing in this subsection (h) is
intended to limit the right of the Borrower to make a claim against the LC
Issuer for damages as contemplated by the proviso to the first sentence of
subsection (f) above.
(i) To the extent not inconsistent with subsection (h) above, the LC
Issuer shall be entitled to rely, and shall be fully protected in relying
upon, any Facility LC, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the LC Issuer. The LC
Issuer shall be fully justified in failing or refusing to take any action
under this Agreement
27
33
unless it shall first have received such advice or concurrence of the
Required Lenders as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Notwithstanding any other provision of
this Section 2.19, the LC Issuer shall in all cases be fully protected in
------------
acting, or in refraining from acting, under this Agreement in accordance with
a request of the Required Lenders (or all of the Lenders, if required
hereunder), and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Lenders and all future holders of
participation in any Facility LCs.
(j) The Borrower hereby agrees to indemnify and hold harmless each
Lender, the LC Issuer and the Agent, and their respective directors,
officers, agents and employees from and against any and all claims and
damages, losses, liabilities, costs or expenses which such Lender, the LC
Issuer or the Agent may incur (or which may be claimed against such Lender,
the LC Issuer or the Agent by any Person whatsoever) by reason of or in
connection with the execution and delivery or transfer of or payment or
failure to pay under any Facility LC or any actual or proposed use of any
Facility LC, including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which the LC Issuer may incur by reason of or
in connection with (i) the failure of any other Lender to fulfill or comply
with its obligations to the LC Issuer hereunder (but nothing herein contained
shall affect any rights the Borrower may have against any defaulting Lender)
or (ii) by reason of or on account of the LC Issuer issuing any Facility LC
which specifies that the term "Beneficiary" included therein includes any
successor by operation of law of the named Beneficiary, but which Facility LC
does not require that any drawing by any such successor Beneficiary be
accompanied by a copy of a legal document, satisfactory to the LC Issuer,
evidencing the appointment of such successor Beneficiary; provided that the
--------
Borrower shall not be required to indemnify the LC Issuer for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to
the extent, caused by (i) the willful misconduct or gross negligence of the
LC Issuer in determining whether a request presented under any Facility LC
complied with the terms of such Facility LC or (ii) the LC Issuer's failure
to pay under any Facility LC after the presentation to it of a request
strictly complying with the terms and conditions of such Facility LC.
Nothing in this subsection (j) is intended to limit the obligations of the
Borrower under any other provision of this Agreement.
(k) Each Lender shall, ratably in accordance with its Percentage,
indemnify the LC Issuer, its affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed by the Borrower)
against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct or the
LC Issuer's failure to pay under any Facility LC after the presentation to it
of a request strictly complying with the terms and conditions of the Facility
LC) that such indemnitees may suffer or incur in connection with this Section
-------
2.19 or any action taken or omitted by such indemnitees hereunder.
----
(l) In its capacity as a Lender, the LC Issuer shall have the same
rights and obligations as any other Lender.
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2.20. Transitional Letter of Credit Provisions. From and after the
----------------------------------------
Closing Date, the Existing LCs shall be deemed to constitute Facility LCs
issued pursuant to Section 2.19 in which the Lenders participate. Fees shall
------------
accrue in respect of the Existing LCs as provided in Section 2.19(d)
---------------
beginning as of the date of this Agreement.
2.21. Judgment Currency. If, for the purposes of obtaining judgment in
-----------------
any court, it is necessary to convert a sum due from the Borrower hereunder
or under any of the Notes in the currency expressed to be payable herein or
under the Notes (the "specified currency") into another currency, the parties
hereto agree, to the fullest extent that they may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase the specified currency with such
other currency at the Agent's main office in Chicago, Illinois on the
Business Day preceding that on which the final, non-appealable judgment is
given. The obligations of the Borrower in respect of any sum due to any
Lender or the Agent hereunder or under any Note shall, notwithstanding any
judgment in a currency other than the specified currency, be discharged only
to the extent that on the Business Day following receipt by such Lender or
the Agent (as the case may be) of any sum adjudged to be so due in such other
currency such Lender or the Agent (as the case may be) may in accordance with
normal, reasonable banking procedures purchase the specified currency with
such other currency. If the amount of the specified currency so purchased is
less than the sum originally due to such Lender or the Agent, as the case may
be, in the specified currency, the Borrower agrees, to the fullest extent
that it may effectively do so, as a separate obligation and notwithstanding
any such judgment, to indemnify such Lender or the Agent, as the case may be,
against such loss, and if the amount of the specified currency so purchased
exceeds (a) the sum originally due to any Lender or the Agent, as the case
may be, in the specified currency and (b) any amounts shared with other
Lenders as a result of allocations of such excess as a disproportionate
payment to such Lender under Section 11.2, such Lender or the Agent, as the
------------
case may be, agrees to remit such excess to the Borrower.
2.22. Market Disruption. Notwithstanding the satisfaction of all
-----------------
conditions referred to in Article II with respect to any Advance in any
----------
Agreed Currency other than Dollars, if there shall occur on or prior to the
date of such Advance any change in national or international financial,
political or economic conditions or currency exchange rates or exchange
controls which would in the reasonable opinion of the Borrower, Agent or the
Required Lenders make it impracticable for the Eurocurrency Loans comprising
such Advance to be denominated in the Agreed Currency specified by the
Borrower, then the Agent shall forthwith give notice thereof to the Borrower
and the Lenders, The Borrower shall give notice to the Lenders as the case
may be and such Eurocurrency Loans shall not be denominated in such currency
but shall be made on such Borrowing Date in Dollars, in an aggregate
principal amount equal to the Dollar Amount of the aggregate principal amount
specified in the related Borrowing Notice, as Floating Rate Loans, unless the
Borrower notifies the Agent at least one Business Day before such date that
(i) it elects
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not to borrow on such date or (ii) it elects to borrow on such date in a
different Agreed Currency, as the case may be, in which the denomination of
such Eurocurrency Loans would in the opinion of the Agent and the Required
Lenders be practicable and in an aggregate principal amount equal to the
Dollar Amount of the aggregate principal amount specified in the related
Borrowing Notice.
ARTICLE III: CHANGE IN CIRCUMSTANCES
3.1. Yield Protection. If, after the date of this Agreement, the
----------------
adoption of or change in, any law or any governmental or quasi-governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law), or any interpretation thereof, or the compliance of any Lender
therewith,
(i) subjects any Lender or any applicable Lending Installation
to any tax, duty, charge or withholding on or from payments due from
the Borrower (excluding taxation of the overall net income of any
Lender or applicable Lending Installation), or changes the basis of
taxation of payments to any Lender in respect of its Loans, L/C
Obligations or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in determining the
interest rate applicable to Eurocurrency Advances) in respect of its
Loans, L/C Obligations or other amounts due it hereunder, or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation
of making, funding or maintaining loans or reduces any amount
receivable by any Lender or any applicable Lending Installation in
connection with Loans under this Agreement, its L/C Obligations or its
Notes, or requires any Lender or any applicable Lending Installation to
make any payment calculated by reference to the amount of Loans or L/C
Obligations held or interest received by it, by an amount deemed
material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an
amount received which such Lender determines is attributable to making,
funding and maintaining its Loans, L/C Obligations and its Commitment.
3.2. Changes in Capital Adequacy Regulations. If a Lender determines
---------------------------------------
the amount of capital required or expected to be maintained by such Lender,
any Lending Installation of such
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36
Lender or any corporation controlling such Lender is increased as a result of
a Change, then, within 15 days of demand by such Lender, the Borrower shall
pay such Lender the amount necessary to compensate, on an after-tax basis,
for any shortfall in the rate of return on the portion of such increased
capital which such Lender reasonably determines is attributable to this
Agreement, its Outstanding Credit Exposure or its Commitment (after taking
into account such Lender's policies as to capital adequacy and the change).
"Change" means (i) any change after the date of this Agreement in the
Risk-Based Capital Guidelines or (ii) any adoption of or change in any other
law, governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after
the date of this Agreement which affects the amount of capital required or
expected to be maintained by any Lender or any Lending Installation or any
corporation controlling any Lender. "Risk-Based Capital Guidelines" means
(i) the risk-based capital guidelines in effect in the United States on the
date of this Agreement, including transition rules, and (ii) the
corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted
prior to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
---------------------------------
maintenance of any of its Eurocurrency Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation or directive,
whether or not having the force of law, such Lender shall promptly give
notice thereof to Borrower and the Agent shall suspend the availability of
Eurocurrency Advances and require any and all outstanding Eurocurrency
Advances to be repaid. If the Required Lenders determine that (i) deposits
of a type, currency or maturity appropriate to match fund Eurocurrency
Advances are not available or (ii) the interest rate applicable to
Eurocurrency Advance does not accurately reflect the cost of making
Eurocurrency Advances, then the Agent shall promptly give notice thereof to
Borrower and the Lenders shall suspend the availability of Eurocurrency
Advances until such time as the circumstances giving rise to such suspension
no longer exist.
3.4. Funding Indemnification. If any payment of a Eurocurrency
-----------------------
Advance occurs on a date which is not the last day of the applicable
Eurocurrency Interest Period, whether because of acceleration, prepayment or
otherwise (but excluding any such prepayment arising pursuant to Section
-------
3.3), or a Eurocurrency Advance is not made or prepaid on the date specified
---
by the Borrower for any reason other than default by the Lenders, the
Borrower will indemnify each Lender for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain such Advance.
3.5. Lender Statements; Survival of Indemnity. To the extent
----------------------------------------
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurocurrency Loans to reduce any liability
of the Borrower to such Lender under Sections 3.1 and 3.2 or to avoid the
------------ ---
unavailability of a Type of Advance under Section 3.3, so long as such
-----------
designation is not
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disadvantageous to such Lender. Each Lender shall deliver to Borrower a
written statement of such Lender as to the amount due, if any, under Sections
--------
3.1, 3.2 or 3.4. Such written statement shall set forth in reasonable detail
--- --- ---
the calculations upon which such Lender determined such amount and shall be
final, conclusive and binding on the Borrower in the absence of manifest
error. Determination of amounts payable under such Sections in connection
with a Eurocurrency Loan shall be calculated as though each Lender funded its
Eurocurrency Loan through the purchase of a deposit of the type, currency and
maturity corresponding to the deposit used as a reference in determining the
Eurocurrency Rate applicable to such Loan, whether in fact that is the case
or not. Unless otherwise provided herein, the amount specified in the
written statement or certificate shall be payable on demand after receipt by
the Borrower of the written statement. The obligations of the Borrower under
Sections 3.1, 3.2 and 3.4 shall survive payment of the Obligations and
------------ --- ---
termination of this Agreement.
3.6. Replacement Lenders. If any Lender either (i) failed to fund its
-------------------
Percentage of any Advance requested by the Borrower, or to fund a Loan in
order to repay Reimbursement Obligations or participations with respect to
Letters of Credit, which such Lender is obligated to fund under the terms of
this Agreement and which failure has not been cured; (ii) makes a demand for
compensation pursuant to Section 2.19(g), Section 3.1 or Section 3.2, (iii)
--------------- ----------- -----------
is unable to fund at the Eurocurrency Rate or determines that such rate is
unavailable or does not accurately reflect its cost of making or maintaining
any Eurocurrency Loan pursuant to Section 3.3 or (iv) invokes the provisions
-----------
of Section 9.2, the Borrower may require and have such Lender transfer,
-----------
pursuant to and in accordance with Section 12.3, all of its rights and
------------
obligations under the Credit Documents to one or more Purchasers selected by
the Borrower, acceptable to the Agent and the LC Issuer, and willing to
accept such assignment provided such Lender is paid upon such assignment all
amounts of principal, interest and fees accrued hereunder to the date of such
assignment. No such assignment shall affect (a) any liability or obligation
of the Borrower or any other Lender to such replaced Lender, which accrued on
or prior to the date of such assignment or (b) such replaced Lender's rights
or obligations hereunder in respect of any such liability or obligation.
ARTICLE IV: CONDITIONS PRECEDENT
4.1. Initial Credit Extension. The Lenders shall not be required to
------------------------
make the initial Advance hereunder, and the LC Issuer shall not be required
to issue the initial Facility LC hereunder, unless the Borrower has furnished
to the Agent with sufficient copies for the Lenders:
(a) Copies of the articles of incorporation of the Borrower and its
Subsidiaries, together with all amendments, and a certificate of
good standing, both certified by the appropriate governmental
officer in its jurisdiction of incorporation.
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(b) Copies, certified by the Secretary or Assistant Secretary of the
Borrower and its Subsidiaries, of its by-laws and of its Board of
Directors' resolutions (and resolutions of other bodies, if any
are deemed necessary by counsel for any Lender) authorizing the
execution of the Borrower Credit Documents and Subsidiary
Guaranties, as applicable.
(c) An incumbency certificate, executed by the Secretary or Assistant
Secretary of the Borrower and its Subsidiaries, which shall
identify by name and title and bear the signature of the officers
of the Borrower authorized to sign the Borrower Credit Documents
and Subsidiary Guaranties, as applicable and, in the case of the
Borrower, to make Credit Extensions hereunder, upon which
certificate the Agent and, the LC Issuer and the Lenders shall be
entitled to rely until informed of any change in writing by the
Borrower.
(d) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Credit Extension Date no
Default or Unmatured Default has occurred and is continuing.
(e) A written opinion of Schmiedeskamp, Robertson, Neu & Xxxxxxxx,
legal counsel to the Borrower, addressed to the Lenders in
substantially the form of Exhibit "C" hereto.
(f) Notes payable to the order of each of the Lenders.
(g) A compliance certificate in substantially the form of Exhibit "D"
hereto signed by the Borrower's chief financial officer showing
the calculations necessary to determine compliance with Sections
--------
6.20, 6.21 and 6.22 of this Agreement.
---- ---- ----
(h) Written money transfer instructions, in substantially the form of
Exhibit "E" hereto, addressed to the Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested.
(i) Evidence satisfactory to the Agent and its counsel that,
concurrently with the Borrower's receipt of the initial Advance
hereunder: (1) the entire principal amount (together with accrued
interest and premium, if any) of the Existing Indebtedness shall
be repaid in full (other than the Existing LCs) and (2) any and
all lender commitments under the Existing Credit Agreement shall
have been terminated.
(j) An amendment to the Note Purchase Agreement, on terms and
conditions reasonably acceptable to the Agent and the Lenders,
which amendment shall permit (i) the issuance of the Subsidiary
Guaranties required by this Agreement, conditioned only upon
receipt by the Senior Noteholders of guaranties from such
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39
Subsidiaries on terms no less favorable to the Senior Noteholders
than those contained in the Subsidiary Guaranties, which
guaranties shall be required only for so long as the Subsidiary
Guaranties have not been released and (ii) the execution of the
Pledge Agreements required by this Agreement, conditioned only
upon the requirement that the Lien of the Pledge Agreement be
extended equally and ratably to the Senior Noteholders, which
Lien in favor of the Senior Noteholders shall be required only
for so long as the collateral under the applicable Pledge
Agreement(s) hereunder has not been released.
(k) Such other documents as any Lender or its counsel may have
reasonably requested.
4.2. Each Credit Extension. The Lenders shall not be required to make
---------------------
any Advance (other than an Advance that, after giving effect thereto and to
the application of the proceeds thereof, does not increase the aggregate
amount of outstanding Advances), and the LC Issuer shall not be required to
issue any Facility LC, unless on the applicable Credit Extension Date, both
immediately prior to, and immediately after giving effect to, such Credit
Extension:
(a) Either (i) in the case of an Advance, the Agent shall have
received a Notice of Borrowing in compliance with Section 2.8 or
-----------
(ii) in the case of a Facility LC, the LC Issuer shall have
received a request for the issuance of a Facility LC in
compliance with Section 2.19 (together with any Facility LC
------------
Application Agreement requested by the LC Issuer pursuant to
Section 2.19(c)).
---------------
(b) The Aggregate Outstanding Credit Exposure does not and would not
exceed the Aggregate Commitment.
(c) The aggregate outstanding principal Dollar Amount of all
Eurocurrency Advances in currencies other than Dollars does not
and would not exceed the Maximum Eurocurrency Amount
(d) There exists no Default or Unmatured Default.
(e) The representations and warranties contained in Article V are
true and correct as of such Borrowing Date except to the extent
any such representation or warranty is stated to relate solely to
an earlier date, in which case such representation or warranty
shall be true and correct on and as of such earlier date.
(f) All legal matters incident to the making of such Credit Extension
shall be reasonably satisfactory to the Lenders and their
counsel.
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Each Borrowing Notice with respect to each such Advance, and each
request for the issuance of a Facility LC pursuant to Section 2.19, shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(b), (c), (d) and (e) have been satisfied.
ARTICLE V: REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. Corporate Existence and Standing. Each of the Borrower and its
--------------------------------
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted.
5.2. Authorization and Validity. The Borrower has the corporate power
--------------------------
and authority and legal right to execute and deliver the Borrower Credit
Documents and to perform its obligations thereunder. The execution and
delivery by the Borrower of the Borrower Credit Documents and the performance
of its obligations thereunder have been duly authorized by proper corporate
proceedings, and the Borrower Credit Documents constitute legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
-------------------------------
delivery by the Borrower of the Borrower Credit Documents, nor the
consummation of the transactions therein contemplated, nor compliance with
the provisions thereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrower or any of its
Subsidiaries or the Borrower's or any Subsidiary's articles of incorporation
or by-laws or the provisions of any indenture, instrument or agreement to
which the Borrower or any of its Subsidiaries is a party or is subject, or by
which it, or its Property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien in, of or on
the Property of the Borrower or a Subsidiary pursuant to the terms of any
such indenture, instrument or agreement. No order, consent, approval,
license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is
required in connection with the execution, delivery and performance of, or
the legality, validity, binding effect or enforceability of, any of the
Borrower Credit Documents.
5.4. Financial Statements. The December 31, 1996 audited and June 30,
--------------------
1997 unaudited consolidated financial statements of the Borrower and its
Subsidiaries heretofore delivered to the Lenders were prepared in accordance
with generally accepted accounting principles in effect on the respective
dates such statements were prepared and fairly present the consolidated
financial
35
41
condition and operations of the Borrower and its Subsidiaries at such dates
and the consolidated results of their operations for the respective periods
then ended.
5.5. Material Adverse Change. Since June 30, 1997, there has been no
-----------------------
change in the business, Property, condition (financial or otherwise) or
results of operations of the Borrower and its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
5.6. Taxes. The Borrower and its Subsidiaries have filed all United
-----
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided. As of the date of this Agreement, the United
States income tax returns of the Borrower and its Subsidiaries have never
been audited by the Internal Revenue Service. No tax liens have been filed
and no claims are being asserted with respect to any such taxes. The
charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of any taxes or other governmental charges are
adequate.
5.7. Litigation and Contingent Obligations. Except as set forth on
-------------------------------------
Schedule "4" hereto, there is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of any of
their officers, threatened against or affecting the Borrower or any of its
Subsidiaries which, if adversely determined, could have a Material Adverse
Effect. Other than any liability incident to such litigation, arbitration or
proceedings, the Borrower has no material contingent obligations not provided
for or disclosed in the financial statements referred to in Section 5.4.
-----------
5.8. Subsidiaries. Schedule "1" hereto contains an accurate list of
------------
all of the presently existing Subsidiaries of the Borrower, setting forth
their respective jurisdictions of incorporation and the percentage of their
respective capital stock owned by the Borrower or other Subsidiaries. All of
the issued and outstanding shares of capital stock of such Subsidiaries have
been duly authorized and issued and are fully paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do
-----
not in the aggregate exceed $1,000,000. Neither the Borrower nor any other
member of the Controlled Group has failed to make a required contribution or
payment to any Multiemployer Plan or made a complete or partial withdrawal
from a Multiemployer Plan. Each Plan complies in all material respects with
all applicable requirements of law and regulations, no Reportable Event has
occurred with respect to any Plan, neither the Borrower nor any other members
of the Controlled Group has withdrawn from any Plan or initiated steps to do
so, and no steps have been taken to reorganize or terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or report
-----------------------
furnished by the Borrower or any of its Subsidiaries to the Agent, the LC
Issuer or to any Lender in connection with the negotiation of, or compliance
with, the Credit Documents contained any material
36
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misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not misleading.
5.11. Regulation U. Margin stock (as defined in Regulation U)
------------
constitutes less than 25% of those assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.
5.12. Material Agreements. Neither the Borrower nor any Subsidiary is
-------------------
a party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in (i) any agreement to which it is a party, which
default could reasonably be expected to have a Material Adverse Effect or
(ii) any agreement or instrument evidencing or governing Indebtedness.
5.13. Compliance With Laws. The Borrower and its Subsidiaries have
--------------------
complied in all material respects with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency thereof, having jurisdiction over the conduct
of their respective businesses or the ownership of their respective Property.
Except for matters identified on Schedule "4" hereto, neither the Borrower
nor any Subsidiary has received any notice to the effect that its operations
are not in material compliance with any of the requirements of applicable
federal, state and local environmental, health and safety statutes and
regulations or the subject of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which non-compliance or
remedial action could reasonably be expected to have a Material Adverse
Effect.
5.14. Ownership of Property. Except as set forth on Schedule "2"
---------------------
hereto, on the date of this Agreement, the Borrower and its Subsidiaries have
good title, free of all Liens other than those permitted by Section 6.17, to
------------
all of the Property and assets reflected in the financial statements referred
to in Section 5.4 as owned by it. The Borrower and each of its Subsidiaries
----------
owns (or is licensed to use) all Intellectual Property which is necessary or
appropriate in any material respect for the conduct of its respective
business as conducted on the date of this Agreement, without any material
conflict with the rights of any other Person. Neither the Borrower nor any
Subsidiary is aware of (i) any material existing or threatened infringement
or misappropriation of any of its Intellectual Property by any third party or
(ii) any material third party claim that any aspect of the business of the
Borrower or any Subsidiary (as conducted on the date of this Agreement)
infringes or will infringe upon, any Intellectual Property or other property
right of any other Person.
5.15. Labor Matters. There are no labor controversies pending against
-------------
the Borrower or any Subsidiary which could reasonably be expected to have a
Material Adverse Effect. The
37
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Borrower and each of its Subsidiaries are in substantial compliance in all
material respects with the Fair Labor Standards Act, as amended.
5.16. Investment Company Act. Neither the Borrower nor any Subsidiary
----------------------
thereof is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of
1940, as amended.
5.17. Public Utility Holding Company Act. Neither the Borrower nor
----------------------------------
any Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
ARTICLE VI: COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself and
-------------------
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Agent (which shall promptly provide copies to the Lenders):
(i) Within 90 days after the close of each of its fiscal years, an
unqualified (except for qualifications relating to changes in
accounting principles or practices reflecting changes in
generally accepted principles of accounting and required or
approved by the Borrower's independent certified public
accountants) audit report certified by independent certified
public accountants, acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on a consolidated
and consolidating basis (consolidating statements need not be
certified by such accountants) for itself and the Subsidiaries,
including balance sheets as of the end of such period, related
profit and loss and reconciliation of surplus statements, and a
statement of cash flows, accompanied by (a) any management letter
prepared by said accountants and (b) a certificate of said
accountants that, in the course of their examination necessary
for their certification of the foregoing, they have obtained no
knowledge of any Default or Unmatured Default, or if, in the
opinion of such accountants, any Default or Unmatured Default
shall exist, stating the nature and status thereof.
(ii) Within 45 days after the close of the first three quarterly
periods of each of its fiscal years, for itself and the
Subsidiaries, consolidated and consolidating unaudited balance
sheets as at the close of each such period and consolidated and
consolidating profit and loss and reconciliation of surplus
statements and a
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44
statement of cash flows for the period from the beginning of such
fiscal year to the end of such quarter, all certified by its
chief financial officer as being prepared, to the best of his or
her knowledge in accordance with Agreement Accounting Principles,
consistently applied, subject to normal year-end audit
adjustments.
(iii) Together with the financial statements required hereunder, a
compliance certificate in substantially the form of Exhibit "D"
hereto signed by its chief financial officer showing the
calculations necessary to determine compliance with Sections
--------
6.20, 6.21 and 6.22 of this Agreement and stating that no Default
---- ---- ----
or Unmatured Default exists, or if any Default or Unmatured
Default exists, stating the nature and status thereof.
(iv) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief financial
officer of the Borrower, describing said Reportable Event and the
action which the Borrower proposes to take with respect thereto.
(v) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (a) any notice or claim to the
effect that the Borrower or any of its Subsidiaries is or may be
liable to any Person as a result of the release by the Borrower,
any of its Subsidiaries, or any other Person of any toxic or
hazardous waste or substance into the environment, and (b) any
notice alleging any violation of any federal, state or local
environmental, health or safety law or regulation by the Borrower
or any of its Subsidiaries, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
(vi) Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy
statements so furnished.
(vii) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files with
the Commission (other than routine filings relating solely to
employee benefit plans and filings on Forms 3, 4 or 5 regarding
xxxxxxx xxxxxxx activities). In the event Borrower is no longer
required to file reports with the Commission, Borrower need not
furnish such reports to the Agent, but nonetheless shall provide
the Agent the financial statements previously contained in such
reports.
(viii) Such other information (including non-financial
information) as the Agent or any Lender may from time to time
reasonably request.
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6.2. Use of Proceeds. The Borrower will, and will cause each
---------------
Subsidiary to, use the proceeds of the Advances and Facility LCs to repay
certain existing Indebtedness, for general corporate purposes, including,
without limitation, for Acquisitions permitted by Section 6.15 hereof, and to
------------
repay outstanding Advances and Reimbursement Obligations. The Borrower will
not, nor will it permit any Subsidiary to, use any of the proceeds of the
Advances either (i) to purchase or carry any "margin stock" (as defined in
Regulation U) or (ii) to make any other Acquisition (except as specifically
permitted by Section 6.15). Notwithstanding anything herein to the contrary,
------------
Facility LCs may be applied for by the Borrower hereunder for the benefit of
the Borrower's Subsidiaries.
6.3. Notice of Default. After knowledge thereof shall have come to
-----------------
the attention of an Authorized Officer of the Borrower, the Borrower will
give prompt notice in writing to the Agent, and the Agent shall promptly
notify each other Lender, of the occurrence of any Default or Unmatured
Default and of any other development, financial or otherwise, which could
reasonably be expected to have a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause each
-------------------
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as conducted on the
date of this Agreement, and to do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic corporation
in its jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to, pay
-----
when due all taxes, assessments and governmental charges and levies upon it
or its income, profits or Property, except those which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves have been set aside.
6.6. Insurance. The Borrower will, and will cause each Subsidiary to,
---------
maintain with financially sound and reputable insurance companies insurance
on all their Property in such amounts and covering such risks as is
consistent with sound business practice, and the Borrower will furnish to
Agent, upon request of the Agent or any Lender, a certificate setting forth
in summary form, the nature and extent of the insurance maintained pursuant
to this provision and such other information as shall be reasonably
requested. The Borrower will, within ten (10) Business Days of its receipt
of notice of termination or cancellation of any products liability or other
liability insurance policy insuring the Borrower or any of its Subsidiaries
(other than any such notice with respect to the expiration of any such policy
at the end of its stated term when renewal of such policy (or the obtaining
of a substantially equivalent policy with a different insurer) is not
expected to be a problem), give written notice thereof to the Lenders.
6.7. Compliance with Laws. The Borrower will, and will cause each
--------------------
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject
including, without limitation, all applicable federal, state and local
environmental, health and safety statutes and regulations; provided however,
neither Borrower
40
46
nor any Subsidiary shall be required to comply with any such laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards if its
failure to comply therewith could not, in the aggregate, have a Material
Adverse Effect.
6.8. Maintenance of Property. The Borrower will, and will cause each
-----------------------
Subsidiary to, do all things necessary to maintain, preserve, protect and
keep all of its tangible personal and real Property in good repair, working
order and condition, and make all necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith may be
properly conducted at all times. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect all of
its Intellectual Property including, without limitation, perform each of its
respective obligations under any and all license agreements and other
contracts and agreements evidencing or relating to Intellectual Property,
using the same in interstate or foreign commerce, properly marking such
Intellectual Property and maintaining all necessary and appropriate
governmental registrations (both domestic and foreign).
6.9. Inspection. The Borrower will, and will cause each Subsidiary
----------
to, permit the Lenders, at their cost, by their respective representatives
and agent, during normal business hours, to inspect any of the Property,
corporate books and financial records of the Borrower and each Subsidiary, to
examine and make copies of the books of accounts and other financial records
of the Borrower and each Subsidiary, and to discuss the affairs, finances and
accounts of the Borrower and each Subsidiary with, and to be advised as to
the same by, their respective officers at such reasonable times and intervals
as the Lenders may reasonably designate.
6.10. Subsidiaries. The Borrower will cause each Person that becomes
------------
a direct or indirect Subsidiary of the Borrower after the date of this
Agreement (whether as the result of an Acquisition, creation, or otherwise)
to execute and delivery a Subsidiary Guaranty to and in favor of the Agent,
the LC Issuer and the Lenders (together with an opinion of counsel, corporate
resolutions and such other corporate documentation as the Agent may
reasonably request, all in form and substance satisfactory to the Agent), in
each case within 30 days after becoming a direct or indirect Subsidiary of
the Borrower. Notwithstanding the foregoing, no Subsidiary either (i)
organized, under the laws of a jurisdiction other than the United States of
America or (ii) more than 80% of the sales, earnings and assets of which are
derived from operations in territories of the United States and jurisdictions
outside of the United States (a "Foreign Subsidiary") shall be required to
give, execute and deliver a Subsidiary Guaranty if the delivery of such
Subsidiary Guaranty would cause the undistributed earnings of that Foreign
Subsidiary to be treated as a deemed dividend to Borrower for federal income
tax purposes, in which event the terms of Section 6.15 shall be applicable.
------------
6.11. Dividends. The Borrower will not, nor will it permit any
---------
Subsidiary to, declare or pay any dividends on its capital stock (other than
dividends payable in its own capital stock) or redeem, repurchase or
otherwise acquire or retire any of its capital stock at any time outstanding,
except that:
41
47
(i) Any Subsidiary may declare and pay dividends to the Borrower or
to a Wholly-Owned Subsidiary.
(ii) Any Subsidiary may declare and pay dividends to a Subsidiary
other than a Wholly-Owned Subsidiary so long as at the time of
and upon giving effect to each such dividend (a) the Borrower
shall be in compliance with Section 6.22 and (b) no other Default
-----------
or Unmatured Default shall exist.
(iii) The Borrower may declare or pay any dividends on its capital
stock or redeem, repurchase or otherwise acquire or retire any of
its capital stock at any time outstanding so long as at the time
of and upon giving effect to each such dividend, repurchase,
acquisition or retirement, (a) the Borrower shall be in
compliance with Section 6.22 and (b) no other Default or
------------
Unmatured Default shall exist.
6.12. Indebtedness. The Borrower will not, nor will it permit any
------------
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Loans.
(ii) Indebtedness existing on the date hereof and described in
Schedule "2" hereto.
(iii) Contingent Obligations permitted by Section 6.16.
------------
(iv) Hedging Obligations entered into in the ordinary course of
business as bona fide xxxxxx against interest rate or commodity
price fluctuations and not for speculative purposes.
(v) Indebtedness of one or more Subsidiaries to the Borrower, but
only to the extent permitted by clauses (vi) and (ix) of Section
6.15. -------
----
(vi) Additional Indebtedness of the Borrower and its Subsidiaries in
an aggregate principal amount at any one time outstanding not to
exceed the greater of (a) $15,000,000 and (b) ten percent (10%)
of Consolidated Net Worth.
6.13. Merger. The Borrower will not, nor will it permit any
------
Subsidiary to, merge or consolidate with any other Person, except that:
(i) A Subsidiary may merge with the Borrower (so long as the
Borrower is the surviving corporation).
(ii) A Subsidiary may merge with a Wholly-Owned Subsidiary (so long
as a Wholly-Owned Subsidiary is the surviving corporation).
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(iii) The Borrower may merge with any other Person subject to the
terms and conditions of clause (x) of Section 6.15.
------------
6.14. Sale of Assets. The Borrower will not, nor will it permit any
--------------
Subsidiary to, lease, sell or otherwise dispose of its Property, to any other
Person except for (i) sales of inventory in the ordinary course of business,
(ii) the sale, discount, or transfer of delinquent accounts receivable in the
ordinary course of business for purposes of collection only, (iii) occasional
sales, leases or other dispositions of immaterial assets for consideration
not less than fair market value, (iv) sales, leases or other dispositions of
assets that are obsolete or have negligible fair market value; and (v) sales
of equipment for a fair and adequate consideration (but if replacement
equipment is necessary for the proper operation of the business of the
seller, the seller must promptly replace the sold equipment); provided,
--------
however, that the aggregate amount of Property of the Borrower and its
-------
Subsidiaries leased, sold or disposed of pursuant to any of clauses (ii)
through (v) of this Section (excluding any equipment which has been promptly
replaced) during the twelve-month period ending with the month in which any
such lease, sale or other disposition occurs shall not constitute a
Substantial Portion of the Property of the Borrower and its Subsidiaries.
6.15. Investments and Acquisitions; Guaranty or Pledge Documentation
--------------------------------------------------------------
for New Subsidiaries. The Borrower will not, nor will it permit any
--------------------
Subsidiary to, make or suffer to exist any Investments (including without
limitation, loans and advances to, and other Investments in, Subsidiaries),
or commitments therefor, or to create any Subsidiary or to become or remain a
partner in any partnership or joint venture, or to make any Acquisition of
any Person, except:
(i) Short-term obligations (i.e., maturing within one year) of, or
fully guaranteed by, the United States of America.
(ii) Commercial paper rated A-l or better by Standard and Poor's
Ratings Group, a division of McGraw Hill Corporation or P-l or
better by Xxxxx'x Investors Service, Inc.
(iii) Certificates of deposit issued by and time deposits with
commercial banks (whether domestic or foreign) having capital and
surplus in excess of $100,000,000.
(iv) Money-market funds or money-market mutual funds which (a) seek
to maintain a constant net asset value, (b) maintain fund assets
under management having an aggregate market value of at least
$500,000,000 and (c) invest primarily in Investments referred to
in clauses (i) through (iii) above.
(v) Demand deposit accounts maintained in the ordinary course of
business.
43
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(vi) Investments in existence on the date of this Agreement and
described in Schedule "1" hereto.
(vii) Current trade and customer accounts receivable that are for
goods furnished or services rendered in the ordinary course of
business and that are payable on terms customary in the trade,
including the existing floor plan program offered to distributors
of the Borrower's products.
(viii) Investments evidenced by promissory notes executed by customers
of the Borrower and payable to the Borrower in an aggregate
principal amount not to exceed $500,000 at any one time
outstanding.
(ix) Loans, capital contributions and other Investments made
subsequent to the date of this Agreement, whether in existing
Subsidiaries, new Subsidiaries or Persons which are not
Subsidiaries of the Borrower; provided, that (a) the aggregate
--------
amount of such Investments to Persons which are not Obligor
Subsidiaries of Borrower made during the term of this Agreement
does not exceed $20,000,000 and (b) the Borrower shall have
complied with Section 6.10 in respect of each Subsidiary not
------------
identified on Schedule "1" hereto.
(x) Acquisitions of other Persons made by the Borrower subsequent
to the date of this Agreement; provided, that (a) except with
--------
respect to Acquisitions where the aggregate consideration to be
paid by the Borrower is less than $10,000,000, at least 30 days
prior to each such proposed Acquisition, the Borrower shall have
supplied the Lenders with historic financial statements for the
Person to be acquired (which financial statements shall include
the four most recently completed fiscal quarters of such Person,
but which need not be audited) and pro forma financial statements
for such Person and the Borrower on a combined and consolidated
basis which shall demonstrate to the reasonable satisfaction of
the Required Lenders that, if the Acquisition were to be
consummated, the Borrower would be able to maintain compliance
with Sections 6.20, 6.21 and 6.22 through the then applicable
------------- ---- ----
Facility Termination Date; (b) upon giving effect to each such
Acquisition (y) the Person so acquired by the Borrower shall have
either been merged into the Borrower (with the Borrower as the
surviving entity) or such Person shall have become a Wholly-Owned
Subsidiary of the Borrower (and the Borrower shall have complied
with Section 6.10 in respect of such Subsidiary) and (z) no
------------
Default or Unmatured Default shall exist; (c) prior to the date
of such Acquisition, such Acquisition shall have been approved by
the board of directors and, if applicable, the shareholders of
the Person whose stock or assets are being acquired in connection
with such Acquisition and no claim or challenge has been asserted
or threatened by any shareholder or director of such Person which
could reasonably be expected to have a material adverse effect on
such Acquisition or a
44
50
Material Adverse Effect; and (d) as of the date of any such
Acquisition, all approvals required in connection with such
Acquisition shall have been obtained.
(xi) Loans, capital contributions and other Investments among the
Borrower and the Obligor Subsidiaries.
For the purposes of this Section 6.15, Investments and Acquisitions shall be
-----------
valued at their initial principal amount, or cost, as the case may be,
without giving effect to any interest or dividends paid thereon or any
appreciation or depreciation in the market value thereof; provided, however,
that Investments consisting of loans and advances shall be valued at the
principal amount thereof then remaining unpaid.
In addition to the foregoing provisions, the Borrower will not, nor will it
permit any consolidated Subsidiary to, create or acquire a Subsidiary (a "New
Subsidiary") other than in connection with an Acquisition permitted hereunder
or pursuant to any transaction that is permitted by or not otherwise
prohibited by this Agreement; provided that (1) upon the creation or
acquisition of each New Subsidiary which is not a Foreign Subsidiary, the
Borrower shall cause each such New Subsidiary to promptly (but in any event
within 30 days) deliver to the Agent an executed Subsidiary Guaranty; (2)
upon the creation or acquisition of each New Subsidiary which is a Material
Foreign Subsidiary, the Borrower shall or shall cause its applicable domestic
Subsidiary promptly (but in any event within 60 days following the creation
or acquisition thereof) to execute a Pledge Agreement with respect to the
stock of such material Foreign Subsidiary, provided the Lien created under
such Pledge Agreement shall be extended equally and ratably to the Senior
Noteholders pursuant to a collateral sharing agreement, intercreditor
agreement or collateral trust agreement executed with the Senior Noteholders
or with respect to the Indebtedness evidenced by the Senior Notes on terms
and conditions reasonably acceptable to the Agent; and (3) in either case,
shall deliver appropriate corporate resolutions, opinions and other
documentation in form and substance satisfactory to the Agent in connection
therewith.
6.16. Contingent Obligations and Off Balance Sheet Liabilities. The
--------------------------------------------------------
Borrower will not, nor will it permit any Subsidiary to, make or suffer to
exist any Contingent Obligation (including, without limitation, any
Contingent Obligation with respect to the obligations of a Subsidiary) or Off
Balance Sheet Liabilities, except (i) by endorsement of instruments for
deposit or collection in the ordinary course of business, (ii) Facility LCs
issued hereunder, (iii) the Subsidiary Guaranties, (iv) litigation
indemnities in favor of Xxxxxx existing on the date of this Agreement, (v) an
additional aggregate amount not to exceed $10,000,000 at any one time
outstanding consisting of Letters of Credit (excluding all Facility LCs, but
including all Existing LCs) issued upon the application of the Borrower (but
not any Subsidiary); (vi) Contingent Obligations of the Borrower with respect
to the obligations of any Subsidiary or other Person in which the Borrower
has a direct or indirect Investment, provided that the aggregate amount of
all such Contingent Obligations, when added to the aggregate amount of all
outstanding Investments permitted by clause (ix) of Section 6.15, shall not
------------
at any time exceed $20,000,000; (vii) Contingent Obligations
45
51
of any Obligor Subsidiary which is a party to a Subsidiary Guaranty
consisting of a guaranty by such Obligor Subsidiary of the Indebtedness
evidenced by the Senior Notes; provided, (y) such guaranty to the Senior
Noteholders shall be on substantially the same terms as the applicable
Subsidiary Guaranty, with such changes thereto as shall not in any manner be
adverse to the interests of the Agent or the Lenders, and (z) such guaranty
of the Senior Notes shall provide for its automatic release upon the release
of the applicable Obligor Subsidiary of the Subsidiary Guaranty; and (viii)
Off Balance Sheet Liabilities which are included in the definition of
Consolidated Debt provided the Borrower is in compliance with the financial
covenants of this Agreement.
6.17. Liens. The Borrower will not, nor will it permit any Subsidiary
-----
to, create, incur, or suffer to exist any Lien in, of or on the Property of
the Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being contested
in good faith and by appropriate proceedings and for which
adequate reserves in accordance with generally accepted
principles of accounting shall have been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations not more
than 60 days past due or which are being contested in good faith
by appropriate proceedings and for which adequate reserves shall
have been set aside on its books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or
other social security or retirement benefits, or similar
legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar
character and which do not in any material way affect the
marketability of the same or interfere with the use thereof in
the business of the Borrower or the Subsidiaries.
(v) Good faith deposits incurred in the ordinary course of business
to secure public or statutory obligations, to secure or in lieu
of surety bonds, or in connection with bids or contracts
(including, without limitation, the purchase or lease of real
estate).
46
52
(vi) Liens securing judgments or orders for the payment of money, or
surety or appeal bonds with respect to any such judgment or
order, in an aggregate amount not exceeding $1,000,000, so long
as no Default exists with respect thereto under Section 7.9.
-----------
(vii) The interest of a lessor under any conditional sale or
Capitalized Lease to the Borrower so long as the related
Indebtedness is permitted by Section 6.12.
------------
(viii) Any Lien on any asset securing Indebtedness permitted by
Section 6.12 which is incurred or assumed for the purpose of
------------
financing all or any part of the cost of acquiring such asset,
provided that such Lien attaches to such asset concurrently with
or within 90 days after the acquisition thereof.
(ix) Any Lien existing on any asset of any Person at the time such
Person becomes a Subsidiary or is merged or consolidated with or
into the Borrower or a Subsidiary, provided that the Indebtedness
secured by each such Lien is permitted by Section 6.12.
------------
(x) Liens existing on the date hereof and described in Schedule "2"
hereto which secure Indebtedness in existence on the date of
this Agreement.
(xi) Liens arising out of any renewal, extension or refinancing of
any Indebtedness secured by any Lien permitted by any of clauses
(vii), (viii), (ix) or (x) above, so long as the principal amount
of such Indebtedness in not increased thereby and such
Indebtedness is not secured by any additional Property.
(xii) Liens in favor of the United States of America or any state
thereof, or any department, agency or instrumentality or
political subdivision thereof, in favor of any other country or
political subdivision, to secure partial, progress, advance or
other payments pursuant to any contract or statute or to secure
any Indebtedness permitted by Section 6.12 and incurred or
------------
guaranteed for the purpose of financing or refinancing all or any
part of the purchase price of Property subject to such Liens, or
the cost of constructing or improving the Property subject to
such Liens, including, without limitation, Liens incurred in
connection with pollution control, industrial revenue or similar
tax-advantaged financings; provided the aggregate amount of
Indebtedness secured under this clause (xii) shall not exceed
$20,000,000.
(xiii) Liens in favor of the Agent granted pursuant to any Collateral
Document.
(xiv) Liens on any collateral covered by any of the Collateral
Documents, which Liens have been extended for the equal and
ratable benefit of the Senior Noteholders to secure the
Indebtedness of the Borrower under the Note Purchase Agreement
and
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53
the Senior Notes and which Liens are governed by a collateral
sharing agreement, intercreditor agreement or collateral trust
agreement executed with the Senior Noteholders or with respect to
the Indebtedness evidenced by the Senior Notes on terms and
conditions reasonably acceptable to the Agent and which Liens,
pursuant to the terms of the Note Purchase Agreement, shall be
automatically released without any action on the part of any
Noteholder, if the Lien thereon under the Collateral Documents in
favor of the Agent for the benefit of itself, the LC Issuer and
the Lenders shall be released.
6.18. Rentals. The Borrower will not, nor will it permit any
-------
Subsidiary to, create, incur or suffer to exist obligations for Rentals in
excess of $6,000,000 during any one fiscal year on a non-cumulative basis in
the aggregate for the Borrower and its Subsidiaries.
6.19. Affiliates. The Borrower will not, and will not permit any
----------
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary than the Borrower or such Subsidiary would
obtain in a comparable arms-length transaction.
6.20. Minimum Consolidated Interest Coverage Ratio. The Borrower
--------------------------------------------
will not, as of the last day of any fiscal quarter of the Borrower,
commencing with the fiscal quarter ending December 31, 1997, permit the
Consolidated Interest Coverage Ratio for the period of four fiscal quarters
ending on such day, to be less than 3.0 to 1.0.
6.21. Maximum Consolidated Debt to Cash Flow Ratio. The Borrower will
--------------------------------------------
not, as of the last day of any fiscal quarter of the Borrower, commencing
with the fiscal quarter ending December 31, 1997, permit the Consolidated
Debt to Cash Flow Ratio for the period of four consecutive fiscal quarters
ending on such day, to be greater than 3.50 to 1.0.
6.22. Minimum Consolidated Net Worth. The Borrower will not at any
------------------------------
time subsequent to the initial Credit Extension hereunder permit Consolidated
Net Worth to be less than the sum of (i) $74,500,000 plus (ii) 50% of
Consolidated Net Income (if positive) for each fiscal quarter of the Borrower
commencing with the fiscal quarter ending September 30, 1997 and concluding
with the fiscal quarter ending most recently prior to the date of
determination, but without deduction for any fiscal quarter in which there is
a loss plus (iii) 50% of any addition to Consolidated Net Worth resulting
from sales by the Borrower or any of its Subsidiaries of any of its capital
stock (other than sales to employees pursuant to employee incentive plans).
6.23. Capital Expenditures. The Borrower will not, nor will it permit
--------------------
any Subsidiary to, expend, or be committed to expend, during any period of
twelve consecutive months on a non-cumulative basis an amount for Capital
Expenditures in the aggregate for the Borrower
48
54
and its Subsidiaries which exceeds five percent (5%) of consolidated revenues
for such twelve-month period, calculated in each case as of the end of each
fiscal-quarter for the twelve months then ended.
6.24. Pledge Agreements. The Borrower shall not at any time permit
-----------------
the aggregate assets of all of the Borrower's Foreign Subsidiaries in
connection with which the Agent has not received a Pledge Agreement (other
than Oy Tamrotor Ab) to exceed twelve percent (12%) of consolidated total
assets.
ARTICLE VII: DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made (or deemed made pursuant to
either Section 4.2 of this Agreement or Section 2 of any Subsidiary Guaranty)
-----------
by the Borrower or any Subsidiary to the Lenders, the LC Issuer or the Agent
under or in connection with this Agreement, any Credit Extension, any
Subsidiary Guaranty, or any certificate or information delivered in
connection with this Agreement or any other Credit Document shall be
materially false on the date as of which made.
7.2. Nonpayment of any Reimbursement Obligation or the principal of
any Note when due; or nonpayment of interest upon any Note or Reimbursement
Obligation or of any fee payable pursuant to Section 2.5 or the first
-----------
sentence of Section 2.19(d) within five days after the same becomes due; or
---------------
nonpayment of any other obligations under any of the Credit Documents within
five days after receipt by the Borrower of a written demand therefor from the
Agent or any Lender, as applicable.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.2, 6.3 or any of Sections 6.10 through 6.19.
----------- --- ----
7.4. The breach by the Borrower (other than a breach which constitutes
a Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of
----------- --- ---
this Agreement, and such breach continues for 30 days after the first to
occur of (i) the date the Borrower first knows of such breach or (ii) the
date the Borrower receives written notice from any Lender (acting through the
Agent) of such breach.
7.5. Failure of the Borrower or any of its Subsidiaries to pay any
Material Indebtedness when due; or either (i) the Borrower or any of its
Subsidiaries shall default in the performance of any term, provision or
condition contained in any agreement or agreements under which any Material
Indebtedness was created or is governed (and any applicable grace period(s)
expressly set forth therein shall have expired) or (ii) any other event shall
occur or condition exist, the effect of which (under either clause (i) or
(ii), as the case may be) is to cause, or to permit the holder or
49
55
holders of such Material Indebtedness to cause, such Material Indebtedness to
become due prior to its stated maturity; or any Material Indebtedness of the
Borrower or any of its Subsidiaries shall be declared to be due and payable
or required to be prepaid (other than by a regularly scheduled payment) prior
to the stated maturity thereof; or the Borrower or any of its Subsidiaries
shall not pay, or shall admit in writing its inability to pay, its debts
generally as they become due.
7.6. The Borrower or any of its Subsidiaries shall (i) have an order
for relief entered with respect to it under the Federal bankruptcy laws as
now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or
similar official for it or any Substantial Portion of its Property, (iv)
institute any proceeding seeking an order for relief with respect to it under
the Federal bankruptcy laws as now or hereafter in effect or seeking to
adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or
its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (v) take any
corporate action to authorize or effect any of the foregoing actions set
forth in this Section 7.6 or (vi) fail to contest in good faith any
-----------
appointment or proceeding described in Section 7.7.
-----------
7.7. Without the application, approval or consent of the Borrower or
any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or
any Substantial Portion of its Property; or a proceeding described in Section
-------
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries
-------
and such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of 60 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control (each a "Condemnation"),
of all or any portion of the Property of the Borrower or any of its
Subsidiaries, which, when taken together with all other Property of the
Borrower and its Subsidiaries, or any of them, so Condemned during the
twelve-month period ending with the month in which any such Condemnation
occurs, constitutes a Substantial Portion of the consolidated Property of the
Borrower and its Subsidiaries.
7.9. The Borrower or any of its Subsidiaries shall fail within 30 days
to pay, bond or otherwise discharge any one or more judgments or orders for
the payment of money in excess of $1,000,000 (other than any judgment for
which a financially sound and reputable insurer has admitted in writing
liability) in the aggregate, which are not stayed on appeal or otherwise
being appropriately contested in good faith with adequate reserves set aside
on its books in accordance with generally accepted accounting principles.
50
56
7.10. The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $500,000; or any Reportable Event shall occur in
connection with any Plan; or the Borrower or any of its Subsidiaries or any
other member of the Controlled Group shall become party to any Multiemployer
Plan.
7.11. Except for matters identified on Schedule "4" hereto, the
Borrower or any of its Subsidiaries shall be the subject of any proceeding or
investigation pertaining to the release by the Borrower or any of its
Subsidiaries or any other Person of any toxic or hazardous waste or substance
into the environment, or any violation of any federal, state or local
environmental, health or safety law or regulation, which, in either case,
could reasonably be expected to have a Material Adverse Effect.
7.12. Any Change in Control shall occur.
7.13. Other than in connection with any transactions which shall be
permitted by the terms hereof or of any other Credit Document or which shall
otherwise have been approved in writing by Required Lenders (or, if required
by the terms of Section 8.3. all of the Lenders), the Borrower shall cease
-----------
to own at least 80% of the capital stock of each Obligor Subsidiary.
7.14. Any Subsidiary Guaranty shall fail to remain in full force or
effect; or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of any Subsidiary Guaranty; or any Subsidiary
shall fail to comply with any of the terms or provisions of any Subsidiary
Guaranty to which it is a party; or any Subsidiary denies that it has any
further liability under any Subsidiary Guaranty to which it is a party, or
gives notice to such effect.
7.15. Any of the following shall occur: (i) any Collateral Document
shall for any reason fail to create a valid and perfected first priority
security interest in any collateral purported to be covered thereby, except
as permitted by the terms of any Collateral Document, (ii) any Collateral
Document shall fail to remain in full force or effect, (iii) any action shall
be taken to discontinue or to assert the invalidity or unenforceability of
any Collateral Document, or (iv) the Borrower shall fail to comply with any
of the terms or provisions of any Collateral Document.
ARTICLE VIII: ACCELERATION, DEFAULTING LENDERS, WAIVERS,
AMENDMENTS AND REMEDIES
8.1. Remedies.
--------
(a) If any Default described in Section 7.6 or 7.7 occurs with
----------- ---
respect to the Borrower, the Commitments of the Lenders hereunder (and the
obligation of the LC Issuer to issue Facility LCs) shall automatically
terminate and the Obligations shall immediately become due and payable
without any election or action on the part of the Agent, the LC Issuer or any
Lender. If any other
51
57
Default occurs and is continuing, the Required Lenders may terminate or
suspend the Commitments of the Lenders (and the obligation of the LC Issuer
to issue Facility LCs), or declare the Obligations to be due and payable, or
both, whereupon the Obligations shall become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which the
Borrower hereby expressly waives. Agent shall notify Borrower of any action
taken by the Required Lenders pursuant to the preceding sentence.
(b) In addition, the Borrower agrees that upon the occurrence and
during the continuance of any Default, it shall, if requested at any time by
the Agent upon instruction from the Required Lenders, pay (and, in the case
of any of the Defaults specified in Section 7.6 or 7.7 with respect to the
----------- ---
Borrower, forthwith, without any demand or the taking of any other action by
the Agent or any Lender, it shall pay) to the Agent an amount in immediately
available funds equal to the then aggregate amount of the LC Obligations (in
the applicable currency or currencies of the Facility LCs under which such
LC Obligations arose) to be held as security therefor for the benefit of the
Lenders and the LC Issuer.
(c) If, within 30 days after acceleration of the maturity of the
Obligations or termination of the Commitments of the Lenders hereunder (and
the obligation of the LC Issuer to issue Facility LCs) as a result of any
Default (other than any Default as described in Section 7.6 or 7.7 with
----------- ---
respect to the Borrower) and before any judgment or decree for the payment of
the Obligations due shall have been obtained or entered, the Required Lenders
(in their sole discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.
8.2. Defaulting Lender. In the event that any Lender fails to fund its
-----------------
Percentage of any Advance requested or deemed requested by the Borrower which
such Lender is obligated to fund under the terms of this Agreement (the
funded portion of such Advance being hereinafter referred to as a "Non Pro
Rata Loan"), until the earlier of such Lender's cure of such failure and the
termination of the Commitments, the proceeds of all amounts thereafter repaid
to the Agent by the Borrower and otherwise required to be applied to such
Lender's share of all other Obligations pursuant to the terms of this
Agreement shall be advanced to the Borrower by the Administrative Agent
("Cure Loans") on behalf of such Lender to cure, in full or in part, such
failure by such Lender, but shall nevertheless be deemed to have been paid to
such Lender in satisfaction of such other Obligations. Notwithstanding
anything in this Agreement to the contrary:
(i) the foregoing provisions of this Section 8.2 shall apply
-----------
only with respect to the proceeds of payments of Obligations and shall
not affect the conversion or continuation of Loans pursuant to Section
-------
2.9;
---
(ii) any such Lender shall be deemed to have cured its failure
to fund its Pro Rata Share of any Advance at such time as an amount
equal to such Lender's
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original Percentage of the requested principal portion of such Advance
is fully funded to the Borrower, whether made by such Lender itself or
by operation of the terms of this Section 8.2, and whether or not the
-----------
Non Pro Rata Loan with respect thereto has been repaid, converted or
continued;
(iii) amounts advanced to any Borrower to cure, in full or in
part, any such Lender's failure to fund its Percentage of any Advance
shall bear interest at the rate applicable to Loans which are Floating
Rate Loans, in effect from time to time, and for all other purposes of
this Agreement shall be treated as if they were Floating Rate Loans;
(iv) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to
its desired application, all repayments of principal which, in
accordance with the other terms of this Agreement, would be applied to
the outstanding Floating Rate Loans shall be applied first, ratably to
all Floating Rate Loans constituting Non Pro Rata Loans, second,
ratably to Floating Rate Loans other than those constituting Non Pro
Rata Loans or Cure Loans and, third, ratably to Floating Rate Loans
constituting Cure Loans;
(v) for so long as and until the earlier of any such Lender's
cure of the failure to fund its Percentage of any Advance and the
termination of the Commitments, the term "Required Lenders" for
purposes of this Agreement shall mean Lenders (excluding all Lenders
whose failure to fund their respective Percentage of such Advance have
not been so cured) whose Percentage represents at least fifty-one
percent (51%) of the aggregate Percentages of such Lenders; and
(vi) for so long as and until any such Lender's failure to
fund its Percentage of any Advance is cured in accordance with Section
-------
8.2(ii), (A) such Lender shall not be entitled to and the Borrower
-------
shall not be required to pay any facility fees with respect to its
Commitment and (B) such Lender shall not be entitled to and the
Borrower shall not be required to pay any letter of credit fees which
would otherwise be payable to such Lender.
8.3. Amendments. Subject to the provisions of this Article VIII, the
----------
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for
the purpose of adding or modifying any provisions to the Credit Documents or
changing in any manner the rights of the Lenders or the Borrower hereunder or
thereunder or waiving any Default hereunder; provided, that no such
--------
supplemental agreement shall, without the consent of each Lender:
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(a) Increase or decrease the amount of, the Commitment of any
Lender (except for a ratable decrease in the Commitments of all
Lenders) or otherwise subject any Lender to any additional
obligation; or
(b) Reduce the principal of or rate of interest on any Loan, any
Reimbursement Obligation or any fees hereunder; or
(c) Postpone the date fixed for any payment of principal of or
interest on any Loan, any Reimbursement Obligation or any fees
hereunder; or
(d) Extend the Facility Termination Date, or otherwise extend the
term of the Commitment of any Lender; or
(e) Change the definition of Required Lenders or the percentage of
the Commitments, the Outstanding Credit Exposures or the
Outstanding LC Exposures or of the aggregate unpaid principal
amount of the Notes, or the number of Lenders, which shall be
required for the Lenders or any of them to take any action under
this Section 8.3 or any other provision of the Credit Documents;
-----------
or
(f) Permit the Borrower to assign any of its rights or obligations
under this Agreement; or
(g) Other than in connection with any transactions which shall be
permitted by the terms hereof or of any other Credit Document or
which shall otherwise have been approved in writing by Required
Lenders (or, if required by the other terms of this Section 8.3.
-----------
all of the Lenders), release any Subsidiary from all or any
portion of its guaranty liability under its respective Subsidiary
Guaranty; or
(h) Other than in connection with any transactions which shall be
permitted by the terms hereof or of any other Credit Document or
which shall otherwise have been approved in writing by Required
Lenders (or, if required by the other terms of this Section 8.3,
-----------
all of the Lenders), release any of the collateral pledged
pursuant to the Pledge Agreements;
(i) Waive the requirements of Section 4.1(i) or 4.1(j); or
-------------- ------
(j) Amend or waive any of the provisions of this Section 8.3.
-----------
No amendment of any provision of this Agreement relating to the Agent
or the LC Issuer shall be effective without the written consent of the Agent
or the LC Issuer, as the case may be. The Agent may waive payment of the fee
required under Section 12.3.2 without obtaining the consent of any other
--------------
party to this Agreement.
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8.4. Preservation of Rights. No delay or omission of the Lenders or
----------------------
the Agent to exercise any right under the Credit Documents shall impair such
right or be construed to be a waiver of any Default or Unmatured Default or
an acquiescence therein, and the making of a Loan or issuance of a Letter of
Credit notwithstanding the existence of a Default or Unmatured Default or the
inability of the Borrower to satisfy the conditions precedent to such Loan
shall not constitute any waiver or acquiescence. Any single or partial
exercise of any such right shall not preclude other or further exercise
thereof or the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Credit Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.3, and then only to the extent in such writing
specifically set forth. All remedies contained in the Credit Documents or by
law afforded shall be cumulative and all shall be available to the Agent and
the Lenders until the Obligations have been paid in full.
ARTICLE IX: GENERAL PROVISIONS
9.1. Survival of Representations. All representations and warranties
---------------------------
of the Borrower contained in this Agreement shall survive delivery of the
Notes and the making of the Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to
-----------------------
the contrary notwithstanding, no Lender shall be obligated to extend credit
to the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. Taxes. Any taxes (excluding federal income taxes on the overall
-----
net income of any Lender and except as otherwise provided in Section 2.18) or
------------
other similar assessments or charges made by any governmental or revenue
authority in respect of the Credit Documents shall be paid by the Borrower,
together with interest and penalties, if any. As of the date of this
Agreement, neither the Borrower nor any Lender is aware of any such taxes,
assessments or charges.
9.4. Headings. Section headings in the Credit Documents are for
--------
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Credit Documents.
9.5. Entire Agreement. The Credit Documents embody the entire
----------------
agreement and understanding among the Borrower, the Agent and the Lenders and
supersede all prior agreements and understandings among the Borrower, the
Agent and the Lenders relating to the subject matter thereof including,
without limitation the Existing Credit Agreement (other than contingent
indemnity obligations which are stated to survive the termination thereof).
9.6. Several Obligations; Benefits of this Agreement. The respective
-----------------------------------------------
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any
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other (except to the extent to which the Agent is authorized to act as such).
The failure of any Lender to perform any of its obligations hereunder shall
not relieve any other Lender from any of its obligations hereunder. This
Agreement shall not be construed so as to confer any right or benefit upon
any Person other than the parties to this Agreement and their respective
successors and assigns.
9.7. Expenses; Indemnification. The Borrower shall reimburse the
-------------------------
Agent for any costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent) paid or incurred by the Agent in
connection with the preparation, negotiation, execution, delivery,
syndication, amendment, modification and administration of the Credit
Documents. The Borrower also agrees to reimburse the Agent, the LC Issuer
and the Lenders for any costs, internal charges and out-of-pocket expenses
(including reasonable attorneys' fees and time charges of attorneys for the
Agent, the LC Issuer and the Lenders, which attorneys may be employees of the
Agent, the LC Issuer or the Lenders) paid or incurred by the Agent, the LC
Issuer or any Lender in connection with the collection and enforcement of the
Credit Documents. The Borrower further agrees to indemnify the Agent, the LC
Issuer and each Lender, its directors, officers and employees against all
losses, claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all expenses of litigation or preparation
therefor whether or not the Agent, the LC Issuer or any Lender is a party
thereto) (collectively "Losses") which any of them may pay or incur arising
out of or relating to this Agreement, the other Credit Documents, the
transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Credit Extension hereunder. The
obligations of the Borrower under this Section shall survive the termination
of this Agreement; provided however that Borrower shall not be obligated to
indemnify any Lender, Agent or LC Issuer with respect to Losses which arise
solely from such Lender's, Agent's or LC Issuer's gross negligence or willful
misconduct. Notwithstanding anything to the contrary herein, the Borrower
shall not be liable to reimburse the Agent, the LC Issuers or any of the
Lenders in respect of disputes which arise or Losses which are incurred by
the Agent, the LC Issuers or any of the Lenders which arise solely as a
result of an action or failure to act on the part of the Agent, an LC Issuer
or a Lender and which do not relate in any way to actions or failures to act
on the part of the Borrower or any of its Subsidiaries.
9.8. Numbers of Documents. All statements, notices, closing
--------------------
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.9. Accounting. Except as provided to the contrary herein, all
----------
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement
Accounting Principles.
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9.10. Severability of Provisions. Any provision in any Credit
--------------------------
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable,
or invalid without affecting the remaining provisions in that jurisdiction or
the operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Credit Documents are
declared to be severable.
9.11. Nonliability of Lenders. The relationship between the Borrower
-----------------------
on the one hand and the Lenders, the LC Issuer and the Agent on the other
hand shall be solely that of borrower and lender. Neither the Agent, the LC
Issuer nor any Lender shall have any fiduciary responsibilities to the
Borrower or vice versa. Neither the Agent, the LC Issuer nor any Lender
undertakes any responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's
business or operations.
9.12. CHOICE OF LAW. THE CREDIT DOCUMENTS (OTHER THAN THOSE
-------------
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.13. CONSENT TO JURISDICTION. THE BORROWER, THE AGENT, THE LC ISSUER
-----------------------
AND EACH LENDER EACH HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN
CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY CREDIT
DOCUMENTS AND EACH SUCH PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR
THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE
RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST
THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE BORROWER AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER OR
ANY AFFILIATE OF THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY CREDIT DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE LC ISSUER
--------------------
AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY
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ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY CREDIT DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
9.15. Confidentiality. Each Lender agrees to hold any confidential
---------------
information which it may receive from the Borrower pursuant to this Agreement
in confidence, except for disclosure (i) to other Lenders and their
respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to that Lender or to a Transferee, (iii) to regulatory
officials exercising regulatory functions over or with respect to any Lender,
(iv) to any Person as required by law, regulation, or legal process, (v) to
any Person in connection with any legal proceeding to which that Lender is a
party, and (vi) permitted by Section 12.4.
------------
ARTICLE X: THE AGENT
10.1. Appointment. The First National Bank of Chicago is hereby
-----------
appointed Agent hereunder and under each other Credit Document, and each of
the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties as expressly set
forth herein. The Agent agrees to act as such upon the express conditions
contained in this Article X. The Agent shall not have a fiduciary
relationship in respect of the Borrower or any Lender by reason of this
Agreement.
10.2. Powers. The Agent shall have and may exercise such powers under
------
the Credit Documents as are specifically delegated to the Agent by the terms
of each thereof, together with such powers as are reasonably incidental
thereto. The Agent shall have no implied duties to the Lenders, or any
obligation to the Lenders to take any action thereunder except any action
specifically provided by the Credit Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
----------------
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Credit Document or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent
-------------------------------------------
nor any of its directors, officers, agents or employees shall be responsible
for or have any duty to ascertain, inquire into, or verify (i) any statement,
warranty or representation made in connection with any Credit Document or any
borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Credit Document, including,
without limitation, any agreement by the Borrower to furnish information
directly to each Lender; (iii) the satisfaction of any condition specified in
Article IV, except receipt of items required to be delivered to the Agent;
(iv) the value, sufficiency, creation, perfection or priority of any Lien in
any collateral security; or (v) the validity, effectiveness or genuineness of
any Credit Document or any other instrument or writing furnished in
connection therewith. The Agent shall have no duty
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to disclose to the Lenders information that is not required to be furnished
by the Borrower to the Agent at such time, but is voluntarily furnished by
the Borrower to the Agent (either in its capacity as Agent or in its
individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all cases
---------------------------------
be fully protected in acting, or in refraining from acting, hereunder and
under any other Credit Document in accordance with written instructions
signed by the Required Lenders (except to the extent Section 8.3 requires the
unanimous consent of all Lenders), and such instructions and any action taken
or failure to act pursuant thereto shall be binding on all of the Lenders and
on all holders of Notes. The Agent shall be fully justified in failing or
refusing to take any action hereunder and under any other Credit Document
unless it shall first be indemnified to its satisfaction by the Lenders pro
rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of
--------------------------------
its duties as Agent hereunder and under any other Credit Document by or
through employees, agents, and attorneys-in-fact and shall not be answerable
to the Lenders, except as to money or securities received by it or its
authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning all matters pertaining to the agency
hereby created and its duties hereunder and under any other Credit Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
------------------------------
rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and,
in respect to legal matters, upon the opinion of counsel selected by the
Agent, which counsel may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
-----------------------------------------
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments or, if the Commitments have terminated, their Outstanding Credit
Exposure (i) for any amounts not reimbursed by the Borrower for which the
Agent is entitled to reimbursement by the Borrower pursuant to Section 9.7,
-----------
(ii) for any other expenses incurred by the Agent on behalf of the Lenders,
in connection with the collection and enforcement of the Credit Documents and
(iii) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent
in any way relating to or arising out of the Credit Documents or any other
document delivered in connection therewith or the transactions contemplated
thereby, or the enforcement of any of the terms thereof or of any such other
documents, provided that no Lender shall be liable for any of the foregoing
to the extent any of the foregoing arise from the gross negligence or willful
misconduct of the Agent. The obligations of the Lenders under this Section
10.8 shall survive payment of the Obligations and termination of this
Agreement.
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10.9. Rights as a Lender. In the event the Agent is a Lender, the
------------------
Agent shall have the same rights and powers hereunder and under any other
Credit Document as any Lender and may exercise the same as though it were not
the Agent, and the term "Lender" or "Lenders" shall, at any time when the
Agent is a Lender, unless the context otherwise indicates, include the Agent
in its individual capacity. The Agent may accept deposits from, lend money
to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or any other
Credit Document, with the Borrower or any of its Subsidiaries in which the
Borrower or such Subsidiary is not restricted hereby from engaging with any
other Person. The Agent, in its individual capacity, is not obligated to
remain a Lender.
10.10. Lender Credit Decision. Each Lender acknowledges that it has,
----------------------
independently and without reliance upon the Agent or any other Lender and
based on the financial statements prepared by the Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Credit
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under this
Agreement and the other Credit Documents.
10.11. Successor Agent. The Agent may resign at any time by giving
---------------
written notice thereof to the Lenders and the Borrower, such resignation to
be effective upon the appointment of a successor Agent or, if no successor
Agent has been appointed, forty-five days after the retiring Agent gives
notice of its intention to resign. The Agent may be removed at any time with
or without cause by written notice received by the Agent from the Required
Lenders, such removal to be effective on the date specified by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall
have the right to appoint a successor Agent on behalf of the Lenders and the
Borrower with its consent (provided such consent may not be unreasonably
withheld or delayed and provided further no such consent shall be required if
a Default shall have occurred and be continuing). If no successor Agent
shall have been so appointed by the Required Lenders or consented to by the
Borrower (if such consent is required) within thirty days after the resigning
Agent's giving notice of its intention to resign, then the resigning Agent
may appoint, on behalf of the Borrower and the Lenders, a successor Agent.
If the Agent has resigned or been removed and no successor Agent has been
appointed, the Lenders may perform all the duties of the Agent hereunder and
the Borrower shall make all payments in respect of the Obligations to the
applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Agent shall be deemed to be appointed hereunder until
such successor Agent has accepted the appointment. Any such successor Agent
shall be a commercial bank having capital and retained earnings of at least
$100,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the resigning or
removed Agent. Upon the effectiveness of the resignation or removal of the
Agent, the resigning or
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removed Agent shall be discharged from its duties and obligations hereunder
and under the Credit Documents. After the effectiveness of the resignation
or removal of an Agent, the provisions of this Article X shall continue in
effect for the benefit of such Agent in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder and
under the other Credit Documents.
10.12. Agent's Fees. The Borrower agrees to pay to the Agent and the
------------
LC Issuer, for their own respective accounts, the fees agreed to by the
Borrower pursuant to that certain letter agreement dated October 22, 1997, or
as otherwise agreed from time to time.
10.13. Execution of Guaranty Collateral Documents. The Lenders and
------------------------------------------
the LC Issuers hereby empower and authorize the Agent to execute and deliver
to the Borrower on their behalf the Subsidiary Guaranties, Pledge
Agreement(s) and all related agreements, documents or instruments as shall be
necessary of appropriate to effect the purposes of the Subsidiary Guaranties
and Pledge Agreements(s).
10.14. Collateral and Guaranty Releases. The Lenders and the LC
--------------------------------
Issuers hereby empower and authorize the Agent to execute and deliver to the
Borrower on their behalf any agreements, documents or instruments as shall be
necessary or appropriate to effect any releases of any entities' liability
with respect to any Subsidiary Guaranty or release of any collateral pledged
pursuant to any Pledge Agreement in connection with any transactions which
shall be permitted by the terms hereof or of any other Credit Document or
which shall otherwise have been approved in writing by the Required Lenders
(or, if required by the terms of Section 8.3, all of the Lenders).
ARTICLE XI: SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights
------
of the Lenders under applicable law, if any Default or Unmatured Default
occurs, any and all deposits (including all account balances, whether
provisional or final and whether or not collected or available) and any other
Indebtedness at any time held or owing by any Lender to or for the credit or
account of the Borrower may be offset and applied toward the payment of the
Obligations owing to such Lender, whether or not the Obligations, or any part
hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
----------------
otherwise, has payment made to it upon its Outstanding Credit Exposure (other
than payments received pursuant to Sections 3.1, 3.2 or 3.4) in a greater
------------ --- ---
proportion than that received by any other Lender, such Lender agrees,
promptly upon demand, to purchase a portion of the Aggregate Outstanding
Credit Exposure held by the other Lenders so that after such purchase each
Lender will hold its Percentage of the Aggregate Outstanding Credit Exposure.
If any Lender, whether in connection with setoff or amounts which might be
subject to setoff or otherwise, receives collateral or other
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protection for its Obligations or such amounts which may be subject to
setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral
ratably in proportion to respective Percentages of the Aggregate Outstanding
Credit Exposure. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.
11.3. Relations Among Lenders. The Lenders are not partners or
-----------------------
co-venturers, and no Lender shall be liable for the acts or omissions of or
(except as otherwise set forth herein with respect to the Agent) authorized
to act for or on behalf of any other Lender.
ARTICLE XII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATION
12.1. Successors and Assigns. The terms and provisions of the
----------------------
Borrower Credit Documents shall be binding upon and inure to the benefit of
the Borrower and the Lenders and their respective successors and assigns,
except that (i) the Borrower shall not have the right to assign its rights or
obligations under the Borrower Credit Documents and (ii) any assignment by
any Lender must be made in compliance with Section 12.3. Notwithstanding
------------
clause (ii) of this Section, any Lender may at any time, without the consent
of the Borrower or the Agent, assign all or any portion of its rights under
the Credit Documents to a Federal Reserve Bank; provided, however, that no
such assignment shall release the transferor Lender from its obligations
hereunder. The Agent may treat the payee of any Note as the owner thereof
for all purposes hereof unless and until such payee complies with Section
-------
12.3 in the case of an assignment thereof or, in the case of any other
----
transfer, a written notice of the transfer is filed with the Agent. Any
assignee or transferee of a Note agrees by acceptance thereof to be bound by
all the terms and provisions of the Credit Documents. Any request, authority
or consent of any Person, who at the time of making such request or giving
such authority or consent is the holder of any Note, shall be conclusive and
binding on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor.
12.2. Participation.
-------------
12.2.1. Permitted Participants; Effect. Any Lender may, in the
------------------------------
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities
("Participants") participating interests in any Outstanding Credit
Exposure owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender under
the Credit Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations
under the Credit Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the holder of
any such Note for all purposes under the Credit Documents, all amounts
payable by the Borrower under this Agreement shall be determined as if
such Lender had not sold such participating interests, and the
Borrower, the LC Issuer and the
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Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Credit
Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole
-------------
right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Credit
Documents, other than any such amendment, modification or waiver which
requires the unanimous consent of the Lenders under Section 8.3.
-----------
12.2.3. Benefit of Setoff. The Borrower agrees that each
-----------------
Participant shall be deemed to have the right of setoff provided in
Section 11.1 in respect of its participating interest in amounts owing
------------
under the Credit Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the
Credit Documents, provided that each Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of
------------
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each
------------
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
------------
each Participant were a Lender.
12.3. Assignments.
-----------
12.3.1. Permitted Assignments. Any Lender may, in the
---------------------
ordinary course of its business and in accordance with applicable law,
at any time assign to one or more banks or other entities
("Purchasers") all or any part of its rights and obligations under the
Credit Documents; provided, that, unless the Agent and the Borrower
--------
shall otherwise agree, each such assignment shall be in the minimum
principal amount of not less than $10,000,000 and each such assignment
shall be of a constant, and not a varying, percentage of the assigning
Lender's rights and obligations under this Agreement and the assignment
shall cover the same percentage of such Lender's commitment, Loans and
interest in Facility LCs. Each such assignment shall be substantially
in the form of Exhibit "F" hereto or in such other form as may be
agreed to by the Agent and the parties thereto. The consent of the
Borrower, the LC Issuer and the Agent shall be required prior to an
assignment becoming effective with respect to a Purchaser which is not
a Lender or an Affiliate thereof (none of which consents may be
unreasonably withheld); provided, that if a Default has occurred and is
--------
continuing, the consent of the Borrower shall not be required.
12.3.2. Effect; Effective Date. Upon Purchaser's (i) delivery
-----------------------
to the Agent of a notice of assignment, substantially in the form
attached as Exhibit "A" to Exhibit "F" hereto (a "Notice of
Assignment"), together with any consents required by Section 12.3.1,
--------------
and (ii) payment of a $3,500 fee to the Agent for processing such
assignment, such assignment shall become effective on the effective
date specified in such Notice of Assignment. On and after the
effective date of such assignment, such Purchaser shall for
63
69
all purposes be a Lender party to this Agreement and any other Credit
Document executed by the Lenders and shall have all the rights and
obligations of a Lender under the Credit Documents, to the same extent
as if it were an original party hereto, and no further consent or
action by the Borrower, the Lenders, the LC Issuer or the Agent shall
be required to release the transferor Lender with respect to the
percentage of the Aggregate Commitment and Outstanding Credit Exposure
assigned to such Purchaser. Upon the consummation of any assignment to
a Purchaser pursuant to this Section 12.3.2, the transferor Lender, the
--------------
Agent and the Borrower shall make appropriate arrangements so that a
replacement Note is issued to the transferor Lender and a new or
replacement Note, as appropriate, is issued to such Purchaser, in each
case in principal amounts reflecting their Commitment, as adjusted
pursuant to such assignment. Upon the Purchaser's receipt of a new or
replacement Note, the transferor Lender shall return its old Note to
Borrower appropriately legended.
12.3.3. Register. The Agent shall maintain at its address
--------
referred to in Section 13.1 a copy of each assignment delivered to and
------------
accepted by it pursuant to this Section 12.3 and a register (the
------------
"Register") for the recordation of the names and addresses of the
Lenders and the Commitments of and principal amount of the Loans owing
to, each Lender from time to time and whether such Lender is an
original Lender or the assignee of another Lender pursuant to an
assignment under this Section 12.3. The entries in the Register shall
------------
be conclusive and binding for all purposes, absent manifest error, and
the Borrower, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes
of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
12.4. Dissemination of Information. The Borrower authorizes each
----------------------------
Lender to disclose to any Participant or Purchaser or any other Person
acquiring an interest in the Credit Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in such
Lender's possession concerning the creditworthiness of the Borrower and its
Subsidiaries; provided, that each Transferee and prospective Transferee
agrees to be bound by Section 9.15 of this Agreement.
------------
12.5. Tax Treatment. If any interest in any Credit Document is
-------------
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of Section
-------
2.18.
----
64
70
ARTICLE XIII: NOTICES
13.1. Giving Notice. Except as otherwise permitted by Section 2.13
------------- ------------
with respect to borrowing notices, all notices and other communications
provided to any party hereto under this Agreement or any other Credit
Document shall be given either in writing or by facsimile and addressed or
delivered to such party at its address or facsimile number, as the case may
be, set forth below its signature hereto or at such other address or
facsimile number as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage prepaid,
shall be deemed given when received; any notice, if properly transmitted by
facsimile, shall be deemed given when transmitted.
13.2. Change of Address. The Borrower, the Agent, the LC Issuer and
-----------------
any Lender may each change the address and/or facsimile number for service of
notice upon it by a notice in writing to the other parties hereto.
ARTICLE XIV: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent, the LC Issuer and the Lenders and each party has notified the Agent by
facsimile or telephone, that it has taken such action.
65
71
IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the
Agent have executed this Agreement as of the date first above written.
Commitments XXXXXXX DENVER MACHINERY INC.
-----------
By:---------------------------------------
Print Name:-------------------------------
Title:------------------------------------
0000 Xxxxxxx Xxxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Vice President,
Corporate Secretary and
Treasurer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE FIRST NATIONAL BANK OF CHICAGO,
$25,000,000 Individually as a Lender, as LC Issuer
and as Agent
By:---------------------------------------
Print Name:-------------------------------
Title:------------------------------------
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Signature Page to Xxxxxxx Denver
Machinery Inc. Credit Agreement
72
$20,000,000 XXXXXX BANK LTD.
By:---------------------------------------
Print Name:-------------------------------
Title:------------------------------------
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Telephone: 212/000-0000
Facsimile: 212/318-9318
Signature Page to Xxxxxxx Denver
Machinery Inc. Credit Agreement
73
$20,000,000 THE BANK OF NEW YORK
By:---------------------------------------
Print Name:-------------------------------
Title:------------------------------------
Xxx Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X'Xxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000/1209
Signature Page to Xxxxxxx Denver
Machinery Inc. Credit Agreement
74
$20,000,000 CREDIT AGRICOLE INDOSUEZ
By:---------------------------------------
Print Name:-------------------------------
Title:------------------------------------
By:---------------------------------------
Print Name:-------------------------------
Title:------------------------------------
00 Xxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Signature Page to Xxxxxxx Denver
Machinery Inc. Credit Agreement
75
$20,000,000 XXXXXX TRUST & SAVINGS BANK
By:---------------------------------------
Print Name:-------------------------------
Title:------------------------------------
000 Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Assistant Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Signature Page to Xxxxxxx Denver
Machinery Inc. Credit Agreement
76
$20,000,000 NATIONSBANK, N.A.
By:---------------------------------------
Print Name:-------------------------------
Title:------------------------------------
000 Xxxxxx Xxxxxx
00xx Xxxxx
XX0-000-00-00
Xx. Xxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Signature Page to Xxxxxxx Denver
Machinery Inc. Credit Agreement
77
EXHIBIT "A"
NOTE
$---------- January 20, 1998
Xxxxxxx Denver Machinery Inc., a Delaware corporation (the "Borrower"),
promises to pay to the order of ---------------------------------- (the
"Lender") the lesser of the principal sum of ------------------ Dollars or
the aggregate unpaid principal amount of all Loans made by the Lender to the
Borrower pursuant to Article II of the Credit Agreement (as the same may be
amended or modified, the "Agreement") hereinafter referred to, in immediately
available funds at the main office of The First National Bank of Chicago in
Chicago, Illinois, as Agent, together with interest on the unpaid principal
amount hereof at the rates and on the dates set forth in the Agreement. The
Borrower shall pay the principal of and accrued and unpaid interest on the
Loans in full on the Facility Termination Date.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual
practice, the date and amount of each Loan and the date and amount of each
principal payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Credit Agreement, dated as of January 20, 1998 among the
Borrower, The First National Bank of Chicago, individually, as LC Issuer and
as Agent, and the lenders named therein, including the Lender, to which
Agreement, as it may be amended from time to time, reference is hereby made
for a statement of the terms and conditions governing this Note, including
the terms and conditions under which this Note may be prepaid or its maturity
date accelerated. Capitalized terms used herein and not otherwise defined
herein are used with the meanings attributed to them in the Agreement.
XXXXXXX DENVER MACHINERY INC.
By:---------------------------------------
Print Name:-------------------------------
Title:------------------------------------
A-1
78
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF XXXXXXX DENVER MACHINERY INC.,
DATED JANUARY 20, 1998
Type Principal Maturity Principal
of Amount of of Interest Amount Unpaid
Date Loan Loan Period Paid Balance
---- ---- --------- ----------- --------- -------
A-2
79
EXHIBIT "B"
SUBSIDIARY GUARANTY
-------------------
THIS SUBSIDIARY GUARANTY (this "Guaranty") is made as of the
----------- day of ----------- , 199-, by ---------------------, a
corporation (the ("Guarantor") to and in favor of the Agent, for the ratable
benefit of the Agent, the LC Issuer and the Lenders under and as defined in
the Credit Agreement referred to below (said Agent, LC Issuer and Lenders are
herein collectively referred to as the "Beneficiaries").
WITNESSETH:
WHEREAS, Xxxxxxx Denver Machinery Inc., a Delaware corporation (the
"Borrower") has entered into a Credit Agreement dated as of January 20, 1998
among the Borrower, The First National Bank of Chicago, as Agent (in such
capacity, the "Agent"), the LC Issuer under and as defined therein and the
Lenders under and as defined therein (as same may be amended, extended,
increased, supplemented or otherwise modified from time to time, the "Credit
Agreement"), providing, subject to the terms and conditions thereof, for the
making of Loans to, and the issuing of Facility LCs for the account of, the
Borrower;
WHEREAS, the Guarantor is a Subsidiary of the Borrower;
WHEREAS, pursuant to Section 6.10 of the Credit Agreement, the Borrower
------------
covenants to cause each Person that becomes a direct or indirect Subsidiary
of the Borrower after the date of the Credit Agreement (whether as the result
of an acquisition, creation, or otherwise) to execute and delivery a Guaranty
substantially in the form of Exhibit "B" to the Credit Agreement to and in
favor of the Beneficiaries, in each case within 30 days after becoming a
direct or indirect Subsidiary of the Borrower (each Subsidiary who executes
such a Guaranty is herein referred to as a Subsidiary Guarantor"); and
WHEREAS, in consideration of the financial and other support that the
Borrower has provided, and such financial and other support as the Borrower
may in the future provide, to the Guarantor, and in order to induce the
Lenders and the LC Issuer to continue extending credit to the Borrower under
the Credit Agreement, the Guarantor is willing to guarantee any and all
existing and future obligations of the Borrower to the Beneficiaries under
the Credit Agreement, the Notes, and the other Credit Documents;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
B-1
80
SECTION 1. Definitions. Capitalized terms defined in the Credit
-----------
Agreement and not otherwise defined herein have, as used herein, the
respective meanings provided for therein.
SECTION 2. Representations and Warranties. The Guarantor represents
------------------------------
and warrants to the Beneficiaries (which representations and warranties shall
be deemed to have been renewed upon the date of each Credit Extension under
the Credit Agreement) that:
(a) it is a [corporation] duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation and
has all requisite [corporate power], and has all material governmental
licenses, authorizations, consents and approvals necessary to own its assets
and carry on its business as now being or as proposed to be conducted.
(b) it has all necessary [corporate] power and authority to
execute, deliver and perform its obligations under this Guaranty; the
execution, delivery and performance of this Guaranty have been duly
authorized by all necessary [corporate] action; and this Guaranty has been
duly and validly executed and delivered by it and constitutes its legal,
valid and binding obligation, enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, or moratorium or other similar laws relating to
the enforcement of creditors' rights generally and by general equitable
principles.
(c) neither the execution and delivery by it of this Guaranty
nor compliance with the terms and provisions hereof will conflict with or
result in a breach of, or require any consent under, its [certificate of
incorporation or by-laws] or any applicable law or regulation, or any order,
writ, injunction or decree of any court or governmental authority or agency,
or any agreement or instrument to which it is a party or by which it is bound
or to which it is subject, or constitute a default under any such agreement
or instrument, or result in the creation or imposition of any Lien upon any
of its revenues or assets pursuant to the terms of any such agreement or
instrument.
SECTION 3. Covenants. The Guarantor covenants that, so long as any
---------
Lender has any Commitment outstanding under the Credit Agreement or any
amount payable by Borrower under the Credit Agreement or any Note shall
remain unpaid, that it will, and, if necessary, will enable the Borrower to
fully comply with those covenants and agreements set forth in the Credit
Agreement.
SECTION 4. The Guaranty. Subject to Section 10 hereof, the Guarantor
------------ ----------
hereby absolutely and unconditionally guarantees the full and punctual
payment when due (whether at stated maturity, upon acceleration or otherwise)
of all unpaid principal of and accrued and unpaid interest on the Notes
(including, without limitation, any such interest, fees and expenses accrued
subsequent to the commencement of any bankruptcy or insolvency proceeding
with respect to the Borrower whether or not allowed as a claim in such
bankruptcy or insolvency proceeding), all LC
B-2
81
Obligations, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrower to the Beneficiaries, or
any of them, in each case whether now existing or hereafter incurred, whether
absolute or contingent obligations, and including all renewals, extensions
and modifications thereof and all attorneys' fees incurred by the
Beneficiaries in connection with the collection or enforcement thereof (all
of the foregoing, subject to the provisions of Section 10 hereof, being
----------
referred to collectively as the "Guaranteed Obligations"). Upon failure by
the Borrower to pay punctually any such amount, the Guarantor agrees that it
shall forthwith on demand pay the amount not so paid at the place and in the
manner specified in the Credit Agreement, any Note or the relevant Credit
Document, as the case may be.
SECTION 5. Guaranty Unconditional. Subject to Section 10 hereof, the
---------------------- ----------
obligations of the Guarantor hereunder shall be unconditional and absolute
and, without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower or any other
Subsidiary Guarantor under the Credit Agreement, any Subsidiary
Guaranty, any Note, or any other Credit Document, by operation of law
or otherwise;
(ii) any modification or amendment of or supplement to the Credit
Agreement, any Note, or any other Credit Document;
(iii) any release, nonperfection or invalidity of any direct or
indirect security for any obligation of the Borrower or any other
Subsidiary Guarantor under the Credit Agreement, any Subsidiary
Guaranty, any Note or any other Credit Document;
(iv) any change in the corporate existence, structure or ownership
of the Borrower or any other Subsidiary Guarantor, or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting the
Borrower, or any other Subsidiary Guarantor, or its assets or any
resulting release or discharge of any obligation of the Borrower, or
any other Subsidiary Guarantor;
(v) the existence of any claim, setoff or other rights which the
Guarantor may have at any time against the Borrower, any Subsidiary
Guarantor, any Beneficiary or any other Person, whether in connection
herewith or any unrelated transactions;
(vi) any invalidity or unenforceability relating to or against the
Borrower, any other Subsidiary Guarantors, for any reason related to
the Credit Agreement, any Subsidiary Guaranty or any other Credit
Document, or any provision of applicable law or regulation purporting
to prohibit the payment of all or any part of the Obligations by the
Borrower or any other Subsidiary Guarantor; or
B-3
82
(vii) any other act or omission to act or delay of any kind by the
Borrower, any other Subsidiary Guarantor, any Beneficiary or any other
Person or any other circumstance whatsoever which might, but for the
provisions of this paragraph, constitute a legal or equitable discharge
of any Guarantor's obligations hereunder.
SECTION 6. Discharge Only Upon Payment In Full: Reinstatement In
-----------------------------------------------------
Certain Circumstances. The Guarantor's obligations hereunder shall remain in
---------------------
full force and effect until all Guaranteed Obligations shall have been paid
in full and the Commitments under the Credit Agreement shall have terminated
or expired. If at any time any payment of any portion of the Guaranteed
Obligations is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of the Borrower or otherwise, the
Guarantor's obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.
SECTION 7. Waiver of Notice. The Guarantor irrevocably waives
----------------
acceptance hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as any
requirement that at any time any action be taken by any Person against the
Borrower, any other Subsidiary of the Borrower, or any other Person.
SECTION 8. Subrogation. The Guarantor hereby agrees not to assert any
-----------
right, claim or cause of action, including, without limitation, a claim for
subrogation, reimbursement, indemnification or otherwise, against the
Borrower, any other Subsidiary of the Borrower or any other Person arising
out of or by reason of this Guaranty or the obligations hereunder, unless and
until the Guaranteed Obligations are paid in full and all Commitments of the
Lenders under the Credit Agreement shall have terminated or expired.
SECTION 9. Stay of Acceleration. If acceleration of the time for
--------------------
payment of any portion of the Guaranteed Obligations is stayed upon the
insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of the Credit Agreement,
any Note or any other Credit Document shall nonetheless be payable by the
Guarantor hereunder forthwith on demand by the Agent.
SECTION 10. Limitation on Obligations. (a) It is the intention of the
-------------------------
Guarantor and the Beneficiaries that the Guarantor's obligations hereunder in
respect of the Guaranteed Obligations shall be in, but not in excess of, as
of any date, the greater of the following (such greater amount determined
hereunder being the Guarantor's "Maximum Liability"): (i) the aggregate
amount of all monies received by the Guarantor from the Borrower after the
date hereof (whether by loan, capital infusion or other means), or (ii) the
maximum amount (such amount being the Guarantor's "Alternative Limitation")
not subject to avoidance under Title 11 of the United States Code, as same
may be amended from time to time, or any applicable state law (collectively,
the "Bankruptcy Code"). To that end, but as to the Alternative Limitation of
the Guarantor, only to the extent such obligations would otherwise be subject
to avoidance under the Bankruptcy Code if the Guarantor is not deemed to have
received valuable consideration, fair value or reasonably
B-4
83
equivalent value for its obligations hereunder, the Guarantor's obligations
hereunder in respect of the Guaranteed Obligations shall be reduced to that
amount which, after giving effect thereto, would not render the Guarantor
insolvent, or leave the Guarantor with an unreasonably small capital to
conduct its business, or cause the Guarantor to have incurred debts (or
intended to have incurred debts) beyond its ability to pay such debts as they
mature, at the time such obligations are deemed to have been incurred under
the Bankruptcy Code. As used herein, the terms "insolvent" and "unreasonably
small capital" shall likewise be determined in accordance with the Bankruptcy
Code. This Section 10(a) with respect to the Alternative Limitation of the
-------------
Guarantor is intended solely to preserve the rights of the Beneficiaries
hereunder to the maximum extent not subject to avoidance under the Bankruptcy
Code, and neither the Guarantor nor any other person or entity shall have any
right or claim under this Section 10(a) with respect to the Alternative
-------------
Limitation, except to the extent necessary so that the obligations of the
Guarantor hereunder shall not be rendered voidable under the Bankruptcy Code.
(b) The Guarantor agrees that the Guaranteed Obligations may at any
time and from time to time exceed the Maximum Liability of the Guarantor,
without impairing this Guaranty or affecting the rights and remedies of the
Beneficiaries hereunder. Nothing in this Section 10(b) shall be construed to
-------------
increase the Guarantor's obligations hereunder in respect of the Guaranteed
Obligations beyond its Maximum Liability.
(c) In the event the Guarantor or any other Subsidiary Guarantor (a
"Paying Guarantor") shall make any payment or payments under its respective
Subsidiary Guaranty or shall suffer any loss as a result of any realization
upon any collateral granted by it to secure its obligations under its
Subsidiary Guaranty, each other Subsidiary Guarantor (each a "Non-Paying
Guarantor") shall contribute to such Paying Guarantor an amount equal to such
Non-Paying Guarantor's "Pro Rata Share" of such payment or payments made, or
losses suffered, by such Paying Guarantor. For the purposes hereof, each
Non-Paying Guarantor's "Pro Rata Share" with respect to any such payment or
loss by a Paying Guarantor shall be determined as of the date on which such
payment or loss was made by reference to the ratio of (i) such Non-Paying
Guarantor's Maximum Liability as of such date (without giving effect to any
right to receive, or obligation to make, any contribution hereunder) to (ii)
the aggregate Maximum Liability of all Subsidiary Guarantors under each of
the Subsidiary Guaranties (including such Paying Guarantor) as of such date
(without giving effect to any right to receive, or obligation to make, any
contribution under any Subsidiary Guaranty). Nothing in this Section 10(c)
-------------
shall affect the Guarantor's several liability for the entire amount of the
Guaranteed Obligations (up to the Guarantor's Maximum Liability), it being
understood and agreed that the Guarantor's liability hereunder is several and
independent of any other Subsidiary Guaranties at any time in effect with
respect to the Guaranteed Obligations and that the Guarantor's liability
hereunder may be enforced regardless of the existence, validity, enforcement
or non-enforcement of any such other Subsidiary Guaranties. The Guarantor
covenants and agrees that its right to receive any contribution from any
Non-Paying Guarantor shall be subordinate and junior in right of payment to
all the Guaranteed Obligations. The provisions of this Section 10(c) are for
------------
the benefit of the
B-5
84
Beneficiaries and the Subsidiary Guarantors and may be enforced by any one,
or more, or all of them in accordance with the terms hereof.
SECTION 11. Collection Expenses. In addition to the Guarantor's
-------------------
guaranty of the Guaranteed Obligations hereunder, the Guarantor hereby agrees
to pay all costs, fees and expenses (including attorneys' fees) incurred by
each of the Beneficiaries in collecting or enforcing the Guarantor's
obligations under this Guaranty. The Guarantor's obligations under this
Section 11 shall not be included within the obligations of the Guarantor
----------
limited by the preceding Section 10.
----------
SECTION 12. Currency of Payment. The Guarantor agrees that all
-------------------
payments under this Guaranty shall be made in the same currency and manner as
provided for the Guaranteed Obligations. If the Guarantor is unable for any
reason to effect payment in Dollars as required by the preceding sentence or
if the Guarantor shall default in the payment when due of any payment under
this Guaranty, the applicable Beneficiary may, at its option, require such
payment to be made to such Beneficiary in the equivalent amount of the
currency of the Guarantor's domicile at the applicable Beneficiary's then
current selling rate for cable transfers of such foreign currency to the
place or places where the Guaranteed Obligations was payable. In any case in
which the Guarantor shall make such payment in such foreign currency, the
Guarantor agrees to hold the applicable Beneficiary harmless from any loss
incurred by the applicable Beneficiary arising from any change in the value
of such foreign currency in relation to United States currency between the
date such Guaranteed Obligations became due and the date of payment thereof.
SECTION 13. Taxes. etc. All payments required to be made by the
-----------
Guarantor hereunder shall be made without setoff or counterclaim and free and
clear of and without deduction or withholding for or on account of, any
present or future taxes, levies, imposts, duties or other charges of
whatsoever nature imposed by any government or any political or taxing
authority thereof, provided, however, that if the Guarantor is required by
law to make such deduction or withholding, the Guarantor shall forthwith pay
to the applicable Beneficiary such additional amount as results in the net
amount received by such Beneficiary equaling the full amount which would have
been received by such Beneficiary had no such deduction or withholding been
made, but after reflecting any actual tax credits taken by such Beneficiary
as a result of the Guarantor's payment of such additional amount.
SECTION 14. Notices. All notices, requests and other communications
-------
to any party hereunder shall be given or made by telecopier or other writing
and telecopied, or mailed or delivered to the intended recipient at its
address or telecopier number set forth on the signature pages hereof or such
other address or telecopy number as such party may hereafter specify for such
purpose by notice to the Agent in accordance with the provisions of Article
XIII of the Credit Agreement. Except as otherwise provided in this Guaranty,
all such communications shall be deemed to have been duly given when
transmitted by telecopier, or personally delivered or, in the case of a
mailed notice sent by certified mail return-receipt requested, on the date
set forth on
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85
the receipt (provided, that any refusal to accept any such notice shall be
deemed to be notice thereof as of the time of any such refusal), in each case
given or addressed as aforesaid.
SECTION 15. No Waivers. No failure or delay by any Beneficiary in
----------
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies provided in this Guaranty, the Credit
Agreement, the Notes, and the other Credit Documents shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 16. Successors and Assigns. This Guaranty is for the benefit
----------------------
of the Beneficiaries and their respective successors and assigns. This
Guaranty shall be binding upon the Guarantor and its successors, but the
Guarantor may not assign any of its obligations hereunder without the prior
written consent of each of the Beneficiaries.
SECTION 17. Changes in Writing. Neither this Guaranty nor any
------------------
provision hereof may be changed, waived, discharged or terminated orally, but
only in writing signed by the Guarantor and the Agent (with the consent of
the requisite Lenders pursuant to Section 8.3 of the Credit Agreement).
-----------
SECTION 18. GOVERNING LAW SUBMISSION TO JURISDICTION WAIVER OF JURY
-------------------------------------------------------
TRIAL. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
-----
THE LAW OF THE STATE OF ILLINOIS. THE GUARANTOR HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS AND OF ANY ILLINOIS STATE COURT SITTING IN
CHICAGO, ILLINOIS FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS GUARANTY (INCLUDING, WITHOUT LIMITATION, ANY OF THE OTHER
CREDIT DOCUMENTS) OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE GUARANTOR
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE
GUARANTOR AND EACH OF THE BENEFICIARIES EACH HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed, under seal, by its authorized officer as of the day and year first
above written.
----------------------------
By: -------------------------
Title: -----------------------
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87
EXHIBIT "C"
FORM OF LEGAL OPINION
Attached
--------
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EXHIBIT "D"
COMPLIANCE CERTIFICATE
To: The Lenders party to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of January 20, 1998 (as amended, modified, renewed
or extended from time to time, the "Agreement") among the Borrower, the
Lenders party thereto and The First National Bank of Chicago, as Agent for
the Lenders and as LC Issuer. Unless otherwise defined herein, capitalized
terms used in this Compliance Certificate have the meanings ascribed thereto
in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected --------------------- of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting
period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which
constitutes a Default or Unmatured Default during or at the end of the
accounting period covered by the attached financial statements or as of the
date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of
the Agreement, all of which data and computations are true, complete and
correct.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it
has existed and the action which the Borrower has taken, is taking, or
proposes to take with respect to each such condition or event:
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The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ---- day of
----------, 19--.
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90
EXHIBIT "E"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To: The First National Bank of Chicago,
as Agent (the "Agent") under the Credit Agreement
Described Below.
Re: Credit Agreement dated as of January 20, 1998 among Xxxxxxx Denver
Machinery Inc. (the "Borrower"), The First National Bank of Chicago,
individually, as LC Issuer and as Agent, and the Lenders named therein
(the "Credit Agreement"). Terms used herein and not otherwise defined
shall have the meanings assigned thereto in the Credit Agreement.
The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds
of Advances or other extensions of credit from time to time until receipt by
the Agent of a specific written revocation of such instructions by the
Borrower, provided, however, that the Agent may otherwise transfer funds as
hereafter directed in writing by the Borrower in accordance with Section 13.1
------------
of the Credit Agreement or based on any telephonic notice made in accordance
with Section 2.13 of the Credit Agreement.
------------
Facility Identification Number(s)---------------------------------------------
Customer/Account Name---------------------------------------------------------
Transfer Funds To-------------------------------------------------------------
For Account No.---------------------------------------------------------------
Reference/Attention To--------------------------------------------------------
Authorized Officer (Customer Representative) Date--------------------------
(Please Print) Signature
Bank Officer Name Date--------------------------
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
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EXHIBIT "F"
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
(the "Assignor") and ------------------ (the "Assignee") is dated as of
----------, 19--. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit
---------------------
Agreement dated as of January 20, 1998 among Xxxxxxx Denver Machinery Inc.,
the Lenders named therein, and The First National Bank of Chicago,
individually, as LC Issuer and as Agent (which, as it may be amended,
modified, renewed or extended from time to time is herein called the "Credit
Agreement"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns
-------------------------
to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an undivided --% interest in and to all of the Assignor's rights
and obligations under the Credit Agreement and the other Credit Documents.
The aggregate principal dollar amount of the Commitment (or Outstanding
Credit Exposure, if the applicable Commitment has been terminated) of the
Assignor purchased by the Assignee hereunder is $----------.
3. EFFECTIVE DATE. The effective date of this Assignment
--------------
Agreement (the "Effective Date") shall be the later of ----------, 19-- or
two Business Days (or such shorter period agreed to by the Agent) after a
Notice of Assignment substantially in the form of Exhibit "I" attached hereto
has been delivered to the Agent. Such Notice of Assignment must include any
consents required to be delivered to the Agent by Section 12.3.1 of the
--------------
Credit Agreement. In no event will the Effective Date occur if the payments
required to be made by the Assignee to the Assignor on the Effective Date
under Sections 4 and 5 hereof are not made on the proposed Effective Date.
---------- -
The Assignor will notify the Assignee of the proposed Effective Date no later
than the Business Day prior to the proposed Effective Date. As of the
Effective Date, (i) the Assignee shall have the rights and obligations of a
Lender (including the agreements of a Lender) under the Credit Documents with
respect to the rights and obligations assigned to the Assignee hereunder and
(ii) the Assignor shall relinquish its rights and be released from its
corresponding obligations under the Credit Documents with respect to the
rights and obligations assigned to the Assignee hereunder.
4. PAYMENT OBLIGATIONS. On and after the Effective Date, the Assignee
-------------------
shall be entitled to receive from the Agent (or the LC Issuer, as the case
may be) all payments of principal, interest and fees with respect to the
interest assigned hereby. The Assignee shall advance funds directly to the
Agent (or the LC Issuer, as the case may be) with respect to all Loans and
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92
Reimbursement Obligations made on or after the Effective Date with respect to
the interest assigned hereby. [With respect to the sale and assignment of
Loans hereunder, (i) the Assignee shall pay the Assignor, on the Effective
Date, an amount equal to the principal amount of the portion of all Floating
Rate Loans assigned to the Assignee hereunder and (ii) with respect to each
Eurocurrency Loan made by the Assignor and assigned to the Assignee hereunder
which is outstanding on the Effective Date, (a) on the last day of the
Eurocurrency Interest Period therefor or (b) on such earlier date agreed to
by the Assignor and the Assignee or (c) on the date on which any such
Eurocurrency Loan either becomes due (by acceleration or otherwise) or is
prepaid (the date as described in the foregoing clauses (a), (b) or (c) being
hereinafter referred to as the "Payment Date"), the Assignee shall pay the
Assignor an amount equal to the principal amount of the portion of such
Eurocurrency Loan assigned to the Assignee which is outstanding on the
Payment Date. If the Assignor and the Assignee agree that the Payment Date
for such Eurocurrency Loan shall be the Effective Date, they shall agree to
the interest rate applicable to the portion of such Loan assigned hereunder
for the period from the Effective Date to the end of the existing
Eurocurrency Interest Period applicable to such Eurocurrency Loan (the
"Agreed Interest Rate") and any interest received by the Assignee in excess
of the Agreed Interest Rate shall be remitted to the Assignor. In the event
interest for the period from the Effective Date to but not including the
Payment Date is not paid by the Borrower with respect to any Eurocurrency
Loan sold by the Assignor to the Assignee hereunder, the Assignee shall pay
to the Assignor interest for such period on the portion of such Eurocurrency
Loan sold by the Assignor to the Assignee hereunder at the applicable rate
provided by the Credit Agreement. In the event a prepayment of any
Eurocurrency Loan which is existing on the Payment Date and assigned by the
Assignor to the Assignee hereunder occurs after the Payment Date but before
the end of the Eurocurrency Interest Period applicable to such Eurocurrency
Loan, the Assignee shall remit to the Assignor the excess of the prepayment
penalty paid with respect to the portion of such Eurocurrency Loan assigned
to the Assignee hereunder over the amount which would have been paid if such
prepayment penalty was calculated based on the Agreed Interest Rate. The
Assignee will also promptly remit to the Assignor (i) any principal payments
received from the Agent with respect to Eurocurrency Loans prior to the
Payment Date and (ii) any amounts of interest on Loans and fees received from
the Agent which relate to the portion of the Loans assigned to the Assignee
hereunder for periods prior to the Effective Date, in the case of Floating
Rate Loans, or the Payment Date, in the case of Eurocurrency Loans, and not
previously paid by the Assignee to the Assignor.] In the event that either
party hereto receives any payment to which the other party hereto is entitled
under this Assignment Agreement, then the party receiving such amount shall
promptly remit it to the other party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. [The Assignee shall pay to the
----------------------------
Assignor a
[FN]
------------------------
Each Assignor may insert its standard payment provisions in lieu of the
payment terms included in this Section.
F-2
93
fee on each day on which a payment of interest or fees is made under the
Credit Agreement with respect to the amounts assigned to the Assignee
hereunder (other than a payment of interest or fees for the period prior to
the Effective Date or, in the case of Eurocurrency Loans, the Payment Date,
which the Assignee is obligated to deliver to the Assignor pursuant to Section 4
---------
hereof). The amount of such fee shall be the difference between (i) the
interest or fee, as applicable, paid with respect to the amounts assigned to
the Assignee hereunder and (ii) the interest or fee, as applicable, which
would have been paid with respect to the amounts assigned to the Assignee
hereunder if each interest rate was --- of 1% less than the interest rate
paid by the Borrower or if the fee was --- of 1% less than the fee paid by the
Borrower, as applicable.] In addition, the Assignee agrees to pay ---% of
the recordation fee required to be paid to the Agent in connection with this
Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
--------------------------------------------------------------
LIABILITY. The Assignor represents and warrants that it is the legal and
---------
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It
is understood and agreed that the assignment and assumption hereunder are
made without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor
nor any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectability of any Credit Document, (ii) any
representation, warranty or statement made in or in connection with any of
the Credit Documents, (iii) the financial condition or creditworthiness of
the Borrower or any of its Subsidiaries, (iv) the performance of or
compliance with any of the terms or provisions of any the Credit Documents,
(v) inspecting any of the Property, books or records of the Borrower or any
of its Subsidiaries, (vi) the validity, enforceability, perfection, priority,
condition, value or sufficiency of any collateral securing or purporting to
secure the Obligations or (vii) any mistake, error of judgment, or action
taken or omitted to be taken in connection with the Credit Extensions or the
Credit Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms
--------------------------------
that it has received a copy of the Credit Agreement, together with copies of
the Borrower's financial statements requested by the Assignee and such other
documents and information with respect to the Borrower as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment Agreement, (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and information at it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under the
Credit Documents, (iii) appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under the Credit Documents
as are
[FN]
------------------------
Each Assignor may insert its standard payment provisions in lieu of the
payment terms included in this Section.
F-3
94
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, (iv) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Documents are required to be performed by it as a Lender, (v) agrees that its
payment instructions and notice instructions are as set forth in the
attachment to Schedule 1, (vi) confirms that none of the funds, monies,
assets or other consideration being used to make the purchase and assumption
hereunder are "plan assets" as defined under ERISA and that its rights,
benefits and interests in and under the Credit Documents will not be "plan
assets" under ERISA, [and (vii) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying that the Assignee is entitled
to receive payments under the Credit Documents without deduction or
withholding of any United States federal income taxes].
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
---------
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee
----------------------
shall have the right subject to Section 12.3.1 of the Credit Agreement to
--------------
assign the rights which are assigned to the Assignee hereunder to any entity
or person, provided that (i) any such subsequent assignment does not violate
any of the terms and conditions of the Credit Documents or any law, rule,
regulation, order, writ, judgment, injunction or decree and that any consent
required under the terms of the Credit Documents has been obtained and (ii)
unless the prior written consent of the Assignor is obtained, the Assignee is
not thereby released from its obligations to the Assignor hereunder, if any
remain unsatisfied, including, without limitation, its obligations under
[Sections 4, 5 and 8] hereof.
---------- - -
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
----------------------------------
Aggregate Commitment occurs between the date of this Assignment Agreement and
the Effective Date, the percentage interest specified in Section 2 above
---------
shall remain the same, but the dollar amount purchased shall be recalculated
based on the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached
----------------
Notice of Assignment embody the entire agreement and understanding between
the parties hereto and supersede all prior agreements and understandings
between the parties hereto relating to the subject matter hereof.
[FN]
------------------------
To be inserted if the Assignee is not incorporated under the laws of the
United States, or a state thereof.
F-4
95
12. GOVERNING LAW. This Assignment Agreement shall be governed by the
-------------
internal law, and not the law of conflicts, of the State of Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement
-------
in the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall
be the address set forth in the attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment Agreement by their duly authorized officers as of the date first
above written.
[NAME OF ASSIGNOR]
By: --------------------------------
Title: ----------------------------
[NAME OF ASSIGNEE]
By: -------------------------------
Title: ----------------------------
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SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee
F-6
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EXHIBIT "A"
to Assignment Agreement
NOTICE
OF ASSIGNMENT
-------------
-----------------, 19--
To: XXXXXXX DENVER MACHINERY INC.
THE FIRST NATIONAL BANK OF CHICAGO
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that certain Credit Agreement dated as of
January 20, 1998 among Xxxxxxx Denver Machinery Inc., The First National Bank
of Chicago, individually, as LC Issuer and as Agent, and the Lenders named
therein (the "Credit Agreement"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the
Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and
delivered to [the Borrower and] the Agent pursuant to Section 12.3.2 of
--------------
the Credit Agreement.
3. The Assignor and the Assignee have entered into an
Assignment Agreement, dated as of -----------, 19-- (the "Assignment"),
pursuant to which, among other things, the Assignor has sold, assigned,
delegated and transferred to the Assignee, and the Assignee has purchased,
accepted and assumed from the Assignor an undivided --% interest of all
outstandings, rights and obligations of the Assignor under the Credit
Agreement and the other Credit Documents. The Effective Date of the
Assignment shall be the later of ----------, 19-- or two Business Days (or
such shorter period as agreed to by the Agent) after this Notice of
Assignment and any consents and fees required by Sections 12.3.1 and 12.3.2
--------------- ------
of the Credit Agreement have been delivered to the Agent, provided that the
Effective Date shall not occur if any condition precedent agreed to by the
Assignor and the Assignee has not been satisfied.
[FN]
------------------------
To be included only if consent must be obtained from the Borrower pursuant
to Section 12.3.1 of the Credit Agreement.
--------------
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98
4. The Assignor and the Assignee hereby give to the Borrower
and the Agent notice of the assignment and delegation referred to herein.
The Assignor will confer with the Agent before ---------, 19-- to determine
if the Assignment Agreement will become effective on such date pursuant to
Section 3 hereof, and will confer with the Agent to determine the Effective
---------
Date pursuant to Section 3 hereof if it occurs thereafter. The Assignor
---------
shall notify the Agent if the Assignment Agreement does not become effective
on any proposed Effective Date as a result of the failure to satisfy the
conditions precedent agreed to by the Assignor and the Assignee. At the
request of the Agent, the Assignor will give the Agent written confirmation
of the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or
before the Effective Date the processing fee of $3,500 required by Section
-------
12.3.2 of the Credit Agreement.
------
6. If Notes are outstanding on the Effective Date, the
Assignor and the Assignee request and direct that the Agent prepare and cause
the Borrower to execute and deliver new Notes or, as appropriate,
replacements notes, to the Assignor and the Assignee. The Assignor and, if
applicable, the Assignee each agree to deliver to the Borrower the original
Note received by it from the Borrower appropriately legended upon its receipt
of a new Note in the appropriate amount.
7. The Assignee advises the Agent that notice and payment
instructions are set forth in Schedule 1 to the Assignment Agreement.
8. The Assignee hereby represents and warrants that none of
the funds, monies, assets or other consideration being used to make the
purchase pursuant to the Assignment are "plan assets" as defined under ERISA
and that its rights, benefits, and interests in and under the Credit
Documents will not be "plan assets" under ERISA.
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9. The Assignee authorizes the Agent to act as its agent
under the Credit Documents in accordance with the terms thereof. The
Assignee acknowledges that the Agent has no duty to supply information with
respect to the Borrower or the Credit Documents to the Assignee until the
Assignee becomes a party to the Credit Agreement.
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: --------------------------- By:----------------------------
Title:------------------------- Title:-------------------------
ACKNOWLEDGED [AND CONSENTED TO] ACKNOWLEDGED [AND CONSENTED TO]
BY [NAME OF AGENT AND LC ISSUER] BY [NAME OF BORROWER]
By: --------------------------- By:----------------------------
Title:------------------------- Title:-------------------------
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SCHEDULE "I"
EUROCURRENCY PAYMENT OFFICES
101
SCHEDULE "1"
SUBSIDIARIES AND OTHER INVESTMENTS
(See Sections 5.8 and 6.15)
Investment Owned Amount of Percent Jurisdiction of
In By Investment Ownership Organization
---------- ------ ---------- --------- ------------
Xxxxxxx Denver Borrower $1,000 100% Delaware
International, Inc.
("GDII")
Xxxxxxx Denver Borrower $1,000 100% Barbados
Export, Inc.
Xxxxxxx Denver GDII $4,810 0.2% Ontario, Canada
Canada, Inc. Xxxxxx 99.8%
Xxxxxxx Denver Borrower $16,904,000 100% Delaware
Holdings Inc.
("GDHI")
Xxxxxx GDHI $12,728,000 100% New York
Corporation
("Xxxxxx")
Xxxxxxx Denver SA GDHI $100,000 99.6% France
("GDSA") Borrower 0.3%
Xxxxxx, GDI and 0.1%
beneficially by
the Borrower
TCM Investments, Inc. Borrower $7,842,000 100% Oklahoma
("TCMI")
Adex, Inc. TCMI $58,000 100% Oklahoma
Lamcor, Ltd. Borrower $2,000 100% United Kingdom
Xxxxxxx Denver Oy GDII FIM 25,400 100% Finland
("GDOY")
Xxxxxxx Denver Ky Partnership 100% Finland
owned by GDOY
and GDII
Oy Tamrotor Ab GDOY FIM 135,070,000 100% Finland
("Tamrotor")
Tamrotor Tamrotor FIM 2,491,000 51% Finland
Kompressorit Oy
MAPRO GDSA Lire 170,949,000 24.2% Italy
International
102
SCHEDULE "2"
INDEBTEDNESS AND LIENS
(See Sections 5.14, 6.12 and 6.17)
Property Maturity
Indebtedness Indebtedness Encumbered and Amount of
Incurred By Owned To (If Any) Indebtedness
------------ ------------ ---------- -------------
Xxxxxx (assumed Illinois Department of PP&E $844,549
by Borrower) Commerce and Community December 15, 0000
Xxxxxxx
Xxxxxxxx Xxxx xx Xxxxxx, Xxxxxxxx None $280,822
July 15, 2001
Borrower Metropolitan Life Insurance None $35,000,000
Company September 26, 2006
Tamrotor Xxxxxx Rahoitus Oy PP&E approximately FIM
3,031,000
Tamrotor Valtiokontturi None approximately FIM
310,000
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SCHEDULE "3"
EXISTING LCs
(Attached)
104
SCHEDULE "4"
LITIGATION AND ENVIRONMENTAL MATTERS
(See Sections 5.7, 5.13 and 7.10)
NONE
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