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EXHIBIT 10.1
Credit Agreement, dated as of August 22, 1996, by and among Printpack, Inc.,
the lenders a party thereto and First National Bank of Chicago, as Contractual
Representative.
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Execution Copy
CREDIT AGREEMENT
Dated as of August 22, 1996
among
PRINTPACK, INC.,
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
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BANPONCE CORPORATION
X.X. Xxx 000000
Xxx Xxxx, Xxxxxx Xxxx 00000-0000
Telephone (000) 000-0000
BANPONCE
CORPORATION
October 8, 1996
VIA XXXXX
Securities and Exchange Commission
000 Xxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
BANPONCE CORPORATION 424(B)(3) FILING 3
I have enclosed with this letter, for filing pursuant to Rule 424(b)(2) under
the Securities Act of 1933, as amended (the "Act"), in accordance with
Regulation S-T, a copy of the Pricing Supplement dated October 7, 1996, to the
Prospectus Supplement dated October 6, 1995. Subject Pricing is related with
the Registration Statements of Forms S-3 (No. 033-61601) of BanPonce
Corporation.
Cordially,
/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Vice President
ges
Enclosure
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ARTICLE I: DEFINITIONS ................................................... 1
1.1 Certain Defined Terms ........................................... 1
1.2 References ...................................................... 28
1.3 Supplemental Disclosure ......................................... 29
ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES .................. 29
2.1 Term Loans ...................................................... 29
2.2 Revolving Loans ................................................. 31
2.3 Swing Line Loans ................................................ 31
2.4 Rate Options for all Advances ................................... 33
2.5 Optional Payments; Mandatory Prepayments ........................ 33
(A) Optional Payments ....................................... 33
(B) Mandatory Prepayments ................................... 33
2.6 Reduction of Commitments ........................................ 35
2.7 Method of Borrowing ............................................. 36
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2.8 Method of Selecting Types and Interest Periods for Advances ..... 36
2.9 Minimum Amount of Each Advance .................................. 36
2.10 Method of Selecting Types and Interest Periods for Conversion
and Continuation of Advances .................................. 36
(A) Right to Convert ........................................ 36
(B) Automatic Conversion and Continuation ................... 37
(C) No Conversion Post-Default or Post-Unmatured Default .... 37
(D) Conversion/Continuation Notice .......................... 37
2.11 Default Rate .................................................. 37
2.12 Collection Account Arrangements ............................... 37
2.13 Method of Payment ............................................. 38
2.14 Notes, Telephonic Notices ..................................... 38
2.15 Promise to Pay; Interest and Commitment Fees; Interest
Payment Dates; Interest and Fee Basis; Taxes; Loan and
Control Accounts ............................................. 38
(A) Promise to Pay .......................................... 38
(B) Interest Payment Dates .................................. 38
(C) Commitment Fees ......................................... 39
(D) Interest and Fee Basis; Applicable Eurodollar Margin and
Applicable Commitment Fee Percentage ................... 39
(F) Loan Account ............................................ 44
(G) Control Account ......................................... 44
(H) Entries Binding ......................................... 44
2.16 Notification of Advances, Interest Rates, Prepayments and
Aggregate Revolving Loan Commitment Reductions ................ 44
2.17 Lending Installations .......................................... 44
2.18 Non-Receipt of Funds by the Agent .............................. 44
2.19 Termination Date ............................................... 45
2.20 Replacement of Certain Lenders ................................. 45
ARTICLE III: THE LETTER OF CREDIT FACILITY ............................... 46
3.1 Obligation to Issue ............................................. 46
3.2 Transitional Provision .......................................... 46
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3.3 Types and Amounts ............................................... 46
3.4 Conditions ...................................................... 47
3.5 Procedure for Issuance of Letters of Credit ..................... 47
3.6 Letter of Credit Participation .................................. 48
3.7 Reimbursement Obligation ........................................ 48
3.8 Cash Collateral ................................................. 49
3.9 Letter of Credit Fees ........................................... 49
3.10 Issuing Bank Reporting Requirements ............................ 49
3.11 Indemnification; Exoneration ................................... 50
ARTICLE IV: CHANGE IN CIRCUMSTANCES ...................................... 51
4.1 Yield Protection ................................................ 51
4.2 Changes in Capital Adequacy Regulations ......................... 52
4.3 Availability of Types of Advances ............................... 52
4.4 Funding Indemnification ......................................... 53
4.5 Lender Statements; Survival of Indemnity ........................ 53
ARTICLE V: CONDITIONS PRECEDENT .......................................... 53
5.1 Initial Advances and Letters of Credit .......................... 53
5.2 Each Advance and Letter of Credit ............................... 54
ARTICLE VI: REPRESENTATIONS AND WARRANTIES ............................... 55
6.1 Organization; Corporate Powers .................................. 55
6.2 Authority ....................................................... 55
6.3 No Conflict; Governmental Consents .............................. 56
6.4 Financial Statements ............................................ 57
6.5 No Material Adverse Change ...................................... 57
6.6 Taxes ........................................................... 58
(A) Tax Examinations ........................................ 58
(B) Payment of Taxes ........................................ 58
6.7 Litigation; Loss Contingencies and Violations ................... 58
6.8 Subsidiaries .................................................... 58
6.9 ERISA ........................................................... 59
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6.10 Accuracy of Information ........................................ 60
6.11 Securities Activities .......................................... 60
6.12 Material Agreements ............................................ 60
6.13 Compliance with Laws ........................................... 60
6.14 Assets and Properties .......................................... 60
6.15 Statutory Indebtedness Restrictions ............................ 61
6.16 Insurance ...................................................... 61
6.17 Labor Matters .................................................. 61
6.18 Xxxxx River Acquisition; Related Transactions .................. 61
6.19 Environmental Matters .......................................... 62
6.20 Other Indebtedness ............................................. 63
6.21 Fiscal Periods ................................................. 63
ARTICLE VII: COVENANTS ................................................... 63
7.1 Reporting ....................................................... 64
(A) Financial Reporting ..................................... 64
(B) Notice of Default ....................................... 65
(C) Lawsuits ................................................ 66
(D) Insurance ............................................... 66
(E) ERISA Notices ........................................... 66
(F) Labor Matters ........................................... 69
(G) Other Indebtedness ...................................... 69
(H) Other Reports ........................................... 69
(I) Environmental Notices ................................... 69
(J) Other Information ....................................... 69
7.2 Affirmative Covenants ........................................... 70
(A) Corporate Existence, Etc. ............................... 70
(B) Corporate Powers; Conduct of Business ................... 70
(C) Compliance with Laws, Etc. .............................. 70
(D) Payment of Taxes and Claims; Tax Consolidation .......... 70
(E) Insurance ............................................... 70
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(F) Inspection of Property; Books and Records; Discussions .. 71
(G) Insurance and Condemnation Proceeds ..................... 71
(H) ERISA Compliance ........................................ 72
(I) Maintenance of Property ................................. 72
(J) Environmental Compliance ................................ 73
(K) Use of Proceeds ......................................... 73
(L) Separate Corporate Existence ............................ 73
7.3 Negative Covenants .............................................. 75
(A) Indebtedness ............................................ 75
(B) Sales of Assets ......................................... 76
(C) Liens ................................................... 78
(D) Investments ............................................. 78
(E) Contingent Obligations .................................. 80
(F) Restricted Payments ..................................... 80
(G) Conduct of Business; Subsidiaries; Acquisitions ......... 81
(H) Transactions with Shareholders and Affiliates ........... 82
(I) Restriction on Fundamental Changes ...................... 83
(J) Sales and Leasebacks .................................... 83
(K) Margin Regulations ...................................... 83
(L) ERISA ................................................... 83
(M) Issuance of Disqualified Stock .......................... 84
(N) Corporate Documents ..................................... 84
(O) Fiscal Year ............................................. 85
(P) Subsidiary Covenants .................................... 85
(Q) Hedging Obligations ..................................... 85
(S) Change of Deposit Accounts .............................. 86
(T) Amendment of Receivables Purchase Documents ............. 86
7.4 Financial Covenants ............................................. 87
(A) Fixed Charge Coverage Ratio ............................. 87
(B) Total Debt to EBITDA Ratio .............................. 87
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(C) Capital Expenditures .................................... 88
ARTICLE VIII: DEFAULTS ................................................... 89
8.1 Defaults ........................................................ 89
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND
REMEDIES .............................................................. 93
9.1 Termination of Commitments; Acceleration ......................... 93
9.2 Defaulting Lender ................................................ 93
9.3 Amendments ....................................................... 94
9.4 Preservation of Rights ........................................... 95
ARTICLE X: GENERAL PROVISIONS ............................................ 96
10.1 Survival of Representations ..................................... 96
10.2 Governmental Regulation ......................................... 96
10.3 Performance of Obligations ...................................... 96
10.4 Headings ........................................................ 97
10.5 Entire Agreement ................................................ 97
10.6 Several Obligations; Benefits of this Agreement ................. 97
10.7 Expenses; Indemnification ....................................... 97
(A) Expenses ................................................ 97
(B) Indemnity ............................................... 97
(C) Waiver of Certain Claims; Settlement of Claims .......... 99
(D) Survival of Agreements .................................. 99
10.8 Numbers of Documents ........................................... 99
10.9 Accounting ..................................................... 99
10.10 Severability of Provisions .................................... 100
10.11 Nonliability of Lenders ....................................... 100
10.12 GOVERNING LAW ................................................. 100
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL ....... 100
(A) EXCLUSIVE JURISDICTION .................................. 100
(B) OTHER JURISDICTIONS ..................................... 101
(C) SERVICE OF PROCESS ...................................... 000
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(D) WAIVER OF JURY TRIAL .................................... 101
(E) WAIVER OF BOND .......................................... 102
(F) ADVICE OF COUNSEL ....................................... 102
10.14 No Strict Construction ........................................ 102
ARTICLE XI: THE AGENT .................................................... 102
11.1 Appointment; Nature of Relationship ............................ 102
11.2 Powers ......................................................... 103
11.3 General Immunity ............................................... 103
11.4 No Responsibility for Loans, Creditworthiness, Collateral,
Recitals, Etc. ................................................. 103
11.5 Action on Instructions of Lenders .............................. 103
11.6 Employment of Agents and Counsel ............................... 103
11.7 Reliance on Documents; Counsel ................................. 104
11.8 The Agent's Reimbursement and Indemnification .................. 104
11.9 Rights as a Lender ............................................. 104
11.10 Lender Credit Decision ........................................ 104
11.11 Successor Agent ............................................... 105
11.12 Collateral Documents .......................................... 105
ARTICLE XII: SETOFF; RATABLE PAYMENTS .................................... 106
12.1 Setoff ......................................................... 106
12.2 Ratable Payments ............................................... 106
12.3 Application of Payments ........................................ 107
12.4 Relations Among Lenders ........................................ 108
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS .......... 108
13.1 Successors and Assigns ......................................... 108
13.2 Participations ................................................. 109
(A) Permitted Participants; Effect .......................... 109
(B) Voting Rights ........................................... 109
(C) Benefit of Setoff ....................................... 109
13.3 Assignments .................................................... 110
(A) Permitted Assignments...................................... 110
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(B) Effect; Effective Date .................................. 110
(C) The Register ............................................ 110
13.4 Confidentiality ................................................ 111
13.5 Dissemination of Information ................................... 111
ARTICLE XIV: NOTICES ..................................................... 111
14.1 Giving Notice .................................................. 111
14.2 Change of Address .............................................. 112
ARTICLE XV: COUNTERPARTS ................................................. 112
15.1 Counterparts ................................................... 000
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EXHIBITS AND SCHEDULES
EXHIBITS
EXHIBIT A -- Commitments
(Definitions)
EXHIBIT B-1 -- Form of Revolving Note
(Definitions)
EXHIBIT B-2 -- Form of Swing Line Note
(Definitions)
EXHIBIT B-3 -- Form of Term Note
Definitions
EXHIBIT C -- Form of Borrowing Notice (Section 2.8)
EXHIBIT D -- Form of Request for Letter of Credit (Section 3.4)
EXHIBIT E -- Form of Assignment and Acceptance Agreement
(Sections 2.20 and 13.3)
EXHIBIT F -- Form of Borrower's Counsel's Opinion
(Section 5.1)
EXHIBIT G -- List of Closing Documents
(Section 5.1)
EXHIBIT H -- Form of Officer's Certificate
(Sections 5.2 and 7.1(A)(iv))
EXHIBIT I -- Form of Compliance Certificate
(Sections 5.2 and 7.1(A)(iv))
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SCHEDULES
Schedule 1.1.1 -- IHC Assets (Definitions)
Schedule 1.1.2 -- Permitted Existing Contingent Obligations (Definitions)
Schedule 1.1.3 -- Permitted Existing Indebtedness (Definitions)
Schedule 1.1.4 -- Permitted Existing Investments (Definitions)
Schedule 1.1.5 -- Permitted Existing Liens (Definitions)
Schedule 3.2 -- Transitional Letters of Credit (Section 3.2)
Schedule 6.3 -- Conflicts; Governmental Consents (Section 6.3)
Schedule 6.4 -- Pro Forma Financial Statements (Section 6.4(A))
Schedule 6.7 -- Litigation; Loss Contingencies (Section 6.7)
Schedule 6.8 -- Subsidiaries (Section 6.8)
Schedule 6.16 -- Insurance (Sections 6.16 and 7.2(E))
Schedule 6.17 -- Labor Matters; Compensation Agreements (Section 6.17)
Schedule 6.18 -- Xxxxx River Acquisition (Section 6.18)
Schedule 6.19 -- Environmental Matters (Section 6.19)
Schedule 6.21 -- Fiscal Periods (Section 6.21)
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CREDIT AGREEMENT
This Credit Agreement dated as of August 22, 1996 is entered into among
Printpack, Inc., a Georgia corporation, the institutions from time to time
parties hereto as Lenders, whether by execution of this Agreement or an
assignment and acceptance pursuant to Section 13.3, and The First National Bank
of Chicago, in its capacity as contractual representative for itself and the
other Lenders. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
1.1 Certain Defined Terms. In addition to the terms defined above, the
following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined.
As used in this Agreement:
"ACCOMMODATION OBLIGATIONS" is defined in the definition "Contingent
Obligation" below.
"ACQUISITION" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election
of directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage of voting power) of
the outstanding partnership interests of a partnership.
"ADVANCE" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by the Lenders to the Borrower of the same
Type and, in the case of Eurodollar Rate Advances, for the same Interest
Period.
"AFFECTED LENDER" is defined in Section 2.20 hereof.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of greater than ten percent (10%) or more of any class of voting
securities (or other voting interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
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management or policies of the controlled Person, whether through ownership of
Capital Stock, by contract or otherwise.
"AGENT" means First Chicago in its capacity as contractual
representative for itself and the Lenders pursuant to Article XI hereof and any
successor Agent appointed pursuant to Article XI hereof.
"AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate of the
Revolving Loan Commitments of all the Lenders, as reduced from time to time
pursuant to the terms hereof. The initial Aggregate Revolving Loan Commitment
is One Hundred Five Million and 00/100 Dollars ($105,000,000.00).
"AGGREGATE TERM LOAN COMMITMENT" means the aggregate of the Term Loan
Commitments of all the Lenders. The Aggregate Term Loan Commitment is One
Hundred Seventy Million and 00/100 Dollars ($170,000,000.00).
"AGREEMENT" means this Credit Agreement, as it may be amended, restated
or otherwise modified and in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section
6.4(B)(1) hereof, provided, however, that with respect to the calculation of
financial ratios and other financial tests required by this Agreement,
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect as of the date of this Agreement, applied in a manner
consistent with that used in preparing the financial statements referred to in
Section 6.4(B)(1) hereof.
"ALTERNATE BASE RATE" means, for any day, a fluctuating rate of
interest per annum equal to the higher of (i) the Corporate Base Rate for such
day and (ii) the sum of (a) the Federal Funds Effective Rate for such day and
(b) one-half of one percent (0.5%) per annum.
"APPLICABLE COMMITMENT FEE PERCENTAGE" means, as at any date of
determination, the rate per annum then applicable in the determination of the
amount payable under Section 2.15(C)(i) hereof determined in accordance with
the provisions of Section 2.15(D)(ii) hereof.
"APPLICABLE EURODOLLAR MARGIN" means, as at any date of determination,
the rate per annum then applicable to Eurodollar Rate Loans determined in
accordance with the provisions of Section 2.15(D)(ii) hereof.
"APPLICABLE L/C FEE PERCENTAGE" means, as at any date of determination,
a rate per annum equal to the Applicable Eurodollar Margin in effect on such
date.
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"ASSET PURCHASE AGREEMENT" is defined in the definition of "Xxxxx River
Acquisition" below.
"ASSET SALE" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a sale-leaseback transaction and including the sale or
other transfer of any of the Equity Interests of any Subsidiary of such
Person).
"AUTHORIZED OFFICER" means any of the President, Vice President-Finance
or Treasurer of the Borrower, acting singly.
"BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35)
of ERISA (other than a Multiemployer Plan) in respect of which the Borrower or
any other member of the Controlled Group is, or within the immediately
preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA.
"BORROWER" means Printpack, Inc., a Georgia corporation, after
consummation of the Xxxxx River Acquisition and Related Transactions, together
with its successors and assigns, including a debtor-in-possession on behalf of
the Borrower.
"BORROWER PLEDGE" means that certain Pledge Agreement of even date
herewith executed by the Borrower in favor of the Agent, as amended, restated
or otherwise modified from time to time, pursuant to which the Borrower has
pledged to the Agent, for the benefit of the Holders of Secured Obligations,
(i) as of the Closing Date, all of the Capital Stock of IHC and PRF and (ii)
from time to time after the Closing Date, all of the Capital Stock and/or other
Equity Interests in any other Person acquired by the Borrower.
"BORROWING DATE" means a date on which an Advance or Swing Line Loan is
made hereunder.
"BORROWING NOTICE" is defined in Section 2.8 hereof.
"BUSINESS ACTIVITY REPORT" means (A) a Notice of Business Activities
Report from the State of Minnesota, Department of Revenue, (B) a Notice of
Business Activities Report from the State of New Jersey, Division of Taxation,
or (C) any similar report required by any other State relating to the ability
of the Borrower or its Subsidiaries to enforce their accounts receivable claims
against account debtors located in any such state.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing interest at the Eurodollar Rate, a day (other than a
Saturday or Sunday) on which banks are open for business in Chicago, Illinois
and New York, New York and on which dealings in Dollars 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 are open for business in Chicago, Illinois
and New York, New York.
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"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
Capitalized Leases and Permitted Purchase Money Indebtedness) by the Borrower
and its Subsidiaries during that period that, in conformity with Agreement
Accounting Principles, are required to be included in or reflected by the
property, plant, equipment or similar fixed asset accounts reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries, other than
Permitted Acquisitions.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"CAPITALIZED LEASE" of a Person means any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"CARRY-OVER AMOUNT" is defined in Section 7.4(C) hereof.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected
against currency fluctuations for any such deposits with a term of more than
ten (10) days); (iii) shares of money market, mutual or similar funds having
assets in excess of $100,000,000 and the investments of which are limited to
investment grade securities (i.e., securities rated at least Baa by Xxxxx'x
Investors Service, Inc. or at least BBB by Standard & Poor's Corporation); and
(iv) commercial paper of United States and foreign banks and bank holding
companies and their subsidiaries and United States and foreign finance,
commercial industrial or utility companies which, at the time of acquisition,
are rated A-1 (or better) by Standard & Poor's Ratings Group or P-1 (or better)
by Xxxxx'x Investors Services, Inc.; provided that the maturities of such Cash
Equivalents shall not exceed 365 days.
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"CASH FLOW PERIOD" means the period from the Closing Date through the
end of the Borrower's fiscal year ending June 28, 1997 and, thereafter, as
separate periods, each fiscal year of the Borrower.
"CHANGE" is defined in Section 4.2 hereof.
"CHANGE OF CONTROL" means an event or series of events by which:
(a) the Principals or their Related Parties cease to be the
"beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of at least eighty
percent (80%) of the combined voting power of the Borrower's
outstanding Capital Stock ordinarily having the right to vote at an
election of directors;
(b) the Principals or their Related Parties cease to have the
right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of the
Borrower; or
(c) during any period of twelve (12) consecutive calendar
months, individuals:
(i) who were directors of the Borrower on the first
day of such period, or
(ii) whose election or nomination for election
to the board of directors of the Borrower was recommended or
approved by at least a majority of the directors then still in
office who were directors of the Borrower on the first day of
such period, or whose election or nomination for election was
so approved, shall cease to constitute a majority of the board
of directors of the Borrower.
"CLOSING DATE" means the date on which the Term Loans and the initial
Revolving Loans are advanced hereunder.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, or any successor statute.
"COLLATERAL" means all property and interests in property now owned or
hereafter acquired by Enterprises, the Borrower or any of its Subsidiaries in
or upon which a security interest, lien or mortgage is granted to the Agent,
for the benefit of the Holders of Secured Obligations, or to the Agent, for the
benefit of the Lenders, whether under the Security Agreement, under any of the
other Collateral Documents or under any of the other Loan Documents.
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"COLLATERAL DOCUMENTS" means all agreements, instruments and documents
executed in connection with this Agreement that are intended to create or
evidence Liens to secure the Secured Obligations, including, without
limitation, the Security Agreement, the Mexican Pledge, the Borrower Pledge,
the Enterprises Pledge, and all other security agreements, mortgages, deeds of
trust, loan agreements, notes, guarantees, subordination agreements, pledges,
powers of attorney, consents, assignments, contracts, fee letters, notices,
leases, financing statements and all other written matter whether heretofore,
now, or hereafter executed by or on behalf of Enterprises or the Borrower or
any of its Subsidiaries and delivered to the Agent or any of the Lenders,
together with all agreements and documents referred to therein or contemplated
thereby.
"COLLECTION ACCOUNT" means each lock-box and blocked depository account
maintained by the Borrower, subject to a Collection Account Agreement, for the
collection of Receivables and other proceeds of Collateral.
"COLLECTION ACCOUNT AGREEMENT" means a written agreement among the
Borrower, the Agent, and, as applicable, each of the banks at which the
Borrower maintains a Collection Account.
"COMMISSION" means the Securities and Exchange Commission and any Person
succeeding to the functions thereof.
"COMMITMENT" means, for each Lender, collectively, such Lender's
Revolving Loan Commitment and Term Loan Commitment.
"CONSOLIDATED ASSETS" means the total assets of the Borrower and its
Subsidiaries on a consolidated basis, but excluding therefrom all items that
are treated as intangibles under Agreement Accounting Principles.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBs"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.
"CONTINGENT OBLIGATION", as applied to any Person, means (i) any
Contractual Obligation, contingent or otherwise, of that Person with respect to
any Indebtedness of another or other obligation or liability of another,
including, without limitation, any such Indebtedness, obligation or liability
of another directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), co-made or
discounted or sold with recourse by that Person, or in respect of which that
Person is otherwise directly or indirectly liable, including Contractual
Obligations (contingent or otherwise) arising through any agreement to
purchase, repurchase, or otherwise acquire such Indebtedness, obligation or
liability or any security therefor, or to provide funds for
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the payment or discharge thereof (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain solvency,
assets, level of income, or other financial condition, or to make payment other
than for value received (such obligations under this clause (i) being sometimes
referred to as "Accommodation Obligations") and (ii) any other contingent
obligation or liability of such Person, whether or not reflected in financial
statements of such Person as a liability.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any equity or debt securities issued by that Person or any indenture,
mortgage, deed of trust, security agreement, pledge agreement, guaranty,
contract, undertaking, agreement or instrument, in any case in writing, to
which that Person is a party or by which it or any of its properties is bound,
or to which it or any of its properties is subject.
"CONTROLLED GROUP" means the group consisting of (i) any corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower; (ii) a partnership or
other trade or business (whether or not incorporated) which is under common
control (within the meaning of Section 414(c) of the Code) with the Borrower;
and (iii) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Code) as the Borrower, any corporation described in
clause (i) above or any partnership or trade or business described in clause
(ii) above.
"CONTROLLED SUBSIDIARY" of any Person means a Subsidiary of such Person
(i) 90% or more of the total Equity Interests or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more wholly-owned Subsidiaries of such Person and (ii)
of which such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies, whether through the
ownership of voting securities, by agreement or otherwise.
"CONVERSION/CONTINUATION NOTICE" is defined in Section 2.10(D) hereof.
"CORPORATE BASE RATE" means the corporate base rate of interest
announced by First Chicago from time to time, changing when and as said
corporate base rate changes.
"CURE LOAN" is defined in Section 9.2(iii) hereof.
"CUSTOMARY PERMITTED LIENS" means:
(i) Liens (other than Environmental Liens and Liens in favor of
the PBGC) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or (if
foreclosure, distraint, sale or other similar proceedings shall not
have been commenced) which are being contested in good faith by
appropriate proceedings properly instituted and diligently conducted
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with Agreement Accounting
Principles;
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(ii) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
similar Liens imposed by law created in the ordinary course of business
for amounts not yet due or which are being contested in good faith by
appropriate proceedings properly instituted and diligently conducted
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with Agreement Accounting
Principles;
(iii) Liens (other than Environmental Liens and Liens in favor
of the PBGC) incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance or other types of social security benefits or to secure the
performance of bids, tenders, sales, contracts (other than for the
repayment of borrowed money), surety, appeal and performance bonds;
provided that (A) all such Liens do not in the aggregate materially
detract from the value of the Borrower's or such Subsidiary's assets
or property taken as a whole or materially impair the use thereof in
the operation of the businesses taken as a whole, and (B) all Liens
securing bonds to stay judgments or in connection with appeals do not
secure at any time an aggregate amount exceeding $5,000,000;
(iv) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of real property which do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of the Borrower
or any of its Subsidiaries;
(v) Liens of attachment or judgment with respect to judgments,
writs or warrants of attachment, or similar process against the
Borrower or any of its Subsidiaries which do not constitute a Default
under Section 8.1(h) hereof; and
(vi) any interest or title of the lessor in the property subject
to any operating lease entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business.
"DECISION PERIOD" is defined in Section 7.2(G) hereof.
"DECISION RESERVE" is defined in Section 7.2(G) hereof.
"DEFAULT" means an event described in Article VIII hereof.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund
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obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is 91 days after the Revolving
Loan Termination Date.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"DOLLAR" and "$" means dollars in the lawful currency of the United
States.
"EBITDA" means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of the amounts for such period of (i)
Net Income, plus (ii) Interest Expense, plus (iii) charges against income for
foreign, federal, state and local taxes, plus (iv) depreciation expense, plus
(v) amortization expense, including, without limitation, amortization of
goodwill and other intangible assets, Transaction Costs, and other fees, costs
and expenses in connection with Permitted Acquisitions, plus (vi) other
non-cash charges classified as long-term deferrals in accordance with Agreement
Accounting Principles.
"ENTERPRISES" means Printpack Enterprises, Inc., a Georgia corporation,
and owner of 99.77% of the Capital Stock of the Borrower, together with its
successors and assigns, including a debtor-in-possession on behalf of
Enterprises.
"ENTERPRISES GUARANTY" means that certain Guaranty of even date
herewith executed by Enterprises in favor of the Agent for the benefit of the
Holders of Secured Obligations, as amended, restated or otherwise modified from
time to time.
"ENTERPRISES PLEDGE" means that certain Pledge Agreement of even date
herewith executed by Enterprises in favor of the Agent, as amended, restated or
otherwise modified from time to time, pursuant to which Enterprises has pledged
to the Agent, for the benefit of the Holders of Secured Obligations, all of the
Capital Stock of the Borrower owned by Enterprises.
"ENVIRONMENTAL AUDIT" means the Environmental Audit dated July 24,
1996, prepared for the Borrower by ESCM & Associates, Inc., including the Phase
I Environmental Property Assessments for Printpack Facilities and Xxxxx River
Facilities appended thereto.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law derived from or relating to federal, state and local laws
or regulations relating to or addressing pollution or protection of the
environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq., the Occupational Safety and
Health Act of 1970, 29 U.S.C. Section 651 et seq., and the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., in
each case including any amendments thereto, any successor statutes, and any
regulations or guidance promulgated thereunder, and any state or local
equivalent thereof.
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"ENVIRONMENTAL LIEN" means a lien in favor of any Governmental
Authority for (a) any liability under Environmental, Health or Safety
Requirements of Law, or (b) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement
of law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."
"EQUIPMENT" means all of the Borrower's present and future (i)
equipment, including, without limitation, machinery, manufacturing,
distribution, selling, data processing and office equipment, assembly systems,
tools, molds, dies, fixtures, appliances, furniture, furnishings, vehicles,
vessels, aircraft, aircraft engines, and trade fixtures, (ii) other tangible
personal property (other than the Borrower's Inventory), and (iii) any and all
accessions, parts and appurtenances attached to any of the foregoing or used in
connection therewith, and any substitutions therefor and replacements, products
and proceeds thereof.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar Rate Loan
for the relevant Interest Period, the rate determined by the Agent to be the
arithmetic average of the respective rates at which deposits in Dollars are
offered by the Reference Lenders 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 Interest Period, in the approximate amounts of the portions
of the relevant Eurodollar Rate Loan of each Reference Lender, and having a
maturity approximately equal to such Interest Period, as adjusted for Reserves.
"EURODOLLAR RATE" means, with respect to a Eurodollar Rate Loan for the
relevant Interest Period, the Eurodollar Base Rate applicable to such Interest
Period plus the then Applicable Eurodollar Margin. The Eurodollar Rate shall be
rounded to the next higher multiple of 1/16 of 1% if the rate is not such a
multiple.
"EURODOLLAR RATE ADVANCE" means an Advance which bears interest at the
Eurodollar Rate.
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"EURODOLLAR RATE LOAN" means a Loan, or portion thereof, which bears
interest at the Eurodollar Rate.
"EXCESS CASH FLOW" means, for any Cash Flow Period, an amount equal to
the Borrower's and its Subsidiaries' consolidated (i) EBITDA for such period,
minus (ii) income taxes paid in cash for such period, minus (iii) Capital
Expenditures paid in cash during such period, minus (iv) cash charges related
to plant closings and early retirement programs for such period, such as
severance and equipment relocation charges and termination and modification of
benefit programs, minus (v) Interest Expense for such period, minus (vi)
scheduled amortization of the principal portion of the Term Loans and scheduled
amortization of the principal portion of all other Indebtedness of the Borrower
and its Subsidiaries during such period, minus (vii) cash payments in respect
of extraordinary and nonrecurring items, minus (viii) the increase (or plus the
decrease) in Working Capital during such period, in each case as calculated in
accordance with Agreement Accounting Principles. All such amounts shall be
calculated assuming that the Borrower has conducted its business in the
ordinary course and in accordance with past practices.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations at approximately 10:00
a.m. (Chicago time) on such day on such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by the Agent in its
sole discretion.
"FINANCING" means, with respect to any Person, the issuance or sale by
such Person of any Equity Interests of such Person or any Indebtedness
consisting of debt securities of such Person pursuant to a registered offering
or private placement.
"FIRST CHICAGO" means The First National Bank of Chicago, in its
individual capacity, and its successors.
"FIXED CHARGE COVERAGE RATIO" is defined in Section 7.4(A) hereof.
"FLOATING RATE" means, for any day for any Loan, a rate per annum equal
to the Alternate Base Rate for such day, changing and as the Alternate Base
Rate changes.
"FLOATING RATE ADVANCE" means an Advance which bears interest at the
Floating Rate.
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"FLOATING RATE LOAN" means a Loan, or portion thereof, which bears
interest at the Floating Rate.
"FOREIGN EMPLOYEE BENEFIT PLAN" means a plan which would be a Benefit
Plan except that such plan is maintained or contributed to by an entity which
is not a U.S.
business entity.
"GOVERNMENTAL ACTS" is defined in Section 3.11(a) hereof.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"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.
"HOLDERS OF SECURED OBLIGATIONS" means the holders of the Secured
Obligations from time to time and shall refer to (i) each Lender in respect of
its Loans, (ii) the Issuing Bank in respect of Reimbursement Obligations, (iii)
the Agent, the Lenders, the Swing Line Bank and the Issuing Bank in respect of
all other present and future obligations and liabilities of the Borrower, any
of its Subsidiaries, Holdings or Enterprises of every type and description
arising under or in connection with this Agreement or any other Loan Document,
(iii) each Indemnitee in respect of the obligations and liabilities of the
Borrower to such Person hereunder, (iv) each Lender (or affiliate thereof), in
respect of all Hedging Obligations of the Borrower to such Lender (or such
affiliate) as exchange party or counterparty under any Interest Rate Agreement,
and (v) their respective successors, transferees and assigns.
"HOLDINGS" means Printpack Holdings, Inc., a Delaware corporation, and
owner of 97.39% of the Capital Stock of Enterprises, together with its
successors and assigns, including a debtor-in-possession on behalf of Holdings.
"HOLDINGS GUARANTY" means that certain Guaranty of even date herewith
executed by Holdings in favor of the Agent for the benefit of the Holders of
Secured Obligations, as amended, restated or otherwise modified from time to
time.
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"IHC" means Printpack Illinois, Inc., an Illinois corporation, together
with its successors and assigns, including a debtor-in-possession on behalf of
IHC.
"IHC AGREEMENTS" means the Intercorporate Services Agreement between
the Borrower and IHC, the respective Trademark License Agreements between IHC
and the Borrower, Holdings, Enterprises and Empaques Printpack de Mexico, S.A.
de C.V., and the respective Intellectual Property License Agreements between
IHC and the Borrower, Holdings, Enterprises and Empaques Printpack de Mexico,
S.A. de C.V., in each case dated as of June 30, 1996.
"IHC ASSETS" means certain intellectual property, certain tangible
assets located in Elgin, Illinois, and certain Equity Interests in the Mexican
Subsidiaries, as more specifically described on Schedule 1.1.1 to this
Agreement.
"INDEBTEDNESS" of any Person means such Person's (a) obligations for
borrowed money, (b) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary
course of such Person's business payable on terms customary in the trade), (c)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from property or assets now or hereafter owned or
acquired by such Person, (d) obligations which are evidenced by notes,
acceptances or other instruments, (e) Capitalized Lease Obligations, (f)
Contingent Obligations, (g) obligations with respect to letters of credit, (h)
Hedging Obligations and (i) Disqualified Stock as provided in Section 7.3(M).
The amount of Indebtedness of any Person at any date shall be without
duplication (i) the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability of any such Contingent
Obligations at such date and (ii) in the case of Indebtedness of others secured
by a Lien to which the property or assets owned or held by such Person is
subject, the lesser of the fair market value at such date of any asset subject
to a Lien securing the Indebtedness of others and the amount of the
Indebtedness secured. In the case of PRF, Indebtedness shall include the
unrecovered investment of purchasers of Receivables from PRF pursuant to the
Receivables Purchase Documents, and such Indebtedness shall be deemed to be
funded Indebtedness for purposes of Section 7.1(G).
"INDEMNIFIED MATTERS" is defined in Section 10.7(B) hereof.
"INDEMNITEES" is defined in Section 10.7(B) hereof.
"INTEREST EXPENSE" means, for any period, the sum of (i) the total
interest expense of the Borrower and its consolidated Subsidiaries, whether
paid or accrued (including the interest component of Capitalized Leases,
commitment and letter of credit fees, and discount and other fees and charges
incurred under the Receivables Purchase Documents), but excluding interest
expense not payable in cash (including amortization of discount), and (ii) the
product of (a) all cash dividend payments on any series of preferred stock
issued by the Borrower or any of its Subsidiaries, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined
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federal, state and local statutory tax rate of the Borrower, expressed as a
decimal, in each case on a consolidated basis, all as determined in conformity
with Agreement Accounting Principles.
"INTEREST PERIOD" means, with respect to a Eurodollar Rate Loan, a
period of one (1), two (2), three (3) months or six (6) months commencing on a
Business Day selected by the Borrower pursuant to this Agreement. Such Interest
Period shall end on (but exclude) the day which corresponds numerically to such
date one, two, three or six months thereafter; provided, however, that if there
is no such numerically corresponding day in such next, second, third or sixth
succeeding month, such Interest Period shall end on the last Business Day of
such next, second, third or sixth succeeding month. If an Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
end on the next succeeding Business Day, provided, however, that if said next
succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.
"INTEREST RATE AGREEMENTS" is defined in Section 7.3(Q) hereof.
"INVENTORY" shall mean any and all goods, including, without
limitation, goods in transit, wheresoever located, whether now owned or
hereafter acquired by the Borrower, which are held for sale or lease, furnished
under any contract of service or held as raw materials, work in process or
supplies, and all materials used or consumed in the Borrower's business, and
shall include all right, title and interest of the Borrower in any property the
sale or other disposition of which has given rise to Receivables and which has
been returned to or repossessed or stopped in transit by the Borrower.
"INVESTMENT" means, with respect to any Person, (i) any purchase or
other acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests
or other securities, issued by any other Person, (ii) any purchase by that
Person of all or substantially all of the assets of a business conducted by
another Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any
other Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to
the functions thereof.
"ISSUING BANKS" means First Chicago and SunTrust Bank, Atlanta, and any
other Lender which, at the Borrower's request, agrees, in each such Lender's
sole discretion, to become an Issuing Bank for the purpose of issuing Letters
of Credit, and their respective successors and assigns, in each case in such
Lender's separate capacity as an issuer of Letters of Credit pursuant to
Article III hereof. The designation of any Lender as an
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Issuing Bank after the date hereof shall be subject to the prior written
consent of the Agent.
"XXXXX RIVER" means Xxxxx River Corporation of Virginia, a Virginia
corporation, together with its successors and assigns, including a
debtor-in-possession on behalf of Xxxxx River.
"XXXXX RIVER ACQUISITION" means the acquisition by the Borrower of
certain of the assets and liabilities of the flexible packaging group of Xxxxx
River and its Affiliates on the terms and conditions set forth in that certain
Asset Purchase Agreement ("Asset Purchase Agreement") dated as of April 10,
1996, as amended through the Closing Date, by and between the Borrower and
Xxxxx River.
"XXXXX RIVER ACQUISITION DOCUMENTS" means the Asset Purchase Agreement
and all other documents, instruments and agreements entered into by Holdings,
Enterprises, the Borrower or any of their Subsidiaries in connection with the
Xxxxx River Acquisition.
"L/C DOCUMENTS" is defined in Section 3.4 hereof.
"L/C DRAFT" means a draft drawn on an Issuing Bank pursuant to a Letter
of Credit.
"L/C INTEREST" is defined in Section 3.6 hereof.
"L/C OBLIGATIONS" means, without duplication, an amount equal to the
sum of (i) the aggregate of the amount then available for drawing under each of
the Letters of Credit, (ii) the face amount of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the applicable Issuing Bank, (iii) the aggregate outstanding amount of all
Reimbursement Obligations at such time and (iv) the aggregate face amount of
all Letters of Credit requested by the Borrower but not yet issued (unless the
request for an unissued Letter of Credit has been denied).
"LENDERS" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"LENDING INSTALLATION" means, with respect to a Lender or the Agent,
any office, branch, subsidiary or affiliate of such Lender or the Agent.
"LETTER OF CREDIT" means the letters of credit to be (a) issued by the
Issuing Banks pursuant to Section 3.1 hereof or (b) deemed issued by the
Issuing Banks pursuant to Section 3.2 hereof.
"LEVERAGE RATIO" is defined in Section 7.4(B) hereof.
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"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"LOAN(S)" means, with respect to a Lender, such Lender's portion of any
Advance made pursuant to Section 2.1 or Section 2.2 hereof, as applicable, and
in the case of the Swing Line Bank, any Swing Line Loan made pursuant to
Section 2.3 hereof, and collectively all Term Loans, Revolving Loans and Swing
Line Loans, whether made or continued as or converted to Floating Rate Loans or
Eurodollar Rate Loans.
"LOAN ACCOUNT" is defined in Section 2.15(F) hereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the L/C Documents,
the Collateral Documents, the Parent Agreements and all other documents,
instruments and agreements executed in connection therewith or contemplated
thereby, as the same may be amended, restated or otherwise modified and in
effect from time to time.
"MANAGEMENT" means those employees or former employees of the Borrower
holding common stock of Holdings, Enterprises or the Borrower as of the Closing
Date and from time to time thereafter.
"MARGIN STOCK" shall have the meaning ascribed to such term in
Regulation U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower, or the Borrower and its Subsidiaries,
taken as a whole, (b) the ability of the Borrower or any of its Subsidiaries to
perform their respective obligations under the Loan Documents in any material
respect, or (c) the ability of the Lenders or the Agent to enforce in any
material respect the Obligations or their rights with respect to the
Collateral.
"MAXIMUM REVOLVING CREDIT AMOUNT" means, at any particular time, the
Aggregate Revolving Loan Commitment at such time minus the amount of any
Decision Reserve in effect at such time.
"MEXICAN PLEDGE" means that certain Pledge Agreement of even date
herewith executed by the Borrower in favor of the Agent, as amended, restated
or otherwise modified from time to time, pursuant to which the Borrower has
pledged to the Agent, for the benefit of the Holders of Secured Obligations,
sixty-five percent (65%) of the Capital Stock of Empaques Printpack de Mexico,
S.A. de C.V.
"MEXICAN SUBSIDIARIES" means, collectively, (i) Xxxxx River Packaging
de Mexico, S.A. de C.V., (ii) Servicios Xxxxx River de Mexico, S.A. de C.V.,
(iii) Xxxxx
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River de Mexico, S.A. de C.V., and (iv) Empaques Printpack de Mexico, S.A. de
C.V., each a Mexican corporation, together with their respective successors
and assigns.
"MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by either the Borrower or any member of the Controlled
Group.
"NET CASH PROCEEDS" means, with respect to any Asset Sale or Financing
by any Person, (a) cash (freely convertible into Dollars) received by such
Person or any Subsidiary of such Person from such Asset Sale (including cash
received as consideration for the assumption or incurrence of liabilities
incurred in connection with or in anticipation of such Asset Sale) or
Financing, after (i) provision for all income or other taxes measured by or
resulting from such Asset Sale, (ii) payment of all brokerage commissions and
other fees and expenses related to such Asset Sale or Financing, (iii) all
amounts used to repay Indebtedness secured by a Lien on any asset disposed of
in such Asset Sale or which is or may be required (by the express terms of the
instrument governing such Indebtedness) to be repaid in connection with such
Asset Sale (including payments made to obtain or avoid the need for the consent
of any holder of such Indebtedness) or Financing consisting of Permitted
Refinancing Indebtedness, and (iv) deduction of appropriate amounts to be
provided by such Person or a Subsidiary of such Person as a reserve, in
accordance with Agreement Accounting Principles, against any liabilities
associated with the assets sold or disposed of in such Asset Sale and retained
by such Person or a Subsidiary of such Person after such Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with the assets sold or disposed of in such Asset Sale;
and (b) cash payments in respect of any Indebtedness, Equity Interest or other
consideration received by such Person or any Subsidiary of such Person from
such Asset Sale upon receipt of such cash payments by such Person or such
Subsidiary.
"NET INCOME" means, for any period, the net earnings (or loss) after
taxes of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with
Agreement Accounting Principles; provided, that when calculating Net Income the
following items shall be excluded from such calculation: (i) the earnings (but
not loss) of any Person that is not a Subsidiary or that is accounted for by
the equity method of accounting, except to the extent of the amount of
dividends or distributions paid in cash to the Borrower or a consolidated
Subsidiary; (ii) the earnings of a Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
to the Borrower with respect to such earnings is not, at the date of
determination, permitted without the prior approval of a Governmental Authority
(and such approval has not been obtained), or is prohibited, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such Subsidiary or the holders of its Capital Stock, (iii) the
cumulative effect of a change in accounting principles, (iv) nonrecurring
items, such as gains or losses on the sale of assets, (v) charges or reserves
taken within eighteen (18) months following the Closing Date for
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severance (including severance relating to the early retirement program
implemented during the fiscal year ended June 29, 1996), plant closings,
equipment relocations and other charges arising out of the consolidation and
rationalization of the assets and liabilities acquired pursuant to the Xxxxx
River Acquisition, including charges and expenses not exceeding $3,000,000 in
the aggregate relating to termination or modification of benefit programs in
connection with the Xxxxx River Acquisition, and (vi) corporate overhead
reflected in the Xxxxx River Group financial statements referred to in Section
6.4(B); but when calculating Net Income such calculation shall include
historical audited Net Income (as calculated above) for such period of any
Person (or division of such Person) that became a Subsidiary of the Borrower
during such period or was merged into or was consolidated with the Borrower or
any of its Subsidiaries during such period, or where the assets of such Person
(or division of such Person) were acquired by the Borrower or any of its
Subsidiaries during such period, whether accrued prior or subsequent to the
date of such acquisition, merger or consolidation.
"NON PRO RATA LOAN" is defined in Section 9.2 hereof.
"NOTES" means the Revolving Notes, Swing Line Note and Term Notes.
"NOTICE OF ASSIGNMENT" is defined in Section 13.3(B) hereof.
"OBLIGATIONS" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to the Agent, any
Lender, any affiliate of the Agent or any Lender, the Swing Line Bank, any
Issuing Bank, or any Indemnitee, of any kind or nature, present or future,
arising under this Agreement, the Notes, the L/C Documents, the Collateral
Documents or any other Loan Document, whether or not evidenced by any note,
guaranty or other instrument, whether or not for the payment of money, whether
arising by reason of an extension of credit, loan, guaranty, indemnification,
or in any other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired. The term includes, without limitation,
all interest, charges, expenses, fees, attorneys' fees and disbursements,
paralegals' fees (in each case whether or not allowed), and any other sum
chargeable to the Borrower under this Agreement or any other Loan Document.
"OTHER TAXES" is defined in Section 2.15(E)(ii) hereof.
"PARENT AGREEMENTS" means, collectively, the Enterprises Guaranty,
Enterprises Pledge and Holdings Guaranty.
"PARTICIPANTS" is defined in Section 13.2(A) hereof.
"PAYMENT DATE" means the last Business Day of each fiscal quarter of
the Borrower.
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"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERMITTED ACQUISITION" is defined in Section 7.3(G) (iii) hereof.
"PERMITTED ADDITIONAL SUBORDINATED INDEBTEDNESS" is defined in Section
7.3(A)(v) hereof.
"PERMITTED EXISTING CONTINGENT OBLIGATIONS" means the Contingent
Obligations of the Borrower and its Subsidiaries identified as such on Schedule
1.1.2 to this Agreement.
"PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the
Borrower and its Subsidiaries identified as such on Schedule 1.1.3 to this
Agreement.
"PERMITTED EXISTING INVESTMENTS" means the Investments of the Borrower
and its Subsidiaries identified as such on Schedule 1.1.4 to this Agreement.
"PERMITTED EXISTING LIENS" means the Liens on assets of the Borrower
and its Subsidiaries identified as such on Schedule 1.1.5 to this Agreement.
"PERMITTED PURCHASE MONEY INDEBTEDNESS" is defined in Section 7.3(A)(xi)
hereof.
"PERMITTED RECEIVABLES TRANSFER" means (i) a sale or other transfer by
the Borrower to PRF of "Receivables" and "Related Security" under and as such
terms are defined in the Receivables Sale Agreement, in accordance with the
terms of the Receivables Sale Agreement and/or (ii) a sale by PRF to purchasers
in accordance with the terms of the Receivables Purchase Agreement.
"PERMITTED REFINANCING INDEBTEDNESS" means any replacement, renewal,
refinancing or extension of any Indebtedness (other than the Subordinated
Notes) permitted by this Agreement that (i) does not exceed the aggregate
principal amount (plus accrued interest and any applicable premium and
associated fees and expenses) of the Indebtedness being replaced, renewed,
refinanced or extended, (ii) does not have a Weighted Average Life to Maturity
at the time of such replacement, renewal, refinancing or extension that is less
than the Weighted Average Life to Maturity of the Indebtedness being replaced,
renewed, refinanced or extended, (iii) does not rank at the time of such
replacement, renewal, refinancing or extension senior to the Indebtedness being
replaced, renewed, refinanced or extended, and (iv) does not contain terms
(including, without limitation, terms relating to security, amortization,
interest rate, premiums, fees, covenants, subordination, events of default and
remedies) materially less favorable to the Borrower or to the Lenders, taken as
a whole, than those applicable to the Indebtedness being replaced, renewed,
refinanced or extended.
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"PERSON" means any individual, corporation, firm, enterprise,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, limited liability company or other entity of any kind, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"PLAN" means an employee benefit plan defined in Section 3(3) of ERISA
in respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"PRF" means Flexible Funding Corp., a Delaware corporation, together
with its successors and assigns, including a debtor-in-possession on behalf of
PRF.
"PRINCIPALS" means Xxxxxx X. Love, Xxxxx X. Love, III, Xxxxx Xxxx Love
Xxxxxxxx, Xxxxxxx X. Love, Xxxxxxx Xxxxx Love, Xxxxx X. Love and Gay Love.
"PRO RATA SHARE" means, with respect to any Lender, (i) at any time
prior to the Closing Date, the percentage obtained by dividing (A) such
Lender's Commitments at such time (in each case, as adjusted from time to time
in accordance with the provisions of this Agreement) by (B) the sum of the
Aggregate Term Loan Commitment and the Aggregate Revolving Loan Commitment at
such time and (ii) at any time after the Closing Date, the percentage obtained
by dividing (A) the sum of such Lender's Term Loans and Revolving Loan
Commitment at such time (in each case, as adjusted from time to time in
accordance with the provisions of this Agreement) by (B) the sum of the
aggregate amount of all of the Term Loans and the Aggregate Revolving Loan
Commitment at such time; provided, however, if all of the Commitments are
terminated pursuant to the terms of this Agreement, then "Pro Rata Share" means
the percentage obtained by dividing (x) the sum of such Lender's Term Loans and
Revolving Loans and, in the case of the Swing Line Bank, Swing Line Loans, by
(y) the aggregate amount of all Term Loans, Revolving Loans and Swing Line
Loans.
"PURCHASERS" is defined in Section 13.3(A) hereof.
"RATE OPTION" means the Eurodollar Rate or the Floating Rate.
"RECEIVABLE(S)" means and includes all of the Borrower's presently
existing and hereafter arising or acquired accounts, accounts receivable, and
all present and future rights of the Borrower to payment for goods sold or
leased or for services rendered (except those evidenced by instruments or
chattel paper), whether or not they have been earned by performance, and all
rights in any merchandise or goods which any of the same may represent, and all
rights, title, security and guaranties with respect to each of the foregoing,
including, without limitation, any right of stoppage in transit; provided,
however, that Receivables that are transferred to PRF pursuant to
a Permitted Receivables Transfer shall be deemed not to be Receivables
hereunder, until such time, if any, as any such Receivables are repurchased by
or otherwise transferred to the Borrower pursuant to
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the terms of the Receivables Sale Agreement or otherwise; provided further,
that upon any such Permitted Receivables Transfer, the Lien of the Agent shall
automatically attach to the proceeds of such sale .
"RECEIVABLES PURCHASE AGREEMENT" means that certain Receivables
Purchase Agreement dated as of August 22, 1996, among PRF, Falcon Asset
Securitization Corporation ("Falcon"), the other purchasers party thereto and
First Chicago as agent for Falcon and such other purchasers, as such agreement
may be amended, restated or otherwise modified from time to time in accordance
with the terms hereof, or any replacement or substitution therefor.
"RECEIVABLES PURCHASE DOCUMENTS" means the Receivables Sale Agreement
and the Receivables Purchase Agreement.
"RECEIVABLES SALE AGREEMENT" means that certain Receivables Sale
Agreement dated as of August 22, 1996, between the Borrower and PRF, pursuant
to which the Borrower shall sell to PRF all of its "Receivables" and "Related
Security" (as such terms are defined therein), as such agreement may be
amended, restated or otherwise modified from time to time in accordance with
the terms hereof, or any replacement or substitution therefor.
"REFERENCE LENDERS" means First Chicago, The Chase Manhattan Bank and
Xxxxxx Guaranty Trust Company of New York.
"REGISTER" is defined in Section 13.3(C) hereof.
"REGULATION G" means Regulation G 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 nonbank, nonbroker lenders for the purpose of
purchasing or carrying margin stock (as defined therein).
"REGULATION T" means Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by and to brokers and dealers of securities for the
purpose of purchasing or carrying margin stock (as defined therein).
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by banks for the purpose of purchasing or carrying
Margin Stock applicable to member banks of the Federal Reserve System.
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"REGULATION X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors relating
to the obtaining of credit by borrowers for the purpose of purchasing or
carrying margin stock (as defined therein).
"REIMBURSEMENT OBLIGATION" is defined in Section 3.7 hereof.
"RELATED PARTY" with respect to any Principal means (A) any spouse or
immediate family member of such Principal or (B) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners, owners
or Persons beneficially holding the outstanding Equity Interests of which
consist of such Principal and/or such other Persons referred to in the
immediately preceding clause (A).
"RELATED TRANSACTIONS" means (i) the formation of Holdings and the
exchange of approximately 99.7% of the Borrower's Capital Stock and
approximately 90.8% of Enterprises' Capital Stock in exchange for capital stock
of Holdings, (ii) the Borrower's transfer of its Equity Interests in certain
entities located in the United Kingdom to Holdings and the Borrower's issuance
of 1,189,850 shares of the Borrower's Capital Stock to Enterprises, (iii)
Enterprises' transfer of all of its North American operating assets other than
the IHC Assets held by it to the Borrower, the assumption by the Borrower of
all of the liabilities of Enterprises with respect to such North American
operating assets, and Enterprises' issuance of 7,975,499 shares of Enterprises'
Capital Stock to Holdings so that, together with the shares of Enterprises'
Capital Stock already held by Holdings, Holdings holds approximately 97.4% of
Enterprises' outstanding capital stock, (iv) Holdings' transfer of all of the
shares of the Borrower's Capital Stock held by it to Enterprises so that,
together with the shares of the Borrower's Capital Stock issued to Enterprises
by the Borrower, Enterprises holds approximately 99.8% of the Borrower's
outstanding capital stock, (v) the formation of IHC and (vi) the contribution
by the Borrower and Enterprises of the IHC Assets to IHC.
"RELEASE" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including the movement of Contaminants
through or in the air, soil, surface water or groundwater.
"REPLACEMENT LENDER" is defined in Section 2.20 hereof.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days
after such event occurs, provided, however, that a failure to meet the minimum
funding standards of Section 412 of the Code and of Section 302 of ERISA shall
be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
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"REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the
aggregate, are equal to or greater than sixty-six and two-thirds percent
(66-2/3%); provided, however, that, if any of the Lenders shall have wrongfully
failed to fund its Pro Rata Share of any Revolving Loan requested by the
Borrower, or any Swing Line Loan as requested by the Agent, which such Lenders
are obligated to fund under the terms of this Agreement and any such failure
has not been cured, then for so long as such failure continues, "REQUIRED
LENDERS" means Lenders (excluding all Lenders whose failure to fund their
respective Pro Rata Shares of such Revolving Loans or Swing Line Loans has not
been so cured) whose Pro Rata Shares represent at least sixty-six and
two-thirds percent (66-2/3%) of the aggregate Pro Rata Shares of such Lenders;
provided further, however, that, if the Commitments have been terminated
pursuant to the terms of this Agreement, "REQUIRED LENDERS" means Lenders
(without regard to such Lenders' performance of their respective obligations
hereunder) whose aggregate ratable shares (stated as a percentage) of the
aggregate outstanding principal balance of all Loans and L/C Obligations are
equal to or greater than sixty-six and two-thirds percent (66-2/3%).
"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws
or other organizational or governing documents of such Person, and any law,
rule or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject including, without limitation, the Securities Act of 1933, the
Securities Exchange Act of 0000, Xxxxxxxxxxx X, X, U and X, ERISA, the Fair
Labor Standards Act, the Worker Adjustment and Retraining Notification Act,
Americans with Disabilities Act of 1990, and any certificate of occupancy,
zoning ordinance, building, environmental or land use requirement or permit or
environmental, labor, employment, occupational safety or health law, rule or
regulation, including Environmental, Health or Safety Requirements of Law.
"RESERVES" shall mean the maximum reserve requirement, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor), with
respect to "Eurocurrency liabilities" or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined or category of extensions of credit or
other assets which includes loans by a non-United States office of any Lender
to United States residents.
"RESTRICTED INVESTMENT" means any Investment other than an Investment
permitted by Section 7.3(D) (other than clause (xi) thereof).
"RESTRICTED PAYMENT" means (i) any dividend or other distribution,
direct or indirect, on account of any Equity Interests of the Borrower now or
hereafter outstanding, except a dividend payable solely in the Borrower's
Capital Stock (other than Disqualified Stock) or in options, warrants or other
rights to purchase such Capital Stock, (ii) any redemption, retirement,
purchase or other acquisition for value, direct or indirect, of any Equity
Interests of the Borrower or any of its Subsidiaries now or hereafter
outstanding,
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other than in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Subsidiary of the Borrower) of
other Equity Interests of the Borrower (other than Disqualified Stock), (iii)
any redemption, purchase, retirement, defeasance, prepayment or other
acquisition for value, direct or indirect, of any Indebtedness prior to the
stated maturity thereof, other than the Obligations and other than with the
proceeds of Permitted Refinancing Indebtedness, (iv) any payment of a claim for
the rescission of the purchase or sale of, or for material damages arising from
the purchase or sale of, any Indebtedness (other than the Obligations) or any
Equity Interests of the Borrower or any of the Borrower's Subsidiaries, or of a
claim for reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission, and (v) any Restricted
Investment.
"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the
amount by which the Maximum Revolving Credit Amount at such time exceeds the
Revolving Credit Obligations at such time.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum
of (i) the outstanding principal amount of the Revolving Loans at such time,
plus (ii) the outstanding principal amount of the Swing Line Loans at such
time, plus (iii) the L/C Obligations at such time.
"REVOLVING LOAN" is defined in Section 2.2 hereof.
"REVOLVING LOAN COMMITMENT" means, for each Lender, the obligation of
such Lender to make Revolving Loans and to purchase participations in Letters
of Credit not exceeding the amount set forth on Exhibit A to this Agreement
opposite its name thereon under the heading "Revolving Loan Commitment" or on
Schedule 1 of the assignment and acceptance by which it became a Lender, as
such amount may be modified from time to time pursuant to the terms of this
Agreement or to give effect to any applicable assignment and acceptance.
"REVOLVING LOAN TERMINATION DATE" means August 22, 2002.
"REVOLVING NOTE" means a promissory note, in substantially the form of
Exhibit B-1 hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Revolving Loan Commitment, including any amendment,
restatement, modification, renewal or replacement of such Revolving Note.
"RISK-BASED CAPITAL GUIDELINES" is defined in Section 4.2 hereof.
"SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii)
all Hedging Obligations owing under Interest Rate Agreements to any Lender or
any affiliate of any Lender.
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"SECURITY AGREEMENT" means that certain Security Agreement of even date
herewith executed by the Borrower in favor of the Agent for the benefit of the
Holders of Secured Obligations, as amended, restated or otherwise modified from
time to time.
"SENIOR NOTE INDENTURE" means that certain Indenture dated as of August
22, 1996, between the Borrower and Fleet National Bank, as Trustee, as amended,
supplemented or modified in accordance with Section 7.3(R) hereof.
"SENIOR NOTES" means those certain Senior Notes due 2004, issued by the
Borrower in the aggregate principal amount of $100,000,000 pursuant to the
Senior Note Indenture, as amended, supplemented or modified in accordance with
Section 7.3(R) hereof.
"SENIOR SUBORDINATED NOTE INDENTURE" means that certain Indenture dated
as of August 22, 1996, between the Borrower and Fleet National Bank, as
Trustee, as amended, supplemented or modified in accordance with Section 7.3(R)
hereof.
"SENIOR SUBORDINATED NOTES" means those certain Senior Subordinated
Notes due 2006, issued by the Borrower in the aggregate principal amount of
$200,000,000 pursuant to the Senior Subordinated Note Indenture, as amended,
supplemented or modified in accordance with Section 7.3(R) hereof.
"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.
"SUBORDINATED INDEBTEDNESS" means, collectively, (i) the Senior
Subordinated Notes, (ii) the Subordinated Notes, and (ii) any Permitted
Additional Subordinated Indebtedness.
"SUBORDINATED NOTE AGREEMENT" means that certain Note Purchase
Agreement dated March 13, 1995, as amended as of the Closing Date, between the
Borrower and the purchasers named therein, as amended, supplemented or modified
in accordance with Section 7.3(R) hereof.
"SUBORDINATED NOTES" means those certain 11.00% Subordinated Notes due
May 4, 2014, issued by the Borrower in the aggregate principal amount of
$10,384,000 pursuant to the Subordinated Note Agreement, as amended,
supplemented or modified in accordance with Section 7.3(R) hereof.
"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
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having ordinary voting power of which shall at the time be so owned or
controlled. Unless otherwise expressly provided, all references herein to a
"Subsidiary" shall mean a Subsidiary of the Borrower.
"SWING LINE BANK" means First Chicago or any other Lender as a successor
Swing Line Bank.
"SWING LINE COMMITMENT" means the obligation of the Swing Line Bank to
make Swing Line Loans up to a maximum principal amount of $10,000,000 at any
one time outstanding.
"SWING LINE LOAN" means a Loan made available to the Borrower by the Swing
Line Bank pursuant to Section 2.3 hereof.
"SWING LINE NOTE" means a promissory note, in substantially the form of
Exhibit B-2 hereto, duly executed by the Borrower and payable to the order of
the Swing Line Bank in the amount of its Swing Line Commitment, including any
amendment, restatement, modification, renewal or replacement of such Swing Line
Note.
"TARGET ASSETS" means certain assets acquired in the Xxxxx River
Acquisition having an aggregate value not exceeding $25,000,000.
"TAX ALLOCATION AGREEMENT" means the Tax Allocation Agreement among the
Borrower and, Holdings, Enterprises, IHC and PRF, as executed by such parties
as of the Closing Date.
"TAX INCENTIVE PROGRAM" means the Payment in Lieu of Taxes Program
sponsored by the Industrial Development Board ("IDB") of the City of Jackson,
Tennessee, pursuant to which (a) real property and equipment associated with
the Jackson, Tennessee, operations are transferred (or were transferred by
Xxxxx River or an Affiliate thereof prior to the Closing Date) to the IDB in
exchange for a non-interest bearing promissory note in an original amount equal
to the fair market value of the property so transferred, (b) the IDB leases
such transferred property to the Borrower pursuant to a lease having no
interest component and providing for rental payments that match the payment
terms of the related promissory note, and (c) the Borrower pays a fee to the
IDB that is substantially less than the property taxes that it would otherwise
pay if it were not participating in such Payment in Lieu of Taxes Program.
"TAXES" is defined in Section 2.15(E)(i) hereof.
"TERMINATION DATE" means the earlier of (a) the Revolving Loan Termination
Date, and (b) the date of termination of the Aggregate Revolving Loan
Commitment pursuant to Section 2.6 hereof or the Commitments pursuant to
Section 9.1 hereof.
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"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower
or such Controlled Group member was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA or the cessation of operations which within a
twelve-month period results in the termination of employment of twenty percent
(20%) of Benefit Plan participants who are employees of the Borrower or any
member of the Controlled Group; (iii) the imposition of an obligation on the
Borrower or any member of the Controlled Group under Section 4041 of ERISA to
provide affected parties written notice of intent to terminate a Benefit Plan
in a distress termination described in Section 4041(c) of ERISA; (iv) the
institution by the PBGC of proceedings to terminate a Benefit Plan; (v) any
event or condition which could reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Benefit Plan; or (vi) the partial or complete
withdrawal of the Borrower or any member of the Controlled Group from a
Multiemployer Plan.
"TERM LOAN" is defined in Section 2.1(a) hereof.
"TERM LOAN COMMITMENT" means, for each Lender, the obligation of such
Lender to make its Term Loan pursuant to the terms and conditions of this
Agreement, and which shall not exceed the principal amount set forth on Exhibit
A to this Agreement opposite its name thereon under the heading "Term Loan
Commitment," as such amount may be modified from time to time pursuant to the
terms hereof.
"TERM LOAN TERMINATION DATE" means August 22, 2002.
"TERM NOTE" means a promissory note, in substantially the form of Exhibit
B-3 hereto, duly executed by the Borrower and payable to the order of a Lender
in the amount of its Term Loan Commitment, including any amendment,
restatement, modification, renewal or replacement of such Term Note.
"TOTAL DEBT" means, for any period, on a consolidated basis for the
Borrower and its
Subsidiaries, the sum of Indebtedness of the Borrower and its Subsidiaries,
other than (i) Hedging Obligations and (ii) the sum of the amounts then
available for drawing under Letters of Credit.
"TRANSACTION COSTS" means the fees, costs and expenses payable by the
Borrower in connection with the execution, delivery and performance of the
Transaction Documents, the issuance of the Senior Subordinated Notes and Senior
Notes, and the consummation of the Xxxxx River Acquisition and the Related
Transactions.
"TRANSACTION DOCUMENTS" means the Loan Documents, the Xxxxx River
Acquisition Documents, and the documents executed in connection with the Senior
Subordinated Notes, the Senior Notes and the Related Transactions.
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"TRANSFEREE" is defined in Section 13.5 hereof.
"TYPE" means, with respect to any Loan, its nature as a Floating Rate Loan
or a Eurodollar Rate Loan.
"UNFUNDED LIABILITIES" means (i) in the case of Single Employer Plans, the
amount (if any) by which the present value of all vested nonforfeitable
benefits under all Single Employer Plans exceeds the fair market value of all
such Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plans, and (ii) in the case of Multiemployer
Plans, the withdrawal liability that would be incurred by the Controlled Group
if all members of the Controlled Group completely withdrew from all
Multiemployer Plans.
"UNMATURED DEFAULT" means an event which, but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"WEIGHTED AVERAGE LIFE TO MATURITY" means when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"WORKING CAPITAL" means, as at any date of determination, the excess, if
any, of (i) the Borrower's consolidated current assets, except cash and Cash
Equivalents, over (ii) the Borrower's consolidated current liabilities, except
current maturities of long-term debt and Revolving Credit Obligations as of
such date and all accrued interest as of such date.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. Any accounting terms used in this
Agreement which are not specifically defined herein shall have the meanings
customarily given them in accordance with Agreement Accounting Principles.
1.2 References. The existence throughout the Agreement of references to
the Borrower's Subsidiaries is for a matter of convenience only. Any
references to Subsidiaries of the Borrower set forth herein shall (i) with
respect to representations and warranties which deal with historical matters be
deemed to include Enterprises and its Subsidiaries, together with the
businesses acquired pursuant to the Xxxxx River Acquisition; and (ii) shall not
in any way be construed as consent by the Agent or any Lender to the
establishment, maintenance or acquisition of any Subsidiary, except as may
otherwise be permitted hereunder.
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1.3 Supplemental Disclosure. At any time at the reasonable request of
the Agent and at such additional times as the Borrower determines, the Borrower
shall supplement each schedule or representation herein or in the other Loan
Documents with respect to any matter hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in such schedule or as an exception to such representation
or which is necessary to correct any information in such schedule or
representation which has been rendered inaccurate thereby. Unless any such
supplement to such schedule or representation discloses the existence or
occurrence of events, facts or circumstances which are not prohibited by the
terms of this Agreement or any other Loan Documents, such supplement to such
schedule or representation shall not be deemed an amendment thereof unless
expressly consented to in writing by the Agent and the Required Lenders, and no
such amendments, except as the same may be consented to in a writing which
expressly includes a waiver, shall be or be deemed a waiver by the Agent or any
Lender of any Default disclosed therein.
ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES
2.1. Term Loans. (a) Amount of Term Loans. Subject to the terms and
conditions set forth in this Agreement, each Lender on the Closing Date
severally and not jointly agrees to make on the Closing Date, a term loan, in
Dollars, to the Borrower in an amount equal to such Lender's Term Loan
Commitment (each individually, a "TERM LOAN" and, collectively, the "TERM
LOANS"). All Term Loans shall be made by the Lenders on the Closing Date
simultaneously and proportionately to their respective Pro Rata Shares, it
being understood that no Lender shall be responsible for any failure by any
other Lender to perform its obligation to make any Term Loan hereunder nor
shall the Term Loan Commitment of any Lender be increased or decreased as a
result of any such failure.
(b) Borrowing Notice. The Borrower shall deliver to the Agent a
Borrowing Notice, signed by it, on the Closing Date. Such Borrowing Notice
shall specify (i) the aggregate amount of the Term Loans and (ii) instructions
for the disbursement of the proceeds of the Term Loans. The Term Loans shall
initially be Floating Rate Loans and thereafter may be continued as Floating
Rate Loans or converted into Eurodollar Rate Loans in the manner provided in
Section 2.10 and subject to the other conditions and limitations therein set
forth and set forth in this Article II. Any Borrowing Notice given pursuant to
this Section 2.1(b) shall be irrevocable.
(c) Making of Term Loans. Promptly after receipt of the Borrowing Notice
under Section 2.1(b) in respect of the Term Loans, the Agent shall notify each
Lender by telex or telecopy, or other similar form of transmission, of the
proposed Advance. Each Lender shall deposit an amount equal to its Pro Rata
Share of the Term Loans with the Agent at its office in Chicago, Illinois, in
immediately available funds, on the Closing Date specified in the Borrowing
Notice. Subject to the fulfillment of the conditions precedent set forth in
Sections 5.1 and 5.2, the Agent shall make the proceeds of such amounts
received by it
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available to the Borrower at the Agent's office in Chicago, Illinois on such
Closing Date and shall disburse such proceeds in accordance with the Borrower's
disbursement instructions set forth in such Borrowing Notice. The failure of
any Lender to deposit the amount described above with the Agent on the Closing
Date shall not relieve any other Lender of its obligations hereunder to make
its Term Loan on the Closing Date.
(d) Repayment of the Term Loans. (i) The Term Loans shall be repaid in
twenty two (22) quarterly installments, payable on the last Business Day of
each fiscal quarter of the Borrower as set forth below, commencing on March 29,
1997, and continuing thereafter (other than the fiscal quarter ending June 29,
2002) until the Term Loan Termination Date, and the Term Loans shall be
permanently reduced by the amount of each installment on the date payment
thereof is made hereunder. The installments shall be in the aggregate amounts
set forth below:
INSTALLMENT DATE INSTALLMENT AMOUNT
-------------------------- -------------------
March 29, 1997 $4,000,000
June 28, 1997 $4,000,000
September 27, 1997 $4,000,000
December 27, 1997 $4,000,000
March 28, 1998 $4,000,000
June 27, 1998 $4,000,000
September 26, 1998 $6,000,000
December 26, 1998 $6,000,000
March 27, 1999 $6,000,000
June 26, 1999 $6,000,000
September 25, 1999 $8,000,000
December 25, 1999 $8,000,000
March 25, 2000 $8,000,000
June 24, 2000 $8,000,000
September 23, 2000 $10,000,000
December 23, 2000 $10,000,000
March 24, 2001 $10,000,000
June 30, 2001 $10,000,000
September 29, 2001 $12,500,000
December 29, 2001 $12,500,000
March 30, 2002 $12,500,000
Term Loan Termination Date $12,500,000
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Notwithstanding the foregoing, the final installment shall be in the amount of
the then outstanding principal balance of the Term Loans. In addition, the
then outstanding principal balance of the Term Loans, if any, shall be due and
payable on the Termination Date. No installment of any Term Loan shall be
reborrowed once repaid.
(ii) In addition to the scheduled payments on the Term Loans, the
Borrower (a) may make the voluntary prepayments described in Section 2.5(A)
for credit against the scheduled payments on the Term Loans pursuant to Section
2.5(A) and (b) shall make the mandatory prepayments prescribed in Section
2.5(B) for credit against the scheduled payments on the Term Loans pursuant to
Section 2.5(B).
2.2 Revolving Loans. Upon the satisfaction of the conditions precedent
set forth in Sections 5.1 and 5.2, from and including the date of this
Agreement and prior to the Termination Date, each Lender severally and not
jointly agrees, on the terms and conditions set forth in this Agreement, to
make revolving loans to the Borrower from time to time, in Dollars, in an
amount not to exceed such Lender's Pro Rata Share of Revolving Credit
Availability at such time (each individually, a "REVOLVING LOAN" and,
collectively, the "REVOLVING LOANS"); provided, however, at no time shall the
Revolving Credit Obligations exceed the Maximum Revolving Credit Amount.
Subject to the terms of this Agreement, the Borrower may borrow, repay and
reborrow Revolving Loans at any time prior to the Termination Date. The
Revolving Loans made on the Closing Date shall initially be Floating Rate Loans
and thereafter may be continued as Floating Rate Loans or converted into
Eurodollar Rate Loans in the manner provided in Section 2.10 and subject to
the other conditions and limitations therein set forth and set forth in this
Article II. On the Termination Date, the Borrower shall repay in full the
outstanding principal balance of the Revolving Loans. Each Advance under this
Section 2.2 shall consist of Revolving Loans made by each Lender ratably in
proportion to such Lender's respective Pro Rata Share.
2.3 Swing Line Loans. (a) Amount of Swing Line Loans. Upon the
satisfaction of the conditions precedent set forth in Section 5.1 and 5.2, from
and including the date of this Agreement and prior to the Termination Date, the
Swing Line Bank agrees, on the terms and conditions set forth in this
Agreement, to make swing line loans to the Borrower from time to time, in
Dollars, in an amount not to exceed the Swing Line Commitment (each,
individually, a "SWING LINE LOAN" and collectively, the "SWING LINE LOANS");
provided, however, at no time shall the Revolving Credit Obligations exceed the
Maximum Revolving Credit Amount; and provided, further, that at no time shall
the sum of (a) the outstanding amount of the Swing Line Loans, plus (b) the
outstanding amount of Revolving Loans made by the Swing Line Bank pursuant to
Section 2.2 (after giving effect to any concurrent repayment of Loans), exceed
the Swing Line Bank's Revolving Loan Commitment at such time. Subject to the
terms of this Agreement, the Borrower may borrow, repay and reborrow Swing Line
Loans at any time prior to the Termination Date.
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(b) Borrowing Notice. The Borrower shall deliver to the Agent and the
Swing Line Bank a Borrowing Notice, signed by it, not later than 10:00 a.m.
(Chicago time) on the Borrowing Date of each Swing Line Loan, specifying (i)
the applicable Borrowing Date (which shall be a Business Day), and (ii) the
aggregate amount of the requested Swing Line Loan. The Swing Line Loans shall
at all times be Floating Rate Loans, which shall be an amount not less than
$100,000. The Agent shall promptly notify each Lender of such request.
(c) Making of Swing Line Loans. Promptly after receipt of the Borrowing
Notice under Section 2.3(b) in respect of Swing Line Loans, the Agent shall
notify each Lender by telex or telecopy, or other similar form of transmission,
of the requested Swing Line Loan. Not later than 2:00 p.m. (Chicago time) on
the applicable Borrowing Date, the Swing Line Bank shall make available its
Swing Line Loan, in funds immediately available in Chicago to the Agent at its
address specified pursuant to Article XIV. The Agent will promptly make the
funds so received from the Swing Line Bank available to the Borrower at the
Agent's aforesaid address.
(d) Repayment of Swing Line Loans. The Swing Line Loans shall be
evidenced by the Swing Line Note, and each Swing Line Loan shall be paid in
full by the Borrower on or before the fifth Business Day after the Borrowing
Date for such Swing Line Loan. The Borrower may at any time pay, without
penalty or premium, all outstanding Swing Line Loans or, in a minimum amount of
$100,000, any portion of the outstanding Swing Line Loans, upon notice to the
Agent and the Swing Line Bank. In addition, the Agent (i) may at any time in
its sole discretion with respect to any outstanding Swing Line Loan, or (ii)
shall on the fifth Business Day after the Borrowing Date of any Swing Line
Loan, require each Lender (including the Swing Line Bank) to make a Revolving
Loan in the amount of such Lender's Pro Rata Share of such Swing Line Loan, for
the purpose of repaying such Swing Line Loan. Not later than 2:00 p.m.
(Chicago time) on the date of any notice received pursuant to this Section
2.3(d), each Lender shall make available its required Revolving Loan or
Revolving Loans, in funds immediately available in Chicago to the Agent at its
address specified pursuant to Article XIV. Revolving Loans made pursuant to
this Section 2.3(d) shall initially be Floating Rate Loans and thereafter may
be continued as Floating Rate Loans or converted into Eurodollar Rate Loans in
the manner provided in Section 2.10 and subject to the other conditions and
limitations therein set forth and set forth in this Article II. Unless a
Lender shall have notified the Swing Line Bank, prior to its making any Swing
Line Loan, that any applicable condition precedent set forth in Sections 5.1
and 5.2 had not then been satisfied, such Lender's obligation to make Revolving
Loans pursuant to this Section 2.3(d) to repay Swing Line Loans shall be
unconditional, continuing, irrevocable and absolute and shall not be affected
by any circumstances, including, without limitation, (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the Agent, the Swing Line Bank or any other Person, (B) the occurrence
of continuance of a Default or Unmatured Default, (C) any adverse change in the
condition (financial or otherwise) of the Borrower, or (D) any other
circumstances, happening or event whatsoever. In the event that any Lender
fails to make payment to the Agent of any amount due under this Section 2.3(d),
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the Agent shall be entitled to receive, retain and apply against such
obligation the principal and interest otherwise payable to such Lender
hereunder until the Agent receives such payment from such Lender or such
obligation is otherwise fully satisfied. In addition to the foregoing, if for
any reason any Lender fails to make payment to the Agent of any amount due
under this Section 2.3(d), such Lender shall be deemed, at the option of the
Agent, to have unconditionally and irrevocably purchased from the Swing Line
Bank, without recourse or warranty, an undivided interest and participation in
the applicable Swing Line Loan in the amount of such Revolving Loan, and such
interest and participation may be recovered from such Lender together with
interest thereon at the Federal Funds Effective Rate for each day during the
period commencing on the date of demand and ending on the date such amount is
received. On the Termination Date, the Borrower shall repay in full the
outstanding principal balance of the Swing Line Loans.
2.4 Rate Options for all Advances. The Advances may be Floating Rate
Advances or Eurodollar Rate Advances, or a combination thereof, selected by the
Borrower in accordance with Section 2.10. The Borrower may select, in
accordance with Section 2.10, Rate Options and Interest Periods applicable to
portions of the Revolving Loans and the Term Loans; provided that there shall
be no more than six (6) Interest Periods in effect with respect to all of the
Loans at any time. The Swing Line Loans shall at all times be Floating Rate
Loans.
2.5 Optional Payments; Mandatory Prepayments.
(A) Optional Payments. The Borrower may from time to time repay or
prepay, without penalty or premium all or any part of outstanding Floating Rate
Advances; provided, that the Borrower may not so prepay Floating Rate Advances
consisting of Term Loans unless it shall have provided at least one Business
Day's written notice to the Agent of such prepayment. Eurodollar Rate Advances
may be voluntarily repaid or prepaid prior to the last day of the applicable
Interest Period, subject to the indemnification provisions contained in Section
4.4, provided, that the Borrower may not so prepay Eurodollar Rate Advances
unless it shall have provided at least three Business Days' written notice to
the Agent of such prepayment. Unless the aggregate outstanding principal
balance of the Term Loans is to be prepaid in full, voluntary prepayments of
the Term Loans shall be in an aggregate minimum amount of $500,000 and integral
multiples of $100,000 in excess of that amount, and shall be applied to each of
the then remaining installments payable thereunder, on a ratable basis based
upon the respective amounts of such installments.
(B) Mandatory Prepayments.
(i) Mandatory Prepayments of Term Loans.
(a) Upon the consummation of any Asset Sale by the Borrower or any
Subsidiary of the Borrower other than those Asset Sales permitted
pursuant to Section 7.3(B)(i), (ii), (iii), (iv), (v) and (vii), except
to the extent that the Net
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Cash Proceeds of such Asset Sale, when combined with the Net Cash
Proceeds of all such Asset Sales during the immediately preceding
twelve-month period, do not exceed $5,000,000, and except as provided in
the second and third sentences of this Section 2.5(B)(i)(a), within
fifteen (15) Business Days after the Borrower's or any of its
Subsidiaries' (i) receipt of any Net Cash Proceeds from any such Asset
Sale, or (ii) conversion to cash or Cash Equivalents of non-cash proceeds
(whether principal or interest and including securities, release of
escrow arrangements or lease payments) received from any Asset Sale, the
Borrower shall make a mandatory prepayment of the Obligations in an
amount equal to one hundred percent (100%) of such Net Cash Proceeds or
such proceeds converted from non-cash to cash or Cash Equivalents. Net
Cash Proceeds of Asset Sales with respect to which the Borrower shall
have given the Agent written notice of its intention to replace the
assets within six months, in the case of a sale of Equipment, or twelve
months, in the case of a sale of real property, following such Asset Sale
shall not be subject to the provisions of the first sentence of this
Section 2.5(B)(i)(a) unless and to the extent that such applicable period
shall have expired without such replacement having been made. The Net
Cash Proceeds of Asset Sales permitted by Section 7.3(B)(vi) shall not be
subject to the provisions of the first sentence of this Section
2.5(B)(i)(a) to the extent that such aggregate Net Cash Proceeds, less
the aggregate costs of equipment relocations and replacements related
thereto, do not exceed $5,700,000.
(b) Upon the consummation of any Financing by the Borrower or any
Subsidiary of the Borrower, except as provided in the second sentence of
this Section 2.5(B)(i)(b), within three (3) Business Days after the
Borrower's or any of its Subsidiaries' receipt of any Net Cash Proceeds
from such Financing, the Borrower shall make a mandatory prepayment of
the Obligations in an amount equal to one hundred percent (100%) of such
Net Cash Proceeds. Net Cash Proceeds of Financings consisting of
Permitted Refinancing Indebtedness or which are used, after written
notice by the Borrower to the Agent thereof, for any Permitted
Acquisition or any Restricted Payment permitted under Section 7.3(F)
shall not be subject to the provisions of the first sentence of this
Section 2.5(B)(i)(b).
(c) Simultaneously with the delivery of the annual audited
financial statements required to be delivered pursuant to Section
7.1(A)(iii) for each Cash Flow Period, the Borrower shall calculate
Excess Cash Flow for such Cash Flow Period and shall make a mandatory
prepayment, payable not later than the earlier of ten (10) days after
such financial statements and calculation are delivered or one hundred
(100) days after the end of such Cash Flow Period, in an amount equal to
fifty percent (50.0%) of such Excess Cash Flow.
(d) Nothing in this Section 2.5(B)(i) shall be construed to
constitute the Lenders' consent to any transaction referred to in clauses
(a) and (b) above which is not expressly permitted by the terms of this
Agreement.
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(e) Each mandatory prepayment required by clauses (a), (b) and (c)
of this Section 2.5(B) shall be referred to herein as a "Designated
Prepayment." Designated Prepayments shall be allocated and applied to
the Obligations as follows:
(I) the amount of each Designated Prepayment shall be
applied to each of the then remaining installments payable under
the Term Loans, on a ratable basis based upon the respective
amounts of such installments; and
(II) following the payment in full of the Term Loans, the
amount of each Designated Prepayment shall be applied to repay
Revolving Loans (but shall reduce Revolving Loan Commitments only
at the option of the Required Lenders) and following the payment
in full of the Revolving Loans, the amount of each Designated
Prepayment shall be applied first to interest on the Reimbursement
Obligations, then to principal on the Reimbursement Obligations,
then to fees on account of Letters of Credit and then, to the
extent any L/C Obligations are contingent, deposited with the
Agent as cash collateral in respect of such L/C Obligations.
(f) On the date any Designated Prepayment is received by the Agent,
such prepayment shall be applied first to Floating Rate Loans and to any
Eurodollar Rate Loans maturing on such date and then to subsequently
maturing Eurodollar Rate Loans in order of maturity.
(ii) Mandatory Prepayments of Revolving Loans. In addition to repayments
under Section 2.5(B)(i)(e)(II), if at any time and for any reason the Revolving
Credit Obligations are greater than the Maximum Revolving Credit Amount, the
Borrower shall immediately make a mandatory prepayment of the Obligations in an
amount equal to such excess.
(iii) Subject to the preceding provisions of this Section 2.5(B), all of
the mandatory prepayments made under this Section 2.5(B) shall be applied first
to Floating Rate Loans and to any Eurodollar Rate Loans maturing on such date
and then to subsequently maturing Eurodollar Rate Loans in order of maturity.
2.6 Reduction of Commitments. The Borrower may permanently reduce the
Aggregate Revolving Loan Commitment in whole, or in part ratably among the
Lenders, in an aggregate minimum amount of $1,000,000 and integral multiples of
$1,000,000 in excess of that amount (unless the Aggregate Revolving Loan
Commitment is reduced in whole), upon at least five Business Days' written
notice to the Agent, which notice shall specify the amount of any such
reduction; provided, however, that the amount of the Aggregate Revolving Loan
Commitment may not be reduced below the aggregate principal amount of the
outstanding Revolving Credit Obligations. All accrued commitment fees shall be
payable on the effective date of any termination of the obligations of the
Lenders to make Loans hereunder.
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2.7 Method of Borrowing. Not later than 2:00 p.m. (Chicago time) on each
Borrowing Date, each Lender shall make available its Revolving Loan or
Revolving Loans, in funds immediately available in Chicago to the Agent at its
address specified pursuant to Article XIV. The Agent will promptly make the
funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address.
2.8 Method of Selecting Types and Interest Periods for Advances. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Rate Advance, the Interest Period applicable to each Advance from time to time.
The Borrower shall give the Agent irrevocable notice in substantially the form
of Exhibit C hereto (a "BORROWING NOTICE") not later than 10:00 a.m. (Chicago
time) (a) on the Borrowing Date of each Floating Rate Advance and (b) three
Business Days before the Borrowing Date for each Eurodollar Rate Advance,
specifying: (i) the Borrowing Date (which shall be a Business Day) of such
Advance; (ii) the aggregate amount of such Advance; (iii) the Type of Advance
selected; and (iv) in the case of each Eurodollar Rate Advance, the Interest
Period applicable thereto. The Borrower shall select Interest Periods so that,
to the best of the Borrower's knowledge, it will not be necessary to prepay all
or any portion of any Eurodollar Rate Advance prior to the last day of the
applicable Interest Period in order to make mandatory prepayments as required
pursuant to the terms hereof. Each Floating Rate Advance and all Obligations
other than Loans shall bear interest from and including the date of the making
of such Advance to (but not including) the date of repayment thereof at the
Floating Rate, changing when and as such Floating Rate changes. Changes in the
rate of interest on that portion of any Advance maintained as a Floating Rate
Loan will take effect simultaneously with each change in the Alternate Base
Rate. Each Eurodollar Rate Advance shall bear interest from and including the
first day of the Interest Period applicable thereto to (but not including) the
last day of such Interest Period at the interest rate determined as applicable
to such Eurodollar Rate Advance.
2.9 Minimum Amount of Each Advance. Each Advance (other than an
Advance to repay Swing Line Loans pursuant to Section 2.3(d) or a Reimbursement
Obligation pursuant to Section 3.7) shall be in the minimum amount of
$5,000,000 (and in multiples of $1,000,000 if in excess thereof), provided,
however, that any Floating Rate Advance may be in the amount of the unused
Aggregate Revolving Loan Commitment.
2.10 Method of Selecting Types and Interest Periods for Conversion and
Continuation of Advances.
(A) Right to Convert. The Borrower may elect from time to time, subject
to the provisions of Section 2.4 and this Section 2.10, to convert all or any
part of a Loan of any Type into any other Type or Types of Loans; provided that
any conversion of any Eurodollar Rate Advance shall be made on, and only on,
the last day of the Interest Period applicable thereto.
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(B) Automatic Conversion and Continuation. Floating Rate Loans shall
continue as Floating Rate Loans unless and until such Floating Rate Loans are
converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall continue as
Eurodollar Rate Loans until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have given the
Agent notice in accordance with Section 2.10(D) requesting that, at the end of
such Interest Period, such Eurodollar Rate Loans continue as a Eurodollar Rate
Loan.
(C) No Conversion Post-Default or Post-Unmatured Default.
Notwithstanding anything to the contrary contained in Section 2.10(A) or
Section 2.10(B), no Loan may be converted into or continued as a Eurodollar
Rate Loan (except with the consent of the Required Lenders) when any Default or
Unmatured Default has occurred and is continuing.
(D) Conversion/Continuation Notice. The Borrower shall give the Agent
irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each conversion of a
Floating Rate Loan into a Eurodollar Rate Loan or continuation of a Eurodollar
Rate Loan not later than 10:00 a.m. (Chicago time) three Business Days prior to
the date of the requested conversion or continuation, specifying: (1) the
requested date (which shall be a Business Day) of such conversion or
continuation; (2) the amount and Type of the Loan to be converted or continued;
and (3) the amount of Eurodollar Rate Loan(s) into which such Loan is to be
converted or continued and the duration of the Interest Period applicable
thereto.
2.11 Default Rate. After the occurrence and during the continuance of a
Default, at the direction of the Required Lenders, the interest rate(s)
applicable to the Obligations and the fees payable under Section 3.8 with
respect to Letters of Credit shall be increased by two percent (2.0%) per annum
above the Floating Rate or Eurodollar Rate, as applicable.
2.12 Collection Account Arrangements. All collections of Receivables
included in the Collateral and other proceeds of Collateral shall be deposited
in a Collection Account which is subject to a Collection Account Agreement or
pursuant to another similar arrangement for the collection of such amounts
established by the Borrower and Agent and shall be transferred in accordance
with the provisions of the respective Collection Account Agreements. On or
prior to the Closing Date, the Borrower shall have entered into and shall
thereafter maintain lock-box services agreements with banks which are parties
to Collection Account Agreements and to which lock-boxes account debtors shall
directly remit all payments on Receivables. Any of the foregoing collections
received by the Borrower and not so deposited, shall be deemed to have been
received by the Borrower as the Agent's trustee and, upon the Borrower's
receipt thereof, the Borrower shall immediately transfer all such amounts into
a Collection Account in their original form. Such deposits shall be remitted to
the Agent, the Borrower or as the Agent may direct, all in accordance with the
provisions of the Collection Account Agreements.
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2.13 Method of Payment. All payments of principal, interest, and fees
hereunder shall be made, without setoff, deduction or counterclaim, in
immediately available funds to the Agent at the Agent's address specified
pursuant to Article XIV, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Borrower, by 2:00 p.m. (Chicago time)
on the date when due and shall be made ratably among the Lenders (unless such
amount is not to be shared ratably in accordance with the terms hereof). Each
payment delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds which the Agent
received at its address specified pursuant to Article XIV or at any Lending
Installation specified in a notice received by the Agent from such Lender. The
Borrower authorizes the Agent to charge the account of the Borrower maintained
with First Chicago for each payment of principal, interest and fees as it
becomes due hereunder.
2.14 Notes, Telephonic Notices. Each Lender is authorized to record the
principal amount of each of its Loans and each repayment with respect to its
Loans on the schedule attached to its respective Notes; provided, however, that
the failure to so record shall not affect the Borrower's obligations under any
such Note. The Borrower authorizes the Lenders and the Agent to extend
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 acting on behalf of the Borrower. The Borrower
agrees to deliver promptly to the Agent a written confirmation, signed by an
Authorized Officer, if such confirmation is requested by the Agent or any
Lender, of each telephonic notice. If the written confirmation differs in any
material respect from the action taken by the Agent and the Lenders, (i) the
telephonic notice shall govern absent manifest error and (ii) the Agent or the
Lender, as applicable, shall promptly notify the Authorized Officer who
provided such confirmation of such difference.
2.15 Promise to Pay; Interest and Commitment Fees; Interest Payment
Dates; Interest and Fee Basis; Taxes; Loan and Control Accounts.
(A) Promise to Pay. The Borrower unconditionally promises to pay when
due the principal amount of each Loan and all other Obligations incurred by it,
and to pay all unpaid interest accrued thereon, in accordance with the terms of
this Agreement and the Notes.
(B) Interest Payment Dates. Interest accrued on each Floating Rate Loan
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof, on any date on which the Floating Rate Loan is
prepaid, whether due to acceleration or otherwise, and at maturity (whether by
acceleration or otherwise). Interest accrued on each Eurodollar Rate Loan
shall be payable on the last day of its applicable Interest Period, on any date
on which the Eurodollar Rate Loan is prepaid, whether by acceleration or
otherwise, and at maturity. Interest accrued on each Eurodollar Rate Loan
having an Interest Period longer than three months shall also be payable on the
last day of each three-month interval during such Interest Period. Interest
accrued on the principal
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balance of all other Obligations shall be payable in arrears (i) on the last
day of each calendar month, commencing on the first such day following the
incurrence of such Obligation, (ii) upon repayment thereof in full or in part,
and (iii) if not theretofore paid in full, at the time such other Obligation
becomes due and payable (whether by acceleration or otherwise).
(C) Commitment Fees. (i) The Borrower shall pay to the Agent, for the
account of the Lenders in accordance with their Pro Rata Shares, from and after
the Closing Date until the date on which the Aggregate Revolving Loan
Commitment shall be terminated in whole, a commitment fee accruing at the rate
of the then Applicable Commitment Fee Percentage, on the amount by which (A)
the Aggregate Revolving Loan Commitment in effect from time to time exceeds (B)
the Revolving Credit Obligations in effect from time to time. All such
commitment fees payable under this clause (C) shall be payable quarterly in
arrears on the last day of each fiscal quarter of the Borrower occurring after
the Closing Date (with the first such payment being calculated for the period
from the Closing Date and ending on September 28, 1996), and, in addition, on
the date on which the Aggregate Revolving Loan Commitment shall be terminated
in whole.
(ii) The Borrower agrees to pay to the Agent for the sole account of the
Agent (unless otherwise agreed between the Agent and any Lender) the fees set
forth in the letter agreement between the Agent and the Borrower dated May 31,
1996, payable at the times and in the amounts set forth therein.
(D) Interest and Fee Basis; Applicable Eurodollar Margin and Applicable
Commitment Fee Percentage.
(i) 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 Obligation
is incurred but not for the day of any payment on the amount paid if payment is
received prior to 2:00 p.m. (Chicago time) at the place of payment. If any
payment of principal of or interest on a Loan or any payment of any other
Obligations shall become due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest in connection with such payment.
(ii) The Applicable Eurodollar Margin and Applicable Commitment Fee
Percentage shall be determined from time to time by reference to the table set
forth below, on the basis of the then applicable Leverage Ratio as described in
this Section 2.15(D)(ii):
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Applicable Eurodollar Applicable
Commitment
Leverage Ratio Margin Fee Percentage
-------------- -------------------------- --------------------------
Greater than
or equal to
4.5 to 1.0 1.50% 0.35%
Greater than
or equal to
4.0 to 1.0 and
less than
4.5 to 1.0 1.25% 0.30%
Greater than
or equal to
3.5 to 1.0 and
less than
4.0 to 1.0 1.00% 0.25%
Greater than
or equal to
3.0 to 1.0 and
less than
3.5 to 1.0 0.75% 0.20%
Less than
3.0 to 1.0 0.50% 0.15%
For purposes of this Section 2.15(D)(ii), the Leverage Ratio shall be
determined as of the last day of each fiscal quarter based upon (a) for Total
Debt, Total Debt as of the last day of each such fiscal quarter; and (b) for
EBITDA, the actual amount for the four-quarter period ending on such day,
calculated, with respect to Permitted Acquisitions, on a pro forma basis using
historical audited and reviewed unaudited financial statements obtained from
the seller, broken down by fiscal quarter in the Borrower's reasonable
judgment. Upon receipt of the financial statements delivered pursuant to
Section 7.1(A)(ii), the Applicable Eurodollar Margin and Applicable Commitment
Fee Percentage shall be adjusted, such adjustment being effective five (5)
Business Days following the Agent's receipt of such financial statements and
the compliance certificate required to be delivered in connection therewith
pursuant to Section 7.1(A)(iv); provided, that if the Borrower shall not have
timely delivered its financial statements in accordance with Section
7.1(A)(ii), then commencing on the date upon which such financial statements
should have been delivered and continuing until such financial statements are
actually delivered, it shall be assumed for purposes of determining the
Applicable Eurodollar Margin and Applicable Commitment Fee Percentage that the
Leverage Ratio was greater than 4.5 to 1.0. The initial Applicable Eurodollar
Margin and Applicable Commitment Fee Percentage shall be 1.50% and 0.35%,
respectively, until any adjustment thereof shall be required in accordance with
this Section 2.15(D)(ii).
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(E) Taxes.
(i) Any and all payments by the Borrower hereunder shall be made
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings or any
liabilities with respect thereto including those arising after the date
hereof as a result of the adoption of or any change in any law, treaty,
rule, regulation, guideline or determination of a Governmental Authority
or any change in the interpretation or application thereof by a
Governmental Authority but excluding, in the case of each Lender and the
Agent, such taxes (including income taxes, franchise taxes and branch
profit taxes) as are imposed on or measured by such Lender's or Agent's,
as the case may be, income by the United States of America or any
Governmental Authority of the jurisdiction under the laws of which such
Lender or Agent, as the case may be, is organized or maintains a Lending
Installation (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings, and liabilities which the Agent or a Lender
determines to be applicable to this Agreement, the other Loan Documents,
the Revolving Loan Commitments, the Loans or the Letters of Credit being
hereinafter referred to as "TAXES"). If the Borrower shall be required
by law to deduct any Taxes from or in respect of any sum payable
hereunder or under the other Loan Documents to any Lender or the Agent,
(i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 2.15(E)) such Lender or the
Agent (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall
make such deductions, and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law. If a withholding tax of the United
States of America or any other Governmental Authority shall be or become
applicable (y) after the date of this Agreement, to such payments by the
Borrower made to the Lending Installation or any other office that a
Lender may claim as its Lending Installation, or (z) after such Lender's
selection and designation of any other Lending Installation, to such
payments made to such other Lending Installation, such Lender shall use
reasonable efforts to make, fund and maintain its Loans through another
Lending Installation of such Lender in another jurisdiction so as to
reduce the Borrower's liability hereunder, if the making, funding or
maintenance of such Loans through such other Lending Installation of such
Lender does not, in the judgment of such Lender, otherwise adversely
affect such Loans, or obligations under the Revolving Loan Commitments or
such Lender.
(ii) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes,
charges, or similar levies which arise from any payment made hereunder,
from the issuance of Letters of Credit hereunder, or from the execution,
delivery or registration of, or otherwise with respect to, this
Agreement, the other Loan Documents, the Revolving Loan Commitments, the
Loans or the Letters of Credit (hereinafter referred to as "OTHER
TAXES").
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(iii) The Borrower indemnifies each Lender and the Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed by any Governmental Authority on amounts payable
under this Section 2.15(E)) paid by such Lender or the Agent (as the case
may be) and any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or
Other Taxes were correctly or legally asserted. This indemnification
shall be made within thirty (30) days after the date such Lender or the
Agent (as the case may be) makes written demand therefor. A certificate
as to any additional amount payable to any Lender or the Agent under this
Section 2.15(E) submitted to the Borrower and the Agent (if a Lender is
so submitting) by such Lender or the Agent shall show in reasonable
detail the amount payable and the calculations used to determine such
amount and shall, absent manifest error, be final, conclusive and binding
upon all parties hereto. With respect to such deduction or withholding
for or on account of any Taxes and to confirm that all such Taxes have
been paid to the appropriate Governmental Authorities, the Borrower shall
promptly (and in any event not later than thirty (30) days after receipt)
furnish to each Lender and the Agent such certificates, receipts and
other documents as may be required (in the judgment of such Lender or the
Agent) to establish any tax credit to which such Lender or the Agent may
be entitled.
(iv) Within thirty (30) days after the date of any payment of Taxes
or Other Taxes by the Borrower, the Borrower shall furnish to the Agent
the original or a certified copy of a receipt evidencing payment thereof.
(v) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.15(E) shall survive the payment in full of
principal and interest hereunder, the termination of the Letters of
Credit and the termination of this Agreement.
(vi) Without limiting the obligations of the Borrower under this
Section 2.15(E), each Lender that is not created or organized under the
laws of the United States of America or a political subdivision thereof
shall deliver to the Borrower and the Agent on or before the Closing
Date, or, if later, the date on which such Lender becomes a Lender
pursuant to Section 13.3, a true and accurate certificate executed in
duplicate by a duly authorized officer of such Lender, in a form
satisfactory to the Borrower and the Agent, to the effect that such
Lender is capable under the provisions of an applicable tax treaty
concluded by the United States of America (in which case the certificate
shall be accompanied by two executed copies of Form 1001 of the IRS) or
under Section 1442 of the Code (in which case the certificate shall be
accompanied by two copies of Form 4224 of the IRS) of receiving payments
of interest hereunder without deduction or withholding of United States
federal income tax. Each such Lender further agrees to deliver to
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the Borrower and the Agent from time to time a true and accurate
certificate executed in duplicate by a duly authorized officer of such
Lender substantially in a form satisfactory to the Borrower and the
Agent, before or promptly upon the occurrence of any event requiring a
change in the most recent certificate previously delivered by it to the
Borrower and the Agent pursuant to this Section 2.15(E)(vi). Further,
each Lender which delivers a certificate accompanied by Form 1001 of the
IRS covenants and agrees to deliver to the Borrower and the Agent within
fifteen (15) days prior to January 1, 1998, and every third (3rd)
anniversary of such date thereafter on which this Agreement is still in
effect, another such certificate and two accurate and complete original
signed copies of Form 1001 (or any successor form or forms required under
the Code or the applicable regulations promulgated thereunder), and each
Lender that delivers a certificate accompanied by Form 4224 of the IRS
covenants and agrees to deliver to the Borrower and the Agent within
fifteen (15) days prior to the beginning of each subsequent taxable year
of such Lender during which this Agreement is still in effect, another
such certificate and two accurate and complete original signed copies of
IRS Form 4224 (or any successor form or forms required under the Code or
the applicable regulations promulgated thereunder). Each such
certificate shall certify as to one of the following:
(a) that such Lender is capable of receiving payments of
interest hereunder without deduction or withholding of United
States of America federal income tax;
(b) that such Lender is not capable of receiving payments of
interest hereunder without deduction or withholding of United
States of America federal income tax as specified therein but is
capable of recovering the full amount of any such deduction or
withholding from a source other than the Borrower and will not
seek any such recovery from the Borrower; or
(c) that, as a result of the adoption of or any change in
any law, treaty, rule, regulation, guideline or determination of a
Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority after the date
such Lender became a party hereto, such Lender is not capable of
receiving payments of interest hereunder without deduction or
withholding of United States of America federal income tax as
specified therein and that it is not capable of recovering the
full amount of the same from a source other than the Borrower.
Each Lender shall promptly furnish to the Borrower and the Agent such
additional documents as may be reasonably required by the Borrower or the
Agent to establish any exemption from or reduction of any Taxes or Other
Taxes required to be deducted or withheld and which may be obtained
without undue expense to such Lender.
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(F) Loan Account. Each Lender shall maintain in accordance with its
usual practice an account or accounts (a "LOAN ACCOUNT") evidencing the
Obligations of the Borrower to such Lender owing to such Lender from time to
time, including the amount of principal and interest payable and paid to such
Lender from time to time hereunder and under the Notes.
(G) Control Account. The Register maintained by the Agent pursuant to
Section 13.3(C) shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the date
and amount of each Advance made hereunder, the type of Loan comprising such
Advance and any Interest Period applicable thereto, (ii) the effective date and
amount of each assignment and acceptance delivered to and accepted by it and
the parties thereto pursuant to Section 13.3, (iii) the amount of any principal
or interest due and payable or to become due and payable from the Borrower to
each Lender hereunder or under the Notes, (iv) the amount of any sum received
by the Agent from the Borrower hereunder and each Lender's share thereof, and
(v) all other appropriate debits and credits as provided in this Agreement,
including, without limitation, all fees, charges, expenses and interest.
(H) Entries Binding. The entries made in the Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest
error, unless the Borrower objects to information contained in the Register and
each Loan Account within thirty (30) days of the Borrower's receipt of such
information.
2.16 Notification of Advances, Interest Rates, Prepayments and Aggregate
Revolving Loan Commitment Reductions. Promptly after receipt thereof, the
Agent will notify each Lender of the contents of each Aggregate Revolving Loan
Commitment reduction notice, Borrowing Notice, Continuation/Conversion Notice,
and repayment notice received by it hereunder. The Agent will notify each
Lender of the interest rate applicable to each Eurodollar Rate Loan promptly
upon determination of such interest rate and will give each Lender prompt
notice of each change in the Alternate Base Rate.
2.17 Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or
facsimile notice to the Agent and the Borrower, designate a Lending
Installation through which Loans will be made by it and for whose account Loan
payments are to be made.
2.18 Non-Receipt of Funds by the Agent. Unless the Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that
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58
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.
2.19 Termination Date. This Agreement shall be effective until the
Termination Date. Notwithstanding the termination of this Agreement on the
Termination Date, until all of the Obligations (other than contingent indemnity
obligations) shall have been fully and indefeasibly paid and satisfied, all
financing arrangements among the Borrower and the Lenders shall have been
terminated (other than under Interest Rate Agreements or other agreements with
respect to Hedging Obligations) and all of the Letters of Credit shall have
expired, been cancelled or terminated, all of the rights and remedies under
this Agreement and the other Loan Documents shall survive and the Agent shall
be entitled to retain its security interest in and to all existing and future
Collateral for the benefit of itself and the Holders of Secured Obligations.
2.20 Replacement of Certain Lenders. In the event a Lender ("AFFECTED
LENDER") shall have: (i) failed to fund its Pro Rata Share of any Advance
requested by the Borrower, or to fund a Revolving Loan in order to repay Swing
Line Loans pursuant to Section 2.3(d), which such Lender is obligated to fund
under the terms of this Agreement and which failure has not been cured, (ii)
requested compensation from the Borrower under Sections 2.15(E), 4.1 or 4.2 to
recover Taxes, Other Taxes or other additional costs incurred by such Lender
which are not being incurred generally by the other Lenders, (iii) delivered a
notice pursuant to Section 4.3 claiming that such Lender is unable to extend
Eurodollar Rate Loans to the Borrower for reasons not generally applicable to
the other Lenders or (iv) has invoked Section 10.2, then, in any such case, the
Borrower or the Agent may make written demand on such Affected Lender (with a
copy to the Agent in the case of a demand by the Borrower and a copy to the
Borrower in the case of a demand by the Agent) for the Affected Lender to
assign, and such Affected Lender shall use its best efforts to assign pursuant
to one or more duly executed assignments and acceptances in substantially the
form of Exhibit E five (5) Business Days after the date of such demand, to one
or more financial institutions that comply with the provisions of Section
13.3(A) which the Borrower or the Agent, as the case may be, shall have engaged
for such purpose ("REPLACEMENT LENDER"), all of such Affected Lender's rights
and obligations under this Agreement and the other Loan Documents (including,
without limitation, its Revolving Loan Commitment, all Loans owing to it, all
of its participation interests in existing Letters of Credit, and its
obligation to participate in additional Letters of Credit hereunder) in
accordance with Section 13.3. The Agent agrees, upon the occurrence of such
events with respect to an Affected Lender and upon the written request of the
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Borrower, to use its reasonable efforts to obtain the commitments from one or
more financial institutions to act as a Replacement Lender. The Agent is
authorized to execute one or more of such assignment agreements as
attorney-in-fact for any Affected Lender failing to execute and deliver the
same within five (5) Business Days after the date of such demand. Further,
with respect to such assignment the Affected Lender shall have concurrently
received, in cash, all amounts due and owing to the Affected Lender hereunder
or under any other Loan Document, including, without limitation, the aggregate
outstanding principal amount of the Loans owed to such Lender, together with
accrued interest thereon through the date of such assignment, amounts payable
under Sections 2.15(E), 4.1, and 4.2 with respect to such Affected Lender and
compensation payable under Section 2.15(C) in the event of any replacement of
any Affected Lender under clause (ii) or clause (iii) of this Section 2.20;
provided that upon such Affected Lender's replacement, such Affected Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15(E), 4.1, 4.2, 4.4, and 10.7, as well as to any fees
accrued for its account hereunder and not yet paid, and shall continue to be
obligated under Section 11.8. Upon the replacement of any Affected Lender
pursuant to this Section 2.20, the provisions of Section 9.2 shall continue to
apply with respect to Borrowings which are then outstanding with respect to
which the Affected Lender failed to fund its Pro Rata Share and which failure
has not been cured.
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 Obligation to Issue. Subject to the terms and conditions of this
Agreement and in reliance upon the representations, warranties and covenants of
the Borrower herein set forth, each Issuing Bank hereby agrees to issue for the
account of the Borrower through such Issuing Bank's branches as it and the
Borrower may jointly agree, one or more Letters of Credit in accordance with
this Article III, from time to time during the period, commencing on the date
hereof and ending on the Business Day prior to the Termination Date.
3.2 Transitional Provision. Schedule 3.2 contains a schedule of certain
letters of credit issued for the account of the Borrower prior to the Closing
Date by SunTrust Bank, Atlanta. Subject to the satisfaction of the conditions
contained in Sections 5.1 and 5.2, from and after the Closing Date such letters
of credit shall be deemed to be Letters of Credit issued pursuant to this
Article III.
3.3 Types and Amounts. No Issuing Bank shall have any obligation to and
no Issuing Bank shall:
(i) issue any Letter of Credit if on the date of issuance,
before or after giving effect to the Letter of Credit requested
hereunder, (a) the Revolving Credit Obligations at such time would
exceed the Maximum Revolving Credit Amount at such time, or (b)
the aggregate outstanding amount of the L/C Obligations would
exceed $10,000,000; or
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(ii) issue any Letter of Credit which has an expiration date
later than the date which is the earlier of one (1) year after the
date of issuance thereof or five (5) Business Days immediately
preceding the Termination Date.
3.4 Conditions. In addition to being subject to the satisfaction of the
conditions contained in Sections 5.1 and 5.2, the obligation of an Issuing Bank
to issue any Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) the Borrower shall have delivered to the applicable
Issuing Bank at such times and in such manner as such Issuing Bank
may reasonably prescribe, a request for issuance of such Letter of
Credit in substantially the form of Exhibit D hereto, duly
executed applications for such Letter of Credit, and such other
customary documents, instructions and agreements as may be
required pursuant to the terms thereof (all such applications,
documents, instructions, and agreements being referred to herein
as the "L/C Documents"), and the proposed Letter of Credit shall
be reasonably satisfactory to such Issuing Bank as to form and
content; and
(ii) as of the date of issuance no order, judgment or decree
of any court, arbitrator or Governmental Authority shall purport
by its terms to enjoin or restrain the applicable Issuing Bank
from issuing such Letter of Credit and no law, rule or regulation
applicable to such Issuing Bank and no request or directive
(whether or not having the force of law) from a Governmental
Authority with jurisdiction over such Issuing Bank shall prohibit
or request that such Issuing Bank refrain from the issuance of
Letters of Credit generally or the issuance of that Letter of
Credit.
To the extent that any provision of any L/C Document cannot reasonably be
construed to be consistent with this Agreement, requires greater collateral
security or imposes additional obligations not reasonably related to customary
letter of credit arrangements, such provision shall be invalid and this
Agreement shall control.
3.5 Procedure for Issuance of Letters of Credit. (a) Subject to the
terms and conditions of this Article III and provided that the applicable
conditions set forth in Sections 5.1 and 5.2 hereof have been satisfied, the
applicable Issuing Bank shall, on the requested date, issue a Letter of Credit
on behalf of the Borrower in accordance with such Issuing Bank's usual and
customary business practices and, in this connection, such Issuing Bank may
assume that the applicable conditions set forth in Section 5.2 hereof have been
satisfied unless it shall have received notice to the contrary from the Agent
or a Lender or has knowledge that the applicable conditions have not been met.
(b) The applicable Issuing Bank shall give the Agent written or telex
notice, or telephonic notice confirmed promptly thereafter in writing, of the
issuance of a Letter of
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Credit, provided, however, that the failure to provide such notice shall not
result in any liability on the part of such Issuing Bank.
(c) No Issuing Bank shall extend or amend any Letter of Credit unless the
requirements of this Section 3.5 are met as though a new Letter of Credit was
being requested and issued.
3.6 Letter of Credit Participation. Immediately upon the issuance of
each Letter of Credit hereunder, each Lender shall be deemed to have
automatically, irrevocably and unconditionally purchased and received from the
applicable Issuing Bank an undivided interest and participation in and to such
Letter of Credit, the obligations of the Borrower in respect thereof, and the
liability of such Issuing Bank thereunder (collectively, an "L/C INTEREST" in
an amount equal to the amount available for drawing under such Letter of Credit
multiplied by such Lender's Pro Rata Share. Each Issuing Bank will notify each
Lender promptly upon presentation to it of an L/C Draft or upon any other draw
under a Letter of Credit. On or before the Business Day on which an Issuing
Bank makes payment of each such L/C Draft or, in the case of any other draw on
a Letter of Credit, on demand by the Agent, each Lender shall make payment to
the Agent, for the account of the applicable Issuing Bank, in immediately
available funds in an amount equal to such Lender's Pro Rata Share of the
amount of such payment or draw. The obligation of each Lender to reimburse the
Issuing Banks under this Section 3.6 shall be unconditional, continuing,
irrevocable and absolute. In the event that any Lender fails to make payment
to the Agent of any amount due under this Section 3.6, the Agent shall be
entitled to receive, retain and apply against such obligation the principal and
interest otherwise payable to such Lender hereunder until the Agent receives
such payment from such Lender or such obligation is otherwise fully satisfied;
provided, however, that nothing contained in this sentence shall relieve such
Lender of its obligation to reimburse the applicable Issuing Bank for such
amount in accordance with this Section 3.6.
3.7 Reimbursement Obligation. The Borrower agrees unconditionally,
irrevocably and absolutely to pay immediately to the Agent, for the account of
the Lenders, the amount of each advance which may be drawn under or pursuant to
a Letter of Credit or an L/C Draft related thereto (such obligation of the
Borrower to reimburse the Agent for an advance made under a Letter of Credit or
L/C Draft being hereinafter referred to as a "REIMBURSEMENT OBLIGATION" with
respect to such Letter of Credit or L/C Draft). If the Borrower at any time
fails to repay a Reimbursement Obligation pursuant to this Section 3.7, the
Borrower shall be deemed to have elected to borrow Revolving Loans from the
Lenders, as of the date of the advance giving rise to the Reimbursement
Obligation, equal in amount to the amount of the unpaid Reimbursement
Obligation. Such Revolving Loans shall be made as of the date of the payment
giving rise to such Reimbursement Obligation, automatically, without notice and
without any requirement to satisfy the conditions precedent otherwise
applicable to an Advance of Revolving Loans. Such Revolving Loans shall
constitute a Floating Rate Advance, the proceeds of which Advance shall be used
to repay such Reimbursement Obligation. If, for any reason, the Borrower fails
to repay a Reimbursement Obligation on the day such Reimbursement Obligation
arises and,
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for any reason, the Lenders are unable to make or have no obligation to make
Revolving Loans, then such Reimbursement Obligation shall bear interest from
and after such day, until paid in full, at the interest rate applicable to a
Floating Rate Advance.
3.8 Cash Collateral. Notwithstanding anything to the contrary herein or
in any application for a Letter of Credit, after the occurrence and during the
continuance of Default, the Borrower shall, upon the Agent's demand, deliver to
the Agent for the benefit of the Lenders and the Issuing Banks, cash, or other
collateral of a type satisfactory to the Required Lenders, having a value, as
determined by such Lenders, equal to the aggregate outstanding L/C Obligations.
Any such collateral shall be held by the Agent in a separate interest bearing
account appropriately designated as a cash collateral account in relation to
this Agreement and the Letters of Credit and retained by the Agent for the
benefit of the Lenders and the Issuing Banks as collateral security for the
Borrower's obligations in respect of this Agreement and each of the Letters of
Credit and L/C Drafts. Such amounts shall be applied to reimburse the Issuing
Banks for drawings or payments under or pursuant to Letters of Credit or L/C
Drafts, or if no such reimbursement is required, to payment of such of the
other Obligations as the Agent shall determine. If no Default shall be
continuing, amounts (including interest income) remaining in any cash
collateral account established pursuant to this Section 3.8 which are not to be
applied to reimburse an Issuing Bank for amounts actually paid or to be paid by
such Issuing Bank in respect of a Letter of Credit or L/C Draft, shall be
returned to the Borrower (after deduction of the Agent's expenses incurred in
connection with such cash collateral account).
3.9 Letter of Credit Fees. The Borrower agrees to pay (i) on each
Payment Date and on the Termination Date, in arrears, to the Agent for the
ratable benefit of the Lenders, except as set forth in Section 9.2, a letter of
credit fee at a rate per annum equal to the Applicable L/C Fee Percentage on
the average daily outstanding face amount available for drawing under all
Letters of Credit, (ii) on each Payment Date and on the Termination Date, in
arrears, to the Agent for the sole account of each Issuing Bank, a letter of
credit fee of one-quarter of one percent (0.25%) per annum on the average daily
outstanding face amount available for drawing under all Letters of Credit
issued by such Issuing Bank, and (iii) to the Agent for the benefit of each
Issuing Bank, all customary fees and other issuance, amendment, document
examination, negotiation and presentment expenses and related charges in
connection with the issuance, amendment, presentation of L/C Drafts, and the
like customarily charged by such Issuing Bank with respect to standby and
commercial Letters of Credit, including, without limitation, standard
commissions with respect to commercial Letters of Credit, payable at the time
of invoice of such amounts.
3.10 Issuing Bank Reporting Requirements. In addition to the notices
required by Section 3.5(c), each Issuing Bank shall, no later than the tenth
Business Day following the last day of each month, provide to the Agent, upon
the Agent's request, schedules, in form and substance reasonably satisfactory
to the Agent, showing the date of issue, account party, amount, expiration date
and the reference number of each Letter of Credit issued by
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it outstanding at any time during such month and the aggregate amount payable
by the Borrower during such month. In addition, upon the request of the Agent,
each Issuing Bank shall furnish to the Agent copies of any Letter of Credit and
any application for or reimbursement agreement with respect to a Letter of
Credit to which the Issuing Bank is party and such other documentation as may
reasonably be requested by the Agent. Upon the request of any Lender, the
Agent will provide to such Lender information concerning such Letters of
Credit.
3.11 Indemnification; Exoneration. (a) In addition to amounts payable
as elsewhere provided in this Article III, the Borrower hereby agrees to
protect, indemnify, pay and save harmless the Agent, each Issuing Bank and each
Lender from and against any and all liabilities and costs which the Agent, such
Issuing Bank or such Lender may incur or be subject to as a consequence, direct
or indirect, of (i) the issuance of any Letter of Credit other than, in the
case of the applicable Issuing Bank, as a result of its gross negligence or
willful misconduct, as determined by the final judgment of a court of competent
jurisdiction, or (ii) the failure of the applicable Issuing Bank to honor a
drawing under a Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto Governmental
Authority (all such acts or omissions herein called "GOVERNMENTAL ACTS").
(b) As among the Borrower, the Lenders, the Agent and the Issuing Banks,
the Borrower assumes all risks of the acts and omissions of, or misuse of such
Letter of Credit by, the beneficiary of any Letters of Credit. In furtherance
and not in limitation of the foregoing, subject to the provisions of the Letter
of Credit applications and Letter of Credit reimbursement agreements executed
by the Borrower at the time of request for any Letter of Credit, neither the
Agent, any Issuing Bank nor any Lender shall be responsible (in the absence of
gross negligence or willful misconduct in connection therewith, as determined
by the final judgment of a court of competent jurisdiction): (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
the Letters of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of
a Letter of Credit to comply duly with conditions required in order to draw
upon such Letter of Credit; (iv) for errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph, telex,
or other similar form of teletransmission or otherwise; (v) for errors in
interpretation of technical trade terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of a Letter of Credit of the proceeds of any
drawing under such Letter of Credit; and (viii) for any consequences arising
from causes beyond the control of the Agent, the Issuing Banks and the Lenders,
including, without limitation, any Governmental Acts.
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None of the above shall affect, impair, or prevent the vesting of any Issuing
Bank's rights or powers under this Section 3.11.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by any Issuing
Bank under or in connection with the Letters of Credit or any related
certificates shall not, in the absence of gross negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, put the applicable Issuing Bank, the Agent or any Lender under
any resulting liability to the Borrower or relieve the Borrower of any of its
obligations hereunder to any such Person.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 3.11 shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of this
Agreement.
ARTICLE IV: CHANGE IN CIRCUMSTANCES
4.1 Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) adopted after the date of this Agreement and
having general applicability to all banks within the jurisdiction in which such
Lender operates (excluding, for the avoidance of doubt, the effect of and
phasing in of capital requirements or other regulations or guidelines passed
prior to the date of this Agreement), or any interpretation or application
thereof by any Governmental Authority charged with the interpretation or
application thereof, or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation to
any tax, duty, charge or withholding on or from payments due from the
Borrower (excluding federal taxation of the overall net income of any
Lender or applicable Lending Installation), or changes the basis of
taxation of payments to any Lender in respect of its Loans, its L/C
Interests, the Letters of Credit or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Rate Loans) with respect to its
Loans, L/C Interests or the Letters of Credit, or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation of
making, funding or maintaining the Loans, the L/C Interests or the
Letters of Credit or reduces any
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amount received by any Lender or any applicable Lending Installation in
connection with Loans or Letters of Credit, or requires any Lender or any
applicable Lending Installation to make any payment calculated by
reference to the amount of Loans or L/C Interests held or interest
received by it or by reference to the Letters of Credit, by an amount
deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender
of making, renewing or maintaining its Loans, L/C Interests or Letters of
Credit or to reduce any amount received under this Agreement, then, within 15
days after receipt by the Borrower of written demand by such Lender pursuant to
Section 4.5, the Borrower shall pay such Lender that portion of such increased
expense incurred or reduction in an amount received which such Lender
determines is attributable to making, funding and maintaining its Loans, L/C
Interests, Letters of Credit and its Revolving Loan Commitment.
4.2 Changes in Capital Adequacy Regulations. If a Lender determines (i)
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a "Change" (as defined below), and (ii) such
increase in capital will result in an increase in the cost to such Lender of
maintaining its Loans, L/C Interests, the Letters of Credit or its obligation
to make Loans hereunder, then, within 15 days after receipt by the Borrower of
written demand by such Lender pursuant to Section 4.5, the Borrower shall pay
such Lender the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender determines is
attributable to this Agreement, its Loans, its L/C Interests, the Letters of
Credit or its obligation to make Loans hereunder (after taking into account
such Lender's policies as to capital adequacy). "CHANGE" means (i) any change
after the date of this Agreement in the "Risk-Based Capital Guidelines" (as
defined below) excluding, for the avoidance of doubt, the effect of any phasing
in of such Risk-Based Capital Guidelines or any other capital requirements
passed prior to the date hereof, or (ii) any adoption of or change in any other
law, governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement and having general applicability to all banks and
financial institutions within the jurisdiction in which such Lender operates
which affects the amount of capital required or expected to be maintained by
any Lender or any Lending Installation or any corporation controlling any
Lender. "RISK-BASED CAPITAL GUIDELINES" means (i) the risk-based capital
guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing
the July 1988 report of the Basle Committee on Banking Regulation and
Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
4.3 Availability of Types of Advances. If (i) any Lender determines that
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, or
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(ii) the Required Lenders determine that (x) deposits of a type and maturity
appropriate to match fund Eurodollar Rate Advances are not available or (y) the
interest rate applicable to a Type of Advance does not accurately reflect the
cost of making or maintaining such an Advance, then the Agent shall suspend the
availability of the affected Type of Advance and, in the case of any occurrence
set forth in clause (i) require any Advances of the affected Type to be repaid.
4.4 Funding Indemnification. If any payment of a Eurodollar Rate Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment, or otherwise, or a Eurodollar Rate
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower indemnifies each Lender for any loss
or cost incurred by it resulting therefrom, including, without limitation, any
loss or cost in liquidating or employing deposits acquired to fund or maintain
the Eurodollar Rate Advance.
4.5 Lender Statements; Survival of Indemnity. If reasonably possible,
each Lender shall designate an alternate Lending Installation with respect to
its Eurodollar Rate Loans to reduce any liability of the Borrower to such
Lender under Sections 4.1 and 4.2 or to avoid the unavailability of a Type of
Advance under Section 4.3, so long as such designation is not disadvantageous
to such Lender. Each Lender requiring compensation pursuant to Section 2.15(E)
or to this Article IV shall use its best efforts to notify the Borrower and the
Agent in writing of any Change, law, policy, rule, guideline or directive
giving rise to such demand for compensation not later than ninety (90) days
following the date upon which the responsible account officer of such Lender
knows or should have known of such Change, law, policy, rule, guideline or
directive. Any demand for compensation pursuant to this Article IV shall be in
writing and shall state the amount due, if any, under Section 4.1, 4.2 or 4.4
and shall set forth in reasonable detail the calculations upon which such
Lender determined such amount. Such written demand shall be rebuttably
presumed correct for all purposes. Determination of amounts payable under such
Sections in connection with a Eurodollar Rate Loan shall be calculated as
though each Lender funded its Eurodollar Rate Loan through the purchase of a
deposit of the type and maturity corresponding to the deposit used as a
reference in determining the Eurodollar Rate applicable to such Loan, whether
in fact that is the case or not. The obligations of the Borrower under
Sections 4.1, 4.2 and 4.4 shall survive payment of the Obligations and
termination of this Agreement.
ARTICLE V: CONDITIONS PRECEDENT
5.1 Initial Advances and Letters of Credit. The Lenders shall not be
required to make the initial Loans or issue any Letters of Credit or purchase
any participations therein unless (i) such initial Loans are made not later
than August 30, 1996; (ii) the Senior Subordinated Notes and Senior Notes have
been issued and the Borrower has received the net proceeds thereof; (iii) the
Xxxxx River Acquisition and Related Transactions have been consummated; and
(iv) the Borrower has furnished to the Agent each of the
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following, with sufficient copies for the Lenders, all in form and substance
satisfactory to the Agent and the Lenders:
(1) Copies of the Articles of Incorporation of the Borrower,
together with all amendments and a certificate of good standing, both
certified by the appropriate governmental officer in its jurisdiction of
incorporation;
(2) Copies, certified by the Secretary or Assistant Secretary of
the Borrower, 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 Loan Documents;
(3) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower, which shall identify by name and
title and bear the signature of the officers of the Borrower authorized
to sign the Loan Documents and to make borrowings hereunder, upon which
certificate the Lenders shall be entitled to rely until informed of any
change in writing by the Borrower;
(4) A certificate, in form and substance satisfactory to the Agent,
signed by the chief financial officer of the Borrower, stating that on
Closing Date no Default or Unmatured Default has occurred and is
continuing;
(5) A written opinion of the Borrower's counsel, addressed to the
Agent and the Lenders, substantially in the form of Exhibit F hereto, and
a written opinion of Sidley & Austin, special counsel to the Agent,
addressed to the Agent and the Lenders, as to enforceability of certain
of the Loan Documents under Illinois law;
(6) Notes payable to the order of each of the applicable Lenders;
(7) Written money transfer instructions reasonably requested by the
Agent, addressed to the Agent and signed by an Authorized Officer; and
(8) Such other documents as the Agent or any Lender or its counsel
may have reasonably requested, including, without limitation all of the
documents reflected on the List of Closing Documents attached as Exhibit
G to this Agreement.
5.2 Each Advance and Letter of Credit. The Lenders shall not be required
to make any Advance, issue any Letter of Credit or purchase any participation
therein, unless on the applicable Borrowing Date, or in the case of a Letter of
Credit, the date on which the Letter of Credit is to be issued:
(i) There exists no Default or Unmatured Default; and
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(ii) The representations and warranties contained in Article VI are
true and correct as of such Borrowing Date except for changes reflecting
events, conditions or transactions permitted or not prohibited by this
Agreement.
Each Borrowing Notice with respect to each such Advance and the letter of
credit application with respect to a Letter of Credit shall constitute a
representation and warranty by the Borrower that the conditions contained in
Sections 5.2(i) and (ii) have been satisfied. Any Lender may require a duly
completed officer's certificate in substantially the form of Exhibit H hereto
and/or a duly completed compliance certificate in substantially the form of
Exhibit I hereto as a condition to making an Advance.
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this Agreement
and to make the Loans and the other financial accommodations to the Borrower
and to issue the Letters of Credit described herein, the Borrower represents
and warrants as follows to each Lender and the Agent as of the Closing Date,
giving effect to the Xxxxx River Acquisition and the consummation of the other
transactions contemplated by the Transaction Documents on the Closing Date, and
thereafter on each date as required by Section 5.2:
6.1 Organization; Corporate Powers. The Borrower and each of its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which failure to be so qualified and in good
standing will have a Material Adverse Effect, (iii) has filed and maintained
effective (unless exempt from the requirements for filing) a current Business
Activity Report with the appropriate Governmental Authority in the States in
which it is required to do so and (iv) has all requisite corporate power and
authority to own, operate and encumber its property and to conduct its business
as presently conducted and as proposed to be conducted.
6.2 Authority.
(A) The Borrower and each of its Subsidiaries has the requisite corporate
power and authority (i) to execute, deliver and perform each of the Transaction
Documents which are to be executed by it in connection with the Xxxxx River
Acquisition and the Related Transactions or which have been executed by it as
required by this Agreement on or prior to Closing Date and (ii) to file the
Transaction Documents which must be filed by it in connection with the Xxxxx
River Acquisition and the Related Transactions or which have been filed by it
as required by this Agreement on or prior to the Closing Date with any
Governmental Authority.
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(B) The execution, delivery, performance and filing, as the case may be,
of each of the Transaction Documents which must be executed or filed by the
Borrower or any of its Subsidiaries in connection with the Xxxxx River
Acquisition and the Related Transactions or which have been executed or filed
as required by this Agreement on or prior to the Closing Date and to which the
Borrower or any of its Subsidiaries is party, and the consummation of the
transactions contemplated thereby, have been duly approved by the respective
boards of directors and, if necessary, the shareholders of the Borrower and its
Subsidiaries, and such approvals have not been rescinded. No other corporate
action or proceedings on the part of the Borrower or its Subsidiaries are
necessary to consummate such transactions.
(C) Each of the Transaction Documents to which the Borrower or any of its
Subsidiaries is a party has been duly executed, delivered or filed, as the case
may be, by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms (except as enforceability
may be limited by bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally), is in full force and effect and no
material term or condition thereof has been amended, modified or waived from
the terms and conditions contained in the Transaction Documents delivered to
the Agent pursuant to Section 5.1 without the prior written consent of the
Required Lenders, and the Borrower and its Subsidiaries have, and, to the best
of the Borrower's and its Subsidiaries' knowledge, all other parties thereto
have, performed and complied with all the terms, provisions, agreements and
conditions set forth therein and required to be performed or complied with by
such parties on or before the Closing Date, and no unmatured default, default
or breach of any covenant by any such party exists thereunder.
6.3 No Conflict; Governmental Consents. The execution, delivery and
performance of each of the Loan Documents and other Transaction Documents to
which the Borrower or any of its Subsidiaries is a party do not and will not
(i) conflict with the certificate or articles of incorporation or by-laws of
the Borrower or any such Subsidiary, (ii) constitute a tortious interference
with any Contractual Obligation of the Borrower or any such Subsidiary or
conflict with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under any Requirement of Law (including,
without limitation, any Environmental Property Transfer Act) or Contractual
Obligation of the Borrower or any such Subsidiary, or require termination of
any Contractual Obligation, except such interference, breach, default or
termination which individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect, (iii) result in or require the
creation or imposition of any Lien whatsoever upon any of the property or
assets of the Borrower or any such Subsidiary, other than Liens permitted by
the Loan Documents, or (iv) require any approval of the Borrower's or any such
Subsidiary's shareholders except such as have been obtained. Except as set
forth on Schedule 6.3 to this Agreement, the execution, delivery and
performance of each of the Transaction Documents to which the Borrower or any
of its Subsidiaries is a party do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by any
Governmental Authority, including under any Environmental Property Transfer
Act, except (i) filings, consents or notices which have been made, obtained or
given, or which, if not made,
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obtained or given, individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect, and (ii) filings necessary to
create or perfect security interests in the Collateral.
6.4 Financial Statements.
(A) The pro forma financial statements of the Borrower and its
Subsidiaries, copies of which are attached hereto as Schedule 6.4 to this
Agreement, present on a pro forma basis the financial condition of the Borrower
and such Subsidiaries as of such date, and reflect on a pro forma basis those
liabilities reflected in the notes thereto and resulting from consummation of
the Xxxxx River Acquisition and the Related Transactions and the other
transactions contemplated by this Agreement, and the payment or accrual of all
Transaction Costs payable on the Closing Date with respect to any of the
foregoing. The projections and assumptions expressed in the pro forma
financials referenced in this Section 6.4(A) were prepared in good faith and
represent management's opinion based on the information available to the
Borrower at the time so furnished.
(B) Complete and accurate copies of the following financial statements
and the following related information have been delivered to the Agent: (1) the
combined balance sheets of Enterprises and the Borrower as at June 29, 1996,
and the related combined statements of income, changes in stockholders' equity
investment and cash flows of Enterprises and the Borrower for the fiscal year
then ended, and the audit report related thereto; and (2) the combined balance
sheet of the flexible packaging group of Xxxxx River (the "XXXXX RIVER GROUP")
as at December 31, 1995, and the related combined statements of operations,
changes in stockholder's investment and cash flows of the Xxxxx River Group for
the fiscal year then ended, and the audit report related thereto, and the
unaudited combined balance sheet of the Xxxxx River Group as at June 30, 1996,
and the related unaudited combined statements of operations, changes in
stockholder's investment and cash flows of the Xxxxx River Group for the six
months then ended.
6.5 No Material Adverse Change. (a) Since June 29, 1996 up to the
Closing Date, there has occurred no change in the business, properties,
condition (financial or otherwise) or results of operations of Enterprises, the
Borrower, or the Borrower and its Subsidiaries taken as a whole or any other
event which has had or could reasonably be expected to have a Material Adverse
Effect.
(b) Since June 30, 1996 up to the Closing Date, there has occurred no
change in the business, properties, condition (financial or otherwise) or
results of operations of the Xxxxx River Group which has had or could
reasonably be expected to have a Material Adverse Effect.
(c) Since the Closing Date, there has occurred no change in the business,
properties, condition (financial or otherwise) or results of operations of the
Borrower or the Borrower and its Subsidiaries taken as a whole or any other
event which has had or could reasonably be expected to have a Material Adverse
Effect.
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6.6 Taxes.
(A) Tax Examinations. All deficiencies which have been asserted against
the Borrower or any of the Borrower's Subsidiaries as a result of any federal,
state, local or foreign tax examination for each taxable year in respect of
which an examination has been conducted have been fully paid or finally settled
or are being contested in good faith, and as of the Closing Date no issue has
been raised by any taxing authority in any such examination which, by
application of similar principles, reasonably can be expected to result in
assertion by such taxing authority of a material deficiency for any other year
not so examined which has not been reserved for in the Borrower's consolidated
financial statements to the extent, if any, required by Agreement Accounting
Principles. Except as permitted pursuant to Section 7.2(D), neither the
Borrower nor any of the Borrower's Subsidiaries anticipates any material tax
liability with respect to the years which have not been closed pursuant to
applicable law.
(B) Payment of Taxes. All tax returns and reports of the Borrower and
its Subsidiaries required to be filed have been timely filed, and all taxes,
assessments, fees and other governmental charges thereupon and upon their
respective property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid except those items
which are being contested in good faith and have been reserved for in
accordance with Agreement Accounting Principles. The Borrower has no knowledge
of any proposed tax assessment against the Borrower or any of its Subsidiaries
that will have or could reasonably be expected to have a Material Adverse
Effect.
6.7 Litigation; Loss Contingencies and Violations. Except as set forth
in Schedule 6.7 to this Agreement, there is no action, suit, proceeding,
arbitration or (to the Borrower's knowledge) investigation before or by any
Governmental Authority or private arbitrator pending or, to the Borrower's
knowledge, threatened against the Borrower or any of its Subsidiaries or any
property of any of them (i) challenging the validity or the enforceability of
any material provision of the Transaction Documents or (ii) which will have or
could reasonably be expected to have a Material Adverse Effect. There is no
material loss contingency within the meaning of Agreement Accounting Principles
which has not been reflected in the consolidated financial statements of the
Borrower prepared and delivered pursuant to Section 7.1(A) for the fiscal
period during which such material loss contingency was incurred. Neither the
Borrower nor any of its Subsidiaries is (A) in violation of any applicable
Requirements of Law which violation will have or could reasonably be expected
to have a Material Adverse Effect, or (B) subject to or in default with respect
to any final judgment, writ, injunction, restraining order or order of any
nature, decree, rule or regulation of any court or Governmental Authority which
will have or could reasonably be expected to have a Material Adverse Effect.
6.8 Subsidiaries. Schedule 6.8 to this Agreement (i) contains a
description of the corporate structure of Holdings, Enterprises, the Borrower,
its Subsidiaries and any other Person in which Holdings, Enterprises, the
Borrower or any of its Subsidiaries holds an
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Equity Interest (both narratively and in chart form); and (ii) accurately sets
forth (A) the correct legal name, the jurisdiction of incorporation and the
jurisdictions in which each of the Borrower and the direct and indirect
Subsidiaries of the Borrower is qualified to transact business as a foreign
corporation, (B) the authorized, issued and outstanding shares of each class of
Capital Stock of Holdings, Enterprises, the Borrower and each of its
Subsidiaries and the owners of such shares (both as of the Closing Date and on
a fully-diluted basis), and (C) a summary of the direct and indirect
partnership, joint venture, or other Equity Interests, if any, of the Borrower
and each Subsidiary of the Borrower in any Person that is not a corporation.
None of the issued and outstanding Capital Stock of the Borrower or any of its
Subsidiaries is subject to any vesting, redemption, or repurchase agreement,
and there are no warrants or options outstanding with respect to such Capital
Stock. The outstanding Capital Stock of Enterprises, the Borrower and each of
the Borrower's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and is not Margin Stock. The Borrower has no Subsidiaries other
than IHC, PRF and the Mexican Subsidiaries.
6.9 ERISA. No Benefit Plan has incurred any accumulated funding
deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a) of the Code)
whether or not waived. Neither the Borrower nor any member of the Controlled
Group has incurred any liability to the PBGC which remains outstanding other
than the payment of premiums, and there are no premium payments which have
become due which are unpaid. Schedule B to the most recent annual report filed
with the IRS with respect to each Benefit Plan and furnished to the lenders is
complete and accurate. Since the date of each such Schedule B, there has been
no material adverse change in the funding status or financial condition of the
Benefit Plan relating to such Schedule B. Neither the Borrower nor any member
of the Controlled Group has (i) failed to make a required contribution or
payment to a Multiemployer Plan or (ii) made a complete or partial withdrawal
under Sections 4203 or 4205 of ERISA from a Multiemployer Plan where such
failure or such withdrawal could reasonably be expected to subject the Borrower
to liability in excess of $1,000,000. Neither the Borrower nor any member of
the Controlled Group has failed to make a required installment or any other
required payment under Section 412 of the Code on or before the due date for
such installment or other payment. Neither the Borrower nor any member of the
Controlled Group is required to provide security to a Benefit Plan under
Section 401(a)(29) of the Code due to a Plan amendment that results in an
increase in current liability for the plan year. Each Plan which is intended
to be qualified under Section 401(a) of the Code as currently in effect is so
qualified, and each trust related to any such Plan is exempt from federal
income tax under Section 501(a) of the Code as currently in effect. The
Borrower and all Subsidiaries are in compliance in all respects with the
responsibilities, obligations and duties imposed on them by ERISA and the Code
with respect to all Plans, except where such noncompliance could not reasonably
be expected to subject the Borrower to liability in excess of $1,000,000.
Neither the Borrower nor any of its Subsidiaries nor any fiduciary of any Plan
has engaged in a nonexempt prohibited transaction described in Sections 406 of
ERISA or 4975 of the Code which could reasonably be expected to subject the
Borrower to liability in excess of $1,000,000. Neither the Borrower nor any
member of the Controlled Group has taken or
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failed to take any action which would constitute or result in a Termination
Event, which action or inaction could reasonably be expected to subject the
Borrower to liability in excess of $1,000,000. Neither the Borrower nor any
Subsidiary is subject to any liability under Sections 4063, 4064, 4069, 4204 or
4212(c) of ERISA and no other member of the Controlled Group is subject to any
liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA which could
reasonably be expected to subject the Borrower to liability in excess of
$1,000,000. Neither the Borrower nor any of its Subsidiaries has, by reason of
the transactions contemplated hereby, any obligation to make any payment to any
employee pursuant to any Plan or existing contract or arrangement.
6.10 Accuracy of Information. The information, exhibits and reports
furnished by or on behalf of the Borrower and any of its Subsidiaries to the
Agent or to any Lender in connection with the negotiation of, or compliance
with, the Loan Documents, the representations and warranties of the Borrower
and its Subsidiaries contained in the Loan Documents, and all certificates and
documents delivered to the Agent and the Lenders pursuant to the terms thereof,
taken as a whole, do not contain as of the date furnished any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
6.11 Securities Activities. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
6.12 Material Agreements. Neither the Borrower nor any of its
Subsidiaries has received notice or has knowledge that (i) it is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any Contractual Obligation applicable to it, or (ii)
any condition exists which, with the giving of notice or the lapse of time or
both, would constitute a default with respect to any such Contractual
Obligation, in each case, except where such default or defaults, if any,
individually or in the aggregate will not have or could not reasonably be
expected to have a Material Adverse Effect.
6.13 Compliance with Laws. The Borrower and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their respective
businesses, in each case where the failure to so comply individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
6.14 Assets and Properties. The Borrower and each of its Subsidiaries
has good and marketable title to all of its assets and properties (tangible and
intangible, real or personal) owned by it or a valid leasehold interest in all
of its leased assets (except insofar as marketability may be limited by any
laws or regulations of any Governmental Authority affecting such assets), and
all such assets and property are free and clear of all Liens, except Liens
securing the Obligations and Liens permitted under Section 7.3(C).
Substantially all of the assets and properties owned by, leased to or used by
the Borrower
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and/or each such Subsidiary of the Borrower are in adequate operating condition
and repair, ordinary wear and tear excepted. Except for Liens granted to the
Agent for the benefit of the Agent and the Holders of Secured Obligations,
neither this Agreement nor any other Transaction Document, nor any transaction
contemplated under any such agreement, will affect any right, title or interest
of the Borrower or such Subsidiary in and to any of such assets in a manner
that would have or could reasonably be expected to have a Material Adverse
Effect.
6.15 Statutory Indebtedness Restrictions. Neither the Borrower nor any
of its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or the
Investment Company Act of 1940, or any other federal or state statute or
regulation which limits its ability to incur indebtedness or its ability to
consummate the transactions contemplated hereby or in connection with Xxxxx
River Acquisition and the Related Transactions.
6.16 Insurance. Schedule 6.16 to this Agreement accurately sets forth as
of the Closing Date all insurance policies and programs currently in effect
with respect to the respective properties and assets and business of the
Borrower and its Subsidiaries, specifying, for each such policy and program,
(i) the amount thereof, (ii) the risks insured against thereby, (iii) the name
of the insurer and each insured party thereunder, (iv) the policy or other
identification number thereof, (v) the expiration date thereof, (vi) the annual
premium with respect thereto, and (vii) any reserves relating to any
self-insurance program that is in effect. Such insurance policies and programs
reflect coverage that is reasonably consistent with prudent industry practice.
6.17 Labor Matters.
(A) Except as listed on Schedule 6.17 to this Agreement, there are on the
Closing Date no collective bargaining agreements, other labor agreements or
Multiemployer Plans covering any of the employees of the Borrower or any of its
Subsidiaries. As of the Closing Date, no attempt to organize the employees of
the Borrower, and no labor disputes, strikes or walkouts affecting the
operations of the Borrower or any of its Subsidiaries, is pending, or, to the
Borrower's knowledge, threatened, planned or contemplated.
(B) Set forth in Schedule 6.17 to this Agreement is a list, as of the
Closing Date, of all material consulting agreements, executive compensation
plans, deferred compensation agreements, Love Family compensation arrangements,
employee pension plans or retirement plans, employee profit sharing plans,
employee stock purchase and stock option plans, severance plans, group life
insurance, hospitalization insurance or other plans or arrangements of the
Borrower and its Subsidiaries providing for benefits for employees of the
Borrower and its Subsidiaries.
6.18 Xxxxx River Acquisition; Related Transactions. As of the Closing
Date and immediately prior to the making of the initial Loans:
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(i) the Xxxxx River Acquisition Documents are in full force and
effect, no material breach, default or waiver of any term or provision
thereof by the Borrower or any of its Subsidiaries or, to the best of the
Borrower's knowledge, the other parties thereto, has occurred (except for
such breaches, defaults and waivers, if any, consented to in writing by
the Agent and the Required Lenders) and no action has been taken by any
competent authority which restrains, prevents or imposes any material
adverse condition upon, or seeks to restrain, prevent or impose any
material adverse condition upon, the Xxxxx River Acquisition or the
Related Transactions;
(ii) the representations and warranties of the Borrower contained
in the Xxxxx River Acquisition Documents, if any, are true and correct in
all material respects;
(iii) except as set forth in Schedule 6.18 to this Agreement, all
material conditions precedent to, and all material consents necessary to
permit, the Xxxxx River Acquisition pursuant to the Xxxxx River
Acquisition Documents have been satisfied or waived, the Xxxxx River
Acquisition has been consummated in accordance with the Xxxxx River
Acquisition Documents, the Related Transactions have been consummated,
and the Borrower has obtained good and marketable title to the "Assets"
(as defined in the Asset Purchase Agreement) free and clear of any Liens
other than Liens permitted under Section 7.3(C).
6.19 Environmental Matters. (a) Except as disclosed on Schedule 6.19 to
this Agreement, in the Executive Summary of the Environmental Audit, a copy of
which Executive Summary was delivered by the Borrower to each Lender prior to
the Closing Date, or otherwise in the Environmental Audit, a copy of which was
delivered by the Borrower to the Agent and made available by the Agent to each
Lender prior to the Closing Date:
(i) the operations of the Borrower and its Subsidiaries comply in
all material respects with Environmental, Health or Safety Requirements
of Law;
(ii) the Borrower and its Subsidiaries have all permits, licenses
or other authorizations required under Environmental, Health or Safety
Requirements of Law and are in material compliance with such permits;
(iii) neither the Borrower, any of its Subsidiaries nor any of
their respective present property or operations, or, to the best of, the
Borrower's or any of its Subsidiaries' knowledge, any of their respective
past property or operations, are subject to or the subject of, any
investigation known to the Borrower or any of its Subsidiaries, any
judicial or administrative proceeding, order, judgment, decree,
settlement or other agreement respecting: (A) any material violation of
Environmental, Health or Safety Requirements of Law; (B) any remedial
action; or
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(C) any material claims or liabilities arising from the Release or
threatened Release of a Contaminant into the environment;
(iv) there is not now, nor to the best of the Borrower's or any of
its Subsidiaries' knowledge has there ever been on or in the property
of the Borrower or any of its Subsidiaries any landfill, waste pile,
underground storage tanks, aboveground storage tanks, surface impoundment
or hazardous waste storage facility of any kind, any polychlorinated
biphenyls (PCBs) used in hydraulic oils, electric transformers or other
equipment, or any asbestos containing material; and
(v) neither the Borrower nor any of its Subsidiaries has any
material Contingent Obligation in connection with any Release or
threatened Release of a Contaminant into the environment.
(b) For purposes of this Section 6.19 "material" means any noncompliance
or basis for liability which could reasonably be likely to subject the Borrower
to liability in excess of $1,000,000.
6.20 Other Indebtedness.
(i) As of the Closing Date and immediately prior to the making of
the initial Loans, the Borrower has issued the Senior Subordinated Notes
in an aggregate original principal amount of $200,000,000 and received
the net proceeds thereof, and the subordination provisions of the Senior
Subordinated Note Indenture are enforceable against the holders of the
Senior Subordinated Notes.
(ii) As of the Closing Date and immediately prior to the making of
the initial Loans, the Borrower has issued the Senior Notes in an
aggregate original principal amount of $100,000,000 and received the net
proceeds thereof.
(iii) The subordination provisions of the Subordinated Note
Agreement are enforceable against the holders of the Subordinated Notes.
6.21 Fiscal Periods. The ending dates of all fiscal quarters of the
Borrower from the Closing Date until the Revolving Loan Termination Date are
set forth on Schedule 6.21 to this Agreement.
ARTICLE VII : COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than contingent indemnity obligations), unless the Required Lenders
shall otherwise give prior written consent:
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7.1 Reporting. The Borrower shall:
(A) Financial Reporting. Furnish to the Lenders:
(i) Monthly Reports. As soon as practicable, and in any event
within twenty (20) days after the end of each calendar month, the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
end of such period and the related consolidated statements of income and
cash flows of the Borrower and its Subsidiaries for such calendar month,
certified by the chief financial officer of the Borrower on behalf of the
Borrower as fairly presenting the consolidated financial position of the
Borrower and its Subsidiaries as at the dates indicated and the results
of their operations and cash flows for the calendar months indicated in
accordance with Agreement Accounting Principles, subject to normal year
end adjustments.
(ii) Quarterly Reports. As soon as practicable, and in any event
within forty-five (45) days after the end of each fiscal quarter in each
fiscal year, the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such period and the related consolidated
statements of income and cash flows of the Borrower and its Subsidiaries
for such fiscal quarter and for the period from the beginning of the then
current fiscal year to the end of such fiscal quarter, certified
by the chief financial officer of the Borrower on behalf of the Borrower
as fairly presenting the consolidated financial position of the Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and cash flows for the periods indicated in accordance with
Agreement Accounting Principles, subject to normal year end adjustments,
and a forecasted consolidated balance sheet and consolidated statements
of income and cash flows of the Borrower for and as of the end of the
next succeeding fiscal quarter and a comparison of the statements of
income and cash flows to the budget.
(iii) Annual Reports. As soon as practicable, and in any event
within ninety (90) days after the end of each fiscal year, (a) the
consolidated and consolidating balance sheets of Holdings and its
Subsidiaries as at the end of such fiscal year and the related
consolidated and consolidating statements of income, stockholders' equity
and cash flows of Holdings and its Subsidiaries for such fiscal year,
which consolidating financial statements may treat the Borrower and its
Subsidiaries as a single entity, (b) the consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of such fiscal year and
the related consolidated statements of income, stockholders' equity and
cash flows of the Borrower and its Subsidiaries for such fiscal year, and
in comparative form the corresponding figures for the previous fiscal
year, in form and substance sufficient to calculate the financial
covenants set forth in Section 7.4, (c) a schedule from the Borrower
setting forth for each item in clause (a) hereof, the corresponding
figures from the consolidated financial budget for the current fiscal
year delivered pursuant to Section 7.1(A)(v), and (d) an audit report on
the items listed in clauses (a) and (b)
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hereof of independent certified public accountants of recognized
national standing, which audit report shall be unqualified and shall
state that such financial statements fairly present the consolidated and
consolidating financial position of Holdings and its Subsidiaries or the
Borrower and its Subsidiaries, as applicable, as at the dates indicated
and the results of their operations and cash flows for the periods
indicated in conformity with Agreement Accounting Principles and that the
examination by such accountants in connection with such consolidated and
consolidating financial statements has been made in accordance with
generally accepted auditing standards. The deliveries made pursuant to
this clause (iii) shall be accompanied by (x) any management letter
prepared by the above-referenced accountants and (y) a certificate of
such accountants that, in the course of their examination necessary for
their certification of the foregoing, they have obtained no knowledge of
any Default or Unmatured Default, or if, in the opinion of such
accountants, any Default or Unmatured Default shall exist, stating the
nature and status thereof.
(iv) Officer's Certificate. Together with each delivery of any
financial statement (a) pursuant to clauses (i), (ii) and (iii) of this
Section 7.1(A), an Officer's Certificate of the Borrower, substantially
in the form of Exhibit H attached hereto and made a part hereof, stating
that no Default or Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and status thereof and (b)
pursuant to clauses (ii) and (iii) of this Section 7.1(A), a compliance
certificate, substantially in the form of Exhibit I attached hereto and
made a part hereof, signed by the Borrower's chief financial officer or
treasurer, setting forth calculations for the period then ended for
Section 2.5(B), if applicable, which demonstrate compliance, when
applicable, with the provisions of Section 7.4, and which calculate the
Leverage Ratio for purposes of determining the then Applicable Eurodollar
Margin and Applicable Commitment Fee Percentage.
(v) Budgets; Business Plans; Financial Projections. As soon as
practicable and in any event not later than thirty (30) days after the
beginning of each fiscal year, a copy of the plan and forecast (including
a projected balance sheet, income statement and funds flow statement) of
the Borrower and its Subsidiaries for the upcoming fiscal year prepared
in such detail as shall be reasonably satisfactory to the Agent.
(B) Notice of Default. Promptly upon any of the chief executive officer,
chief operating officer, chief financial officer, treasurer or controller of
the Borrower obtaining knowledge (i) of any condition or event which
constitutes a Default or Unmatured Default, or becoming aware that any Lender
or Agent has given any written notice with respect to a claimed Default or
Unmatured Default under this Agreement, or (ii) that any Person has given any
written notice to the Borrower or any Subsidiary of the Borrower or taken any
other action with respect to a claimed default or event or condition of the
type referred to in Section 8.1(e), deliver to the Agent and the Lenders an
Officer's Certificate
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specifying (a) the nature and period of existence of any such claimed default,
Default, Unmatured Default, condition or event, (b) the notice given or action
taken by such Person in connection therewith, and (c) what action the Borrower
has taken, is taking and proposes to take with respect thereto.
(C) Lawsuits. (i) Promptly upon the Borrower obtaining knowledge of the
institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting the Borrower or
any of its Subsidiaries or any property of the Borrower or any of its
Subsidiaries not previously disclosed pursuant to Section 6.7, which action,
suit, proceeding, governmental investigation or arbitration exposes, or in the
case of multiple actions, suits, proceedings, governmental investigations or
arbitrations arising out of the same general allegations or circumstances which
expose, in the Borrower's reasonable judgment, the Borrower or any of its
Subsidiaries to liability in an amount aggregating $5,000,000 or more
(exclusive of claims covered by insurance policies of the Borrower or any of
its Subsidiaries unless the insurers of such claims have disclaimed coverage or
reserved the right to disclaim coverage on such claims and exclusive of claims
covered by the indemnity of a financially responsible indemnitor in favor of
the Borrower or any of its Subsidiaries unless the indemnitor has disclaimed or
reserved the right to disclaim coverage thereof), give written notice thereof
to the Agent and the Lenders and provide such other information as may be
reasonably available to enable each Lender and the Agent and its counsel to
evaluate such matters; and (ii) in addition to the requirements set forth in
clause (i) of this Section 7.1(C), upon request of the Agent or the Required
Lenders, promptly give written notice of the status of any action, suit,
proceeding, governmental investigation or arbitration covered by a report
delivered pursuant to clause (i) above and provide such other information as
may be reasonably available to it that would not violate any attorney-client
privilege by disclosure to the Lenders to enable each Lender and the Agent and
its counsel to evaluate such matters.
(D) Insurance. As soon as practicable and in any event within ninety
(90) days of the end of each fiscal year commencing with fiscal year ending
June 28, 1997, deliver to the Agent and the Lenders a report in form and
substance reasonably satisfactory to the Agent and the Lenders outlining all
material insurance coverage maintained as of the date of such report by the
Borrower and its Subsidiaries and the duration of such coverage.
(E) ERISA Notices. Deliver or cause to be delivered to the Agent and the
Lenders, at the Borrower's expense, the following information and notices as
soon as reasonably possible, and in any event:
(i) (a) within ten (10) Business Days after the Borrower obtains
knowledge that a Termination Event has occurred which, when aggregated
with any previous Termination Events during the twelve months prior to
such Termination Event, could reasonably be expected to subject the
Borrower to liability in excess of $1,000,000, a written statement of the
chief financial officer of the Borrower describing such Termination
Event(s) and the action, if any, which
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the Borrower has taken, is taking or proposes to take with respect
thereto, and when known, any action taken or threatened by the IRS, DOL
or PBGC with respect thereto and (b) within fifteen (15) Business Days
after any officer of any member of the Controlled Group obtains knowledge
that a Termination Event has occurred which, when aggregated with any
previous Termination Events during the twelve months prior to such
Termination Event, could reasonably be expected to subject the Borrower
to liability in excess of $1,000,000, a written statement of the chief
financial officer of the Borrower describing such Termination Event(s)
and the action, if any, which the member of the Controlled Group has
taken, is taking or proposes to take with respect thereto, and when
known, any action taken or threatened by the IRS, DOL or PBGC with
respect thereto;
(ii) within fifteen (15) Business Days after any officer of the
Borrower or any of its Subsidiaries obtains knowledge that a prohibited
transaction (defined in Sections 406 of ERISA and Section 4975 of the
Code) has occurred which, when aggregated with any previous prohibited
transactions during the twelve months prior to such prohibited
transaction, could reasonably be expected to subject the Borrower to
liability in excess of $1,000,000, a statement of the chief financial
officer of the Borrower describing such transaction(s) and the action
which the Borrower or such Subsidiary has taken, is taking or proposes to
take with respect thereto;
(iii) within fifteen (15) Business Days after the material increase
in the benefits of any existing Plan or the establishment of any new
Benefit Plan or the commencement of, or obligation to commence,
contributions to any Benefit Plan or Multiemployer Plan to which the
Borrower or any member of the Controlled Group was not previously
contributing where the aggregate annual contributions to such Plan(s)
resulting therefrom are or could reasonably be expected to exceed
$1,000,000, notification of such increase, establishment, commencement or
obligation to commence and the amount of such contributions;
(iv) within fifteen (15) Business Days after the Borrower or any of
its Subsidiaries receives notice of any unfavorable determination letter
from the IRS regarding the qualification of a Plan under Section 401(a)
of the Code, copies of each such letter;
(v) within fifteen (15) Business Days after the establishment of
any Foreign Employee Benefit Plan or the commencement of, or obligation
to commence, contributions to any Foreign Employee Benefit Plan to which
the Borrower or any Subsidiary was not previously contributing, where the
aggregate annual contribution by the Borrower or any Subsidiary to such
Plan are or could reasonably be expected to exceed $1,000,000,
notification of such establishment, commencement or obligation to
commence and the amount of such contributions;
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(vi) within fifteen (15) Business Days after the filing thereof
with the DOL, IRS or PBGC, copies of each annual report (form 5500
series), including Schedule B thereto, filed with respect to each Benefit
Plan;
(vii) within fifteen (15) Business Days after receipt by the
Borrower or any member of the Controlled Group of each actuarial report
for any Benefit Plan or Multiemployer Plan and each annual report for any
Multiemployer Plan, copies of each such report;
(viii) within fifteen (15) Business Days after the filing thereof
with the IRS, a copy of each funding waiver request filed with respect to
any Benefit Plan and all communications received by the Borrower or a
member of the Controlled Group with respect to such request;
(ix) within fifteen (15) Business Days after receipt by the
Borrower or any member of the Controlled Group of the PBGC's intention to
terminate a Benefit Plan or to have a trustee appointed to administer a
Benefit Plan, copies of each such notice;
(x) within fifteen (15) Business Days after receipt by the Borrower
or any member of the Controlled Group of a notice from a Multiemployer
Plan regarding the imposition of withdrawal liability which, when
aggregated with any previous withdrawal liability with respect to which
any such Person has received a notice during the twelve months prior to
such notice, could reasonably be expected to subject the Borrower to
liability in excess of $1,000,000, copies of each such notice;
(xi) within fifteen (15) Business Days after the Borrower or any
member of the Controlled Group fails to make a required installment or
any other required payment under Section 412 of the Code on or before the
due date for such installment or payment and the aggregate of such unpaid
installments or other required payments exceeds $1,000,000, a
notification of such failure; and
(xii) within fifteen (15) Business Days after any officer of the
Borrower or any member of the Controlled Group knows or has reason to
know that (a) a Multiemployer Plan has been terminated, (b) the
administrator or plan sponsor of a Multiemployer Plan intends to
terminate a Multiemployer Plan, or (c) the PBGC has instituted or will
institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan, if any such termination or proceedings, individually
or in the aggregate, could reasonably be expected to subject the Borrower
to liability in excess of $1,000,000.
For purposes of this Section 7.1(E), the Borrower, any of its Subsidiaries and
any member of the Controlled Group shall be deemed to know all facts known by
the Plan
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Administrator (as defined in Section 3(16)(A) of ERISA) of any Plan of
which the Borrower or any member of the Controlled Group or such Subsidiary is
the plan sponsor.
(F) Labor Matters. Notify the Agent in writing, promptly upon the
Borrower's learning thereof, of (i) any material labor dispute to which the
Borrower or any of its Subsidiaries may become a party, including, without
limitation, any strikes, lockouts or other disputes relating to such Persons'
plants and other facilities and (ii) any failure to comply with the Worker
Adjustment and Retraining Notification Act with respect to the closing of any
plant or other facility of the Borrower or any of its Subsidiaries.
(G) Other Indebtedness. Deliver to the Agent (i) a copy of each regular
report, notice or other written communication regarding potential or actual
defaults (including any accompanying officer's certificate) delivered by or on
behalf of the Borrower to the holders of funded Indebtedness, the outstanding
principal amount of which Indebtedness is in excess of $15,000,000, pursuant to
the terms of the agreements governing such Indebtedness, such delivery to be
made at the same time and by the same means as such notice or other
communication is delivered to such holders, and (ii) a copy of each notice or
other written communication received by the Borrower from the from the holders
of funded Indebtedness, the outstanding principal amount of which Indebtedness
is in excess of $15,000,000, pursuant to the terms of such Indebtedness, such
delivery to be made promptly after such notice or other communication is
received by the Borrower.
(H) Other Reports. Deliver or cause to be delivered to the Agent copies
of all financial statements, reports and notices, if any, sent or made
available generally by the Borrower to its securities holders or filed with the
Commission by the Borrower, all press releases made available generally by the
Borrower or any of the Borrower's Subsidiaries to the public concerning
material developments in the business of the Borrower or any such Subsidiary
and all notifications received from the Commission by the Borrower or its
Subsidiaries pursuant to the Securities Exchange Act of 1934 and the rules
promulgated thereunder.
(I) Environmental Notices. As soon as possible and in any event within
ten (10) days after receipt by the Borrower, a copy of (i) any notice or claim
to the effect that the Borrower or any of its Subsidiaries is or may be liable
to any Person as a result of the Release by the Borrower, any of its
Subsidiaries, or any other Person of any Contaminant into the environment, and
(ii) any notice alleging any violation of any Environmental, Health or Safety
Requirements of Law by the Borrower or any of its Subsidiaries if, in either
case, such notice or claim relates to an event which could reasonably be
expected to subject the Borrower to liability in excess of $1,000,000.
(J) Other Information. Promptly upon receiving a request therefor from
the Agent, prepare and deliver to the Agent such other information with respect
to Holdings, Enterprises, the Borrower, any of its Subsidiaries, or the
Collateral, including, without limitation, schedules identifying and describing
the Collateral and any dispositions thereof
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or any Asset Sale or Financing (and the use of the Net Cash Proceeds thereof),
as from time to time may be reasonably requested by the Agent.
7.2 Affirmative Covenants.
(A) Corporate Existence, Etc. The Borrower shall, and shall cause each
of its Subsidiaries to, at all times maintain its corporate existence and
preserve and keep, or cause to be preserved and kept, in full force and effect
its rights and franchises material to its businesses.
(B) Corporate Powers; Conduct of Business. The Borrower shall, and shall
cause each of its Subsidiaries to, qualify and remain qualified to do business
in each jurisdiction in which the nature of its business requires it to be so
qualified and where the failure to be so qualified will have or could
reasonably be expected to have a Material Adverse Effect. The Borrower will,
and will cause each Subsidiary to, carry on and conduct its business in
substantially the same manner and in substantially the same fields of
enterprise as it is presently conducted.
(C) Compliance with Laws, Etc. The Borrower shall, and shall cause its
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, properties, assets or
operations of such Person, and (b) obtain as needed all Permits necessary for
its operations and maintain such Permits in good standing unless failure to
comply or obtain could not reasonably be expected to have a Material Adverse
Effect.
(D) Payment of Taxes and Claims; Tax Consolidation. The Borrower shall
pay, and cause each of its Subsidiaries to pay, (i) all taxes, assessments and
other governmental charges imposed upon it or on any of its properties or
assets or in respect of any of its franchises, business, income or property
before any penalty or interest accrues thereon, and (ii) all claims (including,
without limitation, claims for labor, services, materials and supplies) for
sums which have become due and payable and which by law have or may become a
Lien (other than a Lien permitted by Section 7.3(C)) upon any of the Borrower's
or such Subsidiary's property or assets, prior to the time when any penalty or
fine shall be incurred with respect thereto; provided, however, that no such
taxes, assessments and governmental charges referred to in clause (i) above or
claims referred to in clause (ii) above (and interest, penalties or fines
relating thereto) need be paid if being contested in good faith by appropriate
proceedings diligently instituted and conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with
Agreement Accounting Principles shall have been made therefor. The Borrower
will not, nor will it permit any of its Subsidiaries to, file or consent to the
filing of any consolidated income tax return with any Person other than as
contemplated by the Tax Allocation Agreement.
(E) Insurance. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full force
and effect, the insurance policies and
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programs listed on Schedule 6.16 to this Agreement or substantially similar
policies and programs or other policies and programs as reflect coverage that
is reasonably consistent with prudent industry practice. The Borrowers shall
deliver to the Agent endorsements (y) to all "All Risk" physical damage
insurance policies on all of the Borrowers' tangible real and personal property
and assets and business interruption insurance policies naming the Agent loss
payee, and (z) to all general liability and other liability policies naming the
Agent an additional insured. In the event the Borrower or any of its
Subsidiaries at any time or times hereafter shall fail to obtain or maintain
any of the policies or insurance required herein or to pay any premium in whole
or in part relating thereto, then the Agent, without waiving or releasing any
obligations or resulting Default hereunder, may at any time or times thereafter
(but shall be under no obligation to do so) obtain and maintain such policies
of insurance and pay such premiums and take any other action with respect
thereto which the Agent deems advisable. All sums so disbursed by the Agent
shall constitute part of the Obligations, payable as provided in this
Agreement.
(F) Inspection of Property; Books and Records; Discussions. The Borrower
shall permit and cause each of the Borrower's Subsidiaries to permit, any
authorized representative(s) designated by either the Agent or any Lender to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine, audit, check and make copies of their respective
financial and accounting records, books, journals, orders, receipts and any
correspondence and other data relating to their respective businesses or the
transactions contemplated hereby or by the Xxxxx River Acquisition (including,
without limitation, in connection with environmental compliance, hazard or
liability), and to discuss their affairs, finances and accounts with their
officers and independent certified public accountants, all upon reasonable
notice and at such reasonable times during normal business hours, as often as
may be reasonably requested. The Borrower shall keep and maintain, and cause
each of the Borrower's Subsidiaries to keep and maintain, in all material
respects, proper books of record and account in which entries in conformity
with Agreement Accounting Principles shall be made of all dealings and
transactions in relation to their respective businesses and activities,
including, without limitation, transactions and other dealings with respect to
the Collateral. If a Default has occurred and is continuing, the Borrower,
upon the Agent's request, shall turn over any such records to the Agent or its
representatives.
(G) Insurance and Condemnation Proceeds. The Borrower directs (and, if
applicable, shall cause its Subsidiaries to direct) all insurers under policies
of property damage, boiler and machinery and business interruption insurance
and payors of any condemnation claim or award relating to the property to pay
all proceeds payable under such policies or with respect to such claim or award
for any loss with respect to the Collateral directly to the Agent, for the
benefit of the Agent and the Holders of the Secured Obligations; provided,
however, in the event that such proceeds or award are less than $2,500,000
("EXCLUDED PROCEEDS"), unless a Default shall have occurred and be continuing,
the Agent shall remit such Excluded Proceeds to the Borrower. Each such policy
shall contain a long-form loss-payable endorsement naming the Agent as loss
payee, which endorsement shall be in form and substance acceptable to the
Agent. The Agent
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shall, upon receipt of such proceeds (other than Excluded Proceeds) and at the
Borrower's direction, either apply the same to the principal amount of the
Loans outstanding at the time of such receipt and create a corresponding
reserve against the Maximum Revolving Credit Amount in an amount equal to such
application (the "DECISION RESERVE") or hold them as cash collateral for the
Obligations in an interest bearing account. For up to 150 days from the date
of any loss (the "DECISION PERIOD"), the Borrower may notify the Agent that it
intends to restore, rebuild or replace the property subject to any insurance
payment or condemnation award and shall, as soon as practicable thereafter,
provide the Agent detailed information, including a construction schedule and
cost estimates. Should a Default occur at any time during the Decision Period,
should the Borrower notify the Agent that it has decided not to rebuild or
replace such property during the Decision Period, or should the Borrower fail
to notify the Agent of the Borrower's decision during the Decision Period, then
the amounts held as cash collateral pursuant to this Section 7.2(G) or as the
Decision Reserve shall upon the Required Lenders' direction be applied as a
mandatory prepayment of the Term Loans pursuant to Section 2.5(B). Proceeds
held as cash collateral pursuant to this Section 7.2(G) or constituting the
Decision Reserve shall be disbursed as payments for restoration, rebuilding or
replacement of such property become due; provided, however, should a Default
occur after the Borrower has notified the Agent that it intends to rebuild or
replace the property, the Decision Reserve or amounts held as cash collateral
may, or shall, upon the Required Lenders' direction, be applied as a mandatory
prepayment of the Term Loans pursuant to Section 2.5(B). In the event the
Decision Reserve is to be applied as a mandatory prepayment to the Term Loans,
the Borrower shall be deemed to have requested Revolving Loans in an amount
equal to the Decision Reserve, and such Loans shall be made regardless of any
failure of the Borrower to meet the conditions precedent set forth in Article
V. Upon completion of the restoration, rebuilding or replacement of such
property, the unused proceeds shall constitute Net Cash Proceeds of an Asset
Sale and shall be applied as a mandatory prepayment of the Term Loans pursuant
to Section 2.5(B).
(H) ERISA Compliance. The Borrower shall, and shall cause each of the
Borrower's Subsidiaries to, establish, maintain and operate all Plans to comply
in all respects with the provisions of ERISA, the Code, all other applicable
laws, and the regulations and interpretations thereunder and the respective
requirements of the governing documents for such Plans, except where such
noncompliance could not reasonably be expected to subject the Borrower to
liability in excess of $1,000,000.
(I) Maintenance of Property. The Borrower shall cause all property used
or useful in the conduct of its business or the business of any Subsidiary to
be maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section 7.2(I) shall prevent the
Borrower from discontinuing the operation or maintenance of any of such
property if such discontinuance is, in the judgment of the Borrower, desirable
in
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the conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Agent or the Lenders.
(J) Environmental Compliance. The Borrower and its Subsidiaries shall
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance will not have or is not reasonably likely to subject the
Borrower to liability in excess of $1,000,000.
(K) Use of Proceeds. The Borrower shall use the proceeds of the
Revolving Loans and the Term Loans to (i) facilitate the Xxxxx River
Acquisition, (ii) repay existing Indebtedness, and (ii) provide funds for the
additional working capital needs and other general corporate purposes of the
Borrower. The Borrower shall use the proceeds of the Term Loans to (i)
facilitate the Xxxxx River Acquisition, (ii) repay existing Indebtedness, and
(iii) pay the Transaction Costs. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Loans to purchase or carry any
"Margin Stock" or to make any Acquisition, other than the Xxxxx River
Acquisition and any other Permitted Acquisition pursuant to Section 7.3(G).
(L) Separate Corporate Existence. The Borrower shall take all reasonable
steps (including, without limitation, all steps which the Agent may from time
to time reasonably request) to maintain its and its Subsidiaries' identity as
separate legal entities and to make it apparent to third parties that Borrower
and such Subsidiaries are each an entity with assets and liabilities distinct
from those of Holdings, Enterprises and any of their respective Affiliates
(other than the Borrower and its Subsidiaries) (each of Holdings, Enterprises
and such other Persons are referred to in this Section 7.2(L), as the
"PARENT"). Without limiting the generality of the foregoing, the Borrower
shall:
(i) require that all full-time employees of the Borrower and each
of its Subsidiaries identify themselves as such and not as employees of
the Parent;
(ii) compensate all employees, consultants, investment bankers,
accountants, lawyers and agents directly, from the Borrower's or such
Subsidiary's applicable bank accounts, for services provided to the
Borrower or such Subsidiary by such employees, consultants, investment
bankers and agents and, if any employee, consultant, investment banker or
agent of the Borrower or any of its Subsidiaries is also an employee,
consultant, investment banker or agent of the Parent, allocate the
compensation of such employee, consultant, investment banker or agent
between the Borrower or the Subsidiary, as applicable, and the Parent on
the basis of actual use of the services so rendered to the extent
practicable and, to the extent such allocation is not practical, on a
basis reasonably related to actual use of such services;
(iii) allocate all overhead expenses (including, without
limitation, telephone and other utility charges and lease and office
expenses) for items shared between the Borrower or any Subsidiary of the
Borrower and the Parent on the
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basis of actual use to the extent practicable and, to the extent such
allocation is not practicable, on a basis reasonably related to actual
use;
(iv) cause the Borrower and each Subsidiary of the Borrower to be
named as an insured on the insurance policy covering its property, or
enter into an agreement with the holder of such policy whereby in the
event of a loss in connection with such property, proceeds are paid to
the Borrower or such Subsidiary;
(v) maintain the Borrower's and its Subsidiaries' books and records
complete and separate from those of the Parent;
(vi) ensure that any of the Borrower's or the Parent's consolidated
financial statements or other public information with respect to the
Borrower and its Affiliates prepared on a consolidated basis contain
appropriate disclosures concerning the Borrower's separate existence;
(vii) not maintain bank accounts or other depository accounts to
which the Parent is an account party, into which the Parent makes
deposits or from which the Parent has the power to make withdrawals;
(viii) not permit the Parent to pay any of the Borrower's operating
expenses (except when paid and charged pursuant to an allocation based
upon actual use, to the extent practicable and, to the extent such
allocation is not practicable, on a basis reasonably related to actual
use); and
(ix) not pay dividends or make distributions, loans or other
advances to the Parent except to the extent duly authorized by its board
of directors and in accordance with applicable corporation law.
(M) Future Liens on Real Property. The Borrower shall, and shall cause
each of its Subsidiaries that is required to guarantee the Obligations to,
execute and deliver to the Agent, immediately upon its acquisition or leasing
of any real property after the Closing Date, a mortgage, deed of trust,
collateral assignment or other appropriate instrument evidencing a Lien upon
any such acquired property, lease or interest, to be in form and substance
reasonably acceptable to the Agent and subject only to such Liens as otherwise
shall be permitted by this Agreement. The foregoing provision shall apply to
the leasing of any real property only if (i) the term of such lease (without
regard to any extension thereof at then current market rent) is more than five
years, (ii) such real property consists of an operating plant or (iii) such
lease has a material value by reason of a purchase option, below-market rent or
otherwise.
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7.3 Negative Covenants.
(A) Indebtedness. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:
(i) the Obligations;
(ii) Indebtedness incurred in connection with the Receivables
Purchase Documents;
(iii) Permitted Existing Indebtedness and Permitted Refinancing
Indebtedness;
(iv) Indebtedness evidenced by the Senior Subordinated Notes, the
Senior Notes and the Subordinated Notes;
(v) subordinated indebtedness the terms (including, without
limitation, those with respect to amount, maturity, amortization,
interest rate, premiums, fees, covenants, subordination, events of
default and remedies) of which are acceptable to the Required Lenders
when issued, but in each case not any increase in the principal amount
thereof and not any refinancing, modification, refunding or extension of
maturity thereof, in whole or in part, unless such refinancing,
modification, refunding or extension is not materially less favorable to
the Borrower, including, without limitation, with respect to amount,
maturity, amortization, interest rate, premiums, fees, covenants,
subordination, events of default and remedies (such Indebtedness being
referred to herein as "PERMITTED ADDITIONAL SUBORDINATED INDEBTEDNESS");
(vi) Indebtedness in respect of obligations secured by Customary
Permitted Liens;
(vii) Indebtedness constituting Contingent Obligations permitted by
Section 7.3(E);
(viii) Indebtedness arising from intercompany loans from the
Borrower to any Controlled Subsidiary or from any Subsidiary to the
Borrower or any Controlled Subsidiary, provided that if the Borrower is
the obligor on such Indebtedness, such Indebtedness shall be expressly
subordinate to the payment in full of the Secured Obligations;
(ix) guaranties by the Borrower of Indebtedness permitted to be
incurred by any Subsidiary or Indebtedness of any Person in which the
Borrower makes an Investment pursuant to Section 7.3(D)(viii);
(x) Indebtedness in respect of Hedging Obligations permitted under
Section 7.3(Q);
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(xi) secured or unsecured purchase money Indebtedness (including
Capitalized Leases) incurred by the Borrower or any of its Subsidiaries
after the Closing Date to finance the acquisition of assets used in the
business, if (1) at the time of such incurrence, no Default or Unmatured
Default has occurred and is continuing or would result from such
incurrence, (2) such Indebtedness has a scheduled maturity and is not due
on demand, (3) such Indebtedness does not exceed the lower of the fair
market value or the cost of the applicable fixed assets on the date
acquired, (4) such Indebtedness does not exceed $25,000,000 in the
aggregate outstanding at any time, and (5) any Lien securing such
Indebtedness is permitted under Section 7.3(C) (such Indebtedness being
referred to herein as "PERMITTED PURCHASE MONEY INDEBTEDNESS");
(xii) Indebtedness with respect to surety, appeal and performance
bonds obtained by the Borrower or any of its Subsidiaries in the ordinary
course of business;
(xiii) Indebtedness incurred by the Borrower to the seller in any
Permitted Acquisition as part of the consideration therefor, provided
that such Indebtedness is unsecured and does not exceed in any case 25%
of the total consideration paid in connection with such Permitted
Acquisition.
(xiv) Indebtedness in addition to that referred to elsewhere in this
Section 7.3(A) in an amount not to exceed $10,000,000 at any time; and
(xv) any other Indebtedness if, at the time such Indebtedness is
incurred, (1) no Default or Unmatured Default has occurred and is
continuing or would result from such incurrence and (2) the Borrower's
Fixed Charge Coverage Ratio, calculated on a pro forma basis, including
pro forma application of the proceeds of such Indebtedness, would be
greater than or equal to the ratio set forth below during the applicable
period:
Period Ratio
--------------------- -------------
Closing Date
through June 30, 1998 2.50 to 1
July 1, 1998
through June 30, 1999 2.75 to 1
July 1, 1999
and thereafter 3.00 to 1
(B) Sales of Assets. Neither the Borrower nor any of its Subsidiaries
shall sell, assign, transfer, lease, convey or otherwise dispose of any
property, whether now owned
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or hereafter acquired, or any income or profits therefrom, or enter into any
agreement to do so, except:
(i) sales of Inventory in the ordinary course of business;
(ii) Permitted Receivables Transfers;
(iii) the disposition in the ordinary course of business of
Equipment or other assets that are obsolete, excess or no longer useful
in the Borrower's business;
(iv) transfers of assets pursuant to the Tax Incentive Program,
provided that the aggregate value of such assets, calculated at the times
of such transfers, transferred on or after the Closing Date shall not
exceed $20,000,000;
(v) transfers of assets between the Borrower and any Controlled
Subsidiary or between Controlled Subsidiaries of the Borrower not
otherwise prohibited by this Agreement;
(vi) sales of the Target Assets;
(vii) transfers of assets pursuant to Investments permitted by
Section 7.3(D) and Restricted Payments permitted by Section 7.3(F); and
(viii) sales, assignments, transfers, leases, conveyances or other
dispositions of other assets, provided that any such transaction (a) is
for consideration consisting at least 80% of cash, (b) is for not less
than fair market value (as determined by the board of directors of the
Borrower in good faith, whose determination shall be conclusive evidence
thereof and shall be evidenced by a resolution of such board of directors
set forth in an Authorized Officer's certificate delivered to the Agent),
and (c) when combined with all such other transactions pursuant to this
clause (viii) (each such transaction being valued at book value) (i)
during the immediately preceding twelve-month period, represents the
disposition of not greater than ten percent (10.0%) of the Borrower's
Consolidated Assets at the end of the fiscal year immediately preceding
that in which such transaction is proposed to be entered into, and (ii)
during the period from the Closing Date to the date of such proposed
transaction, represents the disposition of not greater than twenty
percent (20.0%) of the Borrower's Consolidated Assets at the end of the
fiscal year immediately preceding that in which such transaction is
proposed to be entered into.
Not less than five (5) Business Days prior to the consummation of any
transaction permitted by clause (viii) above, the Borrower shall deliver to the
Agent a certificate of an Authorized Officer certifying compliance with the
requirements of clause (viii) and showing in reasonable detail the calculations
on which such certification is based.
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(C) Liens. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or permit to exist any Lien on or
with respect to any of their respective property or assets except:
(i) Liens created by the Loan Documents or otherwise securing the
Secured Obligations;
(ii) Liens arising under the Receivables Purchase Documents;
(iii) Permitted Existing Liens;
(iv) Customary Permitted Liens;
(v) purchase money Liens (including the interest of a lessor under
a Capitalized Lease and Liens to which any property is subject at the
time of the Borrower's acquisition thereof) securing Permitted Purchase
Money Indebtedness; provided that such Liens shall not apply to any
property of the Borrower or its Subsidiaries other than that purchased or
subject to such Capitalized Lease; and
(vi) Liens securing other obligations not exceeding $5,000,000 in
the aggregate at any time outstanding.
In addition, neither the Borrower nor any of its Subsidiaries shall become a
party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit the creation of a Lien on any of its properties or
other assets in favor of the Agent for the benefit of itself and the Holders of
Secured Obligations, as additional collateral for the Obligations; provided
that any agreement, note, indenture or other instrument in connection with
Permitted Purchase Money Indebtedness (including Leases) may prohibit the
creation of a Lien in favor of the Agent for the benefit of itself and the
Holders of the Secured Obligations on the items of property obtained with the
proceeds of such Permitted Purchase Money Indebtedness.
(D) Investments. Other than Investments permitted pursuant to paragraph
(G) below, neither the Borrower nor any of its Subsidiaries shall directly or
indirectly make or own any Investment except:
(i) Investments in Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater than
the amount thereof on the Closing Date;
(iii) Investments in PRF required in connection with the Receivables
Purchase Documents;
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(iv) Investments in trade receivables or received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement (including settlements of litigation) of delinquent
obligations of, and other disputes with, customers and suppliers arising
in the ordinary course of business;
(v) Investments consisting of deposit accounts maintained by the
Borrower in connection with its cash management system, provided funds
deposited in such deposit accounts are regularly transferred to the
Borrower's concentration account maintained, as of the date of this
Agreement with SunTrust Bank, Atlanta, or such other concentration
account as is established with the consent of the Agent, deposit accounts
maintained by the Mexican Subsidiaries in the ordinary course of their
business and deposit accounts maintained by the Borrower and its
Subsidiaries pursuant to the Receivables Purchase Documents;
(vi) Investments consisting of non-cash consideration from a sale,
assignment, transfer, lease, conveyance or other disposition of property
permitted by Section 7.3(B);
(vii) Investments consisting of intercompany loans from any
Subsidiary to the Borrower or any other Subsidiary permitted by Section
7.3(A)(viii);
(viii) Investments which do not constitute Acquisitions, made in
cash and consisting of at least thirty-five percent (35.0%) of the
Equity Interests in any Person having similar lines of business to those
of the Borrower, provided that the total amount of all such Investments
made after the Closing Date (including the amount of all cash invested,
the fair market value of assets or property contributed and the principal
amount of any Indebtedness guaranteed in connection therewith, but
excluding, to the extent that any such Investment permitted hereunder
shall be sold for cash, the lesser of (x) the cash return of capital with
respect to such Investment (net of the cost of disposition) and (y) the
initial amount of such Investment) shall not exceed $25,000,000 during
the term of this Agreement, that such Investments shall not include any
Investment in any of the Borrower's Affiliates located in the United
Kingdom and that all such Equity Interests are pledged to the Agent as
Collateral; and
(ix) Investments in any Controlled Subsidiary of the Borrower;
(x) Investments constituting Permitted Acquisitions;
(xi) Restricted Investments permitted by Section 7.3(F)(v); and
(xii) Investments in addition to those referred to elsewhere in this
Section 7.3(D) in an amount not to exceed $5,000,000 in the aggregate at
any time outstanding;
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provided, however, that the Investments described in clauses (viii), (x) and
(xi) above shall not be permitted if either a Default or an Unmatured Default
shall have occurred and be continuing on the date thereof or would result
therefrom.
(E) Contingent Obligations. Neither the Borrower nor any of its
Subsidiaries shall directly or indirectly create or become or be liable with
respect to any Contingent Obligation, except: (i) recourse obligations
resulting from endorsement of negotiable instruments for collection in the
ordinary course of business; (ii) Permitted Existing Contingent Obligations;
(iii) obligations, warranties, and indemnities, not relating to Indebtedness of
any Person, which have been or are undertaken or made in the ordinary course of
business and not for the benefit of or in favor of an Affiliate of the Borrower
or such Subsidiary; (iv) Contingent Obligations arising under the Transaction
Documents; (v) guaranties of Indebtedness permitted by Section 7.3(A); (vi)
additional Contingent Obligations which do not exceed $5,000,000 in the
aggregate at any time; and (vii) Contingent Obligations with respect to surety,
appeal and performance bonds obtained by the Borrower or any Subsidiary in the
ordinary course of business.
(F) Restricted Payments. Neither the Borrower nor any of its
Subsidiaries shall declare or make any Restricted Payment, except:
(i) the defeasance, redemption or repurchase of any Indebtedness
with the Net Cash Proceeds of Permitted Refinancing Indebtedness;
(ii) mandatory payments of interest, principal or premium, if any,
due on the Indebtedness in accordance with mandatory redemption or
repayment provisions in effect with respect to such Indebtedness as of
the Closing Date, unless in each case such payments are prohibited by the
terms of such Indebtedness or the subordination provisions applicable
thereto;
(iii) the payment of dividends to Enterprises to pay administrative
expenses of Enterprises and/or Holdings in an aggregate amount not to
exceed $200,000 in any twelve-month period;
(iv) in connection with the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the
Borrower owned by any member of the Borrower's management, pursuant to a
management equity subscription agreement or stock option agreement in
effect on the Closing Date or entered into after the Closing Date with
members of the management of any Person acquired after the Closing Date,
or the repurchase of Equity Interests of the Borrower or any Subsidiary
of the Borrower held by employees, former employees, directors or former
directors pursuant to the terms of agreements (including employment
agreements) approved by the Borrower's board of directors, provided, that
the aggregate purchase price of all such repurchased, redeemed, acquired
or retired Equity Interests shall not exceed $3,000,000 during any
twelve-month period or $10,000,000 in the aggregate since the Closing
Date; and
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(v) additional Restricted Payments (including Restricted
Investments) which do not exceed, for the period commencing with the
Borrower's fiscal quarter ending September 28, 1996, and ending on the
last day of the last quarter ending prior to such Restricted Payment, the
sum of (a) fifty percent (50.0%) of Net Income for such period (or, if
Net Income for such period is a deficit, less 100% of such deficit), (b)
the aggregate Net Cash Proceeds from the sale or issuance of Equity
Interests (other than Disqualified Stock) of the Borrower for such
period, (c) to the extent that any Restricted Investment permitted
hereunder and made after the Closing Date shall be sold for cash during
such period, the lesser of (x) the cash return of capital with respect to
such Restricted Investment (net of the cost of disposition) and (y) the
initial amount of such Restricted Investment, and (d) $10,000,000;
provided, however, that the Restricted Payments described in clause (v) above
shall not be permitted (1) if either a Default or an Unmatured Default shall
have occurred and be continuing at the date of declaration or payment thereof
or would result therefrom, (2) unless, after giving effect to such Restricted
Payment, the Borrower could incur $1 of additional Indebtedness pursuant to
Section 7.3(A)(xv), or (3) if such Restricted Payment constitutes an Investment
in any of the Borrower's Affiliates located in the United Kingdom.
(G) Conduct of Business; Subsidiaries; Acquisitions. (i) Neither the
Borrower nor any of its Subsidiaries shall engage in any business other than
the businesses engaged in by the Borrower on the date hereof and any business
or activities which are substantially similar, related or incidental thereto.
IHC shall not, either directly or indirectly, engage in any operating business
enterprise other than the operation of the Elgin, Illinois plant (effected
through the Borrower for the benefit of IHC), incur any Indebtedness or other
liabilities other than pursuant to the IHC Agreements and the Tax Allocation
Agreement, or own any real or personal property other than the IHC Assets.
(ii) The Borrower may create, acquire and/or capitalize any Subsidiary (a
"NEW SUBSIDIARY") after the date hereof pursuant to any transaction that is
permitted by or not otherwise prohibited by this Agreement, provided that (1)
the assets of all of the Borrower's New Subsidiaries shall at no time exceed in
the aggregate ten percent (10.0%) of the Borrower's Consolidated Assets or
constitute assets that in the aggregate contribute more than ten percent
(10.0%) of the Borrower's EBITDA, (2) each New Subsidiary shall execute a
guaranty of the Obligations and grant to the Agent, for the benefit of Holders
of Secured Obligations, Liens on all of its assets, pursuant to documentation
in form and substance satisfactory to the Agent, and (3) all of the Equity
Interests in each New Subsidiary owned by the Borrower or any other Subsidiary
shall be pledged to the Agent, for the benefit of Holders of Secured
Obligations, pursuant to documentation in form and substance satisfactory to
the Agent.
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(iii) The Borrower shall not make any Acquisitions, other than the Xxxxx
River Acquisition and other Acquisitions meeting the following requirements
(each such Acquisition constituting a "PERMITTED ACQUISITION"):
(1) no Default or Unmatured Default shall have occurred and be
continuing or would result from such Acquisition or the incurrence of any
Indebtedness in connection therewith;
(2) in the case of an Acquisition of Equity Interests of an entity,
such Acquisition shall be of at least ninety percent (90%) of the Equity
Interests of such entity;
(3) the businesses being acquired shall be substantially similar,
related or incidental to the businesses or activities engaged in by the
Borrower on the Closing Date, but shall not, in any event, constitute an
Acquisition of any of the Borrower's Affiliates in the United Kingdom;
(4) the aggregate purchase price of all Acquisitions made (a) from
the Closing Date until the first anniversary thereof shall not exceed
$10,000,000, and (b) from the first anniversary of the Closing Date until
the second anniversary of the Closing Date shall not exceed $10,000,000;
and
(5) from and after the second anniversary of the Closing Date, prior
to each such Acquisition, the Borrower shall deliver to the Agent and the
Lenders a certificate from one of the Authorized Officers, demonstrating
to the reasonable satisfaction of the Agent and the Required Lenders that
after giving effect to such Acquisition and the incurrence of any
Indebtedness permitted by Section 7.3(A) in connection therewith, on a
pro forma basis using historical audited and reviewed unaudited financial
statements obtained from the seller, broken down by fiscal quarter in the
Borrower's reasonable judgment, as if the Acquisition and such incurrence
of Indebtedness had occurred on the first day of the twelve-month period
ending on the last day of the Borrower's most recently completed fiscal
quarter, the Borrower would have had a Fixed Charge Coverage Ratio for
such four fiscal quarters of greater than 2.75 to 1.0, and a Leverage
Ratio for such four fiscal quarters of less than 3.00 to 1.0.
(H) Transactions with Shareholders and Affiliates. Neither the Borrower
nor any of its Subsidiaries shall directly or indirectly (i) except as
permitted in Section 7.3(F), pay any management fees or other similar fees or
compensation to Enterprises, Holdings, Management or any other holder or
holders of the Borrower's, Enterprises' or Holdings' equity securities, other
than wages, salaries, compensation arrangements and bonuses of employees who
are also stockholders of the Borrower in the ordinary course and consistent
with past practices or (ii) enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service, but excluding transactions described
in clause (i) above) with any
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holder or holders of any of the Equity Interests of Holdings, Enterprises or
the Borrower, or with any Affiliate of the Borrower which is not its
Subsidiary, on terms that are less favorable to the Borrower or any of its
Subsidiaries, as applicable, than those that might be obtained in an arm's
length transaction at the time from Persons who are not such a holder or
Affiliate, except for (a) Permitted Receivables Transfers, (b) transactions
pursuant to the Tax Allocation Agreement, and (c) Restricted Payments permitted
by Section 7.3(F).
(I) Restriction on Fundamental Changes. Neither the Borrower nor any of
its Subsidiaries shall enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution), or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of the Borrower's or any such
Subsidiary's business or property, whether now or hereafter acquired, except
(a) transactions permitted under Sections 7.3(B) or 7.3(G) and (b) the merger
of any Subsidiary into the Borrower or into a Controlled Subsidiary.
(J) Sales and Leasebacks. Neither the Borrower nor any of its
Subsidiaries shall become liable, directly, by assumption or by Contingent
Obligation, with respect to any lease, whether an operating lease or a
Capitalized Lease, of any property (whether real or personal or mixed) (i)
which it or one of its Subsidiaries sold or transferred or is to sell or
transfer to any other Person, or (ii) which it or one of its Subsidiaries
intends to use for substantially the same purposes as any other property which
has been or is to be sold or transferred by it or one of its Subsidiaries to
any other Person in connection with such lease, unless in either case the sale
involved is not prohibited under Section 7.3(B) and the lease involved is not
prohibited under Section 7.3(A). Transactions or payments pursuant to the Tax
Incentive Program shall not be considered sale and leaseback transactions
hereunder.
(K) Margin Regulations. Neither the Borrower nor any of its
Subsidiaries, shall use all or any portion of the proceeds of any credit
extended under this Agreement to purchase or carry Margin Stock.
(L) ERISA. To the extent that any of the following actions or omissions,
individually or in the aggregate, could reasonably be expected to subject the
Borrower or any member of the Controlled Group to liability in excess of
$1,000,000, the Borrower shall not:
(i) engage, or permit any of its Subsidiaries to engage, in any
prohibited transaction described in Sections 406 of ERISA or 4975 of the
Code for which a statutory or class exemption is not available or a
private exemption has not been previously obtained from the DOL;
(ii) permit to exist any accumulated funding deficiency (as defined
in Sections 302 of ERISA and 412 of the Code) with respect to any Benefit
Plan, whether or not waived;
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(iii) fail, or permit any Controlled Group member to fail, to pay
timely required contributions or annual installments due with respect to
any waived funding deficiency to any Benefit Plan;
(iv) terminate, or permit any Controlled Group member to terminate,
any Benefit Plan which would result in any liability of the Borrower or
any Controlled Group member under Title IV of ERISA;
(v) fail to make any contribution or payment to any Multiemployer
Plan which the Borrower or any Controlled Group member may be required to
make under any agreement relating to such Multiemployer Plan, or any law
pertaining thereto;
(vi) fail, or permit any Controlled Group member to fail, to pay
any required installment or any other payment required under Section 412
of the Code on or before the due date for such installment or other
payment; or
(vii) amend, or permit any Controlled Group member to amend, a Plan
resulting in an increase in current liability for the plan year such that
the Borrower or any Controlled Group member is required to provide
security to such Plan under Section 401(a)(29) of the Code.
(M) Issuance of Disqualified Stock. Neither the Borrower nor any of its
Subsidiaries shall issue any Disqualified Stock other than (i) the issuance of
Disqualified Stock having a liquidation preference in an aggregate amount not
in excess of the principal amount of Indebtedness that the Borrower and its
Subsidiaries could incur on the date of such issuance pursuant to Section
7.3(A)(iv) or (v) or (ii) pursuant to an exchange or conversion of then
outstanding Indebtedness of the Borrower or any of its Subsidiaries for or into
Disqualified Stock, provided that, to the extent that the aggregate amount of
the liquidation preference of such Disqualified Stock exceeds the principal
amount of the Indebtedness so exchanged or converted, such Disqualified Stock
could be issued pursuant to clause (i) above. All such issued and outstanding
Disqualified Stock shall be treated as Indebtedness for all purposes of this
Agreement (and as funded Indebtedness for purposes of Section 7.1(G)), and the
amount of such deemed Indebtedness shall be the aggregate amount of the
liquidation preference of such Disqualified Stock. The Borrower shall not
permit any Subsidiary to issue any shares of preferred stock.
(N) Corporate Documents. Neither the Borrower nor any of its
Subsidiaries shall amend, modify or otherwise change any of the terms or
provisions in any of their respective constituent documents or the Tax
Allocation Agreement as in effect on the date hereof in any manner materially
adverse to the ability of the Borrower or any of its Subsidiaries to perform
their respective obligations under the Loan Documents, without the prior
written consent of the Required Lenders.
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(O) Fiscal Year. Neither the Borrower nor any of its consolidated
Subsidiaries shall change its fiscal year for accounting or tax purposes from a
period consisting of the 12-month period ending on the last Saturday of June of
each calendar year.
(P) Subsidiary Covenants. Except as required in connection with the
Receivables Purchase Documents, the Borrower will not, and will not permit any
Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to pay
dividends or make any other distribution on its stock, or make any other
Restricted Payment, pay any Indebtedness or other Obligation owed to the
Borrower or any other Subsidiary, make loans or advances or other Investments
in the Borrower or any other Subsidiary, or sell, transfer or otherwise convey
any of its property to the Borrower or any other Subsidiary.
(Q) Hedging Obligations. The Borrower shall not and shall not permit any
of its Subsidiaries to enter into any interest rate, commodity or foreign
currency exchange, swap, collar, cap or similar agreements evidencing Hedging
Obligations, other than interest rate, foreign currency or commodity exchange,
swap, collar, cap or similar agreements entered into by the Borrower pursuant
to which the Borrower has hedged its actual interest rate, foreign currency or
commodity exposure. Such permitted hedging agreements entered into by the
Borrower and any Lender or any affiliate of any Lender to hedge floating
interest rate risk are sometimes referred to herein as "INTEREST RATE
AGREEMENTS."
(R) Other Indebtedness. The Borrower shall not amend, modify or
supplement, or permit any Subsidiary to amend, modify or supplement (or consent
to any amendment, modification or supplement of), any document, agreement or
instrument evidencing the Senior Notes or any Subordinated Indebtedness (or any
replacements, substitutions or renewals thereof) or pursuant to which the
Senior Notes or any Subordinated Indebtedness is issued where such amendment,
modification or supplement provides for the following or which has any of the
following effects:
(i) increases the overall principal amount of any such Indebtedness or
increases the amount of any single scheduled installment of principal or
interest;
(ii) shortens or accelerates the date upon which any installment of
principal or interest becomes due or adds any additional mandatory redemption
provisions;
(iii) shortens the final maturity date of such Indebtedness or
otherwise accelerates the amortization schedule with respect to such
Indebtedness;
(iv) increases the rate of interest accruing on such Indebtedness;
(v) provides for the payment of additional fees or increases existing
fees;
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(vi) amends or modifies any financial or negative covenant (or covenant
which prohibits or restricts the Borrower or a Subsidiary of the Borrower from
taking certain actions) in a manner which is more onerous or more restrictive
to the Borrower (or any Subsidiary of the Borrower) or which is otherwise
materially adverse to the Borrower and/or the Lenders or, in the case of adding
covenants, which places additional restrictions on the Borrower (or a
Subsidiary of the Borrower) or which requires the Borrower or any such
Subsidiary to comply with more restrictive financial ratios or which requires
the Borrower to better its financial performance from that set forth in the
existing financial covenants;
(vii) amends, modifies or adds any affirmative covenant in a manner
which, when taken as a whole, is materially adverse to the Borrower and/or the
Lenders;
(viii) in the case of any Subordinated Indebtedness, amends, modifies
or supplements the subordination provisions thereof; or
(ix) in the case of the Subordinated Notes or the Subordinated Note
Agreement, amends or modifies the limitations on transfer provided therein.
(S) Change of Deposit Accounts. The Borrower shall not, and shall not
permit any Subsidiary (other than PRF) to, establish or maintain any deposit
account with any bank or other financial institution other than those which
have entered into a Collection Account Agreement in form and substance
acceptable to the Agent, except the deposit accounts with Fleet Bank described
on Schedule 4 to the Security Agreement.
(T) Amendment of Receivables Purchase Documents. The Borrower shall not,
and shall not permit any of its Subsidiaries to, agree to or enter into any
amendment, restatement or other modification of the Receivables Purchase
Documents, or substitute or replace the Receivables Purchase Documents with
another receivables securitization facility, that would (i) increase the
maximum amount of Indebtedness permitted to be incurred thereunder, unless the
Borrower concurrently reduces the Aggregate Revolving Loan Commitment pursuant
to Section 2.6 by an amount equal to or greater than the amount of such
increase; (ii) accelerate any scheduled amortization date; (iii) increase the
recourse obligations of the Borrower or any of its Subsidiaries (other than
PRF) in any material respect; (iv) provide for an "Event of Default,"
"Termination Event," "Early Amortization Event," "Servicer Default" or other
similar event upon the occurrence of a Default or Unmatured Default hereunder;
(v) impose net worth covenants for PRF that are materially more stringent than
those in existence on the Closing Date; (vi) materially decrease the cash
consideration to be paid to PRF or the Borrower on account of any Permitted
Receivables Transfers; or (vii) materially increase the amount of discount,
yield or interest payable thereunder.
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7.4 Financial Covenants. The Borrower shall comply with the following:
(A) Fixed Charge Coverage Ratio. The Borrower shall maintain a ratio
("FIXED CHARGE COVERAGE RATIO") of EBITDA to Interest Expense of at least:
(i) 1.50 to 1.00 for each fiscal quarter for the period commencing
with the fiscal quarter ending September 28, 1996 through the fiscal
quarter ending March 29, 1997;
(ii) 1.75 to 1.00 for each fiscal quarter for the period commencing
with the fiscal quarter ending June 28, 1997 through the fiscal quarter
ending March 28, 1998;
(iii) 2.00 to 1.00 for each fiscal quarter for the period commencing
with the fiscal quarter ending June 27, 1998 through the fiscal quarter
ending March 27, 1999;
(iv) 2.25 to 1.00 for each fiscal quarter for the period commencing
with the fiscal quarter ending June 26, 1999 through the fiscal quarter
ending March 25, 2000;
(v) 2.50 to 1.00 for each fiscal quarter for the period commencing
with the fiscal quarter ending June 24, 2000 through the fiscal quarter
ending March 24, 2001; and
(vi) 2.75 to 1.00 for each fiscal quarter thereafter until the
Termination Date.
In each case the Fixed Charge Coverage Ratio shall be determined as of the last
day of each fiscal quarter for the four-quarter period ending on such day,
calculated, with respect to Permitted Acquisitions, on a pro forma basis using
historical audited and reviewed unaudited financial statements obtained from
the seller, broken down by fiscal quarter in the Borrower's reasonable
judgment.
(B) Total Debt to EBITDA Ratio. The Borrower shall not permit the ratio
(the "LEVERAGE RATIO") of Total Debt to EBITDA to be greater than the ratio set
forth below under the column entitled "Default Ratio" at the end of the fiscal
quarter ending on the corresponding date set forth below:
QUARTER ENDING DEFAULT RATIO TRIGGER RATIO
------------------ ---------------- -----------------
September 28, 1996 6.50 to 1.0
December 28, 1996 6.25 to 1.0
March 29, 1997 6.00 to 1.0
June 28, 1997 5.25 to 1.0 4.75 to 1.0
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September 27, 1997 5.25 to 1.0 4.75 to 1.0
December 27, 1997 5.25 to 1.0 4.75 to 1.0
March 28, 1998 5.25 to 1.0 4.75 to 1.0
June 27, 1998 4.50 to 1.0 4.00 to 1.0
September 26, 1998 4.50 to 1.0 4.00 to 1.0
December 26, 1998 4.50 to 1.0 4.00 to 1.0
March 27, 1999 4.50 to 1.0 4.00 to 1.0
June 26, 1999 3.75 to 1.0 3.25 to 1.0
September 25, 1999 3.75 to 1.0 3.25 to 1.0
December 25, 1999 3.75 to 1.0 3.25 to 1.0
March 25, 2000 3.75 to 1.0 3.25 to 1.0
June 24, 2000 3.00 to 1.0 2.50 to 1.0
September 23, 2000 3.00 to 1.0 2.50 to 1.0
December 23, 2000 3.00 to 1.0 2.50 to 1.0
March 24, 2001 3.00 to 1.0 2.50 to 1.0
June 30, 2001
and each quarter
thereafter 2.50 to 1.0
In the event that the Leverage Ratio at the end of any fiscal quarter ending
after March 29, 1997 shall be greater than the ratio set forth above under the
column entitled "Trigger Ratio" for such fiscal quarter, the Required Lenders
shall have the right to require that IHC (i) execute a guaranty of the
Obligations in form and substance satisfactory to the Required Lenders, and
(ii) grant to the Agent, for the benefit of the Holders of Secured Obligations,
Liens on all of the IHC Assets, pursuant to documentation in form and substance
satisfactory to the Required Lenders. If, upon such demand by the Required
Lenders, the Borrower shall elect to merge IHC into the Borrower, such Liens
shall thereupon be granted by the Borrower. The Leverage Ratio shall be
calculated, in each case, determined as of the last day of each fiscal quarter
based upon (a) for Total Debt, Total Debt as of the last day of each such
fiscal quarter; and (b) for EBITDA, the actual amount for the four-quarter
period ending on such day, calculated, with respect to Permitted Acquisitions,
on a pro forma basis using historical audited and reviewed unaudited financial
statements obtained from the seller, broken down by fiscal quarter in the
Borrower's reasonable judgment.
(C) Capital Expenditures. The Borrower will not, nor will it permit any
Subsidiary to, expend, or be committed to expend, for Capital Expenditures
during the following periods, on a non-cumulative basis except as provided
herein, in the aggregate for the Borrower and its Subsidiaries, in excess of:
(i) $45,000,000 for the period from the Closing Date through June
28, 1997;
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(ii) $46,000,000 for the period from June 29, 1997 through June 27,
1998;
(iii) $47,000,000 for the period from June 28, 1998 through June 26,
1999;
(iv) $48,000,000 for the period from June 27, 1999 through June 24,
2000;
(v) $49,000,000 for the period from June 25, 2000 through June 30,
2001; and
(vi) $50,000,000 for the period from July 1, 2001 through June 29,
2002.
In the event that for any of the foregoing periods the actual amount of Capital
Expenditures for the Borrower and its Subsidiaries shall be less than the
applicable limitation amount set forth above (plus any increase therein
pursuant to this sentence), an amount (the "CARRY-OVER AMOUNT") equal to
seventy-five percent (75.0%) of (a) permitted Capital Expenditures minus (b)
actual amount of Capital Expenditures for such period, shall be added to the
permitted Capital Expenditures for the next succeeding fiscal year; provided,
that the Carry-Over Amount shall not exceed $50,000,000 in any fiscal year.
ARTICLE VIII: DEFAULTS
8.1 Defaults. Each of the following occurrences shall constitute a
Default under this Agreement:
(a) Failure to Make Payments When Due. The Borrower shall (i) fail to
pay when due any of the Obligations consisting of principal with respect to the
Loans or (ii) shall fail to pay within five (5) Business Days of the date when
due any of the other Obligations under this Agreement or the other Loan
Documents.
(b) Breach of Certain Covenants. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower under:
(i) Section 7.1(C) through and including 7.1(J), 7.2(B) or 7.2(F)
and such failure shall continue unremedied for fifteen (15) days;
(ii) Sections 7.1(A), 7.1(B), 7.2(A), 7.2(C), 7.2(D), 7.2(E) and
7.2(G) through and including 7.2(L) and such failure shall continue
unremedied for five (5) Business Days; or
(iii) Section 7.3 or 7.4.
(c) Breach of Representation or Warranty. Any representation or warranty
made or deemed made by the Borrower to the Agent or any Lender herein or by
Holdings,
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Enterprises, the Borrower or any of its Subsidiaries in any of the other Loan
Documents or in any statement or certificate at any time given by any such
Person pursuant to any of the Loan Documents shall be false or misleading in
any material respect on the date as of which made (or deemed made).
(d) Other Defaults. The Borrower shall default in the performance of or
compliance with any term contained in this Agreement (other than as covered by
paragraphs (a), (b) or (c) of this Section 8.1), or the Borrower or any of its
Subsidiaries shall default in the performance of or compliance with any term
contained in any of the other Loan Documents, and such default shall continue
for thirty (30) days after the earlier of (i) notice from the Agent or (ii) the
date on which any member of Management shall first have actual knowledge
thereof.
(e) Default as to Other Indebtedness. The Borrower or any of its
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect
to any Indebtedness (other than the Obligations and the Indebtedness under the
Receivables Purchase Documents) the aggregate outstanding principal amount of
which Indebtedness is in excess of $5,000,000; or any breach, default or event
of default shall occur, or any other condition shall exist under any
instrument, agreement or indenture pertaining to any such Indebtedness, if the
effect thereof is to cause an acceleration, mandatory redemption, a requirement
that the Borrower offer to purchase such Indebtedness or other required
repurchase of such Indebtedness, or permit the holder(s) of such Indebtedness
to accelerate the maturity of any such Indebtedness or require a redemption or
other repurchase of such Indebtedness; or any such Indebtedness shall be
otherwise declared to be due and payable (by acceleration or otherwise) or
required to be prepaid, redeemed or otherwise repurchased by the Borrower or
any of its Subsidiaries (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof.
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case shall be commenced against Holdings,
Enterprises, the Borrower or any of the Borrower's Subsidiaries and the
petition shall not be dismissed, stayed, bonded or discharged within
sixty (60) days after commencement of the case; or a court having
jurisdiction in the premises shall enter a decree or order for relief in
respect of Holdings, Enterprises, the Borrower or any of the Borrower's
Subsidiaries in an involuntary case, under any applicable bankruptcy,
insolvency or other similar law now or hereinafter in effect; or any
other similar relief shall be granted under any applicable federal,
state, local or foreign law.
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over Holdings,
Enterprises, the Borrower or any of the Borrower's Subsidiaries or over
all or a substantial part of the property of
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Holdings, Enterprises, the Borrower or any of the Borrower's
Subsidiaries shall be entered; or an interim receiver, trustee or other
custodian of Holdings, Enterprises, the Borrower or any of the Borrower's
Subsidiaries or of all or a substantial part of the property of Holdings,
Enterprises, the Borrower or any of the Borrower's Subsidiaries shall be
appointed or a warrant of attachment, execution or similar process
against any substantial part of the property of Holdings, Enterprises,
the Borrower or any of the Borrower's Subsidiaries shall be issued and
any such event shall not be stayed, dismissed, bonded or discharged
within sixty (60) days after entry, appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. Holdings,
Enterprises, the Borrower or any of the Borrower's Subsidiaries shall (i)
commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, (ii) consent to the entry of an order
for relief in an involuntary case, or to the conversion of an involuntary case
to a voluntary case, under any such law, (iii) consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property, (iv) make any assignment for the benefit of
creditors or (v) take any corporate action to authorize any of the foregoing.
(h) Judgments and Attachments. Any money judgment(s) (other than a money
judgment covered by insurance as to which the insurance company has not
disclaimed or reserved the right to disclaim coverage), writ or warrant of
attachment, or similar process against the Borrower or any of its Subsidiaries
or any of their respective assets involving in any single case or in the
aggregate an amount in excess of $5,000,000 is or are entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days
or in any event later than fifteen (15) days prior to the date of any proposed
sale thereunder.
(i) Dissolution. Any order, judgment or decree shall be entered against
the Borrower decreeing its involuntary dissolution or split up and such order
shall remain undischarged and unstayed for a period in excess of sixty (60)
days; or the Borrower shall otherwise dissolve or cease to exist except as
specifically permitted by this Agreement.
(j) Loan Documents; Failure of Security. At any time, for any reason,
(i) any Loan Document as a whole that materially affects the ability of the
Agent, or any of the Lenders to enforce the Obligations or enforce their rights
against the Collateral ceases to be in full force and effect or the Borrower or
any of the Borrower's Subsidiaries party thereto seeks to repudiate its
obligations thereunder and the Liens intended to be created thereby are, or the
Borrower or any such Subsidiary seeks to render such Liens, invalid or
unperfected, or (ii) any Lien on Collateral in favor of the Agent contemplated
by the Loan Documents shall, at any time, for any reason, be invalidated or
otherwise cease to be in full force and effect, or such Lien shall not have the
priority contemplated by this Agreement or the Loan Documents.
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(k) Termination Event. Any Termination Event occurs which could
reasonably be expected to subject the Borrower to liability in excess of
$5,000,000.
(l) Waiver of Minimum Funding Standard. The plan administrator of any
Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and the substantial business
hardship upon which the application for the waiver is based could reasonably be
expected to subject either the Borrower or any Controlled Group member to
liability in excess of $5,000,000.
(m) Change of Control. A Change of Control shall occur.
(n) Interest Rate Agreements. Nonpayment by the Borrower of any
obligation under any Interest Rate Agreement or the breach by the Borrower of
any term, provision or condition contained in any such Interest Rate Agreement.
(o) Environmental Matters. The Borrower or any of its Subsidiaries shall
be the subject of any proceeding or investigation pertaining to (i) the Release
by the Borrower or any of its Subsidiaries of any Contaminant into the
environment, (ii) the liability of the Borrower or any of its Subsidiaries
arising from the Release by any other Person of any Contaminant into the
environment, or (iii) any violation of any Environmental, Health or Safety
Requirements of Law by the Borrower or any of its Subsidiaries, which, in any
case, has subjected or is reasonably likely to subject the Borrower to
liability in excess of $5,000,000.
(p) Guarantor Default or Revocation. There shall occur a default under
any of the Parent Agreements or Enterprises or Holdings shall terminate or
revoke any of their respective obligations thereunder, or any other guarantor
of the Obligations shall terminate or revoke any of its obligations under the
applicable guarantee agreement or breach any of the terms of such guarantee
agreement.
(q) Failure of Subordination. The subordination provisions of the
documents and instruments evidencing any Subordinated Indebtedness shall, at
any time, be invalidated or otherwise cease to be in full force and effect.
(r) Receivables Purchase Documents. An "Event of Default," "Termination
Event," "Early Amortization Event," "Servicer Default" or similar event shall
occur resulting in the termination of purchases and/or funding under the
Receivables Purchase Documents, or the Borrower or a Subsidiary of the Borrower
shall cease to act as "Servicer" thereunder.
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with Section 9.3.
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ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES
9.1 Termination of Commitments; Acceleration. If any Default described
in Section 8.1(f) or 8.1(g) occurs with respect to the Borrower, the
obligations of the Lenders to make Loans hereunder and the obligation of the
Agent to issue Letters of Credit hereunder shall automatically terminate and
the Obligations shall immediately become due and payable without any election
or action on the part of the Agent or any Lender. If any other Default occurs,
the Required Lenders may terminate or suspend the obligations of the Lenders to
make Loans hereunder and the obligation of the Agent to issue Letters of Credit
hereunder, or declare the Obligations to be due and payable, or both, whereupon
the Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower expressly
waives.
9.2 Defaulting Lender. In the event that any Lender fails to fund its
Pro Rata Share 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 Revolving Loan Commitments, the proceeds of all amounts
thereafter repaid to the Agent by the Borrower and otherwise required to be
applied to such Lender's share of all other Obligations pursuant to the terms
of this Agreement shall be advanced to the Borrower by the Agent on behalf of
such Lender to cure, in full or in part, such failure by such Lender, but shall
nevertheless be deemed to have been paid to such Lender in satisfaction of such
other Obligations. Notwithstanding anything in this Agreement to the contrary:
(i) the foregoing provisions of this Section 9.2 shall apply
only with respect to the proceeds of payments of Obligations and shall
not affect the conversion or continuation of Loans pursuant to Section
2.10;
(ii) any such Lender shall be deemed to have cured its failure
to fund its Pro Rata Share of any Advance at such time, within five (5)
Business Days after such failure, as an amount equal to such Lender's
original Pro Rata Share 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 9.2, and whether or
not the Non Pro Rata Loan with respect thereto has been repaid,
converted or continued;
(iii) amounts advanced to the Borrower to cure, in full or in
part, any such Lender's failure to fund its Pro Rata Share of any
Advance ("CURE LOANS") shall bear interest at the rate applicable to
Floating Rate Loans in effect from time to time, and for all other
purposes of this Agreement shall be treated as if they were Floating
Rate Loans;
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(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 Pro Rata Share of any Advance and the
termination of the Revolving Loan Commitments, the term "Required
Lenders" for purposes of this Agreement shall mean Lenders (excluding
all Lenders whose failure to fund their respective Pro Rata Shares of
such Advance have not been so cured) whose Pro Rata Shares represent at
least sixty-six and two thirds percent (66-2/3%) of the aggregate Pro
Rata Shares of such Lenders; and
(vi) for so long as and until any such Lender's failure to fund
its Pro Rata Share of any Advance is cured in accordance with Section
9.2(ii), (A) such Lender shall not be entitled to any commitment fees
with respect to its Revolving Loan Commitment and (B) such Lender shall
not be entitled to any letter of credit fees, which commitment fees and
letter of credit fees shall accrue in favor of the Lenders which have
funded their respective Pro Rata Share of such requested Advance, shall
be allocated among such performing Lenders ratably based upon their
relative Revolving Loan Commitments, and shall be calculated based upon
the average amount by which the aggregate Revolving Loan Commitments of
such performing Lenders exceeds the sum of (I) the outstanding
principal amount of the Loans owing to such performing Lenders, plus
(II) the outstanding Reimbursement Obligations owing to such performing
Lenders, plus (III) the aggregate participation interests of such
performing Lenders arising pursuant to Section 3.6 with respect to
undrawn and outstanding Letters of Credit.
9.3 Amendments. Subject to the provisions of this Article IX, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving
any Default hereunder; provided, however, that no such supplemental agreement
shall, without the consent of each Lender affected thereby:
(i) Postpone or extend the Revolving Loan Termination Date or
Term Loan Termination Date or any other date fixed for any payment of
principal of, or
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interest on, the Loans, the Reimbursement Obligations or any fees or
other amounts payable to such Lender (except with respect to (a) any
modifications of the provisions relating to prepayments of Loans and
other Obligations or (b) a waiver of the application of the default
rate of interest pursuant to Section 2.11 hereof).
(ii) Reduce the principal amount of any Loans or L/C
Obligations or the rate of interest thereon or any fees or other
amounts payable to such Lender.
(iii) Reduce the percentage specified in the definition of
Required Lenders or any other percentage of Lenders specified to be the
applicable percentage in this Agreement to act on specified matters.
(iv) Increase the amount of the Revolving Loan Commitment
and/or Term Loan Commitment of any Lender hereunder.
(v) Permit the Borrower to assign its rights under this
Agreement.
(vi) Amend this Section 9.3.
(vii) Release any of the Parent Agreements or all or
substantially all of the Collateral.
No amendment of any provision of this Agreement relating to (a) the Agent shall
be effective without the written consent of the Agent or (b) Swing Line Loans
shall be effective without the written consent of the Swing Line Bank. The
Agent may waive payment of the fee required under Section 13.3(B) without
obtaining the consent of any of the Lenders.
9.4 Preservation of Rights. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan or the issuance of a Letter of Credit notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan or issuance of such Letter of Credit shall
not constitute any waiver or acquiescence. Any single or partial exercise of
any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Lenders required pursuant to Section 9.3, and
then only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Agent and the Lenders until the Obligations have been
paid in full.
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ARTICLE X: GENERAL PROVISIONS
10.1 Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes
and the making of the Loans herein contemplated.
10.2 Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 Performance of Obligations. The Borrower agrees that the Agent
may, but shall have no obligation to (i) at any time, pay or discharge taxes,
liens, security interests or other encumbrances levied or placed on or
threatened against any Collateral and (ii) after the occurrence and during the
continuance of a Default make any other payment or perform any act required of
the Borrower under any Loan Document or take any other action which the Agent
in its discretion deems necessary or desirable to protect or preserve the
Collateral, including, without limitation, any action to (y) effect any repairs
or obtain any insurance called for by the terms of any of the Loan Documents
and to pay all or any part of the premiums therefor and the costs thereof and
(z) pay any rents payable by the Borrower which are more than 30 days past due,
or as to which the landlord has given notice of termination, under any lease.
The Agent shall use its best efforts to give the Borrower notice of any action
taken under this Section 10.3 prior to the taking of such action or promptly
thereafter provided the failure to give such notice shall not affect the
Borrower's obligations in respect thereof. The Borrower agrees to pay the
Agent, upon demand, the principal amount of all funds advanced by the Agent
under this Section 10.3, together with interest thereon at the rate from time
to time applicable to Floating Rate Loans from the date of such advance until
the outstanding principal balance thereof is paid in full. If the Borrower
fails to make payment in respect of any such advance under this Section 10.3
within one (1) Business Day after the date the Borrower receives written demand
therefor from the Agent, the Agent shall promptly notify each Lender and each
Lender agrees that it shall thereupon make available to the Agent, in Dollars
in immediately available funds, the amount equal to such Lender's Pro Rata
Share of such advance. If such funds are not made available to the Agent by
such Lender within one (1) Business Day after the Agent's demand therefor, the
Agent will be entitled to recover any such amount from such Lender together
with interest thereon at the Federal Funds Effective Rate for each day during
the period commencing on the date of such demand and ending on the date such
amount is received. The failure of any Lender to make available to the Agent
its Pro Rata Share of any such unreimbursed advance under this Section 10.3
shall neither relieve any other Lender of its obligation hereunder to make
available to the Agent such other Lender's Pro Rata Share of such advance on
the date such payment is to be made nor increase the obligation of any other
Lender to make such payment to the Agent. All outstanding principal of, and
interest on, advances made under this Section 10.3 shall constitute Obligations
secured by the Collateral until paid in full by the Borrower.
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10.4 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
10.5 Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Agent and the Lenders and supersede
all prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof.
10.6 Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to
which the Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender
from any of its obligations hereunder. This Agreement shall not be construed so
as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns.
10.7 Expenses; Indemnification.
(A) Expenses. The Borrower shall reimburse the Agent for any reasonable
costs, internal charges and out-of-pocket expenses (including attorneys' and
paralegals' fees and time charges of attorneys and paralegals for the Agent,
which attorneys and paralegals may be employees of the Agent) paid or incurred
by the Agent in connection with the preparation, negotiation, execution,
delivery, syndication, review, amendment, modification, and administration of
the Loan Documents. The Borrower also agrees to reimburse the Agent and the
Lenders for any costs, internal charges and out-of-pocket expenses (including
attorneys' and paralegals' fees and time charges of attorneys and paralegals
for the Agent and the Lenders, which attorneys and paralegals may be employees
of the Agent or the Lenders) paid or incurred by the Agent or any Lender in
connection with the collection of the Obligations and enforcement (whether by
legal proceedings, negotiation or otherwise) of the Loan Documents. Agent shall
provide the Borrower with a detailed statement of all reimbursements requested
under this Section 10.7(A).
(B) Indemnity. The Borrower further agrees to defend, protect,
indemnify, and hold harmless the Agent and each and all of the Lenders and each
of their respective Affiliates, and each of such Agent's, Lender's, or
Affiliate's respective officers, directors, employees, attorneys and agents
(including, without limitation, those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set forth in
Article V) (collectively, the "INDEMNITEES") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses of any kind or nature whatsoever (including,
without limitation, the fees and disbursements of counsel for such Indemnitees
in connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated
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a party thereto), imposed on, incurred by, or asserted against such Indemnitees
in any manner relating to or arising out of:
(i) this Agreement, the other Loan Documents or any of the
Transaction Documents, or any act, event or transaction related or
attendant thereto or to the Xxxxx River Acquisition or the Related
Transactions, the making of the Loans, and the issuance of and
participation in Letters of Credit hereunder, the management of such
Loans or Letters of Credit, the use or intended use of the proceeds of
the Loans or Letters of Credit hereunder, or any of the other
transactions contemplated by the Transaction Documents; or
(ii) any liabilities, obligations, responsibilities, losses,
damages, personal injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or wanton
injury, damage or threat to the environment, natural resources or
public health or welfare, costs and expenses (including, without
limitation, attorney, expert and consulting fees and costs of
investigation, feasibility or remedial action studies), fines,
penalties and monetary sanctions, interest, direct or indirect, known
or unknown, absolute or contingent, past, present or future relating to
violation of any Environmental, Health or Safety Requirements of Law
arising from or in connection with the past, present or future
operations of Holdings, Enterprises, the Borrower, its Subsidiaries or
any of their respective predecessors in interest, or, the past, present
or future environmental, health or safety condition of any respective
property of the Borrower or its Subsidiaries, the presence of
asbestos-containing materials at any respective property of the
Borrower or its Subsidiaries or the Release or threatened Release of
any Contaminant into the environment (collectively, the "INDEMNIFIED
MATTERS");
provided, however, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters caused solely by or resulting
solely from (y) a dispute among the Lenders or a dispute between any Lender and
the Agent, or (z) the willful misconduct or gross negligence of such Indemnitee
or breach of contract by such Indemnitee with respect to the Loan Documents, in
each case, as determined by the final non-appealed judgment of a court of
competent jurisdiction. If the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrower shall contribute the
maximum portion which it is permitted to pay and satisfy under applicable law,
to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees. If any action, claim, investigation or other proceeding is
instituted or threatened against any Indemnitees in respect of which indemnity
may be sought hereunder, the Borrower shall be entitled to assume the defense
thereof with counsel selected by the Borrower (which counsel shall be
reasonably satisfactory to such Indemnitees) and after notice from the Borrower
to such Indemnitees of its election so to assume the defense thereof, the
Borrower will not be liable to such Indemnitees hereunder for any legal or
other expenses subsequently incurred by such Indemnitees in connection with the
defense thereof other
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than reasonable costs of investigation and such other expenses as have been
approved in advance; provided that (i) if counsel for such Indemnitees
determines in good faith that there is a conflict which requires separate
representation for the Borrower and such Indemnitees, or (ii) if the Borrower
fails to assume or proceed in a timely and reasonable manner with the defense
of such action or fails to employ counsel reasonably satisfactory to such
Indemnitees in any such action, then in either such event such Indemnitees
shall be entitled to select one primary counsel and, if necessary, one local
counsel, of their own choice to represent such Indemnitees and the Borrower
shall not, or no longer, be entitled to assume the defense thereof on behalf of
such Indemnitees and such Indemnitees shall be entitled to indemnification for
the reasonable expenses (including reasonable fees and expenses of such
counsel) to the extent provided above. Such counsel shall, to the fullest
extent consistent with its professional responsibilities, cooperate with the
Borrower and any counsel designated by the Borrower. Nothing contained herein
shall preclude any Indemnitees, at their own expense, from retaining additional
counsel to represent such Indemnitees in any action with respect to which
indemnity may be sought from the Borrower hereunder. The Borrower shall not be
liable under this Agreement for any settlement made by any Indemnitees without
the Borrower's prior written consent (which consent shall not be unreasonably
withheld), and the Borrower agrees to indemnify and hold harmless any
Indemnitees from and against any loss or liability by reason of the settlement
of any claim or action with the consent of the Borrower. The Borrower shall not
settle any claim or action without the prior written consent of the
Indemnitees, which consent shall not be unreasonably withheld.
(C) Waiver of Certain Claims; Settlement of Claims. The Borrower
further agrees to assert no claim against any of the Indemnitees on any theory
of liability for consequential, special, indirect, exemplary or punitive
damages. No settlement shall be entered into by Holdings, Enterprises, the
Borrower or any if its Subsidiaries with respect to any claim, litigation,
arbitration or other proceeding relating to or arising out of the transactions
evidenced by this Agreement, the other Loan Documents or in connection with the
Xxxxx River Acquisition or Related Transactions (whether or not the Agent or
any Lender or any Indemnitee is a party thereto) unless such settlement
releases all Indemnitees from any and all liability with respect thereto.
(D) Survival of Agreements. The obligations and agreements of the
Borrower under this Section 10.7 shall survive the termination of this
Agreement.
10.8 Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
10.9 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
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10.10 Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
10.11 Nonliability of Lenders. The relationship between the Borrower
and the Lenders and the Agent shall be solely that of borrower and lender.
Neither the Agent nor any Lender shall have any fiduciary responsibilities to
the Borrower. Neither the Agent nor any Lender undertakes any responsibility to
the Borrower to review or inform the Borrower of any matter in connection with
any phase of the Borrower's business or operations.
10.12 GOVERNING LAW. THE AGENT ACCEPTS THIS AGREEMENT, ON BEHALF OF
ITSELF AND THE LENDERS, AT CHICAGO, ILLINOIS BY ACKNOWLEDGING AND AGREEING TO
IT THERE. ANY DISPUTE BETWEEN THE BORROWER AND THE AGENT, ANY LENDER, OR ANY
OTHER HOLDER OF SECURED OBLIGATIONS ARISING OUT OF, CONNECTED WITH, RELATED TO,
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH,
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN
CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE
INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE
OF ILLINOIS.
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY
TRIAL.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH
OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED
EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE
PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES
HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE
DISPUTE.
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(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE AGENT, ANY LENDER
OR ANY HOLDER OF SECURED OBLIGATIONS SHALL HAVE THE RIGHT TO PROCEED AGAINST
THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON
TO (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2) REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE BORROWER AGREES THAT
IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY
SUCH PERSON TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH
PERSON. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF
THE COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
SUBSECTION (B).
(C) SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL SERVICE OF ANY
PROCESS UPON IT AND, AS ADDITIONAL SECURITY FOR THE OBLIGATIONS, IRREVOCABLY
APPOINTS IHC, WHOSE ADDRESS IS 0000 XXXXXX XXXXX, XXXXX, XXXXXXXX 00000, AS THE
BORROWER'S AGENT FOR THE PURPOSE OF ACCEPTING SERVICE OF PROCESS ISSUED BY ANY
COURT. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
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(E) WAIVER OF BOND. THE BORROWER WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL PROCESS
OR PROCEEDING TO REALIZE ON THE COLLATERAL (INCLUDING, WITHOUT LIMITATION, THE
REAL PROPERTY COLLATERAL) OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR TO
ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PARTY, OR TO
ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER, PRELIMINARY OR
PERMANENT INJUNCTION, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
(F) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER
PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE
PROVISIONS OF THIS SECTION 10.13, WITH ITS COUNSEL.
10.14 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
ARTICLE XI: THE AGENT
11.1 Appointment; Nature of Relationship. The First National Bank of
Chicago is appointed by the Lenders as the Agent hereunder and under each other
Loan Document, and each of the Lenders irrevocably authorizes the Agent to act
as the contractual representative of such Lender with the rights and duties
expressly set forth herein and in the other Loan Documents. The Agent agrees to
act as such contractual representative upon the express conditions contained in
this Article XI. Notwithstanding the use of the defined term "Agent," it is
expressly understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Holder of Secured Obligations by reason of this
Agreement and that the Agent is merely acting as the representative of the
Lenders with only those duties as are expressly set forth in this Agreement and
the other Loan Documents. In its capacity as the Lenders' contractual
representative, the Agent (i) does not assume any fiduciary duties to any of
the Holders of Secured Obligations, (ii) is a "representative" of the Holders
of Secured Obligations within the meaning of Section 9-105 of the Uniform
Commercial Code and (iii) is acting as an independent contractor, the rights
and duties of which are limited to those expressly set forth in this Agreement
and the other Loan Documents. Each of the Lenders, for itself and on behalf of
its affiliates as Holders of Secured Obligations, agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Holder of Secured
Obligations waives.
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11.2 Powers. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties or fiduciary duties to the Lenders, or
any obligation to the Lenders to take any action hereunder or under any of the
other Loan Documents except any action specifically provided by the Loan
Documents required to be taken by the Agent.
11.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is found in a final judgment by a court
of competent jurisdiction to have arisen solely from (i) the gross negligence
or willful misconduct of such Person or (ii) breach of contract by such Person
with respect to the Loan Documents.
11.4 No Responsibility for Loans, Creditworthiness, Collateral,
Recitals, Etc. Neither the Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into,
or verify (i) any statement, warranty or representation made in connection with
any Loan Document or any borrowing hereunder; (ii) the performance or
observance of any of the covenants or agreements of any obligor under any Loan
Document; (iii) the satisfaction of any condition specified in Article V,
except receipt of items required to be delivered solely to the Agent; (iv) the
existence or possible existence of any Default or (v) the validity,
effectiveness or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith. The Agent shall not be responsible
to any Lender for any recitals, statements, representations or warranties
herein or in any of the other Loan Documents, for the perfection or priority of
any of the Liens on any of the Collateral, or for the execution, effectiveness,
genuineness, validity, legality, enforceability, collectibility, or sufficiency
of this Agreement or any of the other Loan Documents or the transactions
contemplated thereby, or for the financial condition of any guarantor of any or
all of the Obligations, Holdings, Enterprises, the Borrower or any of their
respective Subsidiaries.
11.5 Action on Instructions of Lenders. The Agent in all cases, as
between the Agent and the Holders of Secured Obligations, shall be fully
protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders of
Notes. As between the Agent and the Holders of Secured Obligations, the Agent
shall be fully justified in failing or refusing to take any action hereunder
and under any other Loan Document unless it shall first be indemnified to its
satisfaction by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action.
11.6 Employment of Agents and Counsel. The Agent may execute any of its
duties as the Agent hereunder and under any other Loan Document by or through
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employees, agents, and attorney-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the
Lenders and all matters pertaining to the Agent's duties hereunder and under
any other Loan Document.
11.7 Reliance on Documents; Counsel. As between the Agent and the
Holders of Secured Obligations, the Agent shall be entitled to rely upon any
Note, notice, consent, certificate, affidavit, letter, telegram, statement,
paper or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Agent, which counsel may
be employees of the Agent.
11.8 The Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their respective
Revolving Loan Commitments (i) for any amounts not reimbursed by the Borrower
for which the Agent is entitled to reimbursement by the Borrower under the Loan
Documents, (ii) for any other expenses incurred by the Agent on behalf of the
Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby, or
the enforcement of any of the terms thereof or of any such other documents,
provided that no Lender shall be liable for any of the foregoing to the extent
any of the foregoing is found in a final non-appealable judgment by a court of
competent jurisdiction to have arisen solely from the gross negligence or
willful misconduct of the Agent.
11.9 Rights as a Lender. With respect to its Revolving Loan Commitment,
its Term Loan Commitment, Loans made by it and the Notes issued to it, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document as any Lender and may exercise the same as through it were not the
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. The Agent may accept
deposits from, lend money to, and generally engage in any kind of trust, debt,
equity or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which such Person is not prohibited hereby from engaging with
any other Person.
11.10 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this
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Agreement and the other Loan Documents. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents.
11.11 Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, and the Agent may be
removed at any time with or without cause by written notice received by the
Agent from the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint, on behalf of the Borrower and
the Lenders, a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty days after the retiring Agent's giving notice of resignation,
then the retiring Agent may appoint, on behalf of the Borrower and the Lenders,
a successor Agent. Notwithstanding anything herein to the contrary, so long as
no Default has occurred and is continuing, each such successor Agent shall be
subject to approval by the Borrower, which approval shall not be unreasonably
withheld. Such successor Agent shall be a commercial bank having capital and
retained earnings of at least $500,000,000. Upon the acceptance of any
appointment as the Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article XI shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as the Agent hereunder and under the other Loan Documents.
11.12 Collateral Documents. (a) Each Lender authorizes the Agent to
enter into each of the Collateral Documents to which it is a party and to take
all action contemplated by such documents. Each Lender agrees that no Holder of
Secured Obligations (other than the Agent) shall have the right individually to
seek to realize upon the security granted by any Collateral Document, it being
understood and agreed that such rights and remedies may be exercised solely by
the Agent for the benefit of the Holders of Secured Obligations upon the terms
of the Collateral Documents.
(b) In the event that any Collateral is hereafter pledged by
any Person as collateral security for the Obligations, the Agent is hereby
authorized to execute and deliver on behalf of the Holders of Secured
Obligations any Loan Documents necessary or appropriate to grant and perfect a
Lien on such Collateral in favor of the Agent on behalf of the Holders of
Secured Obligations.
(c) The Lenders hereby authorize the Agent, at its option and
in its discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment and satisfaction
of all of the Obligations at any time arising under or in respect of this
Agreement or the Loan Documents or the transactions contemplated hereby or
thereby; (ii) as permitted by, but
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only in accordance with, the terms of the applicable Loan Document; or (iii) if
approved, authorized or ratified in writing by the Requisite Lenders, unless
such release is required to be approved by all of the Lenders hereunder. Upon
request by the Agent at any time, the Lenders will confirm in writing the
Agent's authority to release particular types or items of Collateral pursuant
to this Section 11.12(c).
(d) Upon any sale or transfer of assets constituting Collateral
which is permitted pursuant to the terms of any Loan Document, or consented to
in writing by the Requisite Lenders or all of the Lenders, as applicable, and
upon at least five Business Days' prior written request by the Borrower, the
Agent shall (and is hereby irrevocably authorized by the Lenders to) execute
sch documents as may be necessary to evidence the release of the Liens granted
to the Agent for the benefit of the Holders of Secured Obligations herein or
pursuant hereto upon the Collateral that was sold or transferred; provided,
however, that (i) the Agent shall not be required to execute any such document
on terms which, in the Agent's opinion, would expose the Agent to liability or
create any obligation or entail any consequence other than the release of such
Liens without recourse or warranty, and (ii) such release shall not in any
manner discharge, affect or impair the Secured Obligations or any Liens upon
(or obligations of the Borrower or any Subsidiary in respect of) all interests
retained by the Borrower or any Subsidiary, including (without limitation) the
proceeds of the sale, all of which shall continue to constitute part of the
Collateral.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if any Default occurs and is continuing, any
indebtedness from any Lender to the Borrower (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.
12.2 Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant to
Sections 4.1, 4.2 or 4.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion
of the Loans held by the other Lenders so that after such purchase each Lender
will hold its ratable proportion of Loans. If any Lender, whether in connection
with setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such
action necessary such that all Lenders share in the benefits of such collateral
ratably in proportion to the obligations owing to them. In case any such
payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.
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12.3 Application of Payments. Subject to the provisions of Section 9.2,
the Agent shall, unless otherwise specified at the direction of the Required
Lenders which direction shall be consistent with the last sentence of this
Section 12.3, apply all payments and prepayments in respect of any Obligations
and all proceeds of Collateral in the following order:
(A) first, to pay interest on and then principal of any portion
of the Loans which the Agent may have advanced on behalf of any Lender
for which the Agent has not then been reimbursed by such Lender or the
Borrower;
(B) second, to pay interest on and then principal of any
advance made under Section 10.3 for which the Agent has not then been
paid by the Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Agent;
(D) fourth, to pay Obligations in respect of any fees,
expenses, reimbursements or indemnities then due to the Lenders and the
issuer(s) of Letters of Credit;
(E) fifth, to pay interest due in respect of Swing Line Loans;
(F) sixth, to pay interest due in respect of Loans (other than
Swing Line Loans) and L/C Obligations;
(G) seventh, to the ratable payment or prepayment of principal
outstanding on Swing Line Loans;
(H) eighth, to the ratable payment or prepayment of principal
outstanding on Loans (other than Swing Line Loans), Reimbursement
Obligations and Hedging Obligations under Interest Rate Agreements in
such order as the Agent may determine in its sole discretion;
(I) ninth, to provide required cash collateral, if required
pursuant to Section 3.11 and
(J) tenth, to the ratable payment of all other Obligations.
Unless otherwise designated (which designation shall only be applicable prior
to the occurrence of a Default) by the Borrower, all principal payments in
respect of Loans (other than Swing Line Loans) shall be applied first, to the
outstanding Revolving Loans, and second, to the outstanding Term Loans, in each
case, first, to repay outstanding Floating Rate Loans, and then to repay
outstanding Eurodollar Rate Loans with those Eurodollar Rate Loans which have
earlier expiring Interest Periods being repaid prior to
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those which have later expiring Interest Periods. The order of priority set
forth in this Section 12.3 and the related provisions of this Agreement are set
forth solely to determine the rights and priorities of the Agent, the Lenders,
the issuer(s) of Letters of Credit and other Holders of Secured Obligations as
among themselves. The order of priority set forth in clauses (D) through (J) of
this Section 12.3 may at any time and from time to time be changed by the
Required Lenders without necessity of notice to or consent of or approval by
the Borrower, or any other Person; provided, that the order of priority of
payments in respect of Swing Line Loans may be changed only with the prior
written consent of the Swing Line Bank. The order of priority set forth in
clauses (A) through (C) of this Section 12.3 may be changed only with the prior
written consent of the Agent.
12.4 Relations Among Lenders. Except with respect to the exercise of
set-off rights of any Lender in accordance with Section 12.1, the proceeds of
which are applied in accordance with this Agreement, and except as set forth in
the following sentence, each Lender agrees that it will not take any action,
nor institute any actions or proceedings, against the Borrower or any other
obligor hereunder or with respect to any Collateral or Loan Document, without
the prior written consent of the Required Lenders or, as may be provided in
this Agreement or the other Loan Documents, at the direction of the Agent. The
Lenders are not partners or co-venturers, and no Lender shall be liable for the
acts or omissions of, or (except as otherwise set forth herein in case of the
Agent) authorized to act for, any other Lender. Notwithstanding the foregoing,
and subject to Section 12.2, any Lender shall have the right to enforce on an
unsecured basis the payment of the principal of and interest on any Loan made
by it after the date such principal or interest has become due and payable
pursuant to the terms of this Agreement.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and
the Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 13.3 hereof. Notwithstanding clause (ii) of this Section 13.1, any
Lender may at any time, without the consent of the Borrower or the Agent,
assign all or any portion of its rights under this Agreement and its Notes to a
Federal Reserve Bank; provided, however, that no such assignment shall release
the transferor Lender from its obligations hereunder. The Agent may treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
such payee complies with Section 13.3 hereof in the case of an assignment
thereof or, in the case of any other transfer, a written notice of the transfer
is filed with the Agent. Any assignee or transferee of a Note agrees by
acceptance thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the holder of any
Note, shall be
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conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
13.2 Participations.
(A) Permitted Participants; Effect. Subject to the terms set forth in
this Section 13.2, any Lender may, in the ordinary course of its business and
in accordance with applicable law, at any time sell to one or more banks or
other entities ("PARTICIPANTS") participating interests in any Loan owing to
such Lender, any Note held by such Lender, any Revolving Loan Commitment of
such Lender, any L/C Interest of such Lender or any other interest of such
Lender under the Loan Documents on a pro rata or non-pro rata basis. In the
event of any such sale by a Lender of participating interests to a Participant,
such Lender's obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the holder of any
such Note for all purposes under the Loan Documents, all amounts payable by the
Borrower under this Agreement shall be determined as if such Lender had not
sold such participating interests, and the Borrower and the Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents except that, for
purposes of Article IV hereof, the Participants shall be entitled to the same
rights as if they were Lenders.
(B) Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver
of any provision of the Loan Documents other than any amendment, modification
or waiver with respect to any Loan or Revolving Loan Commitment in which such
Participant has an interest which forgives principal, interest or fees or
reduces the interest rate or fees payable pursuant to the terms of this
Agreement with respect to any such Loan or Revolving Loan Commitment, postpones
any date fixed for any regularly-scheduled payment of principal of, or interest
or fees on, any such Loan or Revolving Loan Commitment, or releases all or
substantially all of the Collateral, if any, securing any such Loan.
(C) Benefit of Setoff. The Borrower agrees that each Participant shall
be deemed to have the right of setoff provided in Section 12.1 hereof in
respect to its participating interest in amounts owing under the Loan Documents
to the same extent as if the amount of its participating interest were owing
directly to it as a Lender under the Loan Documents, provided that each Lender
shall retain the right of setoff provided in Section 12.1 hereof with respect
to the amount of participating interests sold to each Participant except to the
extent such Participant exercises its right of setoff. The Lenders agree to
share with each Participant, and each Participant, by exercising the right of
setoff provided in Section 12.1 hereof, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such amounts
to be shared in accordance with Section 12.2 as if each Participant were a
Lender.
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13.3 Assignments.
(A) Permitted Assignments. Any Lender may, in accordance with
applicable law, at any time assign to one or more banks or other entities
("PURCHASERS") all or a portion of its rights and obligations under this
Agreement (including, without limitation, its Revolving Loan Commitment, all
Loans owing to it, all of its participation interests in existing Letters of
Credit, and its obligation to participate in additional Letters of Credit
hereunder) in accordance with the provisions of this Section 13.3. Each
assignment shall be of a constant, and not a varying, ratable percentage of all
of the assigning Lender's rights and obligations under this Agreement. Such
assignment shall be substantially in the form of Exhibit E hereto and shall not
be permitted hereunder unless such assignment is either for all of such
Lender's rights and obligations under the Loan Documents or, without the prior
written consent of the Agent, involves loans and commitments in an aggregate
amount of at least $5,000,000 (which minimum amount may be waived by the
Required Lenders after the occurrence of a Default or Unmatured Event of
Default). The consent of the Agent and, prior to the occurrence of a Default or
Unmatured Default, the Borrower (which consent, in each such case, shall not be
unreasonably withheld), shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Lender or an Affiliate
thereof.
(B) Effect; Effective Date. Upon (i) delivery to the Agent of a notice
of assignment, substantially in the form attached as Appendix I to Exhibit E
hereto (A "NOTICE OF ASSIGNMENT"), together with any consent required by
Section 13.3.(A) hereof, and (ii) payment of a $3,500 fee by the assignee or
the assignor (as agreed) to the Agent for processing such assignment, such
assignment shall become effective on the effective date specified in such
Notice of Assignment. The Notice of Assignment shall contain a representation
by the Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment, Loans and L/C Obligations under the applicable
assignment agreement are "plan assets" as defined under ERISA and that the
rights and interests of the Purchaser in and under the Loan Documents will not
be "plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser, if not already a Lender, shall for all purposes be
a Lender party to this Agreement and any other Loan Documents executed by the
Lenders and shall have all the rights and obligations of a Lender under the
Loan Documents, to the same extent as if it were an original party hereto, and
no further consent or action by the Borrower, the Lenders or the Agent shall be
required to release the transferor Lender with respect to the percentage of the
Aggregate Revolving Loan Commitment, Loans and Letter of Credit participations
assigned to such Purchaser. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 13.3(B), the transferor Lender, the Agent
and the Borrower shall make appropriate arrangements so that replacement Notes
are issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in principal
amounts reflecting their Revolving Loan Commitment and their Term Loans, as
adjusted pursuant to such assignment.
(C) The Register. The Agent shall maintain at its address referred to
in Section 14.1 a copy of each assignment delivered to and accepted by it
pursuant to this Section
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13.3 and a register (the "REGISTER") for the recordation of the names and
addresses of the Lenders and the Revolving Loan Commitment of and principal
amount of the Loans owing to, each Lender from time to time and whether such
Lender is an original Lender or the assignee of another Lender pursuant to an
assignment under this Section 13.3. The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower and each of its Subsidiaries, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
13.4 Confidentiality. Subject to Section 13.5, the Agent and the
Lenders and their respective representatives, consultants and advisors shall
hold all nonpublic information obtained pursuant to the requirements of this
Agreement and identified as such by the Borrower in accordance with such
Person's customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices and in any event
may make disclosure reasonably required by a prospective Transferee in
connection with the contemplated participation or assignment or as required or
requested by any Governmental Authority or representative thereof or pursuant
to legal process and shall require any such Transferee to agree (and require
any of its Transferees to agree in writing) to comply with this Section 13.4.
In no event shall the Agent or any Lender be obligated or required to return
any materials furnished by the Borrower; provided, however, each prospective
Transferee shall be required to agree that if it does not become a participant
or assignee it shall return all materials furnished to it by or on behalf of
the Borrower in connection with this Agreement.
13.5 Dissemination of Information. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and
any prospective Transferee any and all information in such Lender's possession
concerning the Holdings, Enterprises, the Borrower and its Subsidiaries and the
Collateral; provided that prior to any such disclosure, such prospective
Transferee shall agree in writing to preserve in accordance with Section 13.4
the confidentiality of any confidential information described therein.
ARTICLE XIV: NOTICES
14.1 Giving Notice. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as
may be designated by such party in a notice to the other parties; provided,
however, that Borrowing Notices shall be delivered to the Agent at Xxx Xxxxx
Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000, Attention: Xxxxxxx
Xxxxxx, Telephone No. 000-000-0000, Facsimile No. 000-000-0000. Any notice,
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if mailed and properly addressed with postage prepaid, shall be deemed given
when received; any notice, if transmitted by telex or facsimile, shall be
deemed given when transmitted (answerback confirmed in the case of telexes).
14.2 Change of Address. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XV: COUNTERPARTS
15.1 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by the
Borrower, the Agent and the Lenders and each party has notified the Agent by
telex or telephone, that it has taken such action.
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above written.
PRINTPACK, INC., as the Borrower
By:/s/
---------------------------
Name:
Title:
Address:
0000 Xxxxxxx Xxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Love, President
Telephone No.: ____________
Facsimile No.: ____________
THE FIRST NATIONAL BANK OF
CHICAGO, as Agent and as a Lender
By:/s/
---------------------------
Name:
Title:
Address:
One First National Plaza
Suite ____
Xxxxxxx, Xxxxxxxx 00000
Attention: ________________
Telephone No.: ____________
Facsimile No.: ____________
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