EXHIBIT 10.1
SECOND AMENDED AND RESTATED
SENIOR REVOLVING CREDIT AGREEMENT
[THIS SECOND AMENDED AND RESTATED SENIOR REVOLVING CREDIT AGREEMENT
AMENDS AND RESTATES IN ITS ENTIRETY A CERTAIN AMENDED AND RESTATED
SENIOR REVOLVING CREDIT AGREEMENT DATED AS OF AUGUST 23, 2000 EXECUTED
BY ENESCO GROUP, INC. AND FLEET NATIONAL BANK, AMENDING AND RESTATING A
SENIOR REVOLVING CREDIT AGREEMENT BETWEEN ENESCO GROUP, INC. AND FLEET
NATIONAL BANK DATED AUGUST 3, 2000 (THE "CREDIT AGREEMENT"). ANY
REFERENCE IN ANY "LOAN DOCUMENT" (AS DEFINED HEREIN) TO THE CREDIT
AGREEMENT SHALL MEAN THE CREDIT AGREEMENT AS AMENDED AND RESTATED
HEREBY]
This Second Amended and Restated Senior Revolving Credit Agreement,
dated as of June 16, 2003, is among Enesco Group, Inc., a Massachusetts
corporation, the Borrowing Subsidiaries who may from time to time become party
hereto, the Lenders and Fleet National Bank, a national banking association, as
Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Account Debtor" means any Person obligated on an Account Receivable.
"Accounts Receivable," "Account" or "Accounts" means a right to payment
for goods sold or leased or for services rendered by Borrower or Subsidiaries,
whether or not earned by performance, including all Accounts (as defined in the
Uniform Commercial Code).
"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), a majority (by percentage or voting power) of the
outstanding partnership interests of a partnership or a majority (by percentage
or voting power) of the equity interests in any other Person.
"Advance" means a borrowing hereunder consisting of (i) the aggregate
amount of the several Loans of the same Type and, in the case of LIBOR Advances
or Cost of Funds Advances, for the same Interest Period and, in the case of
LIBOR Advances, in the same currency, made by the Lenders to a Credit Party
pursuant to Section 2.1, (ii) reimbursement obligations arising in connection
with foreign exchange transactions pursuant to Section 2.1.A, or (iii)
reimbursement obligations arising as a result of Letters of Credit and Bankers'
Acceptances issued pursuant to Section 2.1.B.
"Agent" means Fleet National Bank in its capacity as agent for the
Lenders pursuant to Article X, and not in its individual capacity as a Lender,
and any successor Agent appointed pursuant to Article X.
"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 own 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Aggregate Commitment" means the aggregate of the Commitments of all
Lenders, as reduced from time to time pursuant to the terms hereof.
"Agreement" means this Amended and Restated Senior Revolving Credit
Agreement, as it may be amended or modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4,
except for any changes in manner of application required as a result of changes
in generally accepted accounting principles from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day, or (ii) the sum of
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Alternate Base Rate Advance" means an Advance which bears interest at
the Alternate Base Rate.
"Alternate Base Rate Loan" means a Loan which bears interest at the
Alternate Base Rate.
"Alternate Currency" means any lawful currency other than Dollars to
the extent such currency is readily available to each of the Lenders in the
London interbank market as a eurocurrency and freely transferable and
convertible into Dollars in the London interbank market.
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"Applicable Margin" means (i) that number of basis points over the
LIBOR Base Rate, the Cost of Funds or the Alternate Base Rate, as applicable,
and (ii) the Facility Fee, (both (i) and (ii) as determined based upon the
Borrower's year to date Funded Debt/EBITDA Ratio for the four most recent
consecutive fiscal quarters then ended in accordance with the pricing grid which
appears below):
XXXXX 0 XXXXX 0 XXXXX 0
Xxxxxx
Xxxx/XXXXXX Less than 1.30 to 1.00 1.30 to 1.00 to Less 1.50 to 1.00 to 2.00 to
than 1.50 to 1.00 1.00
Facility Fee 25 bps 25 bps 25 bps
LIBOR Base Rate 100 bps 140 bps 175 bps
Cost of Funds 100 bps 140 bps 175 bps
Alternate Base Rate 0 bps 0 bps 0 bps
*bps = basis points
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The Applicable Margin shall be established by the Agent based upon the
Borrower's year to date Funded Debt/EBITDA Ratio as of the date of a request for
an Advance or as of the date of continuation or conversion of any outstanding
Advance pursuant to Section 2.9, as the case may be, using the Borrower's most
recently delivered financial statement under Section 6.1, with such Applicable
Margin remaining in effect until expiration of any applicable Interest Period.
Pricing, effective June _____, 2003 and until delivery by the Borrower of a
Compliance Certificate for the fiscal quarter ending June 30, 2003, shall be in
accordance with Level 1.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" (i) of the Borrower means any of the President and
Chief Executive Officer, the Senior Vice President, and Chief Financial Officer
or the Treasurer or Assistant Treasurer of the Borrower, and (ii) of any other
Credit Party means any of the Persons designated as such in the Election to
Participate executed by such Credit Party, each such enumerated Person acting
singly.
"Back-Up F/X Demand Note" means a promissory note, in substantially the
form of Exhibit "A-3" hereto, duly executed by the Borrower and payable to the
order of a Lender in the amount of the F/X Facility, including any amendment,
modification, renewal or replacement of such promissory note.
"Back-Up L/C and B/A Demand Note" means a promissory note, in
substantially the form of Exhibit "A-4" hereto, duly executed by the Borrower
and payable to the order of a Lender in the amount of the L/C and B/A Facility
Limit, including any amendment, modification, renewal or replacement of such
promissory note.
"Bankers' Acceptance" means drafts drawn by the Borrower or by a Lender
on the Borrower's behalf to meet the applicable requirements of Regulation A of
the Board of Governors of the Federal Reserve System and which are accepted by a
Lender pursuant to 12 U.S.C. Section 372.
"Bankers' Acceptance Financing" means the financing provided by the
issuance of drafts by the Borrower on a Lender (subject to Borrowing Capacity),
in the aggregate amount of up to the L/C and B/A Facility Limit, accepted by a
Lender, endorsed by the Borrower, and sold by a Lender in the Bankers'
Acceptance money markets, such drafts being due and payable at the end of the
Bankers' Acceptance Maturity Period chosen by the Borrower.
"Bankers' Acceptance Maturity Period" means with respect to any
Bankers' Acceptance Financing, the period commencing on the Business Day such
Bankers' Acceptance is issued and ending, as the Borrower may select, pursuant
to Section 2.1.B.
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"Borrower" means Enesco Group, Inc., a Massachusetts corporation, and
its permitted successors and assigns. The Lenders acknowledge that the
shareholders of the Borrower have authorized reincorporation of the Borrower in
Illinois on or about July 31, 2003.
"Borrower Note" means a promissory note, in substantially the form of
Exhibit "A-1" hereto duly executed by the Borrower and payable to the order of a
Lender or any Purchaser pursuant to Section 12.3 of this Agreement in the amount
of such party's Commitment, including any amendment, modification, renewal or
replacement of such promissory note.
"Borrowing Base Certificate" is defined in Section 6.1.
"Borrowing Capacity" means the lesser of:
(x) Fifty Million Dollars ($50,000,000), or
(y) the sum of (i) eighty percent (80%) of Consolidated
Accounts Receivable of the Borrower which are not Ineligible
Accounts.
"Borrowing Date" means a date on which an Advance is or is to be made
hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Borrowing Subsidiary" means any Subsidiary that has satisfied the
provisions of Section 4.3 hereof, and its permitted successors and assigns.
"Borrowing Subsidiary Note" means a promissory note, in substantially
the form of Exhibit "A-2" hereto, duly executed by a Borrowing Subsidiary and
payable to the order of a Lender in the amount of the Commitment, including any
amendment, modification, renewal or replacement of such promissory note.
"Borrowing Subsidiary Obligations" means, with respect to each
Borrowing Subsidiary, any and all amounts or obligations payable or performable
by such Borrowing Subsidiary under or in respect of this Agreement or its
Borrowing Subsidiary Note, including without limitation all principal and
interest payable hereunder or under such Borrowing Subsidiary Note in respect of
Loans made to or Letters of Credit issued at the request of such Borrowing
Subsidiary.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of LIBOR Advances, a day (other than a Saturday or Sunday) on which
banks generally are open in Boston, New York and London and, in the case of any
LIBOR Advance denominated in an Alternate Currency, the principal financial
center in the country of such Alternate Currency, for the conduct of
substantially all of their commercial lending activities and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Boston and New York for the conduct of substantially all of their
commercial lending activities.
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"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 25% or more of the outstanding shares of voting stock of the
Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means the obligation of each Lender, subject to Borrowing
Capacity, to make Loans not exceeding the aggregate principal amount outstanding
at any time as set forth opposite its signature below, or as set forth in any
Notice of Assignment relating to any assignment that has become effective
pursuant to Section 12.3.2, as such amount may be modified from time to time
pursuant to the terms hereof.
"Commitment Fee" is defined in Section 2.23.
"Compliance Certificate" means the Compliance Certificate in
substantially the form of Exhibit "C" hereto.
"Consolidated Accounts Receivable" means, as of the date of any
determination thereof, the amount of Accounts Receivable of the Borrower and
Subsidiaries determined on a consolidated basis in accordance with Agreement
Accounting Principles and certified to by the Borrower on the Borrowing Base
Certificate.
"Consolidated Amortization" means, as of the date of any determination
thereof, the amount of amortization of the Borrower and its Subsidiaries as
included in the consolidated statement of income and expenses of the Borrower
and its Subsidiaries on and as of such date, determined on a consolidated basis
in accordance with Agreement Accounting Principles and as certified to by the
Borrower on the Compliance Certificate.
"Consolidated Capital Expenditures" means, as of the date of any
determination thereof, the amount of capital expenditures of the Borrower and
its Subsidiaries as shown on the consolidated statement of cash flow of the
Borrower and its Subsidiaries on and as of such date, determined on a
consolidated basis in accordance with Agreement Accounting Principles.
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"Consolidated Depreciation" means, as of the date of any determination
thereof, the amount of depreciation of the Borrower and its Subsidiaries as
included in the consolidated statement of income and expenses of the Borrower
and its Subsidiaries on and as of such date, determined on a consolidated basis
in accordance with Agreement Accounting Principles and as certified to by the
Borrower on the Compliance Certificate.
"Consolidated EBITDA" means, for any measurement period, the EBITDA of
the Borrower and its Subsidiaries for such period determined on a consolidated
basis in accordance with Agreement Accounting Principles.
"Consolidated Indebtedness" means all Indebtedness of the Borrower and
its Subsidiaries determined on a consolidated basis in accordance with Agreement
Accounting Principles.
"Consolidated Interest Expense" means, for any measurement period, the
interest expense (including interest expense associated with Capitalized Lease
Obligations) of the Borrower and its Subsidiaries for such period determined on
a consolidated basis in accordance with Agreement Accounting Principles.
"Consolidated Net Income" means, for any period, the net income (or
loss) of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in accordance with
Agreement Accounting Principles; but excluding (i) the income (or loss) of any
Affiliate of the Borrower or other Person (other than a Subsidiary of the
Borrower) in which any Person (other than the Borrower or any of its
Subsidiaries) has a joint interest, other than Included Joint Venture Income
(which shall not be excluded pursuant to this clause (i)) and (ii) the income
(or loss) of any Person accrued prior to the date it becomes a Subsidiary of the
Borrower or is merged into or consolidated with the Borrower or any of its
Subsidiaries or that Person's assets are acquired by the Borrower or any of its
Subsidiaries.
"Consolidated Net Worth" means, as of the date of any determination
thereof, the amount of the shareholders' equity of the Borrower and its
Subsidiaries which would be shown on a consolidated balance sheet of the
Borrower and its Subsidiaries on and as of such day, determined on a
consolidated basis in accordance with Agreement Accounting Principles.
"Consolidated Non-Cash Compensation Expense" means, as of the date of
any determination thereof, the amount of non-cash compensation which is paid in
treasury stock of the Borrower or its Subsidiaries on and as of such date,
determined on a consolidated basis in accordance with Agreement Accounting
Principles.
"Consolidated Operating Profit" means, for the period of time of any
determination thereof, the amount of operating profit of the Borrower and its
Subsidiaries as shown on the consolidated statement of income and expenses of
the Borrower and its Subsidiaries on and as of such date, determined on a
consolidated basis in accordance with Agreement Accounting Principles.
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"Consolidated Scheduled Principal Payments" means, as of the date of
any determination thereof, the amount of scheduled principal payments shown on
the consolidated balance sheet of the Borrower and its Subsidiaries on and as of
such date, determined on a consolidated basis in accordance with Agreement
Accounting Principles.
"Consolidated Total Assets" means total assets of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with Agreement
Accounting Principles.
"Consolidated Total Revenue" means total revenues of the Borrower and
its Subsidiaries determined on a consolidated basis in accordance with Agreement
Accounting Principles.
"Consolidated Total Capitalization" means the sum of (i) Consolidated
Indebtedness and (ii) Consolidated Net Worth.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Cost of Funds" means the per annum rate of interest which Agent is
required to pay, or is offering to pay, for wholesale liabilities of like tenor,
adjusted for reserve requirements and such other requirements as may be imposed
by federal, state or local government and regulatory agencies, as determined by
the Agent in its sole discretion.
"Cost of Funds Advance" means an Advance denominated in Dollars which
bears interest at the Cost of Funds Rate.
"Cost of Funds Interest Period" means, with respect to each Cost of
Funds Advance, a period of time from overnight up to 7 days as may be elected by
the Borrower.
"Cost of Funds Loan" means a Loan which bears interest based upon the
Cost of Funds.
"Cost of Funds Rate" means with respect to any Cost of Funds Advance, a
rate per annum equal to the sum of (i) the Applicable Margin, plus (ii) the Cost
of Funds.
"Credit Parties" or "Credit Party" means, collectively or individually,
as the case may be, the Borrower or any of the Borrowing Subsidiaries. When used
herein with respect to a particular Advance or Letter of Credit, the term
"Credit Party" shall be deemed to refer to the Credit Party that requested such
Advance or Letter of Credit.
"Default" means an event described in Article VII.
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"Default Rate" is defined in Section 2.11.
"Dividend Payment" is defined in Section 2.16.
"Dollar Amount" means in relation to any indebtedness, (i) if
denominated in Dollars, the amount of such indebtedness, and (ii) if denominated
in a currency other than Dollars, the amount of Dollars required to purchase the
amount of such indebtedness at the Exchange Rate on the day such Dollar Amount
is determined.
"Dollars" and "$" mean the lawful money of the United States.
"Domestic Borrowing Subsidiary" means any Domestic Subsidiary that is
also a Borrowing Subsidiary.
"Domestic Subsidiary" means any Subsidiary which is incorporated or
organized under the laws of the United States of America, any state thereof or
the District of Columbia.
"EBITDA" means, as of the date of any determination thereof,
Consolidated Operating Profit for such period, plus Consolidated Depreciation,
plus Consolidated Amortization, plus non-cash compensation paid in treasury
stock.
"Election to Participate" means a letter agreement, in the form of
Exhibit "F" attached hereto, pursuant to which a Subsidiary agrees to become a
Borrowing Subsidiary hereunder.
"Entitled Person" is defined in Section 2.12.2.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Excluded Taxes" is defined in Section 3.5.1.
"Exchange Rate" means, in relation to the purchase of one currency (for
purposes of this definition, the "First currency") with another currency (for
purposes of this definition, the "Second currency") on a given date, the spot
rate of exchange quoted by the Agent as of 9:00 a.m. (Boston time) for the
amount in question on such date for the purchase of the First currency with the
Second currency.
"Facility Fee" means a per annum fee in basis points payable quarterly
in arrears by the Borrower to the Lenders on the unused amount of the Aggregate
Commitment, irrespective of Borrowing Capacity or aggregate outstanding
Advances, pursuant to the pricing grid which appears in the definition of the
term Applicable Margin in this Article I.
"Facility Termination Date" means June 16, 2006.
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"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 a.m. (New York
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.
"Fleet" means Fleet National Bank in its capacity as a Lender, and not
in its capacity as Agent, and its successors and assigns.
"Foreign Borrowing Subsidiary" means any Foreign Subsidiary that is
also a Borrowing Subsidiary.
"Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary.
"Funded Debt/EBITDA Ratio" is defined in Section 6.12.2.
"F/X Facility" is defined in Section 2.1.A.
"F/X Facility Limit" means the obligation of Fleet pursuant to Section
2.1.A to make Advances to be used for the purchase of foreign currencies up to
an aggregate amount of all such Advances outstanding at any given time of
$10,000,000.
"Guarantees" means the guarantees substantially in the form of Exhibit
"G" hereto executed by each of the Guarantors in favor of the Agent.
"Guarantors" mean the Material Domestic Subsidiaries, their respective
permitted successors and assigns or any other Person who guarantees the
Obligations.
"Governmental Agency" means any government (foreign or domestic) or any
state or other political subdivision thereof, or governmental body, agency,
authority, department or commission (including without limitation any taxing
authority or political subdivision) or instrumentality (including without
limitation any court or tribunal) exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
corporation, partnership or other entity, directly or indirectly majority-owned
by or subject to the control of any of the foregoing.
"Included Joint Venture Income" means, without duplication, income (or
loss) of any Person (other than a Subsidiary of the Borrower) in which any
person or entity other than the Borrower or any of its Subsidiaries has an
ownership interest (i) to the extent of the amount of dividends or other
distributions actually paid to the Borrower or any of its Subsidiaries by such
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Person during such period and (ii) which is accrued but unpaid if such Person is
a partnership or limited liability corporation in or with respect to which, for
the purpose of directing the payment of dividends or distributions, the
Borrower, (x) directly or indirectly, has a controlling interest, or (y) has the
right to cause such dividends or distributions to be paid or made to it.
"Indebtedness" of a Person means, without duplication, (x) such
Person's (i) obligations for borrowed money, (ii) obligations representing the
deferred purchase price of Property or services (other than accrued expenses and
accounts payable arising in the ordinary course of such Person's business
payable on terms customary in the trade), (iii) obligations, whether or not
assumed, secured by Liens or payable out of the proceeds or production from
property now or hereafter owned or acquired by such Person, (iv) obligations
that are evidenced by notes or acceptances, (v) Capitalized Lease Obligations
and (y) all Indebtedness of others guaranteed by such Person (to the extent of
the lesser of the outstanding principal amount of such Indebtedness so
guaranteed or the amount of such guarantee), provided that any Indebtedness of
any Subsidiary that is guaranteed by the Borrower or any other Subsidiary shall
be counted only once; excluding, however, with respect to the Borrower and its
Subsidiaries in the case of all of the types of Indebtedness set forth in
sub-clauses (x) and (y) above, obligations owed by Borrower or any of its
Subsidiaries to another member of the Borrower's consolidated group.
"Ineligible Accounts" means the following described Accounts and any
other Accounts which, in the reasonable discretion of the Agent, are not
satisfactory for credit or any other reason. The Borrower and Subsidiaries
acknowledge that the following description of specific types of Ineligible
Accounts does not limit the Agent's reasonable discretion to deem other Accounts
to be Ineligible Accounts:
(a) Any Account for which more than 120 days have elapsed
since the date that the invoice for such Account was due, other than
for Accounts with payment terms dated November 1 due December 1 of each
year which shall become Ineligible Accounts after December 31 of each
year.
(b) Any Account with respect to which a representation or
warranty contained in Section 5.17 is not, or does not continue to be,
true and accurate including, without limitation, any Account subject to
a setoff.
(c) Any Account with respect to all or part of which a
promissory note, or other instrument for the payment of money has been
received, presented for payment, and returned uncollected for any
reason.
(d) Any Account with respect to which Borrower or a
Subsidiary has extended the time for payment without the consent of
Agent.
(e) Any Account as to which any one or more of the
following events occurs: a Responsible Party shall die or be judicially
declared incompetent; a request or petition for liquidation,
reorganization, arrangement, adjustment of debts, adjudication as a
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bankrupt, or other relief under the bankruptcy, insolvency, or similar
laws of the United States, any state or territory thereof, or any
foreign jurisdiction, now or hereafter in effect shall be filed by or
against a Responsible Party; a Responsible Party shall make any general
assignment for the benefit of creditors; a receiver or trustee,
including, without limitation, a "custodian" as defined in the Federal
Bankruptcy Code, shall be appointed for a Responsible Party or for any
of the assets of a Responsible Party; any other type of insolvency
proceeding with respect to a Responsible Party (under the bankruptcy
laws of the United States or otherwise) or any formal or informal
proceeding for the dissolution or liquidation of, settlement of claims
against, or winding up of affairs of, a Responsible Party shall be
instituted; all or any material part of the assets of a Responsible
Party shall be sold, assigned or transferred; a Responsible Party shall
fail to pay its debts as they become due; or a Responsible Party shall
cease doing business as a going concern.
(f) All Accounts owed by an Account Debtor owing Accounts
classified as an Ineligible Account herein, if the outstanding dollar
amount of such Ineligible Accounts constitutes a percentage of the
aggregate outstanding dollar amount of all Accounts owed by such
Account Debtor equal to or greater than thirty-five percent (35%).
(g) All Accounts subject to any lien or security interest
in favor of any Person other than the Agent and other than as permitted
under Section 6.11.
(h) All Accounts owed by an Account Debtor if Borrower, a
Subsidiary or any Person which, directly or indirectly controls
Borrower or such Subsidiary, either owns in whole or material part, or
directly or indirectly controls such Account Debtor.
(i) Any Account arising from a consignment or other
arrangement pursuant to which the subject Inventory is returnable if
not sold or otherwise disposed of by the Account Debtor; any Account
constituting a partial billing under terms providing for payment only
after full shipment or performance; any Account arising from a xxxx and
hold sale or in connection with any prebilling where the Inventory or
services have not been delivered, performed, or accepted by the Account
Debtor; and any Account as to which the Account Debtor contends the
balance reported by Borrower or a Subsidiary is incorrect or not owing.
(j) Any Account which did not arise from the performance
of services or an outright sale of goods by Borrower, or any Account
which did so arise, but such goods have not been shipped to the Account
Debtor.
(k) Any Account which did not arise out of a sale made
upon terms usual to the business of the Borrower or a Subsidiary.
(l) Any Account as to which Borrower or a Subsidiary
permits Borrower's or Subsidiary's rights therein to be reached by
attachment, levy, garnishment or other judicial process.
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(m) Any Account which is the subject of any material
dispute and relates to any goods which are the subject of any dispute
between the Borrower and such Account Debtor.
(n) Any Account which is for goods sold and delivered or
services rendered which represent goods previously sold and delivered,
or services previously rendered, which were the subject of a prior
Account or invoice, unless such rebilled Account (i) would otherwise
qualify hereunder if dated on the original date of the prior Account or
invoice and (ii) Borrower has notified the Agent and the Agent has
approved such rebilling.
(o) Any Account Debtor on "c.o.d." terms.
(p) Any Account which the Agent, in its commercially
reasonable discretion, after reasonable written notice to the Borrower
deems to be unacceptable, for any reason.
"Interest Period" means a LIBOR Interest Period or a Cost of Funds
Interest Period as applicable.
"Joint Venture" is defined in Section 2.16.
"Judgment Currency" is defined in Section 2.12.2.
"LaSalle" means LaSalle Bank National Association and its successors
and assigns.
"L/C and B/A Facility Limit" is defined in Section 2.1.B.
"L/C Liability" means with respect to Letters of Credit, 100% of the
aggregate stated amount of such Letters of Credit outstanding at any given time.
"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 so
designated in accordance with Section 2.21.
"Letters of Credit" means commercial letters of credit or similar
instruments which may be issued by the Agent at the request of the Borrower or a
Borrowing Subsidiary upon the application of such Person.
"LIBOR Advance" means an Advance denominated in Dollars or an Alternate
Currency which bears interest at the LIBOR Rate.
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"LIBOR Base Rate" means, with respect to a LIBOR Advance for the
relevant LIBOR Interest Period, the rate per annum (rounded upward, if
necessary, to the nearest 1/100 of one percent) as determined on the basis of
the offered rates for deposits in Dollars or the relevant Alternate Currency, as
applicable, for a period of time comparable to such LIBOR Advance which appears
on the Telerate page 3750 as of 11:00 a.m. London time on the day that is two
London Banking Days preceding the first day of such LIBOR Advance; provided,
however, if the rate described above does not appear on the Telerate System on
any applicable interest determination date, the LIBOR Base Rate shall be the
rate (rounded upwards as described above, if necessary) for deposits in Dollars
or the relevant Alternate Currency, as applicable, for a period substantially
equal to the interest period on the Reuters Page "LIBO" (or such other page as
may replace the LIBO Page on that service for the purpose of displaying such
rates), as of 11:00 a.m. (London Time), on the day that is two (2) London
Banking Days prior to the beginning of such interest period. "Banking Day" shall
mean, in respect of any city, any date on which commercial banks are open for
business in that city.
If both the Telerate and Reuters system are unavailable, then the rate
for that date will be determined on the basis of the offered rates for deposits
in Dollars or the relevant Alternate Currency, as applicable, for a period of
time comparable to such LIBOR Advance which are offered by four major banks in
the London interbank market approximately 11:00 a.m. London time, on the day
that is two (2) London Banking Days preceding the first day of such LIBOR
Advance as selected by the Agent. The principal London office of each of the
four major London banks will be requested to provide a quotation of its Dollar
or the relevant Alternate Currency, as applicable, deposit offered rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that date will be determined on the basis of the rates
quoted for loans in Dollars or the relevant Alternate Currency, as applicable,
to leading European banks for a period of time comparable to such LIBOR Advance
offered by major banks in New York City at approximately 11:00 a.m. New York
City time, on the day that is two London Banking Days preceding the first day of
such LIBOR Advance. In the event that Agent is unable to obtain any such
quotation as provided above, it will be deemed that LIBOR Base Rate pursuant to
a LIBOR Advance cannot be determined.
"LIBOR Interest Period" means, with respect to a LIBOR Advance, a
period of one, two, three or six months, or twelve months (or any longer or
shorter period specifically agreed to by the Agent at the time of the relevant
borrowing, conversion or continuation) commencing on a Business Day selected by
the Borrower pursuant to this Agreement. Such LIBOR Interest Period shall end on
(but exclude) the date which corresponds numerically to such date in the
succeeding month which is the specified or agreed number of months after the
commencement of such Interest Paid Period, provided, however, that if there is
no such numerically corresponding day in such succeeding month, such LIBOR
Interest Period shall end on the last Business Day of such succeeding month. If
a LIBOR Interest Period would otherwise end on a day which is not a Business
Day, such LIBOR Interest Period shall end on the next succeeding Business Day,
Page 14
provided, however, that, if said next succeeding Business Day falls in a new
calendar month, such LIBOR Interest Period shall end on the immediately
preceding Business Day.
"LIBOR Loan" means a Loan which bears interest at the LIBOR Rate.
"LIBOR Rate" means, with respect to any LIBOR Advance for any specified
LIBOR Interest Period, a rate per annum equal to the sum of (i) the Applicable
Margin plus (ii) the quotient of (a) the LIBOR Base Rate applicable to such
LIBOR Advance and LIBOR Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such LIBOR Advance and LIBOR
Interest Period. The LIBOR Rate shall be rounded to the next higher multiple of
1/100 of 1% if the rate is not such a multiple.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement), but excluding rights or claims of licensees under licensing
agreements with the Borrower or any Subsidiary as licensor.
"Loan" means an Advance made by the Lenders to a Credit Party pursuant
to this Agreement.
"Loan/Credit Related Money Transfer Instruction" means a form
containing written instructions, substantially in the form of Exhibit "E"
hereto, addressed to the Agent and signed by an Authorized Officer of the
relevant Credit Party.
"Loan Documents" means this Agreement, the Notes, the Guarantees, the
Letters of Credit and any Elections to Participate, together with all other
documents executed by the Borrower, the Borrowing Subsidiaries or any Guarantor
in connection with any of the foregoing.
"Margin Stock" means "margin stock" as defined in Regulation U.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise) or results of operations
of the Borrower and its Subsidiaries taken as a whole, (ii) the ability of the
Borrower to perform its material obligations under the Loan Documents, or (iii)
the validity or enforceability of any of the Loan Documents or the rights or
remedies of the Agent thereunder.
"Material Indebtedness" means Indebtedness (i) in an aggregate
principal Dollar Amount in excess of $10,000,000 or (ii) pursuant to a credit
facility providing for borrowings of a Dollar Amount equivalent in excess of
$10,000,000.
"Material Domestic Subsidiary" is defined in Section 6.12.4.
Page 15
"Material Foreign Subsidiary" is defined in Section 6.12.4.
"Material Subsidiary" means any Subsidiary of the Borrower (i) the
assets of which represent more than 4% of the Consolidated Total Assets of the
Borrower and its Subsidiaries as shown in the most recent annual audited
consolidated financial statements of the Borrower and its Subsidiaries as at the
end of the most recent fiscal year of the Borrower for which such financial
statements have been delivered, or (ii) which is responsible for more than 4% of
the Consolidated Net Income of the Borrower and its Subsidiaries as reflected in
such financial statements for the fiscal year covered by such statements,
provided that, if a new Subsidiary is formed as a result of an Acquisition by
the Borrower or any Subsidiary and such Subsidiary or the assets which comprise
such Subsidiary would have been classified as a Material Subsidiary under this
definition as at the end of or for its most recent fiscal year, then such
Subsidiary shall be defined as a Material Subsidiary under this Agreement
commencing on the first date following such Acquisition upon which the Borrower
is required to deliver annual or quarterly financial statements pursuant to
Section 6.1(i) or (ii) for a period during which such Acquisition occurred.
"Maximum Rate" means a rate of interest per annum from day to day equal
to the maximum non-usurious rate permitted by applicable law as it exists from
day to day during the term of the Agreement.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Notes" means, collectively, the Borrower Note, the Borrowing
Subsidiary Notes, the Back-Up F/X Demand Note and the Back-Up L/C and B/A Demand
Note.
"Notice of Assignment" means the Notice of Assignment in substantially
the form of Exhibit "I" to the Assignment Agreement specified in Section 12.3.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, all accrued and unpaid fees and all expenses,
reimbursement obligations pursuant to Letters of Credit issued at the request of
any Credit Party, indemnities and other obligations of the Credit Parties or any
of them to the Agent or any of the Lenders or any indemnified party hereunder
arising under the Loan Documents, including without limitation the Borrowing
Subsidiary Obligations.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the first Business Day of each April, July,
October and January.
"Payment Office" means the office of the Agent designated by the Agent
by written notice to the Borrower and the Lenders.
Page 16
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Acquisition" means an Acquisition: (i) made at a time when
no Default or Unmatured Default exists or would exist after giving effect to
such Acquisition, (ii) for which the board of directors or other governing body
of such Person being acquired has approved the terms of such Acquisition (if
such Acquisition is a tender offer for the securities of a Person that is
required to file periodic reports under the United States Securities Exchange
Act of 1934, as amended, or if by the terms of such Acquisition such board or
other governing body approval is required) or for which (in any other case) the
board of directors or other governing body of the Person owning the stock or
assets being acquired (as the case may be) has approved the terms of such
Acquisition, and (iii) the Borrower has satisfied or is in compliance with, as
the case may be, all conditions set forth in Section 2.16.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any Governmental Agency.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pledge Agreement" means a Pledge Agreement or Share Mortgage between
the Borrower or a Subsidiary and the Agent relating to shares of capital stock
of Subsidiaries of the Borrower.
"Prime Rate" means the variable per annum rate of interest so
designated from time to time by Fleet National Bank as its prime rate. The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate being charged to any customer.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the
Page 17
purpose of purchasing or carrying margin stocks applicable to member banks of
the Federal Reserve System.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least
66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66-2/3% of the Dollar
Amount of the aggregate unpaid principal amount of the outstanding Advances.
"Reserve Requirement" means the aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is
imposed upon the Lender under Regulation D on Eurocurrency liabilities.
"Responsible Party" shall mean an Account Debtor, a general partner of
an Account Debtor, or any party otherwise in any way directly or indirectly
liable for the payment of an Account Receivable.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"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.
"Specified Currency" is defined in Section 2.12.2.
"Specified Place" is defined in Section 2.12.2.
"Specified Remittance Time" means (i) if the relevant Payment Office is
located in Boston, 2:00 p.m. (Boston time) and (ii) if the relevant Payment
Office is located elsewhere, such time as the Agent shall specify.
"Stock Repurchase" is defined in Section 2.16.
"Subject Country" is defined in Section 5A.4.
"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,
Page 18
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, limited liability company or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than 10% of
the consolidated assets of the Borrower and its Subsidiaries as would be shown
in the consolidated financial statements of the Borrower and its Subsidiaries as
at the beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the Consolidated Net Income of the Borrower and its
Subsidiaries as reflected in the financial statements referred to in clause (i)
above.
"Taxes" is defined in Section 3.5.1.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as an Alternate
Base Rate Advance, a LIBOR Advance denominated in Dollars or an Alternate
Currency, or a Cost of Funds Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined (based on actuarial assumptions and methods used from
time to time by the Borrower's independent accountants under the Statement of
Accounting Principles #87 issued by the Financial Accounting Standards Board) as
of the then most recent valuation date for such Plans.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, association, joint
venture, limited liability company or similar business organization, 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
Page 19
ARTICLE II
THE CREDITS
2.1. Commitment. From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender agrees, on the terms and
conditions set forth in this Agreement, to make Loans to the Credit Parties from
time to time subject to Borrowing Capacity in an aggregate Dollar Amount not to
exceed at any one time outstanding the amount of its Commitment. Subject to the
terms of this Agreement, each Credit Party may borrow, repay and reborrow at any
time prior to the Facility Termination Date. Unless earlier terminated in
accordance with the terms and conditions of this Agreement, the Commitments to
lend hereunder shall expire on the Facility Termination Date. Notwithstanding
the foregoing, Fleet shall, subject to Borrowing Capacity, make Loans of up to
$5,000,000 Dollars in excess of the Fleet Commitment based upon availability
under the L/C and B/A Facility Limit in an amount sufficient to fully cover,
Dollar for Dollar, the amount of any such Loan in excess of the Fleet
Commitment. Availability under the L/C and B/A Facility Limit shall be reduced,
Dollar for Dollar, in an amount equal to any such Loan made by Fleet in excess
of the Fleet Commitment. Loans of up to $5,000,000 Dollars in excess of the
Fleet Commitment shall be evidenced by the Borrower Note payable to Fleet and
shall be subject to the interest rate provisions and other terms contained in
this ARTICLE II of the Agreement.
2.1.A. Foreign Exchange Facility. From and including the date
of this Agreement and prior to the Facility Termination Date, Fleet
agrees, on the terms and conditions set forth in this Agreement, upon
request of the Borrower, to make Advances in amounts subject to the F/X
Facility Limit to be used for the purchase of such foreign currencies
as may be hereafter agreed to by Fleet pursuant to contracts or other
agreements to purchase such foreign currency from Fleet (as principal
or agent) with settlement dates up to the Facility Termination Date
(the "F/X Facility"), it being understood, however, that the F/X
Facility shall not be used for currency speculation purposes. In the
event that Fleet is required to advance funds to purchase foreign
currency on account of its obligation as Borrower's principal or agent,
Fleet may charge Borrower's account therefor and such charges shall be
deemed to be Advances. To the extent there is insufficient availability
under the Commitment, the reimbursement obligations arising in
connection with such foreign exchange transactions shall be evidenced
by and subject to the terms of the Back-Up F/X Demand Note. Advances
under the F/X Facility shall not be included in the calculation of
availability under the Aggregate Commitment.
2.1.B. Letter of Credit/Bankers' Acceptance Facility. From and
including the date of this Agreement and prior to the Facility
Termination Date, Fleet agrees, on the terms and conditions set forth
in this Agreement, upon request of the Borrower, to (i) issue Letters
of Credit, subject to the L/C and B/A Facility Limit, with Letter of
Credit expiration dates of not more than 90 days beyond the Facility
Termination Date, and (ii) permit Bankers' Acceptances, subject to the
L/C and B/A Facility Limit, with expiration dates of not more than 90
days beyond the Facility Termination Date, and with any such
Page 20
Bankers' Acceptances obtained in connection with Letters of Credit
issued hereunder having expiration dates of not more than 150 days
beyond the Facility Termination Date (the "L/C and B/A Facility"). L/C
and B/A Facility Limit means the obligation of Fleet pursuant to this
Section 2.1.B and subject to Borrowing Capacity (dollar for dollar
based upon the aggregate stated amount of all such Letters of Credit
and Bankers' Acceptances outstanding), to issue Letters of Credit and
permit Bankers' Acceptances up to an aggregate stated amount of all
such Letters of Credit and Bankers' Acceptances outstanding at any
given time of $10,000,000, minus the aggregate outstanding amount of
any Loan or Loans made by Fleet in excess of the Aggregate Commitment
based upon availability under the L/C and B/A Facility Limit.
Notwithstanding the foregoing, Fleet shall, subject to Borrowing
Capacity, issue Letters of Credit and permit Bankers' Acceptances of up
to $5,000,000 in excess of the L/C and B/A Facility Limit based upon
availability under the Commitment in an amount sufficient to fully
cover, Dollar for Dollar, the amount of any such Letter of Credit or
Bankers' Acceptance in excess of the L/C and B/A Facility Limit.
Availability under the Commitment shall be reduced, Dollar for Dollar,
in an amount equal to any such Letter of Credit issued or Bankers'
Acceptance permitted by Fleet in excess of the L/C and B/A Facility
Limit. Obligations of up to $5,000,000 in excess of the L/C and B/A
Facility Limit shall be evidenced by the Back-Up L/C and B/A Demand
Note.
2.2. Required Payments; Termination. Any outstanding Advances
pursuant to Section 2.1 and all other unpaid Obligations shall be paid in full
by the Credit Party which incurred such Obligations on the Facility Termination
Date. Any outstanding Advances pursuant to Section or Section 2.1.A or Section
2.1.B shall be payable on demand, and if demand is not sooner made, on the
Facility Termination Date.
2.3. Ratable Loans; Types of Advances. Each Advance hereunder shall
consist of Loans or other Advances made from the several Lenders ratably in
proportion to the ratio that their respective Commitments and the type of
Advance bear to the Aggregate Commitment. Advances may be Alternate Base Rate
Advances, LIBOR Advances, or Cost of Funds Advances, selected by a Credit Party
in accordance with Sections 2.8 and 2.9. LIBOR Advances denominated in an
Alternate Currency may be outstanding in not more than 4 Alternate Currencies at
any one time.
2.4. Facility Fee. The Borrower agrees to pay to the Agent for the
account of each Lender the Facility Fee on the average daily unused amount of
the Aggregate Commitment from the date hereof to and including the Facility
Termination Date, payable (i) on each Payment Date occurring hereafter, (ii) on
the Facility Termination Date and (iii) on the effective date of any termination
of the obligations of the Lenders to make Loans hereunder.
2.5. Reductions in Aggregate Commitment. The Borrower may
permanently reduce the Aggregate Commitment in whole, or in part in a minimum
amount of $1,000,000 and in integral multiples of $1,000,000 in excess thereof,
upon at least three Business Days' written notice to the Agent, which notice
shall specify the amount of any such reduction, provided,
Page 21
however, that the amount of the Commitment may not be reduced below the
aggregate principal Dollar Amount, calculated as of the date of such reduction
of the Aggregate Commitment, of all outstanding Advances.
2.6. Minimum Amount of Each Advance. There shall be no minimum
amount applicable to any Advance unless required by the Agent as a result of a
change in administrative procedures of any Lender so long as reasonable notice
thereof is given to the Borrower.
2.7. Repayment. LIBOR Advances and Cost of Funds Advances may be
repaid only on the last day of the applicable Interest Period.
2.8. Method of Selecting Types, Currency and Interest Periods for
New Advances. The Credit Party shall select the Type of Advance and, in the case
of each LIBOR Advance or Cost of Funds Advance, the Interest Period applicable
to each Advance from time to time and the currency in which such Advance is to
be made. The Credit Party shall give the Agent irrevocable notice (a "Borrowing
Notice") not later than 2:00 p.m. (Boston time) on the Borrowing Date of each
Alternate Base Rate Advance or Cost of Funds Advance, or on the second Business
Day before the Borrowing Date for each LIBOR 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,
(iv) the currency in which such Advance is to be made, and
(v) if such Advance is a LIBOR Advance or a Cost of Funds Advance,
the Interest Period applicable thereto.
Not later than one hour prior to the Specified Remittance Time on each Borrowing
Date, each Lender shall make available its Loan or Loans to the Agent in
immediately available funds at the relevant Payment Office. To the extent that
the Agent has received funds from the Lenders as specified in the preceding
sentence, the Agent will make such funds available to the Credit Party at the
relevant Payment Office at the Specified Remittance Time. Unless instructed
otherwise in accordance with the terms hereof, the Agent will then promptly
initiate a wire transfer of such funds to such account as is designated by the
Credit Party in its Loan/Credit Related Money Transfer Instruction for the
applicable currency.
2.9. Conversion and Continuation of Outstanding Advances. Alternate
Base Rate Advances shall continue as Alternate Base Rate Advances unless and
until such Alternate Base Rate Advances are converted into a LIBOR Advance or a
Cost of Funds Advance. Each LIBOR Advance shall continue as a LIBOR Advance
until the end of the then applicable Interest Period therefor, at which time
such LIBOR Advance shall continue as a LIBOR Advance in the same
Page 22
currency with an Interest Period of one month unless the Credit Party shall have
given the Agent a Conversion/Continuation Notice requesting that, at the end of
such Interest Period, such LIBOR Advance either continue as a LIBOR Advance for
the same or another Interest Period or be converted into an Advance of another
Type, it being understood that if the applicable Credit Party fails either to
repay or give the Agent a timely and valid Conversion/Continuation Notice with
respect to any LIBOR Advance prior to the end of the then applicable Interest
Period therefor, such LIBOR Advance shall continue as a LIBOR Advance for an
Interest Period of one month. If the applicable Credit Party fails either to
repay or give the Agent a timely and valid Conversion/Continuation Notice with
respect to any Cost of Funds Advance prior to the expiration of the then
applicable Interest Period therefor, such Cost of Funds Advance shall
automatically convert to an Alternate Base Rate Advance upon expiration of such
applicable Interest Period. Subject to the terms of Section 2.6, the Credit
Party may elect from time to time to convert all or any part of an Advance of
any Type into any other Type or Types of Advances; provided that (i) any
conversion of any LIBOR Advance or Cost of Funds Advance shall be made on, and
only on, the last day of the Interest Period applicable thereto, and (ii) LIBOR
Advances denominated in a particular currency may not be continued or converted
into LIBOR Advances denominated in another currency. The Credit Party shall give
the Agent irrevocable notice (a "Conversion/Continuation Notice") of each
conversion of an Advance or continuation of a LIBOR Advance not later than 11:00
a.m. (Boston time) on the Business Day, in the case of a conversion into an
Alternate Base Rate Advance or a Cost of Funds Advance, or on the second
Business Day, in the case of a conversion into or continuation of a LIBOR
Advance, prior to the date of the requested conversion or continuation,
specifying:
(i) the requested date which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such Advance
is to be converted or continued and, in the case of a
conversion into or continuation of a LIBOR Advance or a Cost
of Funds Advance, the duration of the Interest Period
applicable thereto.
2.10. Changes in Interest Rate, etc. Each Alternate Base Rate
Advance shall bear interest on the outstanding principal amount thereof, for
each day from and including the date such Advance is made or is converted from a
LIBOR Advance or a Cost of Funds Advance into an Alternate Base Rate Advance
pursuant to Section 2.9 to but excluding the date it becomes due or is converted
into a LIBOR Advance or a Cost of Funds Advance pursuant to Section 2.9, at a
rate per annum equal to the Alternate Base Rate for such day. Changes in the
rate of interest on any Alternate Base Rate Advance will take effect
simultaneously with each change in the Alternate Base Rate. Each LIBOR Advance
and Cost of Funds 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 LIBOR
Advance
Page 23
or Cost of Funds Advance, as applicable. No Interest Period may end after the
Facility Termination Date.
2.11. Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Section 2.8 or 2.9, during the continuance of a
Default or Unmatured Default the Agent may, at its option, by notice to the
Borrower, declare that no Advance may be made as, converted into or continued as
a LIBOR Advance or a Cost of Funds Advance. During the continuance of a Default
(i) each LIBOR Advance and Cost of Funds Advance shall bear interest for the
remainder of the applicable Interest Period at the rate otherwise applicable to
such Interest Period plus 2% per annum, and thereafter at the Alternate Base
Rate plus 2% per annum and (ii) each Alternate Base Rate Advance shall bear
interest at a rate per annum equal to the Alternate Base Rate plus 2% per annum
(the "Default Rate").
2.12. Method of Payment.
2.12.1. General. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in
immediately available funds to an account of the Agent designated by
the Agent at the Agent's address specified pursuant to Article XIII, or
at any other Lending Installation of the Agent specified in writing by
the Agent to the Borrower, by 2:00 p.m. (Boston time) on the date when
due and shall be applied ratably by the Agent among the Lenders. Each
payment delivered to the Agent for the account of any Lender shall be
delivered promptly by the Agent to such Lender in the same type of
funds that the Agent received at its address specified pursuant to
Article XIII or at any Lending Installation specified in a notice
received by the Agent from such Lender.
2.12.2. Currency of Payment. All payments of principal of and
interest on any Advance or any other Obligations hereunder shall be
made by the Credit Party responsible therefor in the currency borrowed
(the "Specified Currency") in the manner and to an account of the Agent
at the address (the "Specified Place") specified in Section 2.12.1.
Payment of the Obligations shall not be discharged by an amount paid in
another currency or in another place, whether pursuant to a judgment or
otherwise, to the extent that the amount so paid on conversion to the
Specified Currency and transfer to the Specified Place under normal
banking procedures does not yield the amount of the Specified Currency
at the Specified Place due hereunder. If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum due hereunder
the Specified Currency into another currency (the "Judgment Currency"),
the rate of exchange which shall be applied shall be that at which in
accordance with normal banking procedures the Agent could purchase the
Specified Currency with that amount of the Judgment Currency at 9:00
a.m. (Boston time) on the Business Day next preceding that on which
such judgment is rendered. The obligation of the applicable Credit
Party in respect of any such sum due from it to the Agent or any Lender
hereunder (an "Entitled Person") shall, notwithstanding the rate of
exchange actually applied in rendering such judgment, be discharged
only to the extent that on the Business Day following receipt by such
Entitled
Page 24
Person of any sum adjudged to be due hereunder or under the Notes in
the Judgment Currency, such Entitled Person may in accordance with
normal banking procedures purchase and transfer to the Specified Place
of the Specified Currency with the amount of the Judgment Currency so
adjudged to be due; and each Credit Party hereby, as a separate
Obligation and notwithstanding any such judgment, agrees to indemnify
such Entitled Person against, and to pay such Entitled Person on
demand, in the Specified Currency, any difference between the sum
originally due to such Entitled Person in the Specified Currency and
the amount of the Specified Currency so purchased and transferred.
2.13. Notes; Telephonic Notices. Each Lender is hereby authorized to
record the principal amount and currency of each of its Loans and each repayment
on the schedules attached to its Notes, provided, however, that the failure to
so record shall not affect the Credit Parties' obligations under such Notes.
Each of the Credit Parties hereby authorizes the Lenders and the Agent to
extend, convert or continue Advances, effect selections of Types of Advances and
to transfer funds based on telephonic notices made by any person or persons the
Agent or any Lender in good faith believes to be an Authorized Officer acting on
behalf of such Credit Party, using such security procedures as are agreed upon
between the Agent, the Credit Party and, if applicable, the Lenders. Each Credit
Party agrees to deliver promptly to the Agent a written confirmation, if such
confirmation is requested by the Agent or any Lender, of each telephonic notice
signed by an Authorized Officer. If the written confirmation differs in any
material respect from the action taken by the Agent and the Lenders, the records
of the Agent and Lenders shall govern absent manifest error.
2.14. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Alternate Base Rate Advance shall be payable (i) on each Payment
Date, commencing with the first such date to occur after the date hereof, (ii)
on any prepayment of such Advance (whether due to acceleration or otherwise) and
(iii) on the Facility Termination Date or any earlier date upon which the
Aggregate Commitment is terminated in accordance with the terms of this
Agreement. Interest accrued on each LIBOR Advance shall be payable on (i) the
last day of its applicable Interest Period, (ii) any date on which such LIBOR
Advance is prepaid, whether by acceleration or otherwise, and (iii) the Facility
Termination Date or any earlier date upon which the Aggregate Commitment is
terminated in accordance with the terms of this Agreement. Interest accrued on
each LIBOR Advance 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 each Cost of Funds Advance shall be payable on (i)
each Payment Date, commencing with the first such date to occur after the date
hereof, (ii) any date on which such Cost of Funds Advance is prepaid, whether by
acceleration or otherwise, and (iii) the Facility Termination Date or any
earlier date upon which the Aggregate Commitment is terminated in accordance
with the terms of this Agreement. Interest and Facility Fees shall be calculated
for actual days elapsed on the basis of a 360-day year. Interest shall be
payable for the day an Advance is made but not for the day of any payment on the
amount paid if payment is received prior to noon (local time) at the place of
payment. If any payment of principal of or interest on an Advance shall become
due on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of
Page 25
time shall be included in computing interest in connection with such payment. At
the option of the Borrower, interest payments may be made by automatic debit
from a deposit account maintained by the Borrower with the Agent.
2.15. Letters of Credit. Letters of Credit, Bankers Acceptances and
other trade services may be issued, extended or renewed at the request of the
Borrower or any Borrowing Subsidiary any time prior to the Facility Termination
Date. Fees and other charges for such trade services shall be in conformity with
pricing established by the Lenders for the Borrower and Borrowing Subsidiaries
from time to time, and shall be payable on each Payment Date in arrears.
2.16. Permitted Acquisitions/Dividend Payments/Stock Repurchases.
The Borrower or a Borrowing Subsidiary may request Advances to fund Permitted
Acquisitions, to acquire a controlling interest in a joint venture between the
Borrower or a Borrowing Subsidiary and another Person ("Joint Venture"), to pay
dividends declared by the Borrower or a Borrowing Subsidiary ("Dividend
Payments") or to fund repurchases of stock of the Borrower or a Borrowing
Subsidiary ("Stock Repurchases") subject to the following conditions:
(i) The aggregate cash purchase price for all Permitted
Acquisitions and Joint Ventures in any 12 month period,
excluding the cash purchase price paid by the Borrower in
connection with the acquisition of Bilston & Battersea Enamels
plc., shall not exceed $15,000,000.
(ii) The aggregate total of all Advances used to fund Dividend
Payments or Stock Repurchases on a combined basis during any
12 month period shall not exceed $5,000,000, and shall not
exceed Consolidated Net Income for the then most recent
12-months ending with the then most recently ended fiscal
quarter of the Borrower prior to such Dividend Payment or
Stock Repurchase.
(iii) At the time of closing of any Permitted Acquisition, Joint
Venture, Dividend Payment or Stock Repurchase, the Borrower
shall demonstrate to the satisfaction of the Agent that there
exists no Default or Unmatured Default, and as a result of
such Permitted Acquisition, Joint Venture, Dividend Payment or
Stock Repurchase, no Default or Unmatured Default shall occur
as a result thereof.
(iv) The Person acquired shall, if such Person constitutes a
Material Domestic Subsidiary, execute a Guarantee and become a
Guarantor, and if such Person constitutes a first tier
Material Foreign Subsidiary, the Borrower shall pledge 65% of
the capital stock such Material Foreign Subsidiary as security
for all Obligations under this Agreement.
(v) The business of the Person or Joint Venture interest to be
acquired is the same or substantially similar to that of the
Borrower.
Page 26
(vi) The Joint Venture is consolidated for financial reporting
purposes with the Borrower under Agreement Accounting
Principles.
(vii) The Borrower is in pro forma compliance, including the
financial results of the Person or Joint Venture interest to
be acquired for the preceding twelve month period in all
applicable calculations, with all financial covenants in
Section 6.12 for each fiscal quarter of the preceding twelve
month period.
(viii) Any Indebtedness, exclusive of Advances, incurred or assumed
by the Borrower or any Subsidiary in connection with the
Permitted Acquisition shall, without the prior written consent
of the Lenders which consent shall not be unreasonably
withheld, be (a) unsecured and subject to the terms of Section
6.15, (b) shall be limited to the equivalent of $5,000,000
Dollars in the aggregate owed to foreign lenders in connection
with acquired foreign subsidiaries, and (c) shall be upon
terms otherwise acceptable to the Lenders. Neither the
Borrower nor any Subsidiary shall assume or incur secured
Indebtedness to any foreign lender without the prior written
consent of the Lenders which shall not be unreasonably
withheld.
(ix) After giving effect to any Permitted Acquisition, Joint
Venture, Dividend Payment or Stock Repurchase, all
representations and warranties set forth in Article V and in
Article V-A (other than those expressly related to a prior
date) shall continue to be true in all material respects.
(x) The Person to be acquired shall be in compliance in all
material respects with applicable laws and regulations, and
the Permitted Acquisition or Joint Venture shall not have a
Material Adverse Effect on the Borrower or any Subsidiary.
(xi) Review and approval by the Agent of acquisition documents
including, without limitation, all legal and regulatory due
diligence applicable to the Permitted Acquisition or Joint
Venture.
(xii) The Borrower shall be the surviving or continuing corporation
following such Permitted Acquisition.
Notwithstanding the foregoing Section 2.16, the Borrower shall provide
reasonable prior written notice to the Agent of any acquisition or joint venture
including information with respect to the type of transaction, the amount, how
the transaction will be funded, the location and type of business involved.
2.17. Late Fee. If the entire amount of any required principal or
interest is not paid in full within ten (10) days after the same is due,
Borrower shall pay to the Agent a late fee equal to five percent (5%) of the
required payment.
Page 27
2.18. Withholding Tax Exemption. Any permitted assignee of the Agent
under this Agreement that is not incorporated under the laws of the United
States of America or any state thereof agrees that it will, on or before the
date of such assignment, deliver to the Borrower (for the benefit of each Credit
Party) a duly completed copy of United States Internal Revenue Service From W-8
BEN or W-8 ECI, certifying that such assignee is entitled to receive payments
under this Agreement and the Notes without deduction or withholding of any
United States federal income taxes. Each assignee which so delivers a Form W-8
BEN or W-8 ECI further undertakes to deliver to the Borrower (for the benefit of
each Credit Party) an additional copy of such form (or a successor form) on or
before the date that such form expires (currently, three successive calendar
years for Form W-8 BEN and one calendar year for Form W-8 ECI) or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent forms so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Borrower (on behalf of
any Credit Party), in each case certifying that such assignee is entitled to
receive payments under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
assignee from duly completing and delivering any such form with respect to it
and such assignee advises the Borrower that it is not capable of receiving
payments without complete exemption from withholding of United States federal
income tax; provided, however, that such assignee shall take such action as is
required under Section 3.6 of this Agreement.
2.19. Overadvances. Nothing herein shall be construed to restrict
the Agent, in its sole and exclusive discretion, from making Advances in excess
of the Commitment and in excess of the Borrowing Capacity, the L/C Facility
Limit, or Advances in excess of the face amount of any Note, without requirement
of execution of additional notes, or otherwise modifying this Agreement or any
instrument to accommodate any such Advance in excess of the face amount of any
Note, and in so doing at any time or times, the Agent shall not waive its rights
to insist upon strict compliance with the terms of this Agreement, the Notes, or
any document or instrument granting security to the Agent or other instruments
executed in connection with this Agreement, at any other time, and to further
rely upon all collateral secured to it for satisfaction of all Obligations of
the Borrower and/or Borrowing Subsidiaries to the Agent, without exception.
2.20. Recalculation of Availability. If a Credit Party wishes to
request an Advance, conversion or continuation or if an automatic conversion or
continuation is made pursuant to Section 2.9 at a time when the aggregate Dollar
Amount of Loans outstanding hereunder, calculated for each Loan on the most
recent date upon which such Loan was borrowed, converted or continued hereunder,
would, after giving effect to such Advance, conversion or continuation, exceed
90% of the Aggregate Commitment and any Advance in a currency other than Dollars
is then outstanding, the Borrower shall, one Business Day prior to the delivery
of the required Borrowing Notice or Conversion/Continuation Notice, so notify
the Agent. On the day the Agent receives such notice (or on the date upon which
such conversion or continuation is made automatically pursuant to Section 2.9)
the Agent will recalculate the then-current Dollar
Page 28
Amount of Loans outstanding (after giving effect to such Advance, conversion or
continuation). If the result of such recalculation is that the Dollar Amount of
Loans outstanding, after giving effect to such borrowing, conversion or
continuation, would exceed the Aggregate Commitment, then:
(i) the relevant Credit Party will not be permitted to
request such Advance, conversion or continuation; and
(ii) all outstanding Loans in excess of the Aggregate
Commitment, together with all accrued but unpaid
interest thereon, will, in accordance with the
succeeding provisions of this Section, be due and
payable at the end of their respective Interest
Periods (until any such excess is eliminated).
To the extent that clause (ii) above requires a repayment of any Loans
outstanding in excess of the Aggregate Commitment, the Agent will so notify the
Borrower. The Credit Parties will then prepay, within three Business Days of
receipt of such notice, sufficient Alternate Base Rate Advances to eliminate
such excess. If the amount of Alternate Base Rate Advances outstanding is such
that repayment of all of them would not eliminate such excess, the Credit
Parties will then repay such principal amount of each of the next maturing LIBOR
Advances at the end of their respective Interest Periods so as to eliminate such
excess. If more than one LIBOR Advance has an Interest Period which ends on a
particular day and it is not necessary to repay both such Advances to eliminate
such excess, the Credit Parties may elect which LIBOR Advance to repay. The
restrictions on borrowing, conversion and continuation and the requirement that
Advances be repaid at the end (for LIBOR Advances) of their respective Interest
Periods set forth in this Section 2.20 shall be the exclusive mechanism for
limiting any increase in the outstanding principal amount of Loans under this
Agreement due to currency fluctuation. The Borrower shall not be required to
prepay LIBOR Loans prior to the end of their respective Interest Periods as
result of such currency fluctuations except where such excess is caused by a
voluntary commitment reduction pursuant to Section 2.5.
2.21. 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; provided, however, that no Credit Party shall be
liable for any increase in the obligations set forth in Article III with respect
to such change in Lending Installation to the extent that such increase is
triggered on the date of such change. 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.
2.22. Non-Receipt of Funds by the Agent. Unless a Credit Party 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 a Credit Party, a payment of
principal, interest or fees to the Agent for the account of the Lenders, that it
does not
Page 29
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or Credit Party, 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 (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (y) in the case of payment by a
Credit Party, the interest rate applicable to the relevant Loan.
2.23. Commitment Fee. The Borrower shall pay a Commitment Fee of
$180,000 to the Agent for the account of each Lender, fully earned upon
execution of this Agreement and payable over 3 years, $100,000 of such
Commitment Fee payable upon execution of this Agreement, $50,000 of such
Commitment Fee payable one year from the date hereof and $30,000 of the
Commitment Fee two years from the date hereof. The Commitment Fee shall be
allocated 70% to Fleet and 30% to LaSalle. In the event this Agreement is
terminated prior to the Facility Termination Date, any unpaid balance of the
Commitment Fee shall become immediately due and payable.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. Yield Protection. If, after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change therein, or any change in the interpretation or administration thereof,
or the compliance of any Lender therewith,
(i) subjects any Lender to any tax, duty, charge or withholding on
or from payments due from any Credit Party (excluding Excluded
Taxes), or changes the basis of taxation of payments to any
Lender in respect of the Loans 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 (other than
reserves taken into account in determining the interest rate
applicable to LIBOR Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to the Lender of making, funding or maintaining Loans
or reduces any amount receivable by the Lender in connection
with Loans, or requires the Lender to make any payment
calculated by reference to the amount of Loans held or
interest received by it, by an amount deemed material by the
Lender,
Page 30
then, upon such Lender becoming aware of any such event, the Lender shall
promptly notify the Borrower of such event and, thereafter, within 15 days of
demand by the Lender, the Borrower or other appropriate Credit Party shall pay
the Lender that portion of such increased expense incurred or reduction in an
amount received which the Lender reasonably determines is attributable to
making, funding and maintaining its Loans and the Commitment.
3.2. Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by such
Lender is increased as a result of a Change, then the Lender shall promptly
notify the Borrower of such determination and, within 15 days of demand by the
Lender, the Borrower shall pay the Lender the amount necessary to compensate for
any shortfall in the rate of return on the portion of such increased capital
which the Lender reasonably determines is attributable to this Agreement, its
Loans or its obligation to make Loans hereunder (after taking into account the
Lender's policies as to capital adequacy). "Change" means (i) any change after
the date of this Agreement in the Risk-Based Capital Guidelines or (ii) any
adoption of or change in any other law, governmental or quasigovernmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by the Lender.
"Risk-Based Capital Guidelines" means (x) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (y) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines
that maintenance of its LIBOR Loans would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, or if any
Lender determines that (i) deposits of a type and maturity appropriate to match
fund LIBOR Advances are not available or (ii) the interest rate applicable to a
Type of Advance does not accurately reflect the cost to the Lender of making or
maintaining such Advance, then the Agent shall suspend the availability of the
affected Type of Advance and require any LIBOR Advances of the affected Type to
be repaid.
3.4. Funding Indemnification/Yield Maintenance Fee. If at any time
(i) the interest rate on a Loan is based upon the LIBOR Base Rate or Cost of
Funds, and (ii) the Lenders in their sole discretion should determine that
current market conditions can accommodate a prepayment request prior to the last
day of the Interest Period related to such Loan, the Borrower shall have the
right at any time and from time to time to prepay the Loan in whole (but not in
part), and the Borrower shall pay to the Agent, for the benefit of the Lenders,
a yield maintenance fee in an amount computed as follows: the then current rate
for United States Treasury securities (bills on a discounted basis shall be
converted to a bond equivalent) with a maturity date closest to the expiration
date of the applicable Interest Period as to which the prepayment is made, shall
be subtracted from the LIBOR Base Rate or Cost of Funds component, as the case
may be, in effect at the time of prepayment. If the result is zero or a negative
number, there shall be no yield
Page 31
maintenance fee. If the result is a positive number, then the resulting
percentage shall be multiplied by the amount of the principal balance being
prepaid. The resulting amount shall be divided by 360 and multiplied by the
number of days remaining in the applicable Interest Period. The resulting amount
shall be the yield maintenance fee due to Agent upon prepayment of the Loan.
If by reason of the occurrence of any Default, the Agent elects to declare the
Loans to be immediately due and payable, then any yield maintenance fee with
respect to the Loans shall become due and payable in the same manner as though
the Borrower had exercised such right of prepayment.
3.5. Taxes.
3.5.1. Payments to be Free and Clear. All sums payable by
any Credit Party whether in respect of principal, interest, fees or
otherwise (including, without limitation, sums payable by the Borrower
pursuant to its guaranty in Article XIV) shall be paid without
deduction for any present and future taxes, levies, imposts,
deductions, charges or withholdings imposed by any country, any
Governmental Agency thereof or therein, any jurisdiction from which any
or all such payments are made and any political subdivision or taxing
authority thereof or therein, excluding income and franchise taxes (and
deductions and withholdings therefor) imposed on any Lender (x) by the
jurisdiction under the laws of which any Lender is organized or any
Governmental Agency or taxing authority thereof or therein, or (y) by
any jurisdiction in which the Agent's or such Lender's Lending
Installations are located or any Governmental Agency or taxing
authority thereof or therein (such excluded taxes, deductions and
withholdings, collectively, "Excluded Taxes"; and all such taxes,
levies, imposts, deductions, charges and withholdings (including
Excluded Taxes), collectively, "Taxes"), which amounts shall be paid by
any Credit Party as provided in Section 3.5.2. As set forth in the
preceding sentence, any Credit Party will pay each Lender the amounts
necessary such that the net amount of the principal, interest, fees or
other sums received and retained by each Lender is not less than the
amount payable under this Agreement.
3.5.2. Grossing-up of Payments. If: (a) any Credit Party or
any other Person is required by law to make any deduction or
withholding on account of any Tax (other than Excluded Taxes) or other
amount from any sum paid or expressed to be payable by any Credit Party
to any Lender under this Agreement (other than on account of Excluded
Taxes); or (b) any party to this Agreement (or any Person on its
behalf) other than any Credit Party is required by law to make any
deduction or withholding from, or (other than on account of any
Excluded Tax) any payment on or calculated by reference to the amount
of, any such sum received or receivable by any Lender under this
Agreement:
(i) the Borrower shall notify the Agent of any such
requirement or any change in any such requirement as
soon as any Credit Party becomes
Page 32
aware of it and the Agent shall promptly notify the
Borrower of any such requirement or any change of
such requirement as soon as such Lender becomes aware
thereof;
(ii) to the extent the Borrower or such other Credit Party
is aware or is so notified by such Lender, the
Borrower or such other Credit Party shall pay any
such Tax or other amount before the date on which
penalties attached thereto become due and payable,
such payment to be made (if the liability to pay is
imposed on such Credit Party) for its own account or
(if that liability is imposed on any other party to
this Agreement) on behalf of and in the name of that
party;
(iii) the sum payable by the Borrower or such other Credit
Party in respect of which the relevant deduction,
withholding or payment is required shall (except, in
the case of any such payment, to the extent that the
amount thereof is not ascertainable when that sum is
paid, provided no amount is actually withheld from
such payment) be increased to the extent necessary to
ensure that, after the making of that deduction,
withholding or payment, that party receives on the
due date and retains (free from any liability in
respect of any such deduction, withholding or
payment) a sum equal to that which it would have
received and so retained had no such deduction,
withholding or payment been required or made; and
(iv) within thirty (30) days after payment of any sum from
which such the Borrower or such other Credit Party is
required by law to make any deduction or withholding,
and within thirty (30) days after the due date of
payment of any Tax or other amount which it is
required by Section 3.5.2(ii) to pay, it shall
deliver to the Agent all such certified documents and
other evidence as to the making of such deduction,
withholding or payment as (a) are reasonably
satisfactory to other affected parties as proof of
such deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other
authority and (b) are reasonably required by any such
party to enable it to claim a tax credit with respect
to such deduction, withholding or payment.
3.5.3. Delivery of Tax Forms. No Credit Party shall be
obligated to make any payments under this Section 3.5 to any permitted
assignee of any Lender which is not incorporated under the laws of the
United States of America or any state thereof until such permitted
assignee of such Lender shall have delivered the tax forms required to
be delivered by it pursuant to Section 2.18.
3.6. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, the Lender shall designate an alternate office, branch,
subsidiary or affiliate with respect to its LIBOR Loans to reduce any liability
of the Borrower or any other Credit Party to such Lender
Page 33
under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of a Type of
Advance under Section 3.3, so long as such designation is not disadvantageous to
such Lender. Each Lender shall deliver to the relevant Credit Party a written
statement of such Lender as to the amount due, if any, under Sections 3.1, 3.2,
3.4 or 3.5. Such written statement shall set forth in reasonable detail the
calculations upon which the Agent determined such amount and shall be final,
conclusive and binding on the Credit Parties in the absence of manifest error.
Unless otherwise provided herein, the amount specified in the written statement
shall be payable on demand after receipt by the Borrower of the written
statement. The obligations of the Credit Parties under Sections 3.1, 3.2, 3.4
and 3.5 shall survive payment of the Obligations and termination of this
Agreement.
3.7. Mandatory Prepayments. The Borrower shall prepay Obligations
and the Commitment shall concurrently be reduced by the amount of proceeds, net
of ordinary transaction expenses: (i) in excess of $5,000,000 as a result of any
sale of assets of the Borrower or any Subsidiary other than in the ordinary
course of business; or (ii) in excess of $5,000,000 as a result of any equity or
new debt offering of the Borrower or any Subsidiary. The mandatory prepayment
shall be made by the Borrower upon receipt of proceeds related to such
transaction and the funding indemnification provisions under Section 3.4 shall
apply to any such mandatory prepayment.
3.8. Application of Payments. All payments shall be applied first
to the payment of all fees, expenses and other amounts due to the Agent
(excluding principal and interest), then to accrued interest, and the balance on
account of outstanding principal; provided however, that after the occurrence of
any Default and while such Default is continuing, payments will be applied to
the Obligations as the Agent determines in its sole discretion.
3.9. Other Financial Services. The Borrower shall notify the Agent
of any new needs or contemplated changes to financial services or in providers
of such services used by the Borrower, and shall allow the Agent to submit a
proposal or proposals to provide such services to the Borrower. The Borrower
shall evaluate the Agent's proposals in the context of the credit and non-credit
financial services furnished to the Borrower hereunder and use reasonable best
efforts to acquire such financial services, as appropriate, through the Agent.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Advance. The Lenders shall not be required to make the
initial Advance hereunder unless the Borrower has furnished to the Agent with
sufficient copies for each of the Lenders:
(i) Copies of the articles of incorporation of the Borrower,
together with all amendments, and a certificate of good
standing, both certified by an Authorized Officer.
Page 34
(ii) Copies, certified by the Clerk or Assistant Clerk of the
Borrower, of its by-laws and of its Board of Directors'
resolutions authorizing the execution of the Loan Documents to
which it is a party.
(iii) An incumbency certificate, executed by the Clerk or Assistant
Clerk 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 Agent shall be entitled
to rely until informed of any change in writing by the
Borrower.
(iv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Borrowing Date no
Default or Unmatured Default has occurred and is continuing.
(v) A written opinion of the General Counsel of the Borrower,
addressed to the Agent in substantially the form of Exhibit
"B-1" hereto.
(vi) A written opinion of Massachusetts counsel to the Borrower
addressed to the Agent in substantially the form of Exhibit
"B-2" hereto.
(vii) Borrower Notes payable to the order of the Agent executed by
Authorized Officer(s) of the Borrower.
(viii) Loan/Credit Related Money Transfer Instructions from each
Credit Party for each currency in which such Credit Party
intends to request Advances hereunder, each signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested.
(ix) Such other documents as the Agent or its counsel may have
reasonably requested.
(x) Payment by the Borrower to the Agent of that portion of the
Commitment Fee due pursuant to Section 2.23 of this Agreement.
(xi) No change in governmental regulations or policies having a
Material Adverse Effect on the Borrower or any Lender shall
have occurred.
(xii) Simultaneous payment and performance by the Borrower of all
liabilities and obligations under the Amended and Restated
Senior Revolving Credit Agreement dated August 23, 2000, as
amended, under which agreement the Agent is a Lender.
4.2. Each Advance. The Lenders shall not be required to make any
Advance (other than an Advance that, after giving effect thereto and to the
application of the proceeds thereof,
Page 35
does not increase the aggregate amount of outstanding advances), unless on the
applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are
true and correct as of such Borrowing Date except to the
extent any such representation or warranty is stated to relate
solely to an earlier date, in which case such representation
or warranty shall be true and correct on and as of such
earlier date.
(iii) If such Advance is requested by a Borrowing Subsidiary, (a)
the representations and warranties of such Borrowing
Subsidiary contained in Article V-A are true and correct in
all material respects as of such Borrowing Date or Issuance
Date, as the case may be, except to the extent any such
representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty
shall remain true and correct in all material respects on and
as of such earlier date and (b) it has complied with the
provisions of Section 4.3.
(iv) Loan/Credit Related Money Transfer Instructions signed by an
Authorized Officer.
(v) If such Advance is requested in a currency with respect to
which the Credit Party has not already submitted Loan/Credit
Related Money Transfer Instructions, additional Loan/Credit
Related Money Transfer Instructions for such currency, signed
by an Authorized Officer.
(vi) The Borrower submits to the Agent a Borrowing Base Certificate
dated as of the then most current month end and signed by an
Authorized Officer in the form of Exhibit C-1 hereto in
connection with any Advance request in a principal amount
which would, together with the aggregate principal amount and
stated amount of the existing Loans and Letters of Credit then
outstanding, be in excess of Borrowing Capacity indicated on
the then most current Borrowing Base Certificate submitted by
the Borrower to the Agent pursuant to Section 6.1. Such then
current Borrowing Base Certificate shall indicate sufficient
Borrowing Capacity availability for the Loan.
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by (a) the Borrower that the conditions
contained in Sections 4.2(i) and (ii) have been satisfied and (b) the applicable
Borrowing Subsidiary if such Advance is requested by it, that the conditions
contained in Sections 4.2(i) and (iii) have been satisfied.
4.3. First Advance to a Borrowing Subsidiary. The obligation of the
Lenders to make Advances on the occasion of the first request by a Borrowing
Subsidiary are subject to the
Page 36
satisfaction of the conditions set forth in Section 4.2 hereof with respect to
such Borrowing Subsidiary and the Borrower and the following additional
conditions:
(i) The Agent shall have received, in sufficient numbers of
original counterparts for each Lender, an Election to
Participate and one or more Loan/Credit Related Money Transfer
Instructions dated on or before the Borrowing Date of such
first Advance and duly executed by the relevant Borrowing
Subsidiary and (in the case of the Election to Participate)
the Borrower.
(ii) On or before the date of such first Advance, the relevant
Borrowing Subsidiary shall deliver to the Agent (a) its
Borrowing Subsidiary Notes, all of which shall be duly
executed by such Borrowing Subsidiary and dated on or before
the Borrowing Date of such Advance and (b) the corporate
documentation and certificates identified in Sections
4.1(i)-(iii) with respect to such Borrowing Subsidiary (or
substantial equivalents if such exist).
(iii) All legal details and proceedings in connection with the
transactions contemplated by this Agreement with respect to
the relevant Borrowing Subsidiary shall be satisfactory to the
Lenders, and the Agent shall have received all such originals
or certified or other copies of such documents and proceedings
in connection with such transactions, in form and substance
satisfactory to the Agent, as the Agent may reasonably
request.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower represents and warrants to the Agent and the Lenders that:
5.1. Corporate Existence and Standing. Each of the Borrower and its
Material Subsidiaries is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted, except where the failure to have such authority would not
reasonably be expected to have a Material Adverse Effect.
5.2. Authorization and Validity. The Borrower has the corporate
power and authority and legal right to execute and deliver the Loan Documents to
which it is a party, and to perform its obligations thereunder. The execution
and delivery by the Borrower of the Loan Documents to which it is a party and
the performance of its obligations thereunder have been duly authorized by
proper corporate proceedings, and the Loan Documents constitute legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
Page 37
(regardless of whether the issue of enforceability is considered in a proceeding
in equity or at law).
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate (i) the Borrower's or any Material Subsidiary's articles of
organization or articles of incorporation or by-laws (or equivalent), or (ii)
any law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Borrower or any of its Material Subsidiaries or the provisions of
any material indenture, instrument or agreement to which the Borrower or any of
its Material Subsidiaries is a party or is subject, or by which it, or any
Substantial Portion of its Property, is bound, or conflict with or constitute a
default thereunder, or result in the creation or imposition of any Lien in, of
or on any Substantial Portion of the Property of the Borrower or a Material
Subsidiary pursuant to the terms of any such indenture, instrument or agreement,
except (in the case of the violations, conflicts and defaults described in this
clause (ii)) for any such violation, conflict or default which would not
reasonably be expected to have a Material Adverse Effect. No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any Governmental Agency, other than those
from jurisdictions other than the United States of America or any political
subdivision thereof or the United Kingdom or any jurisdiction of the United
Kingdom or the Commonwealth of Canada or any jurisdiction of the Commonwealth of
Canada or Hong Kong or any jurisdiction of Hong Kong the failure of which to be
obtained would not reasonably be expected to have a Material Adverse Effect, is
required to authorize, or is required in connection with the execution, delivery
and performance by the Credit Parties of, or the legality, validity, binding
effect or enforceability as against or with respect to the Credit Parties of,
any of the Loan Documents to which it is a party.
5.4. Financial Statements. The December 31, 2002 and March 31, 2003
consolidated financial statements of the Borrower and its Subsidiaries
heretofore delivered to the Agent were prepared in accordance with generally
accepted accounting principles in effect on the date such statements were
prepared and fairly present the consolidated financial condition and operations
of the Borrower and its Subsidiaries at such date and the consolidated results
of their operations for the period then ended.
5.5. Material Adverse Change. Except as disclosed in the Borrower's
Securities and Exchange Commission Forms 10-K for the period ending December 31,
2002, 10-Q for the period ending March 31, 2003, since December 31, 2002, there
has been no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Borrower and its Subsidiaries, taken
as a whole, which could reasonably be expected to have a Material Adverse
Effect.
5.6. Taxes. The Borrower and its Material Subsidiaries have filed
all United States federal tax returns and all other tax returns which are
required to be filed and have paid all taxes due pursuant to said returns or
pursuant to any assessment received by the Borrower or any of its Material
Subsidiaries, except such taxes, if any, as are being contested in good faith
and as to
Page 38
which adequate reserves have been provided. The United States income tax returns
of the Borrower and its Subsidiaries have been audited by the Internal Revenue
Service through the fiscal year ended December 31, 1999. No tax liens have been
filed and no claims are being asserted with respect to any material taxes except
as set forth on Schedule 5.6. The charges, accruals and reserves on the books of
the Borrower and its Subsidiaries in respect of any taxes or other governmental
charges are adequate.
5.7. Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect. The Borrower has no material contingent obligations not
provided for or disclosed in the financial statements referred to in Section
5.4.
5.8. Subsidiaries. Schedule "1" hereto contains an accurate list of
all of the presently existing subsidiaries of the Borrower, setting forth their
respective jurisdictions of incorporation and the percentage of their respective
capital stock owned by the Borrower or other Subsidiaries. Material Subsidiaries
as of the date hereof are denoted on Schedule "1" with an asterisk. All of the
issued and outstanding shares of capital stock of the Material Subsidiaries have
been duly authorized and issued and are fully paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans
do not in the aggregate exceed $10,000,000. Neither the Borrower nor any other
member of the Controlled Group has incurred, or is reasonably expected to incur,
any withdrawal liability to Multiemployer Plans in excess of $10,000,000 in the
aggregate. Each Plan complies in all material respects with all applicable
requirements of law and regulations, and no Reportable Event has occurred with
respect to any Plan. Neither the Borrower nor any other member of the Controlled
Group has withdrawn from any Plan or initiated steps to do so, and no steps have
been taken to reorganize or terminate any Plan, where Unfunded Liabilities of
the Borrower and the other members of the Controlled Group with respect to such
Plan exceed $10,000,000 in the aggregate.
5.10. Accuracy of Information. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent in connection
with the negotiation of, or compliance with, the Loan Documents contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not misleading.
5.11. Regulation U. Margin Stock constitutes less than 25% of the
value of those assets of the Borrower and its Subsidiaries which are subject to
any restriction on sale, pledge, or other disposition hereunder.
5.12. Defaults Under Material Agreements; Agreements Restricting
Dividends. Neither the Borrower nor any Material Subsidiary is in default in the
performance, observance or
Page 39
fulfillment of any of the obligations, covenants or conditions contained in (i)
any agreement to which it is a party, which default could reasonably be expected
to have a Material Adverse Effect or (ii) any agreement or instrument evidencing
or governing Indebtedness. No Material Subsidiary is a party to any indenture,
agreement or other instrument which prohibits or restricts (or would, upon the
occurrence of any future event, prohibit or restrict) the payment of dividends
or distributions by such Material Subsidiary to the Borrower or any other
Subsidiary.
5.13. Compliance With Laws. The Borrower and its Material
Subsidiaries have complied with all applicable statutes, rules, regulations,
orders and restrictions of any domestic or foreign Governmental Agency having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property, other than such noncompliance as would not reasonably
be expected to have a Material Adverse Effect. Neither the Borrower nor any
Material Subsidiary has received any notice to the effect that its operations
are not in material compliance with any of the requirements of applicable
federal, state and local environmental, health and safety statutes and
regulations or the subject of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which non-compliance or
remedial action would reasonably be expected to have a Material Adverse Effect.
5.14. Ownership of Properties. Except as set forth on Schedule "2"
hereto, on the date of this Agreement, the Borrower and its Subsidiaries will
have good title, free of all Liens other than those permitted by Section 6.11,
to all of the Property and assets reflected in the financial statements as
owned, or otherwise owned, by it, including, without limitation, all Accounts
Receivable and all patents, trademarks, trade names and rights under any
license.
5.15. Investment Company Act. Neither the Borrower nor any
Subsidiary thereof is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
5.16. Public Utility Holding Company Act. Neither the Borrower nor
any Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility holding Company
Act of 1935, as amended.
5.17. Validity of Accounts. With respect to Accounts Receivable
(other than Ineligible Accounts) included by the Borrower in the calculation of
Borrowing Capacity pursuant to any Borrowing Base Certificate delivered to the
Agent, (a) each Account is genuine and enforceable in accordance with its terms
and represents an undisputed and bona fide indebtedness owing to Borrower by the
Account Debtor obligated thereon; (b) there are no defenses, setoffs, or
counterclaims against any Account; (c) no payment has been received on any
Account and no Account is subject to any credit or extension or agreements
therefor other than in the ordinary course of business unless written notice
specifying such payment, credit, extension or agreement has been delivered to
the Agent; (d) each copy of each invoice is a true and genuine copy of the
original invoice sent to the Account Debtor named therein and accurately
evidences the
Page 40
transaction from which the underlying Account arose and the date payment is due
as stated on each such invoice, or computer based on the information set forth
on each such invoice, is correct; (e) all chattel paper and all promissory
notes, drafts, trade acceptances, and other instruments for the payment of money
relating to or evidencing each Account, and each endorsement thereon, are true
and genuine and in all respects what they purport to be, and are the valid and
binding obligations of all parties thereto and the date or dates stated on such
items as the date on which payment in whole or in part is due is correct; (f)
all inventory described in each invoice has been delivered to the Account Debtor
named in such invoice or placed for such delivery in the possession of a carrier
not owned or controlled directly or indirectly by Borrower; (g) all evidence of
the delivery or shipment of inventory is true and genuine; (h) all services to
be performed by Borrower in connection with each Account has been performed by
Borrower; and (i) all evidence of the performance of such services by Borrower
is true and genuine.
ARTICLE V-A
REPRESENTATIONS AND WARRANTIES OF BORROWING SUBSIDIARIES
Each Foreign Borrowing Subsidiary organized under the laws of a
jurisdiction outside the United Kingdom represents and warrants to the Agent and
each of the Lenders as provided in this Article V-A (except for Sections
5A.2.2), each Foreign Borrowing Subsidiary organized under the laws of the
United Kingdom or a political subdivision within the United Kingdom represents
and warrants to the Agent and each of the Lenders as provided in this Article
V-A (except for Section 5A.2.1) and each Domestic Borrowing Subsidiary
represents and warrants to the Agent and each of the Lenders as provided in
Sections 5A.1, 5A.2.1, 5A.3, 5A.6, 5A.7 and 5A.8 of this Article V-A that:
5A.1 Corporate Existence and Standing. Such Borrowing Subsidiary is
a corporation, company or other legal entity duly organized and validly existing
under the laws of its jurisdiction of incorporation and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted, except where failure to have such authority would not reasonably be
expected to have a Material Adverse Effect.
5A.2 Authorization and Validity.
5A.2.1. Borrowing Subsidiaries Organized Outside the United
Kingdom. Such Borrowing Subsidiary has the corporate power and
authority and legal right to execute and deliver the Loan Documents to
which it is a party and to perform its obligations thereunder. The
execution and delivery by such Borrowing Subsidiary of the Loan
Documents to which it is a party and the performance by it of its
obligations thereunder have been duly authorized by proper corporate
proceedings, and such Loan Documents constitute legal, valid and
binding obligations of such Borrowing Subsidiary enforceable against
such Borrowing Subsidiary in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally
and by general equitable
Page 41
principles (regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law).
5A2.2. United Kingdom Borrowing Subsidiaries. Subject to the
Reservations, such Borrowing Subsidiary has the corporate power and
authority and legal right to execute and deliver the Loan Documents to
which it is a party and to perform its obligations thereunder. The
execution and delivery by such Borrowing Subsidiary of the Loan
Documents to which it is a party and the performance by it of its
obligations thereunder have been duly authorized by proper corporate
proceedings, and such Loan Documents constitute legal, valid,
enforceable and binding obligations of such Borrowing Subsidiary.
When used in this Section 5A.2.2, "Reservations" means:
(a) the principle that equitable remedies are at the discretion of the
courts,
(b) the limitations on enforcement under the laws relating to the
bankruptcy, insolvency, liquidation, administration or similar process
of or affecting any Borrowing Subsidiary,
(c) any laws affecting the rights of creditors generally on insolvency, and
the time barring of claims,
(d) the undertakings and indemnities given by such Borrowing Subsidiary in
Section 9.3, insofar as they may relate to stamp, registration and
similar taxes or charges which may be chargeable pursuant hereto in the
United Kingdom, may be void under Section 117 of the Stamp Xxx 0000,
and
(e) the interest payable under Section 2.11 may not be recoverable if it
amounts to a penalty.
5A.3 No Conflict; Government Consent. Neither the execution and
delivery by such Borrowing Subsidiary of the Loan Documents to which it is a
party, nor the consummation by it of the transactions therein contemplated to be
consummated by it, nor compliance by such Borrowing Subsidiary with the
provisions thereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such Borrowing Subsidiary or
such Borrowing Subsidiary's certificate or articles of incorporation or by-laws
(or similar documents) or the provisions of any material indenture, instrument
or agreement to which such Borrowing Subsidiary is a party or is subject, or by
which it, or any Substantial Portion of its Property, is bound, or conflict with
or constitute a default thereunder, or result in the creation or imposition of
any Lien in, of or on any Substantial Portion of the Property of such Borrowing
Subsidiary pursuant to the terms of any such indenture, instrument or agreement,
except for any such violation, conflict or default which would not reasonably be
expected to have a Material Adverse Effect. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any Governmental Agency, other than those from
jurisdictions other than the United States of America or any political
subdivision thereof or the
Page 00
Xxxxxx Xxxxxxx or any jurisdiction of the United Kingdom the failure of which to
be obtained would not reasonably be expected to have a Material Adverse Effect,
is required to authorize, or is required in connection with the execution,
delivery and performance by such Borrowing Subsidiary of, or the legality,
validity, binding effect or enforceability as against or with respect to such
Borrowing Subsidiary of, any of the Loan Documents.
5A.4 Filing. Except for any such filing, recording or payment made
on or prior to the date hereof, to ensure the enforceability or admissibility in
evidence of this Agreement, the Election to Participate and the Borrowing
Subsidiary Notes of such Foreign Borrowing Subsidiary in such Foreign Borrowing
Subsidiary's country of organization or incorporation and country which is its
principal place of business (each, a "Subject Country"), it is not necessary
that this Agreement, the Election to Participate or the Borrowing Subsidiary
Notes of such Foreign Borrowing Subsidiary or any other document be filed or
recorded with any court or Governmental Agency in any Subject Country or that
any stamp or similar tax be paid to or in respect of this Agreement, the
Election to Participate or the Borrowing Subsidiary Notes of such Foreign
Borrowing Subsidiary. The qualification by the Agent for admission to do
business under the laws of any Subject Country does not constitute a condition
to, and the failure to so qualify does not affect, the exercise by the Agent of
any right, privilege, or remedy afforded to the Agent in connection with the
Loan Documents to which such Foreign Borrowing Subsidiary is a party or the
enforcement of any such right, privilege, or remedy against such Foreign
Borrowing Subsidiary. The performance by the Agent of any action required or
permitted under the Loan Documents will not (i) violate any law or regulation of
any Subject Country or any political subdivision thereof, (ii) result in any tax
or other monetary liability to such party pursuant to the laws of any such
Subject Country or political subdivision or taxing authority thereof (provided
that, should any such action result in any such tax or other monetary liability
to the Agent, the Borrower hereby agrees to indemnify the Agent, against (x) any
such tax or other monetary liability which is not an Excluded Tax and (y) any
increase in an Excluded Tax which results from such action by the Agent and, to
the extent the Borrower makes such indemnification, the incurrence of such
liability by the Agent will not constitute a Default) or (iii) violate any rule
or regulation of any federation or organization or similar entity of which such
Subject Country is a member.
5A.5 No Immunity. Neither such Foreign Borrowing Subsidiary nor any
of its assets is entitled to immunity from suit, execution, attachment or other
legal process. Such Foreign Borrowing Subsidiary's execution and delivery of the
Loan Documents to which it is a party constitute, and the exercise of its rights
and performance of and compliance with its obligations under such Loan Documents
will constitute, private and commercial acts done and performed for private and
commercial purposes.
5A.6 Investment Company Act. Neither such Borrowing Subsidiary nor
any Subsidiary thereof is an "investment company" or a company "controlled" by
an investment company", within the meaning of the Investment Company Act of
1940, as amended.
Page 43
5A.7 Public Utility Holding Company Act. Neither such Borrowing
Subsidiary nor any Subsidiary thereof is a "holding company" or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
5A.8 Regulation U. Margin Stock constitutes less than 25% of the
value of those assets of such Borrowing Subsidiary and its Subsidiaries which
are subject to any restriction on sale, pledge, or other disposition hereunder.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself
and each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Agent:
(i) Within 90 days after the close of each of its fiscal years, an
unqualified (except for qualifications relating to changes in
accounting principles or practices reflecting changes in
generally accepted principles of accounting and required or
approved by the Borrower's independent certified public
accountants) audit report certified by independent certified
public accountants, acceptable to the Agent, prepared in
accordance with Agreement Accounting Principles on a
consolidated basis for itself and the Subsidiaries, including
balance sheets as of the end of such period, related
statements of income and retained earnings, and a statement of
cash flows, together with a list, signed by an Authorized
Officer, of the Material Subsidiaries, as determined at the
end of such fiscal year.
(ii) Within 45 days after the close of the first three quarterly
periods of each of its fiscal years, for itself and the
Subsidiaries, consolidated unaudited balance sheets as at the
close of each such period and consolidated, condensed
statements of income and retained earnings and a consolidated,
condensed statement of cash flows for the period from the
beginning of such fiscal year to the end of such quarter, all
certified by its Chief Financial Officer.
(iii) Together with the annual and quarterly financial statements
required hereunder, a Compliance Certificate in substantially
the form of Exhibit "C" hereto signed by the Borrower's Chief
Financial Officer or Assistant Treasurer showing the
calculations necessary to determine compliance with the
requirements of Section 6.12 of this Agreement and stating
that no Default or Unmatured Default exists,
Page 44
or if any Default or Unmatured Default exists, stating the
nature and status thereof.
(iv) Within 30 days after issuance of any management letter
prepared by the Borrower's auditors with respect to the
Borrower, a copy thereof.
(v) Annual consolidated balance sheet, income statement and cash
flow budgets with quarterly detail prepared by management of
the Borrower.
(vi) As soon as possible and in any event within 10 Business Days
after the Borrower knows that any Reportable Event has
occurred with respect to any Plan, a statement, signed by the
chief financial officer of the Borrower, describing said
Reportable Event and the action which the Borrower proposes to
take with respect thereto.
(vii) As soon as possible and in any event within 10 Business Days
after receipt by the Borrower, a copy of (a) any notice or
claim to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of
the release by the Borrower, any of its Subsidiaries, or any
other Person of any toxic or hazardous waste or substance into
the environment, and (b) any notice alleging any violation of
any federal, state or local environmental, health or safety
law or regulation by the Borrower or any of its Subsidiaries,
which, in either case, if determined or resolved adversely,
would reasonably be expected to have a Material Adverse
Effect.
(viii) Promptly upon the furnishing thereof to the shareholders of
the Borrower, copies of all financial statements, reports and
proxy statements so furnished.
(ix) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files
with the Securities and Exchange Commission.
(x) Within 30 days after being served in connection therewith or
otherwise becoming aware thereof, notice of any litigation,
arbitration or other legal proceeding involving the Borrower
or any of its Subsidiaries which, if determined or resolved
adversely, would reasonably be expected to have a Material
Adverse Effect.
(xi) If a new Subsidiary is formed as a result of an Acquisition by
the Borrower or any Subsidiary and such Subsidiary or the
assets which comprise such Subsidiary would have been
classified as a Material Subsidiary as at the end of or for
such Subsidiary's most recent fiscal year, then on the first
date upon which the Borrower is required to deliver financial
statements pursuant to Section 6.1(i) or (ii) for the fiscal
period during which such Acquisition occurred, the Borrower
Page 45
shall update the list of Material Subsidiaries furnished
pursuant to Section 6.1(i) so as to include such new
Subsidiary.
(xii) Such other information (including non-financial information)
as the Agent may from time to time reasonably request.
(xiii) Within 15 days after the end of each month, a summary schedule
of Accounts Receivable of the Borrower, with aging, and such
other information for Account Debtors as may be reasonably
requested by the Agent, all in form and substance acceptable
to the Agent, and certified as true and correct by the Chief
Financial Officer or Assistant Treasurer of the Borrower.
(xiv) Within 45 days after the close of each fiscal quarter of the
Borrower, a complete schedule of Inventory of the Borrower by
location, and including a summary of the inventory reserve,
all in form and substance acceptable to the Agent, and
certified as true and correct by the Chief Financial Officer
or the Assistant Treasurer of the Borrower.
(xv) Within 15 days following the end of each month, a Borrowing
Base Certificate in the form of Exhibit C-1 hereto showing the
calculations necessary to determine Borrowing Capacity signed
by the Borrower's Chief Financial Officer or the Assistant
Treasurer.
6.2. Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Advances (i) to refinance existing senior
credit obligations of the Borrower and Subsidiaries, and (ii) for general
corporate purposes, including without limitation Permitted Acquisitions, Joint
Ventures, Dividend Payments and Stock Repurchases. Except as set forth in the
preceding sentence, the Borrower will not, nor will it permit any Subsidiary to,
use any of the proceeds of the Advances to purchase or carry any Margin Stock or
to make any Acquisition other than a Permitted Acquisition.
6.3. Notice of Default. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Agent of the occurrence of
any Default or Unmatured Default.
6.4. Conduct of Business. The Borrower will, and will cause each
Material Subsidiary to, do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and maintain all requisite authority to conduct
its business in each jurisdiction in which its business is conducted, provided
that the Borrower may liquidate and dissolve any Subsidiary to the extent that
(i) any such action would not have a Material Adverse Effect and (ii) if such
Subsidiary to be liquidated is a Borrowing Subsidiary, all of its Borrowing
Subsidiary Obligations have been paid and discharged in full prior to such
liquidation and dissolution. The Borrower will not, and will not permit any
Subsidiary to, enter into a new line of business or otherwise change the fields
of enterprise in
Page 46
which it operates if any such entry or change would reasonably be expected to
have a Material Adverse Effect.
6.5. Taxes. The Borrower will, and will cause each Material
Subsidiary to, pay when due all taxes, assessments and governmental charges and
levies upon it or its income, profits or Property, except those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside.
6.6. Insurance. The Borrower will, and will cause each Material
Subsidiary to, maintain with financially sound and reputable insurance companies
insurance on all their Property in such amounts and covering such risks as is
consistent with sound business practice, and the Borrower will furnish upon
request by the Agent information as to the insurance carried.
6.7. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, other than
such noncompliance as would not reasonably be expected to have a Material
Adverse Effect.
6.8. Maintenance of Properties. The Borrower will, and will cause
each Subsidiary to, do all things necessary to maintain, preserve, protect and
keep its Property in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times.
6.9. Inspection. The Borrower will, and will cause each Subsidiary
to, permit the Agent, at the Agent's expense (except following any Default and
while such Default is continuing, which inspections shall then be at the
Borrower's expense), by the Agent's representatives and agents, to inspect any
of the Property, corporate books and financial records of the Borrower and each
Subsidiary, to examine and make copies of the books of accounts and other
financial records of the Borrower and each Subsidiary, and to discuss the
affairs, finances and accounts of the Borrower and each Subsidiary with, and to
be advised as to the same by, their respective officers at such reasonable times
and intervals as the Agent may designate.
6.10. Merger; Sale of Substantially All Assets. The Borrower will
not, nor will it permit any Subsidiary to, merge or consolidate with or into any
other Person, except that (i) a Subsidiary may merge or consolidate with the
Borrower or a Wholly Owned Subsidiary, provided such Wholly Owned Subsidiary has
either guaranteed the Obligations, or in the case of Foreign Subsidiaries not
less than sixty-five percent of the total issued and outstanding capital stock
of such Foreign Subsidiary has been pledged, or at the time of such merger or
consolidation will be pledged, to the Agent as security for the Obligations on
terms acceptable to the Agent and (ii) the Borrower may merge or consolidate
with any other Person provided that (x) the Borrower is the surviving entity and
(y) after giving effect to such merger or consolidation, no Default or Unmatured
Default shall exist. The Borrower will not, nor will it permit any Subsidiary
to, in one or a series of transactions, lease, sell or otherwise dispose of all
Page 47
or substantially all of its Property, except that (a) a Subsidiary may lease,
sell or otherwise dispose of all or substantially all of its Property to the
Borrower or a Wholly Owned Subsidiary, provided such Wholly Owned Subsidiary has
either guaranteed the Obligations, or in the case of Foreign Subsidiaries not
less than sixty-five percent of the total issued and outstanding capital stock
of such Foreign Subsidiary has been pledged, or at the time of such merger or
consolidation will be pledged, to the Agent as security for the Obligations on
terms acceptable to the Agent and (b) the provisions of this sentence shall not
apply to any disposition of Margin Stock to the extent that, at any time, Margin
Stock would (but for the provisions of this clause (b) and of clause (xi) of
Section 6.11) comprise 25% or more of the value of the consolidated assets of
the Borrower and its Subsidiaries subject to any restriction on sale, pledge or
other disposition pursuant to the terms of this Agreement (it being understood
that the exception set forth in this clause (b) shall only apply to the "excess"
portion of such Margin Stock and that capital stock of the Borrower shall be
deemed to be the "excess" portion of such Margin Stock to the greatest extent
possible rather than any other Margin Stock held by the Borrower and its
Subsidiaries). Notwithstanding the foregoing, the Borrower shall be permitted to
complete a merger transaction with a newly formed Illinois corporation in
connection with its reincorporation in Illinois.
6.11. Liens/Negative Pledge. The Borrower will not, nor will it
permit any Subsidiary to, create, incur, or suffer to exist any Lien in, of or
on the Property of the Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings
and for which adequate reserves in according with generally
accepted principles of accounting shall have been set aside on
its books.
(ii) Liens imposed by law, such as carriers', warehousehandler's
and mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on its
books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a
similar character and which do not in any material way affect
the marketability of the same or interfere with the use
thereof in the business of the Borrower or the Subsidiaries.
Page 48
(v) Purchase money Liens granted to secure the purchase price of
equipment or real property or to secure Indebtedness incurred
solely for the purpose of financing the acquisition of such
equipment or real property, provided that such Liens do not
extend to any other assets of the Borrower or of any
Subsidiary.
(vi) Deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business.
(vii) Liens in existence on the Closing Date as set forth on
Schedule "2".
(viii) Any extension, renewal or replacement of a Lien described in
clause (v) or (vi), provided that the principal amount of the
Indebtedness or other obligation secured thereby is not
increased.
(ix) Liens on Margin Stock to the extent that, at any time, Margin
Stock would (but for the provisions of this clause (ix) and of
the final sentence of Section 6.10) comprise 25% or more of
the value of the consolidated assets of the Borrower and its
Subsidiaries subject to any restriction on sale, pledge or
other disposition pursuant to the terms of this Agreement (it
being understood that Liens will only be permitted under this
clause (ix) on the "excess" portion of such Margin Stock and
that capital stock of the Borrower shall be deemed to be the
"excess" portion of such Margin Stock to the greatest extent
possible rather than any other Margin Stock held by the
Borrower and its Subsidiaries).
In addition to the foregoing, except as set forth on Schedule 6.11, the
Borrower shall not, nor shall it permit any Subsidiary to, enter into any other
agreement or arrangement with any other Person which would prevent or in any way
limit or restrict the Borrower's or any Subsidiary's ability to pledge, assign
or grant a first priority security interest in any of its assets in favor of the
Agent.
6.12. Financial Covenants.
6.12.1. Fixed Charge Coverage Ratio. The Borrower shall
maintain a Fixed Charge Coverage Ratio of not less than 2.25 to 1.00 as
of the fiscal quarters ending June 30, 2003, September 30, 2003 and
December 31, 2003, with such Fixed Charge Coverage Ratio to be
calculated on a rolling four quarter basis for the most recent four
fiscal quarter period then ended. For the purposes of this covenant:
(1) the term "Fixed Charge Coverage Ratio" means the ratio of (i) the
Borrower's Consolidated EBITDA, minus Consolidated Capital Expenditures
(including all acquisitions net of amounts paid for with cash on hand
and/or amounts borrowed under the Commitment), minus all cash taxes
paid (to the extent amounts paid exceed $5,000,000), minus Dividend
Payments and
Page 49
Stock Repurchases; to (ii) the Borrower's Consolidated Interest
Expense, plus the Borrower's Consolidated Scheduled Principal Payments
for such period.
6.12.2. Funded Debt/EBITDA Ratio. The Borrower shall maintain
a ratio of funded Consolidated Indebtedness (excluding obligations to
reimburse under Letters of Credit, Banker's Acceptances or in
connection with other trade services obtained by the Borrower in the
ordinary course of business), to the Borrower's EBITDA as calculated
based upon the four most recent consecutive fiscal quarters then ended
as of June 30, 2003, September 30, 2003 and December 31, 2003 of not
greater than 2.00 to 1.00.
6.12.3. Minimum Annual Consolidated Operating Profit. The
Borrower shall have a Minimum Consolidated Operating Profit of not less
than $7,500,000 for the fiscal year ending December 31, 2003.
6.12.4. Consolidated Total Assets/Revenues Limitation. At no
time (i) shall more than forty percent (40%) of the Borrower's
Consolidated Total Assets be owned by any Subsidiary existing as of the
date of this Agreement, or more than forty percent (40%) of the
Borrower's Consolidated Total Revenue be generated by any Subsidiary
existing as of the date of this Agreement unless such Subsidiary has
either guaranteed the Obligations or, in the case of any Foreign
Subsidiary, not less than sixty-five (65%) of the total issued and
outstanding capital stock of such Foreign Subsidiary has been pledged
to the Lenders as security for the Obligations upon terms acceptable to
the Lenders, or (ii) shall more than twenty percent (20%) of the
Borrower's Consolidated Total Assets be owned by any Subsidiary
acquired subsequent to the date of this Agreement, or more than twenty
percent (20%) of the Borrower's Consolidated Total Revenue be generated
by any Subsidiary acquired subsequent to the date of this Agreement
(any such Subsidiary owning more than 20% of the Borrower's
Consolidated Total Assets or generating more than 20% of the Borrower's
Consolidated Total Revenue shall be known as "Material Domestic
Subsidiary" or a "Material Foreign Subsidiary," depending upon whether
its domicile is in the United States or elsewhere, as the case may be)
unless such Material Domestic Subsidiary has either guaranteed the
Obligations or, in the case of Material Foreign Subsidiaries, not less
than sixty-five percent (65%) of the total issued and outstanding
capital stock of such Material Foreign Subsidiaries has been pledged to
the Lenders as security for the Obligations.
6.12.5. Covenant Agreement. Financial covenants shall be
agreed to by the Borrower and Agent for periods subsequent to December
31, 2003 annually on or before May 15, 2004 and May 15, 2005. The
financial covenants shall be reset based upon standards used in
connection with establishing such financial covenants for periods
ending on or prior to December 31, 2003.
6.13. Margin Stock. The Borrower will not, nor will it permit any
Subsidiary to, purchase or carry Margin Stock with a value exceeding 15% of the
value of the consolidated assets of the Borrower and its Subsidiaries (other
than capital stock of the Borrower which has
Page 50
been repurchased and is being held as treasury stock by the Borrower, which
stock is not subject to the limitation set forth in this Section 6.13).
6.14. Accounts Receivable. The Borrower will provide the Agent with
assurances that any Account Receivable used by the Borrower in the calculation
of Borrowing Capacity shall be a good and valid Account Receivable representing
an undisputed bona fide indebtedness incurred by the Account Debtor named
therein for merchandise held subject to delivery instructions or already shipped
or delivered pursuant to a contract of sale for goods, or services already
performed by the Borrower, with or for the Account Debtor. The Borrower shall be
the lawful owner of all such Accounts subject to no Liens or security interests
therein, except as permitted under Section 6.11. No such Account Receivable
shall have then, or shall thereafter be sold, assigned or transferred to any
person other than the Agent, or in any way encumbered, except to the Agent, and
the Borrower shall defend the same against the unlawful claims and demands of
all persons. The Borrower shall give the Agent written notice of each office of
the Borrower at which the records of the Borrower pertaining to Accounts
Receivable are kept.
6.15. Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, assume, or suffer to exist, any Indebtedness,
except:
(i) Indebtedness of the Credit Parties under this Agreement or the
Note or the Loan Documents to which they are a party;
(ii) Indebtedness described in the financial statements referred to
in Section 5.4 of this Agreement or in connection with
existing financing commitments listed on Schedule 6.15 hereto,
but no renewals (other than subject to existing material terms
and conditions), or extensions (other than subject to existing
material terms and conditions) thereof;
(iii) Accounts payable to trade creditors for goods or services
which are not aged more than ninety (90) days from the billing
date, unless subject to agreement with trade creditors for
longer terms, and current operating liabilities (other than
for borrowed money) which are not more than sixty (60) days
past due, in each case incurred in the ordinary course of
business, as presently conducted, and paid within the
specified time, unless contested in good faith and by
appropriate proceedings;
(iv) Indebtedness of the Borrower or any Subsidiary incurred in
connection with purchase money Liens pursuant to Section
6.11(v) of up to $4,000,000 in the aggregate annually for the
purchase of equipment or real estate of a value equal to or in
excess of the amount of the related debt.
Notwithstanding the foregoing, in no event shall Consolidated Indebtedness,
excluding the aggregate Dollar Amount of all Loans outstanding hereunder, exceed
$25,000,000.
Page 51
6.16. No Loans, Advances or Investments. Without the prior written
approval of the Agent, the Borrower will not, nor will it permit any Subsidiary
to, make in any fiscal year any loans or advances to, or investments in, any
Person in an aggregate principal amount in excess of $500,000, not to exceed
$1,000,000 in aggregate principal amount outstanding at any time, other than in
the ordinary course of business. Notwithstanding the foregoing, the Borrower
will not, nor will it permit any Subsidiary, without prior written approval of
the Agent, to make any loans or advances to, or investments in Enesco plc, or in
any other Subsidiary unless such Subsidiary other than Enesco plc has either
guaranteed the Obligations or, in the case of Foreign Subsidiaries, not less
than sixty-five percent (65%) of the total issued and outstanding capital stock
of such Foreign Subsidiary has been pledged to the Agent as security for the
Obligations upon terms acceptable to the Agent, and provided that all such loans
or advances to, or investments in, any Subsidiary by the Borrower in the
ordinary course of business, other than as outstanding as of the date hereof,
shall not at any time exceed $5,000,000.
6.17. Guaranties, Etc. The Borrower will not, nor will it permit any
Subsidiary to, assume, guaranty, endorse, or otherwise be or become directly or
contingently responsible or liable for obligations of any Person except: (i)
guaranties by endorsement of negotiable instruments for deposit, collection or
similar transactions in the ordinary course of business, (ii) guaranties as set
forth on Schedule 6.17 hereto, and (iii) any other guaranties, assumptions or
endorsements of obligations in the ordinary course of business including the
guaranty of payment of minimum license and royalty fees in an aggregate
principal amount not to exceed $5,000,000. Notwithstanding the foregoing, the
Borrower will not, nor will it permit any Subsidiary to, assume, guaranty,
endorse or otherwise become directly or contingently responsible or liable for
obligations of Enesco plc, or any other Subsidiary unless such Subsidiary other
than Enesco plc has either guaranteed the Obligations or, in the case of Foreign
Subsidiaries, not less than sixty-five percent (65%) of the total issued and
outstanding capital stock of such Foreign Subsidiary has been pledged to the
Agent as security for the Obligations upon terms acceptable to the Agent.
6.18. Transactions With Affiliates. The Borrower will not, nor will
it permit any Subsidiary to, enter into any transaction, with any Affiliate, or
permit any Subsidiary to enter into any transaction, except in the ordinary
course of and pursuant to the reasonable requirements of the Borrower's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate.
6.19. Dividend Restriction. Other than as may be permitted pursuant
to Section 2.16, the Borrower will not declare or pay any dividends, nor will
the Borrower permit any Subsidiary to declare or pay any dividends to any Person
other than the Borrower or a Subsidiary controlled, directly or indirectly, by
the Borrower; nor will the Borrower, nor will the Borrower permit any Subsidiary
to purchase, redeem, or otherwise acquire for value any of its capital stock now
or hereafter outstanding; or make any distribution of assets to its stockholders
as such whether in cash, assets, or in obligations of the Borrower; or allocate
or otherwise set apart any sum for the payment of any dividend or distribution
on, or for the purchase, redemption, or retirement of any
Page 52
shares of its capital stock; or make any other distribution by reduction of
capital or otherwise in respect of any shares of its capital stock.
Notwithstanding the foregoing, the Borrower will not, nor will it permit any
Subsidiary, other than Enesco European Giftware Group Limited, without prior
written approval of the Agent, to declare or pay any dividends to Enesco plc, or
any other Subsidiary unless such Subsidiary other than Enesco plc has either
guaranteed the Obligations or, in the case of Foreign Subsidiaries, not less
than sixty-five percent (65%) of the total issued and outstanding capital stock
of such Foreign Subsidiary has been pledged to the Agent as security for the
Obligations upon terms acceptable to the Agent.
6.20. Capital/Lease Expenditures. The Borrower will not, nor will it
permit any Subsidiary to, other than in connection with Permitted Acquisitions
or Joint Ventures, to make Consolidated Capital Expenditures in excess of
$10,000,000 in the aggregate in any fiscal year without the prior written
consent of the Agent.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Agent under or in
connection with this Agreement, any Loan, or any certificate or information
delivered in connection with this Agreement or any other Loan Document shall be
materially false on the date as of which made.
7.2. Nonpayment of principal under any Note when due, nonpayment of
principal under the Back-Up F/X Demand Note or Back-Up L/C Demand Note upon
demand, or nonpayment of interest upon any Note or of any Facility Fee or other
Obligation under any of the Loan Documents within five days after the same
becomes due.
7.3. The breach by the Borrower of any of the terms or provisions
of Sections 6.2, 6.3, 6.10, 6.11 or 6.12.
7.4. The breach by the Borrower (other than a breach which
constitutes a default under Section 7.1, 7.2 or 7.3) of any of the terms or
provisions of this Agreement which is not remedied within thirty days after
written notice from the Agent.
7.5. Failure of the Borrower or any of its Subsidiaries to pay any
Material Indebtedness when due; or the default by the Borrower or any of its
Subsidiaries in the performance of any term, provision or condition contained in
any agreement under which any Material Indebtedness was created or is governed,
or any other event shall occur or condition exist, the effect of which is to
cause, or to permit the holder or holders of such Material Indebtedness to
cause, such Material Indebtedness to become due prior to its stated maturity; or
any Material Indebtedness of the Borrower or any of its Subsidiaries shall be
declared to be due
Page 53
and payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the stated maturity thereof; or the Borrower or any of its
Material Subsidiaries shall not pay, or admit in writing its inability to pay,
its debts generally as they become due.
7.6. The Borrower or any of its Material Subsidiaries shall (i)
have an order for relief entered with respect to it under the Federal bankruptcy
laws as now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment
of a receiver, custodian, trustee, examiner, liquidator or similar official for
it or any Substantial Portion of its Property, (iv) institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it (v) take any corporate action to authorize or effect any of the
foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good
faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower
or any of its Material Subsidiaries, a receiver, trustee, examiner, liquidator
or similar official shall be appointed for the Borrower or any of its Material
Subsidiaries or any Substantial Portion of its Property, or a proceeding
described in Section 7.6(iv) shall be instituted against the Borrower or any of
its Material Subsidiaries and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of 60 consecutive
days.
7.8. The Borrower or any of its Subsidiaries shall fail within 30
days to pay, bond or otherwise discharge any judgment or order for the payment
of money in excess of $5,000,000 which is not stayed on appeal or otherwise
being appropriately contested in good faith.
7.9. The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $10,000,000.
7.10. The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan in an amount which, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Borrower or any other member of the Controlled Group as withdrawal liability
(determined as of the date of such notification), exceeds $10,000,000.
7.11. The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such
Page 54
Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $10,000,000.
7.12. Any Change in Control shall occur.
7.13. The guaranty set forth in Article XIV or any Guarantee shall
fail to remain in full force or effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability thereof, or the
Borrower or any Guarantor, as the case may be, shall fail to comply with any of
the terms or provisions thereof.
7.14. Termination of any license held by the Borrower or any
Subsidiary which will have a Material Adverse Effect.
7.15. Failure by the Borrower on or before May 15 of each year to
agree with financial covenants reasonably established by the Lenders consistent
with past practice for periods subsequent to December 31, 2003 pursuant to
Section 6.12.5 of this Agreement.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligation of the Lenders to make Loans
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 obligation of the Lenders to make Loans 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 Credit Parties hereby expressly waive.
8.2. Amendments. Subject to the provisions of this Article VIII,
the Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Credit Parties 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 Credit Parties hereunder
or waiving any Default hereunder; provided, however, that no such supplemental
agreement shall, without the consent of each Lender affected thereby:
(i) Extend the maturity of any Loan or Note or forgive
all or any portion of the principal amount thereof,
or reduce the rate or extend the time of payment of
interest or fees thereon.
(ii) Reduce the percentage specified in the definition of
Required Lenders.
Page 55
(iii) Extend the Facility Termination Date, or increase the
amount of the Commitment of any Lender hereunder, or
permit the Borrower to assign its rights or delegate
its obligations under this Agreement.
(iv) Amend this Section 8.2.
(v) Release the Borrower from its obligations under
Article XIV.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 12.3.2 without obtaining the consent of any
other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the Agent or
the Lenders 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 notwithstanding the existence of a Default or the
inability of any Credit Party to satisfy the conditions precedent to such Loan
shall not constitute any waiver or acquiescence. Any single or partial exercise
of any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Lenders required pursuant to Section 8.2, and
then only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Agent and the Lenders until the Obligations have been
paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and
warranties of the Credit Parties contained in this Agreement shall survive
delivery of the Notes and the making of the Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, no Lender shall be obligated to extend credit
to any Credit Party in violation of any limitation or prohibition provided by
any applicable statute or regulation.
9.3. Taxes. Any taxes (excluding Excluded Taxes) or other similar
assessments or charges made by any governmental or revenue authority in respect
of the Loan Documents shall be paid by the Borrower, together with interest and
penalties, if any.
9.4. 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.
Page 56
9.5. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Credit Parties and the Agent and supersede
all prior agreements and understandings among the Credit Parties and the Agent
relating to the subject matter thereof.
9.6. Several Obligations; Benefits of 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 Person (except to the extent to which
the Agent is authorized to act as such). This Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns.
9.7. Expenses; Indemnification. The Borrower shall reimburse the
Agent for any reasonable attorneys' fees and time charges of attorneys for the
Agent, which attorneys may be employees of the Agent, paid or incurred by the
Agent in connection with the preparation, negotiation, execution, delivery,
review, amendment, modification, and administration of the Loan Documents. The
Borrower also agrees to reimburse the Agent and the Lenders for any reasonable
costs, internal charges and out-of-pocket expenses (including reasonable
attorneys' fees and time charges of attorneys for the Agent and the Lenders,
which attorneys may be employees of the Agent or the Lenders) paid or incurred
by the Agent in connection with the collection and enforcement of the Loan
Documents. The Borrower further agrees to indemnify the Agent and each Lender,
and their respective directors, officers and employees (each an "Indemnified
Party") against all losses, claims damages, penalties, judgments, liabilities
and expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Agent or Lender is a party thereto)
which any of them may pay or incur arising out of or relating to this Agreement,
the other Loan Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Loan
hereunder, provided that the Borrower shall not be liable for any such losses,
claims, damages, penalties, judgments, liabilities or expenses of any
Indemnified Party which arise from such Indemnified Party's gross negligence or
willful misconduct. The obligations of the Borrower under this Section shall
survive the termination of this Agreement.
9.8. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.9. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
9.10. 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.
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9.11. Nonliability of Lenders. The relationship between the Credit
Parties on the one hand and the Lenders and the Agent on the other hand shall be
solely that of borrower and lender. Neither the Agent or any Lender shall have
any fiduciary responsibilities to any of the Credit Parties. Neither the Agent
nor any Lender undertakes any responsibility to any Credit Party to review or
inform any Credit Party of any matter in connection with any phase of such
Credit Party's business or operations.
9.12. Language. The Loan Documents and all notices, communications,
opinions and other documents to be furnished by or on behalf of any Credit Party
pursuant to the Loan Documents shall be in the English language or, in the case
of any notices, communications, opinions or other documents submitted in another
language, accompanied by a certified English translation thereof and, in the
event of any conflict between the English text and such other text of any such
document, the English text shall prevail.
9.13. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING
A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE COMMONWEALTH OF
MASSACHUSETTS.
9.14. CONSENT TO JURISDICTION. THE CREDIT PARTIES EACH HEREBY
IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR MASSACHUSETTS STATE COURT SITTING IN SPRINGFIELD IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND EACH CREDIT
PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE BANK TO BRING
PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ANY CREDIT PARTY AGAINST THE BANK OR ANY AFFILIATE OF
THE BANK INVOLVING DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT
IN SPRINGFIELD, MASSACHUSETTS.
9.15. SERVICE OF PROCESS. EACH FOREIGN BORROWING SUBSIDIARY HEREBY
AGREES THAT SERVICE OF ALL WRITS, PROCESS AND SUMMONSES IN ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN THE COMMONWEALTH OF MASSACHUSETTS MAY BE MADE UPON THE
BORROWER AT ITS ILLINOIS HEADQUARTERS PRESENTLY LOCATED AT 000 XXXXXXX XXXXX,
XXXXXX, XXXXXXXX 00000. EACH FOREIGN BORROWING SUBSIDIARY HEREBY IRREVOCABLY
APPOINTS THE BORROWER ITS TRUE AND LAWFUL AGENT IN ITS NAME, PLACE AND STEAD TO
ACCEPT SUCH SERVICE OF ANY AND ALL SUCH
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WRITS, PROCESS AND SUMMONSES, AND AGREES THAT THE FAILURE OF THE BORROWER TO
GIVE ANY NOTICE OF ANY SUCH SERVICE OF PROCESS TO ANY SUCH FOREIGN BORROWING
SUBSIDIARY SHALL NOT IMPAIR OR AFFECT THE VALIDITY OF SUCH SERVICE OR OF ANY
JUDGMENT BASED THEREON. EACH FOREIGN BORROWING SUBSIDIARY HEREBY FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING
IN SAID COURTS BY THE DELIVERY THEREOF VIA AN INTERNATIONAL PRIVATE COURIER
COMPANY, DELIVERY COSTS PREPAID, TO EACH FOREIGN BORROWING SUBSIDIARY ADDRESSED
AS PROVIDED HEREIN. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE
ABILITY OF THE BANK TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER
MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER THE CREDIT
PARTIES IN SUCH OTHER JURISDICTION, AND IN SUCH MANNER, AS MAY BE PERMITTED BY
APPLICABLE LAW.
9.16. WAIVER OF JURY TRIAL. THE CREDIT PARTIES, THE AGENT AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
9.17. ERISA Representation. Each Lender hereby represents, warrants
and agrees that none of the funds, monies, assets or other consideration being
used to make the Loans hereunder, to acquire its rights and interests in and
under any of the Loan Documents, or to acquire any participation in the
foregoing from any other lender are or will constitute assets of any employee
benefit plan subject to ERISA and that its rights, benefits, and interests in
and under the Loan Documents will not be assets of any employee benefit plan
subject to ERISA.
9.18. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from any Credit Party pursuant to this
Agreement in confidence, except for disclosure (i) to other Lenders and their
respective Affiliates which agree to be bound by the provisions of this Section
9.18, (ii) to legal counsel, accountants, and other professional advisors to
that lender or to a Transferee, (iii) to regulatory officials having
jurisdiction over such Lender, (iv) to any person as required by law,
regulation, or legal process, and (v) permitted by Section 12.4.
9.19. Other Transactions. Fleet and each other Lender 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, except
to the extent that any of the foregoing are specifically prohibited by the terms
of this Agreement. Except to the extent specifically prohibited or restricted by
the terms of this Agreement, the Borrower and its Subsidiaries may borrow money
from or incur Indebtedness to the Agent, any Lender or any other financial
institution or Person.
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9.20. Maximum Interest Rate. Notwithstanding anything herein to the
contrary, no provision of this Agreement or of the Notes shall require or be
construed to require the payment or permit the charging or collection of
interest in an amount or at a rate in excess of the maximum non-usurious rate
permitted by applicable law, and in no event shall interest on or in connection
with this Agreement or the Notes accrue and be payable in an amount or at a rate
in excess of the Maximum Rate. If any excess of interest in such respect is
hereby provided for, or shall be adjudicated to be so provided, in the Notes or
otherwise in connection with this loan transaction, the provisions of this
Section 9.20 shall govern and prevail, and neither the Credit Parties nor their
respective sureties, guarantors, successors, or assigns shall be obligated to
pay the excess amount of such interest, or any other excess sum paid for the
use, forbearance, or detention of sums loaned pursuant hereto. In the event the
Agent ever receives, collects, or applies as interest any such sum, such amount
which would be in excess of the Maximum Rate shall be applied as a payment and
reduction of the principal of Indebtedness evidenced by the Notes; and, if the
principal amount of the Notes has been paid in full, any remaining excess shall
forthwith be paid to the appropriate Credit Party. All amounts paid in
connection with this Agreement and the Notes which would, under applicable laws,
be deemed "interest" shall, to the extent permitted by such applicable laws, be
amortized, prorated, allocated, and spread throughout the full term of this
Agreement and the Notes. If at the maturity of any Note, whether by acceleration
or otherwise, the total amount of interest paid or accrued thereon in favor of
the Agent is, as a result of the provisions of this Section 9.20, less than the
amount of interest which would have accrued if the rates of interest specified
in Article II of this Agreement (the "Specified Rates") had at all times been in
effect, then, at such time (but only to the extent permitted by applicable law),
the relevant Credit Party shall pay to the Agent for the account of such Lender
an amount equal to the difference between (x) the lesser of the amount of
interest which would have accrued if the Specified Rates had at all times been
in effect and the amount of interest which would have accrued if the Maximum
Rate had at all times been in effect, and (y) the amount of interest actually
paid or accrued on such Note.
9.21. Replacement of Notes. Upon receipt of an affidavit of an
officer of any Lender as to the loss, theft, destruction or mutilation of any
Note or any other Loan Document which is not of public record, and, in the case
of any such loss, theft, destruction or mutilation, upon surrender and
cancellation of such Note or other Loan Document, the Borrower shall issue, in
lieu thereof, a replacement Note or other Loan Document in the same principal
amount thereof and otherwise of like tenor.
ARTICLE X
THE AGENT
10.1. Appointment. Fleet is hereby appointed Agent hereunder and
under each other Loan Document, and each of the Lenders irrevocably authorizes
the Agent to act as the agent of such Lender. The Agent agrees to act as such
upon the express conditions contained in this Article X. The Agent shall not
have a fiduciary relationship in respect of any Credit Party or any
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Lender by reason of this Agreement.
10.2. 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 to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to any Credit Party, 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 for its or their own gross negligence or willful misconduct.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into, or verify (i) any statement,
warranty or representation made in connection with any 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, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (iii) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered to the Agent; (iv) the validity,
effectiveness or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; or (v) the value, sufficiency,
creation, perfection or priority of any interest in any collateral security. The
Agent shall have no duty to disclose to the Lenders information that is not
required to be furnished by any Credit Party to the Agent at such time, but is
voluntarily furnished by any Credit Party to the Agent (either in its capacity
as Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other 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, provided that the provisions of this Section shall not be understood
to override those provisions of Section 8.2 requiring the consent of each Lender
affected thereby for certain enumerated amendments to the Loan Documents. 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.
10.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder
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and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (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 (x) no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent and (y) no Lender shall be liable
to reimburse the Agent for any principal or interest owed to the Agent in its
capacity as a Lender or for any arrangement or administrative fees owed to the
Agent. The obligations of the Lenders under this Section 10.8 shall survive
payment of the Obligations and termination of this Agreement.
10.9. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document as any Lender and may exercise the same as though it were not the
Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a
Lender, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person.
10.10. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other 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.
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10.11. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Lenders, a successor Agent (with the prior approval of the
Borrower). If no successor Agent shall have been so appointed by the Required
Lenders within thirty days after the resigning Agent's giving notice of its
intention to resign, then the resigning Agent may appoint, on behalf of the
Lenders, a successor Agent. If the Agent has resigned or been removed and no
successor Agent has been appointed, the Lenders may perform all the duties of
the Agent hereunder and the Credit Parties shall make all payments in respect of
the Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least $250,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning or removed Agent. Upon the effectiveness of the resignation or removal
of the Agent, the resigning or removed Agent shall be discharged from its duties
and obligations hereunder and under the Loan Documents. After the effectiveness
of the resignation or removal of an Agent, the provisions of this Article X
shall continue in effect for the benefit of such Agent in respect of any actions
taken or omitted to be taken by it while it was acting as the Agent hereunder
and under the other Loan Documents.
ARTICLE XI
SETOFF
11.1. Setoff. Borrower and each Guarantor hereby grants to each
Lender, to the fullest extent permitted by applicable law, a right of setoff as
security for all Obligations of the Borrower to the Lender, whether now existing
or hereafter arising, upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control of
such Lender including, without limitation, any entity under the control of
FleetBoston Financial Corporation, or in transit to any of them. At any time
after the occurrence of a Default and while such Default continues, without
demand or notice, any Lender may set off the same or any part thereof and apply
the same to any liability or obligation of Borrower or any Guarantor even though
unmatured and regardless of the adequacy of any other collateral securing the
Loan. ANY AND ALL RIGHTS TO REQUIRE THE BANK TO EXERCISE ITS RIGHTS OR REMEDIES
WITH RESPECT TO ANY OTHER COLLATERAL WHICH MAY SECURE THE LOAN, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF THE BORROWER OR ANY
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GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW.
11.2. 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 3.1, 3.2, 3.4 or 3.5) 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 Obligations or such
amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Loans. In case any
such payment is disturbed by legal process, or otherwise, appropriate further
adjustment shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Credit Parties
and the Lenders and their respective successors and assigns, except that (i) no
Credit Party shall 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 12.3. Notwithstanding clause (ii) of this Section, any Lender may
at any time, without the consent of any Credit Party, assign all or any portion
of its rights under this Agreement and its Notes to any of the twelve (12)
Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12
U.S.C. Section 341; provided, however, that no such assignment shall release
such Lender from its obligations hereunder. Any assignee or transferee of a Note
agrees by acceptance thereof to be bound by all the terms and provisions of the
Loan Documents. Any request, authority or consent of any Person, who at the time
of making such request or giving such authority or consent is the holder of any
Note, shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Each Lender shall
have the unrestricted right at any time and from time to time, and
without the consent of or notice to Borrower or any Guarantor, to grant
to one or more banks or other financial institutions (each, a
"Participant") participating interest in Agent's obligation to lend
hereunder and/or any or all of the Loans held by such Lender hereunder.
In the event of any such grant by a Lender of a participating interest
to a Participant, whether or not upon notice to Borrower, the Lender
shall remain responsible for the performance of its obligations
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hereunder and Borrower shall continue to deal solely and directly with
such Lender in connection with Lender's rights and obligations
hereunder.
Each Lender may furnish any information concerning Borrower in
its possession from time to time to prospective Assignees and
Participants, provided that such Lender shall require any such
prospective Assignee or Participant to agree in writing to maintain the
confidentiality of such information.
12.2.2. Voting Rights. The Borrower, the Agent and the
Lenders shall continue to deal solely with the Lender which sells a
participating interest to a Participant with respect to such selling
Lender's rights and obligations under this Agreement, and 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 Commitment in which such Participant has an
interest which forgives principal, interest or fees or reduces the
interest rate or fees payable with respect to any such Loan or
Commitment, postpones any date fixed for any regularly-scheduled
payment of principal of, or interest or fees on, any such Loan or
Commitment, releases any guarantor of any such Loan or releases any
substantial portion of collateral, if any, securing any such Loan).
12.2.3. Benefit of Setoff. The Credit Parties agree that each
Participant shall be deemed to have the right of setoff provided in
Section 11.1 in respect of its participating interest in amounts owing
under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as the Lender under
the Loan Documents, provided that the Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lender agrees to
share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with the
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were the Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Each Lender may, in the
ordinary course of its business and in accordance with applicable law, at any
time assign to one or more banks or other entities not owned or controlled by
any competitor of the Borrower ("Purchasers") all or any part of its rights and
obligations under the Loan Documents, provided that (i) no such assignment shall
be of less than $5,000,000 of the Commitment or (if the Aggregate Commitment has
been terminated) of aggregate principal amount of the Lender's Loans, unless
such assignment is of the entire remaining amount of the Commitment and Loans,
each Purchaser agrees to be bound by Section 2.18 and 9.18 and (ii) as a result
of such assignment to each such Purchaser, the Credit Parties shall not, as of
the date of such assignment, have any increased obligations under Article III.
Such assignment shall be substantially in the form of Exhibit "D" hereto or in
such other form as may be agreed to by the parties thereto (the "Assignment
Agreement"). The
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consent of the Borrower (which consent shall not be unreasonably withheld or
delayed) shall be required prior to an assignment becoming effective with
respect to a Purchaser which is not an Affiliate of the Lender; provided,
however, that if a Default has occurred and is continuing, the consent of the
Borrower shall not be required.
12.3.2. Effect; Effective Date. Upon (i) delivery to the
Lender of (1) a notice of assignment, substantially in the form attached as
Exhibit "I" to Exhibit "D" hereto (a "Notice of Assignment"), together with any
consents required by Section 12.3.1, (2) the appropriate tax certifications and
other documents (if any) required under Section 2.18, duly completed and signed
by the Purchaser mentioned in such Notice of Assignment and (3) all Notes
payable to the order of or held by the transferor Lender, and (ii) payment of a
$2,500 fee 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 and Loans under the applicable assignment agreement are assets of any
employee benefit plan subject to ERISA and that the rights and interests of the
Purchaser in and under the Loan Documents will not be assets of any employee
benefit plan subject to ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by the Lenders and shall have all
the rights and obligations of a Lender under the Loan Documents with a
percentage of the Aggregate Commitment and with outstanding Loans as described
in the Assignment Agreement and the Notice of Assignment to the same extent as
if it were an original party hereto, the transferor Lender shall be released
from its obligations hereunder to the extent such obligations have been assigned
to such Purchaser pursuant to the Assignment Agreement and Notice of Assignment,
and no further consent or action by any Credit Party, the Lenders or the Agent
shall be required. Each of the Credit Parties shall be entitled to rely upon and
shall have the benefit of the representations, warranties, covenants and
agreements of the Purchaser set forth in the Assignment Agreement and the Notice
of Assignment. Upon the consummation of any assignment to a Purchaser pursuant
to this Section 12.3.2, the transferor Lender, the Agent and the Credit Parties
shall make appropriate arrangements so that (i) 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
Commitment, as adjusted pursuant to such assignment and (ii) the replaced Notes
are returned to the appropriate Credit Parties for cancellation.
12.4. Dissemination of Information. The Credit Parties
authorize the Agent 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 the
Agent's possession concerning the creditworthiness of the Borrower and its
Subsidiaries; provided that each Transferee and prospective Transferee agrees to
be bound by Section 9.18 of this Agreement.
12.5. Tax Treatment. If any interest in any Loan Document
is transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or
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any State thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with the
provisions of section 2.18.
ARTICLE XIII
NOTICES
13.1. Giving Notice. Except as otherwise permitted by Section 2.13
with respect to borrowing notices, all notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be in
writing and shall be sent by United States mail (or, where applicable,
international airmail) or facsimile machine, and shall be deemed received (i)
when received by the addressee if sent via the United States mail or
international airmail, postage prepaid and (ii) when receipt thereof by the
addressee is confirmed by telephone or facsimile machine, if sent by facsimile,
in each case addressed to such party at its address or facsimile number set
forth below its signature hereto (or, in the case of a Borrowing Subsidiary, to
its address or facsimile number set forth in the Election to Participate to
which it is a party).
13.2. Change of Address. Any Credit Party, 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 XIV
BORROWER GUARANTY OF BORROWING SUBSIDIARY OBLIGATIONS
14.1. The Guaranty. The Borrower hereby unconditionally and
irrevocably guarantees the due and punctual payment (whether at stated maturity,
upon acceleration or otherwise) and performance of the Borrowing Subsidiary
Obligations, including, but not limited to, (i) the due and punctual payment of
principal of and interest on the Borrowing Subsidiary Notes, (ii) all
reimbursement obligations, fees, costs or other expenses arising pursuant to any
Letter of Credit issued at the request of any Borrowing Subsidiary, (iii)
interest accruing upon the filing of a bankruptcy petition by or against any
Borrowing Subsidiary, at the applicable rate or rates specified herein, whether
or not such interest is allowed as a claim in bankruptcy and (iv) punctual
payment of all other sums now or hereafter owed by the Borrowing Subsidiaries
under the Loan Documents as and when the same shall become due and according to
the terms hereof and thereof. In case of failure by any Borrowing Subsidiary
punctually to pay or perform any of its Borrowing Subsidiary Obligations, the
Borrower shall forthwith on demand pay or perform such Borrowing Subsidiary
Obligations in the currency, at the place, in the manner and with the effect
otherwise specified pursuant to the terms of this Agreement. The Borrower hereby
agrees that its guaranty of the Borrowing Subsidiary Obligations pursuant to
this Article XIV is a guaranty of payment and not a guaranty of collection.
14.2. Guaranty Unconditional. The obligations of the Borrower under
this Article XIV shall be irrevocable, unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged or
otherwise affected by:
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(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of any Borrowing Subsidiary under any Loan
Document by operation of law or otherwise or the exchange, release or
non-perfection of any collateral security therefor;
(b) any modification or amendment of or supplement to any Loan
Document;
(c) any compromise, settlement, modification, amendment, waiver,
release, non-perfection or invalidity of or to any direct or indirect security,
guarantee or other liability of any third party, or Borrowing Subsidiary
Obligations;
(d) any change in the corporate existence, structure, or ownership
of, or any insolvency, bankruptcy, reorganization or other similar proceeding
affecting any Borrowing Subsidiary or its assets or any resulting release or
discharge of any Borrowing Subsidiary Obligations;
(e) the existence of any claim, set-off or other rights which the
Borrower may have at any time against any Borrowing Subsidiary, the Agent or any
other Person, whether or not arising in connection with this Agreement ,
provided that nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against any
Borrowing Subsidiary for any reason of any Loan Document, or any provision of
applicable law or regulation purporting to prohibit the payment by any Borrowing
Subsidiary of the principal of or interest on any Borrowing Subsidiary Note or
any other amount payable by it under this Agreement; or
(g) any other act or omission to act or delay of any kind by any
Borrowing Subsidiary, the Agent or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of the obligations of the Borrower under this
Article XIV.
14.3. Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. The Borrower's obligations under this Article XIV shall remain in
full force and effect until the Commitment is terminated and the principal of
and interest on the Notes and all other Obligations payable under the Loan
Documents shall have been paid and performed in full. If at any time any payment
of the principal of or interest on any Borrowing Subsidiary Note or any other
amount payable by any Borrowing Subsidiary under any Loan Document is rescinded
or must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of any Borrowing Subsidiary or otherwise, the Borrower's
obligations under this Article XIV with respect to such payment shall be
reinstated at such time as though such payment had become due but had not been
made at such time. This Section 14.3 shall survive the termination of this
Agreement and the payment in full of the Obligations.
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14.4. Waiver; Authorization. The Borrower irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against any Borrowing Subsidiary or any other Person. Without limiting
its rights under Section 14.7 and subject to the provisions thereof, the
Borrower waives any benefit of the collateral, if any, which may from time to
time secure the Obligations or any part thereof and authorizes the Agent to take
any action or exercise any remedy with respect thereto, which the Agent in its
sole discretion shall determine, without notice to the Borrower. In the event
the Agent in its sole discretion elects to give notice of any action with
respect to the collateral, if any, securing the Obligations or any part thereof,
ten days' written notice mailed to the Borrower by certified mail at the address
shown hereon shall be deemed reasonable notice of any matters contained in such
notice. In addition, the Agent is hereby authorized, without notice or demand
and without affecting the liability of the Borrower hereunder, from time to
time, (i) to renew, extend, accelerate or otherwise change the time for payment
of, or other terms relating to, all or any part of the Borrowing Subsidiary
Obligations (provided that the Agent will not, without the consent of the
Borrower, lend to the Borrowing Subsidiaries an aggregate principal amount which
exceeds the amount permitted to be borrowed by such Borrowing Subsidiaries
hereunder, other than as a result of the capitalization of accrued interest,
fees or other amounts due hereunder in accordance with the terms hereof, or to
otherwise modify, amend or change any of the terms of the Loan Documents
relating to the Borrowing Subsidiary Obligations; (ii) to accept partial
payments on all or any part of the Borrowing Subsidiary Obligations; (iii) to
take and hold security or collateral for the payment of all or any part of the
Borrowing Subsidiary Obligations; (iv) to exchange, enforce, waive and release
any such security or collateral; (v) to apply such security or collateral and
direct the order or manner of sale thereof as in their reasonable discretion
they may determine; (vi) to settle, release, exchange, enforce, waive,
compromise or collect or otherwise liquidate all or any part of the Borrowing
Subsidiary Obligations, the Borrower's obligations under this Article XIV, any
other guaranty of all or any part of the Borrowing Subsidiary Obligations, and
any security or collateral for the Borrowing Subsidiary Obligations or for any
such guaranty. Any of the foregoing may be done in any manner, without affecting
or impairing the obligations of the Borrower under this Article XIV.
14.5. Stay of Acceleration. If acceleration of the time for payment
of any amount payable by any Borrowing Subsidiary under any of the Loan
Documents is stayed upon the insolvency, bankruptcy or reorganization of any
Borrowing Subsidiary all such amounts otherwise subject to acceleration under
the terms of this Agreement shall nonetheless be payable by the Borrower
hereunder forthwith on demand by the Agent.
14.6. Payments. All payments to be made by the Borrower pursuant to
this Article XIV shall be made in immediately available Dollars at the times and
in the manner prescribed for payments in this Agreement.
14.7. Subrogation. Notwithstanding any payments made or obligations
performed by the Borrower by reason of this Article XIV (including but not
limited to application of funds on account of such payments of obligations),
until the Borrowing Subsidiary Obligations are
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indefeasibly paid in full and the Aggregate Commitment is terminated, the
Borrower will not, without the prior written consent of the Agent, exercise any
right it may have (whether arising directly or indirectly, by operation of law,
contract or otherwise) to assert any claim against any Borrowing Subsidiary or
any other Person or against any direct or indirect security on account of
payments made or obligations performed under or pursuant to this Article XIV,
including without limitation any and all rights of subrogation, reimbursement,
exoneration, contribution or indemnity. After the Borrowing Subsidiary
Obligations are indefeasibly paid in full and the Aggregate Commitment is
terminated, the Borrower may (notwithstanding the waiver set forth in the second
sentence of Section 14.4) exercise any rights and assert any claims of the type
described in the preceding sentence, including (without limitation) any rights
of subrogation under claims of the Agent with respect to any collateral which
may have been pledged by any Borrowing Subsidiary or any other Person to the
Agent as security for the Borrowing Subsidiary Obligations, provided, however,
that the Borrower's right of subrogation shall not in any sense be construed to
provide a defense to the Borrower's payment of its obligations under this
Article XIV, regardless of what actions the Agent may take with respect to any
such collateral.
ARTICLE XV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
thereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower and the
Agent (and with respect to each Borrowing Subsidiary when each such Borrowing
Subsidiary has executed an Election to Participate).
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Borrower, and the Agent have executed this
Amended and Restated Senior Revolving Credit Agreement as of the date first
above written.
ENESCO GROUP, INC.
By: /s/ Xxxxxx XxxxxXxxxx
----------------------------------------------
Print Name: Xxxxxx XxxxxXxxxx
Title: Chief Executive Officer and President
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Print Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer and Treasurer
000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Chief Financial Officer
Telephone: (000) 000-0000
FAX: (000) 000-0000
COMMITMENT FLEET NATIONAL BANK
$25,000,000 Loans
10,000,000 L/C and B/A Facility
-----------
$35,000,000 Total By: /s/ Xxxxxx X. XxXxxxx
-----------------------------------------------
Print Name: Xxxxxx X. XxXxxxx
Title: Vice President
Fleet National Bank
MA EH 29321C
X.X. Xxx 000
Xxx Xxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. XxXxxxx, Vice President
Telephone: (000) 000-0000
FAX: (000) 000-0000
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$15,000,000 Loans LASALLE BANK NATIONAL ASSOCIATION
0 L/C and B/A Facility
-----------
$15,000,000 Total
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------------
Print Name: Xxxxxx Xxxxxxx
Title: Vice President Commercial Banking
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
MAILCODE: 135-1112
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
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